Permanent Life Insurance

There are four types of permanent life insurance for which you can receive a life insurance quote:

Whole Life insurance (sometimes called Ordinary Life) is the most common type of permanent insurance policy. It remains in force during your entire lifetime, and offers a death benefit along with a savings vehicle (called the cash value). Some companies pay a dividend, which is a return of excess premiums.

What Are the Types of Permanent Life Insurance Policies?

Universal (or Adjustable) Life insurance offers more flexibility than whole life insurance. As with Whole Life policies, Universal Life insurance provides a savings vehicle (cash value account) which generally earns a guaranteed rate of interest. The cash value belongs to you, the policy owner, and you may withdraw or borrow against it as provided for in the policy.

These policies also give you the option to adjust the death benefit and/or premium payments, within limits, to fit your situation. For example, if there is enough money in your cash value account to cover the costs, you have the option of reducing your premium payments. This can be a useful feature if your economic situation has suddenly changed. However, if you stop or reduce your premiums and the saving accumulation gets used up, the policy might lapse and your life insurance coverage could end.

Variable Life is a kind of policy that, in addition to a death benefit, offers several professionally managed investment options. You can use the cash accumulated in your savings account to invest in stocks, bonds and money market mutual funds. The value of your policy may grow more quickly, but you also have more risk. If your investments do not perform well, your cash value and death benefit could decrease, or you could be required to pay higher premiums to keep the policy in effect. Some policies, however, guarantee that your death benefit will not fall below a minimum level. As with whole life insurance and universal life insurance policies, you also may borrow against or withdraw the cash value at any time. However, it is important to remember that loans and withdrawals could reduce cash values and the death benefit.

Variable-universal Life policies combine the features of variable and universal life policies. You have the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust your premiums and death benefit that is characteristic of universal life insurance.

How Should I Choose What Type of Life Insurance to Buy?

Life insurance is a long-term commitment. Before getting a life insurance quote, ask yourself these very important questions:

• How much insurance do I need? If I were to die, what would my spouse and dependents need in order to live comfortably?
• What am I trying to accomplish with life insurance? Am I accumulating funds for education costs? Providing a way to pay estate taxes? Do I need supplemental income for my retirement or emergencies?
• How much can I afford to pay for a policy?
• After answering these questions and consulting with a life insurance agent, your next step is to choose which type of insurance best meets your needs.

Term Life Insurance

You should consider Term Life Insurance if:

• You need life insurance for a specific period of time
• You need a large amount of life insurance, but have a limited budget

Term life insurance enables you to match the length of the policy term to the length of the need. For example, if you have young children and want to ensure that there will be funds to pay for their college education, you might buy 20-year term life insurance. Or if you want insurance to repay a debt that in a specified time period, buy a term policy for that period.

In general, term life insurance pays only if you die during the term of the policy, so the rate is lower than for permanent forms of life insurance. If you are still alive at the end of the term, coverage stops unless the policy is renewed. Unlike permanent insurance, you will not build equity in the form of cash savings. If you think your financial needs may change, you may also want to look into "convertible" term policies. These allow you to convert to permanent insurance without a medical examination in exchange for higher premiums.

Keep in mind that premiums are lowest when you are young and increase upon renewal as you age. Some term insurance policies can be renewed when the policy ends, but the premium will generally increase. Some policies require a medical examination at renewal to qualify for the lowest rates.

 

Term Life Insurance Advantages

• Offers temporary life insurance protection at a very affordable price
• May be converted to permanent policy
• Income-tax-free death benefits1

 

Permanent (or Whole) Life Insurance

You should consider permanent (or whole) life insurance if:

• You need life insurance for as long as you live. A permanent life insurance policy pays a death benefit whether you die tomorrow or 100 years from now ¹.

• You want to accumulate tax-deferred savings that could be a source of borrowed funds for a variety of purposes. The savings element can be used to pay premiums to keep the life insurance in force if you cannot pay them otherwise, or it can be used for any other purpose you choose. You can borrow these funds even if your credit is shaky². The death benefit is collateral for the loan, and if you die before it is repaid, the insurance company collects what is due before determining what goes to your beneficiary.

Keep in mind that premiums for permanent policies are generally higher than for term life insurance. However, the premium in a permanent policy remains the same no matter how old you are, while term premiums can go up substantially every time you renew.

