Archive for February, 2012

IMPORTANCE OF KEY EMPLOYEE INSURANCE

[ 0 ] February 29, 2012

The Jordan Group Key employees are those whose skills and knowledge are significant contributions to overall business income. If a key employee dies or is unable to work anymore, the impact is significant enough that the business will suffer. The financial consequences are undesirable and detrimental. Research shows that many businesses depend on at least one or two key employees for their overall success. However, less than 25% of employers have Life insurance for their key persons.

Disability Income and Life insurance for key persons who die or become disabled can provide compensation for a business. The monetary benefits are enough to cushion the adverse financial impact of losing the key person. There is no specific dollar amount that employers should purchase for this type of coverage. However, each employer should consider how much their key persons contribute to the company in order to decide how much coverage to buy. To ensure the proper amount is purchased, it’s best to contact our office to discuss insurance options. Some insurance companies provide special formulas for calculating this amount. However, it’s important to keep in mind that a calculator is standardized, so it might be better to purchase more than the amount derived from the formula. Only an employer can determine an individual employee’s worth to their company.

In many cases, reviewing the employee’s list of responsibilities can help in the evaluation process. It’s important to consider the cost of replacing a key person. Hiring new employees can be expensive. In addition to this, agency fees, salary and possible moving expenses should be considered for the replacement. Although the insured organization pays the premium, is the beneficiary, and owns the policy, it’s possible to set up an insurance plan that allows sharing of these responsibilities between the key employee and employer. However, the employee must agree to the company’s purchase of this type of insurance.

Most businesses choose Term insurance if their main purpose is getting compensation for losses resulting from the death or disability of a key employee. In some cases, policies that accumulate cash value are appropriate. It’s best to discuss these options with us. Key Person Life insurance is more popular than Key Person Disability coverage. However, it’s important to consider the possibility of an employee becoming partially or fully disabled and the effects the disability would have on the financial future of the business. If the key person is a sole proprietor or partner, it might be best to consider a business overhead expense policy for disability coverage. To determine which options are best for an individual company, speak with one of our agents.

The Jordan Group’s extensive resources allow access to every service and product to best meet your needs. This gives us access to the best technology, the most flexible products, and expertise to help us better serve our clients. Our clients should and will get the best service and knowledge available to them. 

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


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Plan strategically for retirement accounts

[ 0 ] February 27, 2012
The Jordan GroupLonger working lives and the specter of higher rates next year are creating tax headaches for seniors.
Gone are the days when retirees simply had to remember to file their quarterly estimated tax payments.With more seniors working, even as they begin collecting Social Security and taking distributions from retirement accounts, a tax strategy has never been more important, said Robert Keebler, a partner with Keebler & Associates, a tax-planning firm in Green Bay, Wis.

“I am actually not seeing people retire,” he said.Instead, older clients are hanging on to their careers or cobbling together part-time work as they blend in Social Security and pension benefits, he said. That can mean taxes on Social Security income or a jump in your income-tax bracket or both.

With the highest capital gains rate increasing in 2013 to 20 percent from 15 percent, many seniors, retired or not, are considering selling investments this year to avoid the hike, Keebler said.

And with marginal rates also scheduled to rise next year, managing retirement income with an eye toward staying within your lowest possible tax bracket is crucial. “It’s all about bracket management,” Keebler said.

In other words, he said, think about taking just enough in retirement account distributions that you can stay within your top marginal bracket without spilling into the next higher one. Then convert those funds to a Roth IRA, which generally grows and is withdrawn tax-free, for when you need them later in retirement.

Here are some other issues to keep in mind this year:

Roth conversions. If you converted traditional IRA money to a Roth IRA in 2010, the first year the strategy was allowed for higher-income taxpayers, it may be time to pay up. The income tax owed on those first-year conversions can be spread across 2011 and 2012, so half of the tax owed will need to be included on 2011 returns, said Mark Luscombe, principal federal tax analyst with CCH, a tax information provider. Taxes on conversions done in 2011 will also be due.

