How to Know You’re Choosing the Right Life Insurance

life-insurance-myths-facts For the younger generations, death seems far off and is not something many people spend too much of their time worrying about. This is all well and good, except for the fact that death can happen at any time, not just in old age. If you have a family, what are they going to do when you’re gone? How will they be able to pay for funeral costs? How are they going to survive without that extra income? The answer is simple: life insurance. Of course, the very thought of the delicacy of your life is not exactly comforting, knowing that your family is secure will certainly put you, and them, at ease. It is the responsible and right thing to do when you have anyone who is dependent on you, is life insurance. So how can you know how to choose the right life insurance?

If you are looking into getting any type of insurance, one of the first things you should do is shop around for an insurance agent. If you are looking for reliable insurance business in NJ or frankly anywhere in the US, it helps to do a thorough search beforehand. Look at reviews and compare services as best you can. Once you find an insurance agent and insurance agency that you feel comfortable working with, you can begin to prepare all of your necessary information and any relevant documents you will need before speaking with your agent and asking questions.

What State Are You In Financially? How Much Insurance Do You Need?

This is a really big question to ask yourself when considering buying a life insurance policy. If you have an enormous amount of debt but no one dependent on you, it is still good to consider life insurance to cover those debts and the funeral costs. Even if you do not have a family of your own, other family members may be burdened with your finances once you pass on. There is nothing worse than having a family member die and then have their debt default onto you. The amount of insurance is really dependent on if you have anybody who is financially dependent on you or if you have a lot of debt to pay back. Typically, people with no debt at all get insured for about five years’ worth of wages; people with debt just double that amount.

Before looking at what insurance policies are out there and which one may be the best suited for you, it helps to look at all aspects of your life. Take inventory of your assets, your bank accounts and savings, take note of your debts and look at any loans you may have taken out. Looking at all of your finances will make things easier and you will be less likely to miss something important. With the help of an insurance agent, you get the guidance that you need but by compiling all of your pertinent personal information beforehand, or at least as much of it as you can, will help you streamline the process.

What Different Types of Insurance Are There? Which One is Right for Me?

There are two main types of life insurance: whole life and term life. Term life insurance is the cheapest form of life insurance and only protects you until you hit a certain age or it expires. This can be dangerous if you end up dying after the expiration of your insurance. On top of that, you also made payments month after month without actually being guaranteed full protection. Whole life insurance is a bit more costly, but in the long run is well worth it. Whole term life insurance acts as a kind of investment. It will protect you until you die, no matter how long and happy your life may be.

When it comes to picking and choosing, it really just depends on the individual. If you can afford a whole term life insurance plan and it is important to you that you are covered until the very last day, go for it! Other than the slightly higher monthly cost, it is an investment that you can pass down to your children and grandchildren. If you don’t really care about being covered until death and just want to be protected until the kids go out of college, go for term life! There is not any right or wrong answer; if you just need to make sure you’re protected until the family can take care of itself, there is absolutely nothing wrong with that! Any coverage is better than no coverage!

Smart Financial Tips for Parents

For parents today, smart financial planning is the key to securing your child’s future. This isn’t something that can be put off, because it takes many years to make the necessary investments that secure the financial status of your children. Financial planning is not just an obligation, but it is your parental responsibility. With this in mind, the best way to secure the financial planning of your children is to work with an advisory that is skilled. They can help you set money aside for marriage, retirement and to leave a lasting legacy for you and your family members.

Here are some smart financial tips for parents, so you can plan for the future responsibly.

Make a Will and Trust

This is the most important first step in financial planning. Choosing who will watch after your children ensures their safety and that they will be raised by someone that knows your family values. By setting up a will and a contingent trust, there will be no doubt that your children shall receive the money and benefits you have set up for them. A will and contingent trust also lays the ground work for all your personal wishes, as far as how the money you leave behind gets distributed to family members no matter what their ages.

Buy Sufficient Insurance for Your Family

Having proper insurance for your family can be a complicated issue. When purchasing policies to insure the financial planning to meet your family needs, be sure to purchase life insurance, disability insurance and possibly a whole life insurance policy. The amounts you need may vary, but by purchasing each of these in advance, you can rest easy in almost all monetary situations that arise.

Be Sure Your Beneficiary Forms Are Updated

Having your beneficiary forms updated can guarantee that all your benefits will be distributed according to your wishes. This needs to be done regularly, so that all family members and new additions to your home are represented accordingly. This is something that can be done easily with the help of a financial planning advisory, so that your benefits are up-to-date and never accidentally lapse.

Start Saving for College Costs

With the ever rising costs of a college education, most families need help to begin saving for the schooling of their children. There are options available today, such as a 529 plan that can be helpful in starting up a college savings. Consulting with your tax and financial advisory persons is a smart way to make sure your children will get their college education paid for, do this right away.

Consider a Dependent Care FSA

This is another option for parents, because FSA plans can help pay for some costs of child care with money that is tax free. The money put into such plans is on a use it or lose it basis, so you need to spend at least the minimum amount that the plan is elected to withhold from your earnings. It is something to consider for parents trying to save money, but remain economically sound within a budget today.

Using some or all of these smart financial tips for parents can ease the costs of raising children today. These will help keep your family secure through many financial needs in these changing times.

When and Why You Should Consider Getting Life Insurance

Many people do not think about the importance of life insurance. They usually think that it is something they do not need to consider until they are usually older, have children, or simply even recognize that they are not going to live forever. But this the wrong approach.

