© 2021 Prudential Financial, Inc. and its related entities.
1051976-00001-00 Ed. 10/2021
Not Insured by FDIC or Any Federal Government Agency.
May Lose Value. Not a Deposit of or Guaranteed by Any Bank,
Credit Union, Bank Affiliate, or Credit Union Affiliate.
Securities and Insurance Products:
Founders Plus UL (IULPR-2020 or ICC20-IULPR) and Term Essential (PLTIC-2019 or ICC19 PLTIC-2019) are issued by Pruco Life Insurance Company in all states except New York, where they are issued by Pruco Life Insurance Company of New Jersey.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any clients or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing a client’s retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.
Receiving benefits under the terms of this feature (rider) will reduce and may eliminate the death benefit for your beneficiaries. It is not Long-Term Care (LTC) insurance, and it is not intended to replace LTC. Additional premiums, underwriting requirements and limits may also apply.
We do not provide tax, accounting, or legal advice. Clients should consult their own independent advisors as to any tax, accounting, or legal statements made herein. All guarantees, and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them make any representations or guarantees regarding the claims-paying ability of the issuing insurance company.
Policies contain exclusions, limitations, reductions in benefits, and terms for keeping them in force. A financial professional can provide you with costs and complete details. All guarantees are based on the claims-paying ability of the issuing insurance company. Not all product features are available in all states.
The main reason to have life insurance is because you want your loved ones to receive money after you die to help them financially. This is one reason, but there are many others.
There are many myths about life insurance that can prevent you from considering this valuable financial product. Let’s review 4 of these mistaken beliefs and start you on a path of facts and financial well-being using the full benefits of life insurance.
Permanent Policies — Provides coverage for the rest of your life. Most policies have the ability to grow cash value
and allows you the ability to access money in the policy.
Riders — These are optional benefits or additions you can make to your life insurance to provide specific coverages and tailor
your policy to your needs.
Term Life Insurance — Provides temporary coverage, usually for a period of 10, 15, 20 or 30 years.
Underwriting — Underwriting, a term used frequently in the insurance industry, is an evaluation of your current health, medical history, family medical history, and lifestyle. To purchase life insurance, you may have to take a medical exam to assess your health.
Cash Value — Money that can grow in a permanent policy. This money in the policy can usually be accessed by taking withdrawals or policy loans. Being able to tap into this money can be part of your strategy and among the reasons for buying a particular policy.
Death Benefit — This can be thought of as the ‘beneficiary benefit'. The total amount of money the beneficiaries receive when the covered person dies.
Living Benefits — Features and benefits of a life insurance policy the covered person can use while they are alive. These benefits can be things like chronic illness benefits, or loans and withdrawals, and more.
Premiums — These are the payments you make to the insurance company.
* Source: Top Misconceptions About Life Insurance (limra.com), 2021 Availability and actual rates will vary based on how you satisfy our underwriting and eligibility criteria.
** $500,000 death benefit, preferred non-tobacco, Term Essential 30 year. If she continued the policy beyond the initial level-premium period (in this case, 30 years), premiums will then increase annually through age 95 but will never be more than the maximum stated in the contract. In New York, the amount of coverage will be lower. Availability and actual rates will vary based on how you satisfy our underwriting and eligibility criteria. Rates as of 9/15/2021.
***$100,000 death benefit, preferred non-tobacco, Term Essential 20 year. If you continue the policy beyond the initial level-premium period (in this case, 20 years), premiums will then increase annually through age 95 but will never be more than the maximum stated in the contract. In New York, the amount of coverage will be lower. Availability and actual rates will vary based on how you satisfy our underwriting and eligibility criteria. Rates as of 9/15/2021.
† $100,000 death benefit, preferred non-tobacco, Founders Plus UL. Availability and actual rates will vary based on how you satisfy our underwriting and eligibility criteria. The Current rates are as of 9/20/2021 and subject to change.
Individual life insurance can cost as little as the price of a cup of coffee a day. It's true, but more than half of Americans overestimate the cost of life insurance by as much as three times. Younger Americans overestimate by as much as six times!*
You can be their rock
A Dollar a Day - Term Essential -
for Just a Dollar a Day
What Every Consumer Should Know About life Insurance
You may be surprised to know that the cost of term fife insurance for a healthy 30-year-old is
around $203 per year.*** Term life insurance is a cost-effective way to have death benefit
protection you need for a period of time and can be a perfect starting point. It may also offer
options that allow you to convert it to a policy that can last your lifetime, enabling you to have
an easier path to lasting coverage.
