What You Should Know About the Living Benefits Life Insurance Rider

When you purchase a life insurance policy, you can include living benefit riders, also known as accelerated benefit riders. There are different types of benefit riders available, but you are allowed to choose more than one for your policy. Some of the options include critical illness, chronic illness, and nursing home care and child protection. Before going into details, we’ll first look into an overview of what living benefits life insurance riders are and whether they are right for you.

What Are Living Benefits Life Insurance Riders?

One way to look at benefits riders is like viatical settlements, which was used in the past by terminally ill policyholders to pay for expensive medical bills. The settlements allowed the policyholder to sell his or her policy to a third party settlement company, who would pay them a portion of the policy’s total amount. The company would then be written down as the beneficiary. This was a process that was oftentimes cumbersome and sometimes didn’t work as planned, so the insurance companies took the initiative to offer policyholders the chance to obtain between 25 and 100 percent of their death benefit, depending on the situation, hence the purpose of the riders. Before, riders could only be added to a whole life insurance or universal life insurance policy, but it can now be used with term life insurance as well.

How the Benefits Are Paid Out

The policyholder is sometimes able to choose how he or she wants to be paid, such as a lump sum or periodic payments. The type of benefit and claim determines the forms of payment are available, but either way, the policyholder is still entitled to the remaining cash value and death benefit that’s on his or her policy. You can either have payment as a reimbursement or on an indemnity basis, where it goes directly to the health care providers or other parties that need to be paid. Some have a minimum dollar payout and/or an absolute dollar limit on the total amount of paid benefits.

Difference Between Additional and No-Cost Riders

Adding riders to your life insurance policy can be done at an additional cost, but there are some that are designed within the policy, making them pretty much free. The additional cost riders are determined upfront when the policyholder’s rider is assessed. This type of rider will have a pre-determined benefit that is paid out in full. The no-cost riders aren’t paid out until the claim is made. The insurer will use a formula to determine the amount to be paid to the policyholder that consists of the interest, mortality rates and cash value of the policy.

Benefits Rider Extensions

At an additional cost, a policyholder can get an extension for benefit riders, which typically doubles the amount of the insurance coverage. There’s no need to purchase additional death benefit to obtain this. Savvy life insurance shoppers can purchase a small death benefit amount, while keeping sufficient living benefit protection. Linked benefits riders can be used for long-term care expenses that are two to three times the amount of the entire policy.

Types of Benefit Riders to Choose From

The living benefits that you can find with most life insurance policies are typically within three categories, critical illness riders, chronic illness riders and long-term care riders. The available riders include the following:

  • Accelerated death benefit
  • Accidental death and dismemberment
  • Child protection
  • Critical illness
  • Disability income
  • Guaranteed insurability
  • Long-term care
  • Other insured
  • Paid-up additions
  • Return on premium
  • Spousal
  • Term conversion
  • Term insurance
  • Waiver of premium

Purchasing a life insurance policy that has benefits riders can be a great way to protect yourself and your family from high medical expenses. It’ a good idea to look into the different types to determine which ones you’d like to have included with your life insurance policy.

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Financial Implications of Accelerated Death Benefits

An accelerated death benefit is a benefit that is attached to your life insurance policy, which enables you to receive a cash advance against your death benefit in the case that you are diagnosed with a serious illness. Many people that decide to get an accelerated death benefit only have a few months or years to live and so use the money that they receive in order to pay for treatments and other expenses to do with handling an illness. Picking a life insurance policy that comes with an accelerated death benefit will allow a policyholder to afford the expenses of their daily lives in order to remain the most comfortable while also ensuring that their family is taken care of when they pass away. Jason Kestler, who is the CEO and president of Kestler Financial Group, stated that an accelerated benefit is essentially a way to give consumers a larger amount of control over their life insurance protection.

Medical Expenses

One of the most common reasons why people declare bankruptcy is due to substantial medical expenses that they are unable to afford. An accelerated death benefit can help pay for these expenses, and help avoid any unnecessary stress caused by the financial implications of having a terminal illness. This will allow you and your family to focus on each other and not on paying for expensive medical bills.

