Plain language · Protection planning
The whole menu, and what each one is actually for.
Most people are sold a product before anyone tells them what the products are. Here is the range we place, in order of how simple it is, with the costs stated as plainly as the benefits.
Start here
Term life
Coverage for a set number of years, usually 10, 20 or 30. If you die during the term, it pays. If you outlive it, it ends and pays nothing. That is the entire product, and it is why it costs the least per dollar of coverage by a wide margin.
A mortgage, the years until children are grown, a business loan, an income that other people depend on.
Nothing builds up. When the term ends you have paid for protection you did not use, which is how insurance is supposed to work.
When the need genuinely never ends, or when the policy has a job to do inside an estate or a business succession.
Permanent
Whole life
Coverage for your whole life with a premium that does not change and a cash value that grows at a rate the insurer sets. Predictable, and expensive relative to term for the same death benefit.
A need that does not expire: estate liquidity, a special-needs dependent, business continuity, final costs.
Premium is several times term for the same benefit, and early years are heavily front-loaded with costs.
When it is bought as an investment. It is insurance with a savings component, not a portfolio.
Permanent
Universal life
Permanent coverage with a flexible premium. You can pay more or less within limits, and the policy draws its internal costs from the cash value. That flexibility is the feature and it is also the risk.
A permanent need with income that varies year to year.
Attention. Underfund it for long enough and the policy can lapse, which is the worst outcome in insurance.
When nobody is going to review it. A flexible policy left alone for twenty years is a problem waiting.
Permanent · the complicated one
Indexed universal life (IUL)
Universal life where the cash value is credited based on the movement of a market index, subject to a cap on the upside and a floor that protects against index losses. It is the most oversold product in this industry, so here is the plain version.
A permanent need for someone who wants index-linked crediting with a floor, and who will actually review the policy.
Caps, participation rates and spreads limit the credited amount, insurance charges rise with age, and the carrier can change some of those terms.
When you have term needs, unused 401(k) or IRA space, or no emergency reserve. Those come first.
Income protection
Disability income
Life insurance protects your family from losing you. Disability income protects them from losing your paycheck while you are still here, which is statistically the likelier event during working years. It replaces a percentage of income when illness or injury stops you working.
The mortgage and the groceries during a long recovery, when the income stops but the bills do not.
Premium rises with how quickly benefits start, how long they last, and how strictly the policy defines disability.
Rarely, during working years. The usual mistake is assuming a small group policy at work is enough.
Long-term care
Long-term care, and hybrid policies
Standalone long-term care insurance pays for care at home or in a facility. A hybrid, sometimes called a linked-benefit policy, combines that with life insurance: if care is never needed, the policy pays a death benefit instead.
Care costs that Medicare largely does not pay for, and the burden that otherwise lands on adult children.
Standalone premiums can be raised by the carrier. Hybrids fix that by charging more up front.
When protection and retirement income are not handled first, or when assets are small enough that Medicaid is the realistic path.
Variants worth knowing
Term variants, and accidental death
Three products get sold as if they were ordinary term. They are not, and the differences matter more than the names suggest.
No exam, faster approval, and you generally pay more for the convenience. Useful when time or health makes a full exam impractical.
Refunds premiums if you outlive the term. The premium is substantially higher, and the refund is not interest-bearing, so compare it against buying plain term and investing the difference.
Pays only if death is accidental, which is a small share of deaths. Cheap because it covers little. It is a supplement, never a substitute for real coverage.
Small and specific
Final expense
A small whole life policy, commonly $10,000 to $25,000, meant to cover a funeral, burial and the immediate bills that land on a family in the first few weeks. Underwriting is limited, which is the point.
End-of-life costs for someone who cannot get, or does not need, a larger fully underwritten policy.
A high price per dollar of coverage, and many policies have a graded benefit for the first two years.
When you are healthy enough to qualify for a normal policy, or when savings already cover it.
No small print
How we are paid, so you can weigh the advice.
Rae & Co Capital is compensated by commission on insurance placed. Different products pay different amounts, and permanent products generally pay more than term. That is a conflict of interest, it is disclosed in our Form CRS and disclosures, and it is the reason the term section above says what it says.
Coverage is shopped across 40+ carriers rather than sold from one shelf. Availability, pricing and features vary by product, state, health and underwriting. Nothing on this page is individualized insurance, tax, legal or investment advice, and no coverage exists until a carrier issues a policy.
Fixed and indexed annuities, including multi-year guaranteed annuities and income riders, are placed as part of retirement income planning rather than protection planning. Those are covered on the retirement planning page.
Get it checked
Have what you own reviewed before you buy anything else.
Send what you already have and I will tell you whether it still fits. If the answer is that you do not need anything, that is the answer you will get.