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PLANNING YOUR FUTURE

My Life's Protection
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Life insurance protects a family's or business's financial security after you or your employees (if you own your own company) die. Some types, however, can also help you build assets to meet needs during your lifetime.

Types of Life Insurance

Term life insurance offers protection for a specified period of time but does not enable you to build cash value. The premium increases as you get older.

Whole life insurance guarantees a scheduled level premium for life as well as a minimum guaranteed cash value and death benefit. Premiums are invested in the insurance company's general account.

Universal life insurance is a flexible premium product where the amount and timing of premiums, within broad limits, are subject to the policy holder's discretion. Cash value earns interest at a rate periodically set by the insurance company with a minimum rate generally guaranteed. You can choose from two death benefit options.

Variable universal life insurance has the same type of premium and death benefit flexibility as universal life but you allocate premium dollars and policy cash values to investment options within the policy. The investment options offer different levels of risk and growth potential and usually include a guaranteed interest option.

Business Needs for Life Insurance

• Insuring the owner-employee for accounts payable or any obligations that may be "callable" upon the death of an owner-employee. Also, some states limit business buyouts upon death of an owner to amounts that can be funded from business surplus.
  
• Key-person insurance covers the loss of a key person whose death may have either a depressive effect on business revenue or requires an unexpected cost of recruiting/hiring a competent replacement or both.
  
• Buy-sell funding insures that the owners of a business have enough cash for the surviving owners (or the business) to purchase the deceased owner's business interest.
  
• Insuring the life of a retained independent contractor whose services are essential to the project or endeavor.

Myth: I have life insurance through my job. I don't need any more. 

Truth: Often, group policies offer the least and most prohibitive coverage. Not all employers offer a life insurance benefit – therefore, if you leave your job for any reason, including retirement, your coverage may cease. You may have to convert the coverage to permanent (cash value) insurance or lose it. And as you become older, life insurance becomes more expensive, if not difficult, to get. Group term insurance also is often determined by a salary-related formula that does not consider your individual needs for coverage. For example, someone with no children or dependents will be given the same amount of coverage as someone with four dependents.

To learn more about AXA's "Myths" click here >> 

So You Have Life Insurance

Do you have enough? A "rule of thumb" often used in determining life insurance needs is buying a plan equal to five to seven times income.

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