William Penn Life, 2011 (46. évfolyam, 1-12. szám)
2011-04-01 / 4. szám
Moneywise INSURE U Get Smart About Insurance A 4-Part Series Presented by the National Association of Insurance Commissioners - www.insureonline.org 35 tm rm s i % % 35 a % ^ 5 Eg Your life insurance needs change when entering your retirement years AS A SENIOR, you may be planning to sell your home and retire to a new area, considering long-term care coverage, or evaluating annuities. In addition, you may be entitled to discounts on home or auto insurance. Now is a good time to re-evaluate your insurance needs and coverage to determine whether you still need as much coverage as you did when your family was younger and you had a large mortgage on your home. Your circumstances have likely changed. If you are covered by a group life insurance policy through your job and are planning to retire soon, inquire as to whether you can convert it to an individual policy. Review all your policies to determine whether you can decrease coverage and whether you need to update your beneficiaries. Consider these factors: • Is your spouse alive? • Is your home paid off? • What other financial assets do you have in addition to life insurance? • Are your children financially independent? • Do you have high current debts or anticipate estate taxes that would be a struggle for your survivors to pay off after you die? If you have a cash value life policy, consider whether you can use some of the money built up in the policy to pay for long-term care insurance premiums, if long-term care insurance makes sense for you. Once you reach age 59 V2, you are eligible to withdraw funds penalty-free from your 401 (k) or IRA. At this time you may be considering the purchase of an annuity—a contract with an insurance company that promises to pay a series of income payments at regular intervals in return for premiums you have paid. Explore the different types of annuities available: single premium, multiple premium, fixed, deferred and variable. In addition, make sure you examine whether an annuity makes sense for you in terms of your age and income needs. Ask whether the annuity lets you tap into your principal if you should need it, or whether there are stiff penalty fees. Be sure you understand the fees associated with the annuity, as well as the Photo © Godfcr/Drcamstinic.ct special tax treatment of annuities, namely that income tax on annuities is deferred until you start receiving the income payments. If you are strapped for cash and are considering selling your life insurance policy to a third party in return for a sum of money, called a life settlement, carefully consider the impact on your beneficiaries and whether it will affect your eligibility for any other public assistance you may be receiving. Also, before you make any decisions, be sure to check out the legitimacy of the company to which you are considering selling your policy by calling your state insurance department. If you are considering the purchase of a "Final Expense" policy—a small whole life policy, usually with coverage under $10,000 and often sold to seniors up to age 85-be aware that some are sold as guaranteed issue and come with steep charges. Furthermore, they typically don't pay a full benefit in the first two or three years of the policy. □ 6 0 April 2011 ° William Penn Life
