Monday, July 27, 2009

The Importance of Life Insurance for Young Families

In the event of the early death of a spouse it is important to consider the financial needs of surviving family members. It is unthinkable that the surviving family members would be forced to liquidate personal assets or lose their home simply to make ends meet. It is essential in the present economy to protect our families from this type of financial hardship.

Recently a study found that as much as 75% of people who died between the ages of 30 and 55 left their spouses without adequate life insurance coverage.1

Choosing the Right Coverage

It is important to be well informed when choosing what coverage is best for you and your family. Two types to consider are permanent life insurance and term life insurance. Whether you decide on one type or the other will be based on your specific needs.

Permanent life insurance provides lifetime coverage so long as the premiums are paid when due and also includes the added benefit of accumulating cash value in the policy.

Term life insurance or "temporary" life insurance provides coverage for a specific or designated period of time.

To fully understand your insurance needs you must outline not only the present financial needs of the family but also those projected in the future. Financial obligations such as mortgage payments and other recurring debt payments are key to calculating the right amount of coverage needed. Future factors may include college tuition for your children and retirement plans for your spouse. These factors should be combined with your present source of income and that of your spouse, if any, to determine the right amount to purchase.2

Be Prepared

Since we are unable to predict the future and often life can change in an instant it is essential to plan ahead. It is important to follow these unexpected changes with the evaluation of your life insurance coverage. Such steps will ensure that your family remains financially secure.


1) National Association of Insurance and Financial Advisors (NAIFA) 2004
2) The cost and availability of life insurance depend on such factors as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely there may be surrender charges and income tax implications

Tuesday, July 21, 2009

Good Today, Even Better Tomorrow

From: LFG.com

Preparing for the potential need for long-term care makes sense, especially if you can help protect your existing assets at the same time. Your loved ones may also appreciate your preparations.

Lincoln MoneyGuard Reserve provides guaranteed benefits you can tap into to reimburse qualified long-term care costs, helping to protect assets you've set aside for retirement. It offers a simple solution that makes sense for today and for tomorrow.

Paid with a single premium, Lincoln MoneyGuard Reserve provides multiple benefit options to cover an individual's needs. It includes a money-back guarantee, minimum death benefit and long-term care benefit guarantees.

Lincoln MoneyGuardReserve:

* Helps you pay for long-term care if you need it
* Provides an income tax-free death benefit if you don't
* Offered with a money back guarantee*
* A way to help protect your retirement income from the risk of long-term care expenses

Monday, July 20, 2009

Health Savings Accounts - Questions and Answers

Health Savings Accounts - Questions and Answers

A Health Savings Account (HSA) is an alternative to traditional health insurance that offers consumers a different way to pay for their health care. HSAs enable you to pay for current and future health expenses on a tax-free basis, while an attached high-deductible insurance policy protects you against catastrophic expenses.

Here are answers to some common questions concerning HSAs:

Can anyone open an HSA?

To be eligible for an HSA, you must be under 65 years old, and covered by a qualified high-deductible health policy (QHDHP).You are ineligible if covered by another health insurance policy (except coverages such as cancer, dental, disability, long-term care or vision insurance) that isn't a qualified high-deductible plan.

Where can I open an HSA?

Accounts can be established with banks, credit unions, insurance companies and other approved companies. Your employer may also set up a plan for its employees as well.

What is a QHDHP?

To qualify the policy must meet current IRS requirements. For 2009 the requirements are as follows:

* The deductible must be at least $1,150 for individuals or $2,300 for families.
* The annual out-of-pocket expenses cannot be greater than $5,800 for an individual or $11,600 for a family.
These figures include the deductible and any co-insurance, but not the premiums.

How much can I contribute to an HSA?

Limits are updated annually by the IRS. For 2009, the contribution limits are $3,000 for singles and $5,950 for families. However, if you are 55 or older, you can contribute an extra $1,000.

What happens to unused funds at the end of the year?

The unused balance in an HSA automatically rolls over year after year. You won’t lose your money if you don’t spend it within the year.

How do I receive the tax benefits?

If you have an HSA through your employer, you may be able to make pre-tax payroll contributions. Otherwise, your contributions will be deductible when you file your taxes, even if you don't itemize. Also, you are eligible to make a full contribution regardless of income unlike IRAs.

What is a qualified medical expense?

Qualified medical expenses are defined in IRS Publication 502, Medical and Dental Expenses (available at www.irs.gov).

