Henry Okafor
No matter how prepared you think you are, entering adulthood suddenly is a nasty revelation. Additionally, deciphering tax forms that aren’t as “simple” to understand as they once were, as well as the necessity of internet connectivity and mobile devices, have made things more difficult than ever.
It’s possible that you’re still residing with your parents as you build your career. Maybe you’re excited about getting married or moving from a rental to a home. Considering or even dealing with life insurance may be the last thing from your thoughts. You’re not by yourself. However, there are five life insurance-related truths that you should be aware of.
- Security comes in the form of life insurance. There are a ton of advertisements when you Google “life insurance” that tell you how cheap it can be, but there aren’t nearly enough that explain why you need it. That’s presumably because it’s uncomfortable to think about that we might pass away and inflict someone we care about financial hardship. Life insurance provides a financial safety net for the people you care about in the event of your passing. Do you genuinely think that being single won’t leave anyone out in the cold? Continue to read.
- Debt from college may not disappear. Did someone co-sign for the student loans that your bank offered, like your parents? If this is the case, unlike with federal student loans, the bank will not forgive the obligation upon your passing. That implies that your parents or anyone else who signed the documents would be immediately responsible for the entire sum. Don’t force them to pay for it!
- It’s typically advised to avoid purchasing life insurance online if you have no knowledge of the subject. We’ve grown accustomed to it: you locate the item you’re looking for on Amazon, Ebay, or Etsy, click a few buttons, and POOF. Your house will receive it on delivery. The truth is that life insurance is a financial planning tool, and while it can be as straightforward as a 20-year term policy for less than a cup of coffee per day (for real! ), discussing your options with an insurance expert can help you get the right amount for the right amount of time at the right price. Many people are unaware that an agent will sit down with you and help you without charging you anything.
- Social fundraising is only so effective. Everyone now thinks they can just turn to GoFundMe if something goes wrong in their lives due to this relatively recent phenomenon. However, a grieving person might not want to devote time to running a social fundraising page. The likelihood of becoming viral is slim, and both the IRS and social fundraising platforms will take a piece. Furthermore, it is uncertain whether any money, if any at all, will be raised.
- Social fundraising is only so effective. Everyone now thinks they can just turn to GoFundMe if something goes wrong in their lives due to this relatively recent phenomenon. However, a grieving person might not want to devote time to running a social fundraising page. The likelihood of becoming viral is slim, and both the IRS and social fundraising platforms will take a piece. Furthermore, it is uncertain whether any money, if any at all, will be raised.
4 Things You Probably Don’t Know About Your Life Insurance at Work
For the first time ever, more Americans have employer-provided life insurance (108 million) than individual life insurance coverage, according to a new LIMRA survey (102 million). And although that statistic seems encouraging, it hides a couple important truths.
- There is more to the statistic than first appears. In the data, you can see that the proportion of families with life insurance coverage through their employer has decreased from a peak of 54% in 1984 to 46%, showing a decline in the number of companies offering coverage.
- Even if you have it, it probably isn’t enough. The bulk of life insurance coverage offered by employers runs from one to three times your yearly salary. Therefore, having up to $150,000 in life insurance if you make $50,000 seems like a lot, doesn’t it? However, putting that money to use in the current interest rate environment would soon show that it is not particularly effective. What would your family do after the third year if they have to spend $50,000 every year?
While your income may be $50,000, I’d also like to draw attention to the fact that what about your other advantages, such health insurance? For a family of four, employers shell out an average of $19,000 annually for health care. What if you needed to use that $50,000 to cover your family’s health insurance costs as well?
- It is a perk, not a must. The majority of Americans (73%) believe that businesses should be required to offer life insurance coverage, yet this is not the case currently. Moreover, keep in mind that just because your employer is providing it right now doesn’t mean they will do so in the future or at all. Benefits like life insurance could expire overnight as many businesses cut expenses.
- It doesn’t protect your capacity to be insured. Think about what would transpire if your health changed while you were still only covered by your employer’s health insurance, but they stopped providing it and you were unable to get life insurance. What happens if you leave your job or change jobs and the new company does not offer life insurance as a benefit?
Group life insurance offered by an employer is frequently not portable, so you cannot take it with you if you leave your position. What if you can’t afford it? Some people can convert it to permanent life insurance. This is avoided by purchasing an individual coverage because you are the owner.
The major takeaway is that while having life insurance through your company can be advantageous, you should also consider whether you may have a greater need for private life insurance coverage.
Use an online calculator, such as this Life Insurance Needs Calculator, to get a general idea of what you require. Then, get in touch with an agent if you need help working all of this out. They can help you get the most coverage for your money and coverage that you can count on in case the worst happens. Use our Agent Locator to discover a local agent if you don’t already have one.
