5 Questions Single Parents Have About Life Insurance

5 Questions Single Parents Have About Life Insurance

by | December 13, 2022 | Life Insurance | 0 comments

Parenting is a challenging but rewarding journey for just about anyone who embarks on the adventure. And the journey can be even more challenging when you are a single parent. This is especially true when it comes to making financial decisions.

Single parents often have unique questions when it comes to life insurance. Let’s look at some of the most common questions advisors hear from single parents.

1. Why do you need life insurance as a single parent?

While insurance is beneficial for all households, single-parent households need to strongly consider life insurance as part of their financial strategy.

It might sound obvious, but it is very important for single parents to acknowledge the absence of a backup parent. Unlike in a two-parent household, if the single parent dies, there may be no clear next choice as to who will help pay the bills or care for the children. Life insurance can provide a financial safety net that might not otherwise be there to help facilitate answering some hard questions.

Despite the importance of life insurance, single-parent households are less likely to have life insurance. One study found that 69% of single parents with kids still living at home had no life insurance in place. You can compare this to the 45% of double-parent households that do not have active life insurance. If you are a single parent, it is time to make a plan to make sure you know that your family is correctly covered.

2. What things can life insurance help cover?

Life insurance can help you pay for the expenses that will continue for your children and dependents after you die. These expenses can include house payments (rent or mortgage), debt, current and future education needs, end-of-life costs, child living expenses, childcare, etc.

Life insurance is an amount of money you can pass on to your loved ones to help them keep living their lives, and it’s generally tax-free. If you want to read more, visit this article with more details on what life insurance can cover.

3. How much life insurance should you have as a single parent?

Considering your lifestyle, obligations and children’s future care and education is the first step in determining how much life insurance you need as a single parent. In addition to the items we discussed in the previous question on what life insurance can cover, add in any of your family’s unique or personal financial needs.

Next, to help you further determine your needs, we suggest using a life insurance calculator like this one. By answering a few important questions, you can get a ballpark idea of the amount of cash it would take to provide for your family if you passed.

Finally, you will want to talk to a life insurance agent to help you find the best policy and price for your needs.

4. How do you choose a life insurance beneficiary when you’re a single parent?

Emergency and end-of-life planning is a necessity for all single parents. It is important for your friends and family to know what happens to your dependents in the event of your death. So, even though the conversation is not a fun one, you will need to add life insurance to your end-of-life plan discussions.

Typically, a parent would name their spouse or the other parent of their child(ren) as the beneficiary (person who gets the death benefit cash payout). However, if there is no other parent in the picture, then you will need to first decide who is taking care of your children if you pass.

Then secondly, is that the same person you will trust to receive the money to care for your dependents? They do not have to be the same person. If you have a trusted person or professional who you want to manage your dependents’ estate, that person can be separate from the primary caregiver. You will have to think about how you want your children financially cared for without you. We suggest talking with your family and any trusted financial or estate planners to solidify your plan.

Whatever you do, don’t name your child as the beneficiary—the law prohibits anyone from receiving a life insurance payout if they aren’t the age of majority (which could be 18 or 21 depending on your state). For more information about naming beneficiaries, click here.

5. What type of life insurance should a single parent have?

The world of life insurance is wide and varied these days, but here are a few standard options to get you started on finding the policy that is best for you as a single parent.

Term Life Insurance

If funds are limited or cash flow is tight, as it often can be for a single parent, then term insurance is a great option. Term insurance offers a cash payout to your beneficiaries if you die during the term. In exchange for the death benefit, you pay a monthly premium to keep the policy active. With a term policy, if you stop paying the premium, the policy will end and the benefit goes away. It is temporary coverage for as long as you need it or can afford to pay it. 

A single parent can typically find a premium payment on a term policy in a budget they can afford. Also note that with any insurance policy, you have to pass underwriting to be issued the policy and have your price determined.

Permanent Life Insurance

Next, there are permanent life insurance policies. These often come with a higher cost per month premium for a similar death benefit as a term policy of the same size. However, a permanent insurance policy will accumulate cash value in addition to the death benefit.

The cash value inside the policy can be used or borrowed against after a certain amount of time. When you borrow money from a permanent insurance policy, you’re using the cash value as collateral and the borrowing rates tend to be relatively low.

