Question 1

Why is life insurance important for my family?

Accepted Answer

Life insurance can help protect your family financially if you pass away unexpectedly. The death benefit is generally received free of federal income tax and can help cover immediate costs like funeral expenses and outstanding debts. Over the longer term, it can help replace lost income, keep up with mortgage payments, or fund education, giving your family more options during a difficult time.

Question 2

Why is life insurance an important business tool?

Accepted Answer

Life insurance can play several roles in a business plan. It can help fund a buy sell agreement so surviving owners have cash to buy a deceased partner's share. It can provide key person coverage to help the company absorb the loss of someone essential to its success. And it can support succession planning by giving the business liquidity during a transition. Used this way, it is one part of a broader continuity plan.

Question 3

Why is life insurance important for legacy creation?

Accepted Answer

Life insurance can be a useful tool for passing wealth to the next generation. The death benefit can provide cash to heirs when they need it, and when the policy is owned properly, such as through an irrevocable life insurance trust, it can help heirs cover estate taxes and other costs without having to sell assets. Coordinate any legacy plan with your estate attorney and tax professional so it reflects your values and goals.

Question 4

Can I use life insurance cash value for personal financing?

Accepted Answer

Some people use the cash value of a permanent life insurance policy as a source of personal financing, a strategy sometimes called the Infinite Banking Concept. It is a planning strategy, not a bank or bank account. Policy loans accrue interest and reduce the cash value and death benefit if not repaid, and results depend on how the policy is designed and funded. We help you look at whether the strategy fits your situation and cash flow.

Question 5

Do I need key person coverage?

Accepted Answer

If your business depends on the contributions, relationships, or expertise of specific individuals, whether founders, executives, or revenue-generating team members, then key person coverage should be part of your continuity strategy. The goal is to create a financial bridge that allows your business to maintain operations and stability during a transition period.

Question 6

How is buy sell funding structured?

Accepted Answer

Buy sell funding uses life insurance to help make sure ownership transitions are funded. Whether the agreement is a cross purchase, entity purchase, or hybrid, the funding is meant to give surviving owners or the business the cash to complete the buyout with less disruption.

Question 7

How does insurance support SBA compliance?

Accepted Answer

SBA lenders often require borrowers to maintain life insurance with a collateral Assignment of Beneficial Interest, which protects the lender if the borrower dies. Structuring the coverage correctly helps meet the lender's requirements while keeping flexibility for the business owner.

Question 8

What are living benefits and how do they work?

Accepted Answer

Living benefits are accelerated benefit riders available on many life insurance policies. Subject to the rider's terms and eligibility rules, they may let you access part of your death benefit while living if you have a qualifying terminal, chronic, or critical illness. Using them reduces the death benefit paid to your beneficiaries.

Question 9

How often should policies be reviewed?

Accepted Answer

We recommend a comprehensive policy review at least annually, and whenever there's a material change in your life or business, new family members, new partners, significant income or revenue growth, new loans, or changes in ownership. Policies that aren't regularly reviewed often drift out of alignment with your needs.

Question 10

How do I know if my current policies are underperforming?

Accepted Answer

Policy underperformance can manifest as insufficient death benefit relative to current need, excessive premium costs, poor cash value accumulation, or misaligned ownership and beneficiary designations. Our review process benchmarks your existing coverage against current needs and market standards.

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