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Life insurance can be the foundation of your financial security and can provide comfort and stability for your family. The purpose of life insurance is to help provide your loved ones with financial protection after you die, in exchange for the premiums you pay to your insurer during your lifetime. Some life insurance policies can provide you with financial protection for a specific duration, while others accumulate cash value, offering a living benefit that can be used for any purpose such as to help supplement retirement income, funding for a child’s education, or cash for emergencies.1
1 Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10 percent tax penalty if the policyowner is under age 59½.
Disability Income Insurance
A sudden interruption of income—due to an extended period of sickness or injury—can have serious financial consequences for many of today’s employees. If you are lucky, you may receive group disability benefits through your employer. However, you will need to make sure the benefits available through your group disability coverage are adequate for your needs. Group disability benefits are taxable if your employer pays the premiums, may be capped at a relatively low amount, and may not cover variable income such as bonuses or commissions. As such, these benefits may not be enough to maintain your lifestyle or pay all your bills if you become too sick or injured to work.
An individual disability income insurance policy can help supplement your group long term disability benefits and protect a larger portion of your income. An individual disability income insurance policy you purchase on your own is fully portable, meaning you won't have to worry about losing coverage if you change jobs, and the benefits are generally paid are tax free if you are the premium payor.1 In addition, an individual disability income insurance policy is non-cancelable by the carrier (as long as the premiums are paid), and with a guaranteed renewable policy, your premiums will never change for the life of the policy.
1 The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Disability income insurance policies have exclusions and limitations.
Long Term Care
For most of us, it is unpleasant to envision a time when performing routine tasks may become difficult as the result of injury, illness or aging. If the time comes when you need substantial assistance performing daily tasks, it is unlikely you will want cost to be the primary decision-making factor for your long term care. Long term care (LTC) services can be expensive and costs generally continue to rise. Planning early can help ensure that you have more control in receiving the type of care you want — in the setting you choose, should the need arise.
What is Long Term Care?
Long term care includes a variety of services and supports to help meet personal care needs over an extended period of time. The services include help performing Activities of Daily Living (ADLs), such as: bathing, continence, using the toilet, transferring to/from a bed or chair, dressing and eating. Long term care services are generally not covered under personal health insurance or Medicare because they are not intended to cure, improve or treat a specific medical condition. Medicaid may help individuals with income and assets below state requirements.1
Whether long term care services occur in a nursing home, assisted living facility or your own home, the costs can be a huge expense. The average stay in a nursing home is 835 days (2.3 years) and $183,700.2 The national median hourly rate for a home health aide is $20 and that can add up quickly.3 Using a proactive approach, we enable you to mitigate these costs.
1 For more information regarding benefits provided by Medicare or Medicaid (Medi-CAL in California) visit www.cms.hhs.gov. Medicaid guidelines vary by state. Contact your local Medicaid office for details.
2 National Nursing Home Survey 2014, National Center for Health Statistics.
3 Cost of Care Survey, Genworth, June 2015.
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