Life Insurance
Term Life Insurance
Term life insurance:
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Provides guaranteed death benefit protection with a level premium for 10-, 15- or 20-years.
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Can be converted to a permanent policy, even if your health deteriorates.
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Does not offer a savings component, cash accumulation or loan features.
Whole Life Insurance
Whole life insurance can provide affordable permanent protection for your family and has a savings component that builds cash value.
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Provides a guaranteed death benefit to protect your family.
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Offers a guaranteed premium structure, which means your premiums will never increase, but may be reduced or eliminated.
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Builds cash value that can only increase over time.
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Offers dividends. When dividends are declared, they may be credited to your policy, further increasing the cash value and death benefit.
Indexed Universal Life Insurance
Indexed Universal Life insurance offers long-term death benefit coverage that credits interest based on the performance of a market index. It also offers a number of additional benefits. An IUL is a great financial tool to pack in your bag during the pre-retirement phase, but also if you're coming up on retirement. These policies are different from a traditional whole life policy because of the flexibility of premium.
Indexed Universal life insurance:
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Tax advantages like all life insurance, allow your beneficiaries to receive the death benefit typically free of federal income tax, and growth within the policy is tax-deferred.
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Cash value potential means you also have the potential to build cash value (“living benefits”) with a portion of your monthly premiums earning interest based on either a fixed rate or on the performance of the indexed accounts.
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Flexible premium payments that can allow you decide when (monthly, quarterly, bi-annually, annually) and how much to pay (provided you meet certain minimums).
Disability Insurance
What is disability income insurance?
Disability income (DI) insurance helps provide you with replacement income if you are unable to work due to an illness or injury that is covered by the policy. DI insurance can help cover your medical bills, your house payment and other common monthly expenses.
What is the benefit of having disability income insurance?
One of your most valuable assets is your ability to earn a living. Take away your income, and it is amazing how quickly you can deplete savings and even incur large debt just trying to cover your regular monthly expenses.
Another advantage is that unlike an employer-paid group long-term disability (LTD) plan, an individual DI insurance product is "portable." That means you own the policy, and it stays with you even if you change jobs.
What are the different types of disability income insurance?
DI insurance policies for individuals typically come in one of two forms:
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Non-Cancellable: Guarantees that as long as you pay the premiums, your DI policy cannot be cancelled, and your premium rate will be locked in for a set number of years. This policy is available for people working in professional, executive, white-collar and gray-collar technical occupations.
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Guaranteed Renewable: Guarantees that you can renew the policy with the same benefits as long as you continue to pay the premiums. There is the possibility your premium will increase. This policy is available for skilled technicians, on-site supervisors, manual laborers and people working in certain trades.
Owners of small businesses, including medical and legal practices, also need to consider DI insurance to protect the owners' interests. Coverage options are:
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Business Overhead Expense (BOE): Reimburses small-business owners for the expenses required to maintain the business as a going concern if an owner is disabled.
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Buy-Sell: Provides the funds to assist in the purchase of a disabled person's ownership interest in a partnership or other small business.
Who needs it?
Just about everyone. Whether you are single, married, have children, or own a business, a disability that keeps you out of work can be costly. To maintain your standard of living in the event of disability, it is important to consider this coverage.
You might like to know...
Insuring against disability has not been a high priority for most workers, because many assume they are already covered through Social Security, workers' compensation or employer plans. It is important to note, however, that each of these plans has limitations and should not be solely relied upon for income replacement during disability. An individual DI policy can help supplement these plans and provide additional confidence.
It can happen to you.
Traditional Long Term Care
Traditional long-term care policies work much like policies for auto or home insurance: You pay premiums, usually for as long as the policy is in effect, and make claims if you ever need the covered services.
You can choose a little coverage or a lot to help pay for services in or out of your home. Typical policies spell out how much you can receive daily or monthly, up to a lifetime maximum or a certain number of years. Different amounts may be allowed for care in your home, a nursing home or elsewhere. You pay extra for benefits that rise over the years to protect you from inflation.
