We believe life insurance is one of the most powerful, yet often misunderstood financial tools available. While some treat it as an afterthought, its potential goes far beyond basic coverage. At Royal Circle, life insurance is integrated into the core of our financial planning. We see it as a foundational asset that helps protect and strengthen our clients’ overall financial strategies.

What Is Life Insurance?

Life insurance is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured. ​

The Three Major Components of a Life Insurance Policy

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  • Death benefit - Death benefit is the amount of money the insurance company guarantees to the beneficiaries identified in the policy upon the death of the insured. 
  • Premium - A life insurance premium is a payment made to the life insurance company, to pay for a life insurance policy. Premium can also contribute to growing the cash value of a permanent type of life insurance. 
  • Cash value - This component serves two purposes. It is a savings account, which can be used by the policyholder, during the life of the insured, with cash accumulated on a tax-deferred basis. The second purpose of the cash value is to offset the rising cost or to provide insurance as the insured ages.

The Different Types of Life Insurance Plans

Common types of life insurance plans you could get to protect yourself and your loved ones.
Whole Life InsuranceWhole life insurance provides protection for the entire life of the insured and builds up cash over time that can be available to the policy owner should they need it.
Benefits of Whole Life Insurance
  • Guaranteed death benefit
  • Guaranteed cash value
  • Potential additional cash value by the receipt of any dividends declared by the company. Although not guaranteed, dividend payments are generally declared annually by the company.
  • Level premiums that are guaranteed to never change.
Term Life InsuranceTerm insurance is protection only for a stated period of time. The price, amount, and time length of coverage varies depending on the type. 
Benefits of Term Life Insurance
  • Guaranteed death benefit for a fixed period
  • Fixed premium.
  • No cash value.
  • Coverage is for a certain period of time (term), usually for a specified number of years or to a specific age of the insured.
  • Initial premiums tend to be lower but will eventually increase.
Universal Life InsuranceUniversal life insurance is a form of permanent insurance that gives policy owners the flexibility to adjust cost, coverage, and cash value to meet their goals.
Benefits of Universal Life Insurance
  • Flexible death benefit
  • Flexible premium
  • Policy cash values are credited a current interest rate that is set by the insurance company, which is subject to change, but will never be lower than a guaranteed minimum interest rate.
Indexed Universal Life InsuranceMay be ideal for those who need death benefit protection but are focused on cash value accumulation for lifetime needs such as supplementing retirement income.
Benefits of Indexed Universal Life Insurance
  • Flexible death benefit
  • Flexible premium
  • Cash value grows based on an interest crediting strategy that is tied to changes in a market index such as the S&P 500.
  • Downside protection through minimum guarantees to ensure that your cash value will not decline due to decreases in the Index.
Variable Universal Life InsuranceVariable life insurance is a form of permanent insurance that allows the policy owner to direct the investment of the cash value.
Benefits of Variable Universal Life Insurance
  • Flexible death benefit
  • Flexible premium
  • Cash value grows based on the performance of the professionally managed stock, bond and money market sub-accounts that you choose. You can design a portfolio to match your comfort level and risk tolerance. Policy cash values fluctuate based on the sub accounts in which you are invested and may lose value, including principal.

The Importance of Reviewing Your Current Life Insurance Policy

​The Importance of Reviewing Your Current Life Insurance PolicyFor all of us, providing our family with a safe and secure future is our number one priority. We plan, save and
work hard to make this happen each and every day. But does your existing plan take care of your family, or your
assets, in the event that you are no longer there to provide for them? That is why we recommend a yearly review
of your life insurance coverage to make sure you’re still on track to meet your goals. Whether it is updating the
beneficiary on your life insurance, or simply reviewing your current plan. We want to make sure that you have all
of the information you need to continue to make smart decisions about your financial future.

How do you know if you need a Life Insurance Review?
  • Did you recently purchase a new home?
  • Have you and your spouse recently had a new baby?
  • Are you planning to retire soon? Or have you just recently retired?
  • Have you recently had an increase or decrease in household income?
  • Have your children recently moved out of the family home?
  • Have you recently had grandchildren?

If you answered yes to any of these questions, then it is time for us to meet and review your existing goals to
ensure that you are still on track to meet all your family’s goals.
© 2021 Royal Circle Consulting