Investments/Products

INVESTMENTS/PRODUCTS -

Securities
As independent financial professionals we have the ability to make available to our clients quality investments and financial products available in the marketplace. For specific product information available from us, please refer to the Links section of our web-site or call us directly at 800-475-5670. Please note that additional information not posted on our web-site is available upon request.

Brokerage Services: Investments available include:

- Stocks listed on national exchanges

- Bonds listed on national exchanges

- Unit investment trusts

- Exchange traded funds

The above individual securities are priced at the market or offered at the initial offering price when applicable.

Mutual Funds:
Many thousands load and no-load funds are available at the closing price of the day purchased. Types of mutual funds include money markets, U.S. Treasury funds, bond funds, stock funds, balanced funds, and others. Detailed performance and fund recommendations are available upon request.

Popular tax-advantaged and tax-free* investment contracts that are commonly used in planning today include the following:

IRA Rollover Contracts – From IRAs or corporate plans

Roth Conversion IRAs* – Conversion from an IRA or employer-sponsored plan

Roth IRA*(contributory) – A Roth is generally available to most all working Americans subject to income limitations regardless of retirement plans available at one’s place of employment

SIMPLE IRA – A self-administered qualified plan for self-employed and small business people

Section 403(B) Tax Sheltered Annuity Plans – For public or non-profit employees

Section 529* – College savings plan available to all Americans

Education IRA* – An IRA for college education

Tax-Deferred Annuities – These can have guaranteed income benefits

Please contact us via e-mail or call us directly at 610-465-1188 to request for information or discuss any of the above savings options.

*Roth IRA, Education IRA and Section 529 Plans offer tax-free accumulation when Federal law and stated provisions are followed.

INVESTMENTS/PRODUCTS – Tax-Deferred Annuities

What Is A Tax-Deferred Annuity?
The term “annuity” generally refers to any circumstance where principal and interest are liquidated through a series of regular payments made over a period of time. A tax-deferred annuity is an annuity in which taxation of interest or other growth is deferred until it is actually paid.

A commercial, tax-deferred annuity is a contract between an insurance company and a contract owner. In a typical situation, the contract owner contributes funds to the annuity. The money put into the contract is then allowed to grow for a period of time. At a future date, the contract may be annuitized, and the accumulated funds paid out, generally through periodic payments made over either a specified period of time, or the life of an individual or the joint lives of a couple.

In addition to providing lifetime income, tax-deferred annuities are also used as a means of accumulating funds for a specific purpose.

Parties To An Annuity Contract

There are four parties involved in a typical annuity contract:

- Insurance Company:
The issuer of the annuity contract.

- Contract Owner:
The individual or entity which contributes the funds.

- Annuitant:
The individual whose life is used to determine the payments during annuitization. An annuity will remain in force unless terminated by the owner, or the annuitant dies (or owner’s death, if the contract is owner-driven).

- Beneficiary:
The individual or entity which receives any proceeds payable on the death of the annuitant.

A single individual may be the contract owner, annuitant, and the beneficiary. In other situations, these roles may be held by different individuals or entities.

Types of Tax-Deferred Annuities:
There are many different ways to classify tax-deferred annuities:

- Method of purchase:
Annuities can be purchased with a single lump sum of cash; such annuities are often referred to as single premium annuities. They may also be purchased with installment payments over time. These are often called flexible annuities.

- Fixed Annuity:
In a fixed annuity contract, the issuing life insurance company will guarantee a certain rate of interest, for a specified period of time, typically 1-10 years. Such annuities are useful for conservative, risk averse individuals. The investment risk rests on the insurance company, and any annuity payments are predictable.

- Equity-Index Annuity:
An equity-index annuity is a type of fixed-rate annuity and combines a guaranteed minimum interest rate, with a potential for greater growth linked to a specific equities market index such as the Standard & Poor’s 500 index. If the chosen index rises sufficiently during a specified period, a greater rate is credited to the contract owner’s account for that period.

- Immediate Annuity:
Generally a fixed annuity contract purchased with a single premium where payments to the annuitant begin immediately and continue for a specified period of time or for the lifetime of the annuitant.

- Hybrid Annuities:
Innovative income producing annuities that combine features found in fixed annuities and variable annuities are available from various insurers.

INVESTMENTS/PRODUCTS – Insurance Products

LIFE INSURANCE

Common uses for life insurance:

- Create an estate:
Where time or other circumstances have kept the estate owner from accumulating sufficient assets to care for his or her loved ones, life insurance can create an instant estate.

- Pay death taxes and other estate settlement costs: Federal Estate Taxes are due nine months after death when an estate is above the taxable threshold.

- Fund a business transfer:
Business owners often agree to buy a deceased owner’s share from his or her estate after death.

- Pay off a home mortgage:
Many people would like to pass the family residence to their spouse or children free of any mortgage. Often a decreasing term policy is used, which decreases in face amount as the mortgage balance is paid down.

- Protect a business from the loss of a key employee:
Key employees are difficult to attract and retain. Their untimely death may cause a severe financial strain on the business.

- Supplement retirement funds:
Current insurance products provide competitive returns and are a prudent way of accumulating additional funds for retirement years.

- Replace a charitable gift:
Gifts of appreciated assets to Charitable Remainder Trusts can provide income and estate tax benefits. Life insurance can be used to replace the value of the donated assets.

- Pay Off Loans:
Personal or business loans can be paid off with the insurance proceeds.

- Equalize inheritances:
When the family business passes to children who are active in it, life insurance can give an equal amount to the other children.

