As much as we try to prepare for them, tragic events like death, disability or critical illness sometimes strike unexpectedly. 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 is 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

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 therefore can be an ideal addition to any financial plan. In the event of death, life insurance offers 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 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 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 offer tax-advantaged borrowing opportunities
  • Some plans allow policyholders 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

We 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 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 insurance can help bridge the gap in funding for certain long-term care expenses such as:

  • Home Care 
  • Assisted Living
  • Adult Daycare
  • Respite Care
  • Hospice Care
  • Nursing Home Care
  • Alzheimer’s facilities
  • Home modification

Most policies require 2 of 6 Activities of Daily Living (ADL’s) to be triggered in order to be eligible for covered expenses. (The six ADLs are: Bathing, Dressing, Toileting, Transferring, Continence and Eating)

Long-Term care insurance can be purchased in several forms including whole life or universal life insurance with a Long-Term Care Insurance Rider or as an annuity product with a Long-Term Care Rider.

A comprehensive financial plan can protect income and legacy planning. Contact us today to find out which policies are best for your unique circumstances.

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 an unexpected disability. Disability insurance is a form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work.

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.

Critical Illness Insurance

Suffering a critical illness is a distressing event. Help ease the burden through a type of insurance that will reduce financial stresses. By helping pay for the additional expenses often associated with a critical illness or condition, insurance offers individuals, families and if applicable, businesses, added financial resources —so the focus remains on recovery.

The advantages of critical illness insurance can include:

  • Coverage encompasses a wide range of screening tests
  • An initial lump-sum benefit of up to $500,000 that policyholders can use however they wish—from making mortgage payments to home health care
  • Employers or organizations can add value to benefit packages at an affordable cost
  • Critical illness insurance pays a cash benefit if the policyholder makes a full recovery

Annuities

Annuities are often a go-to choice for those seeking a reliable stream of consistent income and are a popular product among retirees. A very illiquid investment, buying an annuity is a decision that should be made carefully because once an annuity is purchased it can be very difficult and costly to reclaim the funds given to the annuity provider. The payments from annuities are paid out through a very long extended period, until the death of the annuitant. In addition, annuity contracts can include a death benefit to the family members of the annuitant.

There can often be more to annuities than meets the eye however and, in reality, purchasing an annuity may not be for everyone. Annuity contracts can be complex and many people can be at risk of not fully understanding the fees and rules associated with annuity contracts. We highly recommend consulting with a financial professional, who is familiar with annuities, before deciding to buy an annuity. They will be able to help you see if an annuity is right for you and, if so, which kind would suite you best. The truth is that there are many different types of annuities out there. Common types include

Variable Annuities

Variable annuities are annuities built around a selection of investments, frequently mutual funds and are held in the policyholders account. Because of this feature, they have the potential to be more lucrative and provide higher returns than most fixed annuities. This does however come with the risk that is inherent in the name “variable annuity”; the revenues are tied to the market and therefore are “variable.”

While many plans have an initial investment protection in place to ensure that you will not lose money on your investment, it’s important to remember that there are no guarantees to how well or poorly the portfolio of investments in a variable annuity may perform. Good and bad years can affect both the value of the annuity and the value of the periodic payments received. Because of the complexity and unsure nature of variable annuities, we strongly advise you to talk with a financial professional before purchasing one to help you be sure that it’s the right option for you.

Fixed Indexed Annuities

Fixed Indexed Annuities offer a lower risk than most variable annuities. Instead of being built around a portfolio of mutual funds, fixed indexed annuities are based on the performance of a selected index (for example the S&P 500, MSCI-EAFE or Russell 2000). The returns of an index vary with the performance of the underlying investments and the annuity has caps and floors set. This means that there is a limit to both how much you can make and how much you can lose. These are not suitable for all investors.

Single Premium Immediate Annuities

Unlike variable and fixed indexed annuities, single premium immediate annuities or SPIA’s do not have variation or volatility. With a SPIA, a large lump sum deposit is given upfront to the annuity provider in exchange for a life-long stream of consistent payments. The most significant aspect of a SPIA is that the payments begin within the year that the annuity provider receives the lump sum payment. Because of this, the upfront payment or premium can be rather high.

Because of the consistent, predictable lifetime payments that an SPIA can provide, many people view them as investments that can be used in lieu of a pension. As with all annuities however, the trade-offs and other factors can be more complicated than meets the eye. Again, we strongly advise you to talk with a financial professional about alternative investments before deciding to purchase an SPIA.

Deferred Income Annuities

The main difference between SPIA’s and Deferred Income Annuities (DIA’s) is that while the SPIA’s payments begin immediately (within the first year), the DIA’s payments start at a future date, often times several years or even decades away. One type of Deferred Income Annuity gaining traction with retirees with large IRAs is a QLAC, Qualified Longevity Annuity Contract. With this type of contract, the IRA holder can defer up to $135,000 (as of 2020) in a QLAC reducing the amount of an RMD (Required Minimum Distribution).

As is the case with all annuities, once the premium is paid for a DIA, it can be very difficult to reclaim the money that was paid. If you were, all of a sudden, in need of the money you’ve paid, there could be steep penalties to withdrawing funds early. Though this is not unique to DIA’s this can be a very important factor to consider if you are thinking about buying one, due to the long time-horizon involved with a DIA. Like a single premium immediate annuity, deferred income annuities are not exposed to the variation or risk of the stock market.

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice.  For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service.  They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs.  Guarantees are based on the claims paying ability of the issuing company.