Life Insurance

A Quick Overview of Term and Whole Life Insurance
Life insurance can protect your business and provide additional incentives for skilled employees to join your business. Life insurance insures the life of the policy holder and pays a benefit to the beneficiary. This beneficiary can be your business in the case of a key employee, partner, or co-owner.
There are two types of life insurance policies:
Term Insurance
Term insurance is the easiest form of life insurance to understand. It pays only if death occurs during the “term” of the policy, which can be up to thirty years. After the “term”, no matter the premiums paid over the term of the policy, the policy is terminated.
There are two basic types of term life insurance policies:
Level term means that the death benefit stays the same throughout the duration of the policy.
Decreasing term means that the death benefit drops over the course of the policy’s term.
Whole Life Insurance
Whole Life Insurance is life insurance that continues as long as premiums are paid. The way this works is the insurer looks at your current age and health and reviews longevity charts that predict your length of life. The insurer creates a monthly level premium that is much higher than necessary when you are young, but much lower than necessary when you are old. This levels out the premium over the course of many years.
There are three varieties of whole life that offer investment options or variable premiums. These options: variable life, universal life, and variable-universal life; may be good options for your employees to consider or in your personal financial plan, but for purposes of business insurance, these options are not necessary. Also, insurers offer convertible term insurance that can be converted into whole life insurance. But, these types of policies are also beyond the scope of consideration as business insurance.