Other Uses for Life Insurance You May Not Know About

Did you purchase a life insurance policy years ago to protect your loved ones? Just over half of adult Americans have a life insurance policy, and more say they’re interested in purchasing one. However, needs can change later in life when the kids are grown up and a retirement nest egg seems big enough to absorb financial shocks. Those nearing and in retirement may see less reason for their life insurance policy than when they first purchased it and may see the premiums they pay as burdensome.

But for many, there are potential benefits to continuing a life insurance policy or purchasing certain types in retirement, when it comes to taxes, estate planning and long-term care. Here are some ways to use a life insurance policy that you may not know about.

What Are the Tax Benefits of Life Insurance?

The tax benefits of a life insurance policy are potentially even more valuable now that the “stretch IRA” is no more. In 2019, the SECURE Act  (Setting Every Community Up for Retirement Enhancement) eliminated the option for most non-spouse beneficiaries to stretch out RMDs (required minimum distributions) over the course of their lifetime. Now, most non-spouse beneficiaries must drain tax-deferred retirement accounts within 10 years of the original owner’s death. Depending on how much is in the account and the beneficiary’s tax situation, this could mean an increased tax burden and a faster end to the tax benefits of the inherited account.

In contrast, life insurance proceeds paid to beneficiaries are generally income tax-free. In fact, some individuals should consider using life insurance to help transfer wealth to the next generation. Life insurance policies can provide business owners additional opportunities, such as paying off business debt, funding buy-sell agreements related to someone’s business or estate, or funding retirement plans. 

What Are the Long-Term Care Benefits of Life Insurance?

It’s estimated that 70% of Americans age 65 today will need long-term care at some point, and the costs can be staggering: The median annual cost for an assisted living facility is $51,600 and the median

annual cost for a private room in a nursing home is over $105,850. Yet, many Americans nearing and in retirement do not have long-term care insurance. Many people who do want to plan for long-term care costs may not want to invest in traditional long-term care insurance, because premiums can rise significantly, and there are typically no benefits if the owner ends up never needing long-term care.

As a result, traditional long-term care insurance has become less popular in the last decade. An alternative option is to use a life insurance policy with long term care benefits. These policies combine the benefits of long-term care insurance with those of permanent life insurance through the purchase of an optional rider. They can still provide a death benefit if the owner passes away without having needed long-term care. If the owner does need long-term care, a certain amount of money or time is allotted to cover costs. If this amount isn’t used up, some policies can offer a “return of premium” guarantee upon death or termination of the policy. If a remaining amount is passed on, beneficiaries may be able to enjoy it tax-free, depending on the policy.

Unlike traditional long-term care insurance, this type of life insurance policy’s premiums don’t rise. However, some require lump-sum payments at the start, which can make purchasing a policy difficult for some.

The Bottom Line

While your financial planning needs may change as you near and enter retirement, that doesn’t necessarily mean that your life insurance policy is obsolete. There are many potential benefits to life insurance beyond its traditional use to look into when creating a retirement or estate plan. A professional can help you understand how your particular policy works, and if any of these strategies could apply to your financial plan.

Harlow Wealth Management is an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives. Harlow Wealth Management Inc. is an SEC Registered Investment Adviser and an insurance agency registered with the state of Washington and other states. They do not provide tax or legal advice. Legal and tax advice should come from qualified professionals who can provide advice on these topics.
Insurance guarantees are backed by the financial strength and claims-paying ability of the issuing company. Life insurance riders may be available for an additional annual premium; riders may not be available in all states. Life insurance policies are subject to medical underwriting, and in some cases, financial underwriting. Optional LTC benefits are NOT a replacement for long term care (LTC) insurance. Living benefits and LTC riders are not available on all index universal life products. Accelerated death benefits and LTC riders are subject to eligibility requirements.

CEO, Harlow Wealth Management

Chris Harlow is a Certified Public Accountant and CEO of Harlow Wealth Management, serving metropolitan Portland and southwest Washington to help clients craft their financial strategies for retirement. Chris’ past experiences have instilled in him a dedication to guiding clients through tax and retirement strategies. He has passed the FINRA Series 65 securities exam; holds life insurance licenses in Washington, Oregon and Arizona; and has his CPA license.

Source: kiplinger.com

Take These 4 Steps to Lower Your Cost of Living — Without Moving

In the last year, this has saved people 0 million.
Using Insure.com, people have saved an average of 9 a year.
You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all.  Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
Yup. That could be 0 back in your pocket just for taking a few minutes to look at your options.
Capital One Shopping compensates us when you get the extension using the links provided.

1. Knock $489/Year From Your Car Insurance in Minutes

If you owe your credit card companies ,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
Just answer a few questions about your home to see how much money you’re wasting.
A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
So whether you live in Huntsville or The Hamptons, you can cut your cost of living anyway. Take these steps to slash your bills and give your budget a Mississippi makeover.

