Friday, August 31, 2012

Life Insurance Basics and Ways to EnhanceYour Group Life Insurance Plan (Fall 2012)


group, life, insurance, employees

There are many ways to enhance your group life insurance plan to better meet end-of-life needs for your employees.  Making these options available for your employees can provide peace of mind for them and their loved ones. Some of the products and services available include the following:

Accidental death and dismemberment (AD&D) – offers insurance protection when a covered accident results in loss of life, speech, hearing, sight, or in paralysis.  This coverage can be made available as part of the company-paid basic coverage, employee-paid coverage, or both.

Will preparation services make will preparation simple for your employees.  Often these services are available for your employees to utilize online, making it easy and convenient for them to complete their will.

Estate planning and resolutions services gives beneficiaries access to legal assistance to discuss matters involved with settling the insured’s will and estate.  Additional estate planning services are often available for a fee through various insurance companies.

These products and services differ depending on the insurance company and plan you choose.  Contact your Leavitt Group insurance consultant to learn more about what options will best fit the needs of your organization.

life insurance, security, financial, death, employees


Life insurance, financial, protection, dependents

The primary purpose of life insurance is to offer financial protection to your dependents in the event of your death.  An untimely death can leave loved ones with the burden of paying numerous expenses.  Life insurance helps alleviate this burden by paying money directly to your beneficiaries.  It can help cover your family’s daily living expenses and help them maintain their standard of living.  It can be used to fund child care and education and to pay off outstanding household debts including credit cards, automobile loans, and mortgages.  

Rates vary depending on the type of coverage you choose and the length of time you wish to be covered.  In addition, rates are typically lower the younger and healthier you are when you purchase the policy. The types of life insurance policies vary, offering individuals the ability to choose a policy that best fits their needs and life circumstances.  There are two main types of life insurance:  term life insurance and permanent life insurance.  The following is an outline of these two types of coverage:

Term Life Insurance
  • Primarily used for temporary coverage.
  • Typically purchased for a specific amount of time, generally one, five, 10, 20, or 30 years.
  • Premiums are usually less expensive than permanent life insurance.
  • Can be renewed at the end of the term; however, you must re-qualify for coverage based upon your current age and health conditions.  The premiums on the renewal policy will most likely be higher due to increase in age of the insured.   
  • Benefits from a term life policy are paid to the beneficiaries only if the insured dies within the specified period of time for which the policy was written.  
  • Does not build cash value.
Permanent Life Insurance
  • Sometimes referred to as “whole life insurance.”
  • Offers financial protection in case of an untimely death but also serves as a financial investment.
  • Premiums contribute to the cash value of your policy and can be used to help pay for college expenses, estate planning, or retirement.*
  • Cash value increases each year and is tax deferred.  
  • Premiums are generally more expensive than term insurance; however, premiums will not increase over time. 
  • Guaranteed death benefit payout:  since the policy is effective for the entire length of your life, your beneficiaries are guaranteed a payment regardless of when you pass away.
  • Proceeds are generally income-tax free to your beneficiaries.
  • No need for renewal -- coverage lasts for your entire life.
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