Gift Tax - How Much is the Estate Tax?

(The information in this post is for educational purposes only. Legislation around this area is constantly changing. The examples used are hypothetical and very basic for ease of understanding.)

Many people constantly want to know How Much is the Estate Tax? At the time of writing this post the gift tax is allowable to be passed on from one generation to another is $5,000,000 per person or $10,000,000 per couple. (Here the gift tax is also known as the estate tax. For our purposes, the amount that a person may give to their heirs without a taxable consequence.) It is also important to note that the top gift tax rate is as low as it has ever been since 1931! The amount that you pass along valued above this $5 million (person) or $10 million (couple) is taxed at 35% if you pass away in 2012. If congress does not take any action by the end of 2012, the gift tax is set to reset back to $1 million per person or $2 million per couple and the top gift tax rate will jump up to 55%! 

So, long story short, 2012 is a great time to tackle your estate and gift planning needs. (With our country's $1.2 trillion dollar deficit, maybe the best time we will see in a very long time anyway.) This is the year you will be able to gift more and pay less now and at the time your estate passes on. This is also a great time to consider the power of life insurance in your gift planning needs. Especially the power of  Guaranteed Universal Life Insurance. (GUL) Let' s assume that you have 2 children and as part of your estate plan you wish to gift them $100,000 each.  You can put the $100,000 into a brokerage account in their name and hope for the best or dump it into a single premium GUL and have a tax free death benefit of $332,350 dollars PER CHILD GUARANTEED for your lifetime assuming you were a 60 year old non-smoking male with standard health! So the $200,000 that you plan to leave can immediately be worth almost $700,000 and payable in a lump sum tax free death benefit. There are no capital gains taxes due at any time on growth. 

Another important use for life insurance in your estate planning and gift tax needs is to have enough life insurance to cover the top gift tax rate. Lets assume that the estate tax reverts back to the 55% Federal tax rate on all estates valued over $1 million  dollars per person. For easy math sake, lets  use our life insurance figures above. You are a single person and your total estate is valued at $1.6 million dollars. (Real estate holdings, cash, retirement accounts, titled assets, jewelry, etc.) Remember, you able to pass along $1 million tax free under the gift tax rates and $600,000 of your estate would be taxed. At a 55% tax rate scheduled for 2013 and beyond that would be equal to $600,000 @ 55% or $330,000, due in Federal estate tax after your death. Keep in mind, this doesn't include your State's taxes! A good use for life insurance is to offset the taxes due by re-positioning $100,000 into a life insurance policy and having the $332,350 death benefit available in a tax free lump sum to pay the taxes. (In this example, the policy holder could also pay an ongoing annual premium of  $6,282 for life, again assuming 60 yr old non-smoking male standard health). If this man had no life insurance in place, then $300,000 would be due in just Federal taxes after his death. This would leave his family with 2 options: #1 sell assets quickly at current market value or below, #2 use more liquid cash and/or retirement accounts to settle the bill. 

These are just a few basic ideas of  the power of leveraging life insurance for your estate planning needs. Please see our website www.aaarowfinancial.com or contact us. We are able to help you and answer your questions no matter what State you live in. 

What is Travel Insurance?

What is Travel Insurance? Travel insurance can cover you from financial loss while abroad. This financial loss can include anything form trip cancellation to medical expenses, disability or even global life insurance coverage. At Aarow Financial Group, we have partnered with International Medical Group (IMG), to offer first class Travel Insurance. IMG is known for its comprehensive travel insurance products and service. They are the industry leader. No matter where you live in the United States, you can purchase International Travel Insurance, and no matter where you travel IMG offers some form of coverage for your travel insurance needs. Please see below for the IMG suite of products and purchase with confidence.

