2111 Lane Street #24560

San Francisco, CA 94124

How can we help you?

Not to worry, feel free to reach out to us. Our licensed experts are happy to chat with you anytime.

Got more questions?

Contact us for your financial security needs or inquiries. We are a comprehensive life insurance platform offering all types of life insurance plans. 

logo.svg

white-logo.svg

Amplify is the first comprehensive life insurance platform that offers all types of life insurance plans including term, permanent, and cash value life insurance, all at a price that works for you. Leave the commission-driven insurance agents behind, now you can decide what’s best for your family.

Thank you for contacting Amplify Life Insurance. We are a comprehensive life insurance platform offering all types of life insurance plans.

Big and small questions of life insurance? We got you covered!

Blog

large_minion_d35c6733ce.jpg

medium_minion_d35c6733ce.jpg

small_minion_d35c6733ce.jpg

thumbnail_minion_d35c6733ce.jpg

minion_d35c6733ce.jpg

As millennial professionals who are juggling demanding jobs, high cost of living, student debt, etc., we are always on the hunt for efficient ways to save and accrue wealth. A common yet little known wealth building tool is - drum roll - life insurance!

Life insurance, sounds like a boring topic, doesn’t it? As a matter of fact, it doesn’t have to be. Did you know that life insurance has been used as a wealth building tool for the affluent for decades? Actually, life insurance has numerous surprising benefits that make it more than meets the eye.

## 1. It can be an investment account or high interest savings account that you can use later in life. 

Yes, that’s right. Life insurance doesn’t have to be “death” insurance, you can actually invest inside of your policy and reap the benefits when you’re alive. Best yet, the returns on your investment inside of your policy can be accessed income and capital gains tax free. 

**So how does it work?** You pay a basic cost of insurance to cover your life insurance coverage amount (i.e. your “death” benefit). Then any money you pay on top of your basic cost of insurance can be invested in high interest, fixed interest, or public equities that you can retrieve to use for whatever you like after 15 years (typically) with no penalties. In other words, you can overfund your policy and spend your life insurance investment while you are still alive, tax-free. 

**What can I invest in?** There are several fund options, but normally you can choose from fixed interest of 3-5% annual return, high interest of 7-8% average annual return with a floor of 0-1% and a cap of 15% (you won’t lose any principle but you can grow up to 15% per year), or mutual funds that are invested in public equities domestically or internationally. Remember, all your proceeds can be accessed tax-free so that is comparable to 2-3% higher return compared to outside investments that do not have the same tax benefits.

**How can I take the money out?** In most cases, you are only able to access a certain percentage of your investment amount (that increases every year) until year 15 from starting the account, after which you are able to access 100% of the investment. You still can’t access the death benefit unless you are in a health emergency or it’s passed on after death. More about the health benefits later in this article.

![post_image_047753d63e.jpg](https://amplify-strapi-production.s3.us-west-1.amazonaws.com/post_image_047753d63e_5b51be5705.jpg)

## 2. You can lower your income tax bracket in the future.

Since your life insurance investment is after-tax money that grows and can be accessed tax-free on retrieval, similar to a Roth IRA or Roth 401K, the money you withdraw won’t be counted into your income taxes. That way your income taxes won’t skyrocket when you’re taking your money out. This can be especially beneficial if all your other investments (such as traditional 401K, traditional IRA, mutual funds, real estate income) are counted towards your income. In retirement, you can use your life insurance withdrawals to lower your overall tax rate.

## 3. You can use your “death” benefit to cover gaps in health insurance.

So we’ve been talking about the investment portion of life insurance all this time, but you can actually use your “death benefit”, of which your cost of insurance is going to, to cover healthcare emergencies what can be exorbitantly expensive.

**What are examples of gaps in healthcare?** hese are situations where you get injured or suffer an illness that will cause you to not be able to work or do daily activities and you need a replacement of income to cover living expenses and out of pocket medical bills.

