In the last 100 years life expectancy has more than doubled, giving us more time to enjoy life’s pleasures. The medical advancements in health care are even more innovative now with the help of new technologies. And while increased longevity is a blessing, it also means more of us are at risk for developing a long-lasting illness, or disability, that will require additional financial support than we may have planned for previously.
An insurance policy that protects your quality of life in the event of unexpected health issues is Income Protection, also know as an Individual Disability policy. This coverage can assist you in paying bills while you are unable to work due to disability, or if you become unemployed due to your illness. You may think that is what Worker’s Compensation is for, but 95% of disabling accidents/illnesses are not work related, which means Work Comp wouldn’t cover you. Personal savings may not be able to sustain your needs for a prolonged period of time either, especially since a recent Federal Reserve study found that 47% of Americans wouldn’t be able to handle an unexpected emergency costing $400. Insurance is a safety net to use in case of emergencies, and protecting your paycheck is no different. Plan ahead for the what-ifs in life, so you can focus on recovering and get back on your feet sooner.
Life Insurance policies can also include supplementary financial benefits. This is accomplished by adding “riders” to your policy. The Care4Life Acceleration Rider is a popular addition, as it allows you to receive an advance on a portion of the total death benefit. This can be used to cover medical expenses, make modifications to your home, provide for help around the house, or even fund a trip with your loved ones. You can use the advance on the policy to fund your end of life needs, while still maintaining a death benefit for your beneficiaries to use towards your final expenses, as well as providing them financial stability and ease of mind after you’re gone.
Providing care for yourself or a loved one with a chronic, critical or terminal illness can be financially burdensome. Use these products to prepare and protect yourself, and them, from that possibility.
Understanding the difference between your options is the first step in finding the right life insurance solution. We want to make the process simpler, so we have outlined some of the basic differences between the 2 main Life Insurance policy types – Term and Whole. Of course, there are a lot more variables and options to consider, so it is best to speak with a professional, but this explanation will build a solid foundation for your discussion.
Death Benefit Only
Term Life Insurance has the benefit of being more affordable, which is a budget-friendly way to get started with coverage. It allows you to afford a policy earlier in life and puts coverage in place for the time frame, or “term,” you choose (up to 30 years). Of course, there is a reason why it is more affordable - it is more basic and has an expiration date, so it only covers you for the life of the policy. In other words, if you wish to continue to have life insurance coverage after your Term policy expires, you may need to re-qualify, which would entail underwriting taking place when you are older, and potentially less healthy. Think of Term Life Insurance as having a “Death Benefit Only,” meaning it will pay out the “benefit” to your surviving relatives if you have a policy in place at the time of your death.
Living & Death Benefit
Certain types of life insurance also have a cash accumulation feature. This is one of the biggest benefits of Whole Life Insurance, as it can be used to help increase your quality of life while you are still living. It can help you reach savings goals and allow you to use those savings towards a new business, retirement income, and/or providing long term care. As we explained, this is a more expensive option, but it provides you with more coverage options. You can think of Whole Life Insurance as providing you with a “Living & Death Benefit,” allowing you to be better prepared for your future. The underwriting process may be more thorough as the company is considering all of the potential risk your future may hold (not for just a specific time frame), but it takes away the worry of having to re-qualify for life insurance if a health condition unexpectedly occurred.
Renting Vs. Owning
Another way to understand the difference between the two types of policies can be explained by using the comparison of renting vs. home ownership. Term Life Insurance is like renting, where it can be more affordable and allows you to prepare for other options. You have a wonderful place to live for the term of your lease, but you don’t have any guarantees for a renewal after it has expired. Whole Life Insurance is like home ownership, it can be more expensive, but you are able to build equity with your payments (cash value) and there isn’t an expiration date, so the policy covers you for the rest of your life.
Click here to learn more about how Whole Life Insurance works:
No one likes to think of a future they aren’t in, but as the saying goes, there are only 2 things for certain in life – death and taxes. Unfortunately, just like you plan for taxes, you need to plan for death. After all, “Time waits for no man.”
There are lots of ways exciting milestones in our life are reminders we need life insurance coverage. For instance, you may be single and don’t think you need life insurance, because you have few responsibilities and are enjoying all that life has to offer. But if something were to happen to you, who would have the unexpected financial burden added to the heartache of losing you?
Getting married is an exciting celebration of love and life. Thinking about if something tragically unexpected were to happen, when you are just starting your lives together, is understandably not what anyone wants to do. But unfortunately, we don’t know what our futures hold. Wouldn’t you want to be there for each other, to take away the stress of paying the bills when your spouse is grieving? Take time now to put a plan in place, so you can relax and just focus on building a life and growing old together.
Having a child, whether you are a couple or a single parent, means preparing for your child’s needs and making sure they are protected. Nothing can replace a parent, but life insurance can provide savings for their education, and can allow you to provide for them in your absence, as you always planned to in their future. Whether it’s contributing to a car purchase, helping with their wedding, or a down payment on a home, you can give them the gift of security and still be a part of their special moments.
