Category: Life Insurance

mutual perks by mutual of omaha
‘Mutual Perks’ Announced by Mutual of Omaha

‘Mutual Perks’ Announced by Mutual of Omaha

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‘Mutual Perks’ Announced by Mutual of Omaha

mutual perks by mutual of omaha

What are ‘Mutual Perks'(SM) = Are they Discounts?

Yes, and we like discounts.

Moreover, anyone in retirement or on a “fixed income” certainly appreciates discounts. So when Mutual of Omaha announced an added discount benefit to their insurance customers, we were very interested.

What are Mutual Perks?

Mutual Perks are not directly a part of a Mutual of Omaha Policy; rather, they are additional discounts with third-party companies that are available to life insurance policy holders as well as select medical insurance policy holders.

What Kinds of Discounts are Offered?

As far as we can tell, the discounts focus on companies that can either keep you or your bank account healthy. Here is a list of the types of companies that will feature “Mutual Perks” discounts.

  • Eyeglasses
  • Hearing aids
  • Home mortgages. T
  • Massage,
  • Chiropractic
  • Acupuncture
  • Low-cost gym memberships (at over 10,000 locations)
  • Also, retail, travel and dining coupons

The official press release from Mutual of Omaha didn’t specify any particular companies, but we will update this post in the future if we hear any more details.

Why is Mutual of Omaha Offering These Discounts?

The insurance industry is an old, mostly stable industry, but it is still very competitive. It’s great to see insurance company’s still adding benefits to serve their members better. In addition, healthier members are also always better for any insurance company’s bottom line. In this case, Mutual Perks seems like a win-win.

Here is what the corporate office has to say:

“Our customers, and their financial well-being, are important to us,” said Jennifer Wulf, Mutual of Omaha’s vice president of customer insights. “That’s why we’re excited to offer these exclusive money-saving opportunities. It might be a little surprising that an insurance plan opens the doors to these offers, but we are always looking for ways to delight our customers while partnering with them in their financial security and healthy living goals.”

Mutual Press Release on Feb. 25, 2020

How Can I Get Mutual Perks?

If you want Mutual Perks, you will need to be a Mutual of Omaha policy holder. If you already are, the company will most likely be getting in touch with you to let you know if the benefits apply to you.

Otherwise, if you are considering purchasing a life insurance policy, Mutual of Omaha is probably hoping Mutual Perks might make you look again at their options. I must admit, I am interested in hearing more myself!

what is Final Expense Insurance
What is Final Expense Insurance?

What is Final Expense Insurance?

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What is Final Expense Insurance?

what is Final Expense Insurance

Final expense insurance is an insurance policy that provides cash to cover end of life expenses such as funeral and burial costs. They are typically smaller face values (the amount of payout money). In addition, insurance companies often structure them as whole life policies.

Introduction

My father-in-law passed away one year ago. (One year and one day from the day that I am writing this article.) His passing was my first experience in how important Final Expense Insurance is. It made everyone’s lives easier that he had a policy in place to cover end of life expenses.

Up until about 2 years ago, my father-in-law had a larger term policy on himself and his wife. However, they decided to cancel that policy since they were set financially for retirement. Fortunately, he had a good agent that set him up with a smaller Final Expense policy.

Now, my in-laws did have enough in savings to cover a funeral. However, it was just so much easier not to have to worry about how to get access to that cash. Their savings sat invested in mutual funds and stocks, which take a few extra steps to get to. Consequently, no one wanted to go through any more extra steps to get to it.

The insurance money was easy enough. We did have to wait for the hospital to file a coroner’s report before we could get the money. However, in the meantime, we “assigned” the insurance money to the funeral home and burial services before we had it. The whole experience was positive and the final expense money was helpful.

What is Final Expense Life Insurance?

Final expense policies are life insurance policies. Just like other types of life insurance, a final expense policy issued by an insurance company pays money to a designated beneficiary when the insured person dies.

Final Expense policies are whole life policies. Since whole life premiums are usually more expensive than term premiums, the face value is usually a smaller amount. The purpose of these policies is to pay for end-of-life expenses such as funeral costs, burial fees, and even medical bills. Of course, you can use the money for anything. It is just a cash payout.