You also can choose from policies with varying waiting periods between the time you start needing care and when benefits kick in. A typical waiting period is 90 days, but you can pay more to get benefits after 30 days or pay less to accept a 180-day delay. Likewise, you pay more for a policy that pays out $200 a day, lasts five years and grows benefits at a compounded 3 percent per year than you would for one that pays $100 a day for two years with no inflation protection.
Long Term Care Rider on Life Insurance (LTC Rider)
A long-term care (LTC) rider allows you to tap into your life insurance death benefits to help cover long-term care expenses. This is one of the many rider options available to help tailor your life insurance plan to your specific needs. Policyholders can use long-term care riders to cover adult day care services, home health care services and a long-term care facility with 24-hour nursing services. If you think you may need heavy medical assistance in the future and worry about the financial burden of health care expenses, then a long-term care rider might be right for you.
LTC riders give you access to a percent of your death benefit while you’re alive to cover long-term care expenses. The percentage you’re allowed access to vary by insurance company. The more you take out of your death benefit while living, the less your beneficiary will receive when you pass away.
Adding an LTC rider to your life insurance policy will increase your premium price. The premium price for this rider does not have a set amount, meaning it could increase each year. Most insurance companies have a waiting period of 90 days before you can access LTC rider benefits. Once you surpass the waiting period and begin coverage, you can choose your payment preference. Confirm with your insurance provider how much you can take from your death benefit and if your premium price is locked in before purchasing an LTC rider. You will also need to confirm if you are eligible for this rider before taking it into consideration.
Annuities
Fixed Annuities
A fixed annuity is a type of insurance contract that promises to pay the buyer a specific, guaranteed interest rate on their contributions to the account. By contrast, a variable annuity pays interest that can fluctuate based on the performance of an investment portfolio chosen by the account's owner. Fixed annuities are often used in retirement planning.
Investors can buy a fixed annuity with either a lump sum of money or a series of payments over time. The insurance company, in turn, guarantees that the account will earn a certain rate of interest. This period is known as the accumulation phase.
When the annuity owner, or annuitant, elects to begin receiving regular income from the annuity, the insurance company calculates those payments based on the amount of money in the account, the owner's age, how long the payments are to continue, and other factors. This begins the payout phase.
The payout phase may continue for a specified number of years or for the rest of the owner's life.
During the accumulation phase, the account grows tax-deferred. Then the account holder annuitizes the contract, distributions are taxed based on an exclusion ratio. This is the ratio of the account holder's premium payments to the to the amount accumulated in the account that is based on gains from the interest earned during the accumulation phase. The premiums paid are excluded and the portion attributable to gains is taxed. This is often expressed as a percentage.
This situation applies to non-qualified annuities, which are those not held in a qualified retirement plan. In the case of a qualified annuity, the entire payment would be subject to taxes.
Fixed Indexed Annuities
A fixed index annuity is a type of fixed annuity that credits interest based on the performance of an external stock market index providing the potential to earn higher interest rates than offered by a fixed annuity. Fixed index annuities provide an opportunity to earn higher interest rates than a fixed annuity or any other investment product offering principal protection. A fixed index annuity can help you build a source of guaranteed lifetime income, save for a specific retirement goal, or leave a legacy for your loved ones.
The primary benefits of an index annuity are: tax deferral, potential for higher interest rates, and principal protection from downturns in the financial markets.
Under current federal income tax law, any interest earned in your fixed index annuity contract is tax deferred. You don’t have to pay ordinary income taxes on any taxable portion until you begin receiving money from your contract. Withdrawals are taxed as ordinary income and, if taken prior to age 59½, a 10% federal additional tax may apply.
