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2023

Hawaii’s Exceptional Life Expectancy: Ensuring a Graceful Journey with Retirement Planning Solutions

Hawaii’s Exceptional Life Expectancy: Ensuring a Graceful Journey with Retirement Planning Solutions

Hawaii has the highest life expectancy in the United States, with an average of 80.7 years as of 2020. Factors contributing to this longevity include active lifestyles, dietary habits, and culture. There are challenges associated with an aging population, emphasizing the need for life insurance with long-term care, long-term care insurance, and retirement planning to enable aging in place gracefully.

Hawaii’s Longevity Secrets

Hawaii’s exceptional life expectancy can be attributed to various factors:

Active Lifestyles

Asian Americans living in Hawaii tend to lead more active lifestyles. The pleasant climate and natural beauty encourage outdoor activities, including swimming, hiking, and surfing. Such activities contribute to better physical health and, consequently, longer life expectancy.

Dietary Habits

A diet rich in fruits, vegetables, fish, and low-fat meats is typical of 80 and 90 years old in Hawaii. This diet, combined with the cultural emphasis on a balanced and nourishing way of life, and physical activity are essential.

Brain Activity

Keeping a brain active with crosswords, sudokus and reading keeps it growing, and slows dementia. Hawaiian and Asian culture emphasizes community, family, and respect for elders.  The strong social support systems foster emotional well-being among the elderly including social interaction, contributing to their longevity.

Aging Challenges

While Hawaii’s high life expectancy is undoubtedly something to celebrate, it also brings certain financial challenges, particularly for individuals approaching retirement age. Planning for a longer life expectancy is vital for several reasons:

1. Retirement Savings

Many people face challenges related to insufficient retirement savings. It’s essential to save adequately for retirement to maintain the same standard of living.

2. Social Security

Relying solely on Social Security may not provide enough income to cover living expenses. Social Security payments may not keep pace with inflation, leaving retirees with a reduced purchasing power.

3. Inflation

Inflation erodes the real value of money over time. Retirees on a fixed income may find it challenging to maintain their desired lifestyle when the cost of living rises.

4. Debt

Carrying debt into retirement can be burdensome. Mortgage payments, credit card debt, or student loans can deplete retirement savings.

Managing Financial Risks by Planning

To navigate the challenges of aging gracefully and enjoy the benefits of a long life, it’s essential to consider various solutions.

Life Insurance with Long-Term Care Riders

Life insurance policies with long-term care riders provide financial support for both the insured and their beneficiaries. These policies allow policyholders to access a portion of their death benefit to cover long-term care expenses, offering financial flexibility and security.

Long-Term Care Insurance

Long-term care insurance policies are designed specifically to cover the costs associated with long-term care services. These policies can alleviate the financial burden on individuals and their families.

Annuities and Retirement Planning

Annuities can provide a source of income in retirement, helping seniors maintain their standard of living. Proper retirement planning, which may include annuities, is essential to ensure financial security in old age.

Income-Generating Investments

Consider investments that provide regular income, such as dividend-paying stocks, bonds, or real estate investments. These can supplement your retirement income.

Estate Planning

Create a comprehensive estate plan to minimize estate taxes and ensure your assets are distributed according to your wishes. This may involve using trusts and wills.

Social Security Optimization

Understand how to maximize your Social Security benefits by delaying your claim if possible, as this can increase your monthly benefit.

Diversify Investments

Diversification can help manage investment risk. Spread your investments across different asset classes to reduce exposure to any single risk.

Conclusion

As individuals approach retirement, it is essential to consider these challenges and plan accordingly.

Financial professionals can play a pivotal role in guiding individuals toward suitable solutions, such as life insurance with LTC riders and standalone LTCI. Contact a financial professional to review your options. Hawaii’s exceptional life expectancy serves as a model for the rest of the nation, emphasizing the importance of combining healthy living, cultural values, and the right financial strategies to ensure a longer and more comfortable life for our aging population.

TLDR; Be Proactive

Addressing these challenges requires proactive financial planning. Insurance products, such as life insurance with long-term care riders and long-term care insurance, can provide a safety net for aging individuals and their families, allowing them to age in place gracefully without the burden of exorbitant healthcare costs.

