As a full-service financial advisory firm, we make sure each of our clients’ financial future is protected. We give individualized attention to our client’s financial portfolio through life insurance planning. We offer a wide range of life insurance products to meet your needs. As an independent firm, we are not bound to one insurance carrier. We have the freedom to hand select the perfect insurance carrier and policy to fit your specific needs and budget. We will guide you through the entire process from completing the application to the final approval. This will ensure that you and your family are fully prepared to build generational wealth.
What Is Life Insurance?
A life insurance policy pays your beneficiaries a lump sum, cash benefit, at the time or your death. This benefit is immediate and tax-free.
How Much Life Insurance Do I Need?
At Miller Investment, we have the tools and software to determine how much life insurance your family needs. Death, just like taxes, is inevitable, although most people may not be keen to dwell on it. Ensuring that you have the right financial resources in place, including life insurance, is important to the loved ones who depend on your income. Life insurance can help cover funeral and burial expenses, pay off lingering debts, and make managing day-to-day living expenses less burdensome for those you leave behind.
Which Policy is Best?
There are many types of life insurance policies available today.
Term insurance offers most affordable option for purchasing life insurance. You will get the most insurance coverage for your premium dollar. Policies are commonly written for 10-20-30 years to fit your need. For the term period, your premiums are guaranteed to remain level.
Permanent life insurance ensures you are protected for the rest of your life. A huge benefit is that permanent policies build cash value. The cash value can be used for loans or distributions if needed. Permanent life insurance is often seen as a forced savings account to save for unforeseen cash needs such as a down payment, college tuition, etc.
Term insurance is a great way to protect assets and liabilities that have an eventual end-date. With great accomplishments such as buying a house there comes the responsibility to ensure your family stays in that house for as long as the mortgage lasts. Term insurance can be a tool to protect your family from losing the house should catastrophic events occur.
It’s also a great way to ensure your insurability at a healthy age to be then converted to permanent insurance later in life. Let us get you setup with the best policy that makes the most sense for you and your loved ones today.
Term life insurance lasts a certain number of years, then ends. You choose the term when you take out the policy. Common terms are 10, 20, or 30 years. The best term life insurance policies balance affordability with long-term financial strength.
Decreasing Term Life Insurance—decreasing term is renewable term life insurance with coverage decreasing over the life of the policy at a predetermined rate.
Convertible Term Life Insurance—convertible term life insurance allows policyholders to convert a term policy to permanent insurance.
Renewable Term Life Insurance—is a yearly renewable term life policy that provides a quote for the year the policy is purchased. Premiums increase annually and is usually the least expensive term insurance in the beginning.
Permanent life insurance is a building block for your financial foundation that ensures you are protected for the rest of your life. In addition, you can build a cash value within your permanent policy that can be withdrew upon through direct distribution or loan. Permanent life insurance can be seen as a emergency savings account for unforeseen cash needs, down payment on a house, as well as lifelong financial protection for your current or future family. If it makes sense for you, we can tailor a policy to fit exactly to what you need. Permanent life insurance stays in force for the insured’s entire life unless the policyholder stops paying the premiums or surrenders the policy. It’s typically more expensive than term.
Whole Life—whole life insurance is a type of permanent life insurance that accumulates cash value. Cash value life insurance allows the policyholder to use the cash value for many purposes, such as a source of loans or cash or to pay policy premiums.
Universal Life—a type of permanent life insurance with a cash value component that earns interest, universal life features flexible premiums. Unlike term and whole life, the premiums can be adjusted over time and can be designed with a level death benefit or an increasing death benefit.
Indexed Universal—this is a type of universal life insurance that lets the policyholder earn a fixed or equity-indexed rate of return on the cash value component.
Variable Universal—with variable universal life insurance, the policyholder is allowed to invest the policy’s cash value in an available separate account. It also has flexible premiums and can be designed with a level death benefit or an increasing death benefit.
Burial insurance--- is a type of permanent life insurance that has a small death benefit. Despite the name, beneficiaries can use the death benefit as they wish.
How Much Coverage Do I Need?
How much coverage you need depends on your liabilities today and what your future income will be for your family. At Miller Investment, we partner with a national insurance industry leader, Ash Brokerage, who will be able to calculate and determine exactly how much coverage your specific situation requires. Based upon your need, preferences, and budget we can walk you through the process of getting the exact policy to fit in your financial portfolio.
Life insurance can be used to pay off outstanding debts, including student loans, car loans, mortgages, credit cards, and personal loans. If you have any of these debts, then your policy should include enough coverage to pay them off in full. So, if you have a $200,000 mortgage and a $4,000 car loan, for instance, you need at least $204,000 in your policy to cover your debts. But don’t forget the interest. You should take out a little more to settle any extra interest or charges as well.
One of the biggest factors for life insurance is to replace income. If you are the sole provider for your dependents and bring in $40,000 a year, for example, you will need a policy payout that is large enough to replace your income, plus a little extra to guard against inflation.
To err on the safe side, assume that the lump sum payout of your policy is invested at 8%. You will need a $500,000 policy just to replace your income. This is not a set rule, but adding your yearly income back into the policy ($500,000 + $40,000 = $540,000 in this case) is a fairly good guard against inflation. Once you determine the required face value of your insurance policy, you can start shopping around.
While there is nothing you can do about the emotional loss in the death of a loved one however you can protect against the financial burden.
Obviously, there are other people in your life who are important to you, and you may wonder if you should insure them. As a rule, you should only insure people whose death would mean a financial loss to you. The death of a child, while emotionally devastating, does not constitute a financial loss because children cost money to raise. The death of an income-earning spouse, however, does create a situation with both emotional and financial losses.
In that case, follow the income replacement calculation with his or her income. This also goes for business partners with whom you have a financial relationship. For example, consider someone with whom you have a shared responsibility for mortgage payments on a co-owned property. You may want to consider a policy for that person, as that person’s death will have a big impact on your financial situation.