How Much Life Insurance Do You Need?

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We have all struggled with this one important question: How much life insurance should you buy? I can help you answer that question in 2 easy steps.

1. Cash Now

If you passed away, your family would need an instant infusion of cash to pay for any last medical expenses and a funeral. But how much will that be?

The average cost of a traditional funeral is between $7,000 and $10,000. That’s not counting any doctor or hospital bills your spouse may be left with after you’re gone. If you’re in doubt, leaving $10,000 to $15,000 to handle these expenses is a good place to start.

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Types of Insurance Policies

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You know that you need life insurance. However, with the wide variety of insurance policies available, you may find choosing the right one difficult. It’s really not as confusing as it seems, however, once you understand the basic types of life insurance policies. Continue reading “Types of Insurance Policies”

An Easy Way To Leave a Financial Legacy

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I have been a pastor for more than 25 years. I understand the pressures and stress of financing a church ministry or any other non-profit organization. Churches and pastors completely depend on the tithe and offering of those we serve in our congregations.

FINANCIAL LEGACY

What if there was a simple way to overcome some of these financial pressures and educate our parishioners about an easy way to leave a financial legacy – a legacy that blesses our church ministry for years after we are in Heaven?

Well, there is! It’s called Charitable Giving through Life Insurance! Continue reading “An Easy Way To Leave a Financial Legacy”

Using My Trials as Stepping Stones

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Meet Kiara…..

Most of my childhood consisted of hospital waiting rooms, bad cafeteria food and doctors’ names I couldn’t pronounce. I became inevitably involved with my father’s illness at age 9. I gave shots and dosed medicine. Not the definition of a “daddy’s little girl” others would expect, but that was my childhood.

My father’s illness took his life when I was 11, leaving behind his wife and five children. Soon after, we woke up to the bitter realization of our deteriorating financial situation. The burden that was placed on my mother’s shoulders is one that nobody should have to carry alone. If my dad had had life insurance, it would have taken away the constant financial worry.

I’m now the only child in my family to have graduated from high school. And although the financial struggle to go to college continue, and I will use my trials as stepping stones and my education will be the foundation on which I build my life.

I wish I could say it better, but I can’t form a sentence that expresses how much my family would have benefited from life insurance. Although setbacks have struck me when I am down, I’ve found that true failure lies when I stop trying. I refused to give up then, and I refuse to give up now.

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Four Ways Life Insurance Can Help You Meet Your Charitable Giving Goals

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Usually when you hear about life insurance, the focus is on the financial security it can provide for you and your family. But whole life insurance can also be a useful tool if you’ve got a favorite cause you want to support in a significant way — whether it’s helping research a medical cure, giving back to your alma mater or any other issue that’s important to you. Making whole life insurance part of your overall giving strategy may provide benefits to your family and the charity alike. Here are four ways it may help achieve your goals.

Make the Charity Your Beneficiary

The most straightforward way to support a charity with whole life insurance is to make it a beneficiary of the policy. This makes it possible to donate a larger gift than you might otherwise be able to give all at once. For example, for about $110 a month, a healthy 40-year-old female might be able to purchase a policy with a $100,000 death benefit. That is probably a lot more than she’d normally be able to donate to her favorite charity, assuming she isn’t hiding hundreds of thousands of dollars in her mattress.

What’s great about this approach is the flexibility it provides. You can opt to have the entire policy death benefit paid to the charity or split it with other beneficiaries. You can also name more than one charity as a beneficiary. It’s totally up to you.

With this method, nothing is irreversible. If your circumstances change, or you wish to support other charities, you can simply change the beneficiaries or the proportion of the benefit they each should receive. As long as you are alive, you retain access to all of the policy’s features and benefits.

Remember, the charity doesn’t get your gift until you die and you receive no income tax deduction. Some might see this as a drawback. However, some prefer to make their gift after death as a legacy of their life. Others appreciate the anonymity of gifting life insurance proceeds because they are not part of the probate process that becomes public record.
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CRMS – Who We Are

Debbie and I have spent the last 26 years, of our 31 years of marriage, serving families. We have ministered to families in a variety of ways including spiritual counsel, finances and family budget planPicture1ning, parental coaching, child development, insurance consultation, and most recently we added to our services identity theft, legal services, and small business benefits  As you can see, we really do care about serving families!

Therefore, we decided to bring all of these services under one name called Cannon Risk Management Solutions.  Our mission at CRMS is to protect your family, finances, and your future!  We offer a variety of solutions to help you minimize your risk and exposure, thus protecting your family, finances, and your future!

We would love to serve you and your family.  Contact us today for a free consultation and let us evaluate how we can best serve you. You have worked hard to provide for your family, finances, and your future; now, let us help you protect it all! Click here to contact us today and let’s get started minimizing your risk!

