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Cover Advisors

Insurance Types

LIFE INSURANCE

It’s a fact that if you insure yourself using life insurance, you will never benefit from the insurance provided by your policy. Buying insurance is motivated by your caring for others. The act of buying a life insurance policy is unto itself an unselfish, generous act. ~ Bernie Geiss

Tax-Free Death Benefit

Life insurance is a unique financial instrument unlike any other. Your estate will get tax-free dollars that are guaranteed and not related to the performance of any investment. The only variation in the return is based on how long you live. Returns realized—on the premiums paid into the policy—are contingent only on life expectancy and can be guaranteed. As long as the policy is held until death, the premiums will not be lost and they will earn a positive return.

Tax-Free Accumulation

The tax sheltered accumulation of your cash within an insurance policy is another unique feature of life insurance. You will earn investment income that is not subject to annual taxation, and the cash will accumulate in your policy until it is paid out as a death benefit, capital benefit, or a taxable withdrawal. In the event of your death, the tax deferral becomes an outright tax savings when the proceeds are paid out to the estate as a death benefit.

Tax-Free Capital Dividends

Your life insurance returns can be enhanced when the policy is corporately owned. When a corporation receives insurance proceeds, a unique tax benefit is created that allows the cash to be paid out of a company on a tax-free basis. This tax benefit bonus makes life insurance an unmatched, multi-use financial asset.

Insurance Leverage

If you leverage your insurance policy, you harness the benefits of preferred tax treatment of life insurance policies to enhance death benefits plus you reduce the cost of purchasing the insurance. There are a number of options available for this strategy, and it’s important you understand the pros and cons of each before making a decision to leverage. We can help you understand what is right for you.

DISABILITY INSURANCE

Disability Income Insurance

Replacing your lost income during a disability can mean the difference between success and failure in reaching your goals. An individual disability insurance plan can help you meet your income requirements during a disability, so you can concentrate on recovering and returning to an active life. Our experience in this area of financial planning for high-income professionals and business owners sets us apart from others. The maximum benefit for this type of coverage is $30,000 per month with a usual start term of 90 days from the onset of disability and is calculated based on currently income. We can help you determine the amount of coverage you qualify for and the type of coverage that is right for you.

Business Overhead Expense Insurance

This insurance pays you monthly benefit in the event of a disability to cover professional or business overhead expenses. The premium is tax deductible and is therefore very cost effective. You are still on the hook to meet your financial obligations such as rent, leases, and staffing if you become disabled. Don’t get caught having to spend your personal saving to cover these business expenses. You can get up to $40,000 per month of benefits for a period of up to 24 months. Don’t wait to contact us to make sure you are not exposed to an uninsured risk such as this.

Tax-free Benefit

Most disability insurance plans are structured to provide tax-free monthly benefits in the event that you become disabled that continues beyond a basic waiting period. We can set up a Salary Continuation Plan to allow for the deduction of the premiums, which can often provide a lower after-tax cost (e.g., if your tax rate at the time of deducting the premium is higher than your average tax rate at the time of receiving your benefit—insurers allow you to buy more coverage to top up the benefit in case of a claim). Our Right Path Plan explores these options in detail to determine if this approach is suitable for you.

Return of Premium

We are big fans of this rider. Planning for the worst and hoping for the best is a hallmark of good insurance planning. Having a return of premium benefit provides you with a partial return of premiums at regular intervals in the event you don’t have a claim. This feature is popular among all our clients and has provided many refunds over the years. Additional Benefits Depending on your situation, additional benefits can be added to your policy. These benefits include:

  • Cost Of Living Adjustments (COLA) on benefits when paid
  • Additional Insurance Options can be purchased without medical evidence when income increases Additional benefits paid upon disability that accrue for future retirement needs
  • Continuity of policies past age 65

Integrating with Critical Illness

Disability insurance policies insure only a portion of your income with the percentage reducing as you income goes up. Disability insurance covers all causes of a disability and not just a disability resulting from critical illness. Critical Illness insurance, on the other hand, will pay upon the diagnosis of a covered critical illness, even if the critical illness does not disable you for a long time. A combination of coverages is the ideal solution.

CRITICAL ILLNESS INSURANCE

Critical illness insurance can help you cover the unexpected costs and potential loss of your income associated with a serious illness. From the costs of medicine and treatment to travel, recovering from an illness can have a devastating financial impact.

Tax-free Benefit

Critical illness insurance provides a tax-free lump sum of cash, to spend as you like, upon the diagnosis of one of the covered critical conditions.

Illnesses Covered

Depending on the plan you choose, the policy may cover 25 serious illnesses including cancer, heart attack, and stroke.

Early Intervention

Thanks to advancements in medical science, many illnesses that were once critical can now be treated with great success, especially with early intervention. Many insurance companies offer early intervention benefits, paying a percentage of the insured amount and retaining the policy for future benefits.

Return of Premium

A creative strategy that optimizes value and mitigates tax is the return of premium option, providing up to 100% of premiums paid upon surrender.

Additional Health Services

Most critical illness insurance policies provide for additional health services for the insured and their family members. These insurance services can provide access to world-class doctors for second opinions, finding a healthcare provider, and arranging appointments. It can also help you coordinate support for specialized transportation needs including coordinating hospital discharge and return home if you decide to travel to the United States for treatment.

Shared Ownership

This strategy is popular among our professional clients. It provides for benefits to be shared between a corporation and the employee/shareholder in a tax effective manner. Give us a call for more information.

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