Life Cycle Financial Planners, LLC

Category: News

  • Never Lose Money In The Markets Again:

    Never Lose Money In The Markets Again:

    Protect Your Retirement Assets.

    We sell security, not securities.

    We all wish we could make money when the markets are up and avoid losing it when markets are down. Conservative and aggressive investors alike – nobody wants losses!

    As investors, we want the best of both worlds. When markets are up, we want to stay invested with minimal risk and we want to protect our gains. It is tempting to let it ride just a little longer and to stay fully invested, often against our own, best judgment. The problem is that markets take sudden turns for the worse. When they do, it can be paralyzing and difficult to minimize losses or to get out at the right time. It is difficult to consider changing course during these times and it is equally difficult to watch your assets plunging. With retirement assets, a sudden move down can be very costly. Waiting for the markets to cycle back up again is a completely different experience at age 67 than it is at 45. Time is not on your side. Depending on the severity of the drop and its duration will determine the extent of your losses.

    The Good news.

    The best time to consider alternatives is at the top of a market cycle. Instead of being too heavily invested in equities that offer no protection, a balance of income generating assets and equities will better protect your retirement assets. Income generating annuities are state-of-the-art, with indexes that participate in rising markets. Since they are not investments, there is no investment risk. Your principal and any growth is always guaranteed. While there is nothing inherently wrong with risky investments; they should not be the foundation of a retirement plan.

    What I am asking you to consider are guaranteed income contracts or Fixed Indexed Annuities. Think of them as market indexed annuities because returns are partially based on how markets perform, without every being exposed to market losses.

    Need an alternative to 0% savings rates? Get upwards of 2.5%

    “ROI is Reliability of Income in retirement, not Return on Investment. The goal of retirement security is achieved through a shift in focus from asset accumulation to income and asset protection.

    Annuities are over 200 years old. THERE IS NO LOSS OF PRINCIPAL which is the PRIMARY ATTRACTION of an indexed annuity. During the 2008 Financial Crisis and the Covid bear market drop, none of our clients lost a dollar in their fixed indexed annuities. Today, there are millions of indexed annuities inside IRAs and other retirement plans. People want gains when the markets are rising and they want guaranteed income for life with downside risk.

    The world’s leading economists all agree about the value of annuities in retirement. Consider what they say because they are unbiased and impartial. It makes no difference to them whether we invest our retirement assets in hedge funds or annuities. When Olivia Mitchell from Wharton (check out her incredible resume) says that annuities are key assets to own in retirement, she is saying so because she’s spent her entire career studying these issues. Nobody explains why mortality credits are the most valuable asset in annuities, better than Tom Hegna. When Professor Wade Pfau at The American College, or Roger Ibbotson from Yale write books about the advantages of annuities, their pro-annuity positions are credible because they don’t sell products.

    Professor Pfau stresses that “investors typically fall into the ‘trap’ of depending on investment portfolios as the chief way to fund their retirement. Now, many of these folks in retirement find themselves needing a life raft…acquiring an annuity would have prevented such a dire scenario“, he argues.

    HOW CAN YOU DO THIS?

    These annuities are designed to modestly beat the performance of other fixed income products and typically, they do just that. There are also times when they do much better. These are important years that can really boost the overall performance of an annuity. For example, many of our clients earned as much as 14% from January, 2019 to January, 2020. Those were extraordinary returns because the market was experiencing extraordinary growth during that same period.

    More Good News: The gains credited to an annuity contract can never be lost. The upside potential of an indexed annuity is determined by a contract, offering an additional level of security.

    Personally, I do not like to hype the upside of market indexed annuities because their other advantages can be just as powerful.

    Let no one with a financial interest in your assets dissuade you from making a financially sound and prudent decision, especially one that may be in your best interest. When you move money away from stock brokerage firms or wealth management firms, they’re losing significant, recurring revenue that is earned from your assets. I have no problem with fees charged by professionals. But, it should come as NO SURPRISE if they make you second guess a decision to move your assets away from their firm. To keep this simple, if you pay an annual fee of 1.5% on $1,000,000 of assets, that is $15,000 per year, or $150,000 of your money over 10 years.

