The firm of Steven H. Kobrin, LUTCF
In 1991, I entered the life insurance business full-time, and soon formed my own national brokerage. Throughout my career, I have been dedicated to mastering the craft of selling life insurance, and am an expert in helping people get a policy who represent a “higher risk” due to health, lifestyle, or other personal issues. Along the way, I have developed a huge network of industry contacts that enables me to serve as a primary resource for all the insurance needs of my individual and corporate clients.
I now help brokers, advisers, and financial firms across the country utilize my organization and become a primary resource for the insurance needs of their own clients. They form strategic partnerships with my providers so they can stay within their own area of specialization, yet help their clients purchase the other products they need from professionals in those marketplaces. It's a winning formula for all concerned.
My firm runs a Global Insurance Portal through which consumers, brokers, consulting firms, and agencies can gain access to the insurance resources they need, on a global basis. http://planrisklive.com/global-insurance-portal/
On the personal side, I am a religious Jew and avid practitioner of kung fu. I have studied spiritual disciplines and personal development all my adult life. I am a conservative in my political and economic views, and a liberal when it comes to keeping an open mind and a willingness to work with people of all persuasions.
BA in Liberal Arts
I am licensed to sell life insurance. Here's my interview with financial educator and consultant George Bailey:
My own personal standard for an emergency fund is one year of expenses. This is a minimum, I am actually thinking about increasing it to two years.
I have learned from experience that it takes one to two years to recover from a serious financial/business setback. Bear in mind, we are talking about something major here that results in a substantial loss of income, and which will require some rebuilding to get back to normal.
I don't want to have to dip into my retirement or investment accounts in this situation. I want to depend exclusively on the reserve fund, and let it do its job. So, I think it's better to over-fund it, as opposed to under-fund it and jeopardize my other monies.
I use a simple cash account with my broker. No fees, no interest, and liquid. If I needed the money in two hours, I can get it.
As my cash picture changes, the role of this reserve fund will change. In my next stage of life, I may want it to be larger. Or, if I reduce my expenses, it will be smaller.
Here are some of the variables I think you should consider when answering this question. The whole point is to set up a table of standards against which you can compare this recommendation against other options.
Many investors wants their portfolio to have a conservative portion. Do you?
If so, then what are your options? Do any of them offer comparable guarantees and rates of return to whole life insurance?
Where do they stand with regards to liquidity?
Would the death benefit come in handy at all in your financial planning?
Very importantly: can you get good underwriting? Make sure you get prequalified before making a purchase, so you can confirm upfront, before submitting an application, that the policy values will be attractive
The National Association of Insurance Commissioners provides a lot of consumer services, including a policy locator. You can deal with them directly.
“The NAIC can assist consumers in locating life insurance policies and annuity contracts of a deceased family member or close relationship."
"When a request is received, the NAIC will:”
- Ask participating companies to search their records to determine whether they have a life insurance policy or annuity contract in the name of the deceased.
- Ask participating companies that have policy information to respond to the requester if the requester is the designated beneficiary or is authorized to receive information.
- For information on how to complete the request form, please see the Frequently Asked Questions.
You can borrow money from life insurance, that has a cash account for use, while the insured is alive. But you need to make sure you understand how these products work so that doing so doesn't backfire on you. Here are three pitfalls to avoid when you take cash out of life insurance:
1) Don't reduce the death benefit
Remember, life insurance is first and foremost a sum of money to take care of your heirs, estate, business, favorite charity, and all others who will carry on your legacy.
Taking money out of the life insurance policy while you are alive could very well reduce the survivor benefit. You don't want to short-change the beneficiary.
2) Don't tamper with the guarantee
Permanent insurance can have the unique feature of guaranteeing your coverage for the rest of your life. These guarantees are based on certain assumptions. Chief among these are that you will stick to a premium-paying schedule, and will keep the cash accumulating at a certain level.
If you take cash out of the policy, you may deplete the cash needed in the policy to ensure the guarantee. The coverage may not last as long as you want.
3) Don't force yourself to pay additional money
Some permanent policies will even ensure the guarantee when you take out cash. But the cost of providing you that guarantee will have to be covered somehow. They very well could ask you for additional premium payments to pick up the difference.
If they do this, then you will be paying more money into the policy than expected.
The moral of the story is this: get an understanding of what you want to use life insurance for – both the living and the death benefit – and make sure you are informed about the ramifications of tinkering with that strategy.
Please feel free to reach out to me with any additional questions.
It's always a good idea to get tax advice from a tax professional. Having said that, I can share some lessons learned from my 25 years experience in the life insurance business.
I think on virtually every claim I have helped file, the beneficiary has taken the benefit in a lump sum. No income tax there. If they had let the company hold on to the money, and distribute it as monthly income, they would've had to pay tax on the interest earned. Then again, they would've had the same obligation had they received a lump sum and invested it in a taxable investment to generate monthly income.
If you want to get really clever about this, you could do the following: take a lump sum life insurance benefit, and put it into a new life insurance policy on yourself. If you play your cards right, it could both accumulate tax-deferred and be distributed tax-free. Of course, you have to need the life insurance, qualify for a good rate, etc. Make sure you know what you're doing here.
Another way to get taxed on the life insurance benefit is to receive money from an estate that is so large, the unified credit won’t shield all its assets. This is an estate tax, not an income tax. With proper estate planning, you can avoid this. (I personally can't wait until the estate tax is repealed so we don't have to worry about that burden. This may seem like blasphemy coming from a guy who makes money selling life insurance to pay estate taxes; but frankly, I don't think the government has any right to my family's money that was already taxed upside down and sideways when earned.)
Just a little political commentary, as long as we are on the topic :)