The Value of Decreasing Premiums

Life insurance policies offer many different options for both premiums and benefits. One can choose a premium and death benefit that is level and remains the same over the term of the policy; one can choose a premium that increases with a death benefit that remains level; one can even choose a policy with a premium that decreases while the death benefit stays level.

This last option—a decreasing premium policy—presents a great way to plan because:

It banks on your money today—not tomorrow. You never know what life is going to throw your way and you never know how your finances are going to be affected. Choosing a decreasing premium term life insurance policy allows you to find a premium that you know you can afford now while ensuring a lesser financial burden with your future dollars, all without sacrificing your death benefit. This will allow you to better accommodate unexpected financial difficulties in the future.

You can easily continue coverage. The decreasing premium makes it much easier to ensure that you're able to pay your premiums through the entire term of the policy. Instead of lapsing your policy and trying to qualify for new, and increasingly expensive coverage every time your finances go through a shift that affects your budget, you’ll be able to simply continue with current coverage levels while automatically experiencing a reduction in premiums.

It enables you the freedom of adding more protection later. The term policy that you take out today may not offer enough death benefit protection for your heirs in a decade. When you choose a decreasing premium term insurance policy, you ready your future budget for the addition of new insurance protection as your family grows, your debt changes and the future needs of your children are considered.

To find out how decreasing premium term life insurance policy fits into your budget, give us a call at Allstar Direct Insurance & Financial Services. Together we can decide whether decreasing premiums, increasing premiums or level premiums are the best choice for you and your Miami Life Insurance policy.

Permanent Life Insurance: Fixed vs. Variable

When you choose a permanent life insurance policy over a term policy, the decision making process is not quite over. You will need to pick whether you would like a fixed life insurance policy or one that is variable.

Variable Policies

Variable insurance policies allow cash values to grow based on the growth, or decline, of the underlying sub-accounts. Sub-accounts will move based on the investments they are made up of.

Variable life insurance policy sub-accounts can be comprised of bond investments, stocks, and more. They also range in risk from high to low so that you can find one that best suits your tolerance.

It is always important to remember with variable policies, there is no guarantee made of minimal growth. While you won’t lose any of your guaranteed death benefits, you could lose cash values due to poor sub-account performance.

Fixed Policies

With a fixed life insurance policy, your insurance company guarantees a certain amount of interest to be paid over the years. While this limits your growth to an extent, and could net less growth than variable policies, they also provide a guarantee of growth that may make some policyholders more comfortable.

Which Policy is Right for You?

There are many factors you should consider before you determine which life insurance policy is right for you. You need to assess how important cash value growth is to your financial future and what you want the growth for.

If you want conservative growth and must have it in order to realize certain financial goals then you might feel more comfortable with the relative security of a whole life policy.

If you are willing to take on some risk in order to maximize potential gains and comfortable with the flexibility of sub-accounts that you can change, then a variable policy might be a better fit.

If you aren’t sure which type of life insurance policy will work best for you, give Allstar Direct Insurance & Financial Services a call. We can help walk you through all the pros and cons of the various policy options and help determine which one best fits into your financial life.