Insurance that combines liability insurance and hazard insurance. These days, you hear a lot of talk about low-cost auto and home insurance. But what these advertisements do not tell you is what you actually get – or do not get – for your money.

Very important coverage to consider is:

Liability limits (we recommend at least $300k) and this protects you in case of a lawsuit related to an at-fault car or boat accident or injury on your property,

Uninsured and Underinsured motorist coverage (we recommend at least $300k) and this protects you in the event someone injures you and does not carry enough liability protection on their policy, and

Replacement cost on your homeowners so if you do have a fire that completely destroys your home your policy will cover the total cost to rebuild your home using like materials.

By packaging the auto and homeowners policies together we can save you money.

is a type of liability insurance available to individuals and companies protecting them against claims and lawsuits above and beyond the amount covered by their primary policies liability limits, or for claims not currently covered. These policies are purchased in increments of $1,000,000.

In many cases we have been able to help clients fund these important policies through savings realized on their auto and homeowner’s insurance through our insurance carriers and/or through simply increasing their deductibles.

Disability Insurance is a policy that pays benefits in the event that the policyholder becomes incapable of working. They are designed to replace your income and depending on the contract you choose it can pay up to age 65 and beyond. One of the most important features of the policy is the definition of disability. Own occupation is the most advantageous to the individual. This means the policy will pay a benefit if the individual cannot perform the duties of their own specific occupation. This definition is usually found in individually owned polices as well as the first two years of a group policy. Any occupation” definition, such as Social Security disability benefits or after year two in some group policies, means the policy will pay a benefit if the individual cannot work at any occupation.

Many clients have a group benefit provided by their employer but this benefit rarely covers 100% of their income. Usually this benefit is 60% of salary up to a maximum monthly benefit and because the employer generally pays for this coverage the monthly benefit paid to the insured if disabled is taxable therefore decreasing the percentage of salary provided even further. This creates a significant gap in coverage therefore we recommend supplementing group benefits with an individually owned policy whenever possible. An individual policy benefit is not taxable because the individual pays the premium and when coordinated with the group benefit provides maximum income protection. Individually owned polices are also portable so if you change employers the coverage is still in place unlike a group policy. 

is an insurance against loss by illness or bodily injury. Health insurance provides coverage for medicine, visits to the doctor or emergency room, hospital stays and other medical expenses. Policies differ in what they cover, the size of the deductible and/or co-payment, limits of coverage and the options for treatment available to the policy holder.

One of the most important features of a health insurance plan is the lifetime maximum. This limit is how much the insurance company will pay out in expenses over your lifetime. Many plans have limits of 2 or 5 million. Some even have as low as 1 million, and a few plans have an unlimited lifetime maximum. Obviously unlimited is your best option.

The most common plans are group or individual HMOs, PPOs, and POS’s. The newest plan is a high deductible plan in conjunction with a HSA’s (Health Savings Accounts). These plans allow for individuals and businesses to set aside money in savings plans that grow income tax free. The money can then be used income tax free for qualified medical expenses. These plans typically work well for individuals who do not go to doctors frequently or who do not have high drug expenses. 

Medicare supplement insurance fills the gaps between Medicare benefits and what you must pay out-of-pocket for deductibles, coinsurance, and co-payments. Therefore, it is often called Medigap insurance. Medigap policies only pay for services deemed by Medicare as medically necessary, and payments are generally based on the Medicare-approved charge. Some plans offer benefits that Medicare doesn’t, such as, emergency care while in a foreign country, and preventive health care services. There are 10 standardized Medigap benefit plans, labeled A through J. Each insurance company must use these same identifying letters. All companies that sell Medigap insurance must offer Plan A, but do not have to offer the other nine plans.

Long term care is the type of care that you may need if you can no longer perform activities of daily living by yourself, such as eating, bathing or getting dressed. It also includes the kind of care you would need if you had a severe cognitive impairment like Alzheimer’s disease. Care can be received in a variety of settings, including your own home, assisted living facilities, adult day care centers or hospice facilities. Long term care can be covered completely or in part by long term care insurance. Most plans let you choose the amount of the coverage you want, as well as how and where you want to use your benefits. A comprehensive plan includes benefits for all levels of care, custodial to skilled.

In addition, many plans offer options such as inflation riders, joint policy discounts, paid up policies in 10 years or paid up at age 65, and return of premium features. We recommend clients think about the features that are most important to them and we can then choose an appropriate plan to meet their needs. The average age of the general population purchasing these policies is mid to late 50s. There is a new trend of younger individuals, in their 40s, beginning to purchase them to ensure they can meet underwriting requirements and in hopes to pay a lower premium.

Insurance paid to a beneficiary when the insured dies. Life insurance is designed to replace the deceased’s income. The death benefit amount is chosen by the individual and unfortunately most people are unsure of exactly how much they should buy. There are numerous “expert” opinions on how to calculate the amount your family will need in the event of your premature death but since we do not know when this will occur, how much debt you will have at the time, how much college will cost, and what inflation will be, the calculation is at best a guess. Instead, we have our clients think about what they would like their death benefit to provide their beneficiaries when they pass away. We use this list to begin our education of how much death benefit to purchase. Ideally everyone would insure 100% of the loss of their income: this amount is called the human life value. This is the maximum an insurance company will allow you to purchase. (If you are 30 years old and make $80,000 a year the insurance company would assume you could work another 20 years so your human life value would be approximately $1,600,000.)

Another important factor to consider is the type of insurance to buy. There are only two types: term which by definition is temporary insurance, and whole life which by definition is permanent insurance.  All other types, universal, flexible premium…) are blends of term and whole life.

