On the Insurance Benefits page, you can select which life insurance records created at the client level (under Financial Info) you want to bring into the plan. The death benefit for the life insurance policy can be included as income in the plan, depending on whether the insured passes before the end of the plan.
Requirements
The types of insurance that can be added under Client Profile, Financial Info are: Life Insurance, Disability Insurance, Long-Term Care Insurance, Homeowner Insurance, Medical Insurance, Auto Insurance, and Umbrella Liability Insurance.
Only life insurance policies are incorporated into a plan. The following types of life insurance are modeled in Client Profile, Financial Info:
Term: provides protection only for a specified period of time (e.g. one year, five years, 10 years, or until the insured reaches age 65 or 70); does not build up any of the nonforfeiture values associated with Whole Life policies.
Group Term: term insurance for a group of people, generally a company’s employees
Whole Life: Insurance which may be kept in force for a person's whole life and which pays a benefit upon his death, whenever that may be. All Whole Life policies build up nonforfeiture values.
Universal Life: A combination flexible premium, adjustable life insurance policy. The premium payer may select the amount of premium he or she can pay and the policy benefits are those which the premium will purchase. Or, the premium payer may change the amount of insurance and pay premium accordingly. Includes a saving portion which is invested in a tax-deferred account earning money-market rates of interest.
Variable Life: Similar to whole life insurance, but cash value of the policy may be invested in stock or bond portfolios.
Variable Universal Life: Similar to universal life insurance, but cash value of the policy may be invested in stock or bond portfolios.
Existing Life Insurance Records
The table is initially populated with any life insurance policy records which have been created at the client level, under Financial Info, and for which the client (primary member) or spouse is the insured and the other is the beneficiary.
Deleting Life Insurance Records
You can delete existing records by checking the box to the left of the policy name and clicking Delete.
Note: This only removes the record from the plan. It does not delete it from the client level.
Creating Life Insurance Records
There are two ways to create new life insurance records using the Add menu. One way creates a new insurance record at the plan level and the client level, and the other way creates a new insurance record at the plan level only.
To add a life insurance record at the plan level and the client level, do the following:
Click the Add drop-down and select Add from Client. The Add Income to Plan dialog opens.
Click New. The Add Insurance dialog opens.
In the Insurance name box, enter the identifying name for this insurance entry.
Click the Insurance type drop-down, Life Insurance is selected by default.
Fields in blue are required. Fill in the required information and click Submit.
Note: If either the insured or the beneficiary is not the client or spouse, the policy will be saved to the client, but not the plan.
A dialog confirms that the information is saved. Click OK. You are returned to a blank Add Insurance dialog.
Click Exit. You are returned to the Add Income to Plan dialog, with the new life insurance record listed.
Double-click the name of the new life insurance record. The name appears in the Selected Records box.
Click OK. The new record is added to the table.
To add a life insurance record at the plan level only, do the following:
Click the Add drop-down and select Add. A line is added to the table.
In the Description field, enter a name for the life insurance record.
Click the Insured drop-down and select the name of the insured.
Click the Beneficiary drop-down and select the name of the beneficiary.
Click the Policy Type drop-down and select Whole life, Term, Group term, Universal life, Variable life, Variable universal life, or Variable Annuity.
In the Benefit Amount field, enter a dollar amount for the death benefit.
In the Projected Payout Date field, enter an estimated year of death.
Other Notes
The benefit amount is treated as a non-taxable lump sum income amount in the projected year of death of the insured.
If the projected date of death of the insured is later than the year the policy coverage ceases, the benefit amount is not incorporated into the forecast.
Only the death benefit amount of the life insurance policy is incorporated into the plan. Premium amounts are assumed to be accounted for as a standard living expense (and/or part of retirement expenses) and are therefore not incorporated into the plan.