Financial Intel Monthly

Traditional Whole Life Insurance

Apr 29, 2020 11:08:00 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, insurance, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Traditional whole life insurance, also known as ordinary life or straight life, is a type of permanent (cash value) insurance that provides coverage for your entire life. This kind of policy is sometimes described as plain vanilla insurance. You pay a fixed amount, known as a level premium, each payment period (monthly, quarterly, semiannually, or annually), and a guaranteed death benefit goes to your beneficiary when you die. Your premium amount is guaranteed to remain level for as long as you live, even if the insurance company's costs rise. When you reach old age, your premium will not increase over the amount you paid when you started the policy.
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Cash Value Life Insurance

Apr 29, 2020 10:58:00 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, insurance, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Cash value, or permanent, life insurance is life insurance that is designed to be kept until your death--whenever that may be. Part of your premium pays for the "pure" insurance coverage and expenses, and the balance is held by the insurance company in a cash value account. The type of permanent life insurance you buy (e.g., whole, universal, variable) will influence the pace at which the cash value portion of your policy grows. The interest and earnings grow tax deferred until you withdraw the funds, and may be part of the income-tax-free death benefit if you die. However, these policies may require a higher cash outlay than term life policies.
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Key Employee Life and Disability Insurance

Apr 24, 2020 10:04:23 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, Disability Insurance

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You've got a great group working for you now, and business is good. You know that much of that success is due to one or two key people with both skills and personalities that are hard to match. Suppose they were injured and out of work for a while, or suppose they died? Would your business survive? Key employee life and disability insurance coverage can help make sure that it does.
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Is Term Life Insurance for You?

Feb 21, 2020 11:01:00 AM / by The Retirement Group posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Term insurance is the simplest form of life insurance. It provides temporary life insurance protection on a limited budget. Here’s how it works:

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Last-Survivor Life Insurance

Feb 21, 2020 10:30:00 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, Last-survivor

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Last-survivor life insurance covers two lives under one policy. The death benefit is paid after the second insured dies.

Generally, premiums continue to be paid after the first insured dies. However, this type of policy may feature less expensive premiums than two individual policies, allowing the policy owner(s) the potential to buy a policy with a larger death benefit than might otherwise be affordable using separate policies.

Last-survivor life insurance may serve several purposes. For instance, last-survivor life insurance can be used to increase the inheritance for the beneficiaries of a married couple with an otherwise modest estate. Or, this type of insurance can be used to preserve an existing estate by providing cash for estate settlement costs and taxes. A last-survivor policy can be used to protect a two-income family when the loss of one income may be tolerable but the loss of both incomes would leave dependents without financial support.

Last-survivor life insurance may be used for funding the estate taxes of wealthy couples whose estate plans make maximum use of the estate tax deferral at the first death. In this situation, there may be a likelihood of greater taxes due at the death of the surviving spouse than when the first spouse dies. The last-survivor policy can be used to provide cash for the taxes due at that time.

A person who is in poor health may not be able to obtain an individual life insurance policy. However, insurance companies often issue last-survivor policies even when one of the insureds is in poor health (presuming the other insured is in better health) because only one death benefit is paid and not until the last insured person dies.

On the other hand, there may be some tradeoffs to last-survivor life insurance. Since the death benefit doesn't pay until the death of the second insured, it is possible that the surviving insured could be left without sufficient financial resources. And since premium payments must continue to be made, the surviving insured may not have the money available to pay the ongoing premiums. Some policies consider the insurance paid up at the first death so no additional premium payments are needed following the death of the first insured. Check for these features on any last-survivor life insurance policy you are considering.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have contract limitations, fees, and charges, which can include mortality and expense charges.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.
 
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Variable Universal Life Insurance

Feb 18, 2020 11:55:28 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Variable universal life insurance is among the most flexible products on the market today. It is permanent insurance that provides guaranteed lifetime protection, combining the adjustable premium and adjustable coverage of universal life with the growth potential of variable life. (Guarantees are subject to the claims-paying ability of the insurer.) You control nearly every aspect of the policy, including when and how much you pay in premiums (within limits), the amount of the death benefit, and the way your money within the policy is invested.

How a variable universal life policy works

There is no fixed, required premium that must be paid on a variable universal life policy. Instead, you must simply pay in enough money to cover the insurance company's expenses and the cost of the pure insurance, known as the mortality cost. Generally, however, you'll instruct the company to send you a premium notice for a planned premium, which you can pay, skip, or increase, depending on the policy values at the time.

Each time you make a payment, the insurance company deducts its sales and administrative expenses related to your policy. The remainder of the money is credited to a cash value account, from which the company deducts its monthly cost for insuring your life. You'll need to monitor your cash value to make sure you have enough money in the policy to pay this monthly cost, or the policy will expire (lapse). If you pay in more than is needed to keep the policy in force, the excess remains in the cash value account and is invested in subaccounts, separate from the insurance company's general account.

