Financial Spring Cleaning: Insurance Audit

Financial Spring Cleaning: Insurance Audit

By Tim Maurer So much of the maintenance of our personal finances falls into the category of “boring, but important.” But when it comes to life insurance, our subconscious resistance to the topic is further compounded because, unlike retirement or career planning, your pot of gold at the end of the life insurance rainbow is actually a headstone. We don’t like to talk about life insurance for numerous reasons, but especially because it requires acknowledgment of the fragility of our own lives, and of those we love. But considering the extremely high probability of our mortality, life insurance is one of the most important topics to include in your financial spring cleaning. To ensure your life insurance planning is on track, ask and answer these five questions: 1. Where are your policies? Yes, it’s important to know where your original, physical policies are (and it’s a good idea to communicate that information to the Personal Representative in your will). But you also want to ensure that all of the policies you think you own are, indeed, active. Many life insurance companies only send a single annual statement, so if your automatic draft setup changed or you missed your bill in the mail, you might have surrendered your policy without even knowing it. (If this turns out to be true, talk to your agent about the possibility of having the policy reinstated before you get a new one.) Once confirming the location and standing of your policies, consider holding onto the single annual statement–and proof of premium payments, for good measure–for each policy throughout its lifetime for your records.  2. What type of policies...
You May Not Drive A Racecar, But You Still Need Life Insurance

You May Not Drive A Racecar, But You Still Need Life Insurance

By: Tim Maurer Since her early 20s, Danica Patrick has driven a racecar for a living, speeding 200 miles per hour around a crowded track bordered by concrete walls. It’s dangerous. Really dangerous. And she recognizes that. “There are things that happen in the car that you can’t plan for and that are out of your control, like a tire blowing on you or an engine blowing up or a crash that happens in front of you or someone hits you,” Patrick told me in a recent interview. “So no matter what your skillset is, those things just happen. Absolutely it is a risk.” But it’s a risk that she has chosen to manage, in part, with life insurance. Patrick has owned life insurance since she started racing, and the subject is important enough to her that she now advocates on behalf ofLife Happens, a nonprofit founded to help consumers make smart insurance decisions. Commendable though it sounds, I wanted to know more about why. Why was she motivated to buy life insurance at an age when most people don’t even think about it? Why did she feel she needed life insurance—then and now? Why was Danica Patrick so motivated to buy life insurance at such a young age? The risks inherent in driving a racecar for a living aren’t lost on the racing community. Much like for those entering the military, it’s become a rite of passage to grab some life insurance before hitting the track. But for Patrick, it was also more personal. The decision came naturally because her parents were proponents. Each had lost their fathers...
Life Insurance Made Easy

Life Insurance Made Easy

By: Carl Richards As soon as somebody depends on you financially, you need life insurance. Most of us know this, but for some pretty good reasons, we don’t really want to think about it. To start, someone has to die for life insurance to be of use. Also, buying a policy means putting a price on the life of someone we love. That’s all complicated, messy, emotional stuff. So we’re stuck lying in bed thinking about this dilemma: We know we need the insurance, but it’s the last thing we want to think about. So let me get to the point here and just give one very simple way to check life insurance off you mental checklist. My goal is to give you a “good enough” plan that you’ll actually take action on, rather than spending time in the pursuit of the “perfect” plan you will never find. We want you to sleep at night, and this good enough plan will do that. Step 1: Take your salary and multiply it by 20. First, you have to decide how much life insurance to buy. This is where most people get stuck. You’re not going to get stuck. Just take your income and multiple it by 20. For example, let’s say your income is $50,000. Take $50,000 times 20 and you get $1 million. This is the amount of life insurance coverage you’ll buy. This goes a long way toward replacing the economic loss that will result if you’re no longer around. Step 2: Buy a 20-year term policy for that amount. Term life insurance is the cheapest policy you...
It’s Not Raining … Do I Still Need an Umbrella?

It’s Not Raining … Do I Still Need an Umbrella?

By: Joe Delaney I am talking about umbrella liability insurance and yes, you almost certainly always need it.  When I am reviewing prospective clients’ personal financial matters, I almost always find a deficiency in their personal lines coverage and it usually involves having none or too little coverage. Let’s walk through some of the questions I am often asked and often encourage people to ask their financial advisor or insurance agent. Umbrella insurance? What is it? Umbrella insurance is extra liability insurance. It is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future. It does this in two ways: It provides additional liability coverage above the limits of your homeowners, auto and boat insurance policies. This protection is designed to kick in when the liability on these other policies has been exhausted. It provides coverage for claims that may be excluded from other liability policies including: false arrest, libel, slander and liability coverage on rental units you own. What does umbrella insurance cover? Still a bit hazy on what an umbrella policy covers? Well, let’s dig into the details a bit. Umbrella insurance provides coverage for: Injuries Damage to property Certain lawsuits Personal liability situations listed below You’re probably thinking, “I have auto and homeowners insurance that covers some of these situations.” True! But umbrella insurance insures you above and beyond the limits of those policies and covers some situations that aren’t covered by the other types of policies. Here are examples of the types of coverage provided by an umbrella policy and how they protect...
10 Things You Absolutely Need to Know About Life Insurance

10 Things You Absolutely Need to Know About Life Insurance

By: Tim Maurer Life insurance is one of the pillars of personal finance, deserving of consideration by every household. I’d even go so far as to say it’s vital for most. Yet, despite its nearly universal applicability, there remains a great deal of confusion, and even skepticism, regarding life insurance. Perhaps this is due to life insurance’s complexity, the posture of those who sell it or merely our preference for avoiding the topic of our own demise. But armed with the proper information, you can simplify the decision-making process and arrive at the right choice for you and your family. To help, here are 10 things you absolutely need to know about life insurance: 1. If anyone relies on you financially, you need life insurance. It’s virtually obligatory if you are a spouse or the parent of dependent children. But you may also require life insurance if you are someone’s ex-spouse, life partner, a child of dependent parents, the sibling of a dependent adult, an employee, an employer or a business partner. If you are stably retired or financially independent, and no one would suffer financially if you were to be no more, then you don’t need life insurance. You may, however, consider using life insurance as a strategic financial tool. 2. Life insurance does not simply apply a monetary value to someone’s life. Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life. Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expenses and lost income. But most importantly, in the aftermath of an...
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