Even though we are Investment Advisors, we feel that it is imperative to discuss Life Insurance as Financial Planners.
EVERYONE could use Life Insurance at some point during his or her lifetime; often, it is about financial security for someone we care about, protecting one’s income, or even assisting in the cost of final expenses.
Life Insurance protects your investment portfolio and provides your loved ones from potentially devastating financial losses if something were to happen to you. Financial security could mean that the policy helps to pay off debt; or helps pay living expenses, medical expenses, final expenses, college tuition, or other financial requirements you, or your loved ones, might have in the future.
Life Insurance can provide cash when you need it most. It can give peace of mind to have that security in your financial portfolio as a defensive strategy. If you select the right type of insurance for your needs, combined with a strong investment portfolio (offensive strategy), you could leave a legacy behind. We call this Portfolio Protection. Therefore, you do not have to invade your investment portfolio if something happens to you. Managing this risk is only part of the puzzle that we assist with when we create financial plans. Imagine building a house; you must start with the foundation first, and then build from the ground up. We take a holistic approach to financial planning by protecting and growing our clients’ estate through supplementing the right type of life insurance for the investment strategy.
Many questions arise as to what type of insurance is right for you? There are two major types of Life Insurance. Think of Term Insurance as renting a house, and Whole Life Insurance as owning your own home.
Term Insurance typically starts off very in expensive and increases in cost as you age. Like renting a house, the landlord raises rent as time goes by. If you do not pass away during the time that you are paying for the Term, then you will NOT receive any cash.
Whole Life differs because you DO get your money back. It is more like owning a house; coverage is in force permanently. You pay a level premium based on your age and health when you purchase the policy. You still get the death benefit; although, unlike the Term policy, Whole Life builds cash value that is available while you are living. This is wonderful because you may withdraw cash, tax-free, for ANY reason before the death occurs. As financial planners, we love that a policy can assist with retirement, home improvements or education.
At Schenley, we typically like to recommend a blend of two types of insurance: Term Life Insurance and Whole Life Insurance. We suggest a larger amount of 20–30-year term, and a smaller portion of Whole Life. The Term will provide enough insurance required in the short term at an affordable rate, and the Whole Life policy will continue to grow overtime, building cash value along the way and leaving behind a lifetime legacy. Depending on the individual’s situation, we could also add Disability and Long-Term Care Insurance into your Life Insurance policy, thus reducing the cost tremendously by combining it with riders.
We think of life insurance as risk management for families for their entire lifetime, not just until retirement. Do not hesitate to reach out to us about Life Insurance. Whether you are a current client of Schenley, or if you are just someone that has questions about your unique financial position, we can assist in making the right choices that work for you.
Schenley Capital, Inc. 417 Walnut Street Suite 200, Sewickley, PA 15143, (412)-749-9256 (info@www.schenleycapital.com)
