It’s a good idea to review your life insurance situation on a regular basis. Here are some reasons why your coverage may need to evolve to keep pace with your life.

Life Changes

If your income and/or net worth have increased significantly since you purchased your policy, ask yourself whether your current coverage would enable your survivors to maintain their current standard of living. Major life events such as birth, marriage, death, and divorce may also affect the amount of coverage you need.

Inflation

Because of inflation, a policy purchased years ago may no longer offer the same level of protection. For example, a 3% inflation rate can cut the purchasing power of a death benefit in half in about 24 years, based on the Rule of 72 (72 ÷ 3 = 24 years).

Estate Conservation

One popular reason for owning life insurance is to provide liquid funds to help heirs pay estate taxes and any other debts. Considering that the estate tax has changed several times over the past decade, it’s a good idea to review your coverage in light of current estate tax laws and your net worth.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

1) USA Today, December 3, 2010

Call 1-88-347-3550 for more information or to begin an evaluation of your needs. Or emai at info@wealthensure.com

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

Budget deficit. When the federal government spends more money in a fiscal year than it collects in tax revenue, it creates a budget deficit. In the rare instances when government expenditures are less than tax revenues, the result is a budget surplus. Budget deficits have been the norm in recent decades. For example, in the past 28 fiscal years (1982 to 2010), there were only four years in which the federal government ran budget surpluses.¹

National debt. How can the government spend more than it collects? By borrowing money. The total amount owed by the federal government is called the national debt. Because the federal government guarantees the timely payment of principal and interest, many individuals, corporations, state and local governments, foreign governments, and others are willing to lend their money. Although Treasury securities pay relatively low interest rates, they tend to appeal to investors seeking lower risk.

There’s also quite a bit of borrowing between federal agencies. For example, Congress has long been in the habit of borrowing excess Social Security revenues. As a result, the national debt is divided into two categories: debt held by the public and intragovernmental holdings.

As you can imagine, there’s considerable debate over how long the government can keep borrowing to finance spending. Regardless of how you feel about government spending, you might benefit from understanding the terminology.

1) Haver Analytics, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

 This information has been prepared by a number of different sources. The information provided is educational in nature and is not intended to be construed as, legal, tax or investment advice and does not necessarily represent the views of the presenting party.  Specific federal and state laws relevant to a particular situation may affect the applicability, accuracy or completeness of this information.  Material presented is believed to be from reliable sources, but its accuracy is not guaranteed.  If additional information is needed, the reader is advised to seek professional services.

©FIS 2008 – 2011

Privacy Policy

 Wills and trusts are two of the most popular estate planning tools. Both allow you to spell out how you would like your property to be distributed, but they also go far beyond that.

Just about everyone needs a will. Besides enabling you to determine the distribution of your property, a will gives you the opportunity to nominate your executor and guardians for your minor children. If you fail to make such designations through your will, the decisions will probably be left to the courts. Bear in mind that property distributed through your will is subject to probate, which can be a time-consuming and costly process.

Trusts differ from wills in that they are actual legal entities. Like a will, trusts spell out how you want your property distributed. Trusts let you customize the distribution of your estate with the added advantages of property management and probate avoidance.

Wills and trusts are not mutually exclusive. While not everyone with a will needs a trust, all those with trusts should have a will as well. 

Incapacity poses almost as much of a threat to your financial well-being as death does. Fortunately, there are tools that can help you cope with this threat.

A durable power of attorney is a legal agreement that avoids the need for a conservatorship and enables you to designate who will make your legal and financial decisions if you become incapacitated. Unlike the standard power of attorney, durable powers remain valid if you become incapacitated. 

Similar to the durable power of attorney, a health care proxy is a document in which you designate someone to make your health care decisions for you if you are incapacitated. The person you designate can generally make decisions regarding medical facilities, medical treatments, surgery, and a variety of other health care issues. Much like the durable power of attorney, the health care proxy involves some important decisions. Take the utmost care when choosing who will make them.

A related document, the living will, also known as a directive to physicians or a health care directive, spells out the kinds of life-sustaining treatment you will permit in the event of your incapacity. The directive creates an agreement between you and the attending physician. The decision for or against life support is one that only you can make. That makes the living will a valuable estate planning tool. And you may use a living will in conjunction with a durable health care power of attorney. Bear in mind that laws governing the recognition and treatment of living wills may vary from state to state.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. 

This material was written and prepared by Emerald.
© 2011 Emerald Connect, Inc.

 This information has been prepared by a number of different sources. The information provided is educational in nature and is not intended to be construed as, legal, tax or investment advice and does not necessarily represent the views of the presenting party.  Specific federal and state laws relevant to a particular situation may affect the applicability, accuracy or completeness of this information.  Material presented is believed to be from reliable sources, but its accuracy is not guaranteed.  If additional information is needed, the reader is advised to seek professional services.

