Wednesday, June 15, 2022

Is Life Insurance A Good Idea

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How Do Life Insurance Payouts Work

Is Universal Life Insurance A Good Idea?

The death of a loved one is not a time anyone wants to think about paperwork. So thinking ahead about how the life insurance payout works might help.

When making a claim, contact the life insurance company either online or by mail. The beneficiary is required to provide the company with a certified copy of the policyholders death certificate, either through the hospital or from the county or municipality in which they died.

As far as the timing of a claim, heres good news: Theres no time limit on a life insurance payout. You can get this done on your own timetable, when you and your family are ready.

What about the form of the payout? You can go with either the lump sum or an installment plan. We definitely recommend you take the whole amount at onceinstallments have a lot of drawbacks and lack the level of control you get by taking the payout in a lump sum.

Enough To Clear Your Debts

Life insurance shoppers who are concerned about leaving debts behind can calculate their death benefit based on the amount it will take to clear their debts after death. And those who wish to leave money to pay for their burial and other final expenses can fill out a funeral pricing checklist to estimate their needs.

In some cases, though, the amount of coverage you require will be greater than what you can afford. You may wish to address this by buying a combination of term and permanent insurance. Or, you may buy only term insurance. And another option is buying a term policy that you can convert to a permanent policy later.;

Your Family Has Grown

As you welcome new members to the family, it’s important to update your life insurance. From final expenses to loss of income, your coverage should always meet your growing needs.

You may also want to consider a DreamSecure Childrens Whole Life Insurance policy. With it, your child will have coverage that can be added to as they grow.*

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Life Insurance Vs Mortgage Insurance: Lets Break It Down

By;Courtney Reilly-Larke;on March 18, 2021

Usually its a choice between term life insurance and whole life insurance. But where does mortgage insurance come into play? We talked to an expert to find out when its needed.

Life insurance can be a necessity for ensuring your loved ones are taken care of after youre gone. It can help them pay for funeral expenses, the costs of everyday living and much more. But one of life insurances main advantages is that it can pay off outstanding debts, including a mortgage. So, life insurance vs. mortgage insurance? Which is better?

Insurance Protects Your Business

Is Using Whole Life Insurance as a Safe Bucket a Good Idea ...

A life insurance policy can protect different aspects of your business. For example, you can take out a cover to protect your business against the impact of the death of a key employee or partner.

This makes life insurance such a critical asset to your business. Choose from the different types of business life insurance policies, including key person cover, shareholder protection, and business loan protection, among others.

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Cons Of Buying Life Insurance For A Child

It offers a low rate of return.;Although whole life insurance policies build cash value, they do so at a low rate of return. So life insurance for a child shouldnt be a substitute for a 529 college savings plan, Hoang says.

If you buy a policy for a newborn, it usually takes 15 years before the cash value equals the premiums paidto break even, that is. However, if you were to invest in a 529 college savings plan and earn a 7% return , the amount you invested would double in 10 years, Hoang says. You can expect to see much higher returns by investing in a 529 plan than with a life insurance policy.

Its a long-term commitment.;When you buy a whole life insurance policy, you should expect to be paying premiums for decades. If cash flow becomes tight, its not going to be worthwhile if you have to cancel, Hoang says.

You might be able to use the cash value to cover premium payments;for a while if the policy has built up enough cash value. But then there will be less cash value for your child if he or she needs it later in life.

Coverage limits tend to be low. Several insurers limit the coverage amount for childrens life insurance policies to $50,000 or $75,000. That wont be enough coverage once your child is an adult and has a family to support. Theyll likely need to buy life insurance as an adult to have sufficient coverage.

Which Life Insurance Is Right For Me

Life insurance is an umbrella term which covers several different types of insurance. You can buy standalone policies or bundle them together for more comprehensive cover. The six main types of life insurance are:

  • Life . Pays a lump sum benefit to your family in the event of your death or to you if you are diagnosed with a terminal illness.
  • Income protection. Pays a monthly benefit to you if you are unable to work due to illness or injury. It’s designed to replace a portion of your regular income.
  • Trauma insurance. Pays a lump sum benefit if you’re diagnosed with a specific medical condition, such as major head trauma, stroke or heart attack.
  • TPD insurance. Pays a lump sum benefit if an injury or illness renders you totally and permanently disabled. May pay a partial benefit if you are partially disabled.
  • Funeral insurance. Pays a lump sum benefit to your family so they can cover the cost of your funeral after your death.
  • Accidental injury/death. Sometimes called personal accident insurance, it provides a lump sum benefit if you are injured or killed accidentally. This does not include cover for illness.