**Long term care (LTC)** — over 70% of individuals over age 65 will need long term care, and the average cost of in-home long term care is $64,000 per year in California, without inflation. Your life insurance can provide monthly payments out of your “death” benefit if you require LTC.

**Critical illness/injury (CI)** — a healthy 24 year old male has a 25% chance of getting diagnosed with a critical illness before the age of 65. Critical illness includes cancer, stroke, brain injury, paralysis, and much more. *Your life insurance can pay you a lump sum (e.g. $50,000+) at once if you are diagnosed with a critical illness to help pay for costs outside of health insurance coverage.*

So what’s the downside to all of this? There are over 700+ life insurance carriers in the U.S. so finding the right policy for your family can be no easy feat. There are multiple factors to consider including age, health, goals, costs and fees, and more. Some life insurance policies can be significantly more expensive than others with the same coverage and benefits and others can be laden with hidden fees. **It’s extremely important to find an unbiased and independent advisor that can help you through the process and find the best plan for your family.** And once you do, life insurance can not only be a vital protection tool for your family when you need it the most, but also a wealth building tool that you can tap into for your own future.
 
Amplify is a modern, tech-enabled life and health insurance platform designed for young families to find the right coverage amount and type for their individual needs. We have a variety of temporary and permanent coverage and we help you get approved in days, not months, without requiring a tiresome medical exam or phone interview. In addition, we are fee-only advisors that are incentivized to help you, and not the insurance company. Check out our website for an educational walkthrough to find the right coverage and plan for you or schedule a free 20-min consultation with one of our licensed advisors to learn more.

Wealth Building Tool that Few Know About?! 

large_xps_Tx_Xuh_h_A_Fd8_unsplash_caa35adefa.jpg

medium_xps_Tx_Xuh_h_A_Fd8_unsplash_caa35adefa.jpg

small_xps_Tx_Xuh_h_A_Fd8_unsplash_caa35adefa.jpg

thumbnail_xps_Tx_Xuh_h_A_Fd8_unsplash_caa35adefa.jpg

xps_Tx_Xuh_h_A_Fd8_unsplash_caa35adefa.jpg

## Basics 

#### Do I need life insurance?
You need life insurance if someone you love is (or will be) dependent on you financially. Life insurance aims to provide a solution for those who seek:
- Income replacement
- Mortgage protection
- Estate planning
- Leaving a legacy
- Burial expenses
- Safe investment diversification

#### Do I need life insurance if I have it through my employer?
Most often yes, as life insurance through employment are only valid when you are working, which means that if you lose or quit your job you will be uninsured. Also, it is important to note that if you contract an illness (such as cancer or another terminal disease) that will result in you being unemployed before passing, you may be uninsured at a time that you need protection (since you won’t be employed anymore). Lastly, life insurance through your employer (2-3x your yearly income) most often isn’t sufficient for most individual life insurance needs (recommended 10x your yearly income). 
We often recommend those who have life insurance needs to supplement their employer’s life insurance with individual life insurance outside of work.

#### How much life insurance do I need?
In order to determine how much life insurance coverage you need, you need to review the following: 
- Current liabilities - mortgage and outstanding debt
- Ongoing costs - rent, medical costs, etc.
- Future liabilities - retiring family that may rely on you, children’s college education costs, funeral costs, etc.
- Affordability - how much extra income can be diverted to life insurance per month after expenditures
- It is important to review you and your partner’s assets (i.e. investments, etc.) to determine if term or permanent life insurance and how much coverage is most suitable for you.

#### How much does life insurance cost?
The cost of life insurance depends on your gender, age, tobacco use, family medical history, past medical history, and current health (amongst other factors). The cost of insurance increases, naturally, as the amount of coverage purchased increases and also depends on the carrier and structure of that particular product.

#### Can I get a better price if I buy directly from the insurer?
No, life insurance prices are fixed by law and are subject to the insurance carrier and state’s department of insurance approval. 
Most often, a client will choose to work with a broker that works with many life insurance carriers and can shop around based on suitability for the client.

