Frequently Asked
Questions
General
Investment
Life Insurance
Retirement Planning
General
-
What are some
practical things I
can do to lower my
automobile insurance
rates?
-
What are the
advantages to using
an agent to purchase
insurance?
-
What should I
consider when
purchasing
automobile
insurance?
-
Suppose I lend my
car to a friend, is
he/she covered under
my automobile
insurance policy?
Investment
-
What are the
benefits of working
with a financial
professional?
-
What can a financial
professional
provide?
-
What information
should I expect to
provide when working
with my financial
professional?
-
How often should I
meet with my
financial
professional?
-
What is the benefit
of tax-deferred
growth?
-
How do I save for my
children's
education?
Life Insurance
-
Why should I
purchase life
insurance coverage
on my children or my
spouse?
-
How much life
insurance should I
purchase?
-
How do I know which
is the right type of
life insurance?
-
My mortgage company
says I should buy
life insurance from
them, what is that
about?
-
What if I already
have life insurance
coverage through my
employer?
Retirement Planning
-
How do I choose the
right IRA?
-
Can I contribute to
my retirement plan
at work and
contribute to an
IRA?
-
How much do I need
to save for
retirement?
General
What are some practical
things I can do to lower
my automobile insurance
rates?
There are a number of
things you can do to
lower the cost of your
automobile insurance.
The easiest thing to do
is ask us to get quotes
from several companies
for you.
It is not uncommon to
find quotes on
automobile insurance
that can vary by
hundreds of dollars for
the same coverage on the
same car. When you shop,
be careful to make sure
each insurer is offering
the same coverage.
Another way to lower the
cost of your automobile
insurance is to look for
any discounts for which
you may qualify. For
example, many insurers
will offer you a
discount if you insure
multiple cars under the
same policy, or if you
have had a driver
education class in the
last five years. Be sure
to ask us about their
discount plans.
Another easy way to
lower the cost of your
automobile insurance is
to increase the
deductible. Simply
raising your deductible
from $250 to $500 can
lower your premium
sometimes by as much as
five or ten percent.
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What are the advantages
to using an agent to
purchase insurance?
By using an agent to
purchase insurance, the
policyholder receives
more personal service.
An agent with whom there
is direct contact can be
vital when purchasing a
product and absolutely
necessary when filing a
claim. A local, agent is
able to deliver quality
insurance with
competitive pricing and
local personalized
service.
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What should I consider
when purchasing
automobile insurance?
There are a number of
factors to consider when
purchasing any product
or service, and
insurance is no
different. Here is a
checklist of things you
should consider when
purchasing automobile
insurance.
Base your decision on
value. This is more than
simply the lowest price.
The premium you pay
should be compared to
the claims and policy
service, protection and
advice you receive.
Independent agents, and
the companies we
represent, deliver
excellent value.
Purchase the amount of
liability coverage that
makes sense to you. You
should decide which
optional coverages you
want. For example, do
you want optional
physical damage
coverages or is the
market value of your car
too low to warrant
purchasing them.
Once you have decided
what you want in your
automobile insurance
policy, you can now
decide from whom you
would like to purchase
the insurance from.
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Suppose I lend my car to
a friend, is he/she
covered under my
automobile insurance
policy?
Whenever you knowingly
loan your car to a
friend or an associate,
he or she will be
covered under your
automobile
insurance policy,
subject to any driver
exclusions on your policy.
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Investment
What are the benefits of
working with a financial
professional?
With the variety of
investment choices
available today, it is
difficult to make a
solid financial plan
without first
researching your needs,
and then determining the
appropriate products to
meet those needs.
Unfortunately, our daily
lives generally prevent
us from spending the
time required to
legitimately understand
our options. Working
with a financial
professional allows you
to get assistance from
someone who understands
your needs and goals,
and can provide
appropriate options
based on your input.
Taking a professional
approach to meeting your
investment needs and
goals can save you time,
and allow you to make
solid choices regarding
your financial future.
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What can a financial
professional provide?
Personalized Attention
Financial professionals
take the time to get to
know who you are. The
most important
information they receive
is directly from their
clients. Understanding
your financial
situation, goals,
investment time horizon
and risk tolerance
enables your financial
professional to assist
you in working toward a
strategy that fits both
your objectives and your
budget.
