Life Cycle Financial Planners, LLC

Category: Ted Bernstein

  • New Alternative Creates Customized Payouts of Life Insurance Proceeds to Protect Beneficiaries.

    New Alternative Creates Customized Payouts of Life Insurance Proceeds to Protect Beneficiaries.

    For the past 200 years, life insurance companies have only offered a lump-sum payout of policy proceeds to beneficiaries. For many, this is not ideal considering these income tax proceeds are squandered in less than 5 years. Ask any life insurance buyer if they intend for the proceeds to be spent in less than 5 years.
    Life insurance buyers want choices. In fact, a high percentage of life insurance owners do not want a lump-sum payout. Instead, they want a policy that gives them the option to create a customized and guaranteed income stream for their beneficiaries that cannot be mismanaged. The Installment Option instructs the insurance company to make guaranteed, pre-determined income payments over time. These payments are selected when the policy is issued by the policy owner. The best life insurance policies today give policy owners flexibility and options; the more, the better.


    The Installment Payout Option allows policy owners to create a customized schedule to fit their family needs and guarantee a protected income stream for their beneficiaries, up to 10, 20 or even 30 years.
     Premiums payments – up to 50% less for guaranteed results or the
    total benefit is increased as much as 50% for the same premium.
     The annual payments are pre-determined and guaranteed,
    regardless of economic conditions or other variables.
     Ability to customize the death benefit payments to meet individual
    planning objectives.

    Proceeds are paid according to a pre-determined schedule, selected by the policy owner at the time of purchase. In the past, a lump-sum payment was the only option available. The Installment Option eases concerns about lump-sum payments being mismanaged.

    Protect Proceeds For Beneficiaries

    What is the Installment Life Payout Option?
    Rather than your beneficiary receiving a lump-sum payment at the time of
    death, the Installment Payout Option gives you the power and control to choose guaranteed, pre-determined installment payments when the policy is purchased.
    Is the Installment Option Less Expensive ? Can I Buy More Life Insurance With the Same Premium Payments?
    Yes, this option is less expensive. The longer the deferral period, the lower the premium payments will be. Premiums can be as much as 40% less on an annual basis.

    Is the Installment Option Better Than a Lump-Sum Option?
    Neither option is “better” than the other. An increasing number of life
    insurance buyers are concerned about the risks of leaving a lump-sum death benefit to their beneficiaries. For them, the Installment Option may be best. Life insurance owned for estate tax planning is a good example of when a lump-sum option may be a more appropriate alternative.
    How is the Deferral Schedule Determined?
    We encourage every life insurance buyer to meet with a life insurance professional to consider these options, and others. Your income, debt levels,
    other assets, fixed and variable expenses, education, retirement assets and inflation are some of the elements in the calculation.
    Can I Change the Payout Option from Installment to Lump-Sum?
    Some insurance companies allow for this. Unlike the lump-sum option that is very limited from a planning perspective, the Installment Payout Option allows for customization by each policyholder.
    Can I choose a Blend of Lump-Sum and the Installment Option?
    Yes. Most people appreciate the ability to customize their life insurance
    policy by combining a lump-sum payment with installment payments over time.
    Can I Upgrade My Existing Insurance to the Installment Option?
    Yes. By doing so, you may be able to lower the premium payments or
    increase the death benefit for the same premium you pay now.
    Can a Beneficiary Make Changes to the Installment Schedule?
    No. However, the installment payments are an asset that can be sold at a
    discount. We recommend a trust be considered as the policy owner, with an
    informed trustee to ensure the insured’s intent is honored.
    What if My Health Has Changed Since Last Purchasing Life Insurance?
    If you have had a material change in health, be cautious about giving up
    any existing coverage without a careful analysis. Consult with us to help evaluate your options. By choosing the Installment Payout Option, you may be able to neutralize the impact of a higher premiums.
    What Insurance Companies Underwrite the Installment Payout Option?
    The Installment Option is available from several of the most highly rated life insurance companies in the United States.

    Please call me at 561-869-4500 or email me, Ted Bernstein, about a complimentary review of your existing policies.

  • Life Insurance Policy Review

    Life Insurance Policy Review

    Life Insurance Policy Review & Monitoring

     

    A life insurance policy review is strongly recommended every two years. For many life insurance buyers, an objective and impartial advocate always proves to be invaluable. For individuals, families or businesses, you can navigate the life insurance world with the comfort of an impartial professional. Transparency and disclosure is the cornerstone of our practice.