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You Started A New Job

In the pursuit of your dreams, landing a job you’ve been hoping for is a big step. The right opportunity can open many doors and bring you closer to bigger goals.

After a promotion, or when you start a new job, check in with your agent to make sure your policy still meets your needs. It’s important to account for extra income and any changes in your employer-based life insurance policy, too.

How Much Coverage Do You Need

Is Whole Life Insurance Ever A Good Idea?

When it comes to figuring out the right amount of life insurance to buy, its tempting to rely on rules of thumb, such as purchasing a multiple of your annual incomesay, 10 to 15 times your salaryas a death benefit. That would at least ensure that your family has resources that should last for a while.

But chances are, online tools or a rule-of-thumb approach wont provide the best answer for your financial situation, says Steve Parrish, Co-Director of the Center for Retirement Income at the American College of Financial Services.

Its important to use your own numbers and look at the specific obligations and needs your family will have, Parrish says.

If you have young children, for example, and your stay-at-home spouse needs to return to work, you may want to fund additional child-care costs, as well as college educations. You may have mortgage and credit card debt to pay off, additional medical costs, or elderly parents who need financial support.

It makes sense to subtract any emergency savings or current insurance coverage from your financial needs. But you will also want to increase the coverage amount to account for future inflation and salary increases.

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Finding An Accurate Quote Is A Challenge

When you buy a house, you may get offers from your lender and by mail for mortgage life insurance. But it can be hard to comparison shop on your own. You may find it challenging to get mortgage life insurance quotes online. Many insurers dont offer quotes online, making it difficult to compare policies without having to speak with someone directly.

To Review Or Change Your Beneficiaries

Your beneficiaries are the people or entities youve selected to receive your life insurance benefit.

Your annual life insurance review should always include a beneficiary checkup. Take this opportunity to add, remove or change your designations due to any big life events that occurred over the past year or any changes in how you wish the proceeds from the life insurance death benefit to be distributed. Doing so will help make the claims process easier when your loved ones need it most.

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Use A Life Insurance Calculator And Get A Quote

Not sure how much life insurance you need? The best way to get a general idea is to toy around with a life insurance calculator. By entering details like your age, income, overall health, and family status, you can find out how much term life insurance coverage is suggested for your family and what that policy will cost. Start with our online life insurance calculator.

Do I Need Life Insurance In Canada

Is Credit Life Insurance A Good Idea

Unlike car insurance, life insurance is not a requirement in Canada. In fact, unless you have dependents, like a spouse or children who rely on your income and would struggle without it, you probably dont need life insurance. Thats because life insurance is meant to provide financial assistance to the loved ones you leave behind when you die.

Having said that, life insurance is easier to get and costs less when you are young and healthy. So, it may be worth looking into even if you are currently single and expect to be married and/or foresee kids in your future.

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Situations When A Short

So why would someone consider a short-term life insurance policy? The following are just a few reasons why a short-term life insurance policy may be a good choice as either a single, stand-alone temporary policy, or as an additional layer of coverage to your existing life insurance.

  • You’re traveling and want to have an additional layer of coverage
  • You may be exposed to a dangerous situation or event
  • To provide coverage for a short-term loan or business transaction
  • When it’s more important for you to have a greater amount of life insurance for the short-term vs. long-term needs

If you’re not sure if your situation is better suited to a short-term life insurance policy, consult with a qualified agent or company representative to determine the right product for your needs.

Whole Life Insurance As An Investment

With whole life, cash value accounts often see around 5%-6% interest before fees, conventional wisdom has been that you could do better investing on your own in a mutual fund for the long run. I still think so, but the markets current volatility understandably has some investors doubtful.

But before deciding that whole life is a good option, you have to consider the policys fees and commissions. By these estimates, while an agent might make 30%-40% of a term policys first-year premium, they might earn 80-100% of a whole life policys first-year premium . Thats a big incentive to avoid;whole life.

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When Does It Make The Most Sense To Have Insurance

It makes the most sense to have insurance when you cannot easily replace or pay for. And not to insure things that are easy to replace.

Heres an example:

I recently purchased a $47 plug-in radiator/heater to use in a room that is colder than the rest of our house. . When I purchased it at Wal-Mart, I was offered a $5 two-year protection plan to replace the item. That protection plan is insurance.

