Insurance Solutions
Insurance is an often overlooked, but crucial, dimension of wealth management and plays an important role in estate planning, risk management, tax planning, and asset protection. In addition to offering traditional insurance solutions, North Insurance Professionals work with estate planners, business advisors and other professional advisors to propose additional options that best suit your individual needs. Some disadvantages of Term Life: Whole life insurance has some major appeals, one of which is that it guarantees a minimum death benefit (also known as face amount), no matter how long you live, as long as premiums are paid. Some disadvantages of Whole Life: Universal life insurance is permanent insurance that provides protection in case of death, as well as a more robust savings or cash value component. The cash value is based on the amount of premiums you pay, the declared interest crediting rate and the policy charges of the insurance company. Unlike term life insurance or whole life insurance, flexible premium universal life policies permit flexibility in the amount and timing of premium payments (within limits), and they generally offer you the ability to vary the death benefit based on your circumstances. Some disadvantages of Universal Life: Though the choices may seem daunting a North Wealth Insurance professional is qualified to make the best recommendation for you, your family or your business. While the good news is that people are living longer, the bad news is that increased life expectancy also increases the odds of needing long-term care services, which can be expensive. Without long-term care insurance to help meet the cost of needed long-term care services, you run the risk of depleting a lifetime of savings. With long-term care insurance, you’re in a better financial position to make the choice of what long-term care services you receive and where you receive them. That’s where disability insurance comes in. It provides an income to you and your family if you are unable to work because of illness or injury. Disability income can help protect your most valuable asset, your ability to earn a living. For the Individual If you’re an individual and cannot work, Disability Insurance can help you and your family: For the Business Owner, the Threats are Compounded If you’re a business owner, in additional to helping preserve your independence, disability insurance also ensures that you can: · Keep your business doors open & · Keep the disabled co-owner’s investment intact According to a Harvard Law School/Harvard Medical School study, medical expenses associated with an illness or accident caused nearly 50% of the bankruptcies in 2001 (Health Affairs, February 2005). “Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” said Dr. David Himmelstein, the study’s lead author and an associate professor of medicine. “Most of the medically bankrupt were average Americans who happened to get sick.” How it Works Disability income insurance provides a monthly, potentially tax-free, benefit for loss of income because of covered injuries or illnesses. After a predetermined time period, it typically pays a percentage of your income for as long as you're disabled, under your contract. Contact your North Wealth Insurance Professional who can help you identify the amount of Individual Disability Income Insurance that will help you achieve your financial goals. Back to Top of Page Types of Annuities
When properly incorporated into your financial plan, insurance can:
Some of the many forms of insurance include;
Life Insurance
Long Term Care
Disability
Annuities
Life Insurance
Essential to protecting your legacy, an adequate life insurance policy can play an integral role in your financial planning. Choosing a life insurance plan that fits your family's financial needs requires an understanding of taxes, trusts, investments, and a myriad of other factors.
Types of Life Insurance:
Term Life Insurance
Whole Life Insurance
Universal Life Insurance
Term life insurance is the simplest form of life insurance. Coverage is for a specified period of time (the term) and provides a death benefit only. There are several advantages as well as disadvantages to choosing term.
Some advantages of Term Life:
Some advantages of Whole Life:
Universally life insurance costs less initially, offers flexibility in the timing and amount of premium payments, allows for greater accumulation of funds (especially with Indexed Universal Life Insurance), but may not guarantee cash value or death benefit.
Some advantages of Universal Life:
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Long-Term Care
Long-term care insurance purchased today can help provide you with the financial security you need and deserve in your retirement years. By acting today, while you are still healthy and active, you will have protection to help pay for whatever long term care needs a long life brings!
Long-term care refers to help with daily activities needed by people with disabilities or chronic, longer-lasting illnesses, such as help with eating, bathing and dressing. Long-term care also includes assistance for those suffering from cognitive impairments, such as Alzheimer’s disease and dementia. Other types of insurance, such as health insurance and disability insurance, do not typically pay for these services. Long-term care can be provided in a variety of settings, such as your home, an assisted living community or in a nursing home.
A typical long-term care insurance policy helps cover the cost of long-term care services, including:
Plus, qualified long-term care insurance receives favorable income tax treatment.
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Disability Insurance
Your most important asset is not your home, your investments or even your business. It’s your ability to earn a living. Think about it: All of your plans for the future—from buying a car or a home to putting your kids through college to taking vacations or building a retirement nest egg—are based on the assumption you will continue to earn a paycheck until you retire.
