Whole life
A comprehensive, long-term plan that covers the entire duration of a life. It provides a guaranteed death benefit to the policyholder’s beneficiaries, along with a cash value component that accumulates over time.
Term, whole life and indexed universal life — what each one actually does, and which one fits.
We provide a range of life insurance options including term life, whole life, and indexed universal life insurance. Our policies are designed specifically to meet the unique needs and goals of our clients — providing peace of mind and financial security for themselves and their loved ones.
A comprehensive, long-term plan that covers the entire duration of a life. It provides a guaranteed death benefit to the policyholder’s beneficiaries, along with a cash value component that accumulates over time.
Coverage for a specific period, typically one to thirty years. It protects your family in the event of your unexpected death during the term, and is usually less expensive than permanent cover.
Life insurance protection plus the potential for cash value accumulation. Interest is earned based on the performance of a chosen stock market index, with downside protection, and premiums and death benefits can be adjusted as your needs change.
At its core, life insurance is simple. You pay premiums for a policy, and your insurance company disburses a death benefit if you die while the policy is active. We like to refer to life insurance policies as a “savings account on steroids”. It provides you access to your investment, but with huge growth opportunities.
There are three types of life insurance policies you can invest in: whole life, term life, and indexed universal life.
Here at Lampson, the majority of our life insurance policies are indexed universal life policies. However, we have a handful of clients who invested in whole and term.
The good news is, you don’t have to do any research. By scheduling a free consultation with us, we will analyze your financial situation and recommend a life insurance policy if need be.
Indexed universal life (IUL) insurance comes with a cash value that earns interest and provides you with options to adjust your death benefit or pay your premium out of your cash value amount, but it can quickly get complicated. There is potential for big gains with an indexed universal life policy, but you will also need to track your cash value’s performance and the restrictions around accessing those funds. Combined with the fact that IUL is often much more expensive than term life insurance, you may prefer to buy a traditional policy and put the difference in a traditional investment account.
Indexed universal life insurance is a type of permanent life insurance — a policy that stays in effect for your whole life as long as the premiums are paid, as opposed to a term policy, which expires after a set amount of time.
All permanent life insurance policies are split into two parts: the death benefit, which pays a lump sum to a beneficiary when you die, and a cash value that can grow over time. With universal policies, you can adjust the death benefit within set limits, and use gains from the cash value to pay your premiums.
What makes indexed universal life insurance unique is the “indexed” part. These policies have a minimum guaranteed interest rate, so you will not lose money, but the interest rates are not fixed; instead they are based on an index chosen by the insurer. An index is essentially a group of investments like stocks or bonds — the S&P 500 and the Nasdaq 100 are examples. The insurer does not directly invest in the market, but uses the performance of a specific index to set the interest rate.
Key takeaways. IUL includes a death benefit and a cash value, which grows at an interest rate controlled by your insurer. There is a minimum guaranteed rate, but the actual rate varies with the performance of the chosen index and could outperform other cash value policies. You can also adjust the death benefit and pay premiums out of the cash value.
With whole life insurance you only have to pay premiums for a limited time, and in return you get coverage for life. Your beneficiaries are guaranteed to receive a death benefit when you die.
The cash value component pays out dividends, although they are not guaranteed. Dividends are reinvested back into the cash value, essentially paying for an increase in the death benefit if you do not use the cash value while alive. This gives whole life a “no-lapse” quality: as long as you, or the policy’s cash value, are paying the premiums, the coverage will not expire.
Premiums are paid either until a certain age or for a set number of years, and your rate is affected by the option you choose. Once you lock in that rate, it stays the same for the whole time you pay premiums. Each month a portion of the premium goes into a tax-deferred savings account — the cash value of the policy — and grows over time.
Key takeaways. Whole life is permanent cover that lasts your entire life and carries a cash value. You can withdraw from that cash value while you are alive, though doing so decreases the death benefit.
Call 281-459-0023 and ask for the complimentary financial analysis. We will tell you whether a policy is needed at all.
450 N Sam Houston Pkwy E, Suite 150
Houston, TX 77060
281-459-0023 · info@lampsoninc.com
Call 281-459-0023, mention Great Day Houston, and ask for the complimentary financial analysis.