Life Insurance Insights

Hello, and welcome to my blog.

Since the early 1960s, I have enjoyed a long and satisfying career in the Life Insurance industry. I have served as an expert witness before the California State Senate Committee, as a licensed Continuing Education Instructor, and as president of several industry organizations. I remain active today as a consultant.

Here you will find regularly posted articles designed to educate individuals and families about the value and importance of Life Insurance today. I welcome your feedback, and invite you to follow me on Twitter and Facebook.

- Mike (info@lifeinsuranceinsights.com)

28 August 2014 0 Comments

Social Security Planning Tips

shutterstock_112541258The Bridge

When you are about to retire there are several choices that face you.  If you are about to retire at age 62 you may not want to take Social Security retirement benefits at that time due to the early retirement reduction in benefits. You might also not want to leave the workforce until the full retirement age (FRA) of age 66, but then delay the beginning of Social Security benefits until age 70 to maximize the delayed retirement credits.  In either case you will need to provide bridge income as you await for the Social Security benefit to kick in.  Some might suggest using an immediate annuity (IA) for this purpose, but I believe merely drawing down from other investments to be more efficient since the load on short term IA’s can be excessive. More…

26 August 2014 0 Comments

Reflections

shutterstock_184421114Time flies when you’re having fun, they say.  What I barrel of fun I’ve had!  Rounding the corner last May, I’m on my way to 80 big ones above the grass.  Strange as it seems, I don’t feel that old…but how should I know how that feels, never having been there before?

Sure, there have been some changes.  Since I stopped showing up in coat and tie at the office every day at 8:00AM, I’ve had much more time to go to the movies…and my wife and I do love the movies.  We’ve also spent more of our travel time on cruises…enjoying long times at sea between ports for reading, lectures and each other’s company.  It beats checking in and out of hotels every other day on a quest for the next city.  The iPad has become my constant companion, keeping me linked just enough to my blog, consulting and an occasional sale…and Scrabble.   When at home, I’ve become the cook, albeit with a limited menu. More…

21 August 2014 0 Comments

More Life Insurance Uses for Foreign Internationals

shutterstock_165303932In my last entry I discussed special estate tax needs of Foreign Nationals and how life insurance can be an effective answer.  Aside from estate tax liability, there are also some other uses of life insurance issued by U.S. insurers that are attractive to foreign nationals.

International investors often look for safe, secure U.S. based assets in which to deposit funds.  American life insurance policies may be an effective choice.  The low pricing, stability and long term guarantees offered by U.S. carriers are typically not available off shore.  If the investors primary goal is the transfer of assets to heirs at death, then the lifetime death benefit guarantees offered by many Universal Life contracts is appropriate.  More…

19 August 2014 0 Comments

Special Estate Needs of Foreign Nationals

shutterstock_129797951Non-resident aliens who own U.S. real estate.

Non-resident aliens who directly own certain U. S. assets are exposed to U.S. estate tax liability and only $60,000 may be exempt from this tax, not the $5,000,000+ exemption normally allowed for U.S. citizens.  Here’s an example:

Pedro Sanchez is not a U.S. citizen and is a resident of the Dominican Republic.  On his last trip to Miami he purchased a $4,000,000 condominium in South Beach which he visits three times a year.  By buying this property and owning it outright, Pedro created a U.S. taxable estate and as a Non-Resident Alien he is only afforded a $60,000 estate tax exemption. More…

15 August 2014 0 Comments

The Flexibility of Universal Life

shutterstock_148496540My previous entry dealt with how Universal Life (UL) could be structured to resemble a 20 year term policy.  This is just one of the flexibility features of Universal Life.  There might also be some flexibility in amount of death benefit, but here I’ll deal just with premium flexibility and access to cash value in Universal Life policies.

