Disability Insurance

What if the unexpected were to happen and suddenly, you were no longer able to work? What if unanticipated illness or injury were to impede your ability to provide for you and your family? Not only would you have the stress of affording everyday living expenses, but you may also have to place long sought-after financial goals on hold. However, what if there was a proactive strategy that could protect you and your family against the unpredictable risk of losing your main source of income? The proper amount of disability coverage can help mitigate the potential shortfall in income should an unexpected accident or ailment render you incapable of working.

Disability insurance, often called DI, is a form of insurance that protects the insured’s income against the risk of disability. DI policies have what’s known as an elimination period or waiting period. This is the period of time between the time of injury (when one becomes disabled) and the commencement of benefits. The waiting period is often 90 days, however, policy owners can usually elect to adjust the length of the waiting period. As waiting periods are altered, the premium charges are as well. There is an inverse relationship between the waiting period length and the premium size. The two main types of long-term disability insurance include inpidual disability insurance and group disability insurance.

Inpidual disability insurance is a policy type that could work best for self-employed, or employees working for an employer that does not provide long-term disability benefits. Inpidual policies work well for people who may not have enough coverage through their employer and want more protection. Disability policies will vary considerably amongst insurance carriers, employers, occupations and industries. It is important to find an insurer that is a good match for your needs.

Policies with a longer coverage period and higher benefit payments tend to have higher premiums compared to that of a policy containing shorter coverage periods and lower benefits. An advantage associated with inpidual disability benefits include its tax free nature. Disability benefits will be considered tax free income if the premiums are paid with personal, after tax monies. Additionally an inpidual policy is portable. Should you change employers at some point, you have the ability to keep your inpidual policy. Your coverage can increase as your income increases as long as you purchase the appropriate rider(s).

Far different from inpidual disability policies are group disability policies. Group disability policies are typically offered through your employer. There is no health underwriting associated with group coverage, as an employee’s health is not assessed on an inpidual basis. The health rating is actually determined on the group level, as a single unit. This policy type has benefits that will kick in after the stated elimination period, which tends to vary amongst employers. Long-term coverage can have benefit periods of 2, 5 and 10 years. There are also the options of “until age 65” coverage and of course, lifetime coverage. Group coverage can be a tax deductible expense to the business. It can also help the employer entice and retain quality employees.

Disability coverage can serve as an integral component of your financial plan. Although disability may not be as devastating as death, the additional protection provided by DI can help mitigate the irreparable financial damage that one’s inability to work can cause. With the ability to protect both you and your family against an unexpected shortfall in income, DI can equip hard-working inpiduals with a sense of peace of mind. Disability insurance is a strategy that many in the work force tend to overlook. Your greatest asset is not your residence nor your pension, but rather your human capital. Your ability to participate in the workforce and produce annual income over the course of your lifetime is your most valuable asset; and disability insurance helps provide the ultimate protection for that asset.

Do right by all the hard work you have done and the effort you continue to put forth by giving us a call today at (631) 952-4466 x12. We can further educate you on disability insurance and help you find a policy that fits your circumstances. Be sure to visit our website at Mitlinfinancial.com and watch the most recent Mitlin Minute on disability insurance.

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Life Insurance

How would your family survive if you were to unexpectedly pass? Would their standard of living and quality of life diminish? Who would generate the shortfall in income if you were no longer around to earning a living? Will your loved ones be able to afford all the costs associated with your passing, such as estate taxes, funeral expenses and burial services? Although it is a tough concept to wrap one’s head around, these are just some of the questions that would need to be answered if an unexpected critical financial event, such as death, were to transpire. In addition to the insulation from financial devastation provided by these income replacing vehicles, other applications such as estate planning is another inherent use of life insurance. While various types of policies offer different benefits, each performs the same vital function; to provide a measure of security and a financial safety-net for your family and loved ones, should a critical financial event ensue.

What exactly is Life Insurance? It is the protection against the shortfall of income that would result from the passing of the insured. The named beneficiary would receive the proceeds, tax free, in the form of the death benefit. This tax free death benefit functions as a safeguard from the devastating financial impact resulting from the death of the insured. While all Life Insurance policies provide this death benefit, there are four main types. Each one operates in a different capacity in order to accommodate one’s specific circumstances. The main types of Life Insurance policies are Term Life, Whole Life, Universal Life and Variable Universal Life Insurance.

