How Much Life Insurance Should You Purchase?

Many people think about death and tragedy when they consider life insurance. Life insurance, though, is for the living. Without life insurance, when a family member dies or becomes disabled, the family could be left without the resources needed to keep their home and lifestyle.

In years past, it was suggested that a family have a life insurance plan that was 10 times the amount of their annual household income. With the economy the way it is today with house prices rising and interest rates that are low, the professionals are suggesting families have 20 times their annual household income. My friend’s company, who are plumbers in Smyrna GA just got all of this set up and they were happy that they finally did.

With those numbers in mind, it is easy to see that most American families do not have enough insurance. According to a study by a popular life insurance company, most households have a $320,000 gap between what they have and what they need.

There are many reasons that every family should have life insurance as part of their financial planning:

  1. Income replacement: the ability to earn a living is most people’s most valuable economic asset. When others are dependent on you, you need to consider what can happen to them if your income is gone. You can also implement your retirement income with a life insurance policy. This is especially helpful if your surviving spouse’s benefits will decrease when you die.
  2. It can cover long-term obligations and outstanding debts: when you don’t have life insurance, your family is left shouldering credit card debts, burial costs, and any medical expenses your health insurance company left uncovered using their own funds. It is possible to also use the death benefits of your policy to pay off college tuition, your mortgage, or supplement retirement savings.
  3. Use it for planning your estate: you can earmark the proceeds of your life insurance policy to pay taxes on your estate so that your heirs will not be left liquidating other assets to pay the taxes.
  4. Support a charity: you can designate all or part of the proceeds from your life insurance policy to go to your favorite charity or organization.

Talk with your life insurance agent to discuss options available to you and your family. You don’t want to leave your family struggling financially upon your death.



A Look at Long-Term Care Insurance

It is a good idea for anyone to look closer into long-term care insurance. This is because Medicare nor any other health insurance company will pay for long-term care services for an extended period of time if you need it in the future. Also, according to government statistics, after you turn the age of 65, there is around a 70% chance that you will require some form of long-term care. This kind of care can deplete your life savings quickly, so it simply makes sense to make long-term care insurance part of your financial plan.

When you start looking for a long-term care insurance policy, you may become confused by some of the terminologies. There are a few basics that you need to know in order to break down the fundamentals of long-term care insurance. I was speaking with a friend over at Atlanta Gutter Repair about this not too long ago regarding his mother.

When it comes to long-term care benefits, there are four basic components you need to understand that influence your monthly costs:

  1. Maximum benefit: you need to know how much total maximum benefit is available under the policy you are looking at. The maximums can range from $100,000 to more than $500,000. Your benefits will continue to be available until that maximum benefit has been reached.
  2. Limit: you will want to know what the monthly limit is on how much benefits you can access from your maximum amount. An insurance company doesn’t pay out your money in a lump sum. Instead, you can get smaller amounts of your benefits each month based on their monthly maximum they have predetermined.
  3. The rate of growth: this tells you how much your benefits grow over time. 3% is the most common growth rate today. The growth rate can greatly increase the benefits you have years from now.
  4. Deductible: just like most other insurance policies, long-term care insurance has a deductible. Your deductible determines how much money you must pay out of your own pocket before any benefits from the policy are paid. With long-term care insurance, the deductible is determined by days, not money. The deductible typically used as around 90 days, meaning you have to pay for the first 90 days of care out of your pocket before you can begin using your benefits.

Hopefully, you now have a better understanding of long-term care insurance. If you need further help, feel free to contact us.

Using Life Insurance to Benefit Your Favorite Charity

Do you enjoy giving money to your favorite charity? Are you interested in helping people in need? Maybe there is a specific cause that you love to support or want to be recognized at a specific school or university. Maybe you are simply considering giving money to a charity for the tax incentives. There are many reasons people decide to give money to charities, but your life insurance policy can be one of the easiest tools to do so. Maybe you are wondering how that can work. One handyman I know, if you are searching for Roswell handyman services near me is a very charitable person and does great work with several local charities.

Well, let me tell you how.