If the idea of a more permanent policy sounds appealing, but you are worried about having the cash on hand to pay the premiums every month, then a universal life insurance policy might be more your style.

As a single parent with one income, flexibility is key. With a universal life policy, you can make more flexible payment amounts on the policy as needed. If you are considering a universal policy, it’s a good idea to work with an insurance agent to make sure you set up a policy that is best for your needs and situation.

Conclusions

Single parents have a challenging job, but having the safety net of life insurance in place for your children can alleviate some of the stress. If you haven’t already, reach out to a trusted insurance professional to help you get started on securing your peace of mind.

Common Misconceptions About Disability Insurance

Common Misconceptions About Disability Insurance

by | December 1, 2022 | Disability Insurance | 0 comments

According to the CDC, 61 million American adults live with some type of disability. With such a large part of the U.S. population disabled, disability insurance can be a life-changing asset for millions of people. For those who aren’t exactly sure what disability insurance is, it is a form of insurance that provides you with a percentage of your income if an illness or injury prevents you from working and earning a living.

There are two main types of disability insurance: long-term disability insurance, which typically pays a portion of your lost income for anywhere from one year to your entire working life, and short-term disability insurance, which replaces a percentage of your lost income for a brief amount of time—typically, between three to six months.

Disability insurance is arguably one of the most misunderstood types of insurance. Many believe that it’s unnecessary or irrelevant to them. But according to the 2022 Insurance Barometer Study, half of Americans (49%) say their household would face financial hardship in six months or less if their primary wage earner were to become sick or injured.

Here we will discuss a few of the biggest misconceptions about disability insurance and why it might be worth looking into for yourself or your loved ones.

1. I can’t get disability insurance if I don’t work full-time.

Many people believe you must be working full-time to qualify for disability insurance, which is not true. As long as you meet disability insurance eligibility requirements and can prove you are losing wages you would have otherwise been able to earn, you may qualify for disability insurance. It’s important to properly evaluate your situation to determine if disability insurance is right for you, whatever your employment status may be. To get an estimate of the amount of coverage you would need to maintain your current standard of living, visit Life Happens’ Disability Insurance Needs Calculator.

2. I don’t need disability insurance if I’m healthy.

Even if you are in great health now, don’t write off disability insurance. The fact of the matter is that if you rely on a paycheck to provide for you, disability insurance is worth exploring. What many people don’t realize is that there is always the possibility that you could become sick or injured and unable to work in the future. In fact, 1 in 4 workers entering the workforce today will suffer a disability before they retire. Disability can happen to anyone at any time. Disability insurance can provide an immense amount of support if anything were to hinder or eliminate your ability to work and earn a living.

3. Disability insurance is too expensive.

The cost of disability insurance is generally 1% to 3% of your annual salary and depends upon a number of factors, including age, gender, current health status and occupation. For example, in general, the younger you are, the healthier you are. Disability insurance rates will likely reflect this. If your occupation requires hard manual labor, handling of dangerous equipment or hazardous conditions, disability insurance rates tend to be higher.

There are other factors that will impact the cost of disability insurance, such as the benefit period and amount, elimination period and more. It is important to explore all premium options when you’re searching for disability insurance because the cost will depend on your specific situation.

 

Working with an insurance professional is a great way to learn more and get coverage. Check out this helpful information on how to choose a qualified insurance professional. Then use Life Happens’ Agent Locator to find one in your area.

5 Ways to Make Long-Term Care Insurance More Affordable

5 Ways to Make Long-Term Care Insurance More Affordable

by | November 15, 2022 | Long-Term Care Insurance | 0 comments

Do you know someone in your life who needs long-term care? Maybe they are a family member, friend or acquaintance. There are many circumstances where a health condition could result in someone not being able to care for themselves for an extended period of time. Maybe they need help with activities like bathing or dressing, or they have a disease like Alzheimer’s and need supervision.

Those needing care may be fortunate to have a loved one provide unpaid care, but with caregiving burnout on the rise, often professional help is needed. And with long-term care costs not covered by Medicare or health insurance, it’s up to the family to come up with ways to pay for care that can be expensive!  

According to Genworth, the median cost of a home health aide in 2021 was nearly $62,000 per year! That’s a 12.5% increase from 2020. And according to a PwC study, the average person who needs long-term care will spend $172,000—imagine what the cost will be in the future with inflation.

