Posts Tagged ‘Life Insurance’

Taxation and Life Insurance

Thursday, November 28th, 2019

Taxation and Life Insurance

What is it?

Life insurance has long been recognized as a useful and relatively simple way to provide for your heirs and loved ones when you die. If your survivors relied on your income during your lifetime, then they will be able to avoid financial difficulties after your death if your life is adequately insured. Lawmakers have long recognized the social usefulness of life insurance, which helps protect widowed spouses and children and keeps them off of public assistance. Accordingly, lawmakers have historically provided liberal tax benefits as an incentive to those who put their hard-earned dollars into life insurance policies. Favorable tax treatment also extends to accumulations within certain cash value life insurance. Generally, when you pay premiums on a cash value life insurance policy, some of your money is applied toward the policy cash value, which is similar to a savings account within the policy. Over time, cash values accumulate tax deferred as long as certain requirements are met. During your lifetime, you can access the cash value by a withdrawal, policy loan, or surrender (cancellation) of the policy. Caution: If the policy is classified as a modified endowment contract (MEC), withdrawals, including loans and partial surrenders, will be subject to immediate taxation to the extent that the policy’s cash value exceeds the premiums paid. In addition, withdrawals from a MEC made prior to age 59½ may result in a 10 percent penalty, unless an exception applies.

Why do you need to know?

Whether you are purchasing life insurance to protect your family, as an investment, or both, the tax treatment of your policy will directly affect the return that you (or your heirs) get from the dollars you deposited with the insurer. In most cases, your insurance agent or accountant will be able to tell you everything you need to know about the taxation of your policy, but if you are involved in portfolio planning or product comparisons, you may want to become more familiar with the tax rules so that you can draw meaningful conclusions.

How is life insurance taxed?

In general, life insurance death benefit isn’t taxed, but that is hardly the end of the story. Familiarity with some of the basic rules will help you avoid traps for the unwary and plan accordingly.

First, it has to be life insurance…

Life insurance provides you with many tax advantages, but only if it falls within the definition of life insurance for federal income tax purposes. If the terms of a life insurance contract do not meet the statutory definition of life insurance, then you are not entitled to the special income tax treatment.

Income tax considerations…

In most cases, premiums are paid with after-tax dollars. Typically, death benefits are received tax free by your beneficiaries after your death, but the sale or surrender of your cash value policy during your lifetime triggers a tax on realized gain.

Tax-free buildup of policy value…

The cash buildup within permanent or cash value life insurance is not subject to income taxes if certain rules are met. There are a few rare–but important–exceptions.

Taxation of dividends…

A certain type of permanent cash value insurance, whole life insurance, may pay dividends to policy owners out of the insurer’s surplus earnings for the year. Whether you take the dividends in cash or keep them on deposit with the insurer, they are considered a return of your premiums. As long as you don’t get back more than you paid in, you are merely recouping your costs, and the dividends are not included in income. Dividends in excess of premium payments, however, are generally taxable as ordinary income. Dividends paid by mutual life insurance companies do not qualify for capital gains tax treatment.

Taxation of benefits…

Benefits can be characterized as living benefits or death benefits. The tax treatment of benefits varies depending on who receives them and how and when they are distributed.

Taxation of policy exchanges…

The tax code allows you to exchange one life insurance policy for another life insurance policy without triggering current tax liability. However, tax-free treatment will apply to an exchange only if it satisfies certain requirements.

Contact Beck Insurance Agency today for more information.  Call 419-446-2777, or click here.

Source:  Dixon Wells

The Value of Life Insurance

Monday, November 11th, 2019

We know how important it is to seize the moments and live your best life now.  But don’t forget to protect the financial future of the people who depend on you.  One way to get started is with life insurance.  It can help provide for your love ones when they need it most.  How?  By helping to pay off your mortgage and other debt.  Cover college expenses.  Providing cash to settle your estate.  And more.  Plus, life insurance can also offer you living benefits, like helping you pay fewer taxes in retirement, be prepared for the cost of an unexpected illness, or boost your financial portfolio.

Most people recognize the value of life insurance but more than 40% of Americans don’t have it.  And of those who do, almost 20% say they don’t have enough.  So what’s stopping them?  Most people overestimate the cost of life insurance by more than three times the actual cost.  Life insurance comes in many shapes and sizes and we are here to help you find the right solution for your needs and budget…and protect the life you have built.  Ready to get started?  There is no better time than now.  See how much coverage you need at principal.com/lifecalc.

Or, contact Beck Insurance Agency today.  Call 419-446-2777, or click here.

How surprised would you be if you went to buy the new iPhone expecting to pay $1,000, but it only cost you $200? You’d be ecstatic!

Tuesday, October 15th, 2019

How surprised would you be if you went to buy the new iPhone expecting to pay $1,000, but it only cost you $200? You’d be ecstatic!

This happens all the time with 44% of millennials overestimating the cost of life insurance by 5x the actual amount. A policy through @PekinInsurance is simple, affordable, and possibly life-changing for your family.

