Life Insurance - First Financial Security

Going Beyond the Death Benefit

When you think of life insurance, you’re probably imagining term life insurance with a simple death benefit. Term life insurance is the most basic solution, often available through your employer, and serves an essential function – paying a lump sum to your beneficiaries in the event of your death. Term life is the most affordable product, paying out only in the event of your death and coming with an expiration date.

Sometimes simple is exactly what you need, offering peace of mind that your family will be able to handle essential expenses after you’re gone. There are significant advantages to life insurance of any kind:

• With a clear beneficiary, funds go directly to the recipient.
• Money doesn’t sit in probate.
• Benefit isn’t subject to estate tax.

Life insurance has come a long way from simple term products. More sophisticated solutions are now available that you can leverage throughout your life, while still keeping the protection of a death benefit.

Solutions for Your Whole Life

Living Benefits are riders included or added to policies that offer payouts in the event of a chronic, critical or terminal illness or disability. These are typically found in universal or whole life policies, covering the policy owner until they reach 120 years instead of a fixed period. These policies also allow the owner to accumulate cash value in the policy over time. Policy owners can withdraw funds from the policy or take loans against the cash value once the policy has matured. Living Benefits include the advantages of the simple death benefit but offer significant opportunity to leverage your policy during your lifespan. ¹

PLAN FOR THE UNEXPECTED

Accelerated Benefit Riders (ABRs) offer the policy owner a benefit if they suffer from a chronic or critical illness, critical injury or disability. These benefits can be used to pay for anything from expensive medical treatments to at-home care, a new home or everyday living expenses. In the case of life-altering events, living benefits can make the transition to living with chronic illness, injury or disability much easier.¹

BOOST YOUR RETIREMENT

The cash value in your insurance policy can be used to fund your retirement with appropriate planning. Policy withdrawals can supplement your social security income and other income streams. Let’s discuss the tax advantages of keeping retirement funds within an insurance policy. ²

FUND MAJOR EXPENSES

Your policy can also be used to fund major expenses throughout your life. Policy loans and withdrawals can be used to pay for anything, without the need to open a new line of credit with a bank or a credit card company. Fund your child’s education, purchase a new house or pay for medical expenses while your policy remains in force. ²

Living benefits may be provided by riders, which are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy.
Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Surrender charges may reduce the policy’s cash value in early years. Withdrawals up to the basis paid into the contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract lapse or surrender. Policy loans will be taxed as ordinary income if the policy is allowed to lapse. It is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage.