Life Cycle Financial Planners, LLC

Category: Useful Tips & Information

  • 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

  • Annuities & Disappearing Surrender Charges

    Annuities & Disappearing Surrender Charges

    Surrender charges on fee-based variable annuities seem to be retreating faster than the polar ice caps, new filings reveal.

    “These advisor-sold contracts typically have no surrender or a very short surrender (period) with very low penalties,” said Kevin Loffredi, senior product manager, annuity solutions, for Morningstar.

    Surrender charges penalize an annuity contract holder for canceling the contract before a certain date. They also allow insurance companies to recoup their commissions paid upfront to advisors on the sale of a commission-based contract.

    http://insurancenewsnetmagazine.com/article/surrender-charges-disappearing-act-3332#.WYoxfxPyuUk

    For annuity buyers, contracts with shorter or no surrender penalties is advantageous. In the past several months, there has been a rush of insurance companies introducing products with better surrender charge solutions. The challenge for them will be distribution.

    Please contact me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about indexed annuities and your specific needs. You can visit us at www.facebook.com/lifecycleplanners

    ted bernstein boca raton florida 
  • Customized Insurance Policy Lowers Premiums As Much As 40%

    Customized Insurance Policy Lowers Premiums As Much As 40%

    NEW INSTALLMENT PAYOUT OPTION REDUCES ANNUAL LIFE INSURANCE PREMIUMS AS MUCH AS 40%!

    Life insurance buyers have a new and often better option to protect their beneficiaries. According to Ted Bernstein of Life Cycle Financial Planners, it is an important choice policyowners now have when it comes to providing long term security for their families. The Installment Option can be 40% less premium, annually.

    Life insurance owners can choose how their proceeds are paid to their heirs with this option. Until this groundbreaking change emerged, a Lump-Sum payment of insurance proceeds was the only choice. Instead of having $1,000,000 paid in a lump-sum, policyholders can instruct the insurance company to customize the payment of the benefits to protect their heirs. For example, the insurance company can pay 10 equal payments of $100,000. Or, another family may choose to receive a lump-sum payment of $500,000 upon death, followed by 5 equal payments of $100,000 would be better.

    We insure every aspect of our lives including our health, our homes, and our income. Why not protect your beneficiaries from mismanagement they can’t recover from, especially after you’re gone?

    INSTALLMENT PAYOUT OR LUMP-SUM? WHICH IS BETTER?

    “A Lump-Sum payout to heirs is often a recipe for disaster”, warns Ted Bernstein of Life Cycle Financial Planners.  The proceeds are gone within 3-5 years because it is difficult for many to manage a sudden lump-sum of money, similar to the issues facing lottery winners who take a lump-sum. As a result, life insurance consumers now have an alternative.  “Policyholders can protect their families from investment risk and drastically reduce their insurance premiums at the same time”, says Mr. Bernstein.

    Frequently Asked Questions:

    For many, it is a better structure and choosing it can save consumers as much as 40% EVERY YEAR for the same amount of insurance.  Or, they can increase the coverage by 40% for the same premium as a lump-sum option. The payments can be paid between 10 and 30 years.

    Ask us about apply and buy life insurance that allows life insurance buyers to get up to $5,000,000 of coverage in one phone call! WITH NO MEDICAL EXAM. No blood or urine tests, visits from insurance company doctors or an agent! Both term and permanent life insurance policies are available – Term, Whole Life, Universal Life, Guaranteed Universal Life, Indexed Universal Life.

    “From my experience, parents want to make sure there is enough life insurance to avoid any economic upheaval in the event of an early parental loss”, advises Deborah Bernstein of Life Cycle Planners. “The installment option is peace of mind you just don’t have with a lump-sum payout. We have seen too many situations where all the proceeds are gone within a few years of lump-sum payments”. As the innovator of this option, Ted Bernstein says both term and permanent policies are available from the highest rated U.S. insurance companies.

    Special Needs Families:  For families with special needs children, there is no room for error when it comes to investing assets for a lifetime. The Installment Option provides these families with a GUARANTEED solution.

