Life Insurance

Life Insurance can allow your loved ones to have the money they need in the event of your death to pay bills, pay for college, and other necessary expenses. If you’d like to begin the process of getting life insurance from us, scroll down and contact us, using the contact form below. If you’ve already decided that Term Insurance is best for you, please go to our Term Insurance page.

Below are just a few of the life insurance-related problems we’ve been able to solve for clients. Click the silver bar for each problem to learn more about how we can solve them.

Life Insurance Solutions

Below is more information regarding life insurance that may help you know more about life insurance and what kind of life insurance policy may help you meet your needs and goals.

Additional Information about Types of Life Insurance, How They Work & What They Do

Life Insurance for individuals can be divided into two general categories: Term Insurance and Permanent Insurance. The definitions of these categories are:

Term Insurance: Provides coverage for a specific period of time (10, 20 or 30 years, for example) and pays a death benefit only if the insured dies during that term. It has no cash value and is typically the most affordable option.
Permanent Insurance: A category of life insurance that provides lifelong coverage and includes a cash value component that grows over time. Unlike Term Insurance, it does not expire as long as premiums are paid, and it includes policy types such as Whole Life, Universal Life, Indexed Universal Life and Variable Life.

There are two categories of Permanent Insurance: General Account insurance policies and Separate Account insurance policies. The major differences between the two are:

General Account

A General Account is defined as: a pool of assets managed by a life insurance company and used to support its standard obligations, including most traditional life insurance policies. In General Account policies, the insurer controls the investments, bears the investment risk, and credits interest at fixed or declared rates. The policyholder has no control over how funds are invested.

The key features of General Accounts are:

• The insurance company bears all the investment risk and premiums are pooled into the company’s general investment account.
• They are regulated by State Insurance Departments and The NAIC (National Association of Insurance Commissioners), which provides model regulations and standards followed by most state regulators.
• Investments are managed by the insurer.
• The insurer bears all investment risk.
• Interest is credited at a fixed or declared rate.
• No direct market exposure.
• The policyholder has no investment control.
• Returns are generally lower and more predictable.
• Not regulated as a security.
• Backed by the insurer’s general assets.
• Not protected if the insurer becomes insolvent.

The types of insurance policies that are considered General Account policies are:

• Term Life Insurance (Term Insurance is the same as Term Life Insurance)
• Whole Life Insurance (WL)
• Indexed Whole Life Insurance (uncommon)
• Universal Life Insurance (traditional)
• Survivorship Universal Life (SUL)
• Indexed Universal Life (IUL). An older term for it is, “Equity-Indexed Universal Life” (that’s no longer widely-used).
• Adjustable Life Insurance
• Guaranteed Universal Life (GUL)

Separate Account

A Separate Account is defined as: An investment account held by a life insurance company that is legally segregated from its general account. It is used in certain permanent life insurance policies—such as Variable Life and Variable Universal Life—to hold policyholder-directed investments, allowing cash value to fluctuate with market performance while protecting those assets from the insurer’s creditors.

The key features of Separate Accounts are:

• The policyholder selects investment sub-accounts.
• The policyholder bears the investment risk.
• Returns are tied to market performance and can fluctuate.
• Cash value has direct market exposure.
• Investment control belongs to the policyholder.
• Separate accounts have a potential for higher returns, with a risk of loss.
• Assets are segregated from the insurer’s general account.
• Cash value is typically protected from the insurer’s creditors.
• Regulated as a security (by The SEC and FINRA).
  

The types of insurance account policies that are considered Separate Account policies are:

• Survivorship Variable Universal Life (SVUL)
• Variable Universal Life Insurance (VUL) 
• Variable Life Insurance (VL)
• Variable Survivorship Life Insurance (VSL) (less common term for SVUL structure)
• Private Placement Life Insurance (PPLI) (used by high-net-worth individuals)
• Private Placement Variable Universal Life (PPVUL) (a form of PPLI with separate accounts)

The definitions of each insurance policy type are:

