LIFE INSURANCE

Myths about life insurance

The majority of American households have several varieties of life insurance. But so few of us understand that you drag the most. Five of the most dangerous myths, costly mistakes of the life insurance ... Myth 1: I have only enough life insurance for my family to cover future costs. The reality: If you really want for the welfare of your family, you need more than that. The good news is that this additional coverage is not defined, like many of you, as you think. A typical family should combine the rest of the mortgage ... Design Annual inflation in the cost of living for the rest of the spouse's life ... And College costs, if they are a factor (assuming costs increase by 3% to 5% per year) to determine the needs of the family. Subtrahiere the amount that the surviving spouse is to win if she planned to return to employees at some point. Example: A 40-year-old man, who was in good health, the payment of approximately $ 875 per year for a mere 20 years in terms of concept of life insurance, or $ 1 million on hand, which would be enough for all his family's future expenditure. And, for about $ 1750, it was $ 2 million, enough to completely replace the work of his life outcome if his salary had an average of $ 80000 per year for the remaining 25 years of his career. Another $ 875 per year (about $ 73 per month) is a small price to pay to ensure that their families do not suffer financially after his death. In comparison, the cost of life insurance, please contact your insurance professional. Myth 2: Duration misurance is always a better deal than a lifetime. Factice: Term life insurance is a general rule, a reduction in premiums enduring value of cash in politics, like any life insurance from the simple notion of politics, with a fee of investment. However, in special circumstances - if you plan for the policy for more than 20 years ... He can afford the premiums ... And the maximum income tax and other investments such as a 401 (k)-plan for a lifetime and an assurance of the IRA represents most sense. Assuming that you do not dip in your investment for at least 20 years for the entire return of a whole life, including death benefits and the return on investment, it is probably higher than what you deserve, by buying the same amount, the concept of hedging costs and investments in municipal bonds difference - which is a comprarable with regard to investment risk and tax treatment. Other options are permanent life insurance universal variable, which would be capable of young couples in the années'20 and early 30, since the investments could component strong growth in investment funds ... And Universal Life, which for those whose income can vary considerably from year to year, like the pros, because it allows the insured to determine the amount of the premium each year. * Subject to change prices. Other benefits of permanent (value casb) Insurance: you can borrow at the current value of your policy at the lowest interest rates. In addition, payments for a maximum amount of your investment are not taxed. Of course, the permanent insurance loses its charm, if you have access to your money, two decades ago or more elapse. Life Insurance before loading his own expense, if you are the money while your investment is again suffer disproportionately. Myth 3: My wife does not work, so they do not need their own life insurance. Factice: Stay-at-home spouses may not generate income, but they are often expensive services to be replaced, such as cleaning, cooking and childcare. Some spouses also find that their own ability to win is temporarily reduced to the loss of a partner. For example, a lawyer of one's own practice, spent the years after the death of his wife, around the foot of drowsiness, created for the purpose of overthrowing their income. Couples with children must be at least $ 1 million for the coverage except spouse, and even more when the family is large or live in a region dear. You can change this number decrease, if the children are in their teens and the reduction of which he once again, children are out of the house. A woman of 40 years, non-smokers and in good health should be able, from a 1 $ 20 million at year end to approximately $ 730 per year. Myth 4: My political life term can be converted to whole life, so I have no worries in the scope of losing forever if I fall chronically ill. Fact: It is true that over two thirds of the length policvholders can convert whole life, whatever handed health problems, which many of the "convertible" political concept which can be converted within five or 10 years, Windows - You and insurance You can not warn that if the window to close. If you can not convert lapses, and politics, to receive insurance so that all the money you paid premiums, not to pay a tenth of a dollar on politics. It is not unusual for the insured, who have developed serious health problems to miss its chance, without knowing it, the whole life of converting to find themselves and then for the most uninsured and uninsurable. Self-defense: Make a habit of reviewing your policy at least once a year, so you miss your chance to convert - or another appointment. Mytb 5: I am soon to retire, so I no longer need life insurance. The reality: It might also, in some cases, but life insurance can be useful for retirement planning and / or planning. Examples ... * If your employer offers a pension plan, defined benefit, it seems that two payment options - only an annuity, while the only income in your life, and a joint life annuity, a reduction in monthly payments until that you and your spouse to death every two. Despite these small payments a month, most people, you choose married life together for the good of her husband. Assuming that you are in good health, living alone is a better choice, even if you have a life insurance policy with your spouse as beneficiary of the. If you want to use the first, your spouse could live on revenue. It is best to purchase the insurance sector, a decade or more, before going to retire and lock in a rate attractive age. * If you are expecting a large estate - $ 3 million or more - it may be appropriate to use life insurance to pay the tax. Too often, people will not buy, the proper insurance for this purpose. The choice is usually a "second to the" policy - one that relates, if the surviving spouse dies. But if the figures Crunch, second, the policy may not be bad for most couples aged under 60 ... And each couple in which man is more than five years older than his wife or woman is more than 10 years older than her husband, because women live on average five years longer than men. In such cases, it is better for each spouse, buying a separate policy. Scenario: A man and a woman, respectively 45 years and be healthy, you would pay an annual premium of about $ 11000 for a $ 1 million second-die lifetime. If they had bought separate $ 500000 entire political life, they should pay a total of about $ 17500 in annual premiums. (The high cost reflects the life of the coverage of this kind of policy.) At first glance, the second, the policy is excellent and can save approximately $ 6500 per year, but the insurer does not pay Nothing, until both spouses die. Through separate policies, the insurer must pay $ 500000 after the death of the first spouse. If the surviving spouse was to invest $ 500000, he or she could occur over $ 800000 in a decade, even in the case of 5% after tax. Bonus: Once the first spouse died, the premiums must be paid on the policies spouse, a reduction in costs. Second-to-Die-making politics makes sense if both spouses aged 60 and over and in the vicinity of age. In this case, the rates are lower than what they are dying for many years differences.