A financial advisor or life insurance broker, especially a good one can make a lot of difference it is really hard to find one though especially if you go to the Yellow Pages or make a search on the Internet there are faces and names that may look good and sound good but still are not sure about them. A life insurance agent or financial advisor should help you plan for the future should get to know you a little bit before he rattles off the face amount more figures that you should be concerned with when purchasing a life insurance policy.
My name is Mitch Winstead from Allstar senior benefits. Please ask our experts if you have any questions. If you would like a quote with no obligation, our toll-free number is 1-866-598-8170 or 910-538-4547. All of our policies are state regulated and approved by the Insurance Commissioner. Our email address is firstname.lastname@example.org. Call us today!
I have spoken about this and some of my other blogs and this question or comment goes along the same lines as what is and needs analysis and needs analysis addresses things like bills actual debts your income some insurance professionals say that replacing an income from the breadwinner over several years is the most important thing to look at when you are purchasing a life insurance policy for your family. There are several other things that I will address in the body of this blog. The first thing to start off with is something not that is a figure or a bill or debt but asking the person what is of value to you what you value or what are your values some people say or what is most important to you? Some people may answer that question differently because people do have different values. Some may say well the security or financial security of my family that is most important. Some people may say well it is the safety of my family. On the other hand, some people may say well it could be the safety and security of my family. Another may be an obvious question but not so obvious is would you like to make sure your family is taking care of when you die?
The obvious answer again maybe not so obvious would be to some people to say yes, absolutely yes then again, there are some people that are heads of the family and do not have life insurance. I will not go on a rant today to say that you need life insurance. I will save that for another blog. Most of us do know how important life insurance is to our family. This goes along the same lines as if to say do you want your family to be in the same condition or living condition that they have now? Or would you like to put them in a better place? The answer to these questions could mean a lot of things. It could mean that you want to have extra money when you pass away so they can not have the financial burdens of paying off a mortgage or credit card debts or car payments etc. The main thing you don’t want to do is put them in a worse situation I have heard some struggles before that families did not have enough life insurance to help them when they needed it the most.
My mother just passed away recently along with my best friend and my beloved dog they all passed away within a month and a half of each other starting on January 24, 2019. My best friend passed away on February 13, 2019. My mother passed away on Valentine’s Day 2019. She was the one that brought me into the insurance business her name is Kathleen Mullins. She was an agent since the 1980s. She had worked for several companies whether it was a captive insurance agency or an independent insurance agency. My definition of capital means that you only get to sell for one company. The reason I said all that is to say this, we are in the process of settling her estate. And the question may come up who should get a bigger inheritance should all your children receive equal shares or should one child get more than the other. I can tell you are ready where you might be thinking this is leading because if one child or someone else gets more than the other, it does start problems. Also if you die before your kids turned 18 you really should have an estate planner.
Even getting our attorney to call us back has proven difficult. It is recommended absolutely that you do get an estate planner or have an estate trust already in place and have had a family discussion about your estate and the trust. I know in North Carolina an attorney is supposed to call you back within 48 hours. If he or she does not they can actually be reported to the Bar Association. We were told that sometimes it may be a good idea to try to email and give the attorney a specific amount of time but don’t sound threatening if he or she does not return your emails.
Your income is one of the most important things that should be asked by your insurance professional in the event that you passed away. So for example, your if you were making $50,000 per year, your income replacement over 20 years would be $1 million. If it would be over 30 years, your income to replace upon your death might look like 1.5 to 3 million dollars. That’s just talking about your income alone to replace it. It doesn’t factor in any debts any mortgages if you want your kids to go to college and give them a specified amount. Some insurance agents call this the 4% rule with this example- If you have 1,000,000 the 4% rule would provide $40,000 income without spending down your principle and outliving your money. If your household income is $200,00 annually and your spouse makes $100,000 of that then you can find out how many million would be needed for life insurance to replace the income. $100,00/40,000 = $2.5 x $1,000,000 = 2,500,000. To replace that income everyone would need to purchase $2,500,000 on each of us.
If life insurance was not available. What would you do? Would you leave them with real estate? Would you leave them what’s in your bank account? Would you leave them what’s in an annuity? Would you need to take donations? The way I see it no matter what it’s just cheaper to own life insurance. Some agents will explain it like this. It’s “pennies on the dollar”. This means that for only pennies a day you can have a pretty good life insurance policy. Now if you have $1 billion in the bank you may not have to worry about life insurance.
