Having A Conversation With Your Parents About Burial Life Insurance

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As we age, we begin to encounter more realities which seemed to reside in a distant future. Retirement and financial stability, medical costs and overall health concerns, and questions of mortality begin to become more prevalent. And not just for ourselves, but for the rest of our families, especially our parents and older relatives. These issues and subsequent conversations aren’t usually something most of us want to broach, yet they are realities for all of us.

Still, there are ways to go about having frank, yet sensitive discussions about these adult topics. In this post, we’re going to discuss having conversations with parents about burial life insurance. There are some effective steps to take in order to be prepared and sensitive to all parties involved.

Research and Preparation

One of the most effective plans is to prepare yourself, as well as your parents, by conducting thorough research into what your options are, the costs, and other related specifics you’ll need to consider. The most widely used policies are burial life insurance and preneed funeral insurance.

Although many plans will offer similar benefits, some will offer specific plans for the needs of certain religious practices. Additionally, there will be specifics regarding the preparation of the body, either for a coffin burial or for other methods, such as cremation.

Have you ever discussed any of your relatives’ wishes? For many, this can be such a delicate subject that they have never wanted to discuss. In order to abide by a person’s wishes, the conversations must happen, which brings us to our next point.

Location and Attendance

Many families are now conducting family discussions about their burial wishes long before an illness or terminal situation arises. This allows your parents and older adults an opportunity to express exactly what they want, with clear judgement, free of excessive duress.

When planning such a conversation, consider who should be in the room. All immediate family should be there, excluding children, as a small child can be more of a distraction in such a somber situation. A close friend or confidant or even clergy member might also want to be in attendance, to offer additional moral support. Keep the meeting on task and focused. Save your reminiscing and sharing stories for after, when the serious discussions have concluded. This won’t probably be the happiest occasion, but remind yourself and the others that you are conducting this meeting in order to have less turmoil when a loved ones passing actually occurs. Then, when the meeting is concluded, have a celebration of life to lighten the mood and share laughs and memories.

Conversations of mortality with family, especially our parents, is difficult, but you can find creative, compassionate, and effective methods for having these discussions, which leave everyone satisfied and prepared.

Why the Self-Employed Really Need Life Insurance

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So, you’ve started your own business. Things are going well. You even tackled the all-important issue of ensuring your family has health insurance – something none of us should be without. Congratulations, you’ve achieved the American Dream!

But, have you really addressed all the issues business owners should address? Have you purchased a life insurance policy? Let’s take a look at some reasons why life insurance is more critical for the self-employed than for the salaried individual.

Your Family is Left Behind to Pick up the Pieces

Whether the plan is for your family to continue the business after your death or sell it, there are loose ends to be tied up. During this transition period, they’ll need additional capital to ensure things go smoothly.

Let’s consider this for a moment. As the business owner, you offer invaluable skills; skills that are instrumental to the company’s success. Your administrative duties include more than just writing checks for bills each month. You’re in charge of sales and marketing and have forged strong relationships with local distributors. If your family and/or business partners lack these necessary skills, hiring an experienced outsider could mean the difference between the business’ success or failure.

Plan on selling the business upon your death? A life insurance policy can help keep the business afloat while the details are being settled.

Are There Business Loans to Be Paid Off?

If you’re like most entrepreneurs, you probably took out a small loan when opening your business. It’s a great way to raise enough capital safely and quickly. What will happen to that loan should you die unexpectedly?

If the banks wrote off a loan every time the borrower passes away, they would be out of business in no time. To protect their investment, many lenders require individuals to secure a life insurance policy for the full amount of the loan as part of the loan requirement. Even if this wasn’t a requirement for your loan, it’s a great strategy for ensuring your debts are paid once you’re gone, and that your loved ones don’t sacrifice in the process.

Key Person Coverage Protects Your Business Partners

Handling the business’ affairs after your death will be difficult. Your family must make critical decisions, all while trying to deal with the emotions of losing a loved one. Add business partners to the mix and you have a potential recipe for disaster.

