What You Need to Know About Borrowing from a Life Insurance Policy

Borrowing from Life Insurance Robert Taurosa

When life insurance policies were first introduced, they were meant to cushion the beneficiary from financial worry in the event of the insured’s death. However, as time passed by, life insurance incorporated savings and investment into the package. Policies such as whole life and universal life insurance provide cash value back to the insured.

What You Need to Know

You cannot ask for a loan if you have a term life insurance policy. This is because the insurer does not offer any additional benefits. A term policy is only meant to benefit your beneficiaries in case you die before the contract expires.

If your policy has a cash value, think before you ask for the loan. Find out how the loan will affect your policy. Typically, when you borrow on your life insurance policy, the cash value acts as collateral. If you fail to pay back the loan, the insurer can take the cash value. However, you run the risk of losing your entire policy if the interest payments plus the actual loan amount is more than the cash value.

Before you borrow on your life insurance policy, the cash value has to be substantial. Usually, you build this value through years of saving. Talk to a qualified financial planner about how you can build up this cash value.

When asking for the loan, the insurance company will give you a form to fill. Watch out for hidden costs in the form. For example, is there an ‘opportunity cost‘ that you may have to pay? Find out if you can afford to pay the interest payments. Make sure that the loan and interest repayments won’t affect the death benefit portion of your policy.

Borrowing on your life insurance policy is much easier than borrowing from the bank. You don’t have to go through a lengthy application process. You ask, and if the cash value is sufficient, you get your loan.  

Before you borrow on your life insurance, make sure that you have the right policy. A term life policy does not allow you to borrow while a whole life policy will enable you to do so. Then, talk to a financial planner to see how the loan will affect policy benefits.

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What You Need to Know About Borrowing from a Life Insurance Policy

Should You Purchase Supplemental Life Insurance at Work?

Supplemental Life Insurance Robert Taurosa

Supplemental life insurance is an extra life insurance policy. The employer will offer this policy as a benefit for the employee. You should purchase supplemental insurance at work if the policy meets your needs. Here are a few reasons why the employee buys this policy at work. The employee can afford the policy. The employee has a family. The employee can keep the policy. Use the following guidelines to help you make an informed buying decision about supplemental life insurance.

Affordable Payments

First, an employee will most likely buy supplemental insurance because it is affordable. Insurance companies will offer lower rates to a group of employees. This is called group life insurance. For example, an employee making $50,000 annually may receive $50,000 of life insurance at no cost. The employer will pay for the policy. Then, the employee may have the option to buy more coverage at a much lower rate. The options can turn the $50,000 policy into a $500,000 policy. A $500,000 policy will fill the gaps and help the family when the employee die.

Provide for Family

Next, the employee will purchase supplemental life insurance to provide for the family. If you get a supplemental policy from work, try to get a guaranteed renewable policy. This is the best term policy. When the employee is sick and cannot work, the insurance company has to honor the contract as long as the employee pay the monthly payment. The family can receive the $500,000 death benefit to pay medical expenses, funeral expenses, credit cards, mortgage payments, college costs, taxes and much more. A low-cost life insurance supplemental policy can help the family.

Keep the Policy

Then, the employee purchases supplemental insurance to keep the policy for life. When buying this policy, it is essential to think about making payments for many years. Buy the policy at work that you can keep for the rest of your life. The objective is to keep the policy enforced and to keep expenses as low as possible. Find out if the policy is portable before you sign the contract. Find out if the policy will also cover you and your family.

Finally, this information is not financial advice. It is written only to inform the readers.

Should You Purchase Supplemental Life Insurance at Work?

These Are the Best Family Friendly Cars in 2018

  1. Honda Odyssey, Minivan

Ranked #1 of minivans by U.S. News and by Kelly Blue Book, the Honda Odysseyis considered the best minivan in the U.S. because it affords comfortable space for cargo and any size rider. It drives like a car and is equipped with driver assist and safety features such as collision mitigation braking. Inside there is a new infotainment system and even a vacuum for quick cleanups. The redesigned Odyssey with Magic slide seats, five child safety seats, and an in-cabin camera is a reliable vehicle with a high resale value.