A
Resource for Information
Your financial
professional is your
personal financial
instructor. From
explaining financial
concepts to providing
illustrations about
various financial
products, a financial
professional's goal is
to assist you in making
educated decisions in
the implementation of
your financial strategy.
Recommendations and
Assistance
A financial professional
has the expertise,
resources and time to
keep abreast of market
news, legislation, and
trends. A financial
professional can provide
you with current
information and explain
how any such changes may
impact your investment
strategy and objectives.
Explaining Financial
Products and How They
Work
A financial professional
can compare various
financial products
vehicles and describe
the pros and cons of
each with regard to your
personal financial
strategy and goals.
Continuing Support
As your life changes, so
does your investment
strategy; and your
financial professional
is here to help you
continually, not just
when you begin to
implement your plan. A
serious financial
professional will meet
with you periodically in
order to review your
plan’s progress, and
make objective
recommendations when
appropriate.
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What information should
I expect to provide when
working with my
financial professional?
To assist you in
developing a financial
strategy that's right
for you, it is important
for your financial
professional to
understand as much about
your finances as they
can. For your
protection, your
financial professional
will ask about your
financial situation,
financial goals,
investment time horizon
and risk tolerance in
order to assure your
choice of investments
are suitable for your
needs and goals.
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How often should I meet
with my financial
professional?
You should plan to meet
with your financial
professional at least
once a year in order to
reevaluate your plan
strategy. If you have a
major change in your
life—an inheritance, a
new child, a death,
marriage, health
concerns—you should meet
with your financial
professional to consider
any necessary
adjustments. Remember,
this is your financial
strategy; and you should
know how you are
progressing toward your
goals.
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What is the benefit of
tax-deferred growth?
With tax-deferred
growth, you do not have
to pay income taxes on
your earnings until you
withdraw them. This
strategy, sometimes
referred to as “triple
compounding” allows you
to keep more of what you
earn, and grow your
savings more quickly.
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How do I save for my
children's education?
One of most parents'
biggest concerns is
giving their children
the best education
possible. A solid
education, a good job, a
secure future - you want
nothing less for your
children. It's never too
early to start planning,
and it’s never too late
to evaluate your
resources. Most
financial professionals
can make sound
recommendations for
appropriate savings
plans based again, on
your particular
situation.
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Life Insurance
Why should I purchase
life insurance coverage
on my children or my
spouse?
For working spouses,
income replacement is
the most common reason.
Many working couples are
also concerned about the
cost of child care,
paying for household
duties typically
performed by the
deceased spouse, and
more. The survivor’s
priority is continuing
to provide for your
family. The most
opportune time to buy
life insurance for your
children is when they
are young, healthy, and
the rates are as low as
they will ever be.
Insuring young can also
protect their
"insurability", should
they develop health
problems later in life.
Plus, there are many
types of policies that
can be made into "family
plans" at a lower cost
than separate coverage
for each individual.
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How much life insurance
should I purchase?
As a "rule of thumb" you
should purchase an
amount of life insurance
equal to 6 to 8 times
the insured’s annual
earnings. However, many
factors should be taken
into account in
determining a more
precise estimate of the
amount of life
insurance, including:
-
Income sources (and
amounts) other than
salary/earnings
-
Whether or not the
individual is
married and, if so,
the spouse's earning
capacity
-
Length of time until
retirement
-
The number of
individuals who are
financially
dependent on the
insured
-
The amount of death
benefits payable
from Social Security
and from an employer
sponsored life
insurance plan
-
Whether any special
life insurance needs
exist (e.g. mortgage
repayment, education
fund, estate
planning need) etc.
It
is recommended that a
person's financial
professional be
contacted for a precise
calculation of how much
life insurance is
needed.
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How do I know which is
the right type of life
insurance?
The answer will vary
depending on your
circumstances, your
reasons for the
coverage, your age, and
how much you are willing
to spend. The best way
to determine the right
policy for your needs is
to sit down with a
qualified insurance
professional to review
the key points of your
particular situation.
Generally, this can be
done through a very
short interview.
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My mortgage company says
I should buy life
insurance from them,
what is that about?
Most likely your
mortgage company is
offering something
called "mortgage
protection life
insurance" or
"decreasing mortgage
protection". This type
of protection is a basic
term life insurance
policy that pays off
your mortgage loan at
your death. While the
premium is generally
level, the death benefit
decreases over time (as
your mortgage decreases
with payments) There may
be better alternatives,
so you should talk to
your insurance
professional before
purchasing any type of
coverage to see what is
most appropriate for
you.
