Insurance

Life Insurance Helps You Protect What Matters Most

What is life insurance?

Life insurance is a protection against financial loss that would result from the premature death of an insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The death benefit is paid by a life insurer in consideration for premium payments made by the insured. Learn More

Type of Life Insurance

Term
  • Term life insurance is insurance which provides coverage at a fixed rate of payments for a limited period, the relevant term (1, 10, 15, 20, 30 years). After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

Whole Life
  • Whole life insurance, or whole of life assurance, is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. These policies have guaranteed death benefits, builds cash value with the option to borrow against any available cash if needed at anytime, fixed premiums that don’t increase with age, option to pay up face value in 10 years, 20 years, or at age 65. Whole life insurance policies have been around for decades. In general, these policies are considered the safest option for those looking to provide for their families after death.

Universal Life Insurance
  • A type of permanent life insurance. Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, as well as any other policy charges and fees which are drawn from the cash value, even if no premium payment is made that month. Interest credited to the account is determined by the insurer but has a contractual minimum rate of 2%. When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is an "Equity Indexed Universal Life" contract.

Variable Universal Life Insurance
  • Variable Universal Life Insurance is a type of life insurance that builds a cash value. In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, 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 separate accounts whose values vary—they vary because they are invested in stock and/or bond markets. The 'universal' component in the name refers 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 Internal Revenue Code for life insurance.

Indexed Universal Life
  • An indexed universal life insurance policy gives the policy holder the opportunity to allocate cash value amounts to either a fixed account or an equity index account. Indexed policies offer a variety of popular indexes to choose from, such as the S&P 500 and the Nasdaq 100. Indexed universal life insurance policies give policyholders the option to allocating all or a portion of their net premiums (after paying for the insurance coverage and expenses) to a cash account. This account credits interest based on the performance of an underlying index with a floor of 0% return and a cap rate and/or participation cap on the return.

Final Expense

Final expense insurance, sometimes referred to as graded life or burial insurance with easy issue permanent coverage, is an insurance policy used to pay for burial expenses and funeral services when the named insured dies. It is a basic issue life insurance policy that covers people until they reach 100 years old. Most people who do not want to place a hardship on or burden their families with these burial and funeral costs will take out burial insurance polices. An important advantage of burial premiums is that they are fixed, which means they remain the same even if your health deteriorates.

Annuities

Annuities are contractually-executed, relatively low-risk investment products; the insured (usually, an  individual) pays a life insurance company a lump-sum premium at the start of the contract. That money is to be paid back to the insured in fixed, incremental amounts, over some future time period (predetermined by the insured). The insurer invests the premium; the resulting profit/return on investment fund the payments received by the insured, and, compensate the insurer.

Conventional annuity contracts provide a predictable, guaranteed stream of future income (e.g., for retirement) until the death(s) of the beneficiary(ies) named in the contract, or, until a future termination date – whichever occurs first. These financial instruments have been used to accumulate funds and provide significant and sudden increases in personal income (via future, lump-sum withdrawals), all while legally avoiding the taxes (e.g., income-, capital gains-, estate-) that would otherwise be assessed on them.


Immediate Annuities vs. Deferred Annuities
  • An immediate payment annuity is an annuity contract that is purchased with a single payment and pays a guaranteed income that starts almost immediately. Also called a "single-premium immediate annuity (SPIA)," "income annuity" or simply an "immediate annuity," an immediate payment annuity generally starts payment one month after a premium is paid and continues for as long as the annuitant (buyer) is alive or for a specific period of time. The longer an annuitant lives the better their return will be. Such annuities are especially suitable for retirees who are concerned about outliving their savings.
  • A deferred annuity is a type of annuity contract that delays income, installment or lump-sum payments until the investor elects to receive them. This type of annuity has two main phases: the savings phase, which is when you invest money into the account, and the income phase, which is when the plan is converted into an annuity begins paying the account owner. A deferred annuity can be variable or fixed.