Fixed index annuities provide an opportunity for potential interest growth based on changes in one or more indexes. Because of this potential indexed interest, FIAs provide a unique opportunity for accumulation, and since the interest your contract earns is tax-deferred, it may accumulate assets faster. In addition to potential indexed interest, FIAs can offer you an option to receive fixed interest.
Business Owner Solutions
Successful businesses are built on a variety of assets: equipment, inventory, real estate, accounts receivable, cash, goodwill and key people. They're also built on smart choices and planning for a variety of situations.
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Business Overhead Expense Policy: Help protect your business from an unexpected illness or accident with a disability income insurance policy.
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Buy-Sell Planning: Life insurance and disability income insurance policies providing for the sale of a business when a specified event happens.
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Executive Bonus Plan: A simple, yet powerful, fringe benefit that lets you, the employer, purchase life insurance on yourself and selected key executives.
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Family Business Planning: Uses life insurance as an excellent way to equalize the amount of assets distributed to your children.
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Key Person Insurance: Allows you to use life insurance proceeds to cover many business expenses that arise upon the death of a key person.
Medicare Advantage Plans
Medicare Advantage Plans provide all of your Part A and Part B benefits, excluding clinical trials, hospice services, and, for a temporary time, some new benefits that come from legislation or national coverage determinations. Plans must cover all emergency and urgent care and almost all medically necessary services Original Medicare covers. If you’re in a Medicare Advantage Plan, Original Medicare will still help cover the cost for hospice care, some new Medicare benefits, and some costs for clinical research studies.
The plan can choose not to cover the costs of services that aren't medically necessary under Medicare. If you're not sure whether a service is covered, check with your provider before you get the service. With a Medicare Advantage Plan, you may have coverage for things Original Medicare doesn't cover, like fitness programs (gym memberships or discounts) and some vision, hearing, and dental services (like routine check ups or cleanings). Plans can also cover even more benefits. For example, some plans may offer coverage for services like transportation to doctor visits, over-the-counter drugs that Part D doesn’t cover, and services that promote your health and wellness. Check with the plan before you enroll to see what benefits it offers, if you might qualify, and if there are any limitations.
Plans can also tailor their benefit packages to offer additional benefits to certain chronically-ill enrollees. These packages will provide benefits customized to treat specific conditions. Although you can check with a Medicare Advantage plan before you join to see if they offer these benefit packages, you’ll need to wait until you join the plan to see if you qualify.
Most plans include Medicare Drug Coverage (Part D) In addition to your Part B premium, you usually pay a monthly premium for the Medicare Advantage Plan. In 2023, the standard Part B premium amount is $164.90 (or higher depending on your income). (info from medicare.gov)
Medicare Supplement Plans (Medigap)
Medigap is Medicare Supplement Insurance that helps fill "gaps" in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:
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Copayments
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Coinsurance
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Deductibles
Some Medigap policies also cover services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, here's what happens:
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Medicare will pay its share of the Medicare-Approved Amount for covered health care costs.
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Then, your Medigap insurance company pays its share.
9 things to know about Medigap policies
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You must have Medicare Part A and Part B.
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A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.
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You pay the private insurance company a monthly
premium
for your Medigap policy. You pay this monthly premium in addition to the monthly Part B premium that you pay to Medicare.
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A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
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You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.
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It’s important to compare Medigap policies since the costs can vary between plans offered by different companies for exactly the same coverage, and may go up as you get older. Some states limit Medigap premium costs.
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Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.
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Medigap policies can no longer be sold with drug coverage, but if you have an older Medigap policy that was sold with drug coverage (before January 1, 2006), you can keep it. You may choose to join a separate Medicare Prescription Drug Plan (Part D). because most Medigap drug coverage isn’t
creditable prescription drug coverage
, and you may pay more if you join a drug plan later. If you buy Medigap and a Medicare drug plan from the same company, you may need to make 2 separate premium payments. Contact the company to find out how to pay your premiums.
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It's illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you're switching back to Original Medicare. (info from medicare.gov)