Life Insurance Is An Important Factor For Families Across The World
Life Insurance
Budget Planning
Charitable Giving
A Sound Insurance Policy Can Protect You and Your Family.
As much as we try to prepare for them, tragic events like death, disability or critical illness sometimes strike.
Life Insurance & Budget Planning
Do you have a plan for your health care once you retire? A sound insurance policy may include personal, life, and liability insurance.
What Is Long Term Care?
Long Term Care includes assisted living, skilled nursing care, home care, and respite care.
Assisted living – A housing facility provided for those who can longer function by themselves. These facilities offer help with daily activities such as bathing, eating, and mobility.
Home Care – Includes assisted living, help with home cleaning, budgeting, and medication management. However, assistants are hired and come to the client’s home directly to provide the services aforementioned.
Respite Care – Provides patients to take breaks and visit their families.
How Much Does Long Term Care Cost?
According to the Genworth 2018 Cost of Care Survey:
The national average for assisted living (single occupancy) is $48,000 and to live in nursing homes (single occupancy) is $100,375.
Pricing for long-term care varies in the region. Areas such as New York and California are noted for having higher averages, whereas areas such as Utah or Missouri have lower averages.
Pros and Cons of Long Term Care
Pros: Maintain your standard of living and independence. You also have the leverage of protecting your retirement funds and tax benefits.
Cons: Many plans to choose from with a wide range of benefits and high premiums.
Retirement Planning | Investments & Financing
Qualified retirement plans require that you consider social security, personal savings and miscellaneous sources of income such as investments.
How Much Do I Need?
Most individuals must have replaceable income, emergency allowance, and upcoming expenses.
Replaceable Income: In the case of loss of investment or job loss, you should have enough income to replace any assets lost for 3 – 6 months. Siphon off parts of your income to achieve this.
Emergency Allowance: Money should be set aside for pandemics, illness, or an accident.
Upcoming Expenses: Normal expenses such as bills and abnormal expenses such as vacations and weddings will require that money be set aside for these occurrences.
How Should I Invest?
Although there are many strategies to properly investing, these are the five general rules of thumb to go by.
1. Don’t time the market
2. Investment Selection
3. Asset Location
4. Dollar Cost Averaging
5. Re-balance your portfolio
What Are These Investment Concepts?
Not timing the market – Trying to time the market can cause your portfolio’s return to reduce. This happens by missing just a few of the market best performing days.
Investment Selection – There is a wide variation of investment options that can fit your needs properly. Selecting the appropriate investments can have positive effects on your portfolio.
Asset Location – This is a process to help manage investment risk by organizing your investment into different asset classes.
Dollar-Cost Averaging – This is the process of purchasing a set amount of an investment at a fixed period.
Re-balancing Your Portfolio – Having the ability to put money into your portfolio in case of financial loss.
Asset Allocation & Charitable Giving
Asset allocation is assessing the assets in a financial profile to determine loss.
Maslow's Hierarchy of Needs
In 1943, Maslow held a study that determined the importance of lifestyle choices in ascending order.
Maslow argued based on his findings that the needs of people can be organized into basic needs, safety needs, psychological needs, self-actualization, and peak experiences. By adhering to this hierarchy of needs, it can help separate our needs from our wants.
Are Their Benefits of Donating To a Charity?
Every individual has their own reason for donating to a charity. And according to the IRS there can be tax benefits from charity donations.
Additional Resources
Term life Insurance
Term life insurance provides coverage for a certain period of time which your premiums remain the same.
When the policy expires, and that is the end of your coverage. You have paid for the coverage for the length of time specified in the policy, and that is all you will receive.
Pros: It’s often the cheapest life insurance, and it’s sufficient for most people.
Cons: If you outlive your policy, your beneficiaries won’t receive a payout. No, you do not get your money back at the end of a term life insurance policy.
The insured will need to renew the police with a higher premium rate based on age.
Indexed Universal Life Insurance
Indexed Universal Life Insurance usualy links the policy’s cash value component to a stock market index like the S&P 500. Your gains are determined by a formula, which is outlined in the policy.
Pros: You can access cash value, which grows over time. And you may see considerable gains if the stock market performs well. Within limits, your payments and death benefit amount are flexible.
Cons: Due to investment caps, the cash value doesn’t take full advantage of stock market gains. Plus, these policies are often more work than a term or whole life product, as the investments require monitoring.
Whole Life Insurance
Whole Life Insurance lasts until your death, as long as you pay the premiums. It’s the closest thing to “set it and forget it” life insurance. In general, your premiums stay the same, you get a guaranteed rate of return on the policy’s cash value, and the death benefit amount doesn’t change.
Pros: It covers you for your entire life and builds cash value.
Cons: It’s typically more expensive than term life, so if you’re looking for a more budget friendly life insurtance you might want to explore other options.
Final Expense Insurance
Variable Life Insurance
The cash value in Variable Life Insurance is tied to investment accounts, such as bonds and mutual funds. Variable life insurance premiums are typically fixed and the death benefit is guaranteed, regardless of how the market fares. If you’re considering a policy like this, find a planner who doesn’t earn commissions based on product sales to can help you select the best one.
Pros: There is potential for considerable gains if your investment choices do well. You can take partial withdrawals from the cash value or borrow against it.
Cons: It requires you to be hands-on in managing your policy as the cash value can change daily based on the market. Fees and administrative charges are deducted from your payment before going toward the cash value.
Group life insurance
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