## Product Types

#### What is a term policy?
Term insurance covers you with life insurance for a specific number of years. They are used for the purpose of peace of mind that if you die within that period of time your beneficiaries will receive the death benefit. 
Term is suitable for those who only have a temporary need for life insurance or have a limited budget, since they are the cheapest form of life insurance. 
After your term ends, you will no longer be covered and if you would like to purchase more insurance you may have to pay a higher premium (since your age and health will be more advanced).

#### What is the “return of premium” feature?
Some policies offer a return of premium option to refund all or some of the premiums paid to the term policy if the insured does not pass away during the period of the term. These premiums are higher than normal term policy premiums.

#### Should I buy Return of Premium life insurance?
Return of Premium life insurance will often be 2x or 3x as expensive as purchasing normal term insurance. If you prefer to put that money towards other investments then the Return of Premium rider will not be suitable for you. Most often, you will get a greater return in the market with the funds rather than selecting a Return of Premium rider.

#### What is a permanent policy?
Permanent policies are designed for those looking for life-long protection, or an option to accumulate tax-free growth with your cash value that can be accessed through withdrawals and loans. A portion of the premium of a permanent policy is used to build up a cash value. The cash value allows you to build up a supplemental retirement income, be leveraged against for a loan, or the interest on your cash value can be used to pay your policy premium after your policy is fully paid up.

#### What is universal life insurance?
Universal life insurance, also called UL, is a permanent life insurance that provides a guaranteed death benefit with a flexible premium and adjustable coverage amount throughout your life. Often, these allow for a greater amount of interest to be earned through the cash value that can be accessed tax-free through withdrawals and loans.
Universal life insurance currently have the lowest premiums offered for the mass market permanent life insurance and can be structured as a high interest savings account.

#### Which one is better: Term life insurance or permanent?
The answer to this question depends on various factors including need and personal preference. 
**Term**
An individual may choose to purchase term if they only need life insurance for a certain period of time (due to a higher amount of liabilities during that time and having dependents that rely on their income) and are confident in their assets being enough to cover for long term care, critical illness, and any remaining liabilities after the end of the term insurance. 
This is a suitable option if the individual prefers to invest their income in other vehicles to build their assets.
If the individual has a lot of liabilities but little discretionary income, term will be a better option than a more expensive permanent life policy.
**Permanent**
An individual may choose to purchase permanent life insurance if they prefer to have life insurance coverage for their entire life.
Often, individuals who choose to purchase permanent life insurance add additional riders, such as long term care and critical illness, for the ability to use their death benefit for a living benefit later in life.
Individuals have greater than $11.4 million of taxable assets worldwide (or >$22.8 million as a married couple) often use life insurance as an important part of their estate planning.
Permanent life insurance may be suitable for individuals who are very risk-averse when it comes to investing and is a better alternative than saving large amounts of cash (that they do not need to access for a long time) in a savings or checking account.

#### What are life insurance riders?
Life insurance riders are add-on benefits that can be chosen at will (and if available) to suit the customer’s needs. Riders must be chosen when the policy is purchased and cannot be added after the policy is already in-force. Examples of riders include:
- Term conversation (converts term insurance to whole life without having to complete another medical exam at the end of the term)
- Long term care rider
- Accelerated death benefit/Terminal illness rider
- Return of premium (ROP)
- Policy Details

#### How does the insurance company determine my premium?
Factors such as age, gender, height, weight, health status (including whether or not you use tobacco), and if you participate in high-risk activities or occupations can all impact your insurance premium.

#### What is the underwriting process?
Underwriting is a process of which carriers determine whether you are able to qualify for life insurance, at what health rating, and how much your monthly premiums will be based on your risk (age, health, activities, etc.).
Often, the underwriting process can involve a medical exam (scheduled by the life insurance carrier), requesting medical records, prescription database report, and a Motor Vehicle report to determine whether or not to approve, deny, or heighten the rate (and cost) of a life insurance policy for that individual.

