IS THERE A DIFFERENCE BETWEEN WORKING WITH VANTAGE INSURANCE SOLUTIONS AND GETTING QUOTES ONLINE?
When you get price quotes, online or from an agent, all you’re getting is a product quote merely based on pricing alone. You may end up comparing products that are very different in the features and benefits they offer. You have no idea how the various products on the market compare, and what might be best for you. You are not guided as to the various riders that can be added, as well as the different ways a policy can be designed depending on length of time, protection and growth goals, and ongoing changes, etc. When you just go price shopping and get quotes, your getting a financial band-aid. At Vantage Insurance Solutions, you’re getting a real long-term wealth planning solution that you can live with and sleep well at night knowing it was truly designed to meet all your goals and needs. With us, you’re getting all the guidance and help you need to make a well-informed decision on what’s best for you. We will make it simple and easy to put together the right plan, with the right product, and walk you by the hand through the process of putting it in force so you don’t have to worry about a thing! Let’s talk and get you headed on the path to financial security today!
WHAT IS THE RIGHT TYPE OF INSURANCE FOR ME?
In short: It depends. The various products on the market have different possible uses, pricing structures, and so on. Our team at Vantage has found that the best way to find the answer to this question is to have a conversation about your needs, goals, and current financial situation. Once we have a good idea of these, we can apply the tried and true principles of the priorities of wealth creation and protection to your situation, simplifying and proving clarity to the answer.
HOW MUCH COVERAGE SHOULD I HAVE?
At the end of the day, an even better question would be: “How much do you WANT?” Or more clearly stated: “What do you want your coverage to accomplish for you?” The good news is, we will help you determine what we call your “Economic Life Value (ELV)” so the amount of life insurance protection you are purchasing is tied clearly to personal financial goals and needs.
WHAT IS KEY PERSON LIFE INSURANCE?
Key person life insurance is designed to protect a business against potential financial loss caused by the death of an employee who is critical to the success and profitability of the business. The business is the owner and beneficiary of the policy.
HOW IS THE AMOUNT OF INSURANCE FOR KEY LIFE INSURANCE DETERMINED?
One method for determining the amount of insurance is the “contribution to earnings” method. Under this method, the business estimates the key person’s contribution to yearly profits and multiplies it by the estimated number of years the employee would have worked. The result can be appropriately discounted to establish a basis for how much life insurance to purchase currently.
Another method is the “cost to replace experience” method. Here, the business takes the key person’s compensation, subtracts the amount of salary attributable to routine duties, and then multiplies that number by the years required to bring a replacement up to the key employee’s level of experience. Add to this the expenses associated with recruiting and hiring a new employee to determine the appropriate amount of key employee insurance.
WHAT ARE SOME ADVANTAGES OF KEY LIFE INSURANCE?
- If the key person doesn’t die while employed, the business can use the cash value of the policy to meet other needs.
- The policy demonstrates financial stability to creditors, or the cash value can be used as collateral for a loan.
- For key employees who are owners, the policy could help fund a buy-out of the deceased person’s business interest.
- If the policy isn’t needed to protect the business, the cash value can be used to provide deferred compensation or retirement income for the key employee.
- Key person life insurance can serve a number of uses benefiting a business, both during the key employee’s life and after a key employee’s death.
WHO IS A KEY EMPLOYEE?
A key employee is anyone who contributes signifi cantly to the fi nancial success of the business. A key employee (who may or may not be an owner) is anyone who is responsible for management decisions, is highly paid, has a significant impact on sales, or has a special rapport with customers or creditors.
WHAT IS A GOOD AGE TO BUY LONG TERM CARE INSURANCE?
Typically, the ideal age is between 55 and 75 and differs depending on your financial situation. Most of our client’s buy coverage between 60 and 70 since they have the most financial options at their disposal, and are still young enough to get good rates. Earlier than 55 is not typically recommended, simply because most people have other higher financial priorities during these working years and the likelihood of needing this coverage then is very low.
WHAT TYPE OF POLICIES ARE THERE?
Almost all plans on the market can be sorted into 4 types of options:
- Pure LTC insurance – purely protection for a premium. No life insurance benefit, no cash value.
Life insurance with a LTC rider – when the focus is primarily the benefit life insurance can offer, adding a long term care or chronic illness rider can be a great way to multi-task your dollars for this need. This rider gives the insured access to a portion of the death benefit for long term care expenses. - The Hybrid Policy – 100% of the base benefit can be used for long term care costs or death benefit. Builds cash value that can be withdrawn and treated like a return of premium situation. Has the most flexible funding options
- Annuity with Long Term Care benefit multiplier – this is typically ideal for clients that cannot medically qualify for the other options but is still able to get around on their own, and doesnt need care currently. Also, it might be for the client that needs to make their dollar stretch and primarily needs their money to provide an income.
WHAT TRIGGERS LONG TERM CARE BENEFIT PAYMENTS FROM MY POLICY?
- Typically, all policies have the same 2 triggers:
– Loss of 2 ADLs (activities of daily living) or
– Mental illness/ dementia - Of course, these conditions must always be diagnosed by a medical professional.
I HAVE PLENTY OF ASSETS. SHOULD I ‘SELF-INSURE’?
This is a great question, and the point of confusion for many clients of ours. The answer is actually quite simple. Even though you may have enough money to afford a 6-figure expense for 3-5 years or more, it’s just not the best use of your money. The bottom line is, transferring the risk to the insurance company with an asset-based plan is just good math. In other words, you could pay $375,000 out of pocket by liquidating your assets and paying taxes on capital gains, OR you could earmark 30-40% of that ahead of time and get that entire gain in value tax-free. And if you don’t need the coverage for care, it will all pay out to your heirs tax-free. Again, you may not “need” it, but if you understand the math, you’ll probably want it.
HOW DO I APPLY FOR COVERAGE?
Just get in touch with the contact link or book a time with one of our professionals at a time that works for you! We’ll take it from there and walk you through the process.