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Insurance Planning

Protect your income

Why Life Insurance

You take steps to care for and safeguard the ones you love each day. You invest and put away money to protect your family, but even the best investments need time to grow. What if something unexpected were to happen to you along the way - an unforeseen accident, life-threatening illness or death? The life insurance death benefit gives you the opportunity to plan for the unexpected, and protect your family from financial hardship by:

  • Replacing the income lost from the death of a wage-earner
  • Paying off a mortgage and other debts
  • Funding your child's education
  • Maintaining your standard of living

Grow your retirement income

Planning for retirement has become the number one financial concern for most individuals. You may put money aside in 401(k)s and IRAs, but still worry that you do not have enough savings opportunities to work towards your long-term goals. What other options are available to both help protect your family and supplement your retirement income? Life insurance may be the answer.

Many permanent life insurance policies can be designed to provide both death benefit protection for your lifetime and the potential for cash value accumulation. Cash value is built over time through a combination of premium payments and interest - and grows on a federally tax-deferred basis. The cash value can be partially withdrawn or borrowed to help provide an additional source of retirement income.

Preserve your legacy

You've accomplished so much and achieved financial success. As you consider the future, you may want to protect your hard-earned wealth for the next generation - helping them realize their dreams and works towards their financial goals, once you are gone. Life insurance helps ensure that what you've worked hard to earn will be passed on to the people you care about in a tax-efficient manner - allowing you to build and preserve your family's legacy.

Safeguard your business

You own a successful business and would like it to continue for generations. But running a small business can have its challenges. You want to make sure your company is protected against the loss of key employees whose knowledge and contributions are invaluable. You need to be able to attract, retain and reward employees in today's competitive environment. And, when you pass away or are ready to retire, you'll want to have a succession plan in place. Life insurance provides options and potential solutions to address many of these challenges.

Guarantees are based on the claims paying ability of the issuing company. Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse , or affect guarantees againse lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. Tax laws are subject to change and your clients should consult a tax professional.

Types of Life Insurance

Term Life Insurance

Term insurance is straightforward, affordable and easy to understand. It is specifically designed to secure your family needs if an income earner dies unexpectedly. Term Life insurance provides death-benefit protection for a stated time period with a level premium payment. Terms periods may be 10, 15, 20, 25, 30 years, depending on the carrier.

Benefits:

  • Cover a larger, temporary risk
  • Low-cost, flexible product that may be convertible as needs change
  • Level premium payments

Universal Life

Universal Life Insurance, or UL, is permanent insurance that provides lifetime protection and cash value accumulation potential. This product's flexible design allows you to customize the timing and amount of premium payments to meet your needs now and in the future.

Potential Benefits:

  • Product is flexible, and gives clients the opportunity to accumulate cash
  • Flexibility- You can adjust the death benefit and premium payments to fit your clients' needs
  • Tax-Deferred Account Growth- The policy's Account Value earns interest at the company's current interest rate; federal income tax deferred. The current interest rate is typically guaranteed to be at least 3% a year

Indexed universal life insurance

Indexed universal life is a type of permanent life insurance that offers the same features as traditional universal life but with an opportunity to earn interest linked to the performance of an indexed account (such as the S&P 500® †), while protecting the policy's cash value from market risk. Generally, indexed universal life policies have more cash value accumulation potential than other universal life products.

Variable Universal Life Insurance

Variable Universal Life, or VUL, is a type of life insurance that builds a cash value in addition to securing a death benefit. In a VUL, the cash value can be invested in a wide variety of separate accounts and the choice of which of the available separate accounts to use is entirely up to the contract owner. The 'variable' component in the name refers to this ability to invest in volatile investments within a separate account, which is made up of variable sub-accounts. The 'universal' component in the name is used to refer to the flexibility the owner has in making premium payments. The premiums can vary from nothing in a given month up to maximums defined by the IRS code for life insurance.

Potential Benefits:

  • Flexibility- Opportunity to allocate net premiums among a variety of investment options.
  • Tax Treatment- Federal income tax deferral on any growth in the policy account value.

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 principle. Guarantees are based on the claims paying ability of issuer.

Disability Insurance

What is disability insurance?

