HOW COULD YOU BENEFIT FROM LIFE INSURANCE?
If you’re unsure of whether life insurance is a good fit for your needs, consider how it can help protect the people you value most. Through life insurance, you can:
PROTECT YOUR LOVED ONES
Life insurance can provide your family members the resources to maintain their lifestyle. It can replace some or all of your income, pay off debts, cover funeral costs and help fund future expenses, such as college tuition.
LEAVE A LASTING LEGACY
Life insurance can also provide a legacy for your children and grandchildren. When properly structured, life insurance proceeds are paid to beneficiaries income tax-free, which will help you to ensure your estate is passed down in a tax-efficient manner.
HELP CREATE A RETIREMENT SAFETY NET
Are you nearing or already enjoying retirement? If so, life insurance can help preserve the retirement plan you worked so hard to create. For instance, you can use life insurance to protect any dependents you may have, such as disabled adult children, or to fulfill financial obligations, such as the mortgage on a second home. Since retirement can last several decades, life insurance can also help protect your spouse from the loss of an income stream and help cover medical and funeral expenses.
HOW IT WORKS
Purchasing life insurance requires you to enter into a contract with an insurance company. As the policy holder, you can expect to pay premiums on a monthly or annual basis in exchange for a lump sum payment, also known as a death benefit. When you pass away, this benefit is paid to your beneficiaries to help cover living expenses, outstanding debt and other costs.
PRESERVE THE BUSINESS YOU HELPED BUILD
If you’re a business owner, life insurance can help protect the future of your business from a variety of threats, such as the death of a key employee.
Once you’ve decided to get life insurance, there are several important considerations you’ll want to keep in mind. For instance, understanding the premium you’ll pay, any living benefits, such as a cash value component – which can typically be used for withdrawals or loans – and your risk tolerance can help determine what type of life insurance is best suited to your needs.
TERM INSURANCE – COVERAGE FOR THE DURATION YOU WANT
Designed for protection during a specific period of time, term insurance:
- Accommodates for temporary circumstances¹
- Provides coverage that ranges from one year to 30 years
- Can be converted to permanent insurance, depending on the policy
- Provides a death benefit with no cash value²
- Offers affordable, cost-effective premiums³
PERMANENT INSURANCE – DESIGNED FOR YOUR LONG-TERM NEEDS
A permanent insurance policy can offer you protection for life⁴ (as long as it does not lapse⁵,⁶) and access to the tax-deferred cash value of the policy to help cover future income needs. Four key types include:
WHOLE LIFE
- Fixed premiums
- Guaranteed death benefit
- Guaranteed cash value growth at a fixed interest rate
- Low risk tolerance
UNIVERSAL LIFE
- Flexible and adjustable premiums7
- Cash value earns interest that adjusts as interest rates increase or decrease8
- Provides a stated death benefit as long as the policy is in force
- Low to medium risk tolerance
INDEXED UNIVERSAL LIFE
- Flexible and adjustable premiums
- Cash value growth is linked to the performance of the S&P 500
- Can provide downside protection on cash value growth
- Provides a stated death benefit as long as the policy is in force
- Medium risk tolerance
VARIABLE UNIVERSAL LIFE
- Flexible and adjustable premium payments7
- Potential for cash value growth through market participation
- Premium payments can be allocated among investment subaccounts
- Provides a stated death benefit as long as the policy is in force
- Higher risk tolerance
1At the end of the term, the insurance policy will not have any cash value or living benefits.
2Riders and additional features may be available at an additional cost.
3Premium amount is relative to other types of life insurance and is dependent on underwriting.
4Some insurance companies may assign an age cap.
5Required premium payments must be made on a timely basis.
6Policy performance is dependent upon the investment or actual interest rates.
7Premiums may be lower during periods of high interest; in addition, you may be able to skip premium payments if your cash value is enough to cover your minimum expenses.
8Insurance company establishes the minimum interest crediting rate, but excess interest may be credited to your policy if the insurance company’s portfolio earns more than the minimum interest rate. Consult the policy for benefits, riders, limitations and exclusions. All guarantees and benefits of the insurance policy are subject to the claimspaying ability of the issuing insurance company. Withdrawals and loans will reduce the cash value and death benefit of the policy. The tax treatment of life insurance is subject to change.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.
Insurance products offered through Raymond James Insurance Group, an affiliate of Raymond James & Associates, Inc., and Raymond James Financial Services, Inc.
© 2023 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. © 2023 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment
products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value. 23-GWS-1679 TA 8/23