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What if I already have
life insurance coverage
through my employer?
That's great, and it's
wonderful that you are
fortunate enough to have
an employer that
recognizes the value of
life insurance coverage
for you and your family.
Be sure to find out from
your employer though, if
your coverage is
"portable", meaning you
can take your policy
with you when you leave
the company, become
disabled, or retire. Not
all policies are
portable. Further, many
companies offer their
employees term
insurance, meaning that
it may not provide
coverage for the rest of
your life.
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Retirement Planning
How do I choose the
right IRA?
Choosing the right IRA
is dependent on several
factors: your household
income, your current tax
rate, the length of time
you plan to hold your
investments, your
estimation of your
future investment
returns, your estimated
tax rate when you
withdraw funds, and
future tax law
revisions. Because every
person's situation is
different, there isn't
one simple answer. You
need to compare your
choices and decide which
is best for you. Your
financial professional
can assist you in
reviewing your financial
situation, and make
recommendations
accordingly.
Roth IRA vs.
Traditional IRA The
main difference between
a Roth IRA and a
Traditional IRA is when
you pay taxes.
Contributions to a Roth
IRA are made from
after-tax income. Roth
IRA contributions grow
tax-free and are not
taxed when withdrawn for
qualified reasons. These
include a first-time
home purchase,
disability and medical
expenses, and any
withdrawal taken after
age 59-1/2, as long as
the account has been
open for at least five
years. Withdrawals that
do not qualify may incur
taxes and/or penalties.
You may also want to
consult a tax
professional.
Contributions to a
Traditional IRA are
tax-deductible (subject
to certain income
limits) and taxes are
paid when you withdraw
the money. Contributions
grow tax-deferred.
Employee Savings Plan
vs. Roth IRA While
the Roth IRA may provide
significant benefits for
many investors, it
should be considered in
relation to other
retirement savings
opportunities. If you
are eligible to
contribute to an
employer's plan that
matches all or part of
your contributions, you
may find the plan more
advantageous than
contributing to a Roth
IRA. If your company is
not matching any of your
own contributions, a
Roth IRA may provide
more flexibility for
you.
Non-Deductible IRA
vs. Roth IRA If your
income prevents you from
deducting your
Traditional IRA
contributions, you may
be eligible for a
non-deductible IRA or a
Roth IRA. Since
contributions are
non-deductible for
either the
non-deductible IRA or
the Roth IRA, the
difference is in the
distribution rules. The
Roth IRA may be a better
choice because
withdrawals will be tax-
free at age 59-1/2, and
you are not required to
begin distributions at
age 70-1/2. Withdrawals
from a non-deductible
IRA are taxed as
ordinary income at age
59-1/2, and minimum
distributions are
required at age 70-1/2.
Converting a
Traditional IRA to a
Roth IRA If you're
thinking of converting
from a Traditional IRA
to a Roth IRA, project
your tax rate, income
level, and date of
retirement. If you're
far enough away from
retirement to offset the
tax bite of closing your
Traditional IRA when
converting - and if you
expect your tax bracket
to be higher upon
retirement - the Roth
IRA may be a better
alternative.
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Can I contribute to my
retirement plan at work
and contribute to an
IRA?
Anyone who has earned
income may contribute to
an IRA and also
contribute to an IRA for
a spouse who does not
have earned income.
However, not everyone
can deduct his or her
IRA contribution for his
or her taxes each year.
Since all Roth IRA
contributions are made
with after tax dollars,
there is no
deductibility
opportunity for any
person. On traditional
IRAs, if you are
eligible for a company
sponsored retirement
plan, even if you do not
contribute to it, the
ability for you and your
spouse to deduct your
IRA contributions is
based on your combined
income level. These
levels change annually,
so consult your tax
advisor and financial
professional for the
most updated
information.
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How much do I need to
save for retirement?
Experts estimate that
you will need at least
80% of your
pre-retirement income to
live comfortably in
retirement. By the time
you are ready to retire,
you probably won't have
the expenses you do now,
such as a mortgage or a
child's college tuition;
but costs such as
increased medical care
may claim a sizeable
share of your retirement
income. With this in
mind, some financial
planning experts
estimate you may need as
much as 100% of your
pre-retirement income
just to make ends meet!
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