Have you heard of the term “Final Expense” life insurance, wondered how this product differs from traditional insurance coverage and if this affects you? It is important for you to know the difference in order for you to make the best decision when it comes to protecting your family and loved ones.

Being somewhat self-explanatory – “Final Expense” life insurance covers the cost of your final expenses... as in funeral expenses, medical bills or wherever it is needed most when you die. The main difference between final expense and traditional life insurance is a final expense product is NOT designed for income replacement. These type of policies simply do not have large enough coverage amounts. Many experts recommend having 10 -15 times your annual salary in life insurance coverage.

Since simplified underwriting is generally done for this product, final expense life insurance can be the answer when you may not qualify for traditional term life insurance.

Keep in mind the general purpose for final expense products... are for final expenses, which in turn means the typical maximum face value for these products are $25,000.

For those of you who are older and whose families do not depend on you for financial support, this product is for you. --- But, also keep in mind, if you are not able to qualify for traditional term coverage, and qualify for this smaller face value product....Having SOME life insurance is always better than having none. If you are healthy, young and have family to support, a Term Life product is what you are looking for.

 FREE “Final Expense” brochure

3 ways to incorporate the two together – and put you ahead.

When setting your retirement goals, have you thought?... “If I should die before those, who depend on me... will there be enough savings for them? “

Here we will understand importance of incorporating life insurance with your retirement plan in order to give you and your family the comprehensive safety net in the event of premature death or disability. As stated on the LIFE Foundation blog: “A retirement plan without insurance is just a savings and investment program that dies or becomes disabled when you do.”

Prevent your retirement plans from dying when you do. If you die before retirement, your survivors would miss out on both your salary for living expenses and the money you were setting aside for the future. People who die prematurely haven't had as much time to put together an investment program that can really pay off. If you have sufficient life insurance, it can help pay your family's expenses and may still be there for your spouse's retirement.

Supplement your retirement income. Suppose your circumstances change and you no longer have anyone who would need the proceeds of a death benefit. With a permanent life insurance contract, you have the flexibility to surrender the policy and supplement your retirement income with the funds that have accumulated in the policy's cash value account.

Preserve your estate assets for your survivors. If you've accumulated a large estate, life insurance can help foot the estate tax bill from Uncle Sam, preserving assets for your heirs. Or, if your estate is more modest, life insurance can provide a legacy for your children and grandchildren even if you use up most of your assets during your retirement years.
 

Read more about major life events and factors affecting your life insurance needs at the LIFE Foundation
 

Learn more about Term Life & Retirement options below or call: 800-541-5858

Related Topics:

Guidelines – Why Life Insurance

Why do I need Life Insurance

Life Insurance

Retirement Planning

Instant Term Quote

An investment account in which both contributions and growth are tax-deferred. Such as, 401k, Keogh plans and deductible IRAs. 
 

Tax-deferred: an investment account in which some or all taxes are paid at a future date.

• Tax-deferred investments, particularly refer to retirement accounts which allow deferral of taxes on contributions, growth or both. Upon withdrawal of the funds (usually during retirement) taxes are then paid

401k: a retirement plan offered by a company to it's employees. Main feature is the tax-deferred contributions and growth. The company may also provide matching contributions.

Keogh: a retirement account offering tax-deferred growth. Utilized by people who are self-employed or are employees of a non-incorporated business.

Deductible IRAs: Individual Retirement Account. One of the several types of retirement accounts allowed by the IRS to provide tax-deferral or other tax advantage. The three types of these IRAs available are:

Inherited IRA aka: Beneficiary IRA
 

An Inherited IRA is an individual retirement account (IRA) that is left to a beneficiary after the owner's death and usually are received from a parent, but can be from anyone other than your spouse.

IRAs are among the largest assets left to beneficiaries. Since Inherited IRAs are specifically designed for IRA beneficiaries, they offer an opportunity to continue tax-deferred growth of inherited assets. Generally speaking it is better to leave the money within the IRA as long as possible to continue the deferred taxation status.

Losing a loved one can be an incredibly difficult time, and having to deal with financial issues during this hard time is something none of us want. But the question remains: What should I do with an Inherited IRA? Since the responsibility is now yours... as in the earnings and future payouts now belong to you along with the taxes due are now your responsibility as well. A couple options you will need to consider are:

1. Close the account and take the money in a lump sum. Keep in mind, if you do so you will owe taxes immediately.

2. Roll the inherited IRA over into your own IRA, if that turns out to be a possibility for you to do, it would be the more efficient option.

As the beneficiary your options will vary depending on the status of the inherited IRA and generally depend on whether the IRA owner dies before or after April 1^st of the year following the year in which he or she turned age 70½.

Since this can be very confusing it is best to have some guidance from a qualified advisor before making such decisions.

Related topics:

What is a Rollover IRA?

What is an IRA?

A Rollover IRA is one of the several IRA types available. The Rollover IRA is used to hold funds from a company retirement plan (401k plan) after you leave the company. There are different ways to invest the money in a Rollover IRA and there is no limit on the amount of money you can rollover. 
 

Rolling over your 401k plan into a Traditional IRA is a key financial step you when you change jobs or retire. Rolling over a 401k plan can be tricky for some people if they are not careful, because if the money does not roll over correctly and end up in your hands you can be penalized heavily.
 

Eligible distributions from such plans can be rolled over directly into a NCL Traditional IRA without incurring any tax penalties, and assets remain invested tax-deferred. Consolidation multiple employer-sponsored retirement plans into a single Rollover IRA can make it easier to monitor your assets and gives you the freedom to be able to convert to a Roth IRA at a later date.

When rolling over your 401k make sure to have qualified guidance. Rolling over a 401k can easily be accomplished along with avoiding potential penalties and taxes.

More IRA information

IRA – Individual Retirement Account

IRA's provide a tax deferred or tax-free way of saving for retirement.

Traditional IRA: Your money grows tax-deferred until you withdrawal it from your account. Growing tax-deferred gives you a tax deduction which in turn reduces your taxable income. Basically you are not paying tax on the income you set aside in a Traditional IRA. This means you will not have to include interest, dividends, or capital gains from your IRA in your annual income.

Now when you decide to make a withdrawal, funds will be subject to regular income tax, as this is now considered ordinary income. Additionally if you withdrawal before age 59 ½ a 10% penalty will be included to the income tax taken at the time of withdrawal for early distribution.

Another age requirement is a minimum distribution must be taken after age 70 ½.

Roth IRA: Give more flexibility but are not tax-deductible. Contributions can be withdrawn at anytime without penalty or tax, along with eliminating the need to take a minimum distributions after age 70 ½ as the Traditional IRA does. Disadvantage is you do not get the income tax deduction when you contribute to the Roth IRA. There is adjusted gross income limit of $100,000 so this is not for the high level corporate executives. Although coming in 2010 this income limit with be lifted. More good news, is those taking advantage of this 2010 conversion period will be able to spread out the time in which you report your income. Therefore you can report half the income from the conversion in 2011 and the other half in 2012, spreading out your tax obligation.

Choosing IRA's can be complicated it is always best to seek qualified guidance when making this important decision.