5 Life Events That Should Prompt You to Evaluate Your Life Insurance Coverage

For many of us, life insurance never even crosses our mind until a major life event occurs. Whether you’re purchasing a new home or starting a family, our financial responsibilities will change and evolve over time. For many, this signals the need for life insurance. In fact, 41% of all life insurance purchases are life event-related. Let’s take a look at life’s most significant changes that should motivate you to reevaluate your financial situation and consider adding life insurance to your portfolio.

New Home Purchase

There are few things more exciting that collecting the keys to your new home. Living the “American Dream”, however, comes with a price. Regardless of what happens in your personal life, the mortgage company expects their payments monthly. Would your spouse be able to afford the mortgage payment, should the unthinkable occur? What about property taxes, home insurance, and regular maintenance costs? Having sufficient life coverage can help ensure your family isn’t uprooted unexpectedly.

Supporting Dependents

Welcoming a new baby into the world is a time for celebration and hope – perhaps the happiest time in a parent’s life. As you’re picking out paint colors and baby cribs, consider examining your financial health. Are you doing enough to save for your child’s future and how would your strategy be affected should you or your spouse suddenly be removed from the picture? Your children will be your most celebrated accomplishment, as well as your greatest responsibility. Start investing now to ensure they grow up in a stable environment and have everything they need to fulfill their dreams.

Whether you decide to bring a child into the world or not, it’s important to keep in mind that dependents come in multiple forms. Many adults find themselves supporting their parents as they enter their later years. Some move them into their homes, while others help pay for home health care. If you find yourself caring for a family member, life insurance can help ensure your dependents are cared for in your absence.

Tying the Knot

When you tie the knot, your life insurance needs shift enormously. You’ve agreed to share each other’s financial responsibilities and support each other through the ups and the downs. Yet a staggering 35% of Americans express regret that their spouse doesn’t have a life insurance policy. Investing in life insurance offers the peace of mind that he/she is protected in the event of your untimely death.

Open a New Business

Once you become a business owner, you’re exposed to a whole new set of financial commitments. When embarking on such a major life change, it’s important to consider who is at risk were you to pass on unexpectedly. Many partnerships build life insurance into their business strategy, with the agreement that one would buy out the deceased owner’s share of the enterprise upon the co-owner’s death. This policy ensures your family, your business, and your employees are protected, should the unthinkable occur.

Change in Marriage Status

While no one enters into a marriage expecting it to end in divorce, many couples find themselves in a position where divorce is the most healthy option for everyone. Life insurance is an effective way for parents to ensure their children are cared for, even after they’re gone. This is particularly effective in situations where one parent pays child support to their ex, to assist in covering the day-to-day expenses of raising a child.

Purchasing life insurance is a means towards financial piece of mind. And, while few constantly dwell on an inevitable future, we all have considerations now and then about how things will be different after our departure. The events mentioned above, either joyous or more difficult, often cause a person to pause and think about where things are headed in their lives. If you are approaching one of the aforementioned events, or a similar life decision, this can be the perfect time to look into what it will take to purchase a life insurance plan. Contact an agent and see what they can do for you today.

Pursuing Life Insurance With Facts and Purpose

Most Americans understand the importance of life insurance for piece of mind and financial security, yet most either don’t have enough or none at all. Why is this? Many have even done the comparative research and have weighed the pros and cons and still have yet to make the move. Some have cited overall price or competing financial necessities as their reasons for not having a plan in place. In actuality, life insurance is very reasonable but can only be of real value if it is given time to mature. Let’s delve into some of the misconceptions about life insurance and see how this can be a perfect fit for all lifestyles.

An Uninsured America

Insurance by the numbers. Where do you rank?

-86% (9 in 10) of American consumers agree that life insurance is an important part of their financial portfolio, yet only 3 out of 5 actually own a policy (individual or group).

-Among the uninsured, 73% admit they know they need life insurance, with 62% indicating they would be financially strapped immediately if the primary breadwinner passed away unexpectedly.

-Amongst Millennials, 77% say they have recommended or are likely to recommend owning life insurance.

-More than 37 million families are uninsured or underinsured, adding up to approximately $15.3 trillion in life insurance needs going unmet.

