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For some people, the prospect of buying a life insurance policy that pays out upon their death is too close a look at their own mortality. Yet, at the same time, none of us want to leave our families financially insecure when we die. That's why it's critical to have sufficient life insurance. How much life insurance should you have? Below are some questions to consider.
Periodically, you should review your life insurance policies to ensure that they still meet your insurance needs for your current situation. A divorce, change in income, or death or illness in the family are all factors that significantly impact the amount of life insurance you need. Consider the following points during that review:
Life expectancies have increased significantly and are expected to continue to increase in the future. As people age, however, they are more likely to develop conditions that limit their ability to live independently. Thus, as life expectancies increase, so does the need to make provisions for long-term-care costs. If you are wondering how likely it is that you will need to deal with long-term-care costs, consider the following:
When you start shopping for life insurance, choosing the right agent could be the difference between meeting your goals, or buying less than you expected. Or, you could end up finding out that there were choices of which you were not even aware. A good life insurance agent will help you make the right financial decision that meets your goals for acquiring life insurance in the first place.
Many first-time homebuyers do not even know what private mortgage insurance is or why they are being told that they have to acquire it. Unfortunately, it is a necessary evil for many potential homeowners if they want to obtain a mortgage.
The cost of healthcare in the United States is expensive, and is rapidly increasing. Unfortunately it’s a necessity, yet many Americans are either uninsured or under-insured. This is becoming an epidemic in many areas, and many emergency rooms are refusing to treat those without health insurance, even in emergency situations. It’s not a good idea to go without health insurance for any length of time, even if you are a healthy twenty-one-year old who hasn’t been sick a day in your life. You can’t predict when an accident may occur, requiring medical attention, or when you might suddenly develop a serious condition and need ongoing medical treatment. If an accident or illness did occur unexpectedly, you could quickly accumulate some hefty medical bills that could lower your credit rating significantly if not paid in a timely matter.
If you are the owner of a car, then you know how expensive car insurance can be, especially in the states with the no-fault law. Despite the high cost of having coverage, which is required by law, there are ways to pay less than you currently pay. By taking immediate action to find less expensive insurance, you are almost guaranteed to start paying less than you ever thought possible, for the same, quality automobile insurance. It won’t take much effort, and you’ll be on your way to having more cash in your pocket instead of in your insurance carrier’s bank account.
When many people imagine their deaths they often envision themselves being old, wrinkled, and gray. Unfortunately, not everyone lives to be old and gray because unexpected fatal accidents or terminal illnesses can occur at anytime. That is why it is imperative for you to have adequate life insurance coverage, and is especially true if you have a spouse and children that are supported by your income.
Continue reading "The Importance of Quality Life Insurance" »
Today’s family does not only need to think about how they are provided for on a day-to-day basis, but also to consider what would happen if one of the primary income earners died. How would the rest of the family survive such a tragedy? What would happen to that family’s future goals and dreams? Life insurance coverage may be unpleasant to contemplate, but it is a crucial part in planning for your family’s future. Here are a few tips to consider when thinking about making a wise life insurance purchase:
Continue reading "Tips for Purchasing Life Insurance Wisely" »
One of the hardest experiences we ever face in life is dealing with the loss of a loved one. But, at this crucial time each of us must overcome our overwhelming feelings and deal with the hard issues at hand, those being the final arrangements. It is hard enough to deal with the death at hand, but it would be harder still to have to worry about the costs involved with the funeral arrangements. That is one reason why life insurance is so important. Having a life insurance policy ensures that at this crucial time you will not have to worry about the costs involved with a funeral, which can add up to a lot of money. There is the price of the coffin, burial plot, funeral home, luncheon, grave monument, etc. At this time, it is hard enough to do all that has to be done without distressing yourself over money.
Continue reading "How Important Is It To Have Life Insurance?" »
Private mortgage insurance is often referred to as PMI. Since many homeowners are required to purchase PMI, it’s an important term to understand. Essentially, PMI is intended to provide financial security to the lender in regard to his share of the financial investment. When the down payment on the home is below a certain percentage (20%), PMI is required in order to provide the security or collateral required for the mortgage.
Health savings accounts (HSAs) provide a way to help save on medical costs. To qualify, you must be covered by a health insurance policy with a minimum deductible of $1,100 for individuals and $2,200 for families in 2007. Maximum out-of-pocket costs for the plan, including deductibles and copayments, must not exceed $5,500 for individuals and $11,000 for families in 2007. You can then set up an HSA account, where you can deposit pretax dollars up to your deductible every year. In 2007, these amounts are capped at $2,850 for individuals and $5,650 for families. Individuals over age 50 can make a catch-up contribution of $800 in 2007, $900 in 2008, and $1,000 in 2009 or later. Contributions can be made by you, your employer, or a combination of both. There are no income limits for setting up an HSA.
