It's Official: We're in a RecessionWhile the announcement yesterday wasn't a surprise, it is good to acknowledge what many people have already known and felt. The National Bureau of Economic Research, or NBER said Monday...Don't Treat Your 401k Like a Savings AccountThe holidays can be a time where money becomes tight, and many people turn to their 401(k) or other retirement plans for some quick cash. If your retirement plan has...Saving Money is Easy if You Make it AutomaticMany people think saving money is hard, but it doesn't have to be. The biggest problem is that most people treat savings as something that should be done after all...Health Insurance Options After Termination or Early RetirementIf you're a full-time employee, chances are health insurance is one of the benefits available to you. If you choose to take advantage of this benefit, you probably understand that...3 Tips to Help You Maintain a BudgetThe process of creating a budget can be daunting at first, but creating one is actually the easiest part. Maintaining and staying true to your budget for any period of...Use the Rule of 72 to Estimate How Long it Takes Your Money to DoubleHave you ever wondered how you can quickly estimate how fast your money or investments will grow? Sure, you can plug numbers into a financial calculator or software program to...Be Aware of the Warning Signs of Too Much DebtIs paying off debt bogging you down and keeping you from reaching your financial goals? Using credit and can be a powerful tool that allows you to buy a home,...Save Money on Groceries With These Shopping TipsWith a weak economy, high gas prices, and increasing inflation, you're probably finding that your dollar doesn't go as far at the grocery store as it used to. Groceries and...Do You Have the Stock Market Blues? Use This Time to Educate YourselfFor the past year now, stock markets here and abroad have been going down. Things really got ugly in October, and many investors are faced with investment losses of 30%...Comparing the Different Types of Health Insurance PlansIt's open enrollment season for many employer benefits, and that means it's time to review and select your health care benefits. Are you confused by all of the health insurance...
and are no longer needed. There are companies that will buy policies on behalf of pension and institutional funds which hold them as part of their investment portfolio. The best part is that they will buy them for more than the cash value.
Other insurance policies that may be a candidate are those where the premium takes a huge hike because of the drop in interest rates, policies with maximum loans about ready to collapse and create a taxable gain but with no money to pay the tax or even term insurance policies that are nearing the end of their term.
When a policy is sold, one option would be to transfer all, or a portion, of the proceeds into an “asset based” long term care plan. Done deal. Ask your financial planner about asset based LTC plans.
2. Withdraw money from an annuity.
Over 90% of the people who own a non-qualified deferred annuity die owning it. It is never converted to a life income. Essentially it serves as a longer term “rainy day” fund than a CD. The fact that the interest earned is not currently taxable is an attractive feature and makes the money grow faster than a taxable CD.
However, at some point the piper must be paid. When someone dies holding an annuity and leave it to their children, the children are required to pay the tax on the gain. You may have heard this referred to as the annuity “ticking time bomb”.
There is a way to avert this time bomb tax, provide long term care for yourself and not take any money out of your budget. There are several ways to skin this cat…
a. If your annuity is large enough, simply take the 10% penalty-free withdrawals each year and move them into a 10-pay long term care plan.
b. The only mental deterrent that comes up on this suggestion is that there may be remaining surrender charges on the annuity. No problem. Most companies allow you to annuitize. If the annuity pay-out period is at least 10 years, most of them waive any surrender charges.
3. Exchange all or a portion of a CD, non-qualified deferred annuity, variable annuity or IRA for an annuity/long term care combination plan.
This entails simply moving money “from one of your pockets to another”. The difference is that the pocket to which the money is moved has long term care benefits in it as well. This technique also uses the “asset based” long term care plan approach.
So there you have it. Three ways to get long term care without a premium coming out of your pocket.
Article Source: http://activeauthors.com
Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, “The Estate Preservation Advisor”. To subscribe and get the free video, “How to Sell Your Life Insurance Policy for More Than the Cash Value”, go to theestatepreservationadvisor.com/freevideo.htm
Here are some more keyman life insurance articles...
