Category Archives: Insurance Blog

Gift of Life from Grandma and Grandpa!

By Agnieszka Bastrzyk, Director of Marketing

A safer future

As a grandparent, you can help ensure that the grandchildren who mean so much to you will enjoy practical insurance benefits that can be a big help to them later in life.

Insurance: a caring and thoughtful gift for your grandchild

Like most grandparents, you probably enjoy buying your grandchildren gifts. But toys and other presents can only bring short term happiness. Why not consider a gift that can give your grandchildren an advantage for life and leave your legacy?

Help provide a lifetime of security with PRCUA permanent insurance

For less than it costs to buy a few toys a year, you could give your grandchild a much more heartfelt and long-lasting gift. Giving grandchildren a whole life insurance policy from the PRCUA is an affordable way to help protect their future security.

When you buy your grandchildren life insurance, you are giving them a powerful head start on their future. With whole life insurance, your grandchildren can receive lifelong protection regardless of any future changes in their health, hobbies, occupation, or any other situation that could prevent coverage from being approved. As long as premiums are paid, PRCUA’s whole life insurance policies also build “cash value” that your grandchild can borrow from or cash in if future circumstances dictate.

Purchase while premiums are low; Adult-size coverage with child-size premiums

Believe it or not, this gift of financial security can cost as little as $1 a day! That’s because your grandchild is eligible for low childhood premiums. Because premiums are based on your grandchild’s age at the time you submit your application, the sooner you apply, the lower the rates will be. You can start your grandchild with a whole life policy and lock in a low childhood premium that will never increase. Parents, grandparents, and permanent legal guardians may apply.

Purchasing this caring and lasting gift is easy

As a grandparent, you can apply for this gift yourself. There are only a few simple questions to answer to request a free, no-obligation quote. After approval, you’ll receive all the information you need to decide if a PRCUA permanent insurance certificate would make an important contribution toward your grandchild’s future security.

145 years of PRCUA history

As the oldest Polish organization in the United States, the PRCUA has been serving its membership since 1873, helping grandparents just like you provide the loving gift of whole life. Once you purchase whole life insurance for your grandchild, they immediately become a member of PRCUA with access to our member benefits, such as ability to participate in local Polish language or dance schools, sports tournaments, educational scholarships and loans, and much more!

Learn more about the ways that a whole life certificate through the PRCUA can give your child an advantage for a lifetime.

Sample quotes for a 5 Year Limited Pay Whole Life certificate:

A variety of plans and insurance amounts for children and adults are available for every budget!
Ask about the PRCUA Family Plus Plan and possible 10% off premiums.

Contact us today to receive a quote for your grandchild! 1-800-772-8632 ext. 2631 or 2632.

Feel good knowing that you have helped secure their future.

2017 IRA Contribution Deadline Quickly Approaching!

By Agnieszka Bastrzyk

The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

Don’t let taxes sneak up on you this year.

This also means that the final deadline this year for making a 2017 IRA contribution is April 17theven if you plan to extend your 2017 tax return.

You may be able to claim a credit for contributions to your traditional IRA.
If you plan to make an IRA contribution for 2017 anytime after January 1, 2018 (but before April 17, 2018), be sure to clearly state whether the contribution is for the 2017 or 2018 tax year. If you do not specify which tax year the contribution applies to, it may be considered to apply to the year in which it was received – i.e. 2018.

Taxpayers will be able to track the status of their refunds using a “Where’s My Refund?” tool on the www.IRS.gov web site.

2017 and 2018 Combined Traditional and Roth IRA Contribution Limits – Information from IRS.gov

If you are under 50 years of age at the end of 2017 – the maximum contribution that can be made to a traditional or Roth IRA is the smaller of $5,500 or the amount of your taxable compensation for 2017. This limit can be split between a traditional IRA and a Roth IRA, but the combined limit is $5,500.

If you are 50 years of age or older before the end of 2017 – the maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,500 or the amount of your taxable compensation for 2017. This limit can be split between a traditional IRA and a Roth IRA, but the combined limit is $6,500. 

Our competitive annuity portfolio can be viewed online: PRCUA.org/annuities

Contact a PRCUA Sales Representative or call 1-800-772-8632 ext. 2631 or 2632 now to open or contribute to an Individual Retirement Account (IRA) annuity. The minimum amount required to open most PRCUA Traditional or Roth IRA annuities is only $300.

