AccuQuote Blog

Our life insurance blog is dedicated to providing you with valuable information from experts on the topics of insurance, financial planning and personal finance.

Should Millennials be thinking about Life Insurance?

I’m by no means a millennial, but I have three children who are.

With #hashtags, smartphones, and social media to go with school and work and everything else, these young adults lead lives that are absolutely jam-packed with things to do.  

Among all of the hustle and bustle that defines their generation, do they have time to think about life insurance?  Perhaps a better question is whether, at this point in their lives, they should be even thinking about life insurance.  If you have someone depending on you financially—say a spouse or partner or fiancé or child—you NEED life insurance.  It doesn’t matter how old you are—you HAVE to HAVE IT!

And I believe all young adults should at the very least consider getting coverage sooner than later.

The irony, when it comes to this topic, is that some excuses for NOT getting life insurance are in fact the very reasons these young adults SHOULD get covered.  For example, “I’m young and healthy; I don’t need life insurance.”  Fact is, you should look to buy life insurance BECAUSE you’re young and healthy (which, as we know, brings down the price).

Then there’s this argument:  “I don’t have anyone I need to take care of except myself; why do I need life insurance?”

Fair enough, but I would point out to young adults that, while that may be the case now, what about down the road?  Does he or she plan on getting married and having children in the future?  If the answer is yes (and it often is), then getting coverage NOW (again, while they are YOUNG and HEALTHY) will save them money.

Remember, the two biggest factors when it comes to determining your life insurance rates are age and health.  You’re never as young as you are TODAY, and in most cases, you’re never as healthy as you are today (even if you’re single now, wouldn’t it make sense to at least consider buying coverage because you’re healthy?  What if later in life, when you have people depending on you financially and you really NEED life insurance, you are forced to pay more because of your health?  Or even worse, what if you’re not eligible at all!?!).

And lastly, millennials—as well as other generations—will incorrectly argue that life insurance costs too much.  That’s simply not true. 

Life insurance delivers dollars for pennies, and the product does so at the exact moment those dollars are needed most.  And even better, you aren’t spending too many pennies to get coverage.  A millennial can get a good amount of coverage for less than $250 per year.  That’s less than a dollar a day!  With rates that low, young adults can get life insurance AND keep paying off student loans.  Win-Win!

So the answer to the question—Should Millennials be thinking about Life Insurance?—is a resounding YES!  Millennials should think about life insurance.  And then head over to AccuQuote.com and let us shop around for you.  We just need some basic and quick information and we’ll start walking you through a pretty big—and important—decision.

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3 Strategies to Help You Save Money on Your Taxes

Tax time (April 15th) is still months away, but it’ll be here before you know it.  And while it might seem early for tax talk, is there ever a bad time to save money?

Did you know that smart planning at the beginning of the year (aka NOW!) can lead to you paying Uncle Sam less, come April?  Well, it’s true.  Just follow these tips:

  • Save now by looking ahead

Contribute to retirement and savings plans early and often.  Plans such as a 401(k), an IRA, and a 403(b) allow for not just a tax-deferred pot of earnings that multiplies over the years, but these options also reduce the amount of taxable income for the current year.  The deadline for investing in these workplace-based retirement programs is the 31st of December, but if you’ve missed that deadline for 2014, you can still make contributions to a traditional IRA until April 15thof 2015.

  • Give and get back

Charitable donations are tax-exempt, so make sure you gather ALL your donation receipts from 2014.  This way, you have evidence to support you not paying taxes on the charitable donations you made during the previous year (2014).

  • Make sure you’re covered

I’m not just talking about life insurance here.  The Affordable Care Act (Obamacare) means you pay a tax penalty every month you don’t have the minimum health insurance coverage required by law.  And your life insurance policy can also provide tax benefits, because if you have a policy with a cash value rider, any growth in that cash value is tax-deferred. Even if you take out a loan against your policy, that loan amount is tax-free.  Lastly—and maybe most importantly—your beneficiaries generally won’t pay federal income taxes on death benefits, whether the payout is $10,000 or $10 million.

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‘Tis the Season . . . To Buy Life Insurance!

In January, we see a huge spike in interest and purchasing.  Why?  Well, one reason is because people have just finished a holiday season filled with family and loved ones.  If there’s ever a reminder of what family means to us—how important they are to us—it’s the holiday season.  Plus, everyone wants to start off the new year on the right (financial) foot.  

Think about why health clubs are packed in January—it’s for the same reason (everyone wants to start off the year healthy). 

When you’re with family, you’re thinking about family.  And when you’re thinking about your family, you’re more inclined to want to protect them.  

When you think about it, life insurance isn’t really about you; it’s about making sure your family has food on the table when you’re gone.  It’s about making sure your children can still attend college and a legacy is left.  The holiday season and life insurance go hand in hand. 

But while life insurance is in fact about family, it’s not your family who propels you to get covered.  Think about it—how often do you your children say to you, “Dad, I saw something on TV today about life insurance; when are you going to get coverage so me and my sister and Mom are taken care of when you’re not around?”  That simply doesn’t happen.  It’s on YOU to make this very important decision. 

You certainly don’t need to buy life insurance in January just because so many others do, but if something tragic were to happen tomorrow, then wouldn’t this blog post suddenly become the most important thing you ever read?  Think about it.

Happy New Year!

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If You Had a Nickel for Every Time I was Asked How Much Life Insurance to Buy, You’d Be Rich!

 

I get the question all the time.  Sometimes it’s from customers, sometimes it’s on a plane after I say what I do for a living. 
 
