Life Insurance

  Life Insurance is an important part of your overall   Financial Plan and you should make sure your coverage is adequate to  meet your objectives.  Your goals are constantly changing depending on  what is happening in your life.  Start with a policy review. Does your  policy:  

  • Effectively meets your goals in providing liquidity to meet financial obligations
  • Your policy is performing efficiently; or

While  regular reviews are important, certain events are more likely to change  your coverage needs. Some life events that can cause you to review your coverage are:

  • Births and Deaths
  • Marriages and Divorces
  • Starting a business
  • Purchasing a home or additional real estate or refinanced
  • Received an inheritance
  • Creating an Estate Plan
  • Change in Job Status
  • Charitable Giving needs

Any of these life events could cause a need to add or subtract from your present coverage.   A  proper life insurance review entails more than just a review of your  death benefits.  Policy review components should include: 

  • Premium  and performance analysis to ensure your policy(s) is performing on a  cost effective basis (Whole Life, Universal Life, Variable Life)
  • Ownership and Beneficiary Designations to ensure that the policy is set up correctly and will meet your specific needs.

In  the event of your death, life insurance provides money directly to your  beneficiaries. They can use the money for whatever they want, such as:

  • Make up for your lost income
  • Fund your child's education
  • Paying off household debt
  • Paying for your  funeral and other related expenses

If  you were to die, consider what your spouse and dependents would need in  order to cover day-to-day as well as larger expenses, to live  comfortably and have financial stability. Don't forget to  include savings for college and retirement. Also consider the effect of  inflation over time; the amount needed, say, twenty years from now is  likely to be significantly higher than today.   

In addition to protection, what am I trying to accomplish with my life insurance?  

Some  life insurance policies can help you pay for major expenses like  college tuition and estate expenses, or provide additional income for  retirement or emergencies. Remember that Term Life Insurance pays a  death benefit only, while different types of Permanent Life Insurance --  Whole, Universal, and Variable Universal Life — can supplement your  income through withdrawals or loans against a policy's cash value. W.  alt Disney borrowed on his life insurance policy to start his Company.  

What are the tax advantages of life insurance? 

Death  benefits are generally received income tax-free by your beneficiaries.  In the case of Permanent Life Insurance policies, cash values accumulate  on an income tax-deferred basis. That means that you would not have to  pay income tax on any earnings in the policy as long as the policy  remains in effect. In addition, most policy loans and withdrawals are  not taxable.  

However, if you surrender your policy—or it  lapses—you may have income to the extent that distributions and/or  withdrawals exceed your policy basis (i.e., total premiums paid less  prior distributions).  

LC Advisor can help in determining the  best coverage is for you based on your current situation, your goals and  your current tax  status.     

The information contained in  this website is not intended to (and cannot) be used by anyone to avoid  IRS penalties. This website supports the promotion and marketing of  insurance products. You should seek advice based on your particular  circumstances from an independent tax advisor.   

The calculator below can provide guidance in determining the amount of life insurance you may need.  Life Insurance Calculator