So there is a policy that falls in between both term and permanent insurance and it is called “Return of Premium Life Insurance”. A return of premium life insurance policy will generally cost twice as much premium as a simple Level Term Insurance policy.

For example, a 30 year old male wanting a simple 20 Year Term Life Policy for $250K would cost him about $25 per month.  A “Return of Premium” Life Insurance Policy would cost the same 30 year old male $52 per month. If the 30 year old male reached age 50 without dying, he would then receive a check for $12,480.

Was this a good investment? He made no interest on his $52.00 per month over 20 years. BUT WAIT!  He did make interest on the difference that he would not have spent on the simple term insurance policy. He would have bought a policy for $25 a month and possibly invested the other $27 each month into a mutual fund or stock. If he had done that, he would have needed to earn and average return of 7% each year to see a net return of $12,480 after taxes.

So here are the benefits to our return of premium example: A guaranteed return of 7% on the money used to by the ROP rider; a forced savings account with no age 59 1/2 restriction; tax free return of funds in one lump sum; the ability to convert to permanent insurance later on down the road.

I think we answered our question here. Unless you can show were someone can beat a 7% guaranteed interest rate and start with only $20-$30 per month, I think the Return of Premium rider is a good investment when you have a life insurance need and a little extra cash to contribute to it.

Call me today for the best ROP plan in on the market! Or Get a Quote by Email

Is Return of Premium a good or bad investment?

 

 
Here is how it works: You purchase your annuity with the income rider. Allow it to grow for as long as possible before making any withdrawals. When you are ready to receive income you take out the amount calculated by the lifetime income rider (what it would have paid you if you had exercised the rider) but you don’t use the rider yet. You take your income using the 10% penalty free withdrawal. You do this for a number of years in order to get to the next Guaranteed Withdrawal Percentage (confused yet?). Normally this will be for a maximum of five years. Then once your age qualifies you for the next highest bracket in Guaranteed Withdrawal Percentages you turn on your lifetime income stream.

We find that this is a perfectly legal and easy way to receive an additional 10-12% more lifetime income than simply exercising the income rider at the time of retirement. We know you will have some questions so please call us to learn more about this strategy. We are happy to run an illustration for your specific situation in order to show you how much retirement income you can receive from your annuity. Thanks for watching, call us today – (916) 825-9605

Watch this video to see how it works!

After you have watched the video, fill out our Annuity Quote form so we can contact you today and answer all of your questions.

Family Endowment Rider

We at Finish Line Insurance Services specialize in implementing the infinite banking strategy into custom built life insurance policies.

At no cost, we tailor a Universal Life or Whole life insurance policy to you that will give you the following benefits:

1. A tax-free income stream towards retirement
2. A zero cost loan provision
3. An choice of Indices to diversify your investment portfolio
4. An included Long-Term-Care benefit at no cost (depending on state)
5. A flexible premium to invest at your own speed
6. The lowest possible death benefit to allow for your investment to grow quickly

There are many other benefits to the life insurance contract we designed for this purpose. Not only does the policy have a guarantee of principle but it also contains a 3% minimum guaranteed interest rate.

We want to show you how this investment vehicle can help you, so please fill out the contact us form or life insurance quote form and specify “Infinite Banking”. We will contact you ready to answer any questions you may have about this life insurance product and its benefits. Please contact us today!

A life insurance policy custom-designed for “Infinite Banking”!

Example: On February 2, 2011 the ending index value of the S&P 500 was 1304.03. On February 2, 2012 the ending index value of the S&P 500 was 1325.54. So we take 1325.54 and divide it by 1304.03 equaling 1.016. We then subtract 1 from 1.016 and we have our index credit of .016 or 1.6%.

For more information on index annuities or calculations Please fill out my form.

This is a true feeling of most people who are looking to take their savings and begin drawing a retirement income from it. The most popular investment product for this accomplishing this used to be a SPIA (Single Premium Immediate Annuity). Generally offered by insurance companies, a SPIA will allow you to trade your lump sum savings in exchange for a lifetime income. The income payments would begin immediately and over time would generally add up to 1.5 times the amount invested as long as the retiree lived long enough. The longer the retiree lives, the better the investment they made. These are still widely offered today, which is why I felt the need to write this article.

Here is the drawback to purchasing a SPIA. You are trading your lump sum for an income. What happens if the retiree needs more than that fixed income in a particular year? What if they need Long Term Care, or become terminally ill? What if they want to stop the income and take their money somewhere else where they might see a better program? In a SPIA, they will likely not have a favorable answer to any of these concerns.

