Your Financial Security is our Priority
Ricardo Ochoa, License # 20991084
I am committed to securing your future.
My specialization is life insurance and annuities tailored to safeguard your loved ones and provide financial peace of mind. With a focus on personalized solutions and years of expertise, I am dedicated to helping you navigate the complexities of financial planning for a secure and prosperous tomorrow. As a licensed insurance agent in Texas and Arizona, I look forward to helping my clients understand what life insurance and annuties make sense for them so that I can provide them with proper coverage.
Term Life Insurance
A type of life insurance that pays if the covered person dies during a specified term.
Whole Life Insurance
A type of life insurance that provides coverage throughout the life of the insured person.
Indexed Universal Life
A type of life insurance that allows the policyholder more input on how the cash value grows.
Annuities
Insurance that makes a series of regularly spaced payments to you in return for a premium or premiums you have paid.
About Arizona Life Insurance
Arizona Life Insurance has experts in the insurance industry with the licensing and experience needed to offer the best possible service to their customers. We aim to build customized insurance policies tailored to clients’ specific life insurance or retirement needs. As your insurance company, Arizona Life can advise you on many products and services to fit your life insurance or retirement needs.
Our Mission
A solemn promise backs Arizona Life Insurance’s comprehensive insurance products and annuities.
A Promise of:
- Financial security and protection for our clients
- Superb coverage and claims handling
Communicating openly and regularly with our clients to ensure our products and services meet their needs
Term Life Insurance
Term life insurance provides a death benefit that pays the beneficiaries of the policyholder throughout a specified period of time.
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At Arizona Life Insurance, we understand the importance of financial stability and protection for you and your loved ones. We empower you to secure your financial future with our comprehensive range of term life insurance policies.
Term Insurance Benefits
There are several types of term life insurance. Term life insurance is a good fit for most people, especially young families on a budget.
Less expensive
On average, life insurance rates are more affordable for term than whole life insurance because term policies offer coverage for a predetermined time.
If you outlive the term and the policy expires, your beneficiaries don’t receive the death benefit, so it’s less of a risk to the insurer.
More flexible
You have many options when choosing how long your term life insurance should last. Policies that last one or five years can help cover short-term debts or expenses you pay, like a child’s tuition.
Alternatively, if you’re the breadwinner and want a policy to cover your mortgage, a 30-year term might be a better match. These needs disappear over time, and so might your need for a policy.
Good for young families
Because term life covers only a specific period and is generally less expensive than permanent life insurance, it’s an excellent choice for young families looking for temporary coverage.
For example, you can buy a policy to cover the years your family relies on you financially and lower your coverage when your children become self-sufficient.
Simplicity
For many people, term life insurance is a simple, affordable way to safeguard the financial health of loved ones if something happens to them. It offers pure insurance.
You need to make only three main decisions: how much life insurance coverage you need, how long you want the coverage to last, and which insurer you want to do business with.
Compared with whole life insurance and other permanent policies, a portion of your premium goes towards building a cash value.
Types of term life insurance policies
Level term
Under a level term policy the face amount of the policy remains the same for the entire period. This period could be as short as one year or provide coverage for a specific number of years such as 5, 10, 20 years or to a specified age such as 80 or in some cases up to the oldest age in the life insurance mortality tables.
Renewable Term
Renewable term plans give you the right to renew for another period when a term ends, regardless of the state of your health. With each new term the premium is increased. The right to renew the policy without evidence of insurability is an important advantage to you.
Convertible Term
Convertible term policies often permit you to exchange the policy for a permanent plan. You must exercise this option during the conversion period. The length of the conversion period will vary depending on the type of term policy purchased. This type of policy often provides the maximum protection with the smallest amount of cash outlay.
Adjustable Premium
Traditionally, insurers have not had the right to change premiums after the policy is sold. Adjustable premium insurance, however, allows insurers to offer insurance at lower “current” premiums based upon less conservative assumptions with the right to change these premiums in the future. The premium, however, can never be more than the maximum guaranteed premiums stated in the policy.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance, which means the insured person is covered for the duration of their life as long as premiums are paid on time.
Start With a Free Custom Quote
At Arizona Life Insurance, we understand the importance of financial stability and protection for you and your loved ones. We empower you to secure your financial future with our comprehensive range of whole life insurance policies.