    When markets tumble and the assets in your account go down, so too does the revenue for the investment firm and the investment manager that is managing your money. Can you trust the advice of an advisor who loses annual income if you liquidate or move your account? Is that structure in your best interest? Most investors are not aware of these potential conflicts and many are surprised when they finally understand them.

    Who doesn’t want more guaranteed, lifetime income? These annuities pay you for as long as you live AND guarantee the principal – forever. If the market drops 30%, you lose nothing. If you want certainty, predictable outcomes and no anxiety over your retirement security, this is for you.

    “You pay no commission from your annuity assets. Instead of paying “forever fees” in managed accounts, fees that are directly reducing your retirement fund each year, there are no annual annuity fees*. The one-time commission is paid from the assets of the insurance company, NEVER FROM YOUR ASSETS! The interest calculations, participation rates and the contract terms are regulated by the Department of Insurance in your state.”

    *Some people choose riders that may have annual, disclosed fees.

    Guaranteed annuities are ideal for those of us who cannot stomach market volatility or wondering when the next crash will begin. Many people cannot tolerate watching their retirement assets evaporate during these market events. Hearing an advisor tell you “not to panic” or “it always comes back, be patient”, doesn’t help. That’s never easy to hear. In, or near retirement, you must be aware of a risk called “sequence of returns risk”. If markets are down near the beginning of your retirement, down years can be far more damaging. If you are drawing money from your retirement assets, down years can be more damaging.

    From 2000 to 2020, there have been three major bear markets and if you owned an indexed annuity, you avoided all three. That’s “peace of mind” – not a dollar lost over 20 years. Market indexed annuities are only available from major insurance companies because only these insurance companies are financially strong enough to provide the guarantees. They prove their financial strength to regulators and rating agencies each year.

    The numbers say it all. In the chart below, the market-indexed annuity has performed nearly as well as the S&P 500 total return index (including dividends). WITH NO RISK!

    Are annuities safe? If you are a conservative to moderate investor, why not let a market-indexed annuity take some of the most important guesswork out of your retirement planning? When the indexes are up, you can make money. If markets crash or if volatility takes over, you will never lose money. Keeping this simple, if you had put $500,000 in an indexed annuity in January or February of 2020, you still have $500,000 of principal today, plus possible gains. Your principal is always intact — always at the highest level it reached, which is called the high water mark.

    You want the best of all possible worlds.

    How Does This Work? Since the insurance company guarantees the principal, they share in some of the upside, when the markets are up.

    “Don’t compare annuities to what might have been if interest rates had been higher, compare them to what is possible and available now. Now we are stuck with low rates. Trying to wait for rates to increase is going to eat away at your assets in the meantime, and there is nothing you can really gain from the effort. Low interest rates strengthen, not weaken, the case for purchasing a single premium immediate annuity.” Wade Pfau

    Ken Fisher hates annuities. Why do some financial “experts” criticize annuities? Everytime a Ken Fisher client liquidates and moves money to an insurance company for the purchase of an annuity, Ken Fisher’s firm loses annual recurring revenue. Maybe this is why Ken Fisher hates annuities?

    Which Is The Best Indexed Annuity?

    There are thousands of annuities in the market. It is our job to know them and to know which one suits you best. To do that, we listen to what you expect in order to meet your goals and objectives. Some contracts are too expensive and some carry hidden fees and charges. You want to make sure to buy the right indexed annuity from an experienced professional who only represents insurance companies with high ratings.

    Ready to start protecting your retirement assets and never lose money in the market again?

    Contact us and allow us to answer all your questions? You have nothing to lose by taking a complimentary phone call. Time does matter. A low interest rate environment forces insurance companies to lower the rates for new clients. Safety is what drives their investment decisions and in order to properly respond to lower interest rates, they will change their offers accordingly.

    Start the ball rolling and call us or fill out the simple contact form on this page or any page of the this site. We can be reached at 561-771-4647

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  • Protecting Retirement Assets. Seek Advice From Financial Consultants.

    Protecting Retirement Assets. Seek Advice From Financial Consultants.

    The right financial consultants can offer guidance about retirement, insurance, asset protection and guaranteed income strategies. These are the keys to creating and protecting retirement assets:

    Threats to consider:

    Insufficient Lifetime Income: The fact is that too many people have insufficient amounts of lifetime income. Financial consultants say the concept of liquidity in retirement is often misunderstood. The need for liquidity is different than when we are working and accumulating assets. The need for guaranteed income for life takes on new importance. There is comfortable balance of both and that is different for each one of us.

