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 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.

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. 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.

What are the types of life 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.

What are the advantages of life insurance?

• 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 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

Disability and Long-term care insurance

Help guard against the impacts of an unexpected event through long-term care, disability and critical illness 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 help protect the ability to earn an income, which can be affected by a disability or other condition.

Unfortunately, present forms of federal and state-sponsored health care programs do not cover many of the costs associated with 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.

What are the types of LTC and DI?

• 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.
• The two major types of long-term care insurance include traditional and hybrid or combo plans. Traditional or reimbursement LTC is what most people think of when they think of LTC. Individuals with a traditional policy will receive a monthly benefit when they turn their policy on. This benefit can range from $1,500 to $12,000 a month. These polices will pay benefits for a set number of years, known as the benefit period. This typically ranges from 2-6 years. Before an insured can use the benefit, there is an elimination period or waiting period that can range from 0-365 days. Hybrid policies combine two types of coverage. Life insurance or annuities are combined with a LTC feature to offer several benefits to the insured. These polices are best suited for individuals with assets to reallocate.

What are the advantages of LTC and DI?

• Helping maintain financial independence, lifestyle and long-term financial resources in the event income is impacted by disability or chronic illness.
• Reduce the emotional and financial burden to loved ones.
• Protect assets from being depleted too quickly to pay for long-term care facilities.