Most of us don’t have that type of money. So let’s look at a breakdown if you are in your 20s or 30s. For about $30-$50 a month or cheaper you can get a hundred thousand dollars of term life insurance. If your term life insurance runs out when you’re older, it’s still cost-effective for you to get a simple burial insurance policy. You can still get that for around $30- $60 monthly. If you want to leave an annuity to somebody that is a pretty good thing, but just remember most of the time if it is an inherited annuity, that person cannot liquidate that money without losing a boatload to taxes. If it is a spousal annuity, then that would work out better. By the way, many banks in America will not take time and explain all the concerns to you. It is better to hire an insurance professional. of these So kind of the bottom line to all this is, what is your plan?
Now let’s talk about retirement. I had a vision of retiring whenever I was in my late 50s. If I could retire sooner I might do that. However, my vision didn’t turn out to be the way I wanted it. You could say well life happened. I think that is the way it is for a lot of people. Now I’m not sure if I’m going to be able to retire at the age of 65. I still have 12 years left. I think as much as I like the insurance profession I’m in, I will still stay involved a little bit for the rest of my life. I thought at one time I had my life all figured out at the age of 30. I had a great job and a pretty good retirement plan until the company I worked for went bankrupt. What is your retirement plan?
How much money do you want to have when you retire? Do you want to have $100,000, $300,000, or $1 million. As all of us would want we would want to have $1 million in retirement. I remember a while ago in the late 1980s someone close to me retirement $300,000 in their bank account. However, that was not enough. If you are making $40,000 a year and have $300,000 you can do the math, you’ll probably have about seven years to retire. That is if you’re comfortable making $40,000 a year.
A few more things to cover, what do you think taxes are going to be like whenever you decide to retire? Of course, we would all like them to decrease. I don’t know that will ever happen but it would be nice if it did I considering the countries in the world economic conditions. However, you have to think that it’s going to affect your retirement plan regardless.
Do you have any debts? It would be nice if we did not have any debts. Could you imagine no mortgage, no car payment and especially no credit card debt? If he did have a mortgage, then hopefully most of the mortgage would be paid off and you can start seeing some of a windfall in your bank account. I read in a financial magazine that most people in the middle class make a big mistake when they trade for another car or a new car when they don’t really need it.
How much money per month would you like to be saving? If you are able to eliminate some of your debt or preferably all of it you could be putting savings away for a rainy day and trust me there is going to be rainy days. Some people have said it’s not how much you make as a salary but it’s how much you spend. It is better if you put away a little bit of money each month rather than trying to score a touchdown each time. Sometimes you a meaningful amount away like $500 each month but you have to know that it’s going to be doable in your particular situation.
Do you have life insurance and what do you intend your life insurance to do? Do you currently have a policy that is in force? Or do your parents have a life insurance policy that they took it out on you several years ago? Do you have a policy that your employer has on you? More than likely it is a life insurance term or Term life insurance. There are many life insurance types. It is important about every year to discuss what kind of coverage you have and to discuss who your beneficiaries are. This may sound like nonsense but I assure you it is not. When a family member passed away in 2019, there was a lot of turmoil around her death. It’s not as easy as just saying let’s create a will let’s get life insurance and less just be done with it and not review it after the fact.
Another term for life insurance could be called mortgage protection insurance. Early on in my insurance career, I learned about mortgage protection insurance. So for example, if you had a mortgage of 250,000 for 15 or 20 years, you could buy a decreasing term mortgage protection insurance policy. The way this works is the benefits decrease as your mortgage decreases. It usually is a good idea to have your own mortgage protection insurance or life insurance separate from your employer. Especially in this day and age where companies are being bought out and people have to relocate jobs every for five years.
This next question goes like this, are you prepared financially to die? This is a very tough question, to say the least, and also the answer is a very tough answer. No one really wants to talk about death but I heard it is actually emotionally better for you if you do. Believe me, I am no psychologist or psychiatrist. I wouldn’t want to have you take this question in a negative manner. But again it is a reality it’s something we all do eventually. So it’s better to be rather than to because off guard especially if you are the head household in your family or the matriarch were patriarch for your family.
In conclusion, I would encourage you to have a conversation with your life insurance agent about your policy. It’s better late than never and I hope some of these tips were questions can help you and your insurance advisor to come up with a great solution for your family’s needs.
This is Mitch Winstead from Allstar Senior Benefits. if you have any questions about this blog or any other life or health questions, please let us know. All of our life insurance companies we carry are state regulated and are approved by the insurance commissioner. If you would like help with life insurance quotes with no obligations, please also let us know by calling our toll-free number at 866-598-8170 or 910-538-4547. If you prefer email, our email address is email@example.com firstname.lastname@example.org. Our website is http://www.allstarseniorbenefits.com
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Thanks for reading!