Five Rings Financial

Recently I partnered with Five Rings Financial. I think it's a great move for me and my clients. I can offer my clients more products and great services. Five Rings Financial is an Independent Marketing Organization representing many of the world's largest Financial Services Companies and dedicated to serving the financial needs of individuals, families and businesses from all walks of life. Although a national company in one of the world's most vital industries, our thousands of local independent associates and managers offer hometown value, service and education to each client, providing them the opportunity to achieve one of their most desired goals: financial independence. Every month we offer local Money 101 educational dinners as well as a series for women called Wine, Women, & Wealth. Wine, Women, & Wealth is always held at the Wine Spot in Carlsbad, CA. The Money 101 seminars are held in San Marcos, CA and Torrance, CA. Please follow me on Twitter (www.twitter.com/thewic) or Facebook to see the invitations to these monthly complimentary educational events. I would love to have you attend! I look forward to waking up each day and assisting my clients with their financial needs. As a Financial Representative with Five Rings Financial, I get to assist clients with saving money on their health insurance,life insurance and auto insurance and at the same time assist them with saving for their future. Five Rings Financial, Creating Opportunties, Income, Security & Wealth. KSWZ Insurance Services, I don't sell products, I build relationships.

Return of Premium Rider Makes Life Insurance Buying Easier

Since term life insurance policies accrue no cash value, most policyholders see no return on their investment unless they pass away during the policy’s term and a death benefit is paid out to their beneficiaries. This is true of any insurance policy—if your home never burns to the ground or your car accident history is squeaky clean, you’ll never see one dollar from your homeowners’ or car insurance.

Wouldn’t it be nice if your term insurance policy could act like a piggy bank for you—storing your premiums up for a full refund should you outlive the policy? Believe it or not, with the right rider added to your policy, it can. Unlike other types of insurance, many term life policies offer a return of premium (ROP) rider that guarantees a return of the premiums paid if you outlive the policy.

When a ROP rider is added to your policy, your premiums will increase. When determining whether the ROP rider is in your best interests, you must consider whether the funds paid for the rider would be better invested elsewhere.

As an example consider a ten-year term life insurance policy with a premium of $600 per year. If the ROP rider adds an additional $300 per year, you will pay $900 per year or a total of $9,000 over the life of the policy. At the end of that ten-year term, you will receive the entire $9,000 back from the insurance company.

Otherwise, without the ROP rider, you’d have an extra $300 per year to invest—but you would need to earn greater than 16% per year to accumulate $9,000 after ten years. In addition, refunds received under the ROP rider are tax-free, while you’ll pay income taxes on interest earned in your savings account.

There are certain conditions you must meet to receive the return of premium guaranteed by the rider. If you forget to make a premium payment or allow your policy to lapse, you may no longer be eligible for the full premium payout of your policy, so it is important to keep the policy in force or you will be wasting the extra premium dollars you send to the insurance company.

Building a Financial Safety Net for Life Emergencies

If you faced a life crisis, would your finances survive the turmoil? Unfortunately, most people are not prepared for the financial trauma a life emergency can create.

Take Tom and Sue Smith for example. Tom, the owner of a deli, was diagnosed with cancer shortly after his 64th birthday. Three months later, he was dead. Sadly, Sue didn't have much time to grieve over the loss of her husband-she was too busy scrambling to find the money to save his business from bankruptcy. Sue struggled to keep the business running for another year until she was finally able to sell the deli.

Each year, millions of Americans have their lives turned upside down by ill-fated events-whether it's the death of a spouse, an illness in the family, job loss, divorce or disability. Unfortunately, many of these people suffer even more because the crisis puts their finances in such a precarious position. They struggle to pay their mortgage and the bills and they often end up draining their retirement accounts.

The shocking statistics

In today's tumultuous economy, countless families are facing diminishing home equity and the threat of a job loss, and soon-to-be retirees are watching their nest eggs dwindle. However, most people are simply not prepared financially for a life crisis-at least according to a new survey sponsored by AARP Financial. This survey of adults ages 40 through 79 examines how well people prepare for life emergencies-and the results are eye-opening.

