If you want to protect the people you love, life insurance should be an important part of your financial planning. It can provide a meaningful amount of money to your family, give you a way to leave a legacy, and much more.
What are some uses for life insurance?
The main benefit of a life insurance policy is to provide a death benefit to beneficiaries should you pass on. There may be a variety of advantages to the life insurance policy you choose, such as coverage for final expenses and growing your retirement savings. Here are some features you may be overlooking.
Living benefits
Some products include accelerated death benefits, which allow you to accelerate a portion of the death benefit while living, if you should be diagnosed with a qualifying illness. These benefits are subject to eligibility requirements. The funds can be used toward medical bills or any use of your choosing.
Coverage for final expenses
The national median cost for a funeral could end up costing thousands of dollars. One of the biggest costs for your family when you die is your funeral. You may leave behind end-of-life expenses such as medical bills, which will fall on the shoulders of your loved ones. Life insurance can help prevent that kind of financial and emotional strain on your family by covering the cost of your burial and other expenses.
Retirement savings
Whether you started retirement planning too late, or you worry you simply won’t have enough retirement income to meet your needs in your later years, life insurance can help supplement your retirement income with policies that feature cash value growth potential. You can access cash value through policy loans or withdrawals and the money could be used for a generally tax-free income stream.
Funds for your child’s college
Did you know that life insurance can be a great college funding solution? With permanent life insurance, you can protect your family and build college savings at the same time. With permanent life insurance, you have the opportunity to grow cash value by taking advantage of indices that are linked to the stock market when the market is high subject to a cap, while protecting yourself from loss when the market is low with a 0% floor. You can then use the cash value that you may accumulate over time to help pay college tuition costs, whether it’s an in-state or out-of-state college.
Business planning
Are you aware of the role life insurance can play in business planning? Whether you’re an entrepreneur thinking about how to protect your share of the business or are looking for ways to reward your top performers, life insurance could be a solution.
Talk to an agent to help
If you want to get up to speed on all the options available in your life insurance, consider making an appointment with an agent to discuss your policy today.
North American Company gives these tips on reviewing your life insurance policy.
Your life insurance policy can offer assurance and stability for your family should you pass away. But that policy needs to be revised and updated from time to time, especially when a life-changing experience occurs. Review your policy if one of the following events occurs.
Having a child
A new baby is likely a signal that it’s time to review your life insurance policy. Likely, this bundle of joy means a new dependent and your life insurance policy may need updating to account for this.
Getting married or divorced
If you’ve recently tied the knot or gone through a divorce, it’s probably a safe bet that you need to review your policy. Marriage means you could be sharing finances. If you pool your money together and start sharing accounts, it’s good to make sure your policy adequately covers your husband or wife, should you pass away. Similarly, a divorce probably means you’ll be going through a number of financial changes.
Here are some important insurance actions to consider:
Update your beneficiaries
A beneficiary is the person, business, or trust that receives the death benefit proceeds from your life insurance coverage when you’re gone. It’s likely that the person you’ll want to be listed as your beneficiary, depending on your life insurance policy, is your spouse. If you have life insurance coverage through work, remember to update your beneficiary on that policy as well.
Update your retirement accounts
Retirement accounts like IRAs and Roth IRAs, workplace retirement plans such as your Pension, 401(k) or 403(b), and FSA and HSA Flexible spending accounts allow you to designate a beneficiary who will inherit the account should you die.
Purchasing a home
If you’re planning to purchase a home and take out a mortgage you may want to take a look at your life insurance policy. Buying a home may be one of your biggest financial obligations. A life insurance policy can be smart financial protection for homeowners. A mortgage can be a substantial debt, and many mortgage lenders will want to ensure it gets paid even if you pass. If you die before paying off the mortgage, the debt will pass on to your family, and your spouse may not be able to afford to pay for the house on one income. With all of these factors to consider, it may be time to make an update or change to your life insurance policy. Options include:
Term life insurance
Term life insurance pays a death benefit if you die while the policy is in effect. You choose the coverage amount and how many years the policy should last. Most life insurance companies sell term life. New homeowners can buy a term life insurance policy timed to match the duration of their mortgage.
Permanent life insurance
A permanent life insurance policy can last until you die if premium requirements are met. It can also build cash value over time and is generally is more expensive than term life insurance.
