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life insurance

Meet Ana St Louis of Living Legacy Financial Group Inc.


Ana St Louis operates out of her Dracut, MA office as a specialist in Life Insurance, Disabilty Insurance and Long Term Care Insurance. She will work with you to identify the right strategies to achieve and protect your goals and your dreams.

Insurance transfers the financial risk of life's events to an insurance company. A sound insurance strategy can help protect your family from the financial consequences of those events. A strategy can include personal insurance, liability insurance, and life insurance. 

Do you have a strategy? Ana is waiting for your call so she can help.

Contact Ana: Phone 978-995-3338 | Email [email protected]

Matthew Schwartz - LPL Independent Investor

LPL Independent Investor

July 2013


Using Life Insurance to Ensure Business Continuity


The loss of critical personnel can be life threatening to small businesses; however, it's a risk that life insurance can often mitigate. In fact, life insurance policies are frequently used in plans aimed at making it possible for a business to survive a change of ownership or the loss of a partner, the chief executive or an employee whose creative talent, technical knowledge or salesmanship drives the business.


Most commonly, life insurance is employed as the funding mechanism in buy-sell plans—legal agreements that provide for an orderly transfer of ownership interests—and to compensate for the loss of a key person.


Buy-Sell Agreements

A buy-sell agreement allows the remaining owner or owners to acquire the interest of a departing owner due to death or another specified event, such as disability or retirement. The agreement typically restricts an owner’s ability to transfer his or her interest and sets out the terms under which another owner or the business entity may acquire the departing owner’s interest.


A buy-sell agreement can anticipate situations that could imperil the business or be harmful to owners and employees. For example, it can be used to prevent unwanted outsiders or heirs from obtaining an ownership interest; it can prevent the continued involvement of retired or inactive shareholders or partners; and it can ensure the legal continuation of the entity if an owner becomes bankrupt or loses a required professional license.


Among its benefits, a buy-sell agreement creates a marketplace for the shares of a closely held business, helping ensure that departing owners will receive adequate compensation.


Life insurance is typically used to fund the agreement and may also provide cash to pay other costs. How life insurance is employed depends on the structure of the buy-sell agreement. In the case of a partnership, for example, the agreement may call for each partner to buy and maintain policies on each of the other partners in an amount sufficient to cover the beneficiary’s partnership interest. In other types of buy-sell plans, the business entity purchases the insurance policy on each owner and the business is the beneficiary.


Insuring a Key Person

Key person life insurance compensates the business against losses that result from the insured’s death. In that event, the company—which has purchased the policy and paid the premiums—immediately receives the policy’s tax-free death benefit and applies the proceeds toward the resulting business costs. Examples of costs include those incurred in recruiting and training a replacement, purchasing the decedent’s ownership interest and replacing lost revenue.


To provide greater flexibility, the company may arrange an exchange agreement, allowing it to transfer coverage to a successor if the key person leaves the firm prior to retirement. While the insured is employed, the life insurance may provide the firm with additional benefits, such as a potentially higher credit rating and the ability to tap the policy’s cash value for emergency funds.


Practical Matters

  • Establishing a value (or valuation method) for the business is a necessary step in determining how much funding will be needed for a buy-sell agreement. Likewise, the amount of life insurance to purchase for a key person should be based on a reasonable estimate of the costs the firm would incur as a result of his or her departure.
  • A professional appraisal is usually advisable in preparing a buy-sell agreement. Professional advice is also recommended in key person situations where issues such as a potential reduction in the firm’s credit rating or loss of confidence among customers, employees or vendors may be involved.
  • Your insurance agent can provide information about life insurance terms and costs. Keep in mind that insurance premiums are not deductible business expenses and that life insurance cash values and death proceeds may result in corporate alternative minimum taxes.
  • Owners contemplating a buy-sell agreement should consult legal and tax advisors to discuss how the proposed agreement may affect their personal financial situation and estate planning.1


1 Life insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your financial professional can provide you with costs and complete details. This information is intended to provide general education on the importance of buy/sell agreements. Please note that the LPL Financial Advisor providing this newsletter does not provide business valuations services.



This article was prepared by S&P Capital IQ Financial Communications and is not intended to provide specific investment advice or recommendations for any individual. Please consult me if you have any questions.


Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness, or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special, or consequential damages in connection with subscribers’ or others’ use of the content.



Tracking #1-178473



Matthew M. Schwartz

Financial Consultant


Schwartz Financial Services, Inc.

3 Baldwin Green Common #209

Woburn, MA 01801


[email protected]


Tel: (781) 932-3289

Fax: (781) 998-3099




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Friends of Kevin Guest Blog post from Jack Wang - Whats the Difference? I am all Set

What’s the difference?  I’m all set!

Two common misunderstanding when it comes to beneficiaries.


Now that the holiday season is in full swing, we can look forward to seeing family and friends.  Sharing festive meals together.  Decorating and enjoying each others’ company.  And seeing the smiles on people’s faces when they get that perfect gift from you.  It’s a great time of year.


With all of this activity, it’s a great time to review your beneficiaries on all of your accounts and insurance policies.


I’m all set. Besides, it’s supposed to be a happy time of year, not a time to talk about death.


True.  But this is the season of giving.  Many clients I work with don’t want to leave a large inheritance for their beneficiaries, but they don’t want to leave headaches and a pile of bills either.  They would rather gift peace of mind.


One common misunderstanding is leaving money to the estate versus naming beneficiaries.


I was working with a client recently who just got divorced.  Understandably, she wanted to take her ex-husband off as a beneficiary of her life insurance policy and keep her 3 adult children on as beneficiaries.


