Life insurance is the first step in protecting your loved ones in the event of an untimely death. Life insurance can provide an income tax-free death benefit to help secure your family’s financial security.
When purchasing life insurance, there are two basic initial questions to consider:
"What kind of life insurance do I need?"
"How much life insurance do I need?"
Most life insurance products can be categorized into two basic groups: term insurance and permanent insurance. You should purchase life insurance that is based on your specific needs and fits within your budget.
Term insurance provides coverage for a specific period of time -- normally in increments of 10, 15, 20 or even 30 years. Term insurance is generally less expensive than permanent insurance because most term policies do not contain a cash value component. With term insurance, you pay premiums only for as long as you need insurance coverage.
Permanent insurance provides coverage for the lifetime of the insured. Generally, permanent insurance is more expensive than term insurance because of the accumulation of cash value within the policy. Cash value accumulation growth is determined by the type of permanent insurance policy purchased. Some of the most common types of permanent insurance include whole life insurance, universal life insurance, and indexed universal life insurance. An important benefit to cash value policies is that the cash value account grows tax-deferred and may be withdrawn or borrowed from the policy*.
Each family or business has different needs at the time of a death. While there are several ways of saving for this contingency, life insurance may be the best solution for covering long-term financial needs. Life insurance proceeds may help pay for final expenses or burial costs, replace income, provide a college fund, pay outstanding bills, cover business expenses, or even pay for estate taxes (if applicable).
Following the receipt of a life insurance application, most life insurance companies conduct a brief evaluation of the applicant through a process known in the industry as underwriting. West Oak Financial offers simplified underwriting products. Traditional underwriting typically has several requirements including completion of a physical examination by a medical professional. Generally, traditional underwriting is more in depth and may take several weeks to complete.
By contrast, simplified underwriting is based upon the insured’s answers to certain medical questions and shared medical information via the MIB (Medical Information Bureau). Simplified underwriting is designed to take less time than traditional underwriting – perfectly suited for today’s fast paced world.
Critical Illness insurance provides financial protection when a major illness occurs and a person is unable to work and earn an income. It helps cover medical expenses typically not covered by other insurance policies. Paid in lump sums, Critical Illness insurance gives you the freedom to use the money where it is needed most – from medical bills to the mortgage.
This coverage comes into play as traditional health insurance leaves people with more and more gaps in coverage. As a result of high deductibles, coinsurance and limited coverage on nontraditional treatments, individuals may incur large medical bills not covered by a traditional insurance policy. It can also bridge gaps left by disability insurance policy waiting periods.
An individual disability insurance policy pays a percentage of your client’s salary, according to policy guidelines, if he or she is disabled. Disability insurance policies
can be customized by:
This coverage is essential for clients who do not have long term disability (LTD) insurance at work. It is also supplemental for those who have LTD at work because employer-provided plans are very limited.
Long-term care refers to a wide range of personal care and other related services provided on an extended basis to people who need help with certain Activities of Daily Living (ADLs) or who need supervision due to severe cognitive impairment such as Alzheimer’s disease or by simply growing old and becoming frail.
The need for long-term care can occur due to:
Long-term care insurance policies protect the insured’s assets from the drain of long-term care expenses. However, even more importantly, long-term care insurance:
Do you have a will
Do you understand what a revocable or irrevocable trust is?
Do you understand how a living trust works?
Proper estate planning can help to increase the size of your estate, whether large or small. Its basic purposes are to (1) choose how your property will be distributed after your death, (2) help assure that your property will be distributed in an orderly and efficient way and (3) minimize taxes.
West Oak Financial gives you a road map to the estate planning process. It will help you to get started: to provide for your heirs, to lessen the administrative burden on your survivors, and to understand what you'll have to do to minimize estate and income taxes. It will enable you to approach your attorney and other professional advisors with a clearer idea of what the process should entail.
What is your "estate?" Simply stated, it includes everything you own at your death minus your debts. However, some rather tricky rules apply, which may bring back into the estate assets you've given away, or thought you'd given away.
Most estates do not need to pay the federal estate tax, in many cases because you can leave an unlimited amount to a surviving spouse without having it being subjected to federal estate tax (i.e., the bequest provides a marital deduction). In 2020, there is an exemption of $11,580,000 (up from $11,400,000 in 2019) per individual before the federal estate tax kicks in. The nearly doubling of the exemption amount is due to tax reform legislation passed in December 2017. In 2026, however, the estate tax exemption amount reverts to the 5 million exemption amount (indexed for inflation) that that went into effect in 2011. State inheritance taxes, which vary from state to state, must also be considered in addition to federal estate tax.
The number of people who are financially unprepared for retirement is staggering. One study revealed that more than half of the adults in the U.S. were planning to depend solely on Social Security for retirement income. Another study indicated that the great majority of Americans do not save nearly enough money. This Financial Guide provides you with the information you need to get started on this important task.
It is never too late to start or to improve a retirement plan. This Financial Guide shows you the basics of retirement planning, and will enable you to get started or to revamp an existing plan. Basically, there are three steps to retirement planning:
Tip: In making estimates of future income needs and sources of income, be sure to estimate conservatively. This will ensure that you do not shortchange yourself.
Having a big sale, on-site celebrity, or other event? Be sure to announce it so everybody knows and gets excited about it.
Fixed Index Annuities
Equity Index Universal Life Annuities
The world of investing can seem mind-boggling for a beginning investor. How do you decide what type of security to invest in? Should you choose stocks, bonds or a combination of investments? What about mutual funds? How do you choose a particular fund, stock or bond? How do you assess the risk to your money?
This Financial Guide provides a starting point for inexperienced investors. It describes how securities markets work, what protections are afforded, the general types of securities available, the interaction of risk and reward and how to select the investments appropriate for your risk tolerance.