Life Insurance for the Homemaker

Hello All,

It is a commonly held misconception, in families where one parent works outside of the home to bring home a paycheck and one parent stays at home to do the homemaking jobs, it is enough for the money-earning half alone to have life insurance. It is, in fact, one of the many mistakes families make regarding life insurance. Most of us underestimate the importance and value of the homemaker, even when it comes to the cost of trying to replace their valuable contribution should anything happen to them. Whether you want to or not, everyone should consider purchasing life insurance. Make sure that each one knows the company name to prevent lost life insurance.

It’s a fact that non-employed spouses often get overlooked when considering life insurance coverage, particularly in a lower income bracket. It’s important not to overlook their contributions and the economic value they have to the household. When a non-employed spouse in a single-income family with small children is lost, it is often very costly to replace the duties he or she performed especially if there are no friends or relatives available to provide assistance. Full-time childcare is estimated to cost between $3,000 and $15,000 annually per child; nannies cost significantly more. A family with young children can easily find themselves in financial trouble, spending $10,000 to $30,000 a year on childcare until the children reach school age, at which point expenses begin to decline. For a low or middle income family without insurance this is devastating.

 

Consider also the cost for meals. To make up for the cost of childcare, the remaining parent may work evenings or overtime to compensate for the added expense. If this is the case it may be difficult or impossible to get a meal prepared for the family and it may be necessary to find outside help (if the children aren’t old enough to do it themselves). The additional cost of an evening meal can run $100 and up per week, depending on the meal.

 

Housecleaning is an expense some single-income parents also may not consider, Maid Complete in Dallas can also add costs from $50 to $150 a cleaning. Looking at the costs, a single-income parent may consider hiring a full-time nanny to cook, clean and provide the surrogate child care needed. Factor in the counseling which may be necessary to the family after such a devastating loss and finding insurance for a homemaker is beginning to sound like a better and better idea all the time.

 

It’s possible to pay for these expenses out of pocket, of course, but this is often not easy or even possible for many single-income homes, limiting it as an option only for the wealthy. Remarriage is also a conceivable option but that might be asking an awful lot both from the newly widowed parent and anyone entering the relationship. The most likely, the safest, and the best possible option would be purchasing life insurance coverage on a needs-based cost-replacement analysis – exactly the same way coverage is determined for the employed spouse. Figure the approximate costs to replace the necessary services needed with the loss of the homemaking spouse and purchase enough coverage to cover those costs. And it shouldn’t just be for one year but multiple years since it’s likely the young children may still be several years from school age.
Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

 

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

 

 

Lesser Known Categories of Life Insurance

Hello All,

There are some types of life insurance that the general public may not be familiar with so a small introduction to these varieties can come in handy. Prevent lost or unclaimed life insurance by knowing what these are.

While most of us are not in a position to finance loans for other people we are often in the position to apply for a loan.  When seeking a large credit line you should be aware that a lender can purchase a life insurance policy, called “credit life”, to pay off any remaining balance you owe upon your death.  A lender can also mandate that you purchase a credit life policy in accordance to their loan conditions.  A borrower may not need to purchase a credit life policy if he or she already has a term or whole-life policy in place.  In this case the borrower must establish the lender as a partial beneficiary guaranteeing that any remaining loan balance will be paid upon his or her death.   A variation on credit life is an accident and/or health policy which will cover remaining balances if you are unable to meet loan payments because of illness or injury.  These policies are usually attached to and paid for in concert with loan costs.

Another type of life insurance that is becoming increasingly popular is funeral insurance.  This kind of policy is set in place to ensure that funeral expenses are covered in advance.  This insurance can be extremely costly if in place for longer than 10 years or so and often comes with a graduated coverage amount for the first several years.  This means that if you die before you have met a specified number of payments that the death benefit will provide the coverage that it was intended to upon its purchase.  Often a better solution to the expense of funerals and/or burial is to invest in a cemetery plot and funeral expenses ahead of time and make payments directly to the funeral home.  Another option is to set aside a specific portion of your term or whole life insurance policy to pay for these expenses.

