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Secure Your Legacy: A Comprehensive Guide to Trusts, Wills, and ILTs

If you have any sort of assets to leave behind once you pass away, then safeguarding your legacy is paramount. Making sure that your assets are properly allocated and secure can give you peace of mind and ensure that your legacy will be taken care of long after you’re gone.

Legacy planning can also help ensure that your loved ones and charities of your choice are taken care of financially. Taking the time to plan out your legacy now can save you and your loved ones a lot of stress and heartache in the future.

In this article, we’ll discuss what you need to know about trusts, ILTs, and wills.

Trusts

Trusts are a great way to manage how you leave assets to your family. They provide flexibility and control by allowing you to determine how, when, and to whom your assets will be distributed after you are gone. You can use trusts to provide ongoing financial security for your heirs, as well as manage assets such as life insurance proceeds, retirement accounts, investments, and more. Trusts also ensure that your estate is managed according to your wishes and that your family is taken care of no matter what.

There are many different types of trusts that can benefit you and your family. Revocable living trusts, irrevocable life insurance trusts, charitable trusts, special needs trusts, and more can all be used to meet your estate planning goals. Each type of trust offers various benefits, such as protection from creditors and tax efficiencies, as well as control over how and when assets are distributed. Ultimately, the type of trust you choose will depend on your individual needs and goals.

ILTs

An Irrevocable Life Insurance Trust (ILIT) allows you to control the distributions of your life insurance for the benefit of others. These trusts are set up so that they cannot be amended, changed, or revoked. It is designed to provide tax efficiencies and can be used to distribute assets to your heirs without going through probate. The ILIT also allows you to assign a trustee to manage the trust and ensures that the life insurance proceeds are distributed according to your wishes.

Wills

A will is an important document for any person looking to provide a financial roadmap for their family. It allows you to make sure that your wishes are followed in the event of your death, including who will receive what assets and in what manner. A will also allows you to appoint an executor to manage your estate and distribute your assets according to your wishes. This allows your loved ones to have peace of mind knowing that your wishes will be carried out even after your death.

Avoid Probate By Creating a Living Trust

Probate can be a long and drawn-out process, delaying the distribution of assets to your heirs. To avoid probate, consider creating a living trust, which will keep your assets secure and ensure that your loved ones are taken care of.

Additionally, life insurance can be included in your estate when it exceeds certain thresholds, so having your policies owned by an irrevocable life insurance trust is essential.

When it comes to estate planning, consider setting up trusts and other legal documents that are important to ensure you have a lasting legacy. In order to determine your needs and ensure a smooth transfer of your estate to the following generation, the consultants at CPR Investments will collaborate with your tax or legal advisor. Book a consultation with us today!

Term Life Insurance vs. Permanent Life Insurance: Which One Should You Choose?

Weighing the pros and cons of term life insurance vs. permanent life insurance is a daunting task and one that should be carefully considered. Ultimately, the choice is yours and depends on your individual needs. So, here are some considerations which can help you make an informed decision.

Coverage Length

Term life insurance is temporary life insurance coverage that is purchased for a set period of time, usually for 10, 20, or 30 years. This type of policy does not build cash value and does not have any additional features such as long-term care or disability income protection.

Permanent life insurance, on the other hand, provides coverage for your entire life, as long as you pay the premiums.

Premium Cost

The premium for term life insurance is typically much lower than the premiums for permanent life insurance. The premiums are generally fixed for the term of the policy and can be renewed at the end of the term.

Permanent life insurance is designed to provide lifetime coverage and has more features than term life insurance. The premiums for permanent life insurance are usually higher than those for term life insurance, but they can also be flexible. The premiums may be adjusted to generally increase or decrease each year, depending on the policy.

Cash Value

Unlike permanent life insurance, there is no cash value associated with a term life policy, meaning that the policyholder does not accumulate any money over the duration of the policy and does not receive any payments for surrendering the policy early.

