Blog Archives - PFwise.com

3 Considerations When Shopping For Life Insurance - Part C

9/30/2019

In last blogpost, we discussed riders and convertibility of a life insurance product, now we will discuss the last consideration.

How to Buy Life Insurance

There are a number of outlets for term life insurance where you can buy online and many people do. However, it may make sense to buy your policy from an experienced financial professional. Yes, those selling insurance usually get paid on commission. But the policies they offer are, in many cases, the same as the ones you will find online, so typically you won’t pay more for going through an agent.

And there can be some advantages. First, a financial professional can help you determine how much coverage you really need, and that may be the most important buying decision you make. Many people try to make an educated guess. And many companies offer online calculators to help gauge approximate needs.

But actual life circumstances and financial needs vary from individual to individual and can call for more refined and established methods of determining what type of insurance and how much coverage is needed. Financial professionals can help you make that determination.

In addition, an experienced life insurance agent can also recommend a policy that is the best fit for you based on your age and financial goals. They also know the companies and policies they sell, and can answer all your questions. They can shop for the best rates and help you through the underwriting process.

Buying life insurance is an important financial decision. That’s why it is important to get the right amount and type of coverage to protect the financial security of the people that depend upon you every day.

3 Considerations When Shopping For Life Insurance - Part B

9/29/2019

In our last blogpost, we discussed the types of life insurance products, now second consideration.

Riders and Convertibility Considerations
Beyond basic price are other factors to consider when shopping for a policy. For instance, there are some additional benefits, often referred to as “riders,” that you may want to add to your policy.

One is the disability waiver premium rider. This benefit waives your premium and keeps your life insurance in force if you were to become disabled and were unable to work. Look closely at this rider when shopping, because some companies offer very competitive basic policy rates, but their rates for benefits like waiver may not be that competitive.

Another feature that you may want to consider is buying a term policy with an option to convert the coverage to permanent life insurance at a later date. Many policies offer some type of conversion option. But you should consider which permanent policies you can convert to and how many years you have to decide if you want to convert. Some companies limit the policies you can convert to and exclude their most competitive products, or they have very short conversion periods.

Convertibility is important for a couple of reasons. First, term life insurance only provides coverage for a limited period of time. Your coverage may run out when you still need life insurance. When that happens, you may decide to get a new term insurance policy. But you will be older, so your premiums will be higher.

In addition, if you have developed any health issues, you may not be able to get coverage at an affordable price. Converting some or all of your term life insurance to permanent coverage can help ensure that you have coverage that you can keep for as long as you need it. In fact, it may make sense for you to buy some permanent life insurance while you are young, just because it is far more expensive when you get older.

Another reason that a conversion option is important is if you were to become disabled. If you are permanently disabled and you have waiver of premium on your policy, you can convert your term life policy to permanent coverage, and with many companies the premium for the permanent coverage will be waived.

Another thing to consider is the quality of the company you are buying your policy from. Reliable life insurance companies are generally rated on financial strength by several ratings agencies. These include A.M Best, Moody’s Investors Services, Fitch Ratings, and Standard & Poor’s. Financial strength ratings are a key indicator of a company’s ability to meet its financial obligations. Look for a company that has solid ratings.

You might also consider how policyowners (and beneficiaries) rate their service. Many good companies have some type of customer service ratings or awards.

In our next blogpost, we will discuss how to buy life insurance.

3 Considerations When Shopping For Life Insurance - Part A

9/28/2019

September is life insurance awareness month, we will use three blog posts to explain 3 considerations when shopping for life insurance products.

Determine What Types of Life Insurance Do You Need

To make an informed decision, you must first educate yourself on the various types of life insurance products available.

Term life insurance, which provides death benefit protection for a limited number of years (terms), offers the lowest premiums. That’s why most young people start off buying it.