What about an older family member that depends on you now or will in the future? Plan ahead with a Long Term Care policy so their golden years can be spent enjoying each other’s company, instead of worrying about being able to provide expensive care for them.
Did you know you can also use Life Insurance to set a foundation for your retirement? Take care of yourself down the road, your older self will thank you! By planning now, you can set goals and easily meet them. A roadmap of what you want your future to look like is much easier to plan for than driving by the seat of your pants - when what could have been an enjoyable trip is turned into a stressful one.
Give us a call today so we can assist you in making an educated decision on how to best protect your family. Don’t let their heartache be a headache.
Stages of Life
The reason why we have insurance policies in place is for when something unexpected happens, and we need a safety net. No one wants to experience a claim, if for no other reason than to avoid the interruption of our normal routine. Needing to report an insurance claim already means we are in the midst of a stressful situation. The unexpected, and often times major, incident that occurred not only damaged our property, but will take time to repair, further disrupting our lives.
A way to mitigate some stress is to prepare for the worst-case scenario of a “total loss” – like the old adage says, “Prepare for the worst but hope for the best.” An easy way homeowners and businessowners alike can do this is by taking inventory of their possessions, fixtures, and property modifications. Recovering after any claim situation that results in property damage (flood, fire, theft, weather, etc.) will be simplified if you have this completed. By documenting information about your equipment or household items, your insurance adjuster will be better able to assess the full extent of your damages and replace your property as fast as possible.
Here are some recommendations on how to tackle this project:
While it may take some time to document everything at first, it will save you comparable time and headache if you ever have to dispute costs with your adjuster in the event of a claim. Not to mention having everything together and in an electronic format will make it simple to retrieve and share. Can you imagine having to create this from scratch and recall every possession you own when you have so many other things on your mind?
- Make a list of everything in your home - room by room. Be sure to include commonly overlooked items like window treatments, holiday decorations, clothing, outdoor décor & landscaping, etc.
- Take pictures of your “big ticket items” including their serial numbers. These could include electronics, jewelry, rugs, artwork, heirlooms, china, collector’s items, etc.
- Slowly video each room of your home so you can identify all the items at a later date
- Scan all of your important documents (including appraisals) and keep the originals in water/fire safe storage.
- Save this information in 2 locations – email it to yourself, store it in the cloud, use a thumb drive & keep it with the other important documents.
Remember to update your inventory any time you make a big purchase. An added bonus to completing this project is that it will help you make sure your insurance policy is covering your current needs. If you have made any recent purchases or renovated your property, you may need to adjust your coverage, and adding this to your list will remind you to update your agent.
Take the time now to make sure your life gets back to normal with as little pain as possible, trust me, you’ll be thanking yourself!
Since Hurricane Season is in full swing, let’s discuss how we can better prepare ourselves this year after last year’s natural disasters. One simple way is to purchase a flood insurance policy. According to an article in The Economist, Hurricane Harvey caused an estimated $30 billion in property losses - with only about 40% of property having an active flood insurance policy in place. That means the remaining 60% of Texas homes and businesses impacted by the flooding Harvey created were uninsured. FEMA has reported 98% of counties in the United States have experienced a flooding event, yet flood insurance is still not widely carried.
So why is it that the average property owner doesn’t purchase flood insurance? One cause may be due to an overall lack of consumer understanding. We thought we would share some background and general information about the coverage to help our clients better prepare for the next time. Most property policies - including residential and business - do not cover flood damage. Not to mention, unless it is lender required, there is a 30 day waiting period from the date you request to bind Flood Insurance until the day the policy goes into effect. Did you know August 1st is the 50th Anniversary of the National Flood Insurance Program? The NFIP covers the vast majority of flood insurance policies currently in force. In 1979 FEMA was established and began overseeing the NFIP. FEMA determines the flood risk that a community has and uses historical data and surveys to create maps to identify and outline floodplains. These floodplains help to determine the area’s risk for flood, which impacts the cost of flood insurance premiums. It’s important to understand, that just because your property isn’t inside a high-risk floodplain doesn’t mean you don’t have any risk of flooding. Hurricane Harvey was the 3rd “500-year-flood” Houston experienced in 3 years.
Well then, you might be thinking, what is considered a flood? According to FEMA, a flood is “A general and temporary condition of partial or complete inundation of normally dry land areas from: (1) The overflow of inland or tidal waters; (2) The unusual and rapid accumulation or runoff of surface waters from any source; (3) Mudslides (i.e., mudflows) which are proximately caused by flooding and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current.” Basically, Flood Insurance covers damage done to your property due to rising water. This can be brought on by hurricanes, broken levees, newly developed land, outdated/clogged drainage systems, landslides/earthquakes, or other natural disasters. So even though you might have hurricane coverage on your home, and the rising water is caused due to torrential rains from a Hurricane (as was the case with Harvey), the water damage that was caused by the flooding most likely would not covered by the hurricane coverage on your property policy.
Click here to learn more about Flood Insurance. Please reach out to us to get your Flood quote started today. The average policy premium is about $700/year and the average claim is about $43,000. Don't be caught in the storm without protection!