Frequently Asked Questions

Living benefits refer to additional benefits included in some insurance policies that allow policyholders to access up to 100% of their death benefit while they are living. Circumstances that may qualify include critical, chronic, or terminal illnesses, or longer-term disabilities that prevent a policyholder from working for an extended period of time. 

Living benefits can provide early access to the policy's death benefit in order to cover medical expenses or other costs associated with their debilitating health condition. This can help alleviate some of the financial burden during a difficult time. The availability and terms of living benefits can vary depending on the insurance policy, length of time the policy has been in place, the level of severity of the condition.

Annuities have been under scrutiny for years, in part because they’re generally not well understood by the general public, not even professionals. This is unfortunate  because annuities can play an important part in retirement planning. They offer safety,  with no downside risk, and income for life. These financial products come in many forms:

1. Variable Annuities - Compared to other types of annuities, variable annuities have the potential to generate higher returns and greater income. However, these returns come with a risk. The value of the sub-account rises and falls with the market, so the investment can lose money.
2. Indexed Annuities - These products are financial instruments that allow you to participate in the upside of the market without any exposure to downside risk. By design, indexed annuities have a built-in floor that keeps earnings from going backwards and they offer a minimum guarantee.
3. MYGA (Multi Year Guaranteed Annuity) - This is a type of annuity many use for short-term investing due to the fact that it comes with a guaranteed interest rate for the entire contract. Similar to  a certificate of deposit, a MYGA lets the client invest their money for a specific period of time, during which it earns interest. They also tend to have more competitive interest rates than CDs.

Annuities can play a key role in retirement planning—filling gaps and providing

a reliable income stream. They offer several client-friendly benefits that often

get overlooked.

The decision to create a living will and trust should be based on various factors, such as your age, health, and financial situation. If you have significant assets or property that you want to ensure are distributed according to your wishes and protected from potential legal challenges or estate taxes, then creating a living will and trust could be a good option.

There are several schools of thought on this subject. Which school makes the most sense for you may depend on your individual situation, but generally, it will involve taking a multi-pronged approach that includes:

1. Creating and sticking to a budget: Start by creating a realistic budget that includes all your income and expenses. This can help you identify areas where you can cut back on spending and free up more money to put towards debt repayment.
2. Prioritizing debt repayment: List all your debts from highest interest rate to lowest interest rate, and prioritize paying off the debts with the highest interest rates first. This will help you save money on interest charges and pay off your debt faster.
3. Negotiating with creditors: Contact your creditors and explain your financial situation. You may be able to negotiate a lower interest rate or a payment plan that works better for you.
4. Consider debt consolidation: If you have multiple high-interest debts, consolidating them into one loan with a lower interest rate can help you save money on interest and make it easier to manage your payments.
5. Implement a debt payoff strategy incorporating a software "GPS" that calculates the fastest route to zero for you so you don't have to eliminating thousands of dollars in interest as helping you pay off all your debt in as little as 5-7 years. 

It's no secret that getting out of debt takes time and effort, but with a solid plan and commitment, it is possible to become debt-free.

The best way to save for your child's college tuition and expenses depends on your individual situation, but here are some options to consider:

1. Good plan - Traditional savings accounts or CDs: While savings accounts and CDs offer lower interest rates than other investment options, they are low-risk and easily accessible.
2. Better Plan - 529 plan or ESA plans: These are tax-advantaged investment accounts specifically designed for college savings. Contributions to these plans grow tax-free, and withdrawals are also tax-free only when used for qualified education expenses.
3. Alternative Better Plan - Roth IRA: While Roth IRAs are primarily designed for retirement savings, they can also be used for college savings. Contributions to a Roth IRA are made with after-tax dollars, so withdrawals are tax-free, and there are no penalties for using the funds for education expenses, however the account is susceptible to market risk.
4. Most Flexible Plan - Legacy Savings Plan: This tax-free college funding strategy can be used for educational and other future funding including supplemental retirement income with flexible access to cash and virtually no withdrawal limitations or requirements. While this is a strategy that has been used for over a century, it is not a plan that everyone can qualify for. If you can, it has the potential to significantly outperform the previously mentioned college savings options. 

