Think about some of your life’s most memorable milestones: getting married, starting a family, getting an education, or simply saving for something special: your dream vacation, perhaps, or a home of your own. These events don’t just happen. You consider options. You plan. You save. . .
The same smart thinking that made you plan ahead for the expense of college applies to funerals, too. More and more each year, people just like you are taking the time to think about how they will be remembered; taking the time to make decisions now, instead of leaving them for their loved ones.
Planning for one’s funeral is not high on most people’s list of priorities. Many people say they’ll “get around” to it, but never do. Putting off such a critical decision can lead to an added burden on families, who will be left to plan and worry about finances in the midst of grieving. Just remember – you don’t have to get overwhelmed with the details to make a HUGE difference for your families. By making a few key decisions today, such as setting money aside for the purpose, you’re paving a smoother road for the ones you love.
It has become common practice for funeral homes to require payment in full on the day of a memorial service. How will your loved ones pay the expense? Traditional life insurance is one option, but that money is generally intended to cover ongoing family expenses. In addition, there is often a lag between the claim time and the payout, leaving your family to cover costs in the meantime. There is also the possibility of using personal savings, but what if medical costs have depleted that source? Finally, a credit card or loan may be an option, if credit is available to those planning, but there are interest charges to consider. However, there is a better way take charge of your final expenses . . .
A carefully planned and funded funeral expense plan sets aside money specifically for your funeral. There’s no loan, no “tapping” of personal assets, and by assigning the policy to a trust account, the money is secure from all creditors.
While funeral costs are not inexpensive, they may actually be less than you think. A study by the U.S. Senate found the average funeral cost to be around $8,500. But if the unexpected were to happen, where would that money be found?
Even if you have the funds on-hand now, who’s to say that they will STILL be readily available in your time of need? Long-term care is a major expense and a growing concern as we age. In fact, 43% of Americans older than 65 will need nursing home care at some point - an expensive situation to be in. You may need medical assistance to help pay for this care . . . But will you QUALIFY? By using a trust to set aside funds for your funeral, you are effectively “spending down” your assets, preventing them from being counted as excess monies and, possibly, from being disqualified from Medicaid.
Here’s how the trust works: Determine the amount of money you’ll need to provide the funeral you want and purchase a life insurance policy in that amount or higher. Then, simply assign the policy to the NGL Funeral Trust. By irrevocably assigning this policy to the trust, the trust becomes owner and beneficiary, and the funds become excluded from your assets, protecting them from creditors and Medicaid. The policy amount increases, tax-free, until the time of need, is free from probate costs and delays, and is quickly paid out to the funeral provider to immediately cover expenses. Any excess funds are then disbursed to your estate.
The NGL Funeral Expense Trust is packaged very simply with an NGL Single Pay Life Insurance Policy. And, it is offered free of charge! Simply assign your policy to this trust in the same transaction as your purchase, and the money is completely protected so it will be there for any funeral needs - protected from all creditors, nursing homes, probate and even Medicaid.
While Annuities are a good way to fund RETIREMENT, they may not be the best way to pay for final expenses, as your heirs will eventually have to pay tax on any growth. Savings accounts, CDs and Money Market accounts are subject to yearly Federal Income Tax, and require you to file an annual 1099. Mutual Funds are affected by continual market fluctuation. Compared to all of these, Final Expense Trusts are the ONLY accounts that can help protect your assets against Probate, Lawsuits, Creditors, Income Tax AND Medicaid “Spend-Down”. In addition, the benefits are paid directly and immediately to the funeral home, avoiding probate delays and sparing your family any additional stress.
National Guardian Life Insurance Company, or NGL, is a mutual company based in Madison, Wisconsin. With a hundred-year history of excellent service and financial stability, we are proud to be a company you can trust. A less tangible, but equally important asset is our outstanding industry reputation, with “ ‘A-minus’ Excellent” ratings from AM Best - the gold standard in independent review companies.
You’re just three easy steps away from peace of mind. Start by contacting your trusted Financial Advisor. Once you’ve decided on your financial plan, establish a trust-protected final expense policy from existing funds or by transferring from traditional life insurance. You can even add funds in installments for one year! If you decide to preplan, in addition to prefunding, ask for an NGL Funeral Planning Guide. This easy to follow, three-step guide will help you record basic information your family will need, as well as allow you to outline any wishes you may have for a service. You may even decide someday to go the extra mile and meet with a funeral planning professional to make a more detailed plan.
Final Expense planning is the wise and considerate choice for your loved ones. Don’t leave financial burden as your legacy; NOW is the perfect time to start planning for the future.
National Gaurdian Life
Are your funds protected? Final Expense Planning
Consider This . . . <ul><li>Most significant events in our lives require planning; you rarely just let them happen . </li></ul>
Funerals Require Planning, Too! <ul><li>Like other major life events, funerals require planning. </li></ul><ul><li>Today, prearranging and prefunding one’s own funeral is not uncommon. Of all Americans aged 50+ years, it is estimated that: </li></ul><ul><ul><li>34% have preplanned their own funeral.* </li></ul></ul><ul><ul><li>24% have prepaid at least a portion of funeral or burial expenses.* </li></ul></ul>* AARP Funeral and Burial Planners Survey (2007).
