Life & Investments

Term Life Insurance

Provides life insurance coverage for a specified term and is commonly known as the most affordable option of life insurance. Term is generally considered “pure” insurance, where the premium buys protection in the event of death and nothing else for a specific amount of time. The more common time options are; 15, 20, 25- or 30-year terms. The premium and death benefit stay level during these terms. 1. Face amount (protection or death benefit). 2. Premium to be paid (cost to the insured). 3. Length of coverage (term).

Whole Life/Universal Life Insurance

This policy concept provides lifetime death benefit coverage for a level premium. Part of the insurance contract stipulates that the policyholder is entitled to a cash value that is part of the policy and guaranteed by the company. This cash value can be accessed at any time through so called “policy loans”. These “policy loans” are received income tax-free and paid back according to mutually agreed-upon schedules. These policy loans are available until the insured’s death.

Universal Life insurance is intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. Universal Life insurance policies have cash values so paid-in premiums increase their cash values; administrative and other costs reduce their cash values. The big difference is that with universal life, both the premiums and death benefit are flexible.


Indexed Universal Life Insurance

Universal Life may be the way to go if you are looking for a quick and secure way to build your retirement? Indexed. With interest rates that can average around 8% or higher, but that cannot go below 0%. You are looking at a financial vehicle that quickly can accumulate the cash value and build a good retirement tax-free income. BVBC Financial Group work with some of the largest and most recognized IUL companies in the world.

State insurance departments regulate Index Universal Life which is a type of fixed universal life and insurance product. These financial vehicles are usually sold through insurance agents, banks and registered representatives. By contrast, indexed life usually provides a downside guarantee of 1% or less, but earns potentially higher upside interest crediting, based on the performance of an outside stock index (such as the Standard and Poor’s 500, a.k.a. S&P 500). Indexed life products have a floor of zero, so a consumer’s money is always protected from downturns in the market. However, indexed life also has upside interest crediting potential of 15% or more, Indexed Life Insurance is a moderately conservative interest-sensitive life insurance product.

Fixed Annuties

Fixed Annuities are regulated by state insurance departments and sold through insurance agents, banks, or registered representatives and with the purpose of preventing you of outliving your income, similar to Social Security, but with the difference that these are not being managed by the government. Fixed annuities pursuant to state insurance law will provide a minimum rate of interest as provided in the annuity policy. How the actual rate of interest is credited on the policy differentiates traditional fixed annuities from indexed annuities. Traditional fixed annuities pay interest on the premium contributed at a rate declared by the insurer in advance. This rate can never be less than the minimum guaranteed rate stated in the policy. Fixed annuities are a very conservative safe money place for retirement dollars. Fixed annuity interest rates are generated from a portfolio of US treasuries or other low risk, fixed income instruments.

Indexed annuities are a conservative safe money place for retirement dollars. Indexed annuities usually provide a purchaser with various options for interest crediting. A buyer does have an option to elect a declared interest rate, which generally allows an allocation of anywhere from 0-100% of the account value and functions the same as a traditional fixed annuity. However, the annuity is designed for higher potential interest rates, and provides other allocation options which consider the performance of an outside stock index (such as the Standard and Poor’s 500, a.k.a. S&P 500) to determine the rate of interest. These options pay interest at a rate determined by a formula which considers any increase in the outside index, often subject to a “participation rate”, and/or “cap, and/or “spread”. All indexed annuities have a floor of zero, meaning the absolute worst-case scenario due to a downturn in the market index is a consumer might receive no interest in a particular year.