Annuities | Life Insurance | Wealth Assessment
Life insurance is a contract between an individual with an insurable interest and a life insurance company to transfer the financial risk of a premature death to the insurer in exchange for a specified amount of premium. The three main components of the life insurance contract are a death benefit, a premium payment and, in the case of permanent life insurance, a cash value account.
Group Life Insurance
Many people have group life insurance that they can get from their employer, but is it enough to protect their families’ needs? Your group life insurance might be a good solution or at least a good starting point to supplement your families’ plan of protection. Here are some of the details of group life insurance policies/certificates and why they are a great benefit for employees. We will also look at some of the limitations of group life insurance and why you need to look at buying your own policy.
So, let’s talk about individual life insurance policies here. They are really the other option and are typically a good way to supplement the group coverage from your employer.
Buying Group Life Insurance
Group life insurance is a benefit that many employers make part of their benefits package for their employees. This benefit can be purchased as part of a package of benefits or as a stand-alone benefit. Usually you will be eligible for this benefit when the plan is started or when an employee first joins the employer There is often a base benefit that all employees will receive. Plans will sometimes offer an annual enrollment period.
There is usually also an option to buy up additional coverage for you and possible your family on a guaranteed basis. This will allow you to buy a limited amount of additional coverage up to a certain limit. There are usually no or limited questions about your health. This can be very beneficial if you have health issues and cannot qualify for an individual policy.
The issue of everyone being able to buy up additional has an upside and a downside too. This is great if you aren’t healthy, have a chronic disease or are a smoker. These are conditions that traditional Life Insurance companies don’t necessarily like because you are much more likely to die at a younger age. The limited questions being asked of employees enrolling in the group life insurance plans makes the easy to qualify for. For some people that might not otherwise be able to get coverage, this is a great option.
Group Life Insurance can also be a basic amount of coverage that employers often provide to their employees. Being that group life insurance is often given at no cost to employees, it is a great base level benefit.
If you have been turned down or you know that you can’t qualify for an individual life insurance policy, get as much group life insurance as you need or they will give you.
If you have any questions about your being healthy enough to qualify for an individual policy, then let’s talk and we can see if an additional life insurance policy is right for you.
If you are healthy and want to protect your family and loved ones, then look into getting an individual life insurance policy. You can get more coverage, often with better benefits and features, at a better rate and you will own the policy.
I do not offer tax advice, but if you pay for your group life insurance with pre-tax dollars the benefit will be taxed.
Your beneficiary will receive a check from a life insurance settlement and then receive a 1099 for the payment at the end of the year, as it was a benefit from the employer or Union. So since the group life insurance was not paid for by the insured, it was fully taxable.
You can often not get enough group life insurance to protect your family adequately. I hear guys joke about “I don’t want to leave them rich”, but do you want to leave them poor and destitute?
Group Life Insurance will usually be based on multiples of your salary. This is never going to be enough to allow your kids to stay in their house or go to the schools you would want them to.
Why we help people save for retirement and protect their families.
1. We have all seen what happens to people that have not saved enough for retirement.
2. We have all seen families that have been left destitute when they are not protected with life or disability insurance.
All these families thought that they had enough protection.
Even in my own family, we have experienced the loss of loved ones and how having or not having life insurance made a difference both ways.
Some of the services we provide are to help individuals and businesses look at their unique situation and see if there are any areas that they can be more strategically positioned in protecting what is most important to them.
Protecting your family, assets and income are the first things most people want to address, but it depends on your situation!
If you are an individual, it could mean making sure that you …
- are saving enough for retirement
- are planning appropriately for your income needs in retirement
- have enough life insurance to provide for your family and or dependents
- have protection in case you become disabled and are unable to work
- understand the importance of having a will or trust
- have made proper guardianship and beneficiary designations
- funding your trust or special needs trust
On the business owner side, it could mean making sure that you …
- are looking at everything certain individuals need on the above list
- are planning for your succession
- have a buy-sell agreement
- have a buy-sell agreement in writing
- have a buy-sell agreement funded
- have proper disability protection for the business
- are providing for any key personal that you have
As you get closer to retirement you need to be looking at…
- retirement income planning
- how to avoid out-living the retirement nest egg you have saved
- Medicare health plan options
- wealth transfers to charities and loved ones
- protecting your assets and income if you need extended care
There are a lot of areas where we can help and this list is not all inclusive. It really depends on what your needs are.
It is never to late too get started. Whether you are just starting out, building your retirement savings, or into your retirement years, understanding your options and protecting your income during retirement is critical to the security of you and your family.
I am here to help you achieve your goals and protect your family.
Contact us at Michael@Grinnell-Financial.com for a free and no obligation meeting.