Do you fit the profile below -:
If yes, please keep reading the document and a case study from Lincoln Financial Group below -
Q. What's a good long term care product that if I don's use it, my premiums are not wasted?
A. Lincoln National has a hybrid funding solution may be the best way to protect you and your loved ones from long-term care expenses. Here’s how:
1. If you do need care, you have a tax-efficient, dedicated funding source, designed to meet your needs.1
2. However, should you not need care, you’re able to give your family a legacy through a death benefit.2
3. And, if you change your mind, you’re able to get money back.3
1 LTC reimbursements are generally income tax-free under IRC Section 104(a)(3). Funding is through reimbursements, subject to the monthly/annual maximum amount.
2 Beneficiaries may receive an income tax-free death benefit under IRC Section 101(a)(1).
3 The return of premium is provided through the Value Protection Endorsement available at issue on all policies. The amount returned will be reduced by any loans, withdrawals and benefits paid. The Value Protection Endorsement contains complete terms and conditions.
Q. Why every retiree should consider a Single Premium Immediate Annuity product in his or her retirement portfolio?
A. SPIA should be considered by every retiree for two reasons:
1. Eliminate Longevity Risk
A SPIA is an excellent way to reduce the fear of running out of money. It can allow an individual to spend the growth in their portfolio on travel, new cars, hobbies and other activities of daily living that occur in retirement. Retirement has become a new Life Stage and people want to enjoy retirement but it takes income to do so and a SPIA provides that income and they will receive it as long as they are alive.
2. Avoid Unnecessary Losses in a Down Market
By covering fixed and necessary living expenses with a SPIA, an individual has reduced the risk of loss in retirement portfolio. They no longer need to sell off assets in a downmarket in order to fund everyday living expenses. Their social security and Immediate annuity income cover all those necessary expenses.
The Power Series of Index Annuities® with the Lifetime Income Plus FlexS guaranteed living benefit (GLB) rider provide with the flexibility to take Required Minimum Distributions (RMDs) without eliminating rollups or locking in withdrawal rate for life.
See a hypothetical example below - income is guaranteed to grow for the first 10 contract years, even after RMDs begin. Plus, you can wait until you’re in a higher withdrawal age band to activate your rider and lock in more income for life.
Every life stage brings different financial priorities and concerns — Securian Financial’s educational document below discusses priorities and solutions for consumers' Long Term Care and Critical Illness concerns at different life stages. Its target is for insurance professionals, but consumers will find it helpful too.
The average annual cost of a full-coverage auto insurance policy in the United States is $2,390, according to financial data analytics firm ValuePenguin. Based on analysis of insurance rate data from Quadrant Information Services, ValuePenguin has published a list of the 12 cheapest car insurance companies across the country.
Erie has come out on top, with the lowest average annual rate of $1,521, which is approximately 46% cheaper than the national average across all 50 states and the District of Columbia. In the 12 states and Washington D.C. where Erie does business, the insurer is often the cheapest insurer for drivers. ValuePenguin found that drivers in Pennsylvania who choose
Erie could save up to 32% compared to the state average.
In second spot is State Farm, with an average annual rate of $1,737. State Farm is the largest auto insurance company in the country, offering rates that beat the average in 46 states and D.C. State Farm’s mean is just lower than the average annual rate of $1,781 provided by Farm Bureau Mutual (IA Group), a regional insurer that offers coverage in eight Midwestern and Western states.
ValuePenguin’s data is based on online insurance quotes obtained via Quadrant Information Services for a sample driver. For the purpose of the exercise, the driver was a single 30-year-old man, who drove a 2015 Honda Civic EX and had a clean driving record. The only variable that changed was the ZIP code where he lived in the US.
The coverage quoted included: bodily liability (limit of $50,000 per person/$100,000 per accident); property damage (limit of $25,000 per accident); uninsured/underinsured motorist bodily injury (limit of $50,000 per person/$100,000 per accident); comprehensive and collision ($500 deductible); and personal injury protection (the minimum amount when required by the state).
Based on ValuePenguin’s analysis, the 12 major US auto insurance companies with the cheapest average annual rates are:
Average Annual Rate: $1,521
2. State Farm
Average Annual Rate: $1,737
3. Farm Bureau Mutual (IA Group)
Average Annual Rate: $1,781
4. American Family
Average Annual Rate: $2,041
5. Auto-Owners Insurance
Average Annual Rate: $2,112
Average Annual Rate: $2,158
Average Annual Rate: $2,293
Average Annual Rate: $2,393
Average Annual Rate: $2,447
Average Annual Rate: $3,017
Average Annual Rate: $3,545
Average Annual Rate: $4,280
NA. USAA *only provides insurance coverage to current and former military members and their families.