But what would happen if those paychecks stopped?
Did you know?
Annuities
Ready or not, here comes retirement! Have you considered an Annuity?
According to Investopedia.com...
"(An Annuity is) A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years."
They are also seen as an excellent alternative to Cd's for a number of reasons including:
Immediate or Income Annuities
Deferred Annuities
Split Annuities
Immediate or Income Annuities
An immediate or Income Annuity is used primarily to provide you with an immediate and steady stream of income that is guaranteed to last for as long as you live. It’s purchased with a single premium payment and your income payments typically begin in a month; you can defer your first payment for up to a year. Payments will continue as long as you live or for a guaranteed period of time that you select.
Advantages Concerning IRS requirements - offers access to tax-deferred retirement assets prior to age 59 ½ without paying penalties to the IRS.
Deferred Annuities
A deferred annuity is a type of personal account intended for long-term savings goals, like retirement. Unlike an immediate annuity, income payments are deferred until a future time. When you’re ready, you can convert your account balance to an income stream that you can’t outlive (or another income option). Or, you can defer that conversion indefinitely, and simply make withdrawals when needed.
You pay no current tax on earnings within your annuity (this is called tax deferral). Your earnings, when withdrawn, are subject to ordinary income tax. Also, withdrawals of earnings prior to age 59½ are generally subject to a 10% tax penalty (25% for certain SIMPLE-IRA distributions).
When you make withdrawals, early withdrawal charges may apply; these typically decline over the years, finally reaching zero. Also, most deferred annuities offer access to some of your money each year without charge.
Deferred annuities can be a great choice for building a tax-deferred retirement nest egg - especially if you want to save more than you might with IRAs and 401(k) Plans.
Deferred annuities have two phases:
savings and investment, where your earnings accumulate tax-deferred and you generally have access to your money*
income, where you convert your account balance into a guaranteed stream of income that you can live on the rest of your life; any remaining assets can be invested to grow your overall portfolio.
Deferred annuities can be fixed, or fixed index.
FIXED ANNUITIES
Fixed annuities have a fixed rate of interest for a specified period of time. They are generally selected by consumers who are planning for retirement and are interested in a predictable rate of return, as the interest rate will never fall below specified minimums. Fixed annuities offer a guaranteed return of principal based on the claims-paying ability of the issuing insurance company.
To learn more about how fixed annuities can help you plan for retirement, contact your financial representative.
FIXED INDEX ANNUITIES (FIAs)
FIAs are unique products that offer the guarantees of fixed annuities combined with the opportunity to earn interest based on potential market index gains – without directly participating in the market. Since this is a fixed index annuity, your money will not be affected by market losses. FIAs can be important financial tools that provide earning potential while keeping principal safe from market fluctuation. FIAs offer a range of features that may provide:
· Bonuses*
· Various crediting methods
· Allocation options: to give you choices for your money
Insurance companies continue to develop new and innovative fixed-index annuities that provide the guarantees of a fixed annuity with the potential for indexed interest.
North offers a wide variety of annuities with various features and benefits. We go through a strenuous selection process to ensure that the third party insurance companies we choose to recommend will offer the highest quality in product and service to our clients. If you're concerned about the cost of a retirement that may last 20 to 30 years and you're already contributing the maximum to a 401(k) or other retirement plan at work and/or an IRA, then talk to a North Wealth Insurance Professional about annuities.
*bonus annuities may carry higher fees and charges than annuities without the bonus feature. Guarantees are backed by the financial strength and claims paying ability of the insurance company.
Split Annuities
Discover the split annuity to generate income and rebuild principal!
The split annuity is a solution that utilizes two or more annuity products in a strategy where one annuity (generally a single premium immediate annuity or SPIA) is designed to generate a monthly stream of income while a second annuity, generally a single premium deferred annuity, is structured to rebuild the original starting principle over set period of time. The goal is to restore the original principal and then restart the process with prevailing rates and current competitive products.
For information on how to best utilize the Split Annuity strategy or for a customized analysis based on your specific set of requirements contact us today for a complimentary consultation.
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Indexed annuities are not registered securities or stock market investments and do not directly participate in any stock or equity investments. Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; neither an Index nor any market-indexed annuity is comparable to a direct investment in the equity markets.
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