Life

Are you working in the business market? Are you looking to tap into the business market?

Many employers own life insurance on key persons, and for funding buy-sell arrangements, etc. But what if the worst thing that could happen to your business (losing one of these individuals) created a tax problem? What if, you, as your clients financial professional you could have helped avoid this problem?

The problem is, when this legislation past, many advisors weren’t made aware of these rules. Many carriers also weren’t aware of the correct Notice and Consent Requirements. (PS…it is not the carriers responsibility)

So while it seems that we can’t pinpoint whose responsibility it is to make sure things are correct, help your clients that may be in a bad situation. Even though the legislation passed in 2006, there are many policies that are in violation!!

This is where your opportunity steps in.

If you have relationships with Tax Professionals and CPA’s, ask us about our Marketing Kit to get your partners to ask their clients about Life Insurance!!

For more information, please view the following from Prudential:

There are many types of life insurance and at Brookfield Insurance Partners, we can help you understand them and see how life insurance fits into your financial plan.

People usually add life insurance to their financial portfolio for a variety of needs including:

Term insurance is intended to fill a need for a specified period of time (a term) after which the insurance will no longer be needed, for example, to cover the balance due on a home mortgage should the breadwinner die prematurely. Term policies are generally available as annually renewable plans (where premiums increase each year) or as level premium plans for a fixed number of years, e.g., 20 years. Term plans are strictly death benefit policies with no investment or savings aspect included.

Term policies are inexpensive relative to permanent insurance plans that charge higher premiums, and thus are typically the most frequently purchased type of life insurance. With the advent of the Internet, a number of firms offering online term quotes have sprung up. While useful, these firms may simply quote the best available rates from several insurance companies, rates for which you personally may not qualify. Don’t forget that life insurance requires that you be medically underwritten and that your health history, current health, and other factors will be evaluated in determining your actual risk class, and thus, your premium for the coverage.

Whole life insurance provides coverage for as long as you live.

Think of a whole life insurance policy as providing permanent protection, like home ownership. Home ownership provides security and the opportunity for accumulation of wealth. Renting, which is comparable to term life insurance, may be cheaper initially, but there is no equity or opportunity for “growing” your estate.

Whole life insurance policies are more expensive initially, although part of your premium is placed in a savings component called cash value, which builds over time. Sometimes this cash value can be used to offset the premium. Any earnings that are gained are not taxed while the policy is in effect.

Generally, the annual premiums (payments) for a whole life policy remain the same throughout the life of the insured individual.

Probate expenses and delays can be avoided in settling an insurance estate when the policy is payable to a named beneficiary. It is also important to note that life insurance proceeds are generally income tax-free and, depending upon the state you live, favorably treated in terms of inheritance tax.

Universal life insurance is the first variation of whole life to offer flexible premiums. The insurance part of the policy is separated from the savings component . The savings component is invested in tax deferred accounts. However, you do not have the option to direct the funds within the savings component.

The most important component of the variable universal life insurance policy is your ability to direct where net premiums are invested. Once the costs for insurance protection and company expenses are met, the balance of the premium goes directly into investment options selected by you. Typically you can select from professionally managed sub accounts that invest in:

With this type of policy, the opportunity to choose the investment sub accounts that match your overall financial goals and tolerance for risk.

The ultimate value of your account, either at death or at retirement, will depend upon the performance of the investment options chosen. A variable life insurance policy provides no guarantee of either interest rate or minimum cash value.

As with other permanent life insurance contracts, you can borrow against the cash value of the policy however this will lower the cash value and death benefit. The value of the sub accounts will fluctuate in value based on market conditions such that it is possible to lose principal.