Two out of every five participants say they would be scrambling for cash if they were blindsided by an emergency. Among those who have had life crises, 40 percent say they were not prepared financially. Out of those who have lost a job at some point, only 12 percent say they were ready for the change, and 44 percent were angry at themselves for not being better prepared. And the odds of facing an emergency are surprisingly high-57 percent of those surveyed have been through at least one life crisis.

Considering the stats, we will all most likely face a life crisis at some point-which means you simply cannot afford to be unprepared. So, how do you get financially ready for these kinds of emergencies? Here are five preparation tips:

Tip #1: Expect the worst and hope for the best

No one enjoys thinking about the possibility of becoming sick or losing their job or spouse. But if you want to be prepared, you have to expect the worst and hope for the best. Some financial experts say a good way to plan for a life crisis is to figure out how you would live off just half of your current income. While that may be a frightening thought, it may become necessary if the heat of a crisis.

Tip #2: Start saving

The best way to prepare for a financial crisis is to build a safety net-in the form of an emergency fund. Without an emergency fund, many people end up dipping into their retirement accounts during a life crisis. Before long, their nest egg has disappeared.

The amount of money you should have in your emergency fund depends on your unique situation. Most financial experts say you should keep between three and six months worth of living expenses in your fund. Set realistic goals and start small. Even if you put just $10 to $30 aside each week, you'll slowly build up a suitable emergency fund.

Tip #3: Purchase disability insurance

According to AARP Financial's survey, 84 percent of people under 60 have life insurance, but only two-thirds have disability coverage. Seeing as major illness or disability is the number two most common cause for financial hardship, you are taking a huge risk if you don't have disability insurance.

Although you may have disability insurance through your employer, be sure to read the fine print. It may not be enough to cover your expenses if you were to become sick or disabled-which means you may need to purchase supplemental insurance.

Tip #4: Manage your finances together

If just one spouse makes all the money and all the money decisions, this can lead to problems. Many financial experts recommend that married couples take equal part in managing the finances-especially if one spouse is the primary breadwinner. Not only will this allow you to budget and invest wisely, but it will also teach you to not fight about money.

Plus, if you end up getting a divorce, you'll already be accustomed to sharing money decisions-which means you'll have the skills you need to compromise and avoid unnecessary drama.

Tip #5: Act quickly

Most life crises come without warning. That means you should be prepared to take action at a moment's notice. Most people tend to freeze up when they face an emergency. However, experts say that you'll be more likely to survive a crisis if you take action as soon as possible.

When you're in the trenches of financial distress, you can't worry too much about what tomorrow will bring-this will just paralyze you with fear. Try to live in the present and make the wisest financial decisions you can today. Take things one day at a time, and remember that this too shall pass.


Above all else, don't be afraid to ask for help. Most people who have faced financial crises say their family and friends helped them through it and offered them the most valuable advice. Remember, you are not alone in this-whether you turn to a sister, a cousin or a trusted financial advisor, be sure to ask someone for guidance.

Term Life Insurance

Term life insurance is perhaps the most basic form of life insurance. It usually provides affordable protection, often with a guaranteed premium, for some period of time. If the insured should die while the policy is in force, the face amount is paid to the named beneficiary. At the end of the premium guarantee period, the insured can renew the coverage at a higher premium. The premium for term life insurance is initially lower than a comparable permanent insurance policy; however, it can increase at each renewal. This initial lower premium usually makes term insurance an ideal choice for individuals with a temporary need for life insurance protection.

Survivorship Life Insurance Can Protect Assets for the Next Generation

Life insurance can serve a number of purposes in addition to providing a death benefit for a dependent spouse or children. Some policies, especially a specific type known as survivorship or second-to-die insurance, can also be an effective asset preservation technique for estates of various sizes.

Survivorship insurance is a single life insurance policy that covers two individuals, generally husband and wife. These policies compliment the marital estate tax deduction, which defers estate taxes until both spouses pass on. The survivorship policy does not pay out until the second spouse dies. The premiums are relatively low when compared to purchasing individual life insurance policies.

