Category Archives: Insurance

Time is running out to lock in low rates on insurance premiums.

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The January 1, 2013 deadline is approaching fast and we are already seeing changes being made to permanent policy rates.  Revisions to actuarial guideline 38 are going to cause many premiums to skyrocket.  For more information visit our site www.paytaxeslater.com and check out all the resources we have available on insurance in the middle of the page.  We have had radio shows on the topic, and there is currently a transcript and mp3 available for download.  We also have posted an open letter to our clients and friends regarding this important issue, (which can be found directly at: http://www.rothira-advisor.com/articles/insurance_increase.pdf)

Take some time today to read and evaluate this information and then call us for a complimentary insurance review.  412-521-2732

Life Insurance Premiums to Increase on Many Guaranteed Policies…

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Life insurance often plays an important role as one component of an overall retirement and estate plan. A new development in the world of insurance commands our attention.  Insurance premiums on many permanent policies are going up and many plans will never be available at current rates again.

Interest rates have dropped over the last decade and remain stagnant today. This has caused chaos in conservative investment vehicles including bonds, fixed annuities, money market accounts, and certificates of deposit. Now, these lower interest rates are going to drastically affect life insurance product design pricing for many guaranteed life insurance products. The National Association of Insurance Commissioners (NAIC) has seen the need to make adjustments in the way that life insurance companies finance and carry reserves on their policies. In September, the NAIC approved revisions to Actuarial Guideline 38 (AG38) requiring insurance companies to hold more cash reserves in order to guarantee many life insurance policies.

Some insurance companies have already begun changing their policies, but certainly by January 1, 2013, we are going to see a dramatic change in product design and the pricing of life insurance in this country. The most common increase in pricing for guaranteed policies is projected to be between 8 and 15 percent, however, industry wide, the premium increases are going to peak as high as 25 percent.

Life insurance is more than just a death benefit.  It is the only vehicle ever fashioned that creates an instant estate. Life insurance can ease the worry of outliving your resources, help fund a college education, bolster retirement prospects, help you maximize your social security or required minimum distributions, pay for estate and income taxes, and, in some cases, a combination policy can provide for long-term care coverage as well as life insurance.

If you are unsure if you need life insurance, or you’d like to get information about how life insurance can augment your portfolio and improve your loved ones, beneficiaries’, and even your own financial future, now is the time to find out more.

Please, call us today and schedule a complimentary appointment to evaluate and discuss your insurance needs taking into account whatever insurance you already own.  You won’t be sorry.

Please call Alice, at 412.521.2732 to set up your free insurance evaluation today.

Life Insurance Awareness Month

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Life insurance isn’t a big part of what we do here at Lange Financial, but it is an important part. As September is Life Insurance Awareness Month, we want to share some important life insurance facts with you all.

Did you know that depending on the size of your estate, your heirs could be hit with a large estate tax payment after you die. The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of estate taxes, funeral costs, and other debts without having to hastily liquidate other assets. And life insurance proceeds are generally income tax free and can be arranged to avoid probate. Finally, if your insurance program is properly structured, the proceeds from your life insurance policy won’t add to your estate tax liability.

Think it over. If you are one of the 35 million American households that are uninsured, you might want to consider what a life insurance policy could mean for your heirs.

Five Financial Tips for Women

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Five Financial Tips for Women

  1. Make it a Priority to Understand What You Already Have – For working woman, make sure you fully understand your employee benefits and your company’s retirement plan.  Make it a point to see what your short and long term disability and life insurance can offer you and then fill in the gaps with individual policies. You may be surprised what your benefits do and do not cover.  It’s better to know now then at the time you may need to use them. 
  2. Fund Your Retirement Plan:  Most employers offer employees a retirement plan and you must take advantage of it. Make sure though that you consult with a qualified financial advisor when choosing your fund choices.  Leave the selection up to the professionals and review it once a year to make sure your maximizing your returns. Beyond your company’s retirement plan, look into getting your own IRA or Roth IRA, which allows you grow wealth tax-free through the course of your lifetime – it’s worth looking in to.
  3. Recognizing the Challenges is Half the Battle: There’s no doubt about it – women face obstacles that men do not.  Women still earn less than their male counterparts, live longer and are typically out of the workforce for 12 years, on average, taking care of children and now more than ever, aging parents. Recognize these challenges, set goals and build a plan to action to overcome your specific hurdles.  Things such as making a career move or initiating salary negotiations, refinancing your mortgage, opening up an IRA or Roth IRA and adjusting your risk tolerance on your investments can all make a powerful impact on your financial picture. 
  4. Don’t be Afraid to Fire a Bad Advisor:  Let’s face it, there are thousands of financial advisors out there…some of which may suit you better than others.  Choosing a financial advisor is like choosing a doctor.  Choose a person who focuses on your needs and not there’s, someone who listens to your goals, keeps you on track and meets with you at least once a year to review your situation.  If you’re not satisfied with the relationship you have, move on! 
  5. It’s Never Too Late:  Regardless of your age, there are ideas and options that can help your financial picture – we see it everyday.  There is no better time to start investing than right now. Make it a priority to meet with an advisor in 2011.  Ask people you trust to refer you to someone that listens and achieves results and get started as soon as possible.

