Estate and Tax Planning
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Auto Breakdown Insurance

May 27, 2011 | Filed Under Insurance | Comments Off

Is Mechanical Breakdown Insurance (MBI) Worth It?    by Chris Birk on 19 May 2011

http://www.wisebread.com/is-mechanical-breakdown-insurance-worth-it

This is an interesting article regarding a rarely heard insurance product, Mechanical Breakdown Insurance.  This is a hedge against those unexpected, costly automobile expenses.

Medical Bill Forum

April 26, 2011 | Filed Under Finance, Insurance | Comments Off

I found a unique online forum on questions and solutions to medical billing issues, I’d like to share.   The forum was created in response to a new book,  The Medical Bill Survival Guide: Easy, Effective Strategies for People Experiencing Financial Hardship by Nicholas Newsad M.H.S.. Mr. Newsad states that “he hopes the forum will serve as a repository of knowledge for those that have overcome medical bill problems to share their stories and advise those needing help with medical bills.”  It’s my wish you don’t ever need it, but in case you do, take at look at

http://www.medicalbillsurvivalguide.com/forum1/

I have definitely bookmarked this resource!

Planning for Retirement

April 19, 2011 | Filed Under Finance, Insurance, Investment, Retirement Savings | Comments Off

The National Retirement Planning Coalition, a group of prominent financial industry, educational and advocacy organizations, is working to raise public awareness of the need for comprehensive retirement planning.    The members of the Coalition believe it is still possible to “Retire on Your Terms” if comprehensive retirement plans are properly developed and managed. This week the Coalition sponsored the National Retirement Planning Week to help raise awareness and educate Americans.

Cathy Weatherford, CEO and President for the Insured Retirement Institute (IRI), which heads the Coalition, said, “ Planning for retirement can be a daunting task, especially given the recent economic climate. And while by most accounts the financial forecast appears to be improving, millions of Americans have yet to begin preparing for their retirement.  Wanting to spend their later years content, secure and financially sound is the goal of anyone thinking about retirement.”  The IRI has developed a consumer guide to aid in planning for one’s retirement.  Their “Top 10 Ways to Prepare for Retirement” are useful tips to map out a course for a secure financial future.

Top 10 Ways to Prepare for Retirement:

  • Select a target date for when you want to retire.
  • Calculate how much money you need to accumulate by the time you want to retire.
  • Find out how to maximize your Social Security benefits.
  • Take full advantage of tax-advantaged plans such as employer retirement plans, individual retirement accounts and annuities.
  • If you employer doesn’t have a pension or retirement plan, ask that one be started.
  • Don’t touch our savings for anything but retirement.
  • Diversify your assets and be sure to include guaranteed income for life.
  • Ask questions.  Get help.  Seek the assistance of a professional financial advisor.
  • Start now, set goals.
  • Do a retirement plan and monitor your progress.

Just a few short years ago millions of Americans relied up their employer sponsored retirement plan to achieve their future financial goals.  But with more than 2.4 million active 401(k) participants affected by employers suspending their savings match at the beginning of the market decline, along with so many others who have lost jobs or have had their employer benefits reduced, it is even more vital now that people meet with an ethical, and competent financial advisor to start a retirement plan today.

Please contact Shari Mattingly-Bevan & Associates for additional information on retirement planning solutions at 864-283-6906.

Time for a Financial Check-Up

April 1, 2011 | Filed Under Finance, Insurance, Investment, Retirement Savings | Comments Off

We’re coming to the end of the first quarter of 2011, and if you haven’t taken time to examine your financial plans, now is a perfect time to take a fresh look at where you are heading financially.

I encourage you to meet with your qualified planner or contact our office to assess the current state of your finances.  Your advisor should help you to re-evaluate your financial plans and show you how to make any necessary changes that move you closer to your goals.

Here are some things to consider:

  • Are your plans still providing comfort, confidence and security?
  • Are they keeping track to fund your retirement or do you see yourself outliving your money?
  • Is your desire to leave a financial legacy behind for your loved ones still possible?
  • Be sure that you are living within your means.
  • Communicate your plans with loved ones so they can follow through with your wishes in the event of the unexpected.

The future is as uncertain today as it was last year, or 80 years ago.  Reviewing your financial plans every year with a trusted financial advisor, will help you face the challenges in the future.

“Change is only painful if you lack knowledge about how to prepare for its consequences.”  [1]

[1] Van Mueller, LUTCF



Long-Term Care Insurance Costs

March 29, 2011 | Filed Under Finance, Insurance | Comments Off

An analysis of more than 200,000 purchasers of partnership qualified Long-Term Care Insurance policies showed a misunderstanding among consumers on the actual cost of Long Term Care coverage.   There is a perception that the cost of coverage is a bit higher than the actual price.  The reason for this is that premium costs are reported often using averages. These averages include large numbers of older buyers and other factors that result in higher costs.

The American Association for Long-Term Care Insurance(AALTCI) reported that during the first half of 2010  “one-fourth, or 27.8 percent of individuals purchasing long-term care insurance who were under age 61 pay less than $1000 a year.”  In addition, 19.4% or nearly one in five who were under age 61 pay between $20 and $30 a week for new policies.  More than 28.9 percent in this age group pay between $1500 and $2500 a year with the remainder paying more.  Less than 6.8% pay $4000 or over.

