St. Judes Knights of Columbus at 801 N. Bridge St., Dewitt, MI 48820 US - Knights of Columbus Financial Beacon

Brought to you by Doug Nurenberg
Long-term care
The long learning curve
Knights of Columbus
Fall 2009 Financial Beacon
Fixed annuities
A look back in time
Letter from
your agent
The Knights
of Columbus
earns top
ratings in 2009
Dear Brother Knight:
Looking for some good economic
news? Two respected financial
industry rating services have given
the Knights of Columbus their top
rating in 2009. A.M. Best rates us A++
(Superior) for the 34th consecutive
year, and Standard & Poor’s rates us
AAA (Extremely Strong) for the 17th
consecutive year.
It’s even more encouraging that
A.M. Best lists its A++ rating for us as
“stable.” Tell me, when’s the last time
you heard that word attached to a
financial services provider? Here’s part
of A.M. Best’s published assessment:
The ratings of the Order reflect
its strong fraternal and insurance
presence within the Catholic
communities in the United States and
Canada, its superior risk-adjusted
capitalization as measured by Best’s
Capital Adequacy Ratio and the Order’s
consistently positive statutory operating
results.
In short, our Order’s conservative,
values-based management prevails
even during tough times. That’s one
reason the K of C is certified by the
Insurance Marketplace Standards
Association for ethical and honest
business practices. Only four U.S.
insurers have this certification and top
ratings from Standard & Poor’s and
A.M. Best.
Just thought you’d like a reminder
about the quality of the organization
you’ve chosen to be part of.
Fraternally yours,
Doug Nurenberg
Our parents never stop teaching,
whether they want to or not. We learn
from them about how to be adults,
how to be parents, and sometimes,
reluctantly, how to grow old.
When parents reach a point where
it’s a struggle to manage the daily
necessities—getting dressed, fed,
cleaned, etc.—we begin to see how
much daily care is required. It can be a
surprise to learn how little government
programs will provide for the cost of inhome
or nursing home care.
Medicare, for example, generally
pays for only short-term medical care
at home or for a limited stay in a
nursing home after a hospitalization.
Medicare is designed to pay for “skilled
care,” usually from doctors, nurses,
and hospital staff. It isn’t designed to
cover the long-term day-to-day services
referred to as “custodial care.”
Medicaid, on the other hand, does
pay for long-term care. But people
don’t qualify for it until they’ve
exhausted virtually every source
of wealth. This can mean a drastic
reduction in lifestyle for someone
whose spouse’s custodial care is paid
for by Medicaid.
Unlike government programs,
private “long-term care insurance” is
intended to protect families from the
expense and hardship of custodial care.
Unfortunately, many baby boomers’
parents didn’t have access to this type
of coverage, so boomers are learning
harsh lessons from their parents’
difficulties.
One lesson to learn about longterm
care coverage is that it is most
affordable when purchased well before
retirement age. It gets more expensive
for each year that you age, and poor
health can increase the costs or make
coverage unavailable.
According to BrokerWorld magazine’s
2008 survey about individual longterm
care insurance, the average age
of someone buying this insurance
dropped from 63 in 2002 to 58 in 2005,
which is a good thing—but it hasn’t
continued to drop.
One reason for this may be that
long-term care coverage options and
limits are unfamiliar to so many.
The principle behind the coverage,
however, is simple.
Just as with auto and home
insurance, you buy it because you
can’t afford to pay out-of-pocket for
a catastrophic loss.
A 2008 report by the risk
management firm, Lifeplans, in
conjunction with MetLife’s Mature
Market Institute, estimates the average
annual cost in the U.S. of nursing
home care (semi-private room) was
$77,380, and for assisted living
services, $36,372.
Unfortunately, these are more than
abstract numbers to many sons and
daughters. We see how our parents’
decisions have affected their senior
years, and we learn. At the same time,
our children will be learning as they
watch the decisions that we make.
Please let me know if you have
questions about long-term care
insurance. The Knights of Columbus
offers excellent coverage options to
our members at very reasonable rates,
and I’d be happy to give you more
information. ?
A MESSA GE
from your agent
The long learning curve for long-term care
Coverage is most affordable
when purchased well before
retirement age.
Showing continued
doubt about an
economic recovery, more consumers
appear to be using the retirement
planning mantra, “Safety first.” Sales of
annuities with a fixed rate of return in
the first quarter of 2009 were 73 percent
higher than the first quarter of 2008,
according to estimates by LIMRA, a life
insurance industry organization.
The Knights of Columbus topped
this, increasing annuity sales nearly 100
percent in the first six months of 2009
over the same period in 2008. This
followed a 40 percent increase in 2008
over 2007.
