Informed on Life Insurance





Paul Cholak - Principal
Licensed Insurance Agent


January 2018 - In This Issue:

We Offer:
  • Life Insurance
  • Pre-Need Funeral Planning Arrangements
  • Final Expense Insurance
  • Life Insurance for Diabetics and Other Hard-to-Insure Individuals
  • Annuities
  • Individual and Family Health Insurance (Affordable Care Act)
  • Health Plans for Medicare Beneficiaries
  • Dental and Vision Care Coverage
  • Supplemental Health Insurance
  • Prescription-Only Drug Plans
  • International Travel Medical Plans
  • Prepaid Legal and Identity Theft Plans
About our Principal,
Paul Cholak

Paul holds resident (Florida) and non-resident life, health and annuity licenses in 31 other states. He also has a Pre-Need Sales Agent License in Florida. He offers all types of life insurance and most types of annuities with many different carriers. He also offers short- and long-term disability insurance; long-term care insurance; a long-term care discount program; and, where available, short term (recovery care) insurance.

He represents many different life and final expense carriers and operates the Diabetic Life Insurance Center, which offers life insurance to diabetics and other hard-to-insure individuals. 

He has many years of insurance experience and has been Director of Employee Benefits for large companies, as well as a benefits consultant with major consulting firms.

He's available 24/7 and  stays in touch with his customers before and after they've made their insurance purchase.  He's always available to help customers who have any questions about their policies.

He's a recipient of the prestigious Albert Nelson Marquis Lifetime Achievement Award and been listed in Who's Who in America, Who's Who Registry of Business Leaders and Who's Who in Finance and Industry. 

He's a member of Phi Beta Kappa and other national honorary societies and organizations such as Omicron Delta Kappa. He's a graduate of certificate programs from a number of prestigious institutions, been invited to speak at corporate  and university training programs, been featured in articles in national books and magazines, and is also a published author.  

Disability Infographic
The following Infographic was published by Disability Insurance Services on December 18. If you'd like to receive quotes for short-term and/or long-term disability insurance please call us at 877-734-3884.
Tax Bill Signed Into Law--Ramifications for Health Benefits
House and Senate Republicans agreed to a compromise tax bill on Friday, December 15, Congress passed the bill in final form on Wednesday, December 20, and the bill was signed into law by the President shortly before Christmas.

Most provisions of the law take effect January 1, 2018. 

Most of the information in this article is taken from summaries of the law that have appeared in the AARP Webletter that we have updated as more information about the law has become available through other sources.

Tax Rates and Deductions
The compromise plan permanently lowers the top corporate tax rate from 35 percent to 21 percent.  However, individual rate cuts, including a reduction in the top tax rate from 39.6 percent to 37 percent, would expire in 2025.
Other tax brackets (there are a total of 7 brackets) would change as well, and personal exemptions would be eliminated. But the legislation would nearly double standard deductions to $12,000 for individuals and $24,000 for married couples filing jointly.
The tax plan also maintains the extra standard deduction for those 65 and older, currently $1,250 for individuals, $1,550 for heads of households and $2,500 for couples who are both 65 and older.
Medical Expense Deduction Preserved Through 2018
The law preserves the   medical expense deduction , which is used by 6.3 million people with incomes below $75,000. Filers would continue to be able to deduct medical expenses exceeding 7.5 percent of their income in 2017 and 2018. (The threshold had been scheduled to increase to 10 percent effective January 1, 2017; the 10 percent threshold is now scheduled to become effective 1/1/2019.)
Penalty For Not Having Insurance Removed Starting in 2019
The plan retains a Senate proposal repealing the provision of the Affordable Care Act that requires most Americans to have health insurance - beginning in 2019. That would increase the number of people without insurance by about 13 million by 2027, according to the Congressional Budget Office (CBO). Lowering the pool of insureds will increase premiums in the individual market by 10 percent in most years over the next decade, the CBO noted. Those 50 to 64 would face average premium increases in the individual market of up to $1,500 in 2019, an  AARP Public Policy Institute analysis  found.
Please read this New York Times article for an analysis of how repealing the penalty is likely to affect individual policies.
(Note that the tax penalty will still be effective for 2018. The IRS has announced they will enforce the penalty. Some clients have told us that they don't expect the penalty to be enforced but it's our opinion that the penalty WILL be enforced and that people who don't have plans that comply with the Affordable Care Act will have to pay penalties when they file their 2018 tax returns.)
Efforts have already begun by both parties to study what changes, if any, should be made to mitigate the effect on Obamacare premiums once the tax penalty is eliminated. One possibility is that waiting periods will be instituted for those who have not had continuous coverage.  
Unless some additional changes are made, the elimination of the penalty will further destabilize markets and additional insurers may pull out of the ACA market. The reason is that more healthy people will pull out of the market and either not buy insurance or buy new types of plans (referred to as "skinny plnas") that may be introduced by carriers that do not meet the requirements of the ACA.  
Unless some kind of change is made that will prevent sick people from immediately joining plans without some kind of restriction, we anticipate that more carriers will pull out of the market and that premiums will rise even more significantly than anticipated.

Medicare Cuts Expected
The fallout of the plan would be even more pronounced on older Americans and the poor, as it puts Medicare, Medicaid and other safety net programs at risk. With an estimated cost of nearly $1.5 trillion in lost revenue over the next decade, the tax overhaul would trigger automatic spending cuts to key programs mandated by the 2010 "pay-as-you-go" law, including $25 billion to Medicare in 2019 alone. The tax bill delayed these cuts by one year, but as far as we know the PAYGO law has not been repealed, and the law will mandate that these cuts start in 2019. (The President had been expected to sign the bill into law shortly after the first of the year, but apparently some last minute changes in the law were made that permitted these changes to be delayed until 2019.) In a letter to House and Senate leaders earlier this month, AARP Chief Executive Officer Jo Ann Jenkins urged Congress to act swiftly to waive the PAYGO law, as it's known, and prevent automatic  cuts to Medicare .

Impact On Taxes
The nonpartisan Joint Committee on Taxation hasn't weighed in on the financial impact the unified plan would have on household taxes. But in an analysis of the Senate plan, it calculated that the benefits would be fleeting: Over 60 percent of households would receive tax cuts in 2019. But by 2027, when the individual cuts would expire, the analysis found that about the same number of households would pay higher taxes or have cuts below $100.
Among Americans 65 and older, more than 5 million would get no tax break in 2019 and 5.6 million would see no tax decrease by 2027, according to an AARP Public Policy Institute analysis.

Read the entire article here.
Your Life Insurance Options
There are many kinds of life insurance, but they generally fall into two categories: term insurance and permanent insurance.
Term insurance , the most affordable type of insurance when initially purchased, is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and generally pays a benefit only if you die during that term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
Permanent insurance , by contrast, provides lifelong protection. As long as you pay the premiums and no loans, withdrawals, or surrenders are taken, the full amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep it over a long period of time. 

It's impossible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals. Often, a combination of term and permanent insurance is the right solution.
Try our interactive   Product Selector . It walks you through the questions you need to consider to determine the kind of life insurance that's right for you. Remember, the best way to figure out the amount and type of life insurance that makes sense for your particular situation is to meet with a qualified insurance professional .
Paul Cholak