​Do you want to leave a legacy for your spouse, children or grandchildren? If so, permanent life insurance may be the right financial tool for you. As the name implies, permanent life insurance provides coverage for life, assuming you meet the required premiums each year. It also accumulates tax-deferred cash value, which you may be able to use as a supplemental reserve in the future.
 
If you’ve never considered permanent insurance before, you may be overwhelmed by the choices available. There are permanent policies designed to meet a wide range of needs and budgets. Not all policies are right for all situations.
 
Below are descriptions of the three most common types of permanent policies. Before you commit to a policy, do your due diligence and make sure it’s right for your objectives. A financial professional can also help you find the right policy for you.

Whole Life
 
Whole life is a type of permanent policy in which your death benefit and premium amount remain constant for the duration of the coverage. As long as you make the required premium payments, the policy stays in force and you are covered for life.
 
In each premium payment, a portion goes toward the cost of insurance, and another portion goes into a cash value account. The insurance company then pays annual dividends into the cash value, and those funds accumulate on a tax-deferred basis. The dividends may fluctuate from year to year, so be sure to look at the insurer’s dividend history. However, your cash value is not exposed to market risk and will never decrease.

Universal Life
 
Universal life insurance is similar to whole life, but there are a few important differences. Like whole life, universal life has a set premium and death benefit, and it also has a tax-deferred cash value account with no downside risk.
 
One big difference, though, is that you have the power to adjust your premium or death benefit in a universal life policy. If you’ve accumulated enough cash value, you also may be able to skip premium payments in certain years. That flexibility could be helpful as your needs and goals change over time.
 
Also, universal life policies offer interest-based accumulation rather than dividend payments. Your interest rate could fluctuate over time. The policy will offer a guaranteed* minimum interest rate, however, so you’ll always know the least amount of interest you will earn in any given year.

Variable Universal Life
 
Variable universal life (VUL) offers death benefit protection but also unique growth opportunity. Your policy has a death benefit and premium, similar to universal and whole life policies. However, you have the option to invest your cash value in subaccounts, which are similar to mutual funds.
 
Because they’re invested in financial markets, VUL subaccounts often allow for greater growth potential than is available in whole life or universal life policies. However, return and risk often go hand in hand. Your subaccount values could decrease, and you may have to make additional premium payments to support the policy.
 
Ready to find the right permanent life insurance policy for your goals? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and choose the right policy. Let’s connect soon and start the conversation.
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
17963 – 2018/9/4

​Are you purchasing life insurance for the first time? If so, you may feel a little overwhelmed by the process. All insurance involves something called underwriting, which is the insurance company’s assessment of the risk involved in the policy. Essentially, the insurer wants to know the probability that it will actually pay a benefit.
The underwriting process varies based on policy type. For example, your car insurer may look at your type of vehicle and your driving record to determine the likelihood that your car will suffer damage in an accident. Your home insurer will look at the age and quality of your house. Disability insurers look at your health, income and the danger of your occupation.
With life insurance, underwriting is based on several factors, including your gender, age and health. Below are a few common questions about underwriting and how you can make it as stress-free as possible. Your financial professional can also guide you through the underwriting process.

Why do life insurance companies need health information?
 
There are two primary factors that the life insurance company considers during underwriting. One is your age. The insurer uses actuary tables to estimate your life expectancy based on your age. This is one of the factors that most influences your premium amount.
The other important factor is your health. After all, two 50-year-old men could have much different life expectancies based on their health. While an actuarial table can predict life expectancy based on age, it can’t develop a forecast based on your unique health issues.
This is why the life insurance company needs specific health information. It wants to know about your unique health risks and concerns. The insurer then uses that information to assign a rating, which also influences your premium. The healthier you are, the better your rating and the lower your premium. If you have health issues, however, you could see a higher premium.

What’s involved in the medical exam?
 
The medical exam is different for everyone. In fact, if you’re young and are buying a term policy with a relatively low death benefit, you may not have an exam at all. The insurer may simply ask for a questionnaire and a copy of your medical records.
In most cases, the exam involves a blood and urine sample along with measurements of your height and weight. The nurse may also check your blood pressure. These simple exams can usually be performed in your home or office and don’t take more than a few minutes.
If you’re older and are buying a permanent policy or a term policy with a sizable death benefit, you may need a more intense exam. For example, the insurer may ask for a full physical. If you have high blood pressure or a history of heart issues, it may ask for additional tests. If you’ve had cancer, it may want specific information about the treatment and how long the cancer has been in remission. Every underwriting process is different based on the applicant.

Does the insurer consider any other factors?
 
The insurance company will also consider lifestyle factors. Perhaps the biggest is the use of tobacco, alcohol or drugs. The difference in premiums for a smoker versus a nonsmoker can be significant. If you’ve ever considered quitting smoking, you may want to do so in the months ahead of your life insurance exam.
The insurer also may look at hobbies like sky diving or scuba diving. While participation in these activities won’t disqualify you, they may increase your premium. However, your financial professional may be able to look for insurers that aren’t as prohibitive in this area.
 
Ready to find the right life insurance policy for you? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your health, lifestyle and goals, and then develop a strategy. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
17965 – 2018/9/4