FAQs
QUESTIONS | ABOUT OUR FIRM
What is the driving passion behind the King Legacy Group? We have built our practice on the knowledge that insurance is a financial instrument that has been used to address many life circumstances for at least the last century. Life insurance is designed for: creating personal banks, estate planning, retirement planning, wealth accumulation, debt elimination, tax efficiencies, business planning and funding, as well as passing on wealth through its death benefit. Life insurance cannot be contained; it has many use cases. We consider it the Swiss Army Knife of insurance and the financial industry.
What is your promise to your clients? We are committed to progressive thinking that brings an innovative perspective to trusted, highly rated insurance instruments. Through meaningful communication and our forward-thinking approach, we educate each client about product offerings and savings options that align with their lifestyle and future plans—in a language that resonates with them. We introduce products you may not have known existed, ensuring you have access to the best possible solutions. Our passionate team is dedicated to delivering an exceptional experience, surpassing traditional expectations with a refined process. We strive to help each client connect with insurance in a way that they truly enjoy.
What kind of insurance plans do you offer? Insurance is often looked upon as a final expense policy and not a financial instrument, designed to provide several benefits. Most are unaware insurance offers a broader, more long-term financial benefit to them. We offer best-in-class solutions, characterized according to their product names, so you (or we) can easily identify the most efficient plan to remedy your financial goal. At King Legacy Group, our plans are intentionally designed to meet various financial objectives. Whether it’s securing your family’s future, generating tax-free wealth, or preparing for retirement, and more, we offer diverse plans including: -InfinityWealth (IUL): Tax-free wealth transfer with total control over your lifetime. -LifetimeShield (IUL and/or Fixed Annuities): Innovative retirement planning, with guaranteed income for life. -CampusNest (IUL): We consider this to be the superior alternative to 529 plans. -EverGuard (Term and Permanent Life insurance): A foundational standard in protecting your family’s future -LuxLegacy (Premium Financed Life Insurance): Custom solutions for high-net-worth clients.
How do I get a quote or learn more about the plans you offer? Getting a quote or learning about our policies is easy. Just reach out to our team through our website, email, phone or socials. We’re here to guide you through the process, providing all the information and assistance you need to make informed decisions. Feel free to schedule your complimentary consultation.
What is the benefit of securing my plan through King Legacy Group? We are specialist. We do not shop health insurance, burial insurance, home and auto insurance, and we don't simply "run quotes." Therefore, day-in and day-out, we are consulting clients, learning about their life circumstances, ensuring we're addressing their goals or concerns with a customized plan with tangible results.
Can I customize my plan to match my specific needs? Absolutely! We’re all about tailor-made solutions. Your unique needs and goals are what set our agenda. We’ll work together to customize the plan that fits you and your goals perfectly.
How can King Legacy Group help me build wealth tax-free? Specifically, our plans are designed to help you grow your wealth while keeping it tax-free. We’re here to help you achieve financial success, all within a tax-advantaged framework. Our wealth-building solutions are designed to provide a tax safeguarded way to grow your assets. For example, through our InfinityWealth and CampusNest plans, we offer the opportunity to accumulate wealth while reducing tax burdens.
What makes King Legacy Group's wealth-building solutions unique? Our plans are capable of accumulating wealth; compounding tax-free, protecting your principal and interest, and giving you unparalleled access to your funds when you need it. We help you grow your money while protecting it for generations to come. Our plans (IULs) provide a unique blend of investment-driven growth, asset protection, tax-free compounding and tax-free wealth transfer that maximize your financial growth potential.
What makes King Legacy Group's wealth-building solutions unique? Our plans are capable of accumulating wealth; compounding tax-free, protecting your principal and interest, and giving you unparalleled access to your funds when you need it. We help you grow your money while protecting it for generations to come. Our plans (IULs) provide a unique blend of investment-driven growth, asset protection, tax-free compounding and tax-free wealth transfer that maximize your financial growth potential.
How do I know if I need life insurance? If you have loved ones or assets you want to protect and secure, then you likely need life insurance. Our policies are your safety net for life’s uncertainties.