Whole Life Insurance Benefits
If you think whole life insurance could play a part in your financial future, talk to the professionals at Arizona Life Insurance — we understands and explains all the options for you and your family.
The cost is guaranteed to stay the same
Your premium payments, the amount you pay the insurance company each month, will never go up. By remaining level, these premiums may potentially feel much more affordable over the long run.
While whole-life premium payments in the early years are higher than those for term life, the advantages increase significantly as time passes.
For retirement planning, this would mean guaranteed availability of life insurance in your senior years at a fixed cost.
Fixed benefit for your beneficiaries
The decisions you make now will set up your future, even when you’re no longer here to provide financially for loved ones.
You can depend on a guaranteed amount of money going to your heirs or other designated causes from what is known as a death benefit.
This life protection won’t vanish if premiums are paid — it’s a financial product that remains in place for your entire life.
Giving money to a charity or non-profit
If you want to help your favorite causes, you can use your insurance policy in several ways. Charitable giving can also provide income tax benefits now, while you’re alive.
A charitable donation may entitle you to an income tax deduction — often beneficial in cases when you’ve had a high earning year.
In addition, you can leave the money accumulated in the account to the non-profit after you’re gone.
Note that tax laws change so it makes sense to consult with a tax advisor.
Tax-advantaged benefits
In addition to the tax-free sum you’ll be leaving to your loved ones, your cash values grow on a tax-deferred basis.
You can borrow against the value if you need a loan (pay the money back in, or it will reduce the amount going to your heirs).
The tax-free assets you leave to your heirs or causes after you’re gone will be quicker to access than other assets.
While property and other aspects of your estate may be impacted by taxes and possibly take time in probate court, life insurance isn’t part of that package.
The money could also save your heirs or estate from having to cover your funeral expenses.
Potential dividends
If you buy a whole life insurance policy from a mutual insurance company, you may receive annual dividend payments on your policy. These payments, while not guaranteed, are a way mutual companies share with policyholders. Dividends can be reinvested into your policy to help build cash value faster.
Another financial planning tactic is to use dividend payments to buy additional insurance and increase the total “death benefit” (the amount of money that will be payable to your loved ones).
You can also let the dividends pay some of your premiums.
Lastly, you could have the dividends paid to you in cash.
Retirement funding
A whole life insurance policy can effectively build supplemental retirement income.
If you’ve had the policy for enough time to build up your cash value, you can use that money in a tax-advantaged manner as part of your retirement’s financial mix.
Unlike retirement savings accounts, the cash value is insulated by fluctuations of the market and the money may be tax-free when you start withdrawing it.
While that could impact the amount of money you’d be leaving to your beneficiaries, it is another guaranteed asset you could plan and rely upon
Indexed Universal Life Insurance
Indexed universal life is a form of permanent life insurance with flexible premiums and possibly a flexible death benefit. These insurance policies can track a number of well-known equity indexes, such as the S&P 500 or the Nasdaq-100 to earn interest credits.
Start With a Free Custom Quote
At Arizona Life Insurance, we understand the importance of financial stability and protection for you and your loved ones. We empower you to secure your financial future with our comprehensive range of indexed universal life insurance policies.
Indexed Universal Life Insurance Benefits
Indexed universal life (IUL) insurance is a form of permanent life insurance offering a cash value component and a death benefit. IUL insurance policies have an investment element, which can grow and earn interest connected to an equity index.
Builds Cash Value
The policy builds a cash value that can be accessed during the policyholder’s life, for example, through a loan or withdrawal.
Adjustable Payments
The policyholder can adjust the premium payments, as long as the payments are sufficient to keep the policy in force.
Cash value accumulation
If the market performs well, the cash value will grow accordingly. This can result in substantial gains.
Death Benefit Increase
The death benefit can be increased, providing a greater benefit to the policy’s heirs.
Tax-Deferred Growth
Cash value growth has a tax-deferred status. Life insurance policy loans and death benefits are also typically tax free.
Insurance Riders
Some life insurance riders allow you to skip payments if you become disabled. Others allow you to draw on the death benefit early if you are diagnosed with a terminal illness. There are also life insurance riders that provide term coverage for children.
Indexed Annuities
Indexed annuities promise lifetime guaranteed monthly or annual income for a retiree until their death.
Start With a Free Custom Quote
At Arizona Life Insurance, we understand the importance of financial stability and protection for you and your loved ones. We empower you to secure your financial future with our comprehensive range of retirement annuities.
