3 things you probably don’t know about Whole Life Insurance.

Some people don’t know the difference between Term and Whole (Permanent) Life Insurance. But even those who do are amazed when we tell them these attributes of the already remarkable saving-earning-available-multi-use insurance.

1. Whole Life Insurance is tax-free vs. tax deferred. You can take withdrawals – whenever you need to – of cash value up to the paid premiums income tax free. You can borrow against the cash value of the policy and maintain tax-free treatment. (You know that investment earnings and 401ks, SEPs, etc. are subject to income tax.)

2. Your Whole Life Insurance is creditor proof in many states including Illinois. Nobody but the owner and the beneficiaries can touch what you’ve paid in, what those payments have earned and the death and/or Long Term Care benefits your policy provides.

3. There’s a Waiver of Premium in case of disability. The benefits of the policy are self-fulfilling in case of the disability of the owner.

There are a few other benefits you might not know. And we’d love to tell you about them.

I’m on a mission to make sure every woman has her own life insurance policy. Terry Savage, financial advisor is, too. You can see her advice at www.tcwmag.com.

We’ll be glad to discuss plans for any woman who asks. Any guy, too. Just ask.

You might be surprised at the benefits Whole Life Insurance has for you.

PS: If you haven’t done it, please ask your US Reps and Senators to support House and Senate bills to retain Health Insurance Advisors.

Insurance Benefits in the Tax Code

The Single Biggest Benefit in the Tax Code

Ed Slott does not sell life insurance, stocks, bonds, funds, or annuities. But on his PBS show, “Retirement Rescue”, this tax adviser describes what he calls “the single biggest benefit in the tax code and that is the tax exemption for life insurance”.

Ed cites

  1. incredible leverage
  2. tax-free benefits
  3. a big payoff for you while you’re living
  4. and for your heirs when you’re gone.
  5. all with relatively small amounts of taxable money that can be turned into “a tax free windfall”.

Mr. Slott admits to the same problem that we have talking to people about life insurance. We say, “Life”, they hear “death”. But Whole Life Insurance grows your money at a guaranteed rate and gives you access to that money during your lifetime – for whatever you want to spend it on – income tax free.

Yes, we said “guaranteed” in the last paragraph. Whole Life Insurance is an investment. But it comes with something you can never get from the stock market, a guarantee of growth.

It’s easy to look at how this fits you, your age, your income, your retirement plans. We’ll help you make choices for growth, savings, protection and legacy.

We’ll use a program that’s uncommon because it is so clear. It is free. You own it so you can see how to get what you need and want now and forever.

Call us and we’ll get you started.

Take the advice of Ed Slott, the Tax Adviser:

In these volatile and uncertain times, you need to focus on investments that give you control, options, flexibility and certainty and you want to remove both stock market risk and tax risk and you want it all tax free. That’s a tall order but you can get all of that with certain kinds of permanent life insurance.

See Ed’s whole story on You tube



Long Term Care Insurance: How Benefits Are Paid

Long-term care insurance policies are not standardized like Medicare supplement insurance. There are generally five different methods of payment.

1) Expense Incured Method of Payment-

The insurance company must decide if you are eligible for benefits and if your claim is for eligible benefits and if your claim is for eligible services.

Benefits are paid based on the expense and the dollar limit of your policy.
They may be paid either to you or to the provider.
Most policies today pay benefits using the expense-incurred method.

2) Indemnity Method-
When the indemnity method is used, the benefit is a set dollar amount. It’s not based on the specific services received or on the expenses incurred. The insurance company only needs to decide if you are eligible for benefits and if the services you are receiving are covered by your policy.
The insurance company pays that set amount directly to you up to the limit of the policy

3) Disability Method-
You are only required to meet the benefit eligibility criteria.
Once you do, you receive your full daily benefit, even if you are not receiving any long-term care services.

4) Joint Policies-
These cover more than one person, such as a husband and wife, or two partners, or two or more related adults.
If one of the covered individuals collects benefits, that amount is subtracted from the total policy benefit.

5.) Pooled Benefits-
Another type of policy provides a total dollar amount that pays daily, weekly, or monthly dollar limit for one of more covered services. You can combine benefits in ways that best meet your needs.
For example you my combine the benefit for home care with the benefit for community-based care instead of using the nursing home benefit.
The decision to buy Long-term Car Insurance is very important and one you shouldn’t make in a hurry. We’re here to help you better understand which policy works best for you and to make sure you know how to use it.
Source: National Association of Insurance Commissioners 12/2010.

Elder Care: Will You Be Ready?

We work with a number of savvy financial planners. Our friend Joe Bertoni of the Klein/Bertoni Group at Merrill Lynch sent us the above titled article.

It begins, “Whether you are caring for a loved one or are concerned that you will need care for yourself, the emotional and financial costs can be life-altering. It’s critical to be prepared.”

The article goes on to say, “Traditional long-term care insurance may not be the answer for everyone. (1) Health-related requirements for coverage have become more stringent, and (2) some big insurers have stopped issuing long-term care policies altogether. Moreover, (3) many people are understandably reluctant to spend years paying for coverage they may never use.

(4) But a number of alternatives to paying for long-term care expenses are available that may be better suited for many people because of their flexibility.”

The numbers are ours. They’re what we’ve been educating our clients about and why we recommend Whole Life Insurance.

Let’s count down the benefits.

(4) Whole Life Insurance is available with a growth component plus a death benefit plus a benefit to pay the costs traditional long-term care insurance paid.