 ** Please contact your tax advisor for more information regarding tax law changes or if you have questions regarding this year’s IRS deadline to file Federal tax returns and to determine which type of IRA would best fit your financial situation.

Financial Goals & Life Insurance

Written by Anna Marrah

2018 has kicked off and many of us are committing ourselves to New Year resolutions and goals. Financial goals, such as paying off debt, building your credit score, or starting a Roth IRA to begin saving for retirement, are incredibly important objectives to set. One financial cornerstone that you may not have considered a worthy goal is life insurance. However, this is a truly vital financial tool that should not be overlooked when resolving to build your financial portfolio.

Why should life insurance be a financial goal?

Cash flow and the monetary nest you build often steer how you and your family live life. Your income sets your life-style. As your net wealth grows, larger and larger risk is introduced to your way of life. Think about it – if your cash flow suddenly vanishes, the world you have built vanishes too.

This is what often happens to uninsured families after the unexpected loss of the bread winner. Their cash flow stops and the painstakingly built savings deplete in the face of funeral, legal, and living expenses. Savings could dry up entirely before the family has managed to find another source of income. Coupled with the loss of a beloved family member, this loss of stability and financial security can be devastating to families.

Your family needs a financial safety net.

The proper life insurance coverage is there to protect you and your family from the giant “what ifs” of life. It is the safety net that protects your way of life when it is threatened by tragedy and loss. This makes it of huge importance to have life insurance as a financial cornerstone, supporting your carefully built nest egg and providing protection for your real treasures.

As your family grows, as your financial wealth increases, so does your need for a safety net. Insure your family’s way of life, insure your financial stability, by making proper life insurance coverage a prominent financial goal for 2018.

 

 

Whole Life Insurance – 5 Reasons to Consider

By Robert Fattore, PRCUA Director of Sales

As a licensed life insurance agent, I can tell you that the single biggest attraction to life insurance is the general income tax exemption. Life Insurance benefits, paid to the beneficiary, are always tax-free.

Life insurance should be a foundation of any serious financial, retirement, or estate plan, but it is not used nearly enough, According to LIMRA’s 2016 Trends in Life Insurance Ownership study, more than 37 million American families are completely uninsured and at financial risk if their primary wage earner dies unexpectedly. In this blog, I’m focusing on permanent or what is also called Whole Life Insurance. We will discuss term insurance at a later date.

The Advantages of whole life insurance are:

  • Guarantees lifelong protection as long as premiums are paid
  • Generally, premium costs are fixed
  • Develops cash values, which can be borrowed against; loans must be paid back, otherwise death benefit will be reduced by the amount of the loan balance at time of death
  • Cash values can be surrendered, in total, or in part, for cash or to convert to an annuity
  • Cash values can be used to pay future premiums or provide paid-up insurance
  • Generally dividend participating – can be used to reduce the amount of future premiums needed or purchase additional paid-up insurance

Disadvantages:

  • High initial premium levels may make it hard to buy enough protection
  • Is more costly than term

But besides the tax free death benefit, here are five points for considering whole life insurance to enhance long-term financial security.

  1. Life insurance is a good asset.

Most people have their retirement savings in IRAs and 401(k)s. These plans are completely opposite of life insurance because they are tax-deferred. The tax will one day have to be paid, creating a growing debt on these retirement savings.

This makes traditional retirement accounts an inexact and lessening asset over time. Replacing these accounts gradually with whole life insurance can turn these tax-deferred funds into tax-free savings. People should consider a program of systematic IRA withdrawals to decrease their IRA balance and direct those funds into permanent/whole life insurance.

The tax on most IRAs will have to be paid beginning at age 70 ½ so it may be attractive to deal with this now.

  1. Life insurance is an investment, not an expense.

People will say life insurance costs too much. But most don’t know over time it can be an attractive asset. Moving funds either from IRAs to permanent life insurance is not an expense; it’s an investment into a better long-term asset. Yes, if the funds are withdrawn from an IRA, there will be a tax to pay, but that tax will have had to be paid at some point anyway.

Once the funds are in a permanent/whole life insurance policy, they are simply located in a different and far better long-term asset than an IRA or 401(k). The funds in the life insurance policy remove the tax risk in most instances.

