Frequently asked questions
How does private disability coverage differ from worker’s compensation and state disability?
With private disability coverage you buy the policy, select the benefit levels, and pay the premiums yourself. The plan is not based on you continuing to work with your current employer or in the state where you now live. Unlike workers compensation, it is not limited to work-related disabilities. Since private disability coverage is only for the person stipulated in the policy, it can be tailored to fit specific needs.
What if I have been declined for health insurance before?
Please share this with one of our agents before we submit your next application. This information eases the agent’s ability to pair you with a company that will better fit your medical and budgetary needs.
What are the tax advantages of life insurance?
The tax advantages of life insurance can be significant and should be discussed carefully with your tax advisor. But in most cases the death benefit is income tax-free; cash value grows tax-deferred; cash withdrawals are made on a “first-in, first-out” basis – meaning the first dollars out are considered recovery of paid premium and are not taxable; and loans taken against cash value are not taxable as income as long as the policy does not lapse.
Why should someone 45 years old worry about long term care?
It is difficult to know in advance who among us is going to need long term care. Also, it is difficult to predict who will develop a medical condition between the ages 45 and 60 that would preclude the purchase of long term care insurance, when the potential need for assistance with Activities of Daily Living is just a few years away. Another consideration is the premium, which is generally lower at younger ages. Early purchase can make long term care coverage affordable later on, particularly after retirement.
Can retirement assets be accessed prior to retirement?
The answer really depends on the type of retirement plan. Though retirement plans should remain untapped for future use, sometimes, after a divorce, they represent a means of funding an unforeseen expense or for a down payment on a home. Even if you are not contemplating accessing these funds, you should know, prior to any agreement, how and when these funds may be accessed. Some plans may be drawn upon by the non-participant spouse after the plan administrator divides the plan, some may be accessed by rolling the account to an IRA, and others will be inaccessible until the participant spouse retires. All facts regarding the plan should be known in order to devise a plan that minimizes the tax costs of such transactions.
What is the difference between asset allocation and diversification of assets?
Asset allocation is often confused with diversification, which can be summed up as “not putting all your eggs in one basket.” While both help to manage risk, asset allocation takes the concept a step further. Asset allocation involves dividing a portfolio among and within different asset classes (such as stocks, bonds and money market instruments). Diversification involves only spreading your dollars among a variety of investments, but doesn’t necessarily have to involve different asset classes.
Why do I need to have a financial representative review my insurance policies regularly?
Our Financial Representatives are trained to evaluate your current needs, your life circumstances and your goals, and will make comprehensive recommendations that will benefit you in the long term.
Why shouldn’t I leave my retirement plan assets to my children?
Retirement plan assets, when left to children, are subject to both the estate tax and an income tax called the Income in Respect of Decedent tax. What does that mean? Without proper planning, up to 76 percent of your retirement plan assets can be lost to taxes. IRS becomes the beneficiary on the bulk of your IRA.
What are the advantages of Charitable Remainder Trust?
This method of charitable giving creates current benefits without current costs. You will be able to give a significant future gift to a charity while obtaining increased annual income, current income tax deductions and future estate tax savings, thereby satisfying a multitude of needs. The trust works by generating an income tax deduction and lifetime annual income by allowing the donor to purchase life insurance with lifetime annual income and a tax savings. This enables the family to receive life insurance from the irrevocable life insurance trust tax free upon the donor’s death at which time the charity receives the remainder from the charitable remainder trust.
What is a better savings tool, the Deferred Compensation Plan or an IRA?
The Deferred Compensation Plan may be better for a number of reasons. With deferred compensation, every dollar you contribute and earn is tax-deferred. With an IRA, your contributions may not be tax-deferred (consult your tax advisor), and even if they are, there are limits on maximum annual IRA contribution. Another advantage of the Deferred Compensation Plan is that it makes saving automatic through payroll deductions, whereas an IRA requires a conscious decision and self-discipline to make deposits.
Is my business protected for its full value?
A business needs a continuation plan. Part of that plan is a buy-sell. This could be between partners, shareholders, or an outside person. The valuation method and the terms are extremely important as well as the person or persons that have the opportunity to purchase.