    Longevity Risk: To mitigate the risk of living too long, we should increase the amounts of guaranteed, lifetime income.

    Inflation: With interest rates at historic lows, inflation could be a retirement threat if rates move up quickly. Like un-managed high blood pressure, inflation causes unnoticed damage. Inflation is threatening due to our limited options to replenish principle.

    Incorrect Asset Allocation: Proper asset allocation is important too when protecting retirement assets. Financial consultants work with their clients to determine the proper allocation strategies.

    Rising Medical Costs: This is the retirement threat capable of immediate damage to a nest egg.  

    Loss of Spouse & Cognitive Issues– Both married and single retirees will likely deal with the issue of cognitive decline in retirement. For married couples, the loss of a spouse can be a trigger. This has proven to be a significant retirement threat, especially when one spouse assumes primary responsibility for investments. To mitigate the impact of cognitive decline, leading economists and retirement scholars agree about the great value of lifetime income.

    Investment Scams: Be careful of “too good to be true” investments. I have very good radar for scams. Feel free to contact me for an opinion.

    Fees: Fees and other charges are similar to taxes levied against your investments. They are disclosed, easy to measure and they add up. 

    Bad Advice: You know it when you see it. I meet with people in or near retirement every day whose number one objective is “no losses”. Yet, they’re retirement assets are invested in stocks and bonds. It never hurts to get another opinion and having a team of professionals with different disciplines is good prevention. Just make sure one of them is a retirement income specialist.

    Market Losses: Of all the threats to retirement assets, market losses may be the most damaging. Because we don’t have time to replenish losses with income, we can’t overcome them. A fixed indexed annuity provides upside potential while never taking losses.

    The key to security in retirement is making sure to avoid these threats. With the right strategies in place and by working with financial consultants, you can minimize most nest egg risks to gain that peace of mind you may not be currently enjoying.

    Please call me at 561-771-4647 or email me about a complimentary consultation.

  • Best Options Before a Term Policy Expires.

    Best Options Before a Term Policy Expires.

    The two most important considerations to focus on before a term policy expires are your current health and the policy’s conversion option. Every option you will face involves these considerations. Whether you keep, convert or sell the policy, current health and convertibility will be factors. The best time to deal with the end of a term policy is well before its end, allowing for enough time to consider a plan based on the options available in the contract. This way, you retain control over keeping the coverage or shopping for a new policy.

    Long duration, guaranteed term insurance is a relatively new product in the life insurance industry. It started getting popular about 25 years ago. Low premiums have enticed many insurance buyers to overlook some disadvantages. For example, let’s assume a 35 year old person bought a 20 year term policy, 20 years ago. Twenty years later, around age 55, the policy is expiring. What we find is that a very large percentage of people in this boat want to extend the coverage, but they cannot. There are many reasons for this which I cover extensively on this site.

    Before a policy expires, you want to be aware of the following:

    1. If the policy served its purpose, you can walk away, assuming there is no secondary market value. If you are over age 70 with some significant health issues, you might want to explore the secondary market to determine its value to a settlement investor.
    2. Another option is to convert your policy to a permanent one from the company that issued the original term coverage, after making sure the conversion privilege is still in effect and available to you. DO NOT ASSUME IT WILL BE. The conversion option is the single most misunderstood provision in term insurance. Most policies limit the time you can convert. Once it passes, you are out of luck and you will then need to prove evidence of insurability to the insurance company. They will want new and updated health information, new blood and other labs, at the very least. They will re-underwrite you again as if you’re a new policyholder. If, however, you are ABLE to convert WITHOUT evidence, you still may NOT want to exercise this option. It will depend on your health.
    3. Another possibility is to buy another term policy if you are insurable. If you are, shop the market with an insurance professional who can find you the most competitive policy at that time. No matter what you do, you are paying for the professional to assist you. If you buy a policy and use no help from anyone, the insurance company will pay the full commission to the designated agent assigned to your purchase. There is no way around this. Like the car business, you cannot call Ford and bypass the dealerships. My point is to take advantage of what you are paying for and find an agent you are comfortable working with.
    4. Or, you can buy a permanent policy. Beforehand, shop the market with an insurance professional who can maximize the value of your purchase, especially with a permanent policy. See point #3. Be selective and try to find a professional with experience, an impeccable reputation and solid referrals.
    5. Another option is to extend the coverage by paying the “renewal” premium offered by most policies. The rate will be much higher than the rate you’ve been paying. This option usually means the insured is in bad health and has no other options.

