Search Results for: life insurance

The Life Insurance Movement

August 22, 2012 By Shane Ede 9 Comments

Much like the Roth IRA movement that I participated in a while back, Jeff from Good Financial Cents is spearheading a Life Insurance movement today. The movement is designed to help educate people on the different types of life insurance, the ways to go about getting life insurance, and on how life insurance works, in general.

I’m sure we’ll see lots and lots of excellent articles to help educate the community. If you want to check them out, Jeff has compiled a list of all the participants and posted them on the Life Insurance Movement homepage.

Where do I stand on life insurance?

I used to be on the fence. On the one hand, there is a very strong argument for it. On the other hand, it can be pretty draining on your finances, for something you don’t use (hopefully).

For a young person, struggling with debt and bills, that extra $50-$60 a month to cover my wife and I is a not insignificant chunk of money. Neither of us is very old, and our probability of dying is pretty small. So, why spend that money on something that we have no plan on using when it could just as easily go towards paying off some bill? Maybe when we’re older, we thought, we’ll get ourselves some life insurance. You know, when we can “afford” it. I know there are quite a few of you out there who agree with that statement.

But, here’s the thing. I buy car insurance to help pay for damages to my car should I get in an accident. I’ve used that car insurance. My wife and I are good drivers, and neither of us has been in an accident that has been directly our fault. The few accidents we have been in have always been someone else’s fault. We had very little control over whether we got into that accident or not.

Life insurance isn’t all that much unlike car insurance. If car insurance only paid out if you were at fault in the accident, I’d never buy it. After all, I have never been in an accident that was my fault. Likewise, if life insurance only paid out if you died of natural causes, it wouldn’t make much sense, statistically, to purchase any before you were at least 45 years old. But, we all know that people don’t just die of natural causes. They die in all manner of accidents too. And those accidents don’t just happen to people of a certain age. So, it’s really the accidental, not-your-fault sort of death that you are insuring against. And you have no control over that. And, should you die as a result of one of those accidents, will your spouse and family be able to pay the bills? Or, will they be forced to sell the house to pay for the funeral? Do you really want them to have to make that decision if you die?

What kind of Life Insurance should I get?

There are basically two kinds of life insurance. Term life, and whole life. The difference is in how long the term of the insurance is, and how much the premiums are for the coverage level. A whole life insurance policy is good for your whole life. Because it’s good for your whole life, the premiums are usually higher for the coverages. A term life insurance policy is only good for a set term. It might be a 10-year term life policy, and be valid for 10 years from the purchase date. At the end of the 10 years, you have to purchase a new plan. When you are young, the term life policies have much cheaper premiums because, statistically, you aren’t very likely to die young, and so, the chances of having to pay out on the plan is pretty small. When you renew after the 10 years, the new plan would be based on your age at the time, and would be slightly more expensive because of a higher probability of death.

I can’t really tell you which is the best for you, though. It’s something that you, and maybe a good financial planner, should look very hard at. You need to educate yourself on the different types too! I encourage you to click that link above, take a look at all the articles that are part of the life insurance movement, and find out as much as you can about life insurance. Being educated on the subject will make it easier for you to spot bad policies, and find one that will fit your financial needs.

How much life insurance do I need?

Clearly, we’d all like to have a life insurance policy of several million dollars. Some amount that would set our family up to never have to worry about money again should we die. In reality, that just isn’t usually possible. As the amount of the policy goes up, so do the premiums you pay to keep the policy. What you really want is a policy that will pay out enough to make the transition from a two person led household, to a one person led household.

If you’re single, a policy that would pay off your debt, and pay for the funeral is likely enough.
If you’re married, with no children, a policy that can pay off the debt, the funeral, and replace your salary for a couple of years is a good policy.
If you’re married, with children, a policy that can pay off the debt, the funeral, and replace 5-10 years of your salary with some left over is an excellent idea.

Obviously, all of that is partially determined by what size policy you can afford. By “afford”, I don’t mean afford in the way you likely do. I don’t mean, after you’ve eaten out several times in the month, how much money is left over to buy life insurance. I mean, it should be included in your budget, just like car insurance, your mortgage, and your utility bills. When all of that, plus your life insurance premium is paid, you still need to be able to keep your bills current, and buy food to stock the refrigerator. That kind of “afford”.

In the end, when you go and read all the other articles that are part of the life insurance movement, you’ll likely find several viewpoints that clash with mine. You’ll find people who think that whole life insurance is better than term life insurance. You’ll even find people who don’t think you need life insurance at all. I think the important part is that you think about life insurance, learn about life insurance, and then make the decision yourself (preferably with help) on whether you want life insurance, what kind of life insurance you want, and how much you want the policy to be.

Tip: Check with your employer. Some companies are offering life insurance to their employees.

For me, I think that life insurance of some sort should be mandatory, just like car insurance. There should be state required minimums that you have to carry. Far too many people are leaving behind families without any sort of coverage at all. Even if it’s a small policy that can cover funeral expenses, that’s better than nothing at all, and you can increase it later too!

5 Easy Life Hacks That Can Save You Thousands This Year

April 26, 2019 By Angelique @Healthy On A Penny 2 Comments

Once in college, I sat down and calculated how much money I spent on food-not on groceries but those coffee shop pit stops and late night meals. It was in the thousands which are crazy, but not unrealistic. We all can get busy and start spending money on convenient things without thinking. This article will show you how to do the opposite. Here, you will find some awesome tips for saving money on the things we do every day.

