MDS provides a host of Life Insurance options that are designed to help you make the most out of your investment. At it’s core, life insurance pays out a sum of money either on the death of the insured person or after a set period of time. These can provide variable outcomes based on the plan options in the next section.
Term Life Insurance
This is the most basic form of life insurance – it’s a fix payment based on a period of time (term) that has an expiration date at which time coverage ends. This type of plan pays a guaranteed sum that is paid to the beneficiary if the insured party dies. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
Whole Life Insurance
Whole life insurance, or whole of life assurance, is a life insurance policy that remains in force for the insured’s whole life and requires (in most cases) premiums to be paid every year into the policy.
Universal Life Insurance
This is a type of permanent life insurance, which based on the terms of policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, as well as any other policy charges and fees which are drawn from the cash value, even if no premium payment is made that month. Interest credited to the account is determined by the insurer, but has a contractual minimum rate. When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is a “Equity Indexed Universal Life” contract.
Variable Universal Life Insurance
This type of policy builds a cash value. In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The ‘variable’ component in the name refers to this ability to invest in separate accounts whose values vary – they vary because they are invested in stock and/or bond markets. The ‘universal’ component in the name refers to the flexibility the owner has in making premium payments. The premiums can vary from nothing in a given month up to maximums defined by the Internal Revenue Code for life insurance.
Life Insurance policies can be complicated but very effectively provide for your needs strategically. We can help you determine if there is a life insurance plan that fits your requirements and work with you select the best policy based on your needs, budget and goals.
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