The amount of money you pay to keep the insurance in force for the specified term or period.
Term Life Insurance
Provided protection for a certain period of time, for example, 10 or 20 years, or to a certain age. There is generally no cash value associated with term insurance. Term insurance is like "renting" your coverage.
Annually Renewable Term
Starts off inexpensively and it increases in cost each and every year. The reason for that increase is that as you get older, you're considered more of a risk to the insurance company so they have to charge you a little bit more for the coverage each and every year.
Starts off a little bit more expensive than annually renewable term insurance, but the premium remains constant. But it's only for a certain period of time, for instance, 20 years.
Cash-value life insurance featuring lifelong coverage, with flexible death benefit and premium amounts, and competitive cash-value growth potential. The premium, death benefit and cash-value are all guarnateed. In addition to the guaranteed values, the policy may earn dividends that can be used to increase the cash-value and the insurance or they can be used to help pay the premiums.
Similar to whole life insurance except that the policy owner chooses how the cash values are invested. There are generally several accounts to select from, allowing someone to make the investment choices that are best suited to their particular risk tolerance and goals. The cash-value is not guaranteed, because it depends on the performance of the particular funds that are selected.
Similar to whole life in that it can be designed to last your entire lifetime. The biggest difference is that premium payments are flexible. You can generally pay what you want, when you want. The flexibility can also cause this type of policy to not work as originally intended. If someone does not pay enough premium as often enough, the policy will lapse and potentially not be there "where you need it". Premiums, death benefit and cash value are only guaranteed to the extent that premiums are actually paid. In other words, premiums, cash value and death benefit can change on this type of policy. The flexibility can be attractive, but it works both ways.
Cash Surrender Value
The equity available to the owner when the policy is surrendered to the life insurance company. No cash values are accumulated with a term policy.
The amount of money paid back to the policy owner in any given year when the company's actual performance is better than what was guaranteed. While dividends are no guaranteed, Northwestern Mutual has paid them every year since 1872. Typically dividens are left in the policy and used to increase insurance and policy values. (Also called "purchasing paid-up additions".) They could also be received as "cash" or used to pay premiums.
Types of Life Insurance
Term and Permanent.
-Provides temporary protection.
-Some policies may be renewed.
-Some policies may be converted to a permanent policy.
-Most policies have premiums that increase as you get older.
-Provides lifetime protection.
-Contains guaranteed cash value, loan value and paid-up insurance from dividends.
-Most policies have level premiums for life.
Generate superior returns under a variety of economic conditions, while maintaining a well-balanced and diversified portfolio to preserve the company's exceptional financial strength.
Performance of portfolio
Essential ingredient in maintaining the company's financial strength and ability to deliver value to policy owners.
Produce capital that helps build the company's strong financial base. They are also the primary determinant of the dividend scale interest rate applied to traditional permanent life insurance policies.
Contracts issued exclusively by life insurance companies that promise guaranteed rates of interest.
Tier 1 capital reserve
Bank's most important asset and a key measure of its strength.
Fractional reserve lending
Banks ability to lend 10x's more than whats on deposit.
Permanent life key benefits
Safety, earnings in addition to guaranteed rates, valuable tax benefits, asset protection, income-tax-free death benefit, professional money management.
Money is liquid and safe.
100% of money is at risk 100% of time.
Heart of any life insurance company and, by design, one of the safest places for savings in America today.