This is why a Deferred Annuity is the more favorable choice. These days there are Deferred Annuities that will perform better, provide more income for our clients, and give them more flexibility for life changes than ever before. Most Deferred Annuities offer what’s called an income rider. The income rider is a calculation that runs along-side your deferred annuity in order to offer you a larger lifetime income that you can depend on for your future. For more information on income riders, check out my income rider blog. There is a website called www.GuaranteedIncomeRider.com  If you fill out their form, they will send you a report showing you which company will offer you the most lifetime income for your lump sum. Simply put, they compare Deferred Annuities across the board and figure (for your age and investment size) who will offer you the most income. They list the exact amounts of income you can receive over a 20 year forecast for all the top companies, it’s awesome.

Back to the focus of this conversation! Depending on your concerns for retirement, we have Deferred Annuities that offer Long Term Care benefits, Spousal Continuation options, Terminal Illness waivers, and the ability to take your ball and go home if you decide to take a different path for your future. Life changes and so it is important that you are not locked into a one way investment product. Be sure to call us if you are interested in learning more about Deferred Annuities or Lifetime Income Riders or Please fill out my form.

Here is how it works! You go on the website and fill out their form. Its short. You state how much you are looking to invest, your time horizon, and some contact information. Within seven days you receive a bound report via Fed Ex that is custom tailored to you.

The report contains: a list of companies they compare, a breakdown of the top 6 companies, a 20 year forecast of the top 3 companies, and a personal recommendation of the company who will provide for you the most income. THIS IS AN INCOME COMPARISON!!!! What they are doing is comparing Lifetime Income Riders for each one of these companies.

So here is skinny – If you want to know which annuity with “guaranteed income rider” will best provide you with the most guaranteed lifetime income, go to www.GuaranteedIncomeRider.com and order a report.  If you like their report, and you will,  I encourage you to give them your business, that’s how good business is done.

Have other questions Please fill out my form.

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;

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;

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)

Are you looking for a Universal Life policy with no cash value? Or maybe you want no cash value in your life insurance but you don’t like that term insurance plans end prematurely. I have a fantastic alternative!

Offered by one of my carriers, Midland National Life offers what they call their Essential Guaranteed Universal Life Plan (UL-G). This plan is built to keep your insurance in place forever without ever changing in monthly premium or in the policy face amount.

Secondly,  Midland’s UL-G is designed to be very competitive with term policies. Because the program does not promote cash value, all the premiums that you pay are solely going towards the cost of insurance. Therefore you could describe this plan as a term life insurance plan that lasts forever. The advantage being that you receive all the benefits of a Universal Life plan with the low monthly cost of Term Life plan.

Lastly the UL-G does have a premium guarantee built into the product. What this means is that unlike all other universal life policies that are dependent upon fluctuating interest rates to determine the cost of insurance, the UL-G will guarantee that you’re premiums will never change regardless of market performance. The price of the policy will not change nor will the face amount of the policy.

So if you are looking for a life insurance policy with no cash value that is guaranteed to last forever, the Midland National Essential Guaranteed Universal Life Plan was built to do exactly that. Offered by Finish Line Insurance Services, call us today for a quote on this great program or Please fill out my form.

Here are some good guidelines to make sure your insurance agent is doing his/her job well with the cash value growth in your life insurance policy. If you discover that he/she is not, by all means call me or Please fill out my form.

TIP #1 In order to over fund a Cash Values life insurance policy properly you must first ensure without a doubt that the insured is healthy. The health class of the insured should be either “Standard Non-Tobacco” or “Preferred Non-Tobacco”. If not, than this is not an investment style that is in the best interests of the client. The less the insurance cost, the better the investment, so make sure you are either in a Preferred or Standard non tobacco class.

TIP #2 When over-funding a Universal Life Insurance  or Whole Life Insurance policy you should know that life insurance is governed by a 100 year old tax law. There is no grey area when it comes to legality here. But there can be a moral flexibility when in it comes to agents building your program, which is why I am writing this article. The more insurance you buy, the more the agent gets paid.

Your goal is to put as much money away as possible while purchasing as little insurance as possible.

The IRS has a limit as to how much money you can contribute to an insurance policy over the life of the policy. Always ask what the maximum amount is that you can fund the policy with. If you are not putting in close to the maximum amount that the policy allows, than you are not doing yourself any favors. The reason is this; You want the bulk of the funds you deposit to go towards the investment not the cost of the insurance.  This can mean the difference of thousands of dollars in your retirement years.

