Life Insurance Explained

life insurance, disability and other benefits

Tools and Resources

When you're looking for a company to help you manage your financial risk and achieve financial security in today's complex world, you have much to consider. In choosing a life insurance company, your financial security depends on the reliability of the comp a ny and the product you choose.

  • What features should you look for in a life insurance policy?
  • What benefits does a life insurance policy provide? Why do you need life insurance?
  • How do you select the right insurance policy?
  • What do others say about the life insurance company? Is it financially strong enough to be there when you need it? Does it deliver exceptional value over the long term?

 


Key Features of Life Insurance

Not all insurance policies are alike. A life insurance policy may not be the most entertaining reading but what you find in the contract may make all the difference in the world.

Keep in mind that there are many benefits and add-ons you can include in your life insurance policy.

Conversion Rights

Some term life insurance policies may be converted to a permanent life insurance policy without additional proof of insurability. Policies purchased during certain age groups offer conversion rights up to a certain age. Partial conversions may also be permitted. The premium on the new policy is based on the insured’s age at the time of conversion.

Dividend Options

Participating policies share in profits of the Company returned to policyowners in the form of a dividend.*
You may choose to use your policy dividends in multiple ways. Most policyowners choose to use them to increase policy values. You can use them to help pay your premiums, let them accumulate and earn interest. Or you can choose to receive your dividends in cash.

Guaranteed Death Benefit from Life Insurance

The minimum death benefit that will be paid, regardless of dividend and investment experience. The benefit can be adversely affected by untimely premium payment and policy loans. Death benefits are guaranteed with permanent life insurance; limited guarantees apply for blended products.

Guaranteed Minimum Cash Value from Life Insurance

The minimum values guaranteed by the life insurance policy that will be available on surrender of the contract, assuming all required or illustrated premiums have been paid to the date of surrender.
Cash values are invested in and benefit from the investments in PrimeWest Insurance's general account. The cash value increases when you make premium payments and when interest is credited to the policy.

Options Available If Premium Payments Are Missed

A nonforfeiture option protects you if you are ever unable to pay your policy premiums. Options include:

  • Automatic Premium Loan (APL)
    If a scheduled premium payment is missed, money is automatically borrowed from the cash value of a permanent life insurance policy to pay the overdue premium and interest is charged until the loan is repaid.
     
  • Extended Term Insurance
    Keeps the full death benefit in force by using the cash value of the policy to purchase Extended Term Insurance.
     
  • Paid-Up Insurance
    Keeps some level of protection in force by using the policy's entire cash value to purchase paid-up permanent life insurance. The face value of the paid-up insurance will be less than the face amount of the original policy. The paid-up policy remains in force until the insured dies.
     
  • Cash Surrender
    Elect to receive the policy's cash value by surrendering the policy. Any outstanding loan balance and accrued loan interest will be deducted from the cash value.

Optional Life Insurance Policy Benefits

The following optional policy benefits may be added to a life insurance policy subject to underwriting and additional cost.

  • Additional Purchase Benefit
    The Additional Purchase Benefit (APB) guarantees the policyowner the right to purchase additional life insurance policies on the life of the insured at specified dates without evidence of insurability.

    Why is the APB important? When adults add the Additional Purchase Benefit to their own policies, they are purchasing a valuable asset. With more of their income producing years ahead of them, taking steps to guarantee their own future insurability is a strategic and smart move.

    Parents or grandparents can also add the APB to a life insurance policy they are buying for a child. This way, they are not only insuring the child's life, but also protecting the child's ability to purchase additional insurance later in life.
     
  • Indexed Protection Benefit
    The Indexed Protection Benefit (IPB) increases a policy's death benefit in specified years in the policy contract. The increase is based on the Consumer Price Index, usually with an annual cap.

    Why is the IPB important? With increasing prices and decreasing purchasing power becoming realities of life, and the ever eroding effect of inflation, a life insurance policy bought several years ago may now only be providing a fraction of the protection it originally did.
     
  • Waiver of Life Insurance Premium
    With the Waiver of Premium Benefit, the life insurance company will pay an insured's premiums if he or she becomes totally disabled. Total disability must last at least six months before the benefit takes effect and the premiums will be waived for the duration of the disability, potentially for the entire premium-paying period.

