Posts from the ‘For Sun Life Advisors’ Category

Mar 19

Long Term Care and Retirement Health Assist (“Long Term Care Lite”): Keeping the “Me” in “Retirement”

Introduction

No matter how carefully I shop or slice and dice the components, there are far too many mystery meats among the ingredients of my retirement planning stew. Despite my best efforts, I can’t guarantee how long you’ll live, that your equities will earn at least 6% annually for life or that you’ll need precisely $60,000 per year in after-tax income for the rest of your life. Moreover, don’t even get me started about future tax and legal changes, exchange rate fluctuations or cost of living adjustments!

As a financial planner / lawyer / professional worrier, I see my job as a risk manager rather than a promise-maker. In other words, although life will always be full of surprises, I want most of them to be like finding extra Easter Eggs rather than parking tickets. This is where Long Term Care (“LTC”) and Retirement Health Assist (“RHA” or, as I call it, “LTC Lite”) come in.

In addition to assuming that you’ll live to an overly ripe old age and steering you towards boring, stable investments rather than sexy junior equities when you don’t need high returns to reach your goals, I encourage clients to hedge their healthcare bets. Although paying for insurance sucks, wishing you’d paid for it later when you need the protection sucks even more.

Mar 1

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Universal Life Insurance: The Basics – Part 1

Introduction

I describe permanent life insurance as a multipurpose jackknife that combines many useful tools into a single sleek package. Universal Life (“UL”) policies are the ultra-deluxe version that includes enough attachments to do anything from performing minor surgery or opening wine bottles. On the other hand, unless you are supremely confident in your surgical skills or don’t mind a little cork in your chardonnay, perhaps this mythical pocketknife isn’t always the best tool for the job.

Arguably, the same is true for UL insurance; although it is capable of many different uses, which is a wonderful thing, it isn’t always the ideal solution for every problem. All the same, since we don’t always know what to expect when wandering through the forest that is life, having something in our back pocket that can be useful in a variety of different scenarios is a very attractive option. On a similar note, UL may sometimes be a secondary tool you can use in conjunction with your preferred implement to improve your overall results. Of course, in other case, despite these cautions, maybe sometimes a UL policy is exactly what you need.

Feb 7

Participating Life Insurance – The Third and Final Chapter

For those of you waiting with bated breath, here is the third and final installment in my series on Participating Whole Life Insurance aka "Par Policies." The first and second chapters of this exciting story describe what these things are and how they work, including some information on what the insurer considers when determining what to pay you in policy dividends each year, and exploring your different choices for what to do with these things, along with the tax consequences. Today, we get practical. I'll talk about some of the different types of Par Policies currently available, how you can use them to help fund your retirement and, perhaps most importantly, what to consider when you're looking to buy a policy. With no further ado, here goes . . .

Jan 27

More on Par Policies a.k.a. “Participating Whole Life Insurance”

Introduction

This article continues the conversation begun in my last article on Par Policies. For those of you who haven't read it or have quickly repressed the details from your memory, here's a brief recap. Par Policies are a type of permanent life insurance that allows policyholders to reap some of the insurance company's rewards in exchange for taking on some of its risks. You take on these risks by paying a higher initial premium. The insurer doesn't expect its costs each year to be as high as it assumed when calculating your premium, so policyholders typically get some of their extra premium dollars back each year through something called a "policy dividend." How much do you get back? This is stated as a percentage and is called the "dividend scale." I'll now talk a bit more about this delightful thing and will see where the conversation goes from there.