  1. Subaru Outback, Crossover

The respected Outback is versatile like an SUV and rated as the best vehicle for the money. Larger and sleeker than other crossovers, it rides like a family car with room for five passengers and a generous cargo area of 35 cubic feet (73 cubic feet with the back seats down). This Subaru accommodates baby seats, small children, teens, and adults without crowding anyone.

  1. Ford Expedition, Large SUV

The Expedition is ranked #1 in its group. The redesigned Expedition has the best third row of all SUVs, and like other SUVs, the Expedition can be purchased as a four-wheel-drive vehicle. (No minivans other than the Toyota Sienna have this capability). With 3.5-liter V6 engines, this SUV has 375 horsepower and 470 lb-ft of torque so that the family can pull a boat or other things.

  1. Acura MDX, Midsize SUV

Acura MDX is ranked #5 among luxury midsize SUVs by U.S. News. This stylish vehicle is particularly accommodating to older members of the family as entry is much more comfortable than climbing into a van and some SUVs. Android Auto and Apple CarPlay are now standard equipment. The cushioned seats in the second row slide forward, and the backs tilt to a comfortable angle. Acura has a smooth ride, safety features, and a quiet cabin. With its three rows for seating or storage, along with excellent fuel efficiency, the MDX makes a great family vehicle.

  1. Honda CR-V, Compact SUV

Easy to drive and maneuver, the Honda CR-V is ranked #1 among compact SUVs by Kelley Blue Book and US News as the top vehicle for smaller families and the money. Having earned a rating of five stars from the National Highway Traffic Safety Administration, the fuel-efficient CR-V has 40 cubic feet (76 ft. with the seats folded)of storage space, and senior passengers can quickly enter it. Because of its safety/driver assist system, the Honda CR-V is also rated as one of the safest crossovers.

These Are the Best Family Friendly Cars in 2018

Handy Car Gadgets You’ll Want to Have For Your Next Roadtrip

If the warm summer weather creates a sense of wanderlust in your adventurous spirit, it can lead to various road trips being planned. Before you set out on your next road trip adventure, however, you should purchase some handy car gadgets that will improve your convenience and safety while out on the open road.

Portable Jump Starter Kit

While keeping a set of jumper cables in your car will assist you in a battery emergency, they’re only beneficial if there’s another car in the area to provide you with a charge. Being out on a road trip means that you’ll encounter many solitary miles with no other drivers around to provide you with assistance should your battery malfunction. Bringing a portable jump starter kit will ensure that you can jump start your car battery on your own since it holds its own charge. Additionally, some jump starter kits, such as the Bestek Jump Starter, also features a flashlight and USB ports so that you can charge your various mobile electronic devices.

Car Safety Tool

Although it’s something that no one wants to experience, a car accident is an unfortunate reality of venturing out in any automobile. It’s better to prepare for such an eventuality rather than to hope you never experience one. In keeping with this proactive mindset, investing in a car safety tool will prove to be invaluable to you and your companions’ survival in the event of an accident. A car safety tool acts as a hammer that can shatter windshields or door windows to allow you to escape from a wrecked car. There are also blades on the safety device that can cut you free from a malfunctioning seat belt. Be sure to keep the car safety tool in an easily accessible place such as inside the glove compartment or the console between the driver’s and passenger’s seats.

GPS Keychain

While out on your road trip adventure, the last thing you want to deal with is a set of lost keys. Some clever tech-savvy entrepreneurs have realized this and invented a keychain that is Bluetooth-equipped. This GPS keychain will allow you to locate your lost keys using a mobile app that can be downloaded onto any of your mobile devices for quick and easy use.

Handy Car Gadgets You’ll Want to Have For Your Next Roadtrip

Term vs Whole Life Insurance

Life insurance is incredibly important when it comes to making sure our loved ones are left behind in safe hands in the wake of our death. However, the nuances between the varierty of insurances available can often make one’s head spin. It is for this reason that I will address some of these nuances in an attempt to make the convoluted and complicated world of hypotheticals easy to understand.

Here, I will be discussing both term life insurance and permanent life insurance. Term is a bit more simplistic and also boasts the lower cost. However, more of us have been exposed to whole life insurance since it has more publicity behind it.

