Are you purchasing life insurance for the first time? If so, you may feel a little overwhelmed by the process. All insurance involves something called underwriting, which is the insurance company’s assessment of the risk involved in the policy. Essentially, the insurer wants to know the probability that it will actually pay a benefit. The underwriting process varies based on policy type. For example, your car insurer may look at your type of vehicle and your driving record to determine the likelihood that your car will suffer damage in an accident. Your home insurer will look at the age and quality of your house. Disability insurers look at your health, income and the danger of your occupation. With life insurance, underwriting is based on several factors, including your gender, age and health. Below are a few common questions about underwriting and how you can make it as stress-free as possible. Your financial professional can also guide you through the underwriting process. Why do life insurance companies need health information? There are two primary factors that the life insurance company considers during underwriting. One is your age. The insurer uses actuary tables to estimate your life expectancy based on your age. This is one of the factors that most influences your premium amount. The other important factor is your health. After all, two 50-year-old men could have much different life expectancies based on their health. While an actuarial table can predict life expectancy based on age, it can’t develop a forecast based on your unique health issues. This is why the life insurance company needs specific health information. It wants to know about your unique health risks and concerns. The insurer then uses that information to assign a rating, which also influences your premium. The healthier you are, the better your rating and the lower your premium. If you have health issues, however, you could see a higher premium. What’s involved in the medical exam? The medical exam is different for everyone. In fact, if you’re young and are buying a term policy with a relatively low death benefit, you may not have an exam at all. The insurer may simply ask for a questionnaire and a copy of your medical records. In most cases, the exam involves a blood and urine sample along with measurements of your height and weight. The nurse may also check your blood pressure. These simple exams can usually be performed in your home or office and don’t take more than a few minutes. If you’re older and are buying a permanent policy or a term policy with a sizable death benefit, you may need a more intense exam. For example, the insurer may ask for a full physical. If you have high blood pressure or a history of heart issues, it may ask for additional tests. If you’ve had cancer, it may want specific information about the treatment and how long the cancer has been in remission. Every underwriting process is different based on the applicant. Does the insurer consider any other factors? The insurance company will also consider lifestyle factors. Perhaps the biggest is the use of tobacco, alcohol or drugs. The difference in premiums for a smoker versus a nonsmoker can be significant. If you’ve ever considered quitting smoking, you may want to do so in the months ahead of your life insurance exam. The insurer also may look at hobbies like sky diving or scuba diving. While participation in these activities won’t disqualify you, they may increase your premium. However, your financial professional may be able to look for insurers that aren’t as prohibitive in this area. Ready to find the right life insurance policy for you? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your health, lifestyle and goals, and then develop a strategy. Let’s connect soon and start the conversation. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 17965 – 2018/9/4
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At first glance, you may not think that work and retirement mix. After all, retirement is all about leaving the working world. How can you enjoy your newfound freedom and lifestyle if you’re still working?
Working doesn’t have to mean giving up your freedom, though. You could work part time or seasonally. You could work as a coach, consultant or trainer and manage your own schedule. You could even freelance or drive for a ride-sharing company. No matter which route you take, there are serious benefits to working in retirement. Obviously you get supplemental income, which could help you maintain your retirement assets and enjoy greater financial stability. Work could also provide socialization opportunities and help you meet new friends. There are also a few considerations that you shouldn’t ignore. Are you healthy enough to work in retirement? What kind of schedule would allow you to still enjoy your retirement? And perhaps most important, how will the extra income affect your Social Security benefits? Social Security is an important resource for retirees. In fact, nearly 90 percent of all Americans age 65 and older rely on Social Security for income.1 If you’re like most, Social Security will play an important role in your financial picture. Does work impact your Social Security benefits? It depends on a number of factors, including your earnings and your age. Below are a few important guidelines to keep in mind as you plan your retirement strategy: Before Full Retirement Age (FRA) The earliest you can file for Social Security is age 62. You can file at this age even if you are still working. Regardless of whether you’re working, however, filing before your FRA could lead to a big reduction in your benefits, perhaps as much as 35 percent.2 Despite the potential reduction, many people choose to file for benefits as soon as they’re eligible. The benefit reduction could be compounded if you file early and choose to work. Before your FRA, you can earn up to $17,040 in a year without seeing a reduction in your benefits. After you cross that threshold, however, your benefit is reduced by $1 for every $2 you earn. If you plan on continuing to work, think carefully about whether it makes sense to file for Social Security.3 Year of Your FRA Most people’s FRA lands at some point between their 66th and 67th birthdays. The actual month depends on your date of birth. You don’t technically reach your FRA until that month arrives.4 Once you reach the year of your FRA, Social Security makes an adjustment to the work reduction. In that year, you can earn as much as $45,360 without seeing a reduction. Keep in mind that those are your maximum earnings up to the month in which you reach your FRA. After you cross the threshold, your benefit is reduced by $1 for every $3 you earn. After Your FRA In the month you reach your FRA, you can start working with no benefit reduction and no earnings limit. You can earn as much as you want and still receive your full Social Security benefit. At this time, Social Security also recalculates your benefit amount and excludes any months in which your benefit was previously reduced because of earnings penalties. Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation. 1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf 2https://www.ssa.gov/planners/retire/agereduction.html 3https://www.ssa.gov/planners/retire/whileworking.html 4https://www.ssa.gov/planners/retire/1943.html Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov 17846 – 2018/7/30 Are you considering moving into a retirement community? That could be a smart move. Retirement communities are popular because they usually offer a wide range of activities, amenities and socialization opportunities. They also offer support for each phase of retirement, from independent living to assisted living to skilled nursing care.