Permanent life insurance, on the other hand, provides lifelong coverage and typically offers a cash value component. This means that the policyholder accumulates a cash value over the life of the policy and can withdraw money from the policy while they are still alive. Permanent life insurance policies come in various forms (whole life, universal life, variable life) and have different features, but the common theme is that they all have a cash value component. This cash value can be used to pay premiums, take out loans, or cash out the policy.

Death Benefits

Term life insurance pays out a death benefit to the beneficiary upon the policyholder’s death. The amount of the death benefit is usually determined when the policy is written, and it cannot be changed during the term of the policy.

Unlike term life insurance, a permanent life insurance policy does not have an expiration date and will continue to provide coverage until the policyholder’s death. The death benefit of a permanent life insurance policy is typically much larger than a term life policy, as the policy accumulates cash value over time. The cash value can be used to pay premiums, cover living expenses, or provide additional financial resources in the event of the policyholder’s death.

Convertible Policies

Convertible term life insurance is a type of policy that can be converted to a permanent life insurance policy. This type of policy provides the flexibility of starting with a term life insurance policy, which typically has lower premiums, and then converting to a permanent policy without having to take a new medical exam. This is beneficial for people who may be in good health when they purchase the policy but may not be able to qualify for a permanent policy later in life due to health issues.

Nevertheless, a permanent life insurance policy is not convertible.

Which is the Better Option?

The better option between term life insurance and permanent life insurance depends on the particular needs and financial goals of the individual. Term life insurance is a simple and inexpensive way to provide financial protection for a specific period of time. It is the most basic form of life insurance and is best suited for those who need a temporary insurance solution or those who have a limited budget.

On the other hand, permanent life insurance provides lifelong coverage, with a savings component that can accumulate cash value over time. It is more expensive than term life insurance, but it also offers greater flexibility and more features, such as the ability to access the cash value or take out a loan against the policy. Permanent life insurance is best suited for those who want to protect their family for the long term, those who want to accumulate cash value over time, or those who want to use the policy as a tax-advantaged savings vehicle. Ultimately, the best option depends on the individual’s needs and goals.

If you are still confused on which one is the best choice for you and your family, contact CPR Investments Inc. today.

Your Guide to 529 Education Savings Plans

Financing a college education is not an easy task, and many families cannot afford the full cost of higher education. A 529 Education Savings Plan can immensely reduce the future burden of student loan debts, irrespective of your family status or financial situation.

529 plans, officially known as “Qualified Tuition Plans,” are tax-advantaged investment plans that are designed to help families pay for future college and education expenses. There are two types of 529 plans: prepaid tuition plans and education savings plans. They are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. The 529 plans are administered by the 50 states and the District of Columbia.

Some Important Facts about 529 Education Savings Plans

Under the 529 Education Savings Plans, you can open an investment account for your beneficiary to meet the expenses of their future college education, including room or boarding and tuition fees. It is considered one of the smartest tax-advantaged strategies to save for your child or grandchild’s future education costs.

The money saved in this account can normally be used at any college or university, including non-U.S. colleges and universities. The education savings plans offer greater flexibility compared to prepaid tuition plans since the former offers multiple investment options. Moreover, you’re not restricted to the sponsoring state or any specific institution.

As long as the money is used for qualified education expenses, the withdrawal is not subject to either state or federal taxes.  But tax benefits do vary from state to state—you need to check the details of any 529 plan to understand the specific tax benefits the state is allowing.

If you have an Education Savings account, you can choose from a range of investment options like mutual funds and exchange-traded funds (ETF), though mutual funds are much more common. Your investment advisor can help you select from a selection of plans located around the country. However, investments in mutual funds and ETFs are not federally guaranteed.

Fees and Expenses You Need to Pay

States often charge a one-time account setup fee for a 529 plan. The minimum initial contribution requirement can be as low as $ 25 (in Florida) to $964 (in West Virginia) for the lowest-cost option.

Education savings plans may charge an enrollment or application fee, annual account maintenance fees, ongoing program management fees, and ongoing asset management fees. The asset management fees will depend on the investment option you select; therefore, you can search for low-cost mutual funds and ETFs to keep management fees low.

What Is the Contribution Limit for a 529 Plan?

