Life Cycle Financial Planners, LLC

Tag: retirement planning

Never Lose Money In The Markets Again:

Protect Your Retirement Assets.

We sell security, not securities.

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

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

The Good news.

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

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

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

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

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

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

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

HOW CAN YOU DO THIS?

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

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

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

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

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

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

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

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

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

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

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

You want the best of all possible worlds.

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

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

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

Which Is The Best Indexed Annuity?

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

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

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

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

April 3, 2020
Protecting Retirement Assets. Seek Advice From Financial Consultants.

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

Threats to consider:

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

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

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

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

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

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

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

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

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

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

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

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

March 17, 2020
Sell Your Unwanted Life Insurance Policy For Cash.
Are you over 65 with a life insurance policy you no longer need or want? Like any other asset, it can be sold for cash in the secondary market.

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

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

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

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

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

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

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

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

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

To determine its value, potential buyers need the following information:
1. Policy projections including the premiums to keep the policy in-force to various ages.
2. The type of policy and its terms. Some policies have no value in the secondary market because of their terms.
3. The life expectancy of the policy owner which is determined by an independent, 3rd party analyst. No medical is necessary.
4. A detailed history and understanding of the policy owner’s current and past health.
Typically, there is minimal value for policies owned by healthy people under the age of 70. If there are health considerations leading to a shorter life expectancy, that may change the numbers in your favor. I recently helped a 73 year old man sell a $3,000,000 policy. Because of previous medical history, he received several offers. He sold the policy for 16% of face value, or a little bit more than $450,000.

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

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

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

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

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

I offer an initial, complementary consultation in person or by phone. Please email me or fill out the contact form on this page and I will contact you shortly. You can call me direct at 561-869-4500.

Income annuities create guaranteed, lifetime income without any risk to principal. Everything is guaranteed. To learn more about these special annuities, read this.

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November 6, 2018
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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June 20, 2018
Power of Indexed Annuities
Indexed Annuities – The Facts:

Using Fixed Indexed Annuities, insurance companies guarantee lifetime income for a critical part of your retirement plan. Annuities are not investments. Instead, they are contracts you enter with multi-billion dollar financial institutions that are regulated by 50 states. To maintain Triple A ratings, they are transparent to regulators and are considered to be extremely conservative.
- Insurance companies have higher reserve requirements than banks.
- Insurance companies must comply with strict investment guidelines.
- The 30-year bull market in bonds may be over. The Fed has said it will continue to raise interest rates, which is not good for bond owners, especially open-ended mutual fund bond owners. Now is a great time to protect gains and protect retirement assets with a principal protected, lifetime income solution.
- The right annuities, fixed indexed ones, can participate in the some upside of the markets, without any downside risk. This allows you to participate in potential stock market growth without the anxiety from the roller coaster of stock market losses.
- There are contracts with 100% liquidity from day one – a full return of premium if you want out for any reason. These are special contracts not offered by everyone.
- When stock market returns are negative, your annuity is credited at zero percent. When the markets are positive again, you will participate in a portion of the upside. This is a tremendous benefit during down years and bear markets.
- Annuities provide higher income payouts as you get older. The longer you wait, the higher your guaranteed payout will be.
- Annuities can provide guaranteed income for both spouses. The guaranteed income may continue for as long as the surviving spouse is alive. The life expectancy for two lives is much longer.
- Some contracts DOUBLE the income payment for long term health care costs in the event you cannot perform two out of six Activities of Daily Living.
- Upon the owner’s death, any unused principal will be transferred to the beneficiaries. The amount of money you contribute, plus all gains credited to your contract, will pass to your heirs.
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
August 7, 2017
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.
March 22, 2017
Why Income Annuities Are Better Than Bonds

What is the difference between bonds in retirement and annuities?

The Wall Street Journal described income annuities as “super bonds”.

Within the backdrop of retirement planning, annuities are often compared to bonds and vice versa. They are different. It is important to know their differences in order to appreciate the superior qualities of an income annuity for retirement income purposes.

Shortcomings of Bonds:

• A bond or a bond portfolio cannot provide guaranteed income for life.
• A bond or a bond portfolio does not guarantee results, of any kind.
• Bonds and bond portfolios have default risk that bondholders accept without any kind of insurance (General Motors is a recent example of worthless bonds that offered investors no recourse).
• Bonds are usually not redeemable early without an early withdrawal penalty.

