California Life Insurance

California Life Insurance
California Life Insurance

If you check out the other sections at our Vitality Health Insurance Services website you’ll quickly notice that Vitality is synonymous with variety. We are firm believers that the ability to offer you a wide range of California life insurance products from a variety of carriers is the best way to ensure you will get the plan you want at the price you can afford and the safety, security, and peace of mind both you and your loved ones deserve. You’ll note if you go to our California disability insurance section, our California health insurance section, or California long term care insurance section that you’ll find a great selection of insurance carriers to choose a plan from. The same holds true with our life insurance offerings too and even more so! With Vitality California life insurance in either a term life insurance plan or a permanent life insurance plan categories we offer plans from an amazing array of carriers.

Our variety is your personal assurance that your California life insurance shopping experience can be both brief and thorough at the same time! Â As always, our services as an independent California insurance broker are free to the consumer and in addition to that huge cost savings, we provide our client with the careful, considerate consultation they and their family deserve. Our goal is the same with each and every client: To establish a long term relationship with that client that can grow and flourish over the course of time and provide our client with the peace of mind service their insurance requirements deserve.

Yes, as the name implies, we’re about California health insurance here at Vitality Health Insurance. But! We’re not all about just health insurance! Rather, here at Vitality Health Insurance we offer an array of products and services related to California health insurance, California life insurance, California term life insurance, as well as a California life insurance quote. Yes, we’re about both California life and health insurance.

Wait; there’s more: We also offer annuity information related to helping you find the right California annuity for you along with fixed annuities to help secure your retirement years and a detailed annuity definition listing here at the Vitality Health Insurance website that will help you understand these insurance company products, their features and components.

Ever heard the expression “Variety is the spice of life.”? Well, somewhere along the way we’re pretty certain that the powers that be in the insurance industry heard that expression and took it to heart! Our discussion here of both California term life insurance, California life insurance in general, and the review of a California annuity will involve a lot of variety. There are a wide variety of options with both of these products and we’ll review the range of those California insurance offerings here in this section.

Simply put, there are two main categories of California life insurance: California term life insurance and various forms of California permanent life insurance such as California whole life insurance, California universal life insurance, and California variable universal life insurance. California term life insurance is a life insurance product you buy that will provide “X” amount of benefits for “X” number of years. For this coverage, you, the policyholder will be obligated to pay a fixed premium annually, semi-annually, quarterly, depending on the terms of your California term insurance policy. Let’s look at an example:

Robert wants to buy a $500,000 California term life insurance policy to provide for his family in the event of his death. Robert is a young man of 25 years of age, with a wife and two small children. With a limited household budget at this point in his life, Robert decides to purchase an affordable California term life insurance policy that features level premiums paid once a year. The “term” of his policy is 20 years. So: Robert will pay for his term life insurance policy each year for the next 20 years – until he is 45 – but when the term of Robert’s policy is over in 20 years so is his coverage. If Robert dies at age 46 and hasn’t renewed his term coverage, his family will not be covered in the event of his death.

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So – in the above example – we see the two sides of California term life insurance: Affordability feature but lasting only as long as the �term” of the policy.

California term life insurance is a “pure death benefit”: There is no savings aspect to it such as would be possible with California permanent life insurance or California whole life insurance policies. With California term life insurance you will not build up any cash value. This is about one thing: Buying a California life insurance policy that will pay for the debts you have accumulated in your life and that you do not want to burden your survivors with: A mortgage debt, car payments, etc.; along with alleviating that burden, California term life insurance can also provide an “instant estate” that can provide living expenses for a young family, college funding opportunities for your children and other forward looking events in your family’s future without you there as the breadwinner.

While California term life insurance offers life insurance at affordable prices (By the way: Term life insurance policies are at historically low prices right now!) there is one challenge that faces the policyholder who is looking for insurance coverage throughout the term of their life: Maintaining insurability. Let’s say you are in year 18 of a 20 year California term life insurance policy and you are stricken with cancer. Your battle with cancer goes on for two plus years and ultimately exceeds the end date of your 20 year term policy: Your ability to renew that policy with another “term” is going to be slim to none.

As with all insurance policies of all natures and types, there are riders and policy elements that can offer features like guaranteed insurability that provide for renewal without proof of insurability. Further there are other versions of California term life insurance that can provide the benefits you’re seeking in California term life insurance without the worry of premium cost increases and renewal: Level term insurance like the one we used in our example above. Robert paid a level premium in each year of a 20 year term life policy. Policy terms can range in length and you can even secure a term of 30 years! Presumably a 30 year policy might take you up to retirement age where a lifetime of savings and retirement planning will provide for your spouse and family without the need of a life insurance policy.

The other main category of California life insurance that we’ll discuss here is that of California permanent life insurance, which you might have also heard called California whole life insurance, California universal life insurance, California variable universal life insurance. The California permanent health insurance has three features of note: It lasts for the life of the insured (To age 100, when the cash value of the policy is then handed over to the policyholder.); a payout is assured as it is a permanent life policy (Not “term”!); the policy accrues cash value which can be converted at some later point by the policyholder via a policy loan to fund an urgent financial need or an emergency that arises and requires ready access to cash.

