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Life Insurance Made Simple: Comparing Insurance Types

Published: May 2016

Video Transcript

LIVE ACTION SEGMENT — ACTOR PLAYED

Ryan and Michelle are painting their living room.

Michelle: Stephanie said term insurance was the cheapest…

Ryan: Yeah, but Michael said permanent was the way to go…

They're utterly confused and give wacky explanations of what they think each policy offers.

Michelle: Isn't Term insurance for when we, you know, set a certain term for our insurance and…

Ryan: (totally B.S.) No, it's when the terms are clearly defined based on your debt ratios vs your return on the initial payment… and various other demographics. I don't want to bore you with technical terms.

Michelle: (skeptical and slightly bewildered…but she keeps digging) Shouldn't maybe we get permanent then? Based on it being about permanence?

Ryan: (momentarily uncertain…) Maybe…

Michelle: Permanent insurance means you're stuck with it no matter what happens, right?

Ryan: (with renewed bravado) No, it's when the terms are permanently defined based on your debt ratios vs your return on the initial payment… and various other demographics. I don't want to bore you with technical terms.

Michelle: (raises a skeptical eyebrow)


ANIMATION SEGMENT — Segue in from live action open

It's crazy how life insurance can seem so confusing, yet be so essential to your family's long term financial security. So let's break it down into a couple easy concepts.

Life insurance is about protecting your family…making sure they don't fall on hard times when you die. Or leaving a legacy for your kids or their kids

There are two major categories of life insurance: Term and Permanent. Term life insurance is a good choice for younger families who want affordable insurance for only a specific period of time. This time period, or term, is usually determined by how long you plan to be working, the length of your mortgage, when your kids will graduate college, or when certain debts will be paid off. With Term life insurance, you can protect your loved ones from financial distress if you die. The monthly cost stays the same until the end of the term

Then there's Permanent life insurance. It's designed to cover a person for their entire lifetime. Permanent life insurance breaks down into two different types: Whole Life and Universal Life.

Whole Life insurance provides guaranteed coverage and the payments are fixed, based on your age when you buy it. Whole Life insurance builds cash value that's guaranteed to increase. Like equity in a home, cash value can be borrowed or withdrawn if you ever need it.

And many Whole Life policies offer the opportunity to earn even more — through dividends or other credits. Most policies allow these earnings to be taken in cash, used to buy additional life insurance, or to help reduce the amount you might pay out of pocket to fund the policy.

Universal Life may be a good option if you want lifelong coverage, but still want some flexibility down the road. It offers flexible payments and a variety of choice in how aggressive you want cash value performance to be. Some policies offer greater potential for cash value growth while others offer predictable returns.

Term, Whole, and Universal Life Insurance each offer options that fit individual needs.


LIVE ACTION SEGMENT — ACTOR PLAYED

Resolution:

Michelle: Get back to work, slacker…

Ryan is looking at his iPad.

Ryan: Huh!… Now I get it.

Michelle prompts him with look.

Ryan doesn't look up from the iPad but gestures to the wall…

Ryan: Life insurance… I took some notes.
The wall is painted in a giant simple chart about Term v. Perm/Whole/UL


End Frame:

Make sure life insurance is part of your plan. Contact your local Allstate Agency today.


Disclosure:

Loans or partial withdrawals can reduce the policy's cash value and death benefit, can increase the possibility of policy lapse and may result in a tax liability. Consult a tax advisor for additional information on the tax treatment of loans or withdrawals from a life insurance policy.

Subject to terms, conditions and availability. Life insurance offered through Allstate Life Ins. Co. & Allstate Assurance Co., 3075 Sanders Rd, Northbrook IL 60062; Lincoln Benefit Life Co., 1221 N St. Ste 200, Lincoln NE 68508; American Heritage Life Ins. Co., 1776 American Heritage Life Dr., Jacksonville FL 32224. In New York, life insurance offered through Allstate Life Insurance Company of New York, Hauppauge NY.

© 2016 Allstate Insurance Co.


Questions? Your local agent can help.

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Life insurance offered through Allstate Life Ins. Co. & Allstate Assurance Co., 3075 Sanders Rd, Northbrook IL 60062; Lincoln Benefit Life Co., 1221 N St. Ste 200, Lincoln NE 68508; American Heritage Life Ins. Co., 1776 American Heritage Life Dr., Jacksonville FL 32224. In New York, life insurance offered through Allstate Life Insurance Company of New York, Hauppauge NY.

Securities offered by Personal Financial Representatives through Allstate Financial Services, LLC (LSA Securities in LA and PA). Registered Broker-Dealer. Member FINRA, SIPC. Main Office: 2920 South 84th Street, Lincoln, NE 68506. (877) 525-5727. Check the background of this firm on FINRA's BrokerCheck website.
ECC Monitor: OK