How To Protect Yourself From The Unexpected

Last time we talked about the three pillars of protection for you and your family: Disability, Life and Health insurance, with our primary focus on disability insurance. This time we will cover life insurance protection. If someone is depending on you, whether you work outside of the home or you are a home-maker, it is important to have adequate coverage. No one knows when they are going to go and that is why it is so important to protect yourself against the unexpected.

If you are a single mom who is raising children on your own, it vital that you protect your children’s future. Getting life insurance could be the most important thing that you could ever do for your children. If something were to happen to you, who would provide for your children? Would it be your ex-husband, your parents, a nanny, etc.? In either case, money will be required. Don’t assume that someone will step up to the plate to provide for your kids when you die. It would be a shame for your children to struggle and you could have provided it!

A common question that is, how much coverage should I have? The minimum recommended amount is six times your annual salary. So if you make $50,000 per year before taxes, you would need $300,000 at MINIMUM. If you have a lot of debt (cars, homes, credit cards, etc.) your coverage amount could be as high as twenty times your annual income. This is a decision that you will have to make for yourself, but whatever you decide, make sure that the premium is an amount that will be sustainable for future payments. Your life insurance is not something that you want to cut corners with.

There are two main types of life insurance: term and permanent. Term Life Insurance is when you make payments to a life insurance company for a certain amount of time, say ten years. Keep in mind that you will be protect only for that amount of time. One of the advantages of this type of policy is it is very cheap and generally easy to get. Permanent Life Insurance protects you for your entire life, as long as you make your payments. It is known by several different names: whole life, final expense, burial, universal life and variable life. It can be a little more expensive than term life simply because once you get it, it’s yours for life.

I am really passionate about people having life insurance and knowing the amount of coverage the policy provides. Here’s why, when I was growing up I remember he “insurance man” coming by my grandparents’ house to collect their premium for their policy. My family thought that my grandmother’s policy would more than cover her final expenses once she passed. My grandmother passed away from a heart attack many years later. Imagine our surprise when we found out that her policy was worth only $500! It is always worth the time and effort of founding out the worth of your policy, if it’s still in effect and who the beneficiaries are. A good insurance professional will check with his or her clients at least once a year to see if any life changes have taken place in their lives.

If you don’t have an agent to help you with your needs, my firm would be available to provide you the services that you need. Simply drop us an email: contact@totalbenefitsllc.com or give us a call: 205-378-9352.

Financial Safety Net for Women – Part 2

Last week we discussed the importance of building a form financial foundation. This week we will cover the first step; pouring and solidifying the concrete. This step involves meeting with an insurance agent and/or a financial advisor so you can complete a survey entitled a fact finder (needs analysis). This fact finder will uncover where you are financially and where you want to be in the future. It will formulate a plan for your financial objectives and goals. Some of the questions on the survey are: 1) Where day you want to be in 5, 10, 20, 40 years? 2) Do you need long-term care coverage? 3) How much life insurance do you need? 4) How much money should you have in savings for emergencies, etc.

Women are especially vulnerable in planning for their financial future. Schedule an appointment with an agent or planner to get started building your foundation.

The American Dream

It’s been said that the American Dream is to own a home and yes, that is true. But I think the American Dream is much more profound than that. I think that having stability and security is the foundation of that dream and the only way for you to be stable is to plan for your financial future. The bible says, “A good man leave’s an inheritance to his children’s children”. Proverbs 13:22

Did you know that your actions today can change your family’s history? What’s important to you? Is ensuring your child’s future through a college education? Maybe is giving your child a leg up once they finish college. It could even be taking the necessary steps to make sure that Uncle Sam does not take a huge portion of your estate when you walk out of this life into the next. Whatever it is, life insurance is here to create cash for you and your family.

Call our office today to get started on your solutions. 205-378-9352

Estate Planning

■ Make tax-free gifts. Under current federal law, you can give up to $13,000 to as many people as you wish each year. This is a great way to reduce the size of your estate (and potentially save estate taxes) over time. For example, if you give $13,000 per year to your two children and three grandchildren, you would remove $65,000 from your estate in just one year and $325,000 in five years. (You can double these amounts if you are married.) Charitable gifts are unlimited. So are gifts for tuition and medical expenses, if you give directly to the institution.
■ Secure/update health care documents. At the minimum, everyone over the age of 18 needs 1) a durable power of attorney for health care, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) HIPPA authorizations, which give written consent for doctors to discuss your medical situation with others, including family members.