## Application Process

#### Do I need to take an exam?
A traditional life insurance policy requires a medical exam which includes a paramedical exam (questions related to health, health history, family health history, prescriptions, and activities).
No medical exam policies offer coverages up to one million dollars of life insurance coverage but they are often more expensive than traditionally written policies.

#### What do insurance companies test for?
Your insurance broker will schedule a medical exam through the life insurance carrier that you’ve submitted your application to. A licensed nurse will ask you health-related questions and record your pulse, blood pressure levels, height and weight, and also take a blood sample. Sometimes, depending on your age and the company, a urine sample and electrocardiography (EKG) will also be required.

#### How long does it take to get my policy?
The underwriting process for a traditional policy can take anywhere between two to eight weeks.
A no medical exam policy can be issued within a few minutes, though these are limited to certain ages, health, and amount of coverage (under a million). No medical exam policies can also be more expensive than a traditionally underwritten policy.

#### Why did I get conflicting life insurance rates?
Your real life insurance rates will depend on your health rating after underwriting as well as the product and carrier that you choose. Each carrier will provide the same health rating and cost of insurance for the client to every broker that they work with. 
If you are getting different ratings for the same carrier it could be because the broker has not actually provided the rating for you after underwriting and is going off of a standard (estimated) health rating quote.

## Payments & Claims

#### What does it mean when a policy is “fully paid up?”
“Fully paid up” means that you have paid enough premiums for the interest on the premiums to cover the cost of the policy for the rest of your life, and therefore you won’t have to pay additional premiums and you will still be covered for the rest of your life.

#### What happens if I miss a premium payment?
If you have a term policy, they generally allow a 31 day grace period where you can make up the missed premium before they cancel your policy.
If you have a permanent policy, the cost of insurance will be taken out of your cash value, after which they will terminate your policy if premiums are not paid.

#### How does the insurer know I died?
Your beneficiary will need to file a claim with the carrier. They will request a death certificate along with the policy number, social security number, and address. Once verified, the insurance company will need to pay out within 30 days or pay interest on the death benefit amount per day after 30 days.

A Comprehensive Guide for Life Insurance

large_hailey_moeller_I_Xq_NQ_2o_N104_unsplash_ad13504237.jpg

medium_hailey_moeller_I_Xq_NQ_2o_N104_unsplash_ad13504237.jpg

small_hailey_moeller_I_Xq_NQ_2o_N104_unsplash_ad13504237.jpg

thumbnail_hailey_moeller_I_Xq_NQ_2o_N104_unsplash_ad13504237.jpg

hailey_moeller_I_Xq_NQ_2o_N104_unsplash_ad13504237.jpg

Many of you might have heard the terms “whole life” or “universal life” and might be wondering what they are. These are actually different types of permanent life insurance. Although permanent life insurance has been around since the 1940’s, much of how it works, the different types of policies, and who the policies are most suitable for is still a black box for many. Today we would like to clear the air about permanent life insurance so that you may be the judge on whether it’s right for you and your family.

## What is permanent life insurance?

Permanent life insurance is an overall term for life insurance policies that do not expire, compared to term policies that expire within a given number of years (i.e. 5, 10, 15, 20, 30 years).

Often, permanent life insurance allows you to build cash value that grows tax-deferred and can be accessed tax-free through loans and withdrawals. Depending on how much cash value is built up in the policy, loan amounts may not have to be paid back (since you are leveraging against your own death benefit). Carriers typically will charge either a very low interest or no interest on the loan.

Permanent life insurance also offers a plethora of riders including long term care, critical illness, term riders, and more. Most of the time, these riders will allow for a portion of or the entire coverage amount to have a dual purpose: a death benefit and for the purpose of the rider. For example, a $500,000 life insurance policy with a long term care rider will allow for the $500,000 to be used for long term care if the individual needs it in his/her lifetime and if not, the $500,000 will be passed down as a death benefit to his/her beneficiary.

## How does it work?

Permanent life insurance allows you to put one amount of money to be used for several different purposes: life insurance coverage, high interest savings or investment account for supplemental retirement income, and additional rider coverage.

