Freeman's Blog


April 18th, 2017 by

life insurance for a business owner

If you own your own business, I bet you think about your vulnerabilities. If something happens to you, what will happen to your business? Who will take over when you are gone? How will your family afford to live without your income?  Business continuation is difficult enough under normal circumstances. However, if there is an unexpected death of a key person or business owner, complications increase exponentially.

Company-owned life insurance is one way to help protect a business from financial problems caused by the unexpected death of a key employee, partner, or co-owner. If the covered individual dies, the proceeds from this type of insurance can help in several ways. Here are some examples.

Fund a Buy-Sell Agreement

A buy-sell agreement typically specifies in advance what will happen if an owner or a key person leaves the company, either through a personal decision or because of death or disability. The death benefit from a company-owned life insurance contract can be used to purchase the decedent’s interest in the company from his or her heirs.

Keep the Business Going

If survivors decide to continue the business, they might need a break. This period when operations cease will give them a chance to develop a future plan. The death benefit can be used to help replace lost revenue. It can also pay costs associated with keeping the doors open, including rent, utilities, lease payments, and payroll. And, it may help the surviving owners avoid borrowing money or selling assets.

Replace Lost Income for Business Owner

If a business owner has family members that depends on their business income, the proceeds from company-owned life insurance could help replace the lost income. It would also protect the family’s quality of life while they adjust and move on.

The appropriate coverage amount will depend on several factors. It could be a multiple of the business owner annual salary or the company’s operating budget. Don’t forget to include details like the cost of hiring and training a successor and any debts that the family may have to repay.

You should have a thorough examination of a business and personnel before deciding on the exact amount of coverage you need.

The cost and availability of life insurance for a business owner depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that the individual is insurable. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have contract limitations, fees, and charges, which can include mortality and expense charges. In addition, if a contract is surrendered prematurely, there may be surrender charges and income tax implications.

The loss of an owner can be devastating to a small business. A company-owned life insurance contract may help reduce the financial consequences if such a loss were to occur.

I want to give you “peace of mind”.

I can help you determine the right life insurance for your business needs.  Let’s meet for a FREE retirement strategy consultation at my office. Call 1-833-313-7233.



April 18th, 2017 by

Life Insurance

Protect yourself against the financial consequences of premature death by using life insurance. However, choosing from the many types of life insurance that are available can be a difficult process. A few main categories are here to help you search for the right type of life insurance.

The cost and availability of insurance depend on factors such as age, health, amount and type of insurance you purchase. Before implementing a strategy involving insurance, it would be prudent to make sure that you are insurable.

Term life insurance

Term life insurance is the most basic and usually the most affordable. You can purchase a contract for a specified period of time. If you die within the time period of your contract, the insurance company will pay your beneficiaries the face value of your contract. This insurance can benefit your spouse, children or business.

You can buy a contract for any period between 1 and 30 years. Annual renewable term insurance usually can renew every year without proof of insurability. However, the premium may increase with each renewal. This options is useful if you can only afford a low-cost option.

Permanent life insurance

The other major category is permanent life insurance. You pay a premium for as long as you live, and upon your death, a pay out goes to your beneficiaries. This permanent contract typically comes with a “cash value” growth element. There are three main types of permanent life insurance: whole, universal, and variable.

Whole life insurance.

This type of permanent life insurance has a premium that stays the same throughout the life of the contract. Although the premiums may seem higher than the risk of death in the early years, they can increase in cash value.  You may be able to borrow funds from the cash value or surrender your contract for its face value.

Access to cash values through borrowing or partial surrenders can:

  • reduce the contract’s cash value and death benefit
  • increase the chance that the contract will lapse
  • may result in a tax liability if the contract terminates before the death of the insured
  • require additional out-of-pocket payments

Universal life insurance.

Universal life coverage goes one step further. You have the same type of coverage and cash value as you would with whole life, but with greater flexibility. Once cash value has grown, you may be able to vary the frequency and amount of your premiums. In fact, you could structure the contract so that the cash value covers your premium costs completely. Of course, it’s important to remember that altering your premiums may decrease the value of the death benefit.

Variable life insurance.

With variable life insurance, you receive the same death protection as with other types of permanent contracts. However, you have control over decisions for your cash value. You have the option of putting your money into stocks, bonds, or money market funds. The value of your contract has the ability to grow more quickly, but there is also more risk. If your financial instrument does not perform well, your cash value and the death benefit may decrease. However, some policies provide a guarantee that your death benefit will not fall below a certain level. You cannot change the premiums for this type of insurance. Moreover, you cannot change them in relation to the size of your cash-value.

Variable universal life

Variable universal life is another type of variable life insurance. It combines the features of variable and universal life insurance, with the ability to adjust your premiums or death benefit.

As with most financial decisions, there are expenses associated with life insurance. Generally, life insurance policies have contract limitations. Moreover, there are fees, charges, extra costs for optional benefits. Most policies have surrender charges during the early years of the contract if the contract owner surrenders the contract. Any guarantees are contingent on the financial strength and claims-paying ability of the issuing company. FDIC does not guarantee life insurance nor does any other government agency. It is not guaranteed or endorsed by any bank or savings association.

You’ll have to pay tax if you have withdrawals of any increases. Also, you may be subject to surrender charges and a 10% federal income tax penalty if  you are younger than age 59½. Withdrawals reduce contract benefits and values. For variable life insurance and variable universal life, there is no guarantee on the financial instrument’s growth. Moreover, they can fluctuate with changes in index conditions. Thus, the principal may be worth more or less than the original dollar amount when the contract ends.

Variable life and variable universal life are sold by prospectus. Please consider the financial instrument’s objectives, risks, charges, and expenses before making your decisions. The prospectus, which contains information about the variable life or variable universal life insurance contract and the underlying financial instrument’s options, can be obtained from your financial professional. Be sure to read the prospectus carefully before making any final decisions.

Your retirement success is important to me.

I can help you determine the right life insurance for your needs and life situation.  Let’s meet for a FREE retirement strategy consultation at my office. Call 1-833-313-7233.



April 3rd, 2017 by

money in buckets

Saving money is difficult for everyone, especially when it is your last priority every month. However, you can achieve it with a little planning and diligence. No matter how much you are saving, celebrate it. A Federal Reserve study found that 27% of US pre-retirees age 60 and older had no retirement savings or pensions. Moreover, these statistics were common in other age groups too.

Some people find it easier to save more of their income when they create targeted accounts or “buckets” for specific goals. A bucket is simply an account for a single purpose. It is usually more efficient to have a certain amount of money diverted automatically to each bucket on a monthly basis.

Money in buckets for long term goals

It’s common for families to put money away for long-term goals such as retirement and college. However, you can also assign smaller buckets to save for shorter-term or recurring expenses such as household improvements, auto repairs, property tax bills, vacations, and holiday gifts.

Money in Buckets

Creating names for your buckets may help you create a clear visual image for each goal. Name creation tends to make it easier to track progress and makes it harder to spend the money carelessly. The concept of buckets may also inspire you to plan and save for the big-ticket items, instead of using credit and taking on massive amounts of debt.

If you’re not sure how to begin retirement planning, call me for a free consultation. I specialize in retirement strategies and making sure your nest egg is safe during your retirement years. Call 1-833-313-7233