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Our news articles are posted on a regular basis to give our clients relevant and timely information about matters pertaining to our financial services. Browse through our current and archived articles to learn more.

Category: Personal Insurance

Financial & Wealth :: Why Purchase Life Insurance?

purchase_life_insurance

We’ve all heard about the importance of having life insurance, but is it really necessary? Usually, the answer is “yes,” but it depends on your specific situation. If you have a family who relies on your income, then it is imperative to have life insurance protection. If you’re single and have no major assets to protect, then you may not need coverage.

In the event of your untimely death, your beneficiaries can use funds from a life insurance policy for funeral and burial expenses, probate, estate taxes, day care, and any number of everyday expenses. Funds can be used to pay for your children’s education and take care of debts or a mortgage that hasn’t been paid off. Life insurance funds can also be added to your spouse’s retirement savings.

If your dependents will not require the proceeds from a life insurance policy for these types of expenses, you may wish to name a favorite charity as the beneficiary of your policy.

Whole life insurance can also be used as a source of cash in the event that you need to access the funds during your lifetime. Many types of permanent life insurance build cash value that can be borrowed from or withdrawn at the policyowner’s request. Of course, withdrawals or loans that are not repaid will reduce the policy’s cash value and death benefit.

When considering what type of insurance to purchase
and how much you need, ask yourself what would happen
to your family without you and
what type of legacy you would like to leave behind.

When considering what type of insurance to purchase and how much you need, ask yourself what would happen to your family without you and what type of legacy you would like to leave behind. Do you want to ensure that your children’s college expenses will be taken care of in your absence? Would you like to leave a sizable donation to your favorite charity? Do you want to ensure that the funds will be sufficient to pay off the mortgage as well as achieve other goals? Life insurance may be able to help you meet these objectives and give you the peace of mind that your family will be taken care of financially.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the claims-paying ability of the issuing insurance company.

If you are considering the purchase of life insurance, consult a professional to explore your options.

 

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC.

 

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Tips to Keep Your Home Safe During Holiday Travel Time

Whether you’re planning a Caribbean vacation getaway, or a trip to visit relatives this holiday season, keep in mind that an empty house is a tempting target for a burglar. But with a little common sense and some careful planning, you can reduce the possibility that your home will be broken into while you’re gone.

 

Prepare your first line of defense – Use sturdy locks on all doors and windows and secure before you leave. Repair any broken windows or locks. Never operate under the assumption that a burglar won’t find the one that’s faulty.

Enlist the help of a trusted neighbor – Tell one neighbor your itinerary and your estimated time of arrival and return. That person should have a key to your front door to periodically check on the house, and a telephone number where you can be reached in an emergency.

Don’t broadcast your plans – Especially in the era of social media, never post your travel plans on Facebook or Twitter. According to a recent article in the New York Times, tech-savvy thieves are taking advantage of the detailed information provided by unsuspecting social media users.

Never let the house appear empty from the street – Stop your newspaper delivery, and have your neighbor pick up your mail and any packages left on the front porch. Arrange for someone to mow the lawn, rake leaves and clean the yard if you’ll be away for an extended period. Ask your neighbor to place garbage cans at the curb on normal pickup days and put them back after the garbage pickup. If you leave your car at home, park it where you normally would. However, be sure your neighbor moves it occasionally so that it appears the car is being driven. If you’re driving your car, have your neighbor periodically park in your driveway or in front of your house.

Your home shouldn’t seem empty on the inside either – Plug in timers to turn lights and even a television on and off at appropriate times. Turn the ringer on your telephone down. If a burglar is around, and hears a call that goes unanswered, they’ll know you’re away. Don’t leave a message on your answering machine notifying everyone you’re on vacation. Leave your blinds, shades and curtains in a normal position. Don’t close them unless you would normally do so while at home.

Don’t give thieves alternate ways to enter your home – Lock garage doors and windows. You should also secure storage sheds, attic entrances and yard gates.

Don’t leave valuables in plain sight – Consider locking valuables in a bank safety deposit box. If you do leave valuables at home, make sure they are engraved. This simple precaution will allow stolen property to be easily identified and returned to you if recovered later.

