Frequently Asked Questions
Browse some of our most frequently asked questions. If you don’t see what you’re looking for or have additional questions, please reach out today!
Personal Life Insurance
Life insurance policies mainly include Term Life, Whole Life, and Universal Life insurance. Term Life insurance provides coverage for a specified term and pays out only if you die during that term. Whole Life or permanent insurance covers you for your entire life and can include a cash value or investment growth component. Universal Life insurance is similar to Whole Life but offers more flexibility in premiums and benefits.
Life insurance premiums are calculated based on factors like age, health, lifestyle, statistics, and the amount of coverage. Younger, healthier individuals typically pay lower premiums. Lifestyle factors like smoking or high-risk hobbies can increase premiums. The policy type and coverage amount also affect the cost.
Yes, you can borrow money against the cash value of certain life insurance policies, like Participating Whole Life. The funds can be accessed tax free via policy loan through third party, directly from the insurance company or by use of the cash surrender value. All loans have features to consider.
Some policies, particularly Whole Life, allow you to withdraw or borrow against the cash value. However, this may reduce the death benefit and have tax implications.
To claim a life insurance payout, beneficiaries must submit a claim form and a copy of the death certificate. The timeline for payout varies but is typically very efficient provided the proper documentation is given and beneficiary is named.
Yes, exclusions can include suicide within a certain period after the policy is in force, death during act of war or misrepresentation (fraud) on the application. Policies vary, so it’s important to understand the specific terms and be honest when completing the application with your advisor.
Yes, you can change beneficiaries at any time, as often as you like, unless your policy has an irrevocable beneficiary designation in which you would need the beneficiaries signature.
If you miss a payment, there is usually a grace period (about 30 days). If payments are not made after this period, the policy may lapse. Some policies have options for reinstatement or conversion to paid-up status. Universal Life has options available to use the policy value to pay premiums in case of missed payments.
Business Life Insurance
Considerations include the purpose of the policy (e.g., key person insurance might name the business as the beneficiary, while a buy-sell agreement might involve other partners or shareholders), the relationship to the insured, and the financial stability and needs of potential beneficiaries.
Policies can be structured to include employee benefits, such as providing life insurance as part of a benefits package, which can aid in employee retention and morale.
Generally, life insurance payouts are tax-free. However, if the business is the beneficiary, the payout might not be tax-exempt. It’s essential to consult with a tax professional for specific cases.
Yes, some business life insurance policies can be used as collateral for a loan. The policy’s cash value serves as security for the loan.
If the insured person leaves or retires, the policy can be terminated, transferred to the individual, or converted to a personal life insurance policy, depending on the terms of the policy and the agreement between the parties.
The amount is typically based on the individual’s value to the business, which can include factors like their role, salary, and the company’s financials. It might also consider the cost of replacing the individual.
Types include Key Person Insurance (covers the loss of a crucial employee), Buy-Sell Agreements (facilitates a smooth transition of ownership), and Business Overhead Expense Insurance (covers operational costs if the owner is disabled).
Business life insurance is intended to protect the business from the financial impact of losing a key person or owner, while personal life insurance protects individuals and their families. Business life insurance policies often include key person insurance, buy-sell agreements, and business overhead expense insurance.
Retirement & Estate Planning
Charging for services can vary, including retainer fees, hourly rates, or a percentage of assets under management. Some advisors offer fee-only services, while others may receive commissions on products they sell. It’s important to clearly understand the fee structure and ensure it aligns with your financial needs.
Yes, guidance on charitable giving can include strategies like setting up charitable trusts, making direct donations, or using donor-advised funds. These can provide tax benefits and fulfill philanthropic goals while being an integral part of your estate plan.
Staying updated with tax laws and estate planning regulations involves continuous education and research. Changes in laws may necessitate adjustments to your financial and estate plans to ensure they remain effective and compliant.
Asset protection strategies may include setting up trusts, owning insurance policies, and titling assets in ways that offer legal protection. These strategies help shield assets from potential creditors or legal judgments.
While financial advisors can provide guidance on estate planning, the creation of wills and other legal documents typically requires the services of a licensed attorney. However, a financial advisor can work in conjunction with your attorney to ensure all aspects of your plan are aligned.
Integrating retirement and estate planning involves aligning retirement savings and investment strategies with your long-term estate objectives. This includes ensuring that your retirement plan supports your estate goals, such as leaving a legacy or minimizing taxes for heirs.
Key estate planning tools include wills (directing asset distribution), trusts (providing more control over assets), powers of attorney (authorizing someone to make decisions on your behalf), and healthcare directives. Each tool serves a specific purpose in ensuring your wishes are respected and assets are managed effectively.
Tailoring retirement plans involves assessing individual financial situations, goals, and risk tolerance. This includes diversifying investments, choosing the right insurance products, and planning for different retirement income sources to match each individual’s comfort level and financial needs.