    After a life insurance policy review, you will learn about cutting edge improvements to policies, better pricing options and how your current policy stacks up. Although it’s counter-intuitive, if your health is the same, you should be able to improve your policy every few years.

    For institutional owners of life insurance policies or individual trustees of trust owned policies, life insurance is an asset that must be regularly monitored by the policy owner.  The owner is a fiduciary and is therefore responsible for the policy and for keeping it in good standing as any other asset for which they have this responsibility. When revocable or irrevocable trusts are owners of life insurance, we recommend that the policy or policies be reviewed on a regular basis by the Trustee. If the review is out-sourced to a professional, we suggest these reviews be done on a fee basis to ensure objectivity.

    Long before other professionals began working in this area, we recognized the value of an unbiased, fee-based option to give trustees and owners the proper level of due diligence assurance and fiduciary compliance that comes with being trustee. 

    I began offering a life insurance policy review service to individual consumers, law firms, CPA firms and Trust companies, reviewing more than 2000 Trust Owned Life Insurance Policies (TOLI) on a fee basis. 

    The life insurance industry is in a constant state of change making life insurance a complex financial asset.  Many types of policies and their components are insufficiently understood by the policy owner. Having an objective professional who is contractually prohibited from selling products is wise trust management for institutional owners.  

    checklist

     

    FREE OR FEE? IS THERE A DIFFERENCE?

    Your life insurance policy should be treated as a “buy and manage” asset.  Life insurance agents typically offer only the buy function and not the manage function.  If you are a Trustee or 3rd party Owner of a life insurance policy, ask yourself this question:  “Is there a difference in the value of a life insurance policy review done on a fee basis versus a free review?” Is the review being done by a sales agent as a way to create selling opportunities? The goal for policy owners is to develop a review and monitoring model based on best practices versus predatory practices. When the owner is in a fiduciary capacity, the review process should be done on a fee basis to ensure impartiality.

     

    THE LIFE INSURANCE POLICY REVIEW.

    • Life Expectancy has lengthened. 
    • Insurance companies have introduced innovative new products and pricing techniques that reduce premiums and improve policy performance. For example, indexed universal life is policy type that did not exist 20 years ago.
    • Interest and dividend crediting rates change.  These crediting rates are directly tied to the rate of return in the policy. 
    • Market conditions have changed which can affect policies tied to the markets.
    • Planning goals of the policy owner may have changed. Evaluation of current goals and needs is an essential part of the life insurance policy review process.
    • New products have emerged, often making previous product selections less desirable in light of new options.
    • Federal Estate and Gift Tax laws have changed which can eliminate the need for a trust to hold this asset.

    WHAT IS INCLUDED IN A LIFE INSURANCE POLICY REVIEW?

    • Update original goals and objectives, including a policy summary.
    • Location of original policy and all amendments.
    • Confirm current contact information for owners, trustees, etc.
    • A review of policy structure, ownership, beneficiaries, payment methods, etc.
    • Assessment of possible underwriting class improvements.
    • An evaluation of the effect of changes in interest rates/sub-account performance, increase in cost of insurance, or any combination thereof. Updated carrier ratings provided from national rating agencies.
    • An objective evaluation on whether there is a more cost effective and reliable way to meet client expectations. 
    • Context Analysis –is the policy still suitable for the current estate plan, as circumstances are constantly changing in clients’ lives as well as applicable tax law.
    • Premium Funding Analysis – Many policies may lapse due to poor policy performance, leaving a sizeable premium increase. Current projections should be obtained to view the policy under different conditions.
    • Stress Test – Worst case scenarios should be analyzed.
    • Market Comparison – It is important to assess whether there are savings and other benefits available to the client should they choose to switch to a new carrier. 
    • Secondary Market Analysis – If it is determined that a policy is no longer needed or wanted, rather than lapsing or surrendering the policy, does it make sense to settle the policy?

     

    Before a life insurance policy review is undertaken, it is helpful to speak with the insured/owner and their advisors in order to gain important insight concerning the policy’s origination, purpose of insurance and how it fits into today’s planning goals and objectives. Please contact us at 561-9-869-4500 or email me to arrange a complementary consultation about our policy review services.

    Please email me at Ted Bernstein or call me at 561-869-4500.

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  • 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.

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  • Ted Bernstein CBS Interview

    Ted Bernstein CBS interview with David Weir. The interview focused on several of the innovations Ted has introduced to the life insurance industry.

    For more information about Ted Bernstein and Life Cycle Planners, click here. 

     

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  • Retirement Tips & 10 Useful Retirement Terms.

    Retirement Tips & 10 Useful Retirement Terms.

