How do you plan to pay for long-term care, and how much will it cost you?

Long-term care (LTC) is a type of care that is provided to people who have chronic illnesses or disabilities. It can include assistance with activities of daily living, such as bathing and eating, as well as skilled nursing care. LTC can be provided in a variety of settings, including nursing homes, assisted living facilities, and home health care.

The cost of long-term care varies depending on the type and intensity of services required, as well as the setting in which care is provided. In general, nursing home care is the most expensive type of LTC, followed by assisted living and home health care. The average cost of a nursing home stay in the United States is around $90,000 per year.

There are several ways to pay for long-term care, including private insurance, government programs, and out-of-pocket spending. Long-term care insurance (LTCI) is a type of private insurance that can help cover the costs of LTC services. LTCI policies typically have an age limit for eligibility and require policyholders to pay premiums on a monthly or annual basis. Government programs, such as Medicaid and Medicare, also provide financial assistance for LTC services. However, these programs have strict eligibility requirements that must be met in order to qualify for coverage. Finally, some people choose to pay for LTC services out of their own pockets. This option is often not feasible for most people due to the high cost of LTC services.

If you are thinking about purchasing a long-term care insurance policy, it is important to shop around and compare different policies before making a decision. Be sure to read the fine print carefully so that you understand what is covered by the policy and what is not. It is also wise to consult with an Insurance or financial advisor to get guidance on whether purchasing an LTCI policy makes sense for your unique situation.

Why is it important to understand zoning laws when it comes to opening your business?

Zoning laws play an important role in regulating land use and ensuring that businesses operate in the appropriate areas. When you're opening a small business, it's crucial to understand the zoning regulations in your area so that you can choose a location that is zoned for commercial activity.

Zoning laws can be complex, so it's a good idea to consult with a professional who specializes in commercial real estate. They can help you navigate the zoning laws and identify property that is zoned for your business type. In some cases, you may need to apply for a special permit in order to operate in a certain zone.

Laws vary from one municipality to the next, so it's important to do your research and make sure you are following all the regulations. Understanding zoning laws is an important part of opening a successful business. If you are in need of a referral to a commercial real estate agent, we’d love to help you.

What is the Medical Information Bureau (MIB), and what it means to you.

The MIB, or Medical Information Bureau, is a non-profit organization that collects and stores health information on behalf of its member insurance companies. MIB's records are used by insurance companies to help them assess an applicant's risk when determining whether to offer coverage, and at what premium. MIB members agree to share information in MIB's files, which helps to prevent insureds from fraudulently concealing their true health status when applying for life or health insurance.

While the MIB does not have access to your complete medical records, they may have information about previous medical conditions that you have been treated for, or that were discovered during a medical exam required for a life or health insurance policy. If you apply for life or health insurance and the insurer requests your MIB file as part of their underwriting process, you have the right to request a copy of your file from MIB. You also have the right to dispute any inaccurate information in your file. For more information about MIB and your rights, please visit their website at www.mib.com.

Estate planning checklist

Photo by Ketut Subiyanto

When you pass away, it’s important to have provisions in place that allow your family and friends to receive your money and possessions. That’s where good estate planning comes in. To ensure your loved ones receive your assets you’ll need to add a few things to your checklist.

Inventory your asset

Your estate plan starts with a catalog of your tangible and intangible possessions. 

Tangible assets

• Homes—condo, land or other properties

• Vehicles—cars, motorcycles, boats, aircraft

• Collectibles—comic books, trading cards, rare coins, art, etc.

Intangible assets

• Checking and savings accounts

• Certificates of deposit

• Stocks, bonds and mutual funds

• Life insurance policies

• Retirement accounts—401(k) plans, individual retirement accounts

• Health savings accounts

• Proof of Business Ownership

Once you’ve created your inventory you’ll need to estimate the value of each item, using appraisals, financial account statements, and other sources. 

Draft power of attorney

A power of attorney designates someone to manage your financial affairs if you’re medically unable to do so. Your designated agent can act on your behalf in legal and financial situations when you can’t. This includes accessing and managing your assets, as well as paying your bills and taxes. Without a power of attorney, a court may decide what happens to your estate if you are found incapable of managing it.

Create a will or trust

A trust allows you to designate portions of your estate to a trustee while you’re alive. Most trusts cover a specific asset, such as a piece of property, rather than your entire estate. A trust is often set aside for underage beneficiaries, who can only claim it when they are old enough to manage assets.