Benefits of Indexed Annuities
While annuities are perceived as having large up-front costs and early withdrawal penalties that make them somewhat illiquid, they can be great for those who need extra income in retirement.
Income for Life
Perhaps the most compelling case for an annuity is that it generally provides income that you can’t outlive (though some only pay out for a certain period of time).
That’s not necessarily the case with traditional investments such as 401Ks or IRAs unless your nest egg is particularly large.
For folks with more modest means, an annuity ensures you’ll have something to supplement Social Security, even if you live to be very, very old.
Deferred Distributions
Another nice perk of annuities is their tax-deferred status.
With other popular retirement investments, such as Certificates of Deposit (CDs), you’ll have to pay Uncle Sam when they reach maturity.
With annuities, though, you don’t owe a penny to the government until you withdraw the funds. That aspect gives owners some control over when they pay taxes.
Leaving money in a deferred annuity can also help reduce your Social Security taxes, as you have less taxable income when you delay withdrawals.
Guaranteed Rates
The payout from variable annuities depends on how the market performs, but with the fixed type, you know what your rate of return will be for a certain period of time.
For older adults looking for a predictable income stream, that may be a better alternative than putting money into stocks, IRAs, or even corporate bonds.
Frequently Asked Questions
Who needs life insurance?
If people depend on you financially, such as a spouse, children, a business partner or elderly relatives, having life insurance can protect them if they can no longer depend on your earnings.
How much life insurance do I need?
The first step is determining how much cash and income your dependents will need if you die. Instead of relying on your monthly income, your family will receive an insurance benefit upon your death. It is then up to the beneficiary of your policy to decide how to use it.
If you have younger children, a mortgage, or both, you may want to have a higher death benefit to make sure your family can meet its financial obligations should you die. The beneficiary of your policy can decide to use the money from the death benefit to pay monthly bills or pay off the mortgage.
A financial advisor or insurance agent can assist you with figuring out how much coverage to purchase.
Do I need more insurance as I age?
As you age, you may consider reducing the amount of life insurance on yourself or your spouse for cheaper premiums. If your children are older and if the mortgage is nearly paid off, you may need less life insurance.
What are the types of life insurance?
There are two types of life insurance — term and permanent.
Term life insurance provides coverage for a specific period, whether it’s for 5, 10, 20 or 30 years.
Permanent life insurance, also known as “cash value” life insurance, covers a policyholder’s entire life and has a financial component of the policy that will accumulate cash, like a savings account.
Both types of insurance pay out what is known as a death benefit, which is the amount of money paid to the beneficiaries named in the policy upon the death of the insured.
What is term life insurance?
Term insurance protects for a specified period.
Terms of one, five, 10, or 20 years or up to 65 are available. This type of policy only pays a benefit if you die during the policy term.
Term insurance doesn’t build cash value. If you stop paying your premium, the insurance expires.
This insurance is generally less expensive than other types of life insurance.
What is permanent life insurance?
Permanent life insurance is designed to provide protection for the entire life of the policyholder, assuming the premiums are paid on time. Permanent life insurance includes a death benefit and a financial component that will accumulate cash over the life of the policy. With permanent life insurance, part of the premium you pay goes toward building cash value. Therefore, the premiums are generally higher than term life insurance.
What are the types of permanent life insurance?
- Whole life — Premium remains constant throughout the life of the policyholder. Non-participating and participating are two forms of whole life. Participating whole life pays a dividend based on the profits earned by the insurance company. Typically, premiums of participating whole life insurance are higher than non-participating.
- Universal life — Universal life is more flexible than whole life insurance. This type of insurance invests a portion of your premiums into bonds or mortgages. The policyholder can increase or decrease the amount of the premium used toward the death benefit or the cash value.
- Variable life — Variable life insurance is similar to universal life insurance, but the policyholder has a wider selection of investment options, including the stock market. This can yield a high rate of return in a favorable market. However, in a poor-performing market, the death benefit and cash value of the policy may decrease.
Note: As with all investment decisions, consult with a trusted financial advisor before making a purchase.
What are life insurance riders?
Riders are amendments that tailor a life insurance policy to your needs. Attaching a rider to a life insurance policy will typically raise the premiums.
What are some types of riders?
