Tag Archives: Life Insurance

Stay-At-Home-Parents Need Life Insurance Too

 

 

 

Many people think that if their spouse is a stay-at-home-parent, then they do not need life insurance. To me, this doesn’t make any sense because I know all the things that a stay-at-home-spouse does in a given day. Let’s take a moment to think about all the roles a stay-at-home-parent includes:

 

  • Cook/baker
  • Janitor
  • Housekeeper
  • Laundry machine operator
  • In-home day care
  • Homeschool teacher (maybe)
  • Chauffeur
  • Psychologist
  • Nurse

 

I’m probably forgetting something in that list, but that’s a pretty inclusive list. Salary.com does an annual survey to determine how much a stay-at-home-mom (STAHM) is worth, and for 2014, the average STAHM does 96.5 hours of work each week. If this translated into dollars earned, it would be $118,905. Find the infographic here.

 

Now, if the stay-at-home-parent passed away, how quickly do you think your family would feel the effects of losing that parent? Pretty quickly I imagine. You will have to hire from outside sources to replace some of the duties he/she was responsible for.

 

Depending on how old your child(ren) is (are), will also depend on how much life insurance you should allocate to childcare costs. In Michigan, you can expect to pay on average of $10,114 for infants, and about $7,930 for pre-school age children annually.  If you have a baby or toddlers in your house still, that could mean many years of needing childcare, including after-school, summer, etc.

 

One other important thing to consider is whether the stay-at-home-parent is responsible for homeschooling. If so, where will your children go to school if they pass away? Will you put your children into public school or pay for a private/charter school? You’ll need to figure that expense (if applicable) into your life insurance planning.

 

So unless the surviving spouse is able to leave his or her job after their loss, it’s important and necessary to put plans into place before something happens to ensure you have the proper time to grieve and to  figure out how your life will move on from that point.

 

5 Financial Mistakes Millennials Are Making

 

Even as the U.S. economy as a whole recovers from the Great Recession, Millennials (those born from the early 1980s through the early 2000s) continue to struggle with student debt and slow job growth. The lackluster economy and student debt aren’t the only things holding back Millennials from attaining financial independence and success.

Image courtesy of stockimages | FreeDigitalPhotos.net
Image courtesy of stockimages | FreeDigitalPhotos.net

 

Let’s take a look at five mistakes Millennials tend to make–and see how we can correct them.

 

1. Avoiding a budget

One of the most basic mistakes–not budgeting–can lead to living beyond your means. This puts pressure on your future financial plans and goals, even if you have  a good eye for what things like groceries or car insurance usually cost. Doing the math and knowing if you’re breaking even or able to save more each month is crucial for building a buffer against debt. It can be as easy as starting to use a new online or mobile budgeting tool. You don’t even need to leave your desk.

 

 

2. Misusing credit cards.

According to a study by the credit-reporting agency Experian, Millennials are struggling to pay credit card bills on time, while also having one of the highest credit utilization rates of the four generations listed. Credit utilization, also known as the debt-to-credit ratio, accounts for the ratio or rate of your balance (what you owe) compared with your overall credit limit.

 

From the study, Millennials’ average rate is 37 percent, which is above the 35 percent or less that creditors prefer. As a result of these two factors–late payments and high credit utilization–Millennials have the lowest credit scores across all four generations. Consider a credit score as a financial report card, which means you should turn in everything on time and pay the balance in full every month.

Experian Study

 

3. Renting forever.

It’s no secret that Millennials are not active homebuyers. Homeownership is important to consider because ultimately it costs more to rent a home than to buy one in many areas. Plus, Millennials do not build equity when they rent indefinitely. Of course, many Millennials still find themselves traveling and exploring without plans to settle down yet, but in the event that a reasonable deal on property comes up down the road, it would be wise to consider purchasing.

 

 

4. Saving little to nothing for retirement.

Surprisingly, two in three Millennials intend to retire by age 65, but approximately 70 percent have not started saving for retirement, according to a 2013 survey by MainStreet.com and GfK Roper Public Affairs & Corporate Communication. Even more disconcerting is that half of all Millennials plan to draw income from Social Security, even though full payments from reserves are set to cease in 2033.