2. See if You’re Wasting $690/Year on Homeowners Insurance

If you’re determined to have the lowest cost of living among every other human being in the United States, move to Mississippi.
Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.
Ready to stop worrying about money?
Kari Faber is a staff writer at The Penny Hoarder. She has only lived in the most expensive states the last 10 years and has definitely paid for it.
In fact, it saves users an average of 0 a year — or .50 a month. It’ll even help you break up with your old insurance company. (You’re allowed to cancel your policy at any time, and your company should issue you a refund.)
Get the Penny Hoarder Daily

3. Stop Paying Your Credit Card Company

You can get started in just a few clicks to see if you’re overpaying online.
The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying. It finds you cheaper policies and special discounts in minutes.
This isn’t something you actively think about — you just know you’re required to have it.
Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.
That’s exactly what this free service does. And if you want to have a lower cost of living, you should be taking advantage of the lowest prices available on the internet.
Dollar for dollar, your cash will probably go further in the Magnolia State than if you were to live in a major urban cluster like New York, California or Florida. And you’ll definitely get more bang for your buck than if you lived in Hawaii — the state with the highest cost of living.

4. Find Out If You’re Overpaying

But packing up everything you own and moving somewhere just because it’s cheaper doesn’t actually make sense for most people. Jobs, family, friends and just plain old loving where you live means buying a piece of property outside Jackson isn’t always a viable option.
And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.
Privacy Policy
Source: thepennyhoarder.com
When’s the last time you checked car insurance prices? Unless you live in Ohio, North Carolina or New Hampshire — the cheapest states to get car insurance in 2021 — you’re probably paying too much. And that can make a big dent in your lower cost of living.
You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy. But if you’re living in a place where housing is more expensive, this is the one cost you can actually control.
Seriously — it has the lowest cost of living overall, taking into account grocery, housing and transportation expenses.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But a website called AmOne wants to help. <!–

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Wouldn’t it be nice if you got an alert when you’re shopping online at Target and are about to overpay?

4 Tips to Avoid Having an At-Fault Accident Wreck Your Finances

Think you live in a safe neighborhood? Whether it’s a result of dropping your guard in familiar territory or inevitable due to frequency, most car accidents tend to happen within just a few miles of home.

You don’t have to be near your house for an accident to hit close to home, in another sense. We all know how much a fender bender can ruin your day. But what do you do when you’re at fault in an accident that could potentially ruin your financial stability?

Don’t let down your guard when you’re on the final stretch home. And don’t leave home again without reviewing these four tips protecting your finances in case you’re ever responsible for an accident.

Tip No. 1: ‘Right-Size’ Your Auto Insurance

They essentially mean the same thing, but there’s one critical distinction between “responsibility” and “liability” when it comes to auto accidents. It’s OK if you’re responsible for a car accident, as long as there’s an insurance company that’s liable for it.

Liability insurance is as essential as wearing a seatbelt when operating an automobile, because it can help you protect your assets if you’re ever responsible for property damage or bodily harm.

You need to choose enough liability coverage to pay any damages you might incur in an at-fault accident. But if you’re paying too much for auto insurance, you might be tempted to choose a low dollar amount of liability insurance.

When’s the last time you checked car insurance prices?

You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

Tip No. 2: Cover Your Life, Not Just Your Car

Let’s just say it. Death, death, death — it’s an uncomfortable word to use, and it’s a topic many of us would rather skirt.

While it’s inevitable our time will come someday, there are preparations we can make now to help our loved ones cope in a world without us.

While there are exceptions, typically debt doesn’t disappear when you die.

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school?

Life insurance can help you leave money behind for your loved ones. In many states, this money is protected from lawsuits.

So now you’re probably thinking: I don’t have the time or money for life insurance. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

Tip No. 3: Gas Up Your Emergency Savings

It’s probably not likely you’ll want to tap your emergency savings to pay out a settlement if you’re at fault in an auto accident, unless the damages owed are minor. But being without a car, even temporarily, can be expensive. That’s where your emergency savings could help.

You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice, especially if you’re just trying to start an emergency fund or nurture a fledgling savings account.

Maybe you’re just looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)

But a debit card called Aspiration lets you earn up to 5% cashback and up to 16 times the average interest on the money in your account.

Not too shabby!

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

Tip No. 4: Carpool Your Debt with Consolidation and Refinancing

Personal loans aren’t just for bougie people who want to update every surface in their kitchen with massive granite slabs, status seekers who really shouldn’t be buying that car on that salary or the “all gas, no brakes” types that rack up massive amounts of credit card debt.