New Website Feature

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Six months into our new radio show, The Lange Money Hour: Where Smart Money Talks, we’re happy to report that we have loyal listeners from all over the country. Calls, emails and questions have been coming in on a regular basis from California, Michigan, Texas, Ohio, Florida and New Jersey (as well as across Pennsylvania).

We’ve also discovered that many listeners enjoy listening to the shows again once they’ve been posted here at www.retiresecure.com.  Thanks to the listeners who made the suggestion that we offer shorter audio clips in addition to our full-length shows.

Since we also thought that was a great idea, we’ve created a new page featuring clips from every show.  The link is posted on the left-hand side of the homepage — click on Audio: Key Advice From The Lange Money Hour.

To make this feature even more user friendly, we provide a description of the topic and the date of the show.  Now you can get quick advice from Ed Slott, Bob Keebler, Natalie Choate and all of our other guests, just by clicking on the appropriate link.

All of our favorite topics are covered including Roth IRAs and Roth IRA conversions, safe withdrawal rates, the use of insurance in estate planning, tax-loss harvesting and the best estate plan for most traditional families — Lange’s Cascading Beneficiary Plan.

Please use and enjoy these clips at your leisure and keep the ideas coming!

Turning Children Into Financially Responsible Adults

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A huge thanks to Neale S. Godfrey, best-selling author and founder of The Children’s Financial Network, for sharing her incredible ideas for raising financially responsible children on the July 29th edition of The Lange Money Hour. Neale was a great guest — full of tips for parents and grandparents on how to make sure that children are financially fluent.

A couple of her strategies are particularly timely given the economy and the time of the year.  For instance, many parents and grandparents are busy doing back-to-school shopping right now and we all know that shopping with tweens and teens can get ugly.  Neale offered a practical solution to avoid arguments and overspending.  For kids age eleven and up, Neale suggests giving them a budget and letting them make their own decisions.  You can set up a bank account or give them pre-paid debit cards, but in the end, putting them in control of their finances forces them to make budgetary choices.

The recession has also forced a lot of adult children to fly back to the nest and Neale recommends hammering out the details of the arrangement before they move back in.  How long do you expect them to stay?  What financial obligations do you want them to take care of?  Having these discussions in advance avoids problems later.  Neale even suggests taking the extra step of drawing up a lease with all of the terms defined.

In addition to setting up a trust, one of Jim Lange’s chief concerns when it comes to minors is the naming of a guardian.  Neale agreed that naming a guardian for your children is absolutely critical and she also recommends sharing the details of the arrangement with your children.

Notice, though, that the key element in all of these situations is communication — full disclosure of the family’s finances.  The problem for many families is that money is a taboo topic.  If this is the case in your family, one of Neale’s books might help.

Her #1 New York Times best-seller, Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children is an excellent choice for adults and Ultimate Kids Money Book is perfect for elementary school age children.  Both are available on Neale’s website www.childrensfinancialnetwork.com.

New Alternative to LTC Insurance

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If you’re one of the millions of baby boomers approaching your golden years, you’ve probably given consideration to the purchase of LTC (long-term care) insurance. You may also be concerned that you’d be throwing your money away. It’s possible that you could pay a lot in premiums and never need the coverage.

Jim Lange has always felt that if a husband and wife had enough money to provide for both of their potential long-term care expenses, they were really just insuring their estate.  In that case, Jim would typically advise that life insurance was a more certain bet.

Now there’s an alternative to LTC insurance and that was the topic on the July 1st edition of The Lange Money Hour: Where Smart Money Talks. Guest Tom Hall of Capitas Financial/Pittsburgh Brokerage explained the ins-and-outs of a relatively new hybrid product that is essentially a life insurance policy with a long-term care rider.

It works like this — if you need long-term care, the insurance company will pay for your care.  The amount the insurance company pays you will be subtracted from your death benefit.  If you never need long-term care, your life insurance death benefit will remain the same.

All of this is acheived with a single premium that is significantly lower in cost than separate LTC and life insurance policies.  Plus, if you do need to tap into the long-term care coverage, you will be withdrawing the money income tax-free.  In this way, this hybrid policy becomes an effective estate planning tool.  You avoid the possibility of dipping into your retirement plans and paying taxes upon withdrawal.

Tom Hall pointed out that, just like any other policy, you can be turned down for this hybrid product.  However, it also works the other way.  Some people who don’t qualify for LTC coverage may qualify for life insurance with an LTC rider.

By the way, if you currently have a life insurance policy, you can’t just call your agent and add an LTC rider.  An entirely new policy needs to be put in place.

We’d also like to thank the listener who emailed the question asking what happens to your premiums if your insurance company goes bankrupt.  We’re glad she asked because it gave Tom the chance to explain that in Pennsylvania, if your insurance company fails, you are protected for up to $300,000.

Of course, this hybrid product isn’t for everyone — in some cases, straight LTC coverage might still be the better idea.  Each case needs to be evaluated on its own.  As always, the Lange team is happy to provide you with a thorough analysis — just contact the office toll-free at 800-387-1129.