Offset the Financial Impact on Retirement Assets

Say you’ve saved a substantial amount of money for your retirement, and are expecting a good retirement income from your savings and pension, and you also have other types of assets that you would like to pass down to your kids that will be taxed when you pass away. You can purchase a life insurance policy with an accelerated death benefit in order to aid in covering those taxes and other such expenses with a policy that has an accelerated death benefit. If you become ill down the road then your death benefit can then be allocated in order to pay for medical expenses that aren’t covered by your health insurance policy.

Aid in Equalizing Pension Benefits

An accelerated death benefit can help your spouse if you have unequal pension benefits. For instance, if you have a large pension income and a smaller survivor benefit, and your spouse has no pension then if you pass away prematurely, he or she will be unable to enjoy the same type of lifestyle that you did before, and will likely have to downsize their lifestyle. In order to avoid this possibility then you can use your excess pension income in order to purchase a life insurance policy that has an accelerated death benefit.

Making Withdrawals

Once you’ve qualified for an accelerated death benefit you can withdraw money as is allowed under your life insurance policy’s rules. However, keep in mind that you will have to pay a price for doing so. Some life insurance companies require that you pay for an accelerated death benefit add on upfront in the form of additional charges that are added onto your original policy’s premiums. Some life insurance policies will simply reduce the actual death benefit in order to compensate. The nature of this reduction varies by pricing, design and company.

Tax Implications

Gaining access to your death benefit early usually has tax implications. The Internal Revenue Service excludes death benefits from federal income tax when it comes to policyholders that are terminally ill. Death benefits that are given to chronically ill policyholders tend to also be excluded from taxes, that being said, there are often limits that are placed on this rule. An annual certification given by a doctor is also required in order to prove that the taxpayer is legitimately ill.

The Biggest Financial Ramification

The most significant financial implication of an accelerated death benefit will not affect you at all. Instead, taking out your death benefit early will likely hurt your loved ones, as you are essentially reducing the amount that you are leaving to your surviving family members. This can also impact your estate taxes and other such legacy-planning expenses.


Before you encounter a health condition that is so expensive or severe that it requires you to take out an accelerated death benefit, it is highly recommended that you review your eligibility requirements and the cost of doing so. If the time does come when you need to withdraw your death benefit then you should first seek council with a professional. It is recommended that the first thing you do is sit down with an advisor or agent and review all of your assets. You should ensure that you have exhausted all other better alternatives before you determine that an accelerated death benefit is your best option.

Comparison Shop

When it comes to looking for an accelerated death benefit that matches your situation, it is highly recommended that you do some major comparison-shopping. One important factor to keep in mind is how you want to pay for this option. For instance, you may prefer to receive an increased premium as the form of payment. This will typically mean your life insurance premium will increase anywhere from 5 to 15% in order to gain the option of having an accelerated death benefit. However, you may also be able to find a policy that will only require that you pay if you need to use the accelerated death benefit.


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Is an Annual Flu Shot Necessary for Healthy Individuals?

As flu season fast approaches, it seems that everywhere you look, you are reminded that it’s time to get your annual flu shot. Getting a flu shot is one of the easiest things to do—all it takes is a trip to your local pharmacy or grocery store. Even businesses are starting to offer them right in the office. However, not everyone agrees that you need to receive a flu shot every year if you’re a healthy individual. After weighing the pros and cons of receiving a marginal level of protection, you may decide to skip the trip to the clinic for a flu shot this year, or you may decide that some protection is better than nothing. When making this decision here are a few things to keep in mind.

The Claim Against Flu Shots

An increasing number of doctors, academics, and researchers are questioning the validity of influenza vaccines. For one, the influenza virus is not the cause of the majority of flu-like illnesses, which lowers the effectiveness of widespread vaccinations. Some critics of the vaccination even claim that it functions merely as a placebo. Many also worry about the safety of vaccinations as many vaccines including the influenza shot contain toxins like thimerosal, which is a preservative that contains mercury. Lastly, even in healthy individuals, flu shots only protect against three sometimes four stains, but not the multitude of strains that are always mutating. Due to this, even if a shot boosts your immunity, it won’t protect you from the total range of ever-changing illnesses. One study done in 328 households in Michigan found that the risk of contracting the flu was almost the same in individuals who had the flu shot and those who didn’t, which indicates that there may not be any significant protection from flu vaccines.

