WorkingAmericanBenefits™

Individual Life Insurance

Term Life Insurance

Life insurance to provide protection for a stated period of time, expiring at the end of the period without value if the insured lives for longer than the stated period.  The period, called the "Term", can be from 1 to 30 years, but is usually for 5 to 20 years.  Term life insurance is best suited for someone who wants or needs temporary protection - in other words, protection for a specific number of years.

Simply put, Term life insurance pays out only if the insured dies within the "Term" of the policy.  For example, if someone buys a 10-year Term Life insurance and dies during the 10 years, then the policy will pay the full death benefit.  If the insured dies, however, in the 11th year after the policy went into effect, the policy pays nothing.

Most Term Life insurance can be renewed or converted.  The policy owner may renew the policy before its termination date without evidence of insurability (that is,  without having to prove good health).  Also, the policy owner can convert the Term Life policy to a Whole Life (or other permanent plan) before the policy's termination date without evidence of insurability.

The most common type of Term Life insurance is Level Term. This means that the policy provides a level (unchanging) amount of insurance for the specified period.  Level Term Life insurance is what we sell.

Your best sources of Term Life Insurance:

• Protective Life Insurance Company
• Colorado Bankers Life Insurance Company
• ALLIANZ
• Allstate
• Colonial Life & Accident Insurance Company
• Illinois Mutual Life Insurance Company
• UNUMPROVIDENT

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Whole Life Insurance

Permanent level insurance protection for the "whole of life", i.e., from the policy issue date to the date of death of the insured, or age 100, whichever comes first, and provided the premiums are paid.  Whole Life insurance is characterized by level premiums, level death benefits and cash value.  Whole Life insurance is also known as "permanent" or "cash value" insurance.

The death benefit payable is the face amount of the policy, (the amount written on the face of the policy), which remains constant throughout the policy life.  The premiums are set at the time of purchase and also remain constant throughout the policy life.  Whole Life insurance endows (matures) at age 100. This feature combined with its cash-value feature, provides "living benefits" for the policy owner.

The Cash Value is an accumulation or savings element of the insurance.  This cash value builds over the life of the policy owing to the fact that Whole Life insurance plans are credited with a certain guaranteed interest rate, and the interest earned is credited to the policy on a regular basis.  The cash value, also called the Cash Surrender Value, represents the amount of money the policy owner would get if he/she terminated the the policy prematurely.  The amount of cash value in a policy at any given time will depend upon; (a) the face amount; (b) the amount of premium paid; and (c) the length of time the policy has been in force.

The Living Benefit a Whole Life insurance provides is through the cash value build-up in the policy.  A policy owner can borrow from the cash value at reasonable interest rates if there is a need for money.  It is not a requirement of the policy that the loan be repaid, but if the loan is still outstanding when the insured dies, the loan amount plus any interest due will be subtracted from the death benefit before it is paid.

Your best sources of Whole Life Insurance:

• Zurich Kemper
• Colorado Bankers Life Insurance Company
• ALLIANZ
• Illinois Mutual Life Ins. Co.
• UNUMPROVIDENT

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Universal Life Insurance

Universal Life is a variation of Whole Life insurance.  The main difference is its great flexibility.  Unlike Whole Life with its fixed premium, fixed face amount, fixed interest and fixed cash value accumulation, Universal Life allows the policy owner to determine the frequency of premium payments and to adjust the face amount up or down depending on changing needs.  The interest rate also fluctuates and is dependent upon  current market conditions.   However, the policy has a guaranteed minimum interest rate, usually 3% to 4%, that the insurance company will pay regardless of the state of the economy.

As premiums are paid and as cash value accumulates, interest is credited to the policy's cash value either at the current interest rate (determined by the state of the economy), or at the minimum guaranteed interest rate specified in the policy. To take advantage of high interest rates when the economy is good, a policy owner can elect to pay more into the policy adding to the cash value account, subject to certain guidelines controlling the relationship between the cash value and the policy's face amount.

Another difference between the Universal Life policy and the Whole Life policy is the fact that partial withdrawals can be made from the policy's cash value account. (Whole Life allows access to the cash value only through loans or complete surrendering of the policy).  Also, the Universal Life policy owner may surrender the policy for its entire cash value at any time.

Universal Life insurance offers two death benefit options.  Under Option One, the policy owner purchases a specified amount of insurance.  The death benefit is equal to the specified amount which is comprised of the cash values plus the remaining pure insurance.  The pure insurance is decreasing term insurance, i.e., each year, the amount of pure insurance decreases.  However, this decrease is offset by increasing cash values such that the specified amount (face amount) is maintained.  High interest earnings over a long period of time can cause the cash value to rise above the specified amount, thus increasing the death benefit to an amount greater than the specified amount.

Under Option Two, the death benefit is equal to the face amount of pure (level term) insurance plus the rising cash values. As the cash value increases,  the death benefit increases.  However, there are guidelines governing the rise of the cash value in proportion to the pure insurance.  For the product to continue to be considered "insurance" under Tax Laws, a certain level of pure insurance must be maintained.

Your best sources of Universal Life Insurance:

• Zurich Kemper
• Texas Life Insurance Company
• ING
• Illinois Mutual Life Ins. Co.
• Allstate
• Colonial Life & Accident Ins. Co.
• UNUMPROVIDENT

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Fixed Index Universal Life Insurance

A fixed index universal life insurance has all of the features and flexibility of a regular universal life insurance, including a cash value. The difference between the two types of insurance is  the way the fixed index universal life insurance earns interest on the cash value.  Whereas the interest on the cash value in a universal life insurance is determined by the performance of the insurance company's own portfolio in the stock market, the interest on the cash value of the fixed index universal life insurance is determined by the performance of one or more indices.  A fixed index universal life insurance provides the contract owner with the option of earning money from the upward performance of the stock market while not experiencing any of its downside, and/or earning money from a  fixed rate of interest on the money in the cash value of the universal life insurance.  Having the earnings of the cash value determined by the indices gives the fixed index universal life insurance an edge over traditional cash value insurance - they are positioned to earn more interest and grow the cash value larger and faster.

