Life Cycle Financial Planners, LLC

Tag: permanent life insurance

  • Should You Convert Your Term Life Insurance Policy? What You Must Know.

    Should You Convert Your Term Life Insurance Policy? What You Must Know.

    If you’re in good health, you have much better options to consider before converting an inforce term insurance policy. For healthy people, converting is usually the option of last resort, but there are exceptions. First, you have to know the actual conversion deadline but more than 90% of term insurance owners do not understand the conversion options, or the deadline.

    For many reasons, most people do not convert their existing term policy to a permanent policy. The most obvious reason is that the majority of life insurance buyers are not good candidates for permanent life insurance. For them, a less expensive option might be a term policy without conversion options. Not many companies offer this option but it can be the perfect solution. However, for the people who need and want permanent coverage, it makes sense to shop for a new policy with other carriers – BEFORE CONVERTING. Most insurance companies do not expect healthy people to convert term policies. They assume only unhealthy policyholders will convert without shopping and based on that fact, converting can be a very expensive proposition.

    In a perfect world, everyone would like a permanent policy for the cost of term insurance. When we are young, term is easy on the budget and reaching age 50 seems a hundred years away. Young insurance buyers are often told:

    • They won’t need life insurance in the future.
    • Their kids will be grown and other assets will make life insurance unnecessary.
    • Their spouses won’t need protection when the kids are grown; and
    • Once they reach retirement, the need for life insurance goes away.

    For some people, those statements might be true. But for many, those statements do not apply and when they don’t, term insurance is the wrong product solution. In reality, our feelings about life insurance change as we get older – ask anyone over 50. Or ask anyone with grandchildren or anyone who has been divorced. Even if you initially opted for temporary term coverage for budget reasons, we recommend replacing it with a permanent policy. The sooner the better and well before the temporary coverage expires.

    There is a small number of life insurance companies with great term insurance products. These companies have low rates, they allow conversion in ALL YEARS and they allow the term policy to be converted to all available products.

    The decision to convert a term policy depends on your health and your current goals and objectives. If you are going to convert term insurance while you are in good health, you hopefully have the right kind of term policy. If not, the options may not be ideal, making conversion a critically important issue when buying a new policy or reviewing inforce policies. Too many term life insurance agents want you to believe that price matters more than anything else when choosing a policy. Nothing could be further from the truth. For example, accelerated benefits are invaluable and add no cost to a policy.

    We hear from people when they are shopping for new coverage or searching for information about conversion options, usually near the end of the guaranteed period. Like many financial planning issues, help from a professional is your best bet. Getting current policy information about the conversion options will provide clarity about the best possible course of action. Life insurance is not one size fits all, there are no simple answers that apply to each individual. The end of a term insurance policy is an important deadline that brings the question of life insurance coverage into focus again.

    When a term insurance policy is expiring, it should be treated just like the purchase of a new one. How much coverage is needed now and how has that changed? How long do you want the coverage to last? The issue of duration is one of the most important considerations as it determines not only the type of policy to consider, but it’s premium too.

    The longer you want coverage, the higher the premium will be and the sooner you lock in a permanent insurance rate, the less it will be over the long run. For people who prefer to control and minimize future costs, permanent insurance has a much lower net cost than term.

    If you purchased a 20 year term policy 10 years ago, in effect you only have a 10 year term policy without living benefits and the conversion deadline may be right around the corner.

    Things are changing. Life insurance buyers today are benefiting from education, innovation, technology and medical science. However, your current policies are not receiving any of these improvements. New policies offer access to accelerated benefits against the face amount of a policy, at no additional cost. Your life insurance policy is now an emergency fund in the event of a chronic illness. A $2,000,000 policy is eligible for a $1,000,000 advance from the face amount, under the illness rider. Even if there is zero cash value in the policy, it remains eligible for an advance because these special advances come from the face value, not the cash value. Ask an experienced agent to compare your existing policies against what is available in today’s market.

    To take advantage of these innovations, please contact us at 561-771-4647 or complete the contact form on this page to schedule a complementary discussion.

  • Why Do High Net Worth People Own Permanent Life Insurance?

    Why Do High Net Worth People Own Permanent Life Insurance?

    High net worth people tend to appreciate value and typically want life insurance protection for life.

    Permanent life insurance (sometimes referred to as whole life insurance) offers much better value for life insurance buyers than any type of term life insurance. The net cost of permanent life insurance is undeniably better.