Small Steps, Big Impact <ul><li>You don’t have to decide everything all at once! </li></ul><ul><li>Set aside funds today. </li></ul><ul><li>If and when you’re ready to plan out the details, you can meet with the funeral home of your choice to make arrangements. </li></ul>
<ul><li>Life Insurance: </li></ul><ul><li>These are funds intended to be left to your family and may not be immediately available. </li></ul><ul><li>2. Personal Savings: </li></ul><ul><li>These are funds for day-to-day living. In the event of a lengthy illness, they may have eroded significantly. </li></ul><ul><li>3. Credit card or loan: </li></ul><ul><li>This approach leaves heirs in debt. </li></ul><ul><li>4. Family and friends: </li></ul><ul><li>Borrowing from family and friends can be embarrassing as well as a financial strain to repay. </li></ul><ul><li>Fortunately, there’s a better option. . . </li></ul>In the past, there have been four common ways to pay for a funeral:
Funeral Expense Trust <ul><li>A designated, prefunded plan that combines the financial stability of insurance with the security of a trust. </li></ul>
How Much Does a Funeral Cost? <ul><li>Today’s funeral costs less than you might think. </li></ul><ul><li>The U.S. Senate Committee on Aging shows the average adult funeral price to be $8,495*. </li></ul>If something happened to you today, how would your funeral be paid for? *U.S. Senate Committee on Aging (2001); most recent data available. Professional Services $1,283 Embalming/ Cosmetology $537 Memorial Service $670 Flowers $250 Transfer of Remains to Funeral Home $186 Hearse $170 Limo (2) $260 Service Van $100 Graveside $400 Cemetery Charges $1,400 Casket $2,477 Vault $757 Total $8,495
Are Your Funds Protected? <ul><li>Among people turning 65 today, 69 percent will need some form of long-term care.* </li></ul><ul><li>The national average cost of long term care is $68,255-76,460/year** </li></ul><ul><ul><ul><li>Annual growth of 4% over the last five years** </li></ul></ul></ul><ul><li>Many people who need long-term care will need to qualify for Medicaid at some point </li></ul><ul><ul><ul><li>This may require reducing your countable assets by paying the nursing home, making allowable purchases, or exempting assets from consideration </li></ul></ul></ul><ul><li>Putting your funds into a trust for funeral expenses exempts that money from Medicaid consideration </li></ul>* American Association of Homes & Services for the Aging (2009) ** Genworth Financial Cost of Care Survey (2008)
How a Funeral Trust Works Life Insurance Policy Irrevocable Funeral Trust Pre-Planning Funds Use money from Savings, CDs, etc . . . Protected funds earn tax-free interest until time of need Policy Assigned to Policy Value GROWS! Claim Paid Funds avoid probate costs and delays; expenses covered immediately Excess Funds Paid to Estate Funeral Provider Paid Within 48 Hours
Fund Protection Irrevocable Funeral Trust Creditors Nursing Homes Probate Medicaid* * Eligibility varies by state.
How the Trust Compares * Some state regulations apply; please consult your legal advisor. ** Unless put into trust for funeral expenses. No No No** No No Yes* Excluded asset in order to qualify for Medicaid & SSI No No No** No No Yes Funds protected from creditors No No Yes No Depends Yes Defined growth rate No No Yes Yes Yes Yes Principal guaranteed No No Yes Yes Depends Yes Free of market risk No No No No No Yes Federal Income Tax-free death benefits Depends Depends Depends Depends Yes Yes Proceeds avoid probate costs Mutual Funds Money Market CD Savings Account Annuity NGL’s Final Expense Trust
Why NGL? <ul><li>100 Years of Financial Stability </li></ul><ul><li>$2.02 Billion in Current Assets </li></ul><ul><li>A- (Excellent) Rating from A.M. Best </li></ul>National Guardian Life Insurance Company Madison, WI Ratings current as of August 1, 2009. Financials current as of December 31, 2008.
Get Started <ul><li>3. Next Steps (OPTIONAL): </li></ul><ul><ul><li>Basic : Complete a brief, three-step Planning Guide, provided compliments of NGL. Store this with your important documents. </li></ul></ul><ul><ul><li>Advanced : Meet with a local funeral home of your choice to discuss service options and personal preferences. </li></ul></ul><ul><li>Lump sum transfer from savings, CDs or Money Market accounts </li></ul><ul><li>Transfer funds from a pre-existing life insurance account [1035 Exchange] </li></ul><ul><li>Add to the fund in installments over a period of one year </li></ul><ul><li>Work with your licensed NGL Financial Advisor </li></ul><ul><li>2. Establish your Trust-protected Final Expense Insurance Policy easily by: </li></ul>