A will ensures your money and property are distributed to beneficiaries according to your wishes. Make sure the wording in your will is consistent with the way you’ve allocated assets in other documentation, such as insurance policies or retirement accounts, to prevent it being contested. Without a will, your estate will be left in the hands of state officials. You can have a lawyer draft a will or you can prepare a valid one yourself (although working with an attorney who specializes is a prudent idea), but you should have the document witnessed by two adults to prevent challenges to it. Any person may act as a witness to your will, but you should choose people who are not beneficiaries and have no stake in your choices. In some states, a will must also be notarized.

Choose a guardian for your children

A will or trust may include a guardianship clause, but if yours does not, you need to make sure you’ve selected a person to take care of your children should you pass away. Consider a guardian who has similar views to your own, has the finances to take care of your kids, and is willing to raise them. A backup guardian should also be named. Be sure to document how you want your children raised and cared for. Without a guardian designation, a court may rule that your children be taken in by someone you would not approve of.

Review your beneficiaries

Like wills, trusts, and power of attorney, if you don’t name a beneficiary, or the beneficiary is under age or dead, a court will likely decide what happens to your estate. People tend to forget who they’ve named on policies and accounts. Those beneficiary designations can often supersede what’s in a will. Don’t let your money and assets go to the wrong person. Make sure your beneficiary section is always filled out and name backup beneficiaries in case your primary beneficiary dies before you. Be sure to check your retirement and insurance accounts and update them if anything happens to the beneficiaries named.

Write a letter of intent

A letter of intent is a document of instructions for your executor or beneficiary. Letters of intent can provide funeral details, special requests, or directions for a particular asset after you die. This document is not considered a valid legal document, but it does help a judge understand your intentions, which will aid in the distribution of your assets.

Talk to a financial professional

To ensure your estate plan is in good shape, it’s a good idea to talk to a financial professional, attorney and/or estate tax professional who can help make sure you’re on the right path, help you navigate state regulations and inheritance taxes, and even work with you to create a sound estate plan. 

Does your employer-sponsored life insurance cover all your needs?

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Most people get life insurance through their employer because it's easy and convenient. All you have to do is sign up. You don’t have to take a medical exam, and you only have to fill out one form and name a beneficiary. The problem, however, is that the coverage you get through your work probably won’t be enough. To secure the appropriate amount of coverage for you and your family, it's vital to consider buying a supplemental or individual life insurance policy. Here’s why.

Why relying on your employer-provided plan might not be enough

Life insurance offered by your employer is often included as part of your overall benefits package. While some life insurance coverage is preferable to none at all, you may want to ask yourself whether or not relying just on the life insurance offered through your job is enough. There are some ways employer-provided life insurance may fall short, such as:

Limitations to coverage

While the coverage provided by your job may be low-cost, it might not offer enough coverage. The U.S. Bureau of Labor Statistics, for instance, found that the average life insurance benefit amount for flat-dollar plans in 2020 ranged from $10,000 to $25,000. If you are single with no dependents, this amount may be enough for you. On the other hand, if you’re married, have children, or own a home, or you’re planning for any of those things, that amount of coverage likely won’t go very far. There’s no one-size-fits-all amount, but various professionals in the life insurance space may recommend purchasing coverage that is several times your annual income.

Policy options may be restricted

Work life insurance policies are part of group life insurance plans, which are completely determined by your employer. This means you’ll likely have zero say in the details of the policy and you can’t customize it to fit your needs. You’ll also have limited coverage for a spouse.

Lack of control

Your employer can decide to drop its life insurance plan at any time. If they do, you may lose your coverage immediately, without any say in the matter. Your employer is the policyholder, not you, so you’ll likely find it difficult or impossible to talk to the insurance carrier.

Changes in employment

Your life insurance through your employer is tied to your employment status, so if you decide to leave your job, retire, or get laid off, you will likely lose your coverage. If you can take your employer-sponsored policy with you, you probably won’t receive the pricing benefits provided by the employer. This means you’d be paying more money for coverage that likely isn’t sufficient.

Should I consider an individual life insurance policy?

Forty percent of Americans are either without life insurance or are underinsured, according to Life Happens and LIMRA’s 2021 Life Insurance Barometer Study. Most people don't even realize that the coverage provided by their job may be insufficient. While employer life insurance is a great starting point, you must consider getting your own policy if you want to acquire the right amount of protection. Individual life insurance plans offer:

Get the coverage amount your need

Coverage through your employer can vary and often may not fully address your needs. Additionally, there are many different types of life insurance policies available to you and the policy options offered through your job could be very limited.

