Financial Gears

Retirement Planning?
Are you in that season where your planning for retirement as an individual and your looking for information on how best you can plan.Well let me tell you a personal story about retirement
My father retired years back, paid out his benefits but guess what? He hadn't prepared where to put this huge amount of money and kept trying different things as advised by friends and family.All this didn't yield to stable income flows due to unpreparedness and lack of financial principles to help structure his investments. Had he not been a hardworking husband and father.. I probably wouldnt be here. I would therefore say, Thank you Dad (congressman)

My previous post on life insurance as a financial plan advises 20% of monthly income be set aside monthly for retirement. however you need to understand how to utilize your money to have a happy retirement free of anger, depression, social withdrawals and illnesses associated with stress. I commend for its deliberate efforts to educate and equip its members with financial literacy skills to manage and use their retirement benefits wisely for a happier retirement but I would like to bring your attention to research by NSSF showing that 80% of retirees lose all their money in less than 2 years. This is scary, right ? The question is are you prepared to be part of the 20% who succeed or the 80% that don't? Well whichever it is, let me share information that may help you structure your retirement plan

Did you know an illiquid asset in retirement becomes a liability and You have probably heard of the saying "Asset rich and Cash poor"
Assets like land in remote areas, unfinished buildings or shares in a family business are assets that can't easily be turned into cash. While they may seem valuable,they can become liabilities during retirement if not properly planned for

In retirement your financial needs become more urgent, regular, daily expenses, medical bills & emergencies all require accessible income. If most of your wealth is locked in an illiquid asset, you may struggle to meet these needs. i.e land may take months or years to sell especially in less developed areas and often at a lower value than expected

Additionally some illiquid assets come with ongoing costs such as property taxes, maintenance or legal disputes. Rather than supporting your retirement, these assets start to drain your resources.There’s also the challenge of inflation.Aplot of land that isn’t appreciating quickly may lose value in real terms while your cost of living rises

Therefore we should diversify retirement portfolio with liquid, income generating assets like rental property with reliable tenants, gov't securities, unit trusts or annuities from insurance.These offer more predictable support in retirement
In short an illiquid asset can become a liability if it can't provide timely, stable income when you need it most. It's not too late
Emmanuel Ongu
[email protected]

A NOTE TO A PARENT FROM AN INSURANCE AGENT
over time i have decided to share my experiences in this journey of offering insurance to people and to i will share a story about Sarah a salon owner down town who bought an education policy a month ago because as her child grows, so do the educational costs. Preparing for these expenses early ensures their future is bright and stress-free. Learn how education plan policies can offer financial stability for your child's dreams!"
"When Sarah enrolled her daughter in kindergarten, she wasn’t thinking about primary and secondary costs yet. But after speaking to a friend who had a running policy with us, she realized that starting early could make all the difference. Sarah began an education plan policy, saving as little as 150,000 monthly in premiums hence ensuring her daughter’s future would be secure, no matter what came their way. By the way she will be expecting 22.6m at the end of her policy. Sarah is Confident that even when she is a single mum, she is able to secure her child's future.

The Financial Benefits of Life Insurance Beyond Just Death Benefits.

While life insurance is primarily known for providing a financial safety net for beneficiaries in the event of the policyholder's death, it offers several other financial benefits during the policyholder's lifetime. Here are some key financial benefits of life insurance beyond just death benefits:

Cash Value Accumulation:
Permanent life insurance policies, such as whole life or universal life, often have a cash value component. A portion of the premium paid goes into a cash account that accumulates over time.Policyholders can access this cash value through policy loans or withdrawals during their lifetime. This can be useful for various financial needs, such as education expenses, purchasing a home, or supplementing retirement income.

Tax-Advantaged Growth:
The cash value within a life insurance policy grows tax-deferred. This means that policyholders won't be taxed on the growth of the cash value as long as the funds remain within the policy. Policy loans are typically tax-free, providing a way to access funds without incurring immediate tax liabilities.

Estate Planning Benefits:
Life insurance can be a valuable tool in estate planning. The death benefit is often paid out tax-free to beneficiaries, helping to provide liquidity to cover estate taxes, debts, and other expenses.
Setting up an irrevocable life insurance trust (ILIT) can further enhance estate planning benefits by removing the policy from the insured's taxable estate.

Supplemental Retirement Income:
Some permanent life insurance policies allow policyholders to use the cash value to supplement their retirement income. This can be particularly beneficial if other retirement accounts are insufficient.

Flexible Premiums and Payouts:
Many life insurance policies offer flexibility in premium payments and death benefit payouts. Policyholders can often adjust their premiums and death benefits based on changing financial circumstances.

Long-Term Care Benefits:
Some life insurance policies offer riders that provide accelerated death benefits for long-term care. This can help policyholders cover the costs of nursing home care or other qualified long-term care expenses.

Business Continuity:
Life insurance is commonly used in business succession planning. It can provide funds to buy out a deceased partner's share of a business, ensuring continuity and financial stability for the remaining partners.

Collateral for Loans:
The cash value of a life insurance policy can serve as collateral for loans. This can be advantageous for obtaining loans at favorable terms, as the cash value provides security for the lender.
It's important to note that the specific benefits and features of life insurance policies can vary based on the type of policy and the insurance provider. Additionally, before making any decisions regarding life insurance, individuals should consult with a financial advisor to ensure that the chosen policy aligns with their overall financial goals and needs.

Tips for a Smooth Life Insurance Application
Navigating the underwriting process for a life insurance application can be crucial to ensuring a smooth and successful approval. Here are some tips to help you through the process:

Start Early:
Begin the application process as soon as you decide you need life insurance. The underwriting process can take time, and starting early allows you to address any potential issues that may arise.

Research and compare :
Before applying, research different life insurance policies and providers. Compare quotes, coverage options, and customer reviews to ensure you choose the right policy for your needs.

Assess Your Needs:
Determine the amount of coverage you need based on your financial obligations, such as mortgage, debts, education expenses, and future income needs for your dependents.

Complete the Application Accurately:
Fill out the application accurately and truthfully. Any discrepancies or inaccuracies may lead to delays or even denial of coverage.

Gather Documentation:
Be prepared to provide necessary documentation, such as medical records, financial information, and proof of identity. Having these documents ready can speed up the underwriting process.

Understand the Underwriting Process:
Familiarize yourself with the underwriting process and how insurance companies assess risk. Factors such as age, health, lifestyle, and occupation can impact your premium and approval.

Health Check:
Expect a medical examination as part of the underwriting process. This may include blood tests, urine samples, and a general health assessment. Follow any pre-exam instructions provided by the insurer.

Be Honest About Your Health:
Provide complete and honest information about your health history. Failure to disclose pre-existing conditions or lifestyle habits accurately can lead to a denial of coverage.

Address High-Risk Behaviors:
If you engage in high-risk behaviors such as smoking or excessive alcohol consumption, consider addressing these issues before applying for life insurance. Quitting smoking, for example, may result in lower premiums.

Communicate with Your Agent:
Maintain open communication with your insurance agent. They can help guide you through the process, address any concerns, and provide additional information as needed.

Ask Questions:
If you have any questions or concerns about the underwriting process, policy terms, or premium payments, don't hesitate to ask your insurance agent for clarification.

Stay Informed:
Stay informed about the status of your application. Regularly check in with your insurance agent to ensure that all necessary steps are being taken to move the process forward.

By following these tips, you can increase the likelihood of a smooth underwriting process and secure the life insurance coverage that meets your needs.