Brandon Roberts 
A life insurance dividend is a non-guaranteed payment from the insurance company to the policy owner representing profits the company earned during the policy year. Insurance companies often view dividends as a sharing of the surplus created by their insurance activities among policyholders whose insurance contracts generate profits beyond the insurer’s expectations. A dividend also …
Back in 2015 we published this blog post detailing a scenario looking at whole life insurance as an alternative option to buying bonds. The details for the individual who approached us included a desire to invest a sum of $500,000 into bonds, so we looked at how we could best deploy that cash into a …
Keep ReadingWhole Life Insurance vs. Bonds (Updated for 2021)
Imputed income is the recognization of a benefit received for which the recipient did not pay. When it comes to life insurance, imputed income occurs when someone receives coverage through his/her employer where the individual does not pay for the coverage. Internal Revenue Code 61 stipulates most of the rules for imputed income. Imputed income …
Indexed universal life insurance (or IUL) can be good for retirement because it protects your savings from stock market crashes. It also has the potential to earn more than a whole life insurance policy. IUL is able to accomplish this slightly higher return potential because it uses index accounts that are linked to the movement …
Fee-only insurance advisors provide advice on insurance-buying decisions free of the potential conflicts posed by commissions. Fee-only advisors receive compensation through a fee you agree to pay them for their work. In exchange for their fee, these advisors will review the facts of your specific buying situation, insurance proposals you received from agents, and make …
Premium finance life insurance requires the policy owner to get a loan from a bank to pay the premiums on his/her policy. The strategy works to reduce the net cost of buying an extremely large life insurance policy, and wealthy Americans use premium financing for this very purpose. There are, however, times when unscrupulous insurance …
The guaranteed insurability riders, also known as the future purchase option, future increase option, guaranteed purchase option, or guaranteed increase option rider, allows the insured of a life or disability insurance policy to purchase additional coverage without going through a new medical exam. This rider can help an insured purchase additional amounts of insurance when …
Keep ReadingHow Does the Guaranteed Insurability Rider Work?
Life insurance loan interest causes a lot of misunderstanding. The interest is a charge assessed by the insurance company on any outstanding loan balance a policyholder has against an insurance policy’s cash value. That seems simple enough, but why does the insurance company charge interest? How much interest do you have to pay on a …
Keep ReadingBut What About the Life Insurance Loan Interest?
Modified life insurance, also commonly modified whole life insurance, is a unique form of permanent life insurance that offers a much lower premium for the first few policy years in exchange for a higher premium after an introductory period. The spirit of this type of life insurance is budget-friendliness. The target market is families where …
Keep ReadingWhat is Modified Life Insurance and Should you Buy it?
What is a Modified Endowment Contract? A Modified Endowment Contract (MEC) is a life insurance policy that fails the 7-pay test established by the Tax and Miscellaneous Revenue Act of 1988 (TAMRA). Failure of this test reclassified the life insurance policy, which comes with several changes to the taxation of the insurance contract. It’s important …
Keep ReadingA Complete Guide to the Modified Endowment Contract (MEC)