    During disability, premiums are credited to the policy and the tax-deferred cash value will continue to grow. The dividends and cash value are available to the insured for use in emergencies, to supplement living expenses, retirement income, or to provide education funding. With term insurance, the policyowner may be even able to convert the term contract to a permanent plan and have those premiums waived as well.

    Why is the Waiver of Premium important? With the Waiver of Premium Benefit, policyowners, in addition to securing life insurance to protect those who depend on them, can also guarantee that their insurance premiums will be paid, even if they are unable to work due to disability. Few, if any, financial vehicles can offer this type of protection. Any policyowner can become a victim of a disabling accident or illness at any time. To prevent a disability from destroying your life insurance program, make sure your policy has Waiver of Premium.

Life Insurance Policy Loan

Most permanent life insurance policies contain the option to borrow from the cash value of the policy. Loans may be taken at a fixed or a variable loan rate determined annually. The amount borrowed from the cash value affects the amount of dividends you will receive. Any unpaid loans, along with accumulated interest, will be deducted from the proceeds at death or if the policy is surrendered prior to death. Within contractual limitations, there is a maximum value that can be borrowed that is less than the total cash value of the policy.

 

Living Benefits of Life Insurance

Life insurance has no equal when it comes to providing for those you care about when you die. At a time when their lives have dramatically changed, your survivors can be financially secure. Because of your foresight, their everyday needs can be met.

But did you know that a permanent life insurance policy is also an excellent foundation for a long-term financial program? Whether you’re wondering if you will be able to retire comfortably or provide for your family in an emergency, a permanent life insurance policy can be one of the best low-risk financial vehicles available to help you provide for future living needs.

Retirement Income

When you retire, you may need more income than your pension plan, 401(k) or Social Security can provide. You may use the cash values in a permanent life insurance policy to supplement your retirement income.

College Tuition

The cash value your policy generates as your child is growing can be used to help pay college tuition costs. Using a life insurance policy’s cash value to pay for college expenses has some important advantages over other education funding methods.

  • Some education funding tools dictate how and when the money you have accumulated must be used to avoid penalties and taxes. Life insurance doesn’t. If you decide not to use your permanent life insurance policy’s cash value to pay for tuition, it just keeps on growing, tax-deferred.
     
  • Permanent life insurance is one education funding vehicle that will not be taken into consideration for the purposes of determining your child’s eligibility for financial aid. This is important if you’re looking to supplement your existing financial resources with financial aid or loans to cover the full cost of your child’s education.

Opportunity Dollars

You can use the cash value to help make the down payment on a new house, provide start-up cash for a new business or take advantage of other opportunities as they arise.

The guaranteed accessibility to the cash value makes permanent life insurance one of the most valuable assets people can own. It can be withdrawn, borrowed, used and replaced repeatedly at the discretion of the policyowner.

The impact of taxes can make some options more valuable than others. As a general rule, when policy values are surrendered, the amount received is not taxed until it exceeds the amount paid in premiums. Income tax is due on the gain.

Non-guaranteed values and benefits include dividends. The dividend scale is reviewed annually by the Company’s Board of Trustees and is subject to change.

 

Permanent Life Insurance vs. Term Life Insurance

When looking for life insurance, a common debate often occurs over permanent life insurance and term insurance. How do you unravel all of the information you have and make a decision that’s right for you?
Cookie cutter answers are rarely appropriate where lives are as different as ours. Consider the length of time you will need insurance and balance the cost against the value.

Because of the variety of opinions about the relative value of the different kinds of life insurance, the one thing each of us can fall back on is our individual needs.

Permanent life insurance and term insurance can work well together or separately. The solution that’s best for you depends on your situation.

The following examples can help to pinpoint how permanent life insurance or term insurance may help you.

You need protection for the four years your child attends college. (Term insurance)  

  • You want protection for as long as you need it or for your entire lifetime. (Permanent life insurance)
     
  • You want to ensure your child/grandchild attends the college of their choice – whether you live or die. (Permanent life insurance)
     
  • You need protection but your financial resources are stretched. (Term insurance)
     
  • You want to accumulate money to supplement retirement income. (Permanent life insurance)
     
  • You want to provide for a special needs child. (Permanent life insurance)
     
  • You want to protect the lifestyle your income provides for your family. For a two-income family, you should consider protecting both incomes. (Term insurance or Permanent life insurance)
     
  • You need to financially replace the contributions of a non-working spouse. (Term insurance or Permanent life insurance)
  • You want to provide an inheritance for people or organizations you care about. (Permanent life insurance)
     
  • Your bank wants you to own life insurance in order to loan you money, perhaps to expand your business. (Term insurance)
     
  • You want to help your employees save for retirement. (Permanent life insurance)

For costs and complete details of coverage, contact us: 310-281-2886.

