Digital Archiving Enters New Realms

Purchasing life insurance policies, drafting a will or an estate plan and securing your family’s financial well-being in the event you pass are some of the smartest things you can do. Nobody likes confronting the harsh truth that we won’t always be around to provide for our loved ones, but it is a fate you can protect against with proper planning and guidance. But what about everything else? Account numbers and passwords to pay bills, the deed to the house, keys to the safe deposit box, or the actual will itself, if these items cannot be located it makes life for your loved ones a little more challenging after you’re gone.

Everplans, a start-up company co-founded by Abby Schneiderman, has developed a digital archiving system to safeguard against these overlooked details. Everything from contact information for the gardener, to directions on how to care for pets, to treasured family recipes passed down for generations, all this “mundane” information, that seems to slip through the cracks when planning for life-after-death of a loved one, is gathered and stored in an online archive. Not to forget about all of the important materials, which are stored in the archives as well, such as copies of your will, health derivatives, beneficiaries and power of attorney. The client decides the amount and type of date collected so it can be as abundant or scarce as they wish.

The whole idea behind this product is making pertinent information readily accessible to the client, advisor and eventually deputy – the person you designate access to your archive – once you pass. It puts everything in one organized place, eliminating the stress and run around.

 

For a more comprehensive understanding of the product and the need for it, visit CNBC.

Basic 401K Tips

1. Contribute enough to get full employer match.

Many employers will match your 401k contribution up to a certain percentage – usually capped around 6%.Essentially, this is free money that you will benefit from come retirement. In order to qualify for the match, you must contribute a certain amount yourself. Yes, this might mean your paycheck is slightly smaller each month but the money comes from pre-tax dollars so there should not be a huge discrepancy. It’s better to give more now in order to have more later.

2. Utilize automatic increases.

Many will agree that your 401k contributions should equal to 15% of your annual income. (Remember, that percentage will vary depending on how early or late you begin saving in your career.) If you’re just starting out in your career, 15% can be a lot to contribute, especially when you have the burden of student loans and other big expenses. Therefore, start out around 7-10% but increase your contribution by a percent each year then on. You can set up for these increases to happen automatically at the beginning of the new year. That little extra money taken from your pay will hardly be missed but overtime will add significant value to your retirement savings.

3. Invest in stocks while you can.

Your 401k is made up of stocks and bonds, and while bonds are considered the “safe” option, stocks have historically proven a better return. Those who are just starting out have at least 30 years before they retire, therefore, they can be more risky with their investments because the stocks will have time to recover from any market fluctuations. As you mature in your career, it makes sense to slowly alter your investment portfolio to more bonds than stocks. Some plans actually offer this option, called a Target Date Funds, which will automatically invest your retirement savings appropriately according to your age, i.e. more stocks while you’re young and more bonds as you near retirement.

4. Know your vesting date.

Millennials are known for being job hoppers – staying an average of 2 years at a job. While companies are aware of this fact they are taking steps to prevent it from occurring so valuable time and resources are not wasted on their end as well as the employees. A 401k vesting period was established in order to encourage employees to stay with a company. Basically, an employee must work at a company, for a set number of years, in order to earn their employer match contributions to their 401k. While the employees’ contributions are untouched, the potential loss of the match can be devastating to their retirement savings.

5. Roll over, do not withdraw.

If you do leave your job, for whatever reason, before you retire, do not withdraw your 401k! When you withdraw from your 401k before age 59 ½, you are subject to not only income tax but also a 10% penalty. Instead, roll it over into an IRA or your new company’s 401k plan. You even have an option to keep it with your previous company and let the funds grow; you just can no longer contribute to it.

 

These are just a few tips to keep in mind when setting up, nurturing and growing your 401k. Make sure to consult your financial advisor and plan administrator for more in depth analysis and preparation.

Annual Company Retreat – Whitewater Rafting!

At GWE, we work hard to provide the best solutions for our clients’ needs. We research products, perform continuous reviews, align financial goals, and deliver on our promise to look out for the best interest of our clients. But even the best oiled machine deserves a little R&R. Once a year, GWE steps out of the office to take advantage of the beautiful summer weather and endless activities this area has to offer. This year, our firm took at thrilling whitewater rafting trip down the Potomac and Shenandoah rivers for our annual company retreat. We sure do know how to have a good time!

Financial Impacts of Same-Sex Marriage

In light of the recent Supreme Court decision, Obergefell v. Hodges, ruling that same-sex marriages be granted and recognized at the federal and all state levels, big implications can be taking effect on financial and life insurance services.

Previously, in 2013, the Court ruled same-sex marriages be recognized federally, however, each state was still sovereign in granting whether same-sex marriage be legal in said state. This new ruling, now giving all same-sex couples nationwide the opportunity to marry, is a huge progress for those who were denied certain financial and work place benefits. Same-sex couples who are not yet legally married will receive all the same benefits as hetero-sex couples but they will also incur all the not so glamourous consequences as well. Financial services professionals are encouraged to advise these couples of the pros and cons of marriage from a legal and financial standpoint. Intentions are not to discourage same-sex couple from marriage, but rather to exercise due diligence by presenting both sides of the coin. Below is a list of rights same-sex married couples will be granted.