In addition, a revocable living trust* is preferable over a will at incapacity because it can prevent the court from controlling your assets.
■ Review/update guardian for minor kids. It is quite likely that the person you name as guardian for your children when they are small will not be the best choice as they get older. Also, this person could change his/her mind, move away or even become ill or die. Revisit your choice from time to time, and name more than one in case your first choice cannot serve. Remember, if you haven’t named a guardian who is able and willing to serve and something happens to you, the court will decide who will raise your kids.
■ Review/update beneficiary designations. This is especially important if your beneficiary has died or if you are divorced. If your beneficiary is incapacitated or is a minor, setting up a trust for this person and naming the trust as beneficiary will prevent the court from taking control of the proceeds.
■ Review/update your insurance. Check the amount of your life insurance coverage and see if it meets your family’s current needs. Consider getting long-term care insurance** to help pay for the costs of long-term care (and preserve your assets for your family) in the event you and/or your spouse should need it due to illness or injury.
■ Talk to your children about your estate plan. You don’t have to show them bank and financial statements, but you can talk in general terms about what you are planning and why. The more they understand it, the more likely they are to readily accept it — and that will help to avoid discord after you are gone. You can also talk to them about your values and the opportunities that money can provide. Even better, show your values by doing — the holidays are an excellent time for families to do charitable work together.
■ Get basic documents for your unmarried kids who are over 18. Unmarried adults (18 and over) need to have a durable power of attorney for health care and HIPPA authorization, so you can act on their behalf in a medical emergency. And, while you’re at it, go ahead and have your attorney prepare a simple will and durable power of attorney. Hopefully, these will not be needed, but if an event does occur, you will be glad you have them.

*A revocable living trust may be amended, altered or revoked by its settlor at any time, provided the settlor is not mentally incapacitated. Revocable trusts are becoming increasingly common in the US as a substitute for a will to minimize administrative costs associated with probate and to provide centralized administration of a person’s final affairs after death.

**Long-term care (LTC) is a variety of services which help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods of time.

Small Business Planning – Part 3

Key Person Insurance

Key person insurance is another essential component of a smart business continuation plan. Key person insurance is life or disability insurance purchased by the business on the life of such an employee and payable to the business. When a “key person” dies or becomes disabled, insurance can help make up for lost sales or earnings or cover the cost of finding or training a replacement.

~ via Lifehappens.org

Small Business Planning Part 2

Life insurance can be structured to fund a “buy-sell” agreement. This is an agreement among owners to buy a deceased owner’s share of the business at a previously agreed upon price in the event of death, disability or retirement.

Why are these agreements so important? You might think that if you die, your family could maintain their income by running the business themselves or by hiring someone to handle the day-to-day management. The fact is, your loved ones may not have the skills or the desire for the job, and your co-owners may not welcome the idea of an unintended partner. With a properly structured and funded buy-sell agreement, your business partners won’t have to scramble to come up with the money to buy out your share of the business and you’ll be guaranteed that your survivors will be compensated fairly and promptly.

Buy-sell agreements are typically funded by life insurance policies purchased on the lives of each of the business owners. The amount is usually specified in a contract created with the help of an attorney. You can enter into a buy-sell agreement at any time, but it often makes sense to do so when a business is formed or when new owners are brought into the business. Because business values can fluctuate, it’s important to review the contract with your accountant at least once per year or to include a calculation method in the agreement. Also be sure the insurance coverage funding the agreement is up to date.

Though not as common as insuring against death, business owners can also insure against the risk of becoming disabled and unable to work. In this case, disability income buyout insurance would fund the buy-sell agreement, allowing the disabled owners to be bought out, typically after a one-year waiting period.

~ Lifehappens.org

Why Do You Need Life Insurance?

No one wants to leave their family unprepared for the future. Planning today can protect the promise of your family’s tomorrow. Following are some of the reasons why you should consider life insurance from me.

To Replace Lost Income.
Most people buy life insurance as a means to replace income lost if something happens to them. Providing money for survivors is important. Life insurance is the most cost effective way to do it.

To Pay Off Debt.
Debt can be very burdensome to your family, especially without your income available to help repay it. Life insurance can be used to pay off debt and help create more financial security for your family.

To Pay Final Expenses and Offer an Emergency Fund.
Final expenses can be very significant, especially if there are large medical bills, funeral or legal expenses to pay. An emergency fund can cover unexpected bills such as emergency repairs to your home or car. Life insurance provides cash that can be used to help your family cope in a time of distress.

To Help Pay for Your Children’s Education.
Educating children can be expensive and often requires a long-term strategy. Many people plan to contribute funds each year until they have enough money saved to pay all or some of their children’s education costs. Unfortunately if something unexpectedly happens to you, there may not be enough time to set aside adequate funds for education. Life insurance can help by creating a lump-sum of cash that you can count on to help pay part of your children’s education costs.

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Invest in Your Kids

It’s never too early to begin building a secure future. Give your child or grandchild a head start with life with an insurance policy that grows with them – $20,000 in coverage for $45 a YEAR; for kids ages 0 – 24. Click here to cover your child or grandchild: http://jjconsults.com/junior-estate-builder or call Jackie at 205-378-9352.

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Invest in your kids