Life, Disability, Health, Medicare and Long-Term Care Insurance

Our independence as a registered investment adviser carries over into risk management. We broker out all of our insurance products, so we can shop the market instead of selling one company’s policies.

Whether you need a specialized insurance-based planning technique or simply want to make sure your Medicare Advantage plan makes the most sense for you, we have you covered. Our advisors hold advanced credentials in this area, are licensed in multiple states and provide every service our process requires under one roof.

Discussing Long Term Care Risk Management

Protecting What You Have Built

Risk management protects the plan you are working toward. As you accumulate more during your earning years, you have more to lose, and one uninsured event can undo years of saving. We look at three kinds of protection: legal structures that shield assets, insurance that replaces income or pays a benefit, and decisions about how assets are owned. Below is how we think about each one and the main types of coverage we review with clients.

Basic Forms of Asset Protection

  • Insurance Policies & Annuities
  • Home Equity
  • Retirement Accounts

Intermediate Complexity Level of Asset Protection

  • Lifetime and Post-Death Gifts
  • Education gifts (e.g., Section 529 plans)
  • Spendthrift Trusts

Complex Forms of Asset Protection

  • Business Structures
  • Pass-through entities (e.g., limited partnerships & Family Limited Partnerships)
  • Protective trusts including domestic asset protection trusts and off-shore trusts

Life Based Risk Analysis

Pricing

Our business model relies on maintaining the value and success of our client’s financial plan. This is why risk assessment is part of almost every conversation we have with individuals and families we’ve partnered with. As you accumulate more throughout your earning phases of life, you have more to lose – a fairly simple concept. However, as more time elapses, it is actuarially more expensive to manage risk. That obvious fact is why it is very important we take an independent approach in seeking out the best policy, or contract that best suits the individualized goals and plan at hand.

Contract Structures

There are multiple types of common life insurance policies and hundreds of different versions of riders that carriers use to differentiate their products. This is why it is not only important to shop the market, but that the advisor understands the application of different policy types to educate clients on what may be appropriate for your family, retirement or/and estate plan.

Self-Insurance Analysis

The self-insurance conversation starts with identifying what assets are protected and what assets are at risk. These are particular to the type of asset and may be dependent on the state provisions in which you domicile. The next step is to perform a cost-benefit analysis and assign probabilities to potential outcomes; an often imperfect trial and error process but is the framework necessary in coming to a prudent and informed decision. Finally, and often the deciding factors, are the non-financial concerns such as client emotions, timing, stress triggers, peace of mind and realms of uncertainty.

Life & Disability Insurance Policies

Term Life Insurance

Offered in durations of 10 – 30 years, these policies are extremely effective ways of insuring your family while in the accumulation stages of life. Because most term policies end without paying a claim, they are often very affordable.

  • Pros: Usually the cheapest way of insuring your loved ones. Sometimes convertible when term comes to an end.
  • Cons: Not permanent. Outliving your policy often means no insurance benefit received.

Whole Life Insurance

A permanent life insurance policy that will last the full length of your life as long as you fulfill your level annual premium obligation. This policy has a cash value with a guaranteed rate of return and the death benefit will never change.

  • Pros: Permanent life insurance vehicle that has an investment element. Cash values are accessible in the case of an unforeseeable event.
  • Cons: Typically more expensive than many alternatives. Can also have significant opportunity cost over long periods of time with lower rates of return.

Universal Life Insurance

Guaranteed Universal

A type of permanent insurance with little or no cash value and a level premium. These policies are often “paid-up” in lump sums, or paid for over a shorter period of time.

ProsOften cheaper to purchase than other forms of permanent life insurance.
ConsNo accessible cash value, and missed premiums can result in policy forfeiture.

Indexed Universal Life

Permanent insurance with an investment portion that tracks an underlying market index. Your cash value can have significant appreciation potential depending on the chosen asset mix, and premiums are flexible to an extent without risking contract collapse.

