Thursday, May 30, 2013

Investment Rollovers and RMDs

Remember, when rolling investment money over the accounts must be of “like kind” to move.  For example, IRA money can come from a 401(k), 403(b) holdings, or self-directed IRA accounts and you must withdraw at least a minimum amount annually after turning age 70 ½.  The amount that you must withdraw is called the Required Minimum Distribution (RMD), and this amount is determined by the Internal Revenue Service on an annual basis.  Most companies require you to take money in the third quarter of each year.  The funds received from an RMD can be reinvested into non-qualified savings accounts (which you pay taxes on) or non-qualified annuities (which you do not pay taxes on until the funds are withdrawn).  Before taking out your money for an RMD, it is recommended that you consult with your financial advisor and your tax professional or CPA.

At Newsad Insurance Services, we guide our clients through this process making it simple and easy to understand.  Tom Newsad has been providing financial services in Middletown, Trenton, Hamilton, Franklin, Carlisle, Dayton, Monroe, and beyond for over 20 years.  Please visit for more information.

Thursday, May 23, 2013



In a recent Gallup Poll, people who had been asked about annuities believed:

  • Annuities have a competitive rate of return
  • Annuities provide a long term savings plan
  • Annuities are important sources of retirement planning
  • Annuities can ensure that a surviving spouse has a continuing income
  • Annuities provide payout  flexibility
  • Annuities offer tax deferral
  • Multiple beneficiaries can be named on annuities

Annuities can only be purchased through life insurance companies. Prior to purchasing an annuity with a life insurance company it is important to check the company’s ratings.

Annuities purchased through Newsad Insurance Services will give you the peace of mind of knowing that you are investing in a safe plan. At Newsad Insurance Services we believe in knowledge, trust, and service. Let us help you prepare for the future!

Tom Newsad has been building relationships for over 20 years and is based in Middletown, Ohio.  Newsad Insurance Services offers equity indexed annuities as well as life, health, disability, and long term care insurance and serves Hamilton, Butler, Warren, Montgomery, Clermont, and Preble Counties and beyond.

Monday, May 20, 2013

Life Insurance Begins at Age Fifty

Life Insurance Begins at Age Fifty

            If your term life insurance policy is ending but your needs continue, consider the cash value alternative of permanent life insurance.  One way to continue your life insurance is simply to renew your term protection; however, if your health has changed, you may be limited on the type of policy you can buy.  A permanent life insurance policy, or whole life policy as some call it, may provide a steady investment.  In contrast, many people believe whole life insurance as an investment is controversial, but that is because it takes many years for a policy to show value.  The first years’ premium goes largely toward commission and other expenses, so your cash value will lag the amount paid in premiums in the early years.  It typically takes eight to ten years for your cash value to exceed the premiums you pay.  If you carry on, however, the results improve—sometimes dramatically.  This is a long term proposition.  Do not buy it if you cannot keep it.  From 1991 to the start of 2011, according to Blase Research (a life insurance data provider from Easton, PA), annualized cash value returns for representatives from major companies such as Northwestern Mutual and New York Life in private range from 2.62% to 4.44%.  This amount is tax deferred and includes the part of your premiums that go to pay for death protection and company expenses.  It is also a good idea to see whether you can convert your term policy to permanent insurance without changing insurers and without a new physical exam, especially if you have developed medical conditions that were not present when you purchased the life insurance originally.  Clearly earnings on life insurance policies will not keep up with stocks over a lifetime and certainly not with an extended bull market.  This is why just about every financial advisor, including well-trained life insurance agents, emphasize that life insurance is not meant to be your primary investment.  Tom Newsad advises everyone to have a comfortable emergency reserve savings or tax deferred investment.  Remember that permanent or whole life insurance has a few strong suits, the first of which is safety.  With the exception of AIG, life insurers survived the credit crisis and the recession in excellent financial condition.  The next strong suit mentioned is that falling costs, competition, and longer life expectancies are driving the cost of all life insurance policies down, including those for people aged fifty and older.
            Permanent life insurance also appeals to risk-adverse people who do not have time to recover investment losses in the event of another financial crash.  Another form of whole life or permanent life insurance protection is a type of whole life policy called limited pay.  You may pay higher premiums for fewer years, but it is an option that has become popular among pre-retirees who want to time the end of their premium obligations with their retirement date.  Cost could range perhaps twice as much per year versus regular premiums paid over one’s lifetime, but by putting more into the pot earlier cash value also compounds quicker.
            Cash value life insurance can also be a good portfolio diversifier.  That is because a whole life policy is unconnected to the securities market.  You can think of it as cash or bond allocation in your overall investment nest that allows you to become more aggressive with stocks, commodities, or real estate in your IRA and 401(k) or taxable brokerage accounts.  Cash value life insurance is also one alternative to home equity line of credit or other sources of borrowed money.  That is because the money you usually borrow from your whole life insurance policy is not taxed (remember, whole life insurance policies are the only vehicle that you can borrow money out of and not have to pay taxes on).  A policy loan is instant credit.  You can borrow up to your total premiums paid with no questions asked, simply by sending a fax or sending the insurance company a check at the office of Newsad Insurance Services.  A simple phone call or email starts this process for you.  Besides speed, there are two huge advantages to CDs and conventional loans, and that is that nobody runs a credit check or ties the interest rate to your credit score, and that you do not have to repay the money on any schedule.  There is also no penalty if you want to make a withdrawal at or before age 59 ½ because it is not a taxable event like a withdrawal from an IRA or a 401(k).  Policy loans are not a totally free ride, however.  They tend to acutely accumulate interest at 5% to 8% in your unpaid principal and accrued interest is deducted from the death benefit paid to your survivors, or from the cash value taken away if you discontinue the policy. 
            Ultimately, what is most important here is that the money accumulating in your policy is your money.  You also will not have to beg a banker to approve a loan after you have retired and have a lower income.

