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We all know a traditional Long Term Care policy can help with long-term care expenses. But, did you know it can give your clients tax advantages too?
Current tax laws allow your clients to deduct either the actual or eligible premium paid for a tax-qualified LTCi policy. The eligible premium is determined by the Consumer Price Index and the age of the policyholder.
And, since most Long Term Care policies are tax-qualified, benefits paid are intended to be tax-free as long as they do not exceed the greater of:
We have a new agent tax guide that is available now that gives detailed information on this unique advantage of our traditional policy. You can download immediately here or call us at ISN Network 800-338-1892 x 1
Life insurance should be an essential part of every person’s life plan. When you die, it provides income to your beneficiaries – and, this income is not subject to federal income tax. It may provide the needed funds to pay off your personal debt so that your loved ones aren’t burdened with additional financial obligations. Finally, it’s beneficial for your family in case you die unexpectedly.
You should base the amount of life insurance you might need on you and your family’s current financial needs. How much current financial obligation do you have? How much do you want to protect them in case of your death?
To start, consider:
Evaluating these items should help you gauge the amount of coverage you need. An often-used general guideline is that your life insurance should cover five to seven times your annual income. It’s a good idea to review your needs on a regular basis so if you need to make adjustments, your policy can be reviewed accordingly.
The “best time” to buy life insurance is different for everyone. Once you think you have people you want to protect, or significant debt that you want to avoid burdening them with, you should consider some type of life insurance. Although, it’s never too early to plan for the unexpected!
Depending on the type of policy you choose, it may be a good way to contribute toward a fund you can borrow from later. When you do consider life insurance, your current needs will likely help you decide what type of plan you should choose.
It depends on what the illness or medical condition is. Today, it’s often likely that illnesses and conditions may be controlled with treatment, prescriptions and diet. Any good life insurance company will take these factors into consideration. A member of our team can talk with you about your situation to determine what type of life insurance may be right for you.
We offer a variety of products that all have their own separate maximum ages to purchase. Typically, you can purchase life insurance up until your 89th birthday.
The policy owner is the person who owns the insurance policy. The insured is the person whose life is insured. In some cases, the policy owner and the insured may be the same person, or different people (for example, the policy owner could be a parent, while the insured could be a child.)
The beneficiary is the person or other party designated to receive the money from the life insurance policy when the insured dies.
A rider is an additional benefit to an insurance policy that becomes part of the insurance contract and either expands or limits the benefits. These options help make your policy more specific to your insurance needs.
Not all life insurance requires a medical exam to qualify for coverage. Your need for a medical exam will vary based on the type of insurance you’ve applied for, your age, and the face amount of the policy. If a medical exam is required, the insurance company will cover all expenses incurred in the exam and will provide all necessary documentation.
That is where we come in. Let us take a look at your situation and make recommendation. You will be glad you did!
In loan-based split dollar, the corporation pays the premiums on a policy owned by the business owner or key person (the “insured”). Generally, this would be treated as a distribution from the corporation and income taxable. However, in this case the premiums payments are structured as individual loans from the corporation to the insured/policy owner that are collateralized by the cash value and death benefit of the life insurance policy. The principal of the loan is payable at the end of the loan period, with the insured being responsible only for payment of loan interest on an annual basis. If loan interest is not paid, it is treated as taxable distribution to the insured.
Corporate funds are loaned to the insured to purchase a life insurance policy, and are not income taxable to the insured/owner at this point. If a cash value permanent life insurance policy is purchased, there is the possibility to accumulate cash values on a tax deferred basis. At some point, when cash values have accumulated safely beyond the outstanding principal of the loan (generally, premiums paid), funds can be taken out of the life policy on a tax advantaged basis to pay back the loan. The resulting policy, along with tax deferred cash value, will be owned free and clear by the insured. The policy cash values – net of loaned amounts used to repay split dollar loan – can then be borrowed out of the policy income tax free (as long as the policy remains in force) as needed.
Interested in learning more about loan-based split dollar ? ISN Network is here to help! For further training, review or illustration support, please contact ISN at 1.800.338.1892, Option 1 or email us at email@example.com
Storytelling is important. None of us live in a world of data and logic, as much as we might pretend that we do. Stories are important.
Stories provide contexts to teach our customers and help them learn. They provide a basis for helping our customers understand how we might help them. They help customer learn through understanding the stories of people and organizations who have faced similar issues. Stories engage our customers hearts and minds.
Unfortunately, when we think of stories, too often, we think of our stories or those we want to tell.
But our customers have their own stories—stories relevant to their own companies, organizations, and functions. These provide the frameworks that provide them meaning in their jobs. Stories that are personal, these provide the context of who they are. Inevitably, these stories are tightly intertwined.
Stories provide the framework and rationale to how we live, what we believe, what we value, how we dream, what we want to achieve. They shape who we are–as individuals and as people working in organizations.
We focus so much on the stories we want to tell, too often we forget to understand our customers’ stories.
But that’s probably most important, until we can understand our customer stories, we have difficulty positioning ours. Until we understand their stories, we don’t know how to help our customers expand their stories to include ours.
Storytelling is important.
Imagine if we took the time to let our customers tell us theirs.
Since life circumstances change over time, life insurance policies must be updated to reflect those changes. As a rule, it is best to review coverage at least once per year. When doing this, spend some time pinpointing major life changes over the past year. Meet with a personal agent to go over a list of events to ensure adequate updates. To evaluate current coverage, ask these self-assessment questions:
Some of these criteria such as being a smoker will affect life insurance pricing on the insurer’s end and on the policyholder’s end. Major life events and income or debt changes are good reasons to increase a coverage amount. This is not required by the insurer. However, it is important to leave enough money to cover debts, final expenses and some living expenses for heirs. If there was a significant income increase, a person may want to add more money to a life insurance policy for a child’s future college fund or for an elderly parent’s skilled care.
Also, another topic commonly overlooked by consumers is insuring a spouse who is a stay-at-home caregiver. Men and women who stay home to take care of the house and the children make vital contributions. If they die, the main breadwinner is left with the expense of finding someone to care for the children and the home. Paying for child care and a housekeeper can be expensive. It is important for stay-at-home caregivers to have life insurance as well.
Term life insurance is a popular choice. People purchase it for a specific amount of time such as 30 years. If the policy’s term expires without it being renewed, the policyholder is no longer covered. There are other types of policies that do not expire, and the payout and premium remain the same regardless of health or age changes.
A person who buys a term life insurance policy at age 30 for a term of 30 years would pay much less at that point than he or she would pay to renew it at age 60. If the individual started smoking and had multiple health problems, the cost to stay insured would be significantly higher. When choosing life insurance or updating it, always keep a long-term plan in mind. People with term life insurance policies can convert them into permanent policies before they expire.
The right policy choice for each person depends on personal circumstances, health status, age and budget allowances. Although universal life insurance may be a better option than term life insurance, it is more expensive. However, having an affordable term life insurance policy is better than going without life insurance. To learn more about life insurance options and how much coverage to purchase for individual circumstances, discuss concerns with an agent.