Tag Archives: life insurance awareness month

How Will Purchasing Life Insurance Benefit Your Family?

Family dog

As part of Life Insurance Awareness Month, we would like to take this opportunity to shed light on the valuable benefits of purchasing life insurance. This is a chance to ensure your family is protected, accommodated, and comfortable in the event of your absence. Allow us to share some of the ways life insurance can take care of your family and potentially mitigate pressing expenses.

Income Replacement: If you’re the primary earner, your family depends on your livelihood. Life insurance can help your family cover the costs of expenses such as:

Mortgage: A mortgage may prove to be difficult to pay for as your family transitions to living life in your absence. The death benefit could help cover this cost while they adjust.

College Expenses: The death benefit could help cover tuition expenses for your children. It may take your spouse some time to find a job in your absence. Even then, there will be other expenses to account for and this benefit would allow your children to continue college with a smoother transition after their mourning period.

Family beachChild Care: If your spouse must work additional hours in your absence to supplement income or require assistance watching over young children, there may be a need for child care services. The death benefit can help pay for this expense.

Final Expenses: Your life insurance can also cover expenses related to your death, including:

  • Funeral
  • Burial
  • Last Rights
  • Medical expenses you leave behind that may not have been covered by health insurance.

Life insurance will offer your family some peace of mind while going through this sad and difficult time. Everyone’s situation is different, so feel free to contact us and we can tailor a plan that best fits your family’s needs in your absence.

Why Should Young Adults Consider Life Insurance?

Young Athlete

When’s the best time to purchase life insurance? The answer is NOW. If you find yourself thinking you’re too young to purchase life insurance, we urge you to stop and keep reading as we debunk other common life insurance myths with an assist from “Life Happens.”

It’s too expensive. In the ever-burgeoning budget of a young family, things like day care and car payments and possibly student loans eat up a good chunk of the money each month, and a lot of people think that life insurance is just outside those “necessities” when money’s tight. Life insurance is often not nearly as expensive as you might think, especially when you can get a good policy for less than the cost of a daily cup of coffee at the local café, and well, if money’s tight now, what if something happens to you? In other words, you cannot afford NOT to have life insurance.

I’m strong and healthy! You eat right, you stay active, and everyone admires how grounded and centered you are. You passed your last physical with flying colors! That’s GREAT! You’re neither immortal nor indestructible. It’s not even that something could happen to you—though it could—so much as when you’re at your strongest and healthiest, there’s no better time to get a policy to protect your loved ones. If you fall seriously ill or suffer significant injury later, it will make it tougher to get that kind of policy, if any at all. Simply put, purchase it now while you are healthy and it’s less expensive, so that it’s there for you and your family when cost/availability is out of reach in your mature years.

I don’t have kids. Kids are a big reason why some people get life insurance. That’s not the only litmus for needing protection. If there is anyone in your life who would suffer financially from your loss—your spouse or domestic partner, a sibling, even your parents—a life insurance policy goes a long way in making sure everyone’s still OK even if something happens to you. For peace of mind, purchasing life insurance now is key.

Check out more information from “Life Happens” during Life Insurance Awareness Month.

How Does a “Buy Sell Agreement” Help Your Business?

signing-contractYour business is likely to be your most important asset. Many business owners are relying on this asset for retirement as well as planning to pass the business onto their children. However, this plan can be quickly derailed in the blink of eye.

What would happen to the business if you or your business partner were to die unexpectedly, contract a chronic illness or have a permanent injury?

This is not something you want to think about with so much riding on your ability to go to work. Without a succession plan, a business partner can find themselves sharing ownership and operations with the deceased partner’s spouse or children. How do they find the liquidity to buy them out?

How does one replace the owner to keep the business viable and ensure future success of the business?

If the spouse relies on the business for their retirement income, where does this leave the spouse financially?

All too often, families discover too late that their businesses were built on a house of cards.

According to the Conway Center for Family Business, 80 to 90 percent of U.S. businesses are family owned, yet less than a third of these companies succeed into the second generation. Less than a tenth make it to the third generation. According to a Price Waterhouse Coopers report, a whopping 47 percent of companies have no succession plan in place.

Given the volatility of the economy and local industry, it comes as no surprise that small business owners focus their energy on the survival and future growth of their enterprises.

Having a succession plan is essential to maximizing the value of your business for your family.

A Buy Sell agreement is a key component in this plan. This is an arrangement that outlines what happens to the business in the event that an owner retires, sells their shares, passes away, or becomes disabled.

However, the Buy Sell agreement is not complete without a means to fund the transfer of ownership. In the case of a death or disability, the most cost efficient way is often to fund the transfer through a Life and Disability insurance policy.  For example, if a partner were to die, the insurance policy would pay the surviving partner(s) the death proceeds to “buy out” the estate of the deceased owner.  In doing so, the decedent’s family is compensated for their stake in the business, while the surviving partners absorb full equity of the business with little to no financial burden, if funded correctly.

Once established, a Buy Sell agreement and the insurance policies to fund the agreement need to be updated to account for the changes in business valuation and ownership. Contact us today to discuss the scenario for your business.

* The examples in this post are intended to educate the reader generally about the benefits of life insurance, through the use of hypothetical “details” including coverages, cash values and premium costs. These are approximations based on the author’s experience, but are not facts that would necessarily apply to the reader’s own situation or to that of any other person. Reliable information regarding such items as coverages, cash values and premium costs may only be obtained through formal communications with your broker.

Sports Stars See Value Of Investing In Life Insurance

football-life-insuranceLast month, the University of Michigan agreed to an amendment with head football coach Jim Harbaugh on his existing contract. After a successful first season, the school rewarded Harbaugh with increased compensation in the form of a life insurance loan, according to ESPN.

In addition to his base salary, Michigan will loan Harbaugh $4 million in 2016 and an additional $2 million in each of the five years that follow to support the premium on a life insurance policy. Harbaugh will not be obligated to repay the loan until his passing. When that occurs, the university will be allowed to recoup its original investment. The rest of the payout will go to Harbaugh’s beneficiaries. According to the terms of the contract, they will receive no less than 150% of the policy that has been paid out at the time. Harbaugh himself is also allowed to borrow from the policy while living, though he must keep 150% of the value untouched, in order to protect the school’s investment.

While such a contract provision is unique in the sports world, there’s no denying that Coach Harbaugh sees the importance of valuing (and subsequently benefitting from) a life insurance policy.

Another notable sports figure, former NFL player and current commentator Boomer Esiason, also understands the value of life insurance. After his mother passed away, Esiason watched at a young age as his family struggled. They had not invested in life insurance.

“We were very lucky we had neighbors who could help out and make sure I was being looked after while my dad was at work,” he shared as part of his partnership with Life Happens. “I learned at 7 that no one is guaranteed a tomorrow, so I’d probably look them in the eye and say, ‘Just imagine if something happened to you and you hadn’t done the planning. The people you leave behind will feel the brunt of your mistakes.'”

This year’s spokesperson, professional race car driver Danica Patrick, concurs. “I’ve been fortunate to have a successful career from the beginning, and I want my family to be looked after if something were to happen to me, especially since my parents sacrificed so much for me to get where I am. But going a bit deeper, both my parents lost their dads when they were teenagers, and neither had any life insurance. My mom was one of five kids, and remembers that her mom had to sell most of the farm off as a result. When my sister and I came along, my parents got life insurance,” she said.

Traditionally, the biggest names in sports serve as role models because of their talent on the field/track. As demonstrated here, the choice to raise awareness for life insurance gives fans another reason to look up to them.

We would be happy to discuss your life insurance needs with you. Contact us today!