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Power Checklist

  • If you think about the reasons you don't like insurance, you'll most likely find yourself saying, “I hate insurance because I get paid only after something really bad has happened, it's too difficult to understand, and I always feel that I'm being taken advantage when it's being sold to me.”

  • Insurance is a way for you to share the cost of unexpected experiences with others who wish to do the same.

  • As consumers, we have to decide which risks we want to fully insure, which risks we want to partially insure, and which risks we want to self-insure.

  • When faced with managing risk and making an educated buying decision, follow these steps: assess the risk, put the risk into perspective relative to other risks, quantify the cost of reducing or eliminating the risk, and validate the cost and the terms of the product used to reduce or eliminate the risk.

  • You insure assets, not liabilities. This can sometimes be a difficult and emotional pill to swallow.

  • Income insurance replaces up to 100 percent of your preretirement income and can guarantee that income for the rest of your life.

  • Fundamentally, an annuity contract is a tax-advantaged vehicle used to accumulate assets for retirement and a vehicle for distributing income during retirement.

  • Annuities avoid the cost, delay, and publicity associated with the probate process.

  • Annuities can be fixed, variable, or immediate.

  • All annuities enjoy tax-deferred growth. You pay taxes only when you make withdrawals or begin insured income payments.

  • There are typically no costs to buy a fixed annuity; 100 percent of the money received goes to work for you immediately, but there are liquidation fees, usually for the first five to seven years.



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