Welcome to IMG®'s section of Coverage without Boundaries®! We know that the reasons to travel abroad are many and varied – that’s why our products are too.  Our full-service approach to providing international medical insurance products includes servicing vacationers, those working or living abroad for short or extended periods, people traveling frequently between countries, and those who maintain multiple countries of residence. To meet all of these needs, we have developed a comprehensive range of major medical, life, dental and disability products that can be tailored to meet your needs. For your convenience and to assist you in determining which plan is right for you, simply use the scroll function to view each of the products or click on one of the specific product categories below to help narrow your search. You may also obtain more detailed plan information by clicking on the “Review Coverage” link associated with each product. Once you have determined which plan best fits your needs, click on the “Quote/Buy Insurance” link and you can complete the simple and easy-to-follow application.
Individual  |  Group  |  Student  |  Trip Cancellation  |  Specialty
All coverages, benefits and premium amounts listed are in U.S. dollars.
Coverage for individuals & families worldwide
Patriot Travel Medical Insurance®
Individual & family plan
	The two Patriot® travel plans offer a complete package of international benefits available 24 hours a day. Patriot International®provides coverage for U.S citizens traveling outside the U.S with coverage for brief returns to the U.S, while Patriot America®provides coverage for non-U.S citizens traveling outside their home country. Both plans are available for minimum of days up to a maximum of two years.
Quote/Buy Insurance | Review Coverage
Global Medical Insurance®
Individual & family plan
	Global Medical Insurance (GMI) is a revolutionary program that offers long-term flexible worldwide coverage to meet your individual or family needs, backed by the world-class services you expect.  GMI allows you to custom build a plan that is specifically tailored for you. It offers the flexibility to select from an assortment of four unique benefit plan options - each with specialized coverages. To accommodate your financial means, you can customize your length and area of coverage as well as select from multiple deductibles and modes of payment. Its flexible underwriting options also provide IMG the ability consider coverage that may have been declined by other carriers.  To maximize the outcome of your medical care, our on-site clinical staff is ready to assist you at a moment’s notice. You have the freedom to choose any provider for your services, or you can quickly and easily access providers in the extensive PPO network and the International Provider AccessSM (IPA). You also have direct access to our Medical Concierge, an unequalled service that provides you with personalized assistance in locating the best provider for your specific needs, while saving you on out-of-pocket and medical expenses.
Quote/Buy Insurance | Review Coverage
Patriot Platinum Travel Medical InsuranceSM
Individual & family plan
	Patriot PlatinumSM provides first-class protection for the discerning international traveler who wants to obtain the maximum coverage available in a short-term travel medical product on the market today. Patriot Platinum builds upon the Patriot Travel plan by providing up to $8,000,000 of coverage with enhanced benefits and services and our Global Concierge & Assistance ServicesSM. There are two plans available: Patriot Platinum InternationalSM provides coverage for U.S. citizens traveling outside the U.S. and Patriot Platinum AmericaSM provides coverage for non-U.S. citizens traveling outside their home country. Coverage can be obtained from a minimum of five days up to three years.
Quote/Buy Insurance | Review Coverage
Patriot Green Travel Medical InsuranceSM
Individual & family plan
	Patriot Green Travel Medical InsuranceSM is designed for the environmentally conscious traveler and provides up to $2,000,000 of medical coverage and services.  This plan provides the same comprehensive benefits as the Patriot Travel plan, but also includes eco-friendly benefits including providing for the purchase of carbon offsets, pays an additional $5,000 AD&D benefit to an environmentally conscious organization, and it is paperless. Patriot Green InternationalSM provides coverage for U.S. citizens traveling outside the U.S. and Patriot Green AmericaSMprovides coverage for non-U.S. citizens traveling outside their home country. Coverage can be obtained from a minimum of five days up to two years.
Quote/Buy Insurance | Review Coverage
Patriot Executive®
Individual executive and family plan
	Patriot Executive is designed for the executive that takes multiple trips throughout the year outside his or her home country. The plan provides coverage up to 45 days in length for each trip. It offers the ease and convenience of purchasing a single annual plan at an affordable premium. Patriot Executive International provides coverage for U.S. executives traveling outside the U.S. and Patriot Executive America provides coverage for non-U.S. executives traveling outside their home country.
Quote/Buy Insurance | Review Coverage
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Group coverage for employees around the world or short-term coverage for travelers outside their home country
GEOSM Group
Employer sponsored group plan
	GEO Group is one of the most comprehensive group hospital, surgical, medical and life insurance programs in the world. This program is designed for employers with employees who are either U.S. or Canadian citizens who reside abroad, or foreign nationals around the world. GEO Group assists employers to carve out their international employees to provide U.S.-style benefits and worldwide coverage. This program includes medical, dental, life and indemnity benefits for employees and their families.
Request a Proposal for Employers Insurance
Patriot Group Travel Medical Insurance®
Group plan
	Patriot Group Travel Medical Insurance provides coverage for groups of five or more U.S. citizens and/or foreign nationals who need temporary medical insurance while traveling for business or pleasure anywhere outside their home country. It offers a 10% discount from Patriot Travel Medical Insurance and has one easy-to-use enrollment form. There are two Patriot Group Travel plans that provide up to $2,000,000 of medical coverage with a choice of deductibles and policy maximums. Patriot International Group provides coverage for U.S. citizens traveling outside the U.S. and Patriot America Group provides coverage for non-U.S. citizens traveling outside their home country. In addition to medical benefits, the plans include coverage for medical evacuation and repatriation. Coverage can be obtained from a minimum of five days up to a maximum of two years.
Quote/Buy Insurance | Review Coverage/Brochure
