Why Folks Should Purchase

a Fixed Indexed Annuity 

Sometimes folks can be so afraid of being sold something that they are not open to new opportunities.

Last week I was explaining the mechanics of a fixed indexed annuity to a client. When I was through he said that he had no idea that a fixed indexed annuity worked that way. He also said that if everyone understood how it worked, they would purchase one. I told him he was actually correct. If people would take the time to learn about the product, not only would they purchase a fixed indexed annuity, they would be telling all their family and friends. 

Although I can't teach you about all the mechanics of a fixed indexed annuity in this article, I can tell you what I feel are the top five major benefits.

1. A number of fixed indexed annuities today offer an immediate premium bonus of anywhere from 8% to 10% on all monies received in the first 5 to 7 years.

2. Protection against loss of principal. Meaning: If the index goes down, you don't lose a penny. 

3. The power of the annual reset feature. This allows you to lock in gains every year the index is positive.

4. Most fixed indexed annuities have no management fees.

5. Guaranteed income for life (With the guarantee income rider).

At this point you may be thinking, "Well, if this is such an amazing place for me to put my money, why haven't I heard about it?" This is probably my favorite question people ask, because I get to respond back with, "Where would you hear about such a product?" Your stock broker? Nope!  Your financial advisor who happens to be under the influence of Wall Street? No!   Your CPA? I don't think so! It is too risky for the CPA to step out on this branch from a liability side because most are not insurance licensed.  Last year over 34.2 billion dollars of fixed indexed annuities were purchased primarily through insurance brokers and insurance agents.

The biggest fear of retirees is outliving their money. In the past, people could live on Social Security and interest on their savings because the rates of return were in the double digits. With the current 1% or 2% rates of return, there's a strong possibility that you will have to invade the principal of your savings. This could prove catastrophic if you live too long. How much of your savings must you deplete each year to maintain a standard of living that is acceptable to you? Yes, there are surrender charges with annuities, but this typically applies if you take more than 10% per year. How many people are going to spend more than 10% per year of their qualified retirement plan?

In conclusion, where can you get the potential for an inflation-beating return and have 100% protection against market risk of not only your principal, but also of all your previous years of gains? For the past 12 years our clients have enjoyed the guarantees fixed indexed annuities provide, along with the upside potential of market indexes. If you would like to learn how a fixed indexed annuity can fit into your retirement plan give us call.

Types of Insurance Through the Years

What young adults, middle-age folks and those nearing retirement should consider for insurance.

Insurance is a no-brainer when it comes to protecting one's assets and loved ones. After all, why work so hard only to spend even more time worrying about losing it all in an accident, a natural disaster or something else unexpected? Still, many people wonder what types of insurance are appropriate for their particular age group or perhaps a loved one's age group.

The Money Girl, Laura Adams, understands that it's not an easy question to ask oneself, but she maintains it's an important one.

"It's not pleasant to think about what bad things could happen, and maybe that's why so many people are underinsured," writes Adams. "But managing different types of risk is easy, in a financial sense, because most of them can be passed on to a third party, like a health or life insurance company. Having enough of the right kinds of insurance allows you to protect yourself and those you love from something unexpected jeopardizing your financial security and happiness."

So what types of insurance are fitting for which age groups?

Folks in Their 20s and 30s

Below are several types of insurance that young adults should consider:

Health insurance is a priority "Health insurance is the most important insurance to have," Adams contends. "Without it you risk being stuck with a large bill if you have any kind of medical issue from the flu to a broken bone. Even a quick emergency room visit or a basic hospital bill can cost thousands of dollars."

Disability insurance isn't far behind.  Says Adams, "Disability insurance provides a percentage of replacement income if you're unable to work due to a disability, illness, or accident. Remember that health insurance only addresses your medical bills; it doesn't pay your living expenses, like housing or food, if you can't earn money for an extended period of time."

Life insurance depends on your situation. "Life insurance is critical when your death would create a financial hardship for those you leave behind, such as a spouse or children," Adams advises. "If you're single, or no one depends on your income, you either need a very small policy for your funeral expenses or none at all."

