When has procrastination served you well? If you reflect back, you may be able to dredge up a time or two when you put off an onerous task only to find your sloth (can I just call a spade a spade?) rewarded. You watched the game instead of shoveling the walk, and lo and behold it snowed again so you got a two-for-one shovel in afterwards. Nice, right? While that may work with insignificant things, when it comes to important areas of our lives, like protecting the financial future of our family, should we really tempt fate by putting off important decisions?
It’s a lesson many of us need to learn. Our friends Fran and Frida make a good case.
OK, jokes aside. Getting life insurance may seem like a daunting task—something to put off until later (But I’m health!). The fact is, none of us know for sure if we have 20,000 more days to live or 20. What are you going to do about your life insurance needs?
People say that 50 is the new 40, but delivered along with your birthday cards when you turn 50 will be your membership card to AARP. Yes that’s right, your official “pass go” into the American Association of Retired People. Quite ironic, given that retiring at 50 isn’t plausible or realistic for 99.9% of us.
So, after you’ve shredded your AARP card (no early-bird dinner specials needed), it’s time to get realistic about what you need to do to get your insurance and financial life in order. Here is a quick checklist to help you do just that.
Make sure your retirement planning is on track. Hiding your head in the sand because your 401(k) took a hit over the past several years is not a retirement plan. While it may be painful to dissect what you currently have and what you need to save (probably much more than you are), it’s better than the alternative: living in poverty in retirement.
Review your life insurance coverage. Rates for life insurance have come down recently and it is often less expensive now than it was 10 years ago. Sit down with an agent to make sure you’re not overpaying for your coverage and that you have appropriate coverage for your risks.
Explore long-term care insurance. It’s important to understand that this isn’t “nursing home insurance”—80% of people who need long-term care services are receiving them in community settings, which for many of us will be our home. Long-term care insurance protects against the significant financial risk (aka draining your retirement funds) of potentially needing extended care services, at home or in a facility, due to a chronic illness or disability.
Examine your estate plan (or get one if you don’t have one). I know this is daunting, because it is for me, too, and I’m in this business. Keep in mind that the plan you had in place 20 years ago (when choosing a guardian for your children was key) needs to be reexamined. Now it’s about more about managing your assets, mitigating estate taxes and debt. Your advisor may be able to help you with this, or can refer you to someone who can.
Get your legal documents in order. Make sure you have durable power of attorney, which is a legal document that gives someone you trust the ability to act on your behalf if you were to become disabled or incapacitated. In addition, make sure you draft a health-care directive, which gives instructions about medical treatment if you were terminally ill or permanently unconscious.
You don’t have to go this alone. If you don’t have an advisor, you can find one in your community here.
I often marvel at how fast my kids (ages 13, 12, 10 and 10) are growing up. When I sort though photos of their early years, it sometimes feels like it was just yesterday that they began to crawl or utter their first words. Of course that’s not the case – but what if it was. What if everything we experienced in our lifetime, from our own childhood, to marriage, kids, retirement and even death was condensed from years into only a few short days?
It may be hard to imagine, but such is the life of a fruit fly. They’re known for their famously short lives. The average life span of a fruit fly is a mere 30 days. So why am I educating you about fruit-fly mortality on a blog intended to shed light about issues related to human mortality? Well…because we at the LIFE Foundation believe there’s a lot that we humans can learn from fruit flies when it comes to protecting the ones you love with life insurance. Fruit flies are born knowing that life is short. So when it comes to life insurance, they act right away. By contrast, we humans love to procrastinate, especially when it comes to things like life insurance.
Ok, so I know what you’re probably thinking. Do fruit flies really need life insurance? Well I’m glad you asked. Yes, they do. In fact, they need it more than most humans. I bet you didn’t realize that female fruit flies can lay up to 400 eggs at a time. That’s a lot of fruit-fly mouths to feed. Human families may not be quite that large, but it only takes one – one person who depends on you financially or otherwise – for you to need life insurance.
For a fuller glimpse into the world of fruit flies, go to www.insureyourlove.org. There you’ll find a series of funny videos featuring LIFE’s newest life-insurance power couple, fruit flies Frank and Fran. In addition to learning a thing or two about life insurance, you’ll find answers to the most frequently asked fruit-fly questions. Let us know what you think here on the blog or on our Facebook wall.
As our fruit-fly friends illustrate, time really does (eh-hem) fly. If there are people in your life who would suffer financially if you were to die in the next 30 days, don’t procrastinate. Speak with a life insurance professional who can help determine if you need life insurance to protect the ones you love.
I heard the other day that with tight economic times, people have begun to look at life insurance as a luxury, not a necessity. And while I can’t peer into anyone else’s home or bank account to see what’s going on, it seems to me a big gamble to put life insurance into the luxury column. It’s not something that you can get when you need it, because when you need it it’s too late.
And time is not necessarily on your side. You may be young, just raising kids and trying to make ends meet, thinking that you have time to get life insurance … later. But as John Butcher’s story shows, life may have different plans in store. Please watch his story.
And while it’s heartbreaking to see Tre without is his mother, think of how much worse off he’d be if his mother hadn’t made the decision to get life insurance. Is your family protected with life insurance?
While most of us understand the need to insure our cars and homes, many do not consider insuring what pays for those things… our paychecks. It is crucial to understand the importance of properly insuring your paycheck with disability insurance. Here are answers to six of people’s most pressing disability insurance questions:
1. Where does disability insurance fit within my financial plan?
Disability insurance is there to protect your income, should you become ill or injured and unable to work. In essence, it protects your paycheck. Your financial plan needs to begin and end with income planning. Unless you first protect your income, there is no financial plan!
2. What about disability insurance through my work—isn’t that enough?
That’s called group disability insurance. With this particular coverage, you are just a tenant. You are not in control because you do not own the policy. It can be taken from you in an instant; your employer may give it up or the insurer may decide to stop insuring the group. You are at their mercy.
Plus, 70% of employers don’t offer long-term disability insurance at work, which means if you do have coverage, it’s probably short-term disability insurance, which would not help you meet your financial obligations if you were sick or injured for an extended period of time.
Also, keep in mind that group long-term disability insurance typically only covers your base salary, so bonuses, commissions, incentives, deferred compensation, stock options and pension contributions are generally not covered. In most claims scenarios, people are very disappointed with the adequacy of their group disability coverage.
3. How does disability insurance differ from long-term care insurance?
Simple. Disability Insurance pays you and long-term care insurance typically pays someone else who is providing the care service.
4. How does disability insurance differ from life insurance?
When it comes to income replacement and asset conservation, there is no difference. The difference between disability insurance and life insurance is you’re either above or below six feet of dirt. The main concept to think about is that the chances of becoming disabled are much greater than dying prematurely.
5. How much disability insurance should I have?
You should have as much disability insurance as possible. No less than 65% of your gross income is considered adequate. I’ve not met anyone who is receiving disability benefits that has said that their benefit is more than enough. Unfortunately, when you’re disabled, the truth is always the opposite; there is never enough money. That’s why supplemental disability insurance is often necessary to adequately protect a person’s income. You can get a working idea of how much you might need here.
6. Where can I get disability insurance?
A good financial advisor or insurance agent will always offer disability insurance, so that should be a clue when choosing an advisor. If you don’t have an agent or advisor, you can start your search here.