 

The journey to retirement begins with a single payment, then another. If you’re lucky to have any employer’s 401(k) matching plan, take full advantage of it and make above-average contributions. If not, build your own IRA, choosing a Roth or traditional IRA, and set aside a percentage of your monthly income toward it.

 

 

5. Skipping life insurance.

Getting insurance in general may seem daunting, but it’s good to consider the various types, even ones you don’t hunk you need at first. Life insurance is one that might not have come up yet, but there are reasons to consider it.

 

One of the benefits of getting a life insurance  policy early on is that it will likely cost you less now than later–life insurance is cheaper the younger and healthier you are. Plus, you have no idea if your health might change, which could make getting coverage much more expensive or even impossible later on. And remember that co-signers on any financial accounts you have may be liable for your debts should anything happen to you.

 

 

From the basic act of budgeting to considering life insurance, these actions can help ground your financial future. Saving for later in life is the foundation for having a debt-free life and securing retirement plans. As a Millennial you may still be finding your way in this economy, but you can help prevent any of these five financial mistakes from adding to your burdens.

 

by John Kuo

John Kuo is an analyst for NerdWallet. He specializes in investing and insurance. Through transparent tools and content, NerdWallet helps consumers make sound financial decisions.

 

 

Millennials Show More Anxiety About Financial Planning Issues

 

 

Younger Americans show the highest level of concern across all generations for common financial planning issues, including saving for retirement, paying for a child’s education and burdening others with final expenses…

 

Woman stressed by financial issues
Image courtesy of David Castillo Dominici | Freedigitalphotos.net

 

If you are a millennial (between the age of 25-34), have you started planning for your financial future? According to the 2014 Insurance Barometer Study, released earlier this month by nonprofit Life Happens and LIMRA, it was found that younger consumers are noticeably more anxious about their financial plans, despite being best suited to take actions now that can make a difference.

 

 

 

 

 

 

 

 

The study reveals that…

– Half of consumers age 25-34 (52 percent) state they are very or extremely concerned about having sufficient funds for a comfortable retirement, compared with just 47 percent of consumers age 35-44.

 

Education costs
Image courtesy of hywards | Freedigitalphotos.net

 

 

– Nearly a third of millennials (27 percent) are as concerned about paying for a child’s schooling and burdening others with final expenses (28 percent).

 

 

 

 

– Consumers under age 25 show the most worry of all age groups when it comes to paying for medical expenses (43 percent are very or extremely concerned), leaving dependents in a difficult situation if they were to die prematurely (38 percent), and paying for a child’s schooling (36 percent).

“Having come of age through the recession and facing uncertainty about the future of employer and government protections, millennials are having to take personal financial responsibility to ensure their future plans are secure,” said Marvin Feldman, CLU, ChFC, RFC, President and CEO of Life Happens. “Life insurance can provide stability and financial peace of mind and yet, while younger Americans recognize its importance, they lack a basic understanding about it, which may be hindering them from getting the coverage they need.”

 

According to the study, nearly one third of adults overall (31 percent) believe they would feel the financial impact from the loss of a primary wage earner within one month of their passing.

 

About 65 percent of consumers agree that they personally need life insurance and one in four (27 percent) believe they need more. One third of those surveyed under age 25 (33 percent) and age 25-34 (29 percent) say they need more.

 

The two most commonly cited reasons survey respondents provided for not purchasing more life insurance?

– 63 Percent cited too expensive

– 59 Percent cited having other financial priorities

 

Doctor giving thumbs up - you're approved
Image courtesy of stockimages | Freedigitalphotos.net

 

 

The irony of this is that younger Americans are generally more likely to qualify for preferred rates because of their age and health status.

 

 

 

 

 

It’s unfortunate that people have a misguided idea about how much life insurance actually costs. On average, people assume the price for a $250,000 level-term life insurance policy for a healthy 30 year old is $1,000. That’s nearly 10 times its actual cost of $150 a year! Overall, more than 80 percent of Americans surveyed overestimated the cost of life insurance and this misconception has been around for some time.

 

The best course of action is to get a quote from your insurance agent to know for sure how much life insurance will cost you. Call the Reno Agency for your free life insurance quote today, at 269-792-2232.