You may have additional insurance needs. Automobile insurance is a given for drivers, while homeowners insurance is "a requirement when you have a mortgage." If one is renting an apartment, it might be wise to look into renters insurance.

"Renter's insurance is something every renter should have," says blogger Miriam Caldwell. "It is inexpensive ... depending on the amount you take out and your area you will likely pay between ten [and] twenty dollars a month for the coverage. It will protect you from theft and loss from fire. Most people have been robbed or know someone who has been robbed. This policy will protect you from paying for everything [at] cost."

Folks in Their 40s and 50s

In addition to the suggestions mentioned above, people entering middle age have different needs:

Disability insurance becomes more important.  Dave Ramsey of FoxBusiness.com calls this type of insurance "vital" as people age, and he adds that there are ways to purchase it for less money. "The cheapest way to get this is in a group. If you buy it yourself, out on the open market, you'll find that the rates are based more on your occupation than your age or health. So, if you fly a desk, it'll be a lot cheaper than if you work with your hands." 

Folks in Their 60s

In addition to the above-mentioned types of insurance, people in their 60s should also consider insuring themselves against the need to live in a nursing home:

Long-term care insurance. Says Ramsey, "You need 'nursing home insurance' the moment you turn 60. It will also take care of you in your own home. The statistical probability of needing it before age 60 is about one percent, so I'd wait until then to buy long-term care insurance."

It's definitely not easy to think about insurance, because that means we're thinking about the possibility of bad things happening; it also means forfeiting some money in the short term. However, the peace of mind and, in the event that something does happen, the savings can be significant.

  A 92-year-old, petite, well-poised and proud man, who is fully dressed each morning by eight o'clock, with his hair fashionably combed and shaved perfectly, even though he is legally blind, moved to a nursing home today.

His wife of 70 years recently passed away, making the move necessary.  After many hours of waiting patiently in the lobby of the nursing home, he smiled sweetly when told his room was ready.

As he maneuvered his walker to the elevator, I provided a visual description of his tiny room, including the eyelet sheets that had been hung on his window.  "I love it",he stated with the enthusiasm of an eight-year-old having just been presented with a new puppy.

"Mr.Jones, you haven't seen the room; just wait".

"That doesn't have anything to do with it", he replied.

Happiness is something you decide on ahead of time.

Whether I like my room or not doesn't depend on how the furniture is arranged...it's how I arrange my mind.  I already decided to love it. 

It's a decision I make every morning when I wake up.  I have a choice; I can spend the day in bed recounting the difficulty I have with the parts of my body that no longer work, or get out of bed and be thankful for the ones that do.

Each day is a gift, and as long as my eyes are open, I'll focus on the new day and all the happy memories I've stored away...Just for this time in my life.

Old age is like a bank account.  You withdraw from what you've put in.

So my advise to you wold be to deposit a lot of happiness in the bank account of memories!"

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FOR YOUR HEALTH

BREATH DEEP!!

It's something you can do in your sleep--literally.

Breathing is as essential to life

 as it is instinctive.

But that's not to say the process is simple.

 What exactly happens

 when you take a deep breath?

1. The air travels through your nose and into your windpipe (trachea), where tiny hairs called cilia rid it of dirt and mucous.

2. Tubes at the bottom of your windpipe direct the air into your lungs' vast network of tiny airways (imagine two upside-down trees). 

3. Each airway leads to a clump of air sacs (alveoli). Your lungs contain about 6 million air sacs. and as each one fills with air like millions of tiny balloons, your lungs expand.

4. Next the oxygen moves into the capillaries surrounding the air sacs and carbon dioxide takes its place, ready to be exhaled.  The all-important oxygen travels through the bloodstream to your heart, where it is pumped to every cell in your body,

BY THE NUMBERS

6 million+ = THE NUMBER of breaths

 you take each year.

44 MILES = THE LENGTH of the network

of airways in your lungs.

100 MPH = THE SPEED of your sneeze. 

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The purpose of this newsletter is to provide  

information of general interest to our clients, potential clients and other professionals.  The information provided is general in nature and should not be considered complete information on any product or concept described.  For complete information, please contact our office at 410-758-1680

 or 1-877-411-3702.