Hi Tom,

That's great information.

I have a client right now that has a $10 million dollar estate and his heirs will have to pay about $3 million dollars in Federal Estate Taxes based on 2008 current law.

Could you explain how Social Security will be helping him pay that tax?

We set up an Irrevocable Life Insurance Trust and funded it with a $3 million dollar policy that's costing the client $35,000 per year in premium.

Please explain how he'd be better off using your Social Security plan.

He really would rather do something else with his money than buy life insurance to pay his death taxes.
Please help. Any useful information would be greatly appreciated.

Best regards,

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Hi Gary,
Social Security life insurance does not typically play a role for a high net worth individuals planning for estate taxes. However, for many, many other people who buy life insurance to actually insure their lives [to take care of their spouses and kids after they die] SS provides a HUGE benefit that almost all "financial advisors" either do not understand or conceal from their clients, a real tragedy. I'm not sure if your reply is meant to be sarcastic, if it was I want to disabuse you of your condescension for SS benefits as an important part of family financial planning. For a family with two children, SS will provide a life insurance benefit of (1) up to $50,000 per year, (2) that is TAX FREE and (3) that will increase INDEXED TO INFLATION until children reach 18 years of age. Depending on wage history, this is an amazing benefit of almost $1 million paid during the lifetime of a deceased's children. It is a national disgrace that so many fearful people have no idea of this protection and GO AND BUY IDENTICAL PROTCTION from their trusted financial advisors. Gary, do you know anybody who has purchased term life insurance recently?

Source LINK.
Tom wrote:
Tom, did you mean to say SS will provide a monthly survivors benefit of up to $4,166 PER MONTH based on the deceased person's EARNINGS over the past 10 years?

To "get" the maximum you have to pay in the maximum which in 2008 is based on annual income of $102,000.

See THIS link.

So while your $50,000 figured may be mathematically correct it only would be paid the highest wage earners. Additionally, your post reads and could easily be intepreted to imply the survivors benefit is paid in a $50,000 lump sum each and every year which is not the case.

Tom asks:
Yes, I wrote a case yesterday.
Thank you for asking.

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Gary,
Yup, that $50K is paid in twelve monthly installments, every month, tax free and WILL BE ADJUSTED UPWARD TO ACCOUNT FOR INFLATION, a great benefit. You are right, that benefit is the maximum benefit, and the benefit will be less depending on your wage history.
But form many families even half the benefit of $25K for 18 years is a considerable benefit. The SS benefit is easy to calculate and explain to clients, so that clients can buy the RIGHT amount of insurance, depending on their needs. Gary, if you don't explain this to your clients, I am afraid that you are ripping them off. But like most brokers I am sure you will continue to do so and come up with convoluted rationales such as that SS is "too complicated" to justify keeping your clients in the dark. Pretty lame.

Tom Chase wrote:
Thank you for "exposing" this for the General Public. I hope I don't lose my SAFE designation as a direct result of your postings!

Let's do some 4th grade math.....
Yes, assuming the parent dies the day after the child is born. Hey, you're not purposefully inflating SS survivor benefits to make your non-issue point are you?

But let's look at some actual rates shall we?
Using a male age 40 non-tobacco user, preferred plus rate class.

20 year level term for a $100,000 policy has a monthly premium of $16.00
20 year level term for a $250,000 policy has a monthly premium of $21.00

Are you claiming based on your convoluted logic that if after considering SS survivor benefits your client would be better off with the 100K policy and my client would be in a worse financial condition because I "sold" them a 250K policy that costs them $5.00 per month more than your "good" policy?

Full disclosure, as the writing agent I would earn an additional $63 in first year commission by selling the client the higher 250K death benefit.

Remember, ALL things being equal we are taking about the death of the family's main breadwinner.

Please keep posting as I enjoy the sport!

You must be some anonymouse poster from some other message board that I had to take to the woodshed.

Best regards,

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Hi Gary,
The simple truth is that almost everybody stands to receive hundreds of thousands of dollars in SS benefits if they die when they have children. True, if the child is 17, the amount will be a lot less than if the child is 2. But, similarly the future financial demands of the child are much less at 17. Your own example is compelling. The middle income wage earner who buys a $250,000 20 year term policy is buynig that policy to cover living expenses in the event of his death. However, that client probably does not realize that he already has a very nice policy from SS that will cover living expenses during the life of his children. Give the client full disclosure and let him decide based on full information, simple as that. Do you actually believe that clients should not be told about their SS rights??

