Investment & Insurance Planning Services, LLC
Certified FInancial PLanner ™
David J. Blount, CERTIFIED FINANCIAL PLANNER™ founded Investment & Insurance Planning Services, LLC in 2005. David earned one of the most respected financial planning designations, CFP® , in 2007, allowing him to provide a broad range of financial advice. Prior to founding his own company, he worked for Calton & Associates and The MONY Group. While companies and markets may fluctuate, David’s values are steadfast. He values providing straight-forward advice, integrity, professionalism, honesty, and responsive service. He believes that getting to know the person and building trust in an advisory relationship is the key to meeting client satisfaction.
At Investment & Insurance Planning Services, LLC, we believe that you should enjoy your health, wealth and time by doing the things that inspire you. Our client commitment is to provide great service and advice that’s consistent with your individual financial goals. We strive to help our clients find sound financial strategies that enable them to pursue and protect what's most important. Furthermore, we utilize our skills in retirement, investment, estate and insurance planning to help clients solve the financial complexities of making a life-change or adjusting to new circumstances.
David completed his undergraduate studies at Troy State University, where he graduated Summa Cum Laude with a Bachelors in Arts & Sciences. Prior to that he spent 9 years in the United States Coast Guard where he participated in the aids to navigation, maritime law enforcement and search & rescue missions. He earned a number of military awards and recognitions during his time in the service. David has served as the guest financial expert on Orange Televisions Adult Lifestyle Magazine Show and currently serves as the Vice President for Seminole Health & Human Services Network and ELITE Networking groups. David also volunteers his time with the Hook Kids on Fishing programs and is active at Northland Church. When not working, David enjoys fishing and spending time with his wife, Michelle, and their two children, Ryan and Alana.
BS, Psychology, Troy State University
Registered Representative of The O.N. Equity Sales Company, Member FINRA/SIPC. One Financial Way, Cincinnati, OH 45242 (513)794-6794. Investment Advisory Services offered through O.N. Investment Management Company.
Contact your registered representative to obtain current prospectuses. Please read the prospectus carefully before you invest or send money. Investors should consider the investment objectives, strategies, risk factors, charges and expenses of the underlying variable portfolios carefully before investing.
Guarantees are based upon the claims-paying ability of the issuing insurance company.
As with any investment, investing in variable portfolios involves risk, including possible loss of principal. Past performance is no guarantee of future results.
Hello, thank you for the question. First, accumulate an emergency savings account worth three to six months of your monthly living expenses. This money should be stored in a checking, savings or money market account so that it's accessible when needed and not at risk. Then you'd want to understand the amount of risk that you're willing to take with the investment money to achieve your retirement goals. You can probably find some basic risk tolerance questionnaire’s online. The amount of risk that you're comfortable with will then help guide you to a matching portfolio that's suitable for your investment objectives. I'd also suggest finding a CERTIFIED FINANCIAL PLANNER™ in your local area to help you with this and creating a retirement plan. You can search for a financial planner in your zip code at www.letsmakeaplan.org. A good planner can create a written retirement plan that will help you discern how much money you'll need to retire, how much income you can take from your portfolio and what return you'll need on your investments to fund your retirement income long-term. Most will offer a free consult and by all means talk to several to find one with whom you're comfortable with before moving forward. Often bank representatives just want to sell you products whereas a CFP® has a fiduciary duty to do what's in your best interests and to be fair they work in banks too. To summarize, have an emergency savings account, engage a good financial planner to help you create a plan, complete a risk tolerance questionnaire, select a portfolio then invest. Hope this helps and all the best with your financial planning goals!
First of all please accept my condolences. I’m sorry for your loss.
Further to your question, once a policy is issued, the first premium is paid, and all delivery requirements are signed, the policy is in full force and effect. There are many instances where an insured died the day the premium was paid and the carrier paid the claim, as they must.
However, all life insurance policies have a two-year contestable period. During this time the carrier may ‘contest’ the claim and deny payment if there has been a “material misrepresentation” of facts. Some examples would include non-disclosure of health issues such as tobacco use, etc. Furthermore, suicide is an exclusion if occurring in the first two policy years. Thereafter these issues are, generally speaking, non-contestable.
It’s possible that the carrier has not denied the claim so much as they are investigating the circumstances. That is not unusual. During this time the carrier will perform a thorough evaluation of all facts. Presupposing there are no adverse findings, the claim should be paid.
If the claim is denied, you’re entitled to an explanation. In today’s information age, it is difficult for a proposed insured to ‘hide’ any adverse history. If the claim is denied, and depending on the size of the claim, you may consider hiring an attorney experienced in these matters.
Next steps for you should be to confirm if they have in fact denied the claim or are still investigating it in accordance with the contestability clause in your uncle’s life insurance contract. If they’re contesting the claim, then I encourage you to be vigilant in staying informed and patient with the process. If the claim was denied, then obtain a detailed explanation of the reasons for denial. If you disagree with their decision, then see if you can appeal it and or consult with an attorney competent in these matters.
Thank you for the question and I sure hope that in the end this works out in your favor. To conclude I’d like to encourage other readers who are considering buying life insurance with the following story.
I had a client a few years ago apply for life insurance, and during the application process told me she did not want to disclose a particular lifestyle choice. I counseled disclosure explaining the contestability period and that her application would be shopped until adequate coverage for an acceptable premium was found. Not all carriers look at all issues of health or lifestyle in the same way. Part of an agent’s task is to advocate for the client and find the best fit for both the client and the insurance company.
