All posts tagged life insurance

Being catapulted into the adult world is a shock to the system, regardless of how prepared you think you are. And these days, it’s more complicated than ever, with internet access and mobile devices being must-have utilities and navigating tax forms when they aren’t as “EZ” as they used to be.

Maybe you’re still living with your folks while you get established. Or maybe you’re looking forward to moving out of a rental and into a house or to tie the knot. Life insurance might be the last thing on your list of things to deal with or even think about. (You’re not alone.) But here are five things you might not know about life insurance—that you probably should.

1. Life insurance is a form of protection. If you Google “life insurance” you’ll get a slew of ads telling you how cheap life insurance can be, without nearly enough information about what you need it for. That’s probably because it’s not terribly pleasant to think about: this idea that we could die and someone we care about might suffer financially as a result. Life insurance provides a financial buffer for the people you care about in the event something happens to you. Think just because you’re single, nobody would be left in the lurch? Read the next point.

2. College debt may not go away. Did someone—like your parents—co-sign your student loans through the bank? If so, the bank won’t discharge that debt upon your death the way that the federal government would with federal student loans. That means your parents, or others who signed the paperwork, would be responsible for paying the full balance—sometimes immediately. Don’t saddle them with the bill!

3. If you don’t know anything about life insurance, it’s probably better if you don’t buy it off the internet. It’s what we’re used to: You find the thing you need or love on Amazon or Ebay or Etsy, click a few buttons, and POOF. It arrives at your door. But life insurance is a financial planning product, and while it can be as simple as a 20-year term policy for less than a cup of coffee each day (for real!), going through your options with an insurance professional can ensure that you get the right amount for the right amount of time and at a price that fits into your budget. And many people don’t know that an agent will sit down and help you out at no cost.

4. Social fundraising only goes so far. This relatively recent phenomenon has everyone thinking that they’ll just turn to GoFundMe if things go awry in their lives. But does any grieving person want to spend time administering a social fundraising site? The chances of going viral are markedly slim, and social fundraising sites will take their cut, as will the IRS. And there is absolutely no guarantee about how much—if any—money will be raised.

5. The best time is now. You’ll definitely never be younger than you are today, and for most of us, the younger we are the healthier we are. Those are two of the most important factors for getting affordable life insurance coverage. So don’t delay.

By Helen Mosher
Originally Posted By www.lifehappens.org

I Have Life Insurance Through My Employer. Why Do I Need Another Policy? | Ohio Benefit Advisors

Categories: Blog, Life Insurance, Team K Blog
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One of the perks of having a full-time job with a good company is the benefits package that comes with it. Often, those benefits include life insurance coverage, which is great. And everyone who can get life insurance at work should definitely take it, as there are many advantages to company-funded life insurance, also known as group life insurance. These advantages include:

1. Easy qualification. Often, enrollment into group life insurance is automatic. That means everyone qualifies, as there is no medical exam required. So people who have preexisting health conditions, like diabetes or previous heart attack, can get life insurance at work, and may get a better rate compared with what an individual life insurance policy might cost them.

2. Lower costs. Employers’ insurance plans tend to be paid for or subsidized by the company, giving you life insurance at a low cost or even free. You may even have the option to buy additional coverage at low rates. Costs tend to be lower for many people because with group plans, the cost per individual goes down as the plan enlarges.

3. Convenience. It’s easy to subscribe to an employer’s life insurance plan without much effort on your part and if a payment is required, it’s easily deducted from your paycheck in much the same way as your medical costs are deducted.

These are all great advantages, but are these the only considerations that matter when it comes to life insurance? The answer, of course, is no.

Life insurance should first and foremost fit the purpose—it should meet your needs.

Life insurance should first and foremost fit the purpose—it should meet your needs. And the primary purpose of life insurance is to care for those left behind in the event of your death. With group life insurance, it’s often set at one or two times your annual salary, or a default amount such as $25,000 or $50,000. While this sounds like a lot of money, just think of how long that would last your loved ones. What would they do once that ran out?

There are several other disadvantages to relying on group insurance alone:

1. If your job situation changes, you’ll lose your coverage. Whether the change results from being laid off, moving from full-time to part-time status or leaving the job, in most cases, an employee can’t retain their policy when they leave their job.

2. Coverage may end when you retire or reach a specific age. Many people tend to lose their insurance coverage when they continue working past a specified age or when they retire. This means losing your insurance when you need it most.

3. Your employer can change or terminate the coverage. And that can be without your consent, since the contract is between your employer and the insurer.

4. Your options are limited. This type of coverage is not tailored to your specific needs. Furthermore, you may not be able to buy as much coverage as you need, leaving you exposed.

Importance of Buying a Separate Life Insurance Policy
It’s for these reasons you should get an individual life insurance policy that you personally own, in addition to any group life insurance you have. Individual life insurance plans offer superior benefits, and regardless of your employer or employment status, they remain in place and can be tailored to meet your needs and circumstances.

