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4 Things to Know About the Equifax Breach

By Devin Kropp  – Horsesmouth

The Equifax hack has left many concerned about their personal information. While we still have a lot to learn about last week’s hack, here are four things we do know.

Last week’s mega-breach at Equifax has left many scrambling to protect their identity. The credit bureau believes that up to 143 million people were affected- some 44% of the population.

It’s likely that your information has been exposed and, if you have not already, you must place a security freeze on your credit files at the three bureaus:

  • Equifax
  • Experian
  • TransUnion

While we wait for more information on the breach, here are four things you should know about the Equifax hack.

1.  Don’t rely on Equifax’s website

In response to the hack, Equifax set up a special website that included a statement, some FAQs, and a tool to check whether or not you were affected. The tool asked people to submit their last name and the last six digits of their Social Security number. Almost immediately, people began having issues with the site.

For example, many checked on Friday and were told that their information was safe. However, when they checked again over the weekend they were told they were affected. Or they checked on their phone and were told they were safe, but from their laptop, they were told they may have been impacted.

Some took it a step further and began entering fake combinations of Social Security numbers and names to find that those “identities” were  affected  as well.

We recommend that you not even bother checking to see if you were affected using Equifax’s website. It’s best to assume that you were and immediately freeze your credit there- and at Experian and TransUnion.

The three bureaus have been experiencing high traffic recently and your request online may not be processed. If you cannot set up your freeze online, try calling the bureau s or send a written letter so you have a paper trail.

2. Equifax created weak security PINs

After the breach, consumers rushed to lock their credit files with a PIN at the three credit bureaus. Many noticed a suspicious pattern. Instead of being assigned randomly generated numbers, the PINs reflected the date and time they had signed up for the freeze. (For example, someone who froze their credit at 1:30 pm on September 9 would have the PIN 090917 1330.)

Using such a template to create sequential PINs puts consumers at risk. Since hackers know the PIN setup, they could potentially unlock credit files by guessing a series of possible PINs.

Equifax has responded and will be changing how they assign PINs, so that they are randomly generated. If you have already received a PIN for Equifax you have the option to change it.

3.  The first class action lawsuits have been flied

Since the announcement, at least three lawsuits have been filed against Equifax. One filed in Oregon is demanding $70 billion in damages. The lawsuit requests compensation for out-of-pocket costs endured by those impacted by the breach such as having to pay $10 for a credit freeze.

In addition, attorneys general of five different states have launched formal investigation s into Equifax’s practices leading up to the breach and how they notified consumers of the hack.

4.  Tax-related identity theft may rise

So far, we haven’t seen the data stolen in the Equifax hack used fraudulently- but experts worry that could change quickly as we approach tax season. Tax identity theft- the process of hackers fraudulently filing for another’s tax return­ has been a problem for years. The Equifax breach exposed millions of Social Security numbers, which hackers can use to file a fraudulent tax return in your name.

In recent years, the Internal Revenue Service (IRS) has attempted to combat this fraud by providing some taxpayers with a special PIN they must use when filing their taxes. This security feature, however, is not currently available to everyone.

Regardless, it is best to file your 2017 taxes as soon as possible in 2018 to ward off fraud.

Looking forward

Equifax’s hack has brought us into new identity theft territories. It’s difficult to say now what the full impact of this breach will be, but we’ll continue to follow the latest developments closely.

Again, the best way to protect yourself now is to freeze your credit files. Doing so will make it impossible for criminals to open any new accounts in your name. You ca n set up a security freeze at all three of the bureaus online, over the phone, or through the mail.

For more identity theft protection assistance, join our comprehensive client-education program Savvy Cybersecurity or get a copy of our award-winning book, Hack-Proof Your Life Now!

IMPORTANT NOTICE

Securities and advisory services through Mutual of Omaha Investor Services, Inc.  Member FINRA/SPC.  Martin V. Higgins, Representative.  Horsesmouth, LLC, Family Wealth Management and Mutual of Omaha Investor Services, Inc.  are not affiliated.

