Risk management - Insurance Planning

Comprehensive Financial Planning can include all of the following risk mitigation areas and strategies
  • Health insurance
  • Disability income insurance
  • Life insurance – term and cash value policies
  • Auto, homeowners, and umbrella liability insurance
  • Long-term care insurance
  • Legal service plans
  • Identity theft protection and restoration plans
  • Professional liability and errors and omission insurance

Term

Term life insurance, also known as pure life insurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.

Cash Value Policies

Cash value life insurance is a form of permanent life insurance that features a cash value savings component. The policyholder can use the cash value for many purposes, such as a source of loans or cash or to pay policy premiums.

 

While term insurance is often appropriate for meeting the basic family protection or income replacement needs, cash value or “permanent” life insurance can be used as a wealth management tool very effectively, with today’s newer policies. In fact, cash value life insurance policies are unique in the sense that you can enjoy several major benefits, from the same invested dollars:

  • Traditional protection
  • A tax-free “private reserve” that can function as a “better than bank rates” savings account
  • Tax-free income in retirement
  • Tax-free pool of money for long-term care
  • Paying taxes in larger estates for pennies on the dollar

In fact, we often use some of these newer policies in our retirement planning efforts for people who are concerned about taxes in the future.