Life Insurance

How Much Life Insurance Do You Really Need?

In general, the amount of life insurance that you need depends upon your personal and family situation. When purchasing life insurance, you should also consider your future life insurance needs if you plan to marry, start a family, or start a business since you may become uninsurable in the future, and costs increase with age.

What Type of Policy(s) Should You Buy?

There are two types of life insurance - term insurance and permanent insurance.

Term Insurance

Term insurance plans provide pure death benefit protection for a specified period of time (e.g., 10 years, or 20 years). When purchasing term insurance, it is important to consider whether your policy allows you to convert your term policy into a permanent policy. Conversion options into permanent insurance can become important if your health or needs change.

Permanent Insurance

Permanent life insurance offers both death benefit protection and the ability to build cash values on a tax-deferred basis.

  • Universal Life is a form of permanent insurance that provides flexible premium, death benefit and cash value options. This flexibility is important since accumulation and death benefit needs change over time. By adding optional riders you can customize the policy to meet your needs.
  • Variable Universal Life offers all the flexibility of universal life protection, and also offers a variety of investment options whose values vary based on market performance. Consequently, these policies are suitable for those willing to assume investment risk. These products are sold by prospectus, which you should read carefully before investing.
  • Survivorship Life insurance covers two individuals on one policy, paying a death benefit upon the second death (when estate taxes are due). The policy can be designed so that the heirs pay no income, gift or estate taxes on the proceeds of the estate. Beneficiary proceeds could pay most or all of the estate taxes and settlement costs, without resorting to other more costly payment options. In summary, the type of policy(s) that you should buy will depend upon your needs, your budget and your cash value accumulation goals. Term insurance is usually more attractive when your life insurance needs are short-term or when your budget is limited. In contrast, permanent life insurance is more appropriate when your insurance needs are long-term or if you need to accumulate cash values for lifetime needs.

The Need for a Review

Since your life insurance needs will change over your lifetime, now is the time to review your plan. As a first step, call your representative to discuss your needs. This professional can recommend a life insurance program that makes sense for you and your family.

Insurance products are offered through Chunha Insurance, Hanmi Bank's affiliate. Unlike traditional bank products, insurance products are not deposits or other obligations of, or guaranteed or insured by Hanmi Bank or any affiliate of the Bank. Insurance products are not guaranteed or insured by the Federal Deposit Insurance Corporation (FDIC) or any other agency of the United States. Customers are not required to purchase insurance products though Chunha Insurance to qualify for a loan.
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