Life insurance is often thought of as solely a personal coverage that individuals obtain in order to replace lost income, cover end-of-life expenses, and provide for dependents in the future. However, this is just one side of life insurance coverage. Life insurance may also have a number of additional financial benefits, such as transferring business assets, building income, and protecting beneficiaries from taxes and estate costs.
BMTIA offers individual, specialized products to businesses that can be customized to provide individual asset protection. One of these products is Life Insurance , and there are multiple different forms of coverage available.
Term Life Insurance
Term Life, as its name indicates, provides coverage for a predetermined amount of time. This is the standard form of coverage for dependent protection and is a common coverage for younger clients or clients looking to have temporary coverage as they build their wealth, as it can provide a comparatively high payout without requiring a significant investment or commitment. The payout can be structured in different ways; it can be kept level throughout the policy term, or the death benefit can gradually decrease as the insured ages. How the benefit is structured will influence the cost of the policy, along with other factors such as the age of the insured, their health, their medical history, and their lifestyle.
Whole Life Insurance
Also referred to as “Permanent Life Insurance”, Whole Life policies offer a more long-term form of coverage. Unless the insured lapses payment or chooses to end their policy, Whole Life policies have an unlimited coverage period and are guaranteed to provide a payout. They come in various forms, one of which is Universal Life, a form of life insurance coverage that provides more flexibility in both the premium and the death benefit.
What makes Whole Life policies appealing for asset protection and development is that Whole Life insurance policies build cash value as they mature, and depending on the type of Whole Life coverage, the insured can withdraw from the cash value and use it as they please. There are a number of ways in which accumulated cash value can be used, including:
- Withdrawing the cash value to use in a business buyout or for other financial reasons;
- Applying the cash value to the premium payments;
- Borrowing against the cash value, and
- Leaving the cash value alone to continue to build up the value of the policy and its future payout.