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Scholars, faculty and student coverage while traveling, working or studying outside their home country
Patriot Exchange ProgramSM
Individual and family plan
	Patriot Exchange is designed for students studying abroad or participants of cultural exchange programs. Two plan options are available. The Basic Short-Term Travel Plan is an economical plan while the Standard Short-Term Travel Plan is designed to meet the U.S. J1 visa travel insurance requirements. Its flexible plan design also provides three areas of coverage: U.S. citizens worldwide except in the U.S., Non-U.S. citizens worldwide except in their home country and Europe to Europe. Plans are available in monthly increments and if a minimum of three months is purchased, coverage may be renewed (without break in coverage) for a total of four years.
Quote/Buy Insurance | Review Coverage/Brochure
Patriot Group Exchange ProgramSM
Group plan
	Patriot Group Exchange offers the same great benefits, options and renewability as the Patriot Exchange Program, and in addition to the Basic and Standard Short-Term plans, a Long-Term plan is available. The plan is available to groups of two or more students or participants of cultural exchange programs, offers a 10% discount from Patriot Exchange Program and has one easy-to-use enrollment form.
Quote/Buy Insurance | Review Coverage/Brochure
Student Health AdvantageSM
Group and individual plan
	Student Health Advantage is designed for individuals or groups of two or more students or scholars participating in a sponsored study abroad program, and desire an annually renewable comprehensive medical plan. This plan meets student visa requirements, includes benefits for maternity after 10 months, mental health, organized sports and international emergency care. It also provides coverage for pre-existing conditions after 12 months of coverage.
Sponsored groups of 2 or more Quote/Buy Insurance | Review Coverage/Brochure Individuals Quote/Buy Insurance | Review Coverage| Download application
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Individual & family coverage for trip cancellation and interruption, travel delay, medical expenses and baggage
Patriot T.R.I.P.®
Travel protection for trips up to 30 days
	Patriot T.R.I.P. helps protect travelers who are unable to travel or are interrupted during their covered trip due to circumstances such as a sudden and unexpected illness or injury, death in the family, jury duty, job layoff, terrorism or the bankruptcy of the tour operator, cruise line or airline. Benefits also include coverage in the event of travel and baggage delay, lost baggage, emergency medical expenses, emergency medical evacuation and much more.
Quote/Buy Insurance | Review Coverage/Brochure
Patriot T.R.I.P.® Elite
First class travel protection
	To provide superior protection for a picture perfect vacation, there is Patriot T.R.I.P. Elite, a premier travel insurance program. Patriot T.R.I.P. Elite offers a high level of benefits to travelers who need more coverage than provided by the Patriot T.R.I.P. program. The program has increased benefit amounts for emergency medical, emergency medical evacuation, travel delay, baggage, trip interruption and has a benefit for violent attacks.
Quote/Buy Insurance | Review Coverage/Brochure
Patriot T.R.I.P.® Student
Student travel insurance program
	Patriot T.R.I.P. Student is a "budget conscious" travel insurance program designed to provide important benefits to students for many of those unforeseen circumstances that may force the cancellation or interruption of a covered trip. This program also includes coverage for trip cancellation or interruption travel and baggage delay, lost or stolen baggage, emergency medical expenses and emergency medical evacuation.
Quote/Buy Insurance | Review Coverage/Brochure
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Specialty coverage - plans for evacuation only, adventure sports or medical coverage for sea captains and crew
Sky RescueSM
Emergency medical evacuation
	Sky Rescue is designed for those travelers who need to fill the gaps in the international medical insurance. It provides coverage for such benefits as emergency medical evacuation, repatriation, reunion and emergency assistance services that are not covered under most domestic or national plans. Coverage is available for individuals under the age of 65 traveling outside their home country. It can be purchased in three, six or 12 months increments and can be rewritten for succeeding or subsequent periods.
Quote/Buy Insurance | Review Coverage
Patriot AdventureSM
Adventure athletics and adventure insurance
	Patriot Adventure is designed for the adventurous international traveler who intends to participate in the thrill of adventure sports and realizes that their current medical plan does not cover certain hazardous sports and activities. From skydiving to whitewater rafting, Patriot Adventure provides up to $50,000 of coverage and is available to those under the age of 50.
Quote/Buy Insurance | Review Coverage
CrewSelect InternationalSM
Worldwide coverage for professional marine crew
	International Medical Group®, Inc. (IMG®) offers CrewSelect International, a comprehensive and portable international medical insurance plan designed specifically for professional marine crew. CrewSelect International can help eliminate the obstacles of time, currency, and language when you are seeking medical treatment and need assistance and administration of your global health care benefits.
Groups Quote Insurance Individuals Quote/Buy Insurance | Review Coverage| Download application
International Marine Medical InsuranceSM
Worldwide group coverage for professional marine crew
	International medical insurance for marine crew requires provisions not met by many companies. International Marine Medical Insurance (IMMI) was designed specifically to provide comprehensive medical insurance to marine crew by offering continuous coverage worldwide. IMMI provides $1,000,000 of coverage per certificate period with a full range of benefits. Group members will be covered worldwide, including their country of citizenship, 24 hours a day.
Request a Proposal | Review Coverage/Brochure
Global Crew Medical Insurance®
Worldwide coverage for professional marine captains & crew members
	Global Crew Medical Insurance(GCMI) is a comprehensive and portable international medical insurance plan designed specifically for professional marine crew. GCMI can help eliminate the obstacles of time, currency, and language when you are seeking medical treatment and need assistance and administration of your global health care benefits. The plan provides $5,000,000 of lifetime coverage with a full range of benefits and offers two options: worldwide coverage and worldwide coverage excluding the U.S. and Canada. Both options provide coverage 24 hours a day, and you have the freedom to choose any doctor or hospital for treatment.

