Posts Tagged ‘life insurance’

There’s An App For That: Low-Cost Life Insurance

January 25th, 2010

Many people dismiss life insurance because they think it’s too expensive, or already have a policy and feel stuck paying an exorbitant premium. But life insurance can be had for a modest price, and provide security for your loved ones if the unthinkable happened.

Who Should Get Life Insurance?

Single, Ready to Mingle
If you’re young & single without many financial responsibilities, odds are you need little or no life insurance at all. If you had student loans, car notes, or any other debts where a co-borrower is involved, they would be on the hook for your debts. When you’re young, that co-borrower is usually a parent; so be nice to your parents and take out a policy that will cover your debt expense, and list your parents as a beneficiary. And if you want to sail right through purgatory on your way to sainthood, take out a bit more to cover funeral and burial costs.

Married… With Children
If you’re married, and/or have children, take out a policy roughly 10-12 times your salary. That way the beneficiary (your spouse and kids) can live on the income generated from investing the policy pay-out.

Easy example: if you make $50,000/year, you’d want roughly a $500,000 premium, when invested, would provide about $50,000/year to replace the lost income.

Real-World Application: Term Life Insurance

There are plenty of debates between buying whole life or term life insurance, and that’s a topic for another day. What you should know now, is term insurance can be bought for 5-10% the cost of whole life. And in this series, we’re all about saving money in your budget. It is not an investment vehicle, it is an actual insurance against your death for a fixed amount of time.

Term Insurance
The theory behind term is that you buy a policy for a 20-30 year period. If you outlive that timeframe, your kids will be out of the house and your family finances will be under control; therefore you have no further need for life insurance.

Where To Get Term Insurance

I bought mine through Zander Insurance, an independent agency that can price shop for the best rates. For $75/month, both me AND my wife have 20-year policies that pay out $1,000,000 upon death. We’d better sleep with one eye open!

Does anyone have term, or other life insurance products? Are you satisfied cost-wise?

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#031 — Identify Your Underwater Financial Volcanoes

March 23rd, 2009

7.9 Earthquake Near Tonga Sparks Eruption

Last week, a volcanic eruption close to the South Pacific nation of Tonga has destroyed rich birdlife and vegetation, leaving a wasteland of black ash and tree stumps, witnesses said Friday.  The volcano, on the small, uninhabited islet of Hunga Ha’apai 63 kilometres (39 miles) northwest of the Tongan capital Nuku’alofa, began erupting Monday.  It continued to spew Friday even as a major earthquake with a magnitude of 7.9 rocked Tonga’s main island of Tongatapu.

Tonga’s chief geologist Kelepi Mafi, who inspected the area Thursday, said the volcano has two vents, one on Hunga Ha’apai and another around 100 metres offshore.

The volume of the rock and ash coming from the vents has completely filled the gap between the offshore vent and Hunga Ha’apai, increasing the island’s land mass by hundreds of square metres.

What Are Your Financial Underwater Volcanoes?

When life brings a little trembling, there are many financial issues that lie just beneath the surface that can erupt at a moment’s notice.  There is no doubt that life comes at us fast, and it seems as if we’re always playing catch-up in some regard.  If tragedy or just plain life happens unexpectedly, what areas of your financial life would you not be prepared?

Today I offer a pretty simple challenge.  Identify those Financial Underwater Volcanoes in your life today.

For me, I’d have to say first & foremost is estate planning (a will).  This seems to get pushed to the backburner — and I’m an attorney who can write up my own will for free!  Perhaps it is because I know I can write a decent will that I’m waiting for the time to construct a will that is taylor-made for my family.  When in reality, I should get a basic will in place and fine-tune the details later.

Another area of potential Underwater Financial Volcano eruption would be our emergency fund.  But we are working on this one — we just paid off our car and are now building up our baby emergency fund to at least 3 months’ expenses.

As you can see, I’m not perfect either.  But once we can identify these “hot-spots” (yes, pun intended), we can go about rectifying the situation.  I’d hate to see your island be destroyed when you could have minimized the damage.

