Why Now Is The Best Time to Buy Life Insurance

by NFS | Sep 11, 2017 | Archives

The sluggish economy continues to put financial strain on many of us. So it just makes sense to examine our budgets and look for ways to trim the fat from our monthly expenses and put more into savings, if possible.

That’s a great way to help stabilize your finances, but it’s also important that you have a financial safety net in place in case something were to happen to you. Life insurance is one of the few guarantees your family could rely on to maintain their quality of life if you were no longer there to provide for them.

There are 95 million adult Americans without life insurance, according to LIMRA, an insurance industry research group. The fact is, the vast majority of Americans need life insurance and, sadly, most people either have none or not enough. If someone depends on you financially, you need life insurance. It’s that simple.

September is Life Insurance Awareness Month, making it the perfect time to take stock of your life insurance needs. And there are three additional reasons why now is the best time to look into getting life insurance.

You’ll never be younger than you are now. While that may sound obvious, youth is on your side when it comes to life insurance. It makes good financial sense to get coverage when you’re young and healthy, as premiums are based on your age and health. For most policies, your premiums will be locked in at that rate over the life of the policy, and can’t be raised due to a change in your health status.

It’s affordable, with rates near historic lows. People overestimate the cost of life insurance by nearly three times, according to a recent study conducted by LIMRA and the LIFE Foundation, a nonprofit insurance education organization. In fact, life insurance rates remain near historic lows; the cost of basic term life insurance has fallen by nearly 50 percent over the past decade. For example, a healthy 30-year-old can buy a 20-year, $250,000 level-term policy for about $13 per month.

Life happens. One day life is going along smoothly, and the next, you’re thrown a curve ball. No one knows what the future holds. None of us expect to die prematurely, but the truth is roughly 600,000 people die each year in the prime of their lives. That’s why today is always the best day to take care of your life insurance needs.

Life Insurance Awareness Month is the ideal time for a life insurance review. I urge everyone to take a few minutes out of their busy schedules to make sure they have adequate life insurance protection.

Consumers can get a general sense of their life insurance needs by going to www.lifehappens.org/lifecalculator and using the online calculator offered by the LIFE Foundation. The next step should be to contact a local insurance professional, who can conduct a more comprehensive needs analysis and help you find the right products to fit your specific needs and budget.

Held each September, Life Insurance Awareness Month is an industry-wide effort that is coordinated by the nonprofit LIFE Foundation. The campaign was created in response to growing concern about the large number of Americans who lack adequate life insurance protection. Roughly 95 million adult Americans have no life insurance, and most with coverage have less than most insurance experts recommend. For more information on life insurance, visit LIFE’s website at www.lifehappens.org.

Call us at 800-560-4637 and we can help you through the entire life insurance process!

On This Day…Lincoln Imposes First Federal Income Tax

by NFS | Aug 4, 2017 | Archives

On this day in 1861, Lincoln imposes the first federal income tax by signing the Revenue Act. Strapped for cash with which to pursue the Civil War, Lincoln and Congress agreed to impose a 3 percent tax on annual incomes over $800.

As early as March 1861, Lincoln had begun to take stock of the federal government’s ability to wage war against the South. He sent letters to cabinet members Edward Bates, Gideon Welles and Salmon Chase requesting their opinions as to whether or not the president had the constitutional authority to “collect [such] duties.” According to documents housed and interpreted by the Library of Congress, Lincoln was particularly concerned about maintaining federal authority over collecting revenue from ports along the southeastern seaboard, which he worried, might fall under the control of the Confederacy.

The Revenue Act’s language was broadly written to define income as gain “derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere or from any source whatever.” According to the U.S. Treasury Department, the comparable minimum taxable income in 2003, after adjustments for inflation, would have been approximately $16,000.

Congress repealed Lincoln’s tax law in 1871, but in 1909 passed the 16th Amendment, which set in place the federal income-tax system used today. Congress ratified the 16th Amendment in 1913.

Check Withholding Now to Avoid Surprises at Tax Time

by NFS | Jul 24, 2017 | Archives

The federal income tax is a pay-as-you-go system. Employers generally withhold tax from workers’ wages. Taxpayers also often have taxes withheld from certain other income including pensions, bonuses, commissions and gambling winnings.

People who do not pay tax through withholding, like the self-employed, generally pay estimated tax. In addition, those who earn income such as dividends, interest, capital gains, rent and royalties are usually required to make estimated tax payments.

Each year, because of life events like changes to household income or family size, some people get a larger refund than they expect while others find they owe more tax.