What if I already have a life insurance policy? At King Legacy Group, we understand that many individuals already have insurance coverage. However, having insurance doesn’t mean you’ve maximized its potential. Our approach is to review your existing policy to make sure your needs and goals are properly covered. Here’s how we can help: Policy Review: We conduct a thorough review of your current insurance plan. This involves assessing the coverage, benefits, and any potential limitations. Optimizing Coverage: Our experienced team looks for opportunities to optimize your coverage. This includes ensuring that your policy aligns with your current and future financial goals. Conversion Strategies: If you have retirement assets, we explore innovative strategies for converting them. This can unlock additional value, tax benefits and potentially enhance your overall financial plan. Customized Recommendations: Based on the review, we provide personalized recommendations. Whether it’s adjusting your existing policy or exploring new avenues, our goal is to ensure you get the most value from your insurance.
What if I already have a life insurance policy through work? Many employers offer term life insurance as a benefit. But as the name suggests, term policies cover you only for a specified period of time. This generally means that if you leave your job, your life insurance coverage ends. Purchasing your own EverGuard term or permanent insurance policy can help provide financial reassurance over the long term, even if you switch jobs.
What if I already have a life insurance policy through work? Many employers offer term life insurance as a benefit. But as the name suggests, term policies cover you only for a specified period of time. This generally means that if you leave your job, your life insurance coverage ends. Purchasing your own EverGuard term or permanent insurance policy can help provide financial reassurance over the long term, even if you switch jobs.
QUESTIONS | ABOUT OUR PLANS
InfinityWealth™ Questions
What Are InfinityWealth Plans? InfinityWealth Plans are a form of Indexed Universal Life (IUL) insurance, carefully structured to offer policyholders both protection and the potential for financial growth. These policies are designed to offer market benefits and protection, enabling you to build wealth while safeguarding your loved ones.
Why should I consider an InfinityWealth Plan? We take great pride in presenting InfinityWealth Plans, a unique and powerful approach to securing your financial future. These policies offer a perfect blend of protection, growth potential, and tax benefits.
What makes InfinityWealth plans special? We recommend InfinityWealth plans for those seeking: -Long-Term Financial Security: InfinityWealth plans are designed to provide lifelong protection, ensuring your family’s well-being. -Wealth Accumulation: The potential for growth and financial security makes InfinityWealth ideal for those with financial goals. -Tax-Efficiency: InfinityWealth tax advantages enable your wealth to grow without the burden of taxation.
Is InfinityWealth right for me? InfinityWealth plans offer a unique way to build wealth and protect your loved ones simultaneously. The choice to invest in an InfinityWealth plan depends on your financial goals and unique circumstances. Our experienced team is here to guide you in making the best decision for your financial future. InfinityWealth plans represent a pathway to lasting financial prosperity. They offer the best of both worlds – protection of your assets and the potential for wealth accumulation. If you’re looking to secure your family’s financial future with confidence, consider exploring InfinityWealth plan with us.
How does InfinityWealth offer tax-advantaged growth? The InfinityWealth plan achieves tax-advantaged growth by aligning with selected indexes. This strategic approach ensures that your returns remain tax-advantaged, allowing you to maximize your wealth accumulation while minimizing tax implications. Explore the intricate details of optimizing your financial growth with InfinityWealth.
LifetimeShield™ Questions
What are LifetimeShield Plans? Depending on your specific circumstance, this plan can include an IUL and/or a Fixed Indexed Annuity. LifetimeShield Plans are financial instruments that transform your hard-earned savings into a predictable and dependable stream of income. They are often used as a strategy to ensure you have the financial resources you need when you retire. Types of Annuities: Annuities come in various forms, each tailored to meet different financial goals. The three primary types are: -Fixed Annuities: Provide stable, predictable payments. -Variable Annuities: Allow you to invest in various funds, with income fluctuating based on market performance. -Indexed Annuities: Offer growth potential linked to specific market indices while protecting your principal.
Why should I consider a LifetimeShield plan? We believe in offering a diverse range of financial solutions to cater to your unique needs. LifetimeShield plans are a key component of our offerings, designed to provide a reliable source of income and financial security during your retirement years.