What are YOUR Financial “Underwater Volcanoes”??


photo by The Sunday Times

MyMoneyMinute — Identify Your Financial Underwater Volcanoes

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#010 — What We Learn From Tragedy

February 7th, 2009

Happy 30th Birthday, David

My friend David would have turned 30 years old today.

On September 22, 2005, David was tragically killed in an automobile accident, leaving behind a wife and three young children.  The following, which I posted on his memorial site, is a glimpse of how David’s life has impacted mine:

David was my first friend ever. My memories of David seem too numerous to write down. They range from swimming at his aunt’s pool as little kids, spending the night what seemed like every weekend at his house when we were kids, watching his high school football games, and meeting up with him in between the times we were away at college.

David was passionate, and never did anything half-hearted. He worked harder than anyone I’ve ever seen – be it in school, on the job, or even in a hobby – he was always motivated and driven to accomplish more. He never was satisfied with sliding by on his natural talents. He also played harder than anyone else, always willing to live life to its extremes. He would light up and bring life to any room he entered. David also cared for and loved all those within his reach. His sphere of influence seemed to grow with each passing day. David was truly most happy when he was able to serve others.

For David, there was no middle ground. He simply did not live a lukewarm life. It brings me great fulfillment to know that he took the struggles life gave him, and channeled them for the glory of God. His life is a great testimony of what the Lord can do through you when you make the decision to surrender your life to Him.

I reflect back and feel lucky that God blessed me with David’s friendship for a season of our lives, and I feel most fortunate to see his story unfold from the beginning. He has had a profound effect on my life like few others have. I see bits and pieces of his character in myself and all around me nearly every single day. He simply made those around him better, and when around me, he made me a better person too. The only way to repay God for the wonderful memories is to pass along his love, passion, and drive to others. To do anything less would do David a disservice.

What I’ve Learned

There are many emotions that surround a tragic situation or unexpected loss of a loved one.  With time & perspective come an opportunity to learn from such an unfortunate event.  Here are a few things that come to mind given who David was and how his life was cut short:

1. Pursue your passion.

David was a passionate, all-or-nothing type of guy.  What do I take away from it?  Follow your passions and work hard to see them through.  To do less is a disservice to those that came before us, and those who didn’t have a chance to see their vision completed.

2. Fundamentals!

I enjoy — really enjoy — talking about all things money.  It is so intertwined into all we do and a representation of who we are and what values we possess.  I find it fascinating.  But money is only a medium, or a conduit, for goods & services.

It is important to take a step back from bailouts, financial struggles, and budgets, and remember the fundamentals of life do not involve greenbacks or stuff you bought with that money.  Rather, what’s fundamental to life are those relationships we have and seek with others. Relationships — with God, family, and friends — are what make up who we are and what values we possess.  Money is a mere reflection of your values, but it is not a fundamental value of life.

3. Practical Applications:  Be Prepared for Tragedy

Life Insurance

By virtue of happenstance more than methodical planning, David’s company – a local bank – had a life insurance policy on him.  It wasn’t millions of dollars, but it was enough to cover the costs on the home David’s family had just built.  With young kids to take care of, David’s wife is in a position financially where she was not reliant upon an immediate income, but could stay home and care for her children.  If you are married, have substantial debts or assets, or have children — you need a responsible amount of term life insurance.  Do not wait until it is too late.

Estate Planning

I do not know if David had a will, or who was responsible for the household finances in his relationship.  What I do know, is that you need to be prepared.  Some basic things:

  • Get a Will — whether you seek out an attorney or buy a cheap-o online template, get a will.  It makes the financial transition smoother on those that survive you.
  • Prepare a simplified household budget, list of accounts, and usernames & passwords for all relevant accounts — banking, credit cards, retirement, e-mail addresses, online charitable giving accounts, etc.

How About You?

What are your thoughts?  Has a personal tragedy affected your perspective, financially or life in general??

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