Working. If you haven’t reached full retirement age, the maximum you can earn in 2012 and still receive full Social Security benefits is $14,640, up from $14,160 in 2011. Maximum earnings subject to Social Security tax increase to $110,100, up from $106,800 in 2011.

Moving. If you’re planning a move to new retirement digs in another state, consider the tax implications on retirement income.

According to CCH, Michigan, Wisconsin, the District of Columbia and Georgia made changes to retirement-plan taxation last year.

Notably, Georgia begins to phase out income taxes on retirement income.

AMT. People who pay quarterly estimated taxes, including many retirees, need to watch for news on exemption amounts under the alternative minimum tax, a parallel tax system that disallows certain deductions.

Millions more taxpayers will owe higher taxes under the AMT system in 2012 because a “patch” that had granted a temporary increase in the income levels subject to it expired.

According to the IRS website, the exemption drops to $33,750 for singles and $45,000 for couples filing jointly.

Medicare. A 3.8 percent surtax kicks in on certain types of nonwage income next year for higher-income taxpayers, so some experts recommend that this year those who could be affected convert more traditional IRA dollars to Roth IRA accounts, which aren’t factored into income thresholds.

Social Security. For a worker retiring at full retirement age, the maximum Social Security benefit this year will be $2,513 per month, according to CCH. For 2011 returns, taxpayers with modified adjusted gross income of between $25,000 and $34,000 (single filers) and between $32,000 and $44,000 (joint filers) could have up to 50 percent of benefits taxed, while up to 85 percent of benefits could be taxable above those levels, CCH says.

The Jordan Group’s extensive resources allow access to every service and product to best meet your needs. This gives us access to the best technology, the most flexible products, and expertise to help us better serve our clients. Our clients should and will get the best service and knowledge available to them. 

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


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IMPORTANCE OF ADEQUATE LIFE COVERAGE

[ 0 ] February 24, 2012
The Jordan Group

The Jordan Group

Many Americans do not have adequate Life insurance coverage. The number of people going without sufficient insurance is high enough that it has gained the attention of researchers. The number of Americans who don’t have Life insurance is more than 90 million. Researchers believe that this number is related to the lack of jobs. One interesting fact is that almost 80% of Americans only have group Life insurance policies offered by their employers. If these individuals lose their jobs, they also lose their Life insurance coverage. The solution to this problem is to decide what individual Life insurance needs are and fill them.

Women who earn more than $100,000 annually are less likely than men to use group or individual insurance. Although women tend to have longer lifespans than men, statistics show that the majority of them don’t have enough individual coverage. However, this doesn’t apply to all men and women. These statistics came from research and represent majority percentages rather than the entire population. Another factor that isn’t always considered in purchasing Life insurance is the cost of replacing the child care activities of full-time mothers. The costs of driving, housekeeping, child care, food and other details of caring for children must be considered.

Since Americans are living longer than they were in the past, the premiums of Life insurance policies have dropped. The reason for this is because longevity improvement yields lowered mortality costs. However, there is a more difficult aspect of this equation, which involves the earnings on investment portfolios of insurance companies. Life insurers are regulated heavily, so they must meet reserve requirements. The reserves of life insurers are usually placed in interest-bearing investments that are very conservative. As a result of this and other issues, the insurance premiums for long-term care have risen significantly.

There are several professionals who predict similar trends in the future for life insurers. This is because very little is yielded from their conservative reserve assets. This is another good reason why it’s important to solve Life insurance deficiencies as quickly as possible. Life insurance isn’t used only as an income replacement to provide for heirs. It’s also useful in helping to reduce estate taxation, as a tax-favored supplemental benefit to the most valuable employees and to fund the succession of a business. The best way to identify what changes must be made is to contact one of our agents.

The Jordan Group’s extensive resources allow access to every service and product to best meet your needs. This gives us access to the best technology, the most flexible products, and expertise to help us better serve our clients. Our clients should and will get the best service and knowledge available to them. 

