American Bar Endowment sponsors insurance programs for ABA members. This free eBook explores the types of life insurance coverage available and helps ABA members determine for themselves the types of life insurance to consider.
YOUR FAMILY. YOUR HOME.
Each is an important element of your life. Do you have plans in
place to help safeguard yourself and your loved ones should
your financial security be threatened?
The proper life insurance coverage can help provide you with
protection, peace of mind, and a plan for the future.
With life insurance, you’re helping to
provide for the future:
Allow loved ones to better maintain their
current lifestyle, with a benefit level that
will help pay bills such as a mortgage
Help fund the expense of a college
education for your children
Provide a better financial foundation for
your firm to help ensure its continuation
Provide a gift to your favorite charity
Why life insurance?
What is available?
When considering available life insurance options, keep in
mind that a combination of two or more of the following
products may be the right answer for you right now:
• Level Premium Term Life
• Increasing Premium Term Life
• Whole Life
• Universal Life
• Variable Universal Life
Whether an individual policy or a group certificate,
term life is probably the most basic form of life
insurance. It can be an affordable product, providing
protection for a limited time period. There are two
types of Term Life Insurance:
Level Premium Term Life provides a level benefit
amount – meaning the benefit amount does not
reduce as you age – for a rate that does not increase
during the specific period, or “term.” Term lengths can
be 5, 10, 15, or 20 years. At the expiration of the term,
you can generally renew for a new specified term, but
the rate for the subsequent term will be higher.
The length of term that’s right for you will depend on
the length of time you’re committed to financial
obligations, such as a 20-year mortgage on your home,
or children who will be independent in 10 years.
Level Premium Term Life
Once approved based on medical underwriting,
Increasing Premium Term Life is renewable every year
until expiry age (which may vary by state) without
providing evidence of good health. But, as the name
implies, the premiums increase annually or at regular
With all term life insurance products, a benefit will be paid
to your beneficiary should you die within the specific term
in force. If you survive the term and do not renew for
another term or convert to a permanent life insurance
plan, there is no benefit payable.
Increasing Premium Term Life
Permanent life insurance is known as “cash value”
insurance because it accumulates a cash value which
can be borrowed against – which will affect the policy’s
value and would require a payment of loan interest.
Cash value insurance generally has higher initial
premiums than term, and most permanent polices are
eligible for dividends (although dividends are not
Permanent Life Insurance
Whole life insurance is permanent insurance that
protects you for your whole life, from the day of
purchase until death, provided premiums are paid.
Cash values accumulate every year on a tax-deferred
basis and can be accessed through a policy loan or
withdrawal, which reduces the death benefit.
Premiums remain level and are guaranteed never to
increase. You may consider whole life insurance to help
pay off outstanding debts or to cover estate expenses.
Universal life is permanent life insurance that provides
access to cash values that grow tax-deferred at
competitive interest rates. It is adjustable life insurance
in that it allows flexible premium payments – at scheduled or
unscheduled times – but the policy will terminate at any time
the cash surrender value is insufficient to pay the monthly
deductions, whether due to insufficient premium payments, if
loans or withdrawals are made, or if current interest rates or
It will pay the benefit if the insured dies before the maturity
date or pays the cash value if the insured is living at the
maturity date. Premiums increase each year, based on your
age. Administrative expenses and insurance costs are
subtracted from any paid premium when calculating cash
value. Dividends are not payable.
Variable Universal Life combines the premium and
death benefit flexibility of traditional universal life and
Variable Universal Life
the investment flexibility and risks of variable life insurance.
The cash value fluctuates with the market value of
investments chosen by the policyowner. Because of this risk –
assumed by the policyowner – variable universal life products
are considered securities.
As is the case with Universal Life, all administrative expenses
and insurance costs are subtracted from any paid premium
when calculating cash value.
Everyone is different. Even lawyers in the same life
stage may have different financial goals or
The multitude of life insurance options has evolved
because of the varied needs of individuals. You are the
only person who can decide what type of insurance and
how much coverage you need, and these needs change
As your wealth and obligations change, so too will your
need for life insurance.
Why so many options?
Remember that you will usually be required to furnish
evidence of insurability – your health history – for the
initial application for any life insurance product.
How Do I Decide?
Things to consider:
1. Costs. Make sure the cost of coverage fits in your
2. Product features. Make sure the product, or
products, you select fit your needs.
3. Financial strength of the insurance underwriter.
Check with rating agencies, such as Fitch’s, A.M.
Best and Standard & Poor’s to ensure your claim
will be paid when the time comes.
Find out more:
ABE offers ABA members quality, affordable
insurance plans and the chance to give
back to the good works of the legal
profession. So, you may find the insurance
plan solutions best suited to you right here.
Call today to learn more* about the ABE-sponsored
insurance plans offered exclusively to ABA members.
*including plan features, costs, eligibility, renewability, limitations, exclusions and plan carriers.
Toll Free: 800-621-8981
Solo/Small Firm Toll Free Help Line: 877-621-7676
All ABE-sponsored plans are group insurance plans, meaning coverage is issued to an
ABA member under a Certificate of Insurance. It is not provided under an
individual policy, nor is it employer/employee insurance. Plans may vary and may
not be available in all states.
Portability is subject to U.S. government regulations. In addition, each Group Policy is
written with specifics that govern termination of coverage.