Types of Life Insurance

TERM

• Protection for a specified period of time
• May be renewable and convertible to whole life insurance
• Low initial premium
• Premium rises with each new term
• Typically no cash value

WHOLE LIFE

• Permanent protection
• Fixed premium
• Fixed death benefit
• Fixed cash value
• Earnings generated by the policy are not taxed while the policy is in force

UNIVERSAL LIFE

• Permanent protection
• lexible premium
• Flexible death benefit
• Cash value reflects premiums paid and market conditions
• Earnings generated by the policy are not taxed while the policy is in force

CURRENT ASSUMPTION WHOLE LIFE

• Permanent protection
• Fixed premium, but company can adjust premium rates after issue
• Fixed death benefit
• Cash value reflects market conditions. Premiums may be reduced to zero -- "vanish" -- for one or more years if investment results are favorable
• Earnings generated by the policy are not taxed while the policy is in force

VARIABLE LIFE

• Permanent protection
• Fixed or flexible premiums
• Policyholders control the investment of their cash values in separate stock, bond, money market or other accounts
• Death benefits and cash value vary in relation to the performance of invested funds
• Earnings generated by the policy are not taxed while the policy is in force

SECOND-TO-DIE LIFE

• Permanent protection provided through either traditional or interest-sensitive product types
• Premium flexibility to allow for "vanishing" premium or minimum annual premium; policy may allow for adding or changing insureds
• Policy insures two lives and pays upon the second death
• Primarily an estate planning tool to pay estate taxes