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​How To Purchase Life Insurance

 

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Types of life insurance

 
Life Insurance,Term Insurance,定期保险,美国人寿保险

Term

定期寿险

Whole Life, Life Insurance。 终身保险,储蓄分红保险,美国人寿保险

Whole Life

​终身寿险

VUL, Variable Universal Life, Life Insurance. 投资型人寿保险,美国人寿保险

VUL

​投资型寿险

Guranteed Universal Life, GUL, Life Insurance. 保证型万能寿险,美国人寿保险

GUL
保证型万能寿险

IUL, Index Universal Life, Life Insurance。指数型万能寿险,美国人寿保险

IUL

​指数型万能寿险

Group Life Insurance. 团体人寿保险, 美国人寿保险

Group Life

​团体人寿保险

TERM 定期型寿险 

 

  • Term term life insurance is characterized by a period of time and a fixed premium. After expiration, the insurance will become invalid. The common ones are 10-year, 20-year, and 30-year periods. A few companies also provide 40-year guarantees. The longer the term, the more expensive the premium. In addition, the term insurance also provides a convertible option, that is, it can be converted into a permanent life insurance without a physical examination within the guarantee period. For example, an ordinary 20-year term insurance, if you die within 20 years, there will be a claim, and when it expires in 20 years, the insurance will lapse. If a conversion clause is added, it can be converted into permanent insurance such as Whole Life, GUL, IUL, VUL at any time within 20 years.

  • Pros:The premium is cheap, and you can buy the largest amount of insurance with the least premium.

  • Cons:No Cash Value, premium might increase significantly after expiration.

Age: 18
1M Coverage

Age: 35
1M Coverage

Age 50
1M Coverage

Whole Life 终身型寿险 

 

  • Whole life insurance is a type of permanent life insurance with fixed premium payment, guarantees interest, and guaranteed death benefit.  Traditional whole life insurance is designed to pays for lifetime. A lot of time, this is the part policyholders had misunderstanding. The expected shortened payment years are based on insurance company dividends, while dividends are not guaranteed. If the insurance agent fails to make reasonable expectations when designing the policy, the policyowners might be surprised to receive the premium bill after stop payment premium for many years. The new type of life insurance generally provides 10, 15 , 20 year guaranteed pay or paid off at 65 option. Due to the shortened number of years, the annual premium is much higher than the traditional life insurance, but the total premium is lower. Although dividends are not guaranteed, in the past history, top life insurance carriers have paid dividends every year to policy holders (pictured).

  • Pros:Lifetime Protection, Fixed Premium, Guaranteed Cash Value and death Benefit, dividend,tax deferred growth.

  • Cons:Premium payment not flexible,dividend not guaranteed,return might be not high。

GUL, Guaranted Universal Life. 保证型万能寿险,美国人寿保险

Guaranteed Universal Life 保证型万能寿险 

 

  • GUL is a type of Universal Life, which is characterized by flexibility and cost transparency, the amount of coverage can be customized, the premium can be paid more and less, and the number of years of coverage can also be customized. The interest is divided into a pure coverage part and a current interest rate part. After the number of years of payment is set, such as 20 years, the death benefit is guaranteed for a lifetime after 20 years of payment. Although universal life insurance has cash value, GUL is not designed to take money from the policy. There are also insurance companies that return the principal if the policy is cancelled within the first 10 or 20 years. The premium of GUL is cheaper than Whole Life, and it is a type of life insurance commonly used in estate planning.

  • Pros:Lifetime Protection, guaranteed premium payment, no worries about return, premium is cheaper than WL.

  • Cons:distribution is not desired, any withdrawal will impact the coverage. Rated class premium might be too high.

GUL, Guaranted Universal Life. 保证型万能寿险,美国人寿保险
GUL, Guaranted Universal Life. 保证型万能寿险,美国人寿保险

Index Universal Life 指数型万能寿险 

 

  • IUL is also a type of universal insurance. The first IUL came out in 1997. After more than 20 years of development, it has become the 2nd largest market share product except for whole life insurance. IUL is characterized by flexible and indirect participation in investment. The money in the cash value account can earn interest based on the stock market index selected by the insurance company (such as the S&P 500 or the Nasdaq Composite Index). The index fund does not have a fixed interest rate, but it usually comes with a guaranteed minimum interest rate and a capped interest rate, such as a 0% guarantee and a 10% cap. Generally speaking, for the same amount of insurance, the annual premium will be more likely cheaper than Whole Life. However, the IUL needs to be designed properly based on the insured’s situation, and the insured also needs to understand the corresponding risks and Expenses, so as to maximize the use of IUL’s living benefit features..

  • Pros:flexible premium, indirect participate in stock market with higher return, cost is transparent.

  • Cons:Low guaranteed interest rate than whole life, cap can be lower, high risk of lapse for poorly designed policy.

VUL, Variable Universal Life. 投资型万能寿险,美国人寿保险

Variable Universal Life 投资型万能寿险 

 

  • VUL is also a type of permanent life insurance policy, which allows policyowners to investment in the market to generate greater returns. Like standard universal life insurance, premiums are also very flexible with maximum funding and minimum funding limit. VUL Insurance's investment sub-account generally invests in mutual funds. With market fluctuations, it may generate considerable returns, but may also lead to huge losses. Although VUL insurance offers greater flexibility and growth potential not seen in traditional cash value or whole life insurance policies, Policyholders should carefully assess the risks before purchasing insurance. Since VUL sub-accounts are securities, the agent must be registered with the FINRA Securities Regulatory Authority to provide such life insurance products.

  • Pros:Flexible premium, No Cap, tax deferred return, investment choice, suitable fore high risk tolerance insured

  • Cons:high risk, no guaranteed return, complicated costs, high risk of lapse for poorly designed policies.

Group Life 团体寿险 

 

  • Group life insurance is provided by employers or other large entities (such as associations or labor organizations) for their workers or members. It is quite cheap, even free, and is very common across the country. It has relatively low insurance coverage and is usually provided as part of a larger employer or member benefit plan. Some organizations require team members to work for at least a period of time before they can get insurance. For example, an employee may need to go through a probation period before being allowed to participate in the employee's life insurance benefits. Coverage is usually only valid when the member is employed. Once the member leaves, whether it is resignation or fired, the coverage is terminated, but it can be converted to personal life insurance.

  • Pros:No Medical exam, the employer typically share part of the premium

  • Cons:limited coverage choice, group term will expire once you left the job if you didn't convert it to individual life.

© AIMDAR
 
 
 
 
 
 

Individual Life Ins MarketShare (2020 Q4)

 
Life Insurance Marketshare。美国人寿保险市场份额