Annuities And Your Family’s Long Range Financial Security

US Business Finance Corp’s annuity life insurance helps entrepreneurs provide for their families if their family’s main income producer is suddenly employed in other realms. The adage “Life insurance is sold, not bought” probably derives its reality from the idea that, “Everybody wants to go to heaven, but nobody wants to die” – or even think of dying. Life insurance is a coverage that causes customers to ponder their inevitable fate while the sun is still shining. With annuity life insurance, business owners can cover both the financial needs of their dependents’ all as well as preserve the wealth and equity they have in their company.

The following are points to keep in mind when reviewing annuity life insurance possibilities.

1. How much life insurance to purchase?
To determine the top amount, consider the liabilities that your heirs will be faced with, such as:

• Outstanding balance on home mortgage;
• Estate taxes and any uninsured medical expenses;
• Children’s education expenses;
• Any amount you wish to invest in an income fund for your family; or
• Balances on credit cards or installment loans.

One rule of thumb is 5 to 10 times your current annual income. Then measure the packages against your monthly budget, which may dictate an initial policy that is less than optimum, but will be a good safety valve.

2. What life insurance programs are available?

Whole Life is a policy that is an insurance policy with a savings aspect. As you pay insurance premiums, you not only maintain your coverage, but the premium gains cash value. As your policy gains value, you can borrow on that amount – possibly as much as 90%. The interest rate on these loans is usually very low.

Universal Life is like a whole life policy with an potential added benefit of higher earnings on the savings component. Universal life policies are also flexible in their face value depending on if their premiums are increased, decreased or deferred. The downside to this policy is that it includes higher fees (normally 5 to 7%) and they are tied to interest rates. In certain markets your fees could go up while your interest declines.

Variable Life usually has a fixed premium and the cash value of the policy is invested under the policyholder’s direction into bonds, stocks or money market funds. The cash value and death benefits of the policy fluctuates with the value of the underlying investments. Fees on these policies are higher than Universal Life, but the taxes on all the accrued capital gains or interest earnings are deferred.

Term Insurance is the least expensive insurance for individuals less than 50 years old. The policy is written for a specific term, normally between 1 to 10 years, with the ability to renew at the end of the term. A level term insurance policy secures the premium amount for up to 30 years. At each renewal the premiums will get more expensive. A variation of the Term Insurance is a Declining Balance Term that keeps the premium the same, but the face value of the policy declines. These are used sometimes as a mortgage insurance policy. Some term insurance policies can be converted to whole life later on.

3. Where should you get your annuity insurance?

Consult with US Business Finance Corp’s experts for an objective view of various plans (and comparing insurance versus other financial investment instruments) and your particular life insurance and retirement situation.

4. Make sure your heirs, or a trusted advisor, are aware of your financial plans, so when they need the information, they know where to find it and your well laid plans can be carried out.

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