For example:

I am a 32 year old Preferred Plus Non Smoker (thank you Jesus!). If I were to purchase a $250K Equity Indexed Universal Life Insurance Policy today, here are some of the values: The minimum amount to keep the insurance in place until age 100 is $79.88 per month. The maximum the IRS will allow me to put in to keep this a non taxable event is $233.45 per month.

If I only put in the $79.88 per month, then by age 65 I would have deposited in $31,632.48, and at an 8.6% interest rate I’ll have a cash value of $62,232.00. That is a horrible return, because the cost of insurance is eating up all the cash value. I would have been better off buying a term plan and investing in an IRA (assuming I’ll die of old age).

Although, if I put in the maximum amount of $233.45 per month, then by age 65 I would have deposited $92,446.20 and I would have a Cash Value of $383,579.00. Now that looks much better. In addition the death benefit will have grown to over $470,000.

At this point I would elect to stop paying into the policy and I would annuitize it. Over the next 25 years of my retirement I would receive an annual income of $35,201.37. from this policy.

Let’s review, I put in a total of $92,446.20 over a period of 33 years and all the while I have at least $250K of life insurance. By age 65 I accumulated just less than $400K and decided to stop making payments. The policy then turned around and paid me a TAX FREE retirement income of over $880,000 over the next 25 years of my life. By age 91 the income stops and I have a life insurance benefit of $75,000 that I can access for Long Term Care if I need it. The Life Insurance will slowly decrease until age 100 where I will die as a happy handsome 100 year old man.

This brings me to my final tip

TIP #3 Make sure that you have at least a 15 year run to fund your policy. Do to the nature of the product,  life insurance policies do have a cost of insurance.  If you have not figured that out yet, please start back from the beginning of this article. We find that most cash value life insurance policies will not out-perform competing Roth IRA and Mutual Fund accounts until after 15-20 years of funding. These products are designed for funding long-term not short term.

Also - If you only have a short term run of 10 years or less, consider a Bonus Indexed Annuity as one of your options. These days you can still double your investment with a ten year run in an annuity with a Guaranteed Income Rider. Want to know how, click here!

Once again I hope this was helpful, please feel free to ask any questions via online or by phone. Please fill out my form.

This initial investment was $150,000 and the client at the time was 62 years of age. He did not need to begin accessing the funds for 10 years which left plenty of time for growth.

The Variable Annuity came with a 6% bonus on the front end. The Single Annuitant Guaranteed Income rider included a 6% roll-up interest rate if grown for less than 10 years and a 7.2% interest rate of grown for 10 or more years. We illustrated the 7.2% rate for comparison.

The Indexed Annuity came with a 8% bonus on the front end. The Single Annuitant Guaranteed Income rider included 7.2% regardless of how many years the investment was left to grow.

At the ten year mark we could guarantee that the client would have a value to provide lifetime income within the Variable Annuity of $318,672.79.  At age 72 he would be eligible for a 5% guaranteed withdrawal rate for an annual income of $15,933.64 for life.

Since the Indexed Annuity gave a larger bonus, the total amount grown after ten years was $324,685.48. The percentage for calculating the guaranteed income was also substantially different.

At age 72 the client would be eligible for a 6.0% withdrawal rate which gave him an annual income of $19,481.13 for life. Thats roughly $3500 of more annual income, Guaranteed!

Now let’s look at the costs for both products. The Indexed Annuity has no annual fees, no M&E charges, no trading fees and no broker fees. The rider on this Indexed Annuity did cost 0.45%.

The Variable Annuity had an M&E charge of 1.85%, an Investment and Management fee of 1.2% and a guaranteed income rider of .85%. Total fees for the Variable Annuity are 3.9%.

What I have done here is calculate the guaranteed values of both a Variable Annuity and an Indexed Annuity. Just the guaranteed values. I have no idea what the market will bare over the next ten years for my client. So what I did was gave him the information that these products guarantee.

We can speculate on interest rates all day, but these are numbers his retirement can count on.

In the end if you think about it, The Variable Annuity would need to outperform the Guaranteed Roll-up Interest Rate of 7.2% that the Indexed Annuity provides, after making up the charges built into the Variable Annuity of 3.9%. That means that the Variable Annuity would need to consistently grow at a rate of 11.1% for 10 straight years just to tie the Indexed Annuity. 11.1% !!!!!

I have 5 other points I would like to mention regarding the nuts and bolts of these product, but I’ll write about them a little later.

