Category: Life Insurance

Life insurance is one purchase that you make in the hopes of never needing it. However, some people refuse to purchase life insurance for one primary reason: they believe it isn’t worth the money to pay for something they will ideally never use.

However, that line of reasoning is incorrect since, while we all hope never to need life insurance, the truth is that you can never tell when disaster will strike. Without a plan in place, you could leave your loved ones in a situation where they can’t afford to live independently.

According to a recent ConsumerAffairs poll, 29% of respondents believe purchasing a life insurance policy isn’t worth the money. But here are several reasons why you should consider getting insurance.

 If You Have Dependents

Let’s say you’re offered $100 monthly in premiums for a 30-year term life insurance policy covering $500,000 in coverage. That’s $1,200 a year you could be spending on the insurance coverage you’ll hopefully never have to use.

You may believe that it’s best to save that $1,200 instead of paying it yearly as a premium. However, saving $100 every month for 30 years will get you $36,000. And if you died at that time, your loved dependents would have had a lot less than $500,000.

That also implies that you’ll be alive for the next 30 years to save that money.

The entire point of life insurance is to safeguard your loved ones against the unforeseeable. Under the same assumptions, if you died in five years, your family would have $6,000 in savings left behind. This may not even cover the expense of a burial.

Even if it appears to be an unnecessary expense, you should purchase life insurance. If you ever end up needing it, it may more than pay for itself.

How to Save Money on Life Insurance

Some individuals believe that whole life insurance isn’t worth the money, which may be true in some cases (although several benefits come with whole life insurance).

Whole life insurance offers protection for the rest of your life. It also builds up a monetary value over time. However, it can be more expensive than a term life insurance policy, which only offers coverage for a specified time (typically, 20 to 30 years).

Whole life insurance can be unreasonably expensive, to the point that many policyholders are forced to cancel or surrender their coverage owing to a lack of financial resources. Your loved ones will be unprotected if you cancel your policy.

Because term life insurance is cheaper, there’s a good chance that you can afford to pay the premiums each year to make sure that your family has the protection they need if you die.

The last thing anyone wants is to put their dependents in a financial situation where they can’t support themselves. Buying a life insurance policy is an excellent way to protect yourself from such a situation.

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Email: [email protected]
Phone: 2129517376

There are so many different kinds of insurance available — health insurance, vehicle insurance, home insurance, and so on — that it can be challenging to determine which coverages you genuinely need. Life insurance helps to guarantee that your dependents’ financial responsibilities are met if you die and your dependents lose their income — but do you need this form of insurance if you have no dependents?

Let’s see what financial planners and insurance agents have to say on this matter.

If one is single and with no dependents, they probably don’t need life insurance.

“There is absolutely little incentive to acquire life insurance if you are single and have no dependents,” said Jay Zigmont, Ph.D., CFP, founder of Live, Learn, Plan, a financial planning organization located in Mississippi that focuses on assisting childless adults.

However, if you have non-human dependents, this is something to think about.

“I’ve seen some folks get life insurance to pay for their pets when they die,” Zigmont explained.

But the best is to buy life insurance when you’re healthy.

Even if you’re single and have no dependents today, you should consider purchasing life insurance if you expect to have dependents in the future.

“One’s health may change, and a person could become uninsurable in the future,” said Shane Canfield, CEO of WAEPA, a non-profit organization that provides life insurance to civilian government employees and their families. “The easiest way to avoid that risk is to get a whole life insurance policy with the opportunity to acquire additional coverage at intervals with no underwriting.”

Life insurance is also less expensive to purchase while you’re younger and in good shape.

“Younger folks may want to buy insurance because it’s less expensive and can safeguard their insurability, or because they expect to start a family later in life,” said Chris Seabrook, a spokesperson with the insurance firm Country Financial.

Other reasons to buy life insurance

“Even if one is single and with no dependents, having life insurance may help pay off debt,” says Wilson Coffman, Coffman Retirement Group’s president. “Life insurance lets you depart or take care of financial obligations. No one wants to leave this life with the burden of duty or guilt on their shoulders.”

Life insurance helps pay funeral expenses.

“Whether you realize it or not, your death has costs,” Coffman added. “Burial costs can exceed tens of thousands of dollars. Someone must cover these ultimate costs. Again, life insurance may aid any organization or family member.”

A legacy is another incentive to seek life insurance.

“Life insurance is a tax-free advantage,” said Coffman. “Any life insurance left to beneficiaries is tax-free, allowing the money to help others or even charities.”

What amount of coverage do you need?

The amount of coverage you need and who should be your beneficiaries may be uncertain if you are single with no dependents.

“Typically, coverage is 10–12 times your income,” Coffman says. “For your beneficiaries, you should select numerous persons who will be responsible for your estate following your death. That can be a parent, a relative, or a close friend. After paying your obligations, your residual inheritance will go to these beneficiaries.”

Seabrook pointed out that your beneficiaries might be a trust or a charity.

Contact Information:
Email: [email protected]
Phone: 2129517376

While the policies work in different ways, term life and whole life insurance remain the country’s most popular forms of life insurance. Whole life insurance provides an investment component, growing tax-deferred, and provides the benefits of term life. Term life provides a death benefit upon your death if it occurs within a specific period. Term life is also more affordable and well-suited to a wide range of individuals. Let’s delve a little deeper into comparing whole life and term life insurance.

Whole Life Insurance

 Also referred to as permanent life insurance, whole life does not provide a specific coverage term. As the policyholder, it is your responsibility to maintain the policy to keep it in effect. Whether 2 years or 20 years after the initial date, the insurance company will pay out the death benefit to preselected beneficiaries regardless of when the policyholder dies.