    The most important thing I can offer as a takeaway is to review the policy every couple of years and talk through these options to be mindful of when the conversion date expires. Planning around that date will prove to be beneficial in the long and short run.

    Give us a call at 561-869-4500 or email me at TB@LifeCyclePlanners to get started. I offer a complementary conversation about anything on your mind concerning your insurance coverage or succession plan.

  • The Best Life Insurance is No Medical Exam, No Blood, No Wait. In One Phone Call Get Covered Up To $5Million.

    The Best Life Insurance is No Medical Exam, No Blood, No Wait. In One Phone Call Get Covered Up To $5Million.

    What do Barbara Eden and Elizabeth Montgomery have in common with buying life insurance today?

    Magic!

    As fast as they blink and twitch is all the time it takes to buy the best life insurance available in the market today. Apply and Buy is done without a medical exam, without lab tests or without the traditional underwriting hassle. Everything is done online with the guidance of experienced professionals. Whole life insurance, term life insurance, permanent life insurance are all available, up to $5,000,000. For qualified prospects, no traditional underwriting means:

    1. No bloodwork, no needles. No other body fluids necessary.
    2. No visit from the doctor.
    3. For approved candidates, issued and paid in an hour.

    The Need For Speed.

    Consumers today expect everything done quickly. Many people do not review or upgrade their existing life insurance coverage because they dislike the process and it takes too long. But speed alone is not all it takes to make a great life insurance experience. Considering it is among our most important assets, quality is equally important. Without exception, the insurance companies underwriting these programs are market leaders.

    Welcome to the future where you can buy the most competitive life insurance coverage in a single phone call. By collecting information such as prescription history, DMV reports and typical credit and consumer information, you will get a policy in a fraction of the time and none of the aggravation.*

    Everything is done online. In one sixty minute phone call, you can apply and buy up to $5,000,000 of coverage. Everyone under age 65 is a candidate. Therefore, if you have been putting off the decision to review or upgrade your coverage, now is the perfect time to speak us.

    What Type of Policies Are Eligible for Accelerated Underwriting?

    Term and permanent policies are eligible, including whole life. There is no difference between these products and the ones available through traditional underwriting, which is the biggest concern people state for not upgrading their existing life insurance coverage. People realize that policies are better than ever before but at least 50% report taking no action. Enhancements like living benefits, vitality pricing, lifestyle credits and lower premiums are not enough to overcome the hassle of underwriting.
    The typical concerns stated by most people include:

    • the exam process.
    • aversions to needles for blood.
    • disclosing height and weight.
    • fasting.

    What About Living Benefits?

    Living Benefits are available with accelerated underwriting. The value of Living Benefits is that they allow you to draw against the face amount of the policy if you have a qualifying health emergency. Every life insurance policy should include Living Benefits, without exception, since there is no additional cost.

    Please contact me at 561-869-4500 or complete the contact form on this page to schedule a complementary discussion.

    * Applicants may not qualify. Insurance companies retain the right to ask for additional medical information based on the initial application.

  • How Long Should Your Life Insurance Policy Last? What You Need To Know.

    How Long Should Your Life Insurance Policy Last? What You Need To Know.

    Ninety seven (97) percent of term policies lapse without paying a claim.

    Determining the duration of coverage may be the most difficult decision you face concerning your life insurance coverage. Until you are certain about how long you WANT or NEED your policy to last, it is difficult to determine whether you should own a term policy or a permanent policy. The longer you want your policy to last, the higher its premium will be. But the sooner you lock in a permanent policy, the less it will be. For those who prefer to minimize and control their costs in the future, figuring out the duration issue as early as you can is wise. Permanent life insurance has a much lower net cost than term.

    Since the net cost of permanent coverage is much lower, why do people stay with term longer than they should?