Luckily, there is a solution. When someone needs help with things like bathing or dressing, long-term care insurance (LTCI) can make a remarkable difference in a family’s life. However, many people wildly overestimate the cost of LTCI. In reality, the average premium is about $2,500 annually. Sure, that’s not a trivial amount, but compared to the cost of care… there is serious value in coverage.

To get the most bang for your buck, here are five strategies that can help make LTCI more affordable:

1. Buy at a younger age. 

In one example, a 50-year-old couple who purchases a long-term care insurance policy with a $200,000 benefit for each spouse growing at 3% annually would pay a combined annual level premium of $3,573. If they waited until age 60, their annual premium would instead be $4,606. Not to mention that by age 85, the 50-year-old purchasers would have a much higher benefit level because their policy would have grown for 10 additional years at 3%!

2. Buy a smaller policy and let automatic inflation coverage grow its benefit over time. 

Another strategy is to buy a more modest policy at a younger age and then allow automatic inflation coverage to grow its benefit. As an example, a healthy, 50-year-old single male can buy LTCI with an $80 per day/3-year benefit with 5% compound inflation coverage for about $150 per month. At age 86 (when he may need long-term care, for example), the benefit will have grown to $463 per day and a total benefit maximum of more than $500,000. That’s the power of compound inflation.

3. Budget a premium that is a percentage of your income. 

When saving for retirement, the most popular vehicles are tax-qualified plans like a 401(k). Most employees pick a percentage of their salary, like 6%, to contribute to a 401(k) plan. In the same way, someone could decide that a certain percentage of their income, say 2%, will be spent on long-term care insurance. For example, someone earning $100K per year can look at how much coverage a $2,000 annual premium will get them. This can help you plan for the long run.

4. Use money from your Health Savings Account to pay premiums.

Did you know that you can withdraw money from your Health Savings Account to pay LTCI premiums? Since HSA contributions by employers and employees are pre-tax, by using those same dollars for LTCI premiums, you are paying for coverage with pre-tax dollars. And long-term care insurance benefits are tax-free for actual expenses as well!

5. 1035 exchange existing permanent life insurance policies to a combination life/LTCI plan. 

As people age, their need for life insurance may decrease while their need for long-term care insurance increases. Many don’t realize that they can take existing permanent life insurance plans with cash value and purchase combination life insurance/LTCI plans using that cash value on a tax-favored basis. This could either reduce or eliminate the need for additional premiums.

 

Long-term care insurance provides tremendous value. With proper planning, people of all income levels can find a policy that fits their situation and budget. But delaying can be problematic—talk to a financial professional today about LTCI.

I’m Gen Z… Do I Need Life Insurance?

I’m Gen Z… Do I Need Life Insurance?

by | November 4, 2022 | Life Insurance | 0 comments

What is Life Insurance?

Gen Z adults are between the ages of 18 and 24 today… they’re young and healthy overall. So if you’re part of this generation, you may be thinking, why would I need life insurance?

But life happens. Life insurance can still be beneficial in case of sudden death, illness or other tragic and unforeseen circumstances.

Life insurance is there to protect your loved ones financially if anything happens to you. You may be recently engaged, married or have young children, in which case life insurance is absolutely key.

Even if that’s not the case for you yet, life insurance can still be a great way to start accruing wealth to pass on or use later in life. It’s also a safety net to ensure you don’t leave unpaid debts to your family if you die.

Knowing the different types of life insurance available is the first step in deciding what works best for your lifestyle.

Term Life Insurance

Term life insurance is generally the more affordable option. It covers you for a set period of time, usually between 10 and 30 years. If you die during this time, the death benefit will be paid to your beneficiary. The downside to term insurance is that there is no cash value after it expires.

Permanent Life Insurance

Permanent life insurance is usually more expensive than term life, as it covers you for the rest of your life, so long as premiums are paid. Permanent insurance gives you the death benefit and cash value, so as the value of your plan increases, you can take out a loan or make withdrawals as needed. While these policies are more expensive, they are a great option for accumulating wealth and for those with lifelong financial responsibilities.

Pros & Cons of Life Insurance for Gen Z:

The benefits and drawbacks of a life insurance policy can vary, so be sure to do your research before making a decision.

