Tags Archives: Life Insurance

10 months ago Life Insurance

What to Look for in Life Insurance Over 50


If you are or are close to age 50, you may think you don’t need to worry with life insurance. Or maybe you are interested in more coverage but aren’t sure what the best option would be? The need for updating your life insurance as you age is more important than you might think. Particularly because the average life expectancy in the US is now almost 79 years old, pensions are harder to come by in the workplace, and healthcare costs are rising.
It’s true that your life insurance needs and prices change as you age. So, what factors should you consider?


Duration of policy

At or around age 50, the duration of the life insurance you are considering is one of the key factors, along with age, that determine the premium. Healthy individuals up to age 70 can typically get a life insurance policy with a term as long as 20 years. At age 50, you may still qualify for an even longer policy term. However, the longer the term, the pricier your premium could be as you age.
With a term life insurance policy at age 50, there is still the risk that you could outlive your policy. However, premiums are typically lower for this type of policy. Think about your circumstances and budget when considering a term life policy at this stage of your life.
In some cases, a permanent policy that accrues cash value might make more sense. The policy could deliver the benefits to your loved ones or the cash value could serve as additional income for you at a later date. Using the cash value that the policy accrues will cause the life insurance benefit to be reduced, so take that into consideration when purchasing.


Peace of mind-vs-cost

Generally, the older you get, the more life insurance premiums cost. But does the peace of mind you can get from extra coverage outweigh the expenses? If you have loved ones depending on your income, knowing that they are financially secure in the event of your death can be a big weight off your shoulders. In addition, permanent life insurance policies help offer some financial security while you are still alive. The cash value accrued from a whole life insurance policy could help you if your retirement fund is not as much as you needed or if you have unexpected costs arise. Buying this type of policy can provide you a tax advantage, too.
Permanent life insurance policies may often be thought of as a safe way to save. As you age, you have less time to recover from an investment loss. Permanent life insurance may be a good strategy because the cash value in these policies can help diversify your portfolio. Even if something happened to other investments, you would have the cash value from your life insurance policy to fall back on. Remember that falling back on your cash value or using it for any expenses will reduce the policy’s benefit.


Additional coverage needs

If you have loved ones who depend on you financially, life insurance can help give them financial security in the event of your death. Maybe you already have a life insurance policy? Check your life insurance needs and see if an additional life insurance policy should be taken out to help cover final costs and bills.
Life insurance at age 50 is still useful in many cases, but it becomes increasingly important with each year that passes that you understand your specific needs. This will help you make sound policy decisions that can protect you and your family for years to come.


Important Tax Aspects To Consider Before and During Retirement


If you’re saving for retirement, you are most likely accumulating dollars in one or more of the assets (buckets) listed below. It’s important to consider how long you may need this money to last. Today, a male and female in good health who reach age 65 can expect to live to age 84 and 86, respectively. Keep in mind those are just averages. One in four 65 year-olds today will live past age 90. Making the most of your retirement savings is important to maintaining your standard of living throughout retirement. Your money needs to keep working for you even when you no longer can.
One factor that can significantly impact the amount of money you have available in retirement is taxes. Here we’ll take a look at how your money is taxed at key ages before and after retirement.


Pre-Tax/Tax Deferred

401(k), pensions, traditional IRAs, etc.
Dollars are contributed BEFORE taxes are paid, and you will not pay taxes as the money grows. Taxes will need to be paid when you access these funds, ideally in retirement. Because you don’t pay tax on what you contribute to this bucket, there are limits on how much you can contribute, and there are additional tax penalties if you withdraw the money prior to 59½.
You pay ordinary income tax and a 10% penalty on withdrawals.
Any tax-deferred (pre-tax) assets become taxable at ordinary income tax rates.
AGE 62
If distributions cause you to exceed modified adjusted gross income (MAGI) limits, up to 85% of Social Security benefits are taxed.
AGE 65
Medicare Part B premiums could increase to $428.60/ month if MAGI exceeds limits.
AGE 70½
Required to take minimum distributions from tax-deferred assets. This will increase your taxable income.



Stocks, bonds, mutual funds, etc
The assets in this bucket are contributed with after-tax dollars. Because taxes have been paid, there are no limits on how much money you can contribute to this bucket. Any appreciation will be taxed when you sell the asset while any dividends or interest will be taxed in the year they are received.
Taxes on growth are generally payable upon the sale of the asset; dividends or interest generally taxed in the year received at either ordinary income or capital gains rates.
Taxes on growth are generally payable upon the sale of the asset; dividends or interest generally taxed in the year received at either ordinary income or capital gains rates.
AGE 62
If distributions cause you to exceed MAGI limits, up to 85% of Social Security benefits are taxed.6
AGE 65
Medicare Part B premiums could increase to $428.60/ month if MAGI exceeds limits.
AGE 70½
No Required Minimum Distributions.


