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Financial Cleaning Tips for 2019

life settlements blog

Millions of Americans, even those who are in their retirement years, have only a poor grasp of their finances. They do not know about the many financial instruments available to them on the open market. Many do not even have a dollar saved for retirement. It takes years to build up good financial habits. However, one easy step that every American can take is financial spring cleaning. Financial spring cleaning helps people understand and then make the most of their finances during a designated period every year.

Financial Cleaning: What you need to know in 2019 and beyond!

Know what you have

The first step of financial spring cleaning is to bring all of an individual’s assets and debts together. This task may be no small burden. In order to do this, an individual should pull together the account balances and financial statements that make up their financial lives. These statements may include every credit card and bill to pay as well. In addition to simple balances, display all of the fees and interest rates that they pay on these accounts.

Consolidate accounts

This effort leads to the next step in the financial spring cleaning process. They may want to cancel credit cards with high monthly fees. Checking or savings accounts that charge high fees should also be reviewed and possibly cancelled so that those funds can be transfered into low-fee accounts. The process for these account changes can be tedious and cumbersome. As a result, it’s important to come up with a step-by-step plan to handle each problematic account.

For those accounts and debts that cannot easily be handled with a trip to the bank, financial spring cleaning can involve a plan to pay off any debts that an individual may have. It is helpful to restart the process of debt payment and arrangement every year since new debts may have been accumulated throughout the year. The best way to pay off debts is to arrange them by their interest rate. Families may want to shift payments to where they are putting as much money as possible towards the debt with the highest interest rate and then only paying the minimum payment on all of the other debts. Then, once the debt with the highest interest rate has been paid off, the individual or family moves on to the next debt and the debt after that until all debts are paid off.


The next step is to look at goals. Financial investment and savings should always be oriented towards goals. Simply throwing money into an account will break down the moment a severe expense pops up. One suggestion is to make savings goals and then devise plans to achieve these goals. While goals need to be specific numbers, they should not be immutable or unchanging. People need to be able to shift their goals based on major expenses, changes in salaries, or other contributing factors. Financial spring cleaning is a perfect time during the year to adjust different goals. It often occurs several months after a January raise or bonus and right around the time of a tax refund.

Reevaluate holdings

Finally, individuals need to reevaluate their holdings and where exactly their money is. When they bring all of their funds together, they will learn how much money they have in stocks, bonds, and other types of accounts. They will also be able to easily view the performance of those assets over time. Each website for accounts has graphs and charts that allow an individual to view their own progress. Financial spring cleaning is a great time to analyze the percentages of their funds that they have in each asset class. In some instances, an individual may have their money in an asset class that will most likely lose money in the short-term or the long-term. 

They may determine that they have too much risk or not enough to meet their goals. This is especially the case for people who are about to retire and have too much risk. They need to start tapping into the money in the near future and cannot withstand an unexpected drop in the stock or bond market of several percentage points. In those cases, they can use this time of reflection to shift their holdings around to different asset classes. This effort can be helpful in reaching the goals established earlier in the spring cleaning process.

Financial spring cleaning is a time for pause and reflection of an individual’s assets. It may not ensure that a person can immediately work their way out of debt or secure enough money for a comfortable retirement. However, it is critical for making money over the long-term and for reducing any confusion or inefficiency in an individual’s portfolio. Whether individuals have a large amount of money or almost nothing at all, everyone should at least consider a yearly financial spring cleaning.

Letting the Light In: The Value of Transparency for Life Insurance Policy Owners

It’s not entirely realistic to expect that consumers have a thorough understanding of every decision they make; for instance, a heart surgeon doesn’t need to explain every technical aspect of a procedure before a patient agrees to it. But when it comes to life insurance, transparency is a reasonable expectation.

With a host of different types of insurance covering varying payment options and coverage periods, life insurance has become increasingly confusing over the last few decades. But a recent study shows that most individuals who buy and sell life insurance believe it is their right to understand the product, its benefits and its limitations.

The 2017 Insurance Barometer Study, conducted annually by LIMRA and Life Happens, polled insurance consumers on the improvements they believed should be made to the life insurance process. Of those surveyed, 83 percent said that the most crucial factor in choosing life insurance was having a product that was “easy to understand.”  The study also found that 70 percent of insurance customers would like insurance to be offered without a physical exam, and 67 percent are looking for more transparency regarding risk and price when they shop for life insurance.