The Benefits of a Whole Life Policy

As noted, a final expense policy is usually a whole life policy. This means a few things:

  1. Your policy will have a cash value in addition to a face value. A cash value in an insurance policy is an amount of money you have access to for loans while the policy is active (in force). (The face value is the amount of money your beneficiary receives when you die.)
  2. The cash value grows on a tax-deferred basis.
  3. Your final expense policy will have level premiums. (The premiums will be guaranteed not to go up as you age.)

How Much Final Expense Insurance Do I Need?

When you are deciding how much cash you need consider funeral costs, burial costs, end-of-life medical bills, and any other loose ends. According to Mutual of Omaha, an average funeral costs about $7,000 to $10,000. Most people don’t have access to that sum in cash. Even those that do, might have other things they want to do with that cash.

Every insurance company prices premiums differently. Additionally, they all offer different face value amounts (i.e. the amount of money your beneficiary receives when you die). However, the usual amounts are anywhere from $2,000 to $40,000.

Can I Use My Policy for Long-Term Care (LTC) Costs?

Do I need Long-Term Care Insurance?

Additionally, some Final Expense policies have accelerated death benefits for terminal illness or nursing home confinement. This means you can use the face value of the policy as cash to pay for these expenses. However, if your policy is only for $10,000, this will not get you far!

If you are looking to use insurance to cover long-term care (LTC) costs, a final expense policy is not the tool to use. Final Expense policies usually do not have a big enough face value, or accrue cash fast enough, to fund LTC. Look at funding an Indexed Universal Life (IUL) with a LTC/Critical Care Rider to help with this.

Additionally, you can get a Long Term Care Insurance Policy.

Is Final Expense Life Insurance for Me?

What is Final Expense Insurance Pin

To start, insurance companies created final expense policies for older adults (typically 45 years old +). If you are younger and reading this article, there are better options for you at this time in your life. Head over to our IUL page to learn about Indexed Universal Life, or think about term insurance.

As you get older, term insurance and other higher face value whole life policies get more expensive. In addition, insurance takes on a different importance as your debts dwindle and your savings rise. You can read more about insurance needs as you age in our article “Life Insurance in Retirement?”

Final Expense Life Insurance is a great solution for older adults that need to take care of their loved ones by leaving cash to cover their end of life expenses.

How Do I Get a Policy?

If you are ready to get a final expense policy, it is time to talk to an agent. She or he can help you in creating a solution that meets all your needs. Different companies have different options and riders, so it is a good idea to work with an expert to set your’s up right. It does not cost you anything extra.

qualities of a good insurance agent
Qualities of a Good Insurance Agent

Qualities of a Good Insurance Agent

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The Top 6 Qualities of a Good Insurance Agent

What are the qualities of a good insurance agent you should be looking for when you are searching for an agent? Your insurance agent helps you make important decisions to protect you and your family – let’s make sure you have a good one.

The Top 6 Qualities of a Good Insurance Agent

Here are the top six qualities of a good insurance agent:

qualities of a good insurance agent
  1. Educator Over a Seller.
  2. Learner.
  3. Good Listener.
  4. Problem Solver.
  5. Trustworthy.
  6. Authentic & Likable.

Let’s take a look at each one of these qualities and why they are important.

1. Educator Over a Seller

No one wants to be just sold to. You want to be helped, informed and guided. That is why it is so important to pick an insurance agent that is an educator rather than a seller.

One of the reasons I encourage everyone to find an independent insurance agent is that independent agents do not have to push just one insurance company. This goes for Medicare, life insurance, health and even home and auto.

As an example, for those of you that don’t know me, I am an independent agent that specializes in Medicare insurance. When I meet with clients, I spend time helping them understand the two basic ways to set-up their Medicare. Then, I let them make an informed decision that is best for their unique situation. As a licensed representative for many companies I can feel like an educator and not a “salesperson.” This is an important distinction.

2. Learner

The Insurance Industry is constantly changing. Insurance companies roll out new products regularly. In addition, companies create new ways to use these products to best protect yourself and your family. You need an agent that truly enjoys learning about these changes and products so they can keep your financial plan up-to-date.