Pros
  • Provides a financial safety net for your loved ones when you die
  • You can lock in lower premiums now while you’re young and healthy
  • Affordable, depending on which plan you choose
  • Start creating wealth that can help you leave a legacy
  • Make sure any debts, like student loans, are covered and not passed on to your parents
Cons
  • Can be expensive, depending on which plan you choose
  • You may end up not using the coverage (this could be seen as a good thing, though!)
  • It can be difficult to find and choose a policy that’s right for you

Gen Z Life Insurance Trends

According to data from the 2022 Insurance Barometer Study, the need for life insurance is high among Gen Z—just 34% have coverage. When it comes to their reasons for not owning life insurance, uncertainty about products is much higher among this generation, and they are more likely to say they would not qualify for coverage.

A Fresh Take on Life Insurance

As companies go more digital across the board to appeal to younger audiences, it may seem like Gen Z would want an entirely online process for getting life insurance. But the same Barometer Study shows that they’re actually the most likely of any generation to say they would research insurance online, but ultimately buy in person. Gen Z still wants some face-to-face interaction when it comes to this important decision.

If this sounds like you and you’re looking for help in the process, we recommend speaking with an insurance professional. Check out Life Happens’ Agent Locator to find one in your area. An agent can help you compare products and insurance companies so you can find the best solution for your situation.

 

5 Benefits of Life Insurance for Retirees

5 Benefits of Life Insurance for Retirees

by | October 18, 2022 | Life Insurance, Retirement Planning | 0 comments

Many retirees have reached the point of financial security and might not consider life insurance important. Others might feel they don’t qualify or can’t afford the premiums. There’s also a misconception that life insurance is only for people with young families, dependents or those with significant debts.

 While some people may certainly be more likely to see the need for life insurance than others, there are still many benefits of life insurance for retirees.

What are the benefits of life insurance for retirees?

Everyone’s financial situation is different, but life insurance has several valuable features that can benefit retirees. It’s important to remember that life insurance isn’t for you, the insured, it’s for your beneficiaries. Those handling your estate after you pass away may have to pay for funeral expenses, debts and taxes. Your partner or children could find themselves without enough income to cover those costs, especially if they depend on you financially.

Cover final expenses

Funerals, or celebrations of life, can be expensive. Costs will vary depending on the services provided, but the average cost of a funeral in the United States last year was almost $8,000.

Going through a funeral and burial of a family member or close friend is difficult enough without worrying about how you’re going to pay for it all. Having life insurance to cover those expenses can relieve the financial burden on your loved ones and allow them space to grieve. 

Pay off outstanding debt

Approximately 20% of retirees still carry a mortgage, and about 67% carry credit card debt into retirement. Some may sell their home, downsize and use the remaining funds to supplement their other sources of income; others might get a reverse mortgage or home equity line of credit on their home.

Viewing life insurance as a financial tool is a great way to help lower your stress and help you feel more prepared going into retirement and your future. If you pass away, any debt you have will still need to be paid. However, proceeds from a life insurance policy could help your loved ones pay any outstanding debts or bills you may have had.

Provide financial support

If you have a partner, they may not get the same pension income you received before you passed away. Some pensions provide a reduced percentage for a surviving partner, and some only provide pension funds for a specified time. If you pass away, it could result in a reduction in your partner’s income. You may also have dependent children or others in your life who need financial support. Life insurance can provide a source of income replacement for those dependent on you and help them maintain their lifestyle. 

Support a charitable cause

If giving back and contributing to something larger than yourself is important to you, life insurance can be a great way to do that. Many people are passionate about a cause or charity. Did you know that life insurance proceeds can provide a generous donation to an organization of your choosing? You can also use the death benefit to create an ongoing legacy, such as a scholarship. 

Provide a tax-free benefit

Life insurance proceeds are typically tax-free. Other parts of your estate may be subject to taxes, reducing the amount of money available for your beneficiaries. A life insurance policy can help cover the taxes owed, so your beneficiaries receive their entire inheritance.

Deciding if you need life insurance

When considering life insurance, there are two main things to review: how much you need and what it will cost. Using a life insurance calculator can help you determine the amount of life insurance coverage that’s right for your family. Once you have completed the calculator, you should compare life insurance policies to ensure you get what best suits your needs. A qualified insurance professional can help you get started.