If you would like me to build a proposal for you and show you who can guarantee you the most retirement income for your future. Call me or fill out my Annuity Form. You’ll have it within 48 hours, comparing the 3 top companies for your retirement. Compare the best Guaranteed Income Riders!

1. If you are electing to have a Lifetime Income Rider with your annuity, and you wish to take a pre-lifetime income withdrawal, you will not receive the “step up” or “roll up” interest rate credit for that year. You have been guaranteed locked in interest rate for your initial deposit to grow as long as you don’t touch it, the “roll up” rate. But many company brochures are not clear on the fact that you can not touch the money if you want to receive the roll up interest rate for that year. If you withdrawal your allowed 5% or 10% you will not pay penalties, but with most companies you will not receive any “step up” interest credit for that year.

Note: If you need income while your annuity is growing, consider splitting some of your funds into an immediate annuity that will pay you while your deferred annuity is left untouched and can grow freely without any risk of interrupting its due credits.

2. If you are receiving an initial premium bonus with your annuity, make sure that it is 100% vested in a short time period. Many annuity providers will give out initial premium bonuses, as high as 10-14% of the amount initially deposited in the annuity. Yet, these bonuses may have vesting periods as long as fifteen years. That means on a single annuitant scenario, if the owner of the annuity dies in year five of the annuity’s life, the beneficiary will not receive all of the bonus nor the growth that should have been earned on the bonus over the five years. It becomes prorated. Many companies will specify in their brochure whether the bonus is 100% vested in year one, and in death.

I will continue to write these helpful tips for all of you who are considering which annuity type is right for you. I hope you can use my agency and my website as helpful tools in order to make the most informed decision.

If you have any questions regarding these topics please feel free to call me today.

To a small business owner, their business is often their most valuable asset. The loss of a key employee or partner can leave them financially vulnerable. A business needs to be able to leverage their employee benefits to attract and retain the right personnel.

Fortunately, many of Finish Line Insurance Services carriers offer business protection and valuable accumulation for small business owners through an array of options to cover their needs.

A Buy / Sell Agreement protects the business in the event of an owner’s death. As part of a business continuity strategy, it allows an orderly transition of ownership and management.

A Buy/ Sell Agreement:

• Preserves the value of the business interest for the owner’s heirs by establishing a fair market price for the business
• Has the ability to provide cash for survivor income and settlement payments
• Determines who can buy the departing partner’s share of the business

A Key Person Plan protects the business from the financial impact and loss of experience of a key employee. This plan is owned by the business and helps provide cash to the company in the event of a key employee’s death. It can also be used as a source of emergency funds and as collateral for loans.

A Key Person Plan:

• Can be designed as an incentive for key employees
• Compensates for the time spent replacing the loss of the insured
• Remains with the business if the key employee is terminated or retires.

An Executive Bonus Plan allows owners to reward their talented employees with a tax-deductible bonus of insurance. The business determines which employees will participate and offers them an enhanced retirement package and / or survivor benefits at little or no cost to the employee.

An Executive Bonus Plan:

• Is a great employee recruitment and retention tool
• Does not require IRS approval
• Is easy to implement and can be altered at any time

To learn more about the opportunities available for your small business, contact the Finish Line Insurance Services today.

Sacramento Small Business Owner Programs

Our friends at the local agency CPS have shared a very exciting story will us regarding the topic of CAD. We often work side by side on cases in order to better serve our clients and are happy to relay this information to anyone whom this may help.

The Reality:

Coronary Artery Disease (CAD) is the leading cause of death in the United States. 17.6 million people alive today have a history of heart attack, angina pectoris (chest pain due to CAD) or both. This year an estimated 1.26 million Americans will have a new or recurrent coronary attack. Risk factors of CAD include elevated cholesterol and triglycerides, high blood pressure, diabetes, depression and family history of heart disease.

A Real Underwriting Approach to CAD:

One of our A+ carriers takes a flexible approach to underwriting that is designed for real-life scenarios. This carrier’s approach to Coronary Artery Disease could produce favorable results for your clients. Let’s take a look at this real life applicant with CAD.

• Male, non-tobacco, age 57
• Diagnosed with CAD at age 53
• Single vessel disease (95% blockage of the Left Anterior Descending artery)
• Successfully treated with angioplasty and stent placement at age 53
• Three year blood pressure readings 120/80 or less
• Total cholesterol of 185 with cholesterol/HDL ratio of 3.5
• An exercise perfusion scan performed within one year of the application revealed no evidence of ischemia, excellent level of fitness and an ejection fraction of greater than 55%

A Real Underwriting Decision: Standard!