LTC “Learner” Example

For example, in the Long Term Care (LTC) insurance world, it is good to have an agent that can help you be creative with how to fund long-term care expenses. As the LTC products have changed and premiums have priced people out of the market, you need an agent that likes to learn about using different types of products that can meet LTC needs (like IUL riders).

The more information and insurance education your agent has, the more they can effectively meet your needs.

Medicare “Learner” Example

Again, to use my situation as another example, I sell Medicare and the Medicare plan landscape becoming crowded with options. In this niche, education is more important than ever. However, less agents are dedicating themselves to certify with all the Medicare options.

Medicare Advantage sales takes a lot of education. I had to take roughly 17 different tests on various Medicare Advantage (MA) plans offered in my service area just for 2020. In addition, all Medicare agents that sell MA must retake these tests every year as they are necessary to understand plan changes.

This is a big reason why independent agents that are fully certified in both Medicare Advantage and Medigap are difficult to find, but necessary for making informed decisions. My advice is it is worth it to have an agent that understands both well.

3. Good Listener

Insurance solutions should meet your needs and not the needs of the insurance agent. That is why being a good listener is one of the qualities of a good insurance agent.

You need to feel like your insurance agent has fully understood you, your family and your financial situation. Make sure you have an agent that asks lots of good questions. Moreover, make sure your agent actually listens to your answers.

4. Problem Solver

Creating the best insurance solution for your needs requires active problem solving. No two situations are exactly alike. We have already established that you should have an agent that is up-to-date on the latest products and trends in insurance. Then, you need an agent that can synthesize this information into a solution that meets your unique needs.

You may not realize it, but creativity is a big part of being a good insurance agent. Insurance is certainly used for asset protection, but it can also be a creative tool for retirement funds and estate building.

5. Trustworthy

Honesty and integrity come as a package deal. Insurance agents should have both and demonstrate it actively to earn your trust. Enough said.

6. Authentic & Likable

You must like your insurance agent, and they must also like you back! Otherwise, you will dread working with them, and they will probably feel the same about you.

I know when I leave 95% of my clients, I feel energized and happy from our meeting. Consequently, I know they do too. I am always working to get this number to 100%. I purposefully search out clients I can be myself with. When I am my authentic self, I know I can do my best work for my clients.

Conclusions

In summary, there is a good agent out there for everyone. However, it might take a few attempts to find the one that is right for you. Just be on the look out for agents that are: educators, learners, listeners, and problem solvers. In addition, they should be trustworthy and authentic, but above all, you should like them!

What is an IUL Indexed Universal life PIN - Medicare Life Health
What is Indexed Universal Life Insurance (IUL)

What is Indexed Universal Life Insurance (IUL)

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What is Indexed Universal Life Insurance (IUL)? Do I Need One?

What is Indexed Universal Life Insurance (IUL)? That is a question we hear often as IUL’s have been increasing in popularity. I am sure we will hear it even more as they are expected to continue to rise this year.

They have become popular in our low interest bond market as an alternate way to grow savings fund conservatively for both retirement purposes and legacy purposes. However, not everyone needs an IUL. Let’s take a deeper look into what are IULs and who might need/want one.

What is Indexed Universal Life Insurance (IUL)?

An Indexed Universal Life (IUL) Insurance Policy offers insurance with a cash value in addition to a tax-free death benefit. Both the cash value and the death benefit are useful and attractive tax advantaged ways to provide for your family. The cash value can provide you tax advantaged income in retirement, and the death benefit can provide tax advantaged cash for your family when you die.

Premiums

IULs are structured so that premium payments cover not just the cost of insurance, but also the extra money needed to create and maintain the cash value of the policy. Each month the policy cash value grows with excess cash payments and interest. However, the policy is also debited by the cost of insurance and policy charges/fees.

Interest

The interest growth is tied to a financial index (like the S&P 500, Russell 2000, Nasdaq 100 and the Dow Jones) and usually with a minimum growth rate and a maximum (capped) interest rate. This allows participants to take advantage of market growth without having the threat of losing money. The tradeoff for this security is the growth cap. For instance, you might have a minimum interest of 2% and a cap at 12%. If the market loses money, you don’t. If the market grows 20% or 30%, you only see 12%.

