At Plan 4, we have one mission: to assist you in achieving your financial goals.  Our experienced team of advisors believes that an educated client is an empowered client, and through a commitment to honest and forthcoming dialogue and evaluation, we enable you to take control of your financial future.  As the circumstances of your life change, so do your specific financial goals and requirements.  It is important to regularly review your life insurance needs and ensure that your current coverage is still the best fit for you.

Life insurance is an integral part of a well-considered financial plan and can serve many purposes. At its most basic, we purchase life insurance so that our loved ones are more financially secure after we pass on, specifically those who are dependent upon us financially. The proceeds of life insurance can replace lost income or cover things such as funeral or burial expenses, residual debt, and any other expenses that may arise. A key benefit of life insurance is the peace of mind from knowing that your survivors will be financially stable and will have time to grieve without bills looming over them.

Another use of life insurance is as an estate planning tool. Under current tax law, life insurance proceeds pass to beneficiaries free of taxes. This infusion of cash can be beneficial to a comprehensive estate plan.

Call our financial advisors today to discover all the ways that life insurance can help you and your loved ones.

There are a few key terms you should understand when purchasing life insurance. First, the insurance policy is a contract between you, the insured, and the insurance company, or insurance provider. The policyholder is the owner of the policy. The death benefit is the money that will be disbursed after the insured’s passing. Premiums are the periodic payments that are made to keep the policy active, or in force, and ensure that the death benefit remains in effect.  Premiums can be paid monthly, annually, or on any other periodic basis agreed between the policyholder and the insurance provider. Beneficiaries are those who will receive the death benefit. These can be individuals such as a spouse, child or children, or any other person for whom the policy owner would like to provide after the death of the insured.

There are two basic types of life insurance: term life insurance and permanent life insurance. Term life insurance provides coverage for a set amount of time. If you pass away during time period set in the policy, your beneficiaries will be paid the death benefit of your policy. Permanent life insurance lasts for your whole life.  Permanent insurance can take many forms including universal life, and variable life.

Call one of our financial advisors to learn more about life insurance and the many ways it can protect your loved ones. 

The purpose of a life insurance policy review is to determine the adequacy and cost effectiveness of current life insurance coverage. We look at the types of life insurance in place and examine the state of each policy. Considerations include levels of coverage and associated costs. Key is determining whether current levels of coverage are enough to cover projected expenses should you pass.

Life insurance should be periodically reviewed for a variety of reasons. Our financial advisors can help you determine the adequacy and appropriateness of your life insurance. We advise that you regularly review changes to your goals and objectives, health, and lifestyle. In addition, it is important to evaluate whether your coverage is competitively priced, how the amount of coverage is aligned with the current phase of your life, if your beneficiary designations accurately reflect your wishes, and if your life insurance is performing as originally envisioned.

If you don’t have life insurance, talk to one of our trusted financial advisors today. If you are already insured, let’s get started today on scheduling a review of your current life insurance policies and make sure that your life insurance plan is working for you. It’s a best practice to review your life insurance policies annually. Don’t wait! Life happens. Let Plan 4, Inc. help you develop a financial plan for your life so that you can stay busy living it!

Life insurance can provide you with peace of mind that your loved ones will be cared for if anything should happen to you. However, there are far more options when it comes to life insurance than many people realize. How do you decide between whole life insurance and term life insurance? Is life insurance ever taxable? How does your insurance coverage impact your financial plan? We’ve compiled answers to all these questions, as well as several more common questions about life insurance, below so that you’re prepared to make an informed decision regarding your life insurance coverage.

What is the process for receiving life insurance payouts in New York State?

When a person passes away, it’s important that their life insurance is paid out quickly, so that their beneficiaries can maintain financial stability. Typically, a life insurance claim can be processed and paid out within a few days, or a couple of weeks at most. However, the beneficiaries will first need to fill out a claim with the life insurance company and submit it along with a certified copy of the death certificate.