    The Installment Payout Option:

    • Reduces premiums as much as 40% for same amount of death benefit.
    • Premiums and benefits are GUARANTEED.
    • Protects heirs from risk by guaranteeing payments over time.
    • Customizable – great flexibility. Payment periods between 10 and 30 years.

    Please call us at 561-869-4500 and let us help you compare your existing coverage. Or, email Ted.

    Make sure to inquire about Life Insurance with living benefits and turn the face amount of your life insurance policy into an emergency health insurance fund.

  • Catastrophe Insurance For Critical Health Problems says Ted Bernstein Boca Raton

    Catastrophe Insurance For Critical Health Problems says Ted Bernstein Boca Raton

    Living Benefits Adds Immediate Protection For Critical & Chronic Health Problems says Ted Bernstein, at no extra cost! Does Your Current Policy Allow You to Take an Advance Against the Face Amount at No Cost? Learn How You Can Get Money From Your Life Insurance Policy. Living Benefits Life Insurance  by Ted Bernstein Boca Raton 

    Life Insurance is benefiting from innovations in medicine, prevention and intervention. These innovations lead to lower premiums. Policies from only 5 years ago are obsolete in terms of price and features. For most people, being older does not matter; rates are dropping at a faster pace than we are aging and the coverage is getting better too. Catastrophe Insurance For Critical Health Problems by Ted Bernstein Boca Raton 

    Call us today at 561-869-4500 to upgrade your policy to one with living benefits, either for term or permanent policies.

    The following link answers the most basic questions about the value of adding living benefits to your coverage:Living Benefits Life Insurance  by Ted Bernstein Boca Raton 

    Living Benefits: LIVING BENEFITS OVERVIEW

    Our job is to guide you through the selection process to make sure you get a policy with all the living benefits (critical, chronic, terminal) and the lowest premiums. We offer policies that most other agents can not offer you. Because we have been selling living benefits coverage since 2013, we are market leaders for A+ carriers specializing in living benefits. Living Benefits Life Insurance  by Ted Bernstein Boca Raton 

    Want to learn more? Please contact me at 561-869-4500 or by email. I will clarify and answer any questions on a complementary basis.”

    Ted Bernstein Boca Raton Florida 

     

     

  • 10 Life Insurance Underwriting Tips To Lower Your Costs

    10 Life Insurance Underwriting Tips To Lower Your Costs

    Life Insurance Underwriting – Demystifying The Black Box of Underwriting

    Sex, Drugs and Genetics

    One of the most effective ways of reducing your cost of life insurance is by improving the rate class or making sure to get the best class possible when buying new coverage. Once you decide to purchase a life insurance policy, the process of underwriting begins. Life insurance underwriting is the process allowing an insurance company to determine the appropriate rate class for your policy. It is important because the rate class determines the premium. There are many different rate classifications, usually starting at preferred. Most companies use a system with 16 extra classes – the highest rating being a Table 16.

    A system of credits and debits.

    Overweight by 20 pounds? On high blood pressure medication? Smoke an occasional cigar or occasionally use marijuana?

    Most people feel certain that any one of these will cause their life insurance premiums to be higher. In most cases, not one of them will increase the rate or knock you out of standard rates.

    You should expect to pay the lowest possible premiums and receive the best rate class each company offers, based on your specific information.  It is the responsibility of your agent to get you the best rate by giving the underwriters all the information in the best light possible. Underwriters convert positive information into credits and negative information into debits. More information is better. Still, too many people are not paying the lowest possible premiums.

    The difference between one or two rate classes can lower premiums by 20% or more, annually.

    Life insurance underwriting is a blend of art, skill and experience. The key to getting the lowest rates possible is full disclosure on your part. The improvements in medical sciences are leading to lower premiums.  These improvements lead to more people reaching life expectancy, resulting in decreasing premiums. In other words, the rates you are paying on policies issued several years ago are likely MORE than new policies issued today, even though you are older. If you are in similar or better health, you should be able to reduce your cost of life insurance. 

    The following issues require good life insurance underwriting management. A good underwriter will consider many factors to determine your rate class. The more information you and the agent provide to the carrier, the better your chances will be in creating maximum credits:

    • Extra weight. Most people carrying extra weight miscalculate by a lot how their premiums will be affected.  Typically, unless the extra weight puts you in the obese class or is causing other medical problems, added pounds do not automatically warrant any rate increase. 

