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When Premium Financing May Be A Solution
If you need  a large life insurance policy -- with an accordingly large  premium -- you may be able to finance the premium payments from a third-party lender without having to liquidate assets or tap into your capital. Here are just some of the benefits of premium financing, in the right circumstances:

* It can help you acquire sizable life insurance protection to meet your personal or business needs.
* It allows you to keep your capital working for you, often earning higher rates of return than the lender is charging to finance the premiums.
* It may offer tax advantages, such as avoiding capital gains taxes on the liquidation of highly appreciated assets.
* Assets such as the policy's cash value may or other investments can serve as collateral. 
* The design of the financing plan can be structured to reflect your goals, needs and other factors relevant to your  situation.
* Typically with premium financing, your life insurance policy will be owned by a trust, such as an Irrevocable Life Insurance Trust (ILIT). That offers you several options for controlling how the proceeds of the insurance policy are eventually used, as well as opportunities to eliminate or reduce gift taxes, estate taxes, and other costs.

Who Can Benefit from Premium Financing?
In general, premium financing will be most appropriate if you:

* Are insurable, usually at standard rates or better.
Have a net worth of roughly $5 million or more.  
Have the need for significant  life insurance coverage, typically a face value of well over $5 million. 
Have adequate revenue-generating assets - such as an investment portfolio - which can be used to pay premiums.
Can meet the lender's underwriting requirements.

Is Premium Financing Right for You?
There are other important considerations that may impact whether a premium financing strategy is the right approach for you. That's why the best way to determine how it might fit into your goals is to sit down with your DMK Advisor Group professional for a thorough review of your situation. 
A Timely Savings Tool: Fidelity's HSA
The high cost of health care is the number one concern of investors -- even millionaires -- according to Fidelity. And with good reason. Studies show that for the average couple retiring last year, health costs will eat up over $285,000 after retirement. That's why finding a way to pay for those expenses is a top priority for many.

To help you do just that, we're excited to announce that we can now offer you a Fidelity Health Savings Account (HSA). You may already be familiar with this tax-advantaged savings vehicle, but here's a quick overview:

Who's Eligible
 * You must be enrolled in an HSA-eligible health plan. These are typically high-deductible plans that place a greater financial burden for upfront costs on you in exchange for lower health care premiums. 
* You are not covered by Medicare or a non-HSA eligible health plan. 
* You are not claimed as a dependent on someone else's tax return.

Tax Advantages
* Make your contributions with pre-tax dollars and save on your federal tax bill.
* Your contributions and investment earnings  in the HSA grow income tax free. 
* Withdrawals are not taxed if you use the money for qualified medical expenses. 

Greater Flexibility
* If you don't use all the funds in your HSA during a given year, you won't lose it. Instead, it rolls over every year and can be invested to grow tax free. 
* Your HSA is completely portable. You can keep your HSA even if you move, change jobs, or get new insurance. 
* Your HSA is investable. If you don't use all your funds - either because you have no medical expenses or you pay for them out-of-pocket ­­-- then funds in your HSA can continue to grow tax free. You can opt to have your financial advisor help you manage your funds for a greater potential for growth.
* If you are over age 65, you can use your HSA money for purposes other than health care without penalty. You will, however, be subject to income tax just as you would for pretax withdrawals from a 401(k).

When it comes to funding your Fidelity HSA, you have several options: 

* Consolidate multiple HSAs    If you already have an HSA or if you have more than one, you can simplify life by consolidating them with fund transfers from one to another.
* Funds from Your IRA You can also fund your HSA with a one-time IRA contribution. These contributions are not subject to federal income taxes or the 10% penalty for early withdrawals. However, contributions from an IRA will count toward your annual  HSA contribution limit. Lastly, this contribution isn't tax deductible, since you already received a tax deduction on these funds when  you contributed them to your IRA. 
* Convenient EFT Contributions Make your contributions easily from your bank account via electronic funds transfer or electronic direct deposit. These can be either regular or one-time contributions. 
* Pretax Payroll Contributions Your employer may also be willing to help you contribute to your HSA with pretax payroll contributions. Check with your employer to see if this is an option.

More Information
If you think a Fidelity HSA account may be able to play a role in your financial management strategy, give us a call today to learn more!



Summer 2020


Here's info about the latest on the economic impact of the Coronavirus pandemic, plus health savings accounts from Fidelity and how you may be able to finance a large life insurance policy.

And remember, whenever you need us, we're just a phone call away. 

Stay healthy and safe!