    In a perfect world, we’d like guaranteed coverage to last for life at the cost of term insurance. If it weren’t for its higher premiums, everyone would prefer permanent insurance. As it is impossible to predict the future, maximum duration flexibility is an important feature to have in a policy. As we get older, our feelings about life insurance change. In our 30’s and 40’s, we may feel we only need coverage until retirement or when our kids are self-sufficient. Since term policies require less premium, we choose it hoping to replace it with a better policy before it expires. Unfortunately, that is not what happens. The low term premiums are enticing and the insurance industry is failing to communicate the risks of carrying term too long. This has led to a crisis defined by huge numbers of relatively young people being unable to secure a policy after their initial 20 or 30 year term policy expires.

    The biggest problem with term insurance is that it doesn’t last long enough. Consider that 97% of term policies will lapse before paying a claim. The renewal premiums become unaffordable and catch people off guard and unprepared for higher premiums. If their health has changed, the problems begin to multiply. Term insurance is not better value. It’s simply less costly in the low risk years.

    As we get older, we want life insurance to last longer. Waiting to tackle the duration issue can have sobering consequences.

    Innovation is completely changing the insurance industry but existing coverage must be upgraded as often as possible. Did you know that you can take a $2,000,000 advance against the right policy at no cost. If you have a health emergency, it could be a lifesaver.

    And, you can now get a $5,000,000 policy issued in one phone call, without a medical exam and pay the same rates as people who are underwritten traditionally.

    Give us a call at 561-869-4500 or email TB@LifeCyclePlanners to get started.

  • Accelerated Benefits Turn Life Insurance Into Emergency Health Fund.

    Accelerated Benefits Turn Life Insurance Into Emergency Health Fund.

    After A Critical or Chronic Health Event, Advances Are Made Against The Face Value, Not The Cash Value:

    We don’t often use a term like “groundbreaking” when talking about life insurance. But in the case of living benefits, the policyowner now has the ability to take a no cost advance against the policy’s face amount, after a critical or chronic health event. This feature is now available on all types of life insurance policies. Since 2012, we have been helping life insurance buyers learn about and enhance their coverage by adding this option. The ability to take an advance for which there is no additional cost could prove to be invaluable. Also referred to as Living Benefits, accelerated benefits are revolutionizing life insurance policies. Life insurance has traditionally benefited survivors only. The addition of living benefits transforms life insurance into an asset that also benefits owners of life insurance during their lifetime.

    Does your current policy allow you to take an advance against the face amount? Most likely, it does not. But now, you can get a better policy with accelerated benefits. Both term and permanent coverage are available with this option, from several top rated carriers. The question to ask yourself is ‘why keep an outdated policy that doesn’t have living benefits’?

    What is most important to know about living benefits? The advance is unrelated to whether or not there is cash value in the policy. This point is best illustrated through an example. Assume a 40 year old has a $2,000,000 TERM INSURANCE policy with an annual premium of $1500 per year. This policy will never have cash value but it is always eligible for getting an advance against the face value. Let’s further assume that the policyowner has a qualifying event in the 3rd year, entitling him/her to take an advance of $250,000. Of course, this term policy has no cash value and only $4500 in total premiums were paid to this point. The policy still qualifies for a $250,000 (or more) benefit, AGAINST THE FACE VALUE.

    Life insurance needs to be more relatable”, says Deborah Bernstein, owner of Life Cycle Planners. With accelerated benefits, people might think of this option the same way we thought about seat belts when they first appeared in cars. Would anyone accept a car without seat belts once they became available? The accelerated benefits add no cost to the policy but they dramatically increase its value”, she stresses.

    The living benefits turn a life insurance policy into an asset with a dual purpose. In addition to the traditional life insurance benefits for your beneficiaries, the policy is also an emergency health fund for the owner in case of a chronic or critical health event. Even though most people are still unaware of the accelerated benefits option, more and more of the policies include them, FOR NO EXTRA PREMIUM.

    Am I borrowing the cash value from my policy? NO. The advance is against the face amount, not the cash value. No loan or cost is involved in drawing against the face amount of the policy. In fact, this benefit is available on term policies which never have cash value.

    How Do Accelerated Benefits Work?

    In the case of someone who suffers a stroke, for example, the living benefit option allows the policyowner to make a claim which ultimately reduces the face amount of the policy. Perhaps the policyowner wants that $250,000 to help manage the stroke recovery process. The approved amount will reduce the face amount of the policy and future premiums will be reduced. Other illnesses, such as MS and Parkinson’s, are also covered even though they are chronic illnesses.