Home service life insurance policies are sold door to door.  You should be careful before purchasing a policy this way.  Make sure you understand the terms and the benefits provided by the policy before signing any documentation.  A similar type of very limited term life insurance policy is being sold at some department stores.  These policies are usually one year term policies that provide very limited coverage. 

When looking to purchase any type of insurance it is important to find a reputable company to purchase a policy through.  It is also important that you understand your policy thoroughly.  Keep in mind that upon your death your beneficiaries need to be able to locate your policy information so you should leave the name of your provider as well as a reference or policy number in a safe place that you have shared with a loved one.   Weigh the benefits and costs of different kinds of insurance before choosing a policy that you will be paying on for years to come.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

Life Insurance Policies that Offer Cash Value

Hello All,

Because of the increased benefits offered by cash-value life insurance policies their premiums are usually higher than those of term policies.  Cash-value policies offer the ability to use a portion of the policy similarly to a savings account. This is the reason you do not want them to be a lost life insurance policy.  You may borrow against it, invest part of it or even withdraw a portion to meet your current needs.  Premiums begin at a higher rate than those of term policies.  The increased initial rate accounts for the cost of purchasing the savings component of the policy.   The overall cost of cash-value policies versus term policies usually equalizes over time if the policy is purchased when you are young and health and kept active through your middle years.  You may even discover that your premium rate is lower than an equally value term policy would afford.

Cash-value policies are established by placing a share of each premium into what is basically a savings account.  This value of the account grows as more premiums are paid and reflects the cash-value of the policy.  Depending on your insurer and the details of the policy the account could increase at a fixed rate, a flexible rate or be dependent on the insurers’ rate of return on secure investments.  Policies vary on how you may use this cash value.  Most policies will allow you to borrow against it using it as collateral.  You may often be allowed to use the cash value toward your premiums.  You can also simply withdraw a portion of the money for immediate needs.  You must be aware that the withdrawal of the entire cash value will terminate your coverage.

When establishing your policy you should clarify what your beneficiaries will be entitled too.  Some policies disburse only a death benefit others may include part or all of the cash value.  Depending on the benefits allowed to those you name your premium rates may be affects.

Cash-value policies grow over time and it will be several years before there is a significant available balance.   When considering a withdrawal you need to double check your policy terms to make sure you are not going to accrue a surrender charge for accessing the account prematurely.  You should also be aware of any tax penalties you will be responsible for before withdrawing funds.   For your policy to be cost effective it should be in place for more than 15 years.  Cashing your policy in early will mean the loss of death benefits as well as the premiums paid into the policy.  The cash value simply will not cover the incurred expense. 

Both whole-life and universal-life insurance policies can offer cash-value options.  Whole-life policies are in place until your death unless you cash them in or fail to meet the premiums.   Premiums for whole-life policies are set in place when the policy is established.  You will either keep the same payment or know ahead of time that the cost will increase at an agreed upon rate.   Universal policies allow flexibility in rates and term coverage and end at a pre-specified date.

Cash-value policies can be a great financial move but do not establish a policy like this unless you can foresee leaving it in place long enough to benefit from the advantages it offers.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Should You Consider Life Insurance?

Hello All,

As we enter adulthood we often have a sense of invincibility.  Because of this many young adults fail to consider purchasing a life insurance policy.  No matter how young and healthy you may be it is important that you consider purchasing even a small term-life insurance policy to cover any final expenses that may arise in your name in case of a sudden illness or accident.  Small policies exist to make sure that your loss, while devastating to loved ones, does not become a financial burden for them as well. 

With any policy you may decide to name one beneficiary or several.  If naming more than one recipient you need to designate how the benefits will be distributed.  Most policies allow you to name secondary beneficiaries as well to protect the policy if the primary has already died. A huge benefit of life insurance is that, in contrast to investments, they pose no risks.  It guarantees  to pay death benefits as long as your premiums have been met.  This allows you to provide for those you leave behind without the worry that investments will lose value becoming incapable of providing the financial support your beneficiary needs.

There are several types of life insurance policies and some may accrue a cash value that you can borrow from or even use as income.  When you purchase a policy while you are young and in good health it will allow you to receive the lowest premium rates for your insurance that may be available.  Agents should never try to market these policies as investments because they do not meet the requirements to be an investment.