Talk to a financial professional about how buying a home could affect your life insurance needs.
Planning for retirement
If you are approaching retirement age but think you don’t have enough saved, you may be exploring your options. One consideration is how life insurance can play a role in your retirement plan. This, as you’ve probably guessed, means you should consider contacting your life insurance agent to talk about a current policy you may have.
A life insurance policy’s primary objective is to pay a death benefit to your beneficiaries upon your death. You may be able to use the cash value in the life insurance plan to supplement income in retirement.
Often, life insurance can fall into the category of out of sight, out of mind; you purchase a policy and call it good. Resist the urge – review your life insurance policy should you experience any of these life events.
Change in employment
Having a change in employment, whether a new job or promotion, is also an opportunity to revisit your policy and possibly update your life insurance plan. Whether an increase or decrease in household income, the change can affect living standards.
Providing care for loved ones
If you function as a primary caregiver to a loved one, review your life insurance to make changes for their benefit. If you leave a young child behind, your spouse may need to work full-time to pay the bills. This often means paying for child care. Other costs might include cleaning the house regularly or shopping for groceries. Additionally, if you are a caregiver for an elder relative you should consider the financial value of the support you are providing.
Caregivers often have a significant amount of out-of-pocket expenses. According to the AARP, a majority of family caregivers report that they spend an average of over $7,000 annually in out-of-pocket costs related to caregiving needs.1 Should something happen to you, those expenses may still need to be covered. Life insurance can help provide for those costs.
To provide for others, it’s vital that you care for yourself emotionally and physically. But in case something does happen to you, a life insurance death benefit can help the beneficiary financially.
A change in your health
If you’ve become healthier through exercise or changed your habits in a way that significantly impacts your health, you could qualify for new life insurance rates. Lowering your blood pressure, giving up tobacco, or having surgery to reduce weight or rectify medical issues are examples of changes that might alter your health. Should you experience any of these changes, you may want to explore your policy options.
Talk to your agent
If you’ve experienced a change like this, or aren’t sure if it’s time to review your policy, contact your agent. He or she can help you better understand how your changes in life might mean a change in your policy.
We can assist you in your life insurance needs. Contact us at reynold@reynoldjones.com or 817.545.3900.
American consumers’ top three financial concerns are health coverage, savings goals, and living expenses.1 What if we told you their fourth financial concern, life insurance, had the potential to solve for the first three?
Let’s take a look at some reasons to LOVE life insurance and what it could do for you.
L – Low cost
Many don’t realize that life insurance doesn’t have to break the bank—there’s a policy out there that can fit your financial situation. Did you know, that for the price of three cups of coffee per month, you could buy a term life insurance policy?2 While affordability is important when considering life insurance, it’s also important to look beyond the price. What benefits does this policy include? How can it help me financially in the long term?
O – Options
That’s why a policy with flexibility can be important. We know our clients have individual needs and financial goals. And, as your life changes, your needs may change as well. Many life insurance policies have different features such as living benefits, cash value growth potential, and benefits you can use while you’re alive that may fit your unique life needs.
V – Various life stages
As you go through the different stages of life, your financial needs and goals can change. Whether you’re graduating college, getting married, buying a house, starting a family, or planning for retirement, all of these momentous occasions require more financial responsibility. Life insurance can walk alongside life with you and help you during these special milestones.
E – Extra protection
Studies of cancer survivors have suggested that between 33% and 80% of the survivors have used savings to finance medical expenses and between 2% and 34% have borrowed money to pay for their care or have medical debt.3 While the main benefit of life insurance is the invaluable death benefit protection it provides, many policies also come with living benefits, which may be used for a variety of expenses—including covering the costs of a major medical illness.
1Source: 2019 Insurance Barometer Report, LIMRA. Accessed January 2020.
2Source: LifeHappens, lifehappens.org/insurance-overview/life-insurance/. Accessed January 2020.
Erica Oh Nataren shared this very helpful informaton on Life Happens:
Today, women are more concerned than ever about their financial vulnerabilities. Financial advisor Meredith Moore, CLTC, LUTCF, explains how life insurance and related products can help women offset financial risk, maximize opportunity, and plan for the future.
First the good news: Women are making more money than ever. But we still face stubborn challenges in managing it effectively. Factors can include fewer working years, a narrowing but still-present pay gap, and social conditioning.