What makes LifetimeShield plans special? Guaranteed Income: Annuities ensure you receive regular payments, offering peace of mind and financial security in retirement. -Tax Advantages: Many annuities come with tax-deferral benefits, allowing your savings to grow faster. -Flexible Payout Options: Choose from a range of payout options to suit your financial needs and lifestyle. -Protection and Growth: Annuities provide both protection and potential growth, combining the best of both worlds.
Is a LifetimeShield plan right for you? Annuities can be a valuable addition to your retirement plan, offering consistent income and financial security. However, choosing the right annuity depends on your unique circumstances and goals. Our team of experts are here to guide you in making the best decision for your financial future.
CampusNest™ Questions
What are CampusNest plans? CampusNest plans are designed using an Indexed Universal Life (IUL) insurance policy, a unique and powerful approach to securing your child’s financial future. Carefully designed to offer your child both protection and the potential for financial growth during their whole life. These policies are renowned for their versatility, enabling you to build wealth while safeguarding your loved ones.
Why should I consider a CampusNest plan? These plans offer a perfect blend of protection, growth potential, and tax benefits. The CampusNest plan offers you the same market driven returns as traditional college savings plans but with meaningful additional benefits: such as full downside protection and unrestricted use of proceeds from your policy. This means you not only win with the market, but your principal is also safeguarded from risk. In addition, the CampusNest plan provides unparalleled flexibility, allowing you to access your funds on your time, for any opportunity, with tax-free growth. Invest in your child’s future beyond college. Let us help you prepare for the unpredictable and seize new opportunities along the way.
Why should I consider a CampusNest plan instead of a 529 Plan? A CampusNest plan (designed using an Indexed Universal Life (IUL) policy), and a 529 plan serve different purposes and have distinct features. Here’s a comparison: *Purpose* CampusNest plan: This plan is a life insurance policy that offers lifelong coverage and can be used for various financial needs, including college funding. It provides a death benefit to beneficiaries and accumulates cash value over time, which can be withdrawn or borrowed against to cover expenses like college tuition. 529 Plan: A 529 plan is specifically designed for saving ONLY for education expenses. It offers tax advantages for qualified educational expenses and is primarily intended to fund higher education. Should you use the funds for another reason than qualified education expenses, a 529 could have significant tax consequences. *Tax Benefits* CampusNest plan: While contributions to this plan are not tax-deductible, the cash value growth is tax deferred. You can access the cash value tax-free through policy loans and withdrawals. 529 Plan: Contributions to a 529 plan may qualify for state tax deductions or credits, and earnings grow tax-free. Withdrawals for qualified education expenses are also tax-free at the federal level. *Flexibility* CampusNest plan: This plan provides flexibility in terms of fund usage. The cash value can be used not only for college expenses but also for other financial needs such as retirement or emergencies. 529 Plan: Funds in a 529 plan are primarily earmarked for educational expenses. While it can cover various education-related costs, diverting funds to other purposes may incur penalties or taxes. *Investment Options* CampusNest plan: IUL policies often offer a variety of indexed accounts where the cash value can be linked to the performance of financial markets. This can offer the potential for higher returns, but also comes with the benefit of downside protection. Meaning you win when the market wins, and your principal and interested are protected from market losses. 529 Plan: Typically, 529 plans offer a range of investment options, including pre-designed portfolios. Investment options within a 529 plan vary depending on the specific state’s plan. However, investments in a 529 can lose principal due to the performance of investments. *Lifetime Coverage* CampusNest plan: An IUL policy provides lifelong coverage, offering both a financial safety net through its death benefit and a means to accumulate wealth for various needs. 529 Plan: A 529 plan is focused on education savings and doesn’t offer the same lifelong insurance coverage or wealth accumulation features. In summary, a CampusNest plan, particularly designed using an IUL policy, provides greater flexibility, many additional benefits and a broader range of financial uses compared to a 529 plan.