Have You Protected What Matter Most?

WHY DO I NEED LIFE INSURANCE?

If someone will suffer financially when you die, chances are you need life insurance. Life insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. What’s more, there is no federal income tax on life insurance benefits.

Most Americans need life insurance. To figure out if you need life insurance, you need to think through the worst-case scenario. If you died tomorrow, how would your loved ones fare financially? CLICK FOR INSTANT QUOTE!

Would they have the money to pay for your final expenses (e.g., funeral costs, medical bills, taxes, debts, lawyers’ fees, etc.?) Would they be able to meet ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc? What about long-range financial goals? Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?

The truth is, it’s always a struggle when you lose someone you love. But your emotional struggles don’t need to be compounded by financial difficulties. Life insurance helps make sure that the people you care about will be provided for financially, even if you’re not there to care for them yourself. CLICK FOR INSTANT QUOTE!

To help you understand how life insurance might apply to your particular situation, I’ve outlined a number of different scenarios. So whether you’re young or old, married or single, have children or don’t, take a moment to consider how life insurance might fit into your financial plans. Click here to review your scenario.

Do I Need Life Insurance?

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NOT EVERYONE NEEDS LIFE INSURANCE. FIND OUT WHETHER YOU DO OR NOT.

Life insurance has long been a part of estate planning in the United States. Although life insurance does not need to be a part of every person’s estate plan, it can be useful, especially for parents of young children and those who support a spouse or a disabled adult or child.

In addition to helping to support dependents, life insurance can help provide immediate cash at death. Insurance proceeds are a handy source of cash to pay the deceased’s debts, funeral expenses, and income or estate taxes.

People who have no minor children or financially strapped dependents may not need life insurance. Below you’ll find questions to ask yourself to help evaluate your life insurance needs. If you decide to purchase insurance, you should know exactly why you are buying it and choose the best type of policy for your needs. And, of course, you should buy no more than you need.

Long-Term Needs

To determine whether it makes sense for you to buy insurance to provide financial help for family members over the long term, consider these questions:

How many people depend on your earning capacity? If the answer is “none,” you probably don’t need life insurance.

How much money would your dependents need for living expenses? One way to determine this amount is to look at the earned income that you bring to your dependents on a regular basis. From that amount, subtract the worth of property they would inherit from you and any amounts that will be available from public sources or private insurance plans that already provide coverage. Social Security survivors and dependents benefits will probably be available, and you may also be covered by union or management pensions, or a group life insurance plan. Also subtract any other likely sources of income, such as the help reasonably affluent grandparents would provide for your children in case of disaster.

How long would it take for your dependents to be come self-sufficient? If your children are almost out of college, they may not need much additional income. If they’re younger, remember that dependent spouses caring for young children can usually return to work at some point, and some kids may get at least partial scholarships.

Once you perform this exercise, you may find that your dependents may need little additional income from life insurance. But if you have young children, you may find that it makes sense to buy an affordable amount of life insurance.

Short-Term Needs

Now, assess whether you need life insurance for short-term needs:

What assets will be available to take care of your dependents’ immediate financial needs? You might leave some money in joint or pay-on-death bank accounts.

After you die, how long will it be before your property is turned over to your inheritors? If most of your property will avoid probate, there’s usually little need for insurance for short-term expenses, unless you have no bank accounts, securities, or other cash assets. By contrast, if the bulk of your property is transferred by will and therefore will be tied up in probate for months, your family and other inheritors may need the ready cash insurance can provide. While a probate court will usually promptly authorize a family allowance or otherwise allow a spouse or other inheritor access to estate funds, it can still be nice to have insurance proceeds available.

Will your estate owe substantial debts and taxes after your death? Lawyers and financial advisors call cash and assets that can quickly be converted to cash “liquid.” If your estate has almost all “non-liquid” assets (real estate, collectibles, a share in a small business, jewelry), there may be a significant financial loss if these assets must be sold quickly to raise cash to pay bills, as opposed to what they could be sold for later if there had been enough liquid money from insurance or other sources to meet all pressing bills. Obviously, if your estate has significant funds in bank accounts or marketable securities, you won’t need insurance for this purpose. Fortunately, federal estate taxes aren’t due until nine months after death, so cash to pay them doesn’t have to be raised immediately.

Avoid Probate and Estate Taxes on Life Insurance

Avoiding probate. The proceeds of a life insurance policy are not subject to probate unless you name your estate as the beneficiary of the policy. If anyone else, including a trust, is the beneficiary of the policy, the proceeds are not included in the probate estate and can be quickly transferred to survivors with little red tape, cost, or delay. Except when your estate will have no ready cash to pay anticipated debts and taxes, there is no sound reason for naming your estate, rather than a person, as the beneficiary of your life insurance policy.