Tracking Consumer Reasoning by the Numbers

Below are the top 10 reasons U.S. consumers provided for their uninsured or underinsured status:

  1. 64% are unaware of actual cost, believing it’s 3 times more expensive than it really is
  2. 59% have other, more pressing financial responsibilites
  3. 57% feel they have as much as they need
  4. 43% don’t feel there’s any need for life insurance
  5. 40% are confused as to how much or what type best fits their needs
  6. 38% don’t trust insurance companies
  7. 35% haven’t found the time
  8. 34% don’t like thinking about mortality
  9. 28% haven’t been approached about it
  10. 27% believe they wouldn’t qualify

Staying Connected

Despite the virtual connections we make today, 51% of polled U.S. consumers prefer face-to-face interaction when considering their life insurance options.

-Three out of four indicate they would rather meet in person to gain prompt answers to their list of questions.

-51% of Millennials say they would be willing to participate in wearing activity trackers, 21% more than older generations. The number one reason for considering this – building a long-term relationship with their insurance company.

Consumers’ Chief Financial Concerns

Regardless of age or financial status, most American consumers share the same short and long-term concerns.

-66% cite having enough money for a secure retirement as being their chief concern.

-Having enough to pay for long-term care and medical expenses share the spot for second place, coming in at 58%.

-Over 25% of polled consumers showed interest in purchasing a policy that combined both long-term care and life insurance. Yet, less than 1 in 5 have actually followed through on such an investment.

As you have hopefully seen, weighing the pros and cons tips the scale towards a “yes” every time. The potential pitfalls from not having a financial safety net are too numerous and can often become compounding in times of tragedy. Talk to an agent today and set your financial future in motion today.

The Growing Importance of Life Insurance for the Modern Woman

Women have redefined their roles both in the workplace and at home. Whether working as a stay-at-home mom or outside the home as a top executive, our value has increased exponentially over the last decade. We’re running businesses, holding political positions, and homeschooling our children, all while making sure the household runs smoothly. In fact, a recent Bureau of Labor Statistics study reveal that over 40% of mothers in the U.S. are now the breadwinners of the family. Yet, despite our ever-growing responsibilities, 1 in 3 women are underinsured for life insurance. Only 52% have life insurance at all, while those that are insured have 31% less coverage than men.

It’s important for us to remember the financial responsibility we have to our families and really consider how they would be affected should something happen. Regardless of your career choice, marital status, or annual income, life insurance is critical to ensuring our family’s financial health, long-term.

Still not convinced? Let’s consider a few scenarios and how life insurance could benefit women, regardless of their personal situation.

Single Women

It’s easy to assume there’s no need for life insurance when you’re single with no children. Life is seemingly carefree and no one would be affected financially if something were to happen to you, right? Well, that’s not always the case. As we age, we face the difficulties of caring for family members who’re no longer able to care for themselves. Stop and consider what would happen to them in the event of your untimely death. Where would they go? Who would care for them? Where would the funds come from? Who will pay for your burial expenses?

Life insurance can also prove its value to single women who have incurred debt, particularly if you carry a loan with a co-signer. Typically, when you die, the executor of your estate is able to sell off your property to cover any outstanding loans, and the rest is forgiven. But if you have a co-signed loan, the entire debt transfers to the co-signer, often putting them in a difficult financial bind.

If neither of these scenarios describe your situation, you might be okay without life insurance. Keep in mind, however, that life insurance premiums are, on the average, cheaper for women, but also increase in price, as you get older.

Stay-at-Home Moms

If you’re a stay-at-home mom, you know how hard you work. Most consumers purchase life insurance to replace a family member’s income but, what about all the hours you put in, day in and day out? You’re critical to your family 24/7, providing love and support that’s almost impossible to put a price tag on. While it’s difficult to think about, it’s important to consider how your spouse would make it all work should the worst-case scenario occur. A life insurance policy could provide your partner the financial support and security needed to get through this difficult time. He or she could use those funds to take a leave of absence from work, hire a nanny, or pay for a cleaning service – whatever’s necessary to help the household get back to some semblance of normalcy.

Single Moms

Most single moms are the ones primarily responsible for their children. Life insurance offers the peace of mind of knowing your children are cared for financially, should you die prematurely. It can provide the funds needed for childcare, college, and all the others events that will occur on the path to adulthood.

