Tax-Free Financial Security for Your Family

Share

Sign Up For Our Newsletter To Receive Weekly Updates.

After 45 years of selling life insurance, I know that it isn’t necessarily everyone’s favorite topic, no matter how important it is to securing your family’s future. Maybe you’re wondering why you would even need life insurance. Perhaps you’ve already paid off your car, house, credit cards, etc. However, one thing life insurance can guarantee is that your family is taken care of when you’re gone. It can guarantee a source of income for your family to pay for funeral costs, mortgage, and other household expenses. What wouldn’t you give to guarantee a safety net for your family?

Many people believe that leaving money to your heirs through your estate is the only or simplest way to provide for your heirs. However, by making your heirs the beneficiaries of your life insurance policy, you can circumvent the hassle of probate and instead see your beneficiaries paid in a matter of weeks.

Affordable Life Insurance for Retirees

Life Insurance benefits can provide quick and efficient financial assistance after a passing. Retirees can begin these plans now to provide security for their family’s future.

Guaranteed Universal Life versus Whole Life

Regardless of income level or other estate plans, I always recommended a bare minimum of $25,000 in life insurance to cover immediate costs following death. But perhaps you’re now wondering just how much a policy for older people with health issues could be worth. Probably a lot more than you think.

Let’s start by examining the financials of Guaranteed Universal Life (GUL) versus Whole Life policy. For a 68-year-old male, a $40k GUL insurance policy will cost around $190/month; an equivalent policy will run about $145/month for a woman of the same age. Contrastingly, a $40k whole life insurance policy will cost about $258/month for a 68-year-old male and $184/month for a 68-year-old female. And let me emphasize, these are guaranteed premiums. What you pay now, when the policy is issued, will never change.

The difference in cost between the two types of life insurance is, in part, related to the risk taken by the insurance company. With GUL insurance, there is a more rigorous health screening– typically requiring a physical or paramedical exam as well as a complete health questionnaire. However, this does not mean that you need to be in perfect health. I have had many clients approved for policies even if with a history of high blood pressure, diabetes, or even cancer a few years ago.

On the other hand, the application and approval process for whole life insurance is significantly less demanding, typically requiring only a short health questionnaire and a brief overview of your prescriptions. These policies are routinely issued in less than a day.

Another key difference is that of cash value. While whole life insurance charges a higher premium, it does retain a cash value that can even grow over time and provide a supplemental emergency fund. This means that if life throws you some unexpected expenses, you can always rely on this policy to provide that extra needed cash.

Whole life insurance policies can also be significantly smaller than GUL policies. Say you only want $2,000 of coverage? No problem. Unlike GUL insurance, whole life insurance can provide more flexibility in this regard.

In fact, it is this low policy minimum that has given some whole life insurance policies the unofficial name of “funeral” or “burial insurance” — also known as final expense insurance. For those of you whose legacy plans are already cemented and in order, this may be an appealing option. If the burden of paying for funeral and burial costs is something you do not want to place on your loved ones, purchasing a small whole life “final expense” policy is often advisable — and likely even necessary as median funeral and burial costs surpassed $9,000 in 2019 according to the National Funeral Directors Association.

Listen to learn more about life insurance:

From Funeral Costs to Living Expenses: Your Family’s Future, Guaranteed

Now that we’ve established just how obtainable life insurance is financially, let’s get to the most important point: why you need it.

I can guarantee you that all of you reading this have someone you care about — who you want to protect and provide for when you’re gone. This is the uncomfortable part of planning for retirement and beyond. No one wants to think about what happens when they’re gone. But the only thing worse than that is realizing what happens when you’re gone and your family is not provided for. This is why I urge all of my clients to think seriously about life insurance.

A life insurance payout is treated much differently than the money paid out via your Will and estate. It serves as a tax-free windfall to your beneficiaries when they most need it. It’s uncomplicated and guaranteed. What’s not to like?

Perhaps you yourself have experienced the complications associated with estate dispensations. Maybe a loved one’s Will became entangled in probate court for months or even years. You may think that this only happens in complicated families with complicated estates, but that’s not true. The unimaginable could happen — your family could face unforgiving delays in probate court, leaving them unequipped to cover funeral costs, lawyers fees, mortgages, car payments, household bills, and more.