The advantages of Fixed Indexed Annuities:

1. Guaranteed income you cannot outlive, no matter what;
2. No principal loss, ever;
3. Market upside when markets are up; and
4. 100% liquidity from day one.
5. Backed by insurance companies with strict reserving regulations and state guaranty funds.

Below are powerful conclusions from one of the leading retirement scholars in the world, Professor Wade Pfau. According to Professor Pfau:

“The funds used to buy a fixed deferred income annuity should be viewed as a substitute for a bond investment when evaluating a holistic retirement portfolio.”

“Our findings suggest that a short deferral income annuity can both reduce the cost of funding retirement and provide important behavioral benefits to clients concerned about near retirement market performance.”

“Managing assets to create income becomes a significant challenge for the increasing percentage of Americans who suffer from dementia in old age. A retiree can reduce all of these risks through the purchase today of a guaranteed income stream in the future…”

“A Deferred Income Annuity can also be beneficial as insurance to protect against the risk of outliving assets either due to poor investment performance or reduced cognitive ability in old age.”

Using the right income annuities will simplify retirement planning and provide guaranteed results.

Please call 561-869-4500 or email me, Ted Bernstein, to continue our discussions for your specific needs.

March 15, 2017
New York Times: ‘Consider An Annuity’ In Retirement
This retirement story in the New York Times, How to make your money last as long as you do, hit the bullseye by explaining how annuities provide guaranteed, lifetime income in retirement.
“Consider an annuity”… [Retirees] will always have enough to cover essential living expenses, no matter how long they live or how badly their investments perform.”

With a portion of your retirement funds in the right type of annuity, the principal is protected by creating guaranteed income that will last “as long as you do”. As you get older, the amount of income increases and will not level off until you begin to draw a paycheck from the contract.

In other words, anyone who wants absolute security in retirement should take advantage of this special kind of annuity.

No other retirement solution offers 100% principal protection, participation in market gains, tax deferral, favorable taxation on distribution, liquid from day one and no commissions paid by you or your account.

Consider an annuity if you are:

Married and in, or near retirement.

Want dependable, predictable income for life.

Single, in or near retirement.

Seeking a simple and safe solution built entirely on guarantees.

Interested in transparency, disclosure and regulated products.

Seeking guaranteed income for life with NO principal risk.
ROI in retirement is reliability of income.

With the New York Times suggesting that people “consider an annuity” to make their money last as long as they do is supportive of everything that is stressed by economists and professors all over the world. Guaranteed, lifetime income in retirement is finally beginning to receive mainstream attention.

Do you have assets in an IRA? Read this.

If you would like to meet or talk by phone, please email Ted Bernstein or call me at: 561-869-4500
February 21, 2017
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.
February 15, 2017
Department of Labor Fiduciary Rule is DOA

Today, the President delayed the Department of Labor’s Fiduciary Rule that was set to take effect in April. I have been advocating for either a repeal or a delay for many months. The rule was hastily written and poorly written during the Obama administration.

The DOL fiduciary rule attempted to legislate the definition of working in the best interest of a client. On the face of it, trying to legislate this kind of behavior is absurd. Compounding that absurdity, the regulation itself was rife with ambiguities that would undoubtedly create litigation between consumers and insurance companies, wealth management companies, banks and others. This country does not need anymore poorly drafted legislation leading to litigation over judgment calls.

All is not lost however. I truly believe that most professionals are working in the best interest of their clients. There are, for sure, some bad actors who just don’t seem to understand this concept. They seem to be intensely focused on how much commission a product pays or how high of a fee they can charge against the account each year. They will survive changes in regulations, that is for sure. The DOL’s failed attempt here has a silver lining. It most certainly was felt by some of these bad actors as a shot across the bow. Some will be more cautious now, some may even try to up their games.

For consumers of financial service products and advice, many have been monitoring the debate. Working in the best interest of a client is the gold standard for service. Fees and commissions are not the litmus tests. Charging fees is not better than being paid commissions. They are just different. That is an easy point to make. As one of the country’s leading proponents for life insurance without commissions, I would be the first person to say that a fee based model is better; but it isn’t.

The right professional makes recommendations based on several factors that place well ahead of compensation. The rejection of the DOL “fiduciary rule” today will not ensure that consumers have an easy way in determining who is working in their best interest. To know that always has and always will require a bit of work. I suggest that consumers ask for referrals, speak with other professionals such as C.P.A’s and attorneys as well as local chambers of commerce leaders. Trusting your gut is also important, along with the other due diligence.

If you would like to discuss this topic or anything else, please email Ted Bernstein or call me at: 561-869-4500

February 3, 2017