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Life Insurance is Your Friend

Life Insurance is your friend, here’s why.


Financial planning is a fundamental part of life and as we grow older, start a family, or grow our business, we understand the importance of having a safe financial back-up for everything just in case. Similarly, everyone needs a financial plan to protect their family when they leave them forever. At the time of death, a life insurance policy can cover funeral expenses, debt, or mortgage payments and can also guarantee a consistent income for your family. This can save your family from the burden of debt and financial dependence.

There are several life insurance policies in the market that you can choose from depending on your level of income and your financial asset mix. A typical insurance policy is affordable and allows suitable coverage of all liabilities and expenses your family will have to endure when you are no longer there to help. This can give you peace of mind knowing that your family will be financially protected and over the years.

Whether you are single, in a relationship, or married and have kids, life insurance is equally important for all. Life insurance can cover all kinds of debt including personal loans, mortgage, credit card loan, an auto loan.


Types of Life Insurance Policies


Term Life Insurance

Term Life insurance is often called pure life insurance, because it is only available to the beneficiaries and is available when the insured passes away. Although the life insurance of this type is only applicable when the insured dies, it guarantees the payment to beneficiaries whenever the insured dies within a specified period. Most commonly, this period is 10-30 years.


Whole Life Insurance

Whole life insurance is a policy that grows your cash value over time and will last for the duration of the insureds life. The policy is dependent on cash value building. A part of the premium is invested and it earns interest. The life insurance is permanent for life and it covers the duration of your entire life, not specific to your life years.


For example, if a person has a term life insurance until 70, the same person’s beneficiaries will receive the amount whenever the person dies. However, whole life insurance is paid, even if you continue to live.


Universal Life Insurance

Universal life insurance is the all in one investment. It is permanent life insurance that also allows a personal savings and investment plan. Another key element that makes universal life insurance an attractive option for policyholders is low premiums. The policyholder must pay a monthly fee with universal insurance. This monthly fee is split into two parts by the insurance company, one part is kept for insurance and the other part is saved. The savings are invested to accumulate interest. The payment of premiums can also be flexible and allows the policyholder to choose the premium payment amount from a wide range.


Policy Details


Death Benefit

The death benefit is also known as the face value is the lump sum of money the insurance company agrees to provide to the beneficiaries recognized in the policy after the insured deceases. For example, if the insured designated children as beneficiaries, then the receivers of this amount are the deceased’s children. The insured decides the death benefit amount and chooses a plan that will suit the financial needs of the beneficiaries. Afterward, the insurance company determines whether the insurer qualifies for insurance and matches the age, health, and other criteria.


A premium is the amount of money decided by both; insurance company representative and the insured or policyholder. Premium if paid according to the agreement made by both parties deems the insured eligible for life insurance, after death. Premiums are dependent on the size of the insurance policy; for larger death benefits, the premiums are higher.

Cash Value

The cash value refers to two things. Firstly, it is the insured’s savings account, from where payments are made. The money can be withdrawn from this account by the insured and the cash is accumulated while the process is tax-deferred.

Secondly, the policyholder can also use this amount to pay for premiums, purchase more insurance plans, etc. Depending on rules set by some insurance companies, if the cash value decreases, the death benefit may also decrease.

As you’ve just read, all the insurance policies available in the market have their pros and cons. At Yellowbrick Financial, we help you decide which insurance policy is suitable for you. We make sure you have an insurance policy that provides suitable coverage because the last thing you would want is to burden your family in the event of your passing. Getting more informed and educated before investing will help you make the right decision!

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Benefits of an Annuity

Purpose and Benefits of an Annuity

An annuity is a long-term financial contract; it requires the person acquiring the annuity to make a series of payments over a time period to earn interest and receive the payments again in the future. The insurance company and the purchaser of the annuity mutually decide and arrange the contract according to the purchaser’s needs.

Purpose of an Annuity

The purpose of an annuity is to provide a safe income stream to the investor in later years of life. The purchaser of an annuity may make one contribution or several contributions regularly for a fixed period. After all the payments are made, the insurer is obliged to start paying the annuity back. An annuity is usually the traditional retirement plan. Social security and pension plans are examples of annuities.

There are hundreds of annuities available, which makes it very difficult to choose the right one. At Yellowbrick financial, the consultants find the best annuity options and explain everything you need to know when purchasing an annuity to make your future financially independent and worry-free.