Survivorship Life Insurance: A Unique Solution for Estate Planning

Survivorship Life Insurance: A Unique Solution for Estate Planning

Survivorship Life Insurance, also known as “second-to-die” or “joint” life insurance, is a unique type of policy that covers two individuals under a single policy. Unlike traditional life insurance, which pays out upon the death of a single insured person, survivorship life insurance pays out upon the death of the second insured individual. This insurance type is particularly valuable in estate planning.

Table of Contents

Purpose of Survivorship Life Insurance in Estate Planning

Estate planning is a critical aspect of financial management, ensuring the efficient distribution of assets upon the death of the policyholder. Survivorship life insurance serves as a valuable tool for achieving estate planning goals, including preserving wealth, minimizing estate taxes, and providing financial security to beneficiaries.

Benefits of Survivorship Life Insurance

Survivorship life insurance is a powerful tool in estate planning, providing cost-efficiency, estate tax benefits, guaranteed payouts, and flexibility.

Cost-Efficiency

Survivorship life insurance policies are often more cost-effective than insuring two individuals separately. The premiums for this type of policy are typically lower, making it an attractive option for couples.

Estate Tax Benefits

One of the primary advantages of survivorship life insurance is its ability to help minimize estate taxes. When the second insured individual passes away, the policy’s death benefit can be used to cover estate tax liabilities, ensuring that the estate’s assets remain intact.

Guaranteed Payout

Survivorship life insurance guarantees a payout upon the death of the second insured person, providing peace of mind that the intended beneficiaries will receive the death benefit. This payout is typically income-tax-free, further protecting the estate.

Flexibility

These policies offer flexibility in terms of the death benefit, allowing policyholders to adjust the coverage amount as their needs change. This adaptability is especially useful for estate planning, where asset values may fluctuate over time.

Estate Planning and Survivorship Life Insurance

On Estate Taxation

Estate taxes can significantly reduce the value of an estate left to heirs. When an individual dies, their estate may be subject to federal and state estate taxes. These taxes can be substantial, potentially eroding a significant portion of the assets intended for heirs.

How Survivorship Life Insurance Fits In

Survivorship life insurance plays a crucial role in estate planning by providing a financial safety net. It can help cover the estate taxes when the second spouse passes away. This means that heirs can inherit the entire estate without the burden of a hefty tax bill.

While survivorship life insurance is cost-effective when compared to insuring each spouse individually, it is essential to consider the premiums and the overall financial situation of the couple. A thorough financial analysis with a professional is necessary to determine the right coverage and premium structure.

Choosing the Right Survivorship Life Insurance Policy

Types of Policies

There are various types of survivorship life insurance policies, including universal life, whole life, and variable universal life. Each has its unique features and benefits. It’s crucial for couples to understand the differences and choose a policy that aligns with their financial goals and estate planning objectives.

When selecting a survivorship life insurance policy, it’s essential to consider factors such as the coverage amount, premium payment structure, and the insurance company’s reputation. Couples should assess their financial situation, including current and future financial needs.

Working with a Financial Advisor

Given the complexity of survivorship life insurance and its integral role in estate planning, working with a knowledgeable financial advisor is highly recommended. An advisor can help assess your unique situation, identify the right policy, and ensure it aligns with your estate planning goals.

TLDR; Recap on Survivorship Life Insurance

Survivorship life insurance is a valuable tool for estate planning, offering cost-efficiency and estate preservation benefits. It helps protect heirs from the burden of estate taxes and allows couples to leave a lasting legacy.

Understanding Life Insurance Underwriting: What to Expect in the Application Process

Understanding Life Insurance Underwriting: What to Expect in the Application Process

Life insurance stands as a cornerstone of financial security, safeguarding your loved ones’ future. Navigating the path to the perfect policy can be intricate, with underwriting as the linchpin in gauging your eligibility and premiums. We will unravel the intricacies of life insurance underwriting, helping you understand what to expect during the application process.

The Application Process: Setting the Stage

Begin the journey with honesty. Expect a comprehensive questionnaire that dives into your medical history, lifestyle, and more. Honesty is key here, as providing accurate information ensures a smooth underwriting process. For instance, if you smoke but fail to disclose it, it can lead to complications when the underwriter discovers the truth resulting in delayed policies, and possibly rejection by insurers. The application and review process is handled in two parts:

      • Part 1 – Medical Questionnaires
      • Part 2 – The Medical Exam

Part 1: Medical Questionnaires

1. Review of Medical Records

Evaluating Your Health History

Begin the journey with honesty. Expect a comprehensive questionnaire that dives into your medical history, lifestyle, and more. Honesty is key here, as providing accurate information ensures a smooth underwriting process. For instance, if you smoke but fail to disclose it, it can lead to complications when the underwriter discovers the truth resulting in delayed policies, and possibly rejection by insurers.