Her initial thought was the designate her estate as the beneficiary.  After all, her only direct heirs would be her 3 children.


So what’s the difference?


If she names her 3 children as beneficiaries, then upon her death, money will be distributed from the life insurance to the children.  In this case, each would have received 1/3.


But if she simply left the policy to the estate, the money would still be paid.  But it would be used to pay off any debts of the estate first – credit cards, auto loans, mortgage, etc.  Then the estate has to go through probate – which can take months even in the simplest cases.


The kids would eventually money, but likely a lot less than what their mom had intended and after a substantial wait.


Certain types of accounts pass by contract at death.  Life insurance, annuities, IRAs, and 401(k)s are examples.


A second common misunderstanding is not understanding the difference between per capita and per stirpes.


Best way to illustrate the difference is with an example.  In the case of this divorced woman, only one of her children is married and has children.


Under expected circumstances, each child would benefit as follows:


Child A – One third

Child B – One third

Child C – One third


What happens if child A dies before the mom?


Under a per capita scenario, the following would happen:


Child A – deceased

Child B – Half

Child C – Half


Under a per stirpes scenario, the following would happen:


Child A – deceased

Child A’s beneficiaries – One third

Child B – One third

Child C – One third


Can you see the problems with both of these scenarios?  One will leave out possible heirs – grandkids, spouses.  Another might leave money to minor children or to an in-law spouse that you’re not fond of.


Beneficiary planning isn’t just putting a name down on a form.  There are a lot of pitfalls to watch out for.


Ultimately, the question is:  What do YOU want to have happen?  Properly designating beneficiaries goes a long way to making sure what you want to have happen actually happens.


When was the last time you had a beneficiary review?  Take some time around this holiday season.  In between the meals, shopping, and cider, think about what you want to have happen.


Let's visit! Use this link to schedule a time with me:



T. Jack Wang
M.E.R.J. Financial Group 
voice - 877-226-4157

fax - 877-226-4157
[email protected]




Friends of Kevin Guest Blog post from Jack Wang - Have you considered this?

Have you considered this?


When meeting prospective clients, I’m often asked about the difference between term and permanent insurance.  Of course, most people simply think that perm is more expensive than term, and that’s the whole story.  

A nice introduction to insurance can be found on the LIFE Foundation website.  This is a non-profit dedication to educating consumers about life and other forms of insurance.  

The link is here.  Or if you prefer a video, click here.


While you can find lots of articles on the internet about the merits of term versus perm, very few articles I’ve seen actually consider these other important items:


1.      How much do you really need?


Most people I’ve dealt with tend to underestimate – probably because of optimism and probably because of cost.  They figure, heck, the spouse can go back to work.  But they forget to account for the cost of day care.  Or the fact that on 1 income, now the ability to save for college is basically gone.


And have you tried to find a job in this economy???


I always encourage everyone to estimate need a little high.  Consider this example:  If you want to buy something that costs $10 and you $11 in your pocket, you can buy the item and it’s not a big deal.


But if you lose a few dollars, and now only have $9 and can’t buy the thing you wanted, now it’s a big deal.


Or in the example with auto insurance – no one ever said that they wished their insurance only covered part of their accident repair instead of covering the entire amount.


A little extra coverage doesn’t hurt.  But too little coverage can be really painful.


2.      How long do you really need the policy?


Here again – probably for the same 2 reasons – people tend to underestimate.  One of the most common scenarios is that most people want to have their life insurance pay off their mortgage in the event of death.


The thinking goes – I have a 30 year mortgage, so I’ll get a 30 year term policy.  The coverage will last as long as the loan.  Great!


Well, the average mortgage only last about 7 years.  People refinance to build an addition, or to consolidate debt, or pay for whatever large purchase comes up.  Or simply to lower the payment.


So now, the mortgage is back to 30 years.  But the insurance is down to 23 years.  And chances are, the homeowner will refinance again in the future.  That insurance need has become permanent!


Think about it – how many people do you know who have actually paid off a 30 year mortgage?


Regardless of what you want to cover, often what people think is a temporary need is really a permanent need.


3.      How healthy are you really?


Health obviously plays a big role in the cost of insurance.  Every insurance company looks at health slightly differently.  Some prefer only very healthy people.  Others will insure people with medical conditions.  Just like banks.  Banks vary in the type of loans they will approve.


However, if you apply to a bank for a loan and are turned down, you can simply apply to another bank.


Not so with life insurance.  Once you’ve been turned down, it becomes extremely difficult to obtain insurance.


After helping a client determine the proper amount, the client went ahead and applied for insurance on her own.  Well, while she was quite healthy at the time, she forgot about a medical condition she had years ago, and it actually caused her to be denied.


And now this mom to a 6 year old daughter can’t protect her family.


Or if she really wanted coverage, she could probably get something, but at a very high cost.


So what does this all mean?


Well, life insurance can be quite complex and as a result, there can be a lot of pitfalls.  It’s not as simple as going online and buying a policy.  And it certainly goes beyond a simple term versus perm comparison.


If you’re serious about protecting your family, then take the time to work with an expert who can help make the process very simple.


Your family’s well being depends on it!


September is Life Insurance Awareness Month.  How are you protecting your family?


Take part in my poll about life insurance on LinkedIn.  The link is here.



Let's visit! Use this link to schedule a time with me:



T. Jack Wang
M.E.R.J. Financial Group 
voice - 877-226-4157

fax - 877-226-4157
Email: [email protected]