Life Insurance Terms

Term Life Insurance:
    Temporary protection for a specified period of time,  develops no cash value and is usually the least   expensive coverage available for a short term.  Policies are available on a year to year basis with the premium increasing at each renewal.   The premium can be guaranteed at a level amount or premiums can be guaranteed level for 5, 10, or 20 years.

Mortgage Protection Life Insurance:
    Mortgage Protection is usually a decreasing term life insurance policy for the duration of the mortgage period on the home.  This policy is usually offered from the mortgage company with the mortgage company as the beneficiary.  You may not want the mortgage company as the sole beneficiary.  You can purchase the policy individually and specify someone else as beneficiary, such as your spouse.  You may have a very good interest rate on your home mortgage and your surviving spouse may be able to invest the proceeds of the policy at a higher interest rate.  

Whole Life:
    Whole Life policy provides protection usually through age 95 at which the policy matures.  The coverage amount and the premium is level for life.  The policy has a fixed percentage cash value accumulation.  At age 95, the policy is surrendered for the cash value accumulation amount.

Universal Life Insurance:
    Universal Life is a variation of whole life.  As your life changes, your priorities change, especially when considering finances.  First, you worry about buying a home and making the mortgage payments.  Then, when the first child comes along, your priorities change again, and you worry about education and college funds.  When the kids are out of school you have retirement plans to consider.  
    Most life insurance policies provide protection for your family so that they can pay the bills in case you should die.  But the Universal Life plan provides this protection and more.  It is designed to provide you with level premiums, adjustable protection amounts, flexible payment schedules, cash value accumulations, and tax-deferred interest accumulations.
    The Universal Life Policy will contain a guaranteed rate of interest on accumulated cash values but the current interest rate is flexable and is usually higher than the guaranteed rate of interest.  

Variable Universal Life Insurance:
    Variable Universal Life is a variation of Universal Life.  The main difference between Variable Universal Life and Universal Life is that the current interest rate is based on an Investment Portfolio and Investment Strategy that you choose from within the fund families that the Variable Universal Life policy represents.  

Accidental Death Benefit:
    Accidental Death Benefit can be added to many of the life policies.  With this rider, the policy would ususally pay two times the death benefit if the policy holder dies as the result of an accident.  If the policy holder dies of illness, or other natural causes, the death benefit is the death benefit specified on the policy.