If you start saving for college early and contribute regularly, you can reap the benefits of the power of compounding interest. Consider scheduling a free consultation with us to determine which plan will fit your situation best.

The amount of life insurance you need depends on a variety of factors, including your age, income, dependents, debts, and future financial goals. Here are some guidelines to help you determine how much life insurance you may need:

1. Income replacement: A common rule of thumb is to get a policy that covers 10-12 times your annual income. This can help ensure that your loved ones have enough money to replace your income if you were to pass away.
2. Debts and expenses: Consider any outstanding debts, such as mortgages, car loans, and credit card debt, as well as any future expenses, such as college tuition for your children.
3. Dependents: If you have children or other dependents, consider their current and future financial needs, such as living expenses and education costs.
4. Future goals: Consider any future financial goals, such as retirement savings or leaving an inheritance.

It's important to review your life insurance needs regularly, especially if your circumstances change, such as getting married, having children, or buying a home. 

There are actually several retirement account options available to you. Here are some of the most popular:

1. Simplified Employee Pension (SEP) IRA: A SEP IRA allows you to make contributions to a traditional IRA account for yourself and your employees. Contributions are tax-deductible, and there are no annual filing requirements.
2. Solo 401(k): A Solo 401(k) is a 401(k) plan designed for self-employed individuals and small business owners without any employees, except for a spouse. It allows you to make contributions as both the employer and the employee, up to a certain amount.
3. SIMPLE IRA: A Savings Incentive Match Plan for Employees (SIMPLE) IRA is designed for small businesses with 100 or fewer employees. Contributions are tax-deductible, and there is no annual filing requirement.
4. Defined Benefit Plan: A defined benefit plan is a type of pension plan that promises a specific benefit amount at retirement, based on factors such as age and salary history. This option requires more administrative work and is typically more expensive than other options.
5. Tax-Free Retirement Fund: This type of account has virtually no funding or access limitations, allows flexible access to its cash accumulation and does not have withdrawal requirements or early access penalties. With proper structuring of this account by a qualified professional, withdrawals are typically tax-free, however could be taxable if preferred or NOT structured properly. 

It's important to consider the costs, administrative requirements, and tax benefits or liabilities of each option before deciding which retirement account is right for your business. 

Mortgage protection is a type of insurance that is designed to pay off your mortgage in the event of your death or disability. It is a separate insurance policy that you can purchase to provide financial protection for your family.

While you may have mortgage insurance that is required by your lender, such as private mortgage insurance (PMI) if you put less than 20% down on your home or mortgage life insurance offered by the bank, these policies do not provide the same level of protection as mortgage protection life insurance. PMI protects the lender if you default on your loan, while mortgage protection life insurance pays off the mortgage if you pass away and can even provide financial benefit while you are living.  

While neither provides direct access to cash should you become disabled and couldn't make your mortgage payments, many mortgage protection life insurance policies today include living benefits which can potentially provide access to your death benefit, while you are living, in order to pay your mortgage payments should you qualify with an unexpected chronic, critical or terminal illness during the time your policy is in place.

One would think and expect that professionals in the financial services industry would have told you about this strategy already, but there are reasons why they haven't:

1. Your CPA or Tax Accountant - although familiar with doing your taxes and they may know some tips and tricks that will help you save money on your taxes, the average CPA or accountant is not licensed, certified or educated on this type of strategy. For that reason, they would not advise on this approach as they could not legally do so. That being said, they would typically not discourage implementing this into your tax-free asset strategy.
2. Your Financial Planner or Other Advisor - makes their money by managing your assets for you and again is not typically licensed to offer or may not be adequately educated in this tax-free approach to saving. Therefore, most would not be encouraging you to put your assets elsewhere as they could not advise you on implementing this into your financial strategy.
3. Your Life Insurance Agent - not all life insurance agents are educated or certified in these types of life insurance policies, so would not be able to share this strategy with you when helping you put your life insurance in place. In addition, this is not a plan that everyone can qualify for.
4. The Government - being that this is a tax-sheltered savings strategy, the answer to this is obvious.