    Net cost is the total premiums paid minus the total cash value. For example, if $80,000 of total premium is paid into a permanent policy over 10 years and the cash value of the policy is $80,000, there is a net cost of $0. That is not an error. It is how permanent insurance is designed. Comparatively, if $40,000 of total premiums were paid into a term policy over the same period, the net cost would be $40,000. The cost of term insurance increases as we get closer to life expectancy while a whole life premiums are level or may have been paid up in the early years.

    The longer you own a permanent life insurance policy, the better the net cost will be. A lower net cost number is better. Conversely, the longer you own term insurance, the higher the net cost will be.

    There are two types of life insurance that all policies fall into – permanent insurance and term life insurance. Most jumbo life insurance policies are permanent policies.

    What are the differences between term insurance and permanent life insurance?

    Permanent life insurance provides lifetime coverage, meaning that it can be designed to provide lifetime coverage or coverage to a target age. The target age is selected by the policy owner, not the insurance company. Not everyone needs or wants coverage for life.

    Some permanent life insurance policies build up equity or cash in the policy and some do not. Because term insurance has lower premiums in the early years, people mistakenly believe that term insurance is “better” coverage. Not only does permanent insurance have much lower net cost over time, it has much greater flexibility and it is more easily customizable.

    Permanent life insurance is the best value for lifetime coverage.

    Term insurance is temporary insurance – it expires at the end of a guaranteed period. Permanent insurance will stay inforce as long as the policyowner wants to keep it. Permanent insurance puts the policyowner in control of when coverage ends, not the insurance company.

    What Nobody Tells You About Term Life Insurance.

    “Over the past 25 years, people were sold a complicated marketing gimmick called “buy term and invest the rest”. Individual policyholders were told they could invest better than insurance companies, encouraging them to invest the annual difference between a term premium and the higher premium for a permanent policy. The difference would go into a side investment fund to be invested with hope it would be used to pay for the much higher term premiums later in life.

    Buy term and invest the difference has proved to be a costly mistake for millions.

    Although this sounded reasonable to unsuspecting life insurance consumers, “buy term and invest the rest” proved to be nothing more than slick marketing. It has been primarily promoted through multi-level marketing groups and entry level insurance agents. The projections are often run using unrealistic interest rates to grow the side fund. Someone who bought a 20 year term policy in 2005 may have seen projections using 7% while the actual interest rate over that period was half that amount, or less. The proponents often use average S&P returns to justify using high growth assumptions within the side fund. That is not a fair assumption either because the side fund cannot afford losses, forcing the side fund to invest conservatively.

    Insurance companies invest and manage billions of dollars compared to individuals who usually invest much smaller amounts. Insurance companies employ the best and brightest in their investment departments and insurance companies are able to monitor assets on a 24/7 basis, while policyholders cannot. There are no taxes paid while the insurance company is managing the assets. Person after person will tell you they never invested the annual difference. They bought inexpensive term insurance but never built up a side fund. The few who did invest, did not invest with discipline. If they skipped years or withdrew funds from the side fund account, the whole thing was derailed. The result is a messy trail of people with expiring term policies or compromised health. In worse case situations, some have no side fund and they cannot get new coverage because of health issues.

    Most people do not convert their term policy for good reasons.

    More and more people buy permanent life insurance when it is properly presented to them. “But what about Dave Ramsey and Suze Orman who don’t like permanent life insurance?” They are not insurance professionals and they do not offer advice to individuals because that would require them to be in compliance, carry the proper licences and put their reputations on the line. It is easy for pundits to make unsubstantiated claims. They sell ad space, books or subscriptions.

    Buying life insurance is often a process over a lifetime, not a one-time event. Term insurance can be the right decision for young families. The right time to consider buying permanent insurance is sooner than later. The following triggers lead people to consider permanent insurance:

    When moving from the “paycheck to paycheck” lifestyle, we become potential permanent life insurance buyers. Since ninety seven percent (97%) of all term policies do not pay a claim, then 97 percent of ALL term premium were wasted. High Net Worth (HNW) consumers and high income earners choose  permanent life insurance because it has better value:

    Replacing Your Income:  If your family  or business depends on you and your income to run smoothly, permanent life insurance is the right product for those who can handle the higher premiums.  

    Immediate Liquidity:  Very wealthy people own permanent life insurance. They want the guaranteed liquidity it provides at death. 

    Permanent Life Insurance Is The Best Tool For Mitigating Succession Planning Problems:

    • The value of assets fluctuates significantly and death is always the worst time to sell a business or other assets. 
    • Many people have children working in a family business. Life insurance is the great equalizer for those children who do not work in the business. Without liquidity in these cases, there is great risk to a smooth succession of a family business.
    • More and more grandparents own a life insurance policy for each of their grandchildren. The insurance policy is straightforward, inexpensive and a “feel good” asset knowing how it will impact the grandchildren. 
    • Premium Financing. Wealthy people have the ability to finance life insurance. When it makes sense, it is a very effective tool to create tax free wealth.