©FIS 2008 – 2011

Privacy Policy

More than 40% of Americans ages 36 and older are at risk of running out of money in retirement, according to a retirement readiness study.

Researchers divided working Americans into four groups, ranging from the lowest to the highest income levels. They found that, even though the risk of running out of money decreases with a higher pre-retirement income, almost one-third of people with upper-middle incomes and 13% with high incomes may not be able to pay for basic retirement expenses and uninsured health-care costs after two decades in retirement.¹

The risk of running out of money doesn’t appear to be reduced for people who have more time to prepare for retirement: Baby boomers and Generation Xers are almost equally at risk.²

Fortunately, it’s possible to purchase an insurance product that could pay an income for a specified period, including your lifetime or the lifetimes of you and another person. The guaranteed retirement income available from a fixed annuity could be just the fix you’re looking for.

Fund Your Future Income

A fixed annuity is a contract with an insurance company that guarantees a fixed rate of return during the life of the contract. The type of annuity that may be appropriate for you will depend on your situation.

An immediate annuity is typically funded with a lump-sum premium. Payments start soon thereafter and continue for the duration of the contract. This type of annuity is often purchased at the beginning of retirement.

A deferred annuity can be funded with either a lump-sum premium or a series of payments over time. Payments start at some point in the future at a rate that reflects any tax-deferred growth during the accumulation period. The income amount depends on the amount of the initial contract, the contract’s rate of return, the age of the contract holder, and the number of years over which payments will be received.

Annuity Trade-Offs

Generally, annuities have contract limitations, fees, and expenses. They tend to offer more conservative rates of return than the financial markets because the insurance company is responsible for paying the contract’s stated return, regardless of market conditions. Of course, any guarantees are contingent on the claims-paying ability of the issuing insurance company.

Most annuities have surrender charges that are assessed during the early years of the contract if the annuity is surrendered. Distributions of annuity earnings are taxed as ordinary income. Withdrawals prior to age 59½ may be subject to a 10% federal income tax penalty.

If you are concerned about running out of money in retirement, it might be time to consider a fixed annuity. A stable source of income could be a welcome addition to your portfolio.

1–2) Employee Benefit Research Institute, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

 This information has been prepared by a number of different sources. The information provided is educational in nature and is not intended to be construed as, legal, tax or investment advice and does not necessarily represent the views of the presenting party.  Specific federal and state laws relevant to a particular situation may affect the applicability, accuracy or completeness of this information.  Material presented is believed to be from reliable sources, but its accuracy is not guaranteed.  If additional information is needed, the reader is advised to seek professional services.

©FIS 2008 – 2011

Privacy Policy

Debating the Debt Ceiling

Over the past few months, there has been substantial debate in Congress over raising the ceiling on the national debt. This is an important discussion, but it is hardly new — Congress has raised the debt ceiling 74 times since 1962.¹

The debt ceiling is actually more of a legislative formality than a barrier to government spending. The current debate may be driven in part by the fact that the national debt is approaching the psychologically important milestone of 100% of gross domestic product for the first time since World War II. In contrast, 10 years ago, the debt was less than 60% of GDP.²

Government spending and borrowing affect all taxpayers, so it’s worthwhile to keep track of what happens in Washington. Although many Americans could be adversely affected if Congress decided not to increase the debt ceiling, this is unlikely to happen.

Why Does the Government Have a Debt Limit?

The debt ceiling is the federal government’s legal limit for borrowing money. It was established in 1917 to help finance America’s involvement in World War I. Up to that time, federal borrowing and debt limits were usually tied to specific projects.³

Why have a debt ceiling if Congress just raises it every time the national debt approaches the limit? Checks and balances. The U.S. Constitution gives Congress the power to appropriate money and the executive branch the power to spend it. The debt ceiling is one way for Congress to control the amount of money the U.S. Treasury — an arm of the executive branch — can borrow by selling bonds to investors. Each time the national debt reaches the debt ceiling, Congress and the president must have a public debate over the need to spend more than the government collects in tax revenues. Sometimes the debate takes place quietly; at other times, it captures national attention.

What Happens If the Debt Ceiling Is Not Raised?

Once the national debt hits the debt ceiling, the Treasury can no longer borrow. Because most federal budgets require deficit spending, the government might not be able to pay all of its obligations. This has never happened in the United States, so it’s unclear how the Treasury would be required to prioritize its bill payments.

If the government were unable to pay its obligations, investor confidence in U.S. government debt could be reduced and the government would probably have to pay higher interest rates to compensate for the perceived additional risk. The federal budget is already tight (as evidenced by the need to borrow in excess of tax revenues), so higher interest payments could displace other federal spending priorities and require additional borrowing. Because the interest rates offered by the federal government influence other interest rates, a rate increase could translate to higher borrowing costs for state and local governments, businesses, and consumers.