Results may be different based on the age, sex and health status of your client.

Let the Finish Line Insurance Services Team help you take your challenging, real-life case and turn it into success. Call us today to learn more about this carrier and their flexible approach to underwriting.

Real Underwriting For Coronary Artery Disease

SacTown Blues is a chance to tell some good stories from experiences that I’ve had and also to promote myself as professional working blues musician. The site itself has music and video clips, and a blog that I plan to update weekly as I play and record with different artists in Nothern California.

I played over 100 professional shows and feel that it’s time to start writing down some of the experiences that go along with being a blues musician. These are the notes of one Sacramento harmonica player, these are my SacTown Blues!

A recent survey was held by Allianz Life Insurance Co, and an overwhelming 92% of respondents to the survey said there is a retirement crisis in the United States.  Amongst baby boomers the number rose to 97%.  So here you have a massive number of people at the doorstep of retirement feeling like they are not ready to pass through into the next chapter of life.

What are the majority of people doing about it? And what can you do about it? Well there is a lot of information online that can help serve as a starting point on investing, and has perhaps led many investors to think they can handle everything on their own just by searching around the web.

According to the Allianz survey approximately 46% of Boomers currently work with a financial advisor. There were 29% who said they are receptive to advisors. But a quarter of the respondents said they don’t have a financial advisor and are not open to working with one. Among those who are working with an advisor, 44% said they should have learned more about building a solid financial plan.

So what do pre-retirees want from their financial advisor when working with one? Here’s a shocker, 87% said that ensuring the safety of their nest egg was “very” or “extremely” important and another 86% said that locking in a guaranteed income was “very” or “extremely” important.

Katie Libbe, vice president of consumer marketing and solutions for Allianz Life Insurance Co. said that annuities are essentially the only option that can provide guarantee income for life. The only problem, of course, is that annuities have a reputation for being difficult for the average individual investor to understand. Which means that advisors need to be certain they are properly explaining the various parts of an annuity to their clients, while the quarter of boomers who said they are not open to working with an advisor might want to reconsider that stance.

“They can be complex so we usually believe it’s best to have an advisor look at these options and explain them to the individual,” Libbe said. “They can actually be complex in a good way. They don’t just provide a steady stream, they also increase income. But it starts with the advisors so they can easily be understood.”

Closing notes from Finish Line:

When working with potential clients it is not unrealistic that we meet 3 and 4 times in order to ensure the client understands the annuity clearly. Especially when working with a guaranteed income rider. The first meeting is generally focused on gathering information about what might be important to the client, and introducing the different concepts. Educating our clients is our primary strength and one of the reasons our clients continue to recommend our services.  Let us know what we can do for you.

Survey Results – Boomer’s concerns about retirement

ING has just released a new esubmit application process that we have decided to adopt as standard practice while writing their policies. This new program allows agents to sell simple term life insurance policies completely online. Once the agent and client have decided on a term insurance program that they would like, the agent goes online to ING’s website and the application can be filled out 100% electronically. This process included electronic signatures as well. There is virtually no paper needed during any step.

ING does give the option to print out any of the forms used in the process, in case the client would like to keep a paper trail. We like this! Going green is good, but having the option to go one way or another is even better.

This is just another tool that we support, in doing our part to be efficient in our business while being conscientious of our environment. If you would like to review your policy versus a new ING policy, we would happy to compare those numbers for you.

Fill out our form!

The Guaranteed Lifetime Income Rider was first made available to Variable Annuities, and it has become a “must have” add-on for most index annuity products. The GLIR is growing at an incredible rate at the number of applications Life Insurance companies are receiving.

For example: Life Insurance Company Southwest (LSW) has received an astounding increase regarding the rider for its deferred indexed annuity. The company reported receiving 270 Guaranteed Lifetime Income Annuity applications in a single day back in February of 2008. The average number of applications the company usually receives per day is anywhere from 100 to 150.

Why is this? And more importantly how does the Guaranteed Lifetime Income Rider work?  One attractive advantage of this rider is that agents can present a dollar amount for the guaranteed payout for life. We as agents don’t have to speculate your income. We can give you guaranteed numbers that will never go down or go away. Real Lifetime Income!

To calculate the guaranteed withdrawal payment, many agents will multiply a guaranteed withdrawal percentage by the income account. The income account has a guaranteed interest rate for a specific time period. An example of this is a 7.2% roll-up rate guaranteed for 20 years.

