Insurance Products
Insurance is one of the cornerstones to any solid financial plan. It offers risk mitigation to protect your assets from unforeseen and inevitable events. The proper insurance ensures that your financial plan continues un-interrupted in the event of death, disability, incapacity or business transition. Without insurance and proper financial planning, even the wealthiest individuals, families, and businesses are vulnerable to preventable losses.
Life Insurance
Providing a life insurance policy to your family is the greatest love letter you will ever write. It shows that you care about your family and want to protect their future.
There are various types of life insurance to meet the goals and objectives of each unique situation.
Term Life is usually more affordable than other types of life insurance. The benefit of term life insurance is that it offers period-certain coverage to meet current liabilities: you only buy the coverage you need. Competitive rates are available for 10, 15, 20, 25 and 30 year time periods. Yearly renewable term insurance may be converted to whole life insurance if permanent insurance is desirable.
Universal Life offers permanent insurance with flexible premiums. Variable Universal Life (VUL) offers stock market participation for the cash value portion of the contract while still offering a death benefit.
Whole Life provides permanent, non-cancelable coverage with a living benefit: policy owners have access to the cash value during their lifetime. Whole life also provides guaranteed dividends and minimum cash value that may compliment your overall investment asset allocation diversification strategy.
Disability Income
Persons 40 and older have a one-in-four chance of experiencing a short or long term disability before retirement. Before the sub-prime crisis, the number one reason for home foreclosure was disability. Group disability insurance underwrites the insured’s base salary and usually does not cover bonuses, commissions or K-1 distributions which can account for the bulk of highly-compensated employee compensation.
Disability insurance protects your most valuable asset: your earning potential. It can also be integrated with group disability insurance and coverage can be tailored to your profession-specific skills and physical assets. Disability coverage can also protect qualified retirement plan contributions before age 65. Overhead disability insurance is available for business owners and principals to keep business operations running smoothly in case of a medical emergency.
Long-Term Care
According to the U.S. Department of Health and Human Services, people age 65 have at least a 40 percent risk of entering a nursing home sometime during their lifetime. Assuming the average stay in a nursing home is three years, costs can easily surpass $200,000 for the entire long term care event. In 20 years, the average cost of care in California will be in excess of $600,000. Social security does not provide long term care benefits while Medicare withholds paying for care until personal assets are not in excess of $2,000.
Often the elderly assume that their children will be able to provide them care if they become incapacitated. When this is feasible, the caregiver suffers an average $500,000 impact from the loss of income and compounded retirement savings.
Long term care coverage has come a long way to incorporate in-home health care and home modifications as well as providing for nursing home and assisted living costs. Additional features include cash indemnity, return of premium, and reimbursement to qualified family members who undergo personal care training. A portion of premiums may also be tax deductible.
Annuities
Depending on the investment objectives of your portfolio, annuities can be a great compliment to your financial plan. Annuities typically provide investors with tax-deferred investment returns and a death benefit.
Fixed annuities offer guaranteed returns and/or income for life which can create stability for the wealth distribution phase of one’s financial plan. The performance of variable annuities is tied to the securities held within the contract and the account value is subject to the fluctuations experienced by those corresponding securities. Fixed indexed annuities provide the best of both fixed and variable annuities: participation in one or more stock market indexes while providing guaranteed minimum returns.
Business Insurance
Business owners selflessly put the business needs above their own. Years can fly by without consideration to protecting the business from interruptions caused by death and disability.
Key person life and disability: When a business depends on a few key people for the majority of business revenue, these people become instrumental to the ongoing success and longevity of the company. Insuring the lives of these people shelters the business from the impact of pre-mature death and disability.
Funding Executive Benefits: When employees leave at 5pm, often the company’s greatest assets also walk right out the door. To retain your top employees, we can help you create “golden handcuffs” for your executives, such as business-owned life insurance.
Buy – Sell: Business partners usually bring complementary skills and assets to the business endeavors that are quintessential for success. However, upon the death of one of the partners the controlling shares may transfer over to the deceased partner’s spouse who does not share in the same business goals as the remaining partners. Having a buy-sell agreement in place protects all the owners from interruptions caused by leadership succession. Buy sell agreements may be funded with permanent life insurance products that also provide cash value. The cash value may be used to buy out the partner if he/she reaches normal retirement.
Group Benefits
Attracting and retaining top talent in a competitive marketplace may be easier by offering group benefits. Alamo Capital is your one shop for medical, dental, vision, group life, disability and long term care insurance. Group benefits are available for two or more employees. We also offer health insurance for individuals and families.Estate Planning
While it takes a lifetime to build a family’s wealth, an insufficient estate plan can destroy a family’s dynasty in a matter of months. Failure to plan is the main reason that only 3% of families are able to retain their wealth through multiple generations. Let alone the financial impact of such a loss, the emotional distress caused by poor planning can create pain, resentment and splintering of the surviving family members.
In 2011, the estate tax limitations set forth in EGTRRA sunset and revert to the 2001 status. The gifting exemption at death will be $1 million per person; the balance of which will be taxed at 55% and is due nine months from the passing of the grantor. There are no indications that the current administration plans to increase the estate gifting exemption.
Many families procrastinate planning, thinking deathbed trust creation will shelter the family’s assets. However, according to federal look-back provisions, these types of plans may be contestable by the IRS.
Not every family need encounter this calamity. Proper planning can assist you with transferring your wealth to heirs or charity. Tools to assist in accomplishing your wealth transfer objectives may include premium financing, life insurance and the creation of trusts which may help avoid gifting limits while protecting heirs from the impending estate tax.