Image courtesy of pakorn | FreeDigitalPhotos.net
Image courtesy of pakorn | FreeDigitalPhotos.net

 

Financial planning for millennials needs to begin now. Begin the conversation with a certified financial planner (CFP) so you can first become educated on retirement funds and life insurance, and second so you can create a game plan for your financial future.

 

Living Single: Protect Yourself Financially With These Six Insurance Tips

 

One benefit of being single is that your money is your own, to use as you see fit, so you have the freedom to decide which savings plans and investment vehicles are right for you. But you are also solely responsible for protecting yourself financially, and insurance should be at the top of the list. The Insurance Information Institute provides advice to protect your greatest asset–you!

 

More Americans are living alone than ever before, according to a new U.S. Census Bureau report. The proportion of one-person households increased by 10 percentage points between 1970 and 2012, from 17 percent to 27 percent. In 2012, women represented more than half (55 percent) of one-person households, although men have been closing this gap over time. Sixty-two percent of unmarried U.S. residents 18 and older in 2012 had never been married. Another 24 percent were divorced, and 14 percent were widowed, the report noted.

 

If you’re flying solo, you have only yourself to depend on. Take the time to review your insurance and financial needs now in order to take care of yourself in the future. The I.I.I suggests the following six ways to help you enjoy living the single life–securely.

 

1. Life Insurance

According to the U.S. Census Bureau, there were 13.6 million unmarried parents living with children in 2011, the most recent figure available. As a single parent it is crucial to make sure your dependents will be financially secure in the event of your death, so life insurance should be a key element of your financial plan. However, even if you do not have dependents, life insurance can be an excellent way to pay for your final expenses without burdening parents, siblings or other family members. A life insurance policy also enables you to leave a significant contribution to a charity you may want to support. Furthermore, whole life or permanent life policies create a cash value that, if not paid out as a death benefit, can be borrowed against or withdrawn on the owner’s request, creating a kind of “forced” savings plan. And remember, if you are single because of a divorce or a spouse’s death, you may have a life insurance policy with an outdated beneficiary designation, so make sure to make appropriate adjustments to your policy.

 

2. Disability Coverage

If you were disabled and unable to work as a result of an accident or illness, what would you do for income? Who would take care of you? Disability income insurance can replace lost income. Keep in mind that 43 percent of all people age 40 will have a long-term (lasting 90 days or more) disability event by age 65. While many employers offer disability coverage, some smaller businesses may not, so you may want to consider buying a private disability policy, which will replace 50 to 70 percent of your income.

 

3. Long-term Care

The good news is we are living longer. The bad news is that if you end up needing long-term care services, it can get pricey. If you live alone and do not have the financial resources to pay for home health care, a nursing home or an assisted living facility, long-term care insurance can be a solution. In general, it’s a good idea to buy this type of insurance well before you turn 60-there is less chance you will be rejected, and the younger you are, the lower the premiums will be.

 

4. Homeowners and Renters Insurance

Singles are somewhat more likely to rent than own their home; according to the U.S. Census Bureau around 20 percent of owner-occupied homes are one-person households, while close to 40 percent of rental households are occupied by a single person living alone. If you rent a house or apartment, your landlord’s insurance will only cover the costs of repairing the building itself in the event of a fire or other disaster. You need your own coverage, known as renter’s insurance, in order to financially protect yourself and your belongings.

 

If you do own your home, (whether it is a house or condo or co-op apartment), it is important to make sure you have the right amount and type of insurance. Homeowners insurance covers the structure of your house, personal belongings, liability and additional living expenses. With condo or co-op insurance, on the other hand, you will need to make sure you have two separate policies to protect your investment: your own insurance policy, which provides coverage for your personal possessions, liability, structural improvements to your apartment and additional living expenses; and a “master policy” provided by the condo/co-op board. The latter covers the common areas you share with others in your building, such as the roof, basement, elevator, boiler and walkways, for both liability and physical damage.

 

5. Auto Insurance

If you are single because of a divorce, notify your auto insurance company that there is a change in ownership or designated driver for any cars you owned as a couple. If you, or your former spouse or partner, move to a new home, you should get a separate auto policy immediately. And if either of you buys a new car, arrange for a new auto policy before the car is registered. Removing a former spouse or partner from the insurance policy also protects you from possible liability if he or she is involved in an accident and gets sued. You can often save money by buying auto and homeowners or renters insurance from the same insurer. Check with your insurance professional to see what discounts are available.