The most popular policy types are 10- and 20-year term life insurance. But 5 to 40-year terms are available. These policies offer guaranteed level premiums. The longer the coverage period, the higher your premium will be. This is because insurance costs increase as you age. The insurance company calculates a level premium that will cover all the costs over the term period.

There is also an annually renewable term (ART) policy, where the premium covers one year of coverage at a time. These generally start out with a lower premium than level term, but become more expensive after only a few years. In general, ART only makes sense if you are only going to need coverage for a short period of time.

Permanent life insurance, generally whole life insurance and universal life insurance, offering a guaranteed death benefit for life, not just a defined number of years. In addition, permanent life insurance policies can also build cash value and, in some cases, the opportunity to earn dividends, which are not guaranteed.

As a general rule, a term life insurance policy offers the most basic coverage at the most affordable price for many people. Indeed, term insurance is usually quite affordable for those who are young and in relatively good health and is the kind of policy most people start out with. For this reason, the term life insurance market is very competitive.

This leads to some pricing tactics shoppers should be aware of. For example, some companies offer very low premiums for “super” preferred applicants, but only a small percentage of applicants actually qualify for that rate. So you may apply for their best rate, go through a medical exam, and a month later the insurance company offers you coverage, but at a higher premium rate.

In next blog post, we will explain Riders and Convertibility.

A Good Term Life Product For NY

9/27/2019

American National's Signature Term Life product is great for NY for its affordability, conversion feature, and living benefits riders that no other carriers' term life products can match!

Stocks and Bonds: Which To Include In Roth IRA?

9/26/2019

Q. Should I include stocks or bonds in my Roth IRA account?

A. Stocks. Here is why:

1) Roth IRA has no RMD requirements which means the investment horizon is longer than traditional IRA.

2) With no tax implications, you should put your most aggressive investment in Roth and let it run and maximize potential tax-free growth.

3) Bonds tend to have moderate returns so its tax bit from traditional IRA account when to take it out is smaller when compared with stocks.

4) If you hold stocks in regular IRA, you might have to sell them for a loss if the market tumbles and you have to take a required distribution, there is less risk of this happening to bonds.

College Education Funding With Guaranteed Universal Life (GUL)

9/25/2019

Below is an article from American National about how to use its Signature GUL product for collect education planning.

There are many ways to cover the cost of a college education. The cost of a college education has gone up to the point that it is difficult to pay for and college loans follow the graduate for the remainder of their lives due to the interest on the loan and the long repayment schedules.

Many individuals point out that 529 Education plans are the way to fund college education. If the money is used for qualified education purposes it can grow tax-free and be removed from the plan tax-free. However, if the money is not used for qualified college education costs, the growth of the money becomes taxable and subject to penalties when withdrawn. Also, typically the money is conservatively invested for lower growth and safety but is still subject to market downturns. The plan is not self-completing in the event a parent or grandparent funding the plan dies. 529 Plans have funding limits subject to annual gifts (five years at a time). Lastly, 529 plans only serve one purpose and that is college funding.

Funding College Education with Life Insurance
An advantage of life insurance not enjoyed by any other funding vehicle is that the plan is self-completing if anything happens to the individual funding the policy. If someone dies, they will know they have fully funded the education obligation. Any other savings vehicle may suffer a shortfall if the individual funding the education plan dies before funding is completed. Cash Value in a permanent life insurance policy is not currently a countable asset when applying for FAFSA financial aid.

Signature Guaranteed Universal Life
Signature GUL has unique features that can make this a match for saving for college education. The death benefit is guaranteed if premiums are paid and no loans are taken so that if a premature death occurs the death benefit will be there to help cover the cost of college education needs. Signature GUL also has the Guaranteed Cash-Out option that allows a partial return of premium after 15 years and a full return of premium after 20 and 25 years, up to the Cash-Out benefit maximum. Depending upon the timing, the policy can be turned in for a return of premium and the premiums can be used to fund college education. In the meantime, the individual funding the policy has guaranteed protection to self-complete the education funding needs and cover other needs as well.