Permanent policies have an abundance of choices and options. The value in these
types of policies goes beyond what your heirs receive when you die. In addition to
the death benefit, they can have the ability to grow cash value, an optional chronic illness benefit, and more.
You may be able to get more for your money with a newer policy. If you haven't had your old
policy reviewed in a while, you should do that as soon as you can. Your financial professional
can review your current policy, evaluate your needs today to see if they've changed, and see
if another policy might be more suitable for you with a better price.
This is a hypothetical scenario for illustrative purposes only.
Nancy is haunted by her friend’s situation and considers this a wake-up call.
She is determined that what happened to her friend will NOT happen to her.
Nancy and her husband Dan work hard and do their best to make ends meet. She has been working from
home since COVID-19 started and worries every day that her husband, who still goes into the
office, will get it. Her best friend Cheryl lost her husband to COVID and they had no life
insurance. She can’t afford the mortgage and had to ask her son to defer college for a year.
One day Cheryl’s husband was fine and a week later he was gone. It was heartbreaking!
Nancy took action. She got a recommendation for a financial professional who sells life insurance and called him. She spoke with
the financial professional once or twice and had a Zoom call to talk about her life, her worries, and her budget.
It made her feel so good to finally be able to talk to someone who can help her! They spoke about a number of
policy options, but a term policy is what she can afford right now. It’s a 30-year term policy with a $500,000
death benefit. It has an option to allow her to convert it to another policy when she can afford it, and it only
costs $690 a year ($58/month!) because she is a healthy 40-year-old.** She is pleasantly surprised at how
affordable it is and is so relieved to have it.
* Issuance of the policy may depend upon the answers to the health questions set forth in the application.
This is based on the way life insurance used to be bought and sold! Today, most of the process can be completed electronically, depending on the insurance carrier, your health, how much protection you want, and your preferences.
From Application to Ownership
Today, the application process is quite different than it used to be. Most applications
are done electronically with your financial professional, and in some cases, you can do
it yourself online!
For completion of the interview, many times a link can be sent to you when your application
is received. You can complete the interview at your own pace on a laptop, tablet, or your phone.
It is as fast as you make it.
Advancements in underwriting have drastically changed who can get life insurance. In fact,
more people are insurable than ever before! If you've ever tried to get life insurance and
been turned down for a health condition, it's worth a try to see if you can get it now.
If you are healthy, detailed medical questions or screenings may not even be necessary.
If additional medical information is needed, it can often be obtained electronically.
If even more thorough medical screenings or samples are needed, a medical professional
will contact you and arrange a time at your convenience to come to your home or office.
Most policies are delivered in an email as an attachment. Or, if you prefer a hard copy,
you can request it.
Phil is busy. He's an attorney, a dad, a husband, and a landlord. His to-do list is long and relentless. When he
and his wife, Marie, decided they need more life insurance he immediately added it to his
list and his dread began. About 10 years ago when they got their first life insurance policies,
it seemed to take months! He recalls scheduling meetings, going to the lab, and waiting and
waiting. It wasn't a waste of time, but it did take a while and took effort.
Two weeks later, Phil and Marie got their policies. Night and day different than his first time around, he can't
believe how easy it was. Together, Phil, Marie, and Sam did everything electronically, from their meetings to
policy delivery! Even though he and Marie are 10 years older, they are in great health and still in their 30s
so no medical screenings were needed. They got approved for their policies within two days. It's amazing
how different this experience was from their last! Phil happily crossed life insurance off his to-do list.
He is happily surprised that the process has been streamlined! After he and Marie reached out to Sam, their financial
professional, it was a pretty straight-forward process. Sam scheduled a Zoom call with them to review their existing
insurance coverage. They talked about how their needs have changed: both of their salaries have gone up,
their oldest is starting to look at colleges, and they have 20 years left on their mortgage. After that, they had
one more quick Zoom call to hear Sam’s recommendations, and choose which policy they liked best.
This is a hypothetical scenario for illustrative purposes only.