The annuity payments are supplemented from stocks and bond portfolios generally and are payable for a lifetime as per some annuity plans for retirement. But the annuities pay more as compared to investing directly in bonds.

The payments are fixed and are to be paid on time to the retirees or purchasers of the annuity. Most people start to save in their late fifties for a retirement plan or an annuity. An annuity provides retirees with a safe income stream they can depend upon in old age.

Benefits of an Annuity:

  • There are no tax payments involved when paying for the annuity. However, if you withdraw or receive the annuity repayments before the age of 60, a tax payment of 10% might be charged.
  • The payment plans for an annuity are not limited. You can add as much after-tax money as you want to the annuity and there are no limitations based on your sources of income and the amount you earn.
  • If the purchaser of the annuity dies before receiving any payments, the annuity is passed on to the beneficiaries regardless of the probate.
  • The options for receiving payments are diverse. You can modify your annuity plan and also gain payments for the rest of your lifetime or transfer them to beneficiaries.
  • The options for receiving payments are diverse. You can modify your annuity plan and also gain payments for the rest of your lifetime or transfer them to beneficiaries.


The future is uncertain and how the markets will perform tomorrow is uncertain as well. There are many guarantees an annuity can provide. With annuities, the principal is highly protected and the minimum payment is fixed. The guarantees an annuity plan may offer to include:

The Guarantee of Lifetime Withdrawals Benefit: This means that even if the contract has ended and the principal along with the accumulated interest is paid, the insurance company pays annually for a specified period, or until the purchaser lives.

Guaranteed Minimum Accumulation Benefit: A minimum account balance is held and guaranteed, even when the markets perform poorly.

Guaranteed Minimum Income Benefit: Even if the market has been performing poorly, the insurer pays a minimum income to the purchaser of the annuity at all times.

Types of Annuities

There are 5 basic types of annuities. The advantages and disadvantages of these annuities differ. Choosing the right type of annuity is important to gain the best benefit from your investment.

Yellowbrick financial consultants help people every day choose what is right for them. Expert knowledge and hands-on experience of the Yellowbrick financial consultants enable them to look at all the options carefully and determine the best annuity for the purchasers.

Here are the types of annuities:

1. Fixed Annuity

The most simple and safe type of annuity is a fixed annuity. The insurance companies fix an interest rate on payments that are accumulated regularly irrespective of change in interest rate.

The interest rates an insurance company offers are higher than a bank’s deposit while the income is also guaranteed. The retires find this option the safest and best. Also, the retiree can defer or withdraw income at times.

2. Variable Annuity

The variable annuities are dependent on how well the mutual funds perform. The purchaser of the annuity chooses subaccounts, that determine the account value. An insurance policy provision is purchased that finalizes the income stream in case of market performance fluctuations. This finalizing of the income diminishes the risk even if the subaccounts perform poorly in the future.

The variable annuity plan works best for retirees who want to earn a guaranteed lifetime profitable income through subaccounts.

3. Fixed-Indexed Annuity

A fixed index income is based on subaccounts. However, it guarantees a minimum income benefit in case of market fluctuations. The principal is protected but in case of rising stocks, the income is trimmed again. It allows the investor to play safe but the downside of the annuity is conservative participation in the potential market. The annuity is for those retirees who don’t want to take any chances as keeping pace with the robust stock market is not going to make the income higher due to the high-risk management offered by the insurer.

4. Deferred Annuity

The deferred annuity as the name suggests is deferred for a specified period. After payment of the premium, the investor waits for a specified period until the interest in accumulated on each installment.

This delay of payments can earn higher interest and increases the income on low principals. Retirees and other people often invest in a deferred annuity to generate higher income in the later period of their life. It attracts retirees and parents who plan to secure finance for their kid’s college expenses.

5. Immediate Annuity

An immediate annuity is like a life insurance policy where the purchaser of an annuity pays a lump-sum amount to receive gradual payments until death. The payments of an immediate annuity are higher than payments of other annuities and are paid to the investor until death. Once the investment is done, the investor can start receiving payments in one month or year.

The principal is sacrificed as a must but the payments are higher. This type of annuity is for retirees who wish to have a higher income in their old days of life until death.

To find the right annuity type for you, contact the Yellowbrick financial consultants, and enjoy a happy retirement.