Permanent Life Insurance

Permanent Life Insurance

Permanent insurance provides lifelong protection with the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums.  Also, when properly funded, a permanent policy can guarantee that a death benefit will be paid out.  This is a key factor when considering how to ensure your estate will be passed on to your survivors. Death benefits are usually paid out tax free, helping inheritors cover any estate taxes. It even allows you to provide a legacy for your children and grandchildren if you use up most of your assets during your lifetime. For all these reasons, a permanent insurance policy may be a proper fit for your family's financial needs.

Whole Life - An ideal product for the young and the old, whole life provides the extra security of guaranteed protection at affordable rates, yet it maintains the element of cash value accumulation for pre- and post-retirement needs.

Universal Life - a flexible premium, adjustable life insurance product that provides you with the flexibility of choosing the policy features that are appropriate for you and adjusting those features as your financial priorities and needs change.

Indexed Universal Life - unlike other interest-earning life insurance policies, Indexed Universal Life offers interest linked to a stock market index – without the risk of investing directly in the market.

Variable Universal Life - a flexible premium, adjustable life insurance policy that allows you to have premium dollars allocated to a variety of investment options, offering varying degrees of risk and reward.

Permanent plans can have more "moving parts" than a typical term plan and seeking the advice of a licensed professional is always recommended.  At Spartan Insurance Services, our agents have the experience needed to answer your questions and make sure your insurance policy is there when you need it to be.

Term Life Insurance

Term life insurance policies provide affordable, temporary coverage. They contain no cash value and are designed for pure protection.  Term life insurance also protects your insurability. By buying a term policy now, most companies allow you to convert your policy to a permanent life insurance policy later on without providing evidence of insurability - even if your health has changed significantly since you started your original term plan.  You may want to consider term insurance in order to:

  • Protect against outstanding loans and debts for which family members or others may be responsible.
  • Provide an affordable alternative to a permanent policy to those who need to protect their family from financial hardship due to the potential loss of a parent.
  • Guard against uninsurability in the future: If you buy term insurance now, you can continue this coverage even if you become uninsurable.
  • Provide coverage to other family members.
  • Protect key people of a business in its formative years of growth.
  • Purchase time - time to increase your earnings so that the coverage can be converted to a permanent cash value life insurance policy without evidence of insurability.

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance. Why is it cheaper when initially purchased? Because with term insurance, you're generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy. With most permanent policies, your premiums help fund the death benefit and can accumulate cash value.

When considering a term purchase, one thing to keep in mind is that not all term policies are the same. Some may include certain provisions as standard features, while others may require you to pay extra to add these features as "riders" to your policy. These riders offer you a way to customize your insurance policy according to any specific needs or concerns your family may have.  So if you're comparing term policies, remember that price is not the only factor to consider. Available riders may include: 

  • Accelerated death benefits - allows a terminally ill person to collect a significant portion of his or her policy's death benefit while that person is still alive.
  • Waiver of premium - waives premiums when a policy owner suffers a long-term disability, typically one lasting six months or longer.
  • Accidental death benefits - doubles or triples the benefit in the case of death by accidental means.
  • Return of premium - if you keep the policy in force for the entire term, say 20 years, the insurance company will refund the premium payments you made over that 20-year period.
  • Disability - will pay the insured a set amout of money each month for a limited time when they suffer a disability.  Exclusion periods typically apply.
  • Spouse/Child rider - Provide a death benefit equal to or less than the primary insured.

Think you're all set since you purchased that life insurance policy several years ago?  Think again.  Major life events such as getting married, having a child, buying a house, changing jobs, taking on new debt, supporting aging parents or providing for future college funds can all justify the need to routinely evaluate your life insurance needs with a licensed professional.

Long Term Care Insurance

Long term care insurance helps pay for your care and can help protect your assets by reimbursing you for covered expenses up to the amounts set forth in your policy.  The expensese covered may include the type of care you would need if you have a prolonged physical illness, disability or cognitive impairment (such as Alzheimer’s disease) that keeps you from living independently or from carrying out basic self-care tasks known as Activities of Daily Living (ADLs) - such as bathing, dressing or eating.

Statistically, nearly two-thirds of people over age 65 will need some type of long term care in their lifetime. While most people think of long term care as impacting only those in their senior years, 40 percent of people currently receiving long term care are ages 18 to 64.

Depending upon the type of policy you choose, this insurance can reimburse you for a wide variety of home, community-based and facility care services, and can offer you care options that may not be covered through government programs. For example:

Homemaker Services

This service provides "hands-off" care making it possible for people to live in their own homes or to return to their homes by helping complete household tasks they can’t manage alone. Homemaker services aides may clean houses, cook meals or run errands.  Often referred to as "Personal Care Assistants" or "Companions." 

Home Health Aides

Personal and home health aides provide "hands-on" personal care, but not medical care, in the home with activities such as bathing, dressing and transferring.  This service provides assistance to those who are elderly, disabled or ill to live in their own homes or in residential care facilities instead of in nursing homes. Home health aides may offer care to people who need more extensive personal care than family or friends are able to, or have the time or resources, to provide.

Adult Day Health Care (ADH)

Adult Day Health Care centers can offer a much-needed break to caregivers. This type of care provides service at a community-based center for adults in a protective setting who need assistance or supervision during the day but who do not need around-the-clock care.  Some programs also may provide personal care, transportation, medication management, health-related services, intergenerational programming, social services, meals, personal assistance and therapeutic activities. 

Assisted Living Facilities (ALF)

Assisted living facilities (referred to as Residential Care Facilities in California) are living arrangements that provide "hands-on" personal care and health services for people who may need assistance with ADLs, but who wish to live as independently as possible and who do not need the level of care provided by a nursing home. It’s important to note that assisted living is not an alternative to a nursing home, but an intermediate level of long term care.

Nursing Home Care

Nursing homes are for those people who may need a higher level of supervision and care than in an assisted living facility. They offer residents personal care, room and board, supervision, medication, therapies and rehabilitation, as well as skilled nursing care 24 hours a day.

Planning for the future

As with most kinds of personal insurance, the younger you are when you purchase long-term care insurance, the lower your premiums will be. Once you own a policy, premiums generally don't increase with age, unless an insurance company raises them for a whole class of policyholders.

When you consider that 40 percent of those receiving long-term care are under age 65, you should at least give some thought to buying coverage when you're still relatively young. Doing so should allow you to lock in a low rate while providing you with coverage that may be needed sooner than you think. Also, be aware that most companies won't sell individual policies to people under age 18 or over age 84.