  • Unlimited marital deduction for Federal (and possibly state) estate tax planning
  • Spousal and survivor benefits for Social Security
  • Married filing jointly status for Federal (and possibly state) income tax planning
  • State spousal property rights during lifetime (e.g. – community property) or after death (e.g. – election of spousal share
  • Spilt joint gift election for Federal gift tax purposes
  • ERISA protection as a spouse under pension plans
  • Other spousal rights under employer-sponsored benefit plans (e.g. – health insurance)
  • Survivorship insurance

 

One advantage of marrying is the ability to file jointly on income taxes. However, this could be disguised as a benefit because combining incomes can put you into a higher tax bracket. Additionally, if there are children involved, taxes will not be as forgiving filing jointly as it be would filing single and head of household. On the upside, same-sex couples will enjoy the unlimited gift tax between each other, tax free property via survivorship, rollover IRA’s, social security benefits, as well as health insurance and even visitation and information rights in a hospital setting. Many of these new tax benefits will impact life insurance policies, estate planning, and retirement planning. Your advisor will be able to breakdown the logistics for you.

Same-sex couples should education themselves on the implications of marriage and decide if it fits into their financial plan. It is important to note that these are the same implications for hetero-sex couples as well; therefore it is good practice for all couples to review and align their financials before marriage.

GWE 14th Anniversary!

On July 1st, there were a number of noteworthy events that occurred throughout history, including; the Battle of Gettysburg (1863), Canada declares its independence (1863), The Battle of San Juan Hill (1898), the first Sony Walkman goes on sale (1979), the PG-13 movie rating debuts (1984), and the return of Hong Kong back to China (1997). But another significant event took place on July 1st, 2001, when Scott Greenberg and David Wexler founded Greenberg, Wexler and Associates with two employees and one “associates.” Today, with Keith Eig added to the partnership roster, GWE has three partners, four associates, six phenomenal employees and three strategic partnerships. Our goal of providing objective advice, independent carrier representation, and extraordinary service has made us one of the top insurance brokerage firms in the country. We’d like to thank all of our clients and advisors who have helped us on our remarkable journey. We look forward to continuing to providing exceptional service and advice for many more years to come.

15 Common Reasons To Be Denied For Life Insurance

Applying for life insurance is a process and it all starts with evaluating your health and lifestyle choices. In fact, this is the most crucial part of the process because the results will determine your premium and more importantly if are even eligible for a policy. Life insurance companies want to make sure they are investing in reliable clients and your longevity is directly linked to this variable. So, before you start reaching out to companies for rates, consider these 15 basic reasons why people are denied. If you fall into any of these categories, you may want to reconsider your lifestyle before you move forward. Remember, qualifying for any of these reason will not necessarily kill your chances at a policy, you may just pay slightly higher for the coverage.

  1. Overweight or Obese
  2. Income Limitations
  3. Alcoholism
  4. Elevated Cholesterol, Lipids and Triglycerides
  5. Elevated Liver Function
  6. Blood or Protein in the Urine
  7. Hazardous Occupation*
  8. Hazardous Extra-Curricular Activities
  9. Drug Use
  10. Your Driving Record
  11. History of Cancer
  12. Previous Declines on Life Insurance Applications
  13. AIDS or HIV
  14. High Levels of Glucose or Blood Sugar
  15. Hepatitis

 

To read more about the logic behind these red flag factors click here.

*Forbes magazine’s top 10 deadliest jobs.

Have you reviewed your policy beneficiary recently?

On March 15, 2015, a New Jersey higher court ruled on a life insurance beneficiary case, Evanisa S. Fox v. Lincoln Financial Group and Mary Ellen Scarphone, in favor of the defendant based on lack of compliance to properly change the beneficiary of the insurer’s policy.

Evanisa, a Brazilian native, married Michael in July 2012 and shortly after he filed for both an I-30 petition for US citizen sponsorship and I-864 Affidavit for support agreeing to support her 125% above the poverty level. What Michael ignorantly neglected to do was change his life insurance beneficiary from his sister, Mary Ellen Scarphone, to his wife. As any drama would unfold, Michael unexpectedly died in a work-related accident a few months after he married Evanisa but just shy of her receiving US citizenship. Prior to Michael’s death, he failed to submit a change of beneficiary form to Lincoln Financial (his provider) or take any sufficient action to name Evanisa as his new beneficiary.

