life insurance Archives — Beating Broke

How to Get More Financial Peace of Mind

January 18, 2021 By MelissaB Leave a Comment

Money troubles kill relationships. They also cause major stresses, catalyze health problems, ruin plans, mess up sleep schedules, and so much more. We hate to admit it, but money is easy to worry about, and many of us do it a lot. What’s more, there is good reason to worry about money. Without enough of it, we can’t live where we want, eat what we want, get educated, have a fun time out of the house. Like it or not, your sense of well-being has much to do with how much money you have and how you use it. So here are a few ways to get more financial peace of mind.

Life Insurance

Perhaps the best way to get peace of mind in your financial life is to buy life insurance. If you’ve never thought about buying life insurance before, you probably don’t realize how inexpensive it can be. Many people find that life insurance quotes are much lower than they anticipated, especially for people who are young and healthy. Life insurance creates peace of mind not just for you, but for the people who depend on your for income and security.

Know Where Your Money Goes

If you’ve ever made a budget after a long period of not paying attention to your money, you know how much it hurts. You may feel like your spending record is judging you, so some people avoid budgeting at all costs. But the only way to spend money more wisely is to take a close look at how you need to spend, and how you actually spend in practice. Often there is too much difference between these two , and you should find a way to spend your money according to better measures and goals.

Get an Emergency Fund

Financial Peace of Mind — Photo by Nathan Dumlao on Unsplash

Building an emergency fund and contributing to it regularly is one of the most important financial habits you’ll ever create. An emergency fund will help protect you in the event of an accident, a breakdown, and any number of unexpected expenses. It takes awhile to build an emergency fund large enough to cover you and your family for six months (the oft-recommended amount). However, once you’ve managed to build it, you’ll find it’s worth it. An emergency fund provides great peace of mind because you know you have a safety net. Plus, to create one you have to be financially responsbile and disciplined.

Final Thoughts

There are many ways to live beneath your means and acquire better financial peace of mind. We lose our cool financially when our money is out of control. Learn the basic ropes of personal finance, spend time caring for your own financial garden, and you may be surprised at the extent to which it improves your life. People don’t feel secure when their means of sustenance and shelter are constantly in upheaval. When you have financial security, you are very likely to have physical security, which can only have a positive impact on your state of mind.

When Do You No Longer Need Life Insurance?

Finding Low-Cost Term Life Insurance

Realized Benefits of Emergency Funds

How Much Life Insurance Do I Need?

November 23, 2013 By Shane Ede 3 Comments

Life insurance seems like a second thought to so many people. You’ll notice that the title of this article isn’t “Do I Need Life Insurance?”. That’s because there really isn’t much question about whether you need life insurance or not. I suppose there might be a few exceptions, but pretty much everyone needs and should have life insurance. It’s just a matter of how much you need. There’s a couple of ways to figure out how much you really need.

How much life insurance can I afford?

This is probably the most popular method of choosing life insurance. And it’s completely wrong. If you ask most people how much life insurance they can afford the answer is almost always “little” or “none”. Again, wrong answer. Most of us carry car insurance because it’s something that covers us against a loss. If our car is damaged in an accident, we have the insurance to help with the cost of repairing or replacing the car. To the people who depend on us for income, we need to have life insurance in place to help with the costs of continuing on when our income is lost.

How much income do I need to replace?

This question is usually a pretty good place to start when determining how much life insurance you need. If you’re a regular budget-maker, you probably have a pretty good idea of how much income you and your family need to pay the bills and keep food in the fridge. It’s probably not your entire salary, but it might be close. Take into account any investments you have, as well as assets that might become unneeded if you die. You’re family probably won’t need that second car anymore, for instance. Also, any payments on those assets that can be disposed of can be discounted as well.

How long do I need to replace the income?

Once you know how much income you need to replace, the next question you need to ask is how long you need to replace it for. In an ideal world, you’d be able to buy enough life insurance to set your family up for life. Your spouse would be able to quit work and take care of the kids full-time. You’d be able to pay for the children’s college education. But, the world we live in is far from ideal. Most of us won’t be able to afford the premium payments on a life insurance policy that will pay out enough to do those things. In a romanticist world, your spouse would grieve for your loss for the rest of his or her life. That isn’t all that likely either. It’s far more likely that your spouse will remarry at some point.

