Uses for Life Insurance
If someone depends on you financially, chances are, you need life insurance. You may be a spouse, sibling, parent, or child and it is always an emotional struggle for survivors when they have lost someone they love. Helping cope with the emotional upheaval is the purview of clergy and/or friends, whereas life insurance assists in dealing with some or all of the financial ramifications of a death.
You may be a business partner, employer or employee. Business partners may use insurance proceeds to buy your business interest from your surviving spouse (family) at a predetermined agreed upon price. You may be a key employee; the business owner(s) can protect the company by applying for “key person insurance”, which is payable to the company. This allows them the flexibility needed to hire a replacement or work out an alternative.
Enhanced Retirement Income
Ask our experienced planners how you can enhance your retirement income by creatively incorporating existing or new life insurance into your financial plan.
Do you make annual donations to your favourite charity? We can show you how you can plan for a legacy gift that keeps on giving for a fraction of your annual donation.
You have worked hard all your life, you are blessed with good health and prosperity, and you are enjoying the well-deserved rewards of your labour. You would like to leave your assets intact for your intended heirs but you also know that there will be some tax to pay. Life Insurance is the most effective tool to create the necessary liquidity, just when it’s needed the most. We can show you how.
Types of Life Insurance
Life insurance of one type or another is a key element in your financial security. It's also important to those who survive you, whether you have a family, are single, or are older and living alone. What life insurance you have, or should have, depends on your situation and on your plans for the future.
There are two basic types of life insurance:
- permanent insurance that provides protection for life
- term insurance that provides coverage for a specific number of years
Whole life is a common permanent policy that provides a guaranteed death benefit, expressed as the face amount, for premiums that are usually guaranteed to remain level regardless of age or health changes throughout your life. Whole life policies often pay dividends. These policies accumulate a cash value that may be borrowed against, used to continue coverage if premiums are missed, or withdrawn.
Universal life is a permanent interest-sensitive policy that is more flexible and is divided into basic insurance and an investment account. You can decide how much goes into each and increase or decrease your premiums and the death benefits within some limitations. Premiums and benefits can be readjusted at specified times, depending on your insurance needs and on what choices you make in the investment side of the policy.
Term-to-100 policies are often seen as permanent insurance but their main characteristics are similar to other term insurance policies. Most term-to-100 plans don't build cash values or pay dividends. They provide a death benefit to age 100, if the policy is kept in force, and have level premiums, regardless of changes in age or health.
Basic term insurance policies are generally for a specified period, such as five, 10 or 20 years, or to a specified age. These contracts tend to have lower premiums while the life insured is young, but when renewed for an additional term period, the premiums can rise significantly. Term policies are ideal to cover large obligations over a short period when funds available for insurance are small. Most term policies can be converted to a permanent policy under certain conditions.
Because of the many options available in life insurance policies, a knowledgeable, trained life insurance professional is vital in finding the right policy to meet your present and future needs most effectively.