The most basic type of life insurance is Term. The policy is written for a specific term. If the insured dies within that stated term, the insurance company must then pay the death benefit to the named beneficiary, tax free. The insurance coverage will end when the term ends. The premiums for term insurance tend to be the lowest compared to the other different types of life insurance. Unless it is a level term contract, the premium amounts will increase as the age of the insured increases. Term insurance would serve the greatest benefit to someone who only needed the death benefit for a certain period of time. What about a policy that won’t leave you guessing how long of a timeframe you may need it for?

Whole-Life will last for the entire life of the insured; thus the death benefit is guaranteed. Although the premiums tend to be significantly higher with a Whole-Life policy, there is one added benefit that is not seen with a Term policy. The policy has the ability to build cash value. The differential between the premium amount and the cost of the insurance itself is placed into what is known as a cash-value account. The account feature enables the insured to borrow from the accrued cash-value.

Although Universal Life also grants the insured lifetime coverage, there is some added flexibility seen with this type of insurance. A Universal Life policy is similar to a Whole Life policy, however, the policy owner has the ability to change both the premium and death benefit. Like Whole Life, the Universal policy has a general account that also has the ability to accumulate cash-value. Another variation of Universal Life is Variable Universal Life.

The major difference between Universal and Variable Universal Life is seen with the way which the general account is invested. With the Variable Universal Life, more risk is taken on by the policy holder, as the general account tends to be invested in stock, bond and other various sub-accounts, as directed by the policy owner. Someone who wants life coverage and can tolerate a higher risk level may be most interested in a Variable Universal Life policy.

Another very common application of life insurance is seen within estate planning. Life insurance is present in many estate plans and can serve as a source of support, education-expense coverage and a means to fund business buy-sell agreements. Additionally, upon the death of the insured, the deceased’s loved ones would soon become responsible for paying the estate taxes (Death Tax). The death benefit from the life insurance contract is a great source of added liquidity. The monies from the tax free death benefit can be used to pay the death tax. This use of life insurance can help to alleviate a great deal of unnecessary financial pressure and stress during a family’s time of grieving.

Life insurance has been known to serve as an elemental means of protection with regard to dealing with devastating critical financial events. With any of the many policies listed above, the insured and their family may feel peace of mind. Life insurance may be a great tool in allowing their family and loved ones to maintain their standard of living and potentially not fall victim to many of the detrimental expenses associated with critical financial events.

Be sure to check out the latest Mitlin Minute on life insurance! Contact MitlinFinancial, Inc. today at (631) 952-4466 x12 and learn about the applications of life insurance and the ways you can best insulate your loved ones from critical financial events.

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Insurance in Your Financial Plan

Having a financial plan in place is a vital component of a successful financial future. What if something devastating were to derail your plan? What if your working spouse was to unexpectedly pass away or become incapacitated? What if your own health was to take a turn for the worse, and you too were unable to work? Would you be able to continue funding your retirement and savings accounts? It could become increasingly difficult to maintain the integrity of your financial plan. Luckily, financial loss resulting from such unexpected critical financial events can be mitigated by utilizing insurance in your financial plan.

A financial plan is only effective if the continuity of its components remain in good working order. Thus, it is extremely important for you to protect the gears of your financial plan from unexpected critical financial events; and the devastating financial loss that could follow.

These events can lower your likelihood of achieving your goals. Instead of focusing all of your financial efforts on saving for retirement or achieving other financial goals, you now bear the burden of unexpected financial obligations; most of which are unavoidable and very costly. Lacking proper insurance coverage, you could jeopardize all of your savings, investments and hard work.

It is very important to note that there are many different types of risks which create the need for specific types of insurance. There are many types of insurance and each policy helps to hedge against a specific type of risk. Some common risks that can derail your financial plan include death, disability, illness and the costs associated with accidents. Life, Disability and Long Term Care Insurance are all geared toward a specific type of risk. Although each of these types of insurance have their differences, they all aim to achieve the same goal of protecting the insured from the devastating downside of unexpected critical financial events.

With the proper amount of coverage and type of insurance in force, you can protect yourself, your family and your financial plan against potential major financial losses. Integrating insurance into your financial plan can help prevent the derailment of your plan. In the upcoming weeks we will be going into greater detail on Life, Disability and Long Term Care Insurance. In the meantime, contact us today, at to learn if you have sufficient insurance in your financial plan and see how MitlinFinancial can help to facilitate your financial future!

