Category: Life Insurance

Navigating Your Financial Foundation in an Inflation Nation

Navigating Your Financial Foundation in an Inflation Nation

Just when you’ve reached a place in life where you need the big-ticket items the most – a bigger home for your growing family, furniture for that new house, a bigger, more practical car for your growing family—Inflation 2022 hits, and those things move farther away.

You’ve probably heard that the cost of inflation is the highest it’s been in 40 years. For many of us, it’s our first inflation experience. And if that’s the case, you’ve probably lived through two recessions and dealing with crippling student loan debt already.

How did we get here?

U.S. GDP dropped by 1.4% in 2022’s first quarter. And as you might imagine the Ukraine crisis and a rocky stock market haven’t helped.

Depending on who you ask, culprits include COVID stimulus check spending, post-COVID global supply chain disruptions, the Great Resignation, and whomever a politician on any day on any news channel happens to name in the legislative blame game.

Who’s suffering the most?

An April Wells Fargo study indicates that people between ages 25 and 44 experienced the highest inflation rates, at nearly 7%. The very demographics that require those big-ticket items the most. The youngest of which is making the least amount of money.

For those of us carrying student loan debt, despite government promises to cancel it, higher interest rates will affect federal college loans as we wait for that promise to become a reality.

How long can this go on?

Some experts say it may get better as soon as the end of this year. Others say it may last until 2025. The good news is that most of them see positive signs that at least the supply chain challenges may ease soon.

Deloitte recently offered four possible scenarios in an article positing inflation’s future. They predict the following:  1. we return to normal based on economic history  2. we accept a rate of up to 4% and adjust to the new normal  3. Rates rise to between 8 and 9%, which sets off a spiral that discourages future spending or 4. supply chains improve rapidly while demand drops, driving rates down to 1% or lower.

How likely is a recession?

Technically, a recession happens when GDP falls for two consecutive quarters. Economists are saying recession risk is rising to about 50%, although their predictions vary as to how bad it may be. And no one has declared us in an actual recession yet.

The economy is as hard to determine as a pair of grandmothers’ contentious debate over whether to wake a sleeping baby or let them lie.

The Congressional Budget Office is more optimistic. They predict that GDP may grow by 3.1% and that inflation has topped out and will only go down from here.

Given the ongoing debate, it’s best to prepare for the worst and hope for the best.

What Can I Do to Prepare?

The most important thing you can do is to create a budget and learn how to stick to it if you haven’t already. And make sure your budget reflects your actual spending.

Before you make any purchase, carefully consider whether what you plan to buy is a need or a want. If you’re used to buying on a whim, inflation is a great opportunity to acquire a long-term financial mindset by delaying your purchase if you can.

And refrain from listening to the tempting calls of the credit cards in your wallet. Remember, the fed raised interest rates. And, given we are living in uncertain times, you probably shouldn’t rack up credit card debt if you can help it. However, if you’re already carrying credit card debt, consider a balance transfer to a credit card with a 0% APR. They’re out there.

And if you have things in the needs column, buy big. If the baby formula crisis of 2022 has taught us anything it’s that buying in bulk is a smart move.

Yeah. It’s a stressful time. But remember, your grandparents got through miles-long gas lines in the 70s, your parents survived the Great Recession of 2009. And you’ll get through this. After all, two world wars built the Greatest Generation.

Also keep in mind that economies fluctuate. This too shall pass.

In the meantime, make time for Me Time. Go to the batting cage or the gym. Zen out with meditation and yoga. Insurance data shows that stressed-out people suffer health issues they can’t pay for and leave the planet sooner than they statistically should.

Another way to prepare for the worst is to have a solid life insurance policy with a locked-in rate. Get term life insurance policy quotes today.

Understanding
No Exam
Life Insurance

Understanding No Exam Life Insurance

Getting an online term life insurance policy quote is the easy part. Actually receiving the policy can take longer and is a bit more complicated. The culprit? Medical underwriting.

However, if you’re interested in obtaining a term life insurance policy [link to Understanding Term Life Insurance post] with coverage for between 10 and 30 years, it is possible to skip the medical underwriting process with no-exam term life insurance.

What Is Medical Underwriting?

It’s a process that helps insurance companies determine your health risk so they know how much to charge you. The bigger the risk you pose, the more your insurance company wagers they will have to pay your death benefit during your coverage period. To cover their risk, they charge a higher premium.

