Most Americans need life insurance.
- If you died tomorrow, how would your loved ones fare financially?
- Would they have the money to pay for your final expenses? (ex. funeral costs, medical bills, taxes, debts, lawyers’ fees, etc.)
- Would they be able to meet ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc?
- What about long-term financial goals?
- Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?
If someone will suffer financially when you die, chances are you need life insurance. Life insurance provides cash to your family after your death. This cash (known as the Death Benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding.
What's the best option for me?
- Living Benefits - Most people purchase life insurance to provide a legacy of financial security at the time of their death. But doesn’t it make sense for the benefits to extend and be available for the difficult financial times they have to face if a chronic, critical or terminal illness precedes death? The industry calls the benefit an “Accelerated Death Benefit Rider.” We refer to it as Living Benefits. On most of our policies, Living Benefits are provided to you at NO additional cost.
- Term Life - The low initial premiums make term insurance a practical alternative to permanent coverage. However, term premiums will eventually increase. At some point, if you continue to carry your term coverage, the annual premiums will likely exceed the level premiums that could have been had with a permanent policy and you will not have had the benefit of building any cash values. Term insurance often offers the opportunity to convert to permanent life insurance policy prior to the end of the term without having to provide evidence of insurability. Term insurance may be appropriate for young families with low cash flow and high protection needs, for consumers whose protection needs are temporary, or to supplement permanent life insurance.
- Whole Life - Individual whole life insurance, often called permanent or traditional insurance, is precisely what the name implies: Life insurance that’s designed to protect you and your loved ones throughout your entire life. As long as the policy owner continues to pay the premiums, the insuring company will guarantee the death benefit. These policies are designed and priced for an individual to keep over a long period of time. These types of policies are another great option while planning final expenses.
- Universal Life - Universal life insurance is considered to be the most flexible type of life insurance. Universal life insurance provides both premium flexibility and death benefit flexibility, allowing to you adjust your policy according to your life insurance needs. Universal life insurance also offers the ability to accumulate cash value under the policy on a tax-deferred basis.
- Indexed Universal Life - Indexed Universal Life (IUL) provides both premium flexibility and death benefit flexibility of a universal life policy, allowing to you adjust your policy according to your life insurance needs. Indexed universal life also offer the option of having your cash value accumulate at interest based on the changes of a major market index.
DO I REALLY NEED IT?
Living Benefits Life Insurance
Living Benefits are kind of our thing...
Most people purchase life insurance to provide a legacy of financial security to their loved ones at the time of their death. Doesn’t it make sense for the benefits to extend and be available for you if you need them while you’re still living? Living Benefits – life insurance you don’t have to DIE to USE. At AF Financial, our policies come infused with enhancements that allow you to accelerate your policy’s benefits to get much-needed money in your hands if you are to suffer a terminal, chronic, or critical illness – such as heart attack, stroke, or cancer diagnosis – or in case of a critical injury. It’s a game-changing feature that is revolutionizing the face of the life insurance industry, and we, along with our partners, have been leading the charge since 1998.
Life Insurance with living benefits provides benefits when they are need the most-- helping to fill the gaps a health insurance policy doesn't cover, especially non-medical expenses, such as mortgage, car, food, etc.
Experiencing a terminal, critical, or chronic illness leads to increased expenses and decreased income. Once your expenses reach a number higher than your income, you begin creating debt. Living Benefits are the safety net that AF Financial provides for its clients.Most folks purchase life insurance to provide financial security, through the death benefit paid at the time of their passing. We believes that it makes sense for the benefits to extend and be available for the difficult financial times they have to face if a chronic, critical or terminal illness precedes death.
Experiencing a terminal, critical, or chronic illness leads to increased expenses and decreased income. Once your expenses reach a number higher than your income, you begin creating debt. Living Benefits are the safety net that we provide for our clients. Most folks purchase life insurance to provide financial security, through the death benefit paid at the time of their passing. AF Financial believes that it makes sense for the benefits to extend and be available for the difficult financial times they have to face if a chronic, critical or terminal illness precedes death.
The Industry calls it an "Accelerated Death Benefit Rider". We simply call them Living Benefits.
Do you have the OLD kind, or the NEW kind of life insurance?
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Have the old kind? We can fix that...
An annuity allows a customer to deposit money (premiums) with an insurance company that can earn interest and grow on a tax-deferred basis with the agreement that the insurance company will then provide a series of payments back to the customer at regular intervals.
- People typically purchase annuities to provide or supplement retirement income they will receive from Social Security, pension benefits, investments and other sources.
