What is Legacy Life Insurance?
March 11, 2024 | Tom Peterson
Many individuals decide that one thing they would like to achieve in their lifetime is to leave a meaningful legacy or inheritance for their family and loved ones. One of the ways this is achieved is using legacy life insurance. Legacy life insurance is not a type of policy but rather a way of looking at life insurance designed for lifelong coverage and potential wealth accumulation. Life insurance plans are a tool to leave a lasting financial legacy to your loved ones and effectively navigate inheritance planning. In this article, we’ll look at the various types of legacy life insurance available to help you determine the ideal option for achieving your goals.
What is Legacy Life Insurance?
Legacy life insurance, often referred to as estate planning life insurance, is a policy designed primarily to provide death benefits to your beneficiaries upon your passing. Beyond being a financial safety net for your loved ones, it also plays a significant role in funding your estate. There are two main categories of life insurance policies: term and permanent. Understanding these distinctions is key to making informed decisions about securing your financial legacy.
Different Types of Legacy Life Insurance
Term Life Insurance
Term life insurance is designed to cover for a specific period (e.g. 30 years) which pays a benefit in the event of the death of the insured during that time period. This coverage comes with fixed-rate payments for the specified term. After the period expires, coverage isn’t guaranteed, and the client must either forego it or potentially seek additional coverage with different terms. In the event of the insured’s death during the term, the beneficiary receives the death benefit. Term insurance is often the most cost-effective way to secure a substantial death benefit over a specific period.
Whole Life Insurance
Whole life insurance provides coverage for a person’s whole life as long as the scheduled premiums are maintained. These policies accrue cash values and are often guaranteed with maintained premiums. Dividends, dependent on the company’s performance, can be utilized by policyholders to reduce premiums, acquire additional insurance, or even fund term insurance.
Read More: 4 Things to Know About Permanent Life Insurance
Universal Life Insurance
Universal life insurance is a flexible premium life insurance policy that allows the policyholder to adjust the death benefit periodically and vary the amount or timing of premium payments. Premiums are credited to a policy account, from which mortality charges are subtracted and interest is added.
Final Expense Insurance
Final expense insurance is a type of life insurance that covers burial and funeral expenses. Final expense insurance can save your loved ones money and stress at the time of your death. With the high cost of funerals, the last thing anyone wants to think about after they lose a loved one is paying for and planning final arrangements.
Related Read: Understanding the Different Types of Life Insurance
Choosing the right legacy life insurance policy depends on your goals and specific requirements. If you need coverage for just a set period, term life insurance could be suitable. However, if you prefer lifelong coverage, an adjustable death benefit, and cash value, whole life or universal life insurance might be more fitting. For those focusing solely on covering funeral costs, final expense insurance is the ideal choice.
When you want to leave behind a legacy for those who depend on you or who you care most about, the right life insurance policy can be the best option for doing so.
At Twin City Underwriters, we know that individualized attention to a client’s personal situation and needs are especially important, which is why we take the time to understand you and your financial goals. Contact us to schedule an appointment with one of our experienced insurance agents.
Choosing a life insurance plan can be difficult. Working with an insurance broker can help you find a plan that fits your needs. Schedule a one-on-one meeting with one of our life insurance brokers to get your insurance questions answered!