2. Lifestyle and Hobbies

Gauging Risk Factors

Insurance underwriters assess lifestyle choices and hobbies to gauge potential risks. For instance, if you’re passionate about skydiving, your premium could be higher due to the increased risk of fatal accidents associated with this hobby. Similarly, your occupation may also impact your premium. Maintaining honesty and providing additional information to your agent can be beneficial, potentially leading to reduced premiums or a better health class rating, among other benefits.

3. Financial Background

Gauging Your Economic Stability

Your financial situation, including income and debt, may be assessed. If you’re applying for a substantial coverage amount, underwriters want to ensure your beneficiaries won’t face financial hardship upon your passing. For instance, if you have a lot of debt and limited income, it may impact the policy’s approval.

4. Family History

Genetics and Inheritance

Some policies require information about your family’s medical history. If you have a family history of certain hereditary diseases, it could affect your premium. For example, if cancer runs in your family, it may lead to a higher cost.

Part 2: The Medical Exam

Medical Examinations Provide Insight into Your Health

In the life insurance underwriting process, a crucial step often involves a medical examination. Proper preparation is essential. Following your application, you may be required to undergo a paramedical exam. This can be arranged at your home or a local clinic, depending on your preference. During the examination, various health metrics will be assessed, including cognitive ability tests, blood pressure, cholesterol levels, as well as blood and urine samples.

Your insurance agent will likely offer guidance on how to prepare, which may include staying well-hydrated and ensuring a good night’s rest prior to the paramedical exam. They will also provide any additional information you might need to make the process as smooth as possible such as bringing:

  • Your driver’s license or valid photo ID, or a copy
  • A list of prescriptions including dosage amounts
  • Names of your doctors you have seen in the past (most recently, 5 years)
  • Types and dates of any surgeries you have had recently

Preparing for Your Exam: One Week Before

  • Maintain a Healthy Diet: Limit high-cholesterol foods, salt, sugar, and fats.
  • Review medications: Avoid non-essential over-the-counter medications like antihistamines and decongestants, as they can affect blood pressure and glucose levels.
  • Decrease alcohol: Steer clear of alcohol, which can have adverse effects on liver enzymes and lead to dehydration.
  • Hydrate: Increase your water intake to stay well-hydrated, flushing toxins from your body that could impact your blood and urine samples. Proper hydration also makes blood draws more manageable.

Preparing For Your Exam: One Day Before

  • Avoid strenuous exercises as it can impact blood pressure readings and cholesterol levels negatively.
  • Ensure a good night’s sleep for improved vitals.
  • Some agents may recommend fasting for 8 hours prior to the exam for blood draws.

Day of Medical Exam

  • Best practice is to schedule your medical exam earlier in the day, especially if fasting
  • Steer clear from caffeine
  • Drink a glass of water shortly before your exam
  • Dress in lightweight clothing for weigh-in and a short-sleeve shirt for the blood draw.

Once your exam is finished, the results are sent to the insurance company’s underwriting team. The underwriting process may take anywhere from a couple of days, up to a few weeks; though it is typically the latter. During this time, an underwriter examines your application, health data, and lifestyle to determine your insurance risk class. For larger policies, the underwriting process may be more detailed.

Underwriting Decisions

Approval or Rating

Upon completion of underwriting, you will receive your results—an approval and rate information. Based on the gathered information, the underwriter will determine your eligibility and premium. You may receive a standard rating (the norm), a substandard rating (higher risk, higher premium), or even a preferred rating (lower risk, lower premium). For example, if you’re in excellent health, you could secure a preferred rating and lower premiums.


