Resources
1Interest in Life Insurance Stays Strong – findings from 2022 Insurance Barometer Study by Life Happens and LIMRA. (March 2022)
2 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values.
3 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial professionaland refer to your individual whole life policy illustration for more information.
4 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.
5 Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
6 Permanent life insurance consists of two types: whole life and universal life. Cash value grows in a participating whole life policy through dividends, which are declared annually by the company's board of directors and are not guaranteed. Cash value grows in a universal life policy through credited interest and decreased insurance costs. The cash value of both policy types benefits when the policyholder pays an amount above the required premium.
7 Universal Life Insurance may lapse prematurely due to inadequate funding (low or no premium), increase in cost of insurance rates as the insured grows older, and a low interest crediting rate. This does not apply to universal life policies which have a secondary guarantee, but if the secondary guarantee requirements are not met the policy will most likely lapse.
8 A Variable Universal Life (VUL) policy is considered both life insurance and a security and is sold with a prospectus. Premium and death benefit types are flexible. It’s crediting rate is based on the performance of the underlying investment options provided in the policy. There is no guaranteed interest rate. This type of policy may lapse due to low or negative performance of the underlying investment options, inadequate funding, and increasing cost of insurance rates. See your policy prospectus for more information.
Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker-dealer offering competitive investment products, as well as a registered investment adviser offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.
Variable insurance products, their underlying investment options, mutual funds and ETFs are sold by prospectus only. Prospectuses contain important information, including fees and expenses. Please read the prospectus carefully before investing or sending money. You should consider the investment objectives, risks, fees and charges of the investment company carefully before investing. Please contact your investment professional or call 888-600-4667 for a prospectus, which contains this and other important information.
Annuities and variable life insurance issued by The Guardian Insurance & Annuity Company, Inc. (GIAC), a Delaware corporation. Individual variable annuities are distributed by PAS. GIAC is a wholly owned subsidiary of Guardian. Guardian, GIAC and PAS are located at 10 Hudson Yards, New York, NY 10001
*The calculation changes based on your age group, so please refer to the chart:
This article is for informational purposes only. Guardian may not offer all products discussed. Please consult a financial professional to understand what life insurance products are available for sale.
FAQs
A life insurance policy can pay a valuable, income tax-free death benefit that replaces years of future income in return for premiums that are a fraction of your monthly income. You don't have to be your family's primary wage earner to need protection.
Do you really need life insurance? ›
Not everyone needs life insurance. People who've accumulated enough wealth to cover their final expenses and who don't have dependents can usually forgo paying for life insurance.
How do you decide if you even need life insurance? ›
The quickest way to know whether you need life insurance is to ask yourself one question: Would your death have a financial impact on the people in your life? If the answer is yes, then you may want to consider life insurance. Life insurance is a contract between you and an insurance company.
Is it better to save or have life insurance? ›
A savings account better suits the young professional worker who does not have dependents and is just starting to build up savings for a rainy day. But as your career progresses and you start a family, the best way to financially protect your dependents in case of your untimely death is to invest in life insurance.
Can I live life without insurance? ›
If you don't have health insurance, you're at much greater risk of accumulating medical bills that you may not be able to pay. In a worst-case scenario, you could be sued and have your wages garnished. You might even be forced into bankruptcy.
What is a good age to get life insurance? ›
Young people tend to pay the lowest life insurance rates, whereas older people tend to pay the highest. Although there are exceptions — usually based on the health of the applicant — a 30-year-old will likely receive a lower premium quote than a 40-year-old.
At what point does life insurance not make sense? ›
You don't need life insurance if you're young.
While you may have fewer reasons for coverage when you're in your 20s or 30s, buying a policy when you're young means you'll get the best rates when you add other financial responsibilities later in life. Pre-existing conditions disqualify you from life insurance coverage.
What happens if you don't have life insurance? ›
Loved ones might have to take out a loan or arrange a payment plan with the funeral home, or even launch a crowdfunding campaign. If no one steps forward to pay, it's possible the coroner's office will bury or cremate you without a family service.
At what age do you no longer need life insurance? ›
At what age is life insurance no longer needed? Life insurance is no longer needed for many people once they reach their 60s or 70s. At this point they have retired, their kids have grown up, and they've paid off their mortgage and other debts.
Why would you not get life insurance? ›
People are typically denied life insurance because they fall into a high-risk category. This is often due to health challenges like diabetes, obesity or a previous diagnosis of serious disease.
Life insurance premiums are based on your age as well as health and other factors, so the older you are when you apply, the more you'll pay for coverage. By purchasing life insurance early on, you can lock in a lower premium and save money over the long term.
Is life insurance actually worth it? ›
In general, life insurance is worth it if your death would place a financial burden on other people. Consider getting coverage if: You want to cover your own burial costs. Funerals can be pricey and your loved ones may not have the cash to cover the bill.
Why is life insurance not a good investment? ›
Any permanent life insurance policy with a cash value can be used to invest — but for most people, it isn't the best strategy due to high costs and low returns. Buying a term life policy and contributing to a 401(k) or IRA account is often a better option.
Do you really get money from life insurance? ›
Can You Cash Out a Life Insurance Policy? With a cash value life insurance policy, like whole life or universal life insurance, you can access the cash value. One of the ways to do that is to cash out or surrender the policy. If you choose to cash out your policy, you'll receive the cash value minus any surrender fees.
Is it worth taking out life insurance? ›
The Bottom Line
Is life insurance worth it? In many cases, absolutely. At other times, your money may be better placed elsewhere. If you're single or you have other sources of wealth to protect your family, then you may not need life insurance.
What happens if I don't want life insurance anymore? ›
You can cancel a life insurance policy by: Let the policy lapse: No matter what life insurance policy you have, you can simply stop paying premiums at any point. The policy will lapse, and you'll lose coverage. Keep in mind that you typically can't recover any of the premiums you paid once the policy lapses.
What happens if you never use your life insurance? ›
Generally, when term life insurance expires, the policy simply expires, and no action needs to be taken by the policyholder. A notice is sent by the insurance carrier that the policy is no longer in effect, the policyholder stops paying the premiums, and there is no longer any potential death benefit.
Is it irresponsible to not have life insurance? ›
With few or no debts, no dependents, and a healthy nest egg saved up, life insurance might not be necessary. But don't decide to go that route until you take a close look at what your passing would mean financially to your family.
