Life Insurance Solutions  Life insurance is a critical component to any financial plan. Primarily it protects your family and loved ones from hardship by creating the necessary liquidity needed to continue a comfortable standard of living in the event of an untimely death. It can also be used as an effective tool to generate wealth for heirs, beneficiaries and charitable organizations. Protect your loved ones There is no simple answer to how much coverage is enough. If you have young children or significant debt, you should increase your coverage so you have enough to replace as much as 10 years of your salary. That would mean a person making $50,000 a year should have about $500,000 worth of coverage or more. Many factors will influence the decision on how much coverage you need. A few factors to consider include:
Life insurance has long been a staple in basic estate planning, as it may provide an income taxfree death benefit far in excess of the premiums paid. Federal and state estate taxes may be imposed on all the property that you own at your death, and this tax must be paid from your estate. A life insurance policy that is owned by your heirs, or in an irrevocable trust, will avoid being included in your estate. It can then be used to pay any estate taxes that may be levied at the time of your death. Life insurance offers one of the best returns on your investment dollar available in the market today. Other useful benefits include:
There are two basic types of life insurance: term and whole life. Both provide money for your heirs in the event of your death, but they do so in very different ways. Term Life Insurance You pay a premium every month or quarter, and your heirs receive a specified amount if you die. That’s the idea behind term life insurance. The policy lasts for a set amount of time, such as five or ten years. It is very inexpensive for young people. Prices go up as you age. When the “term,” or duration of the policy is over, you have no equity remaining in the policy, and must start over with a new policy. Whole-life insurance This is really a combination of life insurance with an investment strategy. You pay regular premiums, and your heirs received a fixed amount upon your death. However, the policy is also something like a savings account or investment fund, because your premiums build equity, called “cash value.” The cash value is not taxed, and you can borrow against it. About GCPA At Grand Canyon Planning Associates, LLC (GCPA), we provide caring and personalized attention to your needs. We have been helping Arizona residents just like you with their retirement and estate planning for over 15 years. Let our family help your family. Click here to send an e-mail requesting more information, or call 480-991-1055. Grand Canyon Planning Associates, LLC works with several major providers to offer you a variety of insurance solutions. These are just a few:
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