5 stars – preferred plus (excellent health, ideal height/weight ratio, clean family history, non-smoker)
4 stars – preferred (very good health, minor health conditions, non-smoker)
3 stars – Standard Plus (good health, good height/weight ratio, good family history)
2 stars – standard (average height/weight ratio or worse, complicated family health history)
1 star – substandard (complicated family health history, recent serious health issues)

What are Life Insurance Classifications

Preferred Plus
  • Excellent health
  • Ideal height/weight ratio
  • Clean family history
  • Non-smoker
Preferred
  • Very good health
  • Very good height/weight ratio
  • Minor health conditions
  • Non-smoker
Standard Plus
  • Good health
  • Good height/weight ratio
  • Good family history
  • Typically non-smoker
Standard
  • Average health
  • Average height/weight ratio
  • Complicated family history
  • Non-smoker or Smoker
Sub Standard
  • Complicated health
  • Recent serious health issues
  • Below average height/weight ratio
  • Complicated family history
  • Non-smoker or Smoker

If you’ve been working with an experienced agent and there are no health surprises, your premiums should align with your expectations. However, there may be cases where approval is granted, but the coverage amount is adjusted due to risk factors discovered during underwriting.

Negotiating Your Policy

Options and Riders

After underwriting, you can discuss the policy options and riders that best suit your needs. Riders can provide additional coverage for specific scenarios, such as critical illness or accidental death. Be sure to inquire about these options to tailor your policy.

The underwriting process is a critical step in securing the right life insurance policy. Be transparent about your health, lifestyle, and financial situation to ensure a fair evaluation. Remember, life insurance underwriting is not about excluding individuals but determining the most accurate premium rates to protect you and your loved ones. So, when you embark on your life insurance journey, you can now face the process with confidence, knowing what to expect.

Meeting 2

Long-Term Care Planning Workshop

Enjoy complimentary refreshments and pupus while you learn. This workshop offers a perfect blend of valuable information and a friendly atmosphere.

Long-Term Care Planning Workshop
Tuesday, October 3, 2023
5:30 – 6:30 p.m.

 

Occidental Underwriters of Hawaii
1163 S Beretania Street
Honolulu, Hawaii 96814
What will you get?
  • Empowerment – Gain strategies on how to manage rising costs of care
  • Clarity – Understand the truth behind long-term care and busting common myths
  • Support & Knowledge – How to handle emotional and financial aspects of long-term care
  • Personalized Guidance – Get answers to questions during the Q&A session. Our team of professionals are here to provide tailored solutions to your long-term care concerns.

Ken Herlihy, CLTC

Ken Herlihy, CLTC, boasts a career spanning back to 1984 in the insurance industry, with significant leadership experience in sales and marketing. Over the past three decades, he has specialized in the Long-Term Care (LTC) market, refining his expertise.
Ken Herlihy, CLTC, boasts a career spanning back to 1984 in the insurance industry, with significant leadership experience in sales and marketing. Over the past three decades, he has specialized in the Long-Term Care (LTC) market, refining his expertise.
Long-Term Care Planning Workshop

Click to view or download

RSVP
kindly by 9/27

This workshop is for informational purposes only and does not constitute financial or legal advice. Please consult with a qualified professional for personalized guidance related to long-term care planning.

Life Insurance Awareness Month 2023

Life Insurance Awareness Month 2023

Life Insurance Awareness Month (LIAM) is a campaign that occurs every year during the month of September. The nonprofit organization, Life Happens, sponsors LIAM—a month-long campaign dedicated to helping consumers take personal financial responsibility through the ownership of life insurance and related products. This is the perfect time to take full advantage of LIAM resources to get educated about life insurance. What better time than now to get started on securing your future!

Get Educated: Statistics and Studies

Talk with your financial professional about life insurance.

Benefits of Life Insurance

Life insurance is an essential part of any financial plan. While life insurance provides security and protection for your loved ones when you are no longer here, it can also provide a reservoir of cash in some policies. Strategically planning for your future with life insurance ensures that you will have a well-rounded plan for years to come. If plans change, you can buy another policy or cancel an old one.

Protection

Protection

Wealth Creation

Wealth Creation

Savings

Savings

Tax Savings

Tax Savings

Who needs life insurance?

Life insurance is an essential part of any financial plan. While life insurance provides security and protection for your loved ones when you are no longer here, it can also provide a reservoir of cash in some policies. Strategically planning for your future with life insurance ensures that you will have a well-rounded plan for years to come. If plans change, you can buy another policy or cancel an old one.

Living life with life insurance means that you can fully enjoy your time here without worrying about the what-ifs in life, and by providing peace of mind with life insurance, the burden of the unknowns is relieved from your shoulders.

