Wednesday, October 28, 2009

Disability Insurance

DI coverage is a powerful tool in protecting a person's most precious asset, the ability to go out and earn money. Disability coverage can preserve a family's financial future. When a person is stricken with a disability, they need to focus on recovery, not losing homes, cars, etc. Disability insurance can allow a person to recover and enjoy life again.

Thursday, October 15, 2009

Benefits of Permanent Life Insurance

1. Tax-Deferred accumulation of policy cash value
2. Avoidance of 10% tax-penalty on withdrawals before 59 1/2 on qualified plans
3. FIFO (First in-First out) tax treatment on withdrawals = tax free withdrawals up to amount paid in.
4. Tax-Free death benefit to beneficiaries
5. Death benefit in excess of policy cash value
6. Death benefit avoids probate

Wednesday, October 14, 2009

Medicaid Planning

41% of American end up using medicaid to help pay for their long-term care. Many people feel that with proper "Medicaid Planning" they can use federal assistance to help cover their long-term care needs. Here are some things to consider: giving away money may be subject to gift taxes if above allowable limits and this can be far more costly in the long-run than long-term care insurance. The senior will loose control of their assets by giving them away and may need to end up asking family to give them assets back as needed. As of the end of 2008, a spouse may currently only keep one home, a car, a small amount for final expenses, $104,000 in financial assets, and $1,711 a month in income total. Any annuity values and income may also be kept in addition, but after the spouse dies the feds keep enough money to reimburse themselves for their pay-outs. This can deplete inheritances greatly. Medicaid protects the poor, it is not designed to help the middle and upper class.

Monday, October 12, 2009

Life Insurance Beneficiary Review is Vital!

Make sure that your beneficiaries are up to date. For example, if you leave an ex-husband or wife as the beneficiary of your policy, they WILL get the death proceeds. It will not be over turned in a court of law. Depending on how your contingent beneficiaries are set up, if at all, 100% of your death benefit could go to someone that you do not wish to have the funds. The same goes for deceased beneficaries. If you have a deceased parent or spouse as your beneficiary, depending on how your contingent beneficiaries are set-up, the death benefit can go into your estate and be divided as state law dictates. That state's law could send the money through probate to someone you may not wish to have the funds.