Financial services, life insurance and retirement information is understandably on the backburner for most people, most of the time. With that said, people will have occasional periods in their lives when these issues move to the forefront. It is for those times that we have created this resource of useful tips and relevant information. Up To The Minute will always focus on information about topics relating to: retirement income planning, the best insurance coverage at the right price, life insurance premium financing, succession planning, annuities and asset protection. We appreciate feedback and we appreciate it when you share this page or when you connect with us at Facebook and LinkedIn.
Life insurance and annuities are SOLD, NOT BOUGHT. This means there is very little natural demand for either product. There is important need for both products. We are the first to acknowledge that very few people begin their day with the intent to buy more coverage or review their existing coverage. It’s not like buying a new car, refinancing a mortgage or investing more money in the stock market. While the Internet has been disrupting entire industries, the insurance industry was hoping the Internet would somehow boost demand. That has not happened. While there are record numbers of Americans with higher income and more net worth, sales of life insurance and annuities continue declining. Insurance professionals do necessary and noble work by providing financial and retirement security for individuals, families, and the businesses we serve.
Recently, there were dramatic changes to the laws governing life insurance. The law was passed in late December, 2020. These changes will result in better pricing and better flexibility for life insurance buyers interested in permanent life insurance. For more information, this Wall Street Journal article provides a good overview or this one from Think Advisor.
This has the potential to catch clients and some law offices off guard. In 2012, when the rates were going up like they will again soon, many clients were turned away from law firms working 7 days a week to implement strategies before the deadline. We know there will be higher taxes, lower exemptions and maybe even new types of taxes on wealth. We are recommending to any families with estate values greater than $5,000,000 to get started on doing what is possible before the changes are implemented. After the 2012 changes were made, there was a lot less work in this area for estate tax attorneys and many of them changed their practice focus. That has resulted in far fewer experienced professionals. If 2021 and 2022 turn out to be anything like 2012, it may be even more important to start the process sooner than later.
When buying a life insurance policy, great consideration should be given to its flexibility and the ability to customize it to perfectly fit your goals and objectives. For example, some people will retire on fixed incomes from investments, pensions and social security. In order to retain their life insurance coverage through retirement, the life insurance policy should be structured to be paid up before retirement, requiring no premiums past that point. Paying up a policy may not make sense for people with completely different circumstances.
Annuities have decreasing surrender charges that are usually gone in 7-10 years. The purpose of surrender charges is to allow the insurance company to invest in longer term assets, creating better yields for policyholders.
Why doesn’t every life insurance buyer choose a permanent policy over term?
The number one reason people select term insurance is affordability. Many young life insurance buyers, especially, do not yet have the necessary funds to select a permanent life insurance policy, and that forces them into a term policy. In too many cases, once term insurance is selected, it does not get replaced with a permanent policy, once that is affordable. The best insurance professionals should be stressing the importance of replacing the term policy with some type of permanent coverage. Term insurance is the right product only when there is a temporary need for coverage. Paying term premiums is the equivalent of throwing away money term policies lapse 97% of the time, before paying a claim.
CD’s and bank savings’ rates are essentially at zero percent. The Fed says these rates will not increase over the next 2-4 years. Annuities that have been designed to maximize short term rates offer much higher interest? To learn more, check out the bullet points below or click here.
- 1-2% Fixed Rate of Return, net of fees
- Up to 5% interest potential using indexed funds, NEVER less than 0%
- All gains are kept and can never be lost
- Principal guaranteed; no market risk
- No surrender charges; market value adjustments only on surrender in early years can be positive or negative
- 100% guaranteed
- Tax deferred
Why is life insurance ownership consistently dropping in the US? The answer is people don’t realize how to lower their current premiums and how to get more innovative policies with BETTER protection.
With borrowing cost near 0%, life insurance premium financing is a strategy that deserves strong consideration for high net worth individuals, families and business owners interested in permanent life insurance. Compared to paying the annual premiums out of pocket, there are advantages to using a low cost loan to pay the premiums.
Why are sales of Indexed Universal Life (IUL) increasing? The main reason is that policies are invested in safe indexes and NOT invested in the markets. The indexes guarantee no less than zero percent interest and there can never be losses from market performance. When there are gains, they will NEVER be lost. But like all Universal Life insurance, IUL is complex. You will be ahead by working with an experienced professional.
Take a look at the Forbes list of the best life insurance companies in 2020. Acting in a fiduciary capacity, we represent multiple companies in order to place each client with the best company to suit their goals and objectives. We are proud to say we represent most companies on the list.
Working with an experienced fiduciary is important. It means working with people who put the best interests at the forefront of the work they do for clients. The new fiduciary rules will help protect investors/consumers from unethical financial services professionals and that’s a good thing: https://www.investopedia.com/what-is-the-sec-s-regulation-bi-best-interest-rule-4689542 or you can visit the SEC website. As fiduciaries, we are proponents of maximum transparency and disclosure.