When the contract includes a fixed-rate of return for all or a part of the fixed index universal life insurance, the  life insurance has a lifetime guaranteed rate commonly called the minimum interest rate.  The insurance company guarantees that the interest credited to the fixed return portion of the fixed index universal life insurance contract in any given year will never fall below the minimum interest rate.  A contract owner has the option o0f electing that a part of the premium he/she pays is put into any of the available indices and/or in the fixed funds of the universal life insurance. 

Fixed index universal life insurance exercise a series of crediting methods that allow the contract owner upside participation in the growth of a variety of well known and accepted market indices such as the S&P 500*, the NASDAQ 100**, etc.  There are monthly and/or annual caps - meaning - the contract can only earn up to a certain percentage of return either monthly or annually.  However, these caps are way above the returns a fixed-rate universal life insurance would earn.  Monthly and/or annual gains are locked in so that if the market takes a downturn, the gains are not lost but remain fixed where they are.  In a down market, instead of losing earnings, the contract is just not credited with any gains.  Simply put, the contract earns money when the indices go up and lose none of the gains when the indices go down.

Like universal life insurance, fixed index universal life insurance  usually have a money back guarantee.  The insurance company assumes the risk of investing, and the contract owner receives the protection.  The insurance company guarantees the contract owner that if he/she is unhappy with the universal life insurance during the "free look" period after purchasing the universal life insurance, the contract owner may return the universal life insurance to the insurance company and have all of his/her money returned to him/her.

As with most cash value life insurance, fixed index universal life insurance have a surrender charge associated with them.  Surrender charge protects the insurance company in the same way the guarantee protects the contract owner.  Surrender charge can be as much as 7% to 10% of the fixed index universal life insurance value.  However, it  is setup to decrease in amount from the 7% or 10% down to 0% over a period  of years as defined by the insurance company.  Once the  0% is reached, the contract owner can surrender or terminate the fixed index universal life insurance contract without incurring a surrender charge.

Some of today's competitive fixed index universal life insurance have features and benefits that are head and shoulders above the rest, and are designed to address many important aspects of the insured lifespan.  Simply put, there are fixed index universal life insurance  you don't have to die to use!  For example, in addition to all the benefits of a fixed index universal life insurance already mentioned, some of these innovative products have the following benefits:

• Disability Income Rider

• Unemployment Rider

• Chronic Illness Rider

• Critical Illness Rider

• Long Term Care Rider

• Lifetime Extension Rider (extends the Chronic Illness and Long Term Care benefits for life)

• Terminal Illness Rider

• Cost of Living Rider

Clearly such a product as the one described above is an ideal protection, savings and retirement vehicle for young americans. An insurance company may allow a fixed index universal life insurance contract owner to access part or all of the universal life insurance cash value without incurring a surrender charge under certain circumstances.  For example; a contract may provide for the owner to access the cash value of  the fixed index universal life insurance without penalty if  the owner becomes a patient in a nursing home, or if the owner is diagnosed with a terminal illness, or have a need to use the benefits of any of the riders named above.

Your best sources of Fixed Index Universal Life Insurance:

• Americo Financial Life and Annuity Co.
• ALLIANZ Life Insurance Company
• American Equity Investment Life Ins. Co.
• ING Life Insurance Company
• Illinois Mutual Life Insurance Company
• Great American Life Insurance Co.
• Life Insurance Company of the Southwest

Call (954)430-8475 for more information.

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Variable Universal Life Insurance

Variable Universal Life (VUL) insurance is a product that blends many features of Whole Life, Universal Life and Variable Life.  The most outstanding of these features are premium flexibility, cash value investment control, and death benefit flexibility. 

Every VUL is issued with a minimum scheduled premium based on an initial specified death benefit, for example, $100,000. However, after the first year of paying the premium for $100,000, policy owners can pay what ever premium they wish, with certain limitations.  There are maximum and minimum premium limits that are different from the first year's premium.  Policy owners may increase or decrease the face amounts or the premiums as long as the guidelines are followed.

Cash value in a VUL insurance plan is maintained separately from the plan.  At the time the policy owner completes the application for insurance, he/she elects to have the premium and cash values allocated to one or more investment options. These are "sub-accounts" that are similar to mutual funds, and are either created and managed by the insurance companies, or created and managed by investment companies (mutual funds companies) for insurance companies.  Funds are held in a separate account from the insurance company's funds, and are invested in the securities market.  The policy owner directs the investments and therefore assumes the risks.

VUL policies generally offer a level death benefit, which provides for a fixed death benefit of the initial face amount, until the cash value reaches the fixed death benefit amount.  Once the cash value rise above the level of the fixed death benefit amount, then the death benefit becomes a combination of the cash values and the amount of pure insurance (corridor) the policy must maintain to be still considered to be insurance for tax purposes.

VUL policies also offer a variable death benefit option, which provides for a constant level specified amount (face amount), and any cash values accumulated are added to the level specified amount so that at all times, the death benefit is a combination of the two amounts.  Because the cash values fluctuate with the market, the true death benefit varies as well, and can only be known at the time of the death of the insured.

VUL insurance policies permit partial withdrawals, allowing the owner to tap the cash value without owing the insurance company any money.  Policy owners do not have to repay these funds and no interest accrues on the money withdrawn.

Your best sources of Variable Universal Life Insurance:

• Zurich Kemper
• ALLIANZ

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