Tom Newsad has been building relationships in the Middletown, Ohio area since 1994.  Newsad Insurance Services offers life, health, disability, and long term care insurance as well as fixed indexed annuities and serves clients in Middletown, Franklin, Trenton, Liberty Township, Hamilton, Cincinnati, Dayton, and beyond.  Click on or call 513-424-6871 for more information

Thursday, May 16, 2013

Protect Your Clients and Your Business from Cyber Attacks

     In April 2011, thousands of email addresses were stolen from several major retailers and financial institutions.  One of the major concerns of these types of attacks is that hackers could create phony e-emails, known as “phishing attacks” aimed at defrauding consumers or taking control of their computers.  Consumers could also be tricked into giving out sensitive information like their passwords and bank account information. 
     Fortunately, Columbus Life was not among the companies that were affected.  However, this occurrence should serve as a reminder of the duty we all have in protecting our customers’ nonpublic personal information.
Here are a few reminders regarding email privacy:

Q:  What is “sensitive, personal, or confidential” data?
A:  Client, associate and other business data of a sensitive nature must be protected.  This includes name, date of birth, Social Security Number, credit card information, medical information, and policy of contract numbers. Anything that can be used to identify a person, or identify a person as a client, is important to keep confidential.

Q:  How might this data become exposed?
A:  When information is keyed to a public web site or sent via email, it travels across the public Internet.  If the transmission is not secured (encrypted) there is risk that data contained in it could be compromised.  This risk generally does not apply to email that is sent within a company.  If you send e-mail to clients, business partners or any other outside entity (including your personal email address, like @yahoo or @NetZero), that message is potentially traveling outside of a secure environment.  If it contains sensitive information, that is at risk.

Q:  What should I do to avoid revealing sensitive client data via email?
A:  If you receive an email that contains sensitive information, and need to reply or forward the e-mail, you should do so only after deleting the sensitive data or creating a new message.  You have probably seen Columbus Life replies to your e-mails where sensitive data has been removed and altered.  For example a policy number may appear as XXXXX1234.  A good practice when sending emails regarding your clients is to limit the client’s identifying information to last name and policy number, or just the policy number.

-Article taken from “Inside Columbus Life”  July 2012 

Tom Newsad is an independent agent for life, health, long term care, and disability insurance and equity indexed annuities.  Newsad Insurance Services of Middletown, Ohio serves the greater Butler, Hamilton, Warren, and Montgomery county areas and beyond.

Tuesday, May 7, 2013

Objectives of Estate Planning

Objectives of Estate Planning

The property found in most estates generally falls into one of five categories: personal property, real estate, business interest, life insurance, and government benefits. Unfortunately, at death there is often a great deal of conflict due to different ways in which assets pass to the family and other heirs. These conflicts, together with a generally slow probate process, can easily result in a lengthy delay of the estate settlement process, as long as one to two years or more in some cases. Considerable expenses may also be incurred if there is a delay in the estate settlement process. However, a custom tailored life insurance strategy can ease the handling of these important financial matters.
Consult an independent life insurance expert to discuss further.

-Tom Newsad

Tom Newsad of Newsad Insurance Services does estate planning and more in Middletown, Hamilton, Trenton, Franklin, Carlisle, Monroe and surrounding areas. Contact Tom at or email him at for more information.