Case Study:
Darrell and Christine, age 35, felt they needed life insurance protection for Christine and their two young children in the event something happened to Darrell, who was the primary means of support.

The couple also wanted to have the option to help their children pay for their education. They talked to their Financial Advisor and determined a $500,000 Signature GUL policy could help cover several of the risks faced by their family.

In the event that something were to happen to Darrell, they would have protection for the family that could cover education costs for the children, pay off the family home, provide Christine funds to run the home, and provide some funds to put away for her retirement.

Then, the Financial Advisor showed them that the Cash-Out Rider included on the Signature GUL policy would allow them to surrender the policy in exchange for a partial return of premiums at the 15th anniversary or a full return of premiums paid at the 20th, or 25th anniversary1. If the family found they no longer required insurance on Darrell, the premiums paid over the years could be paid out and re-purposed to help pay for their children’s education or student loan repayments.

Lastly, their advisor added that the policy also included Accelerated Benefit Riders for Critical, Chronic, and Terminal illnesses2. In the event that Darrell was diagnosed with a qualifying illness, he may be able to accelerate all or part of the death benefit and receive an unrestricted cash benefit giving Darrell and Christine the option to assist with their children’s education even in the event that Darrell suffered an illness that made him unable to work.

The Best Annual Withdrawal Rate From A Retirement Portfolio

9/24/2019

Q. How much can I safely withdraw from my retirement portfolio?”

A. While there are so many personal variables to factor in, you can actually determine the best annual withdrawal rate, based on the analysis below.

The analysis below is based on a portfolio composed of four primary asset classes with annual rebalancing:

large U.S. stock (40%)
small U.S. stock (20%)
U.S. aggregate bonds (30%)
U.S. cash (10%)

Large stock is represented by the S&P 500, small U.S. stock is represented by the Ibbotson Small Stock Index from 1961 to 1978 and the Russell 2000 Index from 1979 to 2018. U.S. bonds are represented by the SBBI U.S. Intermediate Government Bond Index from 1961 to 1975 and the Barclays Aggregate Bond Index from 1976 to 2018. U.S. cash is represented by 90-day Treasury bills.

A starting balance of $1 million was assumed at age 70. The four-asset retirement portfolio was tested using 15 different withdrawal rates ranging from 1% to 15% for each of the 34 rolling 25-year periods.

The results were compiled and averages computed. The impact of taxes was not accounted for. This analysis also assumes the retirement portfolio was not subject to the RMD, which would be the case for a Roth IRA account.

A 6% withdrawal rate is highlighted because it represents the highest withdrawal rate that never produced an ending balance lower than the starting balance of $1 million.

The withdrawal rate of 8% is highlighted because it represents the withdrawal rate that maximized the average annual withdrawal. In this case, it was $103,844.

Can a Roth Conversion Affect Tax On Long-Term Capital Gains? Part C

9/23/2019

In last blogpost, we discussed stealth-type tax increases result from the increase in adjusted gross income from a Roth IRA conversion. Now we will show some examples.

Roth IRA conversion income is ordinary income and is taxed the same as wages, pensions and other IRA distributions and short-term capital gains.

A married couple filing jointly has no income other than a $100,000 LTCG. In 2019, they will owe zero tax. The LTCG of $100,000 is first reduced by the standard deduction (assuming both spouses are under age 65) of $24,400, resulting in a net LTCG of $75,600, which is under the $78,750 limit for the 0% rate, so no tax will be owed.

Now let’s add a $50,000 Roth conversion. That will increase the tax on the LTCG from zero dollars to $7,028. The tax on the Roth conversion is only $2,684, but the total tax bill will be $9,712.

The $50,000 Roth conversion (or any other additional ordinary income) will get taxed first using the ordinary income tax brackets. The $50,000 Roth conversion (assuming this is the only other income) will be first reduced by the 2019 standard deduction of $24,400, leaving taxable ordinary income of $25,600, and that amount reduces the 0% capital gains bracket available for the $100,000 LTCG.