- Pension maximization:
This is a strategy that generally utilizes permanent life insurance to produce a death benefit for a surviving spouse sufficient to replace the income that would have been available if a joint and survivor pension annuity option were elected by the pensionee.

Term vs. Permanent Life Insurance

Term life insurance, as the name suggests, provides life insurance only for a limited period of time, or “term.” Other types of policies, such as whole life, universal life, or variable life, are considered to be “permanent” insurance, and are designed to provide protection for the entire life of the insured.

Annual Renewable Term

Increasing premium, level coverage, no cash value: Suitable for financial obligations which remain constant for a short or intermediate period; e.g., income during a minor’s dependency.

Long-Term Level Premium Term

Level premium, level coverage, no cash value: The annual premiums are fixed for a period of time, typically 5, 10, 15, 20, 25 or 30 years. Suitable for financial obligations which remain constant for a short or intermediate period.

Whole Life

Level premium, level coverage, cash values: Cash value typically increases based on insurance company’s general asset account portfolio performance. Suitable for long-term obligations; e.g., surviving spouse lifetime income needs, estate liquidity, death taxes, funding retirement needs, etc. This is generally referred to as permanent insurance.

Universal Life

Level or adjustable premium and coverage, cash values: Cash values may increase, based on the performance of certain assets held in the company’s general account. Suitable for long-term obligations or sinking-fund needs: estate growth, estate liquidity, death taxes, funding retirement needs, etc.

INVESTMENTS/PRODUCTS – Insurance Products

INDIVIDUAL DISABILITY INCOME INSURANCE

While most Americans insure their lives and material assets, like their homes, cars, etc., many overlook the need to protect their most valuable asset – the ability to earn an income.

What To Look For In A Disability Insurance Policy

- Definition of disability:
Are education, experience, and past earnings taken into account in determining whether the insured is qualified to resume work? Many policies provide for an initial own occupation definition of disability, for a specified period of time, after which a different definition of disability applies.

- Partial or residual benefits:
The provision pays benefits in the event the disability reduces the insured’s income by a certain amount (for example, 20% or more) from pre-disability levels.

- Cost of living adjustment:
Is there a cost of living adjustment (COLA) which would increase benefit payments after a disability occurs?

- Cancelability and renewability of policy:
Except for nonpayment of premiums, is the policy noncancelable or guaranteed renewable? Noncancelable generally means that the insurance company cannot cancel the policy, change the policy provisions or increase policy premiums after issue. Guaranteed renewable allows the insurance company to increase the premium, but not change the policy benefits.

- Waiting and elimination period:
Is the waiting or elimination period proper for the insured’s circumstances? Commonly available periods include 90, 180 and 360 days.

- Benefit period:
2 years, 5 years, to age 65 or lifetime are commonly available benefit periods. Since a long-term medical disability can be financially devastating, one should elect a long-term benefit where possible. Some companies offer lifetime benefit periods, but periods as short as 24 months to 60 months are also available.

Other Types of Disability Contracts:
Several other specialized disability contracts are available to the businessperson:

- Business overhead expense:
Covers expenses such as staff salaries, rent, telephone, utilities, malpractice insurance and other expenses necessary to keep one’s business open.

- Key person disability:
Reimburses the business for the loss of a key employee and allows funding of temporary replacement or training of a successor.

- Disability buyout:
Provides income to fund a buy-sell agreement triggered by the total disability of a shareholder/business owner. Payouts may come in the form of a lump sum, monthly installments or a combination of the two.

INVESTMENTS/PRODUCTS – Insurance Products

LONG TERM CARE

Long-term care(LTC) is a phrase which is used to describe a variety of services in the area of health, personal care and social needs of persons who are chronically ill or infirm.

What Portion Of These Expenses Will Be Paid By Medicare?

Generally, Medicare pays only for a limited period of time limited to 100 days and only under certain circumstances.

Can Medicaid Help Pay For Long-Term Care?

Medicaid is a welfare program funded by both federal and state governments. It was enacted to provide health care services for the truly impoverished of our nation. Eligibility for benefits under the Medicaid program is determined by each state, based on an individual’s assets and income. Recent legislation has made it extremely difficult to qualify for Medicaid benefits by gifting or otherwise disposing of personal assets for less than fair market value. Generally, individuals with assets worth approximately $80,000 and above not including the value of their residence are not eligible for Medicaid provided long term care benefits.

Common Elements In Long-Term Care Insurance Policies

- Amount of the benefit:
Most policies pay a fixed dollar amount for each day you are eligible for the benefit; e.g., $100 per day.

- Inflation protection:
Since costs inevitably increase, a policy without a provision for inflation may be outdated in a few years.

- Guaranteed renewability:
This important provision will prevent the insurance company from canceling your policy for as long as you continue to pay the premium when it is due.

- Waiver of premium:
Some policies will waive the future premiums after you have been in the nursing home for a specified number of days; e.g., 90 days.

- Prior hospitalization:
Policies currently sold do not contain prior hospitalization clauses.

- Place of care:
Does the policy require that the nursing home be licensed or otherwise certified by the state to provide skilled or intermediate nursing care? Must the facility meet certain record keeping requirements?

- Plan of care:
A plan of care is part of the health care claims process. It is the result of an assessment prepared by the insured’s physician, and a multi- disciplinary team, including practical nurses, social workers, and other health care professionals. The plan outlines the appropriate level of care needed to assist the insured in performing the activities of daily living.