    Please contact us at 561-771-4647 or email me at TB@LifeCyclePlanners.com about a free review.

    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

    best life insurance. what is term insurance?

  • Best Life Insurance Policy – All Done Online, No Medical Exam, No Blood. One Hour Approval.

    Best Life Insurance Policy – All Done Online, No Medical Exam, No Blood. One Hour Approval.

    Are the premiums higher if you buy life insurance without going through medical underwriting such as bloodwork or a medical examination? The answer is no. You can obtain the best life insurance policy online without a visit from a medical professional. That means the best rates and the best policies are available online. Accelerated underwriting does not mean expensive, guaranteed issue. The insurance company still underwrites each individual policy but in a completely new way. Some life insurance companies are leading the way by using information and data they believe is better.

    Although this may be counter-intuitive, you do not pay more. Buying life insurance online is not “buying direct” from the insurance company either. Life insurance companies do not sell policies direct to consumers. They sell only through licensed insurance agents, without exception. Some insurance companies tried going direct, without success. Life insurance is sold, not bought.

    Behind every online site selling life insurance, there is a licensed life insurance agent. For every sale, the insurance company pays a commission to the licensed agent named in your application. You may not realize a life insurance agent is writing the policy, but in fact, it is required by law. Some of these online agencies are hoping consumers believe there is an advantage in going “direct” and cutting out agents. It helps to know that online sites are no different than any other insurance agents or agencies.

    Why It Matters.

    Now that you know there is an agent getting paid a reasonable, non-negotiable commission, you want to always use the help and guidance built into the pricing of the policy. The insurance companies want educated consumers. Some life insurance buyers may incorrectly assume that buying online is “going direct”.

    State of the Art.

    In conclusion, you can now purchase the best life insurance policy online and get it done WITHOUT A MEDICAL EXAM, without lab tests (non blood or urine) or face-to-face visits, if that is what you prefer. The maximum is $5,000,000 per person and we have companies that write up to age 65 without medical evidence. The whole process can be done within an hour. 

    Contact us for a quote to apply and buy. Reach Ted Bernstein at 561-771-4647 or by email. We are close. People often search for “life insurance near me” or “life insurance agent near me” and we are one of the results. Online, we’re all close for business purposes. It truly is one of the great benefits of the Internet. Check out our 5 Star rating on Google or on our testimonial page.

  • 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.

  • Whole Life Insurance.

    Whole Life Insurance.

    Is Whole Life Insurance Right For You?

    Whole life insurance is specifically targeted to consumers seeking high guarantees, tax deferred growth, competitive rates of return and and THE LOWEST NET COST LIFE INSURANCE COVERAGE. Whole life is often recommended for high net worth life insurance buyers who appreciate competitive internal rates of return.

    Let’s consider some of the more common questions about Whole Life:

    • Is whole life insurance right for you?
    • Does Whole Life cost more than other types of coverage?
    • Why does net cost matter so much?
    • Which company offers the best Whole Life?

    Is Whole Life right for you?
    The best candidates for Whole Life are life insurance buyers who want and need guaranteed coverage for life and they can handle higher premium payments in the early years. The net cost of Whole Life is far superior to term insurance, challenging the misleading information that suggest term is cheaper. Whole Life insurance is one form of permanent coverage offering predictable outcomes and guaranteed results. It is not the right policy for short term needs or for people with limited budgets. Whole Life policies create cash value from your premium payments. The cash value growth is measured on two parallel tracks. One is on the guaranteed track and the other fluctuates through a variable dividend rate.

    Does whole life cost more than other types of coverage? Yes and no. The premiums for whole life, in the early years, are higher than other types of insurance, such as term insurance or universal life. However, it is not inherently more “expensive” than other types of insurance. The higher cash outlays in the early years is what makes it appear to be more expensive. Over your lifetime, the net cost of whole life is much less than term insurance. The upside of these higher premiums in the early years is LOWER PREMIUMS or NO PREMIUMS later in life.

    The net cost is the total premiums paid minus the cash value. Since whole life builds cash value within the policy, it stays inforce for life. Whole Life policyholders have coverage that never expires if premiums are paid as planned. Their premiums never increase and their policies are often flush with cash that can be used in a variety of ways.