    Whether you’re in retirement or getting ready to retire, here are 10 useful retirement tips and terms.

    Protect Your Nest Egg:

    1. Full Retirement Age: Full Retirement Age (FRA) is the age you can receive 100 percent of your Social Security benefit. If you delay, the benefits will increase by 8 percent, up to 70.
    2. Spousal Benefits: Another strategy that may help maximize your Social Security income is the spousal benefit. The spousal benefit is an option to receive your own benefit or one-half of your spouse’s benefit, whichever is greater.
    3. Lifetime Income: A term used to describe income for life. Social Security, pensions and annuities all provide lifetime income.
    4. Retirement Asset Diversification: Similar to portfolio diversification, you may benefit from having different types of assets. One of the most important retirement tips to consider is working with a retirement professional to stay properly diversified.
    5. Required Minimum Distributions: Mandatory IRS distributions to begin taking withdrawals from your retirement accounts, such as IRAs and 401k. They are taxable and they begin at 70½, regardless of whether you want them.
    6. Re balancing: Re-balancing is a strategy to help keep your investments aligned with your time horizon and risk tolerance.
    7. Medicare Parts A, B, C, D: 
    • Part A – Hospital Coverage: If you qualify for medicare, you’ll pay no monthly premium for Part A coverage. However, you will have to meet the annual deductible before Medicare kicks in.
    • Part B – Non-Hospital Medical Coverage: Optional coverage for  doctor’s visits, tests, physical therapy, etc. You may want to opt out if you continue health insurance through a qualifying employer, or spouse.
    • Part C – Medicare Advantage: An alternative to Parts A and B, it offers coverage through private insurance companies that contract with Medicare. May provide benefits such as vision or dental care at an additional cost.
    • Part D – Prescription Drug Coverage: Adds prescription drug coverage to Medicare. It is offered by insurance companies and other private companies approved by Medicare.
    1. Donut Hole: A retirement term that describes the gap (or hole) in Medicare Part D, prescription coverage.
    2. Long-Term Care Insurance: Coverage for people who need help with common daily living activities, such as bathing, eating and dressing.
    3. Estate Planning: Preparing for retirement is a good time to review or create an estate plan. Updating living wills and powers of attorney is a good idea too.

    Please contact me at 561-869-4500 or email me to discuss these retirement tips or a review of your current plan.

    You can visit us at www.facebook.com/lifecycleplanners and www.linkedin.com/tedbernstein

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  • Simple Tips For Successful Inheritances & Wealth Transfer

    Simple Tips For Successful Inheritances & Wealth Transfer

    Learn these simple tips for Successful Inheritances. Help your heirs hold on to their inheritances and keep your family intact.

    Giving while living is ideal but that oftentimes is not possible. Wealth transference can be complex and gut wrenching for some. Without careful planning, conditions can end up ripe for wealth destruction. Wealth will transfer, just maybe not where you intended it to go. If you’re not okay with your life’s assets enriching litigation departments of probate law firms you’ve never met, now may be a good time to enhance your current wealth transference plan. Don’t let the assets for your heirs end up being lost to professional fees.

    I see more and more cases where well-meaning inheritances are busting up families and family relationships. The attached article does a great job highlighting a few of the unintended consequences that can affect not only the rich and famous. How much would it disappoint you to learn that your children may never speak to each other again because of their inheritance. It is a reality that is occurring more often every day.

    INHERITANCE Feature-INNM0518

    Or you can click on the link at Insurance News Net to view the article online.

    Please contact me at 561-869-4500 or email me about a complementary consultation about the wealth transfer and inheritance issues that may be concerning you and your spouse.

    You can visit us at www.facebook.com/lifecycleplanners

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  • Permanent Life Insurance, Lower Net Cost Than Term.

    Permanent Life Insurance, Lower Net Cost Than Term.

    Term Insurance or Permanent Insurance?

    Watch out for these term insurance risks .

    Do you want permanent life insurance coverage for your family or business, regardless of how long you live? Then a permanent insurance policy is right for you.

    There are important differences between term life insurance and permanent life insurance such as whole life and universal life. These differences go way beyond price. The proper way to compare life insurance is to compare the net cost of different options. The people pushing term insurance use a marketing gimmick known as “buy term and invest the difference”. The problem is:

    Nobody invests the difference!

    If you want a policy that will protect your family for life, a permanent policy is the only option. If you want a better net cost, again you want to be looking at permanent coverage. The net cost is much lower than term insurance.

