Jan 272012

Mac Frasier pic01/27/12: Insurance can be a vital part of any financial plan, providing a sense of security during turbulent times. We expect that if we pay our premiums on time the policy will be there when we need it most. Over the past few years lapsing insurance policies are becoming more commonplace, even if all premium payments have been made on time.

The problem began to arise as interest rates that are used for calculating cash values for life insurance polices began to fall. For example a policy that was sold showing a 12% interest rate and now only receiving an interest rate of 3% to 4% may have a cash value that is less than originally projected. This becomes a greater problem in the later years of the policy when the cash value would be used to offset premiums. As with your investments, insurance policies need to be reviewed periodically to ensure they are performing how they need to. For a life insurance policy this is accomplished by requesting an In-Force Illustration. This document will show how the policy will perform if you continue to pay premiums and the cash value grows at a certain rate.Investment Answers

If there appear to be problems with you policy, you may have several options. The first one is to pay additional premiums to make up for the decreasing cash value. The second option is a result of changes that have occurred in the insurance industry over the last few years. In 2001 insurance companies were required to adopt new mortality tables because of changes in longevity. This means that the premiums on policies written before 2001 may be much higher than ones written now. By utilizing a 1035 Exchange (IRS Rule regarding Life Insurance Cash Value) you may be able to purchase a new policy with the same death benefit but with lower premiums.

We would love to talk with you if you have any concerns regarding you current policies or if you have never had a policy review.  Also, feel free to email me here.

Mac Frasier
Senior Vice President
Wealth Consultant

Note: The opinions voiced in this material are for general information and are not intended to be specific advice. Any indices such as the S & P 500 can’t be invested into directly. Past performance is no assurance of a future result.

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Oct 212011

10/21/11: Reasons every woman should have an insurance policy

Most young, single women don’t think about life insurance. In fact, less than 5% of all insurance policies sold in the past year have been contracts for single women. Most people in general don’t contemplate the need for life insurance until they get married, have a child, or incur a large debt. But even a single girl needs to give plenty of thought to purchasing a life insurance policy.

Quint Cook, Executive Vice President and Wealth Consultant, states that there are many reasons one should have an insurance policy. He asks clients, “Do you own your own home? Do you have unsecured debt such as student loans or credit card bills? What would happen to this debt if you were to die unexpectedly?” Chances are your estate will not be able to cover these costs in a timely manner, leaving your family to bear the financial burden. I’m sure you would agree with me when I say I never want to be a financial burden on my loved ones. With life insurance coverage, you will have peace of mind knowing your financial responsibilities and debts are covered in the event of your death.

Frequently Asked QuestionsQuint also points out that at our younger and healthier age, we have the opportunity to purchase life insurance at a reduced cost. The older you are the higher the health risks and premiums, so it’s smart to purchase life insurance now. You can easily add to your coverage when life changes occur such as marriage or having a child. Other than reduced costs, there are other benefits to purchasing life insurance at a young age. As time passes you will accumulate a cash value in your policy, which can be used to help secure loans and provide a more desirable credit profile to lenders. Building a strong financial base at an early age is always beneficial down the road.
Insurance policies are available in many formats, such as: Term Life, Whole Life, and Variable Policies. Costs vary depending on the type of coverage you elect as well as any pre-existing health conditions or risks. If you would like to know more about life insurance or any other financial topic, I recommend you call Greg Powell or Quint Cook at fi-Plan Partners today.

For more financial insights for the single woman, call me at 205.989.3498 or email me here.

Amy Marquis
Chief Operations Officer