  • Homeowners

First-time homeowners carry a lot of debt. If you were to pass away while still paying for your mortgage, how would your loved ones pay for the additional cost of owning a house? Life insurance provides protection from life’s unknowns and big what if’s. Instead of your family struggling to pay for your funeral payments, credit card debt, car payments, and mortgage, the insurance company will provide a benefit amount upon your passing which can pay for the entire amount of the house or condo and may even cover your additional debts.

  • Newlyweds

Married couples and life partners are likely to both work and contribute to the household income. What happens when one person passes away and the household income decreases, but the same amount of bills need to be paid, plus funeral costs? The survivor is left with the burden of the loss of a loved one and the harsh reality of increased financial obligations. A life insurance policy’s death benefit can be spent in any way the beneficiary likes. Proceeds from a life insurance policy would help the surviving partner maintain their lifestyle by helping to pay bills and debt including mortgage payments, car payments, student loans, and credit card debt.

  • New Parents

Taking on the new role of parenting, or adding an extra bundle of joy in your life can be both challenging and rewarding. Having a child can also be quite expensive with the typical American family spending $233,000+ raising a child from birth to age 18. For a middle-income family, housing accounts for 29% of costs, 18% for food, 16% for child care/education, according to the USDA. 

Life insurance provides an income should one, or both parents pass away. The life insurance benefit can be used for costs of living including food, housing, child care, and education. If you are a single parent, the life insurance benefit is a financial lifeline for your child should you pass away. 

See this Bankrate guide that covers which financial expenses soon-to-be parents can expect. It includes a breakdown of the different costs to consider when raising a child.

  • Highly-paid employees

Many employers now offer group life insurance with a few thousand dollars of benefit to cover a small funeral cost, sometimes more. However, this is often not enough coverage especially if you have a family. If you are looking to move jobs, your group life insurance coverage will likely end creating a gap in coverage for you and your loved ones. Having your own individual life insurance policy means you won’t have a gap in coverage when you switch jobs.

If you’re starting your own business, a “key person” insurance coverage will help to protect your business by providing a benefit to replace the lost income and pay for business expenses in case of death or disability. Valued partners and employees have an enormous impact on your business both positively, but also negatively if they cannot perform their job. With a “key person” coverage you can use the benefit to buy out a partner without depleting company cash reserves, or use the cash to pay for expenses and buy time to fill in the gap.

  • Individuals Looking Towards Retirement

Life insurance is important in creating a well-structured and well-rounded retirement plan. Permanent life insurance policies provide a reservoir of cash that you can use during retirement through the cash value component. Life insurance is also used for estate planning and may help your beneficiaries pay taxes and legal fees. Consult with your financial advisor on the best plan for your retirement needs.

  • Caregivers

The aging population is living longer, and many people in the United States rely on family members to care for them. This puts an enormous financial and emotional burden on loved ones as they try to cope with their ailing relatives. If you’re providing care for an aging relative, a life insurance policy is essential in making sure you have a backup plan to protect their continuity of care if you pass away.

  • Divorcees

Ending a relationship is a good time to reevaluate your existing life insurance before a divorce is finalized. If your current life insurance coverage lists an ex as a beneficiary, consider excluding them from your list. Don’t forget to review your beneficiaries after splitting up.  In addition, consider purchasing your own life insurance policy, or adding a new one.

NationwidePresents : “Land as Your Legacy” Program (Agricultural Workers)

NationwidePresents : “Land as Your Legacy” Program (Agricultural Workers)

Join Chris Chertboonmuang, RVP and Timothy Kohl, RVP with Nationwide as they present a special program to help various stakeholders in the agricultural industry (produce delivery, farmers, local produce companies, and more) to both plan for their future and receive underwriting concessions.

Nationwide’s Land As Your Legacy® Program (LAYL) is specifically tailored for agricultural workers, including those involved in food distribution, fishing, and chocolate growing, aims to provide flexible underwriting benefits and support to this vital sector.

The Land As Your Legacy® program, reduces barriers to life insurance. Individuals must disclose tobacco use (chew, snuff, cigars) for the potential non-tobacco rating. Enjoy flexible build rates and a possible 50-credit rating upgrade on build or BMI. APS is only based on age and insurance amount.

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View the Webinar Recording
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Land As Your Legacy®

Discover the benefits of Nationwide’s program for agricultural workers including food distribution, fishing, and chocolate growing. Get flexible underwriting with the Land As Your Legacy® program.