    The Risks of Term, Look at the Math: A male 35 will pay $950 annually for $1,000,000 of term (for a female, a little less). The 10-year net cost of this policy is a LOSS OF $9500. Over 30 years, the policy will have a net loss of $28,500. The term policy will lapse at age 65 with no value. If this person is healthy, he has 20 more years to live, using today’s projections. If the person is unhealthy, he will be unable to get life insurance or it will be un-affordable. Millions of people over 60 today cannot afford what is available to them.

    The Advantages of Permanent Life Insurance: On the other hand, the same 35 year old can buy a permanent policy for $9525. Yes, the premium is significantly more than an equivalent term policy and this automatically rules out all the people who currently do not have the cash flow to buy a permanent policy. The $9525 premium is guaranteed to stop at age 65. The 10-year net cost of this policy is projected to be a GAIN OF $2721. The 20-year net cost is a GAIN of $97,816 and the 30 year GAIN is $343,059.

    Over 30 years, the net cost for term is a negative $28,500. The projected gain, using the current dividend scale, is a stunning $343,059. If you would you like to see a simple presentation customized for you, please complete this form and we will be in touch or feel free to call us at 561-771-4647.

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    A permanent policy will remain inforce as long as you need it to without any new medical information. The equity in the policy can be tapped at anytime and today, many permanent policies offer Accelerated Benefits for health emergencies.

    Why doesn’t every life insurance buyer own a permanent policy?

    The number one reason young people select term insurance is affordability. Many young life insurance buyers do not currently have the necessary cash flow to purchase permanent life insurance, and that forces them to purchase term. In too many cases, the term policy that was selected only for its lower cost is not replaced with a better, more appropriate permanent policy, when it is affordable. The right insurance professional should be stressing the importance of replacing the term policy as soon as possible. Term insurance is the right product only if your need for coverage is temporary. Paying premiums into a term policy is throwing away money 97% of the time because 97% of all term policies lapse before paying a claim.

    Most young people underestimate their desire to have life insurance later in life. People over 50 want insurance for life to protect their spouse, children or grandchildren.

    If you have not looked at the net cost advantages of permanent life insurance recently, you might be surprised at its low premiums and low net cost. The entire process, from quotes to underwriting, can be done online and, in many cases, there is no medical exam at all.

    Why Permanent Life Insurance?

    • The net cost of permanent life insurance is superior to term.
    • Does not expire, is there when you need it most, one policy for life.
      • Consult with an experienced insurance professional to get a customized policy.
        • DO YOU WANT YOUR HEIRS TO RECEIVE LIFE INSURANCE PROCEEDS, GUARANTEED FOR LIFE? 
          • Secondary market value. A permanent policy can be sold for cash if you do not need or want the policy after age 70. Typically, you cannot sell a term policy in the secondary market if it can’t be converted.

    The following video speaks to the virtues of permanent life insurance.

    You can visit us at www.facebook.com/lifecycleplanners

    https://en.wikipedia.org/wiki/Whole_life_insurance l https://en.wikipedia.org/wiki/Life_insurance#Permanent_life_insurance

  • Jumbo Life Insurance Policies: Which one is best?

    Jumbo Life Insurance Policies: Which one is best?

    Jumbo life insurance policies typically begin with face amounts of $10,000,000 and are often purchased by high net worth and ultra-high net worth people. Some insurance companies and some life insurance professionals cater to this market which is highly specialized. 

    Jumbo life insurance buyers will work with insurance professionals to secure coverage with the lowest rates and the best underwriting class. There are considerable differences when underwriting policies for $1,000,000 and ones for $15,000,000, $50,000,000 or $100,000,000.

    A key factor in determining the policy’s premium is the underwriting class that is offered. The difference in underwriting classes can be dramatic. Double digit differentials are typical because the cost of insurance is higher as the classes reflect.

    Don’t be fooled by “loss leader” rates that initially look good during the quoting process. The quoting process is not where the battle is won and lost.

    The best preferred rates are offered to people who take no medication, have no medical history and whose families have no medical histories. Underwriting term insurance is very different than underwriting permanent insurance such as whole life, indexed universal life and guaranteed universal life. Most high net worth consumers prefer permanent life insurance because they understand that the net cost of permanent life insurance is much lower than term insurance.

    In fact, getting you the best underwriting class should be the agent’s top priority once underwriting begins. Doing this properly requires experience and expertise from a professional who is willing to push back based on knowledge about illnesses and medications. The right agent will have extensive relationships with underwriters and who can represent all companies. Working with insurance agents who represent only one insurance company, known as a captive agent, is working against the best interest of life insurance buyers.