How Should I Structure the Beneficiary on Life Insurance?

This is often a question that I am asked when writing a life insurance policy, and it is a good question. The answer depends on your situation. If you are using the insurance as coverage for business needs then you should probably specify the type of business coverage (key man or buy sell) and make the business owner and beneficiary. If you have a life insurance trust or any trust that will receive the death benefit from the life policy, then that trust should probably own the policy and be the beneficiary. However, the average person would usually want to make members of their immediate family the beneficiary on their life insurance policy and this is what I will address below. If you have any questions on business or trust structure for your life insurance in North Carolina, you can contact us here. I will be happy to give you a free consultation and we have a licensed North Carolina Attorney in our practice. 


Now, if you have purchased a life insurance policy to protect your family and are looking to just make your family members beneficiaries, here are a few things to consider. 


1. A life insurance policy in its simplest form is a contract between the policy owner, the insured (if different), the beneficiaries and the insurance company. Life insurance proceeds are designed to avoid the probate (court) process after death and go direct to the beneficiaries tax free. A beneficiary can be changed at any time with a simple form from the issuing company at the policy owner's discretion. The policy holder is allowed to name as many beneficiaries as math will allow, however more and more companies are requiring beneficiaries be designated in whole percentage points of at least 1%. So if a policy owner wanted to name 100 people as beneficiary at 1% each, they could so, as long as they could prove "insurable interest" with all the beneficiaries. (family needs, business needs, charity, etc.)