As a result, women across all ages and financial brackets — even high income earners — are worried about their financial future, says Meredith Moore, founder of Artisan Financial Strategies in Atlanta, Georgia, and a nationally recognized speaker on women’s financial planning issues. A recent study even revealed underlying retirement risks to married women in their 50s over their single counterparts.
New pandemic pressures“The pandemic has only magnified this situation,” says Moore. “Women are opting out of the workplace due to household pressures, and they’re losing their place in the pecking order,” sacrificing both current income and lifetime earning potential.
On the flip side, “Several high-income women I know have spouses who stay at home now and they’re having a hard time wrapping their minds around it. There’s no right or wrong,” says Moore, “but these old gender paradigms are a hard thing to navigate.”
Shore up your defense
Life insurance and related products aren’t a cure-all to these complex issues, but they can serve as effective tools in stabilizing finances, offsetting risk, and planning for the future in uncertain times.
“Like any sport, you have to play offense and you have to play defense. It’s sexier to talk about offense, but it does not matter if you get hit by the proverbial bus,” says Moore. “We shouldn’t be glossing over it.”
Life insurance serves as the ultimate defense, protecting your family against the financial fallout if you were to pass away. The right amount of coverage can allow your family to stay in the home, alleviate financial stress at a difficult time, and continue with plans such as college education.
What am I overlooking?
Your risks change depending on your current life circumstances. At every stage, honest communication and a willingness to find out where the gaps are can help you create a financial future that’s more certain.
All the single ladies
While you’re young and single, Moore advises focusing on your emergency fund and buying a small disability insurance policy that you can increase later without additional underwriting. Underwriting is the process an insurance company goes through to determine your eligibility and your rate, which is based on age, health, lifestyle and other factors.
If anyone is financially dependent on you — this could include parents — life insurance can provide for them if you were to die unexpectedly.
Happy grandmother and little granddaughter embracing, having fun and playing together in park
Women with families
Moore says it’s important for couples to set up regular household financial meetings and become comfortable engaging with money together – even if a partner handles most financial matters. Power dynamics can change with the arrival of children. Couples who can communicate openly about money are better able to navigate these twists and turns.
When it comes to financial protection, the stakes are typically higher at this point in life: a mortgage, young kids, and fewer assets. Moore recommends additional disability insurance for any breadwinner, and life insurance is a must.
Some families should consider permanent life insurance, which, unlike term insurance, accumulates cash value that can stabilize a portfolio and be tapped for unexpected expenses* should your death benefits needs decrease. The primary purpose of any life insurance policy remains to protect family members from financial loss in the event of the policyholder’s unexpected death.
Women over 50 and high-net-worth women
As women reach the half-century mark, they face any number of realities: empty nest freedom, caregiving obligations, a new career chapter or perhaps peak earnings. At this stage, Moore says, “I first have a conversation about managing costs for extended periods of care, if it hasn’t already been addressed. Overall, we’re taking a strong look at financial security.”
“In particular, many high-income women have an outsourcing mentality,” says Moore. “But when it comes to money, you need to know where those blind spots are.”
Two of the most common ones she sees:
Elder care. Moore recommends having a family conversation about managing the costs of extended periods of care. “Let’s just be honest, it’s weird to talk to our parents about money,” says Moore. “But the next generation needs to be looking at this with their parents.” High-net-worth women are especially likely to take on the cost of providing for their care.
Longevity. Income goes down in retirement, even among high earning women who often stay active professionally.“Women live longer, and we often don’t know how to address the risk of outliving assets,” says Moore. “Stress test your retirement plan.” Permanent life insurance and annuity products can help assets last longer, and enable wealth transfer to loved ones.
Recent headlines are creating a lot of uncertainty in the
financial markets. At times like this we all consider alternatives to the Stock
Market and Mutual Funds.
Are you familiar with the favorable attributes of
Indexed Annuities and Indexed Life Insurance products?
Markets go through many different cycles and present periods of significant volatility. With the recent volatility that we have seen you can certainly make a strong case for having a portion of your portfolio more secured through indexed products!
You may know Indexed Annuities and Indexed UL are designed to provide protection in times of market volatility while also presenting greater upside potential than traditional fixed interest products.
If you are already involved in Indexed products rest assured you
have built in protections against down markets.
