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Life Insurance

Life insurance can offer peace of mind by providing the funds your family or business may need to meet immediate and ongoing expenses in the event of an untimely death, such as:

  • Final expenses
  • Estate taxes
  • Survivor’s daily living expenses
  • Mortgages and other loan obligations
  • Tuition payments

By purchasing a life insurance policy, you can help ensure that those you care about will not be burdened by debt that could necessitate the sale of assets to pay bills or taxes. Your beneficiaries will not have to pay federal income tax on the benefits they receive, and since the payment process bypasses probate, it can save time and money.

In addition to serving as a tool for financial protection, life insurance can be used for accumulation strategies to meet other goals, including education, retirement, tax minimization, wealth transfer and legacy planning.

Who Needs Life Insurance?

Protecting those you care about from financial hardship in the event of your death can be a prime motivator in the decision to purchase life insurance. You may wish to consider life insurance protection if:

  • others depend on you for financial support
  • you provide family services such as child care or housekeeping
  • you wish to help a surviving spouse or partner maintain his or her lifestyle after you’re gone
  • you need to provide for the care of a disabled or elderly family member
  • you seek an estate planning tool to help reduce the effects of estate taxes and facilitate the transfer of wealth to your heirs or to create a legacy

Replacement of income and your personal situation and preferences will influence the decisions you make. Many different types of insurance are available, each designed to meet different objectives. The type that you purchase may depend on how much coverage you require.

How Much Insurance Do I Need?

While the amount of life insurance you may need will ultimately depend on your unique situation, some experts recommend a benefit equal to several times your annual income.1 You may need more if you have a young family, large salary and a sizeable mortgage, or less if your children are grown or you have other assets that can be utilized.

Life insurance costs vary based on your age, health status and the type of policy you wish to buy, among other factors.

Types of Life Insurance

There are two main types of life insurance: term and permanent. Both categories include different products designed to fulfill various needs.

Term Insurance:

  • Designed to cover a temporary need, for a set period of time, typically 1 – 10 years
  • Benefits are paid only if you die during the policy's term
  • Coverage is generally less expensive than other types of insurance
  • Premiums usually increase over time
  • Policies have no cash value
  • May be renewable after the term expires
  • Some policies can be converted to permanent insurance, should your needs change

Permanent Insurance:

  • Designed to for long-term protection
  • Combines insurance with savings
  • Benefits will be paid as long as the policy remains in effect
  • Premiums are usually higher than other types of insurance
  • Policies may build cash value that can be borrowed on a tax-free basis or withdrawn up to the policy basis amount *2

Types of Permanent Insurance:

  • Whole Life – Whole Life Insurance provides coverage for the insured’s lifetime combined with a savings component. Policies generally offer fixed premiums, guaranteed death benefits and the potential to build cash value.
  • Universal Life – is similar to Whole Life Insurance but features added flexibility and potentially greater returns on the savings component. Premiums and the face amount may be adjusted as your needs change, and cash values may be withdrawn. While cash values are influenced by interest rate changes, Universal Life policies usually offer a guaranteed minimum return. However premiums may increase when interest rates decline.
  • Variable Life – offers fixed premiums, the ability to choose investment options and the potential for the cash value and death benefit to increase or decrease in conjunction with the performance of the underlying investments. While most policies guarantee that the death benefit will not fall below a specified minimum, there is usually no guarantee for cash values. Earnings are not taxed until the policy is surrendered and earned investment interest can be applied to pay the premiums. However the cash value may not be withdrawn during the policyholder’s lifetime.
  • Variable Universal Life – blends the features of Variable Life and Universal Life in a more aggressive policy. Premiums and death benefits may be adjusted as your needs change. In addition, Variable Universal Life policies include the ability to choose investment options and the potential for the cash value and death benefit to increase or decrease in conjunction with the performance of the underlying investments. No guarantees are offered beyond the original face value death benefit.

Your Legend Financial Professional may be a valuable resource as you assess your insurance needs and explore your options. A Financial Professional with insurance knowledge can review your existing coverage, if applicable, and help you develop a customized plan with built-in flexibility to accommodate changing circumstances and goals.

1. Indiana Department of Insurance

2. Surrender charges may apply on withdrawals of cash value. Should a withdrawal exceed the policy basis, ordinary income taxes may apply to any amount above and beyond the policy basis. Interest charges may apply on loans. Loans may affect cash values and death benefits.


Before investing in a variable universal life or variable life insurance policy, consider the policy and its underlying funds’ investment objectives, risks, charges and expenses carefully. Please read the prospectus carefully before you invest or send money.