    There are only a small group of insurance companies specializing in the large case life insurance market. Insurance companies may share underwriting results with one another, which is authorized through the application process. One way is through the MIB (the medical information bureau). The chance of future problems increases if the underwriting process is not being managed properly. The best outcomes occur when insurance professionals represent the best interests of their client by approaching the process with complete transparency and disclosure.

    What you need to know for obtaining the best rates:

    Check your known underwriting history before submitting new applications. I work with my clients to get an accurate picture of their health history and their life insurance history, including previous submissions. With this information, we create a report of how much coverage is currently inforce and how much will be replaced, if any. The total amount of inforce coverage at the end of underwriting is critical information to share with underwriters, at the beginning of the process.

    Chronicle the medical history. This helps us understand both current and past health issues which may impact underwriting decisions. We recently helped a 66 year old woman acquire a jumbo policy for succession planning purposes. She had been on lithium for 15+ years without any problems. Suddenly, she had developed a tolerance to the lithium that created some temporary issues. All her current coverage was issued on a preferred basis. Knowing the history helped the right underwriters understand it was a medication problem and nothing else. Many underwriters declined the case.

    Product Design. The underwriting criteria is different for permanent coverage than it is for term insurance and selecting the right product can be complicated. Commissions, high cash value riders and term blends should all be considered as each of these variables can impact price and net costs. 

    Premium financing and jumbo life insurance: In many cases, it is a perfect combination. Premium financing is often an ideal strategy for purchasing permanent life insurance. Like now, loan rates are significantly lower than a policy’s rate of return and a policyholder’s ROI. An in depth analysis must be done by the life insurance professional to outline the pros and cons of Premium Financing:

    Cover letters go a long way in helping underwriters understand what a prospective client is trying to accomplish with life insurance. Often, these jumbo life policies involve complex estate planning strategies. A cover letter is always beneficial. 

    Please contact me at 561-771-4647 or email me. I offer a complimentary consultation to discuss anything you wish about life insurance or annuities. I am proud of the things many clients have chosen to say about us and perhaps they will give you additional insight about how we do business.

    You can visit us at www.facebook.com/lifecycleplanners

    https://en.wikipedia.org/wiki/Whole_life_insurance  https://en.wikipedia.org/wiki/Life_insurance#Permanent_life_insurance

  • A Whole New Look At Life Insurance Advantages.

    A Whole New Look At Life Insurance Advantages.

    https://money.usnews.com/money/personal-finance/family-finance/articles/2017-07-27/3-ways-to-use-life-insurance-while-youre-still-alive?sf74224675=1

    It used to be that life insurance only provided benefits to your beneficiaries. Like everything else, innovation has made life insurance far more valuable than ever before.

    Now you can tap the face amount of your policy if you have a health crisis. Think of it as an unfunded savings account. You could have a one million dollar policy with no value in it. At possibly the worst time in your life, you have guaranteed access to a portion of the million (up to 90%).

    Another innovation allows you to fund the policy and never lose principal when the market is down. No risk, only potential upside.

    Not impressed yet? If you reach the point where you don’t want or need the policy, you can sell it for a profit like any other asset you own.

    Please contact me at 561-869-4500 or email me about a complementary consultation including guaranteed income ideas and a review of your existing coverage. You can visit us on Facebook.

  • “Not My Family!” Strategies To Avoid Wealth Destruction

    “Not My Family!” Strategies To Avoid Wealth Destruction

    Wealth destruction at inheritance time is showing no signs of slowing down. More and more family members are litigating with one another including attorneys, CPAs, wealth managers, family businesses and other related parties. Why is behind this unfortunate trend?

    Too often, all the planning attention is placed on the family’s financial and real estate assets. There is nothing wrong with this but when there were dysfunctional family dynamics before inheritance, it is likely there will be dysfunctional family dynamics upon death. Neglected during the planning process, this dysfunction can lead to unintended consequences for family and business relationships. Most people passing on wealth do so with an expectation that their generosity will be received in the spirit it was intended. Without a proper amount of focus on family dynamics, succession inheritance can cause further damage to family relationships.

    Avoiding Wealth Destruction

    “If your wealth transfer plan is not done carefully, your wealth will be transferred… just not where you intended. It will end up being transferred, that’s for sure. It will be paid out as legal fees to law firms and other professional firms. In no time, millions of dollars can be wiped out in fees and settlements.

    AVOID WEALTH DESTRUCTION – CLICK HERE

    Contact me at 561-869-4500 or email me at TB@LifeCyclePlanners.com for a complementary consultation. Or, visit us at Facebook

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