When you apply for a life insurance policy the company will use a number of factors, through a procedure called underwriting, to determine if they should cover you and how much your premium should cost for the desired amount of coverage.   Factors that can affect the cost of your coverage are your age, medical history, social history including alcohol consumption, drug use, or whether you are a smoker as well as your gender.   As mentioned before the younger you are and healthier you are the lower your rates will be because you should live long enough to make more payments toward your policy.  Those who smoke or present at-risk health issues such as advancing age, high blood pressure, depression and other health factors have a lower life-expectancy and will most likely pay higher premium rates.  If your risks seem too outstanding an insurer could refuse to cover you.  If you are denied coverage by one company keep looking because policies differ between companies.

If you have no dependents you can look for a small policy to cover your final expenses.  If you are married and hold job it is important that you consider what your spouse will need financially after you are gone.  If you are a stay at home parent, remember that your spouse and children will need help with expenses like child care if you are not there to provide it.  The more children you have the more coverage you should carry.  There are many ways to calculate the amount of insurance you need.  You should research types of policies and discuss with your agent the need to affordably provide for your loved ones after your death.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

 

Why It Is Important To Inform Your Loved Ones Of Your Life Insurance Policy

Everyone has a life expectancy. Some people prepare for the end by getting life insurance. This is so that their loved ones will have something to live off of after they are gone. But sometimes when people take out life insurance policies they do not inform the beneficiary.

Due to someone not being notified of being the beneficiary of a life insurance policy, it will not be paid out. Every year millions of dollars are lost due to unclaimed life insurance policies. If the beneficiary does not claim the life insurance money, than the company will not notify them of its existence.

This is kind of shady but it happens every day, all the time. If you are planning to start a life insurance policy is sure to let the beneficiary know that you have done so. Let them know what company the life insurance is through, and how to get a hold of anyone who can help.

By not letting someone know where the life insurance money is at you risk them losing out on it. Every year this happens and lots of people are left out in the dark. Not only does your loved one die, but you are left without a penny to help with the funeral costs and what not.

When purchasing a life insurance policy is sure to make copies of everything. Copy the policy, and the every single paper you can get a hold of. By doing this you can insure that the beneficiary has a complete set of documents pertaining to the life insurance policy. This way if there is any kind of problem with collecting the life insurance policy than the beneficiary will have copies of the policies so they can make the process of claiming a lot more easily.

By making copies that is the only way to make sure that the beneficiary has a complete grasp on how to get the money that is owed to them. Planning for the end is the best thing one person could do for their family and loved ones. Insurance companies do not like to pay money, so they will not pay if they can. This is shady but it happens every day.

Insurance companies are companies. And needless to say they want to save as much money as possible. By not paying out on life insurance policies they save millions. This is why you should be sure to let the beneficiaries know exactly what to do in case of your death.

Let the beneficiary know who the company is that you are insured through. Give the beneficiary a complete set of copies of the life insurance policy. And be sure to let them know that they are your beneficiary.
 

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

What do you think?

Hello All,

I am a member of a few insurance groups on LinkedIn and I posted the following video of one of Suzi Ormans call ins. Now, please understand that I am not bashing Suzi she does have her own unique style of selling things. However, I wanted to post this because I did get quite the conversation going in LinkedIn from life insurance agents. Everyone had great points for and against what she was saying. Any comments from individuals that agree or desagree with her, please feel free to comment.

https://www.youtube.com/watch?v=IuWea6xpY00&list=UUIN-QsztU-mZpOXXUfB5dGw&index=3

Until next time,

Michael Hartmann http://www.findyourpolicy.com/

Facebook: http://www.facebook.com/FindYourPolicy
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Why Should the Single Non-Parent Consider Life-Insurance

Hello All,

Most of us think about life insurance as a means to help replace lost income from our death.  This income is especially important for dependents such as spouses and children who will suffer without its replacement.  That said, why should a single person who does not have any children consider purchasing life insurance?  Well, first of all no one knows their own destiny.  If you are 45 and never plan to marry you could meet the person of your dreams and start a family five or ten years down the road.  You just never know. 

