Frequently Asked Questions

Financial Legacy Covenant

What is your investment philosophy, and how will you tailor your approach to my unique financial situation?

Our investment philosophy centers around accumulating and preserving wealth by leveraging indexed annuities as a key component of a well-rounded financial plan.We believe in balancing growth potential with principal protection, especially for clients who are looking for a stable, long-term strategy without exposing themselves to the full risks of the stock market. By utilizing indexed annuities, we can take advantage of market-linked growth opportunities while ensuring that your principal is safeguarded against downturns.

How do you get compensated for your services, and are there any potential conflicts of interest?

We do not charge a flat fee, hourly rate, or a percentage of assets under management. Our financial professionals are paid commissions from the carriers. You do not incur out-of-pocket expenses for our services, and our commissions do not impact your account value.

How do you incorporate tax planning and estate planning into your wealth management strategies?

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Fixed Indexed Annuities

What is a Fixed Indexed Annuity (FIA)?

A fixed indexed annuity is a type of insurance product that provides a guaranteed minimum interest rate combined with the opportunity for additional interest based on the performance of a specific market index, like the S&P 500. FIAs are designed to offer more growth potential than traditional fixed annuities while protecting the principal from market downturns.

Is my principal safe in a Fixed Indexed Annuity?

Yes, your principal is protected from market losses in a Fixed Indexed Annuity. Even if the market index performs poorly, you won’t lose any of your initial investment. The worst-case scenario is that you may not earn any interest for a given period, but your principal remains intact.

Are there any fees associated with Fixed Indexed Annuities?

While some FIAs don’t have annual fees, there could be fees associated with optional riders (e.g., lifetime income riders) or if you decide to withdraw funds early, known as surrender charges. Always review the contract for any potential costs.

Can I access my money if I need it, or are there penalties?

FIAs typically have a surrender period during which you’ll face penalties if you withdraw more than the penalty-free amount (usually around 10% of the annuity’s value annually). After the surrender period ends, you can generally access your funds without penalty. Additionally, certain contracts may offer waivers for specific situations like terminal illness or long-term care needs.

Life Insurance

What is Indexed Universal Life (IUL) Insurance?

Indexed Universal Life Insurance is a type of permanent life insurance that combines a death benefit with a cash value component. The cash value grows based on the performance of a market index (e.g., S&P 500) but provides downside protection, ensuring that your cash value won't decrease if the market performs poorly

How does the cash value grow in an IUL policy?

The cash value in an IUL grows by earning interest based on the performance of a market index. However, the growth is typically subject to a cap (maximum earning potential) and a floor (usually 0%, meaning no losses). This allows the policyholder to participate in market growth while being shielded from market downturns.

Can I access the cash value in my IUL policy?

Yes, you can access the cash value in an IUL policy through policy loans or withdrawals. Loans are typically tax-free as long as the policy remains in force, but withdrawing too much or not repaying the loans can negatively impact the death benefit and possibly cause the policy to lapse.

Can I access my money if I need it, or are there penalties?

FIAs typically have a surrender period during which you’ll face penalties if you withdraw more than the penalty-free amount (usually around 10% of the annuity’s value annually). After the surrender period ends, you can generally access your funds without penalty. Additionally, certain contracts may offer waivers for specific situations like terminal illness or long-term care needs.

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