Doctors Benefits offers whole life, universal life, and term life insurance for doctors, physicians and dentists. We provide life insurance for doctors and physicians to fit a range of needs. Life insurance is primarily used for two purposes: to provide a death benefit and to build cash value.
Although conditions and stipulations will vary amongst different types of life insurance contracts, the basic benefit all provide is a death benefit. A life insurance policy protects your loved ones in the event of your death, ensuring they still have a financial resource in your absence.
Some policy types accumulate tax-deferred cash values in addition to a death benefit. Often this cash value can be accessed during lifetime, through policy loans or withdrawals. This is particularly helpful for emergency situations and financing things like a college education or vacation. Again, the conditions and stipulations will depend on the life insurance policy, carrier, and elected features.
Life insurance products are evolving, with new innovations introduced into the marketplace on a regular basis. While there is much variation, life insurance typically falls under two categories: term life and permanent life. Physicians and Dentists typically carry both types of coverage to insure larger short term needs while also locking in permanent coverage so they will always have some level of coverage in place.
Term Life Insurance
Term life, as you would expect from the name, provides protection for a specific timeframe (term). This is usually in ten-year periods from 10 to 30 years. If you die within the term, the insurance company issues a payment to your beneficiaries. If however, you survive the period, your coverage ends. You may have the option to renew for another term or convert to a permanent life policy before the term ends.
For those seeking a large death benefit, term life insurance may be an appropriate option. Additional features can enhance your term coverage, such as “Return of Premium.” Insurance amounts can be up to 30 times income. “No Exam” Life Insurance options are being offered by more and more carriers at higher face amounts.
Permanent Life Insurance
Permanent life insurance policies give lifetime protection, provided premiums and applicable charges are paid per the condition of the contract. This broad category life insurance policy type offers flexibility and builds tax-deferred cash value.
There are three main types of Permanent Life insurance:
Whole Life Insurance provides a death benefit for your entire life, with a guaranteed rate of growth for the cash value component and dividend payments which can be used to reduce future premiums or taken as cash payments. Whole Life Insurance typically out performs the returns or other fixed assets like CDs, money markets and U.S. Treasuries.
Guaranteed Universal Life
Guaranteed Universal Life insurance policies have a level premium and level death benefit for life. This is very much like term life but it does not expire because there is no ending “term.” From a cash flow standpoint this is the lowest cost option for a permanent death benefit.
Indexed Universal Life
A Indexed Universal Life insurance policies also provided a permanent death benefit with cash value accumulation tied to one or multiple market indexes such as the S&P 500, Russell 2000, or Euro Stock Index. Policies participate in the upside of the market up to a specified annual or monthly cap. Anytime the market experiences negative returns, the account receives a 0% rate of return and experiences no losses for that year.
Cash Value Life Insurance – Additional Benefits
The premiums contributed into these policies participate in a fixed or indexed interest rate, potential dividends, and grow on a tax deferred basis. Cash Value within a life insurance policy is protected from creditors in most states meaning you can own this in your name, have access to the value and the account will not be subject to a lawsuit. The cash value can be accessed anytime and often used to supplement other retirement assets.