Reducing the Risk of Outliving Your Money

“What is your greatest retirement fear?” If you ask any group of retirees and pre-retirees this question, “outliving my money” will likely be one of the top answers. In fact, 51% of investors surveyed for a 2019 AIG retirement study ranked outliving their money as their top anxiety…read more…

Coping with College Loans

Total student loan debt in America is now around $1.6 trillion. Since 2008, it has more than doubled. Federal Reserve data states that 44.7 million Americans are dealing with lingering education loans. The average indebted college graduate leaves campus owing nearly…read more…

Buy-Sell Agreements for Businesses

For most, creating an estate strategy is important to make sure your loved ones are taken care of after you’re gone. But it may be just as important to have an estate strategy for your business…read more…

Inventorying Your Possessions

It’s great to have insurance against damage and loss, but if you can’t show proof of your possessions, it may result in a protracted settlement process with your insurance company… read more

Weekly Economic Update

Stocks edged toward all-time peaks during a relatively calm week marked by easing trade tensions. Friday marked the eighth straight daily advance for the Dow Jones Industrial Average. read more

June 2016 – Retirement InSight

CAN YOU STAY ON A COMPANY HEALTH PLAN AFTER AGE 65?

Generally, Medicare is available for people age 65 or older; this is well-known. What is less well-known is the fact that some companies can legally cancel group health insurance for a worker reaching this milestone. Baby boomers who aspire to keep working into their mid-sixties may want to take note of this.

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Keep Your Life Insurance When You Retire

Some good reasons to retain it.

Provided by Ron Richards

Do you need a life insurance policy in retirement? One school of thought says no. The kids are grown, and the need to financially insulate the household against the loss of a breadwinner has passed.

If you are thinking about dropping your coverage for either or both of those reasons, you may also want to consider the excellent reasons to retain, obtain, or convert a life insurance policy after you retire. It may be the best decision once you take these factors into account.

Could you make use of your policy’s cash value? If you have a whole life policy, you might want to utilize that cash in response to certain retirement needs. Long-term care, for example: you could explore converting the cash in your whole life policy into a new policy with a long-term care rider, which might even be doable without tax consequences. If you have income needs, many insurers will let you surrender a whole life policy you have held for some years and arrange an income contract with the cash value. You can pull out the cash, tax-free, as long as the amount withdrawn is less than the amount paid into the policy. Remember, though, that withdrawing (or taking a loan against) a policy’s cash value naturally reduces the policy’s death benefit.1

Do you receive a “single life” pension? Maybe a pension-like income comes your way each month or quarter, from a former employer or through a private income contract with an insurer. If you are married and there is no joint-and-survivor option on your pension, that income stream will dry up if you die before your spouse dies. If you pass away early in your retirement, this could present your spouse with a serious financial dilemma. If your spouse risks finding themselves in such a situation, think about trying to find a life insurance policy with a monthly premium equivalent to the difference in the amount of income your household would get from a joint-and-survivor pension as opposed to a single life pension.2

Will your estate be taxed? Should the value of your estate end up surpassing federal or state estate tax thresholds, then life insurance proceeds may help to pay the resulting taxes and help your heirs avoid liquidating some assets.

Are you carrying a mortgage? If you have refinanced your home or borrowed to buy a home, a life insurance payout could potentially relieve your heirs from shouldering some or all of that debt if you die with the mortgage still outstanding.2

Do you have burial insurance? The death benefit of your life insurance policy could partly or fully pay for the costs linked to your funeral or memorial service. In fact, some people buy small life insurance policies later in life in preparation for this need.2

Keeping your permanent life policy may allow you to address these issues. Alternately, you may seek to renew or upgrade your existing term coverage. Consult an insurance professional you know and trust for insight.

Ron D. Richards may be reached at 208.855.0304 or ron@cir1daho.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Ron Richards is a Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. 439 E Shore Drive, Ste #200 Eagle, ID 83616

Citations.

1 – forbes.com/sites/forbesfinancecouncil/2018/03/06/using-life-insurance-for-retirement-purposes/ [3/6/18]

2 – nasdaq.com/article/4-reasons-to-carry-life-insurance-in-retirement-cm946820 [4/12/18]

How Your Credit May Affect Your Life Insurance Premiums

You may be surprised to learn about the potential relationship.

Provided by Ron Richards

Does your credit history partly determine the cost of your life insurance? It may. The potential for such a relationship may surprise you – and the relationship is not without controversy.

