Life | Zephyrhills Health A

UNDERSTANDING LIFE INSURANCE

TERM VS WHOLE

Life insurance is crucial for protecting your loved ones financially in case of the unexpected. But choosing the right type can be confusing. Here's a clear comparison to help you decide between Term and Whole Life Insurance

While you read...think about your beneficiaries and what life would look like for them if you unexpectedly passed. Think about the peace of mind it will bring to know your family is unified at the service of your choosing and not be torn apart by quarrels of who will pay for what.

AT A GLANCE

Term

Guarantees a Death Benefit
Lower Premium
Can Convert to Whole

Whole Life

Grows Cash Value
Can Borrow Against the Policy
Premiums Never Increase

Term Life

“Term” simply means coverage for a fixed period. It is usually always more affordable, most “bang for your buck” coverage. It pays in the event you pass away within the term. Outside of the term it does not. You can purchase term policies in the 10, 20, 30 year term periods.

Term is Simple. Affordable and most importantly Flexible.

Term gives you the ability to convert your policy to whole life policy should you ever decide that you want something longer than the term.

Whole Life

“Whole Life” Insurance provides coverage for your entire life. Simply put, it stays with you until you die. It also has a unique feature that term does not..

It builds a cash value. That cash value can be used to borrow from. It offers a guaranteed payout and consistent premiums. Although the premiums are going to be higher than term.

Life Insurance

If you are looking to protect those that matter to you most in the event of your death, we can help you protect those you love. Peace of Mind is such a powerful matter that can not be understated.

Life insurance is a contract between an insurance company and a policy owner in which the insurer guarantees to pay a sum of money to one or more named beneficiaries when the insured person dies in exchange for premiums the policyholder pays during their lifetime

Financial Protection for Loved Ones: Life insurance can provide a lump sum payment to your beneficiaries, helping them cope with the financial challenges that may arise after your death.

Covering Outstanding Debts: Life insurance can be used to cover any outstanding debts, such as a mortgage, car loans, or credit card debt, preventing your loved ones from inheriting financial burdens.

Replacing Lost Income: If your income is crucial to supporting your family, life insurance can replace that income, ensuring that your loved ones can continue to meet their financial obligations.

Estate Planning: Life insurance can be a valuable component of estate planning, helping to cover estate taxes and ensuring that your assets are distributed according to your wishes.

Peace of Mind: Knowing that your loved ones will be financially secure in the event of your passing can provide you with peace of mind, allowing you to focus on enjoying life without constant worry about the future.

TYPES OF LIFE INSURANCE

TERM INSURANCE

Term insurance is a type of life insurance that provides coverage for a specific period of time, or "term," typically ranging from 5 to 30 years. It is designed to provide financial protection for your beneficiaries in the event of your death during the term of the policy.

Here are some key features and characteristics of term insurance: Death Benefit: The primary purpose of term insurance is to provide a death benefit to the beneficiaries named in the policy if the insured person passes away during the term of the policy. This benefit is paid out as a lump sum and is typically tax-free for the beneficiaries. Fixed Premiums: Term insurance policies usually have fixed premiums for the duration of the term. This means that the premium amount remains the same throughout the term, making it easier for policyholders to budget and plan for their insurance expenses. Temporary Coverage: Unlike permanent life insurance policies such as whole life or universal life insurance, which provide coverage for the entire lifetime of the insured person, term insurance offers coverage for a specific period. Once the term of the policy expires, coverage ends unless the policy is renewed or converted to a permanent policy. Affordability: Term insurance is often more affordable compared to permanent life insurance policies because it does not accumulate cash value or offer additional features such as investment components. This makes it an attractive option for individuals seeking basic life insurance coverage at a lower cost. Renewability and Convertibility: Some term insurance policies offer the option to renew the policy at the end of the term, usually at a higher premium rate. Additionally, many term policies include a conversion option, allowing the policyholder to convert the term policy into a permanent life insurance policy without the need for a medical exam. Variety of Term Lengths: Term insurance policies offer flexibility in terms of the length of coverage. Policyholders can choose a term length based on their specific needs and financial goals. Common term lengths include 10, 20, and 30 years, although some insurers offer shorter or longer terms as well. No Cash Value: Unlike some permanent life insurance policies, term insurance does not accumulate cash value over time. This means that if the policyholder outlives the term of the policy, they do not receive any benefits or refunds of premiums paid. Overall, term insurance provides straightforward and cost-effective life insurance coverage for a specified period, offering peace of mind and financial protection to the insured person's beneficiaries in the event of their death.

ACCIDENTAL DEATH & DISABILITY

Accidental Death and Dismemberment (AD&D) insurance is a type of insurance policy that provides coverage in the event of accidental death, dismemberment, or loss of certain bodily functions resulting from an accident.