Average Annual Rate: $1,307
While price comparison can be a useful benchmark in personal auto insurance, it’s not the be-all and end-all. The depth and breadth of coverages alongside claims resolution and other value-added services are equally, if not more important than price. This is where the advocacy of the insurance agent really comes into play.
In addition to that, insurance companies are facing many challenges in auto lines right now. Issues like distracted driving, which is at an all-time high, and inflated vehicle repair costs due to increased in-vehicle technology are driving loss costs up, meaning insurers are having to pursue rate in order to break even on their auto insurance books. As a result, many drivers are seeing increases to their annual rate, and even the ‘cheapest’ options above seem expensive to many households.
Grandparents can pass retirement income to grandkids. The document below shows how to make it happen.
The document below shows annual premiums if you apply for this product at different ages ...
The document below is a good description of QLAC and how to grow protected lifetime income while you defer RMDs.
What’s a QLAC?
It’s a special type of deferred income annuity (DIA). A DIA provides protected lifetime income starting in the future. A QLAC allows income from a traditional IRA to be deferred from taxation beyond age 70½ without running afoul of the RMD rules.
How does QLAC work?
A DIA, including a QLAC, works much like a qualified SPIA (single premium immediate annuity) — except that the payments do not begin for at least 13 months and may be deferred up to age 85. The income date is selected at issue. Income payments will be made provided the annuitant is alive at the income start date. (If no annuitant survives, no income payments will be made, and no other benefits provided, unless the owner has elected a return of premium (ROP) death benefit.) Funds in an IRA can be transferred tax-free to the insurance carrier for the purchase of a QLAC.
The account value of the QLAC is disregarded for purposes of calculating the client’s RMDs. A QLAC has to meet many requirements, but it can help address longevity risk by reducing the probability of outliving savings by providing an income stream in the later stages of retirement.
How long can income payments – and thus RMDs – be delayed?
Distributions must begin no later than the first day of the month following the annuitant’s 85th birthday. The longer the deferral period, the larger the income payout amount.
Can I access the funds?
No. A QLAC does not have any cash surrender value or commutation benefit. QLACs may allow limited changes to the income date and payment frequency.
What IRS reporting applies to QLACs?
Insurance carriers will report to purchasers and the IRS using Form 1098-Q, Qualifying Longevity Annuity Information. Form 1098-Q must be furnished to individuals by January 31 of the year following the first year of purchase and every following year while the QLAC is in existence.
How much can be contributed?
Contributions to a QLAC are limited to the lesser of either $130,000 (subject to annual cost-of-living adjustment) or 25% of qualified funds, less premiums for other QLACs.
The dollar limit – $130,000, as indexed for 2019 – applies across all qualified funds. The 25% limit applies to each qualified plan separately based on its most recent valuation date. It applies to IRAs on an aggregate basis as of the prior December 31. Roth IRAs and Inherited IRAs are excluded.
Example: Jesse had $260,000 in his 401(k) as of the latest valuation date and had $260,000 in his traditional IRA as of the prior December 31. He can only use 25% of his IRA or $65,000 to purchase a QLAC. If his 401(k) plan allowed for the purchase of a QLAC, he could purchase a QLAC for 25% of his 401(k) or $65,000. Many defined contribution plans do not yet provide for the purchase of QLACs. Thus, Jesse would need to have at least $520,000 in his IRA as of the prior December 31 if he wanted to purchase the maximum QLAC for $130,000. If Jesse elected to roll over any amounts from his 401(k) plan into his IRA, he would need to wait until the following year to purchase a QLAC with those rolled over funds. Remember, the 25% limit is applied to the fair market value of the IRA as of the prior December 31.
What happens if the contribution limit is exceeded?
Any excess premium must be returned by the end of the calendar year following the calendar year in which the excess premium was paid to avoid jeopardizing the contract’s QLAC status. If not returned in a timely manner, the annuity then fails to be a QLAC beginning on the date that the premium payment was made. The value of the annuity contract thereafter cannot be disregarded for purposes of calculating RMDs. It is the client’s responsibility to comply with the contribution limit. Clients should consult with their own tax and legal advisors before purchasing a QLAC.
Can additional premiums be added as the account value increases and/or the indexed limit increases?
More premium may be added to flexible premium QLACs to take advantage of any unused portion of the then-current contribution limit. What if part of the IRA has already been used to purchase a qualified SPIA? Is that value included in determining the fair market value of the IRA? The fair market value of any IRA SPIAs should be included in determining the account value of all aggregated IRAs (except Roth and Inherited) as of the prior December 31 for purposes of calculating the 25% limitation for QLAC contributions. Insurance carriers annually send clients a fair market valuation letter for IRA SPIAs.
