Default text
Demo Agency
Research - Quote - Purchase
Contact Us:  (909) 900-9935
Insurance News
Informative Insurance Articles
Subscribe to this feed:
RSS 2.0

Friday, Jun 17, 2011 3:05 PM
Business Planning Techniques, Products and Strategies

Small business owners can often be your best prospects for writing insurance. Not only do they usually have better-than-average incomes, but they are also subject to certain unique risks and have some unique opportunities due to their ownership of a business.

For example, a small business is typically dependent upon a key employee. What if that employee dies or is disabled? The business could be crippled due to the loss of that employee’s skill, ability to get things done, expertise, or customer relationships. The answer – key employee life and disability insurance – is often quite affordable.

Small businesses are often partnerships. What if one of the partners dies or becomes disabled. Rachel may be concerned that if Heath dies, besides the fact that Heath is a key employee, she might need to quickly gather funds to buy out his share of the business. Also, Heath’s heirs might disrupt the business if they don’t like the financial arrangement. On the other hand, Rachel is concerned that if she dies, Heath might not be able to pay her heirs a fair value for the business, and he may not be able to continue to run the business without her. Thus, both partners are well served to have a buy/sell and business continuation arrangement in place secured by life and disability insurance.

Small business owners often have two large expenses looming in the future – retirement and estate taxes. The business owner may consider the business itself to be his retirement plan, but the fact that the owner is also a key employee makes many small businesses nearly worthless at the owner’s retirement. Plus, very few people want to buy a particular small business, further depressing the value below what the owner would consider fair. Fortunately, there are a variety of ways that business owners can store considerable money away for their retirement and reduce their income tax bill. Individual 401(k)’s and SEP-IRA’s are two examples. On the other hand, preparing for estate taxes may involve setting up a will and trusts, gifting the business to heirs over time, and providing a plan for how the estate taxes will be paid using joint second-to-die life insurance.

Besides planning for retirement on a tax-preferential basis, business owners can sometimes purchase certain benefits with pre-tax dollars. For example, owners of C-corporations can buy long-term care insurance for themselves on a tax-advantaged basis. LTC premiums paid by the business are tax-deductible to the business and are not considered taxable income to the employee, yet LTC benefits received are income tax-free to the employee. A plan like this can be set up where the only covered employee is the business owner.

So, let us help you learn the opportunities that are available to serve small business owners. They have unique risks and great opportunities.

Last Updated: 8/27/2014 3:04:28 PM

Friday, Nov 5, 2010 10:34 AM
Did you know you can get life insurance with no medical exam?

Usually, when you obtain life insurance, you expect to undertake a medical exam. But for some people, that medical exam is an obstacle that prevents them from seeking insurance. Perhaps you have a health condition that you fear will disqualify you from obtaining life insurance, or perhaps you simply dislike needles.

We have good news for you. There are now a wide variety of life insurance plans available that do not require medical exams.

Some plans are designed and priced like plans that require a medical exam. On these plans, the carrier may still have stringent health requirements in an effort to only insure the best risks, but the carrier has replaced the medical exam requirement with some new technologies that were not available a few years ago.

Other plans are priced a bit higher but allow for insureds with a variety of medical conditions. Since we are independent insurance agents, we offer a wide variety of carriers. This means that if you have a particular medical condition, we can often shop among our carriers and find one that will issue you a competitively-priced plan without a medical exam that allows for your health condition.

Many carriers have also started writing life insurance on our older clients using relaxed underwriting requirements without a medical exam. No medical exam means you are more likely to be accepted for insurance and the policy is placed into effect faster.

So if the medical exam has been keeping you from trying to obtain life insurance, give us a call. We can help you to get the insurance you need.

Last Updated:

Friday, Nov 5, 2010 9:50 AM
Reducing Taxes on Social Security Benefits

Throughout your working career, you paid taxes into the Social Security system. Then, when you retired, you started to receive benefits from the system.

You might think that because your benefits were at least in theory the result of your contributions, your Social Security benefits should be non-taxable. After all, if you pay taxes in but are then also taxed on the benefits, isn’t that double taxation?

For nearly the first fifty years of the existence of the Social Security program, the federal government agreed with you – Social Security benefits were treated as non-taxable income. But, of course, the government’s ever-increasing need for tax revenue caused it to change all that in 1984, when up to 50% of a retiree’s Social Security benefits became taxable, and again in 1994. Now, up to 85% of a retiree’s Social Security benefits are considered taxable income.

What you may not know is that annuities can potentially help you reduce or even eliminate taxation of your Social Security benefits.

Here’s how it works. As a taxpayer, on line 20a of your form 1040, you must fill in the amount of the Social Security benefits you receive. That’s fine, but on line 20b, you must calculate and fill in the amount of the benefits that are taxable. Ideally, regardless of the amount on line 20a, you would like line 20b to be zero.

As usual, the mechanics of tax calculations can seem bewildering. After all, how you get from line 20a to line 20b takes up a full page in the IRS form 1040 instructions document. Fortunately, the fundamentals are fairly easy to understand.

First, you add up the following figures:

  • HALF of your Social Security income, plus
  • ALL of your other income, such as:
  • Wages
  • Pensions
  • Taxable interest
  • Dividends
  • Capital gains
  • Business income
  • And even otherwise tax-exempt interest, such as interest on savings bonds and municipal bonds

For married taxpayers, if this sum exceeds $44,000, up to 85% of your Social Security income is taxed. If this sum is between $32,000 and $44,000, up to 50% of your Social Security income is taxed. For single taxpayers, the two threshold income numbers are lower: $34,000 for 85% and $25,000 for 50% taxable benefits.

Naturally, the last thing you want to do is decrease your income just to decrease your taxes. The golden question is, “How can you earn more than these amounts yet shelter your Social Security benefits from taxation?”

The answer is to recognize a factor that is missing in the combined income formula you see above: Deferred annuity interest that remains in the annuity and is not withdrawn is not included in the above calculation!

Let’s see how this fact can affect you. Let’s suppose that you are retired and your income comes primarily from Social Security and pension income. Let’s also suppose that you have savings somewhere other than in an annuity, and even though you are not withdrawing any money from your savings, the interest income on that savings is causing your Social Security benefits to be subject to income taxes.

If you move that savings into a deferred annuity, then any year that you don’t withdraw money from the annuity, the interest you earned in the annuity doesn’t count in the above calculation. That reduces or eliminates taxes on your Social Security benefits. Pretty sweet, isn’t it?

Here’s the icing on the cake: when you put your money into a fixed or fixed indexed annuity, your money could easily be safer and/or earning a higher rate of interest than where you have the money today, so you win in two ways!

This article is for general information purposes only. We do not provide investment or tax advice. If such advice is needed, the advice of a qualified advisor should be sought.

Last Updated: 11/5/2010 9:50:58 AM
Insurance Made Easy
Research - Quote - Purchase

Contact Us
Eric Carlson
(800) 377-6344

© 2017 All Rights Reserved.