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Commercial Insurance :: What The Weather Experts Are Doing To Prepare For A Worsening Hurricane Season

HurricaneWeather experts predicted a very early and active hurricane season for 2013. The hurricane season lasts for six months and starts on the first day of June. Experts said the chance of having up to 20 storms during those months was about 70 percent. Of these storms, they predicted that up to 11 could become hurricanes, which means the wind gusts would be higher than 74 mph. They also predicted that as many as six of these storms could be major hurricanes. To be considered a major hurricane, a storm must have wind gusts higher than 111 mph. The seasonal average at the time of their prediction was three major hurricanes, six hurricanes and 12 storms.

After several devastating hurricanes hitting the United States
during the past decade, many people become increasingly nervous
when hurricane season arrives each year.

Experts are committed to forecasting these storms as soon as possible to save more lives and minimize damages. It is important for concerned citizens to remember that tropical storms and hurricanes are not exclusive to the coastal areas. As these storms move inland, they bring heavy rainfall, flooding, strong winds and even tornadoes with them.

There are three climate factors affecting how hurricanes form in the Atlantic. These include the following:

  • Water temperatures that are warmer than average in the Caribbean Sea and the Atlantic Ocean.
  • Continual atmospheric climate patterns that are part of African monsoons. 
  • No expected development of El Niño to suppress the formation of hurricanes.

Experts say oceanic and atmospheric conditions in the basin of the Atlantic will create stronger hurricanes in larger numbers. These include wind patterns from Africa, warmer water in the Atlantic Ocean and weaker wind shear. Experts are working on ways to improve their storm tracking abilities.

It’s wise to review your insurance coverage and ascertain
that your property, equipment, personal and business operations
are properly covered against loss and failure.

One of the new developments introduced in early 2013 was an improved forecast model. The National Hurricane Center’s communicating procedures and data gathering techniques were also improved. Experts have plans to add a supercomputer that is capable of running upgraded research to depict the structures of storms and forecast their intensity more precisely.

Additional improvements include a Doppler radar that will provide real-time transmissions to aircraft. This will make it easier for forecasters to analyze storms that are moving or developing rapidly. It will help them improve their model forecasts by up to 15 percent. The National Weather Service also made some changes to keep warnings in effect or to be reissued for stronger storms that are changing. The flexibility allows them to provide a continuous stream of warning information to the public.

 

Be prepared for storm and Hurricane season. Be sure to have safety, evacuation and emergency preparedness plans in place. It’s wise to review your insurance coverage and ascertain that your property, equipment, personal and business operations are properly covered against loss and failure. Contact G.R. Reid Insurance Services to review your existing, or speak about new, insurance coverage. 

Contact G.R. Reid to discuss your Information Technology backup support needs. In the event of a major hurricane, be prepared with appropriate computer backup systems to avoid loss of critical digital files and intellectual property. Our I/T Services experts are available to assist you.

 

 

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Wealth Management :: Life Insurance: How Can I Upgrade My Insurance — Tax-Free?

Responding to the changing needs of consumers, the life insurance industry has developed some alternatives that go much further in satisfying a variety of financial needs and objectives than some of the more traditional types of insurance and annuities.

Advancements
Modern contracts offer much more financial flexibility than traditional alternatives do. For example, universal life and variable universal life insurance policies allow policy owners to adjust premiums and death benefits to suit their financial needs.

Modern contracts can also provide much more financial control. Whereas traditional vehicles, such as whole life insurance and fixed annuities, provide returns that are determined by the insurance company, newer alternatives enable clients to make choices that help determine returns. For example, variable annuities and variable universal life insurance allow investors to allocate premiums among a variety of investment subaccounts, which can range from conservative choices, such as fixed-interest and money market portfolios, to more aggressive, growth-oriented portfolios. Returns are based on the performance of these subaccounts.

There are contract limitations, fees, and charges associated with variable annuities and variable universal life insurance, which can include mortality and expense risk charges, sales and surrender charges, investment management fees, administrative fees, and charges for optional benefits. Withdrawals reduce annuity contract benefits and values. Variable annuities and variable universal life insurance are not guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed by, any bank or savings association. Any guarantees are contingent on the claims-paying ability of the issuing company.