Copyright © 2017 by Horsesmouth, LLC. All rights reserved.

IMPORTANT NOTICE This reprint is provided exclusively for use by the licensee, including for client education, and is subject to applicable copyright laws. Unauthorized use, reproduction or distribution of this material is a violation of federal law and punishable by civil and criminal penalty. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties expressed or implied are hereby excluded.


Designating a Beneficiary for Life Insurance

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Prepared by Broadridge Investor Communication Solutions, Inc

A beneficiary is the person or entity you name (i.e., designate) to receive the death benefits of a life insurance policy. Some states require that your beneficiary have an insurable interest in your life or be related to you (at least at the time the contract is initiated), while others have no such restriction.

If you do not want to name an individual or entity as your beneficiary, you can name your own estate. The proceeds will then be distributed with your other assets according to your will. You should note, however, that naming your estate as beneficiary may have disadvantages. For example, in many states, life insurance proceeds are exempt from the claims of your creditors when there is a named beneficiary, but not when your estate is your named beneficiary.

Revocable and irrevocable beneficiaries

The beneficiary can be either revocable or irrevocable. A revocable beneficiary can be changed at any time. Once named, an irrevocable beneficiary cannot be changed without his or her consent.

Primary and contingent beneficiaries

You can name as many beneficiaries as you want, subject to procedures set in the policy. The beneficiary to whom the proceeds go first is called the primary beneficiary. Secondary or contingent beneficiaries are entitled to the proceeds only if they survive both you and the primary beneficiary. It’s important to name a contingent beneficiary because if you and your primary beneficiary die simultaneously, the Uniform Simultaneous Death Act provides that the beneficiary will be presumed to have died first. By naming a contingent beneficiary, you avoid having the proceeds flow to your estate.

Multiple beneficiaries

You may name multiple beneficiaries if you choose. There are no legal restrictions (and few company restrictions) on the number of beneficiaries you can designate.

If you name multiple beneficiaries, you must also specify how much each beneficiary will receive. You may not want to give each beneficiary an equal share, so you must state how the proceeds should be divided. Because of the numerous interest and dividend adjustments that the insurance company must make, the death benefit check often does not equal the policy’s face value. So, it’s wise to distribute percentage shares to your beneficiaries, or to designate one beneficiary to receive any leftover balance.

How do you name or change a beneficiary?

When you buy life insurance, you will indicate your beneficiaries on the application. When changing a beneficiary, the insurer will provide you with a beneficiary designation form. Unless one or more of the beneficiaries is irrevocable, you only need to list the names of the beneficiaries, sign the form, and date it. This will automatically revoke any previous designations by writing this in on the change-of-beneficiary form. Be sure to check and update your beneficiary designations upon certain life events (e.g., divorce, remarriage, the birth of children).

Don’t make the mistake of thinking that you can change your beneficiary in your will. A change of beneficiary made in your will does not override the beneficiary designation of your life insurance policy. If you want to change the beneficiary of your life insurance, execute a change-of-beneficiary form. Do not rely on your will to do so.

Why designating the proper beneficiary is important

You should name both primary and contingent beneficiaries. If you have not named one or more beneficiaries, the proceeds pass to your estate at your death. Proceeds paid to your estate are subject to probate and will incur all of the expenses and delays associated with settling an estate. But named beneficiaries receive proceeds almost immediately after your death, and probate is bypassed. In addition, proceeds passing to your estate are subject to the claims of creditors. Most states exempt life insurance proceeds from creditors when there’s a named beneficiary.

Other considerations when designating beneficiaries

If you become incompetent, you cannot name or change a beneficiary. And you’re incompetent only if you are legally declared to be so. The test is similar to the test regarding the making of wills or any other legal contract (i.e., do you have the capacity to understand your actions?).

