If you don’t already know the basics, it’s time to get familiar with life insurance!
What is life insurance?
A life insurance policy is a contract with an insurance provider. By paying regular premiums, the insurance company provides a lump-sum payment (also known as the death benefit) to the beneficiaries in the event of the insured’s death. This cash can help a family meet many important needs including funeral costs, daily living expenses, paying the deceased’s debts, college funding, and more. Plus, there is no federal income tax on life insurance benefits.*
What is the difference between term vs. whole life insurance?
Term life insurance provides protection for a specific time period, such as 10 or 20 years. This option is usually less costly than whole life insurance and the premiums are typically fixed, but there is no investment component. Whole life insurance provides lifetime coverage and part of your premium goes toward building cash value from investments made by your insurance company. Whole life is commonly used to accumulate tax-deferred savings and the premiums are typically fixed.
What do these common terms mean?
Beneficiary – This is the person or entity you name in the life insurance policy to receive the lump-sum payment or death benefit.
Policy – The legal document describing the terms of the insurance contract between the policyowner and the insurance company.
Policyowner – If you buy a policy on your own life, you are the policyowner and the insured. You can also own a policy that names someone else or a partnership or corporation as the insured.
Premium – This is the payment the policyowner agrees to make for an insurance policy. It may be one payment or a series of regular payments.
As a FORUM Credit Union member, you have access to several perks. Exclusively for credit union members, we offer TruStage Life Insurance Policies** to help you protect the people who matter most in your life. For more information, click here
or call 855.612.7909.
*The above is not intended to be tax advice, was not written by a tax professional and is informational only. Please consult a tax advisor for your specific situation.
** TruStage™ Life Insurance is offered by TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company. The insurance offered is not a deposit and is not federally insured or guaranteed by your credit union.