Working Women

As our day-to-day expenses become increasingly higher, many families have come to depend on two incomes. How would your family be impacted should one of those salaries disappear suddenly? A life policy can help ensure your family has the financial support needed, as they adjust to this unexpected new life.

Business Owners

Women now represent more than 30% of small business owners. As an entrepreneur, you’re now responsible for the financial well-being of your staff, as well as your family. Investing in a life insurance policy is a great way to ensure payroll and other operating expenses are covered while your estate is being settled. Many business owners also use it as a tool for organizing buy-sell agreements and as benefits for valued employees.

What Can You Do Now?

If any of these situations sound familiar to you, you might want to consider a life insurance policy. Many find the process intimidating, unsure of what type of policy is the best fit or how much coverage is enough. While most quotes can be completed online nowadays, they don’t provide answers to those burning questions. Find an agent that you can trust to offer guidance and support throughout the process. The world isn’t going to crumble if you end up with the wrong policy or you forget to add that rider that would have offered additional coverage. But it’s best to be educated on your options, so you secure a policy with the best coverage, for the best price.

No one wants to fixate on the doom and gloom of life, which is why proper planning for the future is so important. It helps alleviate present day concerns by setting the ball in motion for financial security in the future. Equally, the ones left behind are able to rest a little easier during such a trying time. And, with so many more women becoming integral parts of a family’s financial structure, life insurance has become critical for both men and women. Is your family covered? Ask the right questions and start making a plan today.

6 Items to Consider About Life Insurance Over 50

It’s a common misconception that life insurance is only necessary for young, married adults with small children. The reality is, life insurance policies can prove beneficial at any age. As our lifespan continues to grow, people are having children later in life, further increasing the need for a policy that can take you to retirement age and beyond.

Are you over 50 and considering a life insurance policy? If so, read on for some expert advice to consider as you navigate through the decision-making process.

1) Do I Really Need Life Insurance at This Age?

This is a question only you can answer. Take a moment to consider who might be affected by your death. Who relies on you financially and how far into the future will they require your assistance? If you’re currently working, how would the loss of your income affect your family if something were to happen? What assets would your spouse or children have access to and what kind of debt are you still working to pay off?

Would a death benefit be helpful in covering the following once you’re gone:

Funeral costs –The average funeral costs more than $7,000. Have you set aside a portion of your budget to cover these expenses? Losing a loved one is emotionally taxing; adding the financial stress of paying for a funeral makes the process that much more difficult.

Medical bills –If your death is a result of an illness, you could leave behind a mountain of medical bills. An insurance policy could help relieve that pressure. When comparing policies and rates, ask your agent about the acceleration of death benefit rider. This is offered as a rider on many policies today and could help alleviate the financial pressures of an illness before passing on.

Estate taxes –Life insurance policies can help cover the costs associated with settling your estate.

Funding an education or providing a legacy – Do you have a loved one you plan on helping through college? Many consumers invest in a life insurance policy to ensure their family’s plan for a higher education isn’t derailed early. Policies are also purchased to ensure a donation is made in their honor to their favorite cause or charity.

2) How Much Coverage Should I Purchase?

While there’s no way to determine exactly how much life insurance your family will need, there are a few formulas you can utilize to determine the face value of your policy. Prior to shopping for life insurance, it’s important to consider your current financial, as well as your long and short-term goals. If your primary goal is to cover funeral expenses, you’ll require a lot less protection than the individual with a grandchild’s education to pay for or a mortgage to pay off.

3) What Kind of Policy Is Best?

There are multiple types of policies available, each with their own set of pros and cons. First, you’ll need to consider the two main types of plans and how each would help in accomplishing your life insurance goals.

Term insurance – Term policies offer a guaranteed death benefit of a specified amount, valid until the end of the policy term or until you stop paying your premiums. There is no cash value associated with term policies.

Permanent insurance – This works as a sort of savings account. A portion of your paid premium goes towards the policy’s death benefit, while the rest adds cash value. There are a number of different permanent policies available, so it’s best to speak with an insurance professional or your financial adviser before making your selection.

4) What About the Medical Exam?

The underwriting process varies from policy to policy. Some policies require you to submit blood work and undergo a medical exam, while others simply require the answers to a few questions. Once you’ve determined the amount of coverage and type of policy you need, your agent should be able to provide a clearer picture as to what will be required of you.

