Risk Management Personal Insurance

Life is unpredictable, and no one knows what the future holds. While it’s impossible to completely eliminate all risks that life may bring, planning can help you prepare for the future and reduce the possible consequences.

Personal Insurance

How will you plan to protect your loved ones from losses that may result from life events – death, injury, property losses? The answer is insurance. Through our Retirement Planning Process, Lof Financial Advisors will address your insurance options and help you obtain the coverages that are appropriate for your unique needs.

The following are overviews of the more common types of risks and related insurance vehicles that Lof Financial Advisors will address in your plan.

Life
Insurance

Homeowners Insurance

Car Liability Insurance

Disability Insurance

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And we do it in person and/or virtually on your schedule, not ours.

Life Insurance

Life insurance is the contractual obligation of an insurance company to pay a sum of money (death benefit) to specified individuals (beneficiaries) upon the death of a specified individual (the insured). To fund this payment, the insured pays money (premiums) to the insurance company over a specified period of time. The contract remains in force as long as the premiums are paid according to the contract terms. In the event that the insurance company is unable to pay the death benefit, state government guarantee funds may pay at least some of the death benefit.

Types of Life Insurance

Term life insurance

Term life insurance lasts a specified number of years – 10 years, 20 years, etc. – from the effective date of the insurance to the last day of the term. At the end of the term, the death benefit goes to zero. Generally, term life insurance does not build a residual (cash) value.

In addition to simple term life insurance, there are a number of variations that may be right for you. There are policies that can be converted to permanent (see below) life insurance, policies that allow you to extend the term annually once the initial term is up, coverage that decreases over the term of the policy, etc. Lof Advisors will help you select the policy that best fits your needs.

Permanent Life Insurance

Unlike term life insurance, a permanent life insurance policy stays in force for the insured’s life. The death benefit will cease to exist if the policy premium payments are not made or if the policy is surrendered for its cash value. Because of the duration (life) of the policy and the potential accumulation of cash value, permanent life policies are generally more expensive than term policies.

Types of Permanent Life Insurance

Whole Life Insurance. These policies accumulate a cash value that can be used for loans, to pay policy premiums, or to pay out cash if the policy is surrendered.

Universal Life Insurance

This type of permanent life insurance accumulates a cash value that can earn interest, has flexible premiums that can be changed over time, and can have a flexible death benefit.

Indexed Universal Life

As the name suggests, the cash value on this type of universal life insurance will increase over time based on a fixed rate or an index.

Variable Universal Life Insurance

This universal life insurance permits the investment of the cash value in assets that fluctuate with market conditions. Flexible premiums and death benefits are also a feature of variable universal life insurance.

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Address 4757 East Camp Lowell Drive Tucson, AZ 85712

Email info@lofadvisors.com

What Is Homeowners Insurance?

A homeowners insurance policy provides financial protection against losses in your home resulting from interior and exterior damage to the structure, damage and/or loss to personal effects and assets, and injury to others that occurs on your property. When a claim is settled on a homeowners insurance policy, a deduction (called a deductible) is made to the settlement amount. The deductible is then the responsibility of the homeowner to cover. Coverage for injuries to others while on your property is subject to a liability limit specified in the policy. Every homeowner’s insurance policy has a liability limit which determines the amount of coverage the insured has should an unfortunate incident occur. Other losses resulting from acts of war and/or acts of God (earthquakes, floods, for example) are generally not covered from standard homeowners insurance policies. Coverage for these type of specific losses are available in specific policies.

Homeowners Insurance and Mortgages

When applying for a mortgage lending, institutions generally require proof of homeowners insurance that can be acquired through the institution or separately.

Homeowners Insurance vs. A Home Warranty

Homeowners insurance and a home warranty are not the same thing. A home warranty covers the cost to repair or replace systems and/or appliances in your home. Those things that are not covered by homeowners insurance. Generally, these contracts expire and are renewable annually.

Homeowners Insurance vs. Mortgage Insurance

As it says, homeowners insurance protects the homeowner, while mortgage insurance protects the lender in the event that the borrower defaults on the loan. Lenders (like the FHA) will require the borrower to take out mortgage insurance if the borrower does not meet customary qualifications for obtaining the mortgage.

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What Is Liability Car Insurance?

Liability car insurance is the part of automobile insurance that protects the driver of the insured vehicle if that vehicle is involved in an accident that results in bodily injury and/or property damage to another party and/or vehicle. Virtually every state requires that automobiles drivers have bodily injury and property damage liability car insurance coverage.
If a driver is found to be at fault in an accident, the insurance company will pay for medical expenses and property damage for the other people involved the accident.

In states where no-fault auto insurance is required, drivers who are involved in an accident file a claim with their insurance company even if they are not at fault. This Personal Injury Protection (PIP) coverage will cover the driver’s accident-related medical expenses as well as the passengers in their vehicle.

The insurance company’s obligation under liability and property coverages is only up to the limits per accident set forth in the policy. Each state sets minimum coverage thresholds for liability coverage. Individuals who have substantial assets they want to protect from a liability lawsuit may want to purchase excess liability insurance under an umbrella policy.

Those people who drive an expensive vehicle that depreciates quickly may want to purchase GAP insurance.

Liability vs. Full-Coverage Automobile Insurance

Full Coverage Automobile Insurance covers driver for liability, collision, and comprehensive risks. Collision and comprehensive covers your own car, while property damage insurance covers another person’s car. While full-coverage policies will cost more than a liability-only policy, it will protect against more financial risks. Collision coverage covers repair costs for an accident with another vehicle or another object. Generally, comprehensive coverage provides protection from damage from fire, vandalism, and falling objects, and if your vehicle is stolen. If your vehicle is financed, the lender may require you to have collision and comprehensive coverage. Lof Advisors will help you get the appropriate automobile insurance for your needs and state requirements.

What Is Disability Insurance?

In the event of a disability that prevents the holder of the policy for working and earning an income, disability insurance provides income.

In the United States, disability insurance is available from the federal government (Social Security System) and from private insurers. The cost of this insurance from private insurers is influenced by the amount of income needed, the duration of the income stream, the insurance policy qualification requirements, the insureds medical history, and benefit commencement waiting period.