South Florida Hospital News
Sunday August 25, 2019

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September 2017 - Volume 14 - Issue 3




Why Life Insurance Is Critical for Practicing Physicians

Mark Twain famously once wrote that people who die without life insurance should have to come back and clean up the mess they left behind. Wise words, indeed.

Think about what insurance does - not about what it is. What it does is protect your downside from a total catastrophic unforeseen risk.
Also, think of life insurance as a long-term investment made on behalf of your family. While you may never realize the return on your investment, your family will.
Your advisor’s role is to help you identify your insurable needs, present you with viable insurance options, and explain the pros and cons of each option.
The right insurance agent helps you secure the right amount of coverage at the right time for the right price. Every insurance policy you own is an asset. If you own health, dental, visual, or hospitalization insurance, these assets protect your net worth if you require medical care. If you own auto, property, or casualty insurance, these assets protect your net worth if you have an accident or catastrophe.
Life Insurance serves several purposes:
1. It can create income replacement.
2. It can create business continuation protection if an owner or partner dies.
3. It can create estate preservation protection to pay estate and inheritance taxes.         
4. It can create estate and business equalization so specific assets can go to specific people.      
5. It can pay off debt, taking financial pressure off your family or business.
6. It can complete educational savings for the children.
7. It can complete a retirement saving plan for the surviving spouse.
Three ingredients underlie the decision to purchase life insurance:
• Someone you love would be financially impacted by your death.
• You are medically and financially qualified to be underwritten.
• You can afford to fund the solution to the above problem by paying insurance premiums.
Don’t Wait to Buy Life Insurance
Most life insurance is priced based on your attained age, not your actual age. When you are six months plus one day past your birthday, your premium cost is based on your attained age, the age you’ll be on your next birthday. By waiting to buy life insurance, you pay more and you risk deterioration of your health due to aging. The less healthy you are, the more insurance will cost you, or you may become uninsurable.
Health and Financial Underwriting
Medical underwriting has become very sophisticated. If you have one health issue, underwriting can be very straightforward. If you have multiple health issues, underwriting can become more complicated. Insurance companies intentionally focus on age, gender, and health to compete for your business.
A husband who is healthy but a smoker, and a wife who is a less healthy but a non-smoker may end up insured by different companies because of the underwriting policies for their different health classifications.
Financial underwriting is based on the economic value and needs of your family. Life insurance companies will generally underwrite up to 20 to 30 times your annual income. If more coverage is needed, a letter will be required to explain your need for additional coverage.
When Is the Right Time to Purchase Life Insurance?
Purchase life insurance when you have someone else to protect, when you want to lock in your insurability, and when you are healthy. Sometimes physician clients ask agents to compare different companies and products on a spreadsheet, but spread sheeting can be manipulated.
Clients can be misled by what’s included and omitted. With the amount of assumptions and plan designs, an accurate spreadsheet can be challenging and may omit information to the point of being rendered useless.
It is recommended you work with a trusted advisor to guide you through the process of comparing policy offerings by interpreting complex language and marketing speech.

For more information contact Howard Wolkowitz, Financial Advisor, at or (954) 558-3673.

Howard Wolkowitz is a registered representative of and offer securities and investment advisory services through MML Investors Services, LLC. Member SIPC ( OSJ: 2400 E Commercial Blvd., 11th Floor, Ft. Lauderdale, FL 33308. (800)320-4180. CRN201908-216390.
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