Nicholson Financial Services, Inc.David S. NicholsonFinancial Advisor89 Access RoadSte. CNorwood, MA 02062781-255-1101866-668-1101david@nicholsonfs.comwww.nicholsonfs.com

Protecting Your Loved Ones with Life Insurance

June 12, 2020

How much life insurance do youneed?Your life insurance needs will depend on a number offactors, including the size of your family, the nature ofyour financial obligations, your career stage, and yourgoals. For example, when you're young, you may nothave a great need for life insurance. However, as youtake on more responsibilities and your family grows,your need for life insurance increases.

Here are some questions that can help you startthinking about the amount of life insurance you need:

• What immediate financial expenses (e.g., debtrepayment, funeral expenses) would your familyface upon your death?

• How much of your salary is devoted to currentexpenses and future needs?

• How long would your dependents need support ifyou were to die tomorrow?

• How much money would you want to leave forspecial situations upon your death, such asfunding your children's education, gifts to charities,or an inheritance for your children?

• What other assets or insurance policies do youhave?

Types of life insurance policiesThe two basic types of life insurance are term life andpermanent (cash value) life. Term policies provide lifeinsurance protection for a specific period of time. Ifyou die during the coverage period, your beneficiaryreceives the policy's death benefit. If you live to theend of the term, the policy simply terminates, unless itautomatically renews for a new period. Term policiesare typically available for periods of 1 to 30 years andmay, in some cases, be renewed until you reach age95. With guaranteed level term insurance, a populartype, both the premium and the amount of coverageremain level for a specific period of time.

Permanent insurance policies offer protection for yourentire life, regardless of your health, provided you pay

the premium to keep the policy in force. As you payyour premiums, a portion of each payment is placedin the cash-value account. During the early years ofthe policy, the cash-value contribution is a largeportion of each premium payment. As you get older,and the true cost of your insurance increases, theportion of your premium payment devoted to the cashvalue decreases. The cash value continues togrow--tax deferred--as long as the policy is in force.You can borrow against the cash value, but unpaidpolicy loans will reduce the death benefit that yourbeneficiary will receive. If you surrender the policybefore you die (i.e., cancel your coverage), you'll beentitled to receive the cash value, minus any loansand surrender charges.

Many different types of cash-value life insurance areavailable, including:

• Whole life: You generally make level (equal)premium payments for life. The death benefit andcash value are predetermined and guaranteed(subject to the claims-paying ability and financialstrength of the issuing insurance company). Youronly action after purchase of the policy is to paythe fixed premium.

• Universal life: You may pay premiums at any time,in any amount (subject to certain limits), as long asthe policy expenses and the cost of insurancecoverage are met. The amount of insurancecoverage can be changed, and the cash value willgrow at a declared interest rate, which may varyover time.

• Indexed universal life: This is a form of universallife insurance with excess interest credited to cashvalues. But unlike universal life insurance, theamount of interest credited is tied to theperformance of an equity index, such as the S&P500.

• Variable life: As with whole life, you pay a levelpremium for life. However, the death benefit andcash value fluctuate depending on theperformance of investments in what are known as

Your life insurance needswill depend on a numberof factors, includingwhether you're married,the size of your family,the nature of yourfinancial obligations,your career stage, andyour goals. Lifeinsurance is notguaranteed by the FDICor any other governmentagency; they are notdeposits of, nor are theyguaranteed or endorsedby, any bank or savingsassociation.

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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Nicholson Financial Services, Inc. is not a registeredbroker/dealer, and is independent of Raymond James Financial Services. Investment Advisory Services are offered through Raymond JamesFinancial Services Advisors, Inc.

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond JamesFinancial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary orstatement of all available data necessary for making an investment decision and does not constitute a recommendation. The informationcontained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Thisinformation is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitablefor all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services,Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

subaccounts. A subaccount is a pool of investorfunds professionally managed to pursue astated investment objective. You select thesubaccounts in which the cash value should beinvested.

• Variable universal life: A combination ofuniversal and variable life. You may paypremiums at any time, in any amount (subjectto limits), as long as policy expenses and thecost of insurance coverage are met. Theamount of insurance coverage can be changed,and the cash value and death benefit goes upor down based on the performance ofinvestments in the subaccounts.

With so many types of life insurance available,you're sure to find a policy that meets your needsand your budget.

Choosing and changing yourbeneficiariesWhen you purchase life insurance, you must namea primary beneficiary to receive the proceeds ofyour insurance policy. Your beneficiary may be aperson, corporation, or other legal entity. You mayname multiple beneficiaries and specify whatpercentage of the net death benefit each is toreceive. If you name your minor child as abeneficiary, you should also designate an adult asthe child's guardian in your will.

What type of insurance is right foryou?Before deciding whether to buy term or permanentlife insurance, consider the policy cost andpotential savings that may be available. Also keepin mind that your insurance needs will likelychange as your family, job, health, and financialpicture change, so you'll want to build someflexibility into the decision-making process. In anycase, here are some common reasons for buyinglife insurance and which type of insurance maybest fit the need.

Mortgage or long-term debt: For most people, thehome is one of the most valuable assets and also thesource of the largest debt. An untimely death mayremove a primary source of income used to pay themortgage. Term insurance can replace the lostincome by providing life insurance for the length ofthe mortgage. If you die before the mortgage is paidoff, the term life insurance pays your beneficiary anamount sufficient to pay the outstanding mortgagebalance owed.

Family protection: Your income not only pays forday-to-day expenses, but also provides a source forfuture costs such as college education expenses andretirement income. Term life insurance of 20 years orlonger can take care of immediate cash needs as wellas provide income for your survivor's future needs.Another alternative is cash value life insurance, suchas universal life or variable life insurance. The cashvalue accumulation of these policies can be used tofund future income needs for college or retirement,even if you don't die.

Small business needs: Small business owners needlife insurance to protect their business interest. As abusiness owner, you need to consider what happensto your business should you die unexpectedly. Lifeinsurance can provide cash needed to buy adeceased partner's or shareholder's interest from hisor her estate. Life insurance can also be used tocompensate for the unexpected death of a keyemployee.

Review your coverageOnce you purchase a life insurance policy, make sureto periodically review your coverage; over time yourneeds will change. An insurance agent or financialprofessional can help you with your review.

A note about variable lifeand variable universal lifeinsurance

Variable life and variableuniversal life insurancepolicies are offered byprospectus, which you canobtain from your financialprofessional or theinsurance company. Theprospectus containsdetailed information aboutinvestment objectives, risks,charges, and expenses.You should read theprospectus and considerthis information carefullybefore purchasing avariable life or variableuniversal life insurancepolicy.

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