Depending on your situation the simple answer is… quite possibly.  In fact, single-premium universal life insurance, SPUL, may be one of the most overlooked, misunderstood life insurance products available today and rarely recommended by traditional life insurance agents. However, expert Tax-Free Retirement Specialists use this product frequently with their clients

Single Premium Universal Life is an immediate issue, universal life policy, which combines a death benefit with a savings account. It’s an easy and efficient way for consumers to purchase coverage and transfer wealth to the heirs — TAX-FREE.  Purchased with one single premium payment, this product is designed for people who value added security, flexibility, and cash value with lifetime coverage.

How do you fund a single premium life insurance policy?

One area where a significant amount of SPUL policies are being used is to consolidate stray life insurance policies with lots of cash value where the owner has no plans for the cash value.  By simply using the funds from those policies as a lump sum into a new single premium universal life insurance policy the new policy is usually larger than the sum of the smaller policies and is now paid in full.

Why use a Single Premium Life Insurance Policy?

The SPUL insurance policy can help clients meet a variety of financial objectives.

• Single-premium life policies require only minimal underwriting and are a good choice for the elderly or those with some health issues.
• Ownership of a life policy by the beneficiary or a trust can “remove” the asset from the estate for estate tax purposes.
• Advanced estate and legacy planning.
• Insuring a key employee or a business continuation plan.
• Policy loans from the cash value TAX-FREE
• Some SPUL’s will accept additional premiums if you believe you might want to deposit additional money later to increase your benefit.
• Provides a simple and efficient way to purchase coverage and transfer wealth tax-free. 
• Immediate issue policy purchased with a single payment. 
• Provides a policy with a death benefit much higher than the payment itself.

Single premium life insurance cash value increases much faster than a policy with monthly or annual premiums because it is funded with the entire lifetime premium at the issue of the policy.  Just like other insurance policies, upon the death of the insured the proceeds of the policy go to the beneficiaries free of federal income or estate taxes.

Can it be used as an alternative to an annuity?

The big advantage of SPUL is that it passes the death benefit to your heirs tax-free (although there may be estate taxes to consider).  In many cases, those benefits also will pass quicker to heirs outside of probate, a real plus for larger estates.

Because the annuity’s $150,000 growth was tax deferred the beneficiary will have to pay tax on $150,000.  Life insurance is always transferred tax-free with zero taxes due to the federal government.

Additional Benefits to the SPUL owner

Since an SPUL premium is paid in full at policy issue the policy is planned to last the owner’s entire life time.  The cost of the insurance of the policy will be paid from the cash value and any interest gain.  The only way that the policy will not last the entire lifetime is if the owner were to take out a tax-free loan from the policy for their use and not pay the loan back.  As long as the loan is repaid back into the policy, the insurance policy will continue to last the owner’s entire lifetime.

SPUL’s are the least understood life insurance product by traditional life insurance agents today.  By talking with an expert Tax-Free Retirement Specialist they can discuss your specific goals you are seeking to accomplish and assist you in determining if this is a the best product choice for you.  Click here to find a local Tax-Free Retirement Specialist in your area.

What is Life Insurance?

Life Insurance Calculator?

So you would think that everything was just fine right?  Well not really.  His girlfriend didn’t know him well enough and wasn’t sure where all the important papers were.  She couldn’t adequately explain my brother’s final wishes nor plan a funeral for him because she didn’t know if he wanted to be cremated or buried.  It was an emotional mess for her and my family as we tried to grieve as well as determine what he would have wanted to have done after he died.

His will and life insurance documents were extremely important, but an accompanying Letter of Instruction would have really helped.  This letter of instruction is not a legal document, yet he could have provided all the details and guidance for both his personal and financial matters necessary to all the questions that we had about his final wishes.

Here are some topics to consider addressing in the letter.

• People to contact such as attorneys, financial professionals, insurance agents, and accountants.
• The location of important documents, including your will, insurance policies, birth certificate, marriage and/or divorce papers, Social Security and Medicare cards, tax returns, vehicle titles, and deeds to real property.
• Your wishes for final arrangements such as a memorial or funeral service and organ donation.
• Information on your bank and retirement accounts, including account numbers, PINs, and passwords.
• A list of creditors and the location of bills.
• A description of any important information to be found on your computer, including login IDs and passwords.

The Letter of Instruction doesn’t have to written in in legal fashion.  It can even be hand written.  You can even write you own obituary for yourself if you want.   Store your letter in a safe, yet accessible place; tell your loved ones where they can find it; and give copies to the executor of your estate and other trusted individuals. Because some information in the letter may change over time updating it regularly.

I have no idea why my brother never wrote a letter of instruction.  Maybe he was like a lot of us, putting off thinking about our own mortality.  But it sure would have been helpful if he had. 

Your Own Family Template

Because of all the long and emotional conversations my family had to conduct about his final wishes, we’ve put together a template that covers the above points as well other discussion points that may help your family in your own letter of instruction.  It may be beneficial to include this template in your own letter of instructions.  Click here to download.

What is Life Insurance?

Life Insurance Calculator?

“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.

What is Life Insurance?