The separate account

Unlike the cash value in other types of policies, money in a variable insurance policy, including variable universal life, is controlled by the policyowner. Your cash value is placed into an account separate from the insurance company's general account. You choose from a variety of accounts known as subaccounts, including stock funds, bond funds, and money market accounts, into which to invest your cash value. You may generally allocate your money to as many subaccounts at any time without charge, up to certain limits.

Because these subaccounts are securities-based, they have the potential to grow faster than the cash value accounts contained in nonvariable insurance policies. But, of course, with this potential for rapid growth comes greater volatility and the possibility of loss. Growth is not guaranteed, and your cash value will fluctuate on a daily basis. You'll need to pay close attention to the performance of your subaccounts and may want to consult an investment professional. Also, because the cash value of your variable universal life insurance policy is regulated as an investment product by the Securities and Exchange Commission, you should receive a prospectus. The prospectus contains detailed information about investment objectives, risks, charges, and expenses, so read it carefully before purchasing a policy.

Adjustable death benefit

You may change the amount of your policy's death benefit to adjust to your changing financial situation, subject to the insurance company's guidelines. For instance, if you pay off your mortgage, your need for insurance might be reduced. But keep in mind that if you want to raise the amount of your coverage, you must again go through the underwriting process, which may include a medical exam. Also, when your policy is issued, you may have the opportunity to choose between a level or enhanced death benefit option, which you may later switch.

Option 1 (or option A) calls for a level benefit. If your cash value grows, the amount you are charged for ongoing insurance coverage is reduced by an equal amount. For example, if your $200,000 policy has $50,000 of cash value, you will be paying the cost for $150,000 of pure insurance coverage. Your premium requirement is less than if you have no cash value and are paying for the full $200,000 of coverage. Your beneficiary still receives $200,000 at your death.

With option 2 (or option B), your cash value is added to the amount of the death benefit. For example, if you have a $200,000 policy with $50,000 of cash value at the time of your death, your beneficiary receives the combined total of $250,000. But this additional amount is not free. Throughout the life of the policy, you'll pay for $200,000 of insurance coverage, no matter how high your cash value grows.

Partial withdrawals and policy loans

As with most permanent life insurance, your cash value can be used as collateral to secure (generally) tax-free loans from your insurance company. You will be charged a fixed or fluctuating interest rate on the outstanding balance of any loan. If you do take out a loan, that portion of your cash value designated as collateral is transferred to the company's fixed interest account. This is because the chance exists that the balance of your variable subaccounts may fall below the amount of your loan due to market fluctuations. The company charges interest on loans at a rate a few percentage points higher than the return you receive in the fixed account. Consequently, loans have a permanent effect on the performance of the subaccount investment return.

If you have an outstanding loan on the books when you die, the death benefit paid to your beneficiary will be reduced by the amount of the loan plus accumulated interest. Another method of accessing the money in your variable universal life policy is through a partial withdrawal (partial surrender). Since this is not a loan, you're charged no interest for such a withdrawal, but your death benefit will be permanently reduced. Also, a partial withdrawal could trigger a taxable event if the policy is a modified endowment contract or if the withdrawn proceeds exceed the premiums you have paid into the policy.

Sales charges and other fees

With most variable universal life policies, a sales charge is imposed on every premium payment. This charge is generally not sufficient for the insurance company to pay all of the insurance costs incurred in the acquisition of the policy. Over time, the insurance company will recover these costs out of the profits it earns on the policy. However, if you surrender (cancel) your policy before all of these costs are recovered, a surrender charge is imposed against your cash value. In addition, the fund managers of your variable subaccounts will deduct their fees as they would with any mutual fund.

Note: Variable life insurance and variable universal life insurance policies are offered by prospectus, which you can obtain from your financial professional or the insurance company issuing the policy. The prospectus contains detailed information about investment objectives, risks, charges, and expenses. You should read the prospectus and consider this information carefully before purchasing a variable life insurance policy.

 

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.

 

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Surrendering Your Life Insurance Policy

Feb 17, 2020 12:05:55 PM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, policy, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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If you no longer need life insurance or want to cancel for some other reason, you might be thinking about surrendering your permanent life insurance policy and withdrawing the cash value that has accumulated. But before you do it, here are some things you should consider.
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Shopping for Life Insurance

Feb 13, 2020 11:36:03 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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You've decided to buy some life insurance, but with so many insurance companies and so many products to choose from, shopping for coverage can be a bit of a challenge. Fortunately, with a little homework and the right help, you may be able to find a policy that suits you at a good price. Here are some guidelines to help get you started.
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A Primer on Irrevocable Life Insurance Trusts

Feb 12, 2020 8:00:00 AM / by The Retirement Group posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, Trusts

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"I’m proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money." Entertainer Arthur Godfrey(1)

The irrevocable life insurance trust (ILIT) can be an important estate strategy tool that may accomplish a number of estate objectives; however, it may not be appropriate for every individual.2,3

What Is an ILIT?

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Life Insurance: The Application Process

Feb 11, 2020 5:19:27 PM / by The Retirement Group posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, life insurance, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, Application

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You've shopped around, found the right insurance policy, and now you're ready to apply for it. What happens when you do?
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