There are no yearly contribution limits to a 529 plan. However, each state has a different aggregate contribution limit for each 529 account which typically ranges from $235,000 and $550,000. It doesn’t matter if you cannot afford monthly contributions; after you make your initial contribution of $25, you can invest as much as you want, whenever you want.

At CPR Investments Inc., we’re dedicated to helping you make smart decisions about saving and paying for education. From 529 education savings plans to financial aid and national grant options, we provide tailored financial advice to set you on the road to achieving your child’s educational goals. Contact us today!

All You Need to Know about Long Term Care Insurance

Long term care insurance is one of the most complex topics in the field of insurance. This blog attempts to demystify the concept of long term care insurance for the readers. It discusses in detail about long term care insurance and the various factors that you need to consider while making the decision to buy one. This blog will also highlight the features of long term care insurance plans that are available in the market.

What Is Long Term Care Insurance?

Long term care insurance is a type of insurance that helps cover the cost of long-term care services. These services can include things like in-home care, assisted living, and nursing home care. Long term care insurance can help you pay for the care you need if you can no longer take care of yourself.

Helps Cover High Costs Easily

Long term care insurance can be a great way to help pay for the high costs of long term care services. It can help you pay for the care you need without having to worry about how you will afford it.

Reduced Burden on Children

One of the main benefits of long term care insurance is that it can help to reduce the burden on children. This is because it can provide financial assistance for caregiving expenses, which can otherwise be a major financial burden for families. In addition, long term care insurance can also help to cover the costs of long term care services, which can be very expensive. This can help to ensure that children are not left with a large financial burdens when their parents need to access these services.

Flexibility 

Long-term care insurance provides policyholders with greater flexibility when it comes to choosing care options. With traditional health insurance, policyholders are generally only covered for medical care from licensed providers. However, long-term care insurance typically covers a wider range of care options, including in-home care, assisted living, and nursing home care. This increased flexibility gives policyholders more control over their care and allows them to choose the option that best meets their needs.

Tips for Choosing an Apt Long Term Care Insurance Plan

There are a few things to consider when choosing a long term care insurance policy. First, you need to decide what level of coverage you need. Do you need a policy that covers home care, assisted living, or nursing home care? Once you know the level of coverage you need, you can start to compare policies.

It’s important to read the fine print of any policy you’re considering. Make sure you understand what is and is not covered. Some policies have waiting periods before they start to pay out, so you’ll need to factor that in when making your decision.

Cost is always a factor when choosing an insurance policy. Long term care insurance policies can be expensive, so you’ll need to decide if the coverage is worth the cost. You may be able to get a discount if you purchase a policy through your employer.

Finally, you’ll need to decide how long you need the coverage for. Some policies are for a set number of years, while others will cover you for your lifetime. Choose the policy that best meets your needs.

Long term care insurance is one of the most important insurance policies to consider, especially as you age. It can be complex so you need to know the different types of cover and how it works. CPR Investments Inc. can help you choose the right investment scheme. Contact our team now to avail our investment services. 

5 Reasons to Have Life Insurance

We don’t want to think about our or any family member’s death but we can’t escape it no matter how hard we try. After you die, your family will live and thus, you need to think about giving them a good life after your death. Getting life insurance before you die can be a smart decision for your family’s well-being.

Want to know why you should have life insurance? Find out the key reasons below:

1.   Meet Financial Needs

If you are the only wage earner in your family, the other members would have a tough time paying living costs immediately after your death. Life insurance helps in planning your family’s long-term health and happiness, and they get peace of mind that they will be financially secure.

You need life insurance to act like a savings account so no one suffers financially after you die. The money you get from the policy will help your family meet important financial requirements, such as funeral costs, college fees, and living expenses.

2.   Pay a Reasonable Amount

Many people have the misconception that life insurance is quite expensive. However, it is quite reasonable and accessible. Let’s say you can go for a 20-year term life insurance policy with $200,000 of coverage for approximately $13 a month. If you break down the amount you pay every month, you can easily understand that it’s quite a reasonable amount.

