The Internal Revenue Service (IRS) has published a 10-page PDF document, IRS Notice 2011-68 (PDF), that discusses tax rules that apply to annuity-long term care (LTC) benefits hybrids and exchanges of annuity cash surrender value for qualified LTC insurance.

Tax experts at the American Council of Life Insurers asked the IRS to put those issues on its 2011-2012 guidance priority list to help taxpayers make better use of their new freedom to exchange LTC insurance policies for other LTC insurance policies—and life and annuity contracts for LTC insurance policies—without necessarily paying extra income taxes.

Section 1035 of the Internal Revenue Code (IRC) has been letting taxpayers trade in life and annuity products for other life and annuity products tax-free for many years. A provision in the Pension Protection Act of 2006 added IRC Section 844, which lets taxpayers get or dispose of LTC policies through tax-free Section 1035 exchanges.

Although taxpayers have had the freedom to make the exchanges, there has been confusion on how to report the exchanges, or how the exchanges might affect their income taxes.

IRS officials say they believe all premiums paid for an annuity-LTC combination contract that is an annuity and also provides long-term care insurance are generally included in investment in the contract, as long as the combination premiums are credited to the contract’s cash value, rather than directly to the LTC insurance contract, and coverage under the LTC insurance contract is paid for by charges against the cash value of the contract, officials say.

IRS officials also have confirmed that a taxpayer can use a Section 1035 exchange to trade in a portion of the cash surrender value of an existing deferred annuity for a qualified LTC contract, and the officials have discussed the basis of a qualified LTC contract.
The IRS also has included a section of questions for the public it may use to develop additional guidance for life and annuity contracts with LTC insurance features. Comments on the document are welcome, but must be made by Nov. 9.

Individuals should consult with their tax advisor on any IRS matters to ensure the most appropriate handling of finances. CompassQuote provides term and universal life insurance and will help lead you to the best policy in the nation.

A new study indicates a shift in how Americans prefer to buy life insurance. Traditionally, life insurance has been considered a product that is sold to a person vs. a person actively buying it. But that is changing with a shift toward direct buying methods, like so many other products.

While two-thirds of consumers (64 percent) still prefer to buy life insurance from an insurance or financial professional, that number is down from 1996, when 8 in 10 (80 percent) preferred to buy the product face-to-face. Today, more than one in four adults (26 percent) prefer to purchase life insurance direct via the Internet, mail or over the phone.

“‘Obviously, the Internet has fundamentally changed consumers’ buying practices over the past 15 years,” says Marvin H. Feldman, president and CEO of the LIFE Foundation. “Recognizing the growing consumer interest to use the Internet to conduct research and buy life insurance, life insurance companies and agents have developed and implemented innovative strategies to engage and serve consumers through their websites and social media platforms that are more convenient for the customer.”

Younger consumers have the greatest interest in purchasing life insurance through the Internet. Among those ages 25-244, 31 percent said they would prefer to buy direct, with 3 in 4 citing the Internet, such as CompassQuote, as their preferred method of direct buying.

These findings were released today by the nonprofit LIFE Foundation and LIMRA as part of the organizations’ “The 2011 Insurance Barometer Study,” a new, annual survey designed to increase understanding about consumer attitudes and behaviors regarding a host of insurance and financial planning matters.

Let us lead you to the best life insurance policy from the comfort and privacy of your own home.

Recent headlines have been grim about the current state of our nation, as economic fears continue to mount. Stocks have been suffering their worst losses in a year as fears about a slumping economy continue to overshadow any benefit from the recently signed debt-ceiling package signed by President Obama.

With hard times continuing, consumers are hanging onto their dollars longer and forgoing unnecessary purchases. So, what does that mean in terms of life insurance?

Actually, life insurance is a vital protection no matter the economic environment, and should be considered even more critical if you have loved ones who depend on your income. Even though you may be tempted to not purchase—or even drop—life insurance from your family budget, having this coverage is critical so that your loved ones are taken care of and able to meet expenses in the event of your death.

While having life insurance is important—even or especially when money is tight—there are ways to make sure you have the right insurance without paying for more than you need. Decide what type of life insurance is best for your situation currently, and whether you prefer term or permanent. Term life provides coverage for a set amount of time and is typically less expensive. Permanent is just that…it provides coverage for your lifespan.

When shopping for insurance, make sure you are buying for a reputable agent and that you will get exactly what you are paying for. In other words, be sure to do your research.

