Tucson Life Insurance and Annuities
Life insurance protects against financial loss due to the death of the insured. Annuities provide the security of a lifetime income. These financial products are tailored to meet the needs of people at different stages of their lives. Tucson Insurance Associates have access to a wide range of life and annuity products to offer their customers.
Term Life Insurance
Policy owners pay a periodic premium and insurers pay a stipulated death benefit if the insured dies within the coverage period. Premiums are lower than for permanent insurance, and the policies have no cash value. Annually renewable policies initially carry extremely low premiums, but these premiums rise each year and can become very expensive later in life. Level-premium term policies charge the same periodic premium through 10, 20, 30 or even more years, though level premiums are not always guaranteed for the entire paying preiod. Many offer conversion to permanent products without new underwriting. Some also offer continuation of the policy past the term on an annually renewable basis, but often at extremely high premiums. Term life insurance is appropriate for anyone who needs life insurance only for a certain period of time. For example, young families that need protection while children are young and until retirement income is saved, businesses that want to cover the life of a key employee until retirement, or those who want to supplement permanent life insurance.
Permanent Life Insurance
Permanent life insurance includes whole life and universal life and is often called “cash value” life insurance. Permanent insurance is best purchased early in life, when annual premiums are lower. However, older buyers may find it highly effective for estate planning. Permanent life insurance is purchased by people who need to protect their incomes during working years and who expect to need coverage later in life. People also buy permanent insurance to help in estate planning. The death benefit is free of income tax, and it provides a source of immediate liquidity. Cash values may be accessed by loans or withdrawals. Most policies offer a choice of two death-benefit options: the face amount, or the face amount plus cash value. Policies insuring two people pay on the death of the first or the second.
Annuities protect against annual income taxation, and if annuitized, can protect from running out of money, but do not protect against inflation. Fixed-annuity assets are part of the general fund of the issuing insurer. The general fund invests in conservative instruments. Annuities in their optional distribution – or payout – phase can provide greater income than comparably safe fixed-income products, because the lump sums provided by buyers to purchase their payout streams become part of a pool of money that is divided among survivors when other buyers die. The trade-off for buyers is that they give up access to their lump sums in order to buy their income streams. Income payments remain the same for the life of the annuitant.