Personal loans are just that — lines of credit offered for a wide variety of personal reasons. There aren’t many better uses for a personal loan than keeping a personal injury lawyer from turning your life into a massive estate sale.

If you need a personal loan up to $50,000, AmOne can match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.

AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.

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Source: thepennyhoarder.com

Myth: Life Insurance is NOT Taxable

You may think that life insurance is tax-free. Unfortunately, the “no tax on life insurance” idea is only partly true: Life insurance is income tax-free. In other words, recipients of a decedent’s life insurance policy do not have to pay income tax on that sum.

However, if it’s large enough, the decedent’s estate — including any life insurance proceeds — could be subject to federal and/or state estate taxes. As an example, let’s say you have a $1 million life insurance policy. The IRS deems that policy an asset, just as if you had an investment portfolio worth $1 million. And upon your death, the IRS sees it as a million-dollar asset you just transferred to your beneficiaries, and taxes it accordingly. That estate tax is usually due upon death, and it can be substantial.

If you’re among those wealthy enough to be concerned about this possibility, how can you avoid having your life insurance proceeds included in your estate and therefore possibly subject to the estate tax? You can create an irrevocable life insurance trust (ILIT) and name that trust the owner of your life insurance. By doing so, that particular asset will be removed from your estate. Upon your death, the proceeds from your life insurance will pass on to your heirs not only income tax-free but estate tax-free as well.

Who might be a candidate for an ILIT? If your estate is in excess of the federal “application exclusion amount” (which for 2021 is $11.7 million for single individuals and $23.4 million for couples under the Tax Cuts and Jobs Act of 2017)*, an ILIT could save your family up to 40% in federal estate taxes. It’s a benefit worth the legal fees and complexity associated with setting up an ILIT. Keep in mind, 12 states, plus the District of Columbia, have their own estate taxes, and their exclusion amounts may be much lower than the federal limits.

Another benefit: An ILIT can help you can avoid tax on both spouses’ estates. Life insurance proceeds can be held in a trust for the benefit of the surviving spouse during his/her lifetime. When that person dies, the proceeds will not be included as part of his/her estate either, but will pass tax-free to your children and then to your grandchildren, as an ILIT in a multigenerational trust.

Be forewarned: The IRS scrutinizes ILITs carefully. In order to make sure your ILIT passes IRS inspection, you must:

  1. Transfer any polices you already own to the ILIT by completing an “absolute assignment” or “change of ownership” form.
  2. Relinquish all ownership rights to the trust. It’s not as simple as you may think. In fact, you can be charged with retaining an ownership right in the life insurance policy without ever having held title to that policy. If you want to keep insurance proceeds out of your estate, you need to:
  • Give up all ownership rights to the policy, including the right to change beneficiaries, borrow from cash values, and make premium payments;
  • Enter into an annual cash partition agreement in order to create separate funds from which premiums are paid so that there is no mistake as to whom the payor/owner really is; and
  • Maintain a change of ownership in an existing policy for at least three years before the insured’s death. In other words, you must survive for at least three years after transferring your policy to the trust. Otherwise, the proceeds will be taxed in your estate as if you retained ownership of the policy.

Bottom line: Your heirs will not pay income tax on any life insurance proceeds they receive, but if the estate is large enough, they will pay estate taxes on the policy — unless you set up an ILIT at least three years before your death. And though ILITs can save some families a great deal of money, it’s best to enlist a professional to design a trust that will pass IRS muster.

*The Act sunsets on Dec. 31, 2025, after which the amount will adjust to the old $5 million exemption, indexed for inflation.

CEO and Senior Adviser, Retirement Planners of America

Ken Moraif, CFP, is CEO and senior adviser at Retirement Planners of America, a Dallas-based wealth management and investment firm with over $4.3 billion in AUM and serving over 8,000 households (as of May 2019). He is also the host of the radio show “Money Matters with Ken Moraif,” which has offered listeners retirement, investing and personal finance advice since 1996.

Source: kiplinger.com

Take This 7 Day Minimalism Challenge and Maximize Your Savings

Ah, the American Dream: making lots of money to buy a big house with more toilets than people living in it, then acquiring cars and lots of pretty things to look at.

But as we’ve spent more time than we ever expected in our homes with all of our stuff, we’ve found it’s not our shoe collections or hundreds of kitchen gadgets that bring us joy. It’s our connections with family and friends and creating new memories as we experience the world.

That’s why the minimalism movement has made such an impact on our lives recently. By selling and getting rid of *stuff*, we’re able to free up our cash to put into savings and investments and use it to see the people and things we care about.

So we’ve created this one-week minimalism challenge to cut the excess from our lives and maximize our money. To be able to free ourselves from physical objects weighing us down and grow our cash to be able to do the things we want.

See if you can complete the challenge in seven days!