The $25,600 is taxed using the regular tax brackets, so that tax is $2,684. Here's the math if you'd like to follow along:

$19,400 at 10% = $1,940
$6,200 at 12% = $744
$25,600-----------$2,684

The $100,000 LTCG tax now goes from zero to $7,028. That’s a substantial — and often unexpected — increase.

The benefit of the zero to $78,750 LTCG bracket is reduced by $25,600, which was taxed at ordinary income tax rates, so only $53,150 is being taxed at 0% (the $78,750 less the $25,600 = $53,150). The remaining $46,850 of the $100,000 LTCG is now being pushed into the 15% LTCG bracket and the tax on that $46,850 x15% = $7,028.

$53,150 at 0% = $0
$46,850 at 15% = $7,028
$100,000--------- $7,028

Bottom line: In this simple example, the $50,000 Roth conversion was not only subject to its own ordinary income tax of $2,684, but also triggered a $7,028 tax on the LTCG that, without the Roth conversion, would have incurred zero tax.

Now let’s say we change the example by adding a Roth conversion of $120,000 to the LTCG of $100,000. The $120,000 Roth conversion eliminates the entire benefit of the 0% LTCG bracket, triggering a LTCG tax of $15,000 — all at 15%, and none at 0% on a LTCG that, without the Roth conversion, would have incurred zero tax. In addition, there will be a tax of $12,749 on the Roth conversion, for a total tax bill of $27,749.

Can a Roth Conversion Affect Tax On Long-Term Capital Gains? Part B

9/22/2019

In last blogpost, we discussed Roth Conversion could significantly affect tax on LTCGs. Now we will discuss some other stealth taxes triggered when income is increased by actions like a Roth conversion.

Stealth taxes are other indirect tax increases that occur when income is increased. If not addressed, one may see a higher tax bill than was planned. That won't go over well at tax time next year.

Some of these stealth-type tax increases result from the increase in adjusted gross income (AGI) from a Roth IRA conversion. AGI is a key amount on the tax return and an increase can cause the loss of valuable tax deductions, credits and other benefits.

Some of these well-known items include:

medical deductions;
additional taxes on Social Security benefits and Medicare surcharges;
education-related tax benefits (and financial aid eligibility);
child tax credits; deductible real estate losses;
Roth and IRA contribution limitations;
as well as the new 20% deduction for qualified business income, aka “the 199A” deduction available to certain self-employed business owners

These stealth increases add to the tax bill for a Roth conversion. But Roth conversions can also substantially increase the tax on long-term capital gains.

These very favorable LTCG rates generally apply to capital assets held for more than one year. The rates have been made more attractive by the tax law change. For example, the rate is 0% for capital gains of up to $78,750 in 2019 for a married couple filing jointly. But a Roth conversion can reduce or even eliminate the benefits of the lower capital gains rates. This is something that is not widely noticed until it is seen on the completed tax return, which, of course, is too late. Capital gains should be added to the list of stealth taxes to be considered when projecting the true overall tax cost of a Roth conversion.

In next blogpost, we will show some examples how if Roth IRA conversion not carefully planned could drive up taxes.

Can a Roth Conversion Affect Tax On Long-Term Capital Gains? Part A

9/21/2019

Q. Can a Roth conversion affect the taxation of long-term capital gains?

A. Yes, and could be significantly if you are not careful!

That’s because Roth conversion income, like all other ordinary income, reduces the benefit of the LTCG rates, increasing the overall tax cost of the conversion. This interplay can easily throw off even the best tax projections, especially when they rely on the low (or even 0%) LTCG rates stated in the Tax Code. When there is additional ordinary income, like Roth conversion income, those favorable tax brackets are not as attractive as they appear to be.

