For Individuals
Overview
At Cambridge, we take the time to listen and understand your specific situation. Your family’s lifestyle,
goals and budget are our benchmarks as we customize a solution to meet your needs. We are dedicated
to helping our clients build secure financial futures. With honest communication and mutual trust, we
strive to create long-term relationships and meet our clients' changing needs.
Why an Independent Insurance Advisor?
When taking the time to identify insurance for you and your loved ones, it is important to be very
thorough. Some insurance carriers have underwriting guidelines that are more lenient on blood pressure,
cholesterol, family history of heart disease, cancer, etc… Each individual client has a unique health profile
so we provide access to over 40 insurance companies to ensure the best combination of price, coverage
and service. Our goal is to give you peace of mind to know that your loved one’s are adequately
protected.
Products We Offer
Life Insurance
Disability/Income Replacement
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Retirement Planning
Estate Planning
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Life Insurance Overview
Premature death benefit protection secures your family's financial future by providing the funds to replace
your income and maintain a comfortable standard of living for your family. Life insurance can also help
cover college expenses, pay off a mortgage or other outstanding debts and cover uninsured medical bills.
Life insurance is a complex financial tool but we can help take the guesswork out of the process. Our
trained professionals will also help answer all your questions, including:
- How much insurance do I need?
- How long do I need coverage?
- What type of policy is most appropriate?
Depending on your objectives, there are a variety of life insurance policies to choose from including both
Term and Permanent insurance.
What is Term Life?
Term Life Insurance provides financial protection for a specific period of time, usually 10, 20 or 30 years and only pays a death benefit if the insured dies during that period. Term insurance provides the greatest insurance protection for the premium because you are “renting” coverage for the period selected. Therefore, there is no equity cash value if you surrender the policy or live beyond the Term duration.
Term is a good choice for young families, especially if they’re on a limited budget. Term affords an opportunity to purchase high levels of coverage when the need for protection is often greatest. Term is also an efficient way to cover short-Term needs such as college education costs or a mortgage.
What if I buy Term, but still have a need for life insurance after the Term period ends?
You will have a few options to extend your coverage at the end of the Term period, but expect much higher costs. If you are still healthy, you may qualify for a new Term policy based on your attained age. The new Term price is also subject to the results of a new medical exam and a new round of health and family history questions. If your health has deteriorated, your Term policy should have a conversion right to change coverage from Term to Permanent. Conversion does not require any medical questions which is a great fail safe. However, conversion rates to a Permanent policy are based on your attained age so you may find that it’s too expensive to afford when you need coverage the most.
Therefore, if you are considering a Term policy, make sure you evaluate how long you will need the coverage. Term may be the appropriate solution if your needs are temporary. However, if there is a possibility that you might need coverage for a longer duration, you may want to diversify your insurance portfolio and include both Term and Permanent coverage.
What is Permanent Life Insurance?
Permanent insurance provides lifetime protection with the ability to accumulate cash value on a tax-favored basis. Therefore, Permanent insurance is like “buying” a home, which can build equity value vs. “renting” for a specified duration with Term. Permanent insurance is a general phrase for various products including Whole Life, Universal Life, Variable Life, etc. These products are continually evolving, but Cambridge can provide the latest information and policies available.
Why would someone need insurance for more than 20-30 years?
The need for life insurance often persists after the mortgage is paid off and after the kids graduate. For example, if a spouse lives for another 10-30 years, would there be enough other assets without life insurance to last three decades? Other uses of Permanent insurance include leaving a guaranteed legacy for children or grandchildren, providing charitable bequests or creating liquidity for estate taxes.
Cash Value
Cash value is the amount available if you surrender a policy before your death. Cash values accumulate on a tax-deferred basis just like most retirement plans, annuities and 529 plans. To maximize cash value accumulation, one can contribute higher premiums up to the IRS limitation. The cash value accumulation can be used for any purpose including:
- Paying for your children’s college education
- Providing retirement income
- Paying off a mortgage or down payment on a home
- Paying future premiums
Unlike loans from most banks and financial institutions, a loan from your policy is not dependent on credit checks, financial statements or other restrictions. You can pay yourself back instead of the bank and recapture the principal and interest for use again in the future. The loan repayment schedule is typically flexible as well. When you borrow money from a Permanent insurance policy, you’re using the policy’s death benefit or cash value as collateral so the borrowing rates tend to be low. Unpaid loans typically reduce the death benefit available for beneficiaries.
Permanent policies are designed and priced for you to keep over an extended period of time. Therefore, this may be the wrong type of insurance if you do not have at least a10-year time horizon because there may be little or no cash value in the early years.
Whole Life Insurance
If you like the advantages of Permanent insurance and want predictability, Whole Life insurance may be appropriate. Whole Life provides a guaranteed death benefit, guaranteed level premium and a guaranteed rate of return on your cash values. In addition, many Whole Life policies provide an opportunity to earn a dividend interest credit to enhance the death benefit and/or the cash value accumulation depending on your objectives.
