Experienced life insurance agents at Dan Woron Insurance Agency can assist you by designing a policy that best fits your personal or business needs. We will help you protect the most important people in your life with the right life insurance and financial products. We offer a broad range of optional coverage in Florida. Call us at (772) 878-7276 or start a Free Rate Quote.
Life Insurance Products:
- Whole Life
- Universal Life
- Variable Life
- Term Life
Life Insurance Information
There are two basic types of term life insurance policies—level term and decreasing term.
- Level term means that the death benefit stays the same throughout the duration of the policy.
- Decreasing term means that the death benefit drops, usually in one year increments, over the course of the policy’s term.
In 2003, virtually all (97 percent) term life insurance policies bought were level term.
Whole life or permanent insurance pays a death benefit when you die—even if you live to be 100! There are three major types of whole life or permanent life insurance—traditional whole life, universal life, and variable universal life—and there are variations within each type.
In the case of traditional whole life, both the death benefit and the premium are designed to stay the same (level) throughout the life of the policy. The cost per $1,000 of benefit increases as the insured person ages, and it obviously gets very high when the insured lives to 80 and beyond. The insurance company could charge a premium that increases each year; however, that would make it difficult for most people to afford life insurance at an advanced age. Insurance companies, therefore, keep the premium level by charging more in the first few years higher (i.e. rates go beyond what companies need to cover claims), investing that money, and then using it to supplement the level premium to help pay the cost of life insurance for older people.
By law, when these “overpayments” reach a certain amount, they must be available to the policyholder as a cash value if he or she decides not to continue with the original plan. The cash value is an alternative—not an additional—benefit under the policy.
In the 1970s and 1980s, life insurance companies introduced two variations on the traditional whole life product: universal life insurance and variable universal life insurance.
What are the different types of permanent policies?
Whole or ordinary life
This is the most common type of permanent insurance policy. It offers a death benefit along with a savings account. If you pick this type of life insurance policy, you are agreeing to pay a certain amount in premiums on a regular basis for a specific death benefit. The savings element would grow based on dividends the company pays to you.
Universal or adjustable life
This type of policy offers you more flexibility than whole life insurance. You may be able to increase the death benefit if you pass a medical examination. The savings vehicle (called a cash value account) generally earns a money market rate of interest. After money has accumulated in your account, you will also have the option of altering your premium payments, provided there is enough money in your account to cover the costs. This can be a helpful feature if your economic situation changes suddenly. However, policyholders must keep in mind that if they stop or reduce premiums and the saving accumulation is used up, the policy might lapse and the life insurance coverage will end. Consulting an insurance agent before stopping premium payments for extended periods of time is advisable as you might not have enough cash value to pay the monthly charges to prevent a policy lapse.
This policy combines death protection with a savings account that you can invest in stocks, bonds and money market mutual funds. The value of your policy may grow more quickly, but you also have more risk. If your investments do not perform well, your cash value and death benefit may decrease. Some policies, however, guarantee that your death benefit will not fall below a minimum level.
If you purchase this type of policy, you get the features of variable and universal life policies. You have the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust your premiums and death benefit that is characteristic of universal life insurance.