Life Insurance

Insurance is not a one size fits all proposition. There are many different kinds of insurance and the protection that you need today may change in the future depending upon your short and long term goals.

Permanent Coverage

Upon the passing there will almost certainly be taxes, funeral costs, and other expenses that will arise which must be dealt with. Many people may also desire to leave something to their heirs.
For self employed business owners who may have accumulated a substantial investment portfolio or estate, Permanent Life Insurance can be of great assistance in the transfer of ownership in the business by reducing taxes or as an aid with valuable tax sheltered and tax effective estate transfer mechanisms.

For permanent requirements there are insurance products that range from offering primarily protection with the lowest possible annual cost such as permanent term insurance, such as term to age 100 or Limited Pay types or those plans which allow for substantial tax sheltered growth and asset allocation potential such as Whole Life and Universal Life Insurance which offer equity and growth as well as protection.

Mortgage or Creditor Insurance

Temporary life and health insurance provides a method of protection against certain financial risks that may be unlikely to occur but which may be financially disastrous if they do occur such as the loss of an income earner which if it arises early in life can result in significant financial difficulties for those family members that remain. Without the earners income how will the mortgage on the family home be paid? Will the family have sufficient income to maintain their current standard of living and how will the children’s education be provided for?

Term Insurance

Term Insurance is temporary insurance for a fixed term and this type of insurance has generally the lowest premium cost because you are paying only for the cost of insurance as there is no savings component or cash value. Although most term insurance increases every 10 or 20 years the initial premiums are usually lower than the premiums for a similar permanent insurance policy.

Disability or Income Replacement Insurance

What is your biggest asset? Score full marks if you knew that it is your ability to earn income. If you suffer a disability, household and other bills still need to be paid. Disability insurance can provide you with a benefit that is usually 60% to 70% of your annual salary in the event that you are disabled and are unable to work. Many companies offer their employees this type of insurance through a group disability plan but there are many individuals who do not have access to this type of plan and there are many self-employed individuals who should ensure they get insurance coverage so they can continue to pay their living costs during the time they are disabled and unable to earn a living.

Critical Illness Insurance

This type of insurance pays a benefit to an individual in the event that they are diagnosed with a critical illness such as cancer, a heart attack, or a stroke. Some plans cover 3 or 4 different illnesses while other plans cover a multitude of illnesses. Unlike disability insurance, which usually pays a monthly benefit that is a percentage of your salary in the event you are unable to work, Critical Illness Insurance pays you a Tax Free Lump Sum Benefit shortly after your diagnosis, regardless of your ability to work.

This benefit can help pay for items related to your illness such as medical expenses that are not covered by a health plan, prescription drugs, or mortgage payments. With critical illness insurance, you can focus on getting better and avoid the financial stress of a serious illness. Most likely, your extended health benefits plans do not offer critical illness insurance coverage which pays out a lump sum amount of money upon diagnosis of a covered condition such as:

• cancer
• stroke
• heart-attack
• plus up to 20 other illnesses or more

If you don’t get any illnesses during your period of coverage, the return of premium feature will refund all of your premium payments.

Long-Term Care Insurance

As the population ages and as people live longer more people will be in need of long-term care. The expenses associated with providing these services pose the biggest risk to retirement-savings; the possibility of depleting your savings from unexpected illness.

Long-Term Care Insurance provides a benefit that helps cover the cost of care at home fees or attendant home-care fees without burdening families with the costs. A monthly income is paid when the client is unable to perform 2 of the 6 activities of daily living. It is a cost effective way to maintain independence, dignity and quality of life by supplementing future assisted living expenses.

It will pay a tax free monthly benefit if you lose your independence due to physical or mental limitations following an illness, accident or just old age. This is dignity insurance and should be integrated into every retirement plan.