Term Life Insurance

Term Life Insurance, as the name hints, only covers a certain amount of time, a term if you will.  Occasionally, you may hear this sort of plan referred to as “pure life insurance” since it’s really only supposed to protect your dependents. Terms can last anywhere from one to thirty years, yet the most common is 20 years. Generally, the premium does not increase or decrease throughout the contract, but of course every plan is its own and so it behooves you to make sure that that it is the case should you decide to move forward with a term plan.

For the record, you should pick a term plan for the years your dependents would be the most, for lack of a better word, dependent on you. This way, in the event that the worst happens, your family is provided for. Ideally, the payout they receive will be the equivalent of your current income so as to provide for the smoothest transition possible should you suddenly not be around.

Whole Life Insurance

This sort of plan is permanent, and has you covered from the start of the plan to the end of your life. This said, there is an investment involved that is titled the “cash value” of the plan. This cash value grows at a slow and steady pace and is tax-deferred so you won’t have to pay any percentage based on its gains. However, you can borrow money against the account or even forfeit the policy for cash. However, if you don’t manage to pay the plan back, with interest, you will decrease your benefits until you surrender the entire policy and the death benefit with it.

Frankly, as a whole, whole life insurance is more straightforward than term plans in that the numbers behind it don’t change. Yet, even though this is the case, the plans are typically more expensive, and although offering more benefits than term, they generally cause overbuying as well. Actually, as I mentioned in a previous article, this is because when we grow older we need less benefits, but as stated above, the numbers with whole life insurance plans don’t change. So even when you have less financial obligations and your kids are moved out of the house, you are still paying the same premiums.

This all said, it is up to you to decide which plan to pursue. Of course, every individual has unique circumstances that dictate which plan is best for them. In my personal opinion, you should always be sure to consult a professional before you commit to a plan, and remember to shop around. Insurance companies offer different pricing for different age groups and different policies, so make sure you weigh your options.

 

Life Insurance, Robert Taurosa, Scale

 

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Term vs Whole Life Insurance

Secrets to Inexpensive Insurance: Senior Edition

Old Dude

While we all grow old, many of us do not harbor an understanding of the necessity that is life insurance, especially seniors. Maturing is hard enough without worrying about the fiscal plan you’re leaving behind for your children and grandchildren. Rather than force elders to endlessly peruse through the internet, I have decided to author this quick and easy guide for a few simple tips so that those of us in retirement can have a foundational framework when searching to decrease the expense of life insurance.

Do not purchase unnecessary benefits.

Life is dynamic. Considering such, many of the benefits we need at one point in time, we no longer need later in life. To understand insurance, this is a fundamental principle. For instance, many parents are paying more money when they are younger because they are supporting children, and then paying for said children’s college. However, once the children move out, the financial obligations of said parents decrease tremendously. When this happens (or any obligations diminish), you should make sure your insurance plan reflects such. When financial commitments decrease, so should your insurance.

Work a job.

When seniors are working, they may very well be able to take advantage of their employer’s life insurance plan. Even in the event that the employer does not offer insurance, there are many other groups that may be able to supplement the cost. All you need to do is a little research to find the right plan for you.

Do a price-comparison between companies.

As with any purchase in our capitalistic society, different companies offer different prices. This being said, many companies actually price age groups differently. There is no one universal understanding of what to charge each age group. Thus, it is worth your time to shop around a little and see what each company is offering as per your individual situation, be it age or income or location or anything else. Remember that you don’t need to buy too much and that if a group rate is available, you should take advantage.

Take note of different kinds of insurance.

You should also keep in mind that in the above text I am referring to term life insurance. However, it is plausible that term life insurance may not be accessible and so you will have to resort to whole life or guaranteed issue life insurance; and should that be the case, you should be prepared.

I would consider purchasing a whole life policy that doesn’t heavily rely on large cash values. This way, you are essentially creating a unique, personal, term life policy. However, you may also want to consider guaranteed issue life insurance.

Mostly anyone can purchase this sort of plan no matter their health or age. However, this open admission implies strings attached, and there certainly are strings attached. One, the coverage itself is usually not the best. Two, it generally only pays out to 100,000$. Not to mention, you have to survive 2 or 3 years for the policy to take effect while you’re paying significant premiums in the meantime.

Regardless of what you decide, I hope this helps in your quest through the complicated and treacherous waters of attaining life insurance. Good luck and godspeed!

 

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Secrets to Inexpensive Insurance: Senior Edition