Give Yourself Security Knowing Your Loved Ones are Safe

Hope for the best, plan for the worst. This may seem like a bleak outlook on life, yet it is a savvy way to plan for your future.

No one wants to imagine an unthinkable tragedy befalling themselves, yet the reality is that these tragedies happen to people in all walks of life. If you were to pass on, in what financial state would you leave your loved ones? Life insurance can leave you with the peace of mind that they will be left with ample financial security in such an event.

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Why do I need life insurance?

This is a question that many individuals and families are faced with. Life Insurance is needed to provide financial security for your family if you pass away. Life insurance proceeds can be used to put a child through college, pay off mortgages, ensure your spouse’s retirement, cover your funeral expenses, and many other things. Of course as life changes, your policy should also change. If you have a new child, you may want to increase your coverage.

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Should I choose Term life or Permanent life insurance?

This is another question that many people ask regarding life insurance policies. This is a question with no definitive answer; it depends solely on your own personal circumstances. Term life insurance only provides coverage for a set period of time such as ten years, while permanent life insurance lasts for a lifetime and is partially an investment and not just a worst case scenario plan. The premiums of permanent life insurance are much higher than on term life insurance.

In order to determine what type of coverage is right for you and how much coverage you need, give McMichael Insurance a call and either talk with an agent over the phone or set up a meeting with them.

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Accelerated Death Benefits

This benefit will provide up to 50% of the face amount of your insurance in advance of your death, so long as your physician can certify that you are terminal within 12 months. The advanced fund can be used to pre-arrange funerals and help you put your finances in order instead of leaving these details to your grieving spouse.

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Cash Accumulation

Interest sensitive life insurance products many times offer a guarantee of a positive return on your investment. These financial instruments can be very attractive, especially in times of turmoil in the stock markets. Guaranteed minimum interest rates are as high as 3% with projections being around 4.5% or higher.

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How much life insurance do I need?

The average amount of life insurance coverage on insured husbands is $235,600, with insured wives being $147,800. Using these amounts, an insured husband will have enough life insurance to replace his income for 4.2 years and wives for 4.9 years. Rule of thumb recommendations state that the typical married couple would need to double its current coverage to have enough life insurance to replace income for 7 to 10 years.
The amount of life insurance can vary greatly depending upon how many children you have, schooling and college plans for them, debt load, and other factors. Tools are available to help you establish a basis for how much life insurance is appropriate for your family. Since no two situations are alike we do recommend utilizing these tools.

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Long Term Care Expense Coverage

This is a great feature and one that is much needed. The Long Term Care insurance markets are very much in turmoil. Many insurers have exited this area and the remaining players are greatly increasing coverage and reducing benefits. This option makes an advance on your life insurance face amount in the event a doctor will certify that you cannot perform the normal functions of daily living. Benefits are payable for in-home as well as in a nursing facility.

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Tips For Completing Your Interview And Paramedical Exam

To prepare for your interview, have the following medical information available:

    • Your physicians’ names and addresses.
    • Any prescribed medicine, including dosage and frequency.
    • Dates of any recent doctor, clinic or hospital visits.
    • Your driver’s license number.

Countdown to your paramedical exam

48 hours before:

    • Reduce your salt intake to help regulate your blood pressure.
    • Avoid rich foods or those with high amounts of sugar

24 hours before:

    • Limit your caffeine.
    • Do not drink alcoholic beverages; be sure to limit your intake in the prior week.

12 hours before:

    • Fast. If you choose a morning exam, don’t eat breakfast unless your doctor tells you to.
    • Get a good night’s sleep.

3 hours before:

    • Do not smoke if you typically do.

After the exam

Once all of your medical information is collected, an underwriter will review your application and results to determine your eligibility.

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What are the basic uses of life insurance?

Individual Life Insurance

Life insurance can help protect your personal assets you may have used as collateral on business loans. Your business may be the largest asset in your estate yet the most difficult for your heirs to liquidate.  This unnecessary burden to your beneficiaries may be prevented by purchasing a life insurance policy.

Buy-Sell Agreements

Life insurance may be used to buy your business interest from your family or estate should you die prematurely.  In a general partnership, surviving heirs of a partner can force liquidation of the business.  This potentially crippling business scenario may be prevented by a proper Buy-Sell agreement funded with life insurance.

Key Person Insurance

Life insurance may help to cover the expense of replacing a key employee in the business should they die prematurely.  Most businesses have a key employee who generates a significant amount of revenue for the company.  If that key employee were to die prematurely, your business may have an increased need for cash flow due to a decrease in sales or productivity.  If that key employee played a central part in your day to day operation, lenders may be hesitant to provide your business with money required to find an adequate replacement.  A Key Person life insurance policy may provide you with the additional revenue your business would need.

Key Executive Incentive Arrangements

You may be able to purchase life insurance using corporate dollars to fund tax free retirement for a business owner and or key employees.  There are numerous ways a life insurance policy can be used to create a non-qualified retirement plan you can offer as an incentive to your top employees.