Life Insurance Calculator?

So you’ve come to the realization that you need to buy life insurance.  You’ve read and educated yourself at www.lifeinsurancethinktank.com and have some basic ideas of what types to review with your Retirement Life Solutions Specialist.  Before you make that call, there is one more thing you might want to get together before you meet with them.  You’re going to want to have a basic understanding of how much life insurance you need to buy. 

There are many calculators on the web and they all require that you enter a lot of information.  Life Insurance Think Tank has put together a simple and effective Life Worksheet for you to gather that information onto so you can use the best life insurance calculator on the web to come up with a starting point.  More complicated situations such as businesses, land owners, high net-worth clients, estate planning etc… will always need the assistance of Retirement Life Solutions Specialist to help you create and use tax advantaged life insurance products. 

Click here to find a Retirement Life Solutions Specialist who is an expert at working with tax-free retirement products.

Download our Life Insurance Worksheet to begin your planning. 

Remember, your family is depending on you.

What is Life Insurance?

Life Insurance Calculator?

When you’re considering term life insurance, you need to understand the different types of term life available today.  Term life is the least expensive insurance available today and if used correctly could be the best insurance for you.  In fact many people supplement permanent life insurance (universal, indexed universal or whole life) with term life insurance.

Term life insurance provides coverage for a defined term, i.e. a period of time. It does not accrue cash value like a permanent life insurance policy does. The basic premise is you have a financial risk you want to insure for a period of time in case you die prematurely.  The risk might be your mortgage, a vacation home mortgage, your children until they have moved out, kid’s college education, etc.  Once you determine what the length of time you need to cover the risk, you purchase a term life insurance policy for that period of time.  If your untimely death occurs, the insurance policy will pay your beneficiaries the tax-free insurance benefit.

There are several different types of term life insurance to consider when educating yourself on what is necessary for your specific situation.  Different insurance companies will have one or all of the following available:  Guaranteed Convertible, Annual Renewable, and Level are the common types of term life insurance.

Level Term Insurance

Level Term Insurance requires payment for a fixed period for the duration of the term.  Common terms are usually in 10-year increments because 5-year increments are more expensive than.  Premiums are level during the term of insurance and do not increase.  If you decide to cancel the policy, you just let the insurance company know, any time during the term of the policy, and stop paying the premiums and the will policy lapse. 

Convertible Term Insurance

Most companies offer convertible term insurance.  Here the insured is eligible to convert all or some of the amount of coverage to a permanent universal or indexed universal life insurance policy during the term of the insurance policy.  Most insurance companies allow this during the first 10 years of the term or possibly the first half of the term policy.  If it is converted, the premium will be higher because it is permanent insurance for the rest of your life. 

Annual Renewable Term

Annual Renewable Term is a one-year life insurance policy where the insurance company guarantees to insure the covered person for one year and will issue the same or higher policy at the end of the term without regard to health of the insured.  This is similar to a guaranteed renewable term life policy.  However, the premium will increase because the age of the insured has increased and if the amount of insurance is increased.

Return of Premium Term Life Insurance

This is the newest term life product on the market today and can be quite useful for certain situations.  First thing you need to know is that it will cost more than a standard term life policy for the same amount of insurance benefit.  The unique feature of this policy is that if you pay the premiums through the end of the policy and you are still alive the insurance company will return to you 100% of every single dollar you paid into the policy… TAX-FREE.  There are some very specific advantages for using this type of policy.  Talk with your Retirement Life Solutions Specialist before you decide to buy this type of policy.  If you cancel the policy during the term, the insurance company will not return any of the premiums to you.

Our final Thoughts

Unlike universal life insurance, term life does not provide the tax benefits or cash value buildup of permanent life insurance.  Term life insurance is useful for people who need life insurance at the least expensive price for a specified time frame.  It can also be useful to supplement a universal policy for a defined period of time. 

Besides speaking with a Retirement Solutions Life Specialist, you’ll also want to consider the following factors as a starting point:

• Are you still young and in good health?
• Are you looking for simple, inexpensive insurance to protect your family?
• Is permanent universal life too expensive for you today?

Finally, don’t be misled by a common misconception you may have heard, “buy term, and invest the rest.”  Sometimes this may not be the best choice for you with the uncertain economic times present today.  Who can afford to put their retirement money at the risk of market volatility?  If you can afford a universal or indexed universal life insurance policy, there are some excellent tax-deferred benefits you can maximize no matter what age you are.  If you are able to purchase a universal life policy at a young age, you have the flexibility to increases the cash you add to it (max fund it) and significantly increase your cash value in a safe and guaranteed method to create an additional stream of tax-free income ready for your retirement.

Make sure you speak with a Retirement Life Solutions Specialist to determine what life insurance is best for your specific situation.  Click here to find one in your area.

What is Life Insurance?

Life Insurance Calculator?

But what if that didn’t happen tomorrow?  What if you died tonight and were no longer around to provide all those things that you’ve been doing for your loved ones? What if you were a single parent, now who would be providing for that loved ones left behind?  Without your income and all the other things you provide, would they be able to maintain the comfortable and special family lifestyle and togetherness that you were able to provide for them?