But that kind of insurance is not a good idea. Why? Well, for one, $5 is more than 10 percent of the purchase price of the item. If the item would fail within a year or two, I would likely contact the manufacturer, or I could easily replace the item. If I had the insurance, I would likely have to prove it somehow, and go through a lot of hoops to prove that the item failed, etc.

This Is Where Life Insurance Comes In

Is Term Life Insurance a Good Idea?

When I got married, I realized that I was now responsible for not just me but my wife as well. I want to make sure that she is taken care of which includes her financial well-being.

Then fast forward;some years, we now have a newborn baby girl and a;two-year-old boy. So not only am I worried about my wife;but now my two kids as well.

If something happened to me, I asked myself:

Would my wife have to work three jobs just to keep things afloat?

Would my kids be able to go to college without being saddled with student loan debt?

Would they be able to live in an area where the schools are good and get a quality education?

Would they have to downsize from a house to an apartment?

If so would they have to get rid of the dogs?

Who is going to raise my kids if my wife is working three jobs

Have you ever asked yourself these questions? Or maybe similar questions about how your family would be affected if something were to happen to you?

These questions were enough to motivate me to find out how to protect my family if anything were to happen to me. When I started to do my research, I found that there are two main types of life insurance: term and whole.

I found that whole life insurance is high in fees and is more of a permanent product;where term;life insurance is very low-cost and for a selected period of time.

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Life Insurance Helps You Provide For Your Kids

Raising kids is often an expensive affair, particularly when the family depends on one persons income to cater for most of the expenses. There are countless sad stories about children whose lives changed for the worse when the parent who took care of the bills passed away. Think of it this way, what would happen to your family if your income was taken away from them today?

Purchasing a life insurance policy can helpensure that your children can pursue their education and lead a comfortable life if you pass unexpectedly. The death benefit can help to provide for your children as they grow until they can stand on their own.

Peace Of Mind: Its Worth It

Those nagging to-dos can drag you down. Getting buy term life insurance crossed off your list is worth it for peace of mind. And unlike, say, renovating your kitchen, purchasing term life insurance is an affordable way to provide a financial safety net for your loved ones for the coverage term you select, whether it be a decade, or number of decades, if you were to die during that time.

So is term life insurance worth it? While theres no monetary value on peace of mind, for many, knowing youve put financial protection in place for your family is everything. And you may find that you can provide this protection for little more than the cost of your monthly music or TV streaming service. Term life insurance may not have a big monthly impact on your budget but it can have a big impact on feeling settled and confident that you have protected your family.

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Is Life Insurance A Good Idea

Posted by Dave Stopher | Jul 29, 2020 | Law & Finance | 0

Lets admit it; most of us understand the importance of taking outlife insurance but underestimate the impact of our passing away on the lives of our loved ones. Without the right protection, your passing would have a devastating effect on your surviving family members, especially if youre their breadwinner.

Will Life Insurance Cover A Covid

Is Life Insurance a Good Idea for My Estate Plan?

Typically a pandemic is not excluded from life insurance coverage, but you will need to check your specific policy for confirmation. Just be sure to disclose any current illnesses, medical concerns, and recent or upcoming travel; these wont necessarily exclude you from approval, but there may be a waiting period involved before your coverage kicks in.

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Should I Buy Both Whole Life And Term Life Policies

When you understand the difference between term life and whole life insurance policies, its easy to see how it might benefit you to have both types of policies. For instance, term life insurance may help prevent financial ruin for your dependents by ensuring financial obligations are covered in case you pass expectantly.

While term insurance is great for temporary needs, whole life insurance policies are a long-term solution. Both types of coverage can work together. A term policy is a good idea until youve raised the kids or paid off your mortgage. While a whole life policy, such as burial insurance, can ensure that your burial costs and other final expenses are covered.

What Is Variable Life Insurance

Variable life insurance is a type of permanent life insurance policy., meaning coverage will remain in place for your lifetime so long as premiums are paid.

Every variable life insurance policy has three primary components:

  • Death benefit
  • Cash value
  • Premium

A death benefit is what is left to your beneficiaries. Every time you make a premium payment, a portion of it goes towards the cost of insurance and insurers fees, which keep the death benefit in place. The remainder of the premium goes towards the policys cash value, which is similar in structure to a brokerage account. The cash value can be invested in certain securities which resemble mutual funds.

If the cash value performs well, it can be used to increase the death benefit, withdrawn as cash or used as collateral for a loan.

The cash value is also the amount of money you would receive if you decided to give up your coverage to the insurer, or surrender it.

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