• Term Life Insurance: Provides coverage for a specific period of time (10, 20 or 30 years, for example) and pays a death benefit only if the insured dies during that term. It has no cash value and is typically the most affordable option.
• Whole Life Insurance (WL): A permanent policy with level premiums and a guaranteed death benefit. It builds cash value at a fixed, guaranteed rate.
• Universal Life Insurance (UL): A permanent policy offering flexible premiums and adjustable death benefits. Cash value earns interest at a rate declared by the insurer.
• Indexed Universal Life Insurance (IUL): A flexible permanent policy where cash value grows based on the performance of a market index, such as the S&P 500. The funds are not directly invested in the market and include caps and floors.
• Term Life Insurance: Provides coverage for a specific period and pays a death benefit only if the insured dies during that term. It has no cash value and is typically the most affordable option.
• Whole Life Insurance: A permanent policy with level premiums and a guaranteed death benefit. It builds cash value at a fixed, guaranteed rate.
• Universal Life Insurance (UL): A permanent policy offering flexible premiums and adjustable death benefits. Cash value earns interest at a rate declared by the insurer.
• Indexed Universal Life Insurance (IUL): A flexible permanent policy where cash value grows based on the performance of a market index, such as the S&P 500. The funds are not directly invested in the market and include caps and floors.
• Variable Life Insurance: A permanent policy with fixed premiums and a variable death benefit. Cash value is invested in separate accounts and fluctuates based on market performance.
• Variable Universal Life Insurance (VUL): Combines flexible premiums and death benefits with investment options in separate accounts. The policyholder bears the investment risk and chooses from a range of sub-accounts.
• Guaranteed Universal Life Insurance (GUL): Provides permanent coverage with little or no cash value and fixed premiums. It is designed to guarantee a death benefit through a specified age, often age 90 or later.
• Indexed Whole Life Insurance (IWL): A permanent policy with fixed premiums and a guaranteed death benefit. Cash value growth is linked to a market index but remains in the insurer’s general account.
• Survivorship Life Insurance (Second-to-Die, SVUL): Covers two individuals and pays the death benefit only after both have passed away. Commonly used in estate planning, and can be structured in various permanent forms.
• Survivorship Universal Life (SUL): A permanent life insurance policy that covers two individuals and pays the death benefit only after both have died. It offers flexible premiums and an adjustable death benefit like standard Universal Life, and is typically used in estate planning to provide liquidity for heirs, taxes, or charitable giving.
• Variable Life Insurance (VL): A permanent policy with fixed premiums and a variable death benefit. Cash value is invested in separate accounts and fluctuates based on market performance.
• Variable Universal Life Insurance (VUL): Combines flexible premiums and death benefits with investment options in separate accounts. The policyholder bears the investment risk and chooses from a range of sub-accounts.
• Guaranteed Universal Life Insurance (GUL): Provides permanent coverage with little or no cash value and fixed premiums. It is designed to guarantee a death benefit through a specified age, often age 90 or later.
• Adjustable Life Insurance: A flexible permanent policy that allows changes to the premium, death benefit, and coverage type over time. It combines features of both term and whole life insurance. Today, it’s an uncommon policy type to sell or have. It has generally been replaced by the use of Indexed Universal Life (IUL) and Universal Life (UL) policies, which offer more flexibility.
• Variable Survivorship Life Insurance (VSL) (less common term for SVUL structure):
  A permanent life insurance policy that covers two individuals and pays a death benefit after both have died, with cash value invested in market-based sub-accounts. It functions identically to a Survivorship Variable Universal Life (SVUL) policy and is regulated as a security.
• Private Placement Life Insurance (PPLI) (used by high-net-worth individuals):
  A customized permanent life insurance policy designed for high-net-worth individuals, offering tax-deferred investment growth through institutional-grade investment options. PPLI policies are structured within separate accounts and typically require large minimum premiums and accredited investor status.
• Private Placement Variable Universal Life (PPVUL) (a form of PPLI with separate accounts):
  A type of PPLI that combines the flexibility of Variable Universal Life with private placement investment strategies. PPVUL allows policyholders to direct cash value into specialized sub-accounts, offering greater control, estate planning benefits, and enhanced tax efficiency for wealthy individuals.

The differences between life insurance policy types are:

Whole Life Insurance (UL):

• Fixed premiums and guaranteed death benefit
• Cash value grows at a guaranteed rate
• No investment choices or market exposure
• Strong policy guarantees and builds equity slowly and steadily

Universal Life Insurance (UL):

• Flexible premiums and adjustable death benefit
• Interest credited at a declared rate by the insurer
• No market exposure or investment control
• Modest cash value growth, often lower cost than Whole Life

Indexed Universal Life Insurance (IUL):

• Flexible premiums and death benefit
• Interest crediting tied to a market index (e.g., S&P 500), with caps and floors
• No actual investment in the stock market
• Potential for higher returns than traditional UL, with downside protection

Guaranteed Universal Life Insurance (GUL):

• Fixed premiums and guaranteed death benefit to a specific age (e.g., 121)
• Minimal or no cash value accumulation
• No investment choices or market exposure
• Focused on providing permanent coverage at low cost

Indexed Whole Life Insurance (IWL):

• Fixed premiums and guaranteed death benefit
• Interest crediting linked to a market index
• No direct market investment
• It’s a rare product that combines Whole Life structure with index-linked growth

Adjustable Life Insurance:

• Flexible policy allowing changes to premium, death benefit, and structure
• Cash value grows at a declared rate
• No investment options or market exposure
• Hybrid between term and whole life designs

Variable Life Insurance (VL):

• Fixed premiums and variable death benefit
• Cash value invested in subaccounts chosen by the policyholderMarket performance directly affects cash value and possibly death benefit
• Offers higher growth potential, but with risk

Variable Universal Life Insurance (VUL):

• Flexible premiums and adjustable death benefit
• Cash value invested in separate account subaccounts
• Policyholder bears investment risk and chooses allocation
• Potential for significant growth; useful for long-term, market-oriented planning

Survivorship Variable Universal Life Insurance (SVUL):

• Covers two individuals and pays death benefit after both pass
• Functions like a VUL with separate account investment options
• Common in estate planning for high-net-worth families
• Investment-driven cash value and flexible structure

As complex as this may seem, we at Capital Formation Group have more than 40 years of experience and can help you find a life insurance policy that will help you meet your needs and goals. If you’d like our help getting life insurance, contact us using the contact form on this webpage, by calling or texting us, or by contacting us through our contact page! 

Disclosures: 

No payments were made to the above listing of clients who offered their opinions/testimonials regarding our services. These client experiences may not be representative of all clients.

Indexes are unmanaged and do not incur fees. One cannot directly invest in an index.