    Those of you who are familiar with our content, you know that we stress the importance of always working with an experienced life insurance professional. In the case of accelerated benefits, this is never more important. As insurance professionals, we spend a great deal of time learning about the products of different carriers and we know which product is best suited for each of our clients.

    Jumbo Life Insurance Tips

    Adding the Accelerated Benefits Option to Your Coverage.

    Once the best policy for you has been selected, the underwriting process can be done without medical exams or traditional underwriting. For people needing up to $5,000,000 of coverage, some companies no longer require traditional underwriting, meaning that no medical exam or doctor visit is necessary. In one online session, a policy can be applied for and issued. By applying to the right company or companies, the living benefits option will be automatically included in the coverage. It is worth noting that not all living benefits are the same. Some policies cover critical, chronic and terminal health issues – ALL 3 AT NO ADDITIONAL COST. There is no downside for having this extra layer of protection.

    If you need to make a claim for accelerated benefits, we recommend contacting our office and we will help with the claim process. Or, you can contact the insurance company directly, as this can be a very private matter. Once the claim is approved, there is a permanent adjustment to the face amount and the ongoing premium is lowered. Living benefits are considered not to be taxable but you will want to verify with your CPA, since this is not tax advice.

    To get a quote or start a dialogue, complete the contact form on this page or any page on our site and we’ll contact you immediately. Or, you can contact Ted Bernstein at 561-771-4647, or by email.

    To hear testimonials: https://vimeopro.com/aigmarketing/main/video/303384330 / https://vimeopro.com/aigmarketing/main/video/142685717

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  • Is The Estate Tax Going Up?

    Is The Estate Tax Going Up?

    https://ted-bernstein-insurance.blogspot.com/2019/01/estate-tax-and-life-insurance.html

    Visit my blog for insight and commentary about changes that may affect your planning decisions. The day after this post, Senator Sanders released his proposed bill to increase the federal estate tax.

    The Sanders proposal calls for your estate to pay a 70% tax on assets exceeding $3M per person. For a married couple, assets over $6M – $7M will be taxed. Our recommendation is to plan as if the tax is 50% over $6M of assets.

    Although you may have recently been told that the 40% estate tax would not increase and the tax free credit would never drop from $11,000,000, per person, lawmakers are at it again. To plan properly, it is helpful to use levels that reasonably represent both taxes over the past 50 years. This will provide sufficient liquidity at death to help pay the tax. Otherwise, your estate will shrink by as much as the net tax amount.

    For example, if we assume a $12,000,000 estate and a 50% estate tax for assets over $6,000,000 per couple, the tax calculation would be $6M X 50% = $3,000,000. To pass the full $12,000,000 to your heirs without any dilution, it might be wise to own $3,000,000 of permanent life insurance. The cost is minimal compared to the tax savings.

    If it turns out there is no tax at the time of death, the life insurance always proves to be welcome liquidity for your heirs. This liquidity is an immediate infusion of tax free money with benefits on many levels. The leverage of permanent life insurance for this purpose is undeniable.

    Please contact Ted Bernstein if you are concerned about the estate tax increasing. Let’s discuss your options and the planning strategies to mitigate the hit to your estate.

  • Disability Income Insurance – Lower Premiums

    Disability Income Insurance – Lower Premiums

    by Deborah Bernstein

    A disabling accident occurs every second in the U.S. with many of these accidents qualifying for disability income insurance.

    What would your family do if your paychecks stopped tomorrow and didn’t resume for several months or longer? What if this became several years? In some cases, social security may help with disability income, but many claims are denied by social security because applicants  don’t qualify. A policy that guarantees total income replacement is the optimal coverage to shoot for. Standard coverage is usually 50 to 60% of your income as a baseline as the income is not taxable. The cost of disability insurance is based on many factors including duration of benefits, age, lifestyle and health.

    As a careful planner myself, I cannot imagine the strain on our family if either of us lost our ability to earn our incomes. Long term disability income insurance protects your earned income when you are unable to work for a sustained period of time. You may acquire a non-physical condition or a physical impairment, either one might prevent you from working. In those cases, a disability income insurance policy will pay you.  One out of every three people in the U.S. workforce will suffer a disabling injury before retirement. The question to ask yourself is this: “can I afford to be disabled without income for 90 days or longer?”