Universal Life policies have no stated premium.  There may be a premium that you pay on a regular basis, but that is the planned premium, not the stated premium.  If you skip a planned premium, it does not mean that the policy will lapse.  The cost of insurance and policy fees are withdrawn from the policy’s account value and as long as there is enough value to pay for these items the policy will continue in force.  More…

12 August 2014 0 Comments

When You Want Term, But Conversion is the Only Answer

shutterstock_146949359 (2)I previously discussed how converting term insurance works.  It’s when you decide you no longer want term insurance and you exchange your term policy for a permanent policy without having to provide any current personal information to the insurance company.  The new permanent policy is issued in the same underwriting class as the term based on premiums for your then attained age.

Here’s an interesting scenario where a man purchased a $1,000,000 20 year term policy when he was age 32.  At the time he was a Preferred risk.  He is now age 52 and his 20 year term policy is coming to the end of its term.  If he does nothing the policy will continue as term insurance, but the premium will immediately quadruple and will continue to increase each year thereafter. More…

7 August 2014 0 Comments

Help Yourself to the Best Premiums

shutterstock_89752360There are many factors that go into what you will be charged for life insurance.  There is really only one of those factors that is totally out of your control:  family history.  If your father died of a heart attack at the age of 55 there’s nothing you can do about that, and that would disqualify you as being eligible for the Preferred-plus premiums with all companies.  But even with this totally uncontrollable factor if you are age 65 when you are applying for insurance, have never used tobacco, have no other cardio vascular risk factors and your father was a 2+ pack per day smoker, some insurance companies might be convinced to bend that rule and give you Preferred-plus premiums if you would otherwise qualify. 

Here are some other things you can do to get the best premium: More…

5 August 2014 0 Comments

Why You May Not Be Eligible For The Lowest Premium

shutterstock_185407481Years ago the majority of life insurance applicants received a policy with the lowest premiums.  You could smoke two packs a day and didn’t have to provide a blood draw.  Insurance companies paid little attention to family medical history. The problem with that simplistic pricing approach was that the person in pristine health paid more than what he should have and the nicotine addicted couch potato whose father keeled over at age 55 from a heart attack paid less than his fair share. Standard premiums were the best available and were what were issued to both of these categories.

Then, in the 1970’s the premium advantage for non smokers was introduced followed several years later by the concept of preferred and then preferred-plus premiums for the best risks.  The result of these concepts was to produce lower premiums for many people, but higher premiums when justified by medical records, life style or family history.  Since no one is legally required to carry life insurance, this approach of assigning premiums appropriate to an individual makes sense. More…

31 July 2014 0 Comments

When Feel Good Vanishes

shutterstock_81547240Having discussed how the purchase of life insurance should, and usually does, produce an everlasting good feeling, I’d be less than honest if I didn’t admit that that is not always the case.  There are times when the life insurance purchaser becomes engulfed in buyer’s remorse, or at least uncertainty. “Did I buy the right policy?”  “Can I really afford this?”  “My cousin seems to have a better deal.”

When this happens, before you rush to the incinerator to dispose of your policy, pause.  What has suddenly caused your self doubt?  If it’s another insurance agent, consider that agent’s motive.  Though it might be a desire to provide you with the best policy, it might also be spurred on by the commission to be earned if you replace your current policy with one recommended by him.  Always ask the agent who is promoting the new policy to put his recommendations In writing:  what is wrong with your current policy and why is the one he is recommending better? More…

30 July 2014 0 Comments

The Feel Good Factor

shutterstock_94700359 (2)Buying a new car can make you feel good…until the new car smell wears off and you no longer bother to get it washed every week.  Moving into a new home always makes you feel good…until the newly escalated real estate taxes come due.  Partying with a bunch of your pals from college, reminiscing about the good old days , makes you feel good…until the next morning when your head feels like someone buried an axe in it.  Many of life’s experiences generate a good feeling…it’s just that many of them are short lived.

There is one event that doesn’t always produce good feelings at its commencement, but should certainly cause you to feel good—about yourself and what you have done—for many years into the future.  That “feel good factor” comes with the purchase of life insurance in an amount significant enough to maintain your family it the same level of comfort they enjoy today if you were to die tomorrow. More…