Welcome to the second edition of our Monthly Updates, Insights & Tidbits from Wise Choice Planning, LLC. Our mission is to provide you with valuable insights that spark questions about your current defensive asset and income protection plan.
The Significance of the Elephant
You may have noticed our pink elephant mascot. But why an elephant? Elephants, like humans, have deep family bonds. They are highly intelligent animals with complex emotions, compassion, and self-awareness. They mourn the loss of loved ones and never forget the spot where a family member passed.
We’ve chosen the Pink Elephant as Wise Choice Planning’s mascot for two reasons:
- To encourage our clients to face the “elephant in the room” – those difficult financial discussions we often avoid.
- To emphasize the importance of leaving a legacy that your loved ones will remember.
The Enduring Power of Life Insurance
Did you know that life insurance dates back to 100 BC in Rome? In the United States, its history is intertwined with the nation’s founding. The first life insurance corporation in America was established in 1759 by the Presbyterian Synod of Philadelphia.
A properly structured permanent policy with a reputable Mutual Life Company has stood the test of time, surviving:
- The Civil War
- The Great Depression
- Two World Wars
- The Dot-com bubble
- 9/11
- The Great Recession
- COVID-19
- 39 US Presidents
Today, a well-structured permanent/high cash value life insurance plan remains one of the only financial tools that can provide tax-free income or be passed on to heirs tax-free.
Famous Figures Who Leveraged Life Insurance
Many successful entrepreneurs used their Permanent/High Cash Value Life Insurance Policies to start or save their businesses, including:
- Walt Disney (Disneyland)
- James Cash Penney (JCPenney)
- Ray Kroc (McDonald’s)
- Max and Verda Foster (Foster Farms)
- Leland and Jane Stanford (Stanford University)
- Doris Christopher (Pampered Chef)
Disability Income Awareness
May was Long Term Disability Income Awareness Month. Here’s a simple concept to understand the importance of disability income protection:
Which job would you choose?
- Job A: $150,000 Annually, $0 if disabled
- Job B: $145,500 Annually, $90,000 to $116,400 if disabled
Most would choose Job B, sacrificing a little income for the security of 60% to 80% of their previous income if disabled.
Did you know? Statistically, 1 in 3 Americans will experience a disability before age 65, with men having a 43% chance and women a 54% chance of becoming seriously disabled.
Long Term Care Insurance
Long Term Care insurance isn’t just for nursing homes. It can also cover in-home care, allowing your family to continue their lives without putting everything on hold to care for you. If you meet the qualifying conditions, these funds can be used for your care in your choice of living arrangements.
Supreme Court Case: Connelly v. Internal Revenue Service
A recent Supreme Court case could have significant consequences for closely held corporations, Sub-S Corps, and LLCs regarding life insurance policies. If you have a corporate-owned policy, we should discuss immediately about potentially doing a 1035 exchange into a new policy to be owned by NuCo or a Trust.
Recommended Reads
- “PAYCHECKS and PLAYCHECKS” by Tom Hegna CLU, ChFC, CASL
- “Money. Wealth. Life Insurance.” by Jake Thompson
- “Safety-First Retirement Planning” by Wade Pfau, Ph.D., CFA, RICP
- “A People’s History of the United States” by Howard Zinn
We hope you found this edition informative and thought-provoking. Remember, life doesn’t wait – it’s important to make a plan to defend your assets today. If you have any questions or would like to discuss your financial planning needs, please don’t hesitate to reach out.
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