Among the many people in the United States who rely on the federal government for income are Social Security beneficiaries, civilian and military employees, and federal contractors and their employees. If payments to these individuals were to cease, they may be forced to curtail their spending, which could ripple through the private sector.

U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest, which is why they tend to appeal to investors seeking income and preservation of principal. A significant portion of the federal debt is held by foreign investors, so if the Treasury were unable to honor its obligations, it could have a global effect.

Of course, there could be some benefits to a reduction in federal borrowing: Capital that previously went to finance government spending could be freed up for investment in the private sector. The percentage of the federal budget consumed by interest payments could fall. The less the government has to borrow, the less reason it may have to justify tax increases. However, although simply capping the federal debt limit might seem like an easy way to stop Washington from spending more than it collects in tax revenues, a federal government that is unable to pay its bills is more likely to cause hardship than reform.

Obviously, the federal government cannot continue to borrow indefinitely, but we can expect Congress to keep raising the debt ceiling until longer-term fiscal challenges are addressed. The debt ceiling is important, but don’t let it distract you from pursuing your own fiscal health and long-term financial goals.

The principal value of Treasury securities fluctuates with market conditions. If not held to maturity, they could be worth more or less than the original amount paid.

1–3) Congressional Research Service, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

©FIS 2008 – 2010

Researchers divided working Americans into four groups, ranging from the lowest to the highest income levels. They found that, even though the risk of running out of money decreases with a higher pre-retirement income, almost one-third of people with upper-middle incomes and 13% with high incomes may not be able to pay for basic retirement expenses and uninsured health-care costs after two decades in retirement.¹

The risk of running out of money doesn’t appear to be reduced for people who have more time to prepare for retirement: Baby boomers and Generation Xers are almost equally at risk.²

Fortunately, it’s possible to purchase an insurance product that could pay an income for a specified period, including your lifetime or the lifetimes of you and another person. The guaranteed retirement income available from a fixed annuity could be just the fix you’re looking for.

Fund Your Future Income

A fixed annuity is a contract with an insurance company that guarantees a fixed rate of return during the life of the contract. The type of annuity that may be appropriate for you will depend on your situation.

An immediate annuity is typically funded with a lump-sum premium. Payments start soon thereafter and continue for the duration of the contract. This type of annuity is often purchased at the beginning of retirement.

A deferred annuity can be funded with either a lump-sum premium or a series of payments over time. Payments start at some point in the future at a rate that reflects any tax-deferred growth during the accumulation period. The income amount depends on the amount of the initial contract, the contract’s rate of return, the age of the contract holder, and the number of years over which payments will be received.

Annuity Trade-Offs

Generally, annuities have contract limitations, fees, and expenses. They tend to offer more conservative rates of return than the financial markets because the insurance company is responsible for paying the contract’s stated return, regardless of market conditions. Of course, any guarantees are contingent on the claims-paying ability of the issuing insurance company.

Most annuities have surrender charges that are assessed during the early years of the contract if the annuity is surrendered. Distributions of annuity earnings are taxed as ordinary income. Withdrawals prior to age 59½ may be subject to a 10% federal income tax penalty.

If you are concerned about running out of money in retirement, it might be time to consider a fixed annuity. A stable source of income could be a welcome addition to your portfolio.

1–2) Employee Benefit Research Institute, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

Everyone including seniors can get multiple term quotes from Foundation Insurance Services term quote engine at www.compareterm.com. Click and just input the information and quotes from available insurers will be provided. More than seventy companies are quoted in the database. These quotes can even be formed into a PDF file for further review. The Compulife quote engine is used. Compulife provides rates and data and does not sell life insurance. No other Internet term site uses as many companies for comparison as does www.compareterm.com.

In addition, trained life insurance licensed agents are available by telephone to answer any questions and to provide advise and information. Their expertise can often provide invaluable decision information.

There are policies which require exams and there are policies which do not require exams.

Those who want the least expensive term life insurance by getting multiple quotes from different carriers can shop at www.compareterm.com. More than seventy term life companies are represented in the quote engine. That is more than any other Internet site offers. For those who do not wish to be examined they can quote and shop for guaranteed issue term insurance at Foundation Insurance Services online store at Facebook by clicking on this link: http:on.fb.me/FISNJ.

For those including senior citizens who want a combination plan of term life, long-term care, and critical illness with no underwriting on the long-term care and critical illness coverages contact us by clicking on this link http://preview.tinyurl.com/44y2j7d

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 ©FIS 2008 – 2010

The administration has already made clear where it wants the estate tax rates to be. So why wait? What happens if during the quiet of this coming summer the administration slips their version of the estate tax into an obsecure bill that passes with no debate or  notice. We wake up one morning and find it done. Do we have 19 months or only 6 or 8 months worst case?

Now is the time to call attention to the worst case possibility. To take action and to value a business requires at least 6 months. The window we have may be small and we need to be proactive.