 

6. Retirement Income

If you are single, chances are you will need to be more self-reliant when it comes to investing for your retirement as you may not have a spouse or children to step in and help out should you need that support in the future. Most single people will qualify for retirement income from Social Security, but is unlikely to be enough to pay for more than the bare necessities in retirement. Some will have retirement income from a “defined benefit” type of pension plan–one that pays an income based on your final income and years of service from an employer. Social Security income increases to match inflation, but defined-benefit payments do not, so they will become increasingly inadequate the longer you live in retirement.

For retirement income security, if your employer offers a 401(k) type retirement savings plan, you should contribute the maximum you can to it–especially if the employer matches your contribution. (The employer match is, in effect, extra pay for no extra work so don’t miss out on that!) If you don’t have access to a 401(k) plan, start your own tax-favored retirement savings plan immediately. When you retire, you may want to consider using some of your retirement funds to buy an annuity,  which pays you an income for the rest of your life. This will ensure that your lifetime income (from Social Security, a defined-benefit pension, and the annuity) is enough to pay all your expenses.

Other Things to Consider

Talk to your insurance professional about getting the best insurance protection for your specific needs and make sure that you are taking advantage of all available discounts. Keep in mind, in today’s economy, good credit is more important than ever. A clean credit record will entitle you to higher credit limits, lower interest rates on credit cards and more favorable interest rates on loans. Many landlords now perform credit checks before leasing an apartment and some employers investigate credit histories before making job offers. So whether you are buying a home, applying for a new job or looking for the best price on insurance, a good credit history will go a long way toward helping you realize your financial and personal goals.

 

 

This article was provided by the Insurance Information Institute, http://www.iii.org/press_releases/living-single-protect-yourself-financially-with-these-six-insurance-tips.html

 

Marital Bliss and an Insurance Review

 

Bride and groom running along beach

Whether you are tying the knot this summer, or have recently exchanged wedding vows, the Reno Agency has some tips for the newlyweds.

 

Marriage is a great time to re-evaluate your insurance coverage to make sure you are appropriately covered, and to take advantage of all the discounts you are now eligible for. Here are a few areas to look at once you have tied the knot:

 

Auto Insurance – If both you and your spouse have vehicles, talk to your agent to combine your insurance policies and take advantage of the multi-car discount. Marital status may also help reduce your premium, so make sure to add your spouse’s information to your policy.

 

 

Home or Renter’s Insurance – Now that you are married, it is important to protect your new home together. Have your agent review your policy to make sure your homeowners or renter’s policy protects both of you in terms of personal possessions and liability coverage.

 

If you and your spouse purchased a home, insure your home and autos with the same company to receive the multi-policy discount. If you and your spouse are renting, get a renter’s insurance policy to qualify for this discount. Renter’s insurance is more affordable than many might think. Read, “4 Lessons to School Millennials on Renter’s Insurance,” for more information.

 

 

Life Insurance – Marriage means having someone you can depend on for life. Knowing you depend upon each other means you should consider a life insurance policy. Life insurance is important to have if you have debt (credit cards, medical bills, etc), own a home with a mortgage, are planning on having children, or if you want to plan ahead while you are in good health.

 

There are different types of life insurance policies (Term, Whole, Universal), so make sure to consult your agent on which type(s) are best for you.

 

 

Health Insurance – Save money and consolidate your health insurance into one plan! Marriage is oftentimes a qualifying life event that allows you to make changes to your insurance policy. If both of your employers offer health insurance, choose the better plan.

 

 

Planning a wedding can be stressful enough. Don’t let insurance stress you out further. Update your insurance policies early and enjoy marital bliss.

 

If you need assistance with your insurance policies, call the Reno Agency at 269.792.2232 or toll-free at 877.774.7366.

Protecting Your Children – Now and for the Future

When your children are newborns, you buy baby monitors, car seats and outlet covers, trying your best to stay one step ahead from all the real (and imagined) dangers that threatened your little bundles of joy.