    • Cardiovascular issues.  Many life insurance companies excel at underwriting these cases.  If there is good follow up and control, many insurance companies will consider standard rates after a few years.

    •  If you have had cancer in the past, you have a reasonable chance of getting a policy with standard or preferred rates, depending on the history and your current health.  Do not assume the worst; this is a classic mistake made by people and their advisors, including their physicians. I have many clients with cancer history who now have standard rates.

    • People with Type 1 diabetes typically have impaired life expectancy across the board, so your rates will depend on how well controlled your condition is and what you need to control it. If well controlled, Type 2 should lead to a smaller spike in rates. Diabetes is complicated and requires excellent underwriting.

    • Mood Stabilizing Drugs, Depression, Psychotherapy. If you’re taking medication for an ongoing condition  such as anxiety or depression (meaning it’s more than just a temporary state due to, say, a loved one’s death), you will probably see higher rates, but typically not what most people expect. The insurance industry needs to review these issues regularly as the medications are better and untreated anxiety and depression is far worse.

    • Family history.  If immediate family members have had serious or hereditary conditions, that may prevent you from getting preferred rates.  The biggest culprits here are cardiovascular disease (especially if a parent died from it before 60), cancer and diabetes.

    • Cholesterol & High Blood Pressure. Controlled high cholesterol and blood pressure, by themselves, typically do not add extra cost or deny you preferred rates.  With these conditions, it is all about control and stability.

    • Nicotine use. The use of nicotine comes in many delivery systems and life insurance companies are not consistent about this topic.  Using the Installment Payout Option can help smokers reduce their premiums by as much as 40% per year.

    • Driving History. If you have more than two moving violations in the last three years, you likely won’t be able to get the best life insurance rates. Time is your friend here, even for the most serious offenses.

    • Substance abuse. It is impossible to generalize with substance abuse history.  However, with full disclosure and a strong record of non usage, life insurance can be obtained at standard rates. 

    • Lifestyle/Career Issues. Any hazardous, regular activities such as rock climbing, motorized racing, skydiving, ultralight flying, hang gliding, and scuba diving could increase life insurance premiums.  

    While some companies increase rates for firefighters and police officers, many do not.

    Full disclosure and working with an experienced agent is crucial.  Knowing which companies excel in the each area and then not being afraid to challenge underwriters are some of the advantages you will get from an experienced professional.

    Want to learn more? Please contact me at 561-869-4500 or by email. I will clarify and answer any questions on a complementary basis.”

    Ted Bernstein Boca Raton Florida 

     

     

     

     

  • 10 Most Common Retirement Threats – Protect Your Nest Egg

    10 Most Common Retirement Threats – Protect Your Nest Egg

    Watch out for these common retirement threats to your nest-egg.

    Follow these risk proof retirement tips:

    1. Longevity Risk: Considered by many to be the most dangerous  of all retirement threats as life expectancy continues to increase. To mitigate longevity risk, you want to convert lump-sum retirement assets into guaranteed income streams for life. This retirement threat acts as a multiplier to all the other risks. Longevity risk is the risk of outliving your assets.

    2. Insufficient Lifetime Income: A sustained period of near zero percent interest rates on safe investments and the evolution from government and corporate pensions to the privatization of retirement accounts has left many people without sufficient amounts of reliable income for life. Retirees today must reconsider what liquidity means in retirement.  What percentage of your nest egg should be in lump investments versus guaranteed lifetime income you cannot outlive?  What is the right percentage of each to ensure you don’t run out of gas and run the risk of outliving your assets?

    3. Inflation: With interest rates at historic lows, inflation is a major retirement threat. Learning the secrets about the strategies to manage this “silent” threat is invaluable knowledge.  Like un-managed high blood pressure, inflation causes damage that can go un-noticed for too long.  Periods of low interest rates are often confused for periods of “no inflation”.  Inflation is especially threatening to your nest egg due to limited options to replenish principle.

    4. Incorrect Asset Allocation: The proper asset allocation in retirement is critical. Why do so many retirement aged people say a stock market correction or rising interest rates is keeping them awake at night?   IT DOES NOT HAVE TO. Learn the right allocation strategies for a simpler retirement.