After-Tax/Tax Deferred

Non-qualified annuities
The assets in this bucket are contributed with after-tax dollars. However, you will not pay taxes as the money grows.
Withdrawals from deferred annuities are taxable to the extent of gain (earnings) on the contract at the time of the withdrawal and are subject to a 10% penalty. Withdrawals in excess of the gain in the contract are a non-taxable recovery of basis.
Withdrawals from deferred annuities are taxable to the extent of gain (earnings) on the contract at the time of the withdrawal. Withdrawals in excess of the gain in the contract are a non-taxable recovery of the basis. Upon annuitization, annuity payments received are partially taxable based upon the applicable “exclusion ratio.”
AGE 62
If taxable distributions cause you to exceed MAGI limits, up to 85% of Social Security benefits are taxed.
AGE 65
Medicare Part B premiums could increase to $428.60/ month if MAGI exceeds limits.
AGE 70½
No Required Minimum Distributions.


After-Tax/Tax Favored

Cash Value Life Insurance, Roth IRAs
The premiums you pay into a cash value life insurance policy are paid with AFTER-tax dollars. The cash value that accumulates supports an income tax-free death benefit that will be received by your beneficiaries upon your death. You do not pay tax on the growth of the cash value. Distributions from the policy via withdrawals and loans are generally not income taxable. Roth IRAs have favorable tax characteristics but also limits on how much can be contributed. In addition, if your modified adjusted gross income (MAGI) exceeds $135,000 for single filers and $199,000 for joint filers you are ineligible for a Roth IRA.
You can access cash values on a tax favored basis without penalty. Withdrawals up to cost basis are nontaxable. Policy loans are nontaxable as long as the policy remains in force until death.
You can access cash values on a tax favored basis to supplement your retirement income. Withdrawals up to cost basis are non-taxable. Policy loans are nontaxable as long as the policy remains in force until death.
AGE 62
Non-taxable distributions from a life insurance policy DO NOT impact Social Security benefits.
AGE 65
No impact to Medicare Part B premiums.
AGE 70½
There are no Required Minimum Distributions for cash value life insurance and cash values can continue to accumulate.


Consider the impact taxes have on your retirement



Life insurance provides important death benefits for your family to replace income that would be lost upon your death. What you may not realize is that permanent life insurance, especially cash value life insurance, can provide an extra layer of versatility to complement the income you receive from traditional retirement assets.


The purpose of this material is to discuss the value and versatility of permanent cash value life insurance as a potential source of supplemental income to meet a variety of lifetime contingencies and needs. It is not intended to suggest that life insurance is necessarily superior to other assets designed to provide retirement income, nor is it intended to recommend the liquidation of existing retirement accounts in order to fund a life insurance policy. Rather, it is to suggest that life insurance can be used to complement and supplement traditional sources of retirement income.

12 months ago Life Insurance

Have Life Insurance through Work? Ask These Questions about Your Coverage


Many people enroll in life insurance coverage through work because the cost may be low and it’s easy to manage. If you do have an employer-sponsored life insurance policy, how much do you really know about it? Have you reviewed your policy details closely?
Usually, employers offer two types of life insurance — one is included as part of your benefits package and you don’t pay for it. The other is group life insurance that you can purchase. Here are a few questions you might want to consider to determine whether your employer-sponsored life insurance is right for you and your family.


Is it enough?

While some life insurance coverage is better than no coverage at all, it’s important to closely evaluate how much life insurance you really need.
A number of companies in the U.S. typically offer only one- to three- times your annual salary as a benefit. Does this amount meet your family’s needs? Don’t forget about the role that outstanding debt, like a mortgage, car payment or student loans can have on your family’s finances.


Will it change as my life changes?

Your work life and home life are always changing, and so are your financial needs. As time goes by, your salary is likely to increase, your family might grow or you may take on extra caregiver responsibilities as your parents get older. Your life insurance coverage should also reflect these changes. You’ll want to find out if your policy can flex, and what the cost might be to make changes.


Does it only cover me?

Most group life insurance policies only cover the employee. If you’re married, you may want to research if your partner is also covered, either through their own employer, or by purchasing an individual policy, to help protect your family.


Will my coverage end if I change jobs?

Your life insurance coverage through work may not follow you if you change jobs or if you stop working altogether. And your new employer may not offer the same benefit options, so it’s important to make sure you have sufficient life insurance coverage in place, no matter where you work.
It’s important to remember that a group life insurance plan isn’t your only option. You can purchase additional life insurance coverage as an individual, which might be more affordable than you think. Take control of your life insurance coverage so you’ll have the right protection in place for you and your family at all times.


Thinking Retirement? Enhance Your Benefits with Pension Maximization


Retirement is a time for you to reap the benefits of a lifetime of planning and saving. But what if your preparations aren’t enough? What if the pension you primarily counted on to maintain your lifestyle for you and your spouse isn’t as much as you thought it would be? Consider this: At or prior to retirement, you may be required by your employer to make an irrevocable choice of either a “maximum pension benefit with no survivor benefits,” or a “reduced pension benefit with survivor benefits.”



The first option maximizes the retirement income from your pension or profit-sharing plan while you’re alive, but benefits cease upon your death. Should you elect this option at retirement and die shortly thereafter, your spouse may be left with no source of continuing income.
The second option provides a smaller retirement benefit while you are both living, but ensures that your spouse receives an income in case you die first. But in many instances, if your spouse dies before you, you will continue to receive the lower pension benefit for the rest of your life, even though your spouse never received any income.
Neither choice sounds very appealing, does it? Fortunately, there may be an additional choice called Pension Maximization.

Important Note….

At retirement, the spouse must sign a waiver to make it clear that a single life pension is acceptable.


Pension Maximization: What You Need to Know

The Pension Maximization technique combines purchasing a life insurance policy with electing the “maximum pension benefit with no survivor benefit” option for your pension. With this technique, you may be able to:
  • Maximize your pension benefits during your lifetime.
  • Help provide for your spouse’s financial independence through the life insurance coverage.
  • Use existing savings to help supplement your retirement income with a tax-deferred product.
This concept can work if the insurance is purchased at the time of retirement (ideally, the premiums are lower than the pension gained by taking a “single life” option), but you should note, it may not work if there are any health problems at that time. Therefore, it is generally better to ensure that the proper insurance is in place to help provide a secure retirement income for your spouse.


How Pension Maximization Works

This graph illustrates how pension maximization works while both you and your spouse are living, or when only one of you is living.


Pension Maximization in Action

Carl Robinson, age 52, married to Catherine, age 50, has been working for Company XYZ for the past 25 years and is planning to retire at age 65. Recently, Carl received an estimate from his representative in Human Resources who told him that at age 65, he would receive $2,500/month from his pension plan, provided he doesn’t elect a survivorship benefit. Carl is concerned that if he dies first, Catherine will not see any of his remaining pension benefit. Without survivor benefits, Carl’s early death would mean that most of his pension will be wasted.
If Carl elects the survivorship benefit, his payments will be reduced to $2,100/month, but Catherine will receive a predictable income of $1,050/month (based on a 50% survivorship benefit) after his death. The problem with choosing a survivorship benefit is that if Catherine lives for a short period of time and dies before Carl, Carl will face a lifetime of reduced pension income, even though Catherine and he never received any financial benefit from electing this option. If they both live full lives and die within a year or so of each other, little benefit is ever realized after years of a reduced pension.
Alternatively, Carl can choose to take the maximum pension benefit ($2,500) with no survivor benefit and purchase a life insurance policy prior to his retirement. It is recommended that Carl select an amount that would provide Catherine with a similar income benefit to what it would have been if he had chosen the survivorship benefit ($1,050/month).
The life insurance premiums can be paid while Carl works, or paid using discretionary income. As previously mentioned, it is better for Carl to purchase the life insurance policy sooner than later to reduce the cost of insurance and to take advantage of his current good health. If Carl continues to work and accrue benefits, he needs to consider whether the life insurance policy will be large enough to provide a real choice upon actual retirement at a later date.


In this scenario, the advantages are:

  • Carl and Catherine receive larger pension benefits while Carl is alive.
  • If Catherine dies first, Carl can surrender the policy for cash surrender or leave a death benefit to his children.
  • If Carl dies prior to retirement, Catherine gets the face amount of the insurance policy.
  • Catherine controls how the death benefit is invested if Carl dies first.
  • A portion of the death benefit proceeds (payable in monthly installments) will be income-tax-free if the death benefit is used to buy an annuity. Typically, pension income is fully taxable.
  • Loan capability may be available on the life insurance policy, but, if outstanding, will reduce the net death benefit payable.
  • Flexibility to change the beneficiary under the life insurance policy that you may not have under the pension benefit.


Points to Consider about Pension Maximization:

  • If your pension annuity payments have a cost-of-living adjustment, you will need to factor the cost to purchase a much larger amount of insurance in order to provide your spouse with a comparable retirement income.
  • By not electing the reduced pension survivorship benefit, in some cases your spouse may lose all rights to any retiree medical coverage if your employer sponsors the coverage. Sometimes this coverage is linked to receiving pension benefits, which would terminate when Carl died if he selects the maximum pension benefit.
  • The person on whom the insurance would be issued must be able to qualify for the purchase of life insurance before any further analysis is done.
  • You may want the spouse who signs the waiver to own the life insurance in order to ensure the insurance policy remains in effect.
  • Failure to keep the life insurance in force up to the insured’s death will result in no death benefit proceeds for the spouse.


Is Pension Maximization Right for You?

It depends on a number of factors, such as your financial situation, health, objectives, and the options and benefits you have under your employer’s retirement plan. Your financial, legal and tax advisors can assist you with your decisions and in developing the strategy that is most appropriate for you.


Life Insurance Can Play an Important Role In Your Retirement Plan


Most people understand the importance of purchasing life insurance to protect their loved ones.
With term life insurance, they can purchase this protection for a specific period of time, and money is paid to the beneficiaries if the insured person dies during that period. In contrast, permanent life insurance lasts as long as the policy owner continues paying premiums — and will pay the death benefit whenever the insured person dies, not just during a specified term.
Permanent life insurance also goes beyond basic protection by adding the potential to build cash value through interest credits, market returns, or dividends. That cash value can be used in the future for kids’ education, emergencies, retirement needs, or any other purpose, typically without triggering income tax on the withdrawals .
It’s important to note that the primary purpose of permanent life insurance is protecting loved ones with a death benefit. It is not a savings or investment vehicle, but if needed, it can provide flexibility and access to a policy’s cash value, making it a valuable addition to a retirement plan.


A Closer Look at Permanent Life Insurance

Premiums for permanent life policies can be higher than for term life, because the coverage is provided for life and there is potential to build cash value that can be used in the future. Permanent life insurance policies offer several other benefits as well, including:
  • No annual limit on premium payments, allowing policyholders to potentially build a larger pool of assets for future needs.
  • No penalty for withdrawals taken before age 59½, providing flexibility for meeting cash needs at any age.
  • No required minimum distributions (RMDs) at age 70½, allowing assets to continue growing for longer periods and providing a potential pool of money for later in retirement.
  • The potential to transfer wealth to beneficiaries tax free through a death benefit.


3 Uses for Future Retirement Needs

A diversified retirement plan typically includes a range of savings and investment vehicles, such as 401(k)s, IRAs, and assets such as stocks and bonds held in brokerage accounts. Adding permanent life insurance can complement this mix by providing a death benefit to help cover expenses if anything happens to the insured person, along with access to cash value with tax benefits.
Here are three potential uses for permanent life insurance in a retirement plan:

1. Providing a source of funds to help cover large expenses

Permanent policies typically grow their cash value relatively slowly during the first years of a policy, as most premiums are being used to fund the death benefit. That means a permanent life policy isn’t likely to be a large source of funds early in retirement. After the first 10 years or so, policyholders can tap the cash value of permanent life insurance if needed through:
  • Withdrawals. Policyholders can withdraw from the cash value for any reason, but withdrawals may be especially helpful in managing large expenses during retirement, such as medical costs or home repairs. The money taken out is generally tax-free as long as long as the policy does not qualify as a modified endowment contract and policyholders only withdraw up to the amount they’ve paid in premiums. If the withdrawals exceed the amount paid in premiums and include some gains, the portion of the withdrawal made up of those gains will be taxed at the policyholder’s ordinary income tax rate. However, withdrawals will permanently reduce the policy’s cash value and future death benefit. Depending on the policy, there may be fees for making withdrawals.
  • Loans. Policyholders can take loans from their cash value. While often not taxable, loans typically have a set interest rate and will permanently reduce the policy’s cash value and death benefit if not paid back.
It’s important to remember that the key difference between permanent life insurance and other portfolio assets is the tax-free death benefit it provides. Withdrawing too much of a policy’s cash value during retirement can reduce the amount of money available for beneficiaries as a death benefit, potentially eliminating the primary purpose of permanent life insurance policies. Policyholders should examine any near-term uses for their plan’s cash value against the potential impact on their future death benefit, seeking a balance between meeting current needs and maintaining protection for loved ones. A financial professional can help strike this balance.

2. Opportunity for tax-deferred cash value accumulation

The cash value in a permanent life policy can grow tax-deferred, meaning the policyholder won’t owe taxes on gains until they begin withdrawing money. This feature means these policies can serve as a complement to other tax-deferred savings options such as IRAs and workplace retirement plans. A permanent life policy may be especially attractive to people who max out their contributions in workplace plans and traditional IRAs and are not eligible to contribute to Roth IRAs.

3. Helping to cover healthcare costs with optional riders

Some insurance companies offer optional features (called riders) that can be added to life insurance policies to help protect against healthcare costs that aren’t covered by Medicare or other insurance in retirement. These riders either give policyholders early access to their death benefit (which permanently reduces the value of that benefit) or cover the care outright.
For example, a chronic illness rider can help pay for expenses that arise from being permanently incapacitated by a chronic illness, such as Alzheimer’s. With a chronic illness rider, a portion of the policy’s death benefit is accelerated, and funds can be disbursed in advance to pay for any need, including non-medical expenses.
For people who are eligible, selecting one of these riders may help prevent other retirement savings from being consumed by healthcare costs. A financial professional can help determine if it makes sense to add a rider to a life insurance policy at the time of purchase.


Evaluating Options

While protection is the core purpose of all life insurance, permanent life insurance can offer distinct tax advantages, growth potential, and access to cash that may help strengthen an overall retirement plan. A financial professional can help determine the right type of life insurance policy to consider adding to your retirement plan.


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Achieve Financial Protection While Maximizing Your Pension Benefits


Pension maximization using life insurance is a way to gain needed death benefit protection while helping you get the most out of your defined pension benefits. If you are a participant in a traditional pension plan (also referred to as a “defined benefit plan”), you have a plan that is designed to provide you with monthly income payments upon retirement. First, however, you must make an irrevocable choice. Typically, your employer will give you two options for how the benefits will be paid—Life Only Benefit or Joint and Survivor Benefit. The Life Only option pays you the maximum monthly benefit, but upon your death, your spouse does not continue to receive payments. The Joint and Survivor option pays a reduced benefit, but your spouse will continue to receive benefits when you die. The pension maximization strategy using life insurance is designed to be a way to receive the higher life only pension benefit while also providing funds for your spouse in the form of a death benefit.

How does it work?

Here is how life insurance can be used to maximize pension benefits.
  1. The participant in the defined benefit pension plan purchases a life insurance policy to replace lost income after the participant dies. The death benefit should be an amount that can provide the spouse the same monthly payment amount as the Joint and Survivor option. The spouse is named as the beneficiary of the life insurance policy.
  2. Upon election of pension benefits at retirement, the Life Only benefit is selected rather than the Joint and Survivor benefit.
  3. Upon death of the participant, the life insurance death benefit is paid to the spouse. The pension benefits stop.
  4. The life insurance death benefit is then used to provide income for the surviving spouse.

Who can benefit?

If you’re married, participate in a defined benefit pension plan, and are willing to allocate a portion of your retirement funds to a life insurance policy, it may be worth considering the pension maximization strategy using life insurance. In most situations, it may be ideal if you are within five years of retirement when deciding on the strategy.
As mentioned earlier, the Joint and Survivor option will continue to pay your spouse monthly benefits after your death, but the Life Only option pays a larger monthly benefit. Generally, the Joint and Survivor benefit payment is reduced by one-third to one-half compared to the Life Only option. With the pension maximization strategy, the idea is to select the Life Only benefit and use a portion of the higher benefit amount to purchase a life insurance policy with your spouse as the beneficiary.
The death benefit proceeds from the life insurance policy would provide your spouse with the financial support to help protect his or her financial future. The goal is to receive the higher benefit amount from the pension, while still providing your spouse with the same financial protection as would have been received with the Joint and Survivor option.

Why life insurance?

Life insurance is designed to financially support those left behind after a death. With the pension maximization strategy, this premise remains true. With life insurance, you gain immediate death benefit protection that would pay proceeds to your spouse generally income tax-free upon death.
Let’s take a look at the advantages and disadvantages of using life insurance for pension maximization.


  • Immediate financial protection and control. From the start, you gain death benefit protection for your spouse. When you die, your spouse receives the death benefit generally income tax-free. If you decide on the pension maximization strategy using life insurance, this death benefit replaces the pension income that stops.
  • Higher monthly pension income. When you select the Life Only option, you receive a higher monthly benefit. If your spouse dies first, you aren’t left with the reduced benefit of the Joint and Survivor option. With this scenario you would also have potential access to any accumulated cash values in the policy through loans and withdrawals to help supplement retirement income.
  • Opportunity to pass money to heirs. If your spouse predeceases you (the pension holder) and you keep the policy in force until death, any remaining life insurance death benefit would pass to beneficiaries, such as your heirs.


  • May not be appropriate if the retiree is in poor health. Medical underwriting is required to qualify for life insurance. If the retiree is not insurable, this strategy does not apply.
  • Your spouse may lose medical benefits. Depending on your pension plan, selecting the Life Only option may disqualify your spouse from medical benefits that would be available with the Joint and Survivor option. Carefully review your pension plan guidelines.
  • Potential lapse of your life insurance policy. Should you not make the required premium payments to keep your life insurance policy in force, the policy may lapse and no longer provide a benefit to your spouse.
  • Not selecting the appropriate amount of life insurance coverage. It is important that the policy’s death benefit amount is enough to meet your spouse’s financial needs after your death. If you die soon after retirement, the death benefit needs to be sufficient enough to cover your spouse’s remaining years.
  • Your spouse may lack investment experience. After the life insurance death benefit is paid, your spouse will need to ensure that the benefit will last, especially if it is paid in a lump sum. Please discuss with your financial representative for details.


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Build, Preserve, and Maximize Your Estate


Estate planning can be a real challenge—even with a will in place. Life insurance death benefit proceeds can provide the liquidity needed to pay off debt, replace income, supplement retirement income, create an equitable inheritance between heirs, and even provide protection for businesses.


Who Can Benefit?

Your beneficiaries, including surviving spouses, children, other loved ones, and even business partners, could be faced with an array of financial complications—in addition to the emotional impact of a loss. Planning only gets you so far. How will you be sure that when the time comes, your wishes will be met? By using life insurance to reinforce your plans for your estate, beneficiaries have a simplified way to access the liquid cash proceeds needed to help ensure your wishes are met.
Not all assets are easily converted into liquid funds. Even if you have a will, certain items take time and often require specialized help to sell or transfer, like:
  • real estate
  • tangible personal property (e.g. jewelry, cars, art collections)
  • intangible personal property (e.g. stocks, bonds)
  • business interests/ownership
The specialized agents, fees, and time involved in dealing with asset transfers like this could end up costing your beneficiaries money. Other factors, like state laws, inheritance disputes, and probate court, could slow the process of heirs receiving their inheritance and cause financial complications for everyone involved. By putting a plan in place that includes life insurance, you can help ensure your beneficiaries have access to funds when they need it most.


Why Life Insurance?

First, having a will in place is crucial. A will allows you to control how and to whom your assets are distributed, and it can be used to suggest a guardian for the care of your children or other dependents. Without a will in place, state inheritance laws could determine how your property is distributed, and even who should care for your children. Having a will helps to ensure your wishes are met.
However, even with a will, assets may not always transfer immediately to beneficiaries. There are many circumstances that can impede the process— the most common being probate court. Your debt, funeral expenses, and the care of dependents could all be hanging in the balance during a lengthy court process. Life insurance can provide generally tax-free access to death benefit proceeds at the time of death, rather than waiting for court settlements or the sale of property to be finalized—helping to give your beneficiaries the financial support they may need during a difficult time.
In addition to laying the groundwork for a smoother estate distribution process, life insurance may help create a solid estate plan which allows you to not only preserve what you have now, but also build your estate throughout your lifetime. Good estate planning works to help protect your assets, while also taking other factors into consideration, like outpacing inflation and growing your estate value to maximize the inheritance for your heirs.


How Does It Work?

Estate planning is a complex process and should be done with the guidance of your life insurance agent, attorney, and any other professionals you may work with (e.g. accountants, trust officers, etc.). An in-depth analysis of your personal and professional assets should be performed to determine which planning opportunities can best benefit your estate. Plans for the allocation of different types of property can be constructed, as well as a life insurance plan to provide a liquid asset in the form of the death benefit.
A popular method is to use a joint survivorship life insurance policy. This type of insurance policy can insure two lives under one policy for a low cost and provides death benefit proceeds when both insureds have died, providing financial support to those who need it. The beneficiaries are typically children, a charity, an organization, or a trust. The death benefit can also be used to help pay taxes on sizeable estates upon death. LHENetwork offers survivorship products that can help protect your estate for your heirs, while also building cash value throughout your lifetime with the ability to earn interest. Talk to your LHENetwork representative about the various life insurance products available to meet your estate planning needs.




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Help Preserve Your Wealth for Future Generations

Gain financial protection and help maximize the money you pass along to heirs.
There may come a time when you may need to think about the future generations of your family. You have worked hard, accomplished your goals, and accumulated funds to support a comfortable retirement. Along with your careful planning, maybe you would like to set aside funds to pass along to your children or grandchildren. Whether the amount is a little or a lot, wouldn’t it be nice to help ensure those funds are passed along in a tax-efficient manner? This would help maximize the money you can provide to your heirs. Life insurance provides death benefit protection and can help increase the value of the funds you pass along to beneficiaries
Legacy building, also referred to as wealth transfer, is simply a plan using life insurance to pass along money to your beneficiaries in a way that’s most favorable for them and for you.


Why life insurance?

Life insurance provides a death benefit, which can help provide financial security to beneficiaries generally income tax-free. For legacy building, life insurance offers the same two key benefits:
  1. It helps to provide financial protection and passes along a generally income tax-free death benefit.
  2. It can help maximize the funds you pass along— whether it’s for your children or grandchildren, a church, or perhaps a charity.
If you have set aside funds, you owe it to yourself to explore how life insurance can help efficiently pass those funds along to your beneficiaries.


Who can benefit?

There are a few items to consider before deciding on a legacy building strategy using life insurance. Importantly, legacy building should only be considered if you have funds available to support yourself throughout retirement. Those who have money already set aside for heirs typically consider a legacy building strategy. These assets are often held in low interest-earning accounts, which may not be a tax-efficient method for transferring wealth.
Here are a few questions to help you determine if the strategy is right for you:
  • Are you within the retirement ages of 55-75?
  • Are you financially sound, with your own retirement plan?
  • Do you have children, grandchildren, or an organization you’d like to benefit?
  • Are you holding funds designated to leave to heirs or children—certificates of deposit (CDs), savings accounts, or money market accounts, especially accounts designated as “payable/transfer on death” or POD/TOD?
  • Have you named your heirs joint owners of your assets?
  • Do you have an annuity you’d like to pass along to heirs?
  • Are you taking required minimum distributions (RMDs) but don’t have a current need for the funds?
  • Are you looking for tax-advantaged solutions to transfer funds?



  • Immediate death benefit protection. From the start, you gain death benefit protection that will be paid out to your beneficiary upon death.
  • Income tax-free transfer to heirs. When you die the death benefit passes generally income tax-free to heirs.
  • Leverage. With life insurance, your premium payments can provide a larger death benefit immediately after issue. For example, if you purchase a $250,000 life insurance policy, that full amount would be paid as a death benefit once your policy is put in force. If your first premium payment is $1,500, for example, those dollars are “leveraged” immediately into the full $250,000 death benefit. These premium dollars purchase the full death benefit amount that would be available upon death.
  • Tax-deferred growth. The premium payments into a permanent life insurance policy may earn interest and grow on a tax-deferred basis.
  • Liquidity. Should your needs change or in an emergency, you may access the funds in a life insurance policy through loans or withdrawals.


How does it work?

When properly structured, a legacy building plan can help you gain death benefit protection and maximize the funds you leave to heirs.
  1. Establish whether the strategy is appropriate for you and that you need death benefit protection.
  2. Locate the funds you would like to pass along to your beneficiaries. These funds represent assets you don’t plan to use for retirement. The funds may be in a CD, annuity, IRA, or savings or checking accounts.
  3. The designated funds are then used to purchase a life insurance policy. This may immediately increase the amount available in the form of a death benefit. Consult your representative about methods of transferring funds into the life insurance policy.
  4. Upon death, the funds from the life insurance policy are passed along to beneficiaries in the form of a death benefit—passing along a legacy.



It is important to explore your options and to work with your representative to gain a clear picture of your needs. The goal is to help you decide on an appropriate direction. There are costs with life insurance. Permanent life insurance policies require monthly deductions, which include the cost of insurance, expense charges, and potentially other charges. These deductions may reduce the cash value of the policy.



Help preserve your wealth for future generations and consider a legacy building strategy. Contact your LHENetwork representative today.


Help Keep Your Life’s Goals on Track

Help protect your financial future with a periodic life insurance review

You’re already on your way to a more protective financial future with the life insurance you have, but how often do you review your policy? Do you still have the same needs as when you first bought coverage? Can your needs be met more economically? With the passage of time, life changes, and scheduling a client review with your agent can help keep you on track.



You may periodically review your bank statements, retirement portfolio, and car insurance, but have you recently looked at your life insurance policy? Life insurance is a part of your financial strategy, and a regular review can help make sure your goals and protection needs are being met. Consider these statistics:



In addition to making sure your coverage needs are met, you may be able to improve your situation in several ways:
  • You may be able to lower your premium cost for the same amount of coverage.
  • You may be able to gain more coverage for the same premium you are paying now.
  • It may be possible to improve the death benefit guarantee.
  • There may be a way to help improve policy performance and build cash value.
  • You may be able to gain features and benefits not available on your current policy.
If you haven’t reviewed your life insurance policy in a while or other policies that may be in your household, a phone call to your life insurance agent is all it takes. Your life insurance agent is trained to review certain items to make sure you’re on track with your life insurance goals.
All financial tools need a periodic review, including life insurance. Life insurance policy offerings have changed significantly over the years, and making the right adjustments now may better prepare you for the future.



Life is unpredictable, and the passage of time may bring about a new home, a job change, children, and even a change in health. These are all life events that may affect your life insurance coverage. A client review gives you the opportunity to review your current financial situation and evaluate your life insurance needs.
Here are a few life events that may prompt a further look at your life insurance coverage:
  • Change in marital status
  • New home
  • Job promotion/job change
  • Taking on debt
  • Planning for college
  • Planning for retirement
  • A significant change in assets
  • Changes in your business if you’re a business owner
This list of life events is a guideline to help evaluate your current situation. There are many other events to consider, like whether or not your children are out of college and on their own. In this case, the original reason for purchasing coverage has probably changed, and there may now be a need for retirement or estate planning.
In addition to life events, there may be other circumstances that may affect your policy:
  • Your health: Have you lost weight or stopped smoking? Your health is a consideration when reviewing your life insurance policy.
  • The economic environment: Interest rates fluctuate and could be quite different from where they were a few years ago. These interest rate changes may play a role in the performance of your policy.



Your agent will take a comprehensive look at your policy and analyze its features and performance to see if your original objectives are being met. If adjustments need to be made, your agent will present you with options. If the policy is currently on track with your original goals, then no changes will be needed. The important step is to take action and to see if you’re still on track with your financial protection needs.
There are a few items to note when reviewing your life insurance policy. The list below is not meant to be comprehensive, but it may help you get started in the right direction.
  • Examine your annual premiums: How much are you paying? Is the amount still within your budget?
  • Look at your beneficiary designations: Make sure your beneficiary designations are up-to-date.
  • Review the death benefit amount: Does the death benefit provide you with enough coverage? Items that may affect your death benefit are cost-of-living expenses and any life events.
  • Consider your supplementary benefits: Are there riders or endorsements you no longer need? Are there new riders that may be beneficial to your situation?
Life insurance is a key component to your overall financial plan. Take a moment and help ensure your life insurance goals are being met.



Give your agent a call today to help make sure you’re on track with your life insurance goals.


Gain Death Benefit Protection & Help with Tuition Costs

Achieve financial protection and help pay for the increasing costs of college tuition.
The primary purpose of life insurance is to provide a death benefit to beneficiaries. This benefit protection can make life insurance an attractive choice for creating a self-completing plan to help fund a college education.
While many people are aware that the cost of a college education has been on the rise, many underestimate just how large this cost has grown. According to the 2015 Trends in College Pricing published by The College Board, over the past decade, the published in-state tuition and fees for four-year public colleges and universities grew at an average rate of 2.9% per year beyond the rate of inflation. At the same time, many families lack life insurance protection, which many consider to be the cornerstone of financial protection. Recent studies show that four in ten U.S. households have no life insurance coverage at all, which leaves them vulnerable should the primary breadwinner die unexpectedly. What many people may not realize is that with the right life insurance policy, you can secure needed death benefit protection while gaining a way to help pay for college education.


Why life insurance?

Your personal savings should be the primary source for college funding. However, that comes with a challenge: if the family’s primary breadwinner dies prematurely, the personal savings plan typically comes to an abrupt end. In this situation, a life insurance policy can help. The policy’s death benefit could be used to help pay college tuition costs.
Another key benefit of permanent life insurance, is that it has the potential to accumulate cash value on a tax-deferred basis.1 Those funds can then be accessed while the insured is living to help pay for college costs.
Some of the advantages of a permanent life insurance policy include:
  • Parental stewardship. The policyowner has control of the policy’s potential accumulated cash value. Should plans change, the accumulated cash value can be used for other purposes without tax consequences.
  • Tax-deferred growth. Cash values within a life insurance policy generally grow tax-deferred.
  • Policy loan options. Different loan options are available to help you access the potential cash values within your policy.

Who can benefit?

There are a few items to consider before using life insurance for death benefit protection and a way to help pay for tuition costs:
  • Are you in need of life insurance protection to help ensure your family is financially protected?
  • Do you have a child or children up to 13 years old?
  • Are you concerned about college tuition costs?
  • Are you possibly looking to help supplement income in your retirement years?
It’s important to explore your options and to work with your life insurance representative to gain a clear picture of your needs. There are costs with life insurance. Permanent life insurance policies require monthly deductions to pay the policy’s charges and expenses, some of which will increase as you get older. These deductions may reduce the cash value of the policy.

How does it work?

After a thorough needs-based discussion with your life insurance representative, you select a life insurance policy that matches your needs. The basic steps typically include:
  • Purchase of a permanent life insurance policy. The policy provides death benefit protection and a way to help accumulate cash value on a taxdeferred basis.
  • If the unexpected happens and you die prematurely, the life insurance death benefit would be paid generally income tax-free to beneficiaries.
  • Alternatively, when it comes time for you to pay tuition costs, you may access the policy’s potential cash values through generally tax-free loans or withdrawals.
  • After helping to pay tuition costs, you may reposition the policy for other possible needs, like helping to supplement your retirement income.



Get started today. Contact your LHENetwork representative and financially protect what’s important now, while helping to fund a college education.

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