What makes CampusNest plans special? One of the many benefits of CampusNest lies in its ability to provide tax-free compounded growth. This means that as you save for your child’s educational future, you won’t have to worry about tax obligations on your growth. And when it’s time to access those funds, you can access them without tax obligations for any purpose needed. CampusNest is not just about your child’s education; it’s about safeguarding your child’s financial well-being for life. With this policy, you can rest assured that, no matter what happens, at every stage of their life, your child will be protected. We understand that every family has its unique financial situation. CampusNest provides the flexibility to tailor premium payments to align with your budget. This adaptability ensures that you can comfortably invest in your child’s future without straining your finances. We recommend CampusNest plans for those seeking: Long-Term Financial Security: CampusNest plans are designed to provide lifelong protection, ensuring your family’s well-being. Wealth Accumulation: The potential for growth and financial security makes CampusNest ideal for those with financial goals. Tax-Efficiency: CampusNest‘s tax advantages enable your wealth to grow without the burden of taxation.
Is CampusNest right for me? CampusNest plans offer a unique way to protect your loved ones and build wealth simultaneously. The choice to invest in CampusNest depends on your financial goals and unique circumstances. Our experienced team is here to guide you in making the best decision for your financial future. CampusNest plans represent a pathway to lasting financial prosperity. They offer the best of both worlds – protection for your loved ones and the potential for wealth accumulation. If you’re looking to secure your family’s financial future with confidence, consider exploring CampusNest plans with us.
How does the CampusNest differ from traditional college savings plans like 529s? CampusNest transcends the limitations of traditional plans by providing not just a 529 alternative but a comprehensive solution. This policy enables families to invest in their child’s future beyond college, offering market-driven returns, full downside protection, and tax-free growth. Learn more about securing your child’s educational journey with unparalleled flexibility.
EverGuard™ Questions
What are EverGuard plans? EverGuard plans are life insurance policies that are the cornerstone of financial security for your family. They ensure that in the event of your passing, your family will be taken care of, both emotionally and financially. It’s a pledge to protect your family’s dreams and aspirations. Our Range of EverGuard plans Solutions: We offer a diverse portfolio of life insurance policies, each meticulously crafted to cater to your specific requirements: Term Life Insurance: Affordable protection for a specified period. Whole Life Insurance: Lifelong security and cash value growth. Universal Life Insurance: Flexibility and tailored protection. Indexed Universal Life (IUL): Growth potential and protection combined.
Why should I consider an EverGuard plan? We understand the importance of securing your family’s financial future. EverGuard is not just a policy; it’s a promise to safeguard your loved ones when they need it the most.
What makes EverGuard plans special? EverGuard plans offer a range of benefits to the policyholder and their loved ones: Protecting Your Family’s Future: Life insurance is not just about covering end-of-life expenses; it’s about preserving your family’s way of life. It can help with mortgage payments, educational expenses, and daily living costs, ensuring your loved ones continue to thrive. Planning for Life’s Milestones: Beyond providing security, life insurance can also be a part of your financial planning for various life stages. Education Planning: Securing funds for your child’s higher education. Retirement Planning: Using life insurance to create a tax-free retirement income. Cash value life insurance: Policies offer a unique opportunity to build wealth while providing protection. The Power of Cash Value: Cash value life insurance, such as whole life or indexed universal life (IUL) policies, includes a cash accumulation component. This cash value grows tax-deferred over time and can be accessed during your lifetime for various financial needs. It’s a unique tool that combines protection with financial growth. Growing Wealth Tax-Efficiently: Cash value life insurance offers an opportunity to accumulate wealth tax-efficiently. The growth of cash value inside these policies is not subject to income taxes. This means you can enjoy the benefits of financial growth without the burden of taxation. Versatile Financial Tool: Cash value life insurance is a versatile financial tool. You can use the cash value to fund major life expenses, such as buying a home, financing education, or supplementing retirement income. This flexibility makes it an ideal choice for those seeking a multifaceted financial solution. By understanding the power of cash value and the financial opportunities it presents, you can make informed decisions to create lasting financial security.
Why choose EverGuard plans? Life insurance is a crucial component of any well-rounded financial plan, but let’s be honest – it’s not always the most enticing topic to discuss. But if the unexpected occurs, we want you to be prepared. Our EverGuard plans are customized to your unique needs.
