Life Insurance

What is Life Insurance?

Life insurance is a powerful financial tool that can be used to protect and secure your family's future when you are no longer there to help them.

When should you consider Life Insurance?

Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations:

​1. Protect loved ones from financial uncertainty:
If people depend on an individual’s income, life insurance can replace that income if the person dies. The most common example of this is parents with young children. Insurance to replace income can be especially useful if the government- or employer sponsored benefits of the surviving spouse or domestic partner will be reduced after their companion dies.

2. Pay final expenses:
Life insurance can pay funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.

3. Protection if you become ill: 

Living benefits allow you access to all or part of your death benefit while living in the event of a qualifying terminal, chronic, critical illness or critical injury.

4. Create a Tax-Free Retirement Strategy:
60% of Americans have $10,000 or less saved for retirement.  With a Indexed Universal Life Policy you have access to tax-deferred build-up of cash value and premium dollars are never exposed to market risk. Income-free tax benefit and potential for tax-free retirement income you cannot outlive.

​5. College Planning:
Student debt the average 4-year old college graduate had in 2016 was $37,000.  The death benefit can complete college savings plans if wage earner dies.  Cash value in a life insurance policy is not defined as an asset for Federal financial aid calculations and has no restrictions on use as long as the policy is sufficiently funded.

Types of Life Insurance

​There are two major types of life insurance—term and whole/permanent life.

1. Term Life:
Term insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions. However, Direct Insurance Solutions offers term insurance policies with accelerated benefits riders at no-additional cost.  These Living Benefits allow you to access all or part of your death  benefit, while living.  Life Insurance you do not have to die to use. There are two basic types of term life insurance policies—level term and decreasing term. Level term means that the death benefit stays the same throughout the duration of the policy. Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.

2. Whole Life/Permanent Life:
Whole life or permanent insurance pays a death benefit whenever the policyholder dies. There are three major types of whole life or permanent life insurance—traditional whole life, universal life, and variable universal life, and there are variations within each type.

With an Indexed Universal Life Insurance Policy, commonly referred to as IUL, is a wealth accumulation vehicle that provides policyholders with the potential to create a non-taxable retirement, while protecting themselves with Living Benefits life insurance simultaneously. The idea is that you can setup an indexed universal life insurance policy that grows huge amounts of cash value over the course of your working years. Thanks to the specific IRS code that allows tax-advantaged treatment of these permanent life insurance policies, this cash value grows tax-deferred. You can access these funds when you retire or later in life, through nontaxable participating policy loans, to create a tax-free retirement. Remember, its not about how much you can accumulate for retirement, you need to consider taxes on retirement income. Direct Insurance Solutions only offers IUL insurance policies with accelerated benefits riders at no-additional cost.  These Living Benefits allow you to access all or part of your death  benefit, while living.

3. Universal Life:
Universal life, also known as adjustable life, allows more flexibility than traditional whole life policies. The savings vehicle (called a cash value account) generally earns a money market rate of interest. After money has accumulated in the account, the policyholder will also have the option of altering premium payments—providing there is enough money in the account to cover the costs.​

4. Variable Life:
Variable life policies combine death protection with a savings account that can be invested in stocks, bonds and money market mutual funds. The value of the policy may grow more quickly, but involves more risk. If investments do not perform well, the cash value and death benefit may decrease. Some policies, however, guarantee that the death benefit will not fall below a minimum level. Another variant, universal variable life, combines the features of variable and universal life policies. It has the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust premiums and death benefits that is characteristic of universal life insurance.​

Living Benefits:

Accelerated Benefits Riders are optional, no-additional premium cost riders that can allow you to access all or part of your death benefit, while living, if you experience a qualifying terminal, chronic, or critical illness, or critical injury.  You have the option of accelerating up to 100% of the death benefit up to a maximum of $1,500,000, certain restrictions apply.

Benefits could be used for, but aren't limited to:

• Household expenses

• Home modifications

• Adult day care

• Regular bills

• Quality of life expenses