Most importantly, an individual life insurance policy will fit the purpose for which you purchase it—to ensure your dependents continue to have the financial means to keep their home and lifestyle in the unfortunate event that you’re no longer there to care for them.

Originally Posted By www.lifehappens.org

The Risk of Being Uninsured (and the Hidden Bargain in Addressing It Now) | Ohio Benefit Advisors

Categories: Benefits, Blog, Employee Communication, Employees, Life Insurance, Uncategorized
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With all the expenses of everyday living, it’s tempting to think of insurance as just another cost. What’s harder to see is the potential cost of not buying insurance—or what’s known as “self-insuring”—and the hidden bargain of coverage.

The Important vs. the Urgent
We’ve all experienced it: the tendency to stay focused on putting out fires, while never getting ahead on the things that really matter in the long run. For most people, there are two big things that matter in the long run: their families and their ability to retire. And being properly insured is important to both those concerns.

Life Insurance: a Hidden Bargain?
It’s exceedingly rare, but we all know it can happen: someone’s unexpected death. Life insurance can prevent financial catastrophe for the loved ones left behind, if they depend on you for income or primary care—or both.

The irony is that many people pass on coverage due to perceived cost, when in fact it’s far less expensive that most people think. The 2016 Insurance Barometer Study, by Life Happens and LIMRA showed that 8 in 10 people overestimate the cost of life insurance. For instance, a healthy, 30-year-old man can purchase a 20-year, $250,000 term life insurance policy for $160 a year—about $13 a month.

Enjoy the Benefits of Life Insurance—While You’re Alive
If budget pressures aren’t an issue, consider the living benefits of permanent life insurance—that’s right, benefits you can use during your own lifetime.

Permanent life insurance policies typically have a higher premium than term life insurance policies in the early years. But unlike term insurance, it provides lifelong protection and the ability to accumulate cash value on a tax-deferred basis.

Cash values can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement.

When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value.

In this way, life insurance can serve as a powerful financial cushion for you and your family throughout your life, in addition to protecting your family from day one.

Disability Insurance: For the Biggest Risk of All
The most overlooked of the major types of insurance coverage is the one that actually covers a far more common risk—the risk of becoming ill or injured and being unable to work and earn your paycheck.

How common is it? While no one knows the exact numbers, it’s estimated that 30% of American workers will become disabled for 90 days or more during their working years. The sad reality is that most American workers also cannot afford such an event. In fact, illness and injury are the top reasons for foreclosures and bankruptcies in the U.S. today. Disability insurance ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.

It’s tempting to cross your fingers and hope misfortune skips over you. But when you look at the facts, it’s easy to see: getting proper coverage against life’s risks is not just important, but a bargain in disguise.

By Erica Oh Nataren
Originally Posted By www.lifehappens.org

3 Questions to Ask When It Comes to Life Insurance | Ohio Benefit Advisors

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Your life insurance needs will ebb and flow throughout your lifetime. Buying a term policy early in your career or taking a basic employer-issued life insurance policy is a common course of action.

However, deciding how much and what type of life insurance you need at each stage of your life will serve you and your loved ones much better.

One simple thing to keep in mind throughout this process is that the more responsibility you have, the more life insurance you need. Here are a few questions to consider:

1. Who depends on me?
Of course, if you have children, a term life insurance policy that is large enough to pay off your home and debts with some money left over to support your family while your spouse or partner grieves and recalibrates the new financial situation is the option that gives everyone peace of mind.

Many times, it’s easy to overlook the other people who depend on you. The care of elderly parents or grandparents, siblings, or people in your family with special needs should also be considered carefully when deciding how much basic life insurance to buy. You can also get a working idea of how much you might need with this Life Insurance Needs Calculator.

2. How much insurance can I afford?
A term life insurance policy that covers the care of your loved ones in the event of your untimely death is an inexpensive option, if you are under 40 and in reasonably good health.

Permanent life insurance insurance is worth researching if you know you have a permanent need for life insurance, such as caring for a special needs child or sibling. It also makes sense if you’d like certain benefits beyond a guaranteed death benefit for your loved ones, like premiums that do not increase with age or changing health conditions, and a cash value that you can borrow against.

If you can afford the additional premium amount and expect your financial situation and income to remain stable long-term, whole life insurance policies offer living benefits that may outweigh the temporary pain of higher premiums.

3. How healthy am I?
People in great health who have only a little bit of wiggle room in their monthly budget may want to consider a combination of term and permanent life insurance coverage.

Your clean bill of health will keep premiums for both types of insurance lower than if you have major health issues. If you have a term life insurance policy but want more coverage, adding a permanent policy to the mix may be the ideal answer.

By adding a permanent policy with a cash-value element to your portfolio, you also open a world of options that could help add to your nest egg in retirement, start a business, or pursue a second career, among other benefits.