- You can convert your annuity into a stream of income that can then be paid over a fixed period or for your lifetime.
- You can take withdrawals of varying amounts when you need the income.
There are generally two different types of annuities:
- vailable to purchase using a single lump sum, or with flexible premiums over time.
- When it comes time to take income from your deferred annuity, you will have many options available to meet your needs.
- Immediate - Provides income payments that normally begin within a year after the premium is paid.
- Deferred - Provide income payments that begin later, often after many years. Deferred annuities are designed for long-term savings purposes.
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Instead of trying to predict the future, why not offset risk with a diverse retirement plan?
Fixed Indexed Annuities are EXTREMELY reliable products that can provide peace of mind and balance to anyone’s portfolio. Here are some reasons why you might include FIAs as part of your retirement plan:
- Accumulation Without Risk – Peace of mind that their principal won’t go down! FIAs can offer a balance + security against the VERY turbulent markets. When the index is performing well, you are able to capture the upside and will see interest earnings somewhere close to the cap. Should the index perform poorly, the downside is hedged with the guarantees built in. If retirement is about limiting risk, one of the BEST ways to alleviate the market risk is with an FIA.
- Tax Deferral – Spring is a good time of year to think about your taxes. Do you have a plan for taxes in retirement? You'd be surprised how many people don’t take taxes into account. With an FIA, while there usually is income tax paid when withdrawals are made, you can have the benefit of tax-deferred earnings, which will allow you to earn interest on the principal, interest on the interest, and interest on the tax savings!
- Peace of Mind – Having a secure source of income will add peace of mind. The GUARANTEED stream of income offered by Fixed Indexed Annuities acts as a steady paycheck, though there can be early withdrawal charges for certain withdrawals before the end of the surrender charge period, so that it’s easier to plan for purchases and costs in retirement, which will help you sleep comfortably at night.
In addition to these points, there are several additional advantages - including avoiding probate and protecting a spouse. Within the past few years, we've seen serious increases in FIA sales across the United States. As life expectancy increases, these very well may be the highest payout rates you will see...
It is for this reason that you may want to consider a guaranteed* fixed income component to your retirement strategy.
In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed.* An annuity is a contract you purchase from an insurance company. For the premium paid, you receive certain fixed and/or variable interest crediting options able to compound tax deferred - until withdrawn. Ultimately, when you're ready to receive income distributions, this vehicle offers a variety of guaranteed* payout options. Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit. However, withdrawals will reduce the contract value and the value of any protected benefits. Because they are designed as a long-term retirement income vehicle, annuity withdrawals made before age 59½ are subject to a 10 percent penalty fee, and all withdrawals may be subject to income taxes. There are a ton of options - and depending on your own customized plan, we can work together to figure out what products work best for YOU.
*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Annuities are not FDIC insured.
What if you could:
- Provide an income tax-free death benefit for the people who depend on you,
- Defer taxes as your accumulated cash value grows, and
- Potentially access that cash value using income tax-free policy loans and withdrawals, to use for retirement income or other needs.
Strategies to Save For Retirement
- After Tax Strategy – when you set aside a portion of your after tax income into an account earmarked for retirement. Taxes are paid annually on any earnings. An example of this type of savings is a Certificate of Deposit.
- Tax-Deferred Strategy – when you set aside a portion of your after tax income for retirement, earnings on the account grow tax-deferred. When retirement income is taken, taxes are due on the tax-deferred gain. A Non-Deductible IRA or an annuity is an example of this type of savings.
- Pre-Tax Strategy – might include an Employer sponsored qualified plan, like a 401(k) plan. You don’t pay current taxes on contributions made to the plan and earnings grow tax-deferred. Later when you take retirement income the benefits are income taxable.
- Tax-Free Strategy – is similar to the Tax-Deferred Strategy: you set aside a portion of your after tax income, and earnings grow tax-deferred. Retirement income is received income tax-free. A Roth IRA is an example of this type of savings. Another type of financial vehicle is permanent life insurance.
If you were a farmer, would you rather be taxed on the seed or the harvest?
When you save on a before tax basis, such as a Traditional IRA, your contributions are tax deductible. The trade off is all income received is taxed as ordinary income. If you make a withdrawal prior to age 59½ you may incur an additional 10% penalty. This leaves you exposed to potentially higher future tax rates.If you believe taxes are going up this could be devastating to your retirement income. In this example, you are taxed on the harvest. On the tax-free side, in our example of a Roth IRA, the contributions, i.e., (the seeds), are taxed before they are deposited and both the contributions and earnings may be tax-exempt, thereby insulating you from possible future tax rate increases.
