Permanent insurance, including Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance, can provide protection for loved ones and dependants over your entire lifetime, or in certain instances up to a specific age—at which point the insurer pays the policy owner the cash value. Permanent life insurance policies can build a cash value—money that you can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education.1 Permanent insurance policies are generally more expensive than Term insurance policies because of the lifetime coverage and cash value savings component.
Permanent life insurance policies enjoy favorable tax treatment. Cash value generally grows on an income-tax deferred basis; that means that you pay no taxes on any earnings in the policy so long as the policy remains in force. Withdrawals or loans against the cash value are, in many cases, tax-free.1
Nelson Securities, Inc., through its Insurance Division, offers several Permanent Insurance products designed to meet the unique risk management needs of our clients on an individual basis, as well corporate including Key Person and Executive Bonus Plans for Small Businesses.
Whole Life Insurance
Whole life is the traditional form of cash value life insurance. Also referred to as “ordinary life” or “straight life,” whole life insurance provides coverage for your entire lifetime. The premium depends on your age at the time you buy and stays the same as you grow older. The lowest premiums go to those who buy it when they are young, because they will pay into it the longest. Your cash value grows based on a fixed interest rate set each year in your policy by the insurance company. Some whole life policies let you pay premiums for a shorter time, such as 15 years, or until you reach age 65. Premiums for these policies are higher because you make premium payments during a short time frame.
Universal Life Insurance
Universal life is a type of flexible cash value policy that lets you vary your premium payments. You can also make limited adjustments in the death benefit amount of your policy (with satisfactory evidence of insurability for increases). Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time. If your yearly premiums plus the interest the company credits to your account is greater than the cost of the insurance, your account will grow. However, if your premiums and interest earnings are less than the cost of insurance, your account will decrease. If your account keeps dropping, your coverage will end. To prevent this, you can increase your premium payments or lower the death benefits. Universal life policies can build a cash value—money that you can borrow against and in some instances, withdraw to help meet future goals, such as paying for a child’s college education. 1
Variable Life Insurance*
As with universal life, the death benefit and cash values of variable life insurance vary. With variable life, however, the company invests your cash values into separate investment accounts, such as portfolios of stocks, bonds, and other investments. These separate accounts are like mutual funds. As the policy owner, you choose the separate account to invest the cash value. The cash values and death benefit vary due to increases or decreases in the value of the separate accounts. You take the investment risk as the policyholder in return for possible improved benefits.
1 Cash values can be accessed through loans and/or withdrawals, but these are likely to reduce death benefits.
*Variable insurance products, including variable annuities and variable life insurance, are offered by prospectus only. The prospectus contains information about the product’s features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolios, as well as other information about the underlying funding choices. Read the prospectus and consider this information carefully before you invest. Product availability and features may vary by state. All product guarantees are based on the claims-paying ability of the issuing insurance company.
Licensed in all states except: AL, DC, DE, KY, ND, NM, RI, SD.
CA License #OC45079, MN License #20187353, TX License #008146145
If you are interested in being contacted by Nelson Securities, Inc. regarding Permanent Life Insurance, please contact one of our Registered Representatives at 1-800-345-7593, Set an Appointment or Request Information . Please specify Permanent Life Insurance.