Tag Archives: life insurance

Why I Went With Term Life Insurance

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I went with term life insurance because it’s all that I could afford.  Considering I had goals of paying my mortgage off early, contributing to my 401k, funding my kids 529 plans and investing in my Roth IRA and regular brokerage accounts, I just didn’t have any money left for a whole life insurance policy.

In fact, even with extra money now available, I still only have a term life insurance plan.  You see, I still cannot afford to have a whole life insurance plan or other versions of insurance plans other than term, because of the cheaper cost and benefits that a Term Life Insurance plan provides.  For me, a term life insurance plan offers the most bang for my buck, shop around for term life insurance quotes instead of jump on the first insurance company you think of!  Of course, I’m investing a large degree of my extra income into investments so that makes it worth it.

I just check 20 year term life insurance rates for a 35 year old that wants to receive $500,000 and the rates are around $65 a month.  While more expensive today than when I got my insurance, it’s still relatively cheap.

Other forms of life insurance (whole, universal and variable) include an investment part of the life insurance, but the fees associated with those plans don’t make it worth it unless you are one of the top earners.  Since I’m less than the top 10% of income earners, term life insurance is the best deal for me.

To be honest, I actually like that fact that my term life insurance is just plain insurance and not an investment vehicle.  I would much rather control my destiny via mutual funds, ETFs or individual stocks than trust my money with some company that sells insurance.

What do you think of the various types of life insurance?

MR

Missing But Not Worrying Financially About My Family

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Yesterday, I got back from a business trip for my employer.

While most of the time I was gone, my mind was on business events during the day, and mingling socially with peers during the evening, I did have time to realize how much I missed my family.  As I would go home after the nights of drinking at dinner and bars, I would think how much I miss my family, and especially my kids.  Each night before I would go out, I would call home to tell my kids goodnight.  During those calls, my son and daughter would tell me how much they miss me and wish I was home.  My 7-year-old girl, doesn’t remember when I use to travel when she was a baby, so it was very hard on her.  She kept telling me that she want to come home early, and that she really missed me. My son who is a bit older understood that I couldn’t come home early, but after I did get home, he told me he had problems sleeping the first few nights after I left and that he was glad I was home again.

While I worried about what was going on at home, and I missed my family very much, one thing that I didn’t worry about was their financial well-being if something bad happened to me during the flight or whatever.  The financially comforting fact is that they would have well over 1 million dollars if I were to die, and they would most likely receive Social Security benefits on top of that.

You might be thinking Social Security benefits? and why?  Well, it turns out that if you kids are under a certain age, Social Security will pay out a monthly amount until the kids are 18.  Since I have 2 kids and a wife, the payment from Social Security would be at least $3,500 a month.  This amount is almost as much as we currently spend monthly!

After you factor in the life insurance survivor benefits that they would receive, it would put my family at a very comfortable level.  And then there is my 401k that would be tapped too.  After factoring in the 401k, I feel comfortable enough about the finances that I don’t have to worry about my family… they will have enough money to do as they please.

Knowing that you are missed is great, but knowing your family would be provided for if somehow you were to die is priceless.

I’m glad to be home,

MR

 

Sun Life Financial of Canada

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Sun Life Financial of Canada

They say that when it comes to money, people get particularly anxious and the simple thought of losing their savings and/or earnings is enough to let fear take over.

But why do we allow fear to keep us from seizing opportunities?

Well, in the first place, finance is no child’s play. Being a very complex, risky and dynamic field, it needs to be studied, analyzed and understood, before one can use it to their advantage.

However, not everyone can dedicate their life to understanding finance, which is why there are a number of reliable and trust-worthy financial services companies out there that can take good care of your interests by opting for safe, yet lucrative solutions.

Sun Life Financial of Canada is one of these financial security providers.

With its worldwide presence in 24 countries, its mission is to guide and assist its customers, catering to their financial and personal needs.

In fact, Sun Life Financial of Canada offers a wide range of products and services, including flexible retirement solutions (pensions), protection plans and investment consultancy.

However, the company has recently switched its focus from investors to rather calm savers, helping them achieve tranquility and peace of mind, by offering them specific products, depending on their age, expectations, plans and personal needs.

Over the last decade, international markets have experienced a strong volatility due to a number of unexpected changes the global economy has gone through. That explains the lack of balance between growth and recession which influences both share and bond values, as well as customers’ confidence in financial markets.

So, considering the present circumstances, what can Sun Life Financial of Canada do for savers?

From a psychological point of view, it guarantees stability, security, flexibility, safety and peace of mind. For you to be in total control of your savings and earnings, you will get to choose the funds you want to invest your money in whilst being assisted by an experienced adviser.

For instance, should you want to make the most out of the pension pot you have built throughout the years, the company suggests you opt for i2Live, an innovative pension plan that enables retired people to freely withdraw the amount they need whenever they like, while an insurance company would only provide them with a fixed income that can not be renegotiated.

Needless to say that being i2Live solutions invested in funds, they might go up and down, but there is nothing to worry about since Sun Life will make sure that your income does not drop below a certain amount that you will discuss with your personal adviser.

Returning to protection and stability, the company offers another innovative product called Financial Foundations, which allows its holders to be covered in case of disability and critical illness. Moreover, it provides income and elderly care cover, as well as great flexibility.

And, if you live in the UK, you will be glad to know that Sun Life launched its UK brand in March 2010, after having acquired Lincoln National Corporation.

For any other information, go to Sun Life Financial of Canada and find out more about Sun Life and its products.

As normal readers might have surmised, today article was a guest post provided by Vera Grigorova.  Thanks for the information Vera!

Increasing Insurance Coverage

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I decided to bite the bullet and up my life insurance coverage amount for the family.  I increased the amount by $300,000 more than my current coverage ($200,000).

So now, I’m covered for $500,000 if I die.  While that doesn’t sounds like a lot… in our case it is.  With the Social Security death benefits, my wife should do just fine, and my kids will still be able to go to college (or at least they’ll have enough for the first 3 years, if I were to die now or next year).

A smarter approach on my part would have been to have this level of coverage all along.  Now that this is in process, I feel a little better now.  The only problem with the new coverage amount that I now  have, is that the coverage is through my employer.  I’m not sure what would happen if I were to get laid off (or worse fired).  That’s why I am considering purchasing additional coverage separate from work.  I will earmark these funds separately too, perhaps putting the money in a bond or a safe dividend paying stock (or even a mutual fund or etf…).

What type of extra insurance am I considering?   Since I’m late to the party, I’m looking at 20 year term life insurance (If I was starting new, then 30 year).  Since this is extra security above the amount what I currently have with my employer, I’m going to look for bargain amounts (but at least $150,000).

What should I have done when I started my family?  If I were to start again, I’d buy a 30 year life insurance term right out of the gate.  I’d also make sure the coverage amount is at least $500,000.  If I was just starting a family in 2010, I’d probably go for the $750,000 to $1,250,000 range depending on how much the monthly cost would be.  Actually, I would most likely go for the $1,000,000 amount.  The thing is if you go too low and a mishap occurs and you need it years later, inflation might take a decent size bite out of the amount your family receives.

I can’t stress how important this coverage is.  I’m kind of surprised I was weak on this (to me, at the time, 200,000 seemed like a lot of money), but it’s not!  I also underestimated my chances of death.  But even if you are in excellent shape, that doesn’t prevent accidents from happening to you! 

If you have or are starting a family, please go the extra mile on this one, don’t be naive like I was!