How can multi-life disability help my company?
With three or more lives insured a company can receive as much as a 20% discount annually on the premium as well as using a unisex rate which lowers the cost of a female employee another 30%.
How can the split-dollar plan benefit my business?
There are several advantages of the split-dollar plans to the business owners. You can select who receives benefits, when they receive them and how much they receive. It lacks limits or rules associated with funding and vesting. The plan offers low start-up and administrative expenses. You can potentially recoup your business’ investment when a valued employee quits, retires or dies.
What types of group protection do most employers provide?
Although there are many variations of each, the four major types of insurance coverage provided by employers to their employees are life, accidental death and dismemberment (AD&D), disability, and health or medical. Some employers also provide additional coverages, including group legal, travel accident, and vision and dental care.
Are all types of dental services covered by insurance?
Usually not. Dental services are often divided into different coverage levels. Level I services include semiannual examinations, semiannual cleanings, x-rays and diagnosis. Level II includes filings, crowns and jackets, repair of crowns, extractions and endodontics. Level III includes dentures, bridges and replacement of bridges and dentures. In order to emphasize prevention , many plans cover the Level I services at higher reimbursement levels than Level II and Level III.
How can the split-dollar plan benefit my business?
A defined contribution plan provides an individual account for each person in the plan. Generally, benefits are based on the amount contributed to a participant’s account. Benefits are affected by income, expenses, gains, losses and forfeitures of other accounts in the plan. Typical defined contribution plans include: profit sharing plans, stock bonus plans and ESOPs, money purchase pension plans, cash or deferred 401(k) plans, target benefit plans.
I may not want to exit my business for several years. Do I really need an exit strategy today?
It may appear that your exit plan is far off in the distance, but in most cases, there are years of work and preparation before an exit strategy can be fully developed and successfully implemented. Many business owners never think about the strategy and the issues until they are ready to pull the trigger, and often this is too late to avoid the pitfalls which may result in your getting less value for the business than it may have been worth. Taking steps to have an active exit strategy and knowing what each phase of the business requires is always the recommended approach to maximizing your value.
What are some of the key benefits of using a captive insurance company to insure my company’s risks?
In addition to covering certain insurable risks which have a low probability of occurrence and are currently not being covered, you can fund the costs of insurance for these risks with pre tax dollars while building significant assets within the captive tax free. You can also plan to transfer wealth through changes in the ownership of the captive and thereby avoid estate taxes. For the right situation, a captive can be a creative way to leverage the cash flow being generated in your company for you and your family.
How do I know if conditions are right for restructuring our companies debt?
If you are experiencing severe cash flow problems and having difficulty making your monthly payments for expenses and debt service on time, you may be a candidate for debt restructuring. This is something you want to analyze and plan for well in advance of your lender deciding to call your debt or take over the assets pledged for the loan. It is always best to be proactive and show your lenders that they are better off working with you by restructuring the debt, or allowing you time to raise additional capital to shore up liquidity.
Are bigger companies the only ones who outsource for human resource?
No, it does not matter if you have five employees or five thousand. Outsourcing gives any size company the benefit of getting help with business functions. HR is a very vital element of any business; so, if a company does not currently have the resources to commit to that area, it is a wise decision to seek help.
What are the key benefits of updating our company’s business plan now?
At every stage of growth and development your business faces a different set of issues and risks. Questions like – How do I finance my growth plans? – Do I need additional capital? – Should I consider a joint venture partner? – need to be answered. Without a well thought out, updated business plan you may simply be relying on luck (good or bad) to answer these questions. The main benefit is that you will be proactive and know your planned course of action, rather than reactive and likely never accomplish your long term goals.
How do I decide if a joint venture or merger is the right path to take to expand my business?
In some cases where two parties don’t know each other well enough, a joint venture can be a good first step toward a long term partnership. It allows them to stick their toe in the water and can be unwound if it doesn’t appear to be working as expected. In other cases, the two parties really need to take a more permanent commitment by merging and combining all their assets to achieve their long term plans. In some cases, the decision is clear. In other cases, it is up to the partners and based on their preferences.