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You know you need life insurance, but how do you know which one is right for you?

Here are just a few scenarios when term life insurance may be the better choice…

  1. You want to pay as little as possible while ensuring that your family may stay in the same home without the expense of mortgage payments.
    • Buy a Decreasing Term Life policy otherwise known as Mortgage Insurance.

      As the amount due on your home decreases so does the benefit amount payable by the policy. (Not to be confused with PMI which is mortgage protection for the mortgage company in case you default on your mortgage. This is usually required if you owe more than 80% of the value of your home.)

      Note: Decreasing Term refers to the decreasing benefit amount not to the payments. Most policies are offered on a level-premium basis.

  2. You want to make sure your family is taken care of until your children have finished college.
  3. You can’t afford whole life and just want enough coverage until you can afford a permanent policy.
    • Get a short-term policy and if possible one that includes the Option to Renew or the Option to Convert or both. These options will increase your premium but they also ensure that you cannot be turned down from continuing your policy in the future even if you are uninsurable.

      This does not however prevent the insurance company from increasing your premiums nor does it limit the premium amount that may be charged, although the company may not charge you any more than they charge everyone else in your age group.

  4. You have other means of saving and just want to pay for life insurance only.
    • Purchase a term policy that should be long enough to cover you for your entire life.
  5. You want a certain benefit amount and coverage now but cannot afford the premiums of a level-premium policy. However you expect to earn more in the future.
    • Buy a 10-year renewable term policy that may be renewed every 10 years. Your premiums will increase every 10 years according to your age but you will have enjoyed a higher amount of coverage in your early years then you could normally afford.
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Save 800 calories...buy life insurance

The $25,000 Burger

Unlike any other insurance, with life insurance you know you will use it one day, it’s just a matter of when. Unfortunately, in today’s economy, few of us have money lying around to spend as we please. So how, then, can the average person afford to buy life insurance?

The answer is… buy term life insurance.

You may not be able to buy as much coverage as you should, but even as little as $25,000 makes a big difference when a loved one dies, (especially compared to $0) if only to provide some time to adjust to the new circumstances. And, one month’s premium could cost you as little as a burger at McDonald’s (see Note below). That’s with no medical exam, approval in minutes, and the complete application filled-out online. It’s like buying life insurance through the drive thru …except without the calories or the guilt.

Note: At the time of this writing:

  • a 20 year old male can get a 10 year policy for as little as $4.55 a month or a 30 year policy for $6.51 a month
  • a Bacon Cheese Angus Burger (BCAB) lasts about 15 minutes,
  • a BCAB costs around $4.23, and
  • a BCAB has approximately 790 calories.

BTW, life insurance has 0 calories.

For a free quote for up to $250,000 of coverage with no medical exam go to gfaexpressterm.com and apply in minutes.

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Boat made from 16,000 plastic bottles

Boat made from 16,000 plastic bottles

These days everyone is going green. I just read the coolest article about a boat made of 16000 plastic bottles that will be sailing from california to australia.
Anyway it made me think about the fact that life insurance in general is a green industry.

Think about it. The green movement is all about saving the planet for future generations, accepting responsibility personally for the well being of those to follow. It is an ideal that requires action. Not that you have to be an activist to be green. Just doing your part, doing what you can; recycling, minimizing and reducing waste, and teaching others those same habits, makes you green.

Life insurance is about preserving the financial future of our loved ones, our children – the next generation. It requires effort and sacrifice, though not as much as you might think, but what you put into it is nothing compared to the returns your children will receive back, not the least of which is the value of your example in putting others first.

…And for those of you who are still fighting the “what’s in it for me?” way of thinking, just remember, there may come a time when you will need someone to take care of you. Wouldn’t it be great if the “green” ideal was something your children believed in?

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There are numerous areas that a financial plan needs to cover to provide financial security for you and your family. A few of the major areas are:

  • Emergency funds
  • Life insurance
  • Health insurance
  • Disability income insurance
  • Saving for retirement, etc.

There are two rules of thought regarding financial planning and how much insurance and what type of insurance you should purchase:

1. “decide which goals will take priority and work toward the lesser goals only after the really important ones are well provided for“, and

2. Spread your funds to provide at least some protection to each of the major areas of need, or expressed another way “don’t put all your eggs in one basket”.

I was surprised to read the first opinion expressed by a CNN Money Advisor as if it was the one and only answer to the financial security conundrum. I believe the answer depends largely on you and your situation, and in fact for the most part I subscribe to the second rule of thought. Here’s why:

It is rare that someone just beginning the process of financial planning is able to immediately meet even one of their major goals right away, such as having an emergency fund to meet six months of family expenses or purchasing the maximum amount of life insurance truly needed. But, if one is able to, let’s say, purchase a sufficient amount of life insurance, or purchase an adequate disability policy, but cannot do both, then Murphy’s law is bound to apply; in the case that you purchased the life insurance, you will become disabled, and in the case that you purchased the disability policy, a meteor will fall from the sky landing on you, and only you.

On the other hand, if you are employed with a company that offers a wide array of benefits, it may be worthwhile to sign up for the lowest amount of disability insurance and life insurance, even if it means you cannot put as much into a retirement plan. Remember, regardless of your health or employment situation you can put away into a retirement plan. It does not require you to qualify. However, if any factor such as your health, age, or employment changes, you may not be able to purchase life or disability insurance no matter how much money you have in your emergency fund or in your retirement plan.

This is not meant to question the wisdom of contributing as much as possible to a retirement plan (something you definitely want to do), especially when your employer is matching the contribution amount, but it just illustrates why I believe you shouldn’t necessarily feel that you need to complete one goal before starting another.

Again, I believe that each situation is different and that it is the job of the advisor to inform and explain to the client about the options available and the benefits and drawbacks of each, while it is the client’s job to decide which option best fits his/her circumstance.

Anyway, as always, we are interested in your comments. Do you agree? Disagree? Or is there something else on your mind?

Let us know. We are listening.

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So you’ve been laid off or your business is just not producing like it should. What do you do? Unfortunately, most families do not adjust their spending habits until six months after their income has been reduced and then often the first things to go are benefits such as life insurance, disability insurance, health insurance, saving for retirement, etc. After all you’ll only miss them if you need them. And really how can you prepare for the future when it’s a struggle to provide for your family now?

But is it?…

Stay Positive – Change Your Way of Thinking

A Family Affair

Think about what you CAN do

First of all you need to stay positive. Most often the ‘dread is worse than the deed’. Don’t think about what you can’t do, think about what you can do with what you have. Make ‘doing without’, ‘doing instead’. Substitute going to the park in place of going to the movies, and camping in place of staying in a hotel. Take advantage of ‘freebies’, such as concerts in the park, walking, bike riding, etc. Volunteer to help others. This will help you to appreciate what you have and help keep your feelings of self-worth from becoming despair.

Buying Only What You Need

Before making a purchase ask yourself:

Do I really need this or do I want this?
Can I postpone getting it?
Can I get it for less?
Can I make it or repair the one I have?

Make It a Family Affair

If you think you are protecting the family by not talking about your financial situation, you are wrong. They are stressed too though they may not show it. Call a ‘family meeting’ and discuss the need to cut back. Ask them for ideas on how they may be able to cut back and discuss the ways that you plan on cutting back. Most arguments between couples are concerning finances, but you can make it a means of bringing the family together. But, don’t expect too much too soon. Just as it will take time and effort for you to change your habits and way of thinking, the same is true for your family.

Get more financial advice at getfinancialadvice.com.

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