Real Talk! It’s expensive as hell to die 🤷🏽♀️. But is Life Insurance is a scam or nah. Courtney Richardson @theivyinvestor & me @msmadammoney are sharing the truth, killing the…
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Sharing financial tips on how to save and spend money the right way is my passion. With the Covid19 Pandemic, we should also address how to protect our financial legacy through life insurance. Most people don’t like talking about this topic, but we’re grown! So, let’s talk about it.
Here are seven concerns most people have about life insurance.
Concern #1: It’s Too Expensive.
Many people are dealing with limited funds, and there are so many different types of coverages. However, a budget-friendly option for coverage is term life insurance. You can get a significant amount of coverage for a specific timeframe, like 10, 20, or 30 years. Monthly premiums for term life insurance can be less than the average consumer’s monthly dining out check or bar tab. Don’t judge.
Concern #2: I Have a Pre-Existing Condition. I’m not going to qualify.
Facts: You don’t just buy life insurance; you must qualify for life insurance.
Many life insurance agencies may disqualify due to pre-existing conditions, but that should not stop you from applying for coverage.
Confession: I have Type 2 Diabetes and Hypertension. One of my concerns was being able to find additional coverage because of these health issues. I found a life insurance option that considers those with health concerns.
Concern #3: I have that coverage at work.
The Covid19 Pandemic has shown that if we solely rely on life insurance at work, we can lose it because of business closure or employee benefits reduction. Instead of allowing your employer to control whether or not you have coverage, having life insurance outside of your employer means you control your coverage.
Having coverage at work should be a complemental coverage to what you already have in place.
Concern #4: I Don’t Know Enough to Make a Decision.
Most consumers don’t know the ins and outs of life insurance. As a former Licensed Life Insurance Agent, I am always looking for resources and options to educate people about personal finance, legacy protection, and wealth building. One of those resources is an organization “backed by leading investors, including investment funds of Jay-Z, Will Smith, Kevin Durant, Robert Downey, Jr., and others,” called ETHOS.
Ethos makes life insurance more accessible and affordable for the average consumer. Their website also provides a significant amount of information to help consumers make the right financial decision for them and their families.
Concern #5: I Don’t Want to Deal with a Salesperson.
Some consumers want to get coverage but don’t know an agent that they trust. Ethos is “designed so that you can apply for life insurance the way you want.” Their online application makes it easy to apply. Speaking with a licensed representative is also available by phone or chat. Ethos also has a premium estimate tool so you can see how much the premiums may cost and how it can fit in your budget or spending plan.
Concern #6: It’s Only a Death Benefit. How Will I Benefit from That?
Sometimes, we get so caught up in talking about the death benefit for the beneficiaries that we forget to address the Life Benefit of Life Insurance. An Accelerated Death Benefit Rider (additional benefit added to policy) “provides the insured with the ability to access a portion of the policy proceeds while still living in the event the insured has been diagnosed with a terminal illness.”
Concern #7: I’m Too Young or Too Old to Get Life Insurance.
The reality is, “Everyone dies, and dying is NOT free!” – Courtney Richardson.
Whether a healthy 20-year-old or up to a 65-year-old with health concerns, it is crucial to have life insurance to pay for final expenses and to protect the family’s financial stability.
Regardless of the concerns, getting coverage will help to ensure death’s financial burden does not impact your family. So, let’s get covered so we can focus on living a happy life.
To learn more about Term Life Insurance, visit ethoslife.com.
Talking about some money matters can be very scary. It’s even more frightening when those money matters are filled with myths. Don’t let these scary money myths keep you from discussing, addressing and improving your financial situation.
MYTH #1: I HAVE TIME TO PLAN MY FINANCIAL FUTURE!
Time flies, not only when you’re having fun, but in general too and cannot be replaced, replenished or restored. Most people, especially when they are younger, believe that they have enough time and can wait on planning for retirement. Unfortunately, the importance of future financial planning (retirement planning) is sometimes realized after several precious years of savings and earning compound interest have been lost. The scariest part about late retirement planning is that there may not be time or disposable income to save up enough money at the desired retirement age, which means working longer. Instead of retiring at age 62, you may have to entertain working until age 70 or older. SCARY!
To ensure that Time is on your side, be sure to Save Something Sooner and maximize the time you have.
MYTH #2: I’M TOO OLD TO GET STARTED
It gets easier to fall for the fear factor of “getting started” when get more mature in age. Whether it is starting a business, creating a spending plan, or going back to school to get your degree; it’s never too late to start. Yes, it is scary and may be completely out of your comfort zone, but it will be totally worth it.
So, “Do It Scared!!!” – Tarra Jackson
Just remember that doing it scared doesn’t mean you have to do it alone. Connect with entrepreneurs, mentors, or professionals to help you through the process. Just get started.
MYTH #3: MORE MONEY LESS PROBLEMS
It is easy to believe that more money will solve money problems. However, the rapper Biggie Smalls said it best, Sometimes …
“More Money More Problems.”
