Life Insurance is considered the foundation of each household ’s financial plan, and similar to many insurance products there is a degree of complexity that can be confusing. The OceanPoint Financial Services team, are licensed – a Federal and State requirement – and we can walk you through the intricacies of picking the right Life Insurance policy for you and your family.
OceanPoint is an independent insurance agency which means that we are not tied to one insurance company, we represent many insurance companies. Our mission is to work with you, understand your unique family situation and select the ideal policy for you and your family.
Let’s begin with the most commonly asked question:
What is Life Insurance?
It is a contract with an insurance company where you pay regular premium payments. In return, upon the death of the insured, the insurance company will pay out a lump-sum payment to the beneficiaries of the insurance policy. This payout is referred to as the death benefit.
Death-benefits are generally free of federal income tax (IRC 101 (a)) but ‘may’ be subject to estate taxes. These death benefits can help provide funds to protect your family or business from financial loss if you should die while you have obligations for daily living expenses, home mortgage, education expenses, final expenses and retirement.
What Types of Life Insurance Are Available?
Detailed below are the most common life insurance products:
Term Life Insurance: provides coverage over a specific time range such as ten years, twenty years, etc. During the ‘term’ period the premium payment remains fixed, after the ‘term’ period coverage can be extended but at a higher premium payment rate. Term Life Insurance can:
- replace lost income (the insurance payoff is a lump sum)
- provide a safety net for the policies beneficiaries
- meet a family’s financial goal, e.g., college payments, paying off a mortgage
Universal Life Insurance: provides lifetime coverage however unlike Whole Life, Universal Life Insurance policies have a degree of flexibility where you may be able to lower or increase your premium payment or the policy coverage value during the entirety of your life. Universal Life Insurance can:
- be part of a flexible estate planning strategy
- long-term income replacement extending into your retirement years
Whole Life Insurance: provides lifetime coverage and has higher premium payments than Term Life Insurance. Whole Life Insurance can:
- function as one of your savings tools offering tax-deferral on the cash value
How Are my Premium Payments Determined?
Like all types of insurance, you will fall into a health risk category (rate class). The risk category will assist in determining your premium. Factors which determine your rate class are your health, lifestyle, and your family’s medical history.
As you can see, selecting the appropriate life insurance is a complex task. An OceanPoint Financial Services agent will guide you through this complicated process of picking the best policy, at competitive rates, for you and your beneficiaries.