Do not name a minor as a beneficiary unless you also appoint a guardian in your will or use a trust. If you do name a minor as a beneficiary, and you do not appoint a guardian or use a trust, the probate court will appoint a guardian for you. In states that have adopted the Uniform Transfers to Minors Act, it’s possible to create a custodial account of the minor after the death of the insured to receive the child’s share of the death proceeds.

Your right to change a beneficiary may be limited by a divorce decree or settlement agreement. In some cases, divorce allows a policyowner to change the beneficiary, even if the beneficiary is irrevocable. In other cases, the policyowner may be prohibited from changing the beneficiary or may be required to name a divorced spouse or children as irrevocable beneficiaries.

If you’re a minor

In some states, if you (the insured) are a minor, you can name only a certain class of persons as beneficiaries. That class generally includes your spouse, parents, grandparents, and brothers or sisters. Your parents or legal guardians will also have to sign the application for life insurance.

 

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc., Mutual of Omaha Investor Services, Inc. and its representatives do not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Registered representatives offer securities and investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Mutual of Omaha Advisors is a marketing name for Mutual of Omaha Investor Services, Inc. Mutual of Omaha Investor Services, Inc., Family Wealth Management and Broadridge Investor Communication Solutions, Inc. are not affiliated.

Trading instructions sent via e-mail will not be honored. Please contact my office at the number provided above or Mutual of Omaha Investor Services, Inc. at (800) 228-2499 for all buy or sell orders. Please note that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets.


Term vs. Cash Value Life Insurance

Photo courtesy of Pixabay

Prepared by Broadridge Investor Communication Solutions, Inc.

Which type of life insurance is better–term or cash value? Insurance buyers have been asking this question for generations. When choosing between these two fundamentally different alternatives, you’ll need to think about the amount of coverage you need, the amount of money you can afford to spend, and the length of time you need the coverage to continue.

Term insurance

Term insurance is often referred to as pure insurance. Term policies provide life insurance coverage for a specified period of time. You can typically buy term insurance for periods ranging from 1 to 30 years. If you die during the policy period, your beneficiary receives the policy death benefit. If you don’t die during the term, your beneficiary receives nothing. At the end of the specified policy term, your coverage simply ends. You may be able to renew your policy without a physical exam, but at a much higher premium. Once you reach a certain age (usually 70 and older), you may find it difficult to get term insurance coverage–and if you can, the premiums will be very expensive. There are several variations of term life. You can buy a level death benefit or a decreasing death benefit with premiums that increase annually, or that are level for a period of years (5,10,15, 20, 25, or 30).

Cash value insurance

Cash value insurance, often called permanent insurance, is life insurance that is designed to have you pay a “levelized” premium throughout your life. In some cases, you may fund a cash value policy in a way that the cash values can be used in later years to pay future premiums. As long as you continue paying your premiums by whatever means, cash value life insurance continues throughout your life, regardless of your age or your health. As you pay your premiums, a portion of each payment is placed in the cash value account. During the early years of the policy, the cash value contribution is a large portion of each premium payment. As you get older, and the true cost of your insurance increases, the portion of your premium payment devoted to the cash value decreases. The cash value continues to grow–tax deferred–as long as the policy is in force. You can borrow against the cash value, but unpaid policy loans will reduce the death benefit that your beneficiary will receive. If you surrender the policy before you die (i.e., cancel your coverage), you’ll be entitled to receive the cash value, minus any loans and surrender charges. Many different types of cash value life insurance are available, including whole life, variable life, universal life, and variable universal life.

Note:Variable life insurance and variable universal life insurance policies are offered by prospectus, which you can obtain from your financial professional or the insurance company issuing the policy. The prospectus contains detailed information about investment objectives, risks, charges, and expenses. You should read the prospectus and consider this information carefully before purchasing a variable life insurance policy.