Is a EverGuard plan right for you? If you’re looking for a way to protect your family’s dreams, to ensure their future is secured and to experience the peace of mind that comes with it, EverGuard is right for you. EverGuard is more than just coverage; it’s about securing your family’s future and providing lasting peace of mind. Your loved ones deserve the utmost protection and we’re here to ensure they receive it.
LuxLegacy™ Questions
What are LuxLegacy plans? Our LuxLegacy plan is not your typical financial vehicle. Designed specifically for high-net-worth individuals, it offers a unique and sophisticated financial solution that combines leverage, investment and protection to help policyholders grow their wealth, protect their assets, and plan for the future.
Why should I consider a LuxLegacy plan? Designed specifically for high-net-worth individuals, our LuxLegacy plan offers a unique and sophisticated financial solution that combines premium financing and protection to help policyholders grow their wealth, protect their assets, and plan for the future. What sets our LuxLegacy plan apart is its highly customizable approach to wealth management. By using leverage, our clients can maximize the benefits of their custom solutions while still allowing their capital to grow tax-free. And with tax-free access to funds, individuals can preserve their wealth and minimize their tax burden, giving them greater financial flexibility. -Financial security: Our LuxLegacy plan allows you to acquire high value life insurance with premium finance, keeping your assets working outside the policy, tax implications mitigated and your loves ones protected. -Minimizing estate taxes: Our LuxLegacy plan offers solutions to managing the tax burden of high-net-worth estates. -No probate: By sheltering assets in the Irrevocable life insurance trusts (ILIT), you can avoid the lengthy and costly probate process, ensuring faster asset distribution. -Creditor protection: Assets in the trust or insurance policies can be protected from creditors.
What makes LuxLegacy plans special? What sets our LuxLegacy plan apart is its highly customizable approach to high-net-worth-estate planning. By using premium financing, our clients can maximize the benefits of obtaining high-value life insurance without tax penalties of liquidating assets, all while building another financial tool to meet the needs of their estate.
Why choose LuxLegacy plans? LuxLegacy provides market access with full downside protection against market volatility. Create greater access to market gains with leverage, while still maintaining the protection you are accustomed to, with insurance against market volatility. Meaning, your funds are safe against market losses, while still having full access to market benefits. This is the ultimate vehicle for high-net-worth individuals to meet the high-demands their estates often require.
Is a LuxLegacy plan right for you? Preparing for t he demands of a high-net-worth estate shouldn’t require the sacrifice of assets that made the estate valuable in the first place. That’s why our LuxLegacy plan is designed to allow you to keep your assets in the places they are currently performing, and use bank financed premiums to get the high value life insurance your estate requires. If this resonates with you, LuxLegacy is right for you!
Can LuxLegacy cater to specific financial goals of high-net-worth individuals? Absolutely! The LuxLegacy plan is a sophisticated financial solution meticulously designed for high-net-worth individuals. With a careful blend of wealth preservation, market access, and full downside protection, this policy empowers high-net-worth individuals to navigate the complexities of estate planning with confidence. Uncover the personalized approach to financial success.
QUESTIONS | ABOUT IULs
Index Universal Life Questions
What is Indexed Universal Life (IUL) Insurance? Indexed Universal Life (IUL) insurance is a type of permanent life insurance that offers lifelong coverage and cash value accumulation. What sets IUL apart is how it grows cash value. Unlike other universal life policies, which rely on non-equity earned rates, Indexed Universal Life (IUL) insurance cash value experiences growth based on a selected equity index. Essentially, it allows your policy’s cash value to increase in line with a specific stock index, providing potential for greater returns over time.
What is a participation rate in an IUL policy? A participation rate determines the percentage of an index’s growth that your Indexed Universal Life (IUL) policy will use to calculate your interest earnings. When you purchase an IUL, the cash value is tied to a stock market index, such as the S&P 500. However, you don’t invest directly in the stock market, which means your cash value doesn’t experience losses when the market dips. Instead, your cash value grows based on the index’s performance up to a certain percentage, which is determined by the participation rate. For example: If your IUL policy has a 70% participation rate and the index experiences 10% growth in a given period, your policy will earn 7% interest (70% of the 10% growth). The participation rate allows you to benefit from market growth, but the cap or limit is set by the insurance provider. Why is the participation rate important? The participation rate is key because it influences how much your cash value can grow based on market performance. A higher participation rate means more of the index’s gains are reflected in your policy’s cash value. However, it’s also essential to consider any other limits, such as caps or floors, which may affect overall performance. An IUL policy with a well-structured participation rate can provide attractive growth potential while still protecting your principal from market downturns.