The Claim For Flu Shots

Defenders of the flu vaccine insist that widespread vaccination is important, even for healthy adults, as it establishes a sort of herd immunity to the entire population. In this way healthy individuals who receive the flu shot are protecting the weakest in society, namely children, the elderly, and people with compromised immune systems. On top of this, advocates of the flu shot point out that creating an up to date flu shot every year keeps vaccine factories ready for the day that a more dangerous strain threatens humanity with a real pandemic, such as the one that killed thousands of Americans in 1918.

Deciding to Get the Flu Shot

There are a few things you need to be aware of if you decide to get a flu shot as a healthy adult. Firstly, the flu shot is created in hen eggs, and so if you have allergies to eggs then you could get a reaction. Also keep in mind that anything that has to be re-configured year after year is not risk-free, and contamination is a constant threat. Also, as mentioned earlier, most flu vaccines that are received in multi-dose vials are preserved in the chemical thimerosal, which is a form of mercury. This type of mercury has been known to be the root of inflammatory and neurological disease. There have also been recent cases of narcolepsy found in Finland and convulsions in Australia that flu vaccines were blamed for. The elderly are the most vulnerable of society, and require the most protection from influenza. The flu shot does work well for their bodies, as the elderly immune systems are often too weak to respond. In the end it is your decision as to whether or not a flu shot is worth the risks, especially if you are a healthy individual.

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6 Hidden Benefits of Regular Exercise that Will Slow Down Aging

Becoming older is an inevitable reality. As much as you may want to avoid getting old, your body will age no matter what you do. From the day that you are born your body is constantly changing. Everyday thousands of your cells die off and new cells replace them in order for your body to stay strong and healthy. As you age however, your body’s ability to replace cells starts to diminish. The good news is that you can slow this process down by taking care of your body and exercising. Exercising has many anti-aging hidden benefits, and is considered by many experts to be the fountain of youth. Here are six ways that exercising keeps you younger.

Helps Keep a Young Mentality

The way that you feel after working out is one of the most obvious ways that exercising keeps you young. Exercising simply makes you feel and act younger by helping you maintain a young mentality. Part of staying young is your attitude, and exercising keeps you vigorous and energetic. On top of this, working out tends to give you a more positive outlook on life, which gives you a calmer and more youthful demeanor.

Look Younger

People who regularly participate in some sort of physical activity actually have cells on the molecular level that look younger than those who prefer staying on the couch and watching TV. This is because scientists have found that they can trace the aging process back to telomeres, which are located at the end of the chromosomes that protect your DNA. As we age these telomeres get shorter as cells divide. The good news is that working out actually slows down this process and keeps your telomeres intact for a longer period of time.

Improves Brain Function

Studies have found that exercise does more to work your brain and get it thinking than challenging it through mathematics and reading does. Researchers at the University of Cambridge found that mice that were put on a rigorous exercise regiment had new cell growth in the memory center of their brain, and a memory test indicated that those mice that exercised performed much better compared to the mice that were sedentary.

Maintain Muscle Mass

Beginning at the age of 25 people lose as much as 1% of their muscle mass every year, which can lead to a lack of coordination, frailty, and trembling as well as weakness later in life. However, resistance training can counter this. By participating in at least three training sessions for at least 30 minutes a day, you can drastically slow down the loss of your muscle mass as you age.

Stronger Bones

Bone density decreases as you age, especially if you are a woman. This is because your body loses the calcium and minerals that it stores as you age. As a result of this, your bones become increasingly brittle and can easily break. The only way to avoid this is to start building stronger bones earlier on in your life. Two types of exercises that help to build strong bones are strength training exercises and weight-bearing exercises.

Increased Stability and Balance

About 35% of people who are over the age of 65 take a fall every year, and those who fall are two to three times more likely to take a tumble again. The good news is that exercise can dramatically increase your stability and balance earlier in life.

