Frequently Asked Questions
Life Insurance
What type of Life insurance do i need?
The type of life insurance you need depends on your goal. There are policies designed solely to provide your family payment if you pass away. Other policies provide this for your family, in addition to living benefits as well. These policies have a built-in cash value that grows over time as you pay your premiums that can be accessed for emergencies or whatever else you may need it for while you are still alive. Many people use this additional benefit for retirement planning, college planning, emergency money, etc. There are many benefits to both types of life insurance policies, it just depends on your goals.
what is the difference between term life insurance and permanent life insurance?
Term life is a life insurance policy that provides protection for your beneficiaries for a specified number of years (e.g. 10, 15, 20, 30 years, etc.) if you die during this specified term. Once this term ends, technically your coverage is still active, however, your policy will convert to one-year term and will renew annually. Your premium increases significantly and continues to increase year after year when it renews. Permanent life insurance is a life insurance policy that covers you permanently as long as you pay the premiums (e.g. Whole Life, Universal Life, Indexed Universal, Variable Universal). Certain permanent plans have guaranteed level premiums, the premium is guaranteed to never change--Whole Life is guaranteed level premium. Whole life also has an added benefit that term life does not. In addition to the death benefit, it builds a cash value that increases every year as you pay premiums. Depending on the plan, the cash value can grow tax free and can be accessed by the policyholder tax free for anything they want to use it for.
what are the requirements to get life insurance?
First, you must complete a life insurance application which an agent can provide you with--this begins the underwriting process with the insurance company. Most life insurance policies will also require you to complete a medical exam by a licensed nurse at no cost to you; nurses are flexible and can come to you at your home or work place, and your agent can arrange to have this completed. Depending on the type of policy you apply for, your age and certain answers on the application, additional requirements may be requested by the insurance company. We assist clients throughout this process to ensure underwriting flows smoothly and in a timely manner. Once underwriting is complete, the insurance company will decide if you are approved for coverage or declined.
how much insurance do i need?
The amount of life insurance coverage needed varies for everyone. There is really no way for any advisor or agent to recommend how much coverage you should have without learning more about you. Income, household, family members, goals and other factors will dictate the right amount for you. Discussing your situation with a qualified agent is the best way for you to ensure you and your family are adequately covered if you are no longer around.
how much will life insurance cost me?
Generally, this depends on how a life insurance company rates you based on different criteria. Costs are generally calculated based on: the life insurance application, your age, current health, past health, family history, gender. Other factors may be considered that can affect your insurance cost.
can creditors claim my life insurance money before my beneficiaries if i pass away?
No. By law, if you specifically name a beneficiary of your life insurance policy, creditors and debt collectors are prevented from claiming any portion of your life insurance benefit when you pass away. The only people or entities entitled to an insured's death benefit when they pass away are the ones specifically named as beneficiaries in the policy. Additionally, your beneficiaries cannot be taken to court and sued for your death benefit. However, its important to note, if no beneficiary is named in a life insurance policy, all death benefit proceeds will automatically go to the insured's estate upon their death, at which time the death benefit will in fact be available for creditors and debt collectors to potentially claim.
CAN I ACCESS MY DEATH BENEFIT WHILE I AM ALIVE?
Your policy can potentially be designed to allow you the ability to access a portion of your death benefit while you are still alive; this can be done a few different ways. Some insurance companies have the option to add a "rider" (or extra feature) for an accelerated death benefit option which allows an insured to access a portion of their death benefit if they meet certain conditions such as the inability to perform 2 out of the 6 activities of daily living (ADL). These ADLs are bathing, dressing, eating, transferring, toileting and continence. These are the same ADLs that are considered as a requirement to qualify for Long Term Care policy benefits. Another condition is if the insured is diagnosed as terminally ill during their policy term, they can access a portion of their death benefit early. Additionally, another way an insured may be able to access their death benefit early is through a permanent life insurance policy such as a Whole Life insurance policy. This type of policy allows insureds to spend portions of their death benefit early in the form of loans against their death benefit for various uses (e.g. retirement income, emergency funds, capital for investments, college tuition for their children, etc.).
what if my health changes during my policy, will my premiums increase?
In general, insurance companies cannot increase your premium based on changes in your health; they must honor the premium amount in which you are paying until the end of the policy. For term, your premiums are level and guaranteed not to change until the end of the term; once the term ends, your premiums will increase significantly as it renews annually. Many term life policies come with conversion options in which the insurance company will allow you to convert your term plan to a permanent plan without medical underwriting--your risk class from the term plan will transfer to your new policy--regardless of changes to your health. This is very useful to anyone who experienced an unexpected change in their health and may no longer be insurable if they were to re-apply with other carriers. In permanent plans, your premiums are guaranteed to never change due to changes in your health. Whole Life is guaranteed level premium and will remain the same until the end of the policy. Universal Life, Indexed Universal Life, and Variable Universal Life will have increasing costs over time as you get older--not as a result of health changes.
Guaranteed Lifetime Income
What is guaranteed lifetime income?
