THE most important gift to your family and loved ones is Life Insurance.
Joe Lucey from marketwatch.com; shares some tips:
Hot holiday gift: 5 reasons to buy life insurance
Life Insurance should be a trendy gift this holiday season.
Black Friday often creates "must haves," such as Cabbage Patch Dolls, Beanie Babies, or Tickle Me Elmo. No doubt, this year will prove no different. But as you’re checking your list, and checking it twice, pause for a moment and realize that maybe the greatest gift for your financial health could be missed by an oversight. While often ignored, a life insurance policy should be poised to make a comeback and become a favorite for retirees this holiday season.
So before your turkey tryptophan high wears off, here are five reasons to consider adding life insurance to your year-end holiday list:
1) Door buster pricing.
Current premiums offered on life insurance policies issued this year will be lower for most families compared to waiting until next year. Increased premiums are scheduled, effecting many new policies issued with "No-Lapse" guarantees as the affects of new regulations and low interest rates will increase the costs for most carriers.
2) Tax-free assets are more valuable in periods of rising taxation.
Life insurance may very well be the single biggest benefit in the IRS rules to plan for higher taxes. Our national economy is broke and focusing on the potential levels of future tax rate increases makes life insurance even more attractive.
Too many retirees look at life insurance as a financial tool only to be used after death. Contrarily, permanent life insurance is often designed to offer tax-free savings which can be used during the life of the insured as well. Taxes from retirement accounts both during your lifetime, and after your passing, are likely the largest expense of many retirees. Now is a good time to take advantage of the current low-tax environment.
3) Estate taxes are likely returning for the middle class and could make life insurance trendy again.
Some can hope that fiscal cliff predictions are over stated; but, it is unlikely that a congressional compromise will keep all the current tax rates intact for everyone. I'm betting, that the current $5.12 million estate tax exclusion will soon meet the same demise as 1980s leg warmers and disappear into extinction.
This predicament offers what may be the last great wealth transfer opportunity of our generation. If not addressed by year-end, many retirees, who for the last decade have been able to avoid planning for death taxes, will find themselves exposed. Life insurance dollars offer leveraged benefits which can be used to provide enough liquid assets to cover the estate taxes due.
4) Your spouse will likely need income replacement should you not make it home tomorrow.
You or your spouse's death will result in a loss of a social security check and often a reduction in pension payments for the survivor. Create a spousal income continuation plan which is protected from market volatility by using life insurance.
5) Newer policies can protect your family from longevity.
Many retirees underestimate financial concerns with living too long and the effects of long-term care expenses on an otherwise well designed retirement plan. Long-term care expenses routinely exceed $10,000 per month. Often we hear that families are "self-insured" with retirement assets which can be liquidated to supplement additional health-care expenses. Consider the tax consequences of taking these kinds of funds from a retirement account. Also, consider the potential depletion should the market not cooperate while these expenses are needed. Many life insurance companies have policies which will provide premature liquidity from the death benefits for additional long-term care needs which can greatly reduce the stress on a portfolio, and the family.
A true wealth management approach encompasses tax, income, and estate planning in coordination with investments and insurance advice to provide solid benefits and allow families the ability to retire in confidence. A retiree should demand more from financial professionals than mere investment decisions which focus solely on which stock, bond, mutual fund, REIT, or annuity you should purchase. Demand a comprehensive planning approach from your advisers.
If you are deciding whether you should take a new look at life insurance this year, you may want to hurry up. Like most holiday sales, the price of insurance will be higher after the year’s end!
Black Friday often creates "must haves," such as Cabbage Patch Dolls, Beanie Babies, or Tickle Me Elmo. No doubt, this year will prove no different. But as you’re checking your list, and checking it twice, pause for a moment and realize that maybe the greatest gift for your financial health could be missed by an oversight. While often ignored, a life insurance policy should be poised to make a comeback and become a favorite for retirees this holiday season.
So before your turkey tryptophan high wears off, here are five reasons to consider adding life insurance to your year-end holiday list:
1) Door buster pricing.
Current premiums offered on life insurance policies issued this year will be lower for most families compared to waiting until next year. Increased premiums are scheduled, effecting many new policies issued with "No-Lapse" guarantees as the affects of new regulations and low interest rates will increase the costs for most carriers.
2) Tax-free assets are more valuable in periods of rising taxation.
Life insurance may very well be the single biggest benefit in the IRS rules to plan for higher taxes. Our national economy is broke and focusing on the potential levels of future tax rate increases makes life insurance even more attractive.
Too many retirees look at life insurance as a financial tool only to be used after death. Contrarily, permanent life insurance is often designed to offer tax-free savings which can be used during the life of the insured as well. Taxes from retirement accounts both during your lifetime, and after your passing, are likely the largest expense of many retirees. Now is a good time to take advantage of the current low-tax environment.
3) Estate taxes are likely returning for the middle class and could make life insurance trendy again.
Some can hope that fiscal cliff predictions are over stated; but, it is unlikely that a congressional compromise will keep all the current tax rates intact for everyone. I'm betting, that the current $5.12 million estate tax exclusion will soon meet the same demise as 1980s leg warmers and disappear into extinction.
This predicament offers what may be the last great wealth transfer opportunity of our generation. If not addressed by year-end, many retirees, who for the last decade have been able to avoid planning for death taxes, will find themselves exposed. Life insurance dollars offer leveraged benefits which can be used to provide enough liquid assets to cover the estate taxes due.
4) Your spouse will likely need income replacement should you not make it home tomorrow.
You or your spouse's death will result in a loss of a social security check and often a reduction in pension payments for the survivor. Create a spousal income continuation plan which is protected from market volatility by using life insurance.
5) Newer policies can protect your family from longevity.
Many retirees underestimate financial concerns with living too long and the effects of long-term care expenses on an otherwise well designed retirement plan. Long-term care expenses routinely exceed $10,000 per month. Often we hear that families are "self-insured" with retirement assets which can be liquidated to supplement additional health-care expenses. Consider the tax consequences of taking these kinds of funds from a retirement account. Also, consider the potential depletion should the market not cooperate while these expenses are needed. Many life insurance companies have policies which will provide premature liquidity from the death benefits for additional long-term care needs which can greatly reduce the stress on a portfolio, and the family.
A true wealth management approach encompasses tax, income, and estate planning in coordination with investments and insurance advice to provide solid benefits and allow families the ability to retire in confidence. A retiree should demand more from financial professionals than mere investment decisions which focus solely on which stock, bond, mutual fund, REIT, or annuity you should purchase. Demand a comprehensive planning approach from your advisers.
If you are deciding whether you should take a new look at life insurance this year, you may want to hurry up. Like most holiday sales, the price of insurance will be higher after the year’s end!
Jingle all the way to April Schaffroth's Farmers Insurance Agency at 602-297-5155 to finish your holiday shopping.
www.insuranceinaz.com