⇢ Send us a message and we’ll review your needs!

Life Insurance 101

Thursday, August 1st, 2019

There are interesting differences between Term Life Insurance and Whole Life Insurance when you dig down deep.

Term Life Insurance is the least expensive today, but the most expensive over time.  Less than 1% collect a term life death benefit.

Whole Life Insurance is the most expensive today, and the least expensive over time.  100% payout, with the ability to add Long Term Care coverage.

So how can you say whole life over time is less expensive than term life?  Call Beck Insurance Agency at 419-446-2777 or click to schedule an appointment and a life insurance illustration comparison.

“I have life insurance through my employer.”

Monday, July 29th, 2019

When discussing or proposing life insurance options to people we often get this reply.

While I could easily touch on a number of reasons why you shouldn’t rely on employer provided life insurance, in this post we will only focus on one. A big one.

Approximately 95% of employer provided, group life policies have an active employee requirement written within. Meaning, once you no longer meet the definition of “active” – coverage often is voided without notice.

True story / example: A acquaintance of mine works with a lady. Her husband was diagnosed with cancer. He had to leave work to fight his cancer and not too long after unfortunately passed away. The life insurance the family thought he had, denied the life insurance benefit because he was no longer an “active” employee at the time of his passing.

Employer provided life insurance is a nice benefit….but buy your own as well.

Contact Beck Insurance Agency today to explore your own life insurance options. It’s not as expensive as you think.  Click or call 419-446-2777.

PMI Insurance

Friday, July 26th, 2019

It has come to my attention that some home buyers mistakenly believe that the PMI, or Private Mortgage Insurance that they are paying for as part of their mortgage payment – protects them.

PMI is generally required by the lender when the home buyer has less than the recommended 20% down payment, or equity in the home they are buying.  While you pay the premium, this insurance only protects the bank in the event that you default on your mortgage and the home sells for less than the outstanding balance owed at the foreclosure auction.

PMI is not coverage that protects you, it protects the bank and it does not pay off your mortgage in the event that you die.

If you do need life insurance please, please call or click.

Auto-Owners Insurance Company continues exceptional financial ratings.

Thursday, April 25th, 2019

Auto-Owners Insurance Group continues to be recognized for exceptional financial strength and stability among the nation’s largest insurers. Auto-Owners has once again received the highest AM Best Rating of A++ (superior), and is only 1 of 9 P&C insurers in the United States to do so. This now makes it 47 years in a row Auto-Owners has earned this coveted rating.

Beck Insurance Agency is proud of our relationship with Auto-Owners, having signed our agency contract with them in 1950.

For more information on Auto-Owners click here.

For Auto-Owners quotes call 419-446-2777, or click here.

Max and Kassie on Life Insurance

Monday, February 18th, 2019

Max & Kassie discuss the importance of having life insurance from the world headquarters of Beck Insurance Agency in Archbold, Ohio.

Hi!  I’m Kassie, and I’m Max….coming to you from Beck Insurance in Archbold.  Parents, we want to remind you of the importance and low cost of life insurance.  Do you have kids?  A mortgage?  Loans?  A spouse?  Kids??

You need life insurance!

Only 62% of people have life insurance.  And over half of those have way too little.  Even worse, one out of three households admit they would suffer financial disaster within a month of the main breadwinner passing.

What would we do?

And it’s not as expensive as you think.  80% of people think life insurance is more expensive than it really is.  But it’s like less than a java chip frappechino a day….more like a couple of pop tarts!

So what’s your excuse?  Mom?  Dad?

Contact Beck Insurance today for your painless life insurance review!

Call 419-446-2777, click here, or stop by Beck Insurance Agency in Archbold, Ohio.

Life Insurance….with Max and Kassie

Wednesday, January 23rd, 2019

Kassie – Hey Max, what’s the difference between a whole life policy, and a man?

Max – I give up Kassie…

Kassie – A whole life policy eventually matures!

Max – Ohh, Kassie….

Max – You know what’s mature is making sure you have enough life insurance in place to protect your loved ones, should the unspeakable happen.

Kassie – That’s a really good point Max.  Who can someone call for rate options through all of the top life insurers?

Max – Beck Insurance Agency in downtown Archbold.  They have access to dozens of the top life insurance companies and can help guide you through the process from start to finish.

Kassie – Call or stop by Beck Insurance Agency.  419-446-2777

 

Joe Buller joins Beck Insurance Agency!

Thursday, December 6th, 2018

Beck Insurance is pleased to announce the hiring of Joe Buller.

Commercial Insurance, Business Insurance, Farm Insurance, Joe Buller

Joe comes to Beck Insurance with 22 years of insurance experience.  He started his insurance career in 1996 and has experience at both the carrier and agency levels.  Joe grew up in a farming community in southwestern Minnesota and relocated to the Monclova, Ohio area a few years ago.

Joe will be focusing his time on Commercial Risks, Farms, Life, and Long Term Care.

Please contact Joe for all your commercial / business insurance needs!

jbuller@beckinsurance.com  /  419-446-2777  /  Online Here