Life
Do I need E&O?
Yes, for every company except Banner, William Penn, Genworth and Allianz.
How long are labs good for?
6 Months
How long are paramed slips good for?
90 Days
Will one company use another company’s lab/parameds?
Most companies will share. However, each carrier reserves the right to obtain their own labs. Some carriers require different tests.
Who do I order medical requirements thru?
Portmedic, APPS or Exam1. There is a Paramed locator on our website to locate the closest office.
Do I need to order medical requirements?
Yes, except for West Coast Life Telelife Application, Symetra, and Protective.
Should a copy of the medical requirements be sent to UMS?
Yes. The agent must insist a copy be sent to UMS, due to privacy laws.
Are life applications supposed to be sent to UMS?
Yes
Do I need to be appointed with a carrier before I take an application?
Yes, in pre-appointment states you must. In non pre-appointment states you can submit a contract with the application.
What is the maximum issue age for life insurance?
It depends on each carrier. There are some who issue as high as 85 years old.
Do we have term companies who offer death benefits under 100K?
Yes, the minimum death benefit on term is $50K. We do have simplified Whole Life as low as $5K and traditional Universal Life for $25K.
Which carriers offer Return of Premium (ROP) on their Term Life products?
North American, Trans America, Western Reserve Life, ING, Genworth and American General.
When a company does not provide underwriting guidelines on UMS website, where can I go?
Please call us immediately for assistance.
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Annuities
What is a Traditional IRA?
A Traditional IRA (Individual Retirement Account) is a self-sponsored retirement savings plan. Contributions to an IRA may or may not be tax-deductible depending on your adjusted gross income. Consult your tax advisor to answer questions about your eligibility for tax deductions. Beginning January 2007, you may contribute up to the lesser of 100% of compensation or $4,000. Non-working spouses may also contribute up to $4,000 to an IRA. For individuals age 50+, the contribution limit is increased by $500 from 2002 through 2005 and by $1,000 thereafter.
What is an IRA Transfer?
An IRA transfer means moving IRA values from one IRA trustee or custodian to another. This is usually done with the expectation of receiving a better rate of return on an IRA. To ensure that the transfer is not taxable, it must take place directly between the trustees/custodians on the client’s behalf. There are no IRS restrictions on the number of times IRA monies may be transferred.
What is an IRA Rollover?
A rollover requires a distribution from an IRA or qualified plan, which is then rolled over into an IRA account within a 60-day period to complete the rollover transaction. While the rules for rollovers and transfers differ, they accomplish similar objectives. Both rollovers and transfers facilitate the tax-free movement of IRA monies from one trustee or custodian to another. One kind of IRA rollover involves moving monies from an existing IRA account to another IRA account, and another requires a distribution from a qualified pension, profit-sharing, or 403(b) Tax-Sheltered Annuity plan. In either case, you have 60 days in which to complete the rollover. Values distributed from a qualified retirement plan, which are not directly rolled over into an eligible qualified plan or IRA are subject to a 20% federal withholding tax. Please see direct rollovers, below. One IRA rollover per year is permitted.
What is a Direct IRA Rollover?
A direct rollover is a distribution from a qualified retirement plan such as a pension, profit-sharing, Keogh (HR-10), or 403(b) Tax-Sheltered Annuity program, which is sent on a client’s behalf directly to a new trustee/custodian. A direct IRA rollover can be accomplished by asking the administrator of their qualified plan to make the distribution directly to the new trustee/custodian. Only one direct rollover from an IRA account to another IRA account is permitted in any one-year period.
Is there a way to avoid the 20% Withholding Tax on a Retirement Plan Distribution?
Yes. If the account balance is sent directly by the plan administrator to another qualified plan or to an IRA trustee/custodian on the client’s behalf, the 20% withholding tax requirement does not apply. However, if they do not request a direct rollover of their distribution, 20% will be withheld for federal income taxes.
Is there a maximum IRA Transfer or Rollover?
In most cases there is no limit on the amount one may transfer or roll over into an IRA because you are simply moving the money from one type of retirement plan to another. You may transfer or roll over an IRA regardless of age. However, if the client is 70½ or older, they must receive a minimum required distribution from their IRA each year. This should be taken into account in planning their rollover.
When can money be withdrawn from an IRA?
