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LIFE INSURANCE

Life Insurance is an important element in everyone’s estate planning.  Because estates are very different in terms of assets, liabilities, and tax consequences, life insurance needs can vary greatly. Your family depends on you for many things!  If they depend on you financially, or if they stand to inherit a financial burden in the event of your death, then a life insurance policy is right for you.

Krum Insurance & Financial Services, LLC offers all the important types of life insurance:

  • Term Life: the most affordable insurance which offers a level premium for a pre-determined period of coverage.

  • Whole Life Insurance: permanent life insurance with level payments for the life of the policy and a “cash value.”

  • Universal Life Insurance: offers lifetime or long-term coverage with flexible and adjustable premiums. When premium payments exceed the cost of insurance, the excess is considered as “cash value.”

Through experience, and by gaining intimate knowledge of your needs, Krum Insurance & Financial Services, LLC will help you to understand which type of life insurance and how much life insurance is right for you. Mike Krum, in addition to holding the Life, Health and Disability Insurance license, also holds the CLU® (Chartered Life Underwriter,) which is considered the oldest and most respected insurance designation in the industry. He is experienced not only in Life Insurance but also in estate planning and investment strategy. Therefore, he will help guide you to do what’s most suitable for your circumstances.


Be sure your family is protected!

 Call today: 215-396-2888


GET A LIFE INSURANCE QUOTE 


Are you experiencing a life event?  Retirements, promotions, job changes, births of children or grandchildren, marriage, divorce and death are amongst the many reasons to review your life insurance strategy.  We encourage you to call for a free consultation.  Additionally, we are glad to offer a second opinion on the current strategy you have in place.


The primary reason to purchase a life insurance product is the death benefit. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. Policy loans and withdrawals may create an adverse tax result in the event of a lapse or policy surrender, and will reduce both the cash value and death benefit. Riders are available at an additional cost. Protections and Guarantees are based on the financial strength and claims paying ability of the issuing company.

Michael Krum is a registered representative and investment advisor representative offering securities and investment advisory services through H. Beck Inc., Member FINRA/SIPC. Krum Insurance & Financial Services, LLC and H. Beck Inc. are unaffiliated.


GET THE FACTS OLIFE INSURANCE


Myth vs. Fact, Know the Difference: 

Life insurance has a vital function; protection. Protection from financial devastation for loved ones in the event of the policy holder's death. It's simple and important yet overlooked or misunderstood by far too many. With so many insurance options, many varying opinions on the topic, and a considerable amount of available information, it is no wonder that there is also a substantial amount of misinformation. This confusion, many times, is what prevents people from purchasing a life insurance policy or purchasing an adequate amount. Let us help you get the facts!

1. I AM SINGLE. I DON'T HAVE CHILDREN. I DON'T NEED LIFE INSURANCE. 

Since young children are, many times, amongst the reasons life insurance is purchased, this is a common misconception. But, being unmarried doesn't mean you are alone nor that your death would not have an emotional and financial impact on others. Someone must pay for your funeral costs and any end of life care that could be required. Those costs could become a financial burden on the people who love you most. So, although being single may require a smaller policy, a need still exists.

2. I AM A STAY AT HOME PARENT. I DON'T NEED LIFE INSURANCE.

We see it so many times- the unprotected stay at home parent. Often it is the belief that a policy is unnecessary because there is no salary to replace. Or, perhaps, it is believed to be out of budget in a single-income family. But, this is a mistake that could cause financial devastation to the living family members. Stay at home parents do the work of many; from watching the kids, to cleaning the house, to running the errands. Although you do not get paid for such important work, the cost to replace these things, particularly the care for your children, will require your living loved ones to rework the budget in a way you can't imagine. Additionally, as with single people, the cost for the funeral and any required end of life care could put your loved ones in financial ruin. A life insurance policy, no matter the face value, will provide help to your family in the tragic event of your death.