It’s no surprise that permanent life insurance can be such a confusing topic; each permanent life insurance policy should be designed for the individual’s needs and each policy is highly customizable. In addition, almost every carrier has a permanent life insurance product with a specific focus, suitability, and cost structure and there are 852 life insurance companies in the U.S. (That’s a lot of different products!)

The process of purchasing a life insurance policy usually starts with an analysis of the individual’s goals and needs including:
- How much overall coverage is needed (and how much is already in place)
- Affordability
- Interest in investment and risk tolerance
- Long term goals and other invested assets
- Desired length of payment 
Then, once all that is determined, the insurance advisor will select a carrier and product that would be most suitable for the age, desired needs, and health risk of that individual to apply for. After an application is submitted and a medical exam completed, the insurance carrier will (after underwriting) determine a health rating and a premium amount for the policy. Then the policy will be reviewed and delivered to the client.
For example, if a 35 year old male needs: 
- $1,000,000 of life insurance coverage (liabilities + 5 times his/her annual income)
- Supplemental retirement account 
- Low risk tolerance
- Long term care protection
Customized solution: 
- $250,000 index universal life insurance policy 
- Long term care rider
- Overfunded for supplemental retirement income. The cash value grows interest based on an index that has a designated cap of 15% and a floor of 0.75% so the individual will not lose money when the market is down. 
- $750,000 20 year term life insurance policy (which is what he had left on his mortgage)
- Premiums are paid for 20 years for the term policy and until age 65 for the permanent life policy

## Our Suggestions

Permanent life insurance can be a great product to add to your family’s plan when used in the right way. Although it is pricier than term life, permanent life insurance can provide much more value for you and your family. Some of the most popular benefits of permanent life insurance includes: lifelong protection, living benefit riders, tax-free supplemental retirement income, and protection against creditors for your assets. 

When learning about the best life insurance for you, make sure to consider permanent life insurance or a combination of term and permanent life insurance, and clearly understand the guidelines on how to utilize this vehicle to maximize its long term benefits.

Since these policies are highly customizable, it’s best to work with an experienced advisor and go through a consultation before choosing the right policy for you.

Permanent life insurance - is it for me?

large_javier_allegue_barros_C7_B_Ex_Xp_OIE_unsplash_1b2dfe1cee.jpg

medium_javier_allegue_barros_C7_B_Ex_Xp_OIE_unsplash_1b2dfe1cee.jpg

small_javier_allegue_barros_C7_B_Ex_Xp_OIE_unsplash_1b2dfe1cee.jpg

thumbnail_javier_allegue_barros_C7_B_Ex_Xp_OIE_unsplash_1b2dfe1cee.jpg

javier_allegue_barros_C7_B_Ex_Xp_OIE_unsplash_1b2dfe1cee.jpg

In this article, we are going to shed some light on the different types of permanent life insurance products and what you should look out for.

## What are the different types of permanent life insurance and who is it suitable for?

#### Whole life - created in 1940’s
- Fixed premium and death benefit - one amount of premium for a guaranteed death benefit
- Growth - On average 3.5% annually
Whole life policies are most suitable for conservative individuals who prefer a fixed payment and guarantees in growth and death benefit. These policies tend to be the most expensive of permanent life insurance policies.

#### Universal life - created in 1980’s
- Flexible premium and death benefit - you can adjust your monthly premium (between a minimum and maximum) and adjust your death benefit coverage throughout your life
- Growth - On average 3.5% annually
Universal life policies are the oldest version of “flexible premium, adjustable life products”. Although they allow for flexibility for payments and customization, they generally have very low growth rates for cash value.

#### Variable universal life - created in the 1980s
- Investment subaccounts - Cash value is invested in subaccounts that are managed by the insurance company. The investment value can fluctuate with market performance and 100% of the investment risk is taken on by the policy owner
- Growth - Rate depends on the market
Variable universal life policies allow for the individual to invest, grow their money tax-free, and access the cash value tax-free all within their life insurance policy. However, the downside is that if the market doesn’t perform and their premiums cannot cover the cost of insurance, their death benefit may decrease.