Hal Schwartz
DMK Financial Advisors Group
Chief Investment Officer
Investment Advisor Representative


TOLL FREE     800.983.4448
Denver Metro 303.470.5664
Tampa Bay.    813.996.6100

Visit us online at


The Long Road Back

Like most of us, you're no doubt only too ready to return to life before Covid-19. For some of you, that may mean being able to go out to a restaurant, the movies, or a sporting event. It probably also means gathering with friends and family and being able to see their faces without a surgical face mask obscuring the view. And we are all looking forward to a return to hugging and handshakes, cuddling and kissing grandbabies, pats on the back, and all the many ways we took touch for granted once upon a time.

As wistful as we might be for life to return to normal, we need facts not emotions when trying to ascertain what the future might look like. And that begins with acknowledging that we are now in a recession, according to the National Bureau of Economic Research. And not just any recession, but one with extraordinary features that may challenge how well and how fast we recover.

Near Record Unemployment

Ours is a consumer-driven economy, so when consumers aren't buying, the economy is hurting. And nothing keeps consumers from spending like being out of work - or the fear of a pending job loss. While the Bureau of Labor Statistics (BLS) reported that the unemployment rate in May fell to 13.3 percent from 14.7 percent in April, a telling caveat put a sobering spin on that result. The BLS noted that a "misclassification error" caused them to underreport the actual level of unemployment by about 2 full percentage points, making May's rate around 15.3 percent. 

As of June 30, the BLS is reporting an unemployment rate of 11.1 percent, a trend in the right direction, but still a sign of economic problems.

Most economists agree, however, that even this number probably grossly underreports the number of Americans out of work, as it doesn't capture those working in the gig economy, the self-employed, or those others whose income may have dried up but who have no recourse to unemployment benefits. Although the Paycheck Protection Act was meant to extend benefits to a wider range of workers, many states had difficulty administering the additional aid and workers who might have qualified found that aid out of reach.

All told, more than 19.2 million workers are now sidelined. As long as unemployment remains high, the economic recovery will be impaired.

Hard-Hit Service Sector

During past economic downturns, service sector jobs in such areas as dining out, entertainment, travel, etc., remained relatively resilient while industries producing big ticket items, such as durable goods, autos, new homes, etc., took the hit. This recession, featuring a prolonged "lockdown" that kept consumers at home and away from restaurants, malls and the Cineplex, have hit service sector workers hard. 

Three sectors -- leisure and hospitality, education and health services, and retail -- account for 59 percent of the non-farm job losses from February to May. These sectors account for 47 percent of the jobs held by women, while just 28 percent of men work in these fields. In other words, women are bearing the brunt of this economic downturn -- especially women of color.

Reshaping the Retail Landscape

The economic crisis Covid-19 created was the final nail in the coffin for many troubled retailers and small businesses. One estimate has as many as 100,000 small businesses closing their doors forever. Marquee names such as JCPenneys, J. Crew, Neiman Marcus, Brooks Brothers, and Pier One are declaring bankruptcy, and other retailers have reduced their locations. You may soon have to travel farther to find a Starbucks, Barnes & Noble, or Nordstrom, and that little neighborhood boutique you loved so much may be shuttered for good. 

Then there's the sizable impact of online shopping. Once a late night obsession of insomniacs, shopping online is now a huge source of revenue for those retailers who added a robust digital storefront to their brick-and-mortar operations. Those retailers slow to embrace the digital world will either learn to adapt or continue to lose ground even after Covid-19 is a distant memory.

When the dust clears, what's very likely is that the strong retailers will get stronger while marginal operations will struggle even more. But when consumer spending rebounds, those retailers that have survived are likely to reap the benefits of less competition and pent-up demand.

Not if But When

Clearly, recovery can't begin until Covid-19 ceases to be the catastrophic health threat to so many. That will happen when we have adequate treatment options, better and more consistent testing, and lastly, a viable vaccine. The news on each of these fronts seems to change hourly, but each passing day gives us more and more reason to hope that we may turn the corner soon. 

Spending Our Way Into Recovery

As big a footprint as the Apples, Walmarts, ExxonMobiles, Amazons, etc., might have in the U.S., it's small businesses that serve as the engine of our economy. For a recovery to take hold, these enterprises have to be able to resume business as usual with consumers buying their goods and services at previous levels.

Those with the means to do so may help the economy return to normal once they begin to spend and invest as they have in the past. Once consumer spending picks up, it's likely hiring will too, helping to put a dent in the astronomical unemployment numbers now dragging down the economy.

How to Be a Proactive Consumer

There's no doubt that the world after Covid-19 is likely to look different than before. But much of the power to rebuild the economy is in the hands of consumers and investors. 

So, when it is safe for you to do so when your community fully opens, consider returning to local restaurants, heading back to the malls, going out for a movie, supporting your local arts organizations, donating to the nonprofits you admire, and in all the other ways you usually do, providing both the financial and emotional support your community needs to help it heal. 

How Premium Financing Works


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