Imeriti's Blog

Help Your Clients Avoid New Taxes

mmcnelley — Mon, 11 Mar 2013 18:45:13 +0000

ACA tax provision may make whole life insurance, or rather all insurance products including universal life policies, more attractive...

There may be a boon in the Patient Protection and Affordable Care Act (PPACA) for the life insurance industry due to complexities for taxpayers under a new investment tax within it.

Whole life insurance policies --in fact, all insurance products including universal life policies, that provide for a tax free build up of cash surrender values --could become very attractive to investors, while annuities will likely be used more extensively under a tax mechanism in the health care reform law, according to the Congressional testimony of a tax academic today in Congress and a post-publication later clarification to NU that expanded the advantaged products beyond just whole life products.

Continue reading at: http://bit.ly/XRgw55

Life Insurance Among Top Tax Breaks

jstern — Wed, 23 Jan 2013 16:23:17 +0000

U.S. tax law is filled with so many credits, deductions and exemptions that Americans will be able to reduce their tax bills by about $1.1 trillion this year, according to congressional estimates.

Click here to view the biggest tax breaks, and the amount they will save taxpayers this year.

Price (Often) Does Not Matter

jstern — Mon, 26 Nov 2012 19:43:53 +0000

An interesting article was recently published about Walmart beginning to offer term policies (click here to read this article). While the price of these term policies is much greater than others for the same amount of coverage, people will buy these policies for a few reasons:

People will want coverage and often do not ‘shop’ around for a better price.
People will want some coverage, as opposed to no coverage, and Walmart will be offering a solution to these customers.
Often times, people do not want to deal with a live person, and they are happier to buy online or through a kiosk.

Therefore, agents should be prepared for this advancement to happen more frequently. Agents can increase their sales with term insurance by doing the following:

Imeriti, Inc. Announces Name Change and Appointments of New Executives

kmagnuson — Mon, 12 Nov 2012 18:50:00 +0000

San Diego, CA – November 12, 2012 - Imeriti, Inc. announced today that the board of directors has approved a resolution, which authorized changing the name of the company to Imeriti Financial Network (IFN) and appointing new executive positions. Mr. Nathan Zuidema has been appointed President/Chief Operating Officer, Mr. Ed Prewitt has been appointed President of Annuity Distribution and Mr. Brian Schneier has been appointed President of Life Insurance Distribution. All executive appointments will become effective immediately.

Mr. Jacob Stern, CEO of Imeriti Financial Network, stated, “I am excited to have executive expertise in place driving IFN’s core distribution channels and operations. We are prepared to seize every opportunity to stay an industry leader and contribute to shaping future annuity and life insurance distribution.”

About Imeriti Financial Network

Helpful Underwriting Tips: Importance of the Cover Letter

vbianculli — Mon, 29 Oct 2012 18:01:38 +0000

Very often, an application gets submitted without one of the most important documents in underwriting: the cover letter. Applications for term in excess of $2M, and applications for permanent products in excess of $1M, should be accompanied by a detailed cover letter. For that matter, any application requiring special consideration should have a cover letter.

The cover letter is an excellent way for you to clarify a situation or provide the underwriter with additional information about your client and the need for coverage. It should “paint the picture” for the underwriter and provide insight to your client not usually found on an application.

Key pieces of information that should be included in the cover letter are:

AG 38 – Actuarial Guideline Changes Death Benefit Guarantee Life Products

mmcnelley — Mon, 22 Oct 2012 16:59:46 +0000

AG 38, the Actuarial Guideline 38 of the National Association of Insurance Commissioners (NAIC), requiring life insurance companies to hold more reserves for products that contain a “secondary guarantee”, or a ‘death benefit guarantee’, was adopted September 12, 2012 and will go into effect for new sales dated on or after January 1, 2013.

This will likely translate into higher premium pricing for life insurance policies containing the death benefit guarantee or a no-lapse guarantee rider.

Each life company is currently evaluating their product portfolio, what the guideline reserves liability will be, and determining how they will restructure their policies and/or re-price their policies.

