We speak to clients everyday that are looking to qualify for coverage that are 60 years old and over.   They consistently say that they wish they had bought when they were younger or planned for some coverage into retirement.  With that being said, it is certainly very possible to still qualify for coverage and the premiums will be determined by health.  Premiums have become more and more affordable due to life expectancy increasing.

The amount of coverage and reason for coverage may be totally different than when the client was 35.  At 35, they might have had a primary focus of replacing income if a premature death occurred.   At 65, income replacement might be less important and it might be about estate planning, mortgage protection, and final expenses.    When you are looking at your financial plan it is important to consider changing items of importance in your life.   It is always a good idea to look at your plan every year or two, to make sure nothing has changed.  If something has changed it may be something to address, or it may simply be something to keep in mind going forward.

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Post tags: estate planning, income replacement, life expectancy, Life Insurance, mortgage protection

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Another great option is to try and get more coverage at your place of employment.   Group life insurance is guaranteed issue and is usually going to be better terms than an individual guaranteed issue plan on the open market.   On top of potential guaranteed issue plans, there are survivorship policies that can be issued with one unhealth spouse.  If either the husband or wife are sick they may be able to buy a survivorship/second to die plan.   This type of plan unfortunately doesn’t pay until the death of the second spouse, but it may be a good option if a client is not insurable.   Survivorship is used heavily in estate planning and it is less expensive typically than other permanent plans.

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Post tags: affordable life insurance, estate planning, group life insurance, guaranteed issue, second ot die, survivorship, uninsurable

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One of our clients recently was in need of additional life insurance protection, but didn’t want to change their monthly outlay.  On top of that, they were very concerned about asset protection.   They had been sued in the past and wanted to make sure that they were as protected as they possibly could be.   We recommended that they visit with a good estate planning/asset protection attorney, but also to move part of a non exempt asset into life insurance.  They had over 200,000 in a money market and we suggested that they simply move a small amount of that money each month into a whole life insurance policy.  Not only was it going to purchase them permanent death benefit, but the policy would be overfunded.  Overfunding the policy would create immediate cash value and money that was into an exempt asset from creditors.     Obviously, if they were to be sued that 200k in the money market would be susceptible.  I asked them why they had that much in a money market and they said they wanted to have good liquidity.  Liquidity is a great thing and we explained that they would have that inside the life insurance cash value too.

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Post tags: asset protection, cash value, estate planning, Life Insurance, whole life insurance

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The face amount to qualify for this program needs to fall in the 1 million to 5 million dollar range. The typical offer is 3 to 7 percent of the face amount. The offer is determined by the age of the policyholder and other factors. For example, a 5% offer on a 5 million dollar level term with 4 years left on it, would be $250,000. This can be pretty attractive and can even be used to buy a new policy in some instances. While the term policy may have been used initially for income replacement, the insurance need might be for estate planning now. For more information on this program, you can contact Vince at Vince@paramountlifeinsurance.com and to see if you are eligible.

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Post tags: beneficiaries, estate planning, level term, premiums, settle the policy, settlement, term policy

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If you have children, do you want all of them to receive some share of your assets?

If a child should predecease you, do you want his or her children — your grandchildren

— to receive that child’s share of your assets?

Do you wish to include other individuals as beneficiaries?

Do you have philanthropic goals?

WHAT A S S E T S  S H O U L D  T H E Y  I N H E R I T ?

This may depend on the type of asset and the ability of each recipient.Do you want a recipient to receive a specific asset? For example, if you own a business, do you want your interest to pass only to the children active in the business? If so, how are other children to be compensated? Do you want a recipient to receive a percentage of the estate value or an interest in your assets? For example, do you want your children to receive an equal share of your estate, or an interest based on need, such as for education or health?

Do you own assets that require skill in managing, such as rental properties or an

investment portfolio? Is it appropriate for all your beneficiaries to inherit these assets?

Have you considered each beneficiary’s ability to manage the assets inherited?

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Post tags: estate planning, Life Insurance, what life insurance assests you inherit, Who should inherit your life insurance assests

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Survivorship Life is a great policy to have if you have significant net worth as estate taxes can be as high as 55%.    Survivorship / “Second to Die” policy’s cover you and your spouse’s lives and it is paid out on the second death.   It serves as a great estate planning tool as it can be purchased by an irrevocable trust, with your heirs as the beneficiary and the insurance proceeds are kept out of the estate for tax purposes.    The death benefit can replace a portion or all of the estate that was eaten up by paying Uncle Sam.   Survivorship life has other benefits too as it is generally less expensive than individual polies as two lives are insured.  It also has more lenient underwriting generally as two lives are insured.  It is not uncommon for a client to be denied coverage individually and then be able to qualify with their spouse for a “Second To Die” policy.

The estate tax future is up in the air and may have a shake up with this new administration.    Currently,  the exemption for 2009 is 3.5 million and the estate tax rate is 45%.  In 2010, the estate tax goes away for the year and it is unclear where it goes from there.  According to the Economic Growth and Tax Relief Reconciliation Act of 2001, in 2011 a single person will have an exemption of 1 million dollars and the amount above that will be estate taxed at a rate between 41%-55%.   Something to consider as well is if you have state death or inheritance taxes in your state.  Also, your heirs may need to pay capital gains taxes when selling inherited assets.    Talk to your advisor about your estate plan and see if survivorship life may be right for you.

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Post tags: Economic Growth and Tax Relief Reconciliation Act of 2001, estate planning, estate taxes, Life Insurance, second to die, survivorship life insurance

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