Learn More
Living Benefits Riders

Life Insurance Riders for the Living

In this informative webinar, we will delve into the versatility of life insurance riders, showcasing how they offer added coverage within a single policy. We’ll explore the benefits and important factors to consider when utilizing riders such as Long-Term Care, Chronic Illness, Critical Illness, and more. Join us to discover the extensive range of living benefits that can greatly benefit your clients.

Who Should Attend:

  • Insurance advisors aiming to enhance their sales skills by leveraging versatile life insurance riders.
  • Professionals seeking to strengthen client relationships by offering comprehensive and personalized solutions.
  • Anyone interested in staying informed about the latest industry updates and trends in life insurance riders and living benefits.
View the Webinar

Accompanying Materials

Michael

Speaker: Michael Sato, CLTC®, LUTCF®, FSS

With a proven track record in the industry and a wealth of knowledge in life insurance sales, Michael Sato is an esteemed expert who understands the nuances of the market. His guidance will equip you with the tools needed to stay ahead of the competition and secure long-term success for yourself and your clients.

Valuable 1035 Exchange Sales Ideas

Valuable 1035 Exchange Sales Ideas

Join us for an informative and professional online event as we explore powerful 1035 exchange concepts that can supercharge your sales and benefit your clients simultaneously. Our esteemed speaker, Michael Sato, CLTC®, LUTCF®, FSS, Brokerage Manager, will share his extensive expertise and guide you through a range of valuable strategies.

Who Should Attend:

  • Insurance advisors looking to enhance their sales skills through 1035 exchange strategies.

  • Professionals seeking to maximize their client relationships and provide tailored solutions.

  • Anyone interested in staying informed about the latest industry updates and trends in 1035 exchange sales.

View the 1035 Exchange Webinar & Materials
Michael

Speaker: Michael Sato, CLTC®, LUTCF®, FSS

With a proven track record in the industry and a wealth of knowledge in 1035 exchange sales, Michael Sato is an esteemed expert who understands the nuances of the market. His guidance will equip you with the tools needed to stay ahead of the competition and secure long-term success for yourself and your clients.

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Webinar Overview:

Three sales ideas were presented during the meeting:

  1. Repositioning a failing Universal Life (UL) policy with cash value into a cash value or annuity policy, allowing the client to receive tax-free withdrawals.
  2. Moving cash value from one life insurance policy to an asset-based hybrid long-term care (LTC) policy, offering tax-free withdrawals for long-term care needs.
  3. Utilizing a qualified long-term care annuity to make tax-free withdrawals for long-term care expenses instead of using taxable annuity withdrawals.

The meeting emphasized the importance of understanding the client’s situation and finding opportunities to leverage existing policies for their benefit. It was also highlighted that certain hybrid products like Annuity Care Two might offer tax-free withdrawals for long-term care.

Revitalize Your Life Insurance: How 1035 Exchanges Can Transform Your Coverage

Revitalize Your Life Insurance: How 1035 Exchanges Can Transform Your Coverage

A 1035 exchange is a great option for individuals who already have life insurance and are looking to make changes or upgrade their policy.

 

This type of exchange allows you to transfer cash values from one life insurance policy into another without incurring any taxes. In addition, it can also be used to move funds from an annuity contract to another.

Table of Contents

Benefits of 1035 Exchanges

One of the main benefits of a 1035 exchange is that it can help you save money on your premiums by consolidating existing policies. By transferring existing cash values into a new policy, you can benefit from lower premiums as well as possible additional coverage options depending on the insurer. Additionally, if you choose investments within your new policy, you may even be able to grow your wealth over time with the right approach.

How a 1035 Exchange Works IRL (In Real Life)

To illustrate how a 1035 exchange works in real life, we’ll talk about Cindy, for example.

Cindy was a savvy investor who wanted to make the most of her money. She had heard about a 1035 exchange and wanted to know how she could use it for her life insurance policy. After doing some research, Cindy realized that this type of transaction would allow her to move funds from an existing life insurance policy into another one without incurring any tax liabilities on the earnings.

As Cindy immersed herself in the intricacies of a 1035 exchange, she soon realized its remarkable potential. This unique opportunity would enable her to transfer funds from her existing life insurance policy to a new one, all while decreasing tax liabilities on the accumulated earnings. The implications of this revelation were immense, as Cindy saw it as a way to preserve her wealth while making strategic adjustments to her coverage.