We find that the guaranteed withdrawal percentage is based on the age the client wants to begin receiving payments. For example, if the guaranteed withdrawal percentage is 5% at age 60, yet increases by 0.10% each year, the guaranteed withdrawal percentage will be 8% by age 90.

For you couples, here is another example: a married couple can purchase a single premium deferred indexed annuity, with a Joint Lifetime income for $400,000 at age 55.

At age 65 they would receive to an income of approximately $40K each year. This income would be guaranteed for life even if the contract’s value decreases to zero over time due to the number of income payments. Although, if they decide to receive income payments starting at age 70, their annual guaranteed lifetime income would be roughly $62K.

So I do hope this helps you understand the value that this rider holds to many existing clients. Please feel free to call or email me with any questions regarding annuities and income riders. I will be happy to help you. If you are interested in getting annuity quotes for yourself I do have a new form you can fill out and I will send you competitive quotes within 48 hours. Annuity Quote Request Form You can also get more information at this website www.LifetimeIncomeRider.com

Lifetime Income Riders Revealed!

A study which examined the investment of millions of dollars by life insurance companies was conducted by Harvard Medical School. These companies included such names as Burger King, McDonald’s, Wendy’s, ect.

Some experts are making the argument that investments into such companies are inappropriate, since eating in fast food restaurants is generally perceived to be unhealthy. There view is that life insurance companies should promote healthy living.

But the criticism being raised misses an important point I think. Here is my personal angle on this one – life insurance companies are also investment vehicles, and it is in the best interest of their clients that these investments do well.

I remind my Sacramento clients that most life insurance investment products are not designed to beat the interest rates in the market. They are designed to beat the interest rates that your local bank offers.

The main difference between permanent insurance and term is that permanent insurance offers a standard death benefit plus an investment portfolio. Stay with me here. Sure, fast food is often unhealthy, and the primary concern for all insurance companies ought to be the well-being of their policy holders, but sometimes the definition of well-being depends on the services being rendered.

Millions of policy-holders depend on their permanent insurance investments to pay off in the event of their death. Choosing those investments that offer high quality returns is what insurance companies are being paid to do.

So there is your answer in my opinion, fast food is often bad for your health. Enjoying the financial rewards of a life insurance company that knows how to make sound investments, such as a fast food company, can be very good take away.

Would you like French Fry’s with your Cash Value?

Many policy holders in California have been receiving letters in the mail from their insurance providers stating that their whole life policy has run out of gas and needs more premium payments to stay in force.

Most policy holders are shocked to see this due to the fact that when they were sold the policy, they were told it would last forever as long as it was funded with X amount of dollars. They were told “If you pay a certain amount up front, you can stop paying at age 65 and the insurance will last the rest of your life”. Hence the name “Whole Life Paid Up”.

So why are policy holders now getting letters in the mail saying that they are no longer paid up? Well back in the day of trusting social security checks and well built homes with big backyards, interest rates used to flow strong like an Alaskan Salmon fishing run in the middle of July. What I mean is that these clients were quoted premium prices based on interest rates as high as 12-14%.

Now we Californians are looking at our future where the market average is lucky to see between 5-7%. There’s just not enough gas in the engine anymore to support older insurance products. It’s like trying to hang on to your big Ford truck with the Flat head V8 engine and still only spend $30 a month in gas. Sorry for all the grizzly man metaphors but I had to get that one out. Point is, you need a more efficient insurance vehicle.

So is there a solution?

Yes! There are now Universal Life policies can be structured to work on much less money and still provide the same amount of insurance. In fact insurance providers will also include premium guarantees that make sure the policy’s cost will never raise nor fall regardless of a fluctuating market.

Let me give you an example, earlier this year I met a 66 year old gentleman who had a $100,000 Whole Life policy through major insurance provider. I can’t tell you the name but it rhymed with Zoo Fork Life. Anyhow he had roughly $30K of cash value and his monthly premiums were over $130 per month. He called me when his wife discovered that the quarterly statement showed his policy would lapse at age 81 given its current status.

This couple told me they had no reason to pull out the cash but they needed to make sure the insurance was guaranteed forever. They had funded this policy for so many years, the idea of being left with nothing was no acceptable.

So we shopped for a better insurance vehicle and found that we could rescue all the cash that they had built up over the years for a much better future.

It turns out we moved the cash over to a brand new $100,000 Universal Life policy with a different insurance carrier using a 1035 exchange. The monthly premiums decreased to less than $50 per month and the new policy guaranteed that neither the premium nor the face amount of the policy would change, for life.  The client is now saving $50+ per month and has his insurance secure for the rest of his life.