- Accidental death benefit — Secures an additional amount of money to be paid to the beneficiary if the policyholder dies are result of an accident. The rider is often referred to as “double indemnity,” which doubles the amount of the death benefit.
- Waiver of premium — Says your insurance company will waive your premiums in the event you become disabled and are unable to pay.
- Accelerated death benefit — Allows you to collect a specific amount of the death benefit if you are diagnosed with a terminal illness that requires long-term care. The downside would be a reduction in the benefit after the policyholder’s death.
Note: Speak to your insurance agent about other riders that may be suitable for your needs.
Is cash value growth in a life insurance policy tax-deferred?
Permanent life insurance allows money to accumulate tax free, meaning you don’t have to pay income tax on the growth each year. However, if you surrender the policy for its cash value, the gain on that value over the policy’s life is then taxable if it exceeds the total premiums paid.
Can I take out a loan with life insurance?
Permanent life policies allow the policyholder to borrow against the cash value of the policy. Any unpaid loans will be deducted from the death benefit or from the cash value of the policy.
Can a life insurance policy be used to cover long-term care?
Some permanent life insurance policies allow you to use some or all the death benefit to help pay for long-term care.
Some policies will only pay for long-term care for a specific time. The money used is deducted from the death benefit.
You can buy stand-alone long-term care insurance from your insurance agent, or purchase a “combo” permanent life insurance policy that includes long-term care coverage.
For more information about long-term care insurance, ask our team.
What Is an Annuity?
An annuity is a financial contract between an individual — the annuitant — and an insurance company — the issuer. It can be structured in a lot of different ways with a variety of custom features, including death benefit payments and inflation protection.
Despite the range of structures, all annuities share a fundamental similarity. They involve an upfront payment by the annuitant in exchange for a series of income distributions from the issuer.
The size, timing, variability and duration of the income distributions depend on how the contract is structured. For many people, this is determined as part of their retirement plan.
How Do Annuities Work?
There are many different types of annuities. Fundamentally, all annuities work similarly.
An annuity contract entails a lump-sum purchase in exchange for a series of immediate or deferred income distributions.
The size, timing, variability, and duration of the distributions depend on how the contract is structured, which should be aligned with your investment objectives and tolerance for risk.
How Are Annuity Rates Set?
Annuity rates vary from issuer to issuer, depending on the contract’s structure and the issuer’s leniency.
So, an annuity rate usually reflects a few key factors, including the current interest rate environment, the life expectancy of the annuitant, and the inclusion of customized features, such as inflationary adjustments, lifetime payments, and death benefit payments.
How Much Income Does an Annuity Pay Out, on Average?
An annuity payout depends on several factors, including the amount of your investment, your age and life expectancy, the structure of the annuity, and any features incorporated into the contract.
Generally, the younger you are and the longer your life expectancy, the higher the payout you can expect.
Additionally, riders generally diminish payouts, given the protections they offer.
What Are the Most Popular Types of Annuities?
There are many different types of annuities. The variations exist to fit the diverse needs of investors, especially retirees. At the highest level, annuities can be identified by the following three categories.
Types of Annuities
Is an Annuity a Good Investment?
An annuity is not an inherently good or bad investment. It can be a good investment for a conservative investor with a relatively short time horizon, minimal appetite for market volatility and the desire for a hands-off, guaranteed stream of income.
However, it can be a bad investment for a growth-minded investor with a long time horizon, money to endure near-term market volatility and the ability to generate income from other types of investments.
How Are Annuities Taxed?
The taxation of an annuity depends on whether it is a qualified annuity or a non-qualified annuity.
A qualified annuity is a tax-deductible investment (made with pre-tax dollars), while a non-qualified annuity is an after-tax investment.
Qualified annuities allow for a tax deduction in the year of purchase — non-qualified annuities do not provide for a tax break.
The interest income earned by both types of annuities is allowed to grow on a tax-deferred basis.
What Happens to My Annuity When I Die?
An attractive feature of many annuities is the death benefit. Upon death, it allows an annuitant to transfer any remaining assets in an annuity to a spouse or surviving beneficiary.
All remaining assets are surrendered to the issuing insurance company without the death benefit upon the annuitant’s death.
When Should I Buy an Annuity?
Generally, the ideal time to buy an annuity is in your 50s or 60s. At this age, it’s essential to determine how you’ll generate income to cover your living expenses when you stop working.
For a conservative, hands-off investor, an annuity can be an efficient, low-risk way to fund your retirement needs.