Insurers think a good credit history implies several things. It signals a consumer who routinely lives up to financial responsibilities. It telegraphs maturity in a young adult. It may also be characteristic of good health and a long life.1

That last sentence may have you scratching your head. Weird as it may seem, some life insurance providers see an excellent borrowing history as a predictor of continuing healthiness and longevity. Following this train of thought a little further, a poor credit history may be judged to reflect either inattention to, or ignorance of, personal financial responsibility. The root causes of that inattention or ignorance might cause those consumers to die earlier than others.1

Last year, LIMRA (a noted life insurance industry research firm) examined what kind of data insurance companies were reviewing as they considered life insurance applications. Twenty-eight percent stated that they used a predictive model encompassing consumer credit histories – one created by LexisNexis Risk Solutions, an analytics firm. Eighteen percent simply looked at consumer credit records directly. Eight percent relied on a TransUnion score for life insurance applicants.1

In some states, credit history also influences auto and homeowners insurance rates. The better the behavior, the thinking goes, the less inclined that consumer will be to file a claim. (It is illegal to use credit history as a factor in setting auto insurance premiums in California, Hawaii, and Massachusetts.)1

Other types of data may also be evaluated. In addition to credit history, insurance companies may also look at a consumer’s driving record, criminal history, use of prescription medicines, and applications for life insurance coverage submitted in past years. All this may affect life insurance coverage and premiums.1

Why are life insurance providers interested in all this information? They want to make their business models more efficient.

Life insurance underwriting usually takes weeks or months and includes a medical exam. In this digital age, the whole process looks very analog. By streamlining it around predictive models and abandoning or softening the exam requirement, insurers remove a psychological hurdle that stands in the way of some policy sales. Data-based underwriting can take as little as 48 hours.2

So yes, your credit history may affect what you pay for life insurance. While it may not be a prime factor, it does exert an influence. That is another good reason to keep your credit score high.

Ron D. Richards may be reached at 208.855.0304 or ron@cir1daho.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Ron Richards is a Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. 439 E Shore Drive, Ste #200 Eagle, ID 83616

Citations.

1 – nerdwallet.com/blog/insurance/credit-can-affect-life-insurance-rates/ [6/18/18]

2 – investopedia.com/insurance/accelerated-underwriting-easy-life-insurance/ [3/7/18]

May 2019 – Retirement InSight

RETIRING WITH A CASH RESERVE

Many people want to enter retirement with a) investments that may have benefited from years of growth and compounding, b) a manageable debt position, and c) a cash reserve for emergencies. Just how large should that cash reserve be? There is no simple answer to that question because the answer is different for each retiree.

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What People Overlook When Shopping for Life Insurance

A few realities that must be acknowledged.

Provided by Ron Richards

Shopping for life insurance means paying attention to detail. In scrutinizing these details, however, some fundamental, big-picture truths may be ignored.

If you want to renew or upgrade coverage later in life, the terms could be less than ideal. You may be healthier than most of your peers, you may have the constitution of someone half your age, but insurers base policy premiums and terms of coverage on actuarial norms, not exceptions. Purchase a term life policy at age 50, and your premiums may be considerably more expensive than if you had bought the same coverage at age 30. This is the way of the insurance business.1

Have you had a serious illness? Have you been diagnosed with a medical condition, such as diabetes, sleep apnea, or high blood pressure? You are looking at higher life insurance premiums, and insurers may limit the amount of life insurance coverage you can buy.2

A guaranteed acceptance life insurance policy may be the answer, but even with one of these policies, you may have to live a certain number of years after buying the coverage for your heirs to receive a death benefit. Many times, if the insured dies within 2-3 years of the policy purchase, the named beneficiaries only receive an amount equivalent to the premiums that have been paid, plus interest.2

Your beneficiaries need to know that you own life insurance. Roughly $1 billion in life insurance payouts sit unclaimed in America. Why? The beneficiaries are unaware of them. Also, sometimes beneficiary designations are hazy; a “husband” is named as a primary beneficiary on a policy, but the insured has married more than once, so an ex-spouse contests the beneficiary form. Such legal challenges may generate court costs offsetting the financial value of the death benefit.3

While it seems obvious to inform heirs about a life insurance policy, some people never do – and this simple oversight continues to obstruct life insurance payouts.

You need to name a beneficiary in the first place. Some consumers fail to, however, and that can create problems. If you do not designate a beneficiary for your life insurance policy, its death benefit could be included in your estate, exposed to probate and creditors.4

You must also recognize that you could live much longer than you expect. Years ago, most life insurance policies were sold with the assumption that the insured party would die by age 100. If the policyholder lived beyond that maturity date, the insurer would simply pay out the cash value of the policy (or something similar) to the insured person at that time.5

Today, maturity dates on life insurance policies are often set at age 121, but not all are. There is still a possibility that you could outlive a maturity date and money could be paid out to you instead of your named beneficiaries. This possibility must be acknowledged.5

As you shop for life insurance coverage, keep all this in mind. Some policyholders (and their heirs) tend to lose sight of these realities.

Ron D. Richards may be reached at 208.855.0304 or ron@cir1daho.com.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Ron Richards is a Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. 439 E Shore Drive, Ste #200 Eagle, ID 83616

Citations.

1 – investopedia.com/articles/investing/102914/7-factors-affect-your-life-insurance-quote.asp [6/28/18]

2 – nasdaq.com/article/4-errors-to-avoid-with-your-life-insurance-cm868133 [10/30/17]

3 – baltimoresun.com/health/blog/bs-md-insurance-deceased-database-20170111-story.html [1/11/17]

4 – thebalance.com/must-life-insurance-be-used-to-pay-a-decedent-s-bills-3505232 [5/12/18]

5 – lifeinsurance.org/blog/does-life-insurance-expire-at-a-certain-age [6/28/18]