Census Data & Life Insurance
September is Life Insurance Awareness Month
DID YOU KNOW...
…that life insurance policies dated prior to 2002 are based on 1980 census data?
WHY THIS IS IMPORTANT
If you have a policy dated prior to 2002, you may be paying too much. Because the cost of life insurance is based on life expectancies; the longer we are expected to live, the less it costs to insure a life. For decades, life expectancies have been increasing -- in fact, in 2009 life expectancy tables were revised upward to 121 years of age.
…that the data from the 2010 census may show that we’re actually not living longer?
WHY THIS IS IMPORTANT
If you’re considering life insurance or if you don’t have any, the cost may go up when the 2010 census data is released. If life expectancy tables are revised downward, the cost to insure goes up. Conversely, if the census results show people are living even longer, costs could go down.
WHAT ELSE YOU SHOULD KNOW
With the recent economic downturn, many life insurance policies have not performed as initially illustrated. If you currently have life insurance, you absolutely need to take another look at your policy to ensure it will still do what you initially planned for it to do. You do not want to wait on this; doing so could lead to a nasty surprise later. Be sure to request a Life Insurance Assessment below.
Also, the underwriting process for life insurance has changed; most notably, there are more rate classes today. If you have a policy at any rating other than “preferred”, you may now qualify for a better rate class and save some expense. Originally you may have been placed in a lower rate class due to some minor issue. While you may not get into the best class today, you potentially could be in a better class than you currently are.
A UNIQUE WAY TO USE A UNIQUE TYPE OF LIFE INSURANCE
They say that a penny saved is a penny earned. And if this is true, what do you call a penny spent? Well, I’ve discovered a wealth building strategy that uses a unique type of life insurance policy in a really unique way; this strategy makes sense of the following statement:
“a penny spent can also be a penny earned”. Why? Because this strategy allows you to earn interest on money that you’re spending.
This strategy is called many things; I know it as “Bank on Yourself” – a process for allowing you to get back every penny you pay for your cars, vacations, home repairs, business equipment, a college education and other major purchases. One of my favorite features is that it works in conjunction with everything else you’re already doing. So if cars, vacations or any other large purchases are in your future, I highly recommend we sit down for a free analysis & review.
IF YOU’RE OVER AGE 59 ½ WITH AN IRA
With my retiree clients, I’ve also learned how this strategy can be used to:
- convert your IRA to guaranteed tax-free growth (even RMDs!)
- ensure your beneficiaries get the entire value of your IRA; not just what’s left after Uncle Sam takes his share (this is called Income Tax with Respect to a Decedent -- IRD)
- convert your IRA to a tax-free retirement income
- pay off your mortgage or other debt & then pay yourself what you’re currently paying the finance company (simply by repositioning current assets)
There are so many ways this can be used; I really don’t understand why more people aren’t aware of this!
WHAT YOU SHOULD DO NEXT…
Schedule a Life Insurance Assessment; particularly if you currently have insurance. But if you don’t… or if you’re wondering if you have too much or too little… or if you want to ensure what you have is your best option… OR if you want to see how Bank on Yourself could work in your unique situation – simply call me at 952-746-1321, send me an email at ehagen@nextfinancial.com or return the enclosed reply card.
My work is to help you make the most of your retirement years; if showing you how to make better use of what you have OR if helping you save a few bucks in these tough times would help, then take the next step right now!