By including a regular exercise regiment into your daily routine you can substantially slow down the process of aging. This includes participating in resistance exercise, cardiovascular exercise, functional exercise, and flexibility training. Remember that it is never too late to begin exercising, and slow down the effects of aging, however the sooner you start the better!

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The Connection Between Life Insurance and Optimism

Recently, some studies have been conducted to see if people with life insurance policies were innately different than those without. The results, according to the companies in charge of the studies, were quite unexpected. If you have been considering buying yourself life insurance, you may want to find out what connections insurance has to overall optimism before buying your policy so you know what type of other perks you can expect after the policy is in place.

The Research Study

Greenwald & Associates recently conducted a study to see what attitudes adults felt when it came to life insurance ownership. The survey was given to adults over the age of 21, and both life insurance policyholders and non-policy holders were given the survey.  In the end, 2,069 people completed this survey.

The Results

As the results came in, the researchers found that those who already owned life insurance policies were generally happier with their current lifestyle and overall much more optimistic. In fact, 42% of the people surveyed that did own life insurance policies were quite happy with the current state of their life. Only 32% of those who did not own a life insurance policy felt the same way. People who owned life insurance policies were more optimistic about what the future held for them and their family, plus they felt more fulfilled with their life overall. Those who had life insurance policies felt an overall higher quality of life compared to those without life insurance policies. The results of this study were quite a bit different than what researchers expected when going into the study, as they were expecting to hear results about how those with life insurance policies added “goodness” into their personal lives. They never expected the answer to be that life insurance already had brought a measure of goodness into their lives.

What This Means for New Life Insurance Policy Holders

Most life insurance policyholders have a feeling of optimism, as they feel more financially prepared for what life has to throw at them. They feel as though this is added protection should the inevitable happen before it’s expected, their family will be able to carry on without them without added financial strain. Everyone knows that their family will struggle to go through life without them when they pass away, but knowing that there won’t be the financial hardship at the same time brings a sense of peace.

Offers Peace of Mind Now and Later

As people age, they tend to try and be more organized and prepared so that life has less confusion. Buying a life insurance policy becomes a natural progression for many people, which helps them feel as though they are setting their family up for the future. Most who buy life insurance policies do not expect to receive a sense of optimism in return, but that seems to be exactly what policyholders are receiving. If you have been considering whether or not now is the time to buy your life insurance policy (or policies), you may want to jump at the chance sooner rather than later. If buying this policy can give you the peace of mind that you are ready for the ups and downs that come with life, plus helps you feel a higher quality of life, the policy may end up being worth far more than the financial stipend that comes when the policy is cashed in. Paying a premium each month is nothing when compared to the benefits that optimism and assurance can give you in return. Don’t wait for these feelings in life, but instead, go after the routes that bring them into your life for you.

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5 Ways to Prevent Foodborne Illnesses

Keeping you and your family safe from foodborne illnesses is a lot easier than most people believe. It involves taking a few extra steps to prevent anyone from getting sick. Making sure you have the right tools on hand is one of the most important steps when it comes to keeping your food safe for everyone to eat. Here are some simple ways to keep everyone healthy and happy after eating your cooking.

Disinfect Your Surfaces

When it comes to spreading bacteria around, the surfaces you prepare your food at is the first line of defense. If you make sure to disinfect the surfaces you use after each time you use them, you will help cut down on the potential bacteria your food encounters, and that will help prevent anyone getting sick from something you make. Any surface within your kitchen that could come into contact with your food needs to be thoroughly disinfected with a mild cleanser. This includes, but is not limited to, table tops, counter tops, sinks, blades, kitchen tools, faucets, and cutting boards.

Wash Your Hands

Washing your hands is a great way to prevent the spread of bacteria. Specialists tell everyone to wash their hands thoroughly, especially during the cold and flu season, as it keeps bacteria at bay. The same goes with your hands when you are preparing food. You want to make sure you use enough soap and that you thoroughly wash each surface of your hands. If you are not using a scrub brush when washing your hands, then make sure you clean beneath your fingernails carefully so that no food is stuck under them from when you were working with the food.

