Insurance Services

Most people don’t think of life insurance as a retirement tool, but it’s important to consider what will happen to your family’s retirement plan if you die prematurely. Can your spouse still retire without the benefits your income would have provided? Life insurance can replace the income you would have earned and the savings you would have contributed throughout the remainder of your working life.

If you are a business owner, life insurance can provide your business partners funds they can use to pay your spouse for your share, which can free up your partners to keep operating. Alternatively, life insurance could provide your family with a lump sum that would give them time to sell the business and replace the income lost due to your death.

The Role of Life Insurance in Your Retirement Plan
It’s hard to know what kind you need. It’s hard to know if you have enough. And it’s hard to know if you need any at all. Insurance companies have made it even harder by coming up with bewildering names: whole life, term life, universal life. Some life insurance policies have a cash value while others do not. Some invest that cash value in the stock market while others pay a fixed rate of interest. Some insurance policies combine all of these ideas.

As risky as it is to not have life insurance at all, it’s equally as risky to pay for insurance that’s not right for you. This is why it’s important for you to sit down annually with an insurance professional to review how your policy works and how it will help you to protect your family. It is imperative that you make sure the policy is owned by the right person or entity. It is also vital to review a cash value policy periodically to ensure it will provide the benefits you need.

Benefits of a Life Insurance Policy Review

• Policies that are older may not have enough cash value to keep the policy in force until an assumed age of death. This can be a shocking discovery if you are decades into a policy and you find out that the policy might terminate. You might discover that you must increase your premiums substantially to retain the policy.
• Policies that are not owned by the appropriate person or entity can cost your family money. If the policy is within your estate, it may be subject to estate tax depending on your net worth. If the policy has an inappropriate owner and beneficiary, it may be subject to income tax.
• Policies may have beneficiaries that are no longer alive or part of the family. Imagine how your current spouse would react if your life insurance went to an ex-spouse! Wills do not govern the beneficiary of a policy.
• You may discover that your policy has a loan against it. This can happen when you borrowed the funds for some other purpose. It can also occur if you have not made enough premium payments to keep the policy in force. A loan that is not set up properly has the potential to implode a policy and can create an income tax event for you.
• You may currently be paying for too much coverage. All policies sold since Jan. 1, 2008, utilize the new 2001 CSO Mortality Tables, which reflect longer life expectancies and have allowed insurance companies to reduce their cost of insurance charges
• New products may provide lifetime guaranteed coverage, which would protect you from outliving your coverage, no matter how long you live. Some older product designs were created to mature before age 100, which could potentially lead to unwanted tax liabilities at a vulnerable age, or even no coverage at all.
• Underwriting innovations or your health status may have improved, which can reduce the cost of alternative coverage.
• New features and riders may offer important new benefits. This can include return of premium or guaranteed death benefit protection, as well as the ability to access the death benefit for chronic illness or long-term care needs.

Long-Term Care Insurance
Another piece that you may not realize belongs in your retirement plan is long-term care insurance.

Regardless of the setting (your own home, a nursing home, or an assisted living facility), long-term care can be quite expensive. With rising costs of long-term care, we recommend that everyone make a plan for how they will fund their care.

What to Expect When You Work with Eide Bailly
Our team of specialists will review your existing policies, as well as any additional insurance needs to ensure you have the right protection. We are entirely impartial, and work with only the top-rated financial carriers. Our insurance review process will analyze, improve, and maximize your insurance protection needs.