What are the QLAC payment options?
Options are limited to single or joint life only and single or joint life with cash refund. Payments, once begun, must satisfy RMD rules.
What happens if the last annuitant dies during the deferral period?
If the ROP death benefit option was not selected and no annuitant survives, no income payments will be made and no other benefits provided.
If the last annuitant dies during the deferral period, can the ROP death benefit be directly rolled over or transferred to an IRA?
It depends. If the annuitant dies after their required beginning date (RBD), the ROP payment is treated as an RMD and cannot be rolled over. Likewise, if the surviving joint annuitant dies after their RBD, the ROP payment will be an RMD and not eligible for rollover. If the annuitant or survivor annuitant dies before their RBD, however, the ROP payment may be rolled over.
Q. Why people usually advise wait until 70 to take social security benefits?
A. It's because you will be buying the best annuity in the world! Here is an example with numbers to illustrate:
Consider someone who is age 66 right now, if she delays taking social security until she is age 70, she will have to pull about $36,000 annually from her savings over the 4 years in order to replace the benefits that she would have gotten if she claimed.
In return, however, when she does claim at age 70, she will get a monthly benefit that is $1,040 higher than it would be had she claimed at age 66. To buy that $1,040 monthly payment with inflation protection as an annuity in the private market, it will cost her $252,000!
So in return for using $150,000 for 4 years, she would get a government annuity that is worth $252,000, that is a discount of 40%!
Term to Perm Conversion Flexibility
Prudential is the only leading insurance carrier that does not place restrictions on conversions. While some remove restrictions for an additional cost, Prudential’s flexibility means there’s no extra charge for Pru term to Pru perm conversion. Prudential allows conversion at any time during the conversion period—without a medical exam. What’s more, many of Prudential's permanent policies offer the BenefitAccess Rider (BAR), an optional chronic illness rider.
Age Last Birthday Pricing
An advantage to Prudential’s underwriting is that they use age last birthday to calculate premiums. This means potential savings on annual premiums for the clients. For example, many other companies calculate premiums at age nearest birthday. So, a client who is age 59½ plus one day will get age 60 rates. Prudential would calculate at age 59.
An Accelerated Death Benefit Rider—At No Extra Charge
The Living Needs BenefitSM (LNB) is one of the most robust accelerated death benefit riders offered in the industry. It’s critical component of Prudential’s term policies because it pays a portion of the death benefit early, while the insured is still alive, but terminally ill, it also goes on to providing superior value. LNB also covers permanent confinement to a nursing home and life-saving organ transplant procedures. LNB can be a valuable resource as the money can be used in any way the client chooses. In approved states, up to 100% of the death benefit can be accelerated.
Some IUL products might be loaded with high fees and high multipliers, see the document from Securian below that explains the implications ...
In last blogpost, we showed you two IUL products, one looks very good on paper with its large multiplier. Now we will show you their actual performances in the real world!
Actual Performances in Real World
From 2000-2009, the S&P 500® was down an average -0.7%. During that same time, the traditional IUL example (Strategy A) experienced a 4.8% index credit, and although it had four years with 0% crediting – there were no negative impacts to a client’s cash value because of zero index crediting or indexing fees.
However, the story is a bit different with Strategy B. Its average index credit would have been 3.5% - but there were 5 years where the net result to the cash value was negative. The high-fee/large-multiplier strategy functioned as expected, accentuating the good years, but exposing the client to reduced cash values in other years because of the indexing fees.
Illustrations and illustrated rates don’t really help a client understand the impact of the volatility of indexing credits – including these negative years.
The Bottom Line
It is more important than ever to understand the details of the products you are considering and talk to an expert who can be trusted. When you request an illustration run at a particular rate, you will need to be aware of any high fees and large multipliers that result in comparatively aggressive illustrations, even though the illustrated rate seems low.
Q. I saw IUL products with large multipliers which means the cap could be much higher, what's the trick?
A. Be careful when you compare IUL products' illustrations, after ACTUARIAL GUIDELINE 49 (AG49), here is why.
First, what is AG49? In 2015, AG49 was developed to bring uniformity to the illustrations of policies tied to an external index or indices by providing a reasonable maximum on the illustrated credited rate. Uniformity across illustrations helps clients more easily compare policies of different companies. However, it’s also prompted the creation of very controversial product features: high fees and large multipliers.
Compare IUL Products
Now comparison of IUL products cannot simply be based on illustrated rates as a gauge for how a policy is going to perform, and what the risk/return profile of an IUL might be.
