LEWIS SALGADO CONSULTANTS
Life Insurance Annuities
The goal of life insurance is to provide a measure of financial security for your family after you have passed. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents and/ or your survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.
TYPES OF POLICIES:
TERM:
There may be times when you need financial protection for a limited period. Term life insurance provides maximum protection with minimal cost, with coverage for a specific period of time. It is pure life insurance that does not increase in value. If you die within the designated time frame, your beneficiaries will receive the death benefit amount. The younger you are, the lower the premium — or price — you pay for term insurance. Some term products offer flexible features such as convertibility to a permanent product and return of premium – these are a good choice when you cannot predict your future needs.
Convertibility means when you decide that you need a more permanent form of insurance, your policy can be converted into a permanent life product without new evidence of insurability. Return of premium allows you to recover part of your insurance premiums at the end of the agreed upon term if you are still living. Term is an ideal solution for a variety of business and personal challenges that could arise from an unexpected death:
• Protection for a mortgage, car loan or other personal debt
• Maintain your family’s standard of living
• Provide for your children’s education expenses
• Cover a business loan
• Fund a buy/sell agreement for your business
• Financial protection for your business from loss of a key employee
• Pay for final expenses
• Cover final medical bills
Convertibility means when you decide that you need a more permanent form of insurance, your policy can be converted into a permanent life product without new evidence of insurability. Return of premium allows you to recover part of your insurance premiums at the end of the agreed upon term if you are still living. Term is an ideal solution for a variety of business and personal challenges that could arise from an unexpected death:
• Protection for a mortgage, car loan or other personal debt
• Maintain your family’s standard of living
• Provide for your children’s education expenses
• Cover a business loan
• Fund a buy/sell agreement for your business
• Financial protection for your business from loss of a key employee
• Pay for final expenses
• Cover final medical bills
WHOLE LIFE:
Whole life insurance is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy. Whole life insurance typically requires that the owner pay premiums for the life of the policy. There are some arrangements that let the policy be "paid up", which means that no further payments are ever required, in as few as 5 years, or with even a single large premium.
UNIVERSAL LIFE:
Universal Life insurance offers the better of two worlds--a set amount of coverage with a tax-deferred, cash accumulation account based on current interest rates. This permanent insurance plan generally provides lower premiums for those people who have life insurance needs that will stay relatively constant over their lifetimes, or who desire the cash value build-up universal life policies can provide.
Some Universal Life products offer you the flexibility to design the product to meet your needs, with the ability to increase or decrease the amount of coverage or premium payments as your circumstances or long-term needs change. It can be a flexible way to meet your long-term insurance needs.
While Universal Life insurance policies maintain certain guarantees, they provide benefits that are based on current assumptions for the underlying interest, mortality, and expense formulas. These current assumptions are based on current market conditions and actuarial assumptions, which may change over periods of time. Changes in these assumptions may require additional premium payments in order to meet your needs. These products should be purchased with a thorough understanding of the impact changing circumstances will have on policy benefits and values. A flexible universal life policy can address a wide variety of financial planning needs such as: • Tax-deferred accumulation • Charitable bequests • Efficient transfer of assets to beneficiaries • Business indemnity against loss of a key employee • Funding for buy-sell agreements at death or upon disability or retirement • Supplemental benefit programs for key people (e.g., DBO salary continuation, split dollar) • Income replacement at death for dependents • Final expense cash needs
Some Universal Life products offer you the flexibility to design the product to meet your needs, with the ability to increase or decrease the amount of coverage or premium payments as your circumstances or long-term needs change. It can be a flexible way to meet your long-term insurance needs.
While Universal Life insurance policies maintain certain guarantees, they provide benefits that are based on current assumptions for the underlying interest, mortality, and expense formulas. These current assumptions are based on current market conditions and actuarial assumptions, which may change over periods of time. Changes in these assumptions may require additional premium payments in order to meet your needs. These products should be purchased with a thorough understanding of the impact changing circumstances will have on policy benefits and values. A flexible universal life policy can address a wide variety of financial planning needs such as: • Tax-deferred accumulation • Charitable bequests • Efficient transfer of assets to beneficiaries • Business indemnity against loss of a key employee • Funding for buy-sell agreements at death or upon disability or retirement • Supplemental benefit programs for key people (e.g., DBO salary continuation, split dollar) • Income replacement at death for dependents • Final expense cash needs
INDEXED UNIVERSAL LIFE:
Indexed universal life offers growth potential through Indexed Interest Credits with protection from downside risk through a minimum interest rate guarantee. Indexed universal life also offers all the benefits associated with traditional insurance products.