More and more grandparents are using annuities to create guaranteed, lifetime income for their grandchildren. The annuity and its income is safe from the typical threats and risks that many families may face. Annuities avoid probate, divorce, market risk and other mismanagement risks. For many, there is great value in knowing their grandchildren will receive guaranteed annual income, created just for them.
Can you get a life insurance policy during Covid 19? These are interesting times and people are wondering about life insurance coverage payouts during pandemics? If you are concerned about a specific life insurance policy, please feel free to contact us or the issuing insurance company directly. Since the pandemic began, there are no reports suggesting that life insurance companies have permanently changed underwriting guidelines or any who are denying claims due to the virus.
Tired of volatility and losses?
Few Bear Market History Facts:
1) Since WWII, bear markets occur every 6 Years.
2) A 30 year retirement will experience 5 Bear Markets.
3) Expect no gains during 50% of your retirement.
4) After a market bottoms, it takes 22.5 months on average, to reach the peak where it started.
5) Most bull market gains are in the first year.
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This glossary of insurance terms and definitions from the National Association of Insurance Commissioners is a great resource for life insurance buyers.
Why is the stock market up even when economic news is so bad? This can be terribly confusing for people in or near retirement. Check out this explanation: https://lifecyclefinancialplanners.com/market-losses/
Online vaults are essential planning tools, getting better all the time. They are designed to securely have access to documents, account information, trust documents, contracts, insurance policies and password information in one place, Life Exec is leading the way. Check them out here: Click
In The News…Investopedia explains life insurance payouts, proper ownership and alternatives to lump sum payments for your beneficiaries.
Are Annuities Safe? Yes, annuities are safe and they are worthy of strong consideration for millions of people. Annuities guarantee two of the most important things in retirement – principal and lifetime income. Stock market volatility causes intolerable anxiety for many people, in retirement. Market indexed or fixed indexed annuities take all the guesswork out of retirement income planning.
There are varying degrees of insurance professionals. Same with doctors, attorneys, money managers and accountants – their differences matter. With the Internet helping us to know one another like never before, it turns out that many people prefer handling their insurance matters online. This increases our access to the best professionals, unlimited by distance and geographic constraints.
McKinsey may be right about how financial advice will be consumed in the future. The future of financial services offers consumers tremendous value through customization. It will be increasingly important for us to use real-time data and technology on a more instantaneous basis. Consumers want advice during market turmoil, expecting us to be there with level-headed recommendations. The coronavirus disruption suggests that high income earners and high net worth people DO WANT GUIDANCE from experienced professionals, especially during volatile and uncertain times.
How Do I Compare My Existing Term Life Insurance Policy To A New One To Lower The Premiums And Improve The Coverage?
- Determine how many years of coverage remain in your CURRENT policy?
For example, if you bought a 20 year term policy in 2015, you now have 15 years remaining because the guaranteed term rate will end in 2035 or 15 years from now.
- How long is your current policy convertible without evidence?
This is a critical deadline to be aware of in your existing policy and any new policy you may acquire in the future. Most people are unsure of when this deadline expires in the policy they currently own. The longer the better.
- List the other features in your term policy.
For example, does your current policy allow you to take an advance against the face amount of the policy, at no cost? Or, does it have a return of premium option? There are several features available today that may not have been available when your policy was issued. Nobody should own a policy today without accelerated benefits.
- Base the new quote on your current health.
Getting the best underwriting class will result in a big premium difference. The rates for Preferred vs Standard can be 20% or more.
- COMPARE! Share this information with an agent to obtain a quote.
In no time, the numbers will tell the story. Maybe you can reduce your cost or maybe you can spend the same and get a policy with more years and more benefits. You will be surprised. The result should be a lower premium, even though you are 5 years older now.
Last year, many of our INDEXED annuity clients were credited with more than 14% gains. This means the policy was credited with new principal of 14% at the anniversary. That new interest is added to the principal and can NEVER be lost to market fluctuations. The right indexed annuities are a great story.
Apply and Buy. IN AN HOUR, get up to $5,000,000 of life insurance online, without a DOCTOR VISIT or a BLOOD TEST. The rates are ultra competitive, they’re no different than going the traditional route. No meeting with an insurance agent if that’s what you prefer. Every type of insurance product is available: Whole Life, Indexed Universal Life, Term Life Insurance, Universal Life. Read more about apply and buy…
The passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law by President Donald Trump in late December 2019, loosens the rules on how employers can select annuity providers and include annuity options within 401(k) or 403(b) investment plans. Easing these rules is triggering more annuity options for qualified employees in the near future.
A retirement advisor helps you navigate the change from asset accumulation to asset protection and income distribution. Similar to financial planners, retirement advisors focus on protecting your assets and creating a plan for guaranteed income you cannot outlive.