Withdrawals of annuity earnings are taxed as ordinary income and may be subject to surrender charges plus a 10 percent federal income tax penalty if made prior to age 59 ½. The investment return and principal value of an investment option are not guaranteed. Because variable annuity subaccounts fluctuate with changes in market conditions, the principal may be worth more or less than the original amount invested when the annuity is surrendered.

The cash value of a variable universal life insurance policy is not guaranteed. The investment return and principal value of the variable subaccounts will fluctuate. Your cash value, and perhaps the death benefit, will be determined by the performance of the chosen subaccounts. Withdrawals may be subject to surrender charges and are taxable if you withdraw more than your basis in the policy. Policy loans or withdrawals will reduce the policy’s cash value and death benefit , and may require additional premium payments to keep the policy in force.

There are differences between variable- and fixed-insurance products. Variable universal life insurance offers several investment subaccounts that invest in a portfolio of securities whose principal and rates of return fluctuate. Also, there are additional fees and charges associated with a variable universal life insurance policy that are not found in a whole life policy, such as management fees. Whole life insurance offers a fixed account, generally guaranteed by the issuing insurance company.

A Dilemma
So what should you do if you want to cash out of your existing insurance policy or annuity contract and trade into one that better suits your financial needs, without having to pay income taxes on what you’ve accumulated?

One solution is the “1035 exchange,” found in Internal Revenue Code Section 1035. This provision allows you to exchange an existing insurance policy or annuity contract for a newer contract without having to pay taxes on the accumulation in your old contract. This way, you gain new opportunities for flexibility and tax-deferred accumulation without paying taxes on what you’ve already built up.

The rules governing 1035 exchanges are complex, and you may incur surrender charges from your old policy or contract. In addition, you may be subject to new sales and surrender charges for the new policy or contract. It may be worth your time to seek the help of a financial professional to consider your options.

Variable annuities and variable universal life insurance are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity and variable universal life contract and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

G.R. Reid Wealth Management Services, LLC, offers you a talented, experienced team of professionals that have a broad range of financial expertise and complimentary market specific experience, necessary to help you achieve your financial goals. Please contact us to arrange an appointment.

Jason Reid Saladino and George G. Elkin are Registered Representatives offering Securities through American Portfolios Financial Services, Inc. Member: FINRA, SIPC. Investment Advisory products/services are offered through American Portfolios Advisors Inc., a SEC Registered Investment Advisor. G.R. Reid Wealth Management Services, LLC is not a registered investment advisor and is independent of American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. Independent Portfolio Consultants is an independent financial consulting firm and is not affiliated with American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. does not offer tax advice. Please consult with your tax advisor.

 

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc.
This material was written and prepared by Emerald. © 2013 Emerald Connect, Inc. All rights reserved.

 

 

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Wealth Management :: Life Insurance: What Is a 1035 Exchange?

Named after Section 1035 of the Internal Revenue Code, a 1035 exchange allows life insurance policyowners (and annuity contract owners) to exchange an old policy (or contract) for a new one from a different insurance company without tax consequences. Of course, it must meet the requirements of Section 1035 in order for the transaction to be tax-free. This strategy can be especially beneficial to a person who purchased a life insurance policy or annuity contract many years ago that has less favorable contract stipulations than those available today.

A 1035 exchange applies only when it involves the same contract holder and the same type of contract. It gives the contract owner the flexibility to find another contract that features lower costs, a higher death benefit, or more investment choices. The cost and availability of insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before surrendering your “old” life insurance policy, it would be prudent to make sure that you are insurable.

Investors can also do partial 1035 exchanges for a portion of the total contract amount. In this case, the transferring company should notify the new company of the exchange amount that is investment versus gain, because any gain is subject to ordinary income taxes when withdrawn. Some companies do not recognize partial 1035 exchanges for tax reporting purposes. A tax professional should be consulted to properly track these amounts in the contract.

Nonetheless, a 1035 exchange can be an effective tool for contract holders who want to exchange older contracts for current, more useful ones.

The rules governing 1035 exchanges are complex, and you may incur surrender charges from your “old” annuity contract or life insurance policy. In addition, you may be subject to new sales, mortality and expense charges, and surrender charges for the new contract or policy.