Variable Universal Life
If you like the advantages of Permanent insurance and are willing to assume investment risk for an opportunity to achieve greater returns, Variable Life may be appropriate. With Variable Life, you are transferring death benefit risk to an insurance company but retaining most of the investment risk. Death benefits and cash values vary with the performance of the underlying investment portfolio, which may include stock funds, bond funds or fixed accounts. With Variable Life, you have flexibility to transfer funds between the investment options on a tax-free basis. Therefore, you have the freedom to make investment changes based on your needs and not based on any tax ramifications. Variable Life insurance is offered via a prospectus.
Universal Life
In recent years, there’s been considerable interest in purchasing Universal Life insurance with a No-Lapse Guarantee. With a No-Lapse Guarantee, the insurance company contractually promises that the policy will not terminate if interest rates fall or costs of insurance increase. Using a No-Lapse Guarantee, these policies can be designed to act like Term insurance to age 100 at a cost much lower than other Permanent contracts. Alternatively, Universal Life can be designed to build significant cash value accumulation on a tax-deferred basis. If you own a previous generation of Universal Life, you should request an “inforce illustration” as these policies could lapse under certain circumstances (e.g., interest rates reduce below current projections, insurance costs or administrative expenses increase).
Disability Income Replacement - Overview
Your most valuable asset is often your ability to earn an income. If you were no longer able to work due to an injury or illness, could you afford to live without your income? Individual Disability Income Protection is a must for business owners and highly compensated executives.
Cambridge specializes in designing Disability Income protection for individuals, business owners and executives. Through corporate sponsored programs, Cambridge maximizes the coverage available on a guaranteed issue basis (no medical exam). Business owners should also consider laddering group Long-Term disability coverage on top of their individual disability policies. For more information, click here to view our Disability Case Studies.
Long-Term Care (LTC) - Overview
Cambridge has been a pioneer in the LTC market providing insurance since 1992 to ensure our clients protect the assets they have worked a lifetime to accumulate. An estimated 70 percent of Americans who reach the age of 65 will need some form of LTC services meaning there is a very good chance you will have to use your personal assets to pay for care. Without proper planning, Long-Term care services can be financially devastating. For example, the annual cost for a one-year nursing home stay was $162,000 in Manhattan with a national median cost of $78,000*. Home care can also cost up to $70,000 for eight hours per day of services.
LTC insurance provides financial benefits to offset these costs, but equally as important, provides peace of mind that you will not be dependent on others or be a burden to your children. Long-Term care services can be provided in one’s home or a community-based setting for those needing assistance with activities of daily living as a result of injury, illness or the effects of advancing age. LTC services are not covered by Medicare, Medigap or group health insurance. As Americans continue to live longer, the demand and cost for LTC services will continue to increase. However, one does not need to be old to access LTC services as a car accident, skiing accident or severe illness can be debilitating at any age.
When should I buy LTC?
Similar to Life and Disability Insurance, LTC premiums are lower when you are younger. 40% of LTC services are provided to those under age 65, so you should consider LTC insurance while still relatively young and healthy. If you cannot transfer the full risk today, consider buying a small policy that fits into your budget and enhancing the coverage in the future. LTC premiums generally do not increase with age unless an insurance company raises premium for an entire class of policyholders and the increase is approved by your State Department of Insurance.
Important Notice: Some states provide a tax credit for LTC premiums. NY State provides a 20% tax credit on your personal taxes for qualifying LTC insurance policies. Click here for more information.
Retirement Planning - Overview
Most people spend their lives building a business and accumulating assets but have focused little attention on the proper distribution of those assets. Cambridge believes in helping you protect the assets you have worked a lifetime to accumulate. We understand how to transfer risk to protect and distribute your assets in retirement without the fear of outliving your money. For examples on how to effectively transfer retirement risks, click here to view case studies.
Estate Planning - Overview
Estate planning maximizes the value of your assets for heirs by reducing taxes and eliminates uncertainties over probate administration. A properly crafted estate plan ensures your assets pass to the people you have selected and in the manner desired. Working as a team with your T&E attorney and other advisors, Cambridge evaluates which insurance techniques achieve your goals to minimize state and federal taxes.
Second-To-Die Universal Life Insurance (also referred to as Survivorship)
Most people do not want heirs to hastily sell assets in order to pay estate taxes. For small business owners and those with large real estate or IRA assets, it is often difficult to liquidate those assets without a negative impact. Survivorship insurance provides liquidity for estate taxes when the second spouse dies. The policy can also be used for heirs to replace the value of an asset gifted to charity or the value of an asset sold to pay state or federal estate taxes.
Using a No-Lapse Guarantee, Survivorship Universal Life can guarantee coverage to age 90, 100 or through age 121 at a cost much lower than single life policies. This lower cost and a benefit payable when estate taxes are due are reasons that these policies are so popular for estate planning purposes.
For additional information or pricing, call Cambridge at (212) 695-7495.