Scottish poet and lyricist Robert Burns once wrote, “The best-laid plans of mice and men often go awry.” In a world that has changed so much, it is more important than ever to protect our financial future — and the financial future of our loved ones. In fact, LIMRA reports that the likelihood to buy life insurance is at its highest point in 10 years.1
So, if you’re one of the many who are looking at life insurance and your financial plans and trying to decide what kind of coverage is right for you, it’s important to do your homework. You’ll discover there are a lot more options than there used to be.
When you’re preparing for your family’s future, it’s important to cover all your bases. Should you pass too soon, you want to help your family have the means to maintain their lifestyle without you. If you get sick, you want to make sure medical bills don’t derail your financial future.
Just like you, life insurance has evolved over the years. It still provides the familiar death benefit, but today’s combination products, like an index universal life (IUL) policy, may also play a valuable part in preparing for your family’s financial future. And while the death benefit should always be your primary reason for buying a life insurance policy, a heart attack, stroke, cancer, or disability are more likely to occur and potentially pose a long-term risk to your nest egg. That is when an IUL policy may also be able to help.
Other uses of combination life insurance
If you’ve been a caregiver or had a loved one deal with any kind of chronic illness, you know the expense can be significant. Besides using up your life savings or hitting the lottery, another way to pay for chronic care was buying separate policies to address chronic or critical illness, potentially making things more complicated. Whereas an IUL policy may allow you to accelerate your death benefit while you’re alive to help pay the medical expenses associated with a qualifying chronic or critical illness.
But that’s not all a combination IUL policy can do. Want to add your children or spouse to your life insurance policy rather than going to the expense of buying another one just for them? There’s a rider you can add for that. Want the ability to waive monthly premiums should you become disabled? There’s a rider for that. How about an option designed to help provide for your family with preplanned payments? There’s an option for that, too.
A simple analogy
If all of the options available with an IUL feel a little overwhelming, it might help to think of it this way: Remember when phones only made phone calls? And taking a picture, listening to music, surfing the internet, or watching television each required a separate device? Today, your smartphone can do all of those things and more in one convenient tool. And you can add apps to customize your phone to your specific needs.
IUL insurance is a lot like your smartphone. One powerful tool (life insurance policy) can be customized by adding apps (riders)3 to address multiple needs and may reduce the necessity and expense of multiple devices (insurance policies).
Let an agent help
But configuring an IUL insurance policy can have more options than a build-your-own ice cream sundae bar. That’s why it’s good to have an agent that can help explain the various riders and the advantages each one offers. Together, you can customize a policy that fits your exact needs and budget rather than going to the time, expense, and trouble of buying separate policies to address multiple concerns.
Leave the past in the past
These days, buying multiple policies for different needs may be about as obsolete as a VCR , compact discs, or a 35mm camera. Talk to an agent about protecting you and your loved ones with the kind of life insurance found in today’s flexible combination IUL policies.
Things to Consider:
- If you haven’t already, start researching the different types of life insurance.
- Talk to a life insurance agent about which type(s) might be right for you.
- Evaluate other personal protection needs such as chronic or critical illness before buying a traditional life insurance policy.
1 2020 LIMRA Life Insurance Barometer Study, LIMRA, 2020
2 National Center for Health Statistics, Centers for Disease Control, 2020
3 Benefits provided through the critical, chronic, and terminal illness accelerated death benefit riders are subject to certain limitations and exclusions. The actual benefit paid to the policy owner will be less than the amount that is accelerated because the amount is discounted to reflect early payment of the policy’s death benefit. Administrative fees per request apply. Amounts payable under the critical and chronic illness riders vary based in part on the nature and severity of the insured’s health condition and the insured’s remaining life expectancy at the time of the acceleration as determined by the company. Riders should not be the sole basis to purchase any life insurance policy. Benefits paid under accelerated death benefit riders will reduce the life insurance policy’s death benefit and policy value. Consideration should be given to whether life insurance needs would still be met if rider benefits are paid out in full.
Life insurance products issued by Transamerica Life Insurance Company, Cedar Rapids, IA, or Transamerica Financial Life Insurance Company, Harrison, NY. Transamerica Financial Life Insurance Company is authorized to conduct business in New York. Transamerica Life Insurance Company is authorized to conduct business in all other states. All products may not be available in all jurisdictions.