Category: Life Insurance

While the policies work in different ways, term life and whole life insurance remain the country’s most popular forms of life insurance. Whole life insurance provides an investment component, growing tax-deferred, and provides the benefits of term life. Term life provides a death benefit upon your death if it occurs within a specific period. Term life is also more affordable and well-suited to a wide range of individuals. Let’s delve a little deeper into comparing whole life and term life insurance.

Whole Life Insurance

 Also referred to as permanent life insurance, whole life does not provide a specific coverage term. As the policyholder, it is your responsibility to maintain the policy to keep it in effect. Whether 2 years or 20 years after the initial date, the insurance company will pay out the death benefit to preselected beneficiaries regardless of when the policyholder dies.

Term Life Insurance

This type of life insurance insures the life of the policyholder. As such, you would choose your beneficiaries and your death benefit (i.e., $250k). The length of a term life policy ranges from 15, 20, and 30 years, etc. If the policyholder were to die within the term, the insurance company would pay the death benefit. Otherwise, the death benefit is not paid to beneficiaries.

Contact Information:
Email: [email protected]
Phone: 2129517376

Marvin Dutton

Author

Analyzing the annuities insurance market helps you make the right decisions by fully understanding the insurance market and its various segments. A suitable annuities insurance market will provide a detailed analytical roadmap that visualizes the existing market trend. It will provide a deep assessment of insurance market valuation with details about the profit models, SWOT examination, related vendor strategies employed by the key market players who consistently invest in the global insurance market to stay above competitors, potential and existing threats from market participants, and technological advances leading to varying market substitutes and diversity.

According to a recent annuities insurance market report, the market may witness a CAGR of 13.2% between 2022 and 2028.

Several companies compete within the insurance market, and among the top market participants are Fidelity Investments Life, Brighthouse Financial, and New York Life.

The insurance market is split into variable, fixed-indexed, fixed-immediate, and other markets based on the product type.

Based on the application or end-users, the market report will cover segments such as travel and hospitality, manufacturing, financial, and industrial markets, among other insurance market segments.

Recently, there has been a boom in the life insurance market, as seen by increased individual annuity insurance.

Importance of Annuity Insurance Market Report

The insurance market analysis provides information about the growth, restraints, drivers, and challenges of the market. It also shows how the market will grow in the future. The report identifies Covid-19 impact on the annuity market and recognizes the suitable measures to sustain the market growth.

The report also helps market participants make the best investment decision by going for suitable products and applications. Thus, this report is crucial to market analysts, consultants, and managers (sales, marketing, and product) in need of quickly accessible and readily available documents showing huge annuity insurance market details.

Contact Information:
Email: [email protected]
Phone: 2129517376

Here are some important things to keep in mind regarding your federal benefits if you believe your spouse will need your health insurance in case you die before them.

Your federal health insurance is an important consideration when deciding what type of death benefits you’ll need to have set for your spouse in retirement. 

You must leave some level of survivor benefits for your spouse to continue on your Federal Employees Health Benefits (FEHB) plan after you die. Because of this, most federal employees carry at least the minimal amount of survivor annuity benefit, even if the spouse won’t need the income replacement after death. If your spouse needs this health insurance, you should take at least the minimal survivor benefit.

Are You Insurable?

On the other hand, if you want to leave no survivor benefit and instead get private life insurance to replace your income after your death, there are two essential things to consider.

The first is, as previously said, your spouse’s health insurance. If your spouse relies on your FEHB, you should consider purchasing at least the minimal survivor annuity.

Second, can you even obtain private life insurance? You cannot simply assume that you’ll be able to purchase whatever private coverage you choose. You must first qualify.

Life insurance is acquired with your health first, then with your money. Poor health can lead to higher life insurance premiums, and you might even be denied coverage, making the survivor annuity the most cost-effective alternative in some cases.

Good health can have the opposite impact. These criteria do not apply to survivor annuities; you’re automatically eligible for coverage at a standard 10% cost.

Be A Smart Consumer

There’s no simple method to evaluate which of the different levels of survivor annuity benefits and life insurance alternatives is best for you, as it ultimately boils down to personal preference. That is why we recommend hiring an insurance specialist to conduct a needs analysis for your particular situation.

Let’s consider the case of Kevin, who, like many federal employees, wishes to ensure that his family is provided for in the event of his death.

As a FERS employee, he’ll get an annuity when he retires at the age of 58. He is debating his survivor annuity options for his wife, Sara, who is also 58. He understands that if he doesn’t get a survivor annuity, he will get a larger annuity benefit for the rest of his life. Still, he also doesn’t want Sara to struggle if he dies before her or to be left without federal health insurance.

As a FERS employee, Kevin can choose 50%, 25%, or 0%. For the example, we’ll assume Kevin opts for the 25% option for the purpose of health benefits.

Also, let’s suppose Kevin has a high-three of $110,769 with 32 and a half years of service when he retires.

Pension Maximization

Kevin may be able to take the larger annuity while still providing for his wife’s security in the case of his death.

