Blog

How to Compare Medigap Policies Side by Side

11/17/2020

Medicare Supplement Insurance (or Medigap) helps fill in the gaps in Original Medicare. It is sold by private insurance companies and ranges in price depending on how much coverage you need. Original Medicare pays for much of your healthcare services and supplies, but it doesn’t pay for everything.

Unfortunately, medical care is expensive, and what Medicare doesn’t cover can get out of hand quickly. This is why most people benefit from supplemental insurance. But how can you compare these policies to ensure you are getting the right coverage for your needs?

Side-by-Side Comparison of Medigap Plans

Here is a breakdown of Medigap plans. This is not a complete comparison, but it does give you an idea of what additional expenses will be covered.

Things to Know about Medigap Plans

To be eligible for Medigap, you must have Medicare Parts A and B. You can buy one of these policies from a private insurance company licensed in your state. It’s helpful to work with a financial planner in New Jersey who can help you pick the best plan for your needs and budget.

Once you purchase a supplemental plan, you will pay the insurance company a monthly premium, in addition to paying the premium for Part B. Additionally, keep in mind that a Medigap policy only covers one person. If your spouse wants this coverage, they will need their own policy.

Find Your Medigap Plan Today

If you’re ready to find a supplemental insurance plan, contact Leonard Financial Solutions today. As an independent financial advisor in NJ, we can find you the best policies and rates in your area. You’ve worked hard and paid your dues, so you deserve to get the high quality medical care you need to live a long and healthy life! With the right Medigap plan, you will!

How to Use Whole Life Insurance for Retirement

11/5/2020

You might not be thinking about your life insurance policy on a regular basis, but there are certainly additional benefits to this policy that you may not know about. Aside from paying your beneficiaries money upon your death, it can also be used for retirement planning in NJ. Now this is more worth thinking about, isn’t it?
Let’s explore how your permanent life insurance policy can be utilized as an additional source of income when you retire.

Build Cash Value

One of the main benefits of a permanent life insurance policy is its ability to build cash value. The cash value of a policy is the balance remaining after a portion of your payment has gone to the premium. Each month that you pay into your policy, some of the money goes toward the premium and some goes toward cash value.

Over time, the cash value account grows and can be used as a source of income when it comes time for retirement. And as long as the amount withdrawn isn’t more than the amount you’ve paid in premiums, you don’t have to pay taxes on it either.

Borrow from Yourself

Another option that you have is to use your cash value as a loan. It’s essentially a loan that you’re getting from yourself so you don’t have to deal with anyone else or their terms. You don’t technically have to pay this money back, but it’s a good idea to do so because it accrues interest and won’t take away from your death benefit. But this can be a nice cushion if you plan to purchase a second home in Florida or pay off your mortgage.

Save on Income Tax

There are some tax advantages to using your life insurance to fund your retirement. Let’s say that you have $50,000 coming out of your IRA account, along with $25,000 in Social Security. This full $75,000 would be taxable income. On the other hand, if you get the $50,000 from life insurance, you’re only taxed on the $25,000 from Social Security.

Not only do you reduce your taxable income this way, but also you lower the tax bracket you’re in. This means you pay less taxes on the $25,000 from Social Security. The only downside is that whole life insurance is expensive to invest in. This is one of the reasons why we recommend starting these policies early.

Start Planning for Retirement

So should you fund your entire retirement though a whole life insurance policy? Not necessarily. There are other vehicles you should invest in as well to build wealth. That said, we want you to know that permanent life insurance is one of the ways you can reach your retirement goals. To discuss your options for retirement planning in New Jersey, contact Leonard Financial Solutions today.

Can I Keep My Life Insurance When I Retire?

11/4/2020

For most of your adult life, you likely had a life insurance policy. Most people get their life insurance policy from their employer and don’t think much about it. These policies are generally offered as part of a benefits package for full-time employees. It’s also possible that you took out a life insurance policy once you had children so that they would be protected if you died unexpectedly.

However now that you’re about to retire, you might be wondering if you need to keep your life insurance in New Jersey. Once you retire, you won’t have benefits from your job anymore, so that means you have to take out a new policy or not have one at all. What’s the best option?

Life Insurance is for Your Beneficiaries

While there is no simple answer for everyone, we’ll do our best to explain the purpose of life insurance and why you may not need it anymore.

When you take out a life insurance policy in NJ, you’re not insuring your life. You are protecting family members from the loss of income if you were to pass away. That’s why life insurance is highly recommended for working adults, as their families probably couldn’t keep up with their bills if they were to die unexpectedly.

There are different types of life insurance depending on your needs and budget. Term life insurance offers coverage for a specific period of time, usually 10-30 years. Permanent life insurance is a lifetime policy that helps build cash value.

Do Your Children or Spouse Depend on Your Income?

If your spouse or partner will have a steady source of income if you die, then you probably don’t need life insurance. Many couples live off Social Security and their retirement savings so there’s no income to replace. But this isn’t the case for everyone. If your spouse will lose a substantial amount of your pension income, life insurance can help fill the gap.

Another instance where you may want to keep your life insurance policy is if you have a spouse or adult children who are dependent on you. Even if they aren’t, some people like having something to leave their children or grandchildren.

How Much Life Insurance Do I Need?

If you plan to keep your life insurance after retirement, you’ll probably need to review it because there will be some changes.

Think about your situation and the people who would experience a loss if you were to die today. What amount of money would allow them to keep living and paying the bills? This will help you determine how much life insurance you need. You’ll also likely find that a term insurance policy will fit your needs. We do recommend permanent insurance if you have a high net worth or a thriving business, as you could be subject to taxes.

While this doesn’t give you a simple yes or no answer, we hope it provides you with some insight as to who needs life insurance in NJ when they retire and who doesn’t. To learn more about your options for retirement, schedule a consultation with Leonard Financial Solutions.