*Life insurance policy cash values grow tax-deferred and are potentially income tax-free. You can access your cash value through loans and withdrawals. In general, loans are charged interest; they are usually not taxable. Withdrawals are generally taxable to the extent you take more money out of the policy than you've paid in premiums. Any loans that remain unpaid when the policy lapses or is surrendered while the insured is alive will be taxed immediately to the extent of gain in the policy. Loans and withdrawals may reduce or eliminate cash values and the death benefit payable to your beneficiaries.
** IRC 1O1(a).
*** Source: www.justdisney.com
† Source: www.nndb.com/peop1e
†† Outstanding loans and withdrawals will reduce policy cash values and the death benefit and may have tax consequences.
+ Receiving benefits under the terms of this feature (rider) will reduce and may eliminate the death benefit for your beneficiaries. It is not Long-Term Care (LTC) insurance, and it is not intended to replace LTC.
Additional premiums, underwriting requirements and limits may also apply.
The "living benefits" may be the best-kept secret of life insurance. Think about those times when
life surprises you and having an extra source of income would come in handy. With certain life
insurance policies, you can grow cash value within it. With these types of life insurance, you can
use the cash value and/or "accelerate" (or use) part of the death benefit for yourself. These aspects
of life insurance are what most don't realize and what should have your interest piqued!
Life Insurance With BenefitAccess Rider
Achieve Your Goals in a Tax Efficient Way
Winning the College Savings Race
Value of Permanent Life Insurance
• Pay for college.
• Pay for a wedding or buy a home.
You can buy policies that have potential to grow cash value. They allow you to access cash from your
life insurance policy in the form of TAX-FREE withdrawals or loans* and use it any way you choose.
• Walt Disney borrowed from his life insurance policy in 1953 to
help fund Disneyland.***
• J.C. Penney borrowed from his life insurance policies to help meet
the company payroll, following the 1929 stock market crash.†
There are times when you might choose to use some cash value from a life insurance policy as
income. The advantages to this approach are that you will generally pay no income taxes or
penalties on what you withdraw, there are no age requirements for withdrawing cash, and
there are no required minimum distributions. An example of when this might be an attractive
option is when markets are fluctuating. Whether the market is up or down, withdrawing
income can become stressful when you'd rather leave it invested. Cash value in a life policy
could give you that option.††
Many times, people overlook this great benefit of life insurance as part of their overall portfolio, but
you shouldn't. Life insurance has so many tax advantages for you and your beneficiaries; it makes
sense to want it as part of your holistic financial portfolio. You might also like to know that the cash
value you withdraw from your life insurance is potentially income tax-free and will not count as
taxable income. This means that it will generally not increase your tax bracket or tax exposure.
• Tax-free access—through loans and withdrawals.*
• Tax-deferred growth—you pay no taxes each year on any growth in your policy.
• Tax-free death benefit—The death benefit proceeds that are received by your
beneficiaries are typically income-tax free.**
• Pay for medical care or a family member to care for you.
• Settle debts.
• Add a ramp or special bathroom to your home.
• Maybe even take a dream vacation with your family.
For example, if you have $250,000 of coverage in one of Prudential's life insurance policies,
you may be able to access your policy's death benefit to use in any way you choose.
Some life insurance policies offer an optional chronic or terminal illness feature, called a 'rider',
sometimes available at an additional cost. These riders are designed to help you financially and
can make an emotional time just a bit easier.+
Six months later, she had a stage two breast cancer diagnosis. Now, in her early 6Os, her parents are gone, and her
daughter is in college; she can't, for the life of her, figure out who is going to take care of her for a change.
Sharon takes care of everyone without complaint. She makes sure that everyone in her world is taken
care of but neglects herself. So, when she felt a tiny hard spot in her breast while taking a shower,
she didn't give it much thought.
Imagine her relief when she realized she could use money from her life insurance's death benefit to take care of herself!
The chronic illness rider on her life insurance policy could be her saving grace through this awful time.
She's so relieved she got it1 She can use as much as she needs of the $250,000 death benefit for herself.
Sharon can concentrate on beating this disease and not worry so much about money. She can use the
money from her policy in whatever way she wants, like taking an Uber to her doctor appointments, hiring
someone to help around the house, or even traveling to a specialized treatment center that she read about.
