FDP Insurance Term or Whole life insurance

 

 

 

The decision is “Term or whole life Insurance” lets look at both types of policies—

Term life insurance policies run the length of the term of insurance- The policy may insure a person for 10, 20 or 30 years – The policies statistically look at 1000 people- if they are all insured, how many of the 1000 would pass away in that time period (10 or 20 years).  The insurance company then collects enough money from all the insured to pay the families of the insured members that die.

As an example– if you have a 25-45 year old- the insurance company looks at 1000 25-45 year olds- figures out how many would pass away over 20 years and collect enough premiums from all 1000 to pay the claims to the people who did die during that time frame in that age group- at age 45- if someone has survived past their life insurance- then they may have to re-apply at age 45 for new insurance – also based on their health- the premium for a 45- 65 year old group will be much larger- because more 45- 65 year olds will pass away during that age bracket, than the younger age bracket

If you out live your term policy- you run out of insurance and then it is time to re-apply based on your new attained age and health- the risk being that if you have encountered health issues, you may end up with a much higher rate or may not be insurable at all under a regular term policy

Whole Life insurance –As the name says, a whole life insurance policy covers you for your “Whole life” once you buy the policy. Your whole life insurance policy will go to age 100 or 120 as long as the premiums are paid- Some whole life polices are also available in a 20 pay (which means the policy is paid for in 20 years and runs the rest of your life) or one single premium  – Whole life insurance policies collect a cash value that accrue inside the policy and can be borrowed against at a later time- or can be used to pay the premiums on the policy during a tough economic time- You usually get less whole life insurance for the premium compared to term insurance, however you wont have to take another physical or reapply for insurance again if your health deteriorates over time.

Universal  life – This is a hybrid of the two types of policies- we know that every year as we get older the odds of us passing away become a little better- so the cost of insuring our life becomes a bit more expensive- This policy allows people to buy a policy- front load a lot of premiums during the early part of the policy when the cost of insurance is less expensive and then use that money later in life to offset the cost increase in premium –

 

Universal Life insurance example – a 27 year old has a $100,000 policy- the universal life policy premium is $100 – his cost of insurance for the death benefit may be $25 at the age of 27 -so the rest of the policy premium goes into the cash account in the policy- lets say at age 55 his cost of insurance is about $55 – now his cost has gone up and less money goes into the cash account- finally there will be a point later in life where the cost of the insurance becomes more than the $100 a month premium and the money will start flowing out of the policy to help pay the premium in the later years of life- if the policy runs out of cash the policy can lapse and all the insurance will end.

 

  • Some policies require physicals, some do not-
  • Policies come with a 30 day free look period where you can cancel and get any premiums paid- refunded
  • Accelerated Death Benefit Rider
  • Waiver of premium Rider (in case of disability of the insured)

In addition, FDP Insurance offers dental and vision insurance for individuals and families through Spirit Dental and VSP Vision.

We’d love to consult you on what type of policy is best for you.

BTW- The cost of life insurance is the same from the agent as it is from a Company- However as an agent we can check prices and underwriting guidelines to get you the best value or match you with the best policy- Policy premiums will vary from company to company- we can shop for the best value for your policy- The price does not change and there are no external fees