2. You should always name both a primary and contingent beneficiary. This will insure that if something were to happen to say you and your primary beneficiary at the same time that there would be a back up plan for who gets the proceeds of the policy. The main issue you would want to try and avoid is the proceeds being put into the estate of the insured. This scenario can lock up the money for long periods of time, eat into the money in attorney fees and does not insure that the money will be distributed according to the wishes of the insured. (Basically, the probate court would decide on the distribution and in North Carolina we are a "per stirpes" state or "per bloodline", meaning the state decides based on your closest surviving family who would get the money and that might not always be what the insured wants.)


3. Uniform Simultaneous Death Act of 1940 - If both insured and primary beneficiary die at the same the time the act allows the court to decide who lived longer. If no other proof exists proving otherwise, the court can deem that the insured lived longer and death proceeds can go to the contingent beneficiary if one exists, if there isn't a contingent the death proceeds go to the estate of the insured.


4. Common Disaster Provision - a provision in a life insurance contract , usually put in by the policy owner, that states how long a primary beneficiary must survive past the insured in order to receive the death proceeds. This is usually 10-30 days, but may go out as long as 60 or 90 days, depending on the clause. This clause is designed to protect the death benefit in the case that there was an event that causes multiple deaths of parties to the contract within a short period of time. This clause helps determine if the primary or contingent beneficiary is to receive the payout. 

5. Naming minor children might not be the best idea. Again, in NC and most other states, if a child beneficiary is under the age of 18 in NC (16 in some states, as much as 21 in some states), then the money can be put into a state directed trust and someone "per stirpes" named trustee. (again per bloodline) This trustee would then have access to this money to care for the children. (Again, this may not be in line with the wishes of the insured or children, and there is no guarantee how the money is spent on the children's care.) It is best to name an older person that you trust outside of your spouse as contingent beneficiary. It is also a great idea to have a Will that designates guardianship of your children in the event that you and your spouse both pass while the children are minors. If you live in NC and would like a free consultation on a North Carolina Will, contact us, and we can set up a time for you to have a free consultation with our Attorney.

Life Insurance with Long Term Care

There are many options when it comes to paying for your long term care needs. There are traditional long term care policies, hybrid or combination long term care policies that combine long term care and life insurance, long term care annuities (recently developed thanks to the Pension Protection Act), or lastly you could self insure and pay out pocket. This post is going to focus on life insurance with long term care benefits, also known in the industry as hybrid or combo policies.
Basically, these policies are life insurance that has a long term care benefit attached with it. These polices are gaining popularity as they evolve because they are much more self completing plans. By self completing, I mean a plan that has a benefit no matter the outcome. If you need long term care, the benefit is there, if you don't use LTC and pass away the death benefit is there, or lastly if you use a combination of LTC for a short period and then pass the policy can pay out for both events.
The 2 main types of Life Insurance with Long Term Care are life insurance polices with long term care riders and hybrid long term care life insurance policies.

1. - Life Insurance with Long Term Care Rider - Accelerates the death benefit of the life policy in the case of a long term care event. For example, a $250,000 death benefit on a life policy that will accelerate and pay out up to $5,000 a month for facility or home care until $250,000 is used or the person passes away, whichever comes first. If only $100,000 was used for long term care the policy has a residual death benefit of $150,000.

2. - Hybrid long term care / life insurance -  To put it in car terms the "chassis" of the policy is life insurance and the policy has a long term care benefit attached to it. These polices are different in that most do not allow you to pay ongoing premiums on a long term basis, such as a life pay scenario. These polices work best with a lump sum dump in or annual premium payments up to 10 years (10 pay) or less. The best way to explain is with an example. A 62 year old female, can deposit $100,000 into this type of policy and immediately have a life insurance benefit of $150,000 if she passes, or a long term care benefit of $500,000. The long term care benefit would pay her up to $7,000 a month for 6 years if she needed home care or facility care. These policies allow for easy access to the money deposited and have minimal to usually no fees for withdrawing the money or surrendering the policy if you have an emergency and need your money back. These are truly self completing plans, if you die, need long term care or just your money back its all there. 