#### Index universal life - created in late 1990s
- Indexed strategy - Cash value grows based on an index (such as the SP500) but within a cap and floor, meaning the growth will not exceed a maximum growth or drop below a minimum growth level. For example, a market growth of 30% may be capped at 15% but a market drop of -10% may equate to a floor of 0% (no loss)
- Growth - Rate depends on the market, but often equates to 6-8% on average
Index universal life policies are the most recent form of permanent life insurance. After the 2008 mortgage crisis when the markets came crashing down, and a lot of policy owners lost their insurance policies due to the cash value not being able to cover their cost of insurance. A new product started gaining popularity in the market that allows policy holders to lower downside risk while still capturing upside potential when the market is performing well.

## What should I look out for when choosing what kind of perm life I should get?
Cost - Not all permanent life insurance is created equal, especially when it comes to cost. Each insurance carrier has different cost structures and rates at which they cover various ages and health statuses. For example, some carriers front load their costs while others spread out the cost; therefore, some policies are more suitable for younger applicants and others older. It is best to shop around to find the best value for your dollar. 

**Health** - Occasionally you may obtain a great illustration/projection for a policy but realize the premiums are very different than the initial projection due to health. If you have previous health issues, it is best to get a pre-approval from multiple insurance companies by sending in your medical records and results without submitting a formal application, since once you submit a formal application and obtain a rating (or even worse, a decline), it may likely lower your chances of getting a better rating with other insurance carriers when they look at your previous application history.

**Riders** - When it comes to permanent life insurance, there are a plethora of riders that can significantly increase the use cases for your permanent life insurance policy. Some of the most popular ones include adding a term rider for temporarily higher liability, long term care, critical illness, and terminal illness. These riders often increase the monthly premium by tens of dollars but can allow for your death benefit to act as a living benefit and fill the gap between your health insurance and severe or long term illnesses.

**Return** - Life insurance cash value returns can vary widely depending on the type and structure. The higher the return the more flexibility you have in terms of how long you have to pay into the policy for in order to obtain lifetime coverage and how much tax-free cash value you will have access to later in life. Like any investment, the best strategy is to front-load the policy to maximize long term returns. Unlike investment securities, there is usually a cap of how much you are able to invest in any given year (before creating a Modified Endowment Contract and being subject to income taxes for your investments). The benefit of investing in a life insurance policy is that your cash value will grow tax-free and can be accessed tax-free after a certain number of years.

**Fees** - If you are using the policy for investment purposes, it is important to take note of the fees involved. Some examples include premium expense charge (a percentage of how much you put into the policy, such as 5%), your cost of insurance, and an investment management fee (such as 0.5-0.9% of AUM). 

**Loan interest rates** - Very important to note if you are using permanent life insurance as a cash accumulation vehicle, high loan interest rates that are charged on your death benefit based on how much cash value you retrieve from your policy can significantly eat up your death benefit. Many permanent life insurance policies can offer very low or 0% net loan interest rates on the cash value that you take out of your policy.

**Segment value** - When a life insurance policy shows extremely high or unlimited caps (and a 0% floor), it is likely that they will put a segment value limitation to the growth. This means that they will only credit you interest based on the difference (or delta) between one point of the market and another point after a given period of time and credit you that interest. This significantly lowers the frequency of interest being credited to your account and therefore lowers your compounding interest overall. For example, a 5-year point to point strategy means that you will only be credited once during the 5 years and if you started in January 2015, you will receive the difference in the index between January 2015 and January 2020 and receive the difference as interest.

## How safe/guaranteed are permanent life insurance policies?

Established life insurance companies are very safe places to put your money, even more so than the bank nonetheless other investment vehicles. Often, they’ve been around for hundreds of years and have a “guaranty association” in place whereas other life insurance companies will reinsure their risk. 