Day 1: Cut Your Excess Bills

No, we don’t mean cancel your Netflix subscription — art is something that will continue to bring us joy, without taking up any space in our home.

But sure, if you don’t use Amazon anymore, you can cancel your Prime account (it may help you stop buying so much online), but we suggest cutting the bills that make no sense being so expensive. Like your car insurance.

When’s the last time you checked car insurance prices anyway?

You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

Day 2: Minimize Your Online Spending

Extreme minimalism might not be up your alley, so we challenge you to alter your spending just a little to make your money go further.

For example, when you do your necessary online shopping, make sure you have an alarm ring when you’re about to overpay and save you hundreds every year.

That’s exactly what this free service does.

Just add it to your browser for free, and before you check out, it’ll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item’s price history.

Let’s say you’re shopping for a new TV, and you assume you’ve found the best price. Here’s when you’ll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they’ll also automatically be applied to your order.

In the last year, this has saved people $160 million.

You can get started in just a few clicks to see if you’re overpaying online.

Capital One Shopping compensates us when you get the extension using the links provided.

Day 3: Just Let it Go

One way people kick off their minimalist lifestyle is by doing a 30-day minimalism challenge. Here’s how it works: Every day for 30 days, get rid of something in your house that doesn’t bring you joy. That’s it.

Today is your day to start — and you can make money doing it.

The broken lamp you’ve been thinking about fixing your months/years? Trash it.

The hand-me-down baby toys your kid doesn’t play with? Give it away on your local Buy Nothing Facebook group.

The clothes hanging in your closet that don’t fit or aren’t your style anymore? Sell them! Here are a few easy ways to get cash for your stuff:

  • Order a clean-out bag from ThredUp and fill it with your clothes and shoes in good condition. Your mail carrier will pick it up for free and Thredup will pay you. It’s a pretty easy way to clean out your closet and make some cash.
  • List your high-ticket clothing items on a website like Poshmark. It takes more effort to create an account, market your items and mail them to buyers yourself, but you can potentially make more money than other resale options
  • Have other good condition items you want to get rid of? Sell them on eBay, Craigslist or  Facebook Marketplace to clean out your stuff locally.

Day 4: Say Goodbye to Credit Card Debt

Having credit card debt is a surefire way to minimize your savings. The interest rates your credit card company is charging you makes you feel like you’re never going to escape.

And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But the sooner you get rid of your debt, the sooner you can start maximizing your money.

A website called AmOne wants to help.

If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.

You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all.  Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.

It takes less than a minute and just 10 questions to see what loans you qualify for — you don’t even need to enter your Social Security number. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.

Day 5: Minimize Your Family’s Worries

Speaking of debt, even if you don’t have any now — you don’t want to create any for your family later. All your hard work to adopt a financially minimalist lifestyle could be crushed.

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school? Now’s a good time to start planning for the future by looking into a term life insurance policy.

You’re probably thinking: I don’t have the time or money for that. But your application can take minutes — and you could leave your family up to $1 million with a company called Bestow.

Rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

Day 6: Maximize Your Cash Back

No matter how much you minimize your finances, you’re still going to need to spend money. It’s just a fact!

But here’s the deal: If you’re not using Aspiration’s debit card, you’re missing out on extra cash. And who doesn’t want extra cash right now?

Yep. A debit card called Aspiration gives you up to 5% back every time you swipe.

Need to buy groceries? Extra cash.

Need to fill up the tank? Bam. Even more extra cash.

You were going to buy these things anyway — why not get this extra money in the process?

Enter your email address here, and link your bank account to see how much extra cash you can get with your free Aspiration account. And don’t worry. Your money is FDIC insured and under a military-grade encryption. That’s nerd talk for “this is totally safe.”

Day 7: Maximize Your Investments

Now that you’ve minimized your finances all week long, you’re able to maximize your future net worth — by owning a company.

That may sound expensive at first glance — we’re not Warren Buffet or Elon Musk — but with just a few dollars to start, it’s not totally out of reach when you use an app called Stash.

Stash lets you be a part of something that’s normally exclusive to the richest of the rich — on Stash you can buy pieces of other companies for as little as $1.

That’s right — you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1

It takes two minutes to sign up, and it’s totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) — that’s industry talk for, “Your money’s safe.”2

Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*

1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.

2To note, SIPC coverage does not insure against the potential loss of market value.

For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.

The Penny Hoarder is a Paid Affiliate/partner of Stash. 

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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Source: thepennyhoarder.com

Is Private Insurance the ‘New Kid on the Block’?

Private Insurance. Have you heard of it? Chances are this is a new concept to you, but as a business owner in 2021, it is one well worth exploring.

Private Insurance is a marketing term describing an exclusive program that allows a closely held business to purchase insurance policies for specific losses associated with enterprise (business) risk. By offering businesses the opportunity to direct-procure insurance through an already established insurance structure, and not through the traditional insurance avenue, private insurance delivers a transparent turn-key access into the alternative risk transfer space.

