Products & Services
Life Insurance
Our Insurance program offers a full range of insurance products and services including, Term and Permanent Life insurance, Long-Term Care, and Disability insurance from a variety of carefully selected product providers.
To learn more about the types of insurance products available, contact a Financial Consultant today.
Types of Life Insurance
Term Life
Term life insurance is the most cost-effective form of life insurance and is generally used to provide basic protection for a specified period of time. While cost-effective, owners of term insurance accumulate no cash value in their policies.
Permanent Life
If premiums are paid on time, these policies generally provide coverage for the insured’s entire life. The policy never expires or needs to be renewed. The death benefit goes to the beneficiaries upon death of the insured. Policies have cash value or a savings feature. Whole life, universal, and variable insurance are types of permanent life insurance.
Whole Life
In this type of permanent life insurance, the premium, death benefit, and cash value amounts quoted at the time of purchase remain the same throughout the policy’s life. The benefit: the cash value always stays intact and earns interest, and the death benefit will never decrease. The disadvantage: the carrier invests the premiums conservatively, typically generating less-than-competitive returns.
Universal Life
This product is a flexible version of whole life insurance in which premiums can be adjusted within predetermined boundaries. As a consequence, the death benefit can vary. The flexibility of premiums also means that the policy’s cash value, which is interest-sensitive, cannot be guaranteed. However, many new Universal Life products on the market offer a minimum guaranteed rate of return and death benefit guarantees.
Variable Life
This type of permanent coverage allows owners to choose the policy’s investments. This feature adds risk, as the policy’s cash value depends on investment performance. As a consequence, insurers don’t offer a minimum guarantee. Investments grow tax-deferred until the policy is redeemed.
Irrevocable Life Insurance Trust (ILIT)
An ILIT is a trust that owns a life insurance policy or policies and whose terms cannot be changed once created. The trust pays the policy premiums, collects the death benefits, and distributes the proceeds according to the trust’s terms. It is used to lower assets in an estate so as to minimize taxation.
1035 Exchange Section
1035 of the Internal Revenue Code provides that certain exchanges of life insurance contracts, annuity contracts, and modified endowment contracts generally will not trigger a taxable gain as long as the owner is the same person under both contracts.
Long-Term Care Insurance
What is Long-Term Care?
Long-term care is an array of medical and support services for people with degenerative conditions (e.g. Parkinson’s), prolonged illness (e.g. cancer), a cognitive disorder (e.g. Alzheimer’s), or who are unable to perform two to three activities of daily living (e.g. bathing, continence, dressing, eating, toileting, transferring). This assistance can be provided through a nursing home, home health care, an assisted living facility, or adult day care.
Who Might Want Long-Term Care Insurance?
Individuals ages 50-70 who are relatively healthy and have assets worth protecting might want to consider LTC insurance. Also, individuals who have a family history of Alzheimer’s, Parkinson’s, cancer, and even longevity might want to discuss this form of insurance with a financial consultant.
Why buy it?
People are living longer. Americans 80+ are the fastest growing segment of our population, and those 65 and older have a 40% chance of entering a nursing home.1 Medicare is not long-term care. It provides care for up to 100 days and only if the care is needed following a hospital stay. It usually does not cover home health care. Medicaid is available only after full spend down and does not allow a choice of facilities. Medicaid is, in essence, welfare, and the Medicaid facilities may not be where you would want your mom to stay.
What does it cost?
The average cost for one year in a nursing home is approximately $60,000. With the average nursing home stay at two and a half years, this stay would cost around $150,000.2 The average policy premium for a 60-year-old couple applying for $150/day, five years of coverage, 90-day elimination period, and compound inflation would be $2,050 each. If that same individual owned that policy for 15 years before needing benefits, it would take him/her just 100 days of care to recoup their premiums and break even.
What to look for in a policy?
Financial Strength -- Most benefits are not needed from a policy for 10 to 20 years after issue, so you need a carrier that has the financial strength to be around in 20 years. Good questions to ask are how long have they been in the LTC business, what are their ratings, who are they endorsed by, and have they ever had a premium increase.
Adequate Daily Benefit -- Be aware of the cost of care in your area or the area where you plan to retire.
Inflation Protection -- Cost of care has been rising at an average rate of 5-6% a year.3 Make sure the benefit you buy will be sufficient when it is needed in 10 to 20 years by buying inflation protection. Suggestion: Try using compound inflation up to age 68, simple inflation from 69-74, and no inflation from 75+.
Comprehensive Coverage -- Make sure the policy provides coverage in the variety of settings in which you are interested (e.g. home care, adult day care, etc.). Also be sure that the benefit period is adequate; the average stay in a nursing home is two and a half years.
Stable premiums -- LTC carriers have the right to raise premiums. The policies are guaranteed renewable, which prevents a carrier from singling out individuals for rate increases, but they may raise premiums for a class of policyholders. Be careful of carriers that are priced substantially below the competition. Again, ask if the proposed carrier has ever increased in-force premiums.
- 1 Source: www.mrltc.com.
- 2 Source: MetLife Mature Market Institute, MetLife Market Survey of Nursing Home & Home Care Costs, September 2004.
- 3 Source: Marcell, Jacqueline. "Elder Rage: Why Long-Term Care Insurance is Important" www.consumeraffairs.com.