(3) Whole Life Insurance eliminates the need for use-it-or-lose-it term life insurance and long-term care insurance. This is “living Insurance” with real, guaranteed growth on the premiums you pay that you have access to when you need it or want it. Then you can still leave a legacy through the death benefit. If you don’t need long-term care, you can use your money to travel, start a business, put someone through college, leave an even greater legacy to your kids and grandkids.

(2) The way care is being provided and will be paid for is changing. But you won’t have to worry about that. Your Whole Life Insurance policy makes the money available in the simplest of ways to pay for what you need.

(1) All life insurance policies have physical requirements. Starting early, in your 40s or even 30s, is always the best way to get the most coverage with locked in premiums and upgrade options. But we have just gotten a policy paying 6.65% interest for a 71 year-old woman.

We’re pleased to work with financial planners of integrity like Joe Bertoni. If you’d like to read more contact Joe at joseph.bertoni@ml.com.

Of course, if you’d like to know more about this multi-tasking life insurance contact us.

To Life!

COBRA: 10 Things You Need To Know

1. COBRA is a federally established program that allows you to stay in the group health insurance plan you have through your employer even if you have been separated from that employer. (Think of COB as “continuation of benefits”.)

2. In the situation described above everyone in the family who is now enrolled in the health insurance group can stay in the health insurance group for 18 months unless they become eligible for Medicare, a dependent child has their 26th birthday, you are eligible for other group benefits like a spouse’s company plan, you take a job or sign a contract offering group health insurance benefits or premium payment.

3. There is a different COBRA under the Trade Adjustment Act if you lost a manufacturing job that went overseas, and special rules because of divorce or widowhood.

4. The start of your 18 months of COBRA is triggered by the date your employee benefits end. This can be confusing when the company offers to continue to pay their portion of your health insurance premium as part of your severance. Are you still getting employee benefits or are they offering to pay for COBRA?

5. When your employee benefits end the handling of your health insurance will move to a COBRA desk or independent COBRA administrator. Make sure you know who that is.

6. If during the time you are on COBRA the company changes the group health insurance plans, benefits or provider, you are to be given the same choices as if you were still an employee.

7. COBRA is not extendable. It is repeatable. When you land a job with benefits, you will cancel this COBRA. If you leave the new job you will be eligible for 18 months of COBRA again.

8. You can keep COBRA if you take part-time work or consultancy contracts. Just make sure that you do not take health benefits or reimbursement for health insurance premiums or you can lose your COBRA.

9. Under new Affordable Care Act rules, you may choose private qualified health insurance at three times: 1) in the 60 day period given to choose COBRA; 2) during ACA Open Enrollment periods; 3) when your COBRA expires. Your private insurance will begin on the first of the month after each of these qualifying events. This is to discourage any significant lapse in coverage.

10. The Department of Labor is the source of all COBRA regulations. Their phone number is 866-444-3272. They have a Chicago office with Benefits Consultants 312-353-0900.

People are often shocked at the cost of COBRA. This is because the company was paying 50%-80% of your premium. And there is a 2% administration charge added to your premium for being on COBRA.

How The Affordable Care Act Has Changed Private Health Insurance

Before ACA: Insurance companies could decline, exclude or rate-up individuals because of health conditions.

Now: Insurance companies cannot do those things. There are no health questions on the private health insurance application.

Before ACA: You could choose to go without health insurance without a penalty.

Now: ACA requires almost all US citizens and legal residents age 26 and over to have qualified health insurance for themselves and their dependents.

When you file 2014 federal income tax (in 2015), you will need to include a Certificate of Creditable Coverage from your insurance company. It will say that you and your dependents had qualified health insurance in 2014. If you do not have this proof of insurance, the IRS will levy a fine of $95 per adult or 1% of your household income whichever is larger.

Before ACA: You could choose what insurance benefits you wanted in your plan.

Now: The insurance plans available in 2014 are called Qualified Health Plans. They include the benefits the government says your insurance must have to prevent being fined.

Before ACA: You could enroll in a new health insurance plan whenever you wished.

Now: Unless there are special circumstances, you can enroll only during Open Enrollment or during Special Enrollment periods triggered by a “life qualifying” event. Losing your employee group health insurance is a qualifying event.

You can sign up for private health insurance during the 60-day period given to elect COBRA or when your COBRA ends. You can change from COBRA to private health insurance only during Open Enrollment.

Private insurance must begin on the first of the month following the end of your employee benefits.

Before ACA: Individual policy holders (people who did not get group insurance through an employer, union, etc.) paid all of the costs of their insurance: premiums, deductibles, co-pays.

Now: The government offers payments toward the premium, deductibles and co-pays of a Qualified Health Plan. They are available based on household income and family size. These payments are available “On Exchange” through healthcare.gov.

We strongly recommend using a fully certified agent to help you determine eligibility, gather information that will be asked at time of application and guide you through the process online or in a conference call.

For help, call us at 847-362-8888. Our help is free. The information you give is confidential. There is no obligation.

The SBAC’s Health Insurance Cooperative Explained

The video below was published on YouTube by SkokieNet/Talk in November, 2012. On it I explain the Small Business Advocacy Council’s Health Insurance Cooperative. A partially edited transcript follows the video.

I’m Rebecca Bloomfield, I’m a partner in Jerry Pearlstein Insurance and for a decade we have have provided health and life insurance for independent, very small business people. Because of that we became interested when we heard that the Small Business Advocacy Council wanted to create a health insurance cooperative for small business people. A big group made of many small business people. But it was against the law in Illinois, you couldn’t do that. Continue reading…