That being said, it is important to understand what you can and cannot do when purchasing a permanent life policy. We would recommend reading the details of your policy, not just listening to your agent, including understanding what the minimum mandatory payment is per month/year and never going below that. The permanent life policy is designed for the minimum payment to grow enough so that when your cost of insurance jumps up as you grow older, your premiums will not skyrocket. That also means that you are limited in how much you can take out in cash value and if you take out too much cash value then you will need to pay additional premiums to cover the cost of insurance later on in life. In addition, if the market does not perform well for an extended period of time, you also run the risk of having to pay additional premiums later on in life. 

Overall, permanent life insurance is a very safe place to put your money as long as you are following the guidelines of how you should pay, how long you should pay for, and how you should be taking out your cash value. Illustrations provided by insurance companies often use the average returns of the last 20 years and if you want to be extra conservative, you can ask for them to be run assuming 50% less returns compared to the last 20 years. In addition, we would recommend that if you are paying minimum or target premiums per month, you should wait at least 20 years before removing cash value and you should only remove around 5-10% of your cash value in any given year.

Solving the paradox of choice of life insurance

large_nordwood_themes_E9t_FH_39i_RPE_unsplash_7b7bca0829.jpg

medium_nordwood_themes_E9t_FH_39i_RPE_unsplash_7b7bca0829.jpg

small_nordwood_themes_E9t_FH_39i_RPE_unsplash_7b7bca0829.jpg

thumbnail_nordwood_themes_E9t_FH_39i_RPE_unsplash_7b7bca0829.jpg

nordwood_themes_E9t_FH_39i_RPE_unsplash_7b7bca0829.jpg

We started Amplify to break down education and access barriers to life insurance and help consumers make one of the important financial decisions in their lives - pick the right products and understand what you are putting your hard earned money into. There are two main types of life insurance -

#### Term
Created in 1759, it is the oldest and the only form of life insurance before the emergence of permanent life insurance in 1940. Term insurance is a “pure insurance policy” that provides coverage for a set period of time. If you pass prematurely within the policy period, your beneficiaries receive the payout; otherwise, the policy expires and has no other value. Term life insurance in general is simpler and cheaper than permanent life insurance.

#### Permanent
As the name indicates, permanent life insurance provides lifelong coverage and includes a long term savings vehicle. Since the policy does not expire until end of life, there is a specified death benefit for your beneficiaries. Permanent life insurance has a lot more features - accumulating tax free cash value, borrowing against the policy, etc. - but it is generally more expensive than term insurance. Given the complexity of permanent life insurance, it is very important for you to understand the details before purchasing a permanent policy.
There are three main types of permanent life insurance -
- Whole Life (created in 1940)
- Variable Universal Life (created in 1986)
- Index Universal Life (created in 1997)

## Comparison

The following table summarizes the differences between term and the main types of permanent life insurance:


~~![Screen_Shot_2021_02_13_at_5_46_26_PM_9beba07769.png](https://amplify-strapi-production.s3.us-west-1.amazonaws.com/Screen_Shot_2021_02_13_at_5_46_26_PM_9beba07769_4906f6adb1.png)~~

## Suitability

#### Term
It is suitable for individuals who -
Only need insurance to replace income for a certain period of time, such as raising kids and paying off mortgage
Want the most affordable insurance

#### Permanent
There are several reasons why individuals want the additional offerings provided by permanent life -
- Diversifying their portfolio with a tax advantaged high interest savings vehicle
- Leaving beneficiaries funds that are income tax-free
The different types of permanent life products are designed for individuals with varying degree of risk tolerance.
Whole life is designed for the conservative who -
- Prefers a guaranteed return
- Prefers guarantee on permanent life insurance coverage
Index Universal Life is designed for the moderate who -
- Prefers safety but still desires high return
- Is heavily invested in tax-deferred assets (traditional 401K and IRA, etc.)
Variable Universal Life is designed for individuals with higher risk tolerance who -
- Prefers high returns and is comfortable with market risk
- Is heavily invested in tax-deferred assets (traditional 401K and IRA, etc.)


Blog

Products

Learn

About

Contact

Products

Learn

About

Contact