Term insurance starts off very inexpensive but the cost of term increases as you age. Therefore most individuals will pay for term all there lives and when they need it most (age 60+) the cost is so high that they end up dropping the policy. In this case they may have spent thousand of dollars and they will never receive a benefit. The best use of term insurance is for temporary coverage or until an individual can convert the term to whole life.

On the other hand, whole life starts out with a higher premium but the cost is fixed and will not increase. A portion of the premium is allocated to a savings component within the policy beginning as early as year 2 of the policy. This savings has a guaranteed rate of interest plus the possibility of dividends and can be used throughout the individual’s life for a number of things even to fund a child’s college education.

Most people have heard of the buy term and invest the premium difference between term and whole life strategy. This sounds good on the surface because initially term is so inexpensive but term costs will rise after the end of term, meaning less will be invested. There is also market risk that may cause the investment to lose money. Because of these factors, there are other strategies using whole life insurance that may create more protection and wealth especially if coordinated with other assets during the accumulation, distribution, and preservation phases of money.

An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment.

Mutual funds offer beginning investors an opportunity to buy shares of stock of many companies inside the mutual fund therefore providing them diversification and potentially less volatility than they would have buying one individual stock at a time. An investor has choices as to the type of share class they can buy through an advisor: typically A, B, or C’s. A shares charge an up front sales charge but have lower annual expense charges than do B’s or C’s. B shares have a deferred declining sales charge over the first usually 7 years with higher annual expenses than an A share after which the share converts to an A share for purposes of the annual expenses. C shares offer no sales charge but have a higher annual expense for the life of the fund. For long-term investing, A shares are usually the least expensive and may also provide sales charge discounts if the investor invests larger sums of money.

Before our clients purchase mutual funds with us we determine their risk tolerance and develop a portfolio of mutual funds tailored to their risk tolerance and objectives.

Mutual funds are sold only by prospectus. Consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Mutual funds are subject to market volatility and risk, and may lose value, including loss of the principal amount originally invested.

Not a Deposit | Not FDIC or NCUA Insured | May Lose Value | No Bank or Credit Union

Diversification does not ensure a profit or guarantee against loss. For additional information about the securities products and services offered through Park Avenue Securities (PAS), please visit the PAS website at www.parkavenuesecurities.com.

Individual retirement accounts are tax-deferred retirement accounts for individual that allow them to set aside a set amount per year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (earlier, with a 10% penalty). IRAs can be established at a bank, mutual fund, or brokerage firm. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis. Such contributions qualify as a deduction against income earned in that year and interest accumulates tax-deferred until the funds are withdrawn. A participant is able to roll over a distribution to another IRA. They are also able to withdraw funds without penalty using a special schedule of early payments made over the participant’s life expectancy: this is referred to as a 72t distribution.

From the participants prospective, 401ks, IRA’s and all qualified retirement accounts are wonderful tools for growth during the accumulation phase of money. Careful planning is necessary when using these funds for a majority of one’s retirement assets due to the possible challenges of these accounts during the distribution and preservation phases of money. For example: If the tax structure should increase in future years then tax distributions would be at a higher rate than when contributions were made. This would create a reverse tax strategy.

For additional information about the securities products and services offered through Park Avenue Securities (PAS), please visit the PAS website at www.parkavenuesecurities.com.

A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement. The holder is taxed only when they start taking distributions or if they withdraw funds from the account. All annuities are tax-deferred, meaning that the earnings from investments in these accounts grow tax-deferred until withdrawal. Annuity earnings are also tax-deferred so they cannot be withdrawn without penalty until a certain specified age. Fixed annuities guarantee a certain payment amount, while variable annuities do not, but do have the potential for greater returns. An annuity has a death benefit equivalent to the higher of the current value of the annuity or the amount the buyer has paid into it. If the owner dies during the accumulation phase, his or her heirs will receive the accumulated amount in the annuity. This money is subject to ordinary income taxes in addition to estate taxes.

Annuities are much like IRAs with a life insurance component so they do have higher expenses than do IRAs. They also have surrender charges for 7 – 12 years. Because of this higher expense and lack of liquidity, the decision to purchase an annuity should be made carefully. Factors to consider are your age, health, investment and distribution time horizon, and other assets and insurance you already own.

For additional information about the securities products and services offered through Park Avenue Securities (PAS), please visit the PAS website at www.parkavenuesecurities.com.

A state-operated investment plan that gives families a federal tax-free way to save money for college. Authorized by Congress in 1996, they are officially known as qualified tuition programs (QTPs), but commonly referred to as 529 plans, state 529 plans, or section 529 plans after the section of the IRS code that provides the plans’ special tax breaks.

These tax breaks are a definite benefit but these plans do require you to use these funds for education only. If your child receives a full scholarship you can transfer the funds to another child. Some of our clients have asked for more flexibility so we help them develop strategies using other products that provide for tax breaks, growth, and/or more flexibility.

With a managed account, an investment advisor works with the client to define the client’s risk tolerance and long-term goals. Next, the advisor assists the client in selecting one or more appropriate mixes of managers whose styles and expertise meet the investor’s investment goals and objectives. Each manager selects stocks, bonds or mutual funds for a portion of the client’s investment portfolio, which it actively manages on an ongoing basis. The minimum required investment varies, depending on the mix or program guidelines.

Managed Accounts provide a tiered approach to management and allow our clients to invest with institutional asset managers that otherwise might be unavailable to them. Managed accounts carry management fees that represent a percentage of the assets in the account.

For additional information about the securities products and services offered through Park Avenue Securities (PAS), please visit the PAS website at www.parkavenuesecurities.com.

* Products not underwritten by the Guardian Life Insurance Company of America.

** Disability Income insurance underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Products not available in all states. Product provisions and features may vary from state to state.