The simplest way to move forward is for your partner(s) to take over the business, offering your family an agreed-upon price. The company continues to run smoothly and your family receives additional money to help them get back on their feet. The most effective way to handle this strategy is for each partner to maintain key man life insurance, with the other partners named as beneficiaries. When one partner passes, the surviving partners use the death benefit to buy out the deceased partner’s share.

Make sure you research more than a few insurance agents and their business practices, when looking for a new policy. As with most critical life decisions, you want to make sure you have options and can find the best fit for your individual needs. It’s also important to gauge the interest of the agent and relative pricing of the plans you’re considering.

8 Ways to Get Financially Fit in Your 40’s (Part 1)

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Many people consider the prospect of turning 40 as a negative. We’re getting older and our bodies are starting to show their signs of wear and tear. Life as we knew it no longer exists; it’s time to buckle down and really start being an adult. Well, part of this is true. Turning 40 means we’ve officially hit the “middle age” mark. It’s time to start considering our future as much as the present.

For me, the old saying “Life begins at 40” couldn’t be more true. It’s a time to reflect on lessons learned. A time to use the past to help write our future. To quote one of America’s greats, Benjamin Franklin, “at 20 years of age the will reigns; at 30 the wit; at 40 the judgment.”  The wisdom we gain in the first half of our lives is instrumental in shaping the second half.

No matter what life changes you’ll experience over the next decade, many of us view our 40’s as a time to get serious about financial planning. It’s our first true glimpse at mortality and it awakens us to the truth – we still have 20-30 years to save and invest for our retirement years. And, if done correctly, we can release the shackles our past financial decisions have placed on us and take back our financial freedom.

Let’s check out some expert advice that everyone in their 40’s (or even 30’s) should seriously consider enacting in order to lay the groundwork now for financial security in the future.

1) Start an Emergency Fund

Have you ever been blindsided by life? Imagine car trouble and a medical emergency, all within a few days or weeks of each other. The financial and emotional stress can send you into a tailspin, leaving you scrambling to make it all work.

Most people in this situation have to borrow money or charge these unexpected events to a credit card, leading to a cycle of debt and financial insecurity. In fact, according to a recent NeighborWorks America survey, 34% of Americans have no rainy day savings to fund these unexpected emergencies.

So, how can you prepare for a rainy day? Well, that depends upon your unique situation. Experts suggest having a minimum of one month’s worth of take-home pay set aside. Ideally, three months salary should be your target number. For those who are self-employed or have a more inconsistent income, you should plan for up to 9 months in savings.

2) Manage Your Debt-to-Income Ratio

Your debt-to-income ratio (DTI) is the figure lenders use to gauge how well you manage your debt. To ascertain your DTI, add up all of your minimum monthly loan/debt payments and divide the sum by your gross monthly income.

For example, if your home mortgage is $1,200/month, $400 for your vehicle, and you owe $300 monthly for minimum credit card payments, your monthly debt total is $1,900. With a gross monthly income of $3,900, your DTI would be approximately 49%.

DTI is one of the most critical components lenders look at when considering approving a loan. The lower the number, the less of risk you’re considered. While there’s no set rule regarding the numbers, experts recommend maintaining a DTI of 25% or less.

3) Get Serious About Unsecured Debt

Unsecured debt is one of the biggest financial burdens young adults take on. They carry the highest interest rate and you have nothing to show for it in the end except snowballing debt.

To determine if you’ve taken on too much unsecured debt, do an analysis. Itemize your debt by interest rate, so you have a clear picture of what you’re up against. Then, devise a plan to pay it off, ideally in the next five years. Consider tackling the credit card with the highest interest rate first. Pay the minimums on all other cards, putting all extra monies towards the high-interest card until it’s paid off. You’ll be reducing your debt-to-income ratio, improving your credit score, and putting yourself in a better situation financially.

Whether you have a significant amount of unsecured debt, or have kept it in check, it’s best to pay cash for as much as possible. This ensures you only purchase what you can afford.

