It's not your father's life insurance.
Life insurance protects you by adding long-term strength to your overall financial strategy. Did you know the value of a whole life insurance policy isn't related to the stock market? So your policy's values are not affected by turbulent economic environments of the sort we've experienced in recent years. A whole life policy can serve as a stable component in your overall financial plan.

Furthermore, the accumulated cash value in whole life insurance grows tax-deferred, and accumulated values on a policy may be withdrawn, up to the cost basis, tax-free1. In fact, the protection and cash value of whole life insurance make it one of the most comprehensive financial tools available to you. It can be customized as needed, and it offers options for dividends2, and family and business protection.

Who Needs Life Insurance?
While the main purpose of life insurance is to provide a death benefit, that's only part of the job. We're here to help you become well-informed about all kinds of life insurance policies, whether you are protecting your family for the short-term, protecting your business, or planning for yourself and for them for the long-term.

Life insurance provides financial your loved ones, and it can provide outstanding opportunities for you to meet many financial goals.

You need life insurance.
Here are examples of why most people need some type of life insurance throughout their lives.

You need life insurance, if you are:

Single, alone and young, and you

• Have random debt - such as student loans, you wouldn't want to leave behind
• Need help covering final expenses - funerals, medical bills, debts, legal fees
• Would like to assure a charitable donation is made to your favorite cause

Single, but you support someone, and you

• Provide financial support for your parents, siblings, or other dependents
• Have significant debt you don't want to pass on to your dependents
• Need help covering final expenses - funerals, medical bills, debts, legal fees

Single, alone and elderly, and you

• Have significant debt you don't want to leave behind
• Would like to assure a charitable donation is made to your favorite cause
• Need to cover final expenses - funerals, medical bills, debts, legal fees

Married or divorced, and your spouse or ex depends on your income to

• Pay day-to-day household and living expenses
• Help your survivor retain his or her standard of living
• Cover final expenses - funerals, medical bills, debts, legal fees

Providing child-care, and your income is needed

• For an underage child's day-to-day living expenses
• For a child's college education
• To support a special-needs child

A stay-at-home parent and you

• Provide services that would otherwise need to be purchased
• May be more financially affected than a parent working outside the home

A single parent, and your income is needed

• For an underage child's daily expenses
• For a child's college education
• For a special-needs adult child
• Because you may have no financial backup

Providing eldercare and your income is needed

• To support an older family member or loved one
• To cover final expenses for an older family member or loved one

Looking for an additional source of income during retirement

• If your policy accumulates cash value, at a certain point you can withdraw from it if you need to

A business owner and you

• Think the business can benefit from cash value withdrawals
• Want to make cash value withdrawals to help fund your retirement
• Want to use the cash value of a policy as collateral for loans
• Want assurance that dependents won't be left destitute
• Offer your partners the proceeds to purchase outstanding ownership interests

back to top

How can I learn about the different types of Life Insurance?
Life insurance adds strength to an overall financial strategy. There are various life insurance policies for individual and business uses. The following are the most common types of life insurance policies:

Term Life Insurance

Term Life is just insurance - it has no cash value feature. Policies carry a predetermined death benefit that is generally income-tax free and expires at the end of the term. Term policies are perfect in specific instances, e.g. if you have taken on additional debt and want to be sure it's covered, or if your income is needed to get children through college. Once the children have graduated everyone's needs change, and it's time to update your financial plans.

With Term Life You Get:

• Lower premium payments during your younger years; rates increase significantly as you become older
• insurance protection during the term of the policy, say 10 or 20 years
• certainty that if you pass away during the term (and the policy premiums are up to date) your beneficiary receives the death benefit
• nothing further at the end of the term. But, the vast majority of people outlive their term insurance policies, which leads to other considerations on life protection.

What kinds of Term Policies are available?

Group and Individual

Most people have access to at least one of these two types of term policies.

Group Term is

• Often offered as a form of employee benefit
• A way to have economic protection as part of a larger group
• Paid for with deductions from your paycheck
• Available when you complete a brief questionnaire detailing your health history

Advantages

Easy enrollment

Sign up at the start of a new job, or during the annual enrollment period
Often - though not always - you won't need a medical exam
A statement of good health and a medical history are usually all that's required, although there can be exceptions

Automatic payments

Payroll deductions minimize the financial hit of paying monthly premiums

Individual Term Details

You apply for coverage on your own
You - or typically a family member - own the actual policy
You may be required to have a medical exam, to provide a detailed medical history, and to allow access to your medical records and allow a background check on your driving and legal records

Advantages

It's always yours

If you change jobs, you still keep your life insurance protection.

Level premiums Individual policies can be structured to have level premiums for the life of the policy

Flexibility

Easier to upgrade an individual term policy to permanent than a group term policy

You may be able to upgrade

Most term policies allow you to convert to a permanent policy. This great feature provides future flexibility, but some policies have limitations, so get familiar with the conversion rules of any policy you're considering. The conversion privilege may have an age limitation, to age 70, for example. Some policies allow conversion throughout the life of the policy.
Generous term policies allow you to convert to any type of permanent policy, such as whole life, universal life, or variable universal life. Some term policies may force you to convert specifically to just one type. Some companies don't offer all types, which limits your options.