What Kinds of Risks Can You Insure?

Enterprise risk is quite a popular subject at the moment. These are the low-probability, but high-severity exposures that are now top of mind as the country still adjusts to the economic side-effects of these unprecedented times. The age of COVID-19 has increased the hazards for such enterprise risk. Businesses across the country are seeking to transfer this traditionally self-retained risk to a third-party insurer.

Private Insurance allows a business to direct-procure enterprise risk coverage for loss of net income due to a variety of unfortunate events — such as loss of key personnel, loss of a key customer, loss of a key supplier, and more.

The options for businesses are to transfer this risk by purchasing insurance from a traditional insurance carrier or to seek insurance through alternative means. The latter is often popular when a company feels alternative insurance has superior risk management systems affording them the capacity to outperform the black hole of traditional insurance.

Moreover, Private Insurance offers even more than an insurance policy; it can become a tremendously valuable investment opportunity.

How Does Private Insurance Work?

As with most insurance transactions, a business purchases insurance from an insurance carrier, and that insurance carrier binds the risk, issues policies back to the business, and then reinsures a portion of that risk to a reinsurance carrier — insurance for insurance. However, in Private Insurance, 100% of the premium earned through the sale of policies gets ceded to the reinsurance carrier. That carrier allows investors, who are designated by the business purchasing the policies an investment opportunity connected to the performance of the reinsurance carrier.

Here is the key: The reinsurance company has individual funds that rise and fall with claims experienced over the course of multiple policy-periods. Any dollars not used to pay claims or underwriting expenses are deposited into these policy-linked accounts to participate in the funding of individual policy-linked claims.

With good claims experience, these accounts have the potential for tremendous growth over time. When the business no longer purchases these policies, the investor has the sole-benefit of the assets that have accumulated in these policy-linked accounts.

The Bottom Line

At a high level, Private Insurance is a robust and proprietary transaction whereby a business direct-procures insurance, the reinsurance carrier distributes this risk among hundreds of insureds throughout the country, and the investors benefit from the underwriting profit of the reinsurance carrier. This structure not only protects you in the present, but it can also secure your future.

In a world full of more uncertainties than ever, one thing is certain: Private Insurance is the way of the future.

Managing Partner, Jeffrey M. Verdon Law Group, LLP

Jeffrey M. Verdon, Esq. is the managing partner of the Jeffrey M. Verdon Law Group, LLP, a Trusts & Estates boutique law firm located in Newport Beach, Calif. With more than 30 years of experience in designing and implementing comprehensive estate planning and asset protection structures, the law firm serves affluent families and successful business owners in solving their most complex and vexing estate tax, income tax, and asset protection goals and objectives.

Source: kiplinger.com

Apply for Lemonade Life Insurance Coverage For as Little as $9/Mo

Ok, the idea of life insurance kind of sucks. If it gets used, it means you died. Or someone you love and/or depend on died. No one wants to think about the worst possible outcome — to the point that no one wants to even think about buying life insurance.

But here’s the thing: It can get even worse when the people you love end up in financial trouble without your income and no life insurance to keep them afloat. Think about it — defaulted mortgages, depleted emergency funds and missed college tuition payments could upend your family’s life.

That’s why a website called Lemonade wants to offer you affordable term life insurance in as little as five minutes — so you don’t have to worry about the what-ifs again.

When you quickly apply for a term life insurance policy on their website or app — without going to the doctor for a medical exam — you’ll be able to relax, knowing you’ve done everything you can to help take care of your family.

Apply for Term Life Insurance in as Little as 5 Minutes — for as Low as $9/Month

Let’s get the assumptions out of the way: Life insurance isn’t just for old rich people, and it might not be as expensive as you think, if you know where to go looking for it.

Whether you need a $50,000 policy or a $1.5 million policy, Lemonade can help find the right coverage for you. There’s no paperwork and no medical exam required. Coverage starts for as low as $9 a month!

The application takes as little as five minutes and asks questions about your health, lifestyle and who you want your beneficiaries to be.

What Makes Lemonade Different?

In the past, applying for life insurance was a tedious process that required tons of paperwork and an invasive medical exam. But things are changing, thanks to new companies like Lemonade. Gone are the days of blood tests, signatures and endless insurance jargon.

First of all, Lemonade’s application process is entirely online. Yep. You don’t even need to leave the couch. There’s no medical exam needed, and unlike other life insurance websites, Lemonade offers term life insurance directly, and won’t direct you elsewhere to fill out more forms and compare quotes yourself. You simply fill out an application once, and if approved, choose your coverage and buy right from their website or app.

