Monday, September 20, 2010

Long Term Care Insurance

Long term care insurance is right for people who have assets to protect. Those assets include, retirement savings of all forms, cash, life insurance cash value, homes, cars and anything that can be sold for value. (IE. jewelry, etc) If you have any of the above then you should consider long term insurance. The risk of paying for your long term healthcare should be passed to an insurance company. In long term care planning you will need spend down most of your assets you worked your whole life to accumulate before Medicaid will pay for your care. The current look back period for Medicaid qualification is 5 years. Also, your family should be able to choose the facility and type of care you receive. As with all insurance, the longer that you wait, the more expensive it can be. Contact us for a free quote and consultation. (If you have had health challenges , then new changes to the Pension Protection Act will allow for a linked benefit annuity to payout for care in a long term healthcare facility.)

Friday, September 17, 2010

Guaranteed Universal Life Insurance

Guaranteed Universal Life Insurance or GUL's are universal life policies that offer a guaranteed death benefit for a specific set premium. The death benefit is guaranteed for the time period set forth in the contract, usually to a specific age or maturity date. As long as the policy holder pays the premiums as scheduled, the contract is guaranteed not to lapse. Usually, these contracts are designed not build cash value. The premiums for GUL's is very low when compared to whole life or traditional Universal Life policies. They are a perfect fit for someone who is just looking for coverage. For more information or a free quote, contact us, we can have the information sent out to you.

Monday, September 13, 2010

Fixed Annuity vs CD's

Please see below for a great analysis on the fixed annuity and interest rate environment. These numbers show the benefits of purchasing a fixed annuity now for those clients of yours looking at fixed options. With clients thinking the interest rate environment will increase, many of them are holding off their annuity purchases until rates climb. See below on how to overcome this objection.
It’s All Relative
Last year we had plenty of 5% annuities available and annuity sales were at an extreme high. CD rates at the same time were at 4%. See the table below;
2009 Rates
Difference in Rate
25% in favor of the annuity
As you can see from the above, annuity rates still were 25% higher than CDs last year and many clients jumped into their annuity with both feet. Now a year later we see the following;
Current Environment
Difference in Rate
Over 37% in favor of the annuity
The difference in rates between these two vehicles is dramatically different today. Economists stipulate that the interest rate environment will remain flat until 2012. But, assuming we ignore economists, what would rates have to climb to in order to justify waiting today?
Today we can get 2.9% x 5 years guaranteed with an annuity and without the power of compounding, this equates to 14.5% over 5 years
· If we wait a year we would need to yield 3.62% on a 4 year annuity to equal 14.5% (a 54% increase off today’s 4 year annuities)
· If we wait 2 years we would need a 4.83% rate on a three year annuity to equal 14.5% (a 193% increase off today’s 3 year annuities.
Educating clients and helping them realize the cost of waiting is one of the many services we offer. We can also show you how to guarantee an income stream for life! More to come on that.