Just as consumers are owed a transparent process when they are purchasing life insurance, they should also have all of the facts when an insurance policy is no longer serving their needs. A life settlement is often a favorable option for seniors looking for extra resources in exchange for a burdensome insurance policy. As the life settlement market grows, so does transparency around consumer options when it comes to surrendering their life insurance policy. Recent legislative efforts, such as the life settlement regulation statutes that have been passed in 43 states, seek to make sure consumers have all of the facts about the life settlement option when considering giving up their life insurance policy. Consumer disclosure is a key component of many of those life settlement laws.

Life insurance, both at the beginning and the end of the policy’s life cycle, can serve both Americans and their beneficiaries, but consumers are not well-served when providers seek to obfuscate or inadequately inform them about the risks, benefits and parameters of an insurance policy. Similarly, consumers should have access to full information about their options regarding the sale of a policy. Try Magna’s simple life settlement calculator to understand how much value your policy could have and learn more about selling your policy by exploring our FAQs.

The Hidden Financial Asset Most Retirees Don’t Know They Have

Even seniors who have planned carefully often find that the costs of retirement add up, forcing some retirees to cut corners severely on everything from health care to travel to legacy expenditures like helping with college tuition for grandchildren. Everyone over the age of 65 wants the freedom to create a retirement that meets their needs and those of their loved ones, but to fulfill those hopes they might need to tap into a little-known resource that could turn a dead-end account into an asset.

Life insurance is property and therefore can be sold in a transaction known as a life settlement, but 90 percent of seniors let their policies lapse instead. Instead of lapsing a policy, seniors should first find out how much value their policy holds. A quick example of the hidden value within a life insurance policy: a 73-year-old man who chose to sell his policy learned that his $5 million policy would yield $1.55 million through a life settlement. If had surrendered the same policy back to the insurance company, he would have received just $210,000.

Here are some surprising facts about the hidden value of your life insurance policy:

1. Even though the life settlement industry has been around for more than 25 years, many seniors don’t know that they have the option of selling their policy because insurance companies haven’t been obligated to tell them about it. Thanks to state regulations, that’s changing.

2. This year alone, Americans are expected to make $3 billion in life settlements, putting money to work that would otherwise be lost if the policy was allowed to lapse.

3. The amount of a life insurance payout is directly related to two factors: the policy holder’s overall health and the cost of the original policy. A life settlement calculator can help a policy owner determine if their life insurance has any value.

4. The cash from the sale of a life insurance policy can be used to help fund long-term care, medical treatments, travel or family activities.

5. The life settlement industry is regulated by each state’s department of insurance, and eight states, with two more pending, have recently passed laws requiring insurance companies to disclose the life settlement option to their policy holders.

6. Seniors wishing to explore life settlements can start by calculating the payout value of their policy with Magna’s Life Settlement Calculator. The potential to turn a no-longer-needed insurance policy into much-needed cash might surprise you.

If you or a loved one is nearing retirement age or already navigating life through the senior years, it’s crucial to know the options surrounding old insurance policies. Life settlement companies like Magna stand ready to answer your questions and help you decide if selling a life insurance policy is right for you as you seek to optimize your retirement years.

Your Guide to Selling Your Life Insurance Policy

Life Settlement Guide 2019 - Official Magna Life Settlements Life Settlement Guide

2019 Life Settlement Guide – Magna Life Settlements Official Guide

In the 1911 U.S. Supreme Court case of Grigsby v. Russell, the Court ruled in favor of Dr. Grigsby after the physician was denied the rights to a life insurance policy that he acquired from a patient in exchange for medical attention. The individual sold Grigsby his policy for $100, and the doctor continued to pay premiums on the policy until the patient’s death.

Unfortunately, Grigsby was denied the benefits of the plan after the patient’s death because the executor of the deceased’s estate deemed the transfer of ownership as an unlawful wager on life, and therefore against public policy. Dr. Grigsby took his claim to the Supreme Court which ultimately ruled in favor of the doctor and affirmed a policyholder’s property interest in a life insurance policy and corresponding right to assign benefits as he or she pleases.


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