Jesse Slome, the executive director of AALTCI, says, “Studies that report average premium costs regrettably mislead the public into the perception that long-term care insurance is expensive.”

In reality, it is far more expensive to self insure if a long term care situation arises.  Long term care planning is a critical component to a solid financial plan during retirement.

Annuities – Good For Your Portfolio

March 16, 2011 | Filed Under Finance, Insurance, Investment, Retirement Savings | Comments Off

“Retirees may get more financial security by combining insurance products and mutual funds, some analysts say”

This week in the Wall Street Journal, an article appeared entitled, “Making the Case to Buy an Annuity”.  The article addresses the importance of adding  annuities with lifetime-income guarantees to your retirement portfolio.

When the stock market makes a downturn during the early years of your retirement, you may face running out of money, if you are  invested in the markets.  Annuities with lifetime-income guarantees can offset that risk.

The importance of annuities and income riders was highlighted by Chief Investment Officer of Morningstar, who said, “”The longer we live, the greater stress that puts on our ability to pay for our retirement-income goal, an income stream that lasts as long as we do.  We need to go beyond the universe of mutual funds and ETFs and consider longevity-risk products.”

According to a researcher, “a typical 65-year old should have as much as 50% of their money in annuities, and the typical 75-year old should have about 65% invested through annuites. ”

There are two main types of annuites, variable and immediate, or indexed.   One important disadvantage to variable annuities is the typical high fees compared to the lower fees of an indexed annuity. Both, however, can provide life-time income.

For additional information on this topic, please contact me at Shari Mattingly-Bevan & Associates at (864) 283-6906.

To read the full article, go to    http://online.wsj.com/article/SB10001424052748703954004576089761660773344.html

Medicaid called a Humanitarian Catastrophe

March 11, 2011 | Filed Under Insurance | Comments Off

Interesting study by University of  Virginia exposes perhaps greatest danger to your health: Medicaid.

In a recent article on Forbes.com, Avik Roy draws attention to some alarming statistics regarding the quality of care Medicaid patients receive.

“We spend half a trillion dollars every year to provide the poor with worse care than is gained by the uninsured. How is this even possible? To get your mind around the problem, you need to understand one thing: access to health insurance is not the same thing as access to health care.”

“Patients on Medicare were 45% more likely to die than those with private insurance; the uninsured were 74% more likely; and Medicaid patients 93% more likely. That is to say, despite the fact that we will soon spend more than $500 billion a year on Medicaid, Medicaid beneficiaries, on average, fared worse than those with no insurance at all.”

The study conducted by the University of Virginia in 2010 is the main source of Mr. Roy’s assessment of Medicaid.

Mr. Roy concluded by  saying, “Private insurance outperforms Medicaid by a wide margin. Allowing the poor to control their own health dollars is the best way to help them lead longer, healthier lives….But anyone who genuinely cares about the welfare of the poor should help make it so.”

Please check out the full article at

http://blogs.forbes.com/aroy/2011/03/02/why-medicaid-is-a-humanitarian-catastrophe/

Tax Reformers Targeting Life Insurance

March 11, 2011 | Filed Under Insurance, Retirement Savings, Tax Articles | Comments Off

Is the cash value in your life insurance policy on its way out with tax reform?

In an attempt to tackle the federal deficit and increase revenue, Congressional members are tossing around ideas to alter the tax treatment in insurance policies and retirement plans.  House Budget Committee chairman and a leader of the tax reform effort, Republican Paul Ryan, R-Wisconsin., said in January to the National Press Club, that he would not rule out removing the tax treatment policyholders receive on the cash that is built up in their life insurance policies.

This comes in the wake of a Congressional defeat of similar proposals offered by the President’s National Commission on Fiscal Responsibility and Reform in December 2010.  Mr. Ryan voted against that commission’s proposals.  But a month later, in a response to questions regarding tax reform and the favorable tax treatments in insurance policies, Mr. Ryan said, “We’re looking out for the American people,”  “We’re looking out for the American economy. We’re not looking out for this narrow special interest that has a little piece of the tax code carved out which serves as a direct barrier to entry against….competitors.”  He stated, however, that it is too early to tell whether he and his GOP colleagues will eliminate the tax benefits in insurance policies through future tax reform.

In defense of it’s policyholders, the insurance industry will fight against any attack on the tax-deferred buildup of cash value in life insurance policies, and the tax-free death benefit.  Terry Headley, president of the National Association of Insurance and Financial Advisors, said “What we don’t want to do is for the American public to be disinclined to provide for their own financial security and, therefore, creating a greater dependence on government.”

Death and Inheritance Taxes

March 9, 2011 | Filed Under Insurance, Retirement Savings, Tax Articles | Comments Off

A lot of attention has been paid to the Federal Estate Tax, but there are 20 states in the Union, including D.C. that have their own Estate or Inheritance Tax. Two states, Maryland and New Jersey, have both!

