Life Insurance | AA Lares Insurance

TERM LIFE INSURANCE

Term Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.

There are two basic types of term life insurance policies - level term and decreasing term.

Level term means that the death benefit stays the same throughout the duration of the policy.

Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy's term.

WHOLE LIFE INSURANCE

Whole life or permanent insurance pays a death benefit whenever you die - even if you live up to 100! There are three major types of whole life or permanent life insurance - traditional whole life, universal life, and variable universal life, and there are variations within each type.

WHY LIFE INSURANCE IS IMPORTANT

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Replace Income for Dependents - If people depend on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings, or adult children who continue to rely on you financially.

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Pay final expenses - Life insurance can pay your funder and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insuranc

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Create an inheritance for your heirs - Even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.

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Pay federal "death" taxes and state "death" taxes - According to a new law enacted in December 2010, estates valued at $5 million or less are exempt from the tax. Estates worth more than $5 million are taxed at a 35% rate. Although there was no estate tax due in 2021, some heirs encountered larger-than-expected capital gains taxes upon sale of inherited assets. This was due to the requirement that the basis of such assets be carried over from the decedent to the heir.

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Create a Source of Savings - Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner's request. Since most people make paying their life insurance policy premiums a high priority, buying a cash-value type policy can create a kind of "forced" savings plan. Furthermore, the interest credited is tax deferred (and tax exempt if the money is paid as a death claim).