What's worse, Roth conversions cannot be undone anymore — the tax law changes eliminated recharacterization of Roth IRA conversions beginning in 2018 — one should be careful to do an accurate projection of the tax effect of a Roth conversion. But the permanency of a Roth conversion does not mean it should be avoided. Roth IRAs still offer long-term tax benefits — mainly tax-free growth and no lifetime required minimum distributions for Roth IRA owners, allowing more tax-free accumulation and a hedge against future tax increases.

In fact, if IRA funds are not converted, eventually those IRA funds will be subject to RMDs and those RMDs will similarly cause an increase in capital gains taxes — and at possibly higher future tax rates. That’s why Roth conversions should still be seriously considered while today’s tax rates are at historic lows. However, the tax cost of the conversion needs to be more accurately projected since the tax due cannot be reversed.

In next blogpost, we will discuss some other so-called stealth taxes triggered when income is increased by actions such as a Roth conversion.

What Is Waiting Period For Roth IRA Conversion?

9/20/2019

Q. If I convert a traditional IRA to a Roth, how long do I have to wait to take penalty-free withdrawals?

A. You have to wait 5 years from the start of the tax year in which you made the conversion. That means if you convert a regular IRA to a Roth IRA in January 2020, you must wait until January 2025 to avoid penalties. But depending on when you convert your account, you may not need to wait a full 60 months.

For example, if you convert an account in December 2020, you will still need to wait until January 2025, which means your countdown will have 11 fewer months.

How To Find A Financial Adviser Who Acts In Your Best Interest?

9/19/2019

Q. How could I find a financial adviser who acts in my best interest?

A. Here are four ways to find an adviser who acts in your best interest -

1. Look for an adviser who structures his or her business to minimize conflicts of interest. You can find them among fee-only financial planners through the National Associations of Personal Financial Advisors (www.napfa.org).

2. As of Jun 30, 2020, the CFP Board will begin enforcing the new standard that holds a certified financial planner to a fiduciary duty for all the financial advice they dispense. (Under the current standard, CFPs have a fiduciary duty when they engage in financial planning but not more generally when giving advice)

3. As the adviser to sign a fiduciary oath (you can download one at www.thefiduciarystandard.org). It documents the agreed-up standard of conduct in case you get into a dispute, and it's a way to separate the wheat from the chaff because non-fiduciary advisers won't want to go near it.

4. You can also look for firms with Centre for Fiduciary Excellence certification (CEFEX) at www.cefex.org. These firms have agreed to adhere to fiduciary best practices and undergo audits to ensure that they are doing so.

GUL Is Leading the Competition

9/18/2019

American National's Guaranteed Universal Life (GUL) provides guaranteed lifetime Death Benefit protection and three guaranteed periods that allow the insured to cash-out their policy.

GUARANTEED DEATH BENEFIT
You can determine the face amount and guarantee length between ages 95 to 121. The Death Benefit is guaranteed to the chosen age, assuming all premiums are paid as scheduled.

GUARANTEED CASH-OUT RIDER
During a 60 day period following the 15th, 20th, and 25th policy anniversaries, the rider allows for surrender of policy in exchange for a partial or full return of premiums paid. Added to the policy for no additional premium for issue ages 18-70.

ADDITIONAL RIDERS

Accelerated Benefit Riders
Disability Waiver of Stipulated Premium Rider
Children’s Level Term Rider

If you are interested, please contact us to run GUL quotes for you.

How Top Funds Use Factors To Remake Asset Allocation

9/17/2019

For years, advisors have used active fund managers to target factors, including value, low volatility, capitalization size, momentum, dividend yield and quality to obtain higher returns for clients.

These days, however, with more than 370 U.S equity smart beta ETFs that feature one or more factors available, advisors have the tools to supercharge their own asset allocation strategies.