                                  If you make one change today, increase the amount of guaranteed income from indexed,                                         income annuities.

    5. Rising Medical Costs: The retirement threat considered by many to be the one capable of immediate damage to a nest egg.  

    1. Loss of Spouse & Dementia– Both married couples and single retirees can expect to deal with the real issue of potential dementia in the aging process. For married couples, the loss of a spouse often compounds these challenges and has proven to be one of the most significant retirement threats, especially when one spouse has primary responsibility for overseeing the retirement plan. Leading economists and retirement scholars agree about the benefits of guaranteed income you cannot outlive.

    2. 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.

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

      4. 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.

      5. Market Losses: Right up there with longevity risk, market losses can be the most devastating retirement threat. You cannot afford losses in retirement. You don’t have income to replenish them and you don’t have the time needed to overcome them. A fixed income annuity keeps you invested with no losses, EVER.

      This is just a partial list of retirement threats to your nest egg. The key to security in retirement is to make sure you are not vulnerable to any of these threats. With the right strategy, you can eliminate every risk to your nest egg that leads to peace of mind you may not currently enjoy.

      Please call me at 561-869-4500 or email me, Ted Bernstein, about a complementary consultation about your specific needs.

  • Don’t Need or Don’t Want An Existing Life Insurance Policy?

    Don’t Need or Don’t Want An Existing Life Insurance Policy?

    Do You Know The Market Value Of Your Existing, Inforce Life Insurance Policy?

    Every day, people are receiving significant cash payments for unwanted or unneeded life insurance policies they thought had no value.

    If you are 65 or older, you may have a policy with asset value in the secondary market. The value of policies is measured as a percentage of the face amount. If you have a $2,000,000 policy with a settlement value of 10%, it is worth $200,000. It is fairly simple and straightforward to get an appraisal done to determine your policy’s value.

    Please email or call me at 561-869-4500. Visit us at Life Cycle Planners in Boca Raton, Florida.

    The secondary market is the market for unwanted life insurance policies – they are usually institutional investors. A good analogy is Carmax. They buy cars from people who don’t want or need them anymore. They specialize in the aftermarket of automobiles. In the life insurance industry, there are buyers who specialize in this market and they are typically the highest bidders.

    The state of Florida has made it mandatory for life insurance companies to inform Floridians that they should consult with a professional when contemplating a change:

    …“a life insurer shall provide an individual life insurance policyholder with a statement informing him or her that if he or she is considering making changes in the status of his or her policy, he or she should consult with a licensed insurance or financial advisor.”

    If you have a policy with cash value, its value is based on it and nothing more. Life settlements may not appeal to everyone. Some people don’t like the idea of strangers having an interest in their mortality. It is a perfectly reasonable position, regardless of the potential financial benefit that might exist. There can be meaningful differences in the offers you receive from the secondary market.

    Term life insurance policies may have value in the secondary market.

    There may be no cash surrender value in your life insurance policy but there may be great “market value” for a life settlement company. The payment you receive in a life settlement transaction is the market value (see the recent case studies below).

    It may be in your best interest to consider selling. The goal is to compare offers you receive against the value in the policy.

    More than 90% of seniors lapse policies without knowing about this option. They would have considered a life settlement if they were aware of the process.

    Further, 79 percent feel their advisers should have told them first.

    Depending on several factors, including age, health and policy type, life insurance policies can be valued as much as 20-30% of the face value. If you no longer want to pay premiums for a policy, there are realistic options to consider.

    The reasons to  consider selling an unwanted or unneeded policy:

    · Receive a higher cash payout than cash surrender value.
    · Receive money for a term policy.
    · Create cash to fund retirement solutions such as guaranteed income annuities, long term care insurance or life insurance with the installment payout option.

    For example, 30 years ago, Dr. Smith purchased $2,000,000 of life insurance to protect his wife and children against the loss of his $300,000 income. He was 46 when it was issued and today, at 75, his children are grown and the need for income protection is gone. With nearly $200,000 of guaranteed lifetime income from annuities, a pension and social security, Dr. Smith feels the policy is unnecessary.