  1. Make the charity your beneficiary: if you have an existing policy you can list the charity of your choice as the beneficiary. Maybe there is a policy you own that you no longer need. If the charity becomes your beneficiary, that policy will no longer be part of your estate when you die. This option gives you the chance to keep control of the named beneficiary and the cash value. It is simple to change the beneficiary to the charity of your choice.
  2. Make the charity the owner of your existing policy: when the charity both owns the policy and is the beneficiary, not only will the policy be removed from your estate but you will receive a current tax deduction. Once the charity receives the policy, though, you will no longer be able to control the value of it.
  3. Purchase a new life insurance policy: purchasing a life insurance policy is an easy way to set money aside to a charity in your name without having to write a check to them now. All premiums from the life insurance policy are received directly by the charity. They use the premiums to pay on the policy. The charity will then own the cash value of the life insurance policy as an asset.

Of course, most charities prefer to receive donations upfront. If this is not possible for you, though, gifting the money from your life insurance policy is a great way to leave money to your favorite charity when you die.

Juvenile Life Insurance: The Benefits

If you are a parent, you understand the importance of keeping all the financial items of your family in order. You have probably are ready purchase life and disability insurance, have a strong 401(k) and have an established emergency fund. You may think you have everything your child may need when it comes to insurance.

Well, you may be wrong. This is a great time for parents or grandparents to think about purchasing juvenile life insurance. This type of life insurance is often misunderstood. In fact, many people become fearful and confused when the topic of juvenile life insurance comes up. I mean, who wants to buy insurance for a child that is perfectly healthy?

Luckily, it is extremely rare to lose a child. Though juvenile life insurance does cover death, there are other kinds of insurance that will protect the financial future of your child in ways nothing else can.

There are three basic types of juvenile life insurance available:

  1. Permanent juvenile life insurance: this coverage is not only permanent as long as you pay your premiums, but it can also accumulate value over the years the same as life insurance for adults does. These policies can be purchased at a lower rate with limited underwriting which is what my friend who does permanent makeup in Atlanta. The parent or grandparent owns the policy until the child turns 18. At that point, the child assumes ownership.
  2. Term life insurance for juveniles: this policy costs less than permanent life insurance but comes with more restrictions. This insurance lasts a specified length of time and has no cash value. Throughout the life of this policy, the policy owner pays a set premium for the term then, once the term expires, they can repurchase the coverage at a more expensive rate.
  3. Group life insurance for juveniles: an employer will occasionally offer juvenile life insurance through their group coverage. These can be very convenient, but you must remember that employee benefits can change over the years and life insurance policies can be difficult to take with you if you leave your job.

Juvenile life insurance can help lay a firm foundation for your child’s future financial stability. Consider purchasing it for your child.


Family of One Life Insurance

When you hear talk of life insurance, it is typically about how life insurance can protect the financial future of couples, families, and businesses. So, what does that have to do with you if you don’t fit in any of those categories and are single? Do you also need life insurance?

There are a few people throughout the United States that have no children or anyone else that depends on their income. They may even have enough cash to cover all their final expenses and no ongoing financial obligations. Do you know any of those people? Are you, more importantly, one of those people?

If not, it is important that we illustrate how purchasing life insurance can be a smart move for the finances of someone with no children and is single. The following three questions will help you determine if you need life insurance as a single adult. And this is exactly what my friends at movers near me in Columbia Maryland did not too long ago.

  1. Do you help financially support anyone in your family, such as siblings or aging parents?
  2. If you were to die prematurely, would you have any substantial debts that could be passed on to your surviving family members?
  3. Did someone in your family pay for your education?

If you answered yes to any of the questions above, a life insurance policy is a great way to help you continue meeting those obligations. If someone in your family helped pay for your education, you should consider life insurance to help pay them back for their support. There are several resources online that can help you further determine if life insurance is a good idea for you financially. Regardless of the questions above, there are other reasons life insurance may be a smart move for you.

Though all the reasons above for getting life insurance are valid, the best reason for you to consider purchasing life insurance is likely the peace of mind he can give you knowing that your financial obligations will be covered if something happens to you.