Making a choice

Term insurance coverage typically costs less than cash value insurance coverage when you’re younger, but because the cost of a term policy is based on your age, the cost may eventually exceed that of cash value if you continue to renew your term policy. In contrast, these factors are taken into consideration when cash value insurance premiums are set. As a result, certain cash value policy premiums typically remain the same throughout the life of the policy.

In some cases, the choice may be clear. For instance, your insurance need may be so large that the only way you can afford to meet it is by purchasing lower-premium term insurance. Or, you may need the coverage only for a few years, again making term insurance the logical choice. But if you can afford to pay higher premiums, and you need long-term protection, you may want to consider cash value insurance.

In some cases, you may want to have both types of life insurance coverage. For instance, if you want to have some life insurance at the time of your death, you might consider buying the bulk of your life insurance as term and a smaller portion as cash value. When your need for life insurance decreases, the term policy could be discontinued and the cash value policy kept. It’s also possible to buy a term policy that is convertible to a whole life policy later.

 

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc., Mutual of Omaha Investor Services, Inc. and its representatives do not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Registered representatives offer securities and investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Mutual of Omaha Advisors is a marketing name for Mutual of Omaha Investor Services, Inc. Mutual of Omaha Investor Services, Inc., Family Wealth Management and Broadridge Investor Communication Solutions, Inc. are not affiliated.

Trading instructions sent via e-mail will not be honored. Please contact my office at the number provided above or Mutual of Omaha Investor Services, Inc. at (800) 228-2499 for all buy or sell orders. Please note that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets.


Life Insurance for Children

Photo courtesy of Pexels

Prepared by Broadridge Investor Communication Solutions, Inc.

If you’re thinking about buying life insurance for your child, consider the decision carefully. The main purpose of life insurance is to replace income lost after someone dies, and there’s little doubt that your income could decrease upon your child’s death, due to lost time at work or lost productivity. However, you should also consider protecting your child’s future by purchasing more life insurance for you and your spouse.

Isn’t it smart to buy insurance now, while the rates are low?

While it may be true that life insurance policies for children are inexpensive, the cost alone shouldn’t be the only consideration. A more important factor is the need for coverage both now and in the future. You might especially consider purchasing life insurance for your child if he or she is at risk for developing a specific medical condition that runs in your family or has a condition that is likely to worsen over time.

 

Isn’t it smart to buy cash value insurance now, to help save for college?

The tax-deferred cash value component of cash value life insurance is sometimes used to accumulate funds to pay for college. You may be allowed to withdraw paid-in premiums with no tax consequences, and borrow against the earnings at low or no interest. (Keep in mind, though, that policy loans and withdrawals may affect the death benefit.)

Remember the bottom line: your decision to purchase life insurance should center first on the death benefit. Buy life insurance because you need the financial protection it offers, not only as an investment alternative.

 

What you can do instead

When deciding which family members to insure, and which life insurance policies are appropriate, consider how your family’s income might be affected. To specifically protect your child, you may want to purchase additional coverage on your own life and on your spouse’s life. Since you and/or your spouse support your family financially, your child’s financial future would be profoundly affected if you died. Make sure that the coverage on both parents’ lives ensures that there will be enough money for day-to-day living as well as for college expenses, even if something happens to one of you.

 

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc., Mutual of Omaha Investor Services, Inc. and its representatives do not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Registered representatives offer securities and investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Mutual of Omaha Advisors is a marketing name for Mutual of Omaha Investor Services, Inc. Mutual of Omaha Investor Services, Inc., Family Wealth Management and Broadridge Investor Communication Solutions, Inc. are not affiliated.

Trading instructions sent via e-mail will not be honored. Please contact my office at the number provided above or Mutual of Omaha Investor Services, Inc. at (800) 228-2499 for all buy or sell orders. Please note that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets.


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This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Registered representatives offer securities through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Family Wealth Management and Mutual of Omaha Investor Services, Inc. are not affiliated.

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