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LIFE INSURANCE POLICIES
The accepted definition of life insurance reads Life Coverage is a contract between a life insurance policy holder and an insurer or insurance company. The main purpose of life coverage is fairly basic. And that’s how life insurance policies became known as a gift of love. The contract states the insurance company will pay the beneficiary when the named insured dies. These elements apply to both Permanent Life Insurance and Term Life Insurance.
This is referred to as the death benefit. The death benefit is a stated amount inside the section of the insurance policy called the declarations. The amount is usually defined in a dollar amount like $250,000.00 for example.
The promise to pay a death benefit is made by the insurance company in exchange for a premium. The premium for the stated death benefit is also listed inside the policy declarations.
Life Insurance Does Way More Than it Use to
Regardless of what it is called the main purpose of today’s life policies is to be there when you die. And to help you in case of a serious illness. As well as help you to prepare to live in retirement. That’s a triple advantage no matter how you look at it.
Living Benefits is how a life coverage contract can help you while you are alive. Life insurance and living benefits are what is called a dream team. You don’t have to die to access your face value. Everybody loves a dream team and would like to be part of it.
Unfortunately, most people are so oblivious to life coverage and it’s benefits, it took the CoronaVirus to wake them up. A properly structured policy utilizes the living benefits to help prevent coronavirus wreckage. Yes, the CoronaVirus has spread across this country and left too much wreckage in its wake. Life insurance can help mitigate that carnage.
And now everyone who can get life insurance is trying to get it. Or so they think.
Life Insurance is Really Just Planning for The Future
This virus or any future virus doesn’t care about your retirement. They have a different thought process. Since you care about you it’s a safe bet to say you do not want to retire broke. Nobody intentionally starts their working life actively pursuing a path to retiring broke and/or running out of money.
But, a lot of people do throw up road blocks and make excuses not to hear how life insurance may be the cornerstone of their retirement program.
These same people haven’t figured out how to create an investment philosophy during this thing called the CoronaVirus. Instead of managing it, they let it manage them.
That’s not a good thing given there is a “magic sauce” tool in the life insurance arena called an Indexed Universal Life. This tool is super easy to use and never stops working for its owner. You could consider it an employee who doesn’t ask to be paid or for time off. Ever!
You can’t find that kind of help anywhere. That’s why permanent life insurance makes sense in so many ways. It works 24/7 365 without complaining, whining or taking a sick day off.
Sad to Say, But Life Insurance Still Wont get it’s Well Earned Respect
There are even life insurance points no one talks about. A good example is student loans. If you are a co-signer a life policy could save you from going bankrupt. There are a half dozen more points that should be considered.
Since I am a Life agent in Reno, Nevada you could correctly say I am talking about Nevada life insurance and you’d be right. Insurance companies operating in Nevada have to go by Nevada rules. In this sense you could also say Nevada life insurance and not be off the mark.
Given everything that is transpiring in and around your life isn’t it time to stop making life insurance excuses and start to seriously consider how life insurance can benefit, or maybe even change, your life? If not now, when?
ANNUITIES AND ANNUITY CONTRACTS
When considering investment products, and Annuities are one of the products, people often ask why they should buy an annuity. The answer, annuities serve many useful purposes, is not only simple but straight to the point. People in what is called the saving stage of life can use a type of annuity called a deferred annuity.
Another term for deferred annuity is fixed deferred annuity. It means the same thing and does the same leg work. If you are drawing social security you have an annuity. You paid dollars into the system for a set period of time and now the system is paying you on a monthly basis. This is probably the most known deferred annuity in the United States.
Deferred Annuities can help you meet your retirement goals. Most people have a 401(k), 403(b) or an IRA. For example, let’s say you receive a windfall of cash. Something like a death benefit in the amount of $250,000.00. None of these options allow you to put that much money into them. If you did, or even tried, you’d be over the maximum allowable contribution limit and could face an IRS penalty.
A Legal Scenario Involving Annuities
On the other hand, you could obtain an annuity for the entire $250,000, if you desired, and not face any tax penalties. Your money would grow tax deferred plus you’d enjoy the miracle of compound interest.
An annuity by law lets your interest earned grow without a tax penalty. That means the interest you earn not only is tax deferred but compounds three ways. One, the interest you earn in that year. Two, the interest paid on the earned interest of the previous years. Three, the interest earned on the money you would have otherwise paid in taxes. A triple play. That’s exciting.
Another Type of Annuity
Another type of annuity is an Immediate Annuity. An immediate annuity is just as its name implies. A person with an immediate annuity has given the insurance company a lump sum of cash. The insurance company in return starts paying the annuity owner a certain amount of money for a certain period of time. That’s how an immediate annuity works. There aren’t too many moving parts with this instrument.
Annuities also come in a different flavor. That flavor is called variable. I am not a fan of this type of annuity. It has high fees and its growth is tied directly to the stock market. This kind of product, in my opinion, is not a tool to use for retirement planning or even rainy day planning.
BURIAL EXPENSE INSURANCE/FINAL EXPENSE INSURANCE
Burial Expense Insurance is being so heavily advertised on television you’d think almost everyone would know what it is. And exactly what it does. But, if that’s what you think, it turns out you are wrong.
The terms burial expense insurance and final expense insurance are used interchangeably. They are except for a few semantics the policy holders have created. These are truly irrelevant because no matter what you call it the object is the same. It is to pay for your burial which is another way of saying your life’s existence has become final.
Final Expense Insurance is a type of whole life insurance. And it is designed to pay medical bills and funeral expenses when you pass. The underlying idea is to not leave loved ones with bills to pay. All of us will pass away some day. Leaving even one expense to be paid for by our survivors should not happen. It is unfair to place an expense on their back. After all, we knew we would pass. Why make them pay for it? That expense cold be twofold: the cost of the funeral and/or the cost of the burial. Some people will be cremated so it could be the cost of your cremation instead.
Regardless it is still a cost and a cost your loved ones don’t deserve.
Burial Expense Insurance is the product that lets us cover our final bills. It is a small price, or monthly premium, to pay so we don’t leave our loved ones with the burden of more expenses on top of the ones they already have.
Now we have one more tribulation to face. The CoronaVirus is making itself well known. Seniors also can obtain permanent life insurance or term life insurance in higher amounts than offered by burial expense insurance if they qualify. Generally speaking, final expense and burial expense insurance are no qualifying policies. They are what is called guaranteed issue. There are guaranteed issue policies offered in the standard issue arena as well. It is wise to do research when it comes to this type of insurance.
Before anyone jumps on the phone because of a TV commercial it is wise to consult a Nevada Life Insurance agent. Get the facts and learn the whole story. The TV commercial hired a personality to tout their product for a reason. That may not be the same reason you want the insurance. You would want your questions answered to your satisfaction, right?
DISCLAIMER and DISCLOSURE
The articles on this site are for informational purposes only in regards to life insurance policies and annuity contracts. These articles ARE NOT INTENDED to encourage any person to purchase any type of financial services or investment product. But rather to encourage you to ask questions. So, make sure you
ALWAYS CONSULT WITH A LICENSED AND KNOWLEDGEABLE, COMPETENT PROFESSIONAL
You want the agent you consult with to have at least a few years experience. These can be tricky subjects for new agents. And, I never want anyone making an uninformed decision. Because these decisions can be and are LIFE CHANGING. So this means it is very important that your consultant is fully aware of your particular circumstances and/or situations.
Always assume the links you follow, the videos you watch and any forms you fill out can result in me receiving a commission. This is not always the case. But for the purpose of full disclosure you should assume that. Because I am a licensed life and health insurance agent in the State of Nevada. And that’s also why this website is always available.