Separate Your Preparation Areas

Cutting up raw meat on the same surface that you work with other raw fares at could be an incredibly dangerous mix. Most raw vegetables are cooked for lower amounts of time than raw meats, which mean that any bacteria on them could have a chance to survive. This is why preparing your meats in a different location is so vital. Plus, cleaning off a cutting board that meat was used on requires a deeper amount of cleaning and disinfecting than one used to cut carrots and potatoes due to the slits in the board that could be harboring bacteria. If you want to prevent spreading bacteria around, give each type of food its own surface and area within the kitchen.

Cook Food Thoroughly

Some foods need to be cooked to a minimum temperature to be considered ‘safe’ to eat. Foods such as eggs, poultry, fish, and beef all require minimum temperatures. If these foods are undercooked and then served to people to eat, people could end up getting sick. Having digital or manual thermometers within your kitchen is the safest way to know you are doing everything you can to prevent anyone in your household from getting sick.

Store Food Properly

Storing food properly is one of the easiest ways to prevent anyone getting sick from a foodborne illness. This means all types of foods. Dairy foods, such as milks, cheeses, and creams must be kept cold to stay safe. Meats must be kept in the refrigerator to stay cold prior to being cooked, and if they are not used immediately, they should be stored in airtight packaging. Dry foods should be stored in sealed containers away from extreme temperatures and excess light.

If you are careful about how you store, prepare, and cook your food, you should be able to prevent the spread of nearly all foodborne illnesses. These steps will help you ensure that your guests or family are safe to eat your food, and that they will enjoy coming back next time dinner is served.

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Tips to Not Fall Victim to Deceptive Obamacare Scammers

Obamacare health insurance exchanges have begun to take place, which has unfortunately swung the door wide open for scam artists who are looking to defraud US citizens that are eager to purchase health insurance coverage. These scammers attempt to take advantage of new developments in the marketplace as well as new government programs, which is exactly what is happening with Obamacare. It is important to be on the lookout for Obamacare scammers so that you do not fall victim to one.

The Obamacare Card That Doesn’t Exist 

The Better Business Bureau has posted a warning to not be tempted to purchase an Obamacare card from someone who is claiming that it is mandatory to have one in order to be eligible for and purchase the Affordable Care Act insurance. The truth is that there is no such card out there. Obamacare scammers who pitch these cards to consumers ask for their Social Security number, personal information, and bank account information.

The Fake Government Employee Call

It is mostly elderly Americans who are being targeted for this scam, so it is a good idea to inform your parents about it in order to ensure they do not fall victim to an Obamacare scammer as well. Older citizens are scammed into giving out their medical information and Social Security number to someone who claims to be a federal government agent who wants to simply confirm their eligibility to obtain Obamacare. If you receive a call like this, you should immediately hang up, and make sure to tell your parents and your grandparents to do the same. Federal agencies will usually contact people by mail not phone or email. Do not accept a phone call from an unsolicited caller who is attempting anything to do with Obamacare, as this is certainly a scam.

Fake Obamacare Navigators

Obamacare has created a breed of advisers who are called the navigators. These workers usually work at such places like local agencies such as United Way and their job is to aid the public in signing up for Obamacare coverage. Scammers have begun emailing and calling people posing as these navigators. These people will claim that they want to help you purchase the right coverage, but then actually steal your identity or try to sell you fake health insurance. Remember to always be very careful with your identity. Be careful to never give out your personal information to anyone who has contacted you unsolicited.

Fake Obamacare Websites

Fake Obamacare insurance exchange websites have been popping up on the Internet lately. For example the “Pennsylvania Health Exchange” is a website that was actually run by a private health insurance broker before regulators shut it down. However, many more like it are starting to appear on the Internet, and so be extremely cautious in making sure that the health exchange website that you are using is legitimate.

Scare Tactics With Medicare

AARP has been receiving complaints recently from elderly citizens who are receiving shocking phone calls to inform them that they are losing their Medicare health coverage unless they provide the caller with their Social Security number and other such extremely personal information.