With its significant cash value accumulation potential and flexibility, indexed universal life is easily customized for both personal and business applications such as:
• Tax-deferred accumulation and tax-free income potential
• Charitable bequests
• Efficient transfer of assets to beneficiaries
• Business indemnity against loss of a key employee
• Funding for buy-sell agreements at death or upon disability or retirement1
• Supplemental benefit programs for key people (e.g., DBO salary continuation, split dollar)
• Income replacement at death for dependents.
With its significant cash value accumulation potential and flexibility, indexed universal life is easily customized for both personal and business applications such as:
• Tax-deferred accumulation and tax-free income potential
• Charitable bequests
• Efficient transfer of assets to beneficiaries
• Business indemnity against loss of a key employee
• Funding for buy-sell agreements at death or upon disability or retirement1
• Supplemental benefit programs for key people (e.g., DBO salary continuation, split dollar)
• Income replacement at death for dependents.
SURVIVORSHIP:
Survivorship Universal Life and Survivorship Variable Universal Life are flexible premium life products issued on two insureds' lives jointly, with the death benefit payable at the second death. Both products feature premium payment and withdrawal flexibility, as well as riders and benefits that meet the special planning needs of high net worth individuals. Survivorship life policies provide funds to your beneficiaries when they are needed most -- upon the death of the second insured. Survivorship Universal Life and Survivorship Variable Universal Life offer features and benefits such as:
• Last expense needs at second death
• Potential retirement income or income replacement at first death1
• Efficient transfer of assets to beneficiaries
• Business indemnity against loss of key joint business owner
• Charitable planning
• Last expense needs at second death
• Potential retirement income or income replacement at first death1
• Efficient transfer of assets to beneficiaries
• Business indemnity against loss of key joint business owner
• Charitable planning
VARIABLE UNIVERSAL LIFE:
Variable Universal Life insurance offers the security and tax advantages of life insurance coupled with the growth potential of equity investing. Variable life insurance products offer a unique way to preserve your assets from current taxation, transfer them to your beneficiaries, and accumulate additional assets at the same time. Variable Universal Life addresses a wide range of insurance needs:
• Coverage of death benefit needs
• Potential retirement income or funding for a child's education1
• Transferring assets to heirs
• Hedging death benefits against the effects of inflation
• Protecting business against the loss of a key employee
• Providing funds for a buy-sell agreement
• Providing employee benefits such
as split dollar or deferred compensation With a variable universal life product, you may allocate your premium to an account paying a fixed rate of interest (Fixed Account), or to one or more separate investment options (Sub-Accounts). You have the risk of loss, but you also have the opportunity for gains greater than those normally available in a life insurance product.
Investment return and principal value of a variable sub-account will fluctuate and units, when redeemed, may be worth more or less than their original cost.
1 Lifetime benefits are subject to policy having sufficient cash value; use of cash value may reduce death benefit.
• Coverage of death benefit needs
• Potential retirement income or funding for a child's education1
• Transferring assets to heirs
• Hedging death benefits against the effects of inflation
• Protecting business against the loss of a key employee
• Providing funds for a buy-sell agreement
• Providing employee benefits such
as split dollar or deferred compensation With a variable universal life product, you may allocate your premium to an account paying a fixed rate of interest (Fixed Account), or to one or more separate investment options (Sub-Accounts). You have the risk of loss, but you also have the opportunity for gains greater than those normally available in a life insurance product.
Investment return and principal value of a variable sub-account will fluctuate and units, when redeemed, may be worth more or less than their original cost.
1 Lifetime benefits are subject to policy having sufficient cash value; use of cash value may reduce death benefit.
ANNUITIES:
The way you live today has considerable impact on how you live tomorrow. That means if you want a relaxing and financially secure retirement, you have to plan now. If you're still young, you can enjoy the huge benefits of compound interest even more than someone closer to retirement.
An annuity can guarantee a stream of retirement income that helps you maintain a comfortable lifestyle for the rest of your life.
An annuity can guarantee a stream of retirement income that helps you maintain a comfortable lifestyle for the rest of your life.
SINGLE-PREMIUM DEFERRED ANNUITIES
A single-premium deferred annuity allows for one single, lump-sum contribution. Your money grows tax-deferred until you withdraw it or begin receiving a stream of income payments.
SINGLE- PREMIUM IMMEDIATE ANNUITIES
Unlike a deferred annuity, an immediate annuity generates income payments at the time you purchase the annuity. Single-premium immediate annuities allow you to set up an immediate, steady income stream with a one-time, lump-sum contribution.