Guaranteed lifetime income refers to income designed to continue throughout your lifetime, subject to the terms of the financial product providing it. It can be incorporated into a retirement strategy to help create a more predictable source of income for ongoing expenses.
Why is guaranteed income important in retirement?
Retirement can last for decades, making it important to consider how your income will continue after your regular paycheck stops. A guaranteed income strategy may help provide greater predictability while complementing other sources of retirement income such as Social Security, pensions, retirement accounts, and personal savings.
How much guaranteed income will I need in retirement?
There is no single amount that works for everyone. Your income needs depend on your expected retirement expenses, lifestyle, existing savings, Social Security benefits, pensions, other assets, and long-term financial goals.
Can guaranteed lifetime income help reduce the risk of outliving my money?
Certain financial products can provide income for life, which can help address longevity risk as part of a broader retirement strategy. Guarantees are subject to the terms of the contract and the claims-paying ability of the issuing insurance company.
Disability Insurance
what is the benefit of disability insurance?
The benefit of Disability Insurance is that if you become sick or injured and are unable to perform the duties of your job, your Disability Insurance policy will provide you a monthly income while you are disabled.
what are disabilities that can be covered?
This depends on your policy and what they deem a qualified disability; this is called their Definition of Disability. Certain policies may only cover you if you have a major disability, and will require you to meet certain strict criteria. Other policies may be more general and have a wide range of disabilities and cover not only physical injuries, but sickness and disease, as well as mental illnesses like anxiety, depression, or substance abuse. Professionals like physicians, dentists, computer programmers and engineers and much more that require certain motor skills and senses are much more susceptible to being unable to perform their job duties as a result of sickness or injury. This is why it is very important to understand your policy and know what they require to qualify for your benefits.
what is the difference between short-term and long-term disability insurance?
Short-term disability insurance, as the name implies, has a shorter limit for how long you receive your benefits during disability. In most cases, it is around 3-6 months, regardless of how long you are disabled. Short-term policies are typically provided as a group benefit through your employer; these tend to be the more strict policies that only cover specific disabilities. Long-term disability insurance is a policy that provides the monthly benefit for 1 or more years, depending on your contract. They are usually individual policies meaning you own it and can take it with you wherever you go if you leave your current job. Long-term policies are usually more general in what they consider disability, which is beneficial because they have less limitations on how you can qualify.
is my disability insurance through my employer enough?
It's always a good thing if your employer offers Disability Insurance in a group plan; something is better than nothing. However, there are gaps you should be aware of in group policies. If it is paid by your employer, in-part or entirely, you will owe certain levels of taxes on disability claims paid to you. These plans are typically short-term, meaning you may only receive benefits for about 3-6 months. You cannot take this policy with you if you leave your job or are fired so your coverage will end at that point. Also, short-term group policies generally cover a predetermined percentage of your income up to a certain cap; if you are a higher income earner, the benefit cap may be significantly lower than your income. There may also be strict guidelines on how you can qualify for your benefit, so there is a chance if you do in fact become disabled you may not even qualify for the benefit. A good idea is to explore how you can supplement your group plan and add your own portable coverage that you keep wherever you go that can bridge these gaps so you have a much more reliable safety net.
What is the benefit of my own long-term disability insurance policy?
You can bridge the gaps of your group plan through your employer if you have one. This policy is portable, you can take it with you if you change jobs. You will receive your benefits tax-free unlike employer-paid group plans. They have a much more general definition of disability so you are more likely to qualify for your benefits upon disability. You can have much more of your total income covered. You can be covered for mental illnesses such as anxiety, depression, or substance abuse which is extremely important. Your plan is customizable, you can design it to give you coverage if you are disabled and can't perform the specific duties of your job, but are able to do other work instead while disabled. These extra features and benefits are called "riders" and you can pick and choose different riders to enhance your coverage.
Disability Income Insurance for Physicians & Dentists
Why is Disability Income Insurance especially important for physicians and dentists?
Physicians and dentists spend years developing specialized skills that directly affect their ability to earn an income. An illness or injury that interferes with those specific duties could have a significant financial impact, even if the individual is still capable of performing other types of work.
What does "own occupation" mean in Disability Income Insurance?
Own-occupation generally refers to how a disability policy defines your ability to perform the duties of your occupation. Definitions and benefits vary by policy and insurance carrier, making it important for physicians and dentists to review the actual policy language and understand how their specialty may be treated.
Is employer-provided Disability Insurance enough for a physician or dentist?
Employer-sponsored coverage can provide valuable protection, but benefit limits, definitions of disability, portability, and other provisions may create gaps for higher-income professionals. Reviewing your employer coverage alongside your income and financial obligations can help determine whether additional individual coverage should be considered.
How much of my income should Disability Income Insurance replace?
The appropriate amount depends on your income, existing coverage, monthly expenses, financial obligations, and carrier underwriting guidelines. The goal is to understand how much income you would need if a disability reduced or eliminated your ability to work.
Retirement Planning
when is the best time to start retirement planning?
