1) Make sure your age, family history, smoking status, and any medical or weight issue you have is compatible with the insurance company you choose! When selecting life insurance I’m reminded of that old motor oil commercial with the billowing smoke trailing the driver’s car as he proclaims “motor oil is motor oil.” The point of the commercial and my point with respect to choosing which life insurance company to work with, is that there are many different companies or “carriers” and your particular need or health situation may require you to choose the best carrier for you, not what was great for your uncle Bob or friend! He may not have your family history of cancer or heart problems, or may not have your medical condition. The mistake I often see is a client knows an agent who represents a well known life insurance company or the client may have car insurance with one of the large auto insurance companies and assumes that their life insurance products must be a great fit for them because the company is well known. The problem is that you may overpay by as much as 20 to 50% for coverage from a company that didn’t really want your business at a fair price and priced their coverage to discourage you. They may cost 25% more to cover all the advertising they paid for to get you to know them well! Conversely, there are always companies or carriers that want your business and price their coverage more favorably than most others. While it may be true that for really healthy young people who only want a short duration term policy all prices are fairly inexpensive, there are many companies that offer a better price or coverage for your specific need or medical condition, especially… Read More »
Business Considerations Business owners know that proper planning is critical to the growth and success of businesses of all sizes. However, many business owners neglect to consider that their business’ continued success is also dependent on proper planning in the case of a “triggering event” such as retirement, divorce, disability, or death of a key owner. Many difficult questions need to be answered to ensure a smooth and successful transition of ownership. As a business owner here are a few of the key questions to consider: Who will run the operations of the business? How will the ownership structure change? How will my family be provided for? Is there debt associated with the business? Can/will family members of the deceased/disabled owner become involved? How will the remaining owners finance any buyout of the deceased owner’s share? If you run a business in which you have invested considerable time and money or from which you earn your living, a buy-sell agreement should be considered as a means of protecting your business assets. A buy-sell agreement can benefit businesses of all shapes and sizes including sole proprietorships, partnerships, S corporations, C-corporations, and Limited Liability Companies. Planning Goals A well thought out and properly implemented buy-sell agreement will ensure an orderly transfer of the business if/when a key owner retires, divorces, becomes disabled, or dies. When you set out on creating a buy-sell agreement you should have a few goals in mind: Create a market for the business’ stock when it is needed Establishing the value of the business today Establish a methodology for the business’ future valuation Create the funds needed to buy out an owner’s share Create the funds needed to pay estate tax and estate settlement costs Establish the framework for the transfer of ownership Reduce the overall risk to… Read More »
Medical Exams are a commonly required step of the application process when purchasing a life insurance policy. This exam is for an Insurance Carrier to evaluate the risk involved with providing you with coverage. Exams typically are completed in under an hour and are completed by licensed paramedical companies or a medical doctor. During the process, the technicians will do basic tests including urinalysis, take a blood sample, your measurements as well as your blood pressure. This exam will be provided at no cost to you! The agent assigned to your case will assist you with the scheduling of the appointment. These medical exams are typically completed at your residence or another agreed upon location and all results are kept strictly confidential. EXAM PREPARATION TIPS Make sure to be in a relaxed state at the time of the exam. This means no stressful activities or heavy exercise for at least 24 hours prior to the exam. Be prepared to have your blood drawn and blood pressure taken – wear loose fitting or short sleeves to allow for easy access to your arms. Let the Paramedical Company or your assigned licensed agent know if there are any special needs that may require special attention, prior to the visit. Test your blood pressure prior to your exam to ensure you are within carrier guidelines. You can check your blood pressure by downloading Instant Blood Pressure on your iPhone or Android. This is a 50 second test that will measure blood pressure, no cuff required. Download the Instant Blood Pressure monitor at the: Apple App Store (iPhone) Google Play Store (Adnroid) Drink a lot of water within the 24 hours prior to the exam. It is a good idea to have your exam scheduled for the morning before you eat. Your test results will be more accurate… Read More »
Definition: Key Person Insurance (aka Key Man Insurance) is a type of life insurance that is purchased to offset the expense and financial losses due to the death of a valued employee. This type of plan will provide funds for lost sales, recruiting cost, cost of training and cost of replacing the key employee. What Makes A Key Person? A key person can be anyone. What distinguishes someone as a key person is that his or her loss would severely impact a business until a replacement is found. Key people can be found in a variety of positions and with various titles such as: An owner or non owner. Management/Executives Key Sales People Key Technical People (Engineers, Scientist, Creative, etc) The bottom line is that any person considered vital to the success of the business and essential to its profitable operation is a key person. Quatifying the Amount of Insurance: The amount of insurance coverage should reflect the estimated monetary loss the business would suffer from the death of the key employee. There are two frequently used methods to quantify the face amount of coverage: For traditional deals, the general guideline is 5-10 times total compensation package (Salary, Deferred Comp, Stock Options, Retirement Plan, and Bonus) For debt coverage deal, 50-70% of debt (less the existing amount of key person coverage already in force). Getting Started: Check out some of the addtional resources available for download below. Please contact us to request a quote or if you have any questions.