Affordable options

Many people feel that they simply can’t afford to buy additional life insurance. But the fact is, individual policies can often be affordable based on your budget. Certain term life insurance policies, for instance, can cost as little as $160 a year.

What are the different types of individual life insurance?

Purchasing individual life insurance can go a long way toward providing the kind of financial stability for your loved ones that an employer-based plan may not. There are a variety of choices worth exploring, but the two main options are term and permanent life insurance.

Term life insurance

Term life insurance has level premiums that last for a set number of years (the term). This life insurance generally includes a death benefit in the form of a lump sum of cash that’s paid out to a beneficiary by the life insurance company if you die while this coverage is active. This lump sum can be used for a variety of things, such as burial expenses, mortgage, and debt payments, living expenses for your family, or donations, generally tax-free. Additionally, you may have the option to convert your policy to permanent coverage before the term ends. After the term expires the policy may either terminate or automatically renew annually. If your policy is slated to terminate at the end of the term period, then in order to continue the coverage you may need to shop for a new policy.

Permanent life insurance

Permanent life insurance premiums are used to maintain the policy’s death benefit and may allow the policy to build cash value that can be borrowed by the policy owner, which is another great benefit of permanent life insurance. There is often a waiting period after the purchase of permanent life insurance before borrowing is permitted. This allows potential cash value to accumulate in the policy. But, after that waiting period expires you’ll have the option to withdraw potential cash value to help you when you need it most. If you have an emergency medical issue, for example, the potential cash value can be used to pay for health costs. Many policyholders also tap into potential cash value for other reasons such as building a fund for college costs or to help supplement retirement income, to name a few.

How to Choose A Beneficiary for your Life Insurance

Choosing a beneficiary is a very personal decision the outcome of which is dependent on your values and overall financial situation. The Insurance Information Institute states that your beneficiary can be anybody or anything you choose, including your spouse, child, trust, business, or charity.

Consider how losing your income would effect your spouse's financial situation if you died. Would he or she be able to support themselves? Benefits from life insurance can be used to pay for things like your mortgage, long-term debt, and of course, funeral expenditures. According to nolo.com, some states demand your spouse's approval to name someone else as your life insurance beneficiary so be sure to keep that in mind.

Do you have any children that are financially reliant on you? When you pass away, the proceeds from your life insurance policy may be utilized to assist paying for their college educations. However, the American Institute of Certified Public Accountants warns that minors (defined as those under the age of 18 or 21, depending on the state) cannot be listed as direct beneficiaries (AICPA). Instead, you might set up a trust in the child's name or assign the cash to an adult custodian. The AICPA suggests that the policy's beneficiary be listed as this trust or adult custodian.

You can name a charity as the beneficiary of your life insurance policy also if you wish. If you have a favorite cause or charitable organization, you can "gift" the proceeds from your life insurance policy to it after you die.

Further, you can divide your benefit in thirds amongst two children and a surviving spouse, for example. You must specify the amount or percentage of the death benefit that each beneficiary should receive if you choose multiple beneficiaries. According to the Insurance Information Institute, your insurance policy may limit the number of beneficiaries you can choose.

If you don't name a beneficiary, most life insurance policies will name a default beneficiary for you. Your estate is usually the default beneficiary, but it's a good idea to check with your agent to see who your policy's default beneficiary is. It is best to make sure all to begin with that you have named the beneficiary you want, as well as a contingent beneficiary, just in case something happens to you and your primary beneficiary at the same time. The death benefit would automatically default to the contingent beneficiary named. 

Married people usually choose each other as their insurance beneficiaries, but single people can choose anyone who is related to them or who might be financially dependent on them.

You may also be able to name a friend or partner with whom you are not married. Unrelated beneficiaries may, however, be required to have a financial relationship with you (i.e. sharing living expenses or rent). That's what is known as an "insurable interest.”

You can name your business as your beneficiary, or you and your business partners can name each other as beneficiaries. If something happened to you, your partner could buy out your share of the company, or your insurance proceeds might be used to fund the company while your heirs look for a new owner.

As you see, there are many different ways you can choose your beneficiary. It is always wise, to do annual reviews of your policy to be sure that who you originally named as beneficiary is still the person and/or organization you still want to be there. 

For more information regarding beneficiaries, please feel free to write or call us today. Thanks for your time. 

Funding Buy-Sell Agreements with Life Insurance

Photo by Tiger Lily

We understand the complexities of buy-sell insurance policies and we are here to help you protect your business, your assets and your family. One of the main concerns business owners have is what will happen if one of the owners passes away, how it will affect the business, the other owners, and the heirs.