At CompassQuote, we have experienced and licensed agents in all 50 states to lead you to the best policy that is right for you, your family, and your pocketbook.

We have been talking about news, trends and why having life insurance is important, but on occasion we feel it is important to review the very basics of life insurance and what the definitions really mean.

Consumers often hear the phrase, “term life insurance” and may be unclear about how it is different than permanent life insurance. “Term” simply refers to life insurance that is temporary, meaning that it is coverage for only a specific period of time. Because there is an assigned term period, it is considered to be the best life insurance value because it provides the largest amount of coverage at the lowest price of all options.

When shopping for term life insurance, you will want to be sure that the premium rates quoted are guaranteed for the full term of the policy. While that may sound like it is a given, know that some companies may quote lower rates but only guarantee the rates for half of the policy’s term. So the cheap policy you thought you had turns out not to be such a great deal in the end.

At Compass Quote, we only quote term policies that are guaranteed for the full term, whether that is 5, 10, 15, 20, 25 or 30 years. To help you better understand the different types of life insurance, we also feature a Frequently Asked Questions about life insurance so you are clear about what you are receiving information about. Of course, we also welcome your call!

When considering life insurance needs, consider CompassQuote to lead you to the best policy for you and your family.

Americans continue to have a conservative viewpoint about retirement and how to spend their money, as the economy is far from being robust. Life insurance trends reflect that mindful, prudent spirit as well, with more consumers opting to stick with the fundamentals.

Trends that continue in 2011 include:

• Return to the basics. People buy life insurance to protect loved ones and provide a peace of mind so that survivors’ lifestyles can continue in the unfortunate event of the policyholder’s passing. People today don’t want to see fancy presentations or bells and whistles with life insurance. Instead, they want to know about how to preserve a way of life and for it to be value priced.

• Return to planning. Consumers need to assess and then frequently reassess that financial plans are up to date. Financial plans created years ago most likely are not right for today’s times.

• Return to guarantees. Consumers are looking for guarantees with their life insurance, such as guaranteed death benefits, accumulation features, and premiums. Policyholders seek these assurances so that they will have the certainty and confidence that they are doing the right thing to protect their family and that everything will be as it has been presented and expected.

At Compass Quote, our experienced and licensed agents can discuss your particular life insurance needs and lead you to the right, and most affordable, policy that meets your needs for your family. Get your free quote online or give us a call to get started.

That gold watch may need to wait, as more and more Americans are postponing retirement longer amid continued financial uncertainty.

According to a new report issued by MetLife Employee Study, changing target dates for putting away work clothes and heading off to retirement are constantly changing. In fact, according to MetLife’s 9th annual Employee Benefits Trends Study, four out of 10 employees have changed their predicted retirement date since just last year. Further, almost 60 percent of workers in the study expect to beyond the age 65. This compares to 52 percent who expected to work past age 65 a year ago.

The reasons for the change in retirement expectations are not at all surprising. For starters, Americans are living longer and retirement at traditional ages may mean that people are realizing they need to save more for longer to be able to maintain a preferred quality of life after leaving the workplace. In addition, concerns about the economy have kept individuals on the payroll for longer.

In some cases, workers are also concerned about whether their retirement nest egg will truly be available to them when it is their turn to collect.

As part of the annual study, MetLife uses the information gathered from individuals taking the survey to communicate back to employers that there are ways employers can help employees save money. Human resources professionals are encouraged to provide information to employees about making sure they are not only taken care of in their so-called golden years of retirement, but that they also take steps to protect their families in the present with appropriate life insurance and other insurance plans as appropriate.

At Compass Quote, we can help you find the right senior life insurance that meets your needs today and into the future. Give us a call today!

Having a life insurance policy is not necessarily a case of “’Til Death Do Us Part.” If you want to drop an unwanted life insurance policy or switch plans, you can. And there are several options to do this.

Having life insurance is a good idea as a way to protect loved ones in the event you are unable to do so. But sometimes individuals purchase life insurance once and life changes and circumstances may necessitate a change.

The ideal first step is to speak with the company your insurance is with and make any desired adjustments. But in some cases, policy owners may feel they cannot afford a different plan from what they chose originally.

Policy owners can use of these methods to end an unwanted policy: lapse, surrender for cash value, reduced paid-up, extended term, 1035 exchange for an annuity and 1035 exchange for a different life insurance policy. Another option has been recently introduced according to new article posted on Yahoo! Finance. It is called a life settlement. A life settlement is when a life insurance policy is sold to an individual or entity other than the company that issued the policy for an amount that exceeds the policy’s cash surrender value but is less than the net death benefit. It is different from the other six options in that ownership of the policy is transferred to another person or entity.

