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You may require one or more types of life insurance to meet your financial needs and goals. Two major categories of life insurance are term and permanent. Permanent life insurance has options including whole life, variable life, universal life, and single premium life.
Term life insurance provides a fixed amount of coverage, at a fixed premium, over a specific period of time or term (10, 15, 20 or 30 years). Because its premiums are generally lower, term life insurance is often the choice made by young families. If you die before the end of the term, your beneficiaries receive a lump sum equal to the amount of coverage you purchased. Term Life does not build up cash value. Coverage can often continue after the chosen period if needed, or can be converted to a permanent life policy.
Term life insurance coverage is best suited to wealth protection, especially during periods of increased risk and exposure, like when paying off a mortgage, replacing your income during child-rearing years or protection money that has been set aside for a child's college tuition. It can also benefit others who may depend on you for support, such as an aging parent.
Besides its generally lower premiums compared to permanent life insurance, term life offers you the flexibility to receive additional coverage if you need it, beyond any other life insurance you may have.
Term life only lasts for the term you set or until you stop paying the premium. It accrues no cash value paid out at the end of the term, if you're still living.
Permanent life insurance covers you from date of issue until the day you die, as long as you continue to pay your premiums. Permanent life can earn cash value as your premiums are invested. This helps you build wealth while also protecting it. And of course, it transfers and distributes your wealth efficiently to your heirs.
Because it never expires, permanent life can be used as the foundation of your overall life insurance plan for a variety of life stages and financial needs.
Permanent life insurance never expires and your beneficiaries can receive a lump sum payment when you die. Another benefit of many permanent life plans is the accrual of cash value over time, which can be borrowed against if needed.
Permanent life policies tend to have higher premiums than term policies, and may offer less flexibility than term life for pricing and options.
Whole, universal, variable and single-premium are all types of permanent life insurance. Each may be used for wealth accumulation, protection, distribution and transfer depending on your needs.
HSBC Insurance continually evaluates a variety of insurance options from leading, top-rated carriers. Our broad access and well-established relationships enable us to offer quality coverage choices and cost-effective solutions. We'll help you decide how much and what kind of coverage is optimal for your needs.
| Term life | Permanent life | |
|---|---|---|
| Best for | Wealth protection and transfer | Wealth accumulation, protection, and transfer |
| Consider if | You want protection today for a set period of time and prefer lower premiums | You want protection for your lifetime and to build toward your long-term financial goals |
| Length of Coverage | Usually 10,15, 20 or 30 years | Lifetime |
| Benefit Type | Fixed payout | Fixed payout |
| Premium Payment | Monthly, quarterly, semi-annual or annual | Monthly, quarterly, semi-annual or annual |
| Premiums Go Toward | Cost of policy only | Cost of policy and the policy's cash value |
| Cash Value | None | Yes, a minimum guaranteed rate |
| Borrowing Options | None | Loans may be taken out against the policy's cash value |
Investment and Annuity products are provided by Registered Representatives and Insurance Agents of HSBC Securities (USA) Inc., member NYSE/FINRA/SIPC, a registered Futures Commission Merchant, a wholly-owned subsidiary of HSBC Markets (USA) Inc., and an indirectly wholly-owned subsidiary of HSBC Holdings plc. In California, HSBC Securities (USA) Inc., conducts insurance business as HSBC Securities Insurance Services. License #: 0E67746. Insurance Agents of HSBC Insurance Agency (USA) Inc., a wholly-owned subsidiary of HSBC Bank USA, N.A., and an indirectly wholly-owned subsidiary of HSBC Holdings plc, offers Insurance products issued by third-party insurance carriers. Products and services may vary by state and are not available in all states. California license #: 0D36843.
| Investment, Annuity and Insurance Products: | ||||
|---|---|---|---|---|
| ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES | ARE NOT FDIC INSURED | ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES | MAY LOSE VALUE |
All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.
Equal Housing Lender.| †† Investments, Annuity and Insurance Products: | ||||
|---|---|---|---|---|
| ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES | ARE NOT FDIC INSURED | ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES | MAY LOSE VALUE |
