When our salary is growing bigger than last year, may be there is a small think about our life insurance. How to protect and anticipate the future if someday we got unexpected case suddenly, I mean case in related with our health condition. May be we got serious sick (even we never perhaps in our life) but we can stay calm if we have life insurance system so we don’t have to pay 100% our medical fee.
Insurance could be one solution to protect our health and life and day by day the number of people who care and pay attention for insurance. In other side there are some improvement from insurance provider like the provide some new kinds of insurance beside life insurance, for example car insurance, home insurance, education insurance.
From the extension of insurance variance, provider sure that automotive is big market for auto insurance because the number of car is increasing every day and a car already becomes a social identification for most of people. With the growing of automotive demand, it can be a fresh air for insurance to swing its power and make big profit on it. We can see on the selling of cars there are always car insurance quotes inside and that is a standard package of selling and service for customer.
Have an insurance is a good preventive action beside it can be our saving for future when we need it, but there is one thing that should be attended about monthly payment. Basically we have to manage our income and put it into each allocation post and if we want to make it walk normal we have to do it with full commitment. To save our family financial, commonly our expenses to pay our credit / insurance is not over 35% of our income. For the rest of income we can use for monthly family expenses and for our saving.
The point is we have to check out financial condition before we decide to join into insurance; even it’s a good idea to protect our life or our property. Keep your finance on balance condition to make sure your life is always run smoothly.
In reviewing many retirement plans, I find that many times too little thought is given to life insurance as a retirement benefit. Too often, preretirees do not even engage in life insurance planning at all. Why bother? Life insur-ance is about dying and not about living, they think. On the other hand, most people want to take care of their spouse after they die, but without the proper insurance coverage the spouse could be left with far less avail-able income.
Many severance and early-out packages continue the insurance policy that the company carried while the worker was employed. The policy face amount is usually pegged at the employee’s salary times a multiple, which then is reduced at some future date. For example, two times a salary of $60,000 would give you $120,000 in life insurance coverage, but often-times this face amount is reduced by 10 percent per year for every year you pass age sixty-five. In this case, the retiree’s insurance will have disap-peared by seventy-five. But the need for coverage has not gone away. For some of us, the need for life insurance coverage is even greater as we age. Think of it. As we get older, more things can go wrong, forcing us to spend our savings. A catastrophic illness of one family member is one way we can wind up spending all of our retirement assets, and life insurance can replace those assets.
Trying to explain to retirees that they need to start thinking seriously about adding life insurance—and along with it, another fixed expense, the premium—is not easy. Although we think of our retirement income as being enough for the both of us, we can forget what happens if we die before our spouse. For example, suppose both spouses are receiving Social Secu-rity income. If one spouse never had “earned income,” would your com-bined Social Security income remain the same once the one spouse dies? No. For example, the Social Security benefit that you each may have qual-ified for when you reached sixty-two could be lessened upon death of the higher wage earner. My mother began receiving my dad’s Social Security check after he suffered a stroke, because she became his guardian. For the time being, she also continues to receive her own check. When he passes away, she will receive one check that will be less than the total of the two she now gets. Unhappily, his life insurance will not be enough to replace her lost income. That can happen to you, if you do not have a plan to replace income.
Another important factor for insurance planning is your risk of needing long-term care. Under the current government budget restraints, we now are required to pay for our care in nursing homes or for in-home care for as long as we are able to. In general, the government wants us to spend down our wealth to certain limits before Medicaid will pay for our care. There is nothing wrong with that, but if you want to be sure of leaving a substantial amount of assets to your spouse or children or a charity, then life insurance is one way of replacing lost money due to a catastrophic illness. That is, if you are forced to spend money for health care, a life insurance policy can replace some or all of the assets that may be spent before you die.
Clients Ralph (sixty-seven) and Eve (sixty) had enough 401(k) money to care for a major illness that could wind up landing him or her in a nursing home for a few years. However, they feared a prolonged illness could entirely deplete their principal and other assets. Rather than purchasing long-term care to cover the cost of a nursing home, Ralph bought a $150,000 life insurance policy in order to guarantee his children would have an inheritance. Since they each have children from prior marriages, Eve pur-chased $200,000 of protection. Listing their children as owners on the con-tracts made sure that upon their death the proceeds of each policy would go to the children free of income tax and without estate taxes. Smart planning techniques can create and transfer wealth from one generation to the next, saving taxes to boot.
Another way to protect your assets from the spend-down provision con-nected with Medicaid is to purchase long-term care insurance. Both life and long-term care insurance may cost less before you retire. It is even possible that you can get group rates on these policies, which may be less than individual rates. But it is wise to get quotes from companies besides your company group administrator. When I wanted to add life insurance protection at age fifty-one, I found an individual term insurance policy that cost me less than my corporate group policy. Was I surprised! I had been convinced that company-offered products were always less expensive. The fact that a group is a “captured” society affects group insurance rates, raising them or lowering them. By contrast, individual rates are set in a more competitive insurance environment with more people insured, possibly reducing premiums below what groups offer.
Some expenses may be cut after retirement. Disability insurance, for one, may no longer be needed, since it is intended to replace income lost from an injury related to work. When transitioning to retirement, you may save money by letting the coverage lapse, unless you feel you are going to work at another career; if so, then see whether the coverage can be moved from a group to an individual. Some can and some cannot. When you are no longer employed, Social Security tax will disappear and contributions to your 401(k) or TSA will disappear, too. The extra money saved from no longer buying lunch or paying to travel to and from work can be diverted toward extra insurance.
There are some easy calculations you can do to determine the face amount of the insurance you may need to buy. It is a good idea to do this calcula-tion before retirement for several reasons.
1.If you are working, you may be able to pay higher premiums whileyou have a paycheck and then scale down the premiums after youretire. There are insurance policies, such as universal life, that allowfor great flexibility in when and how much you pay in premiums.Paying more now hurts less than paying more later.
2.You may be able to buy insurance at a group rate and then convert it to an individual policy at the same rate once you leave your job. Or you may have an individual policy aside from work that can be used to develop future income. You may want to add more face amount of coverage without canceling the old policy.
3.Because you are younger than you will be tomorrow, you may not get a better rating if you wait several years to buy additional coverage.
With a little imagination and planning, you may significantly improve your financial outlook. For example, one can replace income lost due to early death using life insurance proceeds. Let’s suppose Barbara, Joe’s spouse, wants to buy an insurance policy on her husband’s life so that she could replace $656 in monthly income if he passes away at age sixty-four (or older). Without the extra Social Security check, Barbara would not feel secure. Suppose Joe does pass on soon after he reaches sixty-four, when Barbara is sixty-five. The $656 per month equals $7,872 per year that will be sorely missed. At today’s annuity rate, Barbara could get $656 per month for life by buying a $100,000 life insurance policy now and converting it to an annuity income at Joe’s death.