  1. Life insurance has lifetime benefits.

Most think of life insurance for the death benefit, but many don’t know about the powerful lifetime retirement and tax benefits. Funds in a permanent life insurance policy can double as a retirement savings account, but without the worry about what future tax rates will be.

If these funds are needed in retirement for nursing home issues, medical bills or other unexpected event, they are accessible, generally tax- and penalty-free. That is a big deal, because funds in an IRA, that are distributed would be taxable (in a traditional IRA).

Accessing funds from a life insurance policy are tax-free (up to cost-basis i.e., what you paid into the life product; and thereafter if taken as policy loans against the tax-free death benefit) so they don’t increase income. The withdrawals keep taxable income and taxes lower in retirement. These are valuable lifetime benefits, in addition to the death benefit.

  1. You get more control with life insurance.

IRAs are subject to annual required minimum distributions (RMDs) after age 70 ½, whether the money is needed or not (Roth IRAs are exempt from lifetime RMDs). This causes forced distributions and additional taxes, though the client may not need or want to withdraw those funds.

These forced withdrawals remove the control aspect, while withdrawing from the value in a life insurance policy can be done at any time, or not. Clients control retirement savings in a life insurance policy.

  1. Leverage is a powerful tool for wealth creation.

Life insurance creates more long-term wealth than any other investment. And because this wealth is income tax-free, it is much more valuable than tax-deferred retirement savings that are at the mercy of future higher tax rates.

It’s the leverage that creates the wealth. Life insurance is the only investment where one dollar can do the work of many dollars and the result is guaranteed and generally tax-free. For example a 40 year old male that has $10,000 can get a life insurance face amount of over $36,000, almost $3.60 of life insurance for every one dollar paid.

Taking the same funds that were in an IRA and investing them (after-the tax was paid on the IRA distribution) in a permanent/whole life insurance policy, would produce many multiples of that original IRA balance, and it would be generally tax-free, not only for use during life but especially if there were an early death.

These are only five considerations, but they need to be known to non-life insurance people, like many, and better understand the power and security of an investment in whole life insurance, for life and beyond.

True Costs

When it comes to life insurance, people offer a lot of reasons as to why they don’t have sufficient coverage. The expense of premiums is the number one stated reason why Americans are either under insured or don’t have life insurance at all. However, a 2015 study asked participants to estimate the cost of life insurance and the findings were astounding.

According to the study, 80 percent of consumers misjudged the price of term life insurance. Breaking that number down into demographics, Millennials overestimated the true cost of life insurance by 213 percent and Gen Xers, by 119 percent.

This is a huge number of people with a grossly inflated idea of premium costs. Unfortunately, with this many people overestimating costs, there are consequences. In this instance, the result is that the majority of Americans do not have the insurance coverage needed to protect their families.

This study also discussed the two road blocks that stand between consumers and the coverage they need. The first road block the study indicated was simply priorities.

  • 29 percent of Millennials cited saving for vacation as a priority over purchasing life insurance;
  • 23 percent of Gen Xers said paying for recreational activities, such as going out to eat, going to the movies, or shopping, was a priority over purchasing life insurance;
  • 49 percent of seniors and 60 percent of Millennials cited paying for expenses such as Internet, cable, and cell phones as a priority over purchasing life insurance.

The second road block discussed is a lack of financial literacy in regards to how life insurance premiums are determined. Understanding the pricing mechanisms allows consumers to take simple steps to lower the cost of their policies. Healthy living, lifestyle choices, and purchasing coverage in younger years can all lead to savings.

 

Premiums Grow as You Do

Your child probably doesn’t need insurance at the moment. After all, she doesn’t add to the family finances and she doesn’t have loved ones relying on her for financial support. But there are still some good reasons why purchasing a life insurance certificate for her might be a good idea.

The growing costs of premiums is the biggest thing to take into account when considering a certificate for your child. As a person gets older, the risk level associated with the consequences of age increases and so do life insurance premium costs. The older you are, the more expensive it gets.

However, if you purchase a Limited Pay Whole Life certificate for your child while she is still young, you will be giving her coverage for her entire life. It doesn’t have to be a large certificate, just enough to cover expenses in the event that they pass away.

Financially this offers your child some worthy benefits. A whole life certificate can be borrowed against if funds are tight and, as the certificate matures, it grows in value due to dividend participation. Purchasing a certificate early also saves your adult child from having to pay much higher premiums for the exact same coverage when they do reach a point in life that they need life insurance coverage.