This example is one of many that I’ve done and am currently working on. The reason that I am writing this blog is simply to warn policy holders that if you have not looked at the health of your whole life policy in the last 5 years, it is time.

What do you need to have in order to examine the health of a whole life policy?

You need to call your insurance company, and request an “InForce Ledger”. This will take a snap shot at where your policy stands, and how long it will last, based of current cash value, premiums, and current interest rates. Lastly you need a trustworthy agent from to give you a non bias opinion of whether you policy’s health is in good standing.

Lets have a look at your Whole Life policy! Set up an Appointment.

Read Part II : Stay tuned for my next blog, it gives an example of using a Fixed Annuity to rescue your Cash Value when life insurance is not an option.

A similar 2006 survey found that 58% of organizations allowed high contribution levels for their employees. The IRS currently permits people to contribute a maximum amount  to their 401(k) of $16,500 each year. For people who are age 50 or older, the additional catch-up contribution is an additional $5,500, for a total maximum limit of $22,000 a year.

This most recent survey of 401(k) practices found that 68% of employers allow employees to contribute 25% or more of their wages to their 401(k) program, according to marketing research company Business and Legal Resources.

The survey concluded that 22% of employers do not match 401(k) contributions at all, 32% match between 2% and 4% of wages, and 33% match up to 6% of wages. Among the organizations that match 401(k) contributions, 59% reported they match at least 50 cents on the dollar.

If you are in a position where your employer is limiting your ability to invest in your own retirement and future, call us for alternative investment strategies.

401K Comparison Blog

Request Annuity Illustration

and read this article:

http://www.financial-planning.com/news/hewitt-retirement-beebe-2666768-1.html?ET=financialplanning:e1462:1898045a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=FP_Daily_050510

Many of the existing retirement savings programs which are seen as standard in our market today have funding limitations. For example, business owners and highly compensated executives with a standalone 401(k) plan are limited to only 2% additional contribution above the eligible “rank and file” employees. This is unless the business elects a Safe Harbor. The Safe Harbor requires that for all eligible employees, a 3% of compensation contribution by the employer be made which has an immediate 100% vesting. As a business owner this law can be very costly. Moreover it only has a maximum contribution of $16,500 for 2009, and has not been found to help retain key employees.

There is hope! Did you know that adding a nonqualified plan to a business retirement program offers additional ways for business owners, executives, and individuals to save up for retirement. This eliminates the need to fight limitations and restrictions placed on qualified 401(k) plan contributions. Depending on the type of options selected, you can take advantage of tax benefits unavailable with other savings and investment plans.

Qualified retirement plans have limits that a properly designed nonqualified executive benefit plan helps reduce. It gives employers the ability to tailor a plan to meet the needs of the company. The plan participants are completely at the discretion of the business owner:

Benefits to non-qualified funding includes:

• Not subject to ERISA contribution and participation limits
• Certain tax advantages or financial benefits can apply, depending on plan type and financing options
• Simplified government reporting may or may not apply depending on the design and/or size of the company.
• Increases the ability to recruit top talent by building the attractiveness of the company’s benefits package
• Encourages loyalty among employees and helps secure the company executives’ financial futures
• Helps provide additional opportunities to reward the employees financially, based on the structure of the nonqualified plan

In an attempt to not give false hope to folks who have diabetes, we prefer to be clear and to the point with the stipulations surrounding our find. What we found was that when a person is diagnosed as having diabetes later in life, the condition is less life threatening and therefore favorable to insurance companies.

In short, “The Later the Better”. Some one who has been diagnosed as a child is at far more risk than someone who is diagnosed in their sixties, insulin dependent or not.

Most life insurance agents run out the door when they are confronted with someone who in insulin dependent. We want those of you out there to know that this is a common mistake and we are happy to help you get affordable coverage. We recommend specific carriers that specialize in these this particular field and we know that you will find the insurance to be affordable.

This is another situation in the life insurance industry where certain carriers have decided to be competitive with a niche market. We research these carriers in order to provide you with better service and a voice of understanding.

Get Started!

Insulin Dependent Diabetes – Why a late onset diagnosis is still insurable.

Good New!

New application processes have recently been released in order to encourage change in the life insurance industry. Companies such as Quick Life have created agent support systems that allow a Life Insurance Agent to not only collect a Life Insurance Application from their client over the internet but they don’t even require any signatures. These new “web apps” allow for data to transfer to the insurance company much faster, clearer and at less cost. Wait! Did I just say clearer? Yes I did. Did you know that most life insurance companies still receive 75% of their applications by fax? It’s fair enough to say that this trillion dollar industry needs a major overhaul. These types of processes are determined to affect the insurance company’s bottom line, and when they save money, you save money. In fact life insurance prices have dropped considerably over the last eight years, so if you haven’t compared your ten year old term policy lately, maybe you should.