To prevent a tax-time surprise, the IRS offers these tips:

• New Job. When starting a new job, an employee must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from regular pay, bonuses, commissions and vacation allowances. The IRS Withholding Calculator tool on IRS.gov is easy for taxpayers to use to figure how much tax to withhold to avoid surprises.
• Estimated Tax. People who have income not subject to withholding may need to pay estimated tax. Those expecting to owe $1,000 or more than taxes withheld from their wages may also need to make estimated tax payments to avoid penalties. The worksheet in Form 1040-ES, Estimated Tax for Individuals, helps to figure the tax.
• Life Events. A change in marital status, the birth of a child or the purchase of a new home can change the amount of taxes a taxpayer owes. The Managing Your Taxes After a Life Event page on IRS.gov provides resources to explain the tax impact of these changes. In most cases, an employee can submit a new Form W–4 to their employer anytime.
• Avoid scams. The IRS will never initiate contact using social media or text message. First contact generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Before Your Kids Go Off To College, Get These Legal Documents In Place

by NFS | Jul 19, 2017 | Archives

For college-bound freshmen and their parents, this is an exciting summer, full of anticipation. The kids are becoming adults, and are ready and eager to take responsibility for their own lives.

Amid all this excitement, it is easy for parents to forget that they are no longer the natural legal guardians of their college-age children, and so they are no longer authorized to make personal, medical or financial decisions for them.   At age eighteen, your children become adults in the eyes of the law.

Consider every parent’s nightmare.  You get a long-distance phone call from your child’s college saying your son or daughter has a critical illness or has been in a serious accident.  Then your nightmare gets even worse.  You phone the hospital, only to be told that federal law prohibits disclosure of any confidential information about your son or daughter’s medical condition, even though you are their parent.

You hop on a plane, perhaps assuming that you can take control of the situation when you arrive.  Instead, the hospital still won’t talk to you, and you are told that you cannot make important personal or medical decisions for your unconscious child.  Instead, you will have to go to court to begin the long and expensive process of being named your child’s guardian and conservator.

Don’t let this easily preventable tragedy happen to you.  Urge your college-bound child to get three simple and inexpensive legal documents in place before he or she heads off to school this fall.

HIPAA Release

The Health Insurance Portability and Accountability Act (HIPAA), is the federal law that prohibits healthcare professionals from disclosing your adult child’s confidential medical information to you unless your child has named you (and/or other family members) as his or her HIPAA “agent”.   If you are not named in a HIPAA Release, it does not matter if you are the patient’s spouse or parent, the doctors’ hands will be tied.    If you get that dreaded phone call, this simple release will at least give you immediate knowledge, for better or worse, of your child’s medical status.

Healthcare Proxy

Even if you talk to doctors as your child’s HIPAA agent, you will not be able to make medical decisions for a child who is mentally incapacitated (e.g., in a coma) unless your child named you as their healthcare agent in a legal document called a healthcare proxy (or healthcare power of attorney).

In Massachusetts, a proxy must be witnessed by two persons, neither of whom is named as health care agent.  If no healthcare proxy exists, you will have no choice but to go to court to get appointed guardian of your child.

Durable Power of Attorney

Many parents incorrectly assume they will be able to step in to manage their incapacitated child’s financial affairs, such as banking, car loans and insurance, simply because they remain the child’s principal income source.   Before leaving for college, your child should execute a durable power of attorney, authorizing you – as their “attorney-in-fact” – to handle their finances in their stead.   Unlike a healthcare proxy, which becomes effective only if your child becomes unable to make his or her own decisions, you can use this durable power of attorney immediately, and as a matter of convenience, to assist your child with their finances while they’re off at college.  Once your child is mentally incompetent, however, the power of attorney will be more than a convenience.   Without it, you’ll need to go to court to be appointed your child’s conservator.

Your son or daughter child can carry a wallet card with them, allowing doctors to gain quick phone or internet access to these crucial healthcare documents, even if your child is no condition to communicate.

In most cases, college students’  permanent legal residence does not change while they are attending college out of state, and these legal documents should be created in their state of legal residence.  So before your children head off for college, they should get these three inexpensive documents in place.

You cannot do this task for them, because they are legal adults who must make their own legal decisions.   But once they realize the unnecessary heartache they can spare you, they will appreciate the wisdom of taking these simple and inexpensive precautions.

If you need help in getting these documents in place, please contact our office and we will make sure to connect you with a trusted attorney who can do this for you.

Happy 4th of July from NFS

by NFS | Jul 4, 2017 | Archives

What is FICA?

by NFS | Mar 20, 2017 | Archives