Types of Life Insurance - Cigar Life Guy

Finding life insurance for cigar smokers is often hard enough. Add to that the types of life insurance policies that are available. Which type of insurance is best for you can leave you scratching your head. That’s where Cigar Life Guy® can help. By ensuring that you buy only what makes sense for you is what sets us apart. If you don’t need it, don’t want it or can’t afford a particular policy, then why buy it, right? We’re here to guide you on which types of life insurance are available. Together, we’ll help you sort through them to get the best policy at the best price and value. It’s not about the money. It’s about ensuring that you and your loved ones are well-protected. So, let’s dive in.

Cigar Life Guy discusses the different types of life insurance

Term Life

Typically, a 10-, 15-, 20-, or 30-year “Level Term Life Insurance” policy is what the name implies. You get the amount of coverage you select for the entire term period. The rate is locked in for the length of the term that you choose.

Term life offers one primary advantage: it is the lowest-cost way to get a lot of coverage. The disadvantage to it is when the term ends, you need to find other coverage. The policy is over. The reason term life is so inexpensive is that the odds of paying a death claim (e.g. you die during the term period) are low. Don’t mistake term life policies that boast of as renewable until age 90 or 95. Most of them are renewable. What they leave out of that statement is the dramatic rate increase after the initial term ends. If you’re considering term life insurance, look at it as though it expires at the end of the term.

One often overlooked feature of most term life policies is a conversion privilege. Conversion allows you to exchange your term policy for a permanent policy. More on this later. Yet, the conversion completes without requiring you to re-qualify your medical history. You fill out some paperwork to convert your term life policy over to a permanent policy and pay the new premium. This is a H-U-G-E opportunity if your health deteriorates (e.g. you get cancer or have a major medical event or crisis) after you start your new policy.

Tip: Do you have an existing policy that you’d like to convert? No problem! Cigar Life Guy® can help you with your conversion options even if you got the policy somewhere else.

Permanent Insurance

There are two categories of permanent life insurance: universal life and whole life. Knowing the difference is important because they are not the same thing. Here’s the breakdown.

Universal Life

Universal life policies are very flexible types of life insurance. At its core, universal life is simple. Every payment gets broken down in two ways.

To pay the current cost of insurance and administrative costs
To credit the policy’s cash account

Over time, the amount in the cash account credits interest that’s based on another factor. It can be rate decided or “declared” by the company or it can be tied to an external index like the S&P 500. The policy owner can stop or vary premium payments if there’s a positive balance in the cash account. The policy remains active.

Some universal life policies are meant to be overfunded. Why? The rate of return offered by the insurance company is attractive. Indexed Universal Life (IUL) is an example of this. Overfunded life insurance policies are often not purchased for their death benefit. Their cash value accumulation opportunity is far more attractive.

Other universal types of life insurance policies, like Guaranteed Universal Life (GUL), are more for a death benefit. The cash values are usually low or non-existent. But, the death benefit is guaranteed as long as the premium payments meet a minimum level. So, this is the most cost-effective way to get a guaranteed permanent death benefit.

Whole Life

Whole life insurance is a type of life insurance that offers less flexibility. It also has a defined payment and it offers contractually guaranteed death benefits and cash value. The cost structure in whole life is higher than universal life. So, Cigar Life Guy® usually recommends using a structured universal life policy to achieve your objectives.

If you’re discussing permanent types of life insurance with Cigar Life Guy®, then begin with your objectives. Are you more focused on the death benefit? If so, it might make more sense to go with a guaranteed universal life insurance policy. Or, is cash accumulation more important? If so, then an indexed universal life policy might make more sense. If you’re looking for a combination, then we can discuss that, too. Together, we’ll find a reasonable solution to meet your needs.

Mortgage Protection

The goal with many types of life insurance is to take care of your largest liability – your home mortgage. Yet, mortgage protection is nothing more than a marketing term. In practice, a regular term life policy is used. Cigar Life Guy® offers several types of life insurance at non-tobacco rates for cigar smokers to protect their mortgages.

Cigar Life Guy® wants you to enjoy all that life has to offer. But, we also want to ensure you are well-protected should something unexpected happen. Dealing with death is not fun for anyone. Call us today to protect yourself and your loved ones. Remember, planning for the future financially protects your loved ones. It also gives you and them peace of mind.