Peter C. Ciravolo
September Newsletter | BC Brokerage | Life Insurance Awareness Month
Statistics on Life Insurance
54% Percent of American adults have some form of life insurance
27% Of American adult only have life insurance through their employer
10x to 15x The multiples of your annual income that most financial advisors recommend you need when buying life insurance for income replacement
29% Percent of American adults intend to buy their life insurance online
40% Percent of insured wish they purchased their policy earlier
5x-15x How much more permanent life insurance is vs. term life
4.5-9% *Average percent increase in your insurance costs as you age
30% The average cost difference between sequential health ratings
2x to 3x How much rates for smokers cost vs. rates for nonsmokers
35% The average difference between the least expensive and most expensive rate for the same person across insurance companies
30% Percent difference between premiums for men and women (with women paying nearly ⅓ less than men, on average)
Source: 2020 Insurance Barometer Study, LIMRA
Increase in Taxes coming to pay for new $3.5 Trillion Spending Bill?
(Above image link to original source)
As of Tuesday 9/14/2021 the House Ways and Means Committee released the proposed tax provisions of the broader budget reconciliation bill that Democrats hope to pass in the upcoming weeks.
· Reinstatement of highest individual tax bracket of 39.6% (to include individuals with annual incomes >$400,000 and married couples of >$450,000)
· New capital gains rate of 25% effective today (September 13) (same applies to dividend income)
· New 3% surtax on individuals with annual AGI over $5 million
· No elimination of step-up basis
· Reinstatement of former estate tax exemption amount of $5.5 million for individuals ($11 million for married couples) to be effective on January 1, 2022
· No SALT provisions in the draft of the bill (though we believe they will be added later)
· No provisions relating to individual tax/information reporting by financial services companies (this too could be added later)
· New corporate tax rate of 26.5% (estimated -3.5% hit to S&P500 earnings)
· Significant changes to taxes paid by US corporations with international profits and foreign companies operating in the US
· No provisions relating to 1031 real estate exchanges
This House draft bill is likely to pass out of committee this week, and continue on through the approval and reconciliation process as outlined in the above image.
If your clients have some net worth, you need to start looking into ways of lowering their estate tax and planning for it.
*** Source for above information ***
Many over estimate the cost of Life Insurance
Is this in fact true? Many times yes!
If you grab a latte on the go between 15 and 20 times a month you can expect to spend somewhere between $75 and $100 per month. A relatively healthy 40 year old male could buy 1 million dollars of life insurance for the same amount of money.
Thanks for the illustration Dwight.
This should be pretty obvious (especially if you've followed us the last 1.5+ years!), but it’s worth saying: this is a myth!
By definition being fee-only means you can’t be earning commissions -- and you can’t be in a position where you could earn commissions.
Insurance compensation is based completely on commissions.
#feeonly #fiduciaries #theBCway
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