Think of it as insurance for your income. Just like car insurance or homeowner’s insurance helps you financially when something unexpected happens, so does disability insurance. It may sound too good to be true, but disability insurance covers you when you can’t work due to an accident or illness. In fact, people who get sick and can’t work are more likely to use disability insurance. Whatever the reason, it ensures you’ll continue to have an income—whether you need it for weeks, months, or years.

Why do I need it?

You may be a lucky employee that gets some disability coverage through work. But what most don’t realize is that employer-provided policies typically only cover a percentage of your income (typically around 60%). Factor in taxes, and that percentage gets lower.

An individual disability insurance policy can supplement the coverage you already have, or work as a stand-alone policy if you don’t have coverage through your employer. It helps you keep your standard of living, so you may not have to pull from savings or find new sources of income. Another benefit? Individual disability policies stay with you, even if you change jobs or careers. You can also customize your coverage to your needs and budget.

How much does it cost?

Of course, every policy is different, but the cost of disability insurance is usually around 1–3% of your annual income.

If you think about it, that’s roughly the cost of a monthly date night or cable bill. It’s a relatively small expense that comes with big peace of mind.

Long-Term Care Insurance

Long-term care (LTC) goes beyond medical care to include all the assistance you could need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time (longer than 90 days), guarantees are based on the claims paying ability of the issuer. While older people generally require the most long-term care services, 40% of long-term care claims are paid to someone under the age of 64. A young or middle-aged person who has suffered a debilitating illness or accident may also require care.

You may require long-term care due to:

  • Dementia/Alzheimer’s
  • Stroke
  • Complications with diabetes
  • Other chronic conditions

Where care is provided?

Professional care can be delivered in a variety of different settings, and many long-term care insurance policies give you the option to receive care in the setting of your choosing:

  • Home health care: Services provided at home.
  • Assisted living facility: Residential care setting that provides housing and support services for people wanting or needing assistance with daily living tasks.
  • Memory loss units: Often located as a separate wing of an assisted living facility, these units provide 24-hour support, and locked premises to assure that no one wanders off.
  • Nursing home: Full-time care in a dedicated facility.
  • Adult day care: Community-based, daytime supervision providing social, recreational or health assistance off-site during working hours.

Would Healthcare Insurance or Medicare Cover These Costs?

Healthcare, including Medicare, pays for skilled or rehabilitative services only, and it doesn’t cover custodial care. Medicare may cover a portion of the first 100 days of care received at a nursing facility if specific program requirements are met. After the first 100 days, you’ll have to cover your own costs.

Medicaid is the joint federal and state welfare program for those with low income and limited financial resources. Eligibility restrictions such as gifting money to loved ones, transferring assets into trusts, and creating promissory notes make it increasingly difficult to qualify for this program.

Ways to Get Long-Term Care Coverage:

Traditional LTC Insurance

These policies offer flexibility in benefits to help you design a plan that addresses your specific needs. It also may limit out-of-pocket expenses. Good health and partner discounts help reduce the cost of these premiums. Traditional LTC insurance policies may qualify for your state’s Partnership Program, which means that every dollar in benefits paid from a long-term care policy will allow you to protect a dollar of your assets should you ever need to qualify for Medicaid. Please consult with your financial advisor on how the Partnership Program may benefit you.

Life Insurance with LTC Riders

Many insurance carriers are now offering a long-term care rider that acts as an added benefit to a permanent life insurance product. This type of policy is advantageous for those clients who are primarily looking for life insurance, because they’re actually securing two forms of insurance in one package. Long-term care riders come at a cost and they allow you to use a percentage of your death benefit should you require long-term care instead.

Single Premium Life/Long-Term Care Insurance

These product options, also known as linked benefit products, may be your best option to self-insure. This product offers a simplified application process for life and long-term care. In the event you don’t require long-term care, the death benefit will be paid income tax free to your requested beneficiaries. Such products may also include Return of Premium features that returns the premiums paid for coverage if you survive the policy’s terms. Such producers may also include a return of premium feature. At any time, you can request a return of premium upon full surrender of the policy.

Such products may also include Return of Premium features that returns the premiums paid for coverage if you survive the policy’s terms. Such producers may also include a return of premium feature. At any time, you can request a return of premium upon full surrender of the policy.

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. Guarantees are based on the claims paying ability of the issuing insurance company.

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