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Life Insurance

What Is Long-Term Care Life Insurance?

Long-Term care life Insurance, or LTC, is a life insurance plan that provides coverage for individuals 65 years and older who require long term care. Long-term care is care in a nursing home or home setting, as well as personal or adult day care services. Individuals who opt for this type of plan typically live with chronic health concerns requiring consistent and/or constant medical care and supervision.

What Is the Difference Between Term and Permanent Life Insurance?

Term life insurance is life insurance that provides coverage for a specific period of time. Should an insured individual pass away while the coverage is active, a death benefit is paid out. Permanent life insurance, on the other hand, is coverage that is not based on a specific period of time and does not expire. Permanent life Insurance plans offer a death benefit, the same as term coverage, but additionally offers savings growth at a guaranteed rate.

<b>Term Life Insurance</b>

Term Life Insurance

  • Pros: more flexibility, lower premium, convertible policies, death benefits, affordability
  • Cons: length of coverage, no savings component

Permanent Life Insurance

  • Pros: coverage does not expire, death benefits, savings component (cash value) which increases over time
  • Cons: less flexibility, higher premium, non-convertible

What Are the Different Kinds of Insurance Offered?


Term plans provide coverage for a specific period of time such as five, ten or twenty years. Death benefits are paid if the insured individual passes away within the term selected. Term plans do not have a savings component.

Permanent/Whole Life

Permanent/whole life insurance plans provide coverage for the duration of an individual's life. The coverage does not expire. These plans feature a death benefit and a savings component that increases over time.

Long-Term Care

Long-term care policies provide life insurance for seniors aged 65 and older who require long-term care services such as living in a nursing home or receiving home care, personal care, and/or adult day care services.

Hybrid Policy

A hybrid policy is any policy that includes features from more than one of the aforementioned plans. For example, an individual may have a life insurance plan that includes whole life coverage as well as long-term care benefits.

What Is LIRP (Life Insurance Retirement Planning)?

A life insurance retirement plan is a permanent life insurance plan that allows individuals to use the cash value portion of the policy, or the savings component, to help fund retirement. Those who have this type of policy are not required to pay taxes on any withdrawals made after the insured individual is over 59.5 years old. Cash gains are additionally tax-deferred.

What Is Index Universal Life (IUL)?

Index universal life insurance allows policyholders to assign cash value, in the amount of their choice, to either a fixed account or an equity-indexed account, such as the S&P 500. These policies provide a death benefit, the same as other plans, but also allow insured individuals to increase cash value over time through an equity index.

Life Insurance Plans for Business Owners

Split-Dollar Life Insurance

Business owners may take advantage of split-dollar life insurance, which is a strategy that can be created by an employee and an employer, a shareholder, or even a corporation. It involves sharing the cost and the benefits of any permanent plan that accumulates cash value.

Key Person Life Insurance

This type of life insurance is purchased by a business or corporation on the life of a key person involved, such as the CEO or owner. The business or corporation pays the premiums and becomes the beneficiary of said key person.

How Much Life Insurance Do I Need?

A life insurance calculator can help determine how much life insurance an individual needs, based on factors including age, gender and income. Such tools only provide estimates, however, so be sure to obtain proper life insurance quotes from a professional.

What About Insurance for People With Chronic Conditions?

Life insurance plans are available for people with chronic conditions. The most commonly selected plans include long-term care and hybrid policies, depending on the needs of the individual.

Frequently Asked Questions

Q: Why is it important to have a life insurance policy?

A: Obtaining life insurance is a way to ensure loved ones are taken care of after a policyholder's passing. Life insurance helps guard against potential financial devastation, particularly in cases of premature death. It helps cover funeral costs so loved ones are able to focus on grieving rather than stressing about money. It offers the insured peace of mind personally and financially.

Q: Is life insurance money considered part of an estate?

A: No. Life insurance proceeds go directly to the beneficiaries declared in the plan regardless of who obtains control of an insured individual's estate upon death.

Q: Is life insurance exempt from creditors?

A: In most cases, yes. Regulations differ by state, however. Those seeking life insurance near Houston, Texas should speak with our experienced team of advisors at Wealth Standard Financial for more information.

Q: How soon does life insurance take effect?

A: It depends. Some policies go into effect immediately while others have a waiting period. The typical waiting period is a few years.

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