The other big thing to consider is your child’s health. Hopefully, they are healthy for many years to come and experience no serious health problems during the course of their life. However, if health problems do develop, it may make life insurance unattainable. Purchasing a Whole Life certificate before health issues emerge will guarantee that she has at least a little coverage. After all, everybody needs a little life.

Life insurance is a gift to your family, to the ones you love most. Don’t wait until it’s too expensive or you’re uninsurable to try and get coverage. Call PRCUA today for a free quote and to learn about the great fraternal benefits that accompany a PRCUA certificate.

Using Insurance Riders to Customize Your Policy

As a life insurance agent, I meet and speak with people in all sorts of unique situations. Each one strives to protect their family and it is my job to assist them in finding the right plan with the right features. Some of the most beneficial features I help people analyze are the available insurance riders.

Although regularly overlooked, riders on life insurance plans are often the best way to adjust and customize an insurance plan. They allow the client to protect their family in the most efficient way. Riders are benefits that may be purchased to supplement the core plan. Below are some of the best riders to take into account when purchasing life insurance:

  • Accidental Death Benefit (ACD): An accidental death benefit is a rider which adds an additional death benefit to the original face amount. The plan pays that additional amount if the insures dies within 90 days of an accident that caused injuries resulting in death.
    • When I like to suggest this rider: This is a great rider for younger clients because it is very inexpensive and covers the risk of their most likely cause of death. In most cases, this rider is able to double or substantially increase the face amount for a fraction of the initial premium. Life insurance is all about the risk and if the most threatening cause of death for a younger person is an accident, it makes sense for younger individuals to utilize this option.

  • Waiver of Premium (WP): This rider waives all future premium payments in the event that an insured becomes totally and permanently disabled. As for most families that I have spoken with, disability due to a disease or bodily injury would cause immense financial stress. This benefit can ease that stress by relieving the family of continued premium payments while still ensuring the family has coverage.
    • When I like to suggest this rider: This rider is one I often suggest to families that rely on one individual to provide the main source of income. If they would happen to pass away, their death and the lack of a steady income might bring a family to a financial ruin. People often don’t consider that the same could happen if the household breadwinner is unable to work. The chances of becoming disabled are much higher than death in most instances, so providing another layer of financial protection is beneficial to these families.
  • Guaranteed Insurability Rider (GIO): With this rider, the insured has the option to purchase additional Whole Life insurance on specific future dates, without further underwriting. As we age, our health deteriorates and insurance needs may change. It can be very difficult to imagine yourself in a poor enough health that further insurance is no longer an option. This rider ensures that no matter what your health is like, there is always the choice to protect what you care about most.
    • When I like to suggest this rider: I like this rider for families expecting a future need for more coverage. A great example of this is a young married couple I spoke to. They wanted to have children in the future, but did not necessarily want to outright commit to getting a bigger policy before children were in the picture. This rider allowed them to have the option of purchasing more coverage without going through the underwriting process when their insurance needs increased.

Having the opportunity to speak with clients to help them understand life insurance has always something I enjoy. Life insurance is composed of many flexible elements, such as riders. When combined appropriately, these elements greatly contribute to making your life insurance decision the most customizable and beneficial for your family. For over 140 years, the PRCUA has been devoted to positively contributing to that decision. Call us today at (800) 782-2600 and let our PRCUA family protect yours.

 

By Rafal Ciolkosz

How To Budget For Life Insurance

When looking into purchasing Life Insurance, it is important to have an idea of what premium amount would comfortably fit into your budget. This will help you decide between Term Insurance and Whole Life Insurance and will also help you make sure the premiums will not stress your finances. One of the best ways to figure out what money you could safely spend on Life Insurance is to work out a personal Cash Flow Statement.

A Cash Flow Statement is a financial accounting tool used to track and balance income and expenses on a monthly basis. This is a tool that is not difficult to use and is incredibly helpful when making financial decisions. See the example below.

Click HERE to download a free, basic Cash Flow Statement worksheet from the PRCUA.

In order to complete a statement, you will need last month’s pay stubs and bank and credit card statements. This information will be needed to complete the three main sections of the statement – Income, Fixed Expenses, and Variable Expenses.