Permanent Life Insurance Like term insurance, the primary goal of permanent life insurance is to provide a death benefit - which may be used as replacement income for a policy owner's beneficiaries, perhaps families and businesses, but unlike term insurance, it offers much more than replacement income.
The three primary types of permanent life insurance are whole life, universal life and variable life. 'Permanent' is an umbrella term for policies that

• do not have a term limitation
• have a death benefit
• build up cash value

With each new permanent policy, cash value accumulates during an initial waiting period. After that period you may borrow from it, or in some cases withdraw from it for certain expenses, such as paying for a child's college education.
Should the amount of the unpaid interest on your loan - plus your outstanding loan3 balance -exceed the amount of your policy's cash value, your policy and all coverage will terminate.
Permanent life insurance policies enjoy favorable tax treatment. Generally, cash value grows tax-deferred, so you pay no taxes1 on any earnings as long as the policy remains in-force (premium payments are up to date).

Whole Life Insurance This is most basic form of permanent life insurance. You make regular premium payments to pay the costs of the insurance. The cash value builds up tax-deferred1.

With Whole Life You Get:

• guaranteed cash value
• guaranteed premium
• guaranteed death benefit
• fixed policy premium payments that usually remain the same
• dividends2 (not guaranteed)
• the insurance company managing the cash value
• the option to use any dividends received to reduce premium payments

You Don't Get

• flexibility to invest outside the insurance company's general account in vehicles such as money markets, stocks, bonds
• flexibility to split your money among different accounts or to move your money between accounts

Universal Life

Like whole life, universal life insurance offers life-long coverage, and both insurance and cash value features. It offers more flexible premiums than whole life. Terminating the policy early in the contract may result in surrender charges.

With Universal Life You Get:

• flexible premium payments
• permanent protection (death benefit)
• the insurance company managing the cash value
• market rates of interest on your cash value
• the right to borrow or withdraw from the policy during your lifetime
• tax-deferred earnings1 through a market-driven interest rate

You Don't Get

• flexibility to invest outside the insurance company's general account in vehicles such as money markets, stocks, bonds
• flexibility to split your money among different accounts or to move your money between accounts

Is Life Insurance a Good Vehicle for Wealth-building Purposes?

Let's look at popular wealth-building vehicles: the market (stocks, mutual funds, etc.) and basic savings accounts. We'll begin with a look at whole life insurance and then make our comparisons.

Whole life insurance offers very appealing attributes. Here are a few…

• Guaranteed cash value every year after the initial build-up period
  Insurance companies guarantee growth on cash value. There is no risk; you can never lose money.
• Dividends and history
  Although dividends are not guaranteed, many top mutual companies have paid dividends2 throughout multiple recessions, so in years when most people lost money in the market, those with cash value in life insurance experienced growth.
• Tax deferred growth
  The growth inside a life insurance policy is tax deferred.
• No fund fees
  For mutual funds, 401(k)s, and financial planners, in general you pay fees. In winning years you lose part of your earnings to fees, and in losing years you lose still more to fees.
• Liquidity This is one of the most appealing features of a life insurance policy: you may obtain a tax-free loan against your cash value. The loan is made at competitive interest rates, and your cash value continues to accumulate at the guaranteed rate. In this way, the remaining cash value continues to grow. Many people don't realize they lose more money to debt interest payments than they earn in their retirement plans. If they accessed to their money to pay off debt now, they could save more money in the long run.
• Certainty
  Whole life insurance suffers no market losses, so you don't need to worry about losing value in a volatile market. You are certain of at least your current cash value and your death benefit.

Life insurance companies themselves are divided into different types

• Stock Companies
  A stock company is owned by its stockholders
• Mutual Companies
  A mutual company has no stockholders - the policy holders are owners in the company, so any dividends2 are paid to them. To grow cash as quickly as possible, mutual companies are the preferred option.
These features make life insurance an attractive option. Let's see how life insurance compares to other options
• The Market
  Life insurance will not have the growth potential that the market has, but as a tradeoff, you don't have the risk. Most people don't have time to study the market and make smart investments, and they lose money. Even experienced investors and professional licensed financial services people aren't protected from market downturns. For this reason, life insurance may be a much better long-term option. The last several years have been hard on many people, and as baby boomers retire and pull more and more money out of the market, it is likely the trend will continue.
• Savings Accounts
  A savings account can't produce nearly as substantial a return as a life insurance policy will, and at the same time your savings account will be taxed. Life insurance provides a safe place for money, like a savings account, yet it will have tax advantages and growth potential.
• Annuities
  Because annuities grow tax deferred they offer good growth potential, but the fees are high and the withdrawals are taxed as ordinary income. If you bought an annuity with $25,000 and it had grown to $100,000 at your death before it annuitized, your beneficiaries would get the $100,000 but $75,000 will be taxed as ordinary income.

Contact us today and we will show you exactly how whole life insurance will fit your needs.

Life Insurance Wealth-Building Features

Type of Insurance	Low Premiums	Fixed Payments	Flexible Payments	Guaranteed Death Benefit, Income-Tax Free	Tax Deferred1 Cash Value	Dividends2 (Not Guaranteed	Risk ofCash Value Reduction (Provided there are no loans or withdrawals)	Market Rates of Interest on Cash Value	OK to Borrow from Policy
Term	Yes	Yes		Yes
Whole Life		Yes		Yes	Yes	Yes		Yes	Yes
Universal Life			Yes	Yes	Yes		Yes	Yes	Yes

What Kind of Life Insurance Do I Need?

thecompleteinsurancesource.com can help you become informed about life insurance and the many ways it's used, so when you choose policies they'll fit your unique circumstances. When you contact us we'll ask about you, your family and dependents, your current financial plan, and your hopes and ideas for the future. Your responses will all play a part in determining how to secure the future for those who rely on you. Contact us any time and we'll help answer all your questions.

back to top