California permanent life insurance or California whole life insurance policies are about paying in the event of death. And here’s the deal: We will all one day leave this world. Where there is an element of greater risk to the term policy in that you may not be “leaving” during that term of California term life insurance period, you most assuredly will be leaving during the period of your California permanent life insurance policy. That means you will pay accordingly higher prices for your California permanent life insurance than you would for a California term life insurance policy.

When and why do I want life insurance? Great question! Typically you’ll want life insurance when you have a relationship where a person or persons would miss your presence in some tangible way beyond the emotional loss that comes with your death. Getting married, having a child, are both typical examples where life insurance proceeds benefit your survivors. There are more examples too that require your thought and consideration: Are you the adult child of an elderly parent who is reliant on your income and support? Are you the committed life partner of a person with whom you’ve built a life and with whom you share joint financial obligations?

As for the amount of coverage in your California term life insurance, California permanent life insurance or California whole life insurance policies, you will want to consider your current and future financial obligations that would have a lasting impact on your loved ones: Do you have a lot of outstanding debt? Do you have a mortgage that you want to see paid off in the event of your death? Do you have children that you want to make certain receive a loan-free college education? And by the way: This is a great time to mention that life insurance is not just for one spouse – we live in a day and age where two income families are the norm. In the event of the untimely passing of one spouse can the financial stability of your household continue unaffected? You and your California life insurance professional will review your needs based on one of two types of assessment methods: Human life approach and needs approach. In �human life’ approach, we’ll look at factors like the insured’s age, their income, the overall effect that their loss would have on the family’s finances. The �needs’ approach will look at what financial obligations the family has now and what they are likely to be moving forward.

If you’re one of the (Incredibly!) lucky few who have built meaningful wealth that will pass to your family at the time of your death, your response to the question of adding a California term life insurance, California permanent life insurance or California whole life insurance policy to your financial portfolio might be “no thanks!”. But – please consider: Tax favored death benefits paid by a life insurance policy can be used to pay estate taxes on the bulk of your other holdings which most assuredly will not be tax favored. Let your California life insurance benefit pay the estate taxes for your family!

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Your California Annuity Center
As an independent California insurance broker Vitality offers an array of products to its new and existing clients, their friends, family, and neighbors throughout the state of California. One such product is a fixed annuity. A description of the fixed annuity and how it works can be found here in this section. While we say it often here at the Vitality Health Insurance Services website: Vitality is all about variety in our product plans and the number of carriers we represent to the marketplace, we feel it bears repeating in this, our California annuity section! Just like our California life insurance lineup, we offer an outstanding range of annuity options and carriers in our California annuity product roster. Whereas California health insurance, California disability insurance and California long term care insurance are about protection from the what-ifs, a California annuity is about devising a financial planning strategy that helps you deal with life the way you want to lead it. An annuity can be about ensuring independence, ensuring financial peace of mind throughout all your tomorrows, creating a dependable financial game plan – especially in these troubling economic times! – and finally helping to reduce the stress that comes with the active management of your finances far into your retirement years when you’re seeking less “work” and more play!

What a California annuity is: An annuity is a contract you enter into with an insurance company wherein you, the annuitant, makes either one lump sum payment or a series of either regularly scheduled or irregularly scheduled payments that are held/invested by the insurance company where your investment grows tax deferred over the course of time. Later – at specified intervals – typically after retirement – payments are made to the annuitant to fund that annuitant’s post-retirement needs. Money placed in annuities is typically after tax money, the money that accumulates over the course of time in your annuity is tax deferred, making annuities a viable retirement planning vehicle and likely one of the few tax deferred options out there that rank with IRAs, 401k, and 403b plans and the like. If you’re a conscientious saver with a primary goal of a well funded retirement lifestyle, the tax deferred feature of California annuities might make the product very appealing. However – and here’s where you can rely on Vitality’s no-nonsense approach to client counsel! – if you haven’t already taken full advantage of your 401k or 403b plan and the opportunity to invest in an IRA – we encourage you to stop right here: These retirement vehicles should always be at the top of your retirement planning pyramid.

Okay, let’s assume you have fully funded your 401k/403b plan for the year and you’ve also considered the viability of that IRA investment. Now you have funds that you want to apply towards another type of retirement vehicle and you’re considering the advantages of adding a California annuity to your investment portfolio.
Where a variable annuity invests the annuitant’s money in investment vehicles like mutual funds where the investment can grow or lose money depending on the stock market’s performance, insurance companies will typically invest fixed annuities in government securities and high-grade corporate bonds. A fixed California annuity will typically offer a guaranteed rate of return for a set number of years and then will adjust to a rate that is tied to some benchmark established by the issuer. These “banded” annuities can be difficult to maneuver for the annuity novice: Rely on Vitality to assist you in a review of the annuity product that is right for you and which will produce the largest return on your California annuity investment. On the other side of the investment equation, annuities will also typically have a surrender charge attached to them that will decrease over a set number or years (Typically seven.). Surrender periods for an annuity should also be on a savvy annuity shopper’s consumer radar and this is just the spot where Vitality will be there to help in finding the California annuity that is right for you. The annuity product also comes with a death benefit that states the beneficiaries will receive either the higher of the value of the annuity at the time of the annuitant’s death or amount of money paid into the California annuity.