In other cases, people often believe that the insurance provided by their employer will be all that they need. That sort of insurance is usually term insurance, and it is not always possible to take it with you if you leave that employer. Term insurance will only last for a given number of years. The premiums are low, but if you live beyond the end of the term, there is no payment to any beneficiaries.

Term insurance can be a good choice, however, if in conjunction with whole life insurance. Because term insurance is cheaper, a $100,000 with a 20-year term can be purchased for a relatively inexpensive amount. However, when the term ends, the benefit ends. At the same time, a lesser amount of whole life insurance can be purchased as a starting point and added to as your ability to pay the extra premiums improves, thus allowing the individual to purchase more insurance. Therefore, the question of when to purchase life insurance is a relatively simple to answer. Life insurance should be purchased as soon as possible, and don’t worry – it will reach a point where the insurance is paid up.

When this point is reached, the insurance is paid up in full and will be available to your beneficiaries when you die. The earlier you purchase it, the cheaper it will be, and unlike term insurance the premium on life insurance does not increase as you age.

The initial purchase will be based in part on your age, but the premium will be set when it is signed. Additional policies that may be purchased at a later date will base the premium on your age and health. There are certain features you should look for, which some companies offer such as:

  • Guarantee insurability: This feature provides that you will be able to purchase more insurance at a later date.
  • Dividends and interest accumulations: A whole-life policy, again depending on the company, will often pay dividends, which become part of the total death benefit. Most companies offer interest payments on the earned cash value of the policy each year.

But the primary reason why you should buy life insurance? To set up financial security for your family.

Providing such assistance or security for your family in the event of your death is important. No one can predict when they are going to die. Thus, in the case of a married couple where both are working, a death can leave the surviving spouse with a considerable amount of debts to pay.

The insurance benefit can be used to help pay burial expenses and other costs. The benefits can also be used to help pay college tuition costs for children, if you die at an early age. The amount of insurance purchased will depend on the size and needs of the family and the cost of the premium. Many policies offer guarantee insurability options where additional insurance can be purchased at certain intervals without the need for any medical tests or examinations.

In short, there are some helpful things to remember when considering getting life insurance:

  • Purchase insurance as soon as possible.
  • Remember, you can always purchase additional insurance as needed.
  • Whole life insurance reaches a paid-up point where monthly payments are no longer needed, but the benefit is still available to the beneficiary, upon your death.
  • A combination of lower cost term insurance and paid-up fill life insurance will help cover any expenses that may be incurred if you die at a younger age.
  • Talk to several agents before making a final decision. Different companies have their own incentives to attract you. Find the plan that is best for you and your family.

5 Little Known Benefits of Life Insurance Everyone Should Know About

When one thinks about life insurance, one thing does usually come to mind – the death benefit. It’s a bit of a morbid thing to consider, but the death benefit is the sum of money that is paid out to beneficiaries after the life insurance policy holder passes on. However, there are two different types of this insurance, and there are differences that do go along with each kind of the two varieties specifically.

The two types of life insurance are no other than term life insurance and permanent life insurance. Both types of this life insurance do have their own individual perks about them as a rule. Nonetheless, they are still different from each other, and each insurance defines itself accordingly to a person’s needs for them and their life overall.

Term life insurance is a type of life insurance policy that only provides protection for a certain period of time, such as ten or twenty years. It will only pay out a benefit if the insured party dies during this predetermined length of time that the insurance is active. Permanent life insurance on the other hand gives you permanent protection for life. This permanent protection never ends and will continue for as long as you pay the monthly premium on it. Permanent life insurance also accumulates in cash value, but there are a number of things that most people do not know. These living benefits are important to know in that they can allow a person to take full advantage of them or be able to fund some of life’s possibilities.

Here are five other little known facts about life insurance that can help you:

You Can Fund a College Education

The cash values of permanent life insurance increases in value over the course of time. This means that if you do have aspirations of going to college and getting a degree that you can afford it. You can borrow against the cash value of your permanent life insurance to fund your education for college or other secondary education of choice.

You Can Start a Business

If you aspire to be a business owner, it can very well be made into a reality. Banks will not usually lend money to businesses that don’t have any form of revenue yet. Instead, the cash value that is tied into your permanent life insurance policy can serve this purpose. Walt Disney took this route to open up Disneyland. If it worked for him and it can also work for you as well.

You Can Take Care of Your Family

Do you have an elderly parent that needs you to look after them for a while? If the answer is yes, you can tap into your accumulated cash value of your life insurance policy, then take the time off from work to be there to care for your family when they need you the most.

You Can Take Care of Yourself

Do you have a chronic illness? Are you far too sick to do anything for yourself and need help with daily living on the average? If the answer is yes, you can use some of the money from your death benefits to be able to cover these care expenses for your health. You can get use out of your death benefits while you are still alive from your permanent life insurance policy. The remainder of the policy’s cash value will be given to your beneficiary if you die.

You Can Grow Your 401K

You can tap into the overall cash value of your permanent life insurance policy to help cover your first few years of retirement. This will help to let the funds that are already in your 401K to last a whole lot longer.

Not all of these benefits may apply to you, but they are still worth keeping in mind. Even if you do not have a need of them now, they may very well happen at some point in your lifetime. Being prepared and having the funds can make all the difference.