Term Life Insurance

This type of life insurance insures the life of the policyholder. As such, you would choose your beneficiaries and your death benefit (i.e., $250k). The length of a term life policy ranges from 15, 20, and 30 years, etc. If the policyholder were to die within the term, the insurance company would pay the death benefit. Otherwise, the death benefit is not paid to beneficiaries.

Contact Information:
Email: [email protected]
Phone: 2129517376

Marvin Dutton

Author

Analyzing the annuities insurance market helps you make the right decisions by fully understanding the insurance market and its various segments. A suitable annuities insurance market will provide a detailed analytical roadmap that visualizes the existing market trend. It will provide a deep assessment of insurance market valuation with details about the profit models, SWOT examination, related vendor strategies employed by the key market players who consistently invest in the global insurance market to stay above competitors, potential and existing threats from market participants, and technological advances leading to varying market substitutes and diversity.

According to a recent annuities insurance market report, the market may witness a CAGR of 13.2% between 2022 and 2028.

Several companies compete within the insurance market, and among the top market participants are Fidelity Investments Life, Brighthouse Financial, and New York Life.

The insurance market is split into variable, fixed-indexed, fixed-immediate, and other markets based on the product type.

Based on the application or end-users, the market report will cover segments such as travel and hospitality, manufacturing, financial, and industrial markets, among other insurance market segments.

Recently, there has been a boom in the life insurance market, as seen by increased individual annuity insurance.

Importance of Annuity Insurance Market Report

The insurance market analysis provides information about the growth, restraints, drivers, and challenges of the market. It also shows how the market will grow in the future. The report identifies Covid-19 impact on the annuity market and recognizes the suitable measures to sustain the market growth.

The report also helps market participants make the best investment decision by going for suitable products and applications. Thus, this report is crucial to market analysts, consultants, and managers (sales, marketing, and product) in need of quickly accessible and readily available documents showing huge annuity insurance market details.

Contact Information:
Email: [email protected]
Phone: 2129517376

Here are some important things to keep in mind regarding your federal benefits if you believe your spouse will need your health insurance in case you die before them.

Your federal health insurance is an important consideration when deciding what type of death benefits you’ll need to have set for your spouse in retirement. 

You must leave some level of survivor benefits for your spouse to continue on your Federal Employees Health Benefits (FEHB) plan after you die. Because of this, most federal employees carry at least the minimal amount of survivor annuity benefit, even if the spouse won’t need the income replacement after death. If your spouse needs this health insurance, you should take at least the minimal survivor benefit.

Are You Insurable?

On the other hand, if you want to leave no survivor benefit and instead get private life insurance to replace your income after your death, there are two essential things to consider.

The first is, as previously said, your spouse’s health insurance. If your spouse relies on your FEHB, you should consider purchasing at least the minimal survivor annuity.

Second, can you even obtain private life insurance? You cannot simply assume that you’ll be able to purchase whatever private coverage you choose. You must first qualify.

Life insurance is acquired with your health first, then with your money. Poor health can lead to higher life insurance premiums, and you might even be denied coverage, making the survivor annuity the most cost-effective alternative in some cases.

Good health can have the opposite impact. These criteria do not apply to survivor annuities; you’re automatically eligible for coverage at a standard 10% cost.

Be A Smart Consumer

There’s no simple method to evaluate which of the different levels of survivor annuity benefits and life insurance alternatives is best for you, as it ultimately boils down to personal preference. That is why we recommend hiring an insurance specialist to conduct a needs analysis for your particular situation.

Let’s consider the case of Kevin, who, like many federal employees, wishes to ensure that his family is provided for in the event of his death.

As a FERS employee, he’ll get an annuity when he retires at the age of 58. He is debating his survivor annuity options for his wife, Sara, who is also 58. He understands that if he doesn’t get a survivor annuity, he will get a larger annuity benefit for the rest of his life. Still, he also doesn’t want Sara to struggle if he dies before her or to be left without federal health insurance.

As a FERS employee, Kevin can choose 50%, 25%, or 0%. For the example, we’ll assume Kevin opts for the 25% option for the purpose of health benefits.

Also, let’s suppose Kevin has a high-three of $110,769 with 32 and a half years of service when he retires.

Pension Maximization

Kevin may be able to take the larger annuity while still providing for his wife’s security in the case of his death.

He can use a technique known as pension maximization, which involves using life insurance to replace a portion of Kevin’s annuity at his death. That necessitates estimating how much Kevin is likely to pay if he chooses private insurance over the survivor benefit option.

The process of maximizing your pension begins with evaluating the future value of your spouse’s survivor annuity. In Kevin’s example, we multiply $750 by a fixed number depending on Sara’s age. In this way, we can calculate the future value of Sara’s survivor benefit, which is roughly $150,000. (We’ve left out the calculation since it’s complicated, varies by individual, and only offers an estimate; you should see an expert for this.)

Once he has determined the amount of the federal annuity, he might be able to replace it with a combination of term and permanent life insurance policies. By looking at the premiums, Kevin can compare the costs of private plans to the expenses of the survivor annuity.

Analyze life insurance products carefully and confirm the length of time the coverage is guaranteed. As a bonus, several life insurance companies include various types of long-term care coverage in their policies.

Blindly accepting the default survivor benefit isn’t a good idea. You’re in control and not OPM.

Your surviving spouse will most likely need your pension income. Do your homework and be a savvy customer by being aware of all of your alternatives. Understand how your survivor annuity decisions will influence your spouse’s federal health insurance coverage. No matter whether you pay for life insurance premiums, take the pension cut that comes with survivor benefits, or both, know that it won’t be cheap.

Contact Information:
Email: [email protected]
Phone: 2129517376