Q: Why would a business owner buy long term care insurance,
when the business could buy it for them?
Yours, with our thanks for answering 2 quick LTC questions.
Cash Value life insurance
What is cash value life insurance?
From the National Association of Insurance Commissioners
Of which, I am not one. In this justifiably regulated industry, as a matter of best-practice and compliance, I see no need to impress anyone with my own terminology definitions, when we can simply go to the authorities to define those terms for you.
"Cash Value Life Insurance is a type of insurance where the premiums charged are higher at the beginning
than they would be for the same amount of term insurance. The part of the premium that is not used for the
cost of insurance is invested by the company and builds up a cash value that may be used in a variety of ways.
You may borrow against a policy’s cash value by taking a policy loan. If you don’t pay back the loan and the
interest on it, the amount you owe will be subtracted from the benefits when you die, or from the cash value
if you stop paying premiums and take out the remaining cash value. You can also use your cash value to keep
insurance protection for a limited time or to buy a reduced amount without having to pay more premiums.
You also can use the cash value to increase your income in retirement or to help pay for needs such as a child’s
tuition without canceling the policy. However, to build up this cash value, you must pay higher premiums in
the earlier years of the policy. Cash value life insurance may be one of several types; whole life, universal life
and variable life are all types of cash value insurance."
The 3 Types of Cash Value Life Insurance
1." Whole Life Insurance covers you for as long as you live if your premiums are paid. You generally pay the
same amount in premiums for as long as you live. When you first take out the policy, premiums can be several
times higher than you would pay initially for the same amount of term insurance. But they are smaller than the
premiums you would eventually pay if you were to keep renewing a term policy until your later years.
Some whole life policies let you pay premiums for a shorter period such as 20 years, or until age 65. Premiums
for these policies are higher since the premium payments are made during a shorter period."
2. "Universal Life Insurance is a kind of flexible policy that lets you vary your premium payments. You can
also adjust the face amount of your coverage. Increases may require proof that you qualify for the new death
benefit. The premiums you pay (less expense charges) go into a policy account that earns interest. Charges are
deducted from the account. If your yearly premium payment plus the interest your account earns is less than
the charges, your account value will become lower. If it keeps dropping, eventually your coverage will end. To
prevent that, you may need to start making premium payments, or increase your premium payments, or lower
your death benefits. Even if there is enough in your account to pay the premiums, continuing to pay premiums
yourself means that you build up more cash value."
3. "Variable Life Insurance is a kind of cash value life insurance where the death benefits and cash values depend on the
investment performance of one or more separate accounts, which may be invested in mutual funds or other
investments allowed under the policy. Be sure to get the prospectus from the company when buying this kind
of policy and STUDY IT CAREFULLY. You will have higher death benefits and cash value if the underlying
investments do well. Your benefits and cash value will be lower or may disappear if the investments you chose
didn’t do as well as you expected. You may pay an extra premium for a guaranteed death benefit."
Disclaimer Regarding Medicare Advantage Plans
We are multi-state licensed, and headquartered in Minnesota. Here, in MN, we represent 7 organizations which offer 45 Medicare Advantage products. You can always contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program for help with plan choices.
Disclaimer Regarding Medicare Supplements
We are multi-state licensed, and headquartered in Minnesota. we do not offer every Medicare supplement available in Every area. Currently we represent 10 out of 13 organizations which offer Medicare supplements in MN. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.
Related Pages
What is Term Life Insurance
What is term life insurance? It's like leasing or renting life insurance for a period of time. At the end of the term you own nothing, but enjoyed the protection while you had it.
Whole Life Insurance
Whole life insurance can vary in a couple of ways.
What's new
The Rest Of Our Retire Early More Often Story
Looking for a sabbatical lifestyle? You might consider becoming an Adamsson Associate for the support and encouragement you and yours are going to need. Why? Because living counter-culturally can be hard. and, On top of that, we don't have all the answers, even after 3 complete business cycles. Sorry.
Every sabbatical year for us has been unique. Every six-year business cycle has been imperfect. Despite that, we don't beat ourselves up when we fail. We choose to approach this all as a gift, and with a sense of humor, instead. Recreationally, really. Why? Well . . . isn't that our purpose? To re-create?
"I'm gonna figure this sabbatical-thing out, even if it kills me." If that's you, rather than dying trying, might we suggest living, instead? From our experience, we have come to realize that a formulaic approach simply won't lead to the sustainable, generational lifestyle that we were designed for, from the beginning.
sabbatical living is more like flying a kite. remain teachable--willing and able to adapt to change.
We're simply pointing out that if you start early enough, you could get seven tries to retire early more often. Maybe even eight! Seven or eight tries-- a retirement, every seventh year. But, only for a year and . . . only if you want to. One way, (if you want to,) would be to join us in delivering to business owners our
RestEquity portfolio:
Risk Management
Executive Compensation/Employee Benefits
Safe Money Places for Lifetime Income, Longterm Care, and Legacy Planning
Trust Funding for Special Needs, Charitable Giving, and Privacy from Creditors without probate
Or, perhaps you're already in another industry and simply looking to limit threats, leverage opportunities, and leave a legacy of living sabbatically for your next generation. So that they, also, can limit their threats, leverage their opportunities, and leave their legacy of living sabbatically for their next generation.
So that . . . and, so that . . . And, so on!
Whether you dream of becoming an Adamsson Associate, or simply working with one, Might we suggest that you download our Financial Picture form, as a first step. Fill it out completely, save it to your system and, if you would like our input, return it securely using our encrypted document transfer. Or, don't.
simply Use it as a benchmark from which to plan. However, Whether you submit the document, or not, please fill it out completely before our discussion of any problems, questions, roadblocks, or results that you just might want to discuss as it pertains to your very first sabbatical plan.
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