Securus Wealth Management
Sarah Hickel
Executive Assistant
3340-B Annapolis Lane N
Plymouth, MN 55447
763-231-7881
763-231-7894
sarah@securuswealth.com
www.howardrichards.net
Policy Types
December 08, 2014
Page 1 of 4, see disclaimer on final page
Policy Types
What are the types of insurance policies?
There are two major categories of life insurance: term life and permanent (cash value) life insurance. Within the two broad
categories are many types of policies that have been developed over the years in response to consumer demand, market
conditions, and changes in the tax laws.
Term life insurance
Term life insurance (also called pure insurance) policies provide life insurance protection for a specific period of time or term. If
you die during the coverage period, the beneficiary named in your policy receives the policy death benefit. If you don't die during
the term, your beneficiary receives nothing. At the end of the coverage period, you must either renew your coverage or apply for a
new policy. Term life insurance is often compared to automobile insurance: You must renew it at the end of every coverage
period. If you get into an accident, you collect on the policy, but if you don't have a claim, you don't get your money back. Term
insurance is available for different time periods ranging from one year to many years.
Permanent (cash value) life insurance
When you buy permanent insurance, the policy provides insurance protection for your entire life as long as the policy remains in
force (meaning the premiums have been paid and the policy hasn't lapsed or been canceled). In addition to the insurance
protection provided by permanent life insurance, this type of policy also builds internal cash values.
Caution: Guarantees are subject to the claims-paying ability of the insurer.
Caution: Variable life insurance and variable universal life insurance policies are offered by prospectus, which you can obtain
from your financial professional or the insurance company. The prospectus contains detailed information about investment
objectives, risks, charges, and expenses. You should read the prospectus and consider this information carefully before
purchasing a variable life or variable universal life insurance policy.
Cash value life insurance covering one life
Policies Covering One Life
Policy
Premium Characteristic
Cash Value Characteristic
Whole life
Fixed, level
Guaranteed rate
Ordinary level premium whole life
Fixed, level
Guaranteed interest
Limited-pay whole life
Fixed, level with shorter payment term
Guaranteed interest
Current assumption whole life
Premium may change, Guaranteed
maximum
May change. Guaranteed minimum
interest
Variable life
Fixed, level
Returns based on investment
performance. Not guaranteed
Adjustable life
Can be adjusted by policyowner
Balance varies depending on premium
payments. Guaranteed minimum interest
Universal life
Flexible at option of policyowner
Balance varies depending on premium
payments. Guaranteed minimum interest
Variable universal life
Flexible at option of policyowner
Balance varies depending on premium
payments. Returns based on investment
performance. Not guaranteed
December 08, 2014
Page 2 of 4, see disclaimer on final page
Cash value life insurance covering more than one life
Policies Covering More than One Life
Policy
Characteristic
Joint life (first to die)
Available in many permanent policy types. Death benefit paid at
first death.
Survivorship
Available in many permanent policy types. Death benefit at
death of last person covered Premiums continue until death of
last person covered.
Policy types subject to special tax rules
Congress has enacted certain tax laws to limit the use of life insurance policies as tax-preferred investment vehicles. When a
policy fails to meet certain insurance definitions and criteria, access to the cash value may be subject to unfavorable tax treatment
and penalties.
Policy Types Subject to Special Tax Rules
Policy
Characteristic
Modified endowment contract (MEC)
Classification can occur when policy excessively funded in early
years or material changes to the policy occur. Cash value loans
and withdrawals subject to unfavorable tax treatment and
penalties.
December 08, 2014
Page 3 of 4, see disclaimer on final page
Securities offered through NFP Advisor Services, LLC, Member FINRA/SIPC. Investment Advisory
Services offered through Securus Wealth Management, LLC. NFP Advisor Services, LLC is not
affiliated with Securus Wealth Management, LLC.
NFP Advisor Services, LLC does not provide tax or legal advice.
This information is published for residents of the United States only. Registered Representatives
and Investment Advisor Representatives of NFP Advisor Services, LLC may only conduct business
with residents of the states and jurisdictions in which they are properly registered. Therefore, a
response to a request for information may be delayed. Not all products and services referenced on
this site are available in every state and through every representative or advisor listed. For additional
information, please contact NFP Advisor Services, LLC Compliance Department at 512-697-6000.
Securus Wealth Management
Sarah Hickel
Executive Assistant
3340-B Annapolis Lane N
Plymouth, MN 55447
763-231-7881
763-231-7894
sarah@securuswealth.com
www.howardrichards.net
Page 4 of 4
December 08, 2014
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2014