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Why Buy Life Insurance?

Personal      Business

Personal Uses of Life Insurance:

1. CREATE AN ESTATE - (Provides a lump sum of cash) Where time or other circumstances have kept the estate owner from accumulating sufficient assets to care for his/her loved ones, life insurance can create an instant (income tax-free) estate. Most people simply do not have a large estate and if they do, it is usually not liquid. This does not mean that the beneficiary should the estate. You are creating an estate immediately in your beneficiary's assets.

2. PAY ESTATE (DEATH) TAXES - (Prevents the erosion of estate values because of settlement cost) Due to the current exemption rules, very few estates are subject to estate taxes. Those that are may see as much as 50% erosion of the total estate value because of the tax and associated settlement cost. Federal Estate Taxes are generally due nine months after death.

3. MORTGAGE PROTECTION - Many people would like to pass the family residence to their spouse or children free of any mortgage. Often a decreasing term policy is used, which decreases in face amount as the mortgage balance is paid down. We have one insurer who has a policy that the death benefit makes you mortgage payments for the remainder of the mortgage. This policy option may save you greatly over the period of the loan.

4. PROVIDE AN EDUCATION FUND - COLLEGE FUND FOR CHILDREN OR GRANDCHILDREN Cash value increases, in a policy on the parent's life (or child's life), can be used to accumulate funds for college. If the insurance is on the parent's life, the death benefit could also fund this expense should death occur prematurely. Grandparents can "gift" the premium on such policy(s). This is complicated to explain, please contact us at 607-843-8860 or insurance@drickardinsurance.com.

5. RETIREMENT FUND - We strongly encourage you to create a retirement plan that is not have life insurance as the primary component. Life insurance is a component of creating financial freedom. However, life insurance may be used as a way to create or supplement a retirement fund. Current insurance products provide competitive returns and are a prudent way of accumulating necessary funds for retirement years. As your needs change so will the use of your life insurance in your financial strategies.

6. COMPLY WITH A COURT ORDER - A divorce settlement with minor children involved may include a court ordered life insurance policy on the payer with the payee as the irrevocable beneficiary. This life insurance would continue the child support in the event of the death of payer before support order ends.

7. MAKE A GIFT - Life insurance is often used to make gifts to individuals or charities. The benefit, when structured correctly, avoids creditors and may be paid as a lump sum or over time.

8. EQUALIZE INHERITANCES - When the family business passes to children who are active in it, life insurance can give an equal amount to the other children. This can help an estate pass on without a nasty court battle.

9. EMERGENCY CASH FUND - Cash value in permanent life insurance is liquid and usually easily accessed. However doing this will likely result in penalties imposed by the insurance company and taxes and penalties imposed by government. So we suggest looking to other sources for money before you strip your life insurance policy.

10. REPLACE LOST INCOME - Have you ever considered the fortune that you will earn in your lifetime. Your family is counting on that for there futures. Don't let your death destroy their dreams. Anyone who depends on another individual for income contribution to the household such as a working spouse, partner, or parent should consider life insurance as protection from the loss of that income. For example a person earning $50,000/years will earn $1,000,000 if they work for 20 years. The average person will work for 35 years. If you do not calculate the increase in earnings the should get in their lifetime, they can expect to amass $1,750,000. Consider now the potential to double your income in your life time and the opportunity to compound interest on savings can you see how a person could easily receive earned and unearned income well over $3,000,000? Protect your family's dreams by using life insurance. Contact us to develop a plan that fits your needs at 607-843-8860 or insurance@drickardinsurance.com.

11. FINAL EXPENSES - Funeral expenses are not cheap. The pain of the loss of a loved one will be compounded by the cost of a funeral, head stone, memory notice, burial fees, transportation, and associated expenses. There are also the costs of finalizing any outstanding indebtedness that the decedent may have outstanding. Plus as misery often comes with company the question is, "What else can go wrong?"

Business Uses of Life Insurance:

1. REWARDING AND RETAINING VALUABLE EMPLOYEES - Life insurance (and its cash value) can be used for rewarding and retaining valuable employees. A 162 Bonus Plan is a simple, discriminatory and tax-advantaged way employers can accomplish this goal. Contact your tax advisor to help with the strategy that is right for you and contact us at 607-843-8860 or insurance@drickardinsurance.com to apply for a life insurance policy.

2. FUND A BUSINESS TRANSFER, BUSINESS CONTINUATION, OR BUY-SELL AGREEMENT Business owners often agree to buy a deceased owner's share from his/her estate after death. Life insurance provides ready cash to finance the transaction. Written agreements for valuations of the business and how the process is to work is must when using life insurance as this tool.

3. VALUABLE EMPLOYEE LOSS FUND - Protect your business from the loss of a key employee. Key employees are difficult to attract and retain. Their untimely death may cause a severe financial strain on the business. Are you a business owner? You are one of those key people. Give your family and your business an opportunity to continue without you at the helm.