While it is never advised to go without life insurance, companies do realize your goals and purposes for a policy could change. The best plan of action is to start with how your existing plan could change to be what you want. But, cost is certainly a driving factor too, and so transferring a policy to another policy is certainly within allowed limits.

At Compass Quote, we want to help you find the right insurance for your needs…both for today and into the future. Our experienced and licensed agents can help lead you to the right plan. Check out our website for some inexpensive life insurance secrets or feel free to call us on how to get started.

A new study confirms that for a second year in a row, baby boomers remain more attracted to guarantees for their retirement savings vs. the potential high returns with a market risk. Prior to the nation’s financial crisis that began in 2008, baby boomers sought high returns when investing. Now, respondents by a nearly 4 to 1 margin seek guarantees and financial stability.

The study is by Allianz Life Insurance Co. of North America and was released this month. Originally conducted in May 2010 with more than 3,200 people age 44-75, the refresh of Reclaiming the Future surveyed 439 of the same participants in March 2011—when the Dow Jones Industrial Average reached its highest point in nearly two years—to determine how attitudes about retirement planning have changed. Despite the recovery, the study reveals that boomers still have high anxiety about whether their retirement income will last and how prepared they are for the future. Their “new normal” mindset includes expectations of a sluggish economy, low investment returns, a more conservative investing strategy, expectations of delaying retirement and an increasing interest in seeking help from financial professionals.

“Despite a significant rebound in the equity markets since the financial crisis, this new study confirms that a ‘new normal’ mindset has dug deep roots in the minds of boomers,” said Allianz Life President and CEO Gary C. Bhojwani. “With the vast majority still in favor of more security for their savings, boomers tell us they are not interested in going back to return-chasing behaviors.”

At Compass Quote, our trained professionals can help lead you—whether a boomer or just starting out—to the best policy that meets your needs and current status. We are licensed in all 50 states. Give us a call or complete our free quote today to get started on the stability in life you crave. Also take a look at our income replacement calculator, a very helpful tool to determining your life insurance needs.

MetLife Inc., the biggest U.S. life insurer, has just reported that springtime storms this past April and May cost as much as 6.7 times the company’s provision for such expenses at the home and auto business.

Natural disasters including tornadoes in Alabama and Missouri probably cost $160 million to $180 million after tax, the New York-based insurer said today in a regulatory filing, compared with a provision of $27 million for the two months.

Travelers Cos. said today that it was scaling back share repurchases after the storms wiped out second-quarter operating income. AIR Worldwide, a modeling firm, has projected insured losses of about $7.7 billion to $12.5 billion from two weeks of storms in April and May. “We would expect those industry estimates to come up” as more information becomes available, Travelers Chief Financial Officer Jay Benet said at an investor presentation today.

MetLife relies mostly on life insurance and retirement products while Travelers focuses on property and casualty coverage. MetLife said the auto and home business contributed about 7 percent of net income in the first quarter. MetLife slipped 75 cents to $40.91 in New York Stock Exchange composite trading at 4:15 p.m., before the regulatory filing was released.

Natural disasters that took a tragic toll on so many lives are another reason why families should consider life insurance to protect their loved ones in the event of a deadly tornado, hurricane, or other unanticipated devastating event. At Compass Quote, our trained professionals will help lead you to the best whole life insurance policy that is right for you and your family.

We’re sometimes asked about price quotes that customers receive when they are considering a life insurance policy, and whether the dollar amount quoted is binding.

While a majority of quotes are consistent with the final price, that quote is not guaranteed until all the underwriting guidelines are fulfilled. A quote is considered a good faith estimate of what you submit when applying for life insurance, but you should know that the final cost will be based on documentation that is submitted and areas reviewed.

Typical areas that underwriters look at include medical history, height, weight, cholesterol, driving record, family history of certain conditions such as heart disease and cancer, participation in hazardous sports, and more.

While the quote you are given is the most accurate and realistic proposal possible based on information you provide directly talking with an agent or whether it is through the internet, it should be understandable that it will also need to be verified.

If you do not receive the rate that had been initially quoted, the company will generally offer an alternative along with an explanation. At that point, it is up to you as the consumer to accept or decline the coverage. There is no cost to submit for a quote and then decline coverage.

At CompassQuote, we use our experience and training to lead you to the right decision for you and your family to get the term life insurance information you need and want.