If you’ve been watching or reading about the global stock markets sliding yesterday and continuing today, you’re probably worried. And rightly so. No one wants to return to the financial chaos that plagued us just a few short years ago.
According to The New York Times this morning, “Investors continued to pull funds away from stocks—including in emerging markets despite their solidly growing economies—and shifted instead into the perceived safety of assets like U.S. Treasury bonds, German bunds and precious metals.”
That sentence can be summed up in just one word: safety. People are looking for a safe place to put their money where it can still grow. And in a climate like this, there is very little safety. There is an exception, however. Owners of whole life insurance have seen their cash values rise when the value of many of their other financial assets have slipped, and this will continue to be the case.
Plus, the cash values in these policies, which accumulate on a tax-deferred basis, can be used in the future for any purpose you wish. You can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement.
In addition, the life insurance policy continues to do exactly what it was designed to—serve as the foundation of a family’s financial security. The death benefit will remain the same through the ups and downs of the economy. Now that’s something to count on.
It’s August, so just about everywhere you look there are ads for back-to-school sales. It’s wistful for me. I loved going to school, and especially liked stocking up on schools supplies. Nothing like the smell of newly sharpened #2s. (Do kids even have to bring those to school anymore?)
But because of the LIFE Foundation’s LIFE Lessons Scholarship Program, I’m also keenly aware of those students who won’t be going to school—college, sometimes even high school—because their parent or parents died without life insurance. Instead of hitting the books, they’re punching time clocks. Recently I spoke with one young woman who got up at 4 am to unload trucks at a big box store just to keep a roof over her family’s head, after her father died without life insurance. Where does school fit into a scenario like that? It doesn’t.
A common theme to these stories of a loss of a parent without life insurance is that the children talk about how much their parent loved them. At the same time, they also talk about the fact that without life insurance the struggle after the parent is gone is sometimes unimaginable.
Graduating early from high school, tutoring every night until 9 pm to earn money, scrounging for food stamps at the end of the month. This was the reality for Esther Kim after her father died suddenly. You can watch her story here.
Esther was fortunate enough to be awarded one of the LIFE Lessons’ scholarships to help her realize her dream of a college education. But there were thousands that applied that didn’t get money, who may not being going to school. That’s why it’s so important for parents to make sure they have life insurance—and enough of it. To find out more about your life insurance needs, start here.
School may be out, but that doesn’t mean the learnin’ is over. Summer’s lazy days usually afford us a bit more free time, so take just five minutes or so for a quick educational video: Life Insurance 101, where agent Mark Chandick walks you through the basics. While there is no quiz after the video, pay attention, because as Chandick says, “Purchasing life insurance may be one of the most important decisions you make in your financial life.” Watch
here.
It’s not often that we get to help a person in need with a simple click of a mouse—so here’s your chance. The three young students profiled here have had to struggle financially and put dreams on hold because of the death of a parent who had inadequate or no life insurance.
The nonprofit LIFE Foundation is sponsoring an online vote to help determine which of three students will receive $5,000 to help pay for their college education. The two runners-up in the vote will receive scholarships in the amount of $2,500.
Joshua Gleim; Altoona, Pa. – Joshua’s stepfather was his family’s sole breadwinner. When he died, the only life insurance he had was a policy purchased through his business to keep it going in the event of his premature death. His family was left with almost nothing, not even the means to pay for his funeral. Joshua immediately started working to help support his family. During his high school years, he worked full time in addition to studying and pursuing extracurricular activities. Today, he attends Penn State University and works in a fast-food restaurant to help put himself through school.
Skyler Baird; Draper, Utah – When Skyler’s father died, he left behind his wife and three children, but no life insurance to cushion the financial blow to his family. His business died when he did, further exacerbating the family’s financial struggles. Skyler isn’t letting this get in the way of his college aspirations, even though he knows that paying for his education will be difficult. He plans to attend the University of Utah this fall. He’s also committed to publicly sharing his father’s story to inspire other families to plan more wisely.
Mahogany Fleming; Cincinnati, Ohio – Mahogany was just one year old when her father was shot and killed, leaving her mother to raise Mahogany on her own. Without the financial support of a life insurance policy, her mother was forced to work three jobs at times, and still struggled to make ends meet. Despite the financial hardships her family has faced, Mahogany is determined to obtain a college degree in musical theater and business. She’s currently attending a career high school where she will receive her cosmetology license so that, after graduating, she can bring in a steady income to help cover the costs of her college education at the University of Toledo.
Cast your vote here: www.lifehappens.org/vote.
Each year the LIFE Foundation eases the path of students like these through the LIFE Lesson’s Scholarship Program. This year, it is awarding 60 scholarships totaling over $115,000, which have been funded in part by generous contributions from the NAILBA Charitable Foundation and the Million Dollar Round Table Foundation.
The winner of the online vote, as well as the other 2011 scholarship recipients, will be announced in September 2011. To donate to the LIFE Lessons Scholarship Fund, go to www.lifehappens.org/donate.
Women are better educated today than ever before, and we are seeking to make smart financial decisions for ourselves and our families. We want to be more self-reliant, and we are living longer. Given this, we need to understand the importance life insurance plays in our financial planning. We need to work together to assure we have the information and access to key insurance products and services required to reach our long-term goals
How can we be financially prepared for our increased longevity?
There are over 20 million women in America who will live longer than our mothers, and who, in a sense, have the highest financial risk. This certainly is a challenge, but it also has associated opportunities. The concerns include:
- Outliving our retirement assets or needing to reduce our lifestyles
- Changing careers or jobs without access to portable benefits
- Living longer than government programs provide for
- Reduced medical and retirement benefits
- Anticipating less assistance through employer-sponsored retirement and insurance benefit opportunities
- Living longer than a spouse or partner and/or not having help needed from children or other family
Living longer is certainly a concern but, if we are adequately insured, we can achieve a level of self-reliance that takes us through our lifetime successfully without having to downsize our lifestyles, be challenged significantly with health-care issues or avoid family related financial obligations.
How can we obtain the information we need?
Since women influence over 90% of financial decisions for themselves and their families, it’s especially important that we have access to the information, products and services needed to make sound financial decisions. As women, we tend to gather information that is meaningful and then analyze it before making decisions. It is critical to have access to this important information and to industry experts in a forum that allows for questions, answers and idea sharing with women in similar situations. Take a look at Penn Mutual’s Worth for Women site, which was created especially for women to address their needs and goals. And the LIFE Foundation website and blog are great places to obtain information about life, health, disability and long-term care insurance for whatever life stage you may be in.
Why is life insurance an important part of the solution?
Due to a renewed interest in security and safety, the benefits of life insurance have become better understood and utilized. And rightfully so. Life insurance not only provides security in the form of a death benefit, but with permanent life policies, we have the additional opportunity to accumulate tax-deferred cash value. This, compared with mutual funds, stocks or bonds, puts insurance in a class by itself providing safe, secure returns plus a death benefit. Life insurance makes sense for women, at any age, as it provides the safety and security many of us need and the lifestyle options we want.