 

Permanent Life Insurance Advantages

• Lifetime protection
• Tax-deferred cash value¹
• Access to your cash value to use however you wish
• "Locked in" premiums
• Income-tax-free death benefits¹

 

¹ Assuming policy does not lapse due to insufficient premiums paid. Death benefit is subject to a deduction of unpaid premiums during grace period and any outstanding loan balances past the grace period.

² Borrowed funds are generally subject to an interest rate.

How Can I Save Money on Life Insurance?

There are ways to save money when buying life insurance. As your top priority, look for a policy that meets your needs. Beyond that, here are some ways to maximize your life insurance dollars.

As part of your research, determine which rate class you?ll fit into. Most companies that sell individual life insurance have several different price classes?usually called "preferred (non-tobacco)," "standard (non-tobacco)," "preferred (tobacco)," and "standard (tobacco)." A small percentage of people have health conditions or histories that disqualify them for even "standard" rates. Many in this group will be offered insurance at "impaired risk" or "nonstandard" rates.

Remember that the best policy is not necessarily the cheapest; you should also consider whether the policy addresses your overall goals.

However, make sure to compare group and individual rates since, depending on your age and health status, group insurance may or may not provide a savings. In comparing group to individual life insurance, remember that if you have over $50,000 of group life insurance, IRS tables determine how much it costs your employer to provide the amount over $50,000 and adds that amount to your taxable income.

Options to avoid:

On the downside, however, the premiums tend to be high and the face value low. If you are healthy, you may get better rates by taking a medical exam, as insurance companies often offer discounts for people in good health.

How Much Life Insurance Do I Need?

The amount of life insurance you decide to purchase depends on your anticipated final expenses and your family's projected monetary needs in the future.

In most cases, if you have no dependents and enough money to pay your final expenses, you do not need any life insurance.

However, once you have dependents you should buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur replacing services you currently provide (for example, if you do the taxes for your family, the survivors might have to hire a professional tax preparer).

Your family might also need extra money to make some changes after you die. For example, they might want to relocate, or your spouse might need to go back to school to be in a better position to help support the family.

Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors' benefits. Many also have life insurance through an employer plan, and some from other affiliations, such as an association they belong to or a credit card. Although these sources might provide a significant income, it is rarely enough.

A multiple of salary?

Some experts recommend buying term life insurance or whole life insurance equal to 20 times your salary before taxes. If the benefit is invested in bonds that pay 5 percent interest, it would produce an amount equal to your salary at death, so the survivors could live off the interest and would not have to "invade" the principal.

While this formula is a useful starting point, it does not take inflation into account. It also assumes that one could assemble a bond portfolio that, after expenses, would provide a 5 percent interest stream every year. But assuming inflation is 3 percent per year, the purchasing power of a gross income of $50,000 would drop to about $38,300 in the 10th year. To avoid this income drop-off, the survivors would have to tap into the principal each year. And if they did, they would run out of money in the 16th year.

The "multiple of salary" approach also ignores other sources of income, such as Social Security survivors' benefits. These benefits can be substantial. For example, for a person who had been earning a $36,000 salary at death ($3000 a month), maximum Social Security survivors' monthly income benefits for a spouse and two children under age 18 could be about $2,300 per month, and this amount would increase each year to match inflation.

In this example, the survivors would need life insurance to replace only $700 per month (adjusted for inflation) of lost income; Social Security would provide the rest. These survivors would need life insurance to replace about $1,150 per month (adjusted for inflation) once the non-working surviving spouse has only one child under 18 in her care, and the surviving nonworking spouse would have to replace the entire $3,000 (adjusted for inflation) when the youngest child turns 18.

Bottom line: the amount of life insurance you need varies according to your financial, family and marital circumstances, but once you have dependents, you definitely need insurance coverage. It is probably best to seek the advice of a qualified insurance agent when you are ready to ask about getting a life insurance quote.

Life Insurance Basics

Life Insurance is divided into two major categories: Term Life Insurance and Permanent Life Insurance.

Term Life Insurance (or "Term Insurance") is the simplest form of life insurance, and is typically the least expensive. The premium is usually lower than other forms of insurance because no cash value is accrued.

There are two basic types of Term Life Insurance policies: Level Term and Decreasing Term. With Level Term Insurance, the death benefit stays the same throughout the duration of the policy, while the death benefit for a Decreasing Term policy drops over the course of the policy's term. Term Insurance pays a benefit only if death occurs during the term of the policy, which is usually from one to 30 years. If death occurs after the term of the policy, no benefit is paid.

