Numerous pension max products available.
For a Quick straight Quote, click on this link.
(Note this is only one carrier of the many I represent, specific medical issue for your quote will not be asked and will effect the premium presented.)
Please contact me to learn how maximizing you pension will benefit you. Thank you.
By Adam Cufr
February 1, 2014
The age-old debate about which is better, term or whole life insurance, deserves to be retired. As financial advisors, our job is to upend myths that can prevent families from reaching true financial security. As I have said before, financial products are amoral—neither good nor bad. Their effectiveness is determined by how we use them solve problems and create opportunities.
I encourage you to consider the following scenarios in which life insurance can create compelling opportunities:
- Bridge to retirement. As a couple approaches financial retirement—the moment their financial assets create investment income that exceeds their needs—they can see the finish line, but they’re not quite there. What happens if there is a premature death? While life insurance is generally considered a must for young families with kids, the couple gaining momentum toward retirement can also be at risk if an income stream stops and asset accumulation is unable to continue as planned. The solution? A simple term policy to get the couple to retirement age, at which point pensions, Social Security and IRAs can be used for income. If a main income-earner passes away, that person’s spouse will have sufficient assets from insurance to fully fund retirement. Simple—but often overlooked.
- Pension maximization. Believe it or not, many aspiring retirees do have traditional defined-benefit pensions. Often a significant portion of their expected income in retirement, the pension comes with enough income choices to make a person’s head spin. These include single life annuity, 100 percent joint and survivor, partial lump sum with 50 percent joint and survivor and on and on. How to choose? The typical married couple will check the box next to 100 percent joint and survivor. After all, the pension recipient loves his spouse and would like her to receive the same amount of pension income whether the recipient is alive or not. Although this choice could very well be right for many, consider the old but often-overlooked pension maximization.
By choosing the 100 percent joint-and-survivor option, the pension recipient is effectively buying a $600 per month life insurance policy from his pension provider and paying the premiums for the rest of his life. What happens if his spouse dies before he does? What happens if both spouses live into their 90s? What about the possibility of an accident or illness causing both spouses to pass away relatively young? In each of those scenarios, a tremendous amount of wealth could be left on the table, unavailable to kids, grandkids, church or charity.
The solution is to determine if the pension recipient qualifies for enough permanent guaranteed life insurance to provide an appropriate death benefit, which can be reinvested to replace the lost pension income. After all, in the example above, the $600 per month would have been lost anyway, so why not pay for life insurance and control the asset for the benefit of family rather than lose it to the pension provider at death?
Yes, this strategy needs to be correctly implemented, but the benefits can be tremendous.
Like any number of financial products, life insurance has the potential to achieve a myriad of financial objectives. The unique attributes of life insurance—leverage, tax efficiency and flexibility—allow for solutions that may not be readily apparent. Stay open-minded so that you can help your clients get the most out of this versatile financial tool.
_
