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There are numerous companies offering Insurance Based Investments but not all providers and not all products are the same - and the difference can be substantial.
There are two types of insurance-based products on the market that offer protection against certain risks. Those are:
a) LIFE INSURANCE WITH CASH VALUE
Why should you use either of them?
First of all, you don't have to. You can buy mutual funds and have your gains taxed at your ordinary income tax rate. But as an alternative, if you are risk-aversive you can buy similar funds within an annuity and use its tax deferral feature to increase yield and its insurance feature to enhance safety.
Note:In order to comply with industry regulations and for the lack of space we can't provide you with definitions of the products listed in here. We, however, will explain all those to you and provide you with the appropriate prospectuses and disclosures to help you make informed decisions before using any of those products.
LIFE INSURANCE WITH CASH VALUE
Most of you know about Whole Life or Term Life insurances – you may even have one. But fewer of you are familiar with some of the newer products came on the market offering low-cost life insurance with flexible premiums that are using the tax benefits of the underlying cash value. In some cases they come handy as an Estate Planning tool and could be an important part of your overall financial plan. (See more under the INSURANCE tab).
VARIABLE LIFE INSURANCE (VL)
UNIVERSAL LIFE INSURANCE (UL)
VARIABLE UNIVERSAL LIFE (VUL)
As with any financial vehicle, each has its unique characteristics and specific application that we apply on a case-by-case basis.
Marika is an Independent Advisor, and as such has access to most major carriers - she understands and compares their products and recommends the ones that fit your specific needs. She is licensed to sell Life Insurance in California, Nevada, and New Mexico.
Among the tools we use to reduce investment risk and gain certain guarantees are the Annuities. The basis for the guarantees is low-cost life insurance products – an integral feature of Annuities. For example:
Guarantee that your funds will not loose more than a certain percentage of its value, thereby limiting your losses in a market downturn.
Ratchet-up feature: Your original deposit and all your prior gains are locked-in annually.
Guaranteed income for a certain period of time, or for life.
Annuity Companies are constantly coming up with new products to meet your needs. It is hard to understand all of them or choose among them. There are hundreds to pick from, and, of course, every one of them boasts to be the 'best on the market'. But are they? And which one fits your needs – if any? Part of our job is to help you with such questions. To illustrate the point:
Annuities can be classified in number of different ways, but they all fall into two basic categories. Those are:
For federal tax purposes there are:
Furthermore, annuities can be:
Other designations refer to the type of underlying investments, the payout options, type of guarantees, etc. Among these you can find:
Period Certain Annuity
(Guarantees – like all insurances - are based on the claims-paying ability and the financial strength of the issuing company. Taxable distribution /and certain deemed distributions/ are subject to ordinary income tax, and if made prior to age 59 ½ may also be subject to a 10% federal income tax penalty. Early surrender charges may also apply. Withdrawal will also reduce the death benefit and cash surrender value).