Adding more money to a financial fiasco may just magnify the money massacre. Often it is not about how much we make; rather it is about how much we spend.
So, before wishing upon a star for more money, make sure you monitor your spending behaviors and create or modify your budget to avoid creepy cash flow issues.
MYTH #4: I CAN’T AFFORD LIFE INSURANCE
One of the scariest myths is that life insurance is too expensive. In most cases, this scary story is a fallacy that keeps people from protecting their family from financial fright during the most difficult time of their life.
“According to a Life Happens and LIMRA study from this year, 65% of households have not purchased life insurance because they think it’s too costly.” – LifeHappens.org
For example, a $250,000 10 year term life insurance policy for a healthy 30-year-old male could cost about $160 a year or about $13 a month. But, one in four people polled in that study thought it would cost more than $1,000 a year. The cost of life insurance is mainly based on a person’s age, gender, health and possibly other factors like driving record. The younger and healthier the person is, the cheaper the cost of life insurance.
Even though one size does not fit all when it comes to the cost of life insurance, connect with a licensed life insurance agent to learn how affordable it is for you or your loved ones.
MYTH #5: BUYING NEW IS BETTER
Of course the Bling of buying New is Beautiful, but it doesn’t always mean it is Better. Especially when it relates to purchasing a car.
“On average, a new car will lose as much as 19 percent of its value in its first year of ownership. That means that your $20,000 new car will be worth about $16,200 after just one year,” reports Trustedchoice.com.
The rate of depreciation, however, does not continue at this rate after year one; it actually slows down. Therefore, a used car value may be more or at least closer to it’s cost.
Instead of buying new when car shopping, consider buying pre-owned (used) with a warranty and low mileage to avoid the possible doomed depreciation of buying new.
I recently did a radio interview where I was asked to give a young man who is a recent widow money tips. He is now a single father to three young boys and had concerns about how to deal with his new financial situation. Here is what I shared with him and the radio listeners.
Losing a loved one like a spouse, that is so significant to the family, is devastating. Adding to the responsibilities of the spouse that has past can add to the stress and fear of the new young widow. While there is so much that needs to be done to keep the family structure in place, here are 3 things to do for the household finances.
#1. Create a New Household Budget
There is either a decrease in the household income, an increase in household expenses or both. Most of the time the surviving spouse not only lose their loving partner, they may also lose the associated income that contributed to the household’s financial stability. If the late spouse was a stay at home mom or dad, new expenses like daycare or after-school care may be added to the household expenses. If this is the case, a new household budget is necessary.
Writing out all of the existing and new household expenses will help the surviving spouse make important financial decisions, like whether to downsize living expenses, cut out or reduce certain activities, or necessity of adding to their income stream.
Knowing the financial position of the family is just as important as creating and working towards financial goals.
#2. List and Prioritize New Financial Goals
The devastation of losing a spouse may pause or change your financial goals.
Once your new household budget is established and stabilized, new or modified financial goals must be executed. Financial goals, like paying off debt, saving for retirement, saving for children’s education, or that family vacation, can still happen. However, with potentially limited or reduced income, they may need to be prioritized. It’s harder to catch multiple balls thrown in the air for one person, so focus on which financial balls to catch (financial goals to work) on first, second, third, etc.
Just never stop working towards accomplishing those financial goals.
#3. Update Beneficiaries, Wills and Life Insurance
Update Beneficiaries
This is a tough one to do, especially if the loss of a spouse is recent. However, it is the best time to get it done so it won’t have to be dealt with it later or forgotten about.
Update beneficiary information on all financial, medical and employment documents. If the child(ren) are under the age of eighteen, designate a trusted family member or friend that will carry out the wishes to financially take care of them. Or, establish a Trust and make the Trust the beneficiary. With a Trust, the Executor will legally carry out the disbursement wishes for each of the beneficiaries.
Update or Create a Will
Update the Will, as necessary, and designate a family member or friend to be the estate executor. If a will is not in place and an estate executor is not designated, it is called dying “intestate.” Which means …
Having a Will is especially important to have if there are children so that a trusted guardian is designated to take care of them.
Click here to read “10 Easy Steps to Writing a Will.”
Update or Get Life Insurance
Life insurance can be a financial blessing by covering final expenses, paying off debt, replacing the late spouse’s income, establishing or adding to an emergency fund, retirement account or educational fund for the child(ren). However, not having life insurance can cause major financial chaos to the surviving family.
This is the time to re-evaluate existing policy(ies) to make sure it is enough for the family or to obtain life insurance to protect the family from financial hardship.
If the late spouse had life insurance, after the final expenses are handled, consider using it to fund one or a few financial goals, like debt elimination, retirement savings or children’s college fund. Avoid spending it on lots of nice things or places that will not be beneficial to the family’s financial future.
If the late spouse did not have life insurance, follow steps one and two, then speak with a Licensed Life Insurance Agent to discuss options. Just remember that one size does not fit all when it comes to Life Insurance and the most important question that needs to be asked before shopping for life insurance is:
“What do I want the Life Insurance to do for my family and while I’m alive.”