Avoiding estate taxes. If you own your insurance policy at the time you die, the proceeds are included in your taxable estate. If your estate is large enough to face estate tax liability (at least over $2 million), your life insurance proceeds will be subject to estate tax. On the other hand, if you don’t legally own your life insurance policy, the proceeds are excluded from your taxable estate. This can significantly reduce your death tax liability.

If you’ve determined that life insurance is right for you, contact me to learn about different types of insurance policies. Or, if you already know the type of policy you need, then let’s talk.

Business Needs

If you are the sole owner of a business, how much cash will it need when you die? Do you want and expect that some of your inheritors will continue the business? If so, do you think there will be enough cash flow for them to successfully maintain the business? You may need insurance proceeds to cover any cash flow shortage of the business. Will there be liquid funds to pay estate taxes?

Example

Alicia owns several valuable pieces of real estate and a profitable antique store, but she has very little cash and no life insurance. When she dies, she owes debts of $90,000 (aside from mortgages) and estate taxes of $120,000.

To raise this money, her beneficiaries (technically, her executor) must sell some of her real estate or her interest in the store. Unfortunately, the country is suffering a recession, and the market value of both antiques and real estate is down. To make matters worse, canny real estate people spread the word that this is a “distress sale” to raise money for estate obligations. As a result, the price the beneficiaries receive when they sell one of the pieces of real estate is far below what they would have received had they been able to choose when to sell. Had Alicia purchased an insurance policy with a payoff at death of $210,000 or more, they wouldn’t have been forced to sell.

If your inheritors won’t continue the business, the questions are different: How much is your death likely to affect the value of the business? Will there be enough cash to keep the business alive until it is sold?

If you are one of several co-owners, life insurance proceeds can be used to buy out co-owners’ interests. For more information on using life insurance to fund buyouts, contact me.

Who Needs Life Insurance?

If someone will suffer financially when you die, chances are you need life insurance because it provides cash to your family after your death.

This cash, known as the death benefit, replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding. What’s more, there is no federal income tax on life insurance benefits.

To help you understand how life insurance might apply to your particular situation, we’ve outlined a number of different scenarios below.

You’re Married

Many people mistakenly believe that they don’t need to think about life insurance until they have children. Not true. What it one of you died tomorrow? Even with your surviving spouse’s income, would that be enough to pay off debts like credit card balances and car loans, let alone cover the monthly rent and utility bills? If you’re planning to have children, you’ll want to buy life insurance now instead of waiting until pregnancy—some companies won’t issue policies to pregnant women.

You’re Married With Kids

Most families depend on two incomes to make ends meet. If you died suddenly, could your family continue meet all their financial obligations—from paying rent or the mortgage to daily living expenses? Could your family continue their standard of living on your spouse’s income alone? Would their plans for the future—like college stay intact? Life insurance makes sure that your plans for the future don’t die when you do.

You’re a Single Parent

As a single parent, you’re the caregiver, breadwinner, cook, chauffeur and so much more. Yet nearly four in 10 single parents have no life insurance, and many with coverage say they need more than they have. With so much responsibility resting on your shoulders, you need to make doubly sure that you have enough life insurance to safeguard your children’s financial future.

You’re a Stay-At-Home Parent

Just because you don’t earn a salary doesn’t mean you don’t make a financial contribution to your family. Childcare, transportation, cleaning cooking, and other household activities are all important tasks, the replacement value of which is often severely underestimated. With life insurance, your family can afford to make the choice that best preserves their quality of life.

You Have Grown Children

Just because your kids are through college and the mortgage is paid off doesn’t necessarily mean that you no longer need life insurance. If you died today, your spouse will still be faced with daily living expenses. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you’ve worked so hard to achieve now and into retirement?

You’re Retired

Depending on the size of your estate, your heirs could be hit with an estate-tax payment of up to 45% after you die. The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of these taxes, funeral costs and other debts without having to hastily liquidate other assets, often at a fraction of their true value. Life insurance proceeds are also generally income tax free and won’t add to your estate tax liability, if properly structured.

You’re a Small-Business Owner

Besides taking care of your family, life insurance can also protect your business. What would happen to your business if you, one of your fellow owners or a key employee died tomorrow? Life insurance can help in a number of ways. For instance, a life insurance policy can be structured to fund a buy-sell agreement. This would ensure that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. That way, the owners get the business and the family gets the money. To protect a business in case of the death of a key employee, key person insurance, payable to the company, provides the owners with the financial flexibility needed to either hire a replacement or work out an alternative arrangement.

You’re Single

Most single people don’t need life insurance because no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or a sibling with special needs. Others may be carrying significant debt that they wouldn’t want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you’re single. If you’re young, healthy, and have a good family health history, your insurability is at its peak and you’ll be rewarded with the best rates on life insurance.

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