Writing Sample

Solutions to Meet Everyday Needs

By Alfonso K. Ajello

Level Premium Term Insurance

When an individual knows exactly how long they will need a life insurance benefit, level premium term life insurance may be a suitable alternative. Level premium term insurance provides a specified death benefit and level annual premium for a fixed period of time. An individual can choose to insure their life for 5, 10, 15, 20, 25, 30 years. Premiums are guaranteed to remain level throughout the initial level term period. One of the advantages of level premium term life is that it is a low cost alternative when compared to permanent life insurance. However, level premium term life polices do not accumulate cash value. At the end of the guaranteed level term period, the policy will generally switch to annual renewable term life with premiums increasing each year according the age of the insured. It is important for the policy owner to be aware of the expiry date of the level term period. In many instances an individual will choose to extend the level term benefit with a new level premium term policy or, if eligible, convert the policy to a permanent plan of insurance.

Whole Life Insurance

Whole life insurance is a permanent form of life insurance that offers insurance protection in the form of a death benefit, as well as living benefits in the form of cash value. Advantages of whole life insurance include guaranteed death benefit, contractually guaranteed cash value, and accumulation of non-guaranteed cash values such as dividends for participating polices. This living benefit builds within the policy on a tax deferred basis and can be used for a variety of different applications including offsetting premium costs, increasing the face amount, retirement funding, college funding, estate planning, emergencies, or whatever the policy owner needs it for. Whole life insurance is more costly than level premium term life , and it is for this reason that many choose term life insurance instead. Insurance professionals argue that whole life is a valuable asset to have in ones portfolio due to the guarantees provided, and the buildup of tax deferred cash value .

Universal Life (UL)

Sometimes called flexible premium life insurance, universal life offers a permanent life insurance benefit on a term life chassis. Universal life features the low-cost protection of term life insurance and a cash accumulation fund, which is invested to provide cash value buildup. Universal life polices can provide more flexibility than whole life polices. A policy owner can set up a universal life to provide specific cash value at a predetermined future point in time, or choose the length of time a policy should remain in effect. For instance, a policy owner can tailor a policy to provide $100,000 cash value at age 65, or tailor a policy to provide the death benefit they need to age 90, or whatever age they choose based upon their circumstances. The cash accumulation account is usually credited an interest rate determined by the insurance company based upon their investment experience. Most policies receive this crediting rate with a minimum rate that the company will abide by regardless of their investment experience.

Variable Universal Life (VUL)

A variable universal life works similar to a universal life except that the cash accumulation account is tied to investments that the policy owner chooses. The policy owner has the freedom to select between many different types of investments or sub-accounts," which function similar to the mutual funds choices one might encounter in their 401k plan. These sub accounts can provide access to many different alternatives such as fixed accounts, money markets, growth, income, bond, international, and global fund classes. A VUL policy offers the possibility of an increased rate of return over a universal life or permanent insurance policy, but exposes the policy owner to greater investment risk. Universal life polices put the investment risk on the insuring company. A variable universal life puts the investment risk on the policy owner. It is important for a policy owner to asses their risk tolerance as they decide which product is right for them.

Voluntary Retiree Reducing Term Life Insurance

Over the past several years, the trend in the group insurance industry is to reduce or eliminate retiree benefits due to growing costs or growing liability concerns. However, retiree life insurance is an important aspect of a comprehensive benefits package. The fact is that many companies continue to offer it so that they can attract and retain the right talent. Voluntary Retiree Reducing Term Life Insurance coverage reduces as the retiree ages, keeping costs fixed. Retirees under age 99 are eligible, and coverage can be continued to age 100. New entrants are offered guaranteed coverage based on their enrollment age.

Critical Illness Insurance

The chances of surviving a critical illness are better than ever. Even with a good medical plan, co-pays, deductibles, out-of-network treatment costs, and loss of income can lead to financial ruin and bankruptcy. Critical Illness Insurance can help ease the financial burden by offering: Standard and optional benefits choices Coverage for spouse and children A lump sum payment upon diagnosis of critical illness (cancer, heart disease, organ transplant, renal failure, or stroke) Unrestricted use of benefits

The coverage is an effective complement to high deductible health care insurance plans. Critical Illness Insurance can be easily enrolled in using the group platform.