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Enriching your life; informing your health. Life insurance, and other topics.


Understanding Life Insurance and the Special Needs Trust: Part 2
Understanding Life Insurance and the Special Needs Trust: Part 2

While it can be difficult to have to think about caring for your family after you pass, doing so when you are responsible for a loved one with disabilities is even more difficult. In order to alleviate some of your concerns, we have put together this two-part series about Special Needs Trusts.

 

In the first post of this two-part series, we defined the basics of what a Special Needs Trust is and it’s benefits. In this second part, we will discuss how you can set one of these trusts up using your life insurance policy.

 

Funding your Special Needs Trust

As we mentioned in the last post, this type of trust is designed to help support your loved one living with disabilities without affecting their government benefits like Social Security, Medicaid, or Medicare. To do this you will need to put money in the trust, but where does it come from?

 

There are a number of ways you can use your savings, investments, or even your will to fund your trust. One of the best and surest ways to fund your trust is with your life insurance plan. Some of the many benefits of using your policy include:

 

You can get an excellent value for your money because your monthly premium can help secure a significant death benefit.

You may avoid excess income and estate taxes if your family structures your trust correctly. You have much more control over how your estate is split among your surviving family members.

 

By using your life insurance to set up a Special Needs Trust, you are providing your loved ones with the resources to lead a full life even after you pass.

Bankers Fidelity is a leader in providing affordable term life insurance in Texas, Iowa, Indiana, and 43 other states (plus DC). If you have questions, contact our agents for life insurance in the state that best applies to your location.

 

Sources:

  1. BestLifeRates.Org

  2. American Bar Association

 

This article is for informative purposes only and not intended to provide legal or tax advice. You should consult with an attorney or tax accountant for professional education.

 

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Understanding Life Insurance and the Special Needs Trust: Part 1
Understanding Life Insurance and the Special Needs Trust: Part 1

f you take care of a loved one who is living with a disability, you understand the amount of time and care that goes into ensuring their day-to-day welfare. You work hard to make sure that their every need is seen to so they can lead a full life. Unfortunately, you might not always be around to support them.

 

Planning how best to protect your family should the worst happen is difficult, it can be especially trying for those with loved ones who struggle with disabilities. Any insecurities and indecision are doubled by the concern for your loved one's long term well-being.

 

Fortunately, you are not without recourse. If you are one of the 60% of people with life insurance, or one of the additional 34% of people planning to purchase it this coming year, you can use your life insurance plan to establish a Special Needs Trust. This trust may help your loved even after you have passed.

 

In this two-part series, we will take a closer look into what Special Needs Trusts are and what they can do for your family, as well as how you can use your life insurance coverage to fund them.

 

What Is a Special Needs Trust?

A Special Needs Trust is a trust that is designed for those living with disabilities; either physical or intellectual. It is designed so that the beneficiary can continue receiving their needs-based government benefits such as Medicare, Medicaid, and Social Security after you have passed. There is an option in this trust to set up a special trustee if an individual is legally incapable of managing the trust themselves.


What Are the Benefits of a Special Needs Trust?

Special Needs Trusts are complex legal documents that, when completed correctly, can accomplish a variety of goals. Working with an attorney may help your trust accomplish the following:

 

  • It allows you to leave both property and other resources to be used for the benefit of your loved one with a disability in a way that preserves their public assistance.

  • It prevents other family members from being overburdened by the demands of caring for a relative with disabilities.

  • It allows you more control over how the estate is distributed.

  • It can help to sustain your loved one with disabilities over a longer period of time through careful budgeting and better management.

Stay tuned for the second installment of this series! In it, we will discuss how you can use your life insurance policy to fund your Special Needs Trust and how you can use a special needs trustee to better manage the funds after you pass.

 

Sources:

  1. BestLifeRates.Org

  2. American Bar Association

 

This article is for informative purposes only and not intended to provide legal or tax advice. You should consult with an attorney or tax accountant for professional education.

 

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Life Insurance: Getting Back to Basics with These 4 Important Facts

life insurance arizona

Life insurance is an important safety net that may provide for your loved ones when you are gone. Despite its importance, there are still a number of misconceptions and misunderstandings about how it works and what it covers.

While the rules for life insurance vary state to state (life insurance offerings in Arizona may not be available in Idaho, for instance), many of the most important tenets remain true.

This post is designed to help you understand four important things to remember when considering life insurance plans.

  1. If you are financially responsible for another person, you may want life insurance: Whether it is a spouse, child, dependent parents, or employees of your business, you should consider life insurance so that the people in your life don't suffer if something were to happen to you.

