Mazo Model Life Insurance Portfolio

Term Life Insurance (Individual) (Level or Increasing)

Term Life insurance pays a death benefit if the insured dies during a set number of years determined at purchase, e.g. 10, 20, etc. “Level Term” charges the same premium for the entire term. “Increasing Term” starts with a lower premium the 1^st year but then increase each year. Term Life has an end. At the end of the term the policy ends, is no longer in force. After that point if the insured dies zero death benefit is paid. “Convertible” term life can be converted to permanent life insurance  by paying more, based on availability by individual carriers and products. “Return of Premium” Term Life will typically have Cash Value of premiums paid. Otherwise, when Term Life ends there would be zero Cash Value.

================================================================================================================

Product

Typical Buyer (sample NB Products might have multiple types of buyers))

Advantages

Disadvantages

Term Life Insurance (Individual)

Parent(s) w child(ren) typically at home and not old enough to earn their own living.

If a parent dies, the child is left in difficult economic circumstances or at the mercy of others.

1. Most bang for the buck when young & healthy
   
   
2. Typically inexpensive / affordable. Relatively small premium for relatively large death benefit. 

1. Most beneficial when the need for life insurance clearly ends at a specific date or event (e.g. youngest child gets 1^st job &  / or moves out)
   
   
2. Typically requires some kind of health underwriting.
   (e.g. typically difficult / “impossible” if you have a terminal illness, regardless of age)
   
   
3. At end of term or earlier if surrendered, no cash value

==============================================================================================================

Individual Term Life Insurance w Return of Premium (ROP)

Same as Individual Term Life except that all or a portion of premiums paid can be recouped “Return of Premium.”

================================================================================================================

Product

Typical Buyer (sample NB Products might have multiple types of buyers))

Advantages

Disadvantages

Individual Term Life Insurance w Return of Premium (ROP)

Parent(s) w child(ren) typically at home and not old enough to earn their own living.

1. Most bang for the buck when young & healthy
   
   
2. Typically inexpensive / affordable

As above except w ROP your annual premium is higher in return you receive some or all  premium back when you surrender or at end of term

===============================================================================================================

Group Term Life Insurance

Term Life Insurance provided through a group such as employer, professional association, etc. More likely to increase in price, either annually or in steps, than to be level for the term period. If from e.g an employer, might not be able to maintain coverage when you leave the employer. Or, sometimes, only at higher cost.

================================================================================================================

Product

Typical Buyer (sample NB Products might have multiple types of buyers))

Advantages

Disadvantages

Group Term Life Insurance

Parent(s) w child(ren) typically at home and not old enough to earn their own living.

1. Most bang for the buck when young & healthy
   
   
2. Typically inexpensive / affordable
   
   
3. Group Life health underwriting might be less stringent than individual Term

1. Most beneficial when the need for life insurance clearly ends at a specific date or event (e.g. youngest child gets 1^st job &  / or moves out)
   
   
2. Tied to membership in the group
   
   
3. “Good” idea: Buy from a professional group you can continue to be a member of for the length of the term.
   
   
4. “Bad” idea: Employer Group because if you change employers but have become less healthy (or worse, uninsurable) individual term life might have become too expensive or in the worst case unavailable at any price.

===============================================================================================================

Guaranteed Permanent Life Insurance (generic description)

A life insurance policy that has the potential to pay death benefit regardless of how old the insured is at death if premiums paid per the policy. At maturity, the death benefit will be guaranteed and no more premiums will be due. Often these days maturity could be at age 121 but carrier dependent and may vary.

================================================================================================================

===============================================================================================================

GUL-Guaranteed Universal Life Insurance

Permanent life insurance with potential of guaranteed lifetime death benefit when premiums paid per policy.

================================================================================================================

Product

Typical Buyer (sample NB Products might have multiple types of buyers))

Advantages

Disadvantages

GUL-Guaranteed Universal Life Insurance

1. One or both spouses e.g. receiving Social Security and / or Pension
   
   
2. Estate planning purposes of various other kinds
   
   a) Provide for a specific post-death need e.g. grandchildren's education
   
   b) Pool of capital to help defray estate taxes and / or add to future generations' net worth

1. Guaranteed lifetime Death Benefit (DB) when premiums paid as specified
   
   
2. Considerably less expensive than Whole Life

1. Typically no guaranteed Cash Value, or else very little
   
   
2. Expensive
   
   
3. Term insurance becomes less and less available as age goes up. Rare past age 70.
   
   
4. Coverage is needed at time of death regardless of age, so need a product guaranteed to stay in force when premium paid as specified.

===============================================================================================================

Whole Life Insurance

Permanent life insurance with potential of guaranteed lifetime death benefit and guaranteed cash value-typically 100% of guaranteed death benefit-at maturity when premiums paid per the policy.

================================================================================================================

Product

Typical Buyer (sample NB Products might have multiple types of buyers))

Advantages

Disadvantages

Whole Life Insurance

1. Estate planning purposes as above with added flexibility of cash value available to owner during lifetime.
   
   
2. Business reasons

1. Guaranteed lifetime DB-Death Benefit when premiums paid as specified
   
   
2. Guaranteed cash value increases over life of policy.
   
   
3. Partial cash value could be borrowed or withdrawn by owner, giving more financial flexibility.

Most expensive