It is important that the Agent be aware of any timelines for applications and policy issuance of each respective life company, and any submission and issuance that could be affected by the January 1, 2013 effective date.

Imeriti Announces Merger With RZ Financial Network

kmagnuson — Mon, 01 Oct 2012 18:00:31 +0000

Imeriti, Inc. Announces Merger with RZ Financial Network

San Diego, CA – October 1, 2012 - Imeriti Inc., an insurance marketing company for financial institutions and independent insurance distribution, has signed a definitive agreement to merge with RZ Financial Network, an independent marketing organization with over 1,000 independent insurance agent relationships nationwide.

Continue reading at: http://www.insurancenewsnet.com/article.aspx?id=359296&type=pressreleases#.UGnZlk3A9uM

Media Contact

Katie Magnuson

kmagnuson@imeriti.com | 800.921.3100

‘Fiscal Cliff’: Impact on Your Clients – Think Alternatives with Index Universal Life Insurance

mmcnelley — Mon, 24 Sep 2012 18:33:34 +0000

In 2013, on behalf of your client, you will face the challenges of volatile markets, ramped up regulations, increased need for capital preservation, and a general tendency towards risk aversion. If lawmakers cannot agree on how to address the pending "fiscal cliff," $7 trillion worth of tax increases and spending cuts will begin to go into effect in January. Uncertainty about just what Congress will do will weigh on the economy.

Here's a rundown on some of what could impact your clients if lawmakers fail to act before January 1, 2013.

September is Life Insurance Awareness Month: Buddy Valastro’s realLIFEstory

kmagnuson — Tue, 04 Sep 2012 15:46:10 +0000

September is Life Insurance Awareness Month! Buddy Valastro, also known as “The Cake Boss”, understands the needs that life insurance fulfills first hand.

Read his story to learn why he has partnered with the Life and Health Insurance Foundation for Education (LIFE) to become the spokesperson for Life Insurance Awareness Month.

Life Insurance as an Asset Class

mmcnelley — Tue, 28 Aug 2012 15:13:18 +0000

Most of us have a “Patchwork of Assets” we’ve acquired one at a time over many years. We acquired them to make our own lives better without worrying about passing them on at death. Despite all of the positive features life insurance policies have, some people have concerns about life insurance. Many have trouble believing that life insurance really is an efficient financial tool. Before they commit to using it, they want to be sure it makes financial sense. They want to be confident that purchasing a policy and paying premiums is a good use of their money: They want proof that life insurance is financially efficient.

There is a way to look at coverage that can give clients a way to incorporate life insurance into their portfolio allocation decisions: the internal rate of return (IRR).

Planning for the 3.8% Surtax using Index Universal Life Insurance

mmcnelley — Thu, 16 Aug 2012 16:41:38 +0000

Beginning in 2013, certain investment income will be subject to an additional 3.8% surtax, enacted as part of the Patient Protection and Affordable Care Act [P.L. 111-148], March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 [P.L. 111-152].

This is sometimes referred to as the “Medicare” surtax because the legislation enacting this tax created a new section of the tax code: Chapter 2A – Unearned Income Medicare Contribution. However, this was simply a revenue-raiser enacted to offset the cost of health care legislation; there does not appear to be any reason this surtax must be used for Medicare.

For an individual, the 3.8% surtax is imposed on the lesser of: (i) “net investment income” [NII], or (ii) the excess of “modified adjusted gross income” [MAGI] over a certain threshold amount.

"Net investment income” is defined to consist of three categories of gross income:

Nearly Half of Pre-Retirees Underestimate Life Expectancy

ateen — Wed, 08 Aug 2012 18:06:31 +0000

A recent online article from Life Pro Health reports that nearly half of retirees and pre-retirees in the U.S underestimate their life expectancy.

Continue reading at:

http://www.lifehealthpro.com/2012/08/03/soa-study-nearly-half-of-retirees-pre-retirees-und

It is important for your clients to understand ways to prepare for their future, such as savings for retirement.

