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Discover Life Insurance
Individual Life Insurance
Insurance Solutions for You
Individual life insurance can play an important role in your financial planning. It can help provide financial security for your loved ones and also provide estate planning and tax-deferred savings benefits.
Death benefits paid on individual life insurance policies are generally federal tax-free and can be used by your beneficiaries for any purpose. Life insurance can be used to create a legacy for your loved ones or important causes you want to support.
Basic Types of Individual Life Insurance
Individual life insurance falls into two basic categories of term or permanent policies
Individual Term Life Insurance
This type of policy lasts for a certain number of years, typically 5 to 30. A term life insurance policy only pays death benefits if the person dies within the policy period. It is a means to ensure that funds for specific purposes, such as college tuition, debts owed, or the mortgage on your home, are covered in case you die during a finite time frame.
Permanent Life Insurance
As long as you stay current on your premiums, permanent life insurance provides coverage for your entire lifetime. This type of policy is often used for tax and estate planning purposes and for funding trusts for dependents with special needs. Most of these policies have a savings component that allows for the accumulation of cash value on a tax-deferred basis. Typically, the premium of a permanent life policy stays the same for the lifetime of the policy and does not increase as you age.
How Mortgage Protection Insurance Works
Safeguarding Your Future
When tragedy strikes, mortgage protection insurance can help save your home. You pay a set premium for the duration of the policy. If you should die during the policy period, the insurance company pays out a death benefit. In the case of a disabling injury, MPI makes it possible to continue making your monthly mortgage payments.
The type of death benefit depends on the type of policy you put in place. In the past, mortgage protection insurance was designed to pay off the outstanding balance on the mortgage. Today, many policies will pay out the full amount of the original mortgage, regardless of how much you still owe. Beneficiaries can use the funds to pay off the mortgage in one lump sum or for any other purpose.
You can buy the policy when you purchase your home, or within a certain time period after closing. The time limit is generally 13 to 24 months, although it may be as long as 5 years with some companies. This insurance is typically issued on a guaranteed acceptance basis, which is valuable for people who have health issues and might be uninsurable or only insurable at a higher rate.
Pricing for mortgage protection insurance depends on the age of the insured, the size of the mortgage, and whether the insured is a smoker. If you are buying, or have recently bought, a home, our local agent at Legacy Insurance Group in Keyport, New Jersey, can assist you with mortgage protection insurance.