Those guilty thoughts about not having your family protected? You can seriously get rid of them without missing a second of “NCIS New Orleans.”

You won’t enter your credit card until after you’ve been approved, accepted your quote and read the fine print, so your info is safe and protected.

If you’re between the ages of 18 and 60 and living in the U.S. (except New York), complete your application in the next five minutes and know you’re covered for the term you selected. You can have this done before the next commercial break ends.

Kari Faber is a staff writer at The Penny Hoarder. She has a life insurance policy through Lemonade because it really was that easy to do. 

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Source: thepennyhoarder.com

Is Pet Insurance Worth It? Our Pros & Cons For 2021

You have insurance for your health, your car, your house, but what about your pets? Do they have pet insurance coverage?

If you don’t currently have pet insurance, you’re not alone. While around 67% of U.S. households own pets, just over 1% of those pets are insured, according to the North American Pet Health Insurance Association.

But given the price of vet care, it’s worth looking into. The ASPCA estimates the annual cost of routine vet visits is $80-$250 for dogs and $110-$550 for cats depending on your pet’s age. Emergency vet visits can cost from $800-$1,500, and sometimes more.

If you’ve ever found yourself at the animal hospital at 3 a.m. with a beloved pet in distress, you know what it’s like to be willing to shell out pretty much anything to make Oscar feel better.

That’s why we’ve put together this breakdown to help pet owners decide: Is pet insurance worth it for you and your pets?

How Does Pet Insurance Work?

Like human health insurance, pet insurance companies help alleviate some of the costs of keeping your pet healthy. You can choose from different levels of coverage, with each plan costing a monthly or annual premium based on how much coverage you choose.

Some plans cover basic scenarios like accidents and injuries, some only cover accidents, and others include accidents, injuries and genetic/hereditary conditions. The more comprehensive the coverage, the higher you can expect the cost to be.

Pro Tip

Whether or not you opt for pet insurance, start an emergency fund now for vet care to make sure you can handle unexpected out-of-pocket costs. 

Many plans have a deductible, a certain amount you must pay out of pocket before coverage kicks in. Depending on your policy, this could be anywhere from $0-$2,500 in a plan year. Typically, higher-deductible plans will give you a better percentage of your money back.

While human health insurance works on a copay basis (you pay a certain percentage when you see the doctor and the insurance covers the rest), pet insurance is largely a matter of reimbursement.

You pay the full amount due when you take your pet in for care, then submit a claim to the insurance company afterwards. Depending on your policy, they’ll pay you back anywhere from 20 to 100% of covered costs.

Rates are calculated based on your pet’s age and breed, as well as your location (vet costs are higher in some areas than others).

How Much Does Pet Insurance Cost?

While individual costs will vary based on your pet’s breed, age, health and the tier you opt for, across 11 of the top pet insurers, the average monthly cost for dog insurance is $42.45, while pet insurance for cats costs an average of $20.99 per month, according to Value Penguin.

Have an exotic pet (i.e. anything other than a dog or cat)? Your options are a bit more limited, but you can still find coverage. Check out Pet Assure and Nationwide for plans for birds, rabbits, reptiles and other members of the animal kingdom.

Is pet insurance worth it
A dog receives cancer treatment at BluePearl Veterinary Partners in Tampa, Fla. Tina Russell / The Penny Hoarder

The 5 Pros of Pet Insurance

1. It’s Easy to Compare Options

Unlike human health insurance, which can be a labyrinth of plans and riders you need a pro to help decode, pet insurance is relatively straightforward. Policies are simple, tiers are easy to compare, and you can get a no-commitment quote from different companies within minutes, making price shopping a breeze.

2. Premiums Can Be Low for Young Pets

If your pet is young or healthy, or you choose a lower tier, you can get coverage for less than the monthly cost of a fancy coffee and croissant. It’s not a huge price to pay for the security of knowing your pet can get the help they need.

3. Deductibles are Reasonable

Compared to the cost of one late-night animal ER visit, most plans’ deductibles are affordable. If, heaven forbid, your pet is seriously injured or ill, you could wind up paying at least the cost of the deductible anyway — but with insurance, you can get your pet the extra care and piece of mind towards vet bills that you may not have been able to afford on your own.

4. You Get to Choose Your Vet

There are no “out of network” provider headaches when it comes to pet insurance. As long as your vet is licensed, eligible expenses should be covered and there’s no need to worry if your vet “accepts” your plan. Since you pay for the cost out of pocket and then submit a claim to the company for reimbursement, all you need from your vet is a copy of their invoice and for them to fill out a section of the claim form.

5. You Can Do More For Your Pet

The NAPHIA reports owners with pet insurance are more likely to seek medical care for their pets than those without. No one wants to have to choose between a sick pet and a mountain of debt. Too many pet owners, faced with a catastrophic medical crisis they hadn’t prepared for, are forced to make the heartbreaking decision to elect for “economic euthanasia,” USA Today reports. If you invest in pet insurance, you could save yourself — and your pet — from ever facing such a decision.