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Financial Planning: Critical Financial Events

If you were lost while driving to an unfamiliar location, what would you do? Would you guess the route and risk never reaching your destination? Would you venture through threatening areas, potentially endangering yourself and the other passengers? Or would you get proper guidance, and insure that you reached your destination efficiently and safely? This is what financial planning is all about. It helps define which direction one needs to follow in order to achieve their financial goals, capital needs and a sustainable standard of living; financial planning is the foundational element of facilitating a stable financial future. Such planning is crucial in order to protect yourself and your loved ones against both the expected and unexpected. A comprehensive financial plan has the ability to help insulate you from these potential adversities, better known as critical financial events.

What are critical financial events? These are events, both planned and unplanned, that have an impact on your financial life. Such events can have either a positive or devastating effect on one’s life. Planned critical events can include anything from sending your children away to college, changing careers, purchasing a new home, having your children get married, allocating an inheritance or even business succession. Unplanned financial events can include death, becoming disabled, the need for long term care, losing a job, or other unexpected health concerns.

Although some of these events can be anticipated and circumvented, others are almost impossible to foresee, let alone avoid. However, just because something is inevitable doesn’t mean one can’t plan for the worst and safeguard themselves to some degree. Whether you are planning for the expected or unexpected, a comprehensive financial plan can be a very powerful tool in both scenarios.

This type of planning is not one of rigid nature; nothing is set in stone. With the guidance of an experienced financial professional, this comprehensive plan has the ability to adjust and adapt to your own circumstances. As your life happens, your financial plan is evolving alongside you over time. This financial forecast will evaluate your current and future financial state by predicating future cash flows, asset values as well as withdrawal and distribution plans. By forecasting such variables, we can extrapolate potential critical financial events and the outcomes they may or may not have on your financial future. No one is immune to the occurrence of such events. They will take place at some point or another. It is your choice how prepared you want to be for the both the expected and unexpected.

Call us today at (631) 952-4466 x12 and learn how MitlinFinancial, Inc. can help you navigate financial obstacles and facilitate a sound financial future for you and your family. Also, be sure to check out our newest Mitlin Minute on Financial Planning: Critical Financial Events!

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Annuities: Immediate vs. Deferred

In the last article we went over the two different types of annuities, fixed and variable; both are avenues by which you are able to grow assets on a tax deferred basis over time. Now we are going to talk about the different ways you can receive or build to later receive a steady stream of retirement income payments.

The contract owner can implement one of two strategies, an immediate annuity or a deferred annuity. They can elect to begin to receive income right away with an immediate annuity, or to build their account value over time and convert it to income at some point in the future with a deferred annuity.

A contract is considered to be an immediate annuity if income payments are scheduled to begin one payout interval after the annuity’s purchase date. This is what is known as annuitizing the contract. It is important to understand the key term, annuitant. An annuitant is the person whose life the payment stream is based on. It is also important to understand the key term annuitization. Annuitization is the process of converting an annuity into a series of periodic income payments. This type of annuity is designed for regular cash flow. With an immediate annuity, a single lump-sum payment is made. This one-time payment initiates the starting date for the payout to begin (sometime within the next 13 months). The size of the payout that the annuitant will receive is based on the annuity’s principal, the payout option selected, the payout term, the annuitant’s age and whether it is a fixed or variable contract. You can choose income for your lifetime or for the joint lifetime of yourself and that of another person. An immediate annuity can be the ideal choice for an investor who fears they might outlive their resources or someone that just simply wants to receive regular income payments. It is also crucial that the contract owner be aware that annuitization is an irrevocable action.

On the contrary, a deferred annuity gives you the opportunity to build your retirement savings over a period of time. A contract is considered to be a deferred annuity if the income payments are scheduled to begin at some later point in the future. With this strategy, the contract owner is essentially deferring the time in which they will begin to receive the income payments (annuitize). This deferred account can be funded with either a lump sum, a series of payments, or even both. The contract owner will have the option to either annuitize the contract or lump sum it out in the future. With this type of annuity you have the ability to accumulate wealth over an extended period of time. One also has access to their money at any time, up until annuitization. However, it is important to know that these withdrawals may incur early withdrawal tax penalties. The deferred annuity is best suited for that investor who has already maxed out all of their other retirement plans such as 401(k)s and IRAs.

By design, an annuity is meant to secure a steady cash flow for an inpidual during their retirement. Each of these annuities have their own advantages and disadvantages. Before choosing between an immediate or a deferred annuity, one must decide if they are looking for a regular stream of income payments or if they want to accumulate wealth. Due to the complex nature of an annuity contract, it is important for investors to be properly educated before they invest in such a contract.

If you have maxed out all of your other retirement plan options or if you simply want to accumulate wealth, call Mitlin Financial, Inc. today at (631) 952-4466 and educate yourself on what may be a great addition to your retirement plan.

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

More Articles ...