As much as we try to prepare for them, tragic events like death, disability or critical illness sometimes strike. When faced with such a situation, insurance can protect policy holders and their families from undue hardship. For this reason, a variety of insurance coverage can be essential to any comprehensive financial plan.
Insurance planning is best when tailored to fit its owner’s personal situation: whether designed for a single person or family; professional or seasonal employees; executive or small business owner, everyone can benefit from an appropriately customized plan.
Life insurance is more than planning for the security of one’s loved ones: it can be a cornerstone in any multi-generational financial strategy.
Life insurance can provide financial resources in a number of concrete ways, from immediate expenses such as hospital bills to income replacement and assistance in settling outstanding debts. It can also help with estate planning and charitable contributions. Furthermore, some forms of life insurance enjoy tax advantages, and so can be an ideal addition to any financial plan. In the event of death, life insurance may offer surviving family members increased financial resources. As a tax-free lump sum payment, the so-called ‘death benefit’ can pay for final expenses and debts, as well as aim to provide income for the deceased’s dependents.
There are two main ways to organize life insurance policies: term insurance and permanent insurance.
Term Insurance involves paying a premium to secure a death benefit payment to beneficiaries. It provides protection for a specified period and is usually renewable. There are several different kinds of term life insurance, including Level Term, Annual Renewable Term, Decreasing Term, and Return of Premium life insurance.
Permanent Insurance involves comparatively high premiums at first, but costs may drop significantly over the long term. Furthermore, some permanent insurance plans include a cash value, and associated tax-advantaged borrowing privileges. There are several kinds of permanent life insurance, including Variable Life, Whole Life, and Universal Life coverage.
The advantages of life insurance may include:
- An instant estate for loved ones at a time when funds are most needed
- Death benefits are generally non-taxable
- Life insurance plans with a cash value component can offer tax-advantaged borrowing opportunities
- Some plans allow policy-holders to invest the cash value or death benefit in sub-accounts containing stocks, bonds, or other investments
- Gain tax advantages and help support a charitable interest through a charitable life insurance program
I can help you select coverage from a variety of life insurance options to meet the needs identified in your financial plan.
Life insurance can play a vital role in your financial plan—contact us today to find out how.
Long-term Care and Disability
Help guard against some of the impacts of an unexpected event through long-term care, disability and critical illness insurance.
Unfortunately, present forms of federal and state-sponsored health care programs do not comprehensively cover long-term care. Medicare generally offers temporary assistance, while Medicaid, which varies by state, may require out of pocket expenses and very low levels of asset value before public assistance becomes available.
Long-term care and disability insurance
Income is important for both current financial obligations (e.g. grocery bills and mortgage payments) and for future financial resources (e.g. planning for a child’s education or for retirement). Just think what might happen if an income stream was lost through a long-term illness or disability.Long-term care and disability insurance products may help protect the ability to earn an income, which can be affected by a disability or other condition.
Advantages of long-term care and disability insurance products may include:
- Helping maintain financial independence, lifestyle and long-term financial resources in the event income is impacted by disability
The two major types of disability insurance are Own Occupation Disability Insurance and Loss of Earning Disability Insurance. Own occupation disability insurance covers the ability of a disabled person to work in their own occupation, but may allow work in another job. Loss of earnings disability insurance provides payment for the percentage of income lost due to a disability.
A comprehensive financial plan can protect income through long-term care and disability insurance. Contact me today to find out which policies are best for your unique circumstances.
Historically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money. In an effort to create a more financially stable arrangement for the claimant, the Structured Settlement was developed.
A Structured Settlement is an alternative to a lump sum cash payment in the resolution of personal physical injury, wrongful death, or workers' compensation cases. The structured settlement usually consists of two components: an up-front cash payment to provide for immediate needs and a series of future periodic payments which are funded by the defendants purchase of an annuity policy or United States Treasury Securities. Those payors make payments directly to the claimant. In the unfortunate event of the claimant's death, a guaranteed portion of the structured settlement may be directed to a beneficiary, such as surviving children or his/her estate.
A Structure Settlement is a guaranteed source of funds paid to the claimant or his/her family on a TAX-FREE basis, if the claimant was physically injured. If the lawsuit involved non-physical injuries, such as for an employment litigation case, then the structured settlement may offer the benefits of tax-deferred payments over-time.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing.
Investors should consider the investment objectives, risks, charges and expenses of the variable insurance contract and sub-accounts carefully before investing. The prospectus and, if available, the summary prospectus contains this and other information about the variable insurance contract and underlying investment options. You can obtain prospectuses and summary prospectuses from your financial representative. Read prospectuses and summary prospectuses carefully before investing.
Variable Universal Life Insurance/Variable Life Insurance policies are subject to substantial fees and charges. Policy values will fluctuate and are subject to market risk and to possible loss of principal. Guarantees are based on the claims paying ability of the issuer.
Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy’s account value and death benefit. Withdrawals are taxed only to the extent that they exceed the policy owner’s cost basis in the policy and usually loans are free from current Federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding.