Looking for a Guaranteed Income Stream for Life? Think Annuities

Looking for a Guaranteed Income Stream for Life? Think Annuities

by | March 29, 2019 | Annuities, Financial Planning | 0 comments

Are you headed toward retirement or even in retirement and concerned about outliving your savings? Perhaps an income annuity will fit your needs. An annuity is a financial instrument that can offer a guaranteed lifetime income that you can’t outlive.

I’ve spent many years helping my clients with annuities as part of their broader financial plan. So here’s a very high-level understanding of some options.

Fixed income annuities are offered with a number of payment options, allowing you to structure payouts according to your financial goals and objectives. Consider these four income streams:

Joint life: This option provides income for two people, as long as either person is alive. When one person passes away, payments continue to the survivor.

Period certain only: This allows you to target how long you need an income stream. If you were to pass away before the end of the certain period, the remaining payments would continue to the person you designate as your beneficiary, meaning the person you want to receive the money.

Life with a period certain: In this scenario, the annuity pays out income for your lifetime. If you were to pass away prior to the end of the certain period elected, your beneficiary receives the remaining payments.

Life only: This is the least-commonly selected payout. When you die, payments cease—no matter what. This can be risky, but the upside is this option provides the highest payouts.

My mother-in-law, now deceased, used a joint life immediate annuity to generate a lifetime income, using the proceeds from the sale of her home. Now my wife, as her beneficiary, is receiving an income stream for the balance of her life from this same annuity policy.

A guaranteed lifetime income, one you cannot outlive, provides peace of mind. Should this be part of your financial plan? Ask your agent or advisor to see if it fits your needs.

9 Reasons Not to Buy Life Insurance (And Why You Should Rethink Them)

9 Reasons Not to Buy Life Insurance (And Why You Should Rethink Them)

by | March 13, 2019 | Life Insurance | 0 comments

From getting married to having a baby to starting a business, there are lots of reasons why you’d want to consider buying life insurance. But maybe something is holding you back from getting the coverage you know (or suspect) you need.

Here are nine of the biggest reasons you’ll hear for not buying life insurance—and why you shouldn’t let them keep you from considering coverage.

1. It’s too expensive. Concern over cost is one of the most common reasons people give for forgoing life insurance. And that’s too bad when you consider that most people overestimate the cost of life insurance. That includes Millennials: Four in 10 think it cost five times the actual amount (Insurance Barometer Study by Life Happens and LIMRA). As a guide, a healthy 30-year-old can get a $250,000 20-year level term life insurance policy for about $13 a month.

2. I don’t have any kids. Does your spouse or partner depend on your paycheck to help pay for living expenses? Or do you have a sick parent or relative who would need to hire a caretaker if you weren’t around? These are just a few of the (many) reasons to consider life insurance if you’re childless.

3. I’m too young and healthy to worry about life insurance. No one is invincible or knows what tomorrow may bring. (Watch the Newby’s moving story if you have doubts.) If anyone depends on you to make ends meet, you’ll want to consider life insurance. Plus, young and healthy people tend to get great rates–and can often lock in coverage in case their health takes a turn for the worse later in life.

4. I’m too old to need life insurance. We all know age is just a number, and that’s certainly the case when someone would face a financial hit without you in the picture.

5. My health isn’t great. There are lots of life insurance options for anyone in less than optimal health, so don’t assume you can’t get coverage if you have diabetes or high blood pressure, for example. The key is typically to have the condition under control with a physician’s guidance and medication if needed.

6. I smoke. There are many companies that offer life insurance for smokers–just know that you’ll end up paying more than nonsmokers.

7. I don’t work outside of the house. Whether you’re caring for young children or aging parents (or both!), you provide invaluable services that would be expensive to replace. Life insurance can help ensure the ones you leave behind get the care they need.

8. I don’t have the time to get coverage. These days, it’s easy to get a quote online or over the phone and to e-sign required documents. And there are even policies out there that don’t mandate a medical exam, often called simplified underwriting.

9. I don’t know what kind of coverage I need or how much. That’s what four in 10 people give as an excuse, according to the Barometer Study. There are lots of trusted insurance agents and advisors in your community and online who can help you pinpoint coverage that works for your life and budget. Find one by visiting the Find Coverage page of our site.

Protecting What Matters Most: Your Loved Ones

Protecting What Matters Most: Your Loved Ones

by | February 25, 2019 | Life Insurance | 0 comments

It’s Insure Your Love month. And what does that mean? Everyone wants the best for their family, whether that’s a spouse, children, aging parents, really anyone you need to take care of. And the numbers back that up: 81% of Americans believe their family is their most valuable asset, according to the new “Protecting What Matters Most Study,” by Edward Jones and Life Happens.

And that’s where life insurance comes in. Every day, you work hard at your job and at home to take care of your loved ones. By having life insurance, it means if something were to happen to you, your loved ones would be OK financially.

But so many people don’t seem to be getting that message. Only four in 10 are protecting their family with an individual life insurance policy. In fact, a third of Americans say that life insurance is a low or is not a priority when starting a family, according to this same study.

Protect What You Value Most

That’s why Life Happens conducts the Insure Your Love campaign every year. Our goal is to remind people of what they value most: their loved ones, and to remind them to protect them financially with life insurance.

I’m convinced we all want to do the right thing. And often that just comes down to better educating Americans on what life insurance can do. For starters, life insurance can replace or pay for:

  • lost income
  • funeral costs
  • education costs
  • retirement income
  • estate considerations
  • estate taxes
  • charitable donations

Another little known fact about life insurance is how affordable it is. In fact, most people overestimate how much it costs by three times, and Millennials overestimate its cost by five times, although they usually pay the least due to their age and health. (2018 Insurance Barometer Study, by Life Happens and LIMRA).

For example, a healthy 30-year-old can get a $250,000, 20-year level term life insurance policy for about $13 a month, or as I like to consider it: three Starbucks a month.  Although I enjoy my caffeine fix as much as the next sleep-deprived mom, I gladly make my family a priority over a grande cappuccino.

So protecting your loved ones financially for the “what ifs” is both doable and affordable. Speak with an insurance agent or advisor, who can walk you through your options that fit within your budget. And if you don’t have one, you can find one with our Agent Locator.

Life Insurance Offers Protection and Peace of Mind

Life Insurance Offers Protection and Peace of Mind

by | February 6, 2019 | Life Insurance | 0 comments

Most Americans agree that preparing financially for life’s unknowns is a way to show that you care. In fact, almost 2 in 3 think that having life insurance is key to taking care of their family financially. These are just some of the findings from the “2019 Insure Your Love Consumer Survey” by Life Happens.

The survey also examined ways that Americans look at financial stress in their lives: 78% say that finding ways to reduce financial stress is a top priority for them. And 69% of people with life insurance say they are less stressed knowing their family is financially protected.

Here are more statistics that you can click to share as a tweet. For the executive summary of the study, click here.

78% of people agree that financially preparing for life’s unknowns is a way to show your loved ones you care for them. #InsureYourLove2019 Click To Tweet
62% of people say that feeling financially secure adds a great deal of meaning to their life. #InsureYourLove2019 Click To Tweet
78% of people say finding ways to reduce financial stress or anxiety is a top priority. #InsureYourLove2019 Click To Tweet
65% of people with life insurance say they’re able enjoy life more knowing their loved ones are financially protected with life insurance. #InsureYourLove2019 Click To Tweet
75% of people with life insurance say they prioritize the happiness of loved ones over personal happiness vs 66% without life insurance. #InsureYourLove2019 Click To Tweet
People who say they prioritize reducing financial stress are also more likely to say having life insurance is a key part of taking care of their loved ones financially. #InsureYourLove2019 Click To Tweet
78% of single parents agree that financially preparing for life’s unknowns is a way to show your loved ones you care for them. #InsureYourLove2019 Click To Tweet

If you use any of these statistics beyond your tweets, please source them: “2019 Insure Your Love Consumer Survey” by Life Happens.

We’d also like to invite you to join us for a Twitter chat about these findings:

Date: Thursday, February 7 from 1:00 p.m. EDT to 2:00 p.m. EDT
Hashtag: #InsureYourLoveChat during the above timeframe

20 Reasons Not to Jettison Your Life Insurance After 60

20 Reasons Not to Jettison Your Life Insurance After 60

by | January 24, 2019 | Financial Fitness, Life Insurance, Retirement Planning | 0 comments

Let’s think about this: You’ve earned the majority of what you’ll ever earn over the past 40 years. You should have accumulated enough assets to retire and live happily ever after, right?

The ups and downs of the financial markets, however, have been an eye opener about how uncertain your (or anyone’s) financial future may be.

Most people think of life insurance only when they want to protect their family and provide a source of replacement income in the event of their death. They don’t think of it as a buffer to replace lost assets due to market volatility—for example, the market goes south and you die before you have the time to rebuild or replace the lost assets.

They don’t think of life insurance as a buffer to replace lost assets due to market volatility.

Yes, I know. Your children are grown and gone. The mortgage is paid off. You have minimal debts. So, why should someone 60 or older consider purchasing permanent life insurance?

Here are some reasons for life insurance after age 60:

  1. Offset loss of retirement income to spouse at death. (Pension max)
  2. Pay costs associated with death
  3. Pay final expenses
  4. Pay estate and inheritance taxes
  5. Pay off debts
  6. Pay income in respect of a decedent taxes on IRAs, 401(k)s, etc.
  7. Provide for the care of a disabled child, spouse, etc.
  8. Offset loss of a key person in a small business
  9. Provide funds to buy out interests of a deceased business partner or co-shareholder
  10. Dividends can be a tax-free source of supplemental retirement income
  11. Cash surrender values are a source of emergency funds during life
  12. Cash surrender values can be wholly or partially annuitized to provide additional guaranteed lifetime income
  13. Any unused funds can be used to provide a gift to grandchildren
  14. Provide a gift to charity at death or prior if desired
  15. It adds flexibility to the estate plan
  16. You can balance uneven distributions of property or business interests to your children
  17. You can spend all your money and still leave a legacy for your children or grandchildren
  18. It’s creditor proof in most states
  19. It can be designed to provide an “inevitable gain,” no matter when you die
  20. It can collateralize loans. As people live longer, they tend to take on more debt or debt that has a longer amortization (just look at all the big houses being built by people who consist of a family of two post-65 adults!)

Review your personal situation. You may find there are more reasons to own life insurance after age 60 than you think.

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