Contact Imeriti today to take advantage of several different sales ideas and options for your clients.

800.921.3100

Problems that can occur with an Inherited [Beneficiary] IRA.

mmcnelley — Tue, 10 Jul 2012 19:59:00 +0000

Inherited individual retirement accounts made news earlier this year when the Senate Finance Committee proposed to make heirs cash them out within five years of the benefactor's death.

The measure, which has been abandoned at this time, would have upended a system that is highly advantageous to families. Under current rules, heirs get to stretch withdrawals from an inherited IRA across their own life expectancies, meaning the assets could potentially increase in value, tax-deferred, for decades.

Unknowingly, families sometime cash out the account, losing the possibility of a life-expectancy payout. That is a problem because there is no way to get the money back into the IRA after it has been cashed out.

And, even when the heir is aware of the opportunity to keep the inherited IRA in tax-deferred investments, mistakes in the paperwork disqualify the inherited IRA.

Here are 5 areas where problems can result:

1.Trusts:

Alternatives to the 401K

jstern — Mon, 02 Jul 2012 16:17:50 +0000

Many Americans rely on the 401K as a means, and often the only means, to save for retirement. While there are some advantages to the 401K, mainly the tax deferral aspect and the automatic nature of the deposits, there are many hidden issues. Many do not realize two important items: the fees on 401K plans and the alternative options.

US News and World Report published a very interesting article on the fees of 401K plans:

http://finance.yahoo.com/news/401-k-robbing-blind-151642010.html.

Once people understand the fees, people also need to understand the alternatives or additional ways to save for retirement.

One invaluable vehicle can be the index universal life policy (IUL). With the IUL, there are many advantages given to the person looking for supplemental ways to save for retirement:

Paying for College is Top Concern of “Generation Z”

kmagnuson — Mon, 25 Jun 2012 17:11:13 +0000

Imeriti’s FundCollege program provides a great opportunity to show your clients the powerful benefits of using life insurance to help fund their child’s college education; PLUS, you can offer them guaranteed FREE college scholarships. Join us for a live 15-minute webinar this Thursday, June 28^th at 11:00am PDT and find out how!

Click on the following link to register: https://www1.gotomeeting.com/register/595696976

Fixed Annuity Interim Interest Payment Calculation

mmcnelley — Mon, 18 Jun 2012 16:56:45 +0000

Question: What is the calculation for monthly payment amounts on fixed interest rate annuities where the interest rate is an effective annual interest rate?

Because you lose the effect of annual compounding, the formula is a little more complicated when calculating the amount of interest actually being paid out.

The interest calculation is *:

((1+(Interest Rate/100)) ^ (#of days of interest/#of days in fiscal year)) x Principal - Principal

For example, for a $90,000 principal, 3.40% annual rate, 365-day fiscal year, ‘monthly’ interest distribution from the annuity:

For 30 days in the payment period:

((1+(3.40/100))^(30/365)) x $90,000 - $90,000

(1.0340^.08219) x $90,000 - $90,000

1.0027518 x $90,000 - $90,000 = $90,247.66 - $90,000 = $247.66

For 31 days in the payment period:

Tax Apocalypse in Retirement Accounts

jstern — Mon, 11 Jun 2012 16:32:28 +0000

A recent Fox Business online article talks about how having all of your funds in tax-deferred accounts can be very detrimental to retirement.

http://www.foxbusiness.com/news/2012/05/30/stern-advice-tax-apocalypse-in-your-retirement-account/

One additional instrument that can be added to a person’s retirement portfolio is cash value life insurance. Because of the unique tax status of life insurance, a person can take out income tax free loans against the policy. Thus, with proper planning, a person with both tax deferred and tax free accounts can draw money out of the tax free accounts when taxes are high, and tax deferred accounts when taxes are low.

Contact Imeriti today to find out how you can take advantage of using tax free life insurance in a person’s retirement portfolio: 800.921.3100.