All of that still leaves us without a real answer to the time question though, doesn’t it? You’ll have to make some assumptions in order to really answer the question. Assume that your spouse will get remarried. Assume that you’re not going to be able to pay for your kids’ college education with the pay-out. I think a good starting point is somewhere around 3-7 years. Some will say that’s too long. Others will say that it’s too short. I don’t think there is a perfect answer. And, when you’re faced with a question that has no perfect answer, you’ve got to find an answer that is as close as possible.

Calculate, then purchase.

You’ve answered how much income you need to replace, and you’ve got a pretty good idea of how long you need to replace it for. Now, you’ve just got to put the two together and come up with how much life insurance you need. Multiply the income number by the length and you’re in the ballpark. Let’s say that you determine that you need to replace about $30,000 a year in income. You’re married to a real hottie, who shouldn’t have any issues with finding suitable future spouses, but you don’t want him or her to rush into it, so you use the 5 year length. $30,000 a year X 5 years = $150,000.

You might want to add a bit extra for sudden expenses at the time of death, like funeral, casket, and burial. But, that’s a pretty good ballpark number for how much life insurance you should buy. Now comes the big step… You’ve got to purchase it. Find a good place to compare life insurance policies and costs and get all the information compiled. Then pull the trigger and purchase the policy.

That will be the hardest part of the whole thing. If anything does happen to you, your family will be thankful that you did.

Finding Low Cost Term Life Insurance

November 11, 2013 By Gary Dek 6 Comments

If you’ve been considering life insurance, you’ve most likely heard financial planners and advisors tout the benefits of term life insurance. Term life insurance is known as the cheapest and most popular type of policy available. This is because there are dozens of different kinds of term life insurance policies addressing every life situation you may be facing, not to mention the fact that it is typically the most affordable coverage for a person of any age. Determining the best type of term life insurance for you depends on multiple factors, including your age, health, present and future income, assets and liabilities.

Term Life Policies

There are many types of term life insurance policies, among them level term, increasing and decreasing term, high risk, survivorship, group, guaranteed, no exam, and mortgage life insurance. Level term offers a low, fixed premium and stable death benefit for a term of 5, 10, 20, or 30 years. With decreasing or mortgage term life insurance, the death benefit and premiums decrease each year based on the insured person’s age or the principal owed on the mortgage, allowing the cost of the policy to adjust as your income increases year after year.

Decreasing term life insurance, similar to mortgage life insurance or credit life insurance, is usually used to cover a debt like a mortgage loan and both the death benefit and premiums decrease over time as you pay down the liabilities. Banks, lenders, or financing companies may sometimes require life insurance as collateral for a business or personal loan, too.

Renewable

Some term life policies may be renewable at the end of the term. It is important to check the policy provisions to see if a medical exam or physical is required at the time of the policy renewal. Generally, renewable life insurance offers more benefits to young individuals or parents since rates of renewal policies are not as cheap as an insured person grows older. Renewable policies are a low cost alternative to permanent life insurance policies – whole and universal.

Convertible

Young people may want the benefits of whole or universal life insurance, but not be able to afford the premiums in their budgets. Convertible term life insurance allows the policyholder to change or convert the type of policy from term to whole or universal life when their budget permits.

With convertible life insurance, families and seniors still have the protection of affordable term life with the option to purchase additional coverage with options at a later date. This is a good low cost option for individuals who intend to use life insurance as part of financial planning.

No Exam

If, for any reason, you think you would be ineligible for or denied coverage by the insurance company, you can apply for a no medical exam policy. Although the premiums will be higher, this type of life insurance exempts you from the usually physical exam and blood tests required for underwriting. Instead, you will be asked to answer questions regarding your current state of health as well as offer a full medical history. The death benefit is typically limited, but older applicants or ones with pre-existing health conditions are able to get enough protection to cover final expenses. Other terms and conditions or exclusions may apply, such as no payout or claims covered for the first 2 years after issuance, so read the fine print when considering no exam life insurance.

Who Should Buy Term Life?

Since rates are largely based on the age and health of the insured person, a term life policy offers the cheapest premiums and greatest advantage to young individuals in good health because they can lock in the cheapest premiums for 20 to 30 years.

Beyond the probable fact that most Americans need life insurance, protection is most essential if you fall into the following categories:

you’re married
you have kids or dependents
you’re single but have financial dependents or loan co-signors (i.e. your parents for student loans)
you have grown children and want to leave them an inheritance, and need a policy to cover estate taxes

The bottom line is – any time you have someone financially dependent on you, you likely need to buy life insurance.