You may find a retirement community helpful because it gives you the chance to enjoy your independence while also having support and medical providers nearby. You also may make a whole network of new friends, as all of your neighbors will be like-minded retirees. In fact, regular socialization with others could reduce your stress level and your risk of cognitive disorders like Alzheimer’s. Before you sign the contract, though, it’s important to do your due diligence and ask tough questions. Every community will put its best face forward during the sales process. Not all communities are the same, however. Below are a few factors to think about as you consider your retirement community options: Community Finances Your retirement community is meant to be your final home. You may transition over time from independent living to assisted living or even skilled nursing care. However, the idea is that you’ll never have to move again after you move into the community. You could be there for several decades. The only way to get the full benefit of the community’s services, though, is for the community to last for the duration of your retirement. If the community fails because of financial issues, you may not get a return of your deposit or other funds. Don’t be afraid to ask about the community’s finances before you move in. The occupancy rate is an especially important point. If the community has a high level of vacancies, that could be a red flag. Ask why the vacancies exist and what’s being done to correct the issue. You may even ask to see the community’s balance sheet. Also, be sure to ask what happens to your deposit and payments if the community ever becomes financially insolvent. Base Services and Extras As you tour a retirement community, you will likely see flashy marketing materials that highlight fun activities and luxurious amenities. However, those items aren’t always included in your initial deposit and monthly payments. Many communities offer premium services and amenities for an extra cost. For example, group outings could cost extra. While the community may have an association with a local golf or tennis club, you may have to pay membership dues to join. Also, it’s possible that your costs may change if you transition to assisted living or skilled nursing care. Ask plenty of questions to see how the costs will add up now and in the future. Long-Term Care Insurance If you’re in the early stages of retirement, you may not be thinking about long-term care. However, long-term care is an issue that many retirees will face at some point. It’s extended assistance with basic daily activities such as mobility, bathing and eating. Most communities offer some level of long-term care support, usually through an assisted living community. If you already own long-term care insurance, check with your insurer to make sure it covers the community and its services. If you don’t have insurance, now may be the time to consider it. Your insurance policy could help cover some of your community payments should you ever need assisted living care or skilled nursing care. Your financial professional can help you determine which long-term care policy is right for you. Ready to develop your retirement strategy? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 17848 – 2018/7/30 Own your own business? If so, you’re probably juggling many different challenges. You have to provide service your customers, find new clients and manage your company’s cash flow. You also may have to manage your employees, develop new products and services and work to achieve your long-term goals. As a business owner, you probably wear many different hats.
With so many challenges on your plate, retirement may not be on your radar. If you’re like many business owners, you may think you can work as long as you want. Many self-employed individuals funnel their energy and resources into their business rather than plan for the future. However, retirement is one challenge you may not want to ignore. It’s not a given that you’ll be able to work forever, and you may not be able to sell your business to fund your retirement. It’s always helpful to have assets set aside for retirement. Also, a business retirement plan may be a helpful tool to attract new employees. Approaching retirement? If so, you may be thinking about how you’ll manage and avoid major financial risks. The biggest risk you may face is the need for long-term care. Long-term care is extended assistance with basic daily activities such as eating, bathing and mobility. It’s often provided either in an assisted living facility or in the home by family members or home health aides.
According to the U.S. Department of Health and Human Services, long-term care will be a reality for many seniors. The department found that today’s 65-year-olds have a 70 percent chance of needing long-term care at some point. The care is usually needed for a few years, but nearly 20 percent of those who need care require it for five years or more.1 Is retirement approaching? Worried that you won’t have enough money? You have company. According to a recent study from the Transamerica Center for Retirement Studies, baby boomers have a median retirement savings balance of only $147,000.1 While that number may represent a good start, it’s unlikely to be sufficient to fund a long retirement.
Baby boomers face a number of unprecedented retirement challenges. Many don’t have pensions, which means they have to shoulder the burden of funding their expenses in retirement. Retirees also have to contend with a longer life span, which means they need to cover more years of spending. Health care is also a substantial area of expense. Did you leave your 401(k) behind at your old job? According to a study from the U.S. Government Accountability Office (GAO), you have company. The study found that more than 25 million Americans left their 401(k) balance in a former employer’s plan during the 10-year period from 2004 through 2013.1
When you leave a 401(k) balance in a former employer’s plan, it could create complications. For example, if the employer is sold or goes out of business, you may have trouble accessing the money. If you pass away, your beneficiaries could have trouble tracking down your old balance. If you have a balance in an old 401(k) plan, now may be the right time to take action. Below are a few options. Consider your unique needs and goals. You also may want to consult with a financial professional to help you decide on the right strategy. According to a recent study from InsuranceQuotes, 40 percent of Americans don’t have life insurance. Among those who didn’t have insurance, half said they feel like it’s not necessary.1 Even among those who have insurance, many don’t know if they have the correct amount.
Risk management is at the core of any financial plan. There may not be a bigger risk than the early death of a parent, loved one or financial provider. If you have young children or you support loved ones, your death could cause serious financial challenges for those who are most important to you. Life insurance helps you minimize that risk. Do you take a comprehensive approach to planning your finances? If the answer is no, you’re not alone. According to a study from the Certified Financial Planner Board of Standards, only 19 percent of Americans could be classified as “comprehensive planners.” The remaining 81 percent either plan only for specific financial goals or don’t do any planning at all.1
A comprehensive financial plan is one that addresses your entire financial picture. It may include everything from retirement planning to investment management to risk management and much more. A comprehensive plan is often helpful because it can show you how financial decisions in one area of your life can impact goals in other areas of your financial life. For example, you may have a plan for retirement. But do you know how your efforts to save for retirement impact other goals, such as saving for your child’s education or paying down high-interest debt? A comprehensive plan shows you the interaction between these goals so you can make more informed decisions. |
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