Here's a detailed explanation of how AD&D insurance works: Coverage for Accidental Death: AD&D insurance provides a death benefit to the beneficiary named in the policy if the insured person dies as a result of an accident covered by the policy. Accidents covered typically include events such as car accidents, falls, drowning, or other unexpected and unintentional incidents. Dismemberment Benefits: In addition to coverage for accidental death, AD&D insurance also pays benefits if the insured person suffers the loss of a limb or certain bodily functions due to an accident. The specific injuries covered and the amount of benefits paid vary depending on the terms of the policy. Common injuries that may result in dismemberment benefits include the loss of a hand, foot, sight, or hearing. Financial Protection for Disability: Some AD&D policies also offer benefits for total or partial disability resulting from an accident. Total disability refers to the insured person's inability to perform any gainful occupation due to the accident, while partial disability refers to a loss of income or earning capacity resulting from the accident. Disability benefits are typically paid out as a percentage of the policy's face value and may be subject to certain limitations and waiting periods. Supplemental Coverage: AD&D insurance is often purchased as a supplemental policy to complement existing life insurance coverage. It provides an additional layer of financial protection specifically for accidental deaths and injuries, which may not be covered by standard life insurance policies. Affordability and Accessibility: AD&D insurance is generally more affordable than traditional life insurance policies because it covers a narrower range of risks (accidental death and dismemberment) and does not typically include coverage for deaths due to natural causes or illnesses. It is also relatively easy to qualify for AD&D coverage, as it usually does not require a medical exam or extensive underwriting. Exclusions and Limitations: Like all insurance policies, AD&D insurance has exclusions and limitations that define the circumstances under which benefits will be paid. Common exclusions may include deaths or injuries resulting from self-inflicted harm, drug or alcohol abuse, participation in certain hazardous activities, or pre-existing medical conditions. Overall, AD&D insurance provides financial protection for individuals and their families in the event of accidental death, dismemberment, or disability, offering peace of mind and assistance during difficult times. However, it's important for policyholders to carefully review the terms and conditions of their AD&D policies to understand the extent of coverage and any limitations that may apply.

WHOLE LIFE

Whole life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the insured person, as long as premiums are paid as agreed.

Here's a detailed explanation of how whole life insurance works: Lifetime Coverage: Unlike term life insurance, which provides coverage for a specific period (such as 10, 20, or 30 years), whole life insurance offers coverage for the entire lifetime of the insured person. As long as the policyholder pays the premiums as scheduled, the policy remains in force, and the death benefit is guaranteed to be paid out to the beneficiaries upon the insured person's death, regardless of when it occurs. Death Benefit: The primary purpose of whole life insurance is to provide a death benefit to the beneficiaries named in the policy upon the death of the insured person. The death benefit is typically paid out as a tax-free lump sum and can be used by the beneficiaries to cover expenses such as funeral costs, outstanding debts, estate taxes, and ongoing living expenses. Cash Value Accumulation: One of the distinguishing features of whole life insurance is the accumulation of cash value over time. A portion of each premium payment is allocated to a cash value account, which grows on a tax-deferred basis. The cash value serves as a savings component within the policy and can be accessed by the policyholder through policy loans or withdrawals, although doing so may reduce the death benefit and potentially incur taxes and fees. Guaranteed Premiums: Whole life insurance policies typically have fixed premiums that remain level for the duration of the policy. This means that the premium amount does not increase as the insured person ages or if their health deteriorates. Guaranteed premiums provide policyholders with predictability and stability in their insurance costs over time. Guaranteed Cash Value Growth: The cash value component of whole life insurance policies grows at a guaranteed minimum interest rate, as specified in the policy contract. This ensures that the cash value accumulates steadily over time, providing a source of financial security and stability for the policyholder. Policy Dividends: Some whole life insurance policies may pay dividends to policyholders, depending on the performance of the insurance company's investment portfolio and mortality experience. Policyholders can choose to receive dividends in cash, use them to reduce premiums, purchase additional coverage, or accumulate them in the cash value account to enhance its growth. Estate Planning and Wealth Transfer: Whole life insurance can be used as a tool for estate planning and wealth transfer, allowing policyholders to pass on assets to their heirs in a tax-efficient manner. The death benefit paid out to beneficiaries is generally not subject to income tax, and proceeds can be used to cover estate taxes or provide a financial legacy to future generations. Overall, whole life insurance offers a combination of lifetime coverage, guaranteed death benefits, cash value accumulation, and potential for policy dividends, making it a versatile financial planning tool for individuals and families seeking long-term financial protection and security. However, it's essential to carefully consider the costs, benefits, and suitability of whole life insurance based on individual financial goals and circumstances.