Permanent Life Insurance (also known as "Whole Life Insurance") is a more complex form of life insurance. The premiums are usually higher than those of a Term Life insurance policy.

In addition to the death benefit, Permanent Life Insurance offers a savings component, known as a Cash Value Account. The monies paid on the policy are split between premium and savings. The money saved in the Cash Value Account grows on a tax-deferred basis. Although the premiums for Permanent Life Insurance tend to be higher than those for Term Life Insurance, one of the primary advantages is that the death benefit is not limited to a pre-determined timeframe.

There are three major types of Permanent Life Insurance: Whole Life Insurance, Universal Life Insurance, and Variable Life Insurance.

This article adapted from information provided by the Insurance Information Institute.

Insurance for Estate Planning

Protection You Can Count On

You've worked hard to build up a substantial nest egg to pass on to future generations. Now, you can ensure that your assets will remain intact after estate taxes and other costs are paid - permitting your estate's distribution exactly as you had planned.

Protecting your greatest asset...Peace of Mind.

Federal estate taxes are generally due within nine months of death and could absorb nearly half of your assets before a single dollar goes to your heirs.¹ Insurance for estate planning, a form of universal life insurance, from American General Life Insurance Company, lets you plan ahead to help provide funds for taxes and settlement costs. This policy, also known as Second to Die, covers both you and your spouse and the benefits are paid on the second death - when your estate passes to your heirs and estate taxes are generally due.

Questions about insurance for estate planning? Call 800.939.3224 to speak with an agent.

Flexibility for Today and Tomorrow

Insurance for estate planning offers these, and other, benefits:

* No-Lapse Guarantee - the policy is guaranteed to remain in force regardless of its cash value, as long as the cumulative monthly guarantee premium requirement is met. If the younger insured is under 50 years old at the time of issue, guaranteed coverage will last 50 years; if he or she is 50 or older, the guarantee will last to age 100.

* Premium Payment Options - You can select a payment plan that fits your financial needs and goals. Pay the guarantee premium for lifetime security, pay less than the guarantee and catch up later, or contribute additional funds to accelerate the growth of your cash values.

* Flexible Death Benefit - Increase or decrease your death benefit to fit your changing needs.²

* Zero-Interest Catch Up - You don't necessarily need to pay the monthly guarantee premium from day one. You can start with a lower premium and catch up the unpaid difference at any time - without interest - as long as the policy is in force.

Contact a licensed life insurance professional today about insurance for estate planning!

¹Consult with your tax professional to determine the effect of federal estate taxes on your individual situation.

²Increases and decreases are subject to the policy's terms and conditions.

Guarantees are subject to the claims-paying ability of American General Life Insurance Company. Elite Global SurvivorSM, Policy Form #02109, issued by American General Life Insurance Company 2727-A Allen Parkway, Houston, Texas 77019. Policy Form Number 02109. The underwriting risks, financial and contractual obligations and support functions associated with products issued by American General Life Insurance Company (AGL) are its responsibility. AGL does not solicit business in the state of New York. Policies and riders not available in all states.

Permanent Life Insurance

There are four types of permanent life insurance for which you can receive a life insurance quote:

Whole Life insurance (sometimes called Ordinary Life) is the most common type of permanent insurance policy. It remains in force during your entire lifetime, and offers a death benefit along with a savings vehicle (called the cash value). Some companies pay a dividend, which is a return of excess premiums.

Universal (or Adjustable) Life insurance offers more flexibility than whole life insurance. As with Whole Life policies, Universal Life insurance provides a savings vehicle (cash value account) which generally earns a guaranteed rate of interest. The cash value belongs to you, the policy owner, and you may withdraw or borrow against it as provided for in the policy.

These policies also give you the option to adjust the death benefit and/or premium payments, within limits, to fit your situation. For example, if there is enough money in your cash value account to cover the costs, you have the option of reducing your premium payments. This can be a useful feature if your economic situation has suddenly changed. However, if you stop or reduce your premiums and the saving accumulation gets used up, the policy might lapse and your life insurance coverage could end.

Variable Life is a kind of policy that, in addition to a death benefit, offers several professionally managed investment options. You can use the cash accumulated in your savings account to invest in stocks, bonds and money market mutual funds. The value of your policy may grow more quickly, but you also have more risk. If your investments do not perform well, your cash value and death benefit could decrease, or you could be required to pay higher premiums to keep the policy in effect. Some policies, however, guarantee that your death benefit will not fall below a minimum level. As with whole life insurance and universal life insurance policies, you also may borrow against or withdraw the cash value at any time. However, it is important to remember that loans and withdrawals could reduce cash values and the death benefit.

