-
Page Index
-
Reichek Financial is Your One-Stop Provider
- Your comprehensive insurance benefits package can include any or all or the following offerings:
Life Insurance
How can I plan for my Life Insurance Needs?
Life Insurance is primarily used to replace your lost income to your beneficiaries in the event of your death.
Life Insurance can also assist in meeting other planning objectives such as advanced estate planning, cash accumulation, efficient wealth transfer to heirs and other beneficiaries of your choosing, providing liquidity for payment of estate taxes.
Don't forget that life insurance policies are "underwritten" meaning that certain medical requirements must be met however significant medical issues does NOT mean that coverage is not obtainable but be aware that rates can be adjusted PRIOR to policy issue.
How much Life Insurance do I need?
After you have decided that Life Insurance is needed to meet you needs, the question then turns to How much insurance will you need. This question and the answer to it is, of course, a very personal decision.
Many formulas and guidelines exist but a general rule of thumb is that you should have a minimum of six times your annual income in life insurance. In reaching you own decision, you will want to consider other factors that may not be taken into account when using guidelines, formulas and rules of thumb, like other obligations and objectives you may have like mortgages, future college funding needs, special needs children considerations, charitable giving desires and the like. You will also have to decide if you want to provide funds to meet those needs in their entirety or only partially upon your death.
Life insurance is often a vital part of many estate plans. It can be used to
- Provide required replacement income to your survivors that is quickly available
- Allow for the replenishment of wealth lost due to death (estate taxes and expenses associated with your death, like remaining medical bills or funeral expenses, for instance)
- Allow you to meet charitable giving objectives to possibly religious, educational and social organizations.
What kind of Life Insurance should I have?
Two main types of life insurance are available in the market place today:
Permanent Insurance and Temporary or "Term" Insurance.
Simply put, Permanent Insurance is meant for situations where you desire to have a policy in effect for the rest of your life. It is also used where an investment objective exists as only permanent insurance builds a "cash value". A number of types of Permanent insurance policies exist, see the Glossary for more details.
Temporary or "Term Insurance" on the other hand provide death benefit protection only and only for a specified period of time selected when the policy is initially applied for. Typical policy "terms" are "annually renewable", sometimes referred to as "ART", 5 year, 10 year, 15 year or 20 year. Some companies also offer 25 and 30 year terms or years of coverage until termination. If you are looking for coverage for a short period of time, like "until the mortgage is paid off", or "until the kids are our of college" and the like, term life insurance policies make more sense. For more information on the type of term life insurance policies available, see the Glossary for more details.
How can I protect my Survivors?
You may purchase life insurance in ensure you survivors don't suffer financial hardship when you are no longer there to protect them. Protecting their long-term financial needs through life insurance planning can ensure they will have enough funds to pay their everyday expenses and live comfortable for many years to come. Short tem needs can also be met using life insurance. Life insurance proceeds do not go through probate and death proceeds can usually be available quickly so loved ones don't have to wait for the estate to be settled to get needed cash to live on.
Can I use Life Insurance to protect my estate against Shrinkage?
Life insurance may be the best method of replacing wealth lost from estate shrinkage. To insure the monies you intended to leave to your survivors is adequate, you can purchase life insurance in amounts that will meet their needs as well as cover any expenses incurred as a result of your death, such as taxes, fees, medical bills or other debts you survivors will need to pay.
What about Charitable Giving?
Life Insurance is a great way to leave money to charity upon your death. Life Insurance will not only let you make a substantial gift to your charity of choice, you can accomplish this objective at very little relative cost to you. Additionally, you will receive certain tax benefits too! For example, in certain circumstances you may be able to take an income tax deduction equal to the fair market value of your policy or your basis in the policy. You may also be able to deduct the costs of the premiums you pay for the policy. Your gifts to charity may also reduce estate taxes owed when you die.
How can I protect a sizeable estate?
Income taxes are not due on life insurance proceeds. Your survivors may however owe estates taxes should you leave behind an estate large enough but fail to plan adequately for such an occurrence. If the estate you leave behind is below a certain amount ($675,000 in 2000 based on the unified credit exemption) there will be no estate taxes owed. If it's possible that your estate could exceed that amount, you may want to investigate the estate tax consequences of how you hold ownership to a life insurance policy.
How can I use Life Insurance to Reduce Estate Taxes?
Be sure you don't do any of the following:
- Own the policy or have any "incident of ownership" in the policy
- Have the policy proceeds payable to your estate
- Have the policy proceeds payable to your executor
- Have the policy proceeds payable to satisfy any debts owed or to pay child support or alimony
- Transfer ownership of an existing policy to a new owner within three years of your death
How can Reichek Financial help you with your Life Insurance Needs?
More than 2,500 Companies issue Life Insurance today in America and more financial institution are getting into the marketplace everyday. It's as important to understand these providers and their strengths and weaknesses as it is to understand the products they offer.
Reichek Financial can:
- Assist you through the planning process
- Assist you in determining how much life insurance you need
- Provide a comparison based on meeting your family's particular needs and desires
- Provide multiple proposals for your consideration
- Assist in evaluating proposals and find the right Company and policy that best fits your needs
For a personalized Life Insurance Presentation, call us at 281-575-1445 today!
Home | About Us | Contact Us
ReichekFinancial.com © 2017