Assuming the claim is approved, your beneficiaries can choose exactly how to receive the death benefit. Many people don’t realize that there are multiple options, and some may be more beneficial than others depending on their circumstances. Options for life insurance payouts include:

• Lump-sum fixed amount - Beneficiaries receive the entire death benefit in a single payment.
• Specific income payout - Beneficiaries receive monthly installments over a certain period of time; the life insurance company holds the money in an interest-earning account during the payout period.
• Retained asset account - Though not offered by every life insurance company, this option allows beneficiaries to place the policy’s payout in an interest-bearing account. The beneficiaries can receive a checkbook so that they can access the cash at any time, and the insurance company guarantees the proceeds on the account.
• Annuity - Beneficiaries receive guaranteed payments throughout their own lifetime, based on the total death benefit and your beneficiaries’ ages; if any benefit amount remains when your beneficiary passes away, that amount would return to the life insurance company.

It’s a good idea to discuss these payout options with one of our experienced advisors when selecting your life insurance policy, so that both you and your beneficiaries have a full understanding of how to best utilize the death benefit from the policy you choose.

What is life insurance used for?

The primary purpose of life insurance is to give you peace of mind that your loved ones are cared for if you pass away unexpectedly, and to provide your beneficiaries with financial stability in those circumstances. Primarily, life insurance is used as a form of income replacement to help care for your family members. If a primary income-earner passes away, their loved ones can experience extreme financial hardships due to the loss of that income. A life insurance policy can provide a death benefit that helps to support your family members for years, either through a lump sum payment or regular payouts each month to help replace your lost income.

Additionally, it’s important to bear in mind that there can be significant estate costs and taxes that arise when you pass away. The expenses associated with planning a funeral and settling an estate can be quite high, and a life insurance policy can ensure that those costs are not a hardship to your loved ones.

Many people also use their life insurance policies as a means of legacy building and gifting to causes that matter to them. Legacy gifting through life insurance policies can make a substantial impact for a non-profit organization or other cause that you support. By donating the value of your life insurance policy, you can leave a powerful legacy that lasts long after you’re gone.

Can I withdraw money from my New York life insurance policy?

Certain types of permanent life insurance do allow for the withdrawal of cash against the value of the policy. Whole life policies have a guaranteed cash value after you’ve maintained the policy for at least two years, and both universal life and variable universal life insurance policies have a cash value feature as well. Just keep in mind that accessing the cash value of your policy presupposes that you have a long-term commitment to keeping the policy in force, and have therefore accumulated enough cash value to borrow against it.

When Is Life Insurance Taxable?

Understanding the taxability of a life insurance policy can be a bit complex. On the surface, life insurance benefits are not taxable to the beneficiaries. However, the value of your life insurance policy is included in the gross value of your estate when you pass away; if your estate’s value is high enough to be taxed, then the value of your life insurance policy would be taxed along with the rest of the estate. The exception to this is when life insurance is purchased and owned by an irrevocable trust. This excludes the policy from your estate and, once again, makes the value nontaxable.

Are life insurance policies part of an estate in New York?

As briefly mentioned above, your life insurance policy is included in the gross value of your estate when you pass away, unless that policy is purchased by an irrevocable trust. Then, it would be excluded from your estate, pursuant to New York laws.

Will the cost of my life insurance policy go up as I age?

This depends on the type of insurance you purchase. Term and whole life insurance have fixed premiums that last for the life of your policy. However, other types of life insurance may have premiums that change over time. The best option for determining your ongoing cost for life insurance is to contact your trusted advisor at Plan 4, Inc.

When should I purchase life insurance?

Most people consider purchasing life insurance when the get married, have a child, or buy a home. However, if you haven’t hit any of these milestones in your life yet, there’s no reason to wait. The younger and healthier you are when you purchase your life insurance policy, the cheaper it typically is.

If you’re ready to take the first step in protecting your family and your future, contact Plan 4, Inc., to schedule a consultation with an advisor. We’ll help you find the right policy and the right amount of coverage for your needs.