“Fortunately, the life insurance industry has almost none of the problems of Wall Street… Until recently, permanent life insurance was arguably the financial industry’s most complex instrument. Fortunately, due to its complexity, life insurance is highly regulated to assure there are always sufficient, safe assets to honor its guarantees. This is referred to as statutory accounting. For more than 100 years, every life insurance death benefit has been paid.

All life insurance companies use statutory accounting. In addition, publicly traded insurance companies use GAAP accounting. It allows them to report the expected profitability of products that require reserves to back their contractual liabilities.”

Mr. Jones doesn’t take the point of view that life insurance companies can fail, several have indeed failed.  But for the other 99% of them, they have a proven track record of stability.  In fact, of those few life insurance companies that have failed, the other insurance companies bought up all of the failed companies policies.  Whole life and universal life insurance products are highly regulated for payment stability and have successfully been through good times and bad.

So let’s look at how about 99% of us struggle to make ends meet.  Many of us are in a position where we think that our lifestyle is consuming all of our earnings.  The belief is that every time we achieve a greater level of affluence, we increase the level of spending to account for that new found level of income.  There is an entire school of research called “behavioral economics” that says a human will consume what it earns or all that comes into his or her personal economy.  This is why it makes it difficult to save.  We’ve got to become better savers for our future retirement.

At www.lifeinsurancethinktank.com we educate people how to accomplish retirement savings and at the same time protect their loved ones with a life insurance product.  This can be an entirely new concept for many people who are accustomed to investing their savings in the highly volatile marketplace and losing lots of sleep watching it go up and down.

We hear that people think that insurance costs too much.  In a much published study, people know they need insurance but think they can’t afford it. However once educated on the true cost of insurance, they realize it is significantly less than they thought it was and they really can afford to protect their loved ones.  There are numerous choices of life insurance to choose from to protect and create a retirement plan; such as term life, universal, and indexed universal life insurance.

A universal life insurance policy is a perfect choice to begin a retirement plan.  Besides the obvious life insurance benefit, it force starts a savings plan that is guaranteed safe.  While term life insurance is obviously less expensive, the universal life policy is earning a higher rate of interest than any other safe investment product on the market today.  This savings element is compounded annually and if held for 10, 20, 30 or more years, it can yield a significant sum of money to supplement other retirement income sources.  Additionally, this money is tax deferred, safe from creditors in many states, has cash value you can borrow tax-free, and most likely has a living long-term care benefit.

At this point, would you say this is an expense or a savings? Is it a smart place to put your money? Any place you can save money is a smart place.  So the real question is, “is this a smarter place to put your money?”  Life Insurance Think Tank would suggest to you that buying a permanent life insurance policy that protects your family for the rest of your life is an excellent choice because it provides:

• Living benefits of long-term care should you require it while you are alive
• A death benefits when you pass away
• Tax-free payment of proceeds to your beneficiaries
•  guaranteed safe place to save money
• An excellent place to earn compounded tax-deferred interest
• The option of taking your cash out tax-free to for any purchase
• The option to take your cash tax-free to supplement your income when you retire
• Does not require you to pay it back into the insurance policy!

Permanent life insurance has stood the test of time and proven useful for a very long time.  Life insurance has been a common place for Americans to save money for decades.  But then the financial markets became all the rage to save money.  We’ve been through some difficult times with the markets and no one knows what’s going to happen in the future.  However, even during the previous rough market times, not one person who had their savings in a life insurance policy ever lost money.  Can you say that for anyone you know who was invested in the stock market?  Learn more about life insurance at www.lifeinsurancethinktank.com.  Find a Tax-Free Retirement Specialist here who can help answer your questions about creating a tax advantaged strategy for protecting your family and a retirement plan.

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Remember… “You do it For Love”

Here are a few short videos that will bring a smile, laughter, and maybe a tear to your eye about some things you may not have thought about this year as you decide what to buy your loved ones for Valentine’s Day.

What would you do for love?

Bad Cupid

A Meaningful Gift

Crazy 4 Love

We’re glad we’re able to share these heartfelt images from The LIFE Foundation’s web site with you about this year’s Valentine’s Day gift.

