Dennis Ho

TERM INSURANCE is typically the best bet for people who need life insurance, while permanent policies are appropriate for relatively few folks. Yet I keep getting the same question from parents: What about children? Does it make sense to purchase a whole-life policy for a young child?
No doubt influenced by Gerber Life Insurance’s relentless marketing, these parents want to know whether it’s worth locking in insurance pricing early on and whether this is a good way to help their children start saving for retirement.

INDEXED ANNUITIES have been taking the insurance world by storm. According to industry sources, sales of indexed annuities—also known as equity-indexed annuities or fixed-indexed annuities—topped $70 billion last year and estimates for 2020 call for continued growth in the market.
On the surface, indexed annuities seem simple enough: You deposit a lump sum and earn interest based on stock market returns, with a guarantee that your annual return will never be less than zero.

TERM LIFE INSURANCE is popular not only because it’s a relatively cheap way to protect your family, but also it’s simple: You pay a premium for a chosen “coverage period” and, if you die during that time, your beneficiaries receive the policy’s death benefit.
Yet, despite its reputation for simplicity, term insurance comes with a surprising number of options. On top of that, there are now dozens of insurers offering the product. Yes, if you buy the cheapest 20-year term policy you can find from an insurer that’s rated A or better by AM Best,

FOR MOST PEOPLE, life insurance is purchased to protect their income in the event of an unexpected death. If you’re 35 years old, you potentially have 30 or more years of future earnings that your family would lose if you passed away, so having life insurance during these working years makes sense. But what happens once you reach retirement? Before canceling your policy, it’s important to assess your situation, because keeping the coverage might be the better choice.

DESPITE THE NEGATIVE press, long-term-care insurance can be a smart buy. In fact, policies can be affordable for those as old as age 79. But as with any financial product, it’s important to understand what you’re buying—and make sure it fits with your goals.
In my last article, I discussed how much money you might earmark for long-term-care (LTC) costs. Need insurance to hit your goal? Today, the two main products are “traditional policies” and “hybrid life and long-term-care policies.”
Both types of policy offer similar LTC benefits.

AS BABY BOOMERS and Generation X march toward retirement, they face a daunting issue: What steps should they take, given the risk they’ll require long-term care?
Long-term care—defined as needing help with activities of daily living such as bathing, dressing and eating—is something that almost 70% of retirees will require at some point, according to LongTermCare.gov. Problem is, Medicare only provides limited coverage.
Yes, Medicaid does cover long-term care. But it was designed as a last resort for low-income folks.

AS OF YESTERDAY’S market close, the S&P 500 was down 25% from year-end 2019 and off 29% from Feb. 19’s all-time high. Worse yet, interest rates are near zero, with the 10-year Treasury note yielding a paltry 1.15%. In a few short weeks, the markets have turned from euphoric to disastrous—and there seems to be no end in sight.
At age 43, I consider myself fairly young. But as I watch the markets, what’s been most surprising to me is how many times I’ve seen this situation before.

TERM LIFE INSURANCE is best for most people: It’s affordable, simple to understand and provides the two or three decades of coverage they need. But that doesn’t mean that permanent “cash value” life insurance is always bad.
The most obvious situation: You actually need insurance permanently. Suppose you’re a business owner and you want to provide money for your family to pay inheritance taxes. By buying life insurance, you’d make sure your family receives a pool of income-tax-free money upon your death,

HOW DO DEFERRED income annuities work and how do they fit into a retirement portfolio? I’m a fan of DIAs—sometimes also called longevity insurance—because of their simplicity and range of benefits. Indeed, I sell them through the insurance website I run. But I also realize they aren’t for everyone.
With a DIA, you hand over a lump sum to an insurer in exchange for regular income payments. Like a standard lifetime income annuity, the payments are guaranteed,

WHENEVER I TELL people I’m an actuary, I often get the same response: “So you’re the guy who can tell me when I’ll die.” It was funny the first couple of times I heard it, but less so a few dozen occasions later.
Still, the comment is a good reminder of a key statistics principle: Probabilities work well for large groups, but are less useful for smaller sample sizes. Statistics help actuaries predict the number of deaths for a large population.

HAVE YOU PROTECTED your paycheck? As I discussed in my article last week, becoming disabled is a serious financial risk—and typically the best way to get coverage is through your employer. What if you don’t have long-term disability insurance through work or if coverage isn’t sufficient? An individual long-term disability policy can fill the gap.
Disability insurance is one of the more complicated products to price, because insurers need to assess two dimensions of risk.

BE HONEST: WHEN WAS the last time you thought about disability insurance? As co-founder of a website that sells insurance, it’s a topic I think about every day, but I realize most folks have other things on their mind. Yet becoming disabled is one of the biggest financial risks that working people face.
Disability can result from accidents or sickness and can impact people of all ages. According to the Social Security Administration, a 20-year-old entering the workforce has a one-in-four chance of becoming disabled for a year or more before retirement.

INCOME ANNUITIES ARE a simple, cost-efficient way to generate guaranteed retirement income, and yet they account for just 5% of overall annuity sales. My contention: They can play a unique role in a portfolio—and deserve serious consideration by anyone planning for retirement.
When most people hear the word “annuity,” they cringe, and rightfully so. Over 95% of the annuity market is made up of tax-deferred variable and fixed annuities—investment products that are often complicated and expensive.