The best answer is the earlier the better. If you start at a young age, you can enjoy many more years of growth in your plan and significantly improve your future retirement income without having to put a lot every year over time. Many people who leave planning to a later age find themselves scrambling to fund their retirement account and having to contribute significantly more of their income in order to make up for lost time and get their account where it should be. You risk not being ready to retire when the time comes and having to postpone it to a later age.
what are different retirement plan options?
There are several ways to plan for retirement. Most employers offer a 401(k) or 403(b) plan to their employees that they can set aside money in every year, and their employer may even match their contributions. An IRA is another vehicle to plan for retirement and you can choose to invest your contributions in certain areas to grow your account similar to a 401(k). Other, more non-traditional ways, to plan are Real Estate investing and Life Insurance which has guaranteed growth and accumulation and tax benefits that make them more flexible and reliable. Discussing your goals with a knowledgeable and trusted advisor will put you in a much better position for the future.
how much will Social security pay me in retirement?
Everyone's Social Security retirement benefit is different, it depends on your years of employment. Additionally, depending on where your personal retirement income is coming from, it may create a tax on a portion of your Social Security benefit. You can learn what your future Social Security benefit in retirement may be and if you will owe a tax on it by speaking to an advisor from our team.
Annuities
What is an annuity?
An annuity is a contract issued by an insurance company that can be used for accumulation, retirement income, or a combination of both. Different types of annuities offer different features, guarantees, risks, and income options.
Are all annuities the same?
No. There are different types of annuities, and each can have different features, growth potential, income options, fees, surrender periods, and guarantees. Understanding those differences is important before deciding whether an annuity fits into your financial strategy.
Can an annuity provide income for the rest of my life?
Certain annuities offer options designed to provide guaranteed lifetime income. The amount of income and the specific guarantees depend on the contract selected and the options available through the issuing insurance company.
How do I know if an annuity is right for me?
That depends on your retirement goals, age, income needs, existing assets, liquidity needs, risk tolerance, and overall financial situation. An annuity should be evaluated as part of your complete retirement strategy rather than as a stand-alone decision.
Mortgage Protection
What is mortgage protection?
Mortgage protection is designed to help protect your home and family from the financial impact of an unexpected death or disability. Depending on the type of coverage selected, benefits may help your family continue meeting mortgage and other financial obligations.
How is mortgage protection different from homeowners insurance?
Homeowners insurance generally protects the physical home and personal property against covered losses. Mortgage protection is designed to address financial risks associated with the person responsible for making the mortgage payments.
Is mortgage protection the same as Private Mortgage Insurance (PMI)?
No. PMI generally protects the mortgage lender if a borrower defaults. Mortgage protection coverage is designed to provide financial protection related to the borrower and their family.
How much mortgage protection do I need?
The appropriate amount depends on your outstanding mortgage balance, household income, existing life and disability coverage, family expenses, and other financial obligations. Reviewing your complete financial situation can help determine the appropriate level of protection.
General Financial Planning
Where should I start if I'm not sure what type of financial strategy I need?
Start with a review of where you are today and what you want to accomplish. We can look at your retirement goals, income needs, existing insurance, family responsibilities, and other financial priorities to identify areas that may need attention.
Can Sunshine Financial review the insurance and retirement plans I already have?
Yes. A review can help you better understand your existing coverage and strategies, identify potential gaps, and determine whether your current approach still aligns with your financial goals.
Do you work with business owners and high-income professionals?
Yes. Sunshine Financial Solutions works with individuals, families, professionals, and business owners to develop strategies focused on retirement, income, financial protection, and long-term goals.
How do I schedule a consultation?
You can contact Sunshine Financial Solutions or schedule an appointment to discuss your current financial situation, concerns, and goals. From there, we can determine which areas may benefit from a more detailed review.
Business Valuation
what is business valuation?
Business Valuation is a service our team provides that gives business owners an accurate figure for what their business is worth today. This will include specialized reports you can review to provide a snapshot of the performance of your business in different areas.
why is business valuation important?
Valuation of your business is essential for you to make sure you are running your business as optimally as possible and see if you are profitable or losing money. This service will not only show you what your business is worth but will also provide you with valuable reports to help your future operations. It will give you a roadmap for maximizing profits, minimizing unnecessary expenses that may be draining profits, and show you what you can do to ensure you can withstand business interruptions from any unexpected event.
how much does a valuation cost?
Normally, business valuations with most companies will cost thousands of dollars. Business owners who take advantage of Business Valuation with our team will get this service FOR FREE. We work with a team of skilled accountants and attorneys to provide you with accurate business valuation reports that you can rely on to see how your business is doing. No strings attached and no obligation.
what can i do with a business valuation?
After you value your business, you can see if you are profitable or not. You can see what areas of your business are draining the most money and how to improve on them. A valuation will give you insight on how you can implement strategies to retain your key talent, give your employees incentives if you haven't already, plan for your future with a solid exit strategy and how you can sell your business if you decide to in the future. You will be able to learn how you can create a plan of action if something were to happen to you or one of your key employees that may disrupt your operations.
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