Insurance protects you and your loved ones. It is important to select the most suitable products for your family’s needs. Insurance can:
- Replace lost income
- Provide necessary money to pay off major expenses such as mortgages and consumer loans
- Provide college funds for children
- Cover costs of assisted living facilities or nursing homes
Life Insurance - Term or Permanent
- Term Insurance policies offer a significant amount of protection but, unlike Permanent Insurance, do not offer an additional savings component. Premiums are typically lower than other types of life insurance, with actual costs determined in part by the holder’s age and health. Designated beneficiaries receive the policy proceeds tax free.
- Permanent Insurance policy premiums tend to be more expensive but have no increase in premium due to age. They are intended for long-term use and offer a significant savings/investment opportunity. Generally the designated beneficiaries receive the policy proceeds tax free upon the policyholder’s death. There are several types, each offering unique benefits:
- Whole Life
- Universal Life
- Variable Universal Life
Disability Insurance - Individual and Business
Disability Insurance provides income replacement when individuals are injured and unable to work. This type of insurance is available for individuals, and also for a variety of business applications.
- Personal Disability policy – for individuals
- Business Overhead policies - for business owners who get seriously ill or injured. Income is used to continue running the business.
- Key Employee policies - income comes to the business to make up for the loss of productivity of a key employee
Long Term Care Insurance
- Standard - This policy provides extra income to help pay for care at home, in an assisted living facility or in a nursing home. Policies provide either a daily or monthly benefit amount.
- Annuities and Permanent Life Insurance Policies – These policies can also provide income support for long term care. See descriptions under Permanent Insurance (above) and Annuities (below).
Policies are available to cover expenses that traditional health insurance may not cover. Typically they pay a lump sum to the insured for major health related issues such as cancer, disability, accidents or hospital stays.
Annuities are savings vehicles offering tax deferred growth and available through insurance companies. There are four types of annuities, each with their own advantages and disadvantages:
- Fixed - paying a fixed rate for a certain period of time. Though they are not guaranteed by government insurance, the principle will have fixed rate and tax free growth, safe from market fluctuations.
- Fixed Index - principle is safe from risk but the earnings are tied to a standard stock market index. Annuity earnings rise as the index rises in value, but with limitations. Gains are locked in so there is no loss of value when the market index drops.
- Immediate Income - provide a fixed amount of income over a pre-determined period of time ranging from a number of years to a lifetime. These annuities provide guaranteed fixed income for the specified time frame.
- Variable - act like mutual funds and so can fluctuate. There is risk of loss of both principle and earnings but also the potential of substantial gain. Many variable annuities offer benefits such as guaranteed income withdrawal and death benefits.