It is possible to have multiple policies and customize your life insurance to your changing wants and needs. Choosing a policy or combination of policies that gives you and your family the greatest potential benefit may seem tricky. So, simplifying the process by asking these three questions will set you on the right track.

By Peter Colis
Originally Posted By www.lifehappens.org

Let’s face it. Most people put off buying life insurance for any number of reasons—if they even understand it Take a look at this list—do any of them sound like you?

1. It’s too expensive. In the ever-burgeoning budget of a young family, things like day care and car payments and possibly student loans eat up a good chunk of the money each month, and a lot of people think that life insurance is just outside those “necessities” when money’s tight. But two things: life insurance is often not nearly as expensive as you might think, especially when you can get a good policy for less than the cost of a daily cup of coffee at the local café, and well, if money’s tight now, what if something happens to you?

2. That’s that stuff for babies and old people, right? People of a certain age remember Ed McMahon telling them their grandparents couldn’t be turned down for any reason and figure that’s the target demographic for life insurance. Or, you might have been offered a small permanent insurance policy for your newborn, attractively presented with a cherubic infant on the envelope. The truth of the matter is that these are very specific insurance products—just as there are many insurance products for adults in their working years.

3. I’m strong and healthy! You eat right, you stay active, and everyone admires how grounded and centered you are. You passed your last physical with flying colors! That’s GREAT! But you’re neither immortal nor indestructible. It’s not even that something could happen to you – though it could – so much as when you’re at your strongest and healthiest, there’s no better time to get a policy to protect your loved ones. If you fall seriously ill or suffer significant injury later, it will make it tougher to get that kind of policy, if any at all.

4. I have life insurance through my job. Many people are offered life insurance as part of their employee benefit coverage –and often, it’s the first time they encounter life insurance and have no idea that a $50,000 policy, or one or two times their salary, isn’t as much as they think it is. It sounds like a lot of money, until you figure that it has to cover some or all the expenses for your loved ones in your absence. Plus, if you leave the job, it’s typically the type of insurance that doesn’t “move on” with you.

5. I don’t have kids. Sure, kids are a big reason why some people get life insurance. But that’s not the only litmus for needing protection. If there is anyone in your life who would suffer financially from your loss—your spouse or live-in partner, a sibling, even your parents—a life insurance policy goes a long way in making sure everyone’s still OK even if something happens to you.

6. Life insurance—it’s on my list … eventually. There’s no deadline on life insurance, no mandate from the government on purchasing it. Your parents may have never talked to you about its importance, and it’s certainly not the most invigorating topic for conversation. But don’t let your “eventually” turn into your loved ones’ “if only.”

By Helen Mosher
Originally published by www.lifehappens.org

Employer-paid life insurance can be an important part of protecting your family in the event that you die prematurely. Companies offer the program on top of other benefits, such as health insurance. The coverage is generally term insurance, meaning there is no investment or cash-value component. If you pass on unexpectedly, depriving your family not only of your presence but also your income, your dependents will be glad you signed up for your workplace’s life insurance benefit.

Basics

Employer-paid term life insurance comes as an option through some employee benefits packages. It works, in a sense, like group health insurance: Rather than buying a separate policy for each employee, the employer buys a single policy that covers all workers who participate, according to Insurance.com. Thus, the employer pays one premium, not a separate premium for each employee. You may be responsible for a part of the premium, too. Typically, the death benefit is one or two times your yearly salary, according to the American Institute of Certified Public Accountants.

Advantages

Life insurance acquired through your employer is likely to be cheaper than what you can buy on the open market, since your employer is likely to cover at least part of the premiums, according to Insurance.com. Additionally, you do not have to undergo individual underwriting, which means you can get coverage even if you have a serious health condition, like heart disease, that would, according to Insure.com, get you denied or make you have to pay high premiums if you were buying on the open market.

Warning

Depending exclusively on employer-paid life insurance to protect your family has some disadvantages, according to Insurance.com. The main one is that if you leave your job, you stand a high chance of losing your insurance. Depending on your age and health status at that time, according to Insurance.com, you may or may not be able to get new insurance at a reasonable rate. For that reason, it is best to carry employer group insurance only as a supplement to other coverage. Another drawback to such coverage is that the amount of insurance available to you is likely to be limited, though some plans allow you to get more coverage for an additional fee.

Considerations

Some employer-paid life insurance plans, according to the American Institute of Certified Public Accountants’ 360 Degrees of Financial Literacy website, can follow you even when you leave your job. But most employees decide against doing this for the reason that the “conversion premiums” tend to be higher than prices for comparable individual policies. Typically, according to the site, “only those who are otherwise uninsurable take advantage of this conversion option.”

Taxes

The Internal Revenue Service taxes life insurance that has a value above $50,000. It uses a formula that takes into account your age and the amount of your death benefit to determine the taxable value per month.

Originally published by www.livestrong.com