    The monthly payment for a 5-year car lease requires more cash flow than a monthly payment for a 3-year lease assuming you are leasing the exact same car. Does that make the car more expensive for a 5 year lease? Of course not. The same logic applies with permanent life insurance. While cars depreciate, insurance policies appreciate. To say whole life is more expensive insurance by definition may be misleading and simply not accurate. Pundits like Dave Ramsey and Suze Orman have rather sophomoric ideas about permanent insurance. They do not have professional designations or practical insurance experience, in my opinion.

    Cost is one critical factor to consider when selecting a life insurance plan that best suits your individual needs. You can compare the approximate net cost of different policies by simply measuring the total premiums minus the total cash accumulation at different intervals.

    Whole Life vs Term Insurance. Here are some advantages:

    • Policy Duration. With whole life, you are insured for life. As long as your premiums are paid, you’ll be covered, whether you’re fifty or ninety. Term life ends at a certain age leaving you without vulnerable if you need or want coverage to last longer. We tend to underestimate our desire for lifetime coverage when we are younger.
    • Whole Life accumulates tax deferred cash value. Cash value grows tax-deferred, like an IRA. You can borrow or use the cash on a tax free, low cost basis.
    • Future premiums can be paid from the cash value.
    • Flexibility. The cash value is protected from market fluctuations. The interest is tax-deferred and there are no limitations on contributions. You will likely earn dividends on the cash value as discussed earlier.

    Which Company Offers the Best Whole Life Policy? There are only a few companies remaining that are dedicated to creating and managing Whole Life products. There is competition among them and each has developed niches where they excel. The process of buying a suit is a good analogy to the process of buying a Whole Life policy. A good suit is customized or tailored to fit you perfectly. The same is true when buying a Whole Life policy. There are many factors to consider, including which company and which product you choose. No one insurance policy is going to be perfect for everyone.

    By doing your research and working with experienced professionals that represent the entire market, you will come close to finding the best policy to suit your needs at this point in time.

    Please contact me at 561-869-4500 or complete the contact form on this site to schedule a complementary discussion or look me up on https://www.advisorycloud.com/profile/Ted-Bernstein

  • 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.

  • Term Insurance Rescue Ideas

    Term Insurance Rescue Ideas

    Worried that your term life insurance is expiring soon; without good options? Or it can’t be extended without paying 5x more premium?

    By taking control now, we will help you find the best solution the market offers.

    If your existing policy is going to expire soon because the conversion deadline passed and the term period will expire, there are good options even if your health has changed. Many people bought term insurance in their 30’s or 40’s who may have been advised that 20 years of coverage was sufficient. Today, if coverage is still needed, there are policies that have been designed for you. By following a few simple tips, you will NEVER have a gap in coverage again.

    Creating a customized plan is what people want today from their life insurance policy. Our goals and objectives change over time. Understanding this, we make sure the policies and plans we offer adapt to the changes in your family and business. The best life insurance policy offers maximum flexibility.

    “What is the best type of life insurance policy” is the most common question I am asked about life insurance and “How much should I own” runs a close second. Simply, there is no such thing as a “best” life insurance policy. Each one does very different things. The right insurance professional offers every type of policy because buying life insurance is not a one size fits all strategy.

    For example, if you want premium flexibility, you rule out whole life. If you need coverage for life, you rule out term insurance. The best life insurance policy is inforce when you need it and is competitively priced, today and tomorrow. The premiums can be structured to increase over time as income grows. Some people prefer to pay more today and eliminate or reduce premiums in the future. Customization and flexibility are the keys.

    Pro Tip: Review the policy at least every two years, it’s painless. Every owner of life insurance is best served by reviewing it on a regular basis.

    You want a life insurance policy where you will never have to provide additional medical evidence in order to keep it. This is the biggest problem with term insurance; it’s not affordable after the term period without more health evidence. If you own a term life insurance policy or you are considering a new term insurance policy, let us explain the options available that will put you in control, not the policy. Simple new innovations such as the Installment Payout Option can reduce the premiums annually and give you guaranteed protection for life.

    Term insurance or permanent insurance? Which should you buy?

    For many life insurance buyers, term insurance fails when it is needed most and permanent insurance is too expensive initially. Innovation has made customization possible. To get the best insurance policy for you, make sure to consider:

    All life insurance is NOT created equal. There is nothing to gain by working without a professional. Whatever compensation is paid to the agent is a built-in cost. It is ALWAYS paid whether the policy is purchased online or from a professional.

    Please contact me at 561-869-4500 or email me about a complimentary consultation.

    You can visit us at Facebook.

    Wiki

    Permanent Insurance

  • 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.