Life Insurance for Families:
Over the years I've found that the thing people still find hardest to talk about is their own sudden and unexpected demise. People are happy to talk about their goals, aspirations and desires for their children, their new car, the beautiful new house they've just purchased and the 529 plan they've just established for their children. They talk freely with me about their 401K plan at work and how the assets should be allocated for maximum returns (or maximum safety... depending on their tolerance to risk) Yes, they talk about a whole lot of things until I ask them two simple questions... what would happen if you got hit by a Mack Truck on your way to work tomorrow morning and killed? And, What would happen if the truck didn't kill you, it just left you in a wheelchair and worse still, the driver was uninsured and your heirs won't be getting a settlement check?
Suddenly, people don't like talking so much. They find it tough to plan their estate and put beneficiaries into place, appoint guardians for their minor children, create powers of attorney in case they are truly unable to function normally and need someone to make their decisions for them and worst of all, many just shrug their shoulders and say, it's not gonna happen and if it does, well I won't be here anyway!
There are three very simple things you can do to ensure that your family is not left destitute if something sudden or unexpected happens to you. Create an estate plan, purchase disability insurance to insure your income stream to pay for all those things that will become important to you in life, the mortgage, the college education and the family expenses... and purchase life insurance to ensure your family will be well taken care of in the event you don not return home from work.
Life insurance, if properly structured can be received without income or estate taxes now matter how much insurance you have, and can be purchased very inexpensively nowadays. Your family will struggle enough emotionally when your gone, without having to worry about Mom or Dad rejoining the workforce, where the money for that first and second mortgage will come from and how the kids are going to be able to go to their college of choice. For mere pennies a day you can ensure that no matter what, your family will; Stay in the dream house you have made a home without being weighed down by credit card and other debts. Of course, you could always apply for Extreme Home Makeover instead but the chances of that paying off are small... The chances of Life Insurance paying off are far superior! Adequate insurance will also ensure that the college 529 plans will be fully funded. Disability Insurance (click my article on disability to the left) will ensure if you become disabled, that your income remains constant for the period you choose, 5 years 10 years or even your lifetime, and an estate plan will ensure that your heirs receive your estate with the minimum of fuss, time and expense and net of any debts, period. It's tough to talk about dying, I know. By pure coincidence, my wife and I executed our estate plan on September 11th, 2001. I had booked nasal surgery for September 22nd, 2001 and was irrationally convinced that I was going to be allergic to the anesthetic and die on the table! I was preparing for my appointment with the lawyers to execute my trust when the first plane hit the twin towers. In the 10 months following 9.11, I flew to Europe no less than 4 times, once on business, once for a funeral and twice on vacation. (No, not jet setting, we are fortunate enough to have a house in Austria so it's a cheap vacation) Sitting in the plane, it hit home hard that I could have been on one of those fateful flights.
All I can tell you is; it's been 8 years as of September 2009, the surgery was a breeze, I can breathe like never before, I'm still as healthy as a horse and best of all... I'm not dead yet and haven't needed my powers of attorney etc. etc. But it sure feels good to have them there just in case.
PLEASE, put aside your fear of this topic and insure your life today. Call me at 310. 260. 1126 and find out how affordable, adequate life insurance coverage can be! You are worth and your family is worth it. I represent most of the independent and most highly rated term carriers and can provide quotes from numerous companies. Insurance is cheap, you and your family are precious, it's really a no brainer!
Life Insurance For Business: Can Your Business Survive Without You? Your business assets could well be the greatest share of your estate. But if you were to die, who would purchase your business interest? And how would the purchase be funded? Your company may be the next Google or E Bay, but right now, you're idea rich and cash poor. All that intellectual property you're investing in your business will one day pay off, you're sure of it! But, if something sudden and unexpected happens to you, will it pay off for your wife and children or your other family members? Will they be forced to sell for pennies on the dollar because your business partners simply can't afford to pay the future fair market value of your investment? Worse still, will your partners reap the benefits of the hard work you put in over the years by purchasing your share of the business for a few pennies on the dollar? There is a very simple way to protect your investment of time and intellect, Life Insurance... here's how it works:
Business succession planning where partners are involved in a start up or even a well run and successful company involves a buy-sell agreement funded with life insurance. The Buy-Sell agreement sets forth in great detail who is entitled to purchase your share of the company and for what price. It contractually obligates your heirs to sell the company to the other partners and contractually obligates the partners to purchase your share.
If your family was forced to quickly liquidate your business to raise cash for estate taxes and settlement costs, as well as to settle your mortgage and other personal debts, they probably wouldn't get the going market value. A buy-sell plan funded by life insurance, however, provides for an orderly transfer of your business to the successor of your choice, at an agreed-upon, fair market value. Term life insurance is inexpensive and covers the cost of the business purchase for a few pennies on the dollar. Whole life or universal life can also be used. The life insurance element ensures that the money to make the purchase will generally be there within 30-60 days of a sudden or unexpected death. Each partner is insured under the contract for the pre-determined value of their interest and the policy pays the death benefit to the company in order to provide liquidity.
It gives you peace of mind knowing that your business will pass into the hands of the successors you choose. After all, your family members are likely to be too distraught to want to continue your business with your partners and may, in fact, know nothing about the business you are in, creating a dilemma for your partners. On the one hand they want to help your family, on the other they can't afford to lose you AND then have inexperienced or unknowledgeable partners step in to take your place. A Buy Sell agreement funded with life insurance solves all these issues and predetermines the value of the business for estate tax purposes. If you are interested in learning more about business succession planning and buy / sell agreements, please call us at 310. 260. 1126 because we can help!
Nigel B Taylor
CA Insurance License Nr 0716446