Carry Cash

Now, you shouldn’t carry more than about $100, but spending cash will typically encourage you to not spend it. If you use a credit or debit card you are spending the same money but it feels different. Having to hand someone your hard earned cash makes us uncomfortable and that’s a good thing. Those moments of hesitation will keep you from making impulse purchases or buying things you may want but you don’t actually need.

Keep Rebates In Mind

There are so many rebate programs that we just don’t take advantage of. There are programs for retail and grocery shopping that will give you money back when you load your receipts. Check out your insurance plans as well. Auto insurance will often give you discounts and rebates for a portion of travel, rental cars, and for things like towing and roadside assistance. Many auto insurance companies have rental car coverage included, check your insurance agreement and if it includes rental coverage, never buy it from the rental company.

Health insurance programs tend to give reimbursements and discounts for certain gym memberships, and other health-related programs. You are already paying for these types of insurance, don’t pay more than you have to for other services.

Start Loving Store Brands

Do you know the difference between many store brands and name brand products? The marketing budget. That’s it. Don’t spend up to 25 percent more on a product because you’ve seen their commercial on TV. This is especially true for higher-end grocery stores like Trader Joe’s, Publix, and Whole Foods. Their store brands are quality and so much less expensive than their name brand counterparts. This one change can save your family thousands every year.

Get To Planting

Growing your own food can really help to reduce your grocery budget. For the tiny cost of seeds and soil, you can have a huge amount of vegetable. Start with easy to grow to produce like tomatoes or spinach and expand as you learn. Also, planting trees can help you save money in a couple of ways. First having beautiful landscaping will up the value of your home, it can also reduce your energy costs by acting as a windbreak. Adding trees can lower your energy costs by about a fourth which is great

Stop Buying All Purpose Cleaning Supplies and Make It Yourself

Cleaning supplies are a recurring cost that can be expensive. There is no reason to buy something when you can make something just as effective at home. Try this easy recipe for an easy DIY cleaner that is all natural and completely non toxic.:

Start by eating a couple of oranges or other citrus fruit.You’ll need the peels. Add the peels to a large glass jar or bowl with a lid. Fill the bottles half with boiling water and the other half with white vinegar. Let it sit in a sunny place in your home for a couple of days. Then strain the peels out and pour the cleaner into a couple of spray bottles. You can use the ones from whatever cleaner you typically bought. Just make sure you rinse them out first. Then use it as you normally would.

There you have it. These simple tips will have you spending money in no time. It’s all about finding easy ways to save money every day.

What’s Credit Insurance and How Can It Protect Me?

March 22, 2019 By Thomas Bawdy Leave a Comment

This post in collaboration with Paul Brian

Credit card spending continues to increase in the United States. According to NerdWallet’s 2018 household debt survey, credit balances carried month to month increased five percent in late 2018 to surpass $420 billion.

The same survey found that around nine percent of Americans who have credit card debt don’t think they’ll ever be completely free from it. Considering the average revolving balance among households is nearly $7,000, the hopelessness makes sense.

While careless spending may be the reason for many people’s misfortunes, it doesn’t tell the whole tale. Aggressively high interest rates can punish any type of financial hardship, self-imposed or otherwise.

In these cases, things like credit insurance can prove valuable. There are many types of credit insurance, ranging from consumer to business needs. However, for the purpose of this article, we’ll discuss what consumer credit insurance is and the protections it offers.

What Is Credit Insurance?

Credit insurance is just as it sounds. It’s an insurance policy that a borrower has on their credit card. It’s a safeguard that pays off the credit card debt if something unexpected occurs that makes repayment difficult. The main types of credit insurance include credit life insurance, credit disability insurance, credit unemployment insurance, and credit property insurance.

How Do These Different Coverages Protect Me?

On a broad level, understanding how credit insurance protections work is quite straightforward. Credit life insurance pays off your debt if you pass away instead of your family being burdened by what you owe, while credit disability will cover your payments if you become disabled and aren’t able to work.

Less common types of credit insurance are unemployment insurance, which takes care of payments if someone is laid off; and credit property insurance, which protects property used to secure a loan if the property is damaged.

As ValuePenguin notes, any of these coverages can be taken out as a single or joint policy. A coverage type may also be worded differently depending on the institution offering it.

Do You Need Credit Insurance?

Credit insurance seems prudent to have, but how essential is it? It’s important to have financial protections in place that will cover you and/or your family should something unexpected occur, but doing so via credit insurance is typically the more expensive option to take.

This of course excludes situations in which credit insurance is required by the lender, such as in mortgage loans. However, this usually only happens when the borrower puts down less than 20 percent. This insurance can also be canceled once the borrower has built their equity over 20 percent.

As you peruse credit insurance terms and offers, evaluate the benefits and costs of life, disability, or supplemental unemployment insurance packages to ensure you’re getting something you actually need.

If you do find a credit insurance package you like, be sure to look at the fine print. It’s often a lack of preparedness and understanding that buries consumers in debt in the first place, which a quick scan of Freedom Debt Relief reviews unfortunately verify.

Like any credit card agreement, credit insurance policies are packed with jargon, small font, and exclusions. Ask questions until you know what you’re getting in a credit insurance policy. Ask questions like:

Does the insurance cover the entire loan’s entire term and balance?
Are there any exclusions that would impact coverage?
Does the lender have the right to change or cancel the policy at their discretion?
How long do the benefits take to be paid?

The last thing you want to do is pay for a policy monthly only to find that it doesn’t protect you in your time of need.