    Too often, this risk is exposed in well-balanced financial plans, especially for women. In households where women are the sole income source or an equal income partner, disability income insurance is necessary. The risk of long-term disability is typically measured by loss of income and the additional costs of care for severe disabilities, especially for the household’s primary wage earners. In these cases, a serious financial hardship is easily mitigated with an affordable long-term disability policy.

    Own Occupation
    Under “Own Occupation” disability, the policy pays benefits when you are unable to work at your own occupation as a result of an accident or sickness. This type of policy is the most expensive and more difficult to obtain. These types of policies are very popular with professionals who wish to insure a specialized skill. For example, a heart surgeon may want this type of policy in the event he or she loses the use of a hand or seriously injures the fingers on one hand.

    Any Occupation
    The “Any Occupation” definition means the inability to work at any occupation. This definition is sometimes softened by adding language such as “the inability to perform the duties of any occupation by which the individual is suited by training, education or experience”. These policies are less expensive and easier for most to obtain. A heart surgeon who loses the use of one hand may no longer be able to perform specific duties of a heart surgeon, but may be able to consult or work in a different medical field. This type of coverage only pays when gainful employment is not possible. The “any occupation” definition can be different in every policy.

    Hybrid Policies
    Many disability policies now offer options allowing you to blend the “own occupation’ rider with the “any occupation” riders. A common example would be a policy issued with two years of own occupation, switching to any occupation for the duration of the disability. These policies have lower premiums and are considered more affordable for some people.

    Please contact me for a DI quote. You can email me at DB@LifeCyclePlanners.com or call me directly at 561-329-4721.

    P.S. Do you have sufficient knowledge about income annuities? Most people are unclear about what makes the indexed annuity special for lifetime income. Add your name to the contact form on this page and I will send you some great information about guaranteed income solutions.

     

  • Sell Your Unwanted Life Insurance Policy For Cash.

    Sell Your Unwanted Life Insurance Policy For Cash.

    Are you over 65 with a life insurance policy you no longer need or want? Like any other asset, it can be sold for cash in the secondary market.

    Life insurance policies have value in the secondary market. Institutional investors will buy policies from people who have determined they do not need or want the policy. The market is best for people over 70 who are not in perfect health. If you fit this profile, you have an opportunity to sell your unwanted policy for a lump-sum, before lapsing or surrendering it.

    Even term policies have value. We help policyholders determine the secondary market value of their inforce policies. The value of a life insurance policy is expressed as a percentage of the face amount. For example, if you sell a $1,000,000 policy for 5 percent, you would get paid a lump-sum of $50,000.  A $3,000,000 policy could fetch $150,000, or more, depending on the percentage. The important considerations are health and the type of policy. There may be some income taxes to consider on these sales (each sale is different) and that is easy information to obtain. After the policy is sold to the new owner, future premium payments are theirs.

    Term policies also have secondary market value but most policyholders are unaware of what this means.

    Life insurance is an important asset to your beneficiaries and I urge potential sellers to consider keeping the coverage whenever possible. There are many creative ways to retain an inforce life insurance policy and you may want to consider them before selling the policy or letting it lapse. There are hybrid arrangements in which you give up a piece of the face value in exchange for having the future premiums paid.

    Life Settlements convert your policy to cash through a sale to an interested buyer. This is no different than selling any asset when it is no longer needed or wanted.  The policy is  appraised along with your medical records and an offer is then made to the owner, if they determine there is value. Sometimes, no offer is made, depending on the outcome of these appraisals. Some people are too young and healthy or they have a policy that is not attractive to buyers. Other times, the market favors sellers, not buyers.

    Getting an appraisal by working with a broker creates great value to sellers. You may have heard ads from some buyers who are attempting to go direct to sellers and that is certainly one approach but it is not optimal? Why deal only with one buyer when there are dozens, if not more?

    As a life insurance professional with secondary market experience, I represent sellers by bringing the policy to all of the market. By putting buyers in a competitive situation, your offers will increase. The U.S. market is robust and you want an agent with access to the maximum number of capital sources buying policies.