What does "quality" mean for top providers? Below are some examples:

Top 5 Common 2020 Tax Problems

9/16/2019

We’re roughly halfway through 2019, which means the 2020 tax season will soon be upon us. But rather than wait until next March or April to think about tax returns, here are top 5 common 2020 tax problems to consider:

1. The individual mandate penalty
Almost all of the Tax Code changes stemming from the Tax Cuts and Jobs Act went into effect during 2018. However, a few didn’t become active until this year. The change to the shared responsibility payment is one of these.

The shared responsibility payment, which is commonly referred to as the individual mandate penalty, was previously introduced under the Affordable Care Act. It essentially required people to have some form of health insurance (Obamacare, private or otherwise). If a taxpayer couldn’t prove they had health insurance, they owed a penalty with their taxes.

Starting with the 2020 tax season (fiscal year 2019), there’s no longer a federal penalty. However — and this is where the confusion exists — there are still some state-based penalties. For example, New Jersey, Massachusetts and Washington, D.C., all still have some form of penalty in place. Taxpayers will need to be cautious in this regard and do their research.

2. Changes to HSA contribution limits
In addition to increasing the amount of money taxpayers can contribute to qualifying retirement plans, health savings accounts are also getting a tiny boost this year. For those with high-deductible policies that qualify under HSA guidelines, the changes are as follows:

Self-only coverage: now $3,500 (up from $3,450 in 2018); and,
Family coverage: now $7,000 (up from $6,900 in 2018).

Again, these slight adjustments won’t make anyone rich, but they are worth noting and could cause some confusion come April 2020.

3 The medical expense deduction threshold
There’s been a lot of back and forth regarding the threshold for deductible medical and dental expenses over the past decade. In 2010, the Affordable Care Act raised the number from 7.5 percent to 10 percent of adjusted gross income. This made it a lot more difficult for people to qualify.

Then came the Tax Cuts and Jobs Act, which brought the threshold back down to 7.5 percent in 2017 and 2018. Unfortunately, it’s returning to 10 percent this year.

What does all of this mean? Basically, if a taxpayer plans on itemizing in 2019, their unreimbursed medical and dental expenses need to exceed 10 percent of their adjusted gross income in order to qualify as a deduction.

4. Failure to report all income
Reporting income used to be a pretty straightforward process. Most people were either W-2 employees or self-employed with one or two 1099s. But as the gig economy has expanded, more and more taxpayers have three, four or five different streams of taxable income that nobody else is reporting. Expect to see less-organized taxpayers fail to report all of their income in 2020. Some of this will go undetected, while others will get slapped with penalties.

5. Underpaying estimated tax payments
Making quarterly estimated tax payments on time is only half the battle. For inexperienced freelancers, underestimating the amount of taxes they owe is another huge problem.

As the name suggests, quarterly tax payments are estimates of what a taxpayer thinks they’ll earn over the course of a given year. In order to accurately estimate their tax burden, they must keep meticulous records and run calculations to generate a ballpark estimate. It’s OK if they slightly underpay, but it’s much better if they slightly overpay. This ensures they end up getting a small amount of money back in April (as opposed to forking over even more money).

While every taxpayer has different earnings and deductions, it’s a good rule of thumb for most taxpayers to set aside somewhere between 22 and 25 percent of every payment into a savings account that’s explicitly reserved for making payments throughout the year.

What Is QLAC and Why It Is Unique And GOOD For You?

9/15/2019

First, What Is DIA?

Is your mindset turning toward how to safeguard your retirement standard of living for many years ahead? A deferred income annuity (DIA) provides protected lifetime income in the future. While the income stream can be started as soon as 13 months after purchase, it also can be delayed for a long time (40 years in some cases).

Bottom line: The longer the deferral period, the larger the income payout amount.

Next, What is QLAC?

A qualified longevity annuity contract (QLAC) is a special type of DIA and it brings added advantages. It allows traditional IRA owners and defined contribution plan participants to ignore the QLAC funds in those accounts when calculating their RMDs. As long as the QLAC distributions are delayed, the associated Required Minimum Distributions (RMDs) and taxes are too.

