Product by itself is not a strategy. Once we create a strategy, we then choose products that are best suited for each client’s individual goals and needs. Because we are an independent firm, we have access to many top rated financial companies and a variety of products. We are not tied to one company’s product line. These products include personal products suited for individuals and families and business products suited for business owners and small businesses.

Personal Products

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 suggest 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 suggest 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 various 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 can create 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.

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.(1) 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.)

(1) – The HLV Theory states that one should maintain life insurance equal to the present value of their expected future earnings. Life insurance companies place limits on life insurance available to consumers based upon this formula and have created age-based multiples of current income as a guideline. For example, a person in their 30s may be insured for around 30 times their annual income, 20 times for a person in their 40s, and 10 times for people in their 50s. Age 60 and over about 1 times net worth.

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. Term insurance may be considered 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 cash value component. This cash value 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 build more protection and wealth especially if coordinated with other assets during the accumulation, distribution, and preservation phases of money.

1) Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.

2) Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors.

3) Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

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 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.

Contract guarantees are guaranteed solely by the claims-paying ability and strength of the issuing insurance company.

A state-operated investment plan that gives families a federal tax-efficient 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.

Investing in 529 plans involves risk, including loss of principal. Before you invest in a 529 plan, request the plan’s official statement and read it carefully. The official statement contains more complete information, including investment objectives, charges, expenses, and the risks of investing in a 529 plan, which you should carefully consider before investing. You should also consider whether your home state or your beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s 529 plan. Section 529 plans are not guaranteed by any state or federal agency. By investing in a 529 plan outside of the state in which you pay taxes, you may lose the tax benefits offered by that state’s plan. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary.

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 experience 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.

Contract guarantees are guaranteed solely by the claims-paying ability and strength of the issuing insurance company.

 

Business Products

Business Owners Policy is a policy that combines property, liability and business interruption coverages for small- to medium-sized businesses. Coverage is generally cheaper than if purchased through separate insurance policies.

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.

A system of compensation for work-related injuries or death, paid for by employer compensation insurance contributions. Premiums are based on the number of employees, the type of business and the incomes of each employee. Workers compensation is required for all businesses in North Carolina with 3 or more employees.

An owner can opt out of coverage for themselves and some will choose to do this to reduce costs. If they make this choice we recommend they have medical and disability income insurance coverage for themselves.

Surety Bond is a contract guaranteeing the performance of a specific obligation. Simply put, it is a three-party agreement under which one party, the surety company, answers to a second party, the owner, creditor or “obligee,” for a third party’s debts, default or nonperformance. Contractors are often required to purchase surety bonds if they are working on public projects. The surety company becomes responsible for carrying out the work or paying for the loss up to the bond “penalty” if the contractor fails to perform.

Group Health Insurance is a single health policy covering a group of individuals, usually employees of the same company or members of the same association and their dependents. Coverage occurs under a master policy issued to the employer or association.

Group Disability Plan is a single disability policy covering a group of individuals, usually employees of the same company or members of the same association and their dependents. Coverage occurs under a master policy issued to the employer or association.

401(k) plan is a defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes, and in some cases employers will match their contribution dollar-for-dollar. Taking a distribution of the funds before a certain specified age will trigger a penalty tax. The name 401(k) comes from the IRS section describing the program.

From the employer perspective, retirement plans are a wonderful benefit to provide in order to attract and retain employees. There are now many variations of these plans that reduce the record keeping burden, and cost associated with establishing and maintaining company retirement accounts.

From the participants perspective, 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.

Simplified Employee Pension Plan (SEP) is a retirement program for self-employed people or owners of companies with less than 25 employees, allowing them to defer taxes on investments intended for retirement. There is no limit to the size of the plan, and the employer makes deductible contributions to the IRA’s of eligible employees.

From the employer perspective, retirement plans are a wonderful benefit to implement in order to attract and retain employees. There are now many variations of these plans that reduce the record keeping burden, and cost associated with establishing and maintaining company retirement accounts.

From the participants perspective, 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 could create a reverse tax strategy.

Profit Sharing Plan is an arrangement in which an employer shares some of its profits with its employees. Profit-sharing allows for changing contributions each year. Contributions are determined by a formula to allocate the overall contribution and distribution of accumulated funds after the retirement age. Contributions and earnings can grow tax-deferred until withdrawal.

From the employer perspective, retirement plans are a wonderful benefit to implement in order to attract and retain employees. There are now many variations of these plans that reduce the record keeping burden, and cost associated with establishing and maintaining company retirement accounts.

From the participants perspective, 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 could create a reverse tax strategy.

Companies with 100 or fewer employees could benefit from the small business pension plan, called Simple IRA — Savings Incentive Match Plan for Employees. A Simple IRA plan is a tax-favored retirement plan.

Employers must make either a non-elective contribution of two percent of compensation or a matching contribution of three percent each year and must notify the employee prior to the beginning of each year which contribution type the employer will make.

All employee and employer contributions are fully vested and tax-deferred until withdrawn. When eventually withdrawn, Simple IRAs are taxed as ordinary income. Generally, withdrawals before two years of participation are subject to an additional penalty of 25% (unless you are 59½ or older or meet other exceptions). After this two year wait, the rules applicable to Traditional IRAs apply.

From the employer perspective, retirement plans are a wonderful benefit to implement in order to attract and retain employees.

From the participants perspective, 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 could create a reverse tax strategy.

Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

* Neither Guardian nor its subsidiaries issue these types of insurance.

** 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.