There are numerous estate transfer scenarios in which applying survivorship insurance is extremely advantageous, including:

Preserving Qualified Plan Money

If you are hoping to pass on untapped IRA or 401(k) retirement accounts to the next generation, you will be disappointed to learn those hard-earned assets could be reduced by as much as fifty percent once all taxes are applied. By purchasing a survivorship policy of a value equal to the estimated taxes, the policy, rather than your qualified plan accounts, can fulfill the tax burden. This same approach can be used for other assets of your estate that are subject to hefty taxes.

Charitable Contributions

The same approach can be used for transferring assets to a charity upon your passing. This ensures that the qualified not-for-profit organization will receive your donation dollar-for-dollar. You can deduct the cost of life insurance premiums from your taxes if you name the charity as both beneficiary and owner of the policy.

Non-liquid Assets

A survivorship policy is also well suited for assets that are not liquid and which the heirs will not want to sell in order to fund the estate taxes. This approach is commonly applied to real estate and family businesses. In cases where not all of the children are interested in running or being invested in the family business, a child could use their share of the survivorship insurance benefit to purchase their siblings' share of the business.

Caring for Special Needs Children

When a family has a child with special needs, the child will likely need financial support their entire life. Who will pay for that individual's care once both parents have passed on? A survivorship policy can provide a large death benefit at a discounted cost. The policy can be structured in conjunction with a special needs trust to ensure that funds will be properly managed and to preserve other government funds that the child may be qualified to receive.

Insurance for a Spouse in Poor Health

A survivorship policy can be a solution for a spouse who is in relatively poor health and cannot obtain a life insurance policy on their own. As long as one spouse is in good health, they generally can obtain a joint survivorship life insurance policy.

To achieve the desired estate planning intent of the survivorship policy, the insurance benefits need to be excluded from the couple's estate. You should consult with an estate-planning lawyer to structure the estate so that neither spouse has ownership rights to the policy. There are several options, including setting up a trust or assigning the rights of the policy to another individual such as an adult child of the insured.

You Never Out Grow Your Need for Life Insurance

The insurance rating company, A.M. Best & Co, reported that less than half of all American households have any life insurance other than that provided by an employer. Why have so many Americans turned their backs on life insurance? There are several answers to that question.

With all of the media focus on living longer and preparing for retirement, Americans have shifted their concentration toward saving for retirement by putting their money into tax-favored accounts. Life insurance companies have been marketing the investment aspects of policies rather than death benefits in spite of the fact that most consider life insurance a poor investment choice. Class-action lawsuits against insurance companies alleging product misrepresentation have also contributed to life insurance earning a bad reputation.

The chief reason to buy life insurance is the protection it provides through the death benefit. The proceeds your beneficiaries receive can replace the income they lost as a result of your death and provide for future needs, such as paying for a child’s education. Investing in the stock market is not a substitute for life insurance. For one, life insurance guarantees a return for the money you pay in premiums. Even under the best market conditions, you are never guaranteed a return on the money you invest in stocks or mutual funds. In fact, most brokers advise that you invest only money you can afford to lose. Even if you do manage to assemble a stock portfolio that provides a reasonable rate of return, that return must accumulate over time in order to grow large enough to cover your family’s long-term needs. The problem arises if you die before amassing the amount needed. With life insurance, the death benefit is available whenever you die.

The other issue with leaning on a stock portfolio to cover long-term financial needs is that portfolio values never remain constant. As market conditions change, so does the value of your stock portfolio. If the market happens to be in a down cycle when you die, asset values will be reduced at the time your family needs them the most. If they have to sell assets, not only will they fail to net as much money as you would have hoped, they will also have to pay taxes on any capital gains. With life insurance, they can receive death benefits tax-free and with proper planning, they will avoid paying estate taxes on the money as well.

Talk with your insurance agent to determine how much insurance you need to best protect your family’s finances in the event of your death. And never overlook the death benefit value of life insurance.