If an IUL is Designed Properly, What Are the Potential Downsides? When an Indexed Universal Life (IUL) policy is thoughtfully and efficiently designed, it can provide substantial benefits like tax-free income, growth linked to the stock market, and protection from market losses. However, even with these advantages, there are a few considerations to keep in mind: 1.A Balanced Strategy: While IULs may include caps that limit your growth potential when the market performs well, this cap ensures your policy remains stable and secure during market downturns. In essence, you’re benefiting from both growth opportunities and protection, avoiding the full risks associated with direct market exposure. 2.Long-Term Value: The cost of insurance increases as you age, but a properly structured IUL helps you front-load premiums, so your policy builds strong cash value early on. This long-term value can help offset rising costs and ensures your policy remains effective throughout your lifetime. 3.Disciplined Contributions: IULs require consistent funding to maximize their benefits, but this disciplined approach is a positive way to ensure your policy is working optimally. By committing to regular premium payments, you’re building wealth for your future and securing a financial legacy. 4.Flexibility and Control: The ability to access your cash value through loans or withdrawals is a key benefit. However, with thoughtful planning and guidance from an advisor, you can manage these features effectively, preserving both the cash value and death benefit to meet your needs. In summary, when designed and managed properly, the IUL’s unique structure can balance market growth, protection, and long-term security. The few considerations—like managing caps, costs, and funding—are simply opportunities to ensure the policy delivers consistent benefits and supports your financial goals.
Can you lose money in an Indexed Universal Life (IUL)? The growth of your policy’s cash value can be tied to the performance of an equity index, which can be volatile. However, the benefit of IUL is that any principal or interest credited are protected against loss, so while your account may not earn interest due to index declines, it won’t experience direct losses during those periods. There are also options to use crediting methods for fixed interest rates. This guarantees accumulation based on the available rates provided from the specific policy options.
Why do high-net-worth individuals use Indexed Universal Life (IUL)? High-net-worth individuals often use Universal Life insurance, including Indexed Universal Life (IUL) insurance, for various reasons. One significant advantage is mitigating wealth tax. To inherit your assets, your family or beneficiaries may have to cover wealth tax. A cash payout from a Universal Life insurance policy can assist them in meeting these obligations, making it a valuable financial tool for the wealthy.
How much can you contribute to an Indexed Universal Life (IUL) annually? One of the appealing aspects of an Indexed Universal Life (IUL) insurance policy is the absence of annual contribution limits. Unlike retirement accounts like IRAs or 401(k)s, IUL policies offer flexibility when it comes to how much you can contribute each year.
How soon can I withdraw money from my Indexed Universal Life (IUL)? Unlike retirement plans such as IRAs or 401(k)s, IULs do not impose minimum withdrawal age requirements. You have the freedom to withdraw funds at any time, offering you financial flexibility.
Is an Indexed Universal Life (IUL) tax-free? Loans taken from an Indexed Universal Life (IUL) insurance policy are not considered income by the IRS. Since you’re essentially borrowing money from your IUL and not generating taxable income, you won’t incur income taxes on these withdrawals. Moreover, these tax-free IUL loans won’t push you into a higher tax bracket in your retirement years.
Can I borrow against the cash value of my permanent life insurance policy? Yes, with certain types of permanent life insurance policies, such as whole life or universal life, you can borrow against the cash value. However, it’s important to consider the potential impact on the death benefit and consult with your insurance provider to understand the terms and conditions of borrowing against your policy.
Can I use my Indexed Universal Life (IUL) to purchase a house? Universal Life Insurance policies, including Indexed Universal Life (IUL) insurance, allow you to contribute extra funds to the policy, increasing its cash value over time. This cash value can be a valuable source of funds for various purposes, including a home purchase.