Now that I have your attention, are you aware of your HSA limits ? Review your paycheck and your deductions. You may not be taking advantage of the maximum HSA contribution for 2018 . The maximum contribution limit if you are single is $3,450 and the maximum contribution limit for family is $6,900. Also, remember that if you are 55+ you are allowed an additional “catch up” contribution of $1,000. See this chart.
A Health Savings Account, or HSA, is a unique, tax-advantaged account that can be used to pay for current or future healthcare expenses.When combined with a high-deductible health plan, it offers savings and tax advantages that a traditional health plan can’t duplicate with an HSA. You are paying for medical expenses with before tax dollars instead of after tax dollars. Who doesn’t want to save tax dollars ?!Important Note : If funds are not used, they roll over and will be accessible year after year. There’s no “use it or lose it” penalty.
You can pay for a wide range of IRS-qualified medical expenses with your HSA, including many that aren’t typically covered by health insurance plans.This includes deductibles, co-insurance, prescriptions, dental and vision care, and more. For a complete list of IRS-qualified medical expenses visit irs.gov or view a list of qualifying expenses.
We work with Qualified Health Insurance Agents and Qualified Life Insurance Agents that can help you with all of your Insurance needs.
Are you in need of cash? Well, that’s kind of a loaded question. Everyone always would like to have some extra cash, right?
So if you find yourself in need of cash, do you go to your Life Insurance policy to withdraw cash? Do you take out a loan in your policy?
Be careful! If you take cash out of your Life Insurance policy, it can have a tremendous impact depending on your policy. Below are some of the things to consider when contemplating taking cash out of a Permanent Life Insurance policy.
Removing Cash Value can adversely effect the guarantees in many Permanent Life Insurance policies.
Permanent Life Policies
If you withdraw cash from a permanent life insurance policy, by request the life insurance company will run an in-force illustration that will project the longevity of your policy. This important tool would reflect any negative impact on your policy as a result of the withdrawl.
Policies and stipulations vary from one life insurance company to another so it is important to review the specifics of your policy. If you own a Guaranteed Universal Life policy, you should NOT take out any cash value without first talking with your life insurance agent.
In fact, you would be well advised to have a discussion with the home office, but most importantly–communicate with your life insurance agent! One must understand the ramifications of removing any cash value from any permanent life insurance policy.
If you need assistance, Reynold Jones Insurance Group works with the very best life insurance agents and financial advisors in Hurst, Euless and Bedford–as well as across the Dallas/Fort Worth Metroplex.
Life insurance. Have you stopped reading yet? What about financial struggles for those you love? Are you interested now? As a topic, life insurance probably ranks with death and taxes on the fun-o-meter. But, this is Life Insurance Awareness Month. It’s an important topic because life happens. So, keep reading.
First, a few facts:
Roughly 30 percent of households had no life insurance coverage in 2016.
Only 44 percent of all households had individual life insurance in 2016 a 50-year low.
Four in ten households with children under 18 say they would be in financial trouble if the primary wage earner died suddenly.
Another three in ten would have trouble meeting monthly expenses beyond a few months.
Here are my top 5 reasons you need life insurance:
Number 5: You have a family. It’s a no brainer if this is you. If you’re not there to bring home the bacon, they might not starve, but they sure may struggle.
Number 4: You have debts. If you die, your estate must pay your debts before your family receives anything. Life insurance will cover those debts so your family doesn’t have to.
Number 3: You rent – don’t have a mortgage, you still pay rent. Who will cover the rent if you’re gone? If you have a life insurance, it’ll be covered.
Number 2: You have a job. No kids, no mortgage, live at home still with the parents – good reasons to not worry about life insurance, you say. But, what happens if you’re unable able to work long-term? Income protection, another form of life insurance, can help make sure you can afford the lifestyle you’re accustomed to living.
And, the number 1 reason … Peace of mind!
Let’s face it, life happens. It throws curveballs, fastballs and wicked knuckleballs at you all the time. Finding even just a little peace can be elusive. Life insurance is a way to make sure you, and your loved ones, will be financially ok no matter what.
In short, you’re paying the insurer for a financial peace of mind.
Peace!
Reynold Jones is a member of the National Association of Insurance and Financial Advisors – Texas. Reynold advises clients on ways to meet their insurance and financial planning needs.