You can now fund both of these types of policies in a variety of ways: from cash value of other life insurance or annuity policies, CD rollovers, out of ordinary income, lump sum deposits from savings, IRA's or old 401K's.


Not many people are aware these policies exist, as I present them I get great reactions from clients to have these types of policies as an option. As you learn more about How to Pay for Long Term Care, keep these life insurance with long term care combo policies in mind, they offer a lot of value. No matter what State you live in, I would be happy to email you a free quote on any these polices, no sales pressure. Funding your long term care is an important need to fill as you age, the #1 cause of bankruptcy today are medical expenses. Contact Me for a Free Quote or Any Questions. My name is Ryan Thomas.

See our full website at www.aarowfinancial.com

How do I get the Best Results on My Insurance Physical Exam?

If you are considering the purchase of a fully underwritten life insurance policy, there are a few things you should know before taking your insurance physical exam. You want to get the best results possible because it can save you thousands of dollars over the life of your policy.
I should start from the beginning...There are both fully underwritten life insurance and non-med exam life insurance policies. A fully underwritten policy requires you to go through a medical exam that is paid for by the insurance company that you are applying with. Fully underwritten policies will have much lower premiums and better provisions in the contract. The requirements of the exam will depend on the amount of life insurance that you are applying for and your age. Most commonly a physical exam consists of a height, weight, chest and waist measurements, blood pressure check, blood draw and urinalysis. The exam will also require the examiner to ask you medical questions, as well as, collect your doctor's and medication information. The insurance company reserves the right to order your doctor's records and most times they do  this to have an idea of your medical background. There are insurance exam companies located all over the country. These companies will send an examiner to your home or office and usually give you the option to come to them at a local office if that is what you choose. Again, these exams are free to applicants and paid for by insurance companies. It usually takes 4-8 weeks after your physical exam to have a medical decision be made on your fully underwritten life policy.

A non-med life insurance policy just checks your MIB (Medical Information Bureau of Records), scripts (open prescriptions) and reserve the right to order your credit file and driving records as well. (Same with fully underwritten insurance. However, companies do not usually order credit files unless you disclose something like a recent bankruptcy on the application. Driving records are ordered very regularly.) This MIB is just an information sharing service fro Insurance Companies, you are entitled to have a copy of your file. A non-med policy will have higher premiums (because the life companies don't know as much about you, so it's higher risk)  and less flexibility with things like term conversions.

Now that you know the general differences between both fully underwritten and non med life insurance, See below for ideas on ways to get the best results on your insurance physical for a fully underwritten policy. If you have any additional questions on how to get the best results on your insurance physical exam, please contact me, I would be happy to help with no sales pressure.

1.     No alcohol 24-48 hours before

2.     At least 8 hour fast, best to take exam in morning before you eat breakfast, your blood pressure and blood work will be better then

3.     No strenuous exercise 24 hours before

4.     Take the weight part with light to minimal clothing and no shoes (if your shoes weigh 2 lbs and that two pounds puts you in another underwriting class, it could cost hundreds over the life of policy.)

5.     Avoid salt 24 hours before, it can raise BP

6.     If you are taking a normal regimen of medication, keep taking it, which will actually look better to the company that your condition is controlled with regular medication


7. If you are a tobacco user try and use those products as lightly as you can 24-48 hours before

What do I Need to Know about Disability Insurance???

I have been getting more and more questions lately about disability insurance (DI), so I thought I would put this post together to help you understand the most general things that you will need to before purchasing a disability policy.

1. There are 2 main types of disability policies. These policies are classified as occupational disability (own occupation) and non-occupational disability (any occupation). An occupational  DI policy pays out an income stream if you can not perform the duties of YOUR occupation. These policies are much more comprehensive, they require more underwriting and the premiums are higher. Non-occupational disability coverage states that you must not be able to perform the duties of ANY occupation before it will pay out an income stream. (These two types of policies are also known as total disability (non-occupational) vs partial disability (occupational) coverage.) A non-occupational disability policy is usually less premium and easier to apply for. Many non-occupational disability policies are also accident only, meaning that if you need to miss work due to a disease or sickness that it is not covered. Check with your writing agent to make sure of the coverage you are considering.