Annuities have contract limitations, fees, and charges, which can include mortality and expense risk charges, sales and surrender charges, investment management fees, administrative fees, and charges for optional benefits. Annuities are not guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed by, any bank or savings association. Any guarantees are contingent on the claims-paying ability of the issuing insurance company. Withdrawals reduce annuity contract benefits and values. The investment return and principal value of an investment option are not guaranteed. Because variable annuity subaccounts fluctuate with changes in market conditions, the principal may be worth more or less than the original amount invested when the annuity is surrendered.

Variable annuities are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

 

G.R. Reid Wealth Management Services, LLC, offers you a talented, experienced team of professionals that have a broad range of financial expertise and complimentary market specific experience, necessary to help you achieve your financial goals. Please contact us to arrange an appointment.

Jason Reid Saladino and George G. Elkin are Registered Representatives offering Securities through American Portfolios Financial Services, Inc. Member: FINRA, SIPC. Investment Advisory products/services are offered through American Portfolios Advisors Inc., a SEC Registered Investment Advisor. G.R. Reid Wealth Management Services, LLC is not a registered investment advisor and is independent of American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. Independent Portfolio Consultants is an independent financial consulting firm and is not affiliated with American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. American Portfolios Financial Services Inc. and American Portfolios Advisors Inc. does not offer tax advice. Please consult with your tax advisor.

 

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc.
This material was written and prepared by Emerald. © 2013 Emerald Connect, Inc. All rights reserved.

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Personal Insurance News :: Hurricane Preparedness: Have a Plan in Place

Since recent news has been filled with warnings about Hurricane Isaac, it’s a good time to evaluate how prepared you are in the event of a major storm threat like we experienced on Long Island last year with Hurricane Irene.

In the United States, hurricane season officially begins June 1 and runs until November 30th  each year. It is important to have a thorough storm emergency plan in place if you live in an area prone to hurricanes. It is also imperative that you know your local evacuation routes prior to the issuing of a “Hurricane Watch” or a “Hurricane Warning.” Radio and television networks will keep you updated with the latest information for your area. There are different meanings to the terms “Hurricane Watch” and “Hurricane Warning.”  If a “Hurricane Watch” is issued for your area, weather conditions are favorable to produce a hurricane within 36 hours.  When a “Hurricane Watch” has been announced preparations that require extra time, such as securing a boat or evacuating an island, should be initiated. A “Hurricane Warning” is a more serious notification.  If a “Hurricane Warning” has been issued, sustained winds of at least 74 mph are expected within 24 hours.  You should now be in the process of completing protective actions and deciding where you will be safest during the storm.

If you live in an area that is prone to flooding, do not plan on riding the storm out at home.

Other Items to Consider Before a Hurricane

  • Purchase materials to board up windows.
  • Store any outdoor objects that could blow away.
  • Find a safe place for your pet.  Your veterinarian or local humane society can provide you with information on preparing your pets for an emergency.
  • Stock up on supplies and prepare a survival kit for your home and car.  Items to include are:  a first-aid kit; canned food and bottled water, enough for at least 3 to 7 days per person; toiletries; blankets and pillows; a battery-operated radio and flashlight; some protective clothing and any special items for infants or elderly.
  • Store important documents in waterproof containers or bags.
  • Withdraw some cash. Banks and businesses can be closed for a period of time following a hurricane.
  • Fill up your car’s fuel tank.

Be Safe As the Hurricane Approaches

  • It is safer to stay indoors and away from windows, as strong winds will blow items around.
  • If you live in a mobile home, seek temporary refuge in a shelter.
  • If your home is in a flood prone or low-lying area, move to higher ground or go to a shelter.
  • If a mandatory evacuation has been issued, leave immediately.

After The Hurricane

  • Exercise caution when checking for injured or trapped people.
  • Beware of flooding which is typical after a hurricane, and do not attempt to drive into floodwaters.
  • Avoid standing water.  It may be electrically charged from underground or downed power lines.
  • Do not drink tap water until it has been cleared to do so.

While hurricanes are potentially dangerous and life threatening, preparedness is crucial to weathering the storm safely.

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