Life Insurance Planning: What to consider in 2023!

There is one thing you can always count on in this world: CHANGE.                                                                                                                              With our ever-evolving lives, new products, and laws that come into effect every year, those thinking about purchasing a policy, may be better off doing so in 2023 rather than waiting longer. Every change has a huge effect on our needs and on the decision-making of purchasing a life insurance plan.

Life insurance is one of those things that we all know we should have, but very few actually follow through with it. Let's get into some of the details about what you should consider at the start of this year. If you're considering getting life insurance, now is the time to take action.

New potential California state tax:

Like many other states, California has a Task Force, which will make recommendations on a state Long Term Care Insurance (LTCI) tax. This tax will mimic the social security setup, so individuals will be taxed based on their income, contributing to some form of long-term care help if needed, at an older age. This option would be very limiting, being that it'll give the services of long-term care at a cap of  $4500 a month, up to 18 months alone. Let's ask ourselves; what happens if you need more than 18 months? Or more likely, what if you need more than $4500 a month?

The good news is, you can choose to opt out of this tax, by purchasing a long-term care insurance plan which fits your needs.  However, those choosing to do so would need to move quickly, and have an LTCI policy in place before the end of this year, in order to avoid paying the tax. There is no word yet on what the tax rate based on an individual's income would be. There are many other benefits to Long term care insurance. 

Government health program funding gaps:

The economy is in a continual state of fluctuation. The U.S. has become more deeply indebted to other countries. Therefore, government health and retirement programs like Social Security are experiencing funding gaps. This means, these programs are not what they used to be, and one shouldn't solely rely on them. They will not provide the financial security needed for retirement or for care.  As a result, it's important to consider the long-term implications of your investment decisions. There are great financial products that will secure your family's future, and/or fund a comfortable retirement. Speaking with a finance professional can help steer you in the right direction...

Others that rely on you financially:

We know you're probably thinking about this one. Not just because the new year is upon us, but because you want to make sure your loved ones are taken care of in case of a life-threatening incident. And it's not just about having life insurance—it's about having the right kind of life insurance. There are many life insurance scams out there, so make sure to get yourself a great life insurance broker to help you. You will find that there are great products out there that can help secure your future. Make sure to do your research so that you are informed about the life insurance options out there.

Buy cheap invest the rest:

This has been a life insurance slogan for many over the years but may have lost its appeal for some. What it means is, people would buy a cheap life insurance plan and invest the rest in whichever investment they chose. This way they would have direct control over their investments and more growth opportunity.  A term policy is a great option when one is young and money is tight, but as one gets older premiums significantly go up in price and one's needs change.  A better option would be to purchase a plan that would allow one to convert it to a whole-life plan at a more affordable rate. The other perk to such a plan is that no additional health exams would be needed when choosing to convert the plan, as they use the previous health information from the initial plan purchased. 

Repositioning non-qualified retirement funds:

We keep hearing about inflation! Prices are rising and the purchasing power of money is falling, so the same amount of money is worth less than it was before. You may have money set aside in savings or investments to self-fund your long-term care costs, but you may sacrifice growth opportunities or risk exposure to equity market volatility. Many people turn to traditional long-term care insurance; however, it's a use-it-or-lose-it situation. 

The good news is, with Forecare by Global Atlantic, you can double or triple the amount you have available for long-term care coverage.  Another great value is: qualified long-term care withdrawals are typically tax-free.  And, if you don’t use your contract value for long-term care benefits, you don’t lose your money. Any remaining contract value passes to your beneficiaries as a death benefit. Now is a great time to reposition your retirement funds! 

According to LIMRA, 52% of Americans had life insurance in 2021. Of those insured, 40% wish they had purchased their policies at a younger age. If you haven’t yet secured life insurance, Don't Wait! It’s one of the most caring things you can do for your family and loved ones.