- Life Insurance
Teachers Insurance and Annuity Association College Retirement
Equities Fund (TIAA-CREF)
over 80 years TIAA-CREF has been providing benefits for the
education and nonprofit research communities, earning a reputation
for high-quality, low-cost financial products, as well as
responsive service, disciplined investment management, and
unrivaled professional integrity.
today TIAA-CREF are doing even more. While continuing to provide
retirement plans, TDAs, and individual insurance to educators
across the country, TIAA-CREF are steadily expanding their
menu of products and services and offering more and more of
them to people in all walks of life. TIAA-CREF's individual
and group life insurance, group disability insurance, and
long-term care insurance are available not only to people
in higher education and research, but also to K-12 teachers
and their families. IRAs are open to spouses of people in
education and research. And TIAA-CREF's mutual funds, mutual
funds IRAs, tuition savings programs, and trust services are
available to the public at large.
more than $290 billion in assets under management, TIAA-CREF,
headquartered in New York City, is a leading financial services
organization, a major institutional investor, and the world's
largest retirement system. TIAA is the Teachers Insurance
and Annuity Association, one of only three U.S. firms to hold
triple-A ratings from all four major independent analysts
of the insurance industry. CREF is the College Retirement
Equities Fund, an open-end, diversified management company
registered with the federal Securities Exchange Commission.
TIAA-CREF Why Life Insurance?
financial experts consider life insurance the foundation of
financial planning. Life insurance offers a unique combination
of benefits not available from other products--benefits that
can serve a variety of purposes. Before learning about the
two basic categories of life insurance policies -- permanent
and term -- it's helpful to review some of the most common
needs that life insurance can help address:
What's your most valuable single asset? Your home? Your investments?
Actually, if you're like most people your most precious asset
is your earning power. Current income is the cornerstone for
your family's lifestyle, the basis for your financial security
now and in the years to come.
what would happen if your earning power were taken away...if
you were no longer there to provide for your family? Could
they keep up their standard of living? Could they afford to
keep living in your home? What would happen to the hopes and
dreams you've shared?
insurance is the best way to protect loved ones from the sudden
loss of a breadwinner's earnings. It can help guard the financial
stability of your household and help your family hold on to
what you've worked so hard to provide.
and estate planning
Life insurance can help supplement retirement income and/or
ensure its continuation to your spouse after your death. Cash
values accumulated in permanent life insurance policies may
become sizable over time and provide the flexibility for realizing
additional income later in life. And policy proceeds can be
used by a surviving spouse to generate or augment retirement
your estate to pay for final expenses can be another important
element of life insurance planning. Such expenses can include
outstanding debts, the costs of estate disposition and transfer
of assets to heirs, medical expenses not covered by insurance,
burial costs, and more. Your estate may also face federal
and state income and other tax liabilities. Life insurance
proceeds can provide a high degree of liquidity, making it
easier to preserve capital and avoid the hasty or forced sale
of assets to meet a family's need for immediate cash.
Life insurance is often used as part of a plan to make significant
gifts to favorite charities or other institutions (universities,
museums, religious institutions, etc.) In some cases you can
use life insurance policies to make direct gifts. In others,
life insurance ensures asset replacement for an estate that
has made a significant gift (for example, art, securities,
or real estate) so that the family's own legacy isn't diminished
by the amount of the donor's gift.
Many business situations call for life insurance. The most
common involve planning for business continuation. Individuals
with an interest in a partnership or other closely held business
often find insurance can provide the liquidity needed by a
surviving spouse or heirs of a partner, principal, or stockholder
without undercutting the viability of the business. Similarly,
in a family business life insurance proceeds can facilitate
the transfer of ownership from one generation to the next.
TIAA-CREF Permanent vs. Term Life Insurance
insurance, such as universal life and ordinary (whole-life)
coverage, includes both income protection in the form of death
benefits and a savings (cash-value) element. Because of the
savings element, premiums do tend to be significantly higher
than for term insurance. But the cash value that accrues can
grow on a tax-deferred basis and become substantial over time.
life insurance is protection in its purest form. You buy coverage
at comparatively low cost for a specific period (the "term")
directly related to your needs. Although premiums for most
term policies increase with age or at the end of each renewal
period, term insurance usually provides the highest amount
of coverage for each premium dollar.
look at how permanent and term life insurance are similar
to "buying" and "renting" a home and the
key features of each.
and term life insurance are often compared to buying or renting
you buy your own home, you satisfy a long-term need with a
long-term solution. While your monthly cost may be higher
than rent, your mortgage payments build equity over time.
Likewise, permanent life insurance helps you to satisfy a
long-term death benefit need with a long-term solution. And
also like with a home purchase, while the monthly premium
for a permanent policy will generally be higher than that
for term, the premiums also help to build cash value that
can be accessed in the future.
term insurance is like renting. It's appropriate for when
you have a short-term or temporary protection need or limited
resources to pay for coverage. Like renting, monthly costs
are usually lower. However, costs increase with age -- so
buying or renewing a term policy as you get older will result
in higher premiums. And like a lease, there won't be any equity
(cash value) in the policy at the end of the coverage period.
Often, just like renters who save before they can buy, individuals
who need insurance protection but have limited resources buy
term coverage and later switch to permanent protection. (This
is called converting the policy.)