What Scammers Are After

Scammers are either after personal information such as your bank account information in order to steal money directly from you, or they will attempt to sell you a fake health insurance policy so that you will send them money yourself. Either way you may find your bank account drained, and that someone is using your personal information. It’s is crucial to be very aware of what you are doing when it comes to switching health care plans in order to ensure your safety.

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E-Cigarettes and Life Insurance Rates

One of the largest trends to hit the smoking community within the last decade is e-cigarettes. These devices are said to be safer than cigarettes, but not everyone agrees with that statement. Life insurance companies have a lot at stake when insuring current and former smokers, so how do they view this new trend? Here is a breakdown of how insurance companies are approaching the topic of e-cigarettes.

What are E-cigarettes?

E-cigarettes are considered vapor devices. They give off a puff of vapor that looks like smoke to give the smoker the feeling that they are still smoking, without as much of the harm as smoking. The manufacturers of most e-cigarettes claim these devices to be safe, and say that they do not take a toll on the e-smoker’s health, but they have not been around long enough to have much proof on those claims.

What Most Insurance Companies Are Saying

Right now most insurance companies are waiting to see some proof on how healthy these devices are. They do not want to say that these devices are healthy only to have to pay out more down the line if the devices are found to not be safe. However, they do not want to claim them as unhealthy and make e-smokers have to pay more without the proof. While waiting to find out more and get more results, most insurance companies are leaving e-smokers in the same category as regular smokers as they still end up with nicotine in their systems when using e-cigarettes.

Rates for E-smokers

For the vast majority of insurance companies, e-smokers pay the same rates as regular smokers. That is because e-smokers still get some of the toxins in their body when they use e-cigarettes. The quantity of toxins, however, is significantly decreased over standard smokers. The problem for most insurance companies is the not knowing what the new toxins can do to the body. There is not enough research to know if these toxins are in such small supply to not cause much, if any, damage, or if the new toxins that are introduced from e-cigarettes are actually more dangerous than what a person smoking a standard cigarette would ingest. Until more proof is available, most insurance companies are sticking with what they know, which is that smoking is harmful to the health.


Currently there is only one life insurance company that has taken a different approach to electronic cigarettes, and that is Prudential. They believe that you can qualify for non-smoker rates if you meet their criteria, even if you are an e- smoker. Basically you have to be honest and say that you use e-cigarettes on your life insurance forms and application, plus you need to have not smoked a standard cigarette within the last 12 months in order to qualify. Once you go through the medical exams and they can prove that you only have the right chemicals in your body, you can then qualify for the non-smoker rates and cut what you must pay for insurance down significantly.

While e-cigarettes are relatively new, they can be the key to cutting down on the smoking that happens around the world on a daily basis. If they are found to be a healthier alternative to smoking, there may be more insurance companies who will credit their consumers with discounts over the standard smoking rate, but that has yet to be seen. Over the next few years, e-smokers should expect to see changes happening all around the insurance industry to accommodate the people who have chosen to smoke vapor instead of standard cigarettes.

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The Smart Way to Manage Your IRA Account to Avoid Heavy Fees

IRA accounts are set up to help you live the life you are used to when you retire. These accounts are very helpful to retirees, but they can also be filled with large fees if they are not managed correctly. Many people suffer from the high penalties simply because they were unaware of the rules that surrounded this type of retirement account. Learning the rules and regulations that pertain to your retirement account can help you keep your money for retirement, rather than paying unnecessary penalties and losing some of the money that should rightfully be yours.

High Income Earners

People that make too much money are typically not eligible for the tax breaks of an IRA account. This means that they cannot contribute to a ROTH or traditional individual retirement account, both of which offer tax savings. If this is the situation you are in, you can contribute to a nondeductible individual retirement account, which carries with it no tax benefits. Once the account is established, it can be carried over to a ROTH in order to gain the tax benefits. This does take a little time and paperwork, but you end up with a substantial savings potential when you’re done, so it makes it worth the effort.

Take Required Distributions

When you reach the age of 70 ½, the IRS requires you to take a minimum distribution on your traditional retirement accounts. If you do not take that minimum amount, you could be penalized by as much as 50 percent of your distribution. You can avoid this fee by taking the minimum distributions on time. Each on time withdrawal helps keep more money in your pocket and less being lost to unnecessary fees.