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


 

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The Hartford Sees Drop In Number Of U.S. Workers With Disability Insurance

[ 0 ] February 22, 2012

The Jordan Group Many consumers do not appear to understand their options

HARTFORD, Conn.–(BUSINESS WIRE)– According to new research from The Hartford, 49 percent of U.S. workers have short-term disability insurance and 44 percent have long-term disability insurance. This represents a drop of 6 percent and 3 percent, respectively, over last year’s survey in the number of Americans with the coverage that provides an income if one cannot work due to an illness or non-work related injury.

“We are concerned about the lower number of Americans who have coverage designed to provide a financial safety net,” said Ron Gendreau, executive vice president of The Hartford’s Group Benefits. “Approximately 2 million Americans have experienced a disabling illness or injury so far this year.  Based on our survey, about half of those workers will continue to have an income to help pay for expenses while they are recovering from their disability.”

The Hartford’s national survey also found:

  • 92 percent of Americans would need to make lifestyle changes if they lost part of their family income for three to six months;
  • 75 percent of consumers base their buying decisions on their fear of experiencing an unexpected financial hardship; and
  • Only 25 percent of workers completely understand disability insurance.

“People understand the importance of insuring their home,” Gendreau said. “Yet by not protecting their paycheck, consumers are essentially putting their home at risk. Consider that losing your income for two years can be the financial equivalent of losing your home.”

The Jordan Group’s extensive resources allow access to every service and product to best meet your needs. This gives us access to the best technology, the most flexible products, and expertise to help us better serve our clients. Our clients should and will get the best service and knowledge available to them. 

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


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Case Study-Multiple Owner Buy/Sell Agreement

[ 0 ] February 15, 2012

The Jordan Group  The Problem: 

A large and successful business has 17 owners all with a varying degree of ownership. Ten years ago they established a buy/sell agreement and funded it with variable universal life contraacts. Today those contracts have an annual premium in excess of $435,000 with cash values at approximately $1,900,000.

The CFO for the company wanted to explore options for reducing the cost of the coverage as well as reducing the  volatility of the coverage since the values are fully exposed to the equity markets. He also expressed a real concern that any potential change cannot have an adverse effect on the current policy surrender values.

The Solution:

The market was sourced for all product types that may provide a lower premium. Variable Universal Life, Fixed Universal Life, and Indexed Universal Life were all explored as a potential solution. While products exist that could provide a lower annual premium outlay, care had to be taken to aviod any significant reduction of surrender values in an 1035 exchange. Ultimately, Nationwide Life was selected and their Indexed Universal Life Product was the solution.

It provided the following to the business and it’s owners: 

  • Reduction of annual premiums by roughly $95,000
  • Death benefit guarantees for 20years or to age 75 of the insured; whichever is less
  • Ability to have cash value growth through participation in the index accounts
  • Provide downside protection of the policy cash values in the event  of equity markey fluctuations
  • No significant reduction in the amount of current surrender values for the 1035 exchange. First year values are illustrated to be in the excess of $2 million
  • Potential for guaranteed issue for some members of the group who have a death benefit of $1,100,000
Contact the The Jordan Group to learn more about your business and what you can do to avoid issues like these.

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


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Career Opportunity- TeleSales – Outbound Calls

[ 0 ] February 15, 2012

The Jordan Group The Jordan Group 

Columbia, MD

Job description:

Do you love talking on the phone? Are you a people person and have a great telephone demeanor? If so we have a great opportunity for someone like you. We are a rapidly growing organization seeking an inside telesales person to qualify and set appointments for our producers. This is a temporary position with the possibility of becoming permanent down the road.

The position will require making a high volume of outbound calls (approx 100-125) a day. The idea candidate should have prior experience in customer service, a professional demeanor and able to present themselves in a professional manner.  The ability to be results focused and organized is a must. This is a great opportunity to join a top quality organization at an entry level position.

If interested please send you resume to Bill Jordan at:

The Jordan Group

7230 Lee Deforest Dr. Suite 202

Columbia, MD 21046

Phone: 410-312-0811
Fax: 410-312-0815


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