Life Insurance

Life Insurance

Q: What are the different types of life insurance? (Source)

A: Whole Life, Variable Life, Universal Life, and Universal Variable Life.

  • Whole Life: Whole life insurance provides permanent protection for your dependents while building a cash value account. With this type of insurance, the insurance company manages the policies various accounts.
    • What it does
      • It pays a death benefit to the beneficiary you name and offers you a low risk cash value account and tax-deferred cash accumulation.
      • It provides a fixed premium which canít increase during your lifetime as long as you continue to pay the planned amount.
      • It allows the insurance company to exclusively manage the cash value account in your policy.
      • It provides you the option to receive dividends from your policy or apply them to reduce payments.
      • It offers you the right to withdraw from the policy during your lifetime.
    • What it doesnít do
      • It doesnít offer the account flexibility to invest in separate accounts such as money market, stock, and bond funds.
      • It doesnít allow you the account flexibility to split your money among different accounts or to move your money between accounts.
      • It doesnít offer premium flexibility.
      • It doesnít offer face amount flexibility.
  • Variable Life: Variable life insurance provides permanent protection for you and is the type of life insurance with account flexibility for the more risk-oriented policy holder.
    • What it does
      • It pays a death benefit to the beneficiary you name and offers you low-risk, tax-free cash accumulation.
      • It allows the death benefit to vary in relation to the fund returns of the cash value account.
      • It allows you to borrow from the policy during your lifetime.
    • What it doesnít do
      • It offers no guarantee to the amount of cash value during your lifetime.
      • It doesnít offer you premium flexibility.
      • It doesnít offer you face amount flexibility. 
  • Universal Life: Universal life insurance provides permanent protection for your dependents and is more flexible than whole or variable life.
    • What it does 
      • It pays a death benefit to the beneficiary you name and offers you a low risk cash value account and tax deferred accumulation.
      • It allows you to earn market rates of interest on your cash value account.
      • It offers the right to borrow or withdraw from the policy during your lifetime.
      • It allows you premium flexibility.
      • It offers face amount flexibility.
    • What it doesnít do
      • It doesnít offer you the account flexibility to invest in separate accounts such as money market, stock, and bond funds.
      • It doesnít allow you the account flexibility to split your money among different accounts or to move your money between accounts.
  • Universal Variable Life: Universal Variable life is the type of insurance which gives you more control of cash value account policy features than any other insurance type.
    • What it does
      • It pays a death benefit to the beneficiary you name and offers you low risk tax deferred cash value options.
      • It offers separate accounts for you to invest in such as money market, stock, and bond funds.
      • It offers premium flexibility.
        It allows you to make withdrawals or to borrow from the policy during your lifetime.
      • It stipulates that if you terminate the contract in early years you will receive less cash value total return than in a whole contract.
    • What it doesnít do
      • It requires you, the policyholder, to devote time to manage the accounts. The policies long term success is contingent on the investment you make.
      • It doesnít work well with small premium amounts because your premium must cover your insurance and your accounts.

Q: What is Long Term Care?

A: Long term care refers to assistance with the very basic, everyday activities that most of us can do for ourselves. We call them ADLs or Activities of Daily Living. As a result of illness, injury or advanced age, many people need assistance in order to eat or dress or bathe. The need for long term care may also result because a person has cognitive impairment. Some people need supervision or reminders to accomplish every day activities, such as using the toilet, eating, bathing, dressing, and so forth.

Q: Who should consider purchasing Long Term Care Insurance?


A: Anyone who is age 45 or older should consider long term care insurance when planning his or her insurance needs. "Consider" does not necessarily mean "purchase". Depending upon a personís particular insurance budget, there may be other insurance needs that deserve priority. Certainly, the purchase of long term care insurance should never create a financial hardship.

Q: Why should someone 45 years old worry about Long Term Care?

A: It is difficult to know in advance who among us is going to need long term care. Also, it is difficult to predict who will develop a medical condition between the ages 45 and 60 that would preclude the purchase of long term care insurance -- when the potential need for assistance with ADLs is just a few years away. Another consideration is the premium, which is generally lower at younger ages. Early purchase can make long term care coverage affordable later on, particularly after retirement.

Q: What is the New York State Partnership for Long Term Care?

A: The New York State Partnership for Long-Term Care is a unique program combining long-term care insurance and Medicaid Extended Coverage. Its purpose is to help New Yorkers financially prepare for the possibility of needing nursing home care, home care or assisted living services someday. The program allows New Yorkers to protect some or all of their assets (resources), depending on the insurance plan purchased, if their long-term care needs extend beyond the period covered by their private insurance policy. Visit http://www.nyspltc.org/ for more information.

Q: Where can I get Long Term Care Insurance?

A: Brian Venton. He will be happy to answer any questions you may have before purchasing, whether over the phone or in person.

Q: Does medical insurance cover Long Term Care?

A: Although medical insurance has some aspects of long term care, they are not the same thing. For example, some medical plans may pay for the services of a nurse while you are recovering from an illness or an injury that requires medical attention. This medical benefit is very limited. Once you are better or reach the maximum benefit for nursing services, this benefit would cease to be available. Medical insurance is not designed to cover activities of daily living. Long term care is designed to cover activities of daily living.

Q: Is there a certain amount I should buy?

A: How much to buy depends primarily on two factors. The first is the daily cost of a facility that you would consider entering, if needed, in a chosen geographic area. The second factor is affordability.

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