Variable-universal Life policies combine the features of variable and universal life policies. You have the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust your premiums and death benefit that is characteristic of universal life insurance.

• This article adapted from information provided by the Insurance Information Institute

Universal Life Insurance

In addition to term life insurance protection, Matrix Direct also offers universal life insurance plans designed to cover you for as long as you live. A universal life insurance policy works similarly to whole life insurance which is designed to cover a person's entire life.
Unlike whole life insurance, universal life makes it possible to adjust the benefit amount up or down without needing to get a new policy.
Universal life insurance may be the right choice if you need long-term financial protection. As long as premiums are paid as requested by the policy, your beneficiaries will receive the death benefit.
Contact us for more Universal Life Insurance information now!
If you are interested in a life insurance product that offers flexibility, affordability and lifelong protection, then a universal life insurance policy may be just what you are looking for.
Contact us at 800-501-5467 to see if this type of coverage is right for you.
The universal life insurance plans we offer have been designed to help meet the life insurance needs and financial goals of many clients. Consider universal life insurance if your focus is on death benefit protection for:

• Estate Planning
• Retirement
• Asset preservation

To make sure you get the coverage you want and need - to protect your family, your home and your future - you need to be able to make choices. A universal life insurance policy allows you to choose and keep the coverage you want, for as long as you want and need it.*
Full protection, flexible premiums, and a lifetime guarantee. What could be better?
Call 800-501-5467 or request your free universal life insurance quote now!
*coverage dependent upon receipt of sufficient premium payments

Our History

Matrix Direct is one of the industry's fastest growing and most innovative companies. Combining advanced technologies with dedicated professionals, Matrix Direct empowers millions of Americans each year to better secure their loved ones' financial futures. Read more about our Journey

1990s

Through years of market research and insurance industry experience, Matrix Direct founders Ron Harris and Laura Huffman understood that people want low pressure, knowledgeable professionals who empower them to make smart decisions about what kind and how much insurance they need. They founded Matrix Direct.

Matrix Direct expanded its platform to the Internet to broaden its reach and began to offer online tools and service. Matrix Direct was one of the first companies to empower consumers with delivery options to secure quality life insurance on their own terms.

Over the years, Matrix Direct has developed long-term partnerships with several highly-rated insurance companies. Insurance companies affiliated with Transamerica, AIG, JCPenney Life, and Protective Life recognized Matrix Direct for its exceptional direct service model and Matrix Direct built and managed direct term life insurance operations for each of these leading companies.

Throughout the early 2000s

Matrix Direct was one of the first to develop online tools to make shopping, applying, and buying term life insurance easier, from online application forms to digital medical exams, e-policy delivery and even voice signature for some policies.

2007

Brand awareness of Matrix Direct reached 20% in the U.S.

2010 and beyond

• Matrix Direct has placed more than $125 billion of insurance in force, and has helped more than 5 million people with their life insurance needs.
• Matrix Direct receives hundreds of applications every day.
• Tens of thousands of people contact Matrix Direct about life insurance every month.

As more than 70% of consumers in the market believe the internet is a good source for insurance information, Matrix Direct continues to anticipate these future customer needs and innovate to make term life insurance as accessible and easy to purchase as possible.

About Matrix Direct

We created Matrix Direct in 1995, because people told us they wanted a better way to secure important Term Life Insurance protection. They were right; finding high-quality term life insurance coverage for your loved ones should be simple, straightforward and convenient.

Matrix Direct is an appointed agent for several highly rated insurance companies, to provide our customers a range of products at affordable rates. Since our founding, we've helped over 5 million people. We continue to assist thousands of people each month, helping them secure top-quality coverage from some of the country's most highly rated life insurance carriers.

We give our customers valuable, in-depth and personalized information so they can choose the right term life insurance products for their needs — with the convenience of working together right over the phone.

It's simple enough; you can contact us whenever you're ready to start your free term life insurance quote. Our team of friendly, knowledgeable and licensed life insurance agents listens carefully to your specific needs, asks the right questions, provides straightforward information, and guides you through the application process. Our goal? To give you the important information you need to make the right decisions for yourself and your loved ones, and to secure valuable peace of mind.