4) Manage Your Credit Score

Another tool lenders use during the loan qualification/underwriting process is your credit score. Your FICO score can range anywhere from 300 to 850, with 850 being the best. While standards regarding what constitutes a good or bad score vary from lender to lender, the below is a good reference when determining your credit health. And the lower the score, the higher your interest rates (assuming you qualify) on everything from your home loan, to auto loans and credit cards.

Excellent Credit: 750+

Good Credit: 700-749

Fair Credit: 650-699

Poor Credit: 600-649

Bad Credit: below 600

To determine your credit score, we recommend checking with all three credit bureaus – Equifax, Experian and TransUnion. Everyone is entitled to one free credit report, per credit bureau, annually.

Stay tuned for Part 2, where we explore additional strategies for achieving financial freedom in your 40’s. Remember, it’s never too late!

7 Everyday Things That Cost More than Term Life Insurance

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We spend much of our adult lives worrying and planning for what might happen. Adults and parents work hard to ensure families have food on the table and a roof over their heads. Unfortunately, if they can no longer provide, the family is left with the burden. We all assume our death to be far off in our future, so many put off life insurance, assuming the cost is too high and that that money could be better spent in the present, yet quite the opposite is true.

In fact, a recent study conducted by LIMRA, found that 25% of Americans said they need more life insurance, while only 10% planned to purchase it within the next year. The primary reason 63% provided, was cost, with 80% of them overestimating the cost of life insurance. The truth is, if you’re in fairly good health, life insurance is typically one of your cheapest investments, costing many as little as $15/month.

Just to put things in perspective, here are a few consumables we Americans spend more money on every day which actually cost more annually than a term life insurance policy.

Technology- We have all come to rely on technology, counting it has a critical part of our everyday lives. Now, no one is saying that you can’t go out and purchase the latest version of your iPhone; we all have our priorities and no one else should define the order of your list of priorities. But a new 55” LED TV costs about $800. That’s enough to cover approximately 5 years of term life insurance premiums! iPads can cost upwards of $550, which is about 3.5 years of premium payments.

Games – Speaking of throwing money at technology, let’s discuss video games for a moment. The average, newly released video game will run you about $55. Consider the lasting effects a life insurance policy has over a few months with a brand new game. We’re not saying you shouldn’t spend money on that exciting new release; just maybe consider waiting a few months and getting it at the used game store. Your loved one’s financial security will benefit from your decision.

Cars – Americans love their cars and we at Vista Life Plan are no different. But, you can spend a little smarter now to offer your entire family the luxury of knowing they’re secure, should you pass unexpectedly. By spending just $3,000 less on your next automobile purchase, you stand to save $500/year on a 6-year loan with 0% APR.

Food – According to a 2015 survey conducted by Visa, Americans spend, on average, $2,746 per year on lunch, with a large portion of that spent on eating out. That comes out to $53/week just for lunch! The National Resource Defense Council also reported each household spends approximately $529/year on unwanted snacks. Think of all the ways your family could better spend that money.

Alcohol & Tobacco- The United States Department of Agriculture Economic Research Service’s most recent poll shows the average American spends 2% of their discretionary income on alcohol and tobacco. They say a “glass of wine a day keeps the Doctor away,” but we all know the lasting negative affects tobacco products can have on us. Purchase one less drink while at dinner each month and you have your life policy premium paid. Take it a step further and put down those cigarettes and the savings will more than pay for your policy. Be tobacco-free for at least 12 months and your policy premium is more than cut in half; so consider this when starting the life insurance buying process.

Entertainment – One afternoon at the movies for a family of three can cost upwards of $50. Enjoying some downtime is critical to your overall health and happiness, but so is the peace of mind of knowing your family is cared for. Don’t sacrifice one for the other.

Fashion – Just one pair of designer jeans will run you over $100. There is something to be said for quality over quantity, but just make sure those jeans will last you a decade or more, if you choose fashion over financial security.

Our purpose is not to tell you you must give up all your favorite things; just the opposite, actually. The cost of life insurance, particularly a term life insurance policy, is minimal compared to your overall budget. This is just an example of a few areas where Americans could better allocate their money. When you’re ready to secure the future of your family, contact our team of experienced agents to discuss your life insurance needs and options available to you.