Both Evanisa and Mary Ellen applied for Michael’s life insurance proceeds and since he never changed the beneficiary, his sister, Mary Ellen, was rightfully awarded the policy claim. Evanisa filed a case against Mary Ellen and Lincoln Financial, stating she had rights to his life insurance policy urging courts to adopt a “bright-line” rule. She claimed that her marriage to Michael created a presumptive right to his life insurance benefits, just as a divorce would revoke those rights. Evanisa was ignoring the fact that life insurance policies are not as easily shared as they are discontinued. Only under very limited circumstances would a designated beneficiary, in this case his sister, be denied proceeds and granted to another. There are some states that do allow a “substantial compliance” in changing beneficiaries, meaning even though the insurer did not complete the process to change beneficiaries, they made every reasonable effort to do so.

Two criteria must be met to be considered substantially compliant:

  1. a clear expression of the insured’s intention to change beneficiaries
  2. a concrete attempt by the insured to carry out his intention as far as was reasonably in his power, i.e., undertaking positive action which is for all practical purposes similar to the action required by the change of beneficiary provisions of the policy.
    1. a. Verbal intent to change is NOT valid!

In this case, Michael did not meet either of those criteria; therefore, Mary Ellen was the lawful recipient of his life insurance policy.

In her final attempt, Evanisa tried to defend her case by using the I-30 and I-864 Forms as evidence to Michael supporting her and justifying the life insurance inheritance. This also did not hold up in court because the I-864 Affidavit for Support explicitly states at the time of application that the support is terminated if death occurs. Therefore, when Michael died, his estate was no longer responsible for supporting Evanisa.

This case is a reminder to continuously review and update your policies in compliance to your insurance company’s specified procedures. Marriage and divorce are two major events in a client’s life that unquestionably facilitate a policy review. Not to forget about the annual reviews that should occur at your policy anniversary date. Accordingly, agents have a due care obligation to inform and remind clients about beneficiary rules and other policy requirements. It is imperative to not become lazy with your policies, always telling yourself you’ll get around to it. If changes in your policy are desired, act now! Be sure to follow all procedures and compliance, first and foremost, putting it in writing. Contact your agent and get the ball rolling before it’s too late.

If you have a policy with us and are unsure about who your beneficiary is or just have questions regarding the process, give us a call. 301-656-0660.

Estate Planning of the Rich and Famous

Have you ever wondered what happens to the estates of the wealthy when they pass? Most would believe that they would protect their assets, in the form of a will, so their families and loved ones could benefit in the future. But it is not always that easy to do and requires meticulous language and perfectly drawn out instructions.

Unfortunately, for these familiar faces, their poor planning led to hardships and long disputes for their families to deal with long after their passing. Some of their stories seem bazaar, others are classic mistakes many people make when drafting a will and for one, there was never any will constructed in the first place. It is important to learn from these mistakes and make sure you have a full proof concise plan in place. Please take the time to read each of their stories below to ensure your legacy is protected for your loved ones in the future.

 

  • Chris KyleAmerican Sniper
  • Robin WilliamsComedian/actor
  • Mickey RooneyActor
  • Casey KasemRadio personality
  • Ernie BanksProfessional baseball player
  • Tom ClancyAuthor
  • Jim MorrisonRockstar
  • Ravi KumraSilicon Valley venture capitalist
  • Richard Mellon ScaifeOwner of Pittsburgh Tribune Review

Read here.

Life Insurance Regulation Focus

With the life insurance drama of the mid-1980’s to early-1990s, where many policyholders were falling victim of life insurance companies insolvencies, many regulations were put into action to counter these issues and make sure the insurance companies upheld their contractual obligations with their clients. Today, the life insurance industry is highly regulated; making sure their number one priority is on protecting the public from any potential insolvencies.

There are 7 main regulations that life insurance companies must adhere to:

  1. Conservative Reserves
  2. Conservative Capital
  3. High Quality General Accounting Assets
  4. Cash Flow/Liquidity Testing
  5. Restrictions Between Insurance Subsidiaries and Parent Holding Companies
  6. Insurance Company Financial Statement Reviews
  7. Mandated Annual CPA Audits and Periodic State Examinations

 

To learn more, read M Financials detailed summary here.

AALU Annual Meeting

The Association of Advanced Life Underwriters – AALU – Annual Meeting was back in town this past week and all three partners, Scott GreenbergDavid Wexler, and Keith Eig, were in attendance along with many other life insurance professionals from the M Financial Group community, including president, Fred Jonske.

This year’s agenda was filled with top keynote speakers, including Futurist Dr. Peter Diamandis kicking off on Sunday. Other speakers included Apple co-founder Steve WozniakBarbara Corcoran of television’s Shark Tank; Jason Dorsey, The Gen Y Guy; Governor Mitt Romney, former Presidential Candidate and Massachusetts Governor, and comedian/television actor Bill Engvall. There were also many informative Professional Development workshops and numerous opportunities to connect and network with other AALU members and meeting attendees.

AALU was founded in 1957 and has flourished into a lobbying, education, and networking resource for the nation’s top life insurance producers. Their mission is to promote, preserve, and protect advanced life insurance planning for members, their clients, the industry, and the general public. With over 2,200 insurance professionals as members, the annual meeting is seen as the premiere learning, networking, and advocacy event in the life insurance community.