5) How Do I Choose the Right Company?

No matter what age you decide to purchase a life insurance policy, it’s important you select a company that will be there for you long-term. When considering your options, research the ratings of each company. A.M. Best Rating Services and Moody’s both offer a financial analysis rating that can help in identifying which company is the most stable. If you use more than one rating source, pay close attention to their rating system, as they do vary from site to site.

In addition to their financial stability, conduct some research to understand the organization’s history. A company that’s been around since the 1800’s has a proven track record that far exceeds one established 20 years ago. Additionally, visit the National Association of Insurance Commissioners’ searchable database to view any complaints lodged against the insurance company. This can provide invaluable insight into how an enterprise does business and how they might treat you or your family in the future.

6) Where do I start?

While much of the information you need is available online, it’s a good idea to discuss your family’s unique situation with an agent before making any purchases. They can help ensure you purchase the right amount of life insurance, without going overboard, and that you get the most bang for your buck. Navigating through the process is generally quick and painless; the hard part is getting started.

8 Ways to Get Financially Fit in Your 40’s (Part 2)

For part two in our series on building your financial future, we will discuss some key strategies for ensuring you aren’t left in the lurch come retirement time. With just a few money maneuvers, and time for growth, you can get your cash working for you. The key is to start soon and contribute often. But where should you put your hard earned income and what added protections can you enact to keep your investments safe?

5) Protect Your Income With Disability and Life Insurance

What would you do if you were unable to work for one month? Some families would be ok, while others would crash and burn halfway through the month. Regardless of how much money you have set aside for a rainy day, it’s always good to add a little extra cushion for peace of mind. And, the more your family grows, the more important it becomes to secure your income in the event of a disability.

No one ever really believes the unthinkable could happen to them. But, according to the Council for Disability Awareness, a 35-year-old male in good health has a 21% chance of being out of work for at least 3 months due to a disability. A healthy female has a 24% chance of becoming disabled short-term.

The best way to secure your family’s future financially is to invest in life insurance and disability insurance. Many employers offer disability insurance for a very reasonable premium. If it’s offered to you, take it.

Life insurance, however, is typically best purchased as an individual plan. Employer-based policies are limited in coverage and you can’t take it with you when you leave the company. An experienced agent can help you identify your family’s unique life insurance needs and assist you in finding an affordable policy.

6) Start a College Fund

If you have children, the necessity for a college savings fund will more than likely rank fairly high on your list of financial to-dos. Education is and always will be a critical tenant of success and we all want the best for our kids. By starting early on a savings plan, you will contribute a smaller amount overall in relation to your end results.

7) Construct Your Financial Dream Team and Discuss Regularly

Many financial advisers recommend knowing your worth and having it in writing. Sit down once a year and write a net worth statement. Review your annual statement line by line with your financial planner. Come up with a financial strategy and update it annually, checking to see how far you’ve come and how far you have left to go.

It’s also important to consult with your spouse or significant other once or every other month to ensure you’re on the same financial path. Consider your expenditures and where you can better allocate your funds. This can also be a chance to make reminders about upcoming annual bills and renewals, schedule payments or delegate responsibilities. Planning ahead, even a couple months, can prove beneficial for both short and long term financial stability.

8) Retirement Savings Begin Today

It’s never too early to begin saving for your retirement, as the level of financial freedom you’re afforded in your golden years directly correlates to what you’re putting aside right now. It can be a challenging endeavor, though, to knowingly squirrel money away for the future when it feels as if there are so many things to spend money on now. The key comes from following your financial plan and realizing that the payoff will far exceed the current wants.

A successful method for actualizing the money you should be saving is considering what percentage of your income you’ll be able to replace annually or monthly. A successful ratio would be in the 80-85% range. In other words, your savings should be able to cover 85% of your monthly salary. You gain a bit of ground because you can factor out your previous retirement contributions.

Overall, the key to future financial security is to invest, protect, and stick to the plan. Even if you waiver at times, make it a goal to make up any lost ground as soon as possible and continue reaching your regular goals. It can be a challenge, but also becomes a great reward. And, once you are following a successful plan, you won’t miss the nominal amounts you’re diverting. For more information on achieving financial freedom or if you missed Part One in our series, visit our website today.