Money may be withdrawn at any time. However, if a person makes a withdrawal from an IRA before age 59½, the distribution may be subject to a 10% IRS penalty tax. This tax is not assessed if the distribution occurs after death or disability. Nor does it apply if substantially equal payments are made based on life expectancy, which continue for five years or to age 59½, whichever is later.
Can the Pre-59½ Withdrawal Penalty be avoided?
Yes. There is a way to take early income from an IRA without the 10% income tax penalty normally applied to withdrawals before age 59½. Section 72(t) of the Internal Revenue Code allows early payouts that meet these basic guidelines:
- Substantially equal payments must be taken at least annually; which are
- Calculated on the life expectancy of the IRA owner or joint life expectancies of the owner and beneficiary; and
- The form of payment may not be modified before the IRA owner attains age 59½ or five years have elapsed since the payments began, whichever is later.
What Are the Tax Consequences of Taking Money Out of My IRA After Age 59½?
There will be no IRS penalty taxes, but ordinary income tax must be paid on the amount received, less any non-deductible contributions.
When must a client begin taking distributions from my IRA?
Required minimum distributions must start no later than April 1 of the year following the year in which age 70½ is attained. Failure to take the required minimum distribution results in an IRS penalty tax of 50% of the amount that should have been distributed.
How can clients receive their IRA values?
Clients may choose from a number of available retirement options. These include a lump sum distribution, a systematic payout or an option customized especially to meet their needs.
What is Annuitization?
An annuitization is a payout option other than a lump sum payment. Some payout options guarantee an income for as long as the client lives, while other options spread the distribution out over the number of years that they choose. Guaranteed lifetime options include life income only, life income with a guaranteed number of payments, and joint life payments. Non-lifetime options include payments for a fixed number of years or payments of a specified amount. Clients may choose the form of distribution when they are ready to begin receiving payments.
What if a client dies before the begin receiving distributions?
The client’s named beneficiary will receive the money in their IRA annuity in the event of their death. The beneficiary may choose any available payout option, subject to the requirements of IRS Code Sec 401(a)(9). Payments to the beneficiary will be subject to ordinary income tax. In the event the named beneficiary is also the client’s spouse, they may choose to continue the account by transferring it to an IRA in their name. Spousal continuations are non-taxable.
What about Estate Taxes?
Depending on the size of the estate, the value of the IRA annuity may be subject to federal estate tax. If, however, the beneficiary is the client’s surviving spouse, the value of their IRA annuity may be exempt from federal estate tax as a marital deduction.
May a client make an IRA Transfer or Rollover and make an annual IRA contribution at the same time?
Yes, the annual IRA contribution can be placed in a separate annuity or combined with their transfer or rollover.
What is a Conduit IRA?
A conduit IRA is a separate IRA (i.e., non-commingled) account established to receive a distribution from a qualified plan having certain characteristics worth preserving. A good example is a rollover from a 403(b) Tax-Sheltered Annuity into an IRA. Such an IRA may be rolled back into a 403(b) account at a later date, as long as it has not been commingled with any other IRA monies. A conduit IRA preserves the flexibility to roll the monies back into the original plan and take advantage of loans or other features not available in an IRA. There are no special requirements to establish a conduit IRA. It is only necessary to ensure that the monies are not commingled with any other IRA monies.
What is a Roth IRA?
The Taxpayer Relief Act of 1997 created the Roth IRA. Contributions to a Roth IRA are not deductible and the maximum annual contribution is the lesser of 100% of compensation or $3,000. Non-working spouses may also contribute up to $3,000 to a Roth IRA. For individuals age 50+, contributions may be increased by $500. Taxpayers with joint adjusted gross income under $150,000 (under $95,000 for single taxpayers) may make full Roth IRA contributions. Contributions may be made beyond age 70½ and qualified distributions from a Roth IRA are tax-free, subject to IRS limitations. There are no required minimum distributions on Roth IRAs.
Holders of existing IRAs may convert to a Roth IRA. To be eligible for conversion, adjusted gross income cannot exceed $100,000 (not counting the income from the conversion). The conversion amount is taxable at ordinary income rates, but the 10% premature distribution penalty tax does not apply.
What is a 403(b) Tax Sheltered Annuity?