Peace of mind is among the many benefits a life insurance policy can offer retirees. Insurance proceeds can provide ongoing income to your beneficiaries, cover funeral expenses, pay debts and help you leave a legacy. A life insurance policy can be a great way to ensure your loved ones are taken care of when you pass away.

Meet Eugenia Mello, Artist in Residence for Life Happens

Meet Eugenia Mello, Artist in Residence for Life Happens

by | October 4, 2022 | Life Insurance | 0 comments

Earlier this year, we partnered with Argentine artist Eugenia Mello to create illustrations that reflect the theme, Life insurance—an easy decision. As she so beautifully puts it, life insurance is “a multiplier of energy, where what you put in has the possibility of giving multiple possibilities to your loved ones.”
Here’s a closer look at her process and what she had to share about her work.
 
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Life Happens: How did you get started as an artist?

Eugenia Mello: I studied graphic design at university in Buenos Aires, and I really liked graphic design, but I felt like it was missing something for me. So I went into illustration additionally, and I realized that what I liked about illustration was what I felt had been missing: expressing something. Eventually, I applied for my master’s program in illustration.

LH: How would you describe your artistic voice in your own words?

Eugenia: I started to find one extreme end of a string, a theme, and I started pulling that string. In the beginning, I started drawing dancers, and I didn’t really know what it meant. I was told that I should draw what I knew, and that’s what came out.

I started studying dance, I went to a lot of dance shows, and I started getting the sense that there is actually a really beautiful parallel between drawing and choreography. Without words, they could say emotions very clearly, and that really resonated with me. I started finding how I wanted to speak, discovering what I sound like.

The biggest theme was motion. What is my filter through which I see things? I look at things through motion. Motion is a way of saying “alive.” Motion is life. What I liked about being chosen for this particular project was that it was another way of expressing this idea of motion. Sometimes it doesn’t need to be any more complex than that. This character is in motion—then it’s alive.

LH: How did you come to the final work of art for this project? What was the process like?

Eugenia: You know, it’s not a niche you think about—life insurance—when you think about potential clients. But when I spoke to Life Happens, I really liked this idea that actually, it’s a celebration of life. That is exactly what I feel like my work is about. There’s an intrinsically optimistic energy that I wanted to translate.

LH: What were you hoping to convey with your illustrations for Life Happens?

Eugenia: I wanted to create characters that weren’t exclusionary. That’s part of the responsibility of making images: You’re creating worlds. It’s about a group of families that coexist together; they’re having joy in a very regular day. The color yellow is joy to me, it’s the color of the sun. When I see it, it feels like a day that you don’t want to end… those summer days that are just perfect and you think, “I wish this day would last for a very long time.”

LH: What did you learn about life insurance? Have any of your views about life insurance changed since working on the project?

Eugenia: Life insurance is like a bit of a net, holding those families together. And that’s something you can count on. That’s what I tried to say in this image. Growing up, I think I only heard of life insurance in movies. I never put too much thought into it, but I think that’s because when you’re young, you’re just living. As you get older, you can put into focus how much life means to you. As the stakes get higher and your net of people gets bigger… that’s when life insurance really starts to make sense.

 

You can follow Eugenia on Instagram at @eumiel. To order Eugenia’s artwork shown above as a print for your home or office, click here. You can select your own dimensions and the print will be shipped straight to your address.

Affordable Financial Security

Affordable Financial Security

by | September 22, 2022 | Life Insurance | 0 comments

As Hispanic Heritage Month unfolds, we feel it’s important to ensure that the Hispanic community understands and takes full advantage of the financial tools that can help safeguard their families’ financial well-being.

A key piece in that financial toolkit is life insurance. And here’s why: It’s often overlooked. Most people don’t think—or want to think—about death or not being there for their loved ones.

But it does happen: 12-year-old Miranda Rivera saw how her family fell apart, including financially, after her father, who was the breadwinner, passed away. (You can watch her story here). She was one of our Life Lessons Scholarship recipients, and she sums up why getting life insurance is so important.

“Life insurance can’t bring a parent back, but it can make the road afterward easier for those left behind.”