3.   Estate tax concerns

If you are wealthy and are concerned with estate taxes or have a business that you intend to leave to only some of your children, a permanent Life insurance policy may be an option to consider. By owning this type of policy outside your estate, the death benefit may be used to equalize inheritance to each child and to pay for estate taxes.

4.   It’s Much More Than Only Life Insurance

If you settle into a life insurance contract or a specific type of policy, you may be able to get much more than death coverage. You can have a life insurance policy, sometimes known as a hybrid policy, which includes living benefits such as a long-term care, critical care, chronic care and terminal illness benefits.

Do you want living benefits from life insurance policy? You should consider having these benefits in your life insurance policy if you don’t have separate coverages for these situations, otherwise, your beneficiary has only death benefits. You can find different riders that can help you in customizing and increasing your coverage.

5.   Maximize Your Retirement Benefits

Living benefits in your life insurance policy can extend the financial and retirement benefits by potentially reducing withdrawals from your retirement savings in the event of a critical care event, chronic care or long-term care needs.

The points above reflect why you should have a life insurance policy for your family. At CPR Investments, our advisors can perform a detailed assessment to determine how much life insurance your family needs after your death. Get in touch with us today!

Retirement Planning: Why Do You Need It?

Retirement is one of the most awaited phases of life. For many, it marks the end of the daily grind, when assignments, meetings, and deadlines are replaced by travel, hobbies, and time with family. Others enjoy the simplicity of having time to enjoy their first cup of coffee in the morning without feeling rushed.

There is going to be a lot of planning involved with retirement because it is such an important life event. Continue reading to learn more about why retirement planning is essential and what it involves.

What is Retirement Planning?

When planning for retirement, you look at your life as a whole, not just financially.  Implementing the actions needed to achieve retirement income, healthcare, and independent living goals is what retirement planning is all about.

Many professional retirement planners believe that 70% to 90% of your pre-retirement income needs to be replenished to lead a comfortable, retired life.

Why Do You Need Retirement Planning?

Medical Emergencies

As we age, we develop new health problems. Your retirement finances can be severely impacted by medical expenses. Studies show that medical inflation is at an average of 5.26% per year. If you have a forward-looking retirement plan, it should be taking medical expenses into consideration without exhausting your nest egg, leaving the surviving spouse vulnerable.

Inflation

The effect of inflation, even if it appears small in the short term, can be noticeable over a few years. Some research points to a 1% inflation rate that could swallow up $34,406 of retirees’ benefits. If inflation were to increase to 3%, the shortfall would total more than $117,000.

Making Your Savings Last

Most Americans wonder if their retirement nest egg will last their entire lifetime. Many times, running out of savings could leave you completely dependent on Social Security, and these benefits don’t provide much in the way of income.

Monthly Expenses

According to the Bureau of Labor Statistics, “older households”—defined as those 65 and older—spend an average of $50,220 per year, or roughly $4,100 a month.

When Should I Start Retirement Planning?

In our opinion, the best time to start planning for your retirement is the day you get your first job. The second-best time is today.

Oftentimes, the best retirement plans are started at an early age, according to an old adage. It’s true: the earlier you start saving for retirement, the more money you’ll have. The advantage of starting early is that you can take more risks with your investments.

The question is, what about those of us who have spent our lives building our nest egg, or who are forced to retire early because of illness, or who can retire earlier than expected? Now is the time to act. A plan is best implemented when you need it. Your plan would have been better if you’d worked on it for a while.

One of the most common questions regarding retirement planning is, “Did we miss out on opportunities because we started planning so late?” The answer is no. Some retirement vehicles or tools require a longer time horizon, but some are specifically designed to cater to those with a shorter time frame. The key is to take the first step and sit down with someone who will look at your whole retirement picture—not just how to invest.

Build a plan and then talk about how to invest to achieve your goals, including a plan “B” if things don’t go as expected.

CPR Investments, Inc. believes that retirement planning is a critical component of your financial wellness. Working together, we will help you clarify your expenses, prioritize your objectives, and build a plan supported by your portfolio that will support a long and full retirement. Contact us today to schedule an introductory meeting.