Have you ever wondered
how to help secure the financial future of your children or grandchildren
beyond college expenses?
Fewer companies are
offering pensions, with the share of Fortune 500 companies that provide them to
new hires falling to 24 percent at the end of 2013 from 60 percent in 1998. Only
7 percent of employers offer new employees traditional pensions, which pay out
a certain amount at retirement based on a worker’s pay and how long they stayed
with a company. (1)
As parents, we want to
see our children achieve success greater than ours. How is that possible without the benefit of
traditional retirement plans?
We have all seen Gerber
Life Insurance Company commercials telling us how we can help our children and
grandchildren “grow-up strong.” Like me,
I am sure you wondered if that type of investment makes sense. The type of investment being promoted in the
Gerber Life commercials are life insurance policies.
Should you consider purchasing life insurance for your child or grandchild?
Whole life insurance:
- Provides a guaranteed death benefit.
- Offers a guaranteed premium structure, which means your premium will never increase, but may be reduced or eliminated.
- Builds cash value that can only increase over time.
- Some whole life insurance offers dividends. When dividends are declared, they may be credited to your policy, further increasing the cash value and death benefit. (2)
A dividend paying whole
life insurance policy that you purchase today for your newborn child or grandchild
could:
- Have a monthly premium as low as $66.69.
- Require no more additional premium payments after ten years.
- Have a cash value of $135,703 at your child or grandchild's age 65.
- Have rate of return equivalent to 4.79% on the cash value.
- If the cash value of the policy is not withdrawn, have a potential death benefit of $282,862.
- May have a rate of return equivalent to 6.07% on the death benefit.(3)*
The cash value is
available for tax-free withdrawal to help fund the policy holder’s retirement
income. The death benefit would be
payable to beneficiaries if he/she passed away without withdrawing the
cash value.
The interest rate that
banks offer is their choice. Historically, online banks have offered their
customers a higher savings interest rate because they have lower overhead costs
— they don’t have to pay rent on their local branches. Throughout the entire industry, however, the
national average savings interest rate is only 0.17%. (4)
Make sure your retirement savings are sufficient. It is wonderful to be generous to the next
generation, but you need to secure your own future first.
For more topics like this, check out our radio show
“Retirement Plain and Simple” every Saturday morning at 8 on WNPV 1440 AM and like
us on
Facebook!
If we at Kemp
Harvest Financial Group can help you in any way with regard
to your financial planning needs, please feel free to contact us.
Securities and investment advisory
services offered through National Planning Corporation (NPC), NPC of America in
FL & NY, Member FINRA/SIPC, and a Registered Investment Adviser. Registered Representatives of NPC may
transact securities business in a particular state only if first registered,
excluded or exempted from Broker-Dealer, agent or Investment Adviser
Representative requirements. In
addition, follow-up conversations or meetings with individuals in a particular
state that involve either the effecting or attempting to effect transaction in
securities, or the rendering of personalized investment advice for
compensation, will not be made absent compliance with state Broker-Dealer,
agent or Investment Adviser Representative registration requirements, or an
applicable exemption or exclusion. Kemp
Harvest Financial Group and NPC are separate and unrelated companies. NPC PRIVACY POLICY. NPC #96292 05/17
Some estate planning and tax services
may be offered by a qualified third party. NPC does not provide tax or legal
advice.
The information being provided is
strictly as a courtesy. When you link to
any of the web sites provided herewith, you are leaving this site. We make no representations as to the
completeness or accuracy of the information provided at these sites. Nor is the company liable for any direct or
indirect technical or system issues or any consequences arising out of your
access to or your use of third party technology, sites, information and
programs made available through this site.
By clicking on the links above you will leave our web site and assume
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linking.
This is a general description of
coverage. This analysis is provided for
informational purposes only and should not be construed as a
recommendation. A complete statement of
coverage is found only in the policy.
Death benefits generally pass on income tax-free to your
beneficiaries. Policy loans and interest
will reduce the death benefit and cash value.
The guarantee only applies to the death benefit, is based on the
claims-paying ability of the issuer and does not protect against market
fluctuation.
*This rate may fluctuate depending on
issuer.
(3) Ohio National Quotes – for specific
quotes and documentation used in this blog, please contact us.
Author: Jen Bauder, Registered Paraplanner™
Jen Bauder is a Registered Paraplanner™ with Kemp Harvest Financial Group and has
over seventeen years of experience in the life insurance and retirement
benefits industry. She is a graduate of Bloomsburg University and holds a
Registered Paraplanner™ designation, FINRA Series 6 and 63 licenses, a
Pennsylvania Notary license, the Associate Customer Service designation, and
the Associate, Insurance Agency Administration Professional designation.