And here’s why it matters that we talk about it openly: Hispanics have the lowest life insurance ownership rates of any race or ethnicity. Six in 10 have no coverage at all, according to a new report, “Hispanic Americans: Life Insurance Ownership and Attitudes,” a supplement to the 2022 Insurance Barometer Study by Life Happens and LIMRA. But a silver lining is that 51% know they need life insurance, including 40% with no coverage at all and 11% who have some but know they need more.

Affordable Financial Security

Additional good news is that one of the top barriers to ownership is that many people, including Hispanics, think life insurance is too expensive. So why is that good news? Because 75% of people overestimate the true cost of life insurance. As a general guide, a healthy 30-year-old can get a 20-year term life insurance policy with $250,000 of coverage for around just $13 a month.

Back to financial security: Life insurance seems to be a key element, according to the full Barometer Study. Two-thirds of people who own life insurance say they feel financially secure, while that’s the case for less than half of those who have none. Those who feel most secure have life insurance through both work and an individual policy they own (78%). This is important for the Hispanic community to consider, as only 40% say they feel financially secure—that’s 18 points lower than any other demographic.

Of course, financial security is a complex set of factors, but life insurance addresses an important one: income replacement. What happens if the breadwinner were to die? For Hispanics, more than a quarter (28%) said they would feel the financial pain in a month or less, and about half said it would be within six months (48%). This is exactly what life insurance is designed for—replacing that lost income and ensuring the family will be OK financially.  

Securing the Future—and the American Dream

Parents want a future that is brighter and better for their kids. Take Roberto Loera, for example. He moved to the U.S. from Mexico to pursue the American Dream and ensure his kids would thrive and be able to go to college.

He made the commitment to get life insurance before his family joined him in Colorado for less than $20 a month. He tragically died of a brain tumor at just 47, but his wife and two sons were OK financially, with plans for college still intact. Roberto had laid the path for his family to not just survive, but thrive. (You can watch his story in English or Spanish.)

 

Getting started on the journey to life insurance ownership is easy. You can learn more about the basics in English or Spanish. Then, you can use our online Life Insurance Needs Calculator, also available in English or Spanish. When you’re ready, reach out to an insurance professional who can help you choose the coverage that fits your needs and budget. If you don’t have one yet, you can use this Agent Locator.

5 Myths the Hispanic Community Has About Life Insurance

5 Myths the Hispanic Community Has About Life Insurance

by | September 8, 2022 | Life Insurance | 0 comments

Insurance professional and Mexican American Monica Rangel works hard to educate the Hispanic community about life insurance.

The founder and CEO of Efficient Financial and Insurance Solutions in Brea, Calif., regularly helps members of her local community get life insurance coverage. Here are the biggest misconceptions she encounters from her Hispanic clients.

1. We can rely on loans or help from family if anything happens.

Monica says this is one of the most frequent myths she hears in the Hispanic community. Many clients like to think that their children will take care of them or that extended family members will come forward in times of need; any money needed beyond that could be covered by loans. But as she says, “Your kids are not your retirement plan.”

We know we can rely on our families for support as we navigate life. However, if you were to die, your family’s world would shift on its axis—emotionally and financially. A time of grief is not the time to crowdsource funeral funds or endure added stress from money troubles.

Life insurance may be a solution that fits your budget so that doesn’t happen.

2. Life insurance will be a free ride for my kids.

For many of Monica’s clients, it’s important to them that their children learn how to earn things. When “nothing is free” in life, they want to teach their kids how to work hard and get what they need.

According to recent data from the 2022 Insurance Barometer Study by Life Happens and LIMRA, Hispanic Americans have a slightly higher likelihood than other race and ethnic groups to say that they value hard work and don’t feel that anyone should get richer from their life insurance policy (35 percent).

Your parents taught you hard work, and that’s what you’re teaching your children. But life insurance isn’t about leaving your kids a financial windfall. It’s about practicing—and teaching—the principles of personal financial responsibility.

As Monica puts it, “Isn’t it our job as parents to help our kids learn to be better than us? We came here for a better life, the ‘American Dream.’ We immigrated to this country to give our kids better opportunities. Why aren’t we using our knowledge we’ve learned here to create a financial step up? Why wouldn’t we give them a tool, like life insurance, to help them?”

Preparing for the future with life insurance is a lesson in goal setting, budgeting and discipline that can help your loved ones to be OK financially—that’s a valuable lesson to pass on.