While an annuity has the same tax deferred advantages of those other vehicles we discussed above, here’s one important annuity advantage: You can place as much money in that annuity investment as you feel comfortable investing! A 401k or an IRA has a set dollar limit attached to it. Your California annuity? Nope! Have $10,000, $25,000, $50,000 or more you want to invest in the stable and reliable investment vehicle that is a fixed annuity product? No problem!

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Here are some methods of how premiums can be paid and when California annuity benefits can begin:
The single premium deferred annuity (SPDA): The annuitant makes a single lump sum payment that buys them an annuity that will accumulate tax deferred and will begin a payout period at a later date to be determined.

The flexible installment premium deferred annuity (FPDA): After an initial payment deposit is made the annuitant follows with varying amounts of premiums in the years that follow while funds again accumulate tax deferred and will begin a payout period at a later date to be determined.

A single premium immediate annuity (SPIA): The annuitant makes one lump sum payment and the insurance company thereafter begins to repay that investment with regularly scheduled payouts for a specific amount of time or an event such as the annuitant’s death.

Level premium deferred annuity: Level means equal as in a fixed premium amount that is paid to the insurance company at regular intervals. Again the funds accumulate tax deferred and begin a payout period at a later date.

Let’s take a further look at how the proceeds of a California annuity can be paid out:

As a “pure” or straight life California annuity: This is the simplest option: This option says the insurance company pays you until the time of your death. You could live to be 120 (Excellent!) and obviously the insurance company would lose on that annuity. Nevertheless, your payments continue until the day you leave this world. On the other hand, there is no refund provision so – if your benefits started on a Monday and on Friday you leave this world, the insurance keeps the all the money in your account with no money going to your spouse of any other beneficiary.

The joint and survivor California annuity: The joint option provides a benefit that will continue during the joint life of two people but will end upon the death of the first person. In the case of the joint survivor option the death of the first person will not end payment s for the second payments but those payments could then be lower.

The refund California annuity: This type of annuity returns at the least the premiums paid in by the annuitant up to the time of that annuitant’s death should death occur during the accumulation phase of the annuity contract. Had the annuitant lived to begin receiving benefits they would have been paid on a straight life basis, but should the annuitant die during this phase – liquidation – payouts could vary between either a lump sum or a continuation of benefit payments in installments depending on the annuity’s contract terms.

Common California annuity payout options include:

Immediate Annuity: With an immediate California annuity, the annuitant starts to receive payments as soon as they purchase their annuity or at a specific future date specified by the annuitant. Here you can go with payout choices such as Period Certain or can provide life income to the annuitant or their beneficiary.

Period Certain: In this California annuity payout option, the insurance company makes payments to the annuitant for a specific amount of time (period certain). Even if the annuitant dies during this period of time the payments would continue to the annuitant’s beneficiaries. When the period certain ends so do the payments.

Amount Certain: With this California annuity payout option the insurance company pays a fixed amount for as long as the accumulated value of the annuity lasts.

Life income with period certain: With this California annuity payout option the insurance guarantees that payouts will be paid throughout the remainder of the annuitant’s life. It also guarantees that should the annuitant die within a certain pre set period of time (Anywhere from 5 to 20 years) these payouts will continue for a specific number of payments or dollar amount.

Life income with amount certain: This California annuity payout option says that the annuitant receives payments for the balance of their life and will continue after death to a designated beneficiary until the total amount of the payout equals the amount paid for the annuity.

Is a California annuity right for you? Well we’re of a mind that a California annuity purchase makes sense if you are a committed saver. How do we define committed saver? A committed saver is a Californian who has access to a 401k/403b plan at work (Or owns a business and has a self employed savings plan via their business.) that they fully fund each year and are either using or have carefully reviewed the advantages of either a Regular or Roth IRA – each and every year. Okay, so if you pass these means tests for considering the viability of a California annuity, let’s move on to this test question: Are you the kind of committed saver who not only maxes out their 401k/403b and that IRA each year but there’s no way you’re touching that money until you can start enjoying the early retirement at 59 ½ you dream of today, even though you might be years away from that age? Congratulations! You’ve passed our California annuity means test! California annuities have some of the same characteristics as any other tax deferred investment vehicle: You can get hit with substantial penalties for early withdrawal. If that’s not an issue for you and you have maxed out the tax deferral opportunities available with other investment vehicles — especially if you live in a state like our beautiful California with its high personal income taxes, the tax deferred benefits of a California annuity might be just the ticket for accruing wealth in a tax deferred investment vehicle you can ride all the way to a comfortable retirement!
As with all our offerings here at Vitality Health Insurance, your free consultation with a member of the Vitality Health Insurance team should be a part of your deliberations before you consider any investment vehicle such as a California annuity.