"Key Person" Insurance

A life insurance policy that a company purchases on a key executive's life. The company is the beneficiary of the plan and pays the insurance policy premiums. This type of life insurance is also known as "key man insurance," "key woman insurance" or "business life insurance.“

Categories of Loss Covered by Key Person Insurance
  1. Losses related to an extended period when a key person is unable to work but has not died.
  2. nsurance to protect profits...for example, offsetting lost income from lost sales, losses resulting from the delay or cancellation of any business project in which a key person was involved.
  3. Insurance designed to protect shareholders or partnership interests. Typically, this insurance enables shareholder or partnership interests to be purchased by existing shareholders or partners.
  4. Insurance for anyone involved in guaranteeing business loans or banking facilities. The value of insurance coverage is arranged to equal the value of the guarantee.

Critical Illness Insurance

Anyone diagnosed with a critical illness will tell you it can be as difficult financially as it is emotionally. Make sure your family is financially protected in the event of an illness.

Critical illness insurance or critical illness coverage is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy. The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.

Conditions That May be Covered:
  • Alzheimer's disease
  • blindness
  • deafness
  • kidney failure
  • major organ transplant
  • multiple sclerosis
  • HIV/AIDS contracted by blood transfusion or during an operation
  • paralysis of limb
  • terminal illness

Long Term Care Insurance

Long term care insurance covers expenses and services not covered by health insurance, Medicare, or Medicaid. LTC or LTCI, an insurance product that helps provide for the cost of long-term care beyond a predetermined period. Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.

Many individuals may feel uncomfortable relying on their children or family members for support and find that long-term care insurance could help cover out-of-pocket expenses. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.

The welfare program, Medicaid, does provide medically necessary services for people with limited resources who need nursing home care but can stay at home with special community care services. However, Medicaid generally does not cover long-term care provided in a home setting or for assisted living. A long-term care policy generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to seven days a week, 24 hours a day (up to the policy benefit maximum).

Tax Considerations:
  • Premiums paid on a long-term care insurance policy may be eligible for an income tax deduction. The amount of the deduction depends on the age of the covered person. Benefits paid from a long-term care contract are generally excluded from income. Business deductions of premiums are determined by the type of business. Generally corporations paying premiums for an employee are 100% deductible if not included in employee's taxable income.

Disability Insurance

Disability Insurance, often called DI or disability income insurance, or income protection, 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.

For example, the worker may suffer from an inability to maintain composure in the case of psychological disorders or an injury, illness or condition that causes physical impairment or incapacity to work. It encompasses paid sick leave, short-term disability benefits (STD), and long-term disability benefits (LTD).

Statistics show that in the US a disabling accident occurs on average once every second. In fact, nearly 18.5% of Americans are currently living with a Disability, and 1 out of every 4 persons in the US workforce will suffer a disabling injury before retirement.

Types of Disability Insurance:

  • Individual Disability Insurance - Those whose employers do not provide benefits, and self-employed individuals who desire disability coverage, may purchase policies. Premiums and available benefits for individual coverage vary considerably between companies, occupations, states and countries. In general, premiums are higher for policies that provide more monthly benefits, offer benefits for longer periods of time, and start payments of benefits more quickly following a disability claim. Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances.
  • High-limit Disability Insurance - High-limit disability insurance is designed to keep individual disability benefits at 65% of income regardless of income level. Coverage is typically issued supplemental to standard coverage. With high-limit disability insurance, benefits can be anywhere from an additional $2,000 to $100,000 per month. Single policy issue and participation (individual or group long-term disability) coverage has gone up to $30,000 with some companies.
  • Key-person Disability Insurance - Key Person Disability Insurance provides benefits to protect a company from financial hardship that may result from the loss of a key employee due to disability. The company can use the benefits to hire a temporary employee should the disabled employee's disability appear to be short-term. In the case of permanent disability, benefits are used to help defray costs related to hiring a replacement, including recruitment, training, startup, loss in revenue and unfunded salary continuation costs.
  • Business Overhead Expense Disability Insurance - Business Overhead Expense (BOE) coverage reimburses a business for overhead expenses should the owner experience a disability. Eligible benefits include: rent or mortgage payments, utilities, leasing costs, laundry/maintenance, accounting/billing and collection service fees, business insurance premiums, employee salaries, employee benefits, property tax, and other regular monthly expenses.

Contact us today and speak to one of our licensed financial consultants to determine which policy is right for you. Knowing the pros and cons of your choices will make you an informed consumer so you’ll be able to better understand your options and make the right choice for yourself, family and or business.
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Middletown, DE 19709​
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