I’m starting to struggle with aging. People in my parents’ generation tell me I’m laughably young, but maybe it’s the beginning of the process that startles you the most. Seeing your cheeks get lower and your eyelids loosen seems off somehow—like it’s not really you in the mirror.
Each year of my twenties felt shorter and shorter, and I’ve struggled to keep up with the changes, both in my appearance and in my understanding of how life works. It might be because I have a deep sense of identity diffusion—I see myself across a wide range of ages and roles.
I am still two years old, five years old, twelve, and sixteen. I’m getting my driver’s license, laughing on merry-go-rounds, and hugging my parents goodbye at the entrance to my dorm. I am a college student; a teacher; a young professional starting his career. I’m still that kid working in a three-job frenzy between smoothie making, door-to-door sales, and substitute teaching, trying to make it to my first apartment. I feel a deep connection to every friend I’ve had since elementary school. I remember vividly everyone I’ve been in love with.
When I look in the mirror, I expect to see all those iterations of myself looking back. They should be carved into the flesh somehow, stored in the hard drive of my skin. Instead, I see the weight of sadness and loneliness. Maybe that’s just how aging looks. Or maybe it’s how the world looks now.
My parents and grandparents never looked that way to me. My teachers didn’t. Wrinkles were marks of maturity and experience when I was a kid. Kind, thoughtful creases made you trust somebody.
I really don’t mind looking older, in the way they did—where your eyes are still young.
I don’t mind looking older. I just want to look happy. I want to look like me.
I know it sounds crazy to talk that way six months before thirty—yeah, you can laugh if you want—, but my generation lives in a universe where our sense of image is heightened. Our friends—real or imaginary—live on our computer screens, where their vlogs and pictures are carefully moderated to demonstrate consistency. Change in appearance means unfamiliarity to viewers—which means fewer subscribers and less affirmation.
It’s even more pronounced for movie buffs and Netflix binge-watchers, whose unconscious idea of normalcy is situated around the Hollywood ideal. Actors spend a chunk of their salaries on looking the same throughout their twenties and thirties—keeping their skin taut, eating on customized nutrition plans, and maintaining a physique that would be otherwise unsustainable outside of work as a professional athlete. Just look up pictures of Stephen Amell “letting himself go,” where he looks better in his mid-thirties than I looked at twenty-two.
Not to mention the fact that actors are more emotionally dynamic, more vulnerable in their performances than most people are in real life. Add that to life in a heavily isolationist society, and we often feel more connected to the images we follow than we do to our colleagues and friendship circles in the real world. Your sense of beauty becomes sharply focused.
It’s no flak against guys like Amell—more power to them, and the rest of us should do what we can to take care of ourselves. It’s just that a nine to five imposes certain limitations. Even entrepreneurs have to put in their hours.
As the generation that pioneered virtual community, I guess it’s up to us to solve its problems. You can’t get ahead of time. It moves forward—and backward—too quickly. But maybe you can keep up. Maybe, if you cultivate a sense of presence in the now, you can feel like things are the way they’re supposed to be.
I hope so. I hope I can figure out what the changes mean. I hope there’s not really some universal standard of beauty that I’m moving away from. Above all, I hope I can enjoy the time I have while I’m learning.
Have you heard the term Rothification. Are you tracking what all is going on with the tax reform discussion in Washington and how that will potentially impact you and your family ?
I am a member of the National Association of Insurance and Financial Advisors ( NAIFA ) an organization that advocates for the insurance and financial services industry as it relates not just to agents and advisors but also our clients. Yes, you and your family benefit from the good work that NAIFA lobbyists do in D.C.
As always there is give and take, right ? Tax cuts must be compensated for in other areas.
One area under consideration would be to limit deductible IRA’s. There have been proposals to limit pre-tax contributions to anywhere from $2,000 to $10,000 a year. NAIFA’s position, and my personal position, is that we believe those limits will “harm overall retirement readiness and severely limit the choices of employers and plan participants”.
Additionally, small business owners may decide that there is less advantage to sponsoring retirement plans for their employees who could simply set up Roth IRAs for themselves.
As stated in a recent NAIFA article :
Rothification is not tax reform. It would simply shift around numbers on the government’s ledger, so that future tax revenues would be available to pay for tax cuts today. In effect, it is robbing future governments and American citizens of needed revenue years down the road. That would be a shameful act.