Can my HSA be used to pay for a family member's medical care?

Yes, you may withdraw funds to pay for the qualified medical expenses of yourself, your spouse or a dependent without tax penalty. This is one of the great advantages of HSAs.

Can I pay health insurance premiums with an HSA?

You can only use your HSA to pay health insurance premiums if you are collecting unemployment benefits or you have COBRA continuation coverage through a former employer.

Can I use the money for non-medical expenses?

Yes, but you'll be hit with a 10% penalty plus income tax on the amount of your distribution. However, after age 65 the 10% penalty is waived on non-qualified distributions which enables your HSA to effectively serve as a retirement supplement.

I have an HSA but no longer have HDHP coverage. Can I still use the HSA?

Once funds are deposited into the HSA, the account can be used to pay for qualified medical expenses tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds.

With an HSA can I still contribute to an IRA?

Absolutely, your HSA contributions won't affect your ability to contribute to an IRA in any way.

Monday, July 6, 2009

Conseco Worksite Critical Illness

Conseco Worksite Critical Illness offers lump-sum benefits for today’s most common critical illnesses, including cancer, cardiovascular disease and major organ transplants. The product is available in three simple plan designs: cancer-only coverage, a critical illness without cancer coverage, and a critical illness with cancer coverage.

Conseco Worksite Critical Illness offers benefit amounts up to $75,000 (in $5,000 increments,) and guaranteed issue for coverage up to $20,000. Benefits are paid for diagnoses in three Health Diagnosis Categories (HDCs): heart attack, stroke; end-stage renal failure, major organ transplant and loss of sight; and cancer. The coverage pays first diagnosis and recurrence benefits in each HDC. A return-of-premium or cash-value rider is available in certain states, and guaranteed issue is available for employer groups that meet minimum participation levels.

Consumers Need Access to Affordable Health Care Options

Congress is considering a play or pay mandate for employers (Cover 60% of cost or pay $750 per employee) and limiting their access to professional assistance by licensed insurance agents. Help your lawmakers understand your concerns and the critical role of the agent.

Contact your Members of Congress. It always has a greater impact if you use your own words when providing your input to members of Congress. So please take a few minutes and "personalize" the sample letter.
http://www.congress.org/congressorg/officials/congress/

Thursday, July 2, 2009

How Will Your Beneficiaries Receive Your Death Benefit?

Everyone knows that the purpose of buying life insurance is to provide a benefit to your survivors. But how do the people you name as beneficiary of your life insurance policy actually receive the funds? For some people who buy life insurance, the thought of a $250,000 check going directly to their loved ones is comforting. For others, it is a nightmare.

The first thing to remember is that you cannot control how the death benefit is paid out unless you make a trust your beneficiary. If you've named individual family members as the beneficiaries of your life insurance policy rather than a trust, then the beneficiaries will determine how they receive the death benefit. If you've chosen multiple beneficiaries, they will each be entitled to choose their own payout option.

Your beneficiaries will have many different options to receive their funds. The payout options should be outlined in your policy and, since this is part of your family's future planning, it is important to take some time to discuss with them the benefits and drawbacks of each payout option. Here are some of the most common options:

1. Lump Sum: A lump sum death benefit works much as you would expect. Once the death claim has been evaluated and approved, a lump sum payment goes out to your beneficiary. If you chose only one beneficiary, that person will receive the entire benefit. If you've chosen multiple beneficiaries, each will receive a check in the amount of the portion for which they are entitled.

2. Interest Income Only: Your beneficiaries may choose to leave the lump sum death benefit with the insurance company and instead only receive a monthly payment of interest that is earned by the lump sum at either a fixed or variable rate. When choosing the interest income option, your beneficiaries will be asked to name a beneficiary to receive the invested funds in the event that they pass away.

3. Life Income: Death benefit proceeds can be treated as an annuity and the life income payout option is one example of this. With the life income method of payout, your beneficiary is guaranteed a certain income for life. When choosing this option, it will be important for your beneficiaries to remember that when they die-even if it's after just one payment-the remaining proceeds will be forfeited. However, if they live long enough they could outlive the death benefit proceeds and still receive monthly payments.

4. Life with Period Certain: Life with period certain works like life income payouts, except that the monthly payouts will be smaller because the insurance company guarantees a certain number of payments-even if the beneficiary dies. In the event of the beneficiary's death, the remaining payments from the period certain will be paid to whomever the original beneficiary chose as their beneficiary.