The ability to transfer her cash values to a more suitable policy presented her with the chance to secure additional benefits and explore potentially higher returns on her investments. She understood that through a 1035 exchange, she could unlock access to new coverage options, lower premiums, and enhanced investment possibilities tailored to her long-term objectives.

In Cindy’s story, the power of a 1035 exchange revealed itself as a transformative tool, propelling her closer to her financial aspirations. Through meticulous research, strategic planning, and the guidance of professionals, Cindy’s journey showcased the immense potential of a 1035 exchange to empower individuals like her to make informed decisions and unlock a future filled with financial abundance.

Important Considerations on 1035 Exchanges

When contemplating a 1035 exchange, several important considerations should be taken into account:

  • Tax Implications

    • While a 1035 exchange allows for tax-free transfers of cash values from one life insurance policy to another or from an annuity contract to a new one, it is essential to understand the potential tax consequences. For instance, if you cash out your existing policy instead of exchanging it, you may be subject to taxes on any gains or accumulated interest. Consulting with a tax professional or financial advisor can help you navigate the tax implications specific to your situation.

  • Timelines

    • It is crucial to be aware of the timelines associated with a 1035 exchange. Different insurance companies may have their own specific requirements and deadlines for initiating and completing the exchange. Missing these deadlines could result in a taxable event. It is advisable to communicate with your insurance advisor and coordinate the exchange process promptly to ensure a smooth transition.

  • Policy Suitability

    • Before proceeding with a 1035 exchange, carefully evaluate whether the new policy aligns with your current and future needs. Consider factors such as coverage options, premium costs, death benefit, cash value growth potential, and any additional features or riders offered. Assessing the suitability of the new policy in terms of your financial goals and circumstances is crucial to ensure the exchange meets your objectives.

  • Surrender Charges and Fees

    • Existing policies may impose surrender charges or fees if terminated or exchanged before a specific period. These charges can erode the value of your policy and impact the benefits you receive from the 1035 exchange. Review the terms and conditions of your current policy to understand any potential costs associated with surrendering or exchanging it.

  • Professional Guidance

    • Engaging the expertise of a financial advisor or insurance professional is highly recommended when considering a 1035 exchange. They can provide personalized advice, assess the benefits and drawbacks, help you understand the terms and conditions of the new policy, and guide you through the process. Their expertise can assist you in making informed decisions and maximizing the potential advantages of a 1035 exchange.

By carefully considering these factors and seeking professional guidance, you can make a well-informed decision regarding a 1035 exchange and ensure it aligns with your financial objectives.

Summary: TL;DR (Too Long, Didn’t Read!)

In summary, a 1035 exchange can be beneficial when looking to upgrade your life insurance policy or consolidate multiple policies into one. It provides the opportunity to save money on premiums as well as potentially grow your wealth over time with the right investments. Be sure to take into account any tax implications and timelines before pursuing a 1035 exchange so that you can make an informed decision when considering this option.

Nationwide: “Land as Your Legacy” & CareMatters Together Launch

Nationwide: “Land as Your Legacy” & CareMatters Together Launch

We had the privilege of bringing in Nationwide’s Chris Chertboonmuang, Regional Vice President, and Julie Odovch, Regional CareMatters Wholesaler. The event was centered around their revolutionary CareMatters Together product, showcasing its exceptional strength as a cash indemnity long-term care product for couples!

Nationwide’s Land As Your Legacy® Program (LAYL) is specifically tailored for agricultural workers, including those involved in food distribution, fishing, and chocolate growing, aims to provide flexible underwriting benefits and support to this vital sector.

The Land As Your Legacy® program, reduces barriers to life insurance. Individuals must disclose tobacco use (chew, snuff, cigars) for the potential non-tobacco rating. Enjoy flexible build rates and a possible 50-credit rating upgrade on build or BMI. APS is only based on age and insurance amount.

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Download the Nationwide Materials
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Land As Your Legacy®

Discover the benefits of Nationwide’s program for agricultural workers including food distribution, fishing, and chocolate growing. Get flexible underwriting with the Land As Your Legacy® program.

Learn More
CareMatters Together Email

CareMatters Together

Find out what makes CareMatters Together a potential solution for couples’ LTC protection needs.

Learn More

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Occidental Underwriters of Hawaii, Ltd.
1163 South Beretania Street
Honolulu, Hawaii 96814
Phone: (808) 536-1933
Fax: (808) 527-8810