Insurance is Unique... and Complicated
Insurance* is a unique financial instrument with features that are unavailable in any other financial products. For example, only annuities can provide guaranteed income for as long as you live. As well, there are unique tax advantages that are available only in life insurance. Features like these open up opportunities for creative retirement, estate, and tax planning strategies. But insurance is also complicated. And sensible insurance planning requires considerable expertise and experience with deep knowledge of the "science" behind it—like carrier due diligence, product selection, policy design, underwriting, income and estate tax ramifications, legal aspects, etc.
Your ability to financially achieve your goals and dreams—saving for retirement, saving for children's education, retiring in style, etc.—is predicated largely on two things: 1) your ability to earn income during your working years, and 2) being able to make your money last through retirement years. If you can't work due to illness or injury, die too soon, or live too long, your (and your family's) ability to realize your goals would be profoundly impaired. Fortunately, you can often mitigate these risks efficiently by transferring them to insurance companies, whose business is to assume such risks and absorb losses that may result from these unforeseen events.
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Unlike retirees from the previous generation, many of whom received guaranteed pension income for life, most of today's retirees are left on their own to make their nest-eggs last for potentially many decades of retirement without the safety net of guaranteed income. And, if a retiree's investment performs poorly, especially early on in retirement, the probability of money lasting through retirement may become irreversibly impaired. Thus, there is a real risk of running out of money during retirement. Fortunately, insurance can help manage such risk by providing guaranteed lifetime income and low-volatility assets without market risk.
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Perhaps you have accumulated substantial assets, and you wish to preserve and pass as much of your assets as you can to your heirs and/or charities. But federal (and state!) estate taxes may significantly erode your assets. And, if your assets are mostly illiquid, your heirs may be burdened with selling the those assets to come up with cash to pay estate taxes. Additionally, costs of long-term care can eat away at your assets that could otherwise be passed on to your heirs/charities. Well-designed life insurance and long-term care insurance, along with a thoughtfully crafted estate plan may help you to efficiently maximize what your heirs and/or charities ultimately receive.
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If you are a business owner, your business is likely the most valuable asset you own. So it would be well worth your time and energy to protect its value because it's enormously consequential to meeting your retirement and legacy goals. Life and disability insurance can enable your business to "buy time" and continue with little disruption if you or your key employee dies or becomes disabled. Insurance can also fund a buy-sell plan, providing tax-free funds to the surviving owner(s) to buy out the deceased or disabled owner's interest and carry on. And to attract, motivate and retain key employees, you can provide executive benefits created and designed specially for them.
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* By insurance, we mean LIFE INSURANCE, DISABILITY INSURANCE, LONG-TERM CARE INSURANCE and ANNUITIES.
What Properly Designed Insurance Can Do For You
// Protect family or business from financial ruin due to an untimely death
// Replace income if unable to work due to an illness or injury
// Minimize significant erosion of assets due to costs of long-term care
// Enhance retirement security with guaranteed lifetime income
// Provide liquidity to meet estate tax obligations in cost- and tax-efficient ways
// Provide financial security for a child with special needs
// Add a low-volatility, tax-efficient asset without stock market risk
// Provide an alternative to "stretch IRA" without being bound by IRA tax rules
// Enable a business to "buy time" if an owner or a key employee dies or is disabled
// Provide funds for surviving owners to buy deceased/disabled owner's business interest
// Provide insurance and retirement benefits to executives to help attract and retain them
// Replace income if unable to work due to an illness or injury
// Minimize significant erosion of assets due to costs of long-term care
// Enhance retirement security with guaranteed lifetime income
// Provide liquidity to meet estate tax obligations in cost- and tax-efficient ways
// Provide financial security for a child with special needs
// Add a low-volatility, tax-efficient asset without stock market risk
// Provide an alternative to "stretch IRA" without being bound by IRA tax rules
// Enable a business to "buy time" if an owner or a key employee dies or is disabled
// Provide funds for surviving owners to buy deceased/disabled owner's business interest
// Provide insurance and retirement benefits to executives to help attract and retain them