Question 1

What is life insurance?

Accepted Answer

Life insurance is a binding contract between a policy Owner and an insurance company to provide money to someone or something (the policy Beneficiaries) in the future when the person insured under the policy passes away. The policy owner can be the insured or can be another party if they are also the beneficiary of the policy. In return for this promise of future payment, the policy owner must pay money (Premiums) to the insurance company during their lifetime.

Question 2

Why should I consider life insurance?

Accepted Answer

When applied for, owned and managed properly, Life insurance death benefit is paid to beneficiaries completely tax free. It is the most tax efficient financial instrument to provide immediate liquidity to fund planning objectives that will transpire at the death of an insured regardless of when that death occurs. Whether this is to protect future earnings potential for young families, fund a trust that will need to pay estate taxes when wealth is transferred to the next generation, provide liquidity to capitalize a corporate succession plan or fulfill a charitable commitment that will leave a lasting legacy, life insurance is the most commonly used tool to plan for these life events.

Question 3

How does the insurance company determine my premium?

Accepted Answer

Premium rates for an insured are determined based on the following four factors:
•     Age
•     Gender
•     Health
•     Lifestyle Habits (risky avocations, travel, etc.)
Underwriting is the process insurance companies use to evaluate these factors to determine what it will cost to insure an applicant for the desired amount of insurance. Our informal underwriting process allows us to determine each client’s insurability and underwriting classification before they ever purchase an insurance policy. We are dedicated to helping you find the best insurance value for your unique situation.

Question 4

Can I get life insurance without taking a medical exam?

Accepted Answer

Yes, you can often obtain life insurance without a medical exam, especially if you've had a physical in the last 12-18 months and are below Age 70.

Question 5

How much life insurance can I obtain?

Accepted Answer

Depending on the age and health of the insured, it is possible to obtain up to $400,000,000 of coverage on an individual. To justify large insurance purchases, insurance companies will also underwrite the financials of a prospective insured to validate the desired insurance amount. A personal financial statement, past two years of tax returns and statements showing the source of funds to pay future premiums are the typical items that will be requested for review by the insurance company underwriters.

Question 6

Who can be a beneficiary of my insurance policies?

Accepted Answer

A beneficiary is the person or entity designated to receive the proceeds from your life insurance policy after your passing. You can choose anyone that has a legitimate insurable interest in your life as your beneficiary, such as:
•     Family Members: Spouse, children, grandchildren, etc.
•     Other Individuals: Relatives, friends, business partners, etc.
•     Trusts: Trusts define how the benefit will be owned and distributed in accordance with your wishes after your passing
•     Organizations: Corporations, Charities, Private Foundations, educational institutions, etc.
Beneficiary designations are a component of the insurance application process and can be managed and changed by the policy owner at any time throughout the life of the policy.

Question 7

Can life insurance also be used to protect a company or a charity?

Accepted Answer

Life insurance is used pervasively for corporate planning purposes. Each of the following strategies can play a crucial role in safeguarding the future of your business and the well-being of your employees and partners:
•     Buy-Sell Agreements
•     Key Person Insurance
•     Executive Compensation Programs
•     ESOPs (Employee Stock Ownership Plans)
To determine the best options for your specific situation, please share more details with us, and we will provide personalized guidance.

Question 8

What living benefits can life insurance provide?

Accepted Answer

Permanent life insurance policies include a Cash Value account whereby any payment into the policy in excess of the annual policy charges goes into a general account that earns a yield from the insurance company. Growth of the cash value account compounds tax free throughout the life of the policy and will become another asset on the policy owner’s personal financial statement. Cash values can be accessed by a policy owner through policy loans or withdrawals to provide supplemental income during an insured’s lifetime if necessary. Additionally, many permanent life insurance products now include some form of long-term care benefit that an insured can access to help cover assisted living costs.

Question 9

What is disability insurance?

Accepted Answer

Disability insurance provides guaranteed monthly income to an insured that experiences a disability that results in a loss of earnings. Common examples would be a surgeon who suffers a career ending hand injury, a fortune 500 CEO that can’t return to work due to a life-threatening illness or a professional entertainer that suffers an injury that prevents them from being able to perform their talent. Depending on the level of income being protected, there are different insurance markets that have to be considered and we at AIP are experts in navigating how to best protect the earning potential of our clientele in the event of a disability.

Question 10

What other insurance products can AIP help me with?

Accepted Answer

Accidental Death and Dismemberment policies (AD&D) are specialty policies that can be secured to protect a person or company in special situations in the event of an accident. These policies can be secured very quickly, are usually cheaper than traditional life insurance and are often used to provide protection for a very specific purpose. Clients who travel frequently, have risky avocations or who may be exposed to dangerous environments may be able to secure an AD&D policy to provide critical financial protection when traditional insurance may not be available. We also have access to a breadth of insurance specialists in the areas of corporate and personal property casualty as well as professional liability that we can put you in touch with if you need existing policies reviewed or are seeking other coverages. You may contact our offices and we will put you directly in touch with an appropriate professional who will be able to assist with these specific insurance needs.

Question 11

Does AIP work with international clients?

Accepted Answer

AIP provides tailored estate planning insurance solutions for global citizens with an established financial presence in the United States, addressing cross-border complexities, tax considerations, and enhancing wealth preservation strategies. Learn more about our specialized Global Wealthy Citizens program here.

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