3. MY EMPLOYER OFFERS ME A POLICY, SO I AM PROTECTED. 

If you have life insurance through your employer that is good, particularly if it is low in out of pocket costs or being paid for by the employer. However, review that policy carefully before rejecting the idea of getting a supplemental plan. For one, employer policies may not offer enough coverage to prevent financial ruin for your family in the case of your unexpected death. Also, the group coverage is a nice addition to your overall coverage, but the rates you're getting may not be as good as medically underwritten individual policies. And, most importantly, if you leave your job, whether by choice or by lay-off, your policy may not come with you, leaving you without life insurance. Applying for coverage later, when you are older, can always be a bit more difficult.

4. MY BENEFICIARIES WILL HAVE TO PAY INCOME TAX ON THE MONIES RECEIVED. 

This is a common myth but life insurance products payouts are not considered ordinary income and are not included in your annual gross income. Monies received do not have to be reported, and are not taxable! In fact, taxes have already been paid on the value of the policy, by the policyholder, with each premium payment made out of the insured's taxable income. So, in most cases, in the event of your death, your beneficiary(ies) will receive their portion of the face value tax free. *Please note that life insurance products with investment features have different tax treatment and you should consult an adviser.

5. LIFE INSURANCE IS TOO EXPENSIVE!

Most of us live on tight budgets and adding another expense to our monthly responsibilities seems impossible, particularly an expensive one. But, life insurance is, often times, very affordable. Premium rates can vary significantly depending on a number of factors, and though age and health status can't be changed, the face value of the policy can be altered in order to meet within your personal budget restraints. There is, likely, an affordable policy out there for you.

6. YOU MUST GET "X TIMES" YOUR ANNUAL INCOME. 

We all need a ballpark, an idea of where to begin, so this is a rule of thumb that generalizes the amount needed. It is just a generalization, however. There is not a one-size fits all model. Everybody has different needs and your calculations should be customized to your specific requirements. Individual factors that will affect your policy may include, but are not limited to; the number of dependents, the amount of risk, your assets, and more.

7. ALL POLICIES ARE THE SAME, ONLY THE AMOUNT OF COVERAGE VARIES. 

Not all policies are the same and they are not all created equal. Understanding what you are purchasing is an important part of your broker's job as well as your due diligence. There are a number of different types of policies including Term Life, Traditional Whole Life, Variable Life, and Universal Life. Each type has their own set of pros and cons and the right type is not the same for everyone. For more information on any of these types of policies please contact us.

8. INVESTING MONEY IS BETTER THAN LIFE INSURANCE. 

The answer to this depends on you and your level of comfort with a high amount of risk. While investing your money may feel like you have more control, there is no guarantee your money will do well in the open market. And, though guarantees are hard to come by, life insurance is safe and is guaranteed. It is guaranteed that your beneficiaries will receive the monies if death occurs while the policy is inforce and it is guaranteed that they will receive the full face value*. (*Please note these guarantees are based on the claims-paying ability of the issuing company.) If you choose to invest the money this year and pass away a few years later your beneficiary will only receive the amount invested to that point plus any growth.

9. PREMIUMS ARE TAX DEDUCTIBLE. 

This is a common misconception and it is important that you understand that, unless you have your own small business, the cost of your premium for a life insurance product is never deducted. Because taxes are being paid with each payment the monies received by the beneficiary(ies) in life insurance products are not taxable to the beneficiary. However, any life insurance product with an investment feature has different tax treatment for the untaxed growth. Additionally, the insured's estate may be taxed on the gain with certain products. It is important to speak directly to an adviser about these details.

10. I TRAVEL A LOT FOR WORK. IF SOMETHING HAPPENS OVERSEAS THEN I AM NOT COVERED, ANYWAY. 

This is something that needs to be carefully reviewed with your agent. If you travel overseas regularly it may be difficult to get approved for coverage, but not impossible. Depending on the amount of travel, the country you are travelling to, and the state you live in, approvals will vary. If you already have a policy that was issued and put in force prior to your travel, and then something terrible happens overseas, your policy should pay out. Make sure you review your current policy today.


The information contained in this material is not intended to be tax advice and it may not be relied on for the purpose of avoiding tax-related penalties. Please consult a qualified tax advisor regarding your individual circumstances.


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