A Tax-Sheltered Annuity (TSA), also known as a 403(b) plan is named after a section of the Internal Revenue Code. It is an employer sponsored retirement savings program. Participation is limited by law to employees of public educational organizations and certain nonprofit organizations. The vast majority of participants are teachers in public schools, colleges and universities.
Contributions to a TSA are made for the participating employee by his or her employer. The money that is contributed to the TSA comes either from employer contributions - which are called non-elective deferrals, or from employee contributions, called elective deferrals.
Elective deferrals are deducted from the participant's paycheck and forwarded to the insurance company or mutual fund custodian selected by the participant. The participant signs a salary reduction agreement giving the employer the authority to make the paycheck deduction and remit it to the chosen company. Most TSA contributions are elective deferrals.
A client may contribute 100% of their compensation subject to the elective deferral limit of $11,000 for 2002. This limit increases by $1000 per year for each of the next four years so it will be $15,000 in 2006. For individuals age 50+, an additional $1,000 can be contributed for 2002, making the deferral limit $12,000, This amount also increases by $1,000 per year for each of the next four years reaching $5,000 in 2006. If a 403(b) participant has 15 or more years of service, they may be eligible for an additional "catch-up" provision. A "catch-up" provision of $3000 is available only if the participant has not contributed on average more than $5,000 per year into a 403(b) account. An averaging calculation must be done to ensure that the option is available. A lifetime limitation of $15,000 applies to this special "catch-up' provision.
What is a 457?
The law allows public school districts and other governmental employers to sponsor voluntary savings plans for their employees under Section 457 of the Internal Revenue Code. These plans are technically "non-qualified deferred-compensation plans." However, Congress has effectively given them the same characteristics as qualified retirement plans, such as 401(k) plans, through a series of changes in federal laws made from 1996 through 2001.
A 457 plan is sponsored by the local employer and in many ways works like a 401(k) plan. The employer can pick the vendors offering investments in the plan and remove them if they do not do a good job. The employer can set all of the other rules. Federal laws make compliance for such plans much easier than for 401(k) plans since there are no "non-discrimination tests" to perform.
Federal law allows an employee to defer up to the lesser of 100% of compensation or $15,500 to a 457 plan on a tax-deferred basis. For individuals age 50 or older, the dollar limit goes up to $20,500. This limit is in addition to the limit for any other plan. Thus, an employee can defer $15,500 under a 457 plan and also defer the maximum amount to a 403(b) or other salary deferral plan. There is also a "Catch-up" provision that if the employee is in their last three years of employment they may contribute up to a maximum of $22,000 per year. There are restrictions on this provision.
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LTC
How long does the underwriting process take
Underwriting usually take 6-8 weeks, depending on the time it takes to get the medical records.
What are the underwriting requirements?
Based on age, a phone interview or face-to-face interview and medical records. There is no “paramed” (blood and urine) needed for LTCI.
What is the cost of care in my area?
Click here for a map of costs.
How do I get a quote?
You can visit the quote engine on our website or call us at 800-524-1774 and we can discuss your case.
What is the difference between Medicare & Medicaid?
Medicare is health insurance that most people over 65 are eligible for. It pays for limited nursing home care, in specific circumstances.
Medicaid is a welfare program that will pay for nursing home care when your assets are depleted.
Are the benefits taxable?
Long Term Care benefits are guaranteed to be tax free by the 1996 HIPPA act, even if the premium is paid for and deducted by a business.
Medicaid is a welfare program that will pay for nursing home care when your assets are depleted.
What are the 6 ADLs?
Bathing, eating, dressing, transferring, using the toilet & continence
Are the rate guaranteed?
Simply put – no. Long Term Care is guaranteed renewable, however, the carrier must raise the premium on an entire block of business. They cannot single one person out due to changes in health.
What exactly is tax-qualified Long Term Care insurance?
A 90-day certification period is required before insurance benefits can be paid. In other words, a health care professional must certify that a condition is expected to last for three or more months. It does not mean that the client must wait 90 days for benefits. This requirement was included in the 1996 Health Insurance Portability and Accountability Act to help ensure that tax-qualified long-term care insurance provides protection only for “chronically ill persons.
The tax implications: Long Term Care insurance premiums are tax deductible if a policyholder itemizes his or her medical expenses and they total at least 7.5 percent of the person’s annual gross income. Benefits received are not taxable as income.
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