ProsPermanent product with access to cash value, flexible premiums and market appreciation.
ConsIndexed products contain caps on earnings. These caps can be monthly, quarterly or annual and can translate into significant opportunity cost over time.

Variable and Variable Universal Life

Permanent products with a similar structure to indexed universal life, except the cash value is invested in mutual funds and bond funds. Variable Universal has flexible premiums, while Variable Life does not.

ProsPermanent product with accessible cash value and significant potential for appreciation.
ConsNo caps on earnings, but potentially higher fees and investment expenses are taken out of the cash value. Investment options are limited and often require a hands-on management approach.

Simplified Issue Life Insurance

Simplified issue life insurance is typically term and will allow underwriting without any paramedical exam. There is usually a questionnaire that helps the insurance company decide whether to make an offer. These insurance policies are usually only available with death benefits fewer than one million dollars and have the same pros and cons as traditional term insurance.

Group Life Insurance

A type of policy that is offered by employers as an employee benefit. These policies range in structure and coverage levels, and employer-paid coverage above $50,000 is taxable income to the employee, so many group policies stop at that amount. For an additional charge, employees often have the option to purchase more supplemental coverage if desired. Because of the additional out of pocket expense, these should often be compared to third party options.

Short Term Disability

Depending on the policy, short term disability is typically for benefit periods of 3-6 months. Common claims for disability are things like injury, pregnancy, mental health and cancer. You often can have the majority of your earned income paid directly to you with no restriction on expenses.

Long Term Disability

Long term disability can provide a vital benefit for those who may be at risk of losing an income they need to survive financially. These benefits are typically 40-70% of your income, can be purchased with different elimination periods, and for durations usually stated in years – some will pay until retirement. Medical professionals with hundreds of thousands of dollars in student loan debt or people in high risk industries should all have a cost-to-benefit analysis done on purchasing one of these policies.

Asset Based Risk Analysis

Protected Assets

  • Real Estate
  • Insurance
  • Qualified Retirement Accounts
  • College Savings Accounts
  • Trust assets, Corporate Assets and Partnership Assets

Vulnerable Assets

  • Any assets transferred to protected structures/entities within certain look back periods or statute of limitations. (lookbacks and rules applicable on a state by state basis)
  • Contributory IRA and Roth IRA assets above the federal bankruptcy exemption limit, which is adjusted every three years
  • Real estate and other large assets (aircraft, autos, etc.) not owned by entities
  • JTWROS & TIC account assets
  • Second Homes and Vacation Homes
  • Individually owned assets

The list of vulnerable assets is usually larger than the list of protected assets. Even with the assets that are protected, there can be limitations and variations that may or may not be applicable based on a number of factors. It is important that every situation be analyzed on a case by case basis. If you have any of these assets listed above, there could be vulnerabilities you could be assessing, mitigating, or eliminating all together.

Frequently Asked Questions

Do you sell insurance from just one company?

No. As an independent firm we broker out our insurance products, which lets us compare carriers and contract types to find the policy that fits your plan.

Should I buy term or permanent life insurance?

Term insurance is usually the least expensive way to protect a family during the years you are building wealth, but it ends after a set period. Permanent policies such as whole and universal life last for life and can build cash value, but cost more. The right choice depends on how long the need lasts and how the policy fits the rest of your plan.

Is the life insurance from my employer enough?

Often it is not. Group coverage is usually limited, it may end if you leave the job, and employer-paid coverage above $50,000 is taxable to you. It is worth comparing supplemental group coverage with an individual policy.

Can you review my Medicare or long-term care coverage?

Yes. We review health, Medicare and long-term care coverage alongside life and disability insurance so that each policy supports the same plan. See our page on long-term care events.

Which of my assets are protected from creditors?

It depends on the type of asset and the state you live in. Qualified retirement accounts and some insurance products have strong protections, while individually owned assets, second homes and jointly titled accounts are often more exposed. We review each situation case by case, and any legal structures are set up with your attorney.

For a plain-language introduction, read Why You Need Risk Management and What Is Life Insurance?

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