    The insurance policy had a cash value value of $90,000 if he walked away. The Life Settlement value was 15% of the face value, or $300,000. The decision was simple in this case.

    Unfortunately, each year there are too many people who are still unaware of life settlements or they fail to give it proper consideration.

    Potential Disadvantages:

    1. Life Insurance benefits are usually income tax-free. Some portion of a life settlement may be subject to income tax.
    2. Paperwork is required to transfer the ownership of the policy.
    3. Proceeds will benefit the buyers, typically non-family members.

    Organizations such as the AICPA and hundreds of esteemed estate planning law firms are on record advocating the benefits of life settlements. Life insurance is an asset with great potential value.

    RECENT CASE STUDIES REPORTED IN THE INDUSTRY

    – an 88 year old male sold a $2,500,000 John Hancock policy, which netted him $500,000 (cash surrender value was $0),

    – an 88 year old male sold a $2,000,000 universal life policy for $1,110,000 (cash surrender value was $218,000),

    – a 64 year old female sold a term policy for $20,100 (the face value was $250,000; she kept $50,000 for her beneficiary),

    – a 72 year old man sold a $896,450 Transamerica policy for $196,476 (cash surrender value was $94,647),

    – a 61 year old man sold a $400,000 Mass Mutual term policy for $220,400.

    Please email me at Ted Bernstein or call me at 561-869-4500. Visit us at Life Cycle Planners in Boca Raton, Florida.

  • ROI = Reliability of Income

    ROI = Reliability of Income

    In Retirement, ROI is Reliability of Income. Helping you shift your focus from asset accumulation to guaranteed income will create more security in your retirement plan. Economists, professors and thought leaders all over the world are helping planners and their clients change the dialogue about why sufficient levels of lifetime income are more beneficial and valuable than asset accumulation in retirement. If your goal is maximum security without principal risk, you will benefit from this shift in focus.

    The financial risks of living longer.

    We strive to create a long, healthy and enjoyable retirement. That is a reality if you are well positioned in retirement with reliable sources of income supporting your lifestyle. The financial downside of living longer is the increased risk of outliving your wealth – referred to as longevity risk. Many professors and economists believe it is the single biggest threat in retirement.

    Warren Buffett (that wise, wise man from Nebraska) said, “that in order to succeed, you must first survive.”

    When it comes to retirement income, investors are dramatically underfunded, but that trend might be changing: Willis Towers Watson’s 2016 Global Benefits Attitudes Survey found 59 percent of millennials and 66 percent of Baby Boomers are willing to pay a higher amount for a guaranteed retirement benefit. The data suggests that people with guaranteed income in retirement are happier than those without it.

    Protecting your spouse.

    For couples, joint annuities allow a steady flow of income during each spouse’s lifetime and after the first death.  Compared with a single-life payout, a joint payout will pay less each year, but the guaranteed lifetime income for your spouse will take care of her in a way that nothing else can. Managing a complex investment portfolio for a surviving spouse is challenging on nearly every level. Converting your retirement assets into guaranteed income streams is retirement planning state of the art. The assets remain 100% liquid and there can be no losses. Gains are added to the principal.

    Further, I believe that guaranteed monthly income payments are perfectly suited to offset the risks of health changes and normal cognitive declines.

    How to Manage Longevity Risk.

    Ideally, you need guaranteed, lifetime income streams that provide income for as long as you are alive, under any conditions. You, nor your spouse, can outlive guaranteed, lifetime payments from an insurance company. Too many people in or near retirement are invested too heavily in the stock market, creating a real threat to their nest egg when the market has a normal correction. By re-balancing your portfolio, you can move these assets out of harms way and put a protective wrapper around them.

    Absolute security in retirement requires that you convert a portion of your retirement assets, including IRA monies, into reliable lifetime income from insured contracts that create guaranteed income from insurance companies. Working with experienced retirement professionals ensures your heirs will receive all unpaid principal if that is your goal. 

    According to Yale Professor, Roger Ibbotsen:

    “Investors should be willing to pay an insurance premium to hedge away the longevity risk.”