Then, as they grow older, your focus broadens to include schools, social activities and other influencing factors, as you do your best to keep them safe and secure. Your whole goal as a parent is to make sure your children navigate the space between birth and young adulthood as well protected as possible.

But one item might be missing from your “must have” list: life insurance. While parents typically buy life insurance for themselves for the first time, or increase the amount on existing policies when they add new members to their family, they may overlook insuring those new additions with a policy of their own.

It’s true that one function of life insurance is to protect those left behind, such as spouses or dependents, a situation that doesn’t apply when talking about minor children. But there are other reasons why it makes sense to insure your children.

1. The first comes down to dollars-and-cents: It’s far less expensive to insure a child than an adult. If the policy is convertible, meaning it can be converted from a term to a permanent policy, the insured child can theoretically have the policy for life, increasing its value, if desired, while benefiting from the cash value that is accumulating.

2. The second reason has to do with unfortunate events that could affect the long-term health of a child. While we hope and pray that are children will stay healthy, events can transpire over which we have no control. A major illness, a newly developed chronic health problem or even a catastrophic accident with permanent injuries can result in the child being considered uninsurable for life. However, if a life insurance policy was in place, especially one with a guaranteed policy purchase option for additional insurance in the future or the option to convert from term to permanent, the child will continue to be covered, regardless of what happens in terms of his or her physical health.

While it’s true that you may be able to insure your child through a group policy available through your workplace, keep in mind that changes in an employee’s group benefits may take away that option. Overall, only 19 percent of children have individual life insurance, with just 14 percent covered under group life policies, according to LIMRA, and both numbers have shown a significant decline.

Purchasing life insurance for your children is just one more way you can show your love and concern for them, and ensure that they are protected from the consequences of life’s unexpected events.

Article taken from: http://www.lifehappens.org/protecting-your-children-now-and-for-the-future/

Written by: Jaimee Niles, VP of Communications, LIFE Foundation

LETTER

Drive With Caution, It’s Deer Season

Opening day of firearm season in Michigan is quickly approaching, beginning November 15th. Hunters are making final preparations by purchasing and gathering their gear, and selecting the best location in the woods to set them up for success.

Photo courtesy of Michigan Department of Natural Resourses website

For many, this date signals the beginning of a season where heightened alertness while driving is necessary. Tens of thousands of drivers each year fall victim to deer-car accidents, and as we’ve recently seen this week along US-131, some are fatal. Unfortunately, this woman was not killed as a result of hitting the deer, but from another driver failing to react in time as she tried to avoid the deer.

So what does this cautionary tale mean for you?

  • Be alert! Don’t drive intoxicated or under the influence. If you are feeling sleepy, call someone to drive you to where you need to go. Minimize all distractions including the radio, cell phones, and too many passengers. You not only need to watch out for deer, but also for other drivers around you. If your reaction time is jeopardized, it could cost you your life or another.
  • Deer are most active at dawn and dusk. Keep a watchful eye for what is happening around you especially during these times.
  • Deer are almost always found in herds. If you see one deer, chances are more are following.
  • If a crash is unavoidable, don’t swerve! Brake firmly and hold on to the steering wheel to bring your vehicle to a controlled stop. Pull off to the side of the road and turn your emergency flashers on to alert other drivers. Report the accident to the police and also to your insurance agent.

Question: Is there a specific coverage I should have in my auto insurance policy to protect me in a deer-car accident?

Answer: YES! It is called Comprehensive Coverage, (also known as “Other Than Collision Coverage”).

Comprehensive coverage protects you from having to pay the full repair bill in the event that your vehicle hits an animal while driving, an object falls onto your vehicle, your vehicle is stolen or vandalized, and in most cases, auto glass damage. Similar to Collision coverage, you select a deductible. This is the amount of the claim that is your responsibility to pay for, such as $100. The insurance company would then pay everything above and beyond this once coverage is determined. Call us today at 269.792.2232 to make sure this valuable coverage is on your policy, or if you have additional questions.

Now, one question I have for you: If you are in a fatal car-deer accident (or any car accident for that matter), how would that situation look for your family?

Answer: __________?_____________

Life Insurance can help when your loved ones pass away, and while you are living. Call or email me today at 269.792.2232 or mike@renoagency.com so we can talk about your family’s life insurance needs so you can make sure you are able to fill in the blank.