Watch your Contributions Closely

It is easy to over contribute to your retirement accounts, but if you do, you could be subjected to stiff penalties. The IRS watches the contributions closely, which means you need to do the same. Make yourself cognizant of the limits for each tax year, as they change every year, and ensure that you do not contribute more than that amount or you risk paying a 6 percent penalty on the amount that you overpay. You should take the time to plan this out at the beginning of the year and check it quarterly to ensure that you are still right in line for your contributions.

Watch your Transfers Carefully

When you rollover your retirement accounts, you have to pay careful attention to where they are going. One form completed incorrectly could have your money being placed in a regular account and you being held accountable for a large amount of taxes as a result of an “early withdrawal.” This situation can be remedied with the IRS, but it can take a lot of time, paperwork and patience.

Watch your Rollovers

You are only authorized to perform one rollover every 365 days. If you leave your job, you have a small window of opportunity to take your money out of your employer’s 401k and transfer it to an IRA. If you miss that opportunity or you perform more than one transfer every 365 days, you could lose your entire IRA, which is about the worst penalty to pay.

Use Money for Education

If you need extra financing to pay for your education, you can withdraw the money penalty free from your IRA. It is important to note that the same is not true for a company sponsored 401k. There is no penalty for this type of withdrawal from the right account, which allows you to get your education and avoid heavy fees.

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Life Insurance Benefits for Special Needs Children

Parents who have a child with special needs should think about insuring themselves in order to provide their child with the care and the financial stability he or she needs in the case that anything happens to them. Remember that financial planning is complicated enough as it is, but with a disabled or special needs child the financial challenges can increase to a new level. As a parent with a child who has special needs, it can be easy to get consumed in the day-to-day task of properly caring for him or her, but it is also very important to look beyond the immediate present and devote some time and energy into planning your child’s future.

What to Consider

When planning for your family’s needs beyond your lifetime there are many considerations that you must look at. For example, the process of purchasing a life insurance policy is chalk-full of legal implications that must be looked at carefully. Many well-meaning families have named their special needs child as the beneficiary on their life insurance policy thereby losing his or her eligibility for financial aid from the government. Due to this, it is crucial that you consult with a financial adviser, life insurance agent, or attorney who specializes in families who have a special needs child in their care.

Life Insurance as a Financial Safety Net

An attorney can assist you in setting up a special-needs trust, which is a very important tool if you believe that your child will need government aid. A special needs trust will hold assets for your child, and can be designated as the beneficiary of your life insurance policy. In most cases a family member will act as a trustee and distribute the money accordingly in order to give your child the special care that he or she needs. When properly set up, a special needs trust will provide financial assistance in order to maintain you child’s stability and quality of life as well as preserve their eligibility for government financial aid.

Role of Life Insurance

Life insurance plays a crucial role since the majority of families cannot save enough of a financial nest egg in order to secure their child’s lifetime needs. Life insurance coverage will provide security in the case that one or both parents die prematurely. There are specialized life insurance plans designed for special needs care. There are a growing number of insurers who are establishing life insurance products specifically for special-needs planning. Life insurance agents are also becoming more fully educated on how to work with families who have a special needs child in their care, as it takes a broad and deep knowledge and understanding of the financial situation of these families.

Tips For Utilizing Life Insurance to Plan Your Special Needs Child’s Future

It is crucial that you ensure that you have an adequate amount of disability insurance, long-term care insurance, and life insurance for yourself in order to ensure that your family will not be financially strained in the case that you pass away, become disabled or are in need of long-term care. It is recommended that you invest money into a whole life insurance policy in order to finance your child’s future financial needs. A permanent life insurance policy will also provide cash value, which your family can use in case of an emergency. Also consider important riders when purchasing a life insurance policy, like a waiver of premiums (pays your life insurance premium if you become disabled) and an insurability rider (allows you to purchase more life insurance later on without a medical exam). Lastly and most importantly, do not procrastinate, now is the right time to start planning your child’s future.

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