2 Reasons why a QLAC stands out for modern retirements include:

No other qualified retirement product allows you to defer the start of your guaranteed income payments to as late as age 85
It’s the only way to defer RMDs past age 70½ (other than the “still working” exception)

Term Life Conversion 101

9/14/2019

Below is a case study about Term Life Conversion from American National for people with term life but are interested in converting to permanent coverage in the future -

Converting from a term to a permanent policy is quite simple. The only paperwork that is required is a policy change application, USA PATRIOT Act Form, a signed illustration (or illustration acknowledgement), and a supplemental application. The beauty of a conversion is that if there is no increase in the face amount, the applicant does not go through additional underwriting and will not need to prove additional insurability! See the Term Conversion Guide for complete details.

Case Study:
One of American National’s agents, Charles, was kind enough to share his experience with the conversion process at American National. Charles recently had a thirty-year-old client that was recently widowed and raising two small children on her own. She knew the importance of life insurance and wanted to make sure that her parents would have the means to take care of her children if anything were to happen to her. After spending several years as a stay-at-home mom, she was just reentering the workforce. She was working hard to make ends meet, and she scrutinized every dime she spent. However, she knew the peace of mind that obtaining life insurance would give her was worth every penny.

After completing a needs analysis and discussing the difference in premiums between American National’s 20-year level Signature Term and multiple permanent products, the client decided that the term policy was all she could afford right now. She was a little concerned because she wanted to make sure she would not be a burden to her family if she were to pass away in 21-years; however, she was relieved to know she temporarily (for 20-years) had a solution in place to protect her family.

Charles eased her concerns even more when he told her about the conversion opportunities that were available at American National. He let her know that she was making a smart decision to get coverage while she was young and in great health and told her she would have the option to convert to any permanent plan over the next twenty years! Charles also informed her that the conversion options would allow her to change her term policy to a permanent policy without having to go through any more underwriting. He advised her the process was quick and easy and would allow her to get the new policy at the same rate class as her original term policy. He also let her know that if she was able to convert in the next five years, she would even get a premium credit towards her permanent policy! She was so grateful that the term policy with American National would provide the coverage she needed NOW along with the flexibility to get what she really wanted later.

Charles checked in with his client every 6 months to make sure she did not have any additional needs and to review her statements. While meeting with her to review her third annual statement, she mentioned that within the last year she got a huge promotion at work, bought her dream starter home, and was doing better than ever! Happy to hear that she had made huge financial strides in her life, Charles reminded her of the conversion options that she had available on her term policy. Next thing you know, she converted her term policy to the Signature Guaranteed Universal Life, and she now has guaranteed coverage (at a guaranteed premium) until she is 121 years old!

Protect to 100 With the Best of Both Worlds

9/13/2019

How about getting a protection...for now and in the future? Below is an idea from American General by using a combination of Term Life and GUL to accomplish this goal.

Protective's Powerful Life Insurance With Chronic Illness Coverage

9/12/2019

With Protective's blended solution, you can be prepared with protection against the unexpected — chronic illness coverage while you're living and death benefit protection when you're gone.

Protective Indexed ChoiceSM UL + ExtendCareSM: A blended strategy for keeping life on track when a chronic illness arises.

How to Pre-fund Your Retirement Taxes?

9/11/2019

As the chart below shows, life insurance products are a good way to prefund your retirement taxes today!

An Example of How Sequence of Return Might Hurt You

9/10/2019

How to Use Life Insurance Products to LIFT Your Financial Future

9/9/2019

American National's WealthQuest Citadel 7 Diamond Annuity Products

9/8/2019

Overview
Flexible premium. May include a first year interest rate enhancement. 10% surrender charge free withdrawals each contract year. 7 year surrender period.

PRINCIPAL GUARANTEE FEATURE
The Minimum Guaranteed Surrender Value is return of premiums paid less any cumulative withdrawals.

