Life insurance provides a degree of financial protection against the certainty of death and can help survivors achieve specified financial objectives. Life insurance death benefits are usually income tax free and can be used to complete a retirement plan, generate lifetime income, pay off the mortgage, and provide funds for childcare, college educations and more. Life insurance policies that accumulate cash value can often provide tax-advantaged money to help meet retirement or emergency cash needs.
Many factors are involved in determining the amount and type of life insurance that's right for you. To help people better understand life insurance, the Principal Financial Group® developed the From Here to SecuritySM program - complete with a step-by-step educational booklet and interactive calculator. These tools, along with your financial representative, can help you identify the amount and specific types of life insurance that will help you achieve your financial goals.
Types of life insurance available from The Principal® include:
Universal Life Insurance
- Delivers flexible death benefits and flexible premiums (as long as the cash values are enough to cover insurance costs)
- Usually includes a cash value account that accumulates at a floating rate of interest, with a minimum rate guarantee
- Accumulates cash value that may be used to help pay for the cost of insurance, riders and other policy expenses
- May provide secondary guarantees such as no-lapse protection that allows for you to dial in your coverage period from 10 years to age 100
Variable Universal Life Insurance
- Combines the flexibility of universal life with the performance of investment accounts - with a focus on accumulating cash values
- Is performance-based and may outperform or underperform a traditional whole life or universal life policy
- Has flexible death benefits and flexible premiums (as long as the cash value of the policy is adequate)
- Directs net premium to investment accounts, with potential growth in cash value and death benefits tied to the accounts' performance, except in the fixed account there is no guaranteed rate of return and you could lose money
Survivorship Life Insurance
- Covers two lives, where the death benefit is payable on the death of the second life
- Is commonly used in estate planning, where the first spouse to die leaves his or her estate to the surviving spouse, utilizing the unlimited marital estate tax deduction; the estate then becomes taxable upon the death of the second spouse
- Provides protection for a specific term
- Produces a death benefit that is generally free from income taxes
- Is often renewable after the policy term without evidence of insurability
- Usually costs less than permanent insurance in the short-term
- Can usually be converted to permanent insurance with the same company during part of the life of the policy
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