Permanent Life Insurance
Which policy is right for you?
With MTA Benefits, you can select from several forms of Permanent Life insurance, with the most common forms being Universal Life and Whole Life. While Whole Life is generally a fully guaranteed policy with guaranteed cash value accumulation, Universal Life is usually a lower cost, more flexible policy, allowing the insured to vary both premiums and death benefits and still accumulate cash values.
Life insurance cash values accumulate on a tax-deferred basis and can serve as a valuable emergency fund in the future or as an education accumulation vehicle. All policies offered are written through insurers who are rated 'A' or higher by A.M. Best.
Permanent Life Insurance can be a good foundation in almost any life insurance portfolio. Most people have needs that do not diminish as we age or accumulate wealth, such as providing for the ongoing needs of a spouse or life partner. You may consider a combination of both permanent and term life insurance to meet all of your long-term needs.
For more information, call our partner, Vista Financial Group, at 888.646.1972.
How much life insurance do you need?
In a recent article in CNN Money Magazine, the question was posed as to how much insurance someone needs. There was no simple answer. Some financial planners say at least five to seven times your gross annual income. Others argue that you need twice as much in face value. That would mean a person making $50,000 a year should have anywhere from $250,000 to $750,000 worth of coverage or more.
Remember, the sole purpose of life insurance is to replace your income in case you die, so that your dependents can maintain their current lifestyle.
Factors to consider include whether the surviving partner will have childcare expenses if one partner is out of the picture. Do you have other assets on which to draw? Will your children be out of the nest soon? These, and many other factors, influence the decision on how much coverage you need. Buying a whole life policy doesn't necessarily mean you are fully insured. Because of the investment component of whole life, the policies are much more expensive than term. Don't simply buy less coverage, as it defeats the purpose of buying insurance in the first place: to cover dependents.
Advisors with the MTA Life Insurance Program can help you figure out how much coverage you need.