Tips & Advice

Your Life Insurance Options, Simplified

Presented by the Financial Advisors at Apple Financial Services LLC, through CFS*

When it comes to life insurance, there are many options. You may have heard terms like "whole life insurance," "term insurance," or "variable insurance," but what do they all mean? And what are the differences? First, let's consider what they have in common: all life insurance policies provide payment to a beneficiary in the event of your death. Except for that basic tenet, the differences between policies can be major.

Whole life insurance.
This type of insurance covers your entire life (not just a portion or a "term" of it). Insurance companies tend to be cautious when selecting their investments, so the benefits could be potentially lower than if you invested on your own. Whole life policies also tend to cost more than "term" policies. This is both because they grow what is known as "cash value," and, after a certain period of time, you will be able to borrow against or withdraw from your whole life benefits.

Term insurance.
Rather than covering your whole life, "term" insurance covers a pre-determined portion of your life. If you die within that term, your beneficiaries receive a death benefit. If not, generally, you get nothing. To put it simply, term insurance allows you to purchase more coverage for less money. Basically, you are betting on the probability of your death occurring within that specified "term."

Variable life insurance.
Variable life insurance is a permanent insurance. Unlike whole life insurance, however, variable insurance allows you to invest the cash value of your policy into "subaccounts" (which can include money market funds, bonds or stocks). Variable insurance offers a bit of control, as the value and benefit depend upon the performance of the subaccounts you select. That means there could be significant risk involved, though, since the performance of your subaccounts cannot be guaranteed.

Universal life insurance.
With universal insurance, it all comes down to flexibility. It is permanent life insurance that provides access to cash values, which, over time, build up tax-deferred. You can choose the amount of coverage you feel is appropriate, and you retain the ability to increase or decrease that amount as your needs change (subject to minimums and requirements). You also have some flexibility in determining how much of your premium goes toward insurance, and how much is used within the policy's investment element.

So, which is right for you? Many factors come into play when deciding what type of life insurance will best suit your needs. The best thing to do is schedule no cost, no obligation consultation with an Apple Financial Services Financial Advisor through CFS* to review your options.


*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer, (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Apple FCU has contracted with CFS to make non-deposit investment products and services available to credit union members. Apple Financial Services LLC is a subsidiary of Apple FCU and is not directly affiliated with CFS.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.