Life insurance is much more affordable if you purchase it when you are young.  This is especially true of term life policies.  Permanent or whole-life policies increase in price with age but start out more expensive than term does.  Term policies can be purchased for just a few dollars a month when you are healthy and in your 20’s.  That changes the older you get however.  Even if you retain your perfect health that cost of those policies can multiply as much as five times over less than two decades.  In addition to that aging often brings changes in health.  Even minor changes in your health can affect insurance premiums.  Gaining 10 pounds could possibly bridge an invisible line that increases your rates.  As you age, the risks of high blood pressure and cholesterol increase.  You could receive an injury that will increase your rates.

If you marry and have children at some point down the road you will appreciate having the coverage you already purchased.  Most policies allow you to increase coverage without a repeated physical and many term policies are convertible to permanent policies.  By purchasing life insurance when you are young you keep your options open for the future.

By having life insurance in place you can continue to help the people you love.  While you may not be in a place of financially providing for your extended family and friends you probably provide them with plenty of help.  If you have family or friends who depend on you to help them through life a financial benefit after your death could help them to compensate for the things you will not be available to do. 

An option that many people forget to consider is the ability to contribute to a church or favorite charity through your death benefits. 

A really important reason to consider purchasing life insurance, even a relatively small policy, is to prevent your loved ones from having to cover funeral and burial expenses when you are gone.  A grieving parent or sibling should never have to struggle financially to figure out a way to bury you.    The cost of an average funeral is well over $7000 and higher end options can run over $20,000.  The financial impact of this could weigh heavily on those you leave behind.

If you pass away with outstanding debts those debts do not go away.  Your family may not be legally responsible for paying them off but they may feel like it is the right thing to do.  With insurance benefits your survivors will be able to pay these debts off instead of allowing them to remain unpaid.

No matter what your circumstances you cannot foretell the future so it is easiest to prepare ahead, just in case.  Someone you love will benefit from you having a policy in place at the time of your death.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

How Much Life Insurance Do You Need

Hello All,
 
Figuring out how much life insurance you should purchase can be a complicated process; no matter what shortcut strategies like multiplying your income imply.  More goes into planning than just your annual salary.  You want to find the middle ground; insurance coverage that will meet the needs of your loved ones, that has an affordable premium payment and that is not far in excess of what you truly need. 

A simple way to figure how much insurance coverage you should shop for is to take into account four main categories of financial need, in addition to some other contingencies.  These categories are income replacement, debt, final expenses, and education expenses for your children. 

Your family’s most immediate need will be the money to cover the expenses of your final arrangements.  Whether you decide in advance not to have a service there will be costs for burial or cremation.  This cost can exceed $20,000.    Make sure that if you want something lavish to celebrate your life after you are gone that you plan for the extra cost.  The benefit of using insurance coverage for this is that beneficiaries are usually allowed quick access to part or all of the policy.

You need to take into account your debts.  These need to include the mortgage or rent on the home you live in now and the likelihood of that expense increasing over time.  Include loan payments such as student loans, credit card balances, and car loans.   Even if your beneficiaries do not decide to sell the home they will need the money to cover the payments each month.  This will ensure a home for them to live in long-term.

After debts have been paid off and final expenses have been met your family should not need your full annual salary but a portion of it.  It is important that you take into account the replacement of your income.  Usually this amounts to about 50%-60% of your pre-tax income.

The thought of college expenses is very overwhelming whether you have one child, three or even more.  You need to plan for an estimated cost of college once your children reach 18.  Over the past 20 years tuition at most colleges both public and private has nearly tripled.  Remember to include this amount of money for each of your children.

You need to total the amounts for each category and combine them to get an estimate of your insurance needs.  Medical problems, spousal income, a paid off home, and more will figure into exactly what your needs will be.  You also need to consider how long you want the coverage to last.  If you are most worried about covering the expenses of your children growing to adulthood you might consider a 20 year term policy.  If you want to ensure that your spouse and children receive death benefits when they are independent adults you will want to check into a whole-life policy. 

 

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

 

Rights of Life Insurance Beneficiaries

Hello All, 

A life insurance policy helps make certain those goals you or your beneficiaries have come to fruition even when you pass away. In the policy, you name a specific person, persons or others as a beneficiary or beneficiaries of the policy so they can pay for the things you felt were necessary or important after you’ve died. But what rights do the beneficiaries actually have?