Thinking of you always,

Your friends at www.lifeinsurancethinktank.com

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Because of the alignment of these and other factors, this could be the best time for many years to buy life insurance.  Take advantage and protect your family at the lowest costs.  Now is the time to talk to your Retirement Life Solutions Specialist.  If you don’t have one, fill in the information on the front page of www.lifeinsurancethinktank.com and an expert specialist will answer all of your questions for you. 

Check out current rates using the best insurance rate calculator.

What is Life Insurance?

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Recently, LIMRA (Life Insurance and Market Research Association) provided a life insurance IQ test to 4,000 Americans to gauge their knowledge and understanding of life insurance. Less than a third (1,200) passed the 10-question exam and the majority (55 percent) answered fewer than five questions correctly.

As an industry, life insurance companies and their agents are failing on educating consumers on life insurance knowledge.  While this is a poor reflection on the industry it validates our Mission Statement at Life Insurance Think Tank to provide valuable education to consumers.  You can help your family and friends increase their understanding about life insurance by sharing www.LifeInsuranceThinkTank.com  with them.

To read the full article Click Here

To check out your own life insurance knowledge, take the survey.

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Because of increased life expectancy, many people will live 20 or more years beyond their normal retirement age. Yet, while they may be living longer, this does not necessarily mean that they will be living healthier. Therefore, from a financial standpoint, it is imperative that people plan ahead not only for basic living expenses in retirement, but also for the high cost of long-term care.

There are three primary methods of insurance yourself for long-term care costs

Self-Insurance as an Option

To do this you must have sufficient income to pay the rising costs of long-term care. Keep in mind that even if you have sufficient resources to afford long-term care now, you may not be able to handle rising future costs without drastically altering your lifestyle.

The Medicaid Option

Medicaid is a joint federal and state program that covers medical bills for the needy. If you qualify, it may help pay for your long-term-care costs. Unfortunately, Medicaid is basically welfare. In order to qualify, you generally have to have few assets or will need to spend down your assets.

Your resident State law determines the allowable income and resource limits. If you have even one dollar of income or assets in excess of these limits, you may not be eligible for Medicaid.

It is critical that you meet with a tax planner and a retirement life solutions specialist to ensure that you follow the specific laws of your state in advance of expecting to file for Medicaid.  Most states will look back 5-7 years on the assets you held and if you sold or transferred them during that time period, then they may elect to include them in your current asset valuation.

Long-Term-Care Insurance

A long-term-care insurance policy may enable you to transfer a portion of your liability of future long-term care costs to a long-term care policy issued by an insurance company in exchange for the regular premiums.

Most long-term-care insurance policies benefits may be used to help pay for skilled nursing home care, assisted care living facilities, continuing care retirement communities, in-home care, and adult day care. The main requirement is that you cannot perform 2 of the 6 Adult Daily Living skills (ADLs). These ADLS are bathing, mobility, dressing, transferring, toileting, eating, and the need for supervision.  Insurance can help protect your family financially from the potentially devastating cost of a long-term disabling medical condition, chronic illness, or cognitive impairment.

A Recent Alternative

Long-Term-Care Riders on Life Insurance

Something new that most universal life insurance policies may now include is a long-term-care rider.  These riders will provide a living benefit — usually a percentage of the face value — to help cover the cost of long-term care. By speaking with a Retirement Life Solutions Specialist, they can provide you with the full coverage of any of the policies you are investigating.

Source:

Life Insurance Think Tank. (2012) The Truth About Long-Term Care [White Paper] Retrieved from eSeries Here

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The original long term care policies that were sold prior to 2005 were not Partnership Certified. This means that for the government Medicaid program to pay for someone’s long-term care expenses, the person would have to be impoverished, i.e. poor.  If they had assets then they would have to spend those assets first and become impoverished before Medicaid would cover them.  But what happens to the spouse of the person with the long-term care expenses?  They are now poor and have to drastically downgrade their previous level of living just because their spouse needs state assistance.

Since the passage of the Deficit Reduction Act in 2005, most states are allowing their residents to keep more of their assets if they own a government approved long-term care policy.  These policies are sold by insurance companies and are called Partnership Certified in the contract. 

These policies are almost identical to the pre-2005 long-term care policies, except they must include consumer protection for inflation.  In these policies, for every dollar that you have of maximum overage in your policy, you are entitled to keep a dollar of your own assets should you ever need to apply for state Medicaid to help pay for your long-term care expenses. This helps prevent you from becoming poor and lowering your standard of living for your family and loved ones.