In the following example, both strategies show an illustrated rate of 5.85% - and much of the indexing specifications are similar. But, when you look closer, you see that Strategy B employs a multiplier and a fee. The best and worst case won’t show up because the illustration is only going to show averages – and won’t show the impact of paying the fee during years of zero index crediting. A consumer using Strategy B needs to be prepared for years that the cash value decreases because of the fees.
In the next blogpost, we will show you what these two products could actually perform in the real world and how they are different from what the illustrations show.
AIG has put all the financial worksheets into one documents, this helps insurance applicants to explain to the underwriters why they need the coverage amounts, because one frustrating fact for some insurance applicants is being declined for their applications.
The spreadsheet from AIG below has many different worksheets to help either individuals or businesses to determine the appropriate life insurance needs.
David Littell is a Professor Emeritus at the American College of Financial Services, where he co-created the Retirement Income Certified Professional® designation. In other words, he’s a pro at one of the most complex tasks retirees face: turning a lump sum of savings into a reliable income stream that will last for life. And as he approached retirement himself, Littell discovered some key differences between what the textbooks say and the way things play out in real life.
Here’s what Littell has learned by finally living what he’s taught all these years:
Start with Something
Financial advisors love to ask their clients detailed questions about their future plans: When are you going to retire? Will you work in retirement? If so, how much?
In reality, “it’s hard to nail that down until you’re close to it,” Littell says. “I’ve changed my plans four or five times.”
For starters, you don’t know how your health will hold up. Some 43% of workers retire earlier than planned, and of those 35% stop working due to a health problem or disability, according to the Employee Benefit Research Institute.
Also, while you’re still working full-time, you’re probably not looking for a part-time job to supplement your retirement income. So you don’t know how feasible it is to get the kind of part-time work you want, or how much you might earn once you find it. Alternatively, if you’d rather continue working for your former employer on a part-time or consulting basis, you won’t likely broach the topic with them until you’ve given your notice. All this means that it’s hard to have real numbers to plug into retirement income calculations in advance.
Yet that doesn’t mean you shouldn’t try, Littell says. There’s a good reason advisors ask all these questions, to try to make accurate projections of your retirement income. It’s helpful to know how much you’ll have coming in, to make sure it’s enough to meet your needs. (To ballpark those needs, Littell suggests a simple method: use your most recent paycheck as a proxy for the retirement income you’ll need each month — assuming, of course, that you live within your means and aren’t racking up credit card debt to fund your lifestyle.)
So go ahead and make some assumptions, and do your calculations based on those. But understand that estimates are just that, and are subject to change. Revisit your plan regularly, and make sure the numbers are going to work before you give up your full-time gig. “People should think really carefully before they leave full-time work,” Littell says. Many people get tired of the grind and let their emotions govern the decision of when to quit, he says. But if you leave the workforce and then regret your decision, it’s very hard to re-enter at the same salary with the same benefits.
For his part, Littell recently cut back to working three days a week and plans to further reduce his hours as he shifts to a consulting role early next year.
Listen to Your Gut
Littell’s father lived to age 104. Aware he might have similar longevity, Littell didn’t want to risk outliving his savings. So he bought several annuities, insurance products that turn your lump sum into guaranteed income for life.
Financial advisors commonly recommend that clients use annuities to cover their essential spending. This way, all of your necessary needs will be covered by a “floor” of guaranteed income, and you can use your 401(k) or IRA withdrawals for discretionary fun. The logic behind this strategy is that, if stocks take a dive, you can always curtail your travel plans, but you can’t suddenly stop paying your mortgage or your Medicare premiums.
To determine your essential spending, you would tally up what you pay for housing, health care, food, and other necessary categories. Then, you calculate how much of the total would be covered by Social Security and any pensions you might have. An annuity or annuities would be used to cover any shortfall.
But Littell didn’t go through this exercise. Instead, bought annuities with the percentage of his portfolio that he felt comfortable parting with about 25% of the total. Many consumers balk at annuities because they reduce your liquidity. Littell was willing to give up control over a quarter of his portfolio in return for guaranteed income, and staying within that comfort zone — rather than imposing textbook calculations — helped him execute that strategy. “The intellectual and the reality didn’t match very well,” he says. “The reality for me was, how much are you willing to give up?”
He’s deferring claiming Social Security until age 70, and he estimates that once he reaches that age, about 75% of his essential and discretionary needs will be covered by guaranteed income. The annuities will help him sleep at night and not fret about outliving his savings. “I have no intention of worrying about that,” Littell says.
Q. I just bought a life insurance policy, how do I review it a few years later?
A. You can review your life insurance policy, especially if it is a permanent life insurance policy, from the following 3 perspectives -
From Financial Strategy Perspective
From Coverage Perspective
From Protection Perspective
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.
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.
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.
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!
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.
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.
PFwise's goal is to help ordinary people make wise personal finance decisions.