The 4 Cons of Pet Insurance

1. Premiums Can be High for Older Pets

If your pet is older, has a pre-existing condition or you choose a high tier, you could be looking at monthly premiums of $40 or more. You’ll want to carefully weigh whether the annual cost makes sense for you.

2. You Still Have to Pay Up Front

Having pet insurance won’t save you from having to shell out big bucks if your pet needs a costly procedure. Whether you have coverage or not, it’s wise to have a separate savings fund for vet emergencies to ensure you can handle upfront charges until your claims are processed.

3. It Doesn’t Cover Everything

 On average, pet owners with insurance still pay around 20%of their pets’ medical expenses, according to a report by The New York Times. Routine wellness checkups usually aren’t covered, so you’ll still pay for those out of pocket. Certain hereditary/genetic conditions may also not be covered; be sure to check each policy’s specifics carefully.

4. The Coverage has Limitations

Many plans also limit the amount you can claim, either annually or over your pet’s lifetime. If your pet is unfortunate enough to suffer a major medical problem, you could max out your plan’s limit quickly and find yourself paying the difference. It’s then that pet insurance costs seemed worth it.

If your pet only needs routine vet care, you won’t save much. If they insure their pets, owners spend an average of $324 out of pocket on a dog and $264 out of pocket on a cat, according to the zoology and veterinary sciences journal, Animals, compared to $251 for an uninsured dog and $146 for an uninsured cat.

This is largely because, unsurprisingly, owners with pet insurance take their animals to the vet more often than those who don’t have insurance.

And Then There’s the Premiums

And these numbers don’t include the annual price of pet insurance premiums. With an average cost of $42.45 a month for dogs and 20.99 a month for cats, insuring your pet could mean your total costs hit $833 for a dog or $515.88 for a cat. If your pet is fortunate enough to avoid any big issues, the cost of pet health insurance could outweigh the savings.

A dog is held down by two vet techs while receiving cancer treatment.
Veterinary technicians comfort a dog as it receives cancer treatment at BluePearl Veterinary Partners in Tampa, Fla. Tina Russell / The Penny Hoarder

Should You Get Pet Insurance?

Like property insurance (car, home, etc.), you won’t necessarily “save” or “make” money in an average scenario, but in the event of a catastrophe, you may find it’s worth the investment.

While you may not get the most bang for your buck with a relatively healthy pet, there’s no way to predict what illnesses or injuries might occur, and for many pet owners, knowing they have a safety net in place is value enough.

According to data based on average claims from PetFirst holders, the most common dog treatments cost $252.75 on average, while the most common cat treatments cost $266.79.

“Pet insurance can help offset routine medical expenses and can be especially helpful for the unknown,” said Dr. Jennifer Welser, chief medical officer of BluePearl Veterinary partners in Tampa. “Keeping the coverage may give you the freedom to make medical decisions for your beloved pets based on quality of life, not finances.”

Pro Tip

To get the most benefit from pet insurance, enroll your pet when they’re young for maximum savings. 

Talk to your vet to get an idea of your pet’s potential breed-specific health problems, and ask them which insurance they’d recommend. If you decide to choose catastrophic coverage (generally the best cost-to-savings option), spring for the highest deductible you can afford.

A dog stares at the camera.
A dog waits to be examined at BluePearl Veterinary Partners in Tampa, Fla. Tina Russell/The Penny Hoarder

How to Get Pet Health Insurance

To sign up for pet health insurance, you’ll need the following information for your pet:

  • Name
  • Breed
  • Age
  • Pre-existing conditions (if any)
  • Vet’s name and contact information

Have your pet seen by a vet if you haven’t done so within the past year.

Most policies have waiting periods, which means you can’t get coverage immediately following an accident or illness. (This ensures people don’t sign up for coverage only when they know they need to cover a big bill.) So if you think you’d be interested in pet insurance, apply now before you end up needing it.

Kelly Gurnett is the managing editor of Money Crashers and wrote this as a contributor to The Penny Hoarder.

Source: thepennyhoarder.com

Is It Time to Let Your Life Insurance Policy Lapse?

Taking out a life insurance policy is a smart move if you have anyone who depends on you. It’s no wonder then, that an estimated 54% of Americans have some type of life insurance. This figure only increased in the wake of COVID-19, which caused the demand for life insurance policies to increase. If you’re young, recently married or looking to start a family, most agree that the right path is clear — you should take out a life insurance policy.

But what do you do when, 20 or 30 years down the line, if all goes well, your policy is close to expiring or the financial well-being of your loved ones has changed significantly? You might think that this is a no-brainer, and that simply buying a new policy is always the best call — but that isn’t quite so.