Advisors Find a Unique Opportunity to Move Money off the Sidelines

hpalermo — Mon, 04 Jun 2012 18:23:09 +0000

With interest rates at historic lows you would think consumers would be clamoring at the opportunity to expose those idle funds to greater upside potential. But financial analysts tell us there are trillions of dollars sitting on the sidelines just waiting for a ‘better’ opportunity. In speaking with financial advisors across the country every day I have noted that there are three main reasons why consumers are too anxious to commit their funds to a particular investment vehicle:

Deferred Annuities: Helpful Tips for General Suitability Guidelines

mmcnelley — Tue, 29 May 2012 17:39:55 +0000

Good investment practices and, now, state regulations and insurance companies have agents and representatives who recommend the purchase or exchange of an annuity support that the transaction is in the purchaser’s interest and is appropriate for the purchaser’s financial needs and goals. As part of this process, insurance companies have ‘Suitability Questions, Worksheets, and/or Acknowledgment Forms’ to be included with applications. Following are some GENERAL guidelines based on discussions with many of the insurance companies – please remember, one insurance company’s suitability information request may differ from that of another, and may or may not be the same as the following commentary. Also, if you have oversight by a broker/dealer or other supervising entity, an insurance company’s suitability requirement does not supersede or replace any other suitability requirements you are obligated to follow.

Wealth Stabilization Using Life Insurance

mmcnelley — Wed, 23 May 2012 16:24:49 +0000

Wealth stabilization involves a combination of planning techniques, diversification strategies and life insurance to help reduce the impact and volatility a down market has on a couple’s wealth transfer plans.

For estates that contain a significant portion of assets that are exposed to the volatility of the financial and real estate markets, a down market could wreak havoc on a client’s wealth transfer plans. You should consider taking steps to ensure that your wealth transfer plans are not adversely impacted by market volatility.

Inflation & Additional Life Insurance

mmcnelley — Mon, 21 May 2012 16:28:28 +0000

Life Insurance is a unique wealth creation and preservation tool that assures the accumulation of a desired amount of liquid capital at death. Depending on the plan of insurance, it may also create more or less capital for lifetime needs.

Many times, insurance values provide for income needs of surviving dependent family members, provide for children’s education, meet “special” financial demands, or relieve survivors of financial management burdens by providing an inexhaustible lifetime annuity. Retention of purchasing value is a discussion to be included in all life insurance reviews.

The following table shows the amount of additional life insurance required to maintain a given purchasing power. For example, if $100,000 of insurance had been purchased in 2001, then an additional $26,943 of insurance would have to be available to provide the same purchasing power in 2012 – i.e., what $100,000 would have purchased in 2001 will require $126,943 in 2012.

Milliman 100 Companies Report $326.8 Billion Pension Funding Deficit at Close of 2011

jstern — Mon, 14 May 2012 16:00:30 +0000

How to Avoid Taxes on Life Insurance

mmcnelley — Mon, 07 May 2012 17:17:35 +0000

Having enough life insurance should be a key element of your personal financial plan. Hopefully, with some advance planning, you can collect life and disability insurance proceeds free of taxes.

The main reason most people have life insurance is to replace income that would be lost if they die prematurely. Life insurance death benefit payments can generally be received by policy beneficiaries free of any federal income tax (and usually free of any state income tax too).

Is There Really a Perfect Life Insurance Contract?

jstern — Thu, 03 May 2012 16:42:27 +0000

Learn how an IUL policy is becoming the ideal contract for consumers today: http://www.foxbusiness.com/industries/2012/05/02/is-there-really-perfect...

Delaying retirement: 80 is the new 65

jstern — Mon, 30 Apr 2012 18:34:26 +0000

A quarter of middle-class Americans are now so pessimistic about their savings that they are planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live. Read more at: http://money.cnn.com/2011/11/16/retirement/age/index.htm

Now is the time to talk with your clients about the benefits of purchasing an Index Universal Life insurance policy! An IUL builds cash value, can be used for tax-free loans when tax rates skyrocket in the future and it provides for a Death Benefit in the event of someone’s early demise. Contact Imeriti today for more information on the advantages of Index Universal Life: 800.921.3100.