That’s where life insurance helps you help your family.  It can’t put your loved one’s life back the way it was, but it can make sure they have the world they’ve always known.  So if you think you need life insurance (or need more than you have), do something about it today.  Your family is counting on you.

With Valentine’s Day next week, besides bringing home that romantic gift to surprise your loved one.  Do something permanent for them.  Buy them a life insurance policy to protect them in case you aren’t around to.  Talk to your Retirement Life Solutions Specialist today to determine the best insurance for your family.

What is Life Insurance?

Life Insurance Calculator

Furthermore, many statistics indicate that 54% of Americans have less than $25,000 in savings and investments.¹   As you can imagine, even with Social Security income, these people will soon outlive their savings and become impoverished. Some advisors recommend that someone who is working to begin saving at least 8-12 times current salary for retirement.  Then make sure they’ve saved at least eight times their final salary in order to retire at 67 years old.²

So how can a permanent life insurance policy help in advanced planning?

The cash value in your life insurance policy is your money.  You can take it out as a TAX-FREE loan. There are some concerns by doing this, but if created correctly in the first place, this can become an additional source of income during your retirement years.

So who do you talk to for more information about setting this up correctly? Retirement Life Solutions Specialists are advisors who can help you plan to use life insurance for other things than just the beneficiary’s life insurance payment.  They can show you how to fund a life insurance policy to help pay for children’s college, large purchases without borrowing from your bank, starting a business, and retiring on your own terms.

How can I help pay for my kids college education?

Most parents would rather their children not have to work their way through college or have large loans to pay off when they graduate.  A permanent life insurance policy correctly set up to build cash value can be used for college expenses.  When the child enters college the policy owner can take a TAX-FREE loan from their insurance policy each year to pay for some or all of the annual expenses. 

During this time, they should continue to pay the monthly premiums as well as the loan back.  By paying the loan back they are paying the principal and interest into their own cash account not the bank or lender who they might have had to take a loan from.  This continues to rebuild and grow the cash value in the insurance policy for future use.

Other mid-life uses

The policy owner can also use their cash value for other large purchases rather than borrowing from a lender and paying interest. Buying a car, down payment on a home, or other large purchases is easily done by borrowing from the insurance policy.  How about starting a business?  The policy owner can borrow from the cash value of their life insurance policy and quickly access startup capital.  Did you know that a few famous entrepreneurs – Walt Disney and Ray Kroc – used this exact method to start up Disneyland and McDonald’s?

Using life insurance in retirement

The use of a permanent life insurance cash value accumulation to add to other retirement savings can make perfect sense.  If a policy owner has done a good job building up their nest egg of cash over many years they have more flexibility to use this as an extra source of funds.  These funds have grown tax-deferred and now can be borrowed as a TAX-FREE loan to supplement monthly income as needed.  More importantly, at this point there is no rule that you have to pay the money back into the insurance policy.  Finally when the policy owner dies, there still is a life insurance benefit paid to the family for protecting their family.

The best time to begin funding a permanent life insurance policy is as young as possible.  However, at just about any age there are numerous ways to buy a permanent life insurance policy and still take advantage of this benefit.  Talk with your Retirement Life Solutions Specialist about your family’s specific situation.  They can educate you on the best choices available today.

¹ Brandon, Emily “Planning to Retire” U.S. News & World Report | Money, 10 February 2011, Accessed February 7, 2013

² CNBC Online, “Think Magic Numbers (Plural!) for Retirement Savings” cnbc.com, 25 October 2012, Accessed February 7, 2013.

What is Life Insurance?

Cost of Life Insurance?

An ROP Term Life insurance policy costs a bit more than a standard term policy.  Depending on your specific situation, it has its place among the varieties of life insurance.  There are many reasons why you might choose a ROP Term Life policy.

For example, many people going through a divorce and consulting with an attorney may have to carry life insurance on one or the other spouse for a period of time.  A divorced spouse may be required to purchase a term life policy on the risk that they might die during the time they are required to pay for alimony and/or child support. In these siutations, the beneficiary is the other spouse or children.  This insures that if they were to die, the insurance policy would cover the remaining alimony or child support. 

However, if the paying spouse is still alive at the end of the term, than the money paid for the life insurance policy could be considered wasted since “risk” they paid for did not occur.  By using a Return of Premium Term Life Insurance policy, the divorced spouse who paid for it would receive all the money back used to pay for the insurance policy. This money is TAX-FREE!

• In-depth review of using a ROP Term Life Insurance in a divorce decree.

Check with your Retirement Insurance Solutions Specialist to determine when and why you might want to use a ROP Term Life Insurance policy for your specific situation.

What is Life Insurance?

Cost of Life Insurance?

This is something that everyone here at Life Insurance Think Tank has a strong desire to educate consumers about.  If set up the correctly, permanent life insurance can be more than just life insurance.  Talk with your Retirement Life Solutions Specialist about your specific situation.

Click here to read his complete article

What is Life Insurance?

Cost of Life Insurance?

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.

What is Life Insurance?

Cost of Life Insurance?