Rethinking YourLOSAPEntitlement

Besides the love of serving our communities, there is one thing we have in common as members of the fire service. At some point we will reach Entitlement Age and begin collecting LOSAP. When that time comes, our life circumstances will determine how we spend that money. Now is the time to evaluate this “life event” so you get the most out of your payments.

If you are fortunate enough to have no debt or financial obligations, spending the money as you wish may be the best option for you. But if you’re like most of us, you’re looking to protect your family’s future. That's where life insurance comes in. How much do you have? Do you need more? Or do you have any at all? Why not use your LOSAPbenefit to buy a policy that will provide financial freedom to your family when you pass?

I met with two life insurance agents to obtain some facts. I told the first agent about a 55-year-old, non-smoking male firefighter. He withheld the most taxes from his LOSAPpayment of $600 per month, leaving him with $414 per month. She suggested a whole life policy, payable to the age of 100, with a face value of $100,000. The monthly payment on that policy was $322.16 per month.

She noted that by age 75, the firefighter would have contributed $77,318 worth of premium into that policy. The net death benefit would have grown to $157,851; and by age 95 the policy would have grown to $289,207. That’s a sizeable tax-free payment to his heirs.

I met with another agent. He recommended a 20-year, convertible term policy with a dis- ability waiver. This policy can be converted to a whole life policy after the first year, and up until the firefighter’s 65th birthday. The face value was $100,000 guaranteed for 20 years. The premium was 80.91 per month (or $64.73 per month without the disability waiver). If the firefighter becomes disabled, the carrier pays the remaining premiums.

The most intriguing thing about this policy is the conversion option. If the firefighter became disabled, they could convert the policy to a whole life policy. After the conversion, he would notify the carrier of the disability. The approved disability would then force the waiver to kick in, covering the premiums for the life of the policy, not just the 20-year term.

Your LOSAPmoney, of course, is yours to do with whatever you choose. But I hope these scenarios inspire you to get the most out of your benefit by bolstering your financial situation. Finance and insurance can be complex, and different for everyone. Review your personal finances to be sure you aren’t leaving your family with a financial hardship when you’re gone.

Please call me if you would like more information. - Kevin S. Parrett, Senior Account Executive, Hometown Firefighter & EMS Services; 631-589-2929. extension 319