The fact of the matter is that in some cases, letting your policy lapse even before it is about to expire can be the wiser choice. The feeling of security that you get from holding such a policy is always comforting — but in some cases, that feeling could be misguided.

It’s difficult to find trustworthy sources of information that deal with this topic, as most will feature a financial incentive to get you to renew your policy or buy a new one. Here, we’ll cover the situations in which you should renew your policy, but we’re also going to illuminate an often overlooked topic: When does it make sense to let your policy lapse?

What is Life Insurance?

A life insurance policy is a contract that is signed between you, as the policyholder, and an insurer. It guarantees that the beneficiaries you name in the contract will receive a sum of money when you pass away. In exchange, you will have to pay premiums — usually as either a one-time payment or as regular monthly payments.

If the worst comes to pass, your beneficiaries will receive the death benefit or the face value of the policy. You get to choose what that amount will be, based on your approximation of how much money is necessary for your loved ones to be secure.

When applying for a policy, you will go through the process of underwriting — the insurance company will assess the level of risk that they’re exposed to, based on factors such as your age, gender, health, history and occupational hazards.

What Happens When Your Life Insurance Policy Lapses?

If you have a term life insurance policy and it lapses while you are alive, your beneficiaries will not receive a payout. Your policy will lapse if you stop paying premiums — and you won’t receive anything in the way of a refund for premiums paid up to that point.

However, missing a single payment won’t automatically render your life insurance policy void. All life insurance policies in the United States must offer a grace period by law, usually 30 days — although with the advent of the Coronavirus, plenty of life insurance providers have extended that grace period to 60 or even 90 days.

Keep in mind, however, that grace period payments are usually substantially higher than regular payments. After the grace period expires, your policy is officially void in most cases. Nonetheless, some insurance companies offer a period, known as a reinstatement period, during which you can renew your policy.

You should always be aware of whether your insurance provider offers such an option. In the vast majority of cases, where applicable, you can reinstate your policy without underwriting within a month of your policy lapsing.

However, if you exceed your reinstatement period, the insurance company will most likely want to find out if your risk profile has changed. Thankfully, the underwriting process that is required with reinstating a policy is much less time-consuming and grueling than the initial process of taking out a life insurance policy.

Reinstating a policy always comes with fees. However, on the whole, reinstating a policy is much cheaper than taking out a new life insurance policy altogether. If you do not reinstate the policy, it will lapse.

Now, let’s take a look at some of the reasons why you might decide to let that happen.

When Should You Let Your Life Insurance Policy Lapse?

The simplest way to find the answer to this question is to ask yourself: If I died tomorrow, would anyone who depends on me face significant financial challenges? 

If you’ve saved up enough for retirement, paid off the house and don’t have any major debts, letting your policy lapse can be the more cost-effective decision. Keep in mind that renewing your policy always comes with much higher premiums — and since the policy is renewed year after year, it is perfectly reasonable to explore whether paying for such coverage has continued value.

If your family is in a position to keep up with their regular payments (mortgages, auto loans, student debt, etc.) while still retaining their current standard of living, and if your financial obligations are settled, there is little reason to renew your policy. The purpose of life insurance is to keep our loved ones financially secure if we should pass — and if the criteria listed above have been met, your family is likely to already be in a secure position. Thus, renewing your policy could have the sole effect of putting undue strain on your finances.

When Should You Renew Your Life Insurance Policy?

Conversely, if you still carry a significant amount of debt that is yet to be settled, or you don’t have enough saved for retirement, renewing your policy is a good way to ensure that your beneficiaries will be safe in the years to come, no matter what happens.

Although premiums are higher when you renew a life insurance policy, you can still opt to sign up for a payout that is smaller, yet more affordable for your current needs. 

In your 20s or 30s, leaving a spouse or children without your financial support makes policies with $1 million or even more in payouts justified. However, if you’re close to retirement age, a couple hundred thousand dollars might be more than enough should the worst come to pass.

Keep in mind that some employer-sponsored policies can come with tax benefits. Group-term life insurance policies, for example, are not taxable for the first $50,000 worth of coverage, allowing you to reduce your taxable income by a sizable amount.

You should also keep in mind that plenty of life insurance policies also come with living benefits. If you run into long-term health complications, this can greatly reduce the financial burden that you and your family will be subject to.

Founder, Lakeview Capital

Tim Fries is co-founder of Protective Technologies Capital, an investment firm focused on helping owners of industrial technology businesses manage succession planning and ownership transitions. He is also co-founder of the financial education site The Tokenist. Previously, Tim was a member of the Global Industrial Solutions investment team at Baird Capital, a Chicago-based lower-middle market private equity firm.

Source: kiplinger.com