For example:

Mary’s long-term care partnership certified policy would pay her a maximum of $300,000 of benefits in her lifetime.  Mary enters a long-term care facility and her long-term care policy runs out after paying $300,000 in benefits to the facility.  She and her husband Robert have $400,000 in savings.  Now they are required to spend $100,000 to provide care for her before she can apply for state Medicaid aid to help with her long-term care expenses.  The state disregards the first $300,000 of their assets when determining her eligibility. Because her policy was partnership certified, Robert does not have to become poor and change is level of living to obtain help from the state.  Even when Mary passes away, Robert’s remaining assets are protected from “estate recovery” from the state’s Medicaid program.

Currently only 6 states have no partnership documentation available for insurance companies to provide these LTC policies.  Four more have pending state applications and the rest of the states in the nation have partnership certified policies for sale by carriers licensed in each state.  Your Retirement Solutions Specialist can educate you on how these plans can benefit your specific situation.

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Today we’d like to share an excellent short video from the non-profit organization Life and Health Insurance Foundation for Education (LIFE).

With the number of families in the nation that don’t have life insurance (or don’t have enough), this video creatively highlights the #1 reason why we need life insurance.

Make sure you really do watch the entire video, like we said, it is really creative!

Click to watch:  “A Legacy of Love”

 What is Life Insurance?

Cost of Life Insurance?

This is one situation in which a little information might go a long way. Because people are living longer today than they used to, the cost of basic term life insurance has dropped by almost 50%.  This may be a good time to consider purchasing additional protection for your family.⁴

Preparing for a Certainty

As you know the only thing that is certain is death and taxes.  Every four years as we select a new president, and more recently the last six months of focus on the Fiscal Cliff, we spend more time focusing on the taxes we pay.  This has made it even easier to ignore the inevitable fact of death, especially when you may be young and healthy.  But wait… young and healthy is usually when life insurance is most affordable.  Even those people who may be older or have medical issues may be surprised at how cost-effective a life insurance policy might be for them.

Have you considered what would happen if you were no longer able to provide for your family due to your death?

• Would they be able to continue to have the same level of lifestyle you’ve been able to provide for them?
• Would your children still be able to pursue college?
• How would this challenge the retirement lifestyle of your spouse?

Have you done anything to prevent these concerns?  Have you had your plan reviewed recently to take advantage of the reductions in life insurance costs?  A life insurance policy with the appropriate level of coverage would help your family live the way you would like them to even if you were not around to provide for them.

Types of Life insurance

The two basic types of life insurance are Term and Permanent.  Term life insurance offers a death benefit if the insured dies within a specified time period.  Term is usually the least expensive and may offer low-cost coverage appropriate for your specific needs.

Permanent life insurance offers a death benefit on the insured person’s life as long as they continue to pay the premiums.  Permanent life insurance comes in two types, Universal or Whole life and each type can have different features.  One of the secondary benefits of these policies is the ability of the policy to build up cash value that you can use if needed as tax-free supplemental income when you retire, or other needs your family may have.

It’s common for people to have term life insurance through their work.  These plans are usually limited to a multiple of their salary.  However, when you leave your employer the coverage ends or it becomes extremely expensive to continue to keep in force.  Having your own individual policy could provide protection for your family regardless of any career changes.

What Should I do Next?

If financial concerns have held you back from obtaining the life insurance coverage your family needs, now is a good time to investigate all the available options. The best resource to learn about these options is a life insurance agent specializing in life insurance solutions.  Many times, these specialists may refer to themselves as Retirement Income Specialists or Retirement Advisors that solely specialize and assist clients in life insurance, annuity and retirement planning.

A great resource to find these specialists is Annuity123, which has a free matching service for consumers of all ages to find retirement income specialists in their area.  Once you find that professional who is knowledgeable, make sure to ask lots of questions and find out the potential pros and cons of the policies they may recommend for your specific situation.  Finally, make sure you do plenty of research and get educated on life insurance.  It could be the best thing you ever did for your family!

1, 3, 4) LIFE Foundation, 2012

2) LIMRA, 2011

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Life Insurance Education