Typically, irrevocable life insurance trusts (ILITs) have been used to help pay estate taxes through the use of life insurance proceeds not considered part of the deceased’s estate. The trust receives the life insurance proceeds free of estate and income taxes. But with the uncertain future of estate taxes, you may wonder whether ILITs are still a valid estate planning strategy. You probably don’t want to undo any ILITs in place, since the estate tax won’t be fully repealed until 2010 and then will be reinstated in 2011. Even if the proceeds aren’t needed for estate tax purposes, you may find other uses for the proceeds, such as leaving larger bequests to beneficiaries or charitable organizations. Deciding whether to set up a new ILIT is a tougher decision. You should first analyze all relevant factors, including your views about the future of the estate tax. Below are some of the basic factors of irrevocable life insurance trusts (ILITs) that may help you with this analysis.
Continue reading "What Are Irrevocable Life Insurance Trusts" »
One of the more common reasons to own life insurance is to help fund estate taxes after your death. If the policy is properly structured, the proceeds will not be included in your taxable estate and your beneficiaries will not have to pay federal income or estate taxes. However, with the eventual repeal of the estate tax in 2010, you may wonder whether you still need life insurance for estate purposes.
Life expectancies have increased significantly and are expected to continue to increase in the future. As people age, they are more likely to develop conditions that limit their ability to live independently. However, it is estimated that only 5% of people between the ages of 45 and 64 have purchased long-term-care insurance (Source: Employee Benefit News, January 1, 2006).
You probably have life insurance to protect your family’s lifestyle in case you die prematurely. But have you considered how your family would cope if you were unable to work for a lengthy period due to illness or injury? Only 28% of workers have some form of disability insurance (Source: SmartMoney, July 2005). Many people ignore disability coverage, hoping they won’t be affected by a disabling injury or illness. However, the Society of Actuaries indicates that an adult has a one-in-seven chance of dying before age 65, but a one-in-three chance of being disabled for at least three months.
Continue reading "Protecting Your Earning Power With Disability Insurance" »
In a recent press release that garnered little mainstream press, one major life insurer has turned what has been a difficult insurability situation for many breast cancer survivors into a non issue going forward. To date, no other life insurance carriers have announced they are following suit.
The good news is we are living longer than prior generations! If you were born just 100 years ago, your life expectancy was only an average age of 47. Now a child born today has a life expectancy average of 77 years, a 30 year increase.
With the good news, comes the bad news from the Federal Office of Personnel Management that in 2003 concluded a sobering 60% of the population will need some type of long term care. Think about it in real terms. You have ten members in your company management team; six of you will require some type of long term care (LTC) as a part of their future living expense planning during your lifetime. Just four of these educated professionals will not require funding for this expense during their lifetime. You may need to do more financial planning than just to max out your 401(k)!
Continue reading "60% of the Population Will Require Long Term Care" »
At what age should you buy long-term care insurance? Often the advice is, the earlier the better. It’s not uncommon to see insurance carriers and some experts recommend that people buy a long-term care (LTC) policy while they are still in their 40s. Yet most people who buy individual policies wait until they are in their 60s. [Financial Planning Interactive]
It is a personal nightmare. You are sick, really sick and need time off to get well and whole again. You feel vulnerable, scared, ache and you are physically exhausted, unable to function. Your friends and family are really worried about you.
Continue reading "You can Protect Your Assets from Catastrophic Medical Expenses" »
As retirement age approaches, it’s usually a good time to reassess your life insurance policies, since your needs may change then. With your children on their own and no earned income to replace, you may no longer need a large life insurance policy. Especially if your insurance premiums are high, you may be tempted to cancel the policy, take the cash surrender value, and enjoy retirement. Before you do so, make sure there aren’t other uses for your life insurance policy. Some possibilities include:
Continue reading "Reevaluate Your Life Insurance at Retirement" »
This is a subject that most people would just prefer to ignore. After all, it requires you to face your own mortality and then make some hard decisions about how you want to provide for your family after your death. A recent study found that 39% of surviving families did not have any life insurance. Of those who had insurance, the average amount was just 2.1 times personal income. Thus, two-thirds of surviving spouses felt that there was a devastating or major impact on their family’s personal situation after their spouse’s death (Source: National Underwriter, July 5, 2004).
Life insurance is one of those things you know you should pay more attention to, but can never seem to get around to doing. Part of the reason is an unwillingness to deal with our own mortality. But the vast array of insurance choices also makes it difficult to make decisions. To help overcome these obstacles, consider these five points:
Effective starting in 2004, Health Savings Accounts (HSAs) provide a way to help save on medical costs.
Continue reading "What Are Health Savings Accounts (HSAs)?" »
While most people understand the need for life insurance, the need for disability income insurance is less widely understood, probably due to several misconceptions:
Have you made provisions for long-term care in your financial plan? Many people don’t believe they’ll ever need this type of care, but it is estimated that individuals age 65 and over face a 43% chance of entering a nursing home. And approximately 21% of those entering a nursing home will remain there for at least five years (Source: Agency for Healthcare Research and Quality, 2004). The average annual cost of a nursing home is $66,153 (Source: SmartMoney, 2004).
Continue reading "Is There Still a Need for Second-to-Die Life?" »
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