But it’s a good option for younger people who want term life insurance but are concerned about disqualifying due to a chronic health condition. It’s also good for those who don’t mind paying a higher premium to avoid the insurance health exam. You only have to fill out an online health questionnaire.

The time-saving factor is understandable, as medical underwriting involves a battery of medical tests, blood, urine, blood pressure, and so on.

Nearly all life insurance companies have a questionnaire. But they typically only ask about your gender, age, lifestyle habits, and any risky hobbies you indulge in.

Easy peasy.

The best part is, you walk away with all the benefits of a term life policy at a locked-in rate and a guaranteed payout of up to $2,500,000 should your family lose you unexpectedly.

It pays to shop around. You just might find the best life insurance company at the lowest rate despite a health condition. Because as underwriting algorithms improve, fewer insurance companies are requiring medical exams.

Also, the list of disqualifying conditions is smaller than you think. These circumstances include, but aren’t limited to:

• Cancer
• Organ transplant
• Kidney disease
• HIV positive or AIDS
• Heart or artery disease
• Lung disease
• Hepatitis B or C
• Gastric bypass
• Crohn’s Disease
• Multiple Sclerosis
• Bipolar Disorder
• Drug or Alcohol abuse
• Epilepsy

Unless you fall into a disqualifying category, don’t let a trip to the doctor prevent you from getting life insurance. It’s too important. Your family depends on you.

Interested in the cheapest no medical exam life insurance? Compare life insurance companies today..

How to Select a
Life Insurance Beneficiary

How to Select a Life Insurance Beneficiary

One potato, two potato, three potato, four…remember that game? Whoever you landed on was It.

Picking a life insurance beneficiary isn’t like that.

Your beneficiary will be the one receiving and managing the money from your life insurance death benefit after you pass away. How do you want that money used? Who will need it most? It’s important you choose the right person and reevaluate that choice as your circumstances change.

Who Can Be a Beneficiary?

Pretty much anyone. It can be:

• your spouse or domestic partner
• your children
• your parent(s) or another family member
• a charity
• a friend
• a business partner
• A trust

Just know this. If you don’t choose a beneficiary, one will be chosen for you.

Why You Need a Beneficiary

Your death benefit—the one you’ve paid premiums into—must go to someone. A death benefit with no beneficiary goes straight to your estate. Which sounds okay. Except that going through your estate will keep the money tied up in probate court for six months to a year.

If after you die your family needs immediate financial support to make up for your lost salary, pay the mortgage, clear debts, pay taxes, and pay your funeral expenses, well, they’ll just have to wait. Also, your estate pays the legal fees, leaving your loved ones with less than you intended.

Tips for Choosing the Right Beneficiary

Who will benefit from the money the most? 

Be specific. Is it your minor children? Then your spouse probably makes the best choice as minor children can’t inherit assets directly. If you haven’t specified precisely by whom and how your death benefit will be managed, the court will assign a guardian to make those decisions on behalf of your children, not you.

Do you want to leave your benefit to more than one person?

If you would like your benefit distributed among a few people, make sure you identify them by name (“children”, for example, is too vague). And stipulate the percentage of your death benefit each will receive. Percentages are a better measure than dollar figures as your death benefit amount may fluctuate, depending on your policy.

Keep your beneficiaries up to date with each major life change.

Life changes include marriage and divorce, each of your children’s births, when your adult children leave the house, and if you become responsible for your aging parent(s). Keeping your policy up to date will avoid misunderstandings, like having your death benefit go to your ex-spouse because you forgot to update your life insurance policy.

Keep your life insurance policy aligned with your will.

When there’s confusion about who gets what, the insurance policy, being a legal contract, will supersede the will. (See above paragraph regarding an ex-spouse).

What If My Beneficiary Dies Before I Do?

This is where your second, or contingent beneficiary, comes in. And choosing a contingent beneficiary is every bit as important as choosing your primary beneficiary.

This is especially true if you have children and your spouse predeceases you. If you want the money to go directly to your children but they are too young to manage it, set up a trust and make the trust your contingent beneficiary. The trust, managed by the legal guardian you’ve chosen to raise your children, will manage the trust to make sure your children’s needs are cared for and relinquish whatever money remains in the trust once they reach early adulthood.

A quick caveat: If one of your chosen beneficiaries receives financial assistance for a special need or disability, be aware that if you leave them more than $2,000, it may cause them to lose that subsidy. Make sure you take this into account.