Keep in mind that Life Insurance does not have to be death insurance. Life insurance can be a financial tool and investment to assist in reaching financial goals as well as take care of your family when you pass.
The new normal of living without the spouse is emotionally, physically, spiritually and financially draining and overwhelming. Just remember to take it one at a time and ASK FOR HELP! Your family loves and needs YOU!
When Apple co-founder Steve Jobs passed away, he left behind a huge legacy – and a huge financial fortune too. Since Jobs was one of the richest men in America, his family undoubtedly had no problem paying for his funeral and putting Jobs to rest.
Unfortunately, that’s not the case with many other Americans. It’s a sad reality that many families and individuals have to deal with, but the truth is that when many people pass away, their family members or close friends struggle to afford the funeral.
Knowing what to do when you can’t afford to bury a relative can help to relieve some of the stress and heartache of this difficult time.
According to the National Funeral Directors Association, the national average cost of a funeral with a vault was $7,775 in 2010. The cost of a burial without the casket was about $4,265 that same year. For many grieving families, paying thousands of dollars to bury a relative just isn’t economically feasible.
If a loved one passes away and the burial and funeral costs are out of your budget, here’s what you need to do:
Analyze the individual’s life insurance policy
Determine whether some or all of the burial and funeral costs are covered under the deceased’s life insurance policy. Talk to an agent in person or over the phone to go over all of the details, limitations and stipulations associated with the policy so that you understand what is and isn’t covered. You may find that a good percentage of the funeral costs are already covered based on life insurance the individual had on the job or a life insurance policy they bought on their own.
Review low-cost burial options
Cremating someone is usually less expensive than burying the individual in a casket or vault. If your state doesn’t require embalming the body, consider a “green burial” where you don’t have to pay for a vault, headstone or expensive caskets. You can also shop around to find an affordable casket online.
Consider getting a loan
If you have good credit and are comfortable with taking on a personal loan, consider applying for financing from a local bank or credit union in order to pay for the burial. Avoid taking out a cash advance on a credit card because you’ll be responsible for paying very high interest charges and could end up carrying that debt for several months, even years.
Ask other family members to chip in
You may not have to shoulder the responsibility of paying for the burial all by yourself. Consider asking family members to pitch in and help with the costs. Be specific and candid with relatives about how much the funeral costs; ask everyone involved how much they can reasonably contribute; and put together a cost sheet or budget to help you keep track of all of expenses.
Talk to your county coroner’s office
If you simply can’t come up with the money to pay for cremation or burial costs, you can sign a release form with your county coroner’s office that says you can’t afford to bury the family member. If you sign the release, the county and state will pitch in to either bury or cremate the body. The county may also offer you the option to claim the ashes for a fee. But if these also go unclaimed, they will bury the ashes in a common grave alongside other unclaimed ashes.
Obviously, when a person dies it’s a terribly emotional time for that individual’s family members and friends. But it needn’t cause financial turmoil too.
You can do yourself and those you care about a favor by planning ahead and making sure you at least set aside money or have enough life insurance to cover your own burial costs in the event of your unexpected death.
Originally appeared on BlackEnterprise.com by Lynette Khalfani-Cox, The Money Coach.
In recognition of Life Insurance Awareness Month, Tonya Rapley of MyFabFinance.com shares her story and 3 Reasons Why You Should Consider Getting Life Insurance.
I was raised in military household, which meant living with the imminent possibility of a parent being sent on an assignment and not returning home. For that reason, my parents were always insured. When I reached the age limit on my parent’s policy, my mother took out a small policy on me. As I began my first job, one of the only demands my mother requested of me was to purchase a life insurance policy. We all have our different reasons for insuring the ones we love, her reason was and still is reasonable to me…She didn’t want to have to beg for money to give me a proper burial.
I have seen numerous crowdfunding campaigns of parents requesting financial assistance to cover burial fees and other costs. Every time I hear this request I am reminded of my mother’s words.
As a sentient being, I understand the emotional justification for having life insurance. As a financial educator I understand the financial significance of having adequate life insurance. Here are three reasons I encourage you to consider getting life insurance.
- It helps provide a secure future
Life insurance becomes even more important if your loved ones depend on you for financial support. This is especially true if you are a single mother, the primary breadwinner, or contribute significantly to your family dynamic (such as stay at home parents since your presence in the home relieves the family of child care costs). The death benefit that accompanies life insurance policies can replace your income and provide the financial support your family will need in your absence.
- It allows you to create a legacy
Regardless of your socio-economic status, you can leave an inheritance by naming your dependents as the beneficiaries of the life insurance policy. When used properly, life insurance policies can be an intergenerational wealth building tool. The dependant(s) could use the money to pay for their education, start a business, or invest in … (continue reading 3 Reasons Why You Should Consider Life Insurance via MyFabFinance.com)
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