What direction do think future tax rates are going to go?
Your outlook on future tax rates may drive some of your retirement strategy.
- If you think future tax rates will be lower, then saving today on a pre-tax basis, such as a qualified plan or Traditional IRA, makes a lot of sense.
- If you think future tax rates will be higher, then you may want to consider a tax-free retirement strategy such as a Roth IRA or permanent life insurance.
Only 14% of Americans are confident that they will be able to retire.
Where do you stand?
Let’s take a closer look at tax-free retirement strategies.
Roth IRAs: Good choice……if you qualify. In order to contribute to a Roth IRA your adjusted gross income must be below a certain threshold. In 2011, contributions are limited to $5,000 per person unless you’re 50 or older and then you can contribute an extra $1,000 as a catch up provision.
What are your options if you don’t qualify for a Roth IRA, or if you want to contribute more?
Permanent Life Insurance: The primary purposes for purchasing permanent life insurance is for the death benefit protection that it provides. However, permanent life insurance offers the ability to build up tax-deferred cash value that can be accessed during your lifetime to generate a stream of retirement income – potentially income tax-free.
Additional Benefits of Permanent Life Insurance
In the event of a premature death, the income tax-free death benefit would help fund your spouses retirement goals.
Access to funds in the event of Illness
Accelerated Benefit Riders are available at no additional cost and may allow you to access all or a part of your death benefit to help pay for costs associated with a terminal, chronic or critical illness.
Protection in the event of disability
For an additional fee, many policies offer an optional Waiver of Premium Rider that continues to pay your planned premiums if you became permanently disabled, keeping your policy on track with your original accumulation goals.
Permanent Life Insurance Provides:
- Income Tax-Free Death Benefit
- Tax-deferred build-up of cash value
- Potential for Tax-free retirement income
So what is best for you?
For many people, a Roth IRA is a great tool. However, as mentioned earlier, there are some restrictions as to how much you can contribute and how much income you are allowed to have in order to qualify for a Roth IRA.
Permanent life insurance may be the solution.
If you have someone who depends on you financially, then you may need life insurance. In addition to the death benefit protection, permanent insurance cash value can also serve as an accumulation vehicle, with some great tax advantages. Premiums are determined based on the amount of coverage you need and distributions, through tax-free w withdrawals and loans, can generally be taken after your first policy anniversary. Your insurance agent can help you determine the best coverage to meet your goals.
It may be that a combination of the two works best for you.
If you meet the income eligibility requirements for a Roth IRA, but want to set aside more than the contribution limits allow and you have a need for protection, you may want to do both a Roth IRA and Permanent Insurance. Contribute the maximum you can under the Roth and then apply the excess amount to your life insurance coverage.
Automotive Coverage Options...Explained:
LIABILITY For: At-fault repairs & medical care
Bodily Injury and Property Damage Liability coverage protects you if you cause an accident; we pay for the other driver’s medical bills (passengers’ bills, too) and any damage. We even cover legal fees if you’re sued (rare, but it happens).
UNINSURED/UNDER-INSURED BODILY INJURY For: Not-at-fault medical care
Uninsured/Under-insured Motorist Bodily Injury coverage protects you if you're in an accident caused by a driver who either has no insurance or just not enough insurance. We pay for damages you incur, including medical expenses and lost wages.
PERSONAL INJURY PROTECTION For: Any post-accident medical care
This protects you if you’re in an accident; we pay for $10k less your chosen deductible of medical care you and your passengers receive when first treated within 14 days of the accident. We also cover medical care if you get hit by a car while you’re walking or riding a bicycle. You may wish to add MEDICAL PAYMENTS for an additional coverage amount and/or work-loss coverage for lost wages.
COLLISION For: Any post-accident repairs
Collision coverage protects you if you get hit by, or hit, another vehicle; we pay for your car repairs. You choose a deductible and pay this portion to the repair shop after an accident, and we pay the rest of the bill.
COMPREHENSIVE For: Any other repairs
Comprehensive coverage protects you if your car is damaged by something other than a collision, such as fire, vandalism, hail or flood; we pay for repairs (after you pay the deductible). We also cover damage caused by hitting an animal and theft (if your car gets stolen).
ROADSIDE ASSISTANCE For: Breakdowns/Lockouts
Roadside Assistance coverage protects you if your car breaks down due to mechanical or electrical issues like a dead battery, a flat tire, or a lock-out, or if you run out of gas. We pay for towing services or roadside help.
LOAN/LEASE PAYOFF For: Your car loan
Loan/Lease Payoff coverage, or gap insurance, protects you if your car is ever declared a total loss; we pay up to 25 percent over the actual cash value towards the amount you owe the lender.