She doesn't have to worry.+
* Source: Top Misconceptions About Life Insurance (limra.com), 2021
** Source: page (1105_covid-drives-li-awareness-infographic_032221_final-002.pdf (limra.com), 2021
*** Under the current tax law, the federal estate tax exemption is set to expire at the end of 2025. Starting in 2026, the exemption will return to approximately $5 million with an adjustment for inflation.
Prudential does not provide tax or legal advice, please consult an independent tax advisor regarding your personal tax situation.
† $25,000 single pay, Essential UL, 50-year-old, non-smoker rating class. Availability and actual rates will vary based on how you satisfy our underwriting and eligibility criteria.
Understanding what might happen if you die and your income is suddenly gone helps negate this
myth easily. There aren't any hard and fast rules about how much death benefit you need; in fact,
the number is unique to each individual and family situation and is generally a calculation using
your salary, debt, financial responsibilities. and college expectations.
An Asset Repositioning Strategy
How Taxes Affect Your Assets at Death
Preparing for the Future of
Your Loved One with Special Needs
Providing for a Surviving Spouse in Retirement
Wealth Transfer leaving a Legacy
Is A Million Dollars Enough?
Protecting What Matters Most
• Shortcomings of a policy through work —The median life insurance coverage offered
at the workplace is a flat sum of $20,000 or one-year's salary.*
What will your family do year two?
If you were to die suddenly, without warning, the livelihood of your family could be at risk.
There are expenses around housing, food, clothing, college, etc., that will not die with you.
Life insurance is made for this ... to protect your family's livelihood and keep your dreams alive.
Would that be enough to allow your family to stay in their home, preserve their lifestyle,
and keep college dreams alive? 42% of Americans would face financial hardships within
six months if the household's wage earner died unexpectedly.** What would happen to
your family if you were unemployed when you passed, and your work policy ended when
your job did? This is why an individual policy is so important.
Your estate tax burden may not seem problematic today. The current federal estate tax exemption
($11.7 million for 2021) may seem high enough that your estate won't be taxed. However, if your
assets are positioned well, they will likely grow, and your future estate could have a tax problem.
If that happens, coupled with the potential change to tax laws and a lower estate tax exemption,***
there is a real chance that your estate tax bill could be significant. Life insurance, with its powerful
tax advantages, can be a valuable tool in this situation.
When you die, your surviving spouse or other dependents may still need income. It's as simple as
that. They could lose benefits, they might be living on a reduced income stream, they might need
or want to wait to tap into social security, they might have debt that you accumulated together
that needs to be paid, etc. If you have a dependent with special needs, the need for support may
never end. Just because your life ends doesn't mean your loved ones' lives end, too. Life insurance
can help make sure their lifestyle isn't lost, as well.
Life insurance can be a great way to protect your legacy and to potentially enhance the amount
you had earmarked. For example, if you were a 50-year-old male who didn't smoke and you had
$25,000 earmarked as a legacy, you could use that money to buy a life insurance policy and get
death benefit coverage of $40,514.† This is a very simplified example, but you get the picture.
Larry feels every bit of his responsibility to provide for his family knowing that they are completely reliant on him.
Because Elizabeth needs special care, it's always made sense for Donna to stay home to help her.
When Donna mentioned how a friend in Elizabeth's play group set up a trust for their daughter
with special needs, Larry paid attention. They had nothing of the sort in place for Elizabeth!
Larry and his wife, Donna, were blessed with a daughter, Elizabeth, who has Down Syndrome. Every day,
Elizabeth enjoys life and everything in it and has the magical ability of making Larry and
Donna see it too. They have given thanks for Elizabeth every single day.
Larry still sweats when he thinks about the risk Donna and Elizabeth had been in! After that conversation, Donna and
Larry immediately set up a meeting with their friend's financial planner. He listened to their needs,
evaluated what might be best for their situation, and made a recommendation. Larry now has two life
insurance policies: One that would give Donna enough money to pay off the mortgage and any
outstanding bills, as well as pay for all of Elizabeth's needs until she's an adult; and the second policy
is being used to fund a Special Needs Trust because Elizabeth won't ever be able to live on her own.
The premiums on these policies are within Larry's budget and is money well spent to make sure the
loves of his life will be taken care of when he's gone.
Don't risk your financial well-being by holding on to myths about life insurance. Get the facts and strengthen your financial foundation on them.
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