Life insurance is a very important component of a comprehensive financial plan. Do you already have life insurance?  As life changes and needs change it’s good to perform an impartial policy review, this can be done quickly and easily. We can make sure you are getting the most out of your policy(ies).

Life insurance pays tax free death benefits to beneficiaries at the death of the insured person. Proceeds from life insurance commonly cover mortgages and other debts, replace income and fund education expenses.  For business owners, life insurance can be useful to fund agreements for the transfer of business ownership. Life insurance is for the people who live.

Living benefits of life insurance include:

  1. Liquid reserves for unexpected expenses
  2. FAFSA friendly source of savings which may be used for tuition
  3. Tax-deferred growth and tax-free supplemental retirement income, accelerated benefits for critical illness, chronic illness and/or long-term care

Life insurance as an asset class.  Proper use of life insurance may influence decisions regarding your mortgage and other types of loans as well as other opportunity costs, including decisions with IRAs, 401(k)s and other retirement accounts.

The advisors at I & E Planning will design recommendations uniquely for your particular circumstances.

I&E Discussion Points

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The professionals at I&E Planning will customize a recommendation for an amount of coverage that is right for you.  Do you need life insurance for personal reasons, business reasons, or both? Final expenses might include medical bills and funeral expenses. Beyond final expenses, do you need to cover housing expenses such as paying off a mortgage or providing money to cover rent? Replacing income may be important, too.            

Could your beneficiaries make it without your paycheck coming in?  One of the most common reasons for life insurance is to replace one’s income for a period of time. Is funding a child’s education important to you? Life insurance can be a useful tool in paying for tuition.                      

Businesses commonly use life insurance to prevent liquidation, to obtain financing, for creditor protected accumulation, to fund buy-sell agreements and for an executive bonus plan, just to name a few.

It can be a daunting task to navigate through the companies and products. Work with an experienced agent as your guide. Term, whole, universal and variable are types of life insurance. Each is a tool which should be used appropriately. There is a cost to buy and a cost to own life insurance. It is important to understand the distinction. What makes sense for your situation may be different than someone else’s.  Ask about our “Informal inquiry” process.

Underwriting guidelines can vary greatly from one company to another. Let’s face it, life insurance favors people while they are young and healthy. The costs increase with age and declining health.  By waiting too long, insurance may become unavailable even to those who are willing to pay more for it. Too many Americans have no life insurance at all, while others have only insurance that they get through benefits at work.                    

Underwriters may look at a number of data points, including your: lifestyle, occupation, medical history, driving record, etc. to determine your risk class. Your risk class determines how much you pay for life insurance.

What is an Irrevocable Life Insurance Trust (ILIT)?  An irrevocable life insurance trust is an estate planning tool that allows for the possible exclusion of life insurance proceeds from the estate tax by acting as both the owner and beneficiary of life insurance policies.  In order for the life insurance proceeds to benefit those intended, perhaps the deceased's children, the ILIT has beneficiaries for whom the trustee will invest and administer the proceeds from the policy. The life insurance benefit is generally meant to assist beneficiaries of a large estate to pay estate taxes without having to dip into the value of the estate itself, which may or may not be liquid.