Life Insurance2018-12-12T12:38:28-06:00

Life Insurance

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Life Insurance That Meets Your Needs

Instead of life insurance, I wish we called it Income Replacement. We can never replace the one that is gone, but we can hopefully replace their income for a number of years. Everyone’s circumstance is different, but most people use Life Insurance for Estate Planning purposes.   When you are gone, your loved ones, business partner(s), etc. will need to continue on and your thoughtfulness in planning can make this transition easier.

How-Much-life-insurance-do-i-needHow much life insurance do you need?

There are simple rules of thumb to help determine how much life insurance you will need:

  • Rule 1: Multiple your yearly income by 10 (or number of years before your youngest child finishes high school). While we cannot replace you, we can replace your income for 10 years to allow your family to live in the way that you have gotten them accustomed to living.
  • Rule 2: Add $100,000 per child for college expenses.
  • Rule 3: Add the cost of your mortgage and overall debts.
  • Rule 4: Subtract out any savings, retirement money, and life insurance that you already have.

Example: John and Jane have two small children, 2 and 4 years old. John is an Engineer and Jane is a stay-at-home mom. Note that you always want to insure both adults because if something happened to Jane, John would have to pay someone to do what Jane does for free.

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What would they need:

  • John’s salary is $80,000
    • He needs a minimum of $800,000
    • Plus $200,000 for children’s college fund
    • Add $150,000 for mortgage and $35,000 for debts
    • Plus $15,000 for final expenses
    • Subtract $30,000 in savings for $100,000 life insurance at work
    • His overall need is $1,295,000 (just roll that up to $1.3 million in life insurance coverage)
  • Assume Jane needs $100,000 to replace the child care that she now provides, until the kids are teenagers
    • Plus $200,000 for children’s college fund
    • Add $150,000 for mortgage and $35,000 for debts
    • Plus $15,000 for final expenses
    • Subtract $30,000 in savings for $100,000 life insurance at work
    • Her overall need is $435,000

Life Insurance That Meet Your Needs

We can help you get coverage that’s right for you and your loved ones. It may be helpful to watch the videos or use our tool to help you get started (before you get a quote). It will be beneficial to know the right type of life insurance, how much you or your family needs, which options might benefit you, etc. Read below to learn more about life insurance, but if you are ready, click Go to get started.

What is life insurance?

Instead of life insurance I wish we called it Income Replacement. We can never replace the one that is gone, but we can hopefully replace their income for a number of years. Everyone’s circumstance is different, but most people use Life Insurance for Estate Planning purposes.   When you are gone, your loved ones, business partner(s), etc. will need to continue on and your thoughtfulness in planning can make this transition easier.

>>Click Here For A Free Quote<<

Explanation of Coverage:

Term Insurance can be affordable short term, but will increase significantly each time you renew the contract (10, 20 or 30 year terms). Permanent insurance offers lifetime protection and the ability to earn cash value. In many cases, the premium is set for a lifetime, as long as you pay the premiums. Below is a description of the different types of life insurance. Decide which coverage is right for you and fits your budget before getting a life insurance quote.

Temporary –

Term Life

Permanent –

Whole Life

Permanent –

Universal Life

Premiums Level premiums for term length Guaranteed level premiums for life Flexible premiums for life
Coverage Length Specific term is defined by the policy selected Lifetime protection Lifetime protection
Advantages Simple, affordable coverage for a period of time Lifetime coverage with access to cash value Flexible coverage flexible premiums
What It’s Used For Income replacement Income replacement/

Supplemental Income/

Estate planning/

Legacy planning

Income replacement/

Supplemental Income/

Estate planning/

Legacy planning

Cash Value No Cash Value Yes Cash value growth is tax-deferred. Yes Cash value growth is tax-deferred.
Lifetime Coverage1 No Yes Guaranteed for the insured’s lifetime, provided premiums are paid as required Yes It is possible coverage will expire when either no premiums are paid following the initial minimum premium or subsequent premiums are insufficient to continue coverage1
Issue Age Range 18 yrs – 75 yrs 15 days – 80 yrs 15 days – 75 yrs

Note:  Guarantees are based on the claims-paying ability and financial strength of the issuer.

The Many Uses For Life Insurance:

Life insurance is not about the person that dies, but the people they leave behind. In its basic form, it provides financial resources for your beneficiaries. Did you know that death-benefit proceeds of a life insurance policy are almost never subject to federal income taxes? It’s true and very important to know for estate planning. Most people think about life insurance in terms of paying for final expenses and leaving a death benefit for your family, but it can be utilized in so many more ways:

  • Pay for funeral costs
  • Help pay the bills and meet ongoing living expenses
  • Pay off outstanding debt, including credit cards and the mortgage
  • Continue a business
  • Finance future needs like your children’s education
  • Protect a spouse’s retirement plans

It can help you accomplish other goals as well:

Wealth Transfer: The death benefit from life insurance is not taxed at the federal level, but is subject to federal estate taxes. Having the trust as the owner of your life insurance policy can make it exempt from estate taxes. When the insured dies, the money will remain in the trust paying an income to the beneficiary and heirs.

Buyout of a Business Interest: Typically when there are multiple owners of a business, the owners take out insurance on each other in the case of death of one of them. This policy usually accompanies a Buy/Sell Agreement between the owners to ensure that the remaining owners pay a fair market value of the deceased person’s share. The proceeds from the policy will help to buy out the deceased’s share of the business from the heirs. The policy allows the remaining owners to buy out and not have to use their operating income.

Generating retirement income:  Some executives will use life insurance to fund a split-dollar plan. The employer gives funds to the executive to fund the policy, and the employer is the beneficiary. The funds from the policy can be used to provide income for the executive’s family.

Borrowing.  Most permanent life insurance policies allow for loans or partial withdrawals up to 80% of the surrender value of the cash value. As long as the policy is in force, loans are not subject to income tax.

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Types of Life Insurance:

Term Life Insurance: Term life insurance policies provide affordable, temporary coverage. Term policies contain no cash value and are designed for death benefit protection only. The premiums may be level for the first 10, 15, 20 or 30 years, depending on the policy selected. Because the death benefit protection is for a limited period, the premium is often the lowest of all types of life insurance policies. However, after the level term period, premiums go up significantly and increase annually.

Whole Life Insurance: Whole life is the traditional form of permanent life insurance. It provides the certainty of level premiums, a guaranteed interest rate and a guaranteed death benefit. Whole Life provides the extra security of guaranteed protection at affordable rates, yet it includes the element of cash value accumulation.

Universal Life Insurance: Universal life is a flexible premium, adjustable life insurance product that provides you with the flexibility of choosing the policy features that are appropriate for you and adjusting those features as your financial priorities and needs change. Policy cash value that grows on a tax-deferred basis2.

Indexed Universal Life: Indexed universal life is a version of universal life that combines death benefit protection with the opportunity to grow cash value through an account that credits interest based upon the upward movement of stock market indexes – without the risk of investing directly in the market. The Index Account features a zero percent floor which guarantees your account won’t earn less than zero percent due to poor market performance.

Variable Universal Life: Variable universal life insurance is designed to provide solid death benefit protection and the potential for cash accumulation. The combination of flexibility, attractive tax features, and Separate Account investment portfolios create life insurance products that you can tailor to your insurance needs, risk orientation and long-term objectives.

Note:  Guarantees are based on the claims-paying ability and financial strength of the issuer.  Insurance policies may have fees and expenses, limitations, exclusions, holding periods and terms for keeping the policy in force.  Surrenders, withdrawals and loans will reduce an insurance policy’s cash surrender value and death benefit.

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