What is the rate of return on an Indexed Universal Life (IUL)? Indexed Universal Life (IUL) insurance policies can offer a guaranteed minimum return by selecting a fixed-rate crediting option available within the specific policy. But they also can offer indexed -options that allow you to correlate your interest credit to a market index of your choice. Often available to market indexed crediting methods are bonuses and participation rates that could accelerate the rate of returns in the event of positive market performance.
Can you use an Indexed Universal Life (IUL) as a bank account? Indexed Universal Life Insurance policies, when properly structured, can serve as an instrument for “infinite banking.” This strategy allows you to borrow money from your IUL, ideally on a tax-free basis, while the remaining funds continue to generate returns. It’s a powerful way to leverage your IUL as both an insurance policy and a financial tool.
What happens at the end of an Indexed Universal Life (IUL) policy? An Indexed Universal Life (IUL) insurance policy reaches maturity through one of two scenarios. First, in the event of the policyholder’s passing, the policy matures, and the death benefit, which may include any remaining cash value, is paid out to the beneficiaries. Second, if the policyholder outlives the policy’s coverage and doesn’t opt for an extension, the policy naturally matures and pays out the death benefit while the beneficiary is alive.
Is the death benefit from a life insurance policy taxable? In most cases, the death benefit from a life insurance policy is not subject to federal income tax. However, there may be exceptions if the policy has certain characteristics or if the estate is large enough to trigger estate taxes. It’s advisable to consult with a tax advisor for specific information related to your situation.
QUESTIONS | ABOUT ANNUITIES
General Annuity Questions
What is an Annuity? An annuity is like a promise for your future well-being. It’s a financial contract you enter with an insurance company, ensuring that you’ll receive a steady stream of payments, either immediately or at a designated point in the future. In exchange for a lump sum or a series of payments, you secure yourself a fixed amount of money, guaranteeing financial support for the rest of your life. Imagine it as a lifelong friend that ensures your financial comfort.
What are the types of annuities? Annuities are your versatile financial companions, coming in two main categories to adapt to your needs. The immediate annuity offers you a quick income stream by using a lump sum, while the deferred annuity provides a future income source, often beginning at a later date. There are further subdivisions to consider: Fixed Annuity: Your financial security grows over time at a set interest rate, delivering predictable returns and the bonus of tax-deferred growth. Variable Annuity: The potential for higher growth in line with financial market performance, though you must be ready for potential value fluctuations. Fixed Index Annuity: This one is linked to the performance of an external index, which helps safeguard your premium from market downturns. Think of it as a safety net with the potential for growth.
What are some of the pros of an annuity? Annuities come bearing an array of advantages that can be your secret weapon against life’s financial uncertainties. These are a few enticing perks to consider as you delve into the world of annuities: -Customized Income: Annuities can adapt to meet your specific financial needs and provide benefits tailored to you. -Market Protection: Certain annuities stand as a shield against market volatility and potential declines, helping you rest easy, even during turbulent times.
Do I need an annuity? Welcoming an annuity into your financial portfolio can play a crucial role in enhancing your savings and securing a reliable income source for retirement. As life expectancy increases, ensuring your savings can last throughout a potentially extended retirement becomes vital. An annuity steps in as your trusted partner, offering a dependable income stream to handle everyday expenses and unforeseen financial challenges, from medical bills to long-term care.
When should I buy an annuity? The right time to acquire an annuity isn’t set in stone; it hinges on your unique goals. Typically, people tend to explore annuities when they’re between 40 and 70 years old. However, your health and family history can influence your decision. Some providers may impose maximum age limits, so your individual circumstances play a pivotal role in this choice.
Can I access my money in an annuity? Annuities are designed with the intent to provide guaranteed income, making early withdrawals subject to potential withdrawal fees, surrender charges, and possible tax penalties. While immediate annuities usually offer limited withdrawal options, deferred annuities might provide more flexibility depending on the specific product. Keep in mind that withdrawals during the surrender charge period may incur charges, and if you’re under the age of 59 ½, you could face IRS penalties or taxation. Certain annuities may offer more leniency regarding withdrawals.
