Brantley Whitley 
It’s September, well almost anyway, so you know what that means? Yep, it’s life insurance awareness month again.
We know that today is technically August 31st for all you obsessed with details, but we’re assuming that most of us will be enjoying the last hoorah of summer this weekend–which means we probably won’t be thinking about life insurance.
If you've read any of my previous posts, it's no big surprise to you that I'm very passionate about the subject of retirement income. Honestly, I think this is one of the biggest boondoggles for financial advisors, investment companies and life insurance companies.
None of them have been prepared for the growing demand that is now upon us to help our clients distribute their accumulated wealth in the best way during their retirement.
Many consumers and most agents assume that because interest rates are at an all time low and thus cap rates are at an all time low, the fixed index annuity is no longer a viable alternative to other investments such as CDs and the stock market. However, this is an extremely narrow point of view and one that could seriously damage a client’s future retirement income.
See, my opinion is that a retired person should be more concerned with their income than with the growth of their assets.
So every once in a while (much more frequently than we'd like) an a-ha moment comes along at the Insurance Pro Blog where we sit and think “why did it takes us this long to think about doing that,” and a handy guide on buying life insurance happens to be just one of those a-ha moments.
We didn't need the help of Mutual of Omaha for our a-ha moment, instead something I read in a report from LIMRA that made me realize this would probably be a good idea.
To follow up Brandon's post from yesterday regarding employer owned life insurance (EOLI) and so called Dead Peasant Insurance as it's been described in the media, I thought I'd share a piece recently written over at Forbes.
We think this sort of reporting is pretty typical of the insider media mantra, “if it bleeds it leads”.
You should really take a few minutes to read the piece and form your own opinions, however, it quickly became apparent to me that the journalist is really huffing and puffing about nothing in this case.
There’s a funny sounding phrase in the life insurance world that relates to a lethal tax trap called the “Goodman Triangle”. Sounds deadly doesn’t it?
Well, it actually refers to a court case Goodman v. Commissioner that dates back to 1946 believe it or not. And it is the “unholy trinity” of life insurance planning.
Let's start with a brief discussion of modern portfolio theory (MPT) just to make sure we're all on the same page. To avoid a less than exciting academic foray into MPT, I'll provide a basic definition.
Basically, the theory is that individual investment (a particular asset i.e. stock or bond) selection should not be chosen on their own merits. What's more important is how each asset's price moves relative to all the other investments in a portfolio. Harry Markowitz was the first to articulate this concept back in 1952.
Typically a multi-year guaranteed annuity and the term “CD annuity” are used interchangeably within marketing literature. While the description is accurate in describing conceptually how the product works, I feel it could be a little misleading to consumers.
An annuity is NOT a CD, it’s not related to a CD, and the two really shouldn’t be compared as much as they are. Later on I’ll get into some of what really makes them different. The differences may seem subtle to some but they are vitally important to understand.
For the past few decades, a big part of the American Dream was to go to college, get a great job with a big company, work there for forty years and then spend your days cruising around in your golf cart in some place like Boca Raton, Scottsdale or Palm Desert.
Of course this whole “fantasy” (that’s arguable in my opinion) was possible because almost all retirees were covered by a traditional pension plan.
The last few years have certainly seen an unprecedented amount of chaos in the global financial markets. And life insurance companies have not been immune to the aftershocks. We all know that in large part, the turmoil was caused by the collapse of the derivatives market.
All of the financial unrest has lead to a much greater awareness and concern regarding life insurance company ratings, overall financial stability and how the carriers are being overseen by third party rating agencies.