Policy holders also have an option that is becoming more popular as it is offered, the “Paperless Policy”. Jackson National life is one company who has expressed an interest in offering their clients an option to access their policy online via private and secure web page. Each policy receives his/her own web address and security access information.

We see that the current methods of collecting life insurance applications and paper packed policies is coming to an end. Quite frankly, we are glad. As an agency Finish Line Insurance Services has already begun utilizing these new “web apps” and is happy to offer you the option of a “soft policy” from your insurance carrier. At the end of the day having systems like these in place help save you, us, and your insurance carrier a good deal of money. If we can all save money and help the planet stay green, we encourage it.

Thanks for reading.

1.         “Are you a full time agent?”

Due to agent commissions being reduced and expenses rising, it is becoming increasingly more difficult for agents to maintain a business office and overhead expenses. Some agents are forced to operate out of their “spare bedroom” and work a second job to make ends meet. You wouldn’t want to go to a part-time doctor so why would you use a part-time agent? Make sure the agent you are speaking with is stable and not “desperate” to make a sale. You deserve a competent, well-established agent.

2.         “Do you have errors and omission insurance?”

Reputable insurance agents carry errors and omissions insurance that will help protect themselves and the client in the event of a wrongful act or misrepresentation by the agent. You should make sure they have a policy with a face amount of at least $500K.

3.         “What area of life insurance is your specialty?”

There are many products an insurance agent can offer other than standard life insurance. These products include disability income protection, long term care insurance, Annuities or Retirement vehicles.  Make sure the agent you are speaking with fully understands the products you’re after and how they relate to your needs.

4.         “How accessible are you?”

The Internet has made shopping for many types of products as easy as clicking a mouse. Life insurance is no exception; there are many life insurance companies that assume you will go to their Web site, click the policy you want and pay. There are consumers who prefer to do business this way. But if you are a not one of them, make sure you select a life agent who shares your views on the importance of personal attention.

5.         “How often will we talk?”

Many policyholders believe that buying a life insurance policy is a once-and-done deal. The reality is that your life insurance needs change as your life changes; getting married, having a new baby, earning a big promotion or buying a big home can require changes in your policy. You will not always remember to call your agent every time there is a significant change in your life. An agent who will periodically assist in evaluating your needs could be a blessing, especially if he or she initiates the contact.

6.         “What companies do you represent?”

Asking this question is important for several reasons. First, an agent who has access to several different insurance companies will be able to shop for you – more choices means more opportunities for better terms, premiums, etc. In addition, knowing what companies your agent will go to for coverage can help you determine the financial strength and integrity of the company before the policy is offered. There are several insurance company rating services available to research this information as well as your state’s insurance department. And, by all means, question any agent who suggests placing your business with a financially unstable insurance company. Lastly, a greater selection of products may give your agent the tools he or she needs to always act in your best interest, even as your needs change over time.

7.         “What other services do you provide?”

This question can really go either way. You either are looking for a specialist that works closely with the life insurance product you are shopping for, or you want one person who can handle your laundry list of needs. Personally I tend to think that it’s better to go with an independent agent who is a specialist in a particular field. This way the agent is not held to one company and but they work with specific products that they know inside and out.

8.         “Is my policy convertible? Up to what age?”

Know whether your policy is convertible and for how long. Your policy likely has a conversion clause. That’s the line on your agreement that discusses how you may exchange your renewable term policy for another type of policy without evidence of insurability. You want to find out how for how many years your policy is convertible. And if your policy is convertible, you want to make sure you know and understand the rules.

9.           “How do I make a claim if I need to?”

Finally, know what you need to do to make a claim on the policy. Make sure it’s clearly written on your policy whom you contact and under what time guidelines you’re required to act. Also, become aware of what options the insurance company has when you make a claim. Learn how long the company has to respond to your claim.

10. “Why do you feel this product is in my best interests?”

This question will quickly drive out whether or not your agent was listening to your needs in the first place. The simple answer to this question should first state what you asked for and then address how this policy fulfills those needs.

This video is a great approach to using life insurance as an investment tool. From the way the they explain the conservative interest rates to the percentage of a clients portfolio, I was happy to see some sensible discussion regarding the topic.