PET INJURY For: Vet bills
This helps you get care for your dog or cat if it's hurt in an accident; we pay for vet bills. It's included with your Collision coverage.
RENTAL REIMBURSEMENT For: A car rental
This protects you if your car is being repaired as part of a Comprehensive or Collision claim; we pay for up to 30 days of a rental.
CUSTOM PARTS & EQUIPMENT VALUE For: Accessories
This protects you if items you add to your car get damaged; we pay to repair or replace them. We protect accessories like stereos and TV equipment, navigation systems, phones, custom grilles and spoilers, and custom paint.
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Protect your biggest investment!
Dwelling — Pays for damage or destruction to your house and any unattached structures and buildings, such as fences, detached garages, and storage sheds.
Personal Property — Covers the contents of your house, including furniture, clothing and appliances, if they are stolen, damaged, or destroyed.
Liability — Protects you against financial loss if you are sued and found legally responsible for someone else's injury or property damage.
Medical Payments — Covers medical bills for people hurt on your property. Medical Payments coverage also pays for some injuries that may happen away from your home, such as if your dog bites someone.
Loss of Use — Pays for additional living expenses if your home is too damaged to live in during repairs. Most standard home insurance coverage pays 10 to 20 percent of the amount of your dwelling coverage.
What is not covered by home insurance?
A standard homeowners policy may not protect you from: Flood, Earthquake, Nuclear Accident and War, Sinkhole + MORE — To protect against unforeseen and uncontrollable events like these, you can purchase hazard insurance through your home insurance policy.
What does Renters Insurance Cover?
Renters insurance covers your belongings (furniture, clothes, appliances, electronics, etc.) if they're damaged or stolen. Plus we'll cover injuries that happen at your place, lawsuits/legal fees if someone sues you and even hotel expenses if you need a place to stay.
Guaranteed Replacement Cost — Provides the most complete coverage for your home. Your home insurance company requires you to meet specific underwriting rules and conditions to qualify for this coverage. For instance, you may need to increase your home insurance amount on a monthly, quarterly or yearly basis to keep up with the inflation rate.
Inflation Guard Endorsement — Automatically adjusts your home insurance limits during your policy period so they are at 80 percent or more of your home's replacement cost, which is the amount most home insurance companies require you to have. This coverage is beneficial if your home's replacement cost is increasing with inflation.
Scheduled Personal Property Endorsement — Also called a personal article floater. With this coverage, possessions, including jewelry, furs, stamps, coins, guns, computers, antiques, etc., are covered. Each article is itemized and detailed in the floater, and excluded perils also are outlined. Personal article floaters often do not have deductibles.
Increased Limits on Money and Securities — Increases coverage amounts for money, bank notes, securities, deeds and more.
Secondary Residence Premises Endorsement — Covers a secondary residence, such as a summer home. Insurance for secondary homes is not automatically provided by the home insurance policy you have for your primary or principal residence, so it's important to consider this endorsement if you own more than one home.
Watercraft Endorsement — Expands personal liability and medical payments coverage for small sailboats and outboard motor boats only.
Credit Card Forgery and Depositors Forgery Coverage Endorsement — Coverage applies if your credit cards are lost, stolen or used without permission, or if someone forges a check, draft, promissory note, etc. Certain restrictions apply and are noted in your home insurance policy.
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It Only Takes One Unforeseen Event...
The success of a business - small or large - is mainly reliant on hard work, sweat and ingenuity. However, regardless how ingenious you are or how hard you work, one disastrous event can erase your progress, your profits, or worse - put you out of business for good. The best offense is a good defense. At AFF, our strategy is to make sure that all of the resources you've invested in your business don't vanish if & when disaster strikes.
Commercial Auto Insurance
Tow truck insurance
Box truck insurance
Dump truck insurance
General liability insurance
Business owners policy
Professional liability insurance
We have options that satisfy the ACA law with the 10 essential benefits required to avoid the tax penalty for not having coverage. Depending on family size and income you may also qualify for a tax subsidy that can be used to reduce your monthly premium. Your income level will also determine your cost sharing and could result in a reduction of copays and deductibles.
For those under 65 who do not qualify or cannot afford an ACA qualified plan, we offer a fixed benefit plan or a short term (90 day) medical plan. Call us to discuss if either of these options are right for your family situation.
Our over 65 clients will enjoy an open discussion on all available options for Medicare coverage. From Medicare supplements to Medicare Advantage plans, we are contracted with many carriers to get you in the best possible plan for your individual needs and concerns.