Paying for life insurance, in most instances, is just like auto or homeowners insurance – you have to pay premiums on a regular basis to enjoy the benefit of the policy. This makes sense as you’re paying for a service that’s provided to you. Not paying the premium means the coverage lapses, providing you no protection. When you’re earning income, keeping an insurance policy in force may not be an issue. However, as you look toward retirement, that might not be the case. If you are unable to pay premiums during your retirement years, you put your coverage at risk at a time when you may need it the most. Through a paid-up whole life policy though, you can mitigate much of that risk while also...
Continue reading...
Is life insurance tax deductible? If you hopped on the internet for a quick answer to this question, we’ll save you some time: No, it isn't, but there is one exception (more on that in a moment). Life insurance premiums are considered a personal expense, and therefore not tax deductible. From the perspective of the IRS, paying your life insurance premiums is like buying a car, a cell phone or any other product or service. There’s also no state or federal mandate that you purchase life insurance, unlike health insurance, so the government isn’t offering you a tax break in this case. Although premiums aren’t tax deductible, there are several tax benefits of a life insurance policy. THAT...
Continue reading...
Unexpectedly finding yourself retrenched or totally and permanently disabled is something you can't plan for. Choosing to cover your insurance premiums should that happen is a way to help protect you financially from the unexpected. What is Premium Waiver insurance? Premium Waiver insurance covers your life insurance policy premiums if you were to become totally and permanently disabled or were retrenched from your job and left unable to pay your premium (see conditions for retrenchment below). This means that your policy continues to provide you with the same cover as if you were still making your payments. When you have Income Protection insurance with us, you will automatically have...
Continue reading...
Did you know that you must request a waiver of premiums for all disability cases, even when the long-term disability (LTD) benefits are not paid by the insurer? Yes, even for CNESST or SAAQ cases! Neglecting this could have costly consequences, including having to pay the life insurance benefit yourself. Waiver of premium life insurance = more than a stoppage of premiums Should the member become totally disabled before age 65, the insurer will no longer require the payment of premiums (waiver) but the insurance coverage will continue. Therefore, the waiver not only means that premium payment to the insurer is no longer required, but also that the insurer acknowledges its responsibility with...
Continue reading...
Even in difficult economic times High-net-worth individuals continue to grow and protect their wealth. They take advantage of leverage and actively look for investment opportunities that yield returns greater than the cost of capital. In other words, many need life insurance to address inheritance, business and tax issues, but they’d prefer to keep the funds they would spend on life insurance premiums in investments that yield more profitable returns. Premium finance is not a gimmick. It is not free insurance. It never was and never will be. Retained capital and lost opportunity costs are not the only reasons to consider premium financing. Premium financing is a leverage sale, which can...
Continue reading...
How do Life Insurance Premiums Work? Ever wondered what factors influence your life insurance premiums? There are many factors that an insurer will consider when determining how much you'll pay for your life insurance policy. Your insurer will evaluate the level of risk you pose to them and calculate your premiums accordingly. Typically, how you pay depends on: Receive a quote from these direct companies How much does life insurance cost in Australia? As stated in the introduction, the cost of life insurance comes down to personal circumstance. But what are the typical life insurance rates for men and women? Below is table that breaks down the average monthly cost for men and women at...
Continue reading...
As discussed in the section “Corporate vs.Personal Ownership of Life Insurance” an insurance policy can be owned by a company or personally. The premiums can be paid through personal income sources or assets, or if the policy is owned by a company, through its annual cash flow, dividend income or via the transfer of assets into the policy. The “asset transfer” method of funding the premiums takes advantage of the tax-exempt investment opportunities within an over-funded Universal Life or Whole Life policy. In this “asset transfer” approach, tax-exposed investment assets are liquidated and the cash is transferred into the tax-exempt investment pool of the policy, such that the tax-sheltered...
Continue reading...
I’ll start out by saying that I’m not opposed to premium financing. I’m simply a strong advocate for making sure it’s understood and done right. That being said, many of these proposals are not understood and can be misleading. First, it’s a good idea to look back to the general fundamentals of financing. Financing comes into play when someone needs or wants to purchase an asset of something but doesn’t have the money or the liquidity to pay the entire purchase price. Financing fills this void, not to get something that’s otherwise unaffordable. We do this day in and day out. We finance our homes, cars, businesses, equipment and more. Generally, we...
Continue reading...
Life insurance has its own language. Words like beneficiary, rider, and underwriting come up frequently when you’re shopping for coverage. And after a while (okay, sometimes right away) the terms can start running together. Being fluent in life insurance requires some patience, but if there is one term to get extra familiar, it’s “premium.” This word is important because it has everything to do with what you’ll pay to keep your coverage in place. Learning how premiums work is key to finding coverage that protects your family without putting your monthly budget at risk. What is a life insurance premium? Simply put, “premium” means payment. It’s the amount of money you pay your...
Continue reading...
NEWS & ARTICLES INSURANCE GUIDE A life insurance premium is the payment made to the life insurance company, to pay for a life insurance policy. This term is also applied to payments remitted for annuity contracts. Typically the premium will pay for the cost of insurance, but excess premium over the cost of insurance can be made to the insurance company to build cash value in the policy. Premium payments are required to be made to the insurance company for a life policy, otherwise the policy will lapse. Premium Due For Life Insurance Term Life Insurance Premiums Term life insurance does not build cash value. Therefore, the premium payment made to the insurance company only covers...
Continue reading...
