Life Insurance

Two (2) kinds of Life Insurance policies are, Whole life and Term Life. The most commonly asked question with regard to Life Insurance is, how much Life Insurance do I Need? The simplest rule of thumb is, five (5) to ten (10) times your earnings. This is not a concrete rule, but it is a good rule of thumb nonetheless. In addition, different agents will likely suggest different multiples; this makes the calculation of a precise amount even more difficult.

Term Life Insurance
Term life insurance provides a low cost way to get maximum insurance protection for a temporary period of time. A Term Life Insurance policy builds no cash value, it pays a benefit only if the insured dies during the term of policy coverage. If death occurs, the beneficiary collects the face amount (death benefit) of the policy income, tax free. Many insurance companies offer level premium terms for periods of 5, 10, 15, 20 and now even 30 years. However, premium rates do increase at the end of the guaranteed policy period. These policies have become very popular because of their low cost and the availability of relatively long term of coverage. Policies require that evidence of insurability be furnished at renewal to qualify for these available rates. It is important to understand the terms of any insurance policy that you are considering before making a purchase.

Whole Life Insurance
Whole life Insurance policies provide lifelong protection, due to this, potential insureds are best advised to purchase this policy at a young age when the premiums tend to be cheaper. One attractive element of the Whole Life Insurance policy is, as long as you pay the necessary premium, the death benefit will always exist. The policy is designed and priced for you to keep over a long period of time. However, If you don't intend to keep your life insurance policy for the long term, usually fifteen years (15) or longer, Whole Life Insurance may not be the correct type of Life Insurance for you. Most Whole Life Insurance policies have a feature known as "cash value" or "cash surrender value”. This is a feature not found in Term Life Insurance policies. The cash values of many life insurance policies may be affected by the parent company's future experience, including mortality rates, expenses and investment earnings. Keep in mind that with all types of Whole Life Insurance policies, the cash value of a policy is different from the policy face amount. Cash value is the amount available when you surrender a policy before its maturity or before death of the insured. Provided the cash value is sufficient, the face amount is the money that will be paid at death or at policy maturity.

Contact Sonnenberg Agency, LLC for a Life Insurance quote or for additional information.