Many insurance companies allow you to choose more than one person or organization as your contingent beneficiary.

For example, if you are married without any children and your primary beneficiary, say your spouse,  dies before you do, you can divide your death benefit between your aging parent and your favorite charity.

Are there Certain Requirements or Restrictions?

It depends on the state you live in.

Some states have community property laws, which mandate that all property obtained during a marriage is equally owned by each partner in that marriage.

This means that, if you do not want your spouse to inherit your entire death benefit, he or she must sign a waiver that relinquishes their right to half of your shared assets.

States that have community property laws include:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington

It also depends on the insurance company, for a different reason.

If an insurance company suspects that a beneficiary has coerced the benefactor into assigning them as a beneficiary, the insurance company will refuse to issue the death benefit. Which then makes it part of your estate. So, if you end up sad and lonely in your old age, don’t get too chummy with your at-home healthcare worker. Your children—and your insurer—will not remember you fondly.

Got a beneficiary or two in mind? Get a term life quote today..

How Much Life Insurance Do I Need?

How Much Life Insurance Do I Need?

If you’re asking this question, you’re taking your future seriously.

Thinking about death is uncomfortable. Perhaps that’s why people purchasing life insurance often rush to an online calculator and punch in some arbitrary number they imagine their family can live on just to get the whole process over with.

Does that approach work?

Nope. According to Nerd Wallet, 30 million people with life insurance coverage are underinsured.

If you’re one of the millions who prefer conducting purchases online with minimal human intervention, is it possible to pinpoint how much life insurance you need on your own?

Yes. There’s even a formula or two.

How to Determine How Much Life Insurance You Should Have

Before you start shopping for life insurance companies online, take a thoughtful look at the following factors: Age, Life Expectancy, Health, Debts, Assets, and Income.

Age

Unlike with car insurance, the younger you are when you purchase your life insurance, the less you’ll pay in premiums. If you’re just starting out, consider a term life insurance policy. That will save you even more money in the long run and may avoid a future medical exam to boot.

Life Expectancy

According to most sources, the average person will enjoy their 78^th birthday. However, life insurance is about what happens if you don’t live that long, right? What you need to consider is how long your dependents will live and for how long they will need financial assistance.

Health

You and your dependents may be healthy now. But what about 30 years from now? Does your spouse have a family history of cancer or heart disease? Do any of your children have special needs?

Do you or your dependents smoke? Smoking raises your insurance premium up to three times the regular rate. If you stop smoking, your rate will come down.

Also, advances in artificial intelligence technology across the insurance industry have improved accuracy in determining risk factors, which improves trust between those selling and those buying the quotes offered.

And if you smoke, drink, or have a risky hobby, don’t lie to the insurance company about it. Advanced technology also improves the likelihood that you will get caught and your family denied benefits.

Debts & Assets

If your assets outweigh your debts, you may not need as much life insurance.

Debts include things like car loans, credit card balances, and tax debts. You don’t have to include your federal student loan balance. It’s canceled upon your death. But you may want to factor in your funeral expenses here.

Assets include your savings, your investments (mutual funds, stocks, and bonds), your retirement savings (IRAs and 401Ks), and any other insurance policies you have.

Income

Questions to ponder:

• Are you your family’s sole source of income?
• If so, how much replacement income will your family need if you pass away? For how long?
• Is your salary your only source of income, or are there other income streams?
• If your spouse is responsible for day-to-day household tasks, how much would you need to cover housekeeping and childcare costs if they had to make up for your lost income?
• Do you have any children who will need special care into adulthood?
• Do you have dependent parents who will need their care costs covered?
• Are you a business owner? There are insurance options that will cover the costs of keeping your business going or to help your beneficiaries sell the business in the event you pass away before you are able to sell or retire.

Quick & Simple Formulas

As promised, here are three simple formulas to give you an idea of how much life insurance you need to give you and your family peace of mind.

FORMULA 1:  Annual Salary x Years Left to Retirement

Multiply your current salary by the number of years you think you will continue to work.

FORMULA 2:  Annual Salary x 10 + –

1. Add up your debts.
2. Add up your assets.
3. Multiply your current annual salary by 10.
4. Add your total outstanding debt figure to that number.
5. Subtract your total assets figure from the step 4.

The final number should give you an idea of how much life insurance you need.

FORMULA 3:  DIME Formula

DIME stands for four factors: DEBT, INCOME, MORTGAGE & EDUCATION.