In addition, surviving owners want to ensure continuity of ownership and avoid having a large stake fall into the hands of inexperienced heirs. They also want to protect their personal assets and the company's financial well-being.

Furthermore, owners want to make sure their families are financially secure and are fairly compensated in case of their death.

All of these concerns can be addressed with a buy-sell agreement. This is a contract between business owners that, upon the death of one of the owners, requires the remaining owners or the company itself to purchase the deceased's interest in the business according to the agreement. A deceased individual's heirs are also required to comply by selling the inherited interest at the previously agreed price.

FUNDING THE BUY-SELL AGREEMENT

There are a variety of options for funding a buy-sell agreement, but some are more risky than others. Owners may choose to save money and pay cash now or to take out a loan against the company's assets to purchase the shares of a deceased owner. Financially, both scenarios can pose a risk, both to the surviving owners and to the company itself.

Life insurance is the smartest way to fund buy-sell agreements. As a result, funds are available immediately when a death occurs, and the death benefit proceeds are generally tax-free. Also, the funds used to purchase the deceased's share are purchased for pennies on the dollar, and the premiums will likely be significantly less than the interest paid on the loan.

Types of buy-sell life insurance options include the following:

Entity Purchase Plan: With this type of agreement, also known as a stock redemption plan, the company purchases life insurance policies on each owner and names itself as the beneficiary. In the event of a business owner's death, the company is entitled to the proceeds of his or her life insurance policy and uses said proceeds to purchase the deceased's business interest, while the heirs are entitled to an agreed-upon payment for their interest in the business.

Cross Purchase Plans: An agreement between the owners is the basis of this type of plan. Every owner purchases a life insurance policy on the other owners, in which they will be named the beneficiaries. Each surviving owner receives income tax-free life insurance proceeds and uses those proceeds to purchase the deceased's business interests, while the heirs receive an agreed-upon payment for their ownership interest also.

As you see, there is a lot that can go into the proper succession plan of a business and there are various ways to plan for it. If you have further questions about how these life insurance plans work, please feel free to call or message us today.

MDRT Study: Families who seem financially stable may not be protected against potential risks

PARK RIDGE, Ill. (June 6, 2017) — About half of Americans (47 percent) say if they were to lose their primary source of income tomorrow, they could only maintain their current lifestyle for three months or less. A new study commissioned by the Million Dollar Round Table (MDRT) – conducted online by Harris Poll among over 2,000 U.S. adults ages 18 and older – finds that many Americans, even those considered financially successful, do not account for unexpected risks during financial planning.

Planning for the unknown
It appears that many American households are unprepared in the event of something unexpected happening to a family member, thus losing a primary source of income. A majority of Americans (61 percent) say their family would assume debt if they passed away tomorrow, with 38 percent of U.S. adults saying the debt would be $10,000 or more. Additionally, only half of Americans (50 percent) have life insurance. Of those who have any dependents, 47 percent say their dependents would run out of money without their personal income in two years or less if they were to pass away tomorrow.

“While these families with a steady source of income may seem prepared, they are jeopardizing it all by not having the right protection to ensure future financial security for themselves and their families,” said Mark J. Hanna, CLU, ChFC, MDRT President. Americans are also not taking in to account the possibility of disability or illness while planning for their financial future. One in 20 Americans (five percent) are unemployed and unable to work because of disability or illness, but only 20 percent of U.S. adults have either short-term and/or long-term disability insurance. Of those Americans who do have disability insurance, only 39 percent believe it would be enough to cover their long-term care and medical expenses if they were to have an accident.

Even financially successful families do not anticipate financial risks
On average, Americans say their household has two sources of income, with 40 percent having income of $74,000 or more.

“It’s not just lower income Americans who are vulnerable to financial strain in the event of a life-altering incident; families considered financially successful are also at risk,” added Hanna. “A financial professional can help identify potential risks and work with you to set up a plan that protects your family from these pitfalls.” Of the Americans surveyed:

• 70 percent have received some college education, are graduates or have a higher degree

• 62 percent are currently employed

• 67 percent are homeowners

• 80 percent have medical insurance

• 56 percent are parents

Saving for the climbing cost of college
College expenses are rising faster than inflation, yet only 36 percent of parents with children under the age of 18 in their household are saving for their children’s college education. Lack of college savings may be a result of many Americans still working to pay off their own student loan debt. According to the Quarterly Report on Household Credit and Debt from the Federal Reserve Bank of New York, Americans currently owe $1.31 trillion in student loan debt.1 For a high-resolution infographic that highlights the potential risks Americans face, please contact Tori Unger at TUnger@gscommunications.com.