In purchasing life insurance, you are providing your loved ones with a guaranteed safety net to cover those expenses — both expected and unexpected. Having been in this industry for over 4 decades, I have real experience with families in the aftermath of their loved one’s passing. I have seen firsthand what can happen when families are left with assets tied up in probate. They might manage. Maybe they compensate by taking out loans or racking up credit card debt. Maybe they go without. The reality is hard to face — especially since it’s entirely avoidable.

Lastly, another benefit provided by a life insurance policy is that of privacy. Life is complicated. Distributing assets amongst loved ones is not always the neatest endeavor. Whatever your specific circumstances are, a life insurance policy can serve as a more private means of providing when you are gone. Wills are public. The assets allocated in your Will will be known to everyone. If you want to avoid the possible discomforts of those disclosures, purchasing a life insurance policy is an excellent alternative.

No matter your situation, life insurance is a must-have for responsible retirement and estate planning. From covering funeral costs to guaranteeing tax-free income to your heirs, it is an indispensable and versatile tool. Cardinal is here to help you figure out which life insurance policy best suits your needs. We will work with you to ensure your family is provided for when you are gone.

Get In Touch

Contact us today with any questions, concerns, or just to stay connected.

Contact Us

Have questions? Contact us today.

[contact-form-7 id="d91790a" title="Contact Us"]

Tax-Free Financial Security for Your Family

Share

Sign Up For Our Newsletter To Receive Weekly Updates.

Understanding the Upcoming 2026 Income Tax Increase: What You Need to Know

A Brief History of the Tax Cuts and Jobs Act (TCJA)

In today’s Cardinal lesson, we’re discussing the significant changes coming to income tax rates in 2026. This isn’t a proposal but a law already set in motion. The Tax Cuts and Jobs Act (TCJA), passed in 2017 and effective from January 1, 2018, brought about substantial reductions in income taxes. However, these reductions were only funded for eight years, meaning they will expire at the end of 2025.

What Changes to Expect in 2026

As of January 1, 2026, the tax rates will revert to their 2017 levels, adjusted for inflation. Key changes include:

  • The 12% bracket will increase to 15%.
  • The 22% bracket will rise to 25%.
  • The top rate of 37% will revert to 39.6%.

Not Just a Proposal

It’s crucial to understand that this change is already the law. Many people mistakenly believe that the tax rate increases are still under discussion. However, unless Congress enacts new legislation, these higher rates will take effect as scheduled.

Implications for Your Financial Planning

Impact on IRAs and 401(k)s

With the current lower tax rates, now is the time to consider strategies like Roth conversions. By converting funds from a traditional IRA to a Roth IRA now, you can potentially save a significant amount in taxes over the long term.

Why Planning Ahead is Crucial

For individuals with substantial retirement savings, understanding these changes is vital for effective tax planning. The window to take advantage of the current lower tax rates is closing, and planning ahead can make a significant difference.

Case Studies and Planning Opportunities

Hans Scheil and Tom Griffith discuss specific case studies and planning strategies in our latest video. These examples illustrate how different scenarios can be managed effectively:

  • Case Study 1: A married couple with an adjusted gross income of $150,000 in 2024 can convert part of their IRA to a Roth IRA, taking advantage of the lower current tax rates.
  • Case Study 2: High-net-worth individuals with large IRAs can save substantial amounts in taxes by planning conversions over the next two years.

Estate Tax Considerations

The TCJA also doubled the estate tax exemption, which will revert in 2026. This change can significantly impact high-net-worth individuals, making estate planning more crucial than ever.

Action Steps to Take Now

  • Review Your Current Tax Situation: Analyze how the upcoming changes will affect your finances.
  • Consider Roth Conversions: Take advantage of the lower tax rates before they expire.
  • Plan for Estate Taxes: Assess your estate plans in light of the changing exemptions.

Conclusion

The changes coming in 2026 are significant, but with proper planning and informed decision-making, you can navigate these changes effectively. Watch our video for more detailed insights and personalized advice.

Get In Touch

Contact us today with any questions, concerns, or just to stay connected.

Contact Us

Have questions? Contact us today.

[contact-form-7 id="d91790a" title="Contact Us"]
Scroll to Top

Ansylla Ramsey

OFFICE ADMINISTRATOR

Caleb Bartles

Life, Accident & Health insurance

Daphne Sutton

ADVISOR

Tommy Fallon

ADVISOR

Weekly Email

Want to get important updates first?

Don’t miss out on any important info, from Medicare deadlines to taxes, we will keep you updated! Try it out, you can always unsubscribe at any time.

Newsletter