What's the difference between a term, a universal and a variable universal life insurance policy?
How have interest rate changes since I bought my policy affected my cash values?
Why not pay the minimum early in a cash-value policy?
How does increasing life expectancy of the general population affect my policy?
Why has life insurance been largely ignored as an investment tool given its tax benefits and debtor protection?
In the event of bankruptcy, is the cash-value of my life insurance policy protected from creditors?
Does the beneficiary pay income tax on the death benefit?
Can I borrow from my life insurance policy?
Who does Watson Willcox work with?
Is your life insurance policy up to no good?

What's the difference between a term, a universal and a variable universal life insurance policy?
Term life is initially the least-expensive, least-complex policy. Term insurance works like your car insurance. Coverage is for a fixed, usually renewable term (e.g. 10 years). The policy does not build cash.
Universal life earns an interest rate from bond market investments. It offers flexible premium payments and an accumulating cash value.
Variable universal life uses equity or bond markets, and as a result, the cash value can offer the potential for strong long-term investment returns.

How have interest rate changes since I bought my policy affected my cash values?
If you bought a cash-value policy at any time prior to 2000, you purchased at a higher interest rate than the current rate. As a result, projections probably are higher than your actual return and your policy is in danger of drying up down the road or becoming incredibly expensive.

TRUISM #2: Life insurance can offer tax and creditor protections

Why not pay the minimum early in a cash-value policy?
The more cash you put into a cash value policy, the less the risk for the insurance company and therefore the lower the cost of insurance risk to you. Life insurance can be a powerful financial tool, and the longer the money is in the policy, the greater the potential return.

How does increasing life expectancy of the general population affect my policy?
Over the past century as life expectancy has increased, the cost of life insurance has decreased. Because insurance companies benefit from longer lives and the resulting additional premium payments, life insurance has become more inexpensive every year. As a result, a policy purchased years ago might stand to be reworked to your benefit.

Why has life insurance been largely ignored as an investment tool given its tax benefits and debtor protection?
Until recently, life insurance in this country has been stodgy, archaic, and viewed with less than enthusiasm by many Americans. Fortunately, the industry now is thoroughly in synch with the times. As so often happens, American ingenuity has transformed and improved upon a product created abroad.

In the event of bankruptcy, is the cash-value of my life insurance policy protected from creditors?
Bankruptcy protection in life insurance varies from state to state, but in Texas your policy is protected against creditors, just as is your pension money.

TRUISM #1: Changing interest rates can damage an unattended insurance policy

Does the beneficiary pay income tax on the death benefit?
No, the benefit is not subject to income tax, although it may be affected by inheritance and estate tax.

Can I borrow from my life insurance policy?
Generally, if you have sufficient cash in policy, you can take out a loan. If you die before paying back the loan and interest, the amount you owed is paid back from the death benefit.

Who does Watson Willcox work with?
Our clients are Texans with existing Term, Whole Life, Universal Life or Variable Universal Life insurance.

Is your life insurance policy up to no good?
In other words, is your policy still wearing polyester wide lapels? Time to bring it into the twenty-first century...

This FAQ and any recommended reading and reference materials mentioned herein are for informational purposes only. You should consult the appropriate professional advisor concerning the suitability of any points discussed to your particular needs as well as any reading and reference materials.