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Life insurance provides cash to your family when
they need it most...in the event of your death. The income-tax free
death benefit of your policy is an important financial resource
that can help:
- Pay the mortgage
- Support the household, or
- Ensure that your dependents won't be burdened
by debt.
Who Needs Term Life Insurance?
- Young couples with or without families who need
to protect their future earning potential
- Anyone with others depending on them for support
- Business owners with a need to ensure the continuation
of their businesses through buy-sell agreements
- Professionals with temporary death benefit protection
needs such as short-term debt or cash shortfall
- Anyone with employer group insurance needing
the portability provided by an individual term life insurance
policy
| Here is a sample which can
help you estimate whether your resources are sufficient to adequately
protect your family in the event of your premature death. (replace
the example figures with your own) |
Example
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| What annual income might your family need to
replace in the future in the event of your premature death? |
$100,000
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| What is the total of income-producing assets
currently available to replace this income? (for example, savings/checking
accounts, mutual funds/stocks, a business) |
$250,000
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| What overall rate of return would you expect
to receive on your income producing assets? |
8%
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| What is the annual amount of income that would
be replaced by your income-producing assets? (multiply line
2 by line 3) |
$20,000
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| What is the annual shortfall? (subtract line
4 from line 1) |
$80,000
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| What is the amount of life insurance needed
to replace your income? (divide line 5 by line 3) |
$1,000,000
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Who Needs Permanent Life Insurance?
- Individuals who have a permanent need for funds
to replace lost income
- for mortgage or education expenses
- for household services (such as child care
or home management)
- for other outstanding debts and obligations
- Individuals who have group insurance through
their employers but are concerned about portability, levels of
coverage, and long-term costs.
- Business Owners who need to fund buy-sell agreements
and want flexibility to address wealth transfer needs in the future
- Business Owners who want informally-funded
non-qualified alternatives to help key employees supplement
future cash flow needs on a tax-advantaged basis
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What is it?
Critical Illness Life Insurance is a policy designed
to help survivors of a critical illness. It provides for a lump
sum cash benefit based on diagnosis, paid directly to you upon the
diagnosis of a covered illness. The remainder of the death benefit
is paid at time of death. You do not have to be terminally ill!
Here’s an example: You own a $500,000 critical
illness insurance policy. You are self employed. You have a minor
heart attack and you can’t work for a month. If you have a
policy which pays out 10%, you get a check for $50,000. If your
policy paid 50%, you get the idea. You need money to cover expenses
when you are not working at 100%.
Covered conditions mostly include (depends which
policy) major or minor heart attack, stroke, cancer, kidney failure,
blindness, paralysis, organ transplant surgery, severe burns, loss
of independent living, coronary artery bypass surgery, coronary
angioplasty, non-invasive carcinoma in situ, hearing loss, chronic
disability, spouse or child’s death, terminal illness and HIV
(for medical personnel).
Coverage is available for amounts up to $1,000,000.
Many policies feature a non-tobacco discount, plus unemployment
protection where premium may be waived for up to six months, and
premium waiver during illness.
*If you do not have a benefit paid out prior to
your 65th birthday and have been contributing for a minimum of 15
years, some policies offer a retirement income stream with many
distribution options.
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