The Flexibility of IUL

One of the main reasons, IULs are popular is their flexibility.

  • Premium Flexibility – The premiums are flexible each month. There is usually a minimum and maximum you can feed into the policy each month. Staying within your contracted terms, this allows you to let the accumulated cash value help in paying the cost of insurance if you miss a month’s premium. However, the policy will lapse if there is not enough cash value to cover the cost of insurance and fees. (This is true with most policies, unless you have a no lapse guarantee rider.)
  • Death Benefit Flexibility – You have the ability to increase or decrease your death benefit (subject to underwriting).

Do You Need Universal Life Insurance (IUL)?

Here are some reasons you might need an IUL.

  • First, if you are looking for another avenue to bolster tax advantaged (tax-free) cash flow in retirement.
  • Second, if you need to leave money after you die for final expenses, income replacement, debts, or estate taxes.
  • Finally, if you need an alternative to long-term care insurance.

Let’s break each of these down.

IULs for Retirement Planning

Sometimes you need another revenue stream in retirement. You probably have your taxable accounts (IRAs, Pensions, Social Security, Investments) to draw from as one stream. In addition, you might have tax free accounts such as a Roth IRA (or Social Security if you keep your tax threshold low enough), but often times you need another vehicle to in this tax advantaged category.

This is where an IUL’s cash value comes in. You can borrow against this amount in retirement and the loan is considered a tax free event. This is an avenue is not just for the super wealthy, but if you are looking for a place to grow a lot of money conservatively, this is a good place. It is also a good way to manage your tax exposure in retirement. Are you interested in keeping your taxes as low as possible in retirement? I suggest reading the book, The Power of Zero by David Mcknight to learn more.

IULs for Survivor’s Benefits

These are the traditional reasons for taking out life insurance, and they all stand-up in an IUL. You can structure your policy so that your beneficiaries will receive a lump sum of cash that is not taxed by the federal government. You will need to plan to see how much of a death benefit you will need to leave to help your family in paying off your expenses (funeral, medical) and your debts. In addition, your beneficiary(ies) might need to replace your income after you pass or pay off big ticket items to maintain their lifestyle. Moreover, the death benefit can offer money to help pay estate taxes.

IULs for Long-Term Care Planning

What is an IUL

Long Term Care Riders are a newer benefit of IUL policies. However, only some carriers offer them. Long Term Care Insurance can be very expensive… very, very expensive. Wrapping up the “cost” of insurance in an upfront IUL rider is one way to make it less painful. With an LTC rider, qualified long-term care expenses are paid using the death benefit before death. The insurance company pays what is left to your beneficiaries as a death benefit when you pass. Remember, Medicare doesn’t cover Long Term Care.

Action Steps

Now that you know what is Indexed Universal Life Insurance (IUL) Policy, here is what you can do next:

  • If you have decided that you want an IUL or want more information on one, you should talk to a licensed insurance agent. IUL’s are complicated. In addition, each company structures them differently. This is not a product you can just “click to buy!.”
  • If you have read through this article and thought, “not me” or “not now,” then I would encourage you to consider other alternatives to solve your planning problems.
    • Investing: If you need a place to access cash that is not taxable in retirement, make sure you are maxing out your Roth IRA first.
    • Insurance: If you need life insurance, but just not that much, check out final expense policies, or if you are younger, term life.
Do I need life insurance in retirement?
Life Insurance in Retirement?

Life Insurance in Retirement?

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Do I need life insurance in retirement?

Personal Finance and Insurance for Retirement

In retirement, you need a plan that will keep you healthy and happy for many years, but what happens when those years run out? Well, you need a plan for that too. Life insurance in retirement is one solution.

We all will end up in different financial places in retirement, and our cash flow and savings will dictate how our “final expenses” play out after we pass. Not everyone needs life insurance in retirement, but even if you don’t “need” it, you still may want it.

Reasons for life insurance in retirement and recommendations

Let’s break down some of the reasons for having life insurance in both the need and want categories.