INTEREST RATE ENHANCEMENT
American National may offer an interest rate enhancement on all premium payments received in the first 36 months of the contract for one year. This enhancement is not guaranteed and is subject to change.

INTEREST RATE GUARANTEE
The declared annual effective interest rate for the initial premium and each subsequent premium payment will be guaranteed for two years from the date the premium payment is received. After two years, the interest rate is declared annually.

MINIMUM GUARANTEED INTEREST RATE:
NAIC Index. See rate sheet for current rate.

RATE LOCK:
60 days for 1035 Exchanges, CD Rollovers, Mutual Fund Transfers and Institutional Transfers

SURRENDER CHARGE SCHEDULE:
Year 1 2 3 4 5 6 7 8+
% 7 7 7 6 5 4 2 0

SURRENDER CHARGE FREE WITHDRAWALS
10% of annuity value as of the beginning of each contract year, including first year

SURRENDER CHARGE WAIVERS*

Confinement
Disability *Availability will vary by state

Strategies to Reduce Investment Volatility - Other Than Min Vol ETFs

9/7/2019

In last blogpost, we focused on min vol ETFs to reduce investment volatility, now a few other strategies:

Bonds
Bonds tend to be less volatile than stocks. When the stock market is expected to be more volatile, investors may want to consider increasing their bond allocation. It is worth noting that the bond market is not immune to volatility.

High-yielding Stocks
High yielding stocks are another opportunity that investors can explore. The income component of high-yielding stocks tends to make these investments less volatile than more cyclical stocks, which have lower or no dividend yield. Of course, the 2008 financial crisis highlights that even this strategy may not be immune to severe market stress.

Some Mutual Funds
Some mutual funds that have historically exhibited lower volatility, relative to the broad market, as well as managed account solutions - particularly those with a defensive strategy are good options too.

Options Strategies
Additionally, there are several options strategies, including straddles, strangles, and other spreads, which can be used to take advantage of expected market volatility.

Strategies to Reduce Investment Volatility - Using Minimum Volatility ETFs

9/6/2019

Q. What are the options to reduce my investment's volatility?

A. If volatility concerns you, in addition to diversification, there are volatility strategies that may help protect your portfolio.

Below we will focus on minimum volatility ETFs, also mention a few other options.

What Is a Min Vol ETF?
A min vol ETF attempts to reduce exposure to volatility by tracking indexes that aim to provide lower-risk alternatives. Some min vol ETFs accomplish this objective by purchasing securities that exhibit relatively low volatility and concentration risk (i.e., heightened exposure to a particular asset class, investment characteristic, or other risk factor that results from a heavily weighted allocation). It is worth noting that some min vol ETFs may not have lower concentration risk than broadly diversified market indexes.
A min vol ETF does not eliminate risk exposure to volatility, and may not prevent a loss in the event of a downturn. Low volatility funds may underperform when the broad market is doing well, and they can experience declines during sharp corrections. However, the expectation for a min vol ETF investor is that any potential losses during a market decline might be smaller relative to other investments that may have more exposure to volatility. As a result, a less risky portfolio could recover more quickly than the broad market after a downturn when stocks recover.

Examples of Min Vol ETFs?
If you are concerned about a US stock market decline, you may want to consider researching min vol ETFs, the largest of which by net assets are:

iShares Edge MSCI Min Vol USA ETF ( USMV)
Invesco S&P 500® Low Volatility ETF ( SPLV )
iShares Edge MSCI Min Vol EAFE ETF ( EFAV)

If you have global investments and are concerned about some of the volatility risks that have emerged out of China, Europe, and other parts of the world, there are also non-US min vol ETFs. The largest non-US min vol ETFs by net assets are:

iShares Edge MSCI Min Vol EAFE ( EFAV)
iShares Edge MSCI Min Vol Emerging Markets ETF ( EEMV)
iShares Edge MSCI Min Vol Global ETF ( ACWV )

In next blogpost, we will mention a few other investment options to reduce exposure to market volatility.

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