2. The amount of coverage that you purchase cannot be 100% of your salary. This may sound crazy, but its true. There is a little thing called "moral hazard" that is designed to prevent people from carrying too much DI coverage. This is done in order to prevent policy holders from injuring themselves or faking a disability. The premise is that you are less likely do this if you cannot carry your full salary in DI income. So, insurance companies have worked with the Federal Government to set guidelines on the amount of DI coverage that you can purchase. The standard for most work place disability policies that I have seen, (group policies carried by employers), is to cover 60% of their employee's salaries. Most insurance companies will allow an individual to cover up to 80% of their income however, as long as your income is not too high. It is very common for someone to purchase an individual disability policy to cover the gap between a 60% employer plan and the remaining 20% that an insurance company will allow you to carry. (80% allowed minus the 60% employer coverage = 20%)

3. Long term vs short term disability - A long term disability policy is designed to pay for a period longer than six months. These policies have waiting periods of at least 30 days before they begin to pay out. Most group employer plans are long term disability plans. The most common employer plan that I have seen are a standard of a 90 day waiting period, then a 24 month pay out of 60% of the employee's salary.
Short term disability is a plan that can begin payout immediately or with a small waiting period, and usually pays out for a period of 6 months or less to 1 year at the most. These short term plans tend to have smaller premiums and less underwriting requirements. If you have a long term disability plan then you might want to consider a short term disability plan to supplement that policy. This all should depend on how much savings you have in your emergency fund.

4. What effects costs in DI? Your age, sex, amount of coverage, lifestyle and type of occupation can all effect the premiums of a DI policy. A higher risk job will have higher premiums. Lastly, the longer that you can extend your waiting period, the lower your premiums will be. If you have a nice emergency fund and have 6 months of living expenses, then go a 6 month waiting period and keep your DI premiums lower. Insure yourself against a catastrophe not a paper cut!

5. Tax treatment - if you pay into your DI policy with after tax dollars then your disability pay out will be tax free. If you choose to try and write off your DI premiums, then the payout will be taxed, and taxed at a time when you need the highest income you can get. If you are an employer and have found this post searching for a group disability plan for your employees please keep this in mind. You might want to pay the premiums of your employees plan, but include those premiums in the employees taxable income, this way the pay outs will be non-taxable. If you are self employed you can include DI as a business expense, but make sure you include the premiums in your taxable employee income or the benefits or taxable. Please consult your tax or insurance professional on this I would be happy to answer any questions free of charge here. Contact Me

We hope this information helps you in your disability insurance search. If you have any questions or would like a free no hassle quote please contact us. No matter what state you live in we can email you some information.




Click here for the 5 questions that every worker should ask about disability insurance.

Second to Die, Survivor Insurance, Survivorship Life - A Great Way to Leverage Lower Premium Payments

More and more people are asking about what is called second to die, survivorship insurance or survivorship life. This is a life insurance contract or policy on two lives, that pays the death benefit after the death of the second insured. The two insured parties must have reasonable financial ties (most commonly husband and wife).

These policies are excellent estate planning, preservation and creation tools because the cost of insurance is much lower than a policy on just one life.  Also, if one spouse has had some health concerns they can still usually be one the insureds on the second to die policy. Many families that take out second to die policies are trying to leverage the smaller life insurance payments into larger payouts. This is a great way for parents to leave children an inheritance, cover lawyer & estate fees, and pay estate taxes. I have also seen second to die for charitable contributions with life insurance. Husbands and wives that have a strong tie with a charitable cause can again leverage their smaller payments into a much larger death benefit, and even be able to deduct premium payments from their taxes. (If set up correctly. See our page on Charitable Contributions with Life Insurance.)

To sum up and give you an idea of the power of a second to die strategy, please see below:

A 55 year old non smoking man at standard non tobacco rates can purchase a $250,000 Guaranteed to Age 100 Universal Life Insurance policy for $3,800 annually.