Survey methodology
This survey was conducted online within the United States by Harris Poll on behalf of MDRT January 9– 11, 2017, among 2,192 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, please contact Tori Unger at tunger@gscommunications.com.

1 Federal Reserve Bank of New York, Quarterly Report on Household Credit and Debt

About MDRT
This year, MDRT celebrates its 90th year of delivering innovative ideas and generating empowered growth. Founded in 1927, the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 49,500 of the world's leading life insurance and financial services professionals from more than 500 companies in 70 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. For more information, please visit mdrt.org and follow them on Twitter @MDRtweet.

Brittany Lange
MDRT
+1 847.692.6378
blange@mdrt.org
@MDRTweet

Tori Unger
Gibbs & Soell, Inc.
Phone: +312.648.6700, ext. 2124
Email: tunger@gscommunications.com
@ToriKUnger

# # #

Buy-sell Agreements, why are they important?

Do you and your co-owners have a strategy in place to transfer your business to the right people, at the right time, for the right amount of money? That’s what a buy-sell agreement allows you to do. Having a buy-sell agreement in place can help protect the future of your business.

A buy-sell agreement is an important aspect of your overall exit strategy. It helps create a market for the business when an owner dies, leaves the business, or becomes disabled. When structured correctly and funded with life insurance, and or disability insurance, a buy-sell agreement can help provide a solid start to your business exit plan and the people who depend on the future of your business.

Some of the key protection benefits of a buy-sell agreement includes:

Co-owner: Co-owners of the business get protection by providing them the opportunity and funding to purchase the business interest of a deceased, disabled, or a departing owner.

Business: Protect the business by preventing and/or limiting transfers to parties that might be unqualified or undesirable, by requiring certain restrictions.

Continuation: Minimize conflicts among owners by setting the price and terms of a sale when an owner leaves the business. Depending on the growth of your business, you may want to have the business valued every couple of years or so to be sure the buy-sell agreement has the appropriate funding in place.

Estate: Fix the value of your business interest for estate tax purposes if the price meets the IRS guidelines at the time the agreement was signed. Also, be sure to consult your accountant regarding all tax related questions. The estate tax limits can change.

Family: You and your family can be protected by having co-owners buy your interest in the business for a set price and providing them with the funding to do that if you die, become disabled, or leave the business.

Thank you for reading. For more information about how a buy-sell agreement funding option can work for you, please submit your information on our contact page, or call us today!

Woodland Advisors, LLC Achieves Membership in MDRT

Woodland Advisors, LLC Achieves Membership in MDRT

Prestigious Membership is Exclusive to World’s Leading Financial Professionals

PARK RIDGE, Ill. (1/12, 2021) — Jason W. Woodland of Salt Lake City, Utah achieves membership in the prestigious MDRT organization, a coveted career milestone that offers the opportunity to share innovative ideas and best practices with other leading financial professional members. This is the 2nd year that Woodland achieves MDRT membership.

Membership in MDRT is a highly recognized mark of excellence and limited to only the most successful in the financial services profession. This places Jason Woodland among the top professionals in the global life insurance and financial services industry.

Members are provided career-shaping resources to better communicate and serve clients, as well as opportunities to broaden professional development. The exchange of ideas at MDRT meetings helps members gain new and unique insights to better serve clients’ individual needs. Working with an MDRT member connects clients not only to a highly credible and leading financial advisor but also to cutting-edge strategies.

“For more than nine decades MDRT has delivered access to innovative ideas to motivate members and help them refine their skills,” said MDRT President Ross Vanderwolf, CFP. “MDRT is committed to helping our members achieve inspired growth and personal success.”  

MDRT’s culture motivates the best in the business to share innovative ideas, concepts and techniques with each other. The exclusive tools and resources members obtain through membership help them to better guide their clients to beneficial solutions and provide their clients’ the greatest service. 

For more information contact Jason Woodland at 801-347-3408. 

About MDRT

Founded in 1927, Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 66,000 of the world's leading life insurance and financial services professionals from more than 500 companies in 72 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. For more information, please visit www.mdrt.org and follow them on Twitter @MDRtweet.

Contact Information

Jason W. Woodland

President, Woodland Advisors, LLC

jason@woodlandadvisors.co

www.woodlandadvisors.co 

Facebook: https://www.facebook.com/WoodlandAdvisors       

Giang Ngo

Media Relation Coordinator, MDRT

gngo@mdrt.org 

847-993-4928

@MDRTweet