1. No Savings

You may need life insurance if your saving plan didn’t quite pan out like you thought it would. According to a study done by Northwestern Mutual, 1 in 3 Americans have less than $5,000 saved for retirement. The average funeral costs between $7,000 and $9,000, and many people have large medical bills from their last days, so you can see how that math does not add up.

You might have Social Security coming in monthly or even a pension. However, you typically need that money for retirement living expenses. Unless you think you can save a little of that money each month in retirement, life insurance is a good idea. (Be honest with yourself. If you could not save it before retirement, you probably will not save it now.)

Life Insurance Recommendations

Your options will depend on your cash flow situation. First, you need to decide how much insurance you need. Second, you will need to see what you can afford to pay each a month in premium.

Final Expense – Term life and whole life insurance is usually too expensive when you are older, and your social security death payment is only $255. Final Expense Insurance will give you a smaller face value ($10,000 to $20,000 is very common) but it is priced accordingly. I recommend getting this insurance sooner rather than later, as the premiums will go up every year you get older.

Life Insurance for your final expenses has a bonus when it comes to cash flow – it is paid to the beneficiary directly and is not subject to federal income tax which can save hundreds/thousands. Moreover, because it does not have to go through probate delays, your family gets the money faster. Here is one last benefit. You can assign funds from the life insurance to be paid directly to your funeral home. This little convenience can be a big deal to your loved ones.

2. Market Volatility Concerns

Another type of retiree may want life insurance because they are concerned about their savings being affected by market losses. Maybe you are like “most Americans” who have an average of $84,821 saved for retirement. However, $85k well below what experts consider enough for living expenses. Think of what one bad market year could do to your nest egg.

Even if you had a couple million in retirement, there are reasons for life insurance in relation to market losses. It just depends on how much you are intending to leave behind and for what reasons.

Example

For example, one spouse dies right after a large market crash (hopefully unrelated). The crash leaves the other spouse with half their portfolio assets and the same amount of living costs. The surviving spouse can use the life insurance money to fill in the holes from the lost income and catch up in the market.

You could use this money to pay off a mortgage. Similarly, you could use it to handle any issues with the estate. In addition, it is always good to know that your loved ones will have cash to bury you, no matter what the market conditions.

Life Insurance Recommendations

  1. IUL – For those that have cash to pay premiums and market assets to protect, I recommend you talk to a licensed agent about an IUL – Indexed Universal Life Insurance. These policies offer flexibility for your particular phase in life. However, they are complex, so please talk to a professional about your options.
  2. Final Expense – For those that are mostly concerned about final expense costs (i.e. funeral, medical bills, credit card/loan balances, etc.), a small final expense policy might be your best bet.

3. Long-Term Care Considerations

What Is Long Term Care Insurance

As an alternative to Long Term Care Insurance, some retirees consider Life Insurance Policies that have LTC riders or a Chronic Illness Rider. For example, an insurance carrier might offer a product (like an IUL policy) with an option to purchase up-front a rider that will cover long term care events. You can pay qualified long-term care expenses with the death benefit, naturally, before death. Then, when you pass, the insurance company pays what is left to your beneficiaries

Life Insurance in Retirement Summary

I would recommend some form of life insurance to retirees.

  • If you can afford to be responsible for your final expenses, do it. Your family will appreciate it.
  • If you can afford to make sure your spouse can continue to enjoy retirement when you are gone, hop to it.
  • If you are looking for an alternative to Long Term Care Insurance, call an agent and learn your options. Medical expenses are not getting cheaper. In addition, Medicare does not cover these.

My Personal Experience

I’ll leave you with my own family’s relevant story. Last year, when my father-in-law unexpectedly passed away, his Final Expense policy saved everyone time and from stress. This left my mother-in-law well taken care of financially, but a lot of her assets were not in cash at the moment.

It was a great relief for all of us not to have to jump through a bunch of hoops to get the bills all taken care of. The policy paid money directly to the funeral home and then sent my mother-in-law the rest in a check. All of that without a tax event. It made me grateful to have a family that planned for each other and made the last year a little less stressful for all.

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