Who inherits an annuity? Annuities offer a thoughtful feature known as a death benefit. This enables you to designate a beneficiary who will receive your financial benefit if you were to pass away. Your beneficiary typically has options for receiving these payments, including the choice between a lump sum or gradual payments over time. In some cases, you might find contracts that offer spousal continuance, granting your spouse the role of the new owner of your annuity, ensuring your legacy continues to provide for your loved ones.
QUESTIONS | ABOUT LIFE INSURANCE
General Life Insurance Questions
How much does a life insurance policy cost? The cost of a life insurance policy varies based on factors such as your age, gender, lifestyle, policy type, and medical status. Your risk level plays a significant role in determining your premium. For instance, factors like your job, hobbies, and smoking habits can affect your premium. Generally, permanent insurance policies cost more than term policies.
Will my life insurance provide living benefits? Life insurance isn’t just about death benefits; many policies include living benefits. These benefits vary depending on the insurance company. Some of the common living benefits cover asset growth, tax fee compounding, guaranteed income, terminal illness, long-term care, and short-term care. While some benefits come with the policy, others can be added for an extra cost.
What life insurance benefits are guaranteed? For both term and permanent life insurance, the death benefit is usually guaranteed. However, certain situations can affect the guarantee. Also, accumulation value has guarantees against market losses as well subject to the term of your policy.
What if my health changes? If your health changes during the life of your policy, you might be able to reduce your premium or enhance your coverage, depending on the circumstances. It’s essential to inform your agent and discuss possible riders if you become disabled or anticipate future changes in your health.
What if I need more coverage in the future? As your needs evolve with time, your life insurance needs may change. With term insurance, you can renew your policy for one or more terms, even if your health status changes. If you anticipate needing insurance coverage beyond the term, consider adding a term conversion rider when you buy the policy. Buying life insurance early and while you’re healthy can save you money in the long run. Remember, life insurance isn’t just about end-of-life expenses; it can be an essential tool for your financial security.
What’s the difference between term and permanent life insurance? Term insurance is typically characterized by lower premiums compared to permanent policies. However, it doesn’t include a cash value component that you can access in the future. As the name implies, term life insurance provides coverage for a specified term, ranging from one to several years. If you pass away during this term, the policy pays out the death benefit. Many term insurance policies offer the option to renew for additional terms, even if your health has changed, though this may result in higher premiums. It’s essential to inquire with your insurance agent or company about renewal options and any age restrictions. For added financial security during times when you need life insurance the most, you can also consider combining term insurance with cash value life insurance to replace lost income. Permanent insurance policies remain in effect as long as you continue paying the premiums. They feature a unique cash value component that grows over time, allowing the policyholder to borrow against this accumulated cash value. Due to the savings element and the ability to access the cash value, premiums for permanent insurance are generally higher in comparison to term insurance. There are four primary types of permanent life insurance: whole life, universal life, variable life, and variable universal life. Each type offers distinct features and benefits, providing a range of options to cater to various financial objectives. You can explore these different types of permanent life insurance in greater detail on our website.
Can life insurance policies be transferred or sold to another individual? Yes, life insurance policies can be transferred or sold through a process known as life settlement. This option allows policyholders to liquidate their policy for a lump sum payment. However, it’s crucial to carefully consider the implications and explore alternative strategies before pursuing a life settlement. Our experts provide comprehensive guidance on navigating such transactions.
What is the Difference Between Whole Life Insurance and an Indexed Universal Life (IUL) Insurance? Q: What is Whole Life Insurance? A: Whole life insurance is a type of permanent life insurance that provides coverage for your entire lifetime, as long as premiums are paid. It includes a guaranteed death benefit and builds cash value over time, which grows at a guaranteed interest rate. Q: What is an Indexed Universal Life (IUL) Insurance? A: An IUL is a type of permanent life insurance that also provides coverage for your entire life. However, unlike whole life, the cash value in an IUL policy is tied to the performance of a stock market index, such as the S&P 500, allowing for the potential of higher returns. Q: What are the key differences between Whole Life and IUL? A: The main differences lie in the growth of the cash value and the flexibility. Whole life insurance has guaranteed growth with fixed premiums, while IUL offers the potential for higher growth through index-linked returns and more flexibility in premiums and death benefit amounts.