A 55 year old man and  55 year old woman (married couple) at standard non tobacco rates can purchase a Guaranteed to age 100 Universal Life policy with a death benefit of $453,000 payable at the death of the second to die for the same $3,800 annually. (As you can see almost double the death benefit for the same premium!)

Please see our website for more information on Universal Life Insurance. I will be happy to email anyone a free quote on Second to Die, Survivorship Insurance, Survivorship life or any other form of life insurance free of charge and with no sales pressure. If you wish Contact Us here.

North Carolina Life Insurance

The North Carolina Department of Insurance (NCDOI) governs North Carolina Life Insurance and its industry. In NC we have available to us most life insurance products, the only exception is that the NCDOI is tough on guaranteed issue life insurance products. A guaranteed issue life insurance product is a policy that basically accepts everyone no matter their health conditions. These policies of course have very high premiums and also usually have a waiting period of at least 2-3 years before they pay out a full claim. We do have some final expense products available in NC, but not as many as I have found in neighboring states for example.
NC's current Insurance Commissioner, Wayne Goodwin, has done an excellent job in office and I have been fortunate enough to meet him and see him speak to a group I was in. I could tell that he truly cared about his constituents and doing what was best for them was his top priority. The NCDOI oversees everything from Property Insurance, the Senior Health Insurance Information Plan or (SHIIP at www.ncshiip.com), all forms of life, health and accident insurances, to even bail bondsmen licenses. We are well protected in North Carolina.

As for North Carolina Life Insurance, the products available to us are put into 3 major categories.

1. Term Life Insurance
2. Universal Life Insurance
3. Whole Life Insurance

The first category is term life insurance. A Term life insurance policy is designed to last for a specific duration or term period. The most common term periods are 10 - 30 years. Term is the least expensive of all life insurance products and is the most common insurance sold online today. A person could purchase much more coverage through a term policy for a much lower premium to cover the risk of death for a time period important to them. The most common situations that I see are the 20 - 30 years that children are young and still very much dependent on their parents and when someone has a mortgage. Lastly, there is also a return of premium term life insurance product that will return 100% of the premiums that you pay into the term policy at the end of the term period.

The next major category is universal life insurance, this category can include current assumption universal life, indexed universal life, and guaranteed universal life.  A universal life policy or UL for short is designed to be a flexible premium contract and can build cash value. A UL is a form of permanent insurance and differs from whole life insurance in the flexibility of the policy. If your UL has built up sufficient cash value, then you may choose to let it pay its own premium's from its accumulated cash value, or you may choose to withdraw the premiums that you have paid into the policy. When a UL pays for itself, it does not loan against itself and a withdrawal is not a policy loan so neither option charges you an interest rate. You do have the option to take policy loans with a UL.

The last major category is whole life insurance. A whole life insurance policy is also designed to be permanent coverage and is the first form of life insurance to come into existence. A whole life policy has guaranteed premiums and a base interest rate. You can choose different payment schedules, single pay, 7 pay, 10 pay, 20 pay, pay to 65 and pay to maturity are all examples. If you have what is called a participating whole life policy, then the policy will usually pay what is called a dividend. A dividend is basically an annual return that you receive from the life insurance company based on the profitability of the company for that year. A dividend can be allocated in several ways. A dividend can accumulate in a dividend account for withdrawal or future payment of premiums, a dividend can lower your current premium or a dividend can purchase additional life insurance regardless of insurability. Generally, we recommend a Mutual Life Insurance Company for your whole life needs. A Mutual Life Insurance Company is owned by the policy holders and usually offers a better dividend scale.

There are many great North Carolina Life Insurance products available to us here in the Tar Heel State. For a free evaluation of your situation and free quotes for your North Carolina Life Insurance feel free to contact me.  We represent all major life insurance carriers and our team has over 60 years of combined experience. We have the ability to show a multi-quote of top life insurance companies and we can shop your NC Life Insurance to find you the best rates and policy for you, no matter where you are in NC. If you wish we can even mail you all the necessary paperwork.