I was recently interviewed about this topic by Editor Kim Lankford for Kiplinger’s magazine.  Kiplinger’s is pretty much the first and last word when it comes to personal finance, and Kim always does a great job capturing the importance of life insurance and conveying my passion for the product.
 
So, what IS life insurance and who needs it?  Life Insurance is a contract with a large financial institution; a contract that promises to pay a bunch of money to your loved ones when you die.  If you have anyone in the world that you care about, anyone who depends on you financially (like your family!), YOU need to have it.  Why?  Because there is no other product that does what insurance does—delivering dollars for pennies—at the exact moment it’s needed most.   
 
Understand that life insurance can’t replace YOU (a father, husband, wife, or mother), but it CAN replace your economic value to your family.  It secures your family’s financial future, protects them against the unexpected, and, in my opinion, is the most important product mankind ever invented (with the possible exception of the wheel).

But how much should you buy?

This is the question everyone wants to know the answer to.  Well, there’s no quick answer, and as you know, if you read this blog, I’m not a huge fan of rules of thumb.  But for the sake of this post, here are some things you may want to consider when determining how much life insurance to buy:
 
Debt—If you’ve taken out a loan or mortgage, the face amount of your policy should be large enough to cover these debts (and have some left over for your dependents)
 
Expenses—Make sure your beneficiary receives enough for final expenses, death taxes, funeral costs, bills, and other day-to-day expenses
 
The future—You can’t anticipate exactly what your family will need in the future, but make sure your death benefit is enough to cover your kids’ college tuition, weddings and monthly bills
 
Income replacement—If your family depends on you to be the bread winner, when you die, life insurance needs to replace your income; how many years of your income will you need to replace is up to you, but the math is really pretty easy

Over the years, I’ve heard several ‘rules of thumb’ (which I hate), but they do provide a place to start.  In some cases, 10x income is appropriate, but in others, it’s not.  For example, a man in his 30s with two children probably needs more than 10x his income (20x or 30x is more like it), while a highly paid exec in his 60s with kids already out of college might need less than 10x his income.
 
There are many life insurance needs calculators on the web, including the one on our website at www.accuquote.com/needs.cfm.  Most people are shocked at the number it takes to replace their economic value.  The good news is that they are equally shocked at how INEXPENSIVE it is.  According to LIMRA, the industry’s research arm, younger folks overestimate the cost of life insurance by a factor of 7, while older folks overestimate what life insurance will cost by a factor of 3!

How cheap is it?
 
As I mentioned in my Kiplinger’s interview, a 30-year-old man wanting $1 million in coverage (20-year term) would only pay $421 annually.  A woman of the same age would pay even lesser—only $354 per year.
 
A ONE MILLION dollar policy, with a 20-year rate guarantee, for just over a dollar a day?  Really?  Really!  
 
Anyone depending you financially?  What’s your excuse now?!?!

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Long Term Care Insurance: “To buy or not to buy”

In September, I wrote a post about long term care (LTC) because I was sourced in a USA Today piece on the topic.  I barely scratched the surface, though.

Now we’re in November, and it’s LTC Awareness Month.  But there’s a pretty good chance you’ll need long term care EVERY MONTH when you get older (not just in November).  Here are some more details on LTC insurance (pay attention, as the stats say you’ll probably need it!):

What is it?

Well, let’s start with what long term care is; it’s what you’ll probably need when you’re older (keep reading to learn just HOW LIKELY it is that you’ll need it).

Long term care insurance is what can HELP you pay for that care, which costs A LOT now and is only going to increase.

Of course, you don’t want to think about getting old, wearing a diaper, and not being able to take care of yourself.  But as long as you’re alive, that day will probably come.  And when it does, where will the money for care come from?

Answer: Long term care insurance.

Why do you need it?

Because LTC costs are staggering, will eat up your savings, and could cause you or loved ones to die broke.  In other words, long term care poses a HUGE threat to your retirement plans.

How much of a burden do you plan to be on your family in your “old age”?

Live-in care is $200 a day.  A nursing home is over $300 a day. Do the math.  That’s $180,000 A YEAR for a couple.  If you can’t afford it, your family bears the brunt of these expenses.

Think you eventually won’t need long term care? Think again

FACT: There’s a 91% chance that either you or your spouse will need long term care

FACT: 70% of people over 65 will need ongoing assistance of some kind in their lives (and Medicare only pays for short periods of care)

Bottom line: Long term care insurance shouldn’t be an option; it should be an essential and required part of your financial plan.

How do long term care policies work?

No one gets excited about buying long term care insurance … paying premiums … and coming to grips with what life will be like one day when you actually need the care. No one wants to even think about it. But it’s important to learn how it all works.

In order to collect benefits, most long term care policies require that you either:

  1.   Have a severe cognitive impairment (i.e. Alzheimer’s) OR
  2. Are unable to perform (without help) two or more of the six Activities of Daily Living (ADLs)

The six ADLs are: eating, dressing, bathing, toileting, continence, and transferring (transferring is the ability to get out of a chair and walk across the room and sit in another chair—all without assistance).

How much does it cost?

It depends on a handful of factors, including your age, gender, current health and the amount of coverage you want.  You can buy a little, a lot, or none at all; it’s your choice.   If you want specifics on pricing and plans, call us at 877-908-5089

Think about this …

The odds of your house burning down are 1 in 1,200. Yet who in their right mind goes without homeowner’s insurance?!

The chances of needing long term care are much greater (91%); can you really afford not to have long term care insurance?

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