    You need guaranteed income solution if you are:

    • At or planning for retirement.
      • Concerned about outliving your money.
        • Concerned about spouse’s well-being upon your death.
        • Currently have retirement assets invested in bonds, stocks or real estate.
        • Have insufficient guaranteed lifetime income.
        • Concerned about losing investment control as you get older or if health is compromised.
        • Do not have a plan for retirement or longevity risk.

    A Private Pension – How it Works.

    There is no principal risk. A longevity annuity is designed using indexing strategies. Simply put, this means there is a guaranteed floor of 0% and reduced gains on the upside. When the market is up, the contract will capture some of the gains and when the market is down, there are NO LOSSES as you contractually cannot earn less than 0%.

    Return of Premium – I recommend contracts that are 100% liquid from day one (minus any disclosed contract fees). With this special guarantee in place, you are protected from unforeseen events or a bad decision. With all of your capital GUARANTEED and LIQUID, you have the freedom to take advantage of “better” contracts if it makes sense to do so in the future. Without the traditional surrender penalties levied against your account if you change your mind, threats from inflation are minimized.

    Mortality Credits.

    There is no other investment that guarantees income for life without ANY principal loss – ever. Because insurance companies create assets called mortality credits and then share them with their annuity clients, they are able to do what no other investor or company can do. The word guarantee does not apply to the world of equities. Longevity annuities are built around guarantees and this is quite a distinction offering you real choices.

    Income for life, 100% liquid from day one, guaranteed principal protection and tax deferred growth. A secure retirement plan should be built on this foundation. An advisor who is experienced in retirement and longevity planning will prove to be invaluable to helping you create reliable income you cannot outlive. In retirement, an income advisor will become the most important member of your team.

    If guaranteed lifetime income is a primary retirement goal for you, please contact me to arrange a discussion about helping you with retirement security and the power of guaranteed income. You will not learn about these strategies from traditional money managers. Please email me or call Ted Bernstein directly at 561-869-4500.

    Ted Bernstein, Life Cycle Financial Planners

  • Long Term Care Covers More Than You Might Think.

    Long Term Care Covers More Than You Might Think.

    Most people report uncertainty about the definition of claim triggers in their long term care insurance policy. My experience confirms that people want a better understanding about what IS covered and what MAY NOT be covered. You will be surprised about today’s long term care policies and find they DO cover you when you need it most.

    The issue of Long Term Care is at the top of the list of retirement threats facing many of us. It is one of the largest uninsured financial risks facing the elderly in the United States today. Incredibly, long term care represents about 8½ percent of all health care spending for all ages and more than 1 percent of GDP.

    Eligible claims: Let’s focus on what many people find confusing – benefit triggers and when can you claim? For example, the REQUIRED wording for chronically ill is:

    1. You cannot perform at least two activities of daily living without substantial assistance for at least 90 consecutive days; or
    2. Cognitive impairment issues creating and requiring supervision in order to protect you from health and safety threats.

    These are standard and straightforward definitions. Being aware of them will lead to the receipt of proper benefits under the contract. 

    The benefits are in the details! Looking closer at number One:

    ‘You cannot perform at least two activities of daily living without substantial assistance…’ Does this definition require the insured to be sick in order to meet the chronically ill definition?

    No. These benefits are triggered by a loss of functional capacity – meaning you cannot manage Activities of Daily Living  (ADL) without assistance.

    Activities of Daily Living (ADLs) are defined as “the things we normally do… such as feeding ourselves, bathing, dressing, grooming, work, homemaking, and leisure activities”.

    Eligibility of claims in these cases IS NOT tied to a specific diagnosis or injury. You are not required by the policy to have MS, Parkinson’s, a stroke or any other diagnosed medical condition. You might be 70 years old or 85 years old – that does not matter.

    A large number of people receiving long term care benefits do have one or more chronic conditions but do not have a catastrophic diagnosis. They are still eligible for claims under the right contracts. 

    Without a doubt, the longer we live, the more likely it is that we will need help with our daily living activities.

    Fortunately, being sick is not a requirement to receive legitimate benefits.

    Please feel free to contact me to arrange a consultation about long term care.  There are dozens of threats to your nest egg in retirement and I will explain this one and any others you wish to discuss. You can email me or call me directly at 561-869-4500.