The term “straight life insurance” is no longer used in the insurance industry, but it pops up occasionally when people talk about life insurance. What you need to know is that, in today’s terminology, “straight life insurance” is the same as whole life insurance. If friends or family members have advised you to look into “straight life,” you will want to look into whole life.
It’s never easy to think about what will happen after we’re gone. When we do, it’s usually because of large life changes. Perhaps you get married. Have your first child. Lose a parent. These are moments when we think about a future that will go on without us. These are also good times to think about the legacy and protection you can leave behind for your family with life insurance.
Whole life insurance (which is the same as “straight life insurance”) is a dependable financial vehicle that can ensure your family’s financial stability after you’re gone. Once you have a whole life policy in place, the insurance benefit is guaranteed for life.1 As long as you continue to pay premiums, you can count on your whole life policy to support your family, no matter what happens.
There are two main types of life insurance: whole life (which is the same as “straight” life) and term life. While term life protects you for a predetermined amount of time (usually 10-20 years) and is initially less expensive than lifetime coverage, whole life offers guaranteed lifetime coverage, stable premiums, and a savings component called cash value that builds up over time. While the premiums for whole life are initially higher, they are locked in at the time you purchase your policy coverage, and they will never increase. So whole life can actually be more cost-effective in the long run.
Life insurance protects the lifestyle of your family if you’re no longer there. The benefits can cover a mortgage, children’s higher education, and other ongoing living expenses. So your family can continue to do the things you always wanted them to do. The right policy can remove the extra financial burden on your family during a particularly difficult time.
Since life insurance premiums are based, in part, on your age, your rates for coverage will probably never be lower than they are right now. So, if you want to lock in the lowest possible rates—and never have to worry about them going up in the future—the sooner you act, the better off you’ll be.
No. Annuities are products designed to provide a stream of income while you are still alive. They are used as a retirement vehicle to give retirees a guaranteed 1 and steady income in their golden years. There is usually no extra benefit paid to your family after you pass. The term “straight life annuity” is rarely used within the insurance industry anymore.
Whole life (which is the same as “straight” life) offers lifetime protection. Once you agree to a policy and purchase it, you’re set. Most of the time, you’ll need to take a medical exam to qualify. After that, your premiums are locked in and never increase. All you must do is continue to pay the premiums.
Once you agree on the policy and it goes into effect, the premiums will never go up. The younger and healthier you are when you begin your policy, the lower the guaranteed premiums will be, so it’s best to get started early.
As long as you continue to pay the premiums, your life insurance benefit is guaranteed to be paid to your beneficiaries.1 They will get a lump sum for the full coverage amount of your policy and will not owe federal income taxes on it.
Cash value is an additional benefit that can help with unforeseen costs while you are still alive. It grows with each premium payment and can be used when you need it for things like medical bills, a down payment on a house, a grandchild’s college tuition, and more.2
While everyone’s situation is different, whole life insurance can be a sound choice for anyone who likes to know exactly what they’re getting. That’s because this coverage offers guaranteed lifetime protection, fixed premiums, and steady, predictable cash value growth. In fact, there may be no more dependable way to protect your family’s lifestyle and future, and to make sure that you can leave them a financial legacy when you are gone.
Of course, you don’t have to make such an important decision on your own. Our knowledgeable agents offer a free consultation and can help you build a plan to take care of you and your family, no matter what type of insurance you choose.
1 Any guarantees are backed by the claims-paying ability of the insurer
2 Accessing the cash value for special purposes will reduce the available cash surrender value and the death benefit.
In Oregon, the New York Life Whole Life policy form number is ICC18217-50P (4/18)