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  • Writer's picturePeter 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)

Increase in Taxes coming to pay for new $3.5 Trillion Spending Bill?

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.

Bottom Line:

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.

Insurance Myth

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.

Have an upcoming client onboarding or annual review?

Let us complete a policy analysis for you!

Upload current policies securely here and we will get you a full insurance analysis back to you within 24 business hours.

Have additional questions? Feel free to schedule a time with us here.

Life / Disability / Long Term Care / Annuities

Thank you for supporting BC Brokerage.

We love serving Fee-Only Financial Planners and their clients throughout the United States.

Picture of Broc visiting Yellowstone National Park in September 2021

BC Brokerage, LLC

P.O. BOX 441032

Indianapolis, IN, 46244


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