He can use a technique known as pension maximization, which involves using life insurance to replace a portion of Kevin’s annuity at his death. That necessitates estimating how much Kevin is likely to pay if he chooses private insurance over the survivor benefit option.

The process of maximizing your pension begins with evaluating the future value of your spouse’s survivor annuity. In Kevin’s example, we multiply $750 by a fixed number depending on Sara’s age. In this way, we can calculate the future value of Sara’s survivor benefit, which is roughly $150,000. (We’ve left out the calculation since it’s complicated, varies by individual, and only offers an estimate; you should see an expert for this.)

Once he has determined the amount of the federal annuity, he might be able to replace it with a combination of term and permanent life insurance policies. By looking at the premiums, Kevin can compare the costs of private plans to the expenses of the survivor annuity.

Analyze life insurance products carefully and confirm the length of time the coverage is guaranteed. As a bonus, several life insurance companies include various types of long-term care coverage in their policies.

Blindly accepting the default survivor benefit isn’t a good idea. You’re in control and not OPM.

Your surviving spouse will most likely need your pension income. Do your homework and be a savvy customer by being aware of all of your alternatives. Understand how your survivor annuity decisions will influence your spouse’s federal health insurance coverage. No matter whether you pay for life insurance premiums, take the pension cut that comes with survivor benefits, or both, know that it won’t be cheap.

Contact Information:
Email: [email protected]
Phone: 2129517376

Many reasons can cause a federal worker to leave government employment before they are eligible to do so. For those interested in taking this step, five years of service or more can aid the decision without the worker having to forgo pension payment. The only condition is that the worker must have opted out of taking money out of pre-saved retirement funds and must be ready to wait for some time before they can be on the annuity payroll.

This system is known as deferred retirement, and there are rules guiding the process under FERS and CSRS. For employees that the latter covers, deferment ends at the age of 62 regardless of the age a worker files for it. So by age 62, a worker who defers annuities will start receiving payment under the system.

FERS workers who have put in a minimum of five years will be eligible for deferment payment at age 62. Workers who have put in 20 years will start getting previously deferred annuities at age 60, while those who put in at least 30 years will start receiving deferred annuities at their minimum retirement age. Workers who put in less than 30 years but more than ten years of service could also begin receiving reduced pensions when they reach their MRA. The reduction will be about 5% annual deductions until they are age 62.

To avoid the deduction, it is best to wait out the years and receive full payments later.

Recall the following about minimum retirement ages of workers based on the year of birth:

A person born before 1948 will reach his/her MRA at 55 years. Workers born in 1948 will add two months to that to make 55 years and two months. A two-month increase continues until 1953-1964. Workers born during these twelve years will reach their MRA at age 56. Again, two months of increase continue until 1970 and succeeding years. Workers born in this period will reach their MRA at age 57.

Under deferred retirement, after the waiting period, retirees will receive their deferred annuities until they die. The disadvantage in this system is that the benefits remain unchanged through the years until retirees start receiving them. As the years go by, inflation and other factors will reduce the value of the benefits.

Lastly, being eligible for deferment before age 62 will stop entitlement for SRS (special retirement supplement). The flip side here is that as soon as such a worker clocks age 62, he or she will be entitled to a Social Security benefit.

Many reasons can cause a federal worker to leave government employment before they are eligible to do so. For those interested in taking this step, five years of service or more can aid the decision without the worker having to forgo pension payment. The only condition is that the worker must have opted out of taking money out of pre-saved retirement funds and must be ready to wait for some time before they can be on the annuity payroll.

This system is known as deferred retirement, and there are rules guiding the process under FERS and CSRS. For employees that the latter covers, deferment ends at the age of 62 regardless of the age a worker files for it. So by age 62, a worker who defers annuities will start receiving payment under the system.

FERS workers who have put in a minimum of five years will be eligible for deferment payment at age 62. Workers who have put in 20 years will start getting previously deferred annuities at age 60, while those who put in at least 30 years will start receiving deferred annuities at their minimum retirement age. Workers who put in less than 30 years but more than ten years of service could also begin receiving reduced pensions when they reach their MRA. The reduction will be about 5% annual deductions until they are age 62.

To avoid the deduction, it is best to wait out the years and receive full payments later.

Recall the following about minimum retirement ages of workers based on the year of birth:

A person born before 1948 will reach his/her MRA at 55 years. Workers born in 1948 will add two months to that to make 55 years and two months. A two-month increase continues until 1953-1964. Workers born during these twelve years will reach their MRA at age 56. Again, two months of increase continue until 1970 and succeeding years. Workers born in this period will reach their MRA at age 57.

Under deferred retirement, after the waiting period, retirees will receive their deferred annuities until they die. The disadvantage in this system is that the benefits remain unchanged through the years until retirees start receiving them. As the years go by, inflation and other factors will reduce the value of the benefits.

Lastly, being eligible for deferment before age 62 will stop entitlement for SRS (special retirement supplement). The flip side here is that as soon as such a worker clocks age 62, he or she will be entitled to a Social Security benefit.