She took my advice, answered all of the questions truthfully and accurately, and bought the coverage offered. The insurance company issued the policy as applied for. However, within the two-year contestability period she passed away. The insurance company “contested” the claim and sure took their time looking into the coroner’s report, medical records, blood tests, media etc.…and paid the policy in full.
The point: it’s very important to disclose everything in an insurance application to avoid claim denial.
Many people want to avoid certain questions on the application to save money on premiums and keep it out of their records. For example, tobacco and recreational drug use are often not admitted. However, this creates a potential claim risk and unintended consequences to surviving family members.
I’d like to add the following considerations to the thoughtful answers already provided. To answer your question, I'd consider what return is needed on your investment in a balanced portfolio to equal the potential life insurance benefit that you already have. For example, if you die at age 90 then your balanced portfolio beginning with $213,000 would need to earn a 16.72% after tax annual return to replace the $1mm. (Present Value = $213,000, Future Value = $1,000,000, Years = 10, Payments = None) That high of a return is very unlikely for a balanced portfolio. So if this decision is based upon which option makes more economic sense from a return on investment standpoint, then this analysis suggests keeping the life insurance.
Taxes: In most cases the proceeds from life insurance are non-taxable to your heirs, free from income taxes, but included in your gross estate. Since your policy was a work related benefit, you would need to do some checking with the insurance company, former employer or accountant to see if this holds true for your policy. If you find out that your benefit will be non-taxable, then keeping the non-taxable life insurance benefit to replace taxable accounts can make sense. IRA's, 401(k)'s and other such retirement accounts will be taxable to your heirs whereas the life insurance benefits are usually tax free. So you could take more money out of the qualified accounts each year to pay the insurance premiums but in the end save on taxes and consequently leave behind a greater share of your estate. You would have to pay taxes on the withdrawals from IRA’s of course. Hypothetically, if you have a $1mm IRA and pass it along to your heirs and they’re in the 25% tax bracket, then the net after tax proceeds to them would be $750,000. Whereas the net after tax proceeds from the life insurance policy could be $1,000,000. A significant difference for sure! I still think you could pay less taxes and pass along a greater share of your estate via the life insurance even after considering the opportunity costs of paying premiums and additional taxes on the withdrawals from the qualified accounts.
- Any discussion about replacing this policy assumes that your healthy enough to qualify for a new policy.
- Since it's an adjustable life plan of insurance, you can make changes to the policy. For example, you could reduce the death benefit to a level where the premiums are more tolerable. You would need to either understand policy design or work with someone who does because you have to be very careful when making policy changes. The insurance company can provide in force policy illustrations to help you solve for the right amount of coverage, premium or cash value. I'd make sure that in whatever scenario you choose you confirm that the policy will last longer than you expect to live.
I hope that this added some value. Without knowing the exact particulars of your estate, it's hard to know what's best for you. But I submit this information as food for further thought to the answers you're seeking. Feel free to call or write if you have further questions and best wishes!
Thank you for your question and congrats on working towards your retirement goals. Where you live is a very important consideration during retirement and in most cases having a paid for house is a great idea. However, within the context of the data you provided, I'd be apprehensive about taking such a large withdrawal from a 401k to pay for a house. The main reason being is because you'll have to pay A LOT in taxes on that withdrawal. For example, if you withdraw the $300,000 for the home purchase you would be taxed as if you had made $300,000 this year on top of your other earned income. Because this money has never been taxed before, it's assessed ordinary income tax rates. For 2016 the tax on $300,000 would be 33%. So at 33% on the $300,000 your tax bill would be approx. $100,000 in addition to the taxes owed on any other earned income you have. If your credit score isn't that great then you might have to pay a higher interest rate on your mortgage loan too. Having said this, if you're convinced that buying a home is in your best interest then consider doing that on a 15-year mortgage. Then it will still be paid up in a reasonable amount of time. And if it's necessary to use funds from the 401k to help out, then you can spread out the withdrawals over the term of the loan to potentially reduce the tax implications. Remember with a home purchase you still have insurance, taxes, home maintenance and possible HOA fee's to figure into your retirement budget. Consider starting your analysis with with a forecast of your income and expenses during retirement. This may help you back into your decision and gain more clarity regarding what's important to you and how much you can afford. Finally, consult with an accountant or tax preparer prior to making such a large withdrawal to confirm your tax liabilities. Hope this helps and best wishes for a long and healthy retirement!
Typically no, however, some 401k plans may permit the 401k custodian to rollover a 401k account to an IRA if you're no longer employed and the account value is under a certain amount. For example, if XYZ company handles your 401k plan then the governing plan document for your company's plan may allow XYZ to move the 401k account into an XYZ IRA. This is sometimes allowed so that the custodian can clear smaller 401k accounts out of the plan. But I don't think it would ever allow for your 401k at XYZ to be rolled over into another broker dealer's IRA. If this rollover was permitted by the pan document then you should have received ample notification from the 401k custodian before any such transfers were processed.
Definitely "no" regarding the broker dealer permitting your husband to initiate a rollover. This couldn't happen without someone forging your signatures on the account documents. One caveat would be if you had passed away then of course he would be permitted to roll the 401k into his own IRA. So yes, this does sound like a securities violation and you should make further inquiries to see exactly what happened, file a complaint if your money was mishandled and take further legal action as you see necessary.