Life & Disabilities

The name of the game is “Asset Protection.”  Whether you realize it or not, you are the greatest asset to your family and without your income your accumulated wealth will quickly be depleted.  Life and Disability insurance is put in place to provide your family the income they need, when you are no longer able to.

 Life Insurance

• Term

• Return on premium Term

• Universal, Variable and Whole Life

Here is a quick overview of Life Insurance: (Life Insurance 101)

You can break Life insurance into two basic buckets: Term and Whole Life.  Now there are several variations of each, but to keep it simple let’s just focus on these two.

Term Life is purchased for a specified contract “term,” hence the name. Normally the contract term is for 20 or 30 years, where your premium is locked in for the stated term of the contract.  If you die while the life policy is in place, your beneficiary will receive the death benefit (note: all death benefits are tax free). If you out-live the term of your policy you walk away with nothing. Return on Premium Term Life will reimburse you the total amount of your premiums if you outlive the term of your policy.

Whole life products are purchased for the entire life of the person, not just for a specified term.  This makes Whole Life great for estate planning to pay off estate taxes upon death.  Whole Life is also unique in that equity grows within the policy, also known as the Cash Value.  As the owner of the policy, you can borrow against the cash value interest free.  Many people take advantage of this to pay for Junior’s college expenses.  If you do not pay back the loan, it simply comes off the death benefit.  Whole Life is substantially more expensive than term, but perfect for those with great wealth or those who like the investment side of it.

 A common analogy to describe the difference between term and whole life is that of renting or buying a home. Term Life is substantially less expensive and most financial advisors will suggest purchasing the term insurance and investing the difference.

Disability  

Statistics show that people under the age of 35 years old are a 1000 times more likely to be disabled (for a period of 6-months or longer) than to die.  With the popularity of extreme sports these statistics are growing substantially. 

If you earn a high income you should especially take note.  Many disabilities inhibit people from retuning to their old profession.  Disability income can assist high income earners to keep the lifestyles they have grown accustom to having.