 

Straight Talk From Your Broker

The Broker Advantage

Because we're an insurance brokerage firm, we work for YOU. That means we provide continuous assistance to satisfy your insurance needs. When you talk with PrimeWest Insurance Group, you deal with insurance professionals who know how to match your requirements with the right policy, and the right Company, at the right price.

We will be completely up front with you, our client, and that's the most valuable Broker Advantage you can get.

It Makes Sense to Talk to a Broker

ONLY A BROKER CAN OFFER YOU:

  • Quick access to the best policies from the major companies.
  • Impartial advice on the coverage that's right for your needs.
  • The most advantageous terms available in the marketplace.
  • Assistance with the fast and satisfactory settlement of your claim.

Our Expertise

As a firm we are over twenty years old, but from an experience level we represent 80+ years in the financial and insurance industry. PrimeWest specializes in liability insurance, employee benefits, individual and group life and disability products. We also have specially designed carrier Universal Life Index life products for high-net-worth individuals and their families.

We have CFP, CLU, ChFC, CAP, MBA, JD, PHR and CPA/ABV, CVA professional degrees on staff, and have relationships with hundreds of companies, through which we have sold tens of millions in premiums. But none of that really matters. What matters is we always do absolutely everything in our power to help our clients achieve their goals and needs. We focus on service that has won us accolades and trust of our clients. We consistently strive to deliver an experience to our clients that are unrivalled with results to match.  See letter to Clients and Friends.

How We do Business

When you buy through an Insurance Broker, you are using the services of qualified professionals, like Forever Young Insurance, who understand your needs. We operate independently of any insurance company... and solely on behalf of you, our customer.

More importantly, we are not tied to any one Insurance Company. We have access to an extensive range of policies offered by many of the major life insurance companies, including:

Transamerica

John Hancock Life Insurance

Nationwide Life Insurance

MetLife

When PrimeWest Insurance Group acts on your behalf, a comprehensive range of coverage is fully accessible to you. You can be assured that we will do everything in our power to find the best protection to suit your specific needs.

Our Brokerage Works For You ... and only you!

Shopping around for insurance can be a bewildering task for even the most sophisticated buyer.
Forever Young Insurance Brokers will make insurance buying so much easier for you. By using our expertise we will assess the many and various policy alternatives currently available, and provide you with a quote.

Then, guided by your special insurance requirements, we will work with you to select the coverage that's right for you. We will negotiate for the best terms... so that you can buy at a price that suits your budget and needs.

We Speak For You... When you need to be heard

Speaking to a large Insurance Company can sometimes be a frustrating and intimidating experience.

But speaking to one of our Brokers is easy... and gets results, fast!

REMEMBER, WE'RE ON YOUR SIDE!

PrimeWest Insurance Group is Committed to YOU Our Client

When you engage the services of PrimeWest Brokerage, you can be confident that we will work hard and diligently for you.

Your satisfaction is our number one objective.

Our success, and our reputation as Brokers, depends on just that... your satisfaction.

At PrimeWest Insurance Group, The Client is #1

The Next Step

Our website can't tell you everything you need to know about life insurance and it can't tell you what type of life insurance policy is best suited to your particular situation.

PrimeWest Insurance Group Brokerage Representatives are well prepared to answer questions you may have. They can also provide expert guidance in helping you identify the right mix of products and in making recommendations that will meet your specific needs.

Contact Us

Los Angeles, CA
Beverly Hills, CA 90211


San Fernando Valley
19528 Ventura Blvd. #440
Tarzana, CA 91356


Irvine, CA
Consolidated Benefits & Commercial
Insurance Services
8181 E. Kaiser Blvd.
Anaheim Hills, CA 92808
949.870.3347 | 424.672.4058 (Fax)

 

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