Debt factor

Add up your debts, including funeral expenses. Do not include your mortgage.

Income factor

Determine how many years your family will need your income should you pass away. Multiply that number by your current salary.

Mortgage factor

Determine how much you still owe on your mortgage.

Education factor

Estimate your children’s college costs. Exclude anything you’ve already saved for their education.

Add up the totals from each of the four factors. That should give you a comprehensive idea of how much life insurance you need.

If you’re spinning out from the totals you just generated, it’s not as bad as you think. According to the Life Insurance Marketing and Research Association, 50% of Americans believe life insurance costs more than it does. They’re wrong.

What you actually end up paying may surprise you—especially if you opt for level term life insurance. You can pay as little or as much as you want for as little or as long as you want. Permanent insurance premiums are more costly.

No matter which type of insurance you consider, compare at least three quotes before making a final decision. Life insurance companies vary in the premiums they offer. Make sure you find the best deal for your family.

Find out how much you can save on term life insurance. Get your life insurance quotes comparison today.

5 Types of People Who Need Life Insurance
the Most

5 Types of People Who Need Life Insurance the Most

The people who really need life insurance are the accident-prone, heavy drinkers, long-term smokers, and careless daredevils, right? Well, yeah, in a perfect world.

Here are five less obvious types of people for whom life insurance may be particularly useful.

1. Pre-planners

such as…

Independent Millennials.

Why? Because the younger you are, the less expensive it is. And if you wait until later and get sick, you may not qualify anymore.

Parents.

Why? Because if the breadwinner dies, the policy’s death benefit covers his or her salary. Or, if the family caregiver dies necessitating childcare or eldercare, the caregiver’s policy will cover the care costs.

Also, many insurance policies serve as investment vehicles that you can use for college tuition, paying off debt, funeral expenses, or a financial legacy for your kids or a favorite charity.

For parents raising a chronically ill child, a short-term children’s policy may make sense. Why? Because converting a short-term policy to another one when your child becomes an independent adult will prevent them from disqualifying due to their health issues.

2. Business owners.

Why? Because you can structure your policy so that, if you die before selling your business, your partner can buy you out, leaving the proceeds to whoever you’ve designated to receive it. Your children can also use your policy to cover the costs of selling or running the business themselves.

And because your policy covers outstanding business costs, it also protects anyone who has co-signed credit card or loan accounts with you.

3. Tax masters.

Why? Because some premium payments are eligible for maximum tax benefits. Just as with death benefits, insurance company investment payouts are non-taxable, depending on the type of insurance you’ve purchased

Cash value payouts can also pay estate or inheritance taxes.

4. Savvy savers.

Why? Because you can choose a policy that charges a premium payment higher than the policy is worth. Your insurance company can then invest the balance into its own financial portfolio, generating cash value you can reinvest in other assets like property and annuities or to fund your retirement. You can also withdraw all or part of your insurance equity in an emergency. Withdrawals are tax-free up to several million dollars.

5. Debtors.

Unlike transgressions, debts are not forgiven. Life insurance protects your heirs as well as your co-signers from debt collectors. Thankfully, student loans are forgiven.

The fact is, we all grow older. As you’ve read this blog post, you’ve aged a minute or two.

Take a few more moments and think…how will you fund your life when you can no longer work? Will your loved ones have enough money to live comfortably after you pass on?

No matter who you are, what stage of life you’re in, or what you choose to do with your money, life insurance makes sense. Find affordable life insurance today.

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Get your quote

When it comes to life insurance, there are a lot of options to choose from. You can get a policy that lasts for a certain number of years, or one that is permanent. You can also choose the amount of coverage you need. It’s important to compare life insurance quotes before you make a decision. That way, you can find the best policy for your family.

Pick your policy

When it comes to life, it’s important to have a policy in place that will work for you and your family. But with so many life quotes out there, how do you know which one to choose? At PolicyWand you can compare quotes from the most popular life insurance carriers to make the process of picking your policy simple.

Apply online

In a world where most things can be done with the touch of a button, PolicyWand brings that same simplicity to applying for life insurance.  You can now apply for life insurance online. Applying for life insurance used to mean meeting with an agent, being pitched expensive products that you don’t need or want, and filling out a mountain of papers just to apply. But thanks to the PolicyWand, you can now apply for coverage online in minutes, without ever having to leave your home.