In some cases, an annuity can serve as a prudent complement to other investments.
Who Issues Annuities?
Insurance companies issue annuities, but most contracts are not sold directly to consumers.
Most annuities are sold via intermediaries, such as distributors, brokerage firms, banks, mutual fund companies and independent agents.
These intermediaries conduct most of the interaction with consumers, but the insurance company backs the annuity.
Is My Annuity Guaranteed?
Annuities are insurance products backed by insurance companies. However, an annuity is not insured in a literal sense. The financial strength of the issuing company backs it.
In the event of a default, state guaranty associations offer additional protection, but it may not be enough to make you whole.
Therefore, you should strive to buy annuities from insurance companies that are in excellent financial condition..
Why Invest in an Annuity vs. a Mutual Fund?
There are a number of factors to consider when deciding between an annuity and mutual fund. The top thing to consider is your investment horizon. Generally, the younger you are and the longer your horizon, the more risk you can tolerate. Conversely, the older you are and the shorter your horizon, the less risk you can tolerate.
Ultimately, this means younger investors should favor investing in assets with higher returns and greater growth potential, like stock mutual funds. On the other hand, older investors and retirees are more well-suited for annuities. Annuities’ long-term returns are very modest compared to stocks, but they offer stability and guaranteed income.
Why Invest in an Annuity vs. a Certificate of Deposit?
Annuities and certificates of deposit (CDs) are both relatively safe investment vehicles that offer guaranteed interest income over a specified period.
However, CDs are better suited for short-term investors with a simplistic need for interest income.
Annuities are better suited for long-term investors who seek tax advantages and customized features.
What’s the Difference Between Immediate and Deferred Annuities?
An immediate annuity contract disburses income payments within 12 months of the initial purchase, but typically, within a month.
Deferred annuities offer a guaranteed payout stream that begins after an accumulation period, which can span several years.
What’s the Difference Between a Qualified and Non-Qualified Annuity?
A qualified annuity allows for a tax-deductible purchase (with pre-tax dollars), while a non-qualified annuity involves a purchase with after-tax dollars. When you receive a distribution from a qualified annuity, the entire amount — principal and earnings — is subject to ordinary income tax. With a non-qualified annuity, since you already paid tax on the money used to make the purchase, only the earnings are taxable.
Another important distinction relates to the money used to purchase the annuity. A qualified annuity can only be purchased with money from another type of qualified vehicle, such as a traditional 401(k) plan or an individual retirement account (IRA).
An annuity purchased with non-qualified sources of money is automatically classified as non-qualified.
Are There Any Fees Associated With Purchasing an Annuity?
Different kinds of annuities charge different fees. Generally, the most common fees are as follows.
Common Annuity Fees
- Mortality and expense (M&E) fees are levied to support the insurance guarantees and selling expenses of the insurance company.
- Administrative fees are levied to cover ongoing servicing of the annuity contract.
- Investment management fees cover the costs of managing an annuity’s underlying assets. They are largely associated with variable annuities.
- Surrender charges are another potential fee. They protect the insurance company against the risk of an annuitant making premature withdrawals. Oftentimes, surrender charges are costly, but they can be largely avoided by wisely planning prior to buying an annuity.
Will a Beneficiary Have To Pay Taxes on the Annuity?
Yes, annuity payments disbursed to a spouse or beneficiary will be treated as taxable income.
How Soon Can I Withdraw From My Annuity Savings?
Annuity owners can begin withdrawing money from their annuity by the age of 59 1/2 without having to pay an early withdrawal fee.
Some annuity contracts contain a surrender period, which is the amount of time an investor has to wait before withdrawing funds from his or her annuity account.
If money is withdrawn before that time, a surrender charge is levied.
What Is the Exclusion Ratio?
The exclusion ratio is a percentage that represents the portion of a non-qualified annuity distribution that is excluded from gross income and, therefore, not subject to ordinary income tax. It exists because a portion of each non-qualified distribution is a return of your principal (which has already been taxed) and a portion is interest income (which has never been taxed).
Incidentally, the exclusion ratio is not applicable to a qualified annuity, because both the principal and interest income associated with this type of vehicle are fully taxable.
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At Arizona Life Insurance, we understand the importance of financial stability and protection for you and your loved ones. We empower you to secure your financial future with our comprehensive range of life insurance policies to retirement annuities.
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