3. I’m going to “jinx” myself if I get life insurance.

Monica says some of her Hispanic clients fear that getting life insurance will tempt fate. They think something bad will happen to them as a result of getting coverage.

“The image I have in my head is the grim reaper,” she laughs. “I promise the grim reaper doesn’t follow me around! If that really happened, life insurance companies would be out of business.”

Overall, only a quarter of Americans are comfortable talking about end-of-life planning, but Hispanics report they’re even less at ease when it comes to those conversations, according to the same Barometer Study.

We get it, talking about death isn’t on the top of your to-do list. Just like those annual doctor appointments or finally getting the car serviced… it’s easier to put it off. But tomorrow is never guaranteed. The more familiar you are with life insurance, the easier it becomes to have those tough conversations. For more tips on talking about life insurance with your loved ones, check out this article.

4. I’m only going to leave this earth with a handful of dirt. I might as well “live it up” while I can.

Monica shares that many of her Hispanic clients feel that life is about living it to the fullest. “It’s very much a cultural thing to think of living in the day-to-day. Even in Spanish songs, there’s a common theme of ‘you’re only going to take dirt with you when you die,’ so you might as well live it up while you can.” She says this contributes to a culture of living paycheck to paycheck.

This sentiment is supported by the Barometer Study, which shows that paying monthly bills is a top-five financial concern for Hispanic Americans, but not for other ethnic groups. This relatively high level of concern among Hispanic respondents (46%) suggests many members of this group aren’t able to address competing financial priorities.

It’s understandable… bills, rent or mortgage, car payments, childcare, food, gas. The list goes on. But what would happen to your family financially if you died? If you’re gone, so is your income, but their bills and expenses stay the same. If money is tight, life insurance picks up the financial burden for your family when you’re no longer there to do it.

What Monica tells her clients is, “It’s ok to live it up, but why don’t you pay yourself first? Live it up today, but also, let’s create a strategy so you can live it up tomorrow too.”

5. I’m going to lose all the money I’ve put into the policy and not get anything back.

Monica says her clients often misunderstand life insurance and view it like other types of insurance where you make payments “just in case,” but don’t necessarily receive anything in return.

She is quick to educate clients about the different types of life insurance. While it’s possible that your beneficiaries wouldn’t receive a death benefit with term insurance if you died after the term ended, with permanent insurance you’ll have lifelong protection for as long as you pay the premiums. This means your beneficiaries will receive a payout when you die (based on the claims-paying ability of the insurer), whether that happens to be next month or 40 years from now.

Another way that permanent insurance dispels this myth is through what is known as living benefits. These policies can build cash value over time that you can use while you’re still alive to pay for anything you wish, like a down payment on a home, income for your retirement and more (accessing the cash value will decrease the death benefit).

 

Working with an insurance professional like Monica is a great way to learn more and get coverage. Check out our helpful information on how to choose a qualified insurance professional. Then use our Agent Locator to find one in your area.

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Roselyn Sánchez on Life Insurance: ‘I Know I Made the Right Decision.’

Roselyn Sánchez on Life Insurance: ‘I Know I Made the Right Decision.’

by | September 1, 2022 | Life Insurance | 0 comments

Our 19th annual Life Insurance Awareness Month (LIAM) is here! Actress, producer, proud Puerto Rican, wife and mother Roselyn Sánchez joins us this September as LIAM Spokesperson to help educate others on the importance of getting life insurance.

As a mom of two, Roselyn has life insurance for the sense of peace that it brings her. If anything happens, she knows there’s something in place that can give her children a sense of financial security.

As she says, life insurance is about “financial security, peace of mind, tranquilidad.” It’s a simple and affordable way to protect the ones we love.

For Roselyn, the greatest thing we can give the public this month is greater education on life insurance and how to take action. We know the perfect place to start:

  • Check out our Life Insurance 101 information as a first step (also available in Spanish). As a nonprofit, we’re here to give unbiased information that can help more people get protected with insurance. We don’t sell anything, and we don’t endorse any particular insurance products. Our mission is only to help educate you.
  • Estimate your coverage needs by using our Life Insurance Needs Calculator in English or Spanish. The amount of coverage to buy depends on who you want to protect financially and for how long.
  • Then, find an insurance professional in your area. It can be helpful to work with a professional who can answer any additional questions you may have and offer solutions for your unique situation.

