Why You Should Work With an Experienced Life Insurance Professional by Henry Montag

Why You Should Work With an Experienced Life Insurance Professional

by Henry Montag, CFP, CLTC

Our current financial situation should make any buyer of any new financial product think twice about what they are buying, as well as the integrity and competence of the seller of the product.

It is also imperative to be equally vigilant in evaluating assets already owned.

Many consumers simply don't realize that what they already own may not be as competitive as similar products offered at other financial institutions.

For example, there are currently three trillion dollars of annuity products in force on the lives of millions of Americans. Many of those consumers will not take advantage of various qualifying events during their lifetimes. Often, a person that purchases an Insurance product from a friend or an agent at a bank will not take advantage of the benefits that come when a person reaches age 59-1/2, and free of the IRS penalty for early withdrawal.

Similarly, an individual may not take advantage of a declining interest rate which could otherwise trigger a favorable bailout. Often, rates are not competitively shopped at the end of a surrender period to the detriment of an insured. The worst possible situation would be for an Insurance company to automatically annuitize, begin making monthly payment, due to an insured's failing to notify the insurance company of the option they meant to choose for the balance of their account at their age of maturity, usually at age 80.

A prime example is a new law, (the 2006 Pension Protection Act) which just came into effect Jan 01 2010. As a result of this law, it is now possible for an annuity holder to withdraw the full amount of the premium for their long term insurance contract on a 100% tax free basis if properly transferred to pay for a Long term care Insurance premium.

An experienced Independent broker would never allow any of those situations to occur without first alerting and then if necessary, reminding their client to take specific actions that would result in their best interest.

Often times an inexperienced agent or broker will not have the courage to guide their client into purchasing the right product today, which may result in problems down the road that could and could have been avoided. Many of today's products are highly specialized and unless one specializes in the field, an agent or broker may inadvertently be doing you a disservice by discussing a product they are not properly qualified to discuss.

Because of a Supreme Court of Appeals ruling on June 18, 2010, an attorney was successfully sued by the estate of a client he represented for not advising his client to have the $1,000,000 Insurance policy owned not includable in his taxable estate.

We should be aware that perhaps many life insurance agents or brokers may not be giving their clients the best advice either in terms of correctly setting up the contracts as well as beneficiary and ownership designations.

Ask anyone trying to sell you anything how many years they've been practicing in the business. You don't want them practicing on you. Find out if they've had any complaints against them. This can easily be verified with a call to the State Insurance Department they work for.

Remember no one has as much of a vested interest in your financial well being as you do, so be a very active participant and seek the help of a trusted adviser to refer you to a professional you'll be comfortable and better off with.

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Henry Montag and Ronald Roel are Principals of Financial Forums, Inc., which provides workshops, conferences and private consultations, specializing in strategic approaches to elder care, including interpersonal, financial and legal tools needed to meet family needs.

Henry Montag CLTC
Phone: {516} 695-4662
Fax: {631} 549-2786
6800 Jericho Tpke. Suite 202W
Syosset, NY 11791
www.financialforumsinc.com
henry@financialforumsinc.com
To learn more about Henry Montag: http://www.youtube.com/watch?v=yTpACuc33fg

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