How can I protect my family with life insurance?

If you have a spouse or children, make sure you have adequate life insurance coverage.

There are two types of life insurance. You can either buy pure term insurance coverage or a plan that can last a lifetime with various investment vehicles that can gain value and enjoy tax advantages while the policy remains in force.

Lifetime plans can resolve estate-planning problems. With additional investment vehicles (some include the use of the life company’s dividends) the cost of lifetime insurance coverage is higher. Yet the tax-free death benefit can solve estate-planning problems such as paying an estate’s tax liability on capital gains.

Life insurance is generally affordable. If you can’t afford the premium for lifetime coverage, consider term insurance or a combination of both. Term plans are quite affordable. For example, at 3%, $1,000,000 will generate $30,000 annual interest as pre-tax income.

Buy enough insurance to meet your needs. Many families need $250,000 or more—even up to $1,000,000 during low-interest periods—to generate adequate investment income if the breadwinner were to die.

Ask your insurance representative to do a capital needs analysis. You will want to replace the income of the life insured—either yourself or your spouse. It is easy to calculate the capital needed over any short or long period of time in any situation if the life insured were to die.

Buy the insurance you need when you are healthy. If you get high blood pressure or diabetes or suffer from angina before you buy insurance, you may find that your premiums will be higher than for a healthy person. So buy as much as you can afford when you are younger, and healthier if you have capital needs in relation to your dependents.


Group Life Insurance Benefits

Group Life Insurance Benefits

When defining solutions that truly fit your business needs we will look at:

– Stronger service that works with you. We work with you to reach your service requirements.

– Fitting your flexible needs. Regardless of your group’s size—from five to thousands—we can design a benefits plan that fits.

The following areas are generally considered in a benefit plan relating to Group Life Insurance.

Employee Basic Life

Basic life insurance pays a contract-specified amount in the event of the death of an employee from any cause. Premiums paid by the employer on behalf of the employee are a taxable benefit; however, benefits received are non-taxable. Some of the main features of a basic group life plan are:

Benefit Schedule: The amount of coverage is generally based on either the employee’s earnings or salary (e.g. 1 x salary, 2 x salary, etc. ) or a flat amount from  $25,000 to $500,000.

Non-Evidence Maximum (NEM):  This is the minimum amount of coverage for which all employees are eligible (subject to income requirements). This is a great benefit for employees who may not qualify for an individual life insurance policy.

Waiver of Premium Continuance of Life Insurance coverage while premiums are waived is generally available to employees age 65 or younger, under the regular care of a physician, who become totally and permanently disabled for a period, typically 4 months.

Waiver of Premium Conversion Privilege If a plan is to terminate when an employed no longer qualifies for coverage as an employee, the conversion privilege allows the policy to be convertible without medical evidence to a permanent plan owned by the insured according to plan specifics.

Dependent Basic Life

Dependent Basic Life is a flat coverage offered to the spouse and dependent children of an employee; the spouse’s coverage is generally higher than that available for children for whom it becomes effective at live birth or 14 days after birth and continues until the child is 21 years of age (25 years if in full-time attendance at school or university).

Employers can share paying the premium, or have employees entirely pay; the benefit is payable to the covered plan member upon the death of the dependent.

Benefit Amount:  Generally $5,000 is the face amount of coverage for a spouse; $2,500 per a dependent child; or $10,000 for a spouse and $5,000 per dependent child; while higher amounts may be available.

Employee (and Dependent) Optional Life Benefit

This benefit allows employees and sometime the spouse and/or the children (referred to as Dependent Optional Life); to supplement and pay for more life insurance coverage over that which is provided by their benefit plan (some as high as an extra $1,000,000). Medical evidence is required and coverage usually ceases at age 65 or the employee’s retirement.

Accidental Death & Dismemberment (AD& D)

This benefit provides protection where an employed plan member incurs a loss, or loss of use of: life, limb, sight, hearing, and/or speech due to an accidental injury (usually on a flat amount of coverage e.g. $25,000, $50,000, $100,000 or as a multiple of salary, e.g. 1 x salary, 2 x salary).  This benefit may also be referred to as “double indemnity insurance” as it doubles the benefit for plan members who die as a result of an accident. 24-hour coverage is common covering accidents that occur both on and off the job; though coverage can be provided on a 24-hour non-occupational basis.
AD & D frequently covers both “loss”(meaning an actual severance) and “loss of use”(meaning total and irrecoverable loss of use).