There's nothing quite like a good Internet thread war!



Tom, if when you sit down with your clients when doing your financial needs analysis and in your "professional opinion" you believe and recommend to your client's they should buy less life insurance coverage BECAUSE if they have minor children they will recieve a survivors benefit from SS until the last child reaches age 18.....that's great!

But I strongly disagree SS survivor benefits should be a compelling reason to buy less death benefit especially since the cost per thousand drops substantially for the higher face amounts.

I think I have demonstrated above for another $5 bucks a month the family would receive an additional $150,000 CASH, income tax FREE in addition to whatever SS benefits would be available.

I've found your comments to be non-responsive and your rhetorical questions to be amusing.

That being said, I have the utmost respect for persons who use their real names when posting.

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Well,......

I guess Mr. Tom Chase just wasn't quite up for a good Internet thread war with someone who actually knows what they are talking about.

Too bad!

For the General Public who may read this thread, believe it or not, there are Financial Services firms out there that are cults.

It's that simple.

But not only are they cults they are also clueless clowns.

But how can you as the General Public spot one of these clueless clown cult members?

Well, there are two glaring tip offs.

#1) They want to "recruit" you into the magnificent wealth and riches of the Financial Services Industry.

#2) The first thing that comes out of their mouth is some assinine blanket condemnation of Insurance Agents and/or Brokers. Usually along the lines of commission. See THIS thread titled Life insurance - Top things to know. It was posted by one of these cult members.

You need to read no further than this thread to see how far these cult members have their head up their A double SS.

So if you go to some "meeting" or are being recruited by your plumber brother-in-law who "justs wants to share an idea with you" AND/OR while they are showing you "their" products they make blanket condemnations against the entire Financial Services Industry......

BEWARE! It's a cult member!

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Gary,
Do you explain SS survivor benefits to a young couple with a new born baby looking to purchase insurance? If not, why not? Why shouldn't the client have full information??

If you do, good job, you essentially agree with me that it is important that the client have full information.

Tom,

Your rhetorical questions sound like Hill & Bill, ObamaManCan or McCain't.

Tom, when did you stop beating your wife?
If not, why are you still beating your wife?
If so, why did you start beating your wife?

I'm not sure if you are aware but there are a lot more uses for life insurance than just "a young couple with a new born baby looking to purchase insurance."

....and if you must know, "a young couple with a new born baby looking to purchase insurance" is NOT my target market.

I rarely see a client with less than $500,000 net worth or one who is under age 50.

Best regards,

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Gary,
What a rambling bunch of bs. You are punch drunk and on the ropes, unble to answer a simple question, responding only with obfuscation. Answer my question, if a young couple came to you and wanted to buy life insurance, would you explain to them their SS benefits? Or try this question, over the last 10 years have you ever explained to any of your clients their SS life insurance benefits? Pease answer these questions, they are real and not rhetorical. I have schooled you in your own class room, established the difference between posturing and true professionalism, taken the weary old mare (that's right, mare) to the glue factory. Here's some advice, take the weekend off, catch a breather on the lazy-boy, and rest up a litte before you try to keep up with me on Monday. Ciao bella.

Gary,
At least you are obedient, I have to give you credit. Hopefully, after the weekend break you are now more coherent and can try to more honestly engage in our thread. But please don't over exert yourself.

Calling out Tom Chase:

Tom, which financial services/insurance cult are you a member?

Cult #1, #2 or #3?

See THIS link.

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

I'm a member of the cult of David Swenson, the investment manager for the Yale University endowment and author of Unconventional Success, which is a guide to personal financial investment and planning. Personal investment planning is littered with landmines for the unwary, only three of which are the cults you mention. The soundest course for most people is to invest in and rebalance a diversified equity oriented portfolio of low cost index funds and to avoid the excessive and often poorly disclosed fees charged by many brokers/financial advisors. I am also a member of the John Bogle and Vanguard cults, so whatever you do Gary please don't take Lord Bogle's name in vain or attack the Church of Vanguard.