February 28, 2010 Insurance Review This is tax season and we are happy for it. While you should have your tax return prepared, you might also consider looking at more paperwork and performing a review of your life insurance needs. Here is a guide for what to look for: 1. Review performance considering: a) Interest rates b) Dividends c) Load structure d) Mortality Costs and Expenses 2. Update ownership and beneficiaries 3. Policy provisions available on contracts: a) Long term care riders b) Return of premium riders c) Secondary death benefit guarantees d) Accelerated death benefit riders e) Extended maturity 4. Possible rate reductions on policies: a) Consider increasing term or mortgage insurance 5. Review for unnecessary policy riders 6. Review impact of policy loans 7. Consolidate multiple policies 8. Review positive medical changes: a) Weight changes b) Smoker/nonsmoker status c) Improvements in blood pressure or cholesterol 9. New underwriting classifications 10. Changes in life/business circumstances needs analysis 11. Need for survivorship coverage vs. individual policy 12. Has the policy been reviewed within the past three years If you would like us to review the foregoing, please call us. Quote “In the short term the market is a voting machine but in the long term it is a weighing machine.” Benjamin Graham Lessons From The Michael Jackson Estate – So Far Michael Jackson was well advised by his counsel to use a pour over will and trust, his assets are added to an existing trust but the beneficiaries and the nature of their interests in the trust remain private. Unlike a will, a trust is not filed with the probate court where it becomes a public document. Also, to the extent that Jackson transferred assets to his trust during his lifetime, those assets will not be subject to the expense and delays of probate. Trusts have many advantages for the decedents and their families. If Jackson made gifts to an irrevocable trust, those assets are free of estate tax, the issues of probate proceedings, the settlement of lawsuits and the overall administration of the estate. Jackson’s children would have had immediate access to those funds, subject to the terms of the trust. The trust would have isolated those assets from Jackson’s creditors, which is especially important if his liabilities exceed his assets. Moreover, the trust could have owned insurance on his life, which would have provide an immediate cash benefit free of income and estate taxes to his heirs, regardless of the value of his estate. On Wall Street 8/09 p.65 Locking In Future Income Variable Annuities can shield your nest egg from stock market losses. But, make sure to understand what is guaranteed and what that promise will cost you. Variable Annuities have created a new fuss because in the stock market slide of the past two years, people appreciated the protection afforded by these vehicles. Guarantees sound great but many people do not purchase them because they carry steep fees for the insurance. Additionally, you might not be entitled to the return of your guaranteed amount in a lump sum. In other words, a guarantee of lifetime income does not help those people who may need access to the money all at once. They can be valuable to those who do not have old-fashioned defined benefit pension plans, particularly single women expected to live long lives. Another caveat, if a neighbor boasts of generous guarantees, it probably is not for sale these days; the juiciest ones have been pulled from the market after regulations last year required insurers to increase reserves and capital to show they can make good on their promises. So, is now a good time to buy, to protect gains from the market rally? These products are far too complex for yes/no answers. We suggest you call your financial advisor to find out if these are suitable for you. WSJ 12/8/09 p. C14 As always, if you have any questions about these or any other matters, do not hesitate to call me. Remember, We’re Here For You!!