To gain some perspective on this
trend, take a hypothetical look backward:
On January 1, 1999, two 55-year-old men
in the U.S. each invest $50,000 toward
their retirement income.
One put the money in an S&P 500
stock fund and the other purchased
a Knights of Columbus tax-deferred
retirement annuity. Ten years later, on
December 31, 2008—we’re using that
time period to avoid the major stock
fluctuations—see how their investments
performed (chart below).
One reason for the difference in
growth is that monies in the S&P fund
were taxed annually on any gains, while
gains from the annuity won’t be taxed
until the funds are withdrawn.
This accomplishes an important thing:
the annuity fund grows tax deferred, and
allows a greater compounding of interest.
Another reason the annuity earned
a better return during this period is
that it had a fixed rate of return that
was protected by a guarantee from the
Knights of Columbus (as are all annuities
from the Knights of Columbus). This
means that once the rate is locked in,
shifts in the stock market don’t affect
the annuity’s performance.
Keep in mind that the previous
decade’s stock fund returns don’t
predict those of the next decade. For
many people, stocks do have a place in a
diversified portfolio of retirement funds.
It’s important to get expert advice when
you’re making decisions about your
financial future.
If you’ve got questions about
retirement annuities, I’d be glad
to talk with you.?
This information should not be construed as advice
about buying specific stocks, mutual funds, or
annuities. Always consult a qualified financial expert
when making investment decisions.
What a difference a guarantee makes
A look back in time explains the rising popularity of fixed annuities
Original investment on Jan. 1, 1999 $50,000 $50,000
Value on Dec. 31, 2008 $43,494.17 $78,152.41
Annual compounded rate of return -1.38% 4.57%*
*Based on a Knights of Columbus Vantage Single Premium Deferred Annuity
S&P 500 Fixed Annuity*
Sales of annuities with a
fixed rate of return in the first
quarter of 2009 were 73%
higher than the first quarter
of 2008.
YOUR AGENT
Doug Nurenberg, FIC
3416 Banner Road
St. Johns, MI 48879
PHONE: (989) 292-1583
FAX: (989) 227-2273
EMAIL: douglas.nurenberg@kofc.org
Contact me today for inf ormation on long-term care insurance
Family benefits & services
Knights of Columbus insurance consistently ranks at
the top of the industry in financial stability and ethics.
Please call to discuss these services:
• Financial needs analysis
• Life insurance
• Tax deferred fixed-rate annuities
• Long-term care insurance
• Retirement planning
• Estate preservation
• Scholarships
• Family fraternal benefits
This publication is written to provide accurate and authoritative information with respect to the subjects
covered. However, the information contained in this publication
is not intended as a substitute for
direct financial and legal advice. For such assistance, please contact a qualified professional.
Reproduction of any part without written permission is strictly prohibited. Published in conjunction with the
Knights of Columbus by Jargon Marketing; distributed in the United States and Canada. Copyright © 2009 Jargon Marketing, 1 N. Pinckney Street, Madison, Wisconsin
53703, (800) 419-5203
Beyond the value of protecting a
family from the premature loss of
a breadwinner, life insurance can
be an important tool for protecting
an estate’s assets from taxes in the
probate process.
When a married spouse dies,
his or her assets generally transfer
tax-free to the surviving spouse.
This includes the payout from a life
insurance policy.
But say the surviving spouse dies
before spending (or gifting) all of
the money paid by the policy. That
leftover money—perhaps all or most
of the payout amount—now becomes
a taxable part of the estate.
The point is, don’t allow the entire
burden of estate planning to fall to
the surviving spouse—who knows
whether that person will be able to
accept such a burden when the time
comes?
Life insurance can be used to
protect your heirs in at least two
important ways:
? A joint and survivor (also called
“second-to-die”) life insurance
policy can provide funds to pay
estate taxes, so your heirs don’t
have to sell property or liquidate
investments you wanted them to
have. Joint and survivor insurance
is permanent, or “whole,” life
insurance—as opposed to “term”
insurance—and the premiums
are based on the health risks
of both spouses. This can be a
major advantage. For example, a
husband may not be able to afford
permanent life insurance premiums
because of his health, but his wife
is less of a health risk, and the
premium is significantly lower as
a result.
? Assign a permanent life insurance
policy to a third-party beneficiary,
such as a child or a trust, so that
income and estate taxes on the
policy’s payout can be avoided
altogether.
These matters require guidance
from legal and tax experts. I’m
always ready to help, also, by guiding
you through the ins and outs of
life insurance, annuities, and other
tools you can use to plan for your
family’s financial security now and
in the future. ?
How life insurance can protect your heirs from estate taxes

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