  2. Life insurance isn't a ‘Get Rich Scheme’: Daytime television might be full of stories of murder for life insurance benefits but the reality is that, in many cases, life insurance will cover little more than the cost of funeral services and outstanding debts. While it is true that benefit increments can range from $10,000 into the millions, whatever is left over will likely be necessary to help lessen the burden after losing a steady income.

  3. There are different types of life insurance: One form is called Term Life Insurance. This is the popular type and can be less expensive in premium. It essentially only lasts through the term -- or amount of time -- it is in place, usually 10, 20, or 30 years.

    Another form is Whole Life Insurance, which is designed to last the lifetime of the insured. With this option there is a cash value involved in order to sustain the policy.

  4. Life Insurance is Probably Cheaper Than You Think: Unless you are applying for the top benefits, life insurance can be less expensive than most people believe. For someone in their 30s who leads a healthy lifestyle and doesn't smoke, policies may be available for less than $500 a year.

Life insurance is an important tool to protect your loved ones. This may give you a better idea of some of the core information about life insurance policies so you can start a conversation with an independent agent today.

Sources:

 

  1. Knowledge Center

  2. Forbes

 

Life Insurance policies are underwritten by Bankers Fidelity Life Insurance Company®, Atlanta, GA. Limitations and exclusions apply; actual policy provisions control. Application to determine eligibility required. Rates subject to change. Product availability and benefits can vary by state.


Don’t Underestimate the Importance of Insurance Policies
 Don’t Underestimate the Importance of Insurance Policies
Sadly, far too many people in the U.S. take insurance policies for granted. These people either ignore their policies, agree to whichever one is first offered to them without doing any research, or, in the worst circumstances, completely disregard the need for insurance policies.

Over the next few decades, there's going to be a significant increase in the amount of elderly people living in the United States. Eventually, that group will include you. That's why you should find quality insurance policies well before it's too late. Here are some important insurance policies that are often recommended:


Health and Life Insurance
You absolutely must have some form of health and life insurance throughout your adult life to ensure that you and your family are protected if anything were to ever happen to you. Without health insurance, for example, you could end up having to pay thousands of dollars out of pocket if you become injured or ill and need to front the bill for various costly medical expenses. Don't be unprepared when it comes to your health, life, and the well-being of your family -- get the necessary insurance today.

Dental Insurance
If you don't have dental insurance and something goes wrong with your teeth, you're in for either a few years of severe pain or a few costly visits to your dentist. Insurance will help cover some of those expenses so you don't have to pay out of pocket.

Homeowners Insurance
Although your dental health, physical health, and family's health is most important, you should make sure that your property is protected, too. Certain home repairs can be extremely expensive if you don't have a quality property insurance policy.

If you want to learn more about health and life insurance policies and Medicare Supplement insurance, contact Bankers Fidelity today.


Struggling With Debt? Why You Need Life Insurance Anyway
Struggling With Debt? Why You Need Life Insurance Anyway
If you are currently facing student loans, a high mortgage, car loans, or other forms of debt, purchasing life insurance is likely the last thing on your mind. By neglecting to face this important life step, however, you are setting yourself and your loved ones up for more complicated financial realities in the future. As cost of living continues to go up and the number of employers offering pension packages continues to go down, it is important that you safeguard your retirement. Purchasing a life insurance policy is part of this process. While it may seem like an unnecessary burden in the immediate future, it is sure to pay off as you age.

Purchase Life Insurance Now To Simplify Your Retirement
If debt and daily living costs encompass the entirety of your financial priorities, you are probably not building a retirement fund. Look at your spending budget and see if you can find room to purchase a life insurance policy. You should also speak with your employer to see if they offer retirement fund matching plans in addition to your 401K. Again, while it may be difficult to manage, adding a life insurance plan will prevent this stress later on. 

Make The Future Easier On Your Loved Ones
When someone passes away, their remaining debt is handled by their estate. This means that the person's executor will do whatever is necessary to pay off the debt. This could include selling valuable objects and property. While policies vary depending on the specific type of debt, sometimes creditors won't have a solution if your executor runs out of options. In cases such as mortgage payments, however, the debt falls onto the living spouse. This situation creates a potentially significant financial burden for your loved ones.

While 55% of Americans said in 2015 that they would recommend life insurance to someone they know, this number jumped to 66% in 2016. This 11% increase suggests that more people are recognizing the importance of insurance, despite increased cost of living. Speak to your insurance agent about adding life insurance into your plan and about how you can better handle it financially.