 

According to life insurance law a person or persons named as a beneficiary must suffer some form of financial loss if you die. This is called an insurable interest and can include family, business partners, life partners and the like. A life insurance company can’t accept any person or entity without an insurable interest as a beneficiary. After the policy is issued, however, you can change the beneficiary to anyone you want to, even the local mail carrier. And, unlike a will, the named beneficiary cannot be contested by anyone. The insurance company has a legal obligation to pay them. You can also choose to divide the proceeds of the policy by percentages or equally if there are several beneficiaries you’ve named. This can include any surviving family or heirs of said beneficiaries should they also pass away before the proceeds are released.

 

Naming a beneficiary also helps avoid state inheritance or estate taxes in some states. Some states don’t include the life insurance proceeds going to a named beneficiary as taxable inheritance, even though the funds are still subject to the federal estate tax. Naming one or several primary and secondary beneficiaries is another contingency. Without multiple or secondary named beneficiaries the proceeds go to the estate and become an asset of probate, creating a time-delay before they can legally be distributed.

 

It’s important to word the policy correctly if naming children as beneficiaries. Include any unborn children so future family members aren’t accidentally left out of life insurance benefits. Also, do not name a trusted adult family member as a custodian of the child’s benefits and hope they will use the funds in the best interest of a minor. Many times in that situation, the funds simply become theirs to use for whatever they wish instead of protecting yours or the child’s interests. Fortunately, many states will not  release the funds if the child or children are under the age of majority but you can allow you to name a custodian on the provision the court approves any use of the beneficiary funds. This allows the money to be available while the children are young and helps direct the use of the money as you had planned.

 

Finally, a spendthrift clause may automatically be written into the life insurance policy. The wording used helps to prevent any creditors from legally attaching the beneficiary proceeds. Any proceeds are also protected from attachment by debtors’ creditors. The proceeds will then go directly to the intended person or persons, no matter how much the insured owes to creditors or others.
 
Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”

Lost life insurance is a huge problem!!

Hello All,

Lost life insurance is a big deal and a huge problem!! There are millions, and maybe billions, of dollars out there that should be going to families of those who have passed away but instead, the money is sitting there…waiting. That’s all good for the insurance industry, but what about these families? Sadly, many of them aren’t even aware that they have money coming to them. Life insurance policyholders quite often forget to mention the existence of their policies to the beneficiary(s). They might have every intention of doing so, it just never happens. It’s a talk that most people avoid because of the morbid nature of the subject. What they don’t realize is how important it is.

So how does one go about finding a lost insurance policy? Well, the first thing you want to do is look through the person’s financial paperwork. Hopefully they have kept a record of it. You’ll also want to check the checkbook and financial statements as they may have evidence of payments made for the policy. You’ll also want to check tax returns for any interest income they may have reported. The next thing you will want to do is check former employers/check stubs. They may have had a payroll deduction that would be evident. If that doesn’t work, check with whoever holds the other insurance policies, such as auto insurance and homeowners insurance. People tend to stick with the same company for all policies when possible. You can always contact all the insurance companies in the state and ask. This could be a time consuming approach though.  You also want to check with the state as, when the insurance company is aware of the death, they may turn it over to the state’s unclaimed property division. Sadly, though, unless you have evidence of the policy or can find the company that actually holds the policy, you may never see it.

Now, the question for the living is, how do I keep this from being such a problem for my loved ones? First thing you could do is talk to them and give them the necessary information. That is sometimes easier said than done. Plus there is no guarantee that they will remember 30 years down the road anyway. The next best thing would be to register your information with a company like FindYourPolicy.com. You can store your insurance policies with them and your relatives will then be able to conduct a search and be able to find it/them.  It’s free to register your policies and there is only a minimal fee for the search, part of which goes towards cancer research. Whatever you do, be sure that your family is taken care of. It will give you peace of mind now and will help give them peace of mind later.

Until next time,

Michael Hartmann http://www.findyourpolicy.com/
Tweeter: @FindurPolicy

Always remember our Mission Statement
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”