  • Under the Income section, you will list your monthly salary, bonuses or commissions, child support payments, rental income, and Social Security or Welfare payments. Basically any money, even monetary gifts for holidays, would be listed in this section.
  • Fixed Expenses would be listed next. These expenses include any bills that remain the same from month to month. Your rent/mortgage, daycare expenses, and insurance premiums are great examples of this type of expense. This section of the Cash Flow Statement will not typically change if the spreadsheet is completed on a monthly basis.
  • Variable Expenses are ones that fluctuate from month to month. The amount of money spent on groceries, electricity, entertainment, and clothing will almost always shift each month. This part of the statement may require a little bit of time to complete, this is time well spent in order to construct and protect financial health.

To help save you some time and make the process easier, click HERE to download a free, basic Cash Flow Statement worksheet from the PRCUA. Each section can be altered to include the income and expenses that are applicable to you.

Once you’ve completed the Cash Flow Statement, look at the left over funds available and decide how much of that amount could comfortably go towards a Life Insurance premium. It should still leave cash left over to be saved and invested. With that number in mind, call us today at (800) 773-8632 and ask for a quote that works with your budget.

Final Expense: A Policy For Everyone

What if you are retired or nearing retirement and you do not have life insurance? You may think that you will no longer qualify, due to age or health. However, this is not necessarily the case. Final expense insurance is a form of life insurance that requires little or no underwriting, which means almost anyone can qualify. Policies are available in face amounts typically ranging from several thousand dollars up to a maximum of $25,000-$50,000—much less than a standard life insurance policy. This is because these policies are only intended to cover final expenses and small legacy wishes; they are not meant to address longer-range expenses like ongoing living costs or college and retirement funding.

Final expense insurance typically comes in two varieties. The first type is the immediate full benefit policy, which is generally available to people with no serious health concerns. This type of policy pays the full face value to the beneficiaries immediately upon the insured’s death, even if the policy has only just been bought. The second type of final expense insurance is the graded benefit policy, which is available to people with serious health concerns. This type of policy provides the insured with limited or no benefits during the first few years, but will pay 100% of the death benefit after the policy has been in place for a specified number of years. If the insured dies before the time has elapsed, then the beneficiary will still receive a return of premiums.

These policies can provide the peace of mind, knowing that your survivors will not be left struggling to pay for your funeral or with outstanding medical bills or debts. To find out more about these life insurance products and to inquire about coverage, call your local PRCUA agent or the home office.

 

Life insurance is not a mystery, it’s a necessity

The topic of life insurance doesn’t have much going for it. First, it’s about insurance, which many find boring and complicated. Second, it can involve paying money for something you may or may not use depending on whether its Term insurance or Whole/Universal life.

And, it’s about death.

Those are difficult hurdles and probably among reasons why many surveys show many of us are vastly underinsured when it comes to life insurance, which might better be called “income insurance” because its primary purpose is to replace income from the family breadwinner.

“Selling life insurance is an uphill battle,” said Byron Udell, CEO of online life insurance broker AccuQuote.com. “It’s not a product that’s fun to buy.”

But life insurance should be a fundamental part of financial planning for those who have others relying on their income like children and a spouse.

Yet 2013 statistics show ownership of individual life insurance policies is at the lowest level in 50 years, with only 44 percent of households owning them, according to the insurance industry group LIMRA. And 86 percent of people say they haven’t bought life insurance because it’s too expensive, yet they overestimate its cost by more than two times, the group found.

A national survey commissioned by New York Life Insurance Co. recently found that Americans’ gap in protection worsened considerably since the Great Recession. Americans say they want enough life insurance, on average, to cover expenses for at least 14 years after the loss of a breadwinner. But they have only three years of protection in place.

“It’s no surprise that Americans are underinsured. What did surprise us was the magnitude of the gap and the fact that it has grown so dramatically since 2008,” Chris Blunt, co-president of the Insurance and Agency Group of New York Life, said in releasing the results.

Also concerning is what the survey found about Americans’ perception of what life insurance is for. A majority said the top reason for buying it was to cover funeral expenses, but paycheck replacement is far more important.

The good news for consumers is, the basics of life insurance continue to apply. “The beauty of life insurance is that it’s not a fast-moving industry,” said Amy Danise, editorial director for Insure.com. “Unlike health insurance, where what you know one month is wrong the next month, life insurance advice is consistent.”

Contact your PRCUA insurance agent to first find out how much you need then you can work your way into a solution that will help address this need. PRCUA has a variety of plans to help you achieve your goal.