    Should you sell your policy? It pays in many ways to work with a professional working solely in your best interest. A life insurance professional is qualified to help you think through the pros and cons of selling a policy. Before making a decision, I advise my clients to speak with their spouse, other advisors and often, their heirs. This information about a life settlement transaction may help.

    Interested but unsure? The best way forward is to determine if your policy has value. There is no downside and no obligation to obtain this value or to get bids. You will learn a great deal about the policy you own.

    To determine its value, potential buyers need the following information:

    1. Policy projections including the premiums to keep the policy in-force to various ages.
    2. The type of policy and its terms. Some policies have no value in the secondary market because of their terms.
    3. The life expectancy of the policy owner which is determined by an independent, 3rd party analyst. No medical is necessary.
    4. A detailed history and understanding of the policy owner’s current and past health.

    Typically, there is minimal value for policies owned by healthy people under the age of 70. If there are health considerations leading to a shorter life expectancy, that may change the numbers in your favor. I recently helped a 73 year old man sell a $3,000,000 policy. Because of previous medical history, he received several offers. He sold the policy for 16% of face value, or a little bit more than $450,000.

    Are term policies eligible for sale in a life settlement?
    Yes. You should be age 65 or older with some decline in health since the policy was issued. Term policies are typically bought for a temporary insurance need, unlike permanent policies where the policy owner typically has a long duration or lifetime insurance need.

    Are there special requirements for selling a term insurance policy?
    Most life settlement buyers want term policies that are convertible to some form of permanent insurance. Therefore, being able to control future premium obligations through a conversion is usually ideal.

    When does the conversion privilege on a term policy expire?
    The answer varies among different policies even issued by the same company. Some limit the conversion period to a number of years; other companies may also impose a maximum age.

    When should I begin the process if a conversion is involved?
    A life settlement transaction requires getting medical records, in-force illustrations, life expectancy analyses, investor pricing and the closing. In addition, a term settlement usually includes issuance of the conversion policy. Because the entire process usually takes 3 to 4 months, you should get it started at least 4 to 6 months prior to the expiration of the conversion privilege.

    Can I sell part of a term policy and keep part?
    Insurance companies typically do not permit a permanent policy to be split for a life settlement. It is worth exploring if they will allow partial conversions. Then, it would be possible to sell only a portion of a term policy by doing a partial conversion as part of a life settlement transaction. The remaining policy can be kept as term insurance or be converted separately.

    I offer an initial, complementary consultation in person or by phone. Please email me or fill out the contact form on this page and I will contact you shortly. You can call me direct at 561-869-4500.
    ted bernstein, selling your life insurance, ted bernstein boca raton, ted bernstein insurance
  • Selling Un-Needed Life Insurance Gains Acceptance

    Selling Un-Needed Life Insurance Gains Acceptance

    Selling un-needed life insurance policies in the secondary market is now considered mainstream. It is a noteworthy development when class action lawsuits against life insurance companies are brought by policyholders. Should you sell an un-needed  or unwanted life insurance policy? Most qualified sellers are happy to learn about the benefits of selling their policy in the secondary market. It pays to seek the guidance of a professional when dealing with life insurance matters. Selling an un-needed life insurance policy in the secondary market is known as a life settlement transaction.

    Unsure about it? Ask your CPA or tax attorney about life settlements. Those with life insurance experience are advocates. I advise potential sellers to only work with insurance professionals to help maximize the value of an unwanted or un-needed life insurance policy. The right professional will make you aware of issues such as potential income taxation.

    Selling un-needed life insurance policies is all about the value.

    To determine the value of a policy you are considering selling, potential buyers need the following information:

    1. The required premiums to keep the policy inforce to life expectancy.
    2. The type of policy and its terms.
    3. Your life expectancy which is measured by an independent, 3rd party specializing in this practice.
    4. A detailed history and understanding of your current health and past health.

    With this information, you should get initial offers. Typically, there is minimal value for policies owned by people under the age of 70. If there are health considerations leading to a shorter life expectancy, that may change the numbers in your favor. I recently helped a 77 year old woman sell a $2,000,000 policy she purchased at age 54. Because of previous medical history, she received a bit more than $400,000, net. Some clients I’ve helped have only received offers of 4 to 5 percent of the face amount.

    If you have a policy you may no longer need or want, there is no downside to knowing its value.

    ted bernstein, selling your life insurance, ted bernstein boca raton, ted bernstein insurance