There’s no better time than Life Insurance Awareness Month to make that easy decision for your family: Get life insurance.

What Does a Million-Dollar Life Insurance Policy Really Mean?

What Does a Million-Dollar Life Insurance Policy Really Mean?

by | August 26, 2022 | Life Insurance | 0 comments

One million dollars seems like a lot of money, and for most of us, it really is.

However, when it comes to life insurance, is a one-million-dollar life insurance policy enough? Is it too much?

Let’s look at what a million-dollar life insurance policy really means for your financial security.

The Basics of a One-Million-Dollar Life Insurance Policy

First, let’s start with a few basics. Life insurance is a financial protection you provide to your loved ones if you die. Depending on your family’s stage of life, you may need more or less coverage.

Take, for example, newlyweds in their early twenties with a baby on the way, and then compare them to a retired couple with grown kids and sizable savings. If a spouse dies in either of these scenarios, the financial outcomes could be very different. The young couple may not have as much saved in the bank to cover their living expenses compared to the older couple.

In this example, the one-million-dollar death benefit might be more than enough for the retired couple. However, the newlyweds may see a need for a larger death benefit as they assess their obligations as a young and growing household.

What does life insurance need to cover?

Common considerations to factor into your decision include mortgage payments, car payments, student loans, personal loans, credit cards and other debts. You should also consider everyday living expenses and future costs (like college tuition for the kids and retirement costs).

Depending on your circumstances, suddenly that big $1 million number can start shrinking.

Although $1 million seems like a nice, round amount when applying for a life insurance policy, it makes sense to take a more strategic path. Using a calculator to help you decide how much life insurance is appropriate for your situation will give you a better picture of how much money you need to support your loved ones if you die.

Who can get a million-dollar life insurance policy?

Let’s say you’ve decided that a million-dollar life insurance policy is the right amount. Then, you need to see if you can get one. The first question to ask yourself is, “Can I afford to keep up the monthly premiums to carry the policy?” When you buy a life insurance policy, you pay a monthly premium to keep it in force.

How much does a one-million-dollar life insurance policy cost?

Typically, the premium for a million-dollar term policy starts at around $30+ a month and then goes up from there based on your age and health status.

Here are a few of the factors that affect the cost of the policy:

  • Age
  • Lifestyle factors (i.e., skydiving or smoking)
  • Health
  • Gender (women tend to live longer than men)
  • Policy type (Term vs. Permanent)

Term vs. Permanent for a Million-Dollar Policy

Buying a one-million-dollar permanent life insurance policy will have a significant price difference over a term policy with the same face value. Term insurance will be cheaper, as these policies have no accrued cash value and end after a certain amount of time (the “term”).

For example, if you have a 20-year term policy for $1 million, you would pay your monthly premiums for 20 years, and if you did not die during that time, your policy would end at 20 years with no value attached to it after that. As mentioned before, perhaps you paid $40 a month or so for that policy.

On the other hand, you may pay hundreds a month for a one-million-dollar permanent policy, but that policy will be, as the name suggests, permanent. If you keep it long enough, it will also accrue cash value that can be accessed if needed.

Do I Have to Take a Medical Exam?

Your next question may be, “What’s the process for getting a policy?” The insurance company offers you a life insurance policy only if you are considered a reasonable risk for them. The way the insurance company determines this is through a process called underwriting. They’ll ask you health questions, do a medical exam and/or obtain medical records from third-party sources.

No Medical Exam Options

Some insurance companies advertise “no medical exam needed” for their insurance plans. However, these are typically for policies with a lower face value than a million dollars.

Express policies with no exams can sometimes go up to $300,000, but any higher, and you’re looking at more scrutiny to get underwritten. Perhaps you may even be able to find a company or two that offers up to $1 million with no medical exam. But even with these, there is a good chance that you won’t get through the whole process without a follow-up exam.

Conclusions

Knowing what a million-dollar life insurance policy means in today’s market and in today’s dollars is an important benchmark to understand. It’s a good starting point for making your own decisions on life insurance. Then, your next step should be to dive deeper into your own needs and find the insurance product that is right for you.  

Finally, if you are looking for help in this process, we recommend speaking with an independent insurance agent. As a licensed professional, an agent can help you compare products and insurance companies so you can find the best solution for your situation.

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