Many people are unaware that they may be living in a State that has it’s own Estate or Inheritance Tax. According to Constance Fontaine, an Associate Professor of Taxation at American College, “People are writing checks in the thousands who didn’t expect to be.”

Exemption levels are often low, so many beneficiaries are surprised the estate they inherited qualifies to be taxed.  In Ohio, for example, the Estate Tax exemption level is only $338,333.  In New Jersey, the exemption level is $0.

Estate tax rates are typically in the teens, unless you live in Minnesota. The top estate tax rate there is a whopping 41 percent for estates totaling more than $1 million.  Inheritance tax rates are usually in the teens as well.  In Indiana, however, you will pay 20% of your inheritance back to the state, if you inherit more than $150.

Many people in these 20 states are affected more by these state taxes than they are of the federal taxes.

Life insurance policies can sometimes be used to pay for the expected taxes, since their benefits are exempt from these taxes in most states.  However, you have to be careful the insurance benefit goes to an individual and not to the estate or executor.

Estate Tax                                2011 Exemption                                  2011 Top Rate

  • Connecticut                             $3,500,000                                          12
  • Deleware                                 $5,000,000                                          16
  • District of Columbia                 $1,000,000                                          16
  • Hawaii                                     $3,600,000                                          16
  • Maine                                      $1,000,000                                          16
  • Massachusetts                        $1,000,000                                          16
  • Minnesota                               $1,000,000                                          41
  • New Jersey                             $   675,000                                          16
  • New York                                $1,000,000                                          16
  • North Carolina                        $5,000,000                                          16
  • Ohio                                        $   338,333                                           7
  • Oregon                                   $1,000,000                                          16
  • Rhode Island                          $   850,000                                          16
  • Vermont                                  $2,750,000                                          16
  • Washington                            $2,000,000                                          19

Inheritance Tax                        2011 Exemption                                 2011 Top Rate

  • Indiana                                    $100                                                  20
  • Iowa                                        $0                                                      15
  • Kentucky                                 $500                                                  16
  • Maryland                                 $150                                                  10
  • Nebraska                                 $10,000                                             18
  • New Jersey                              $0                                                      16
  • Pennsylvania                           $0                                                      15
  • Tennessee                                $1,000,000                                        9.5

Life Insurance Disclosure Requirements to Expand Your Options

March 8, 2011 | Filed Under Insurance | Comments Off

In today’s economy in particular, life insurance policyholders are looking to save money when they find they can no longer afford the premium.  The decision to keep paying the premium or to not pay the premium while the policy owners struggles to put food on the table tends to be an easy one.  Unfortunately, when they contact the insurance company they are frequently offered only three options: let the policy lapse, keep paying the premium or surrender it for its cash value.  Many times the cash value has been borrowed against either by the policyholder or reduced by the insurance company to pay premiums.

Now state lawmakers are meeting to establish a new disclosure, which would inform the public that their options aren’t so limited.  State legislatures will be introduced this year to the Life Insurance Consumer Disclosure Model Act, which would require life insurance companies to inform policyholders above the age of 60 or with a terminal or chronic condition that there are eight approved alternatives.

The law also stresses that “policy owners should contact their financial advisor, insurance producer, broker or attorney to obtain further advice and assistance.” Insurance companies may be subject to state penalties if they violate the law, which would be considered an unfair trade practice.

Some insurance companies, such as MetLife, Prudential and the American Council of Life Insurers (ACLI) have objected to the new disclosure requirement, on the premise that it would be too much information for their customers, leading only to confusion.  In addition, they announce that it would be too costly to send out the notices.  That claim is disputable, considering they would be sending out notices through existing mailings.  Perhaps, the companies’ main concern, although not publicized, is that some of the alternatives would not benefit them directly.

For consumers requiring long-term care, the additional options bring opportunities to utilize their life insurance policy’s death benefit while the consumers are still alive. Medicare and Medicaid cover some of the costs of long-term care for qualifying recipients, but for others who don’t qualify or already have a separate long-term care policy, they may opt into exchanging their current life insurance policy for a long-term care benefit plan.    Unlike an insurance policy, the benefit plan is not subject to the same limitations and wait periods as is a long-term care insurance policy. It is not issued by a carrier and isn’t restricted to policies that contain a conversion rider. The policy conversion can be done in less than a month and can be for any form of individual or group life insurance. This becomes in many cases an excellent means to provide for the cost of long-term care and/or senior housing.

The National Conference of Insurance Legislators which passed the Act in November 2010, sees the passage of the Life Insurance Consumer Disclosure Model Law as “a strong stand for life insurance policy owners and would empower consumers through education about their options.”
The additional options that would be required to be disclosed to policyholders are:

* Accelerated death benefit
* Assignment of policy as a gift
* Life Settlement
* Policy Replacement
* Maintenance pursuant to terms or riders
* Maintenance of policy through a loan
* Conversion from a term to a permanent policy
* Conversion to Long-Term Care Policy or a Long-Term Care Benefit Plan

For additional information on this topic, please contact Shari Mattingly-Bevan at Shari Mattingly-Bevan & Associates at (864) 283-6906.

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