Our Time of Greatest Need

Our Time of Greatest Need

My mother was so loving. She was also my best friend and my rock.

I had a great childhood. My mom was the educational director at the local nature center, and I spent a lot of time with her and all the great animals. And that included at home. We had a cat called Precious and a dog named Peaches, and a pet not many other kids can say they had: a bull python.

Everything changed, though, when my mom was diagnosed with liver cancer on my fifth birthday. I started spending a lot of time in hospitals. That was OK because I was still with her.

But on October 26, 2004, I gave my beautiful mother one last hug and she whispered to me, “I will always be proud of you.” I was 6 at the time, and she was just 44.

For a long time I didn’t understand the finality of death. I remember telling my sisters that I wanted to see my mom. They explained that she was in a better place now, but I didn’t understand what that really meant. I thought she had gone away or was hiding from me.

During that difficult time—when your only anchor is your family—mine was being pulled apart by financial hardship. My mother didn’t have life insurance, which meant my dad, who was 73 at the time, ended up working more than 50 hours a week. And my sisters, who were in high school, had to find work to help put food on the table. We hardly saw each other, which made things even worse.

It would have saved us not only from financial hardship, but from the heartbreak of not having our family together in our time of greatest need.

When I was 16, I got two jobs in order to help out, but it compromised my sleep, my studies and the little time I did have with my family. Our ritual of a family dinner each night became obsolete. At this point, I’d not only lost my mother, but my sisters and father too, because they were always working.

My mother never got life insurance because she thought it was too expensive, but I know now that life insurance is priceless. It would have saved us not only from the financial hardship that we faced after her death, but from the heartbreak of not having our family together in our time of greatest need.

 My sisters weren’t able to go to college, but nothing is going to stop me from getting my college degree. That’s why I am so thankful for the scholarship I’ve received through the Life Lessons Scholarship Program. It’s making my dream of a college education come true.

I’m now a freshman at the University of South Florida in Tampa. I’m majoring in bio medical sciences and my dream is to go on to medical school. And this coming summer I’m looking forward to giving back as well by joining the non-profit organization MedLIfe on a trip to Thailand to help at a local hospital in an impoverished area.

I know I have a lot of hard work ahead of me, but I’m looking forward to the day when I get my college degree, something my mom wasn’t able to do. I know she will be smiling down on me when I can finally say, “Mama, I made it.”

Editor’s Note: You can support students like Samantha through your tax deductible donation the the Life Lessons Scholarship Program. And know that 100% of your donation goes directly to fund the students’ scholarships. To donate, go to lifehappens.org/donate. And please spread the word.

Here’s What You Need to Know About a Long-Term Care Insurance Policy

Here’s What You Need to Know About a Long-Term Care Insurance Policy

So you’ve made the decision to learn more about long-term care insurance. That’s smart, as neither health insurance nor Medicare would pay for extended long-term care services in the event that you needed them in the future. Plus, there’s about a 70% chance you’ll need some type of long-term care after age 65, according to government stats. And given that the cost of long-term care can quickly deplete your life’s savings, it just makes sense to add it your financial plan.

When you prepare for any upcoming investment or purchase, you probably run into some unfamiliar language or terminology in your research, which can be frustrating and downright confusing.

Searching for a long-term care insurance policy is no different. A long-term care insurance policy describes coverage under the policy, exclusions and limitations—and can be laden with industry jargon. Here’s a breakdown of the fundamentals:

There are four primary components that determine your long-term care benefits and influence your monthly cost.

1. How much. This is the total maximum benefit available under any policy. There are many maximums to choose from, ranging from $100,000 to $250,000, $500,000 or more. Benefits are available until you have received your maximum benefit in total.

2. How fast. This is the monthly limit you can access from your total maximum benefit. Insurance companies do not pay out your “how much” in a single lump sum. Rather, you access your benefits in smaller amounts on a monthly basis up to a predetermined monthly maximum.

Depending on the carrier you choose, your monthly maximum could range from $1,500 to $10,000 a month. The “how much” and “how fast” components work together to determine how long your coverage will last. If your monthly maximum (“how fast”) is $5,000 and your total policy maximum (“how much”) is $250,000, it would take 50 months (four years, two months) before your exhaust your policy benefits. If you needed $2,000 a month to pay for home care, as an example, it could take more than 10 years to exhaust a $250,000 policy. The greater your “how much” and “how fast,” are the higher your premium will be.

3. Growth rate. This determines how your benefit grows over time. The most common growth rate today is 3%. If your policy started with $176,000 in your “how much” and $4,500 in your “how fast,” a 3% annual growth rate would double your benefits in 24 years to $352,000 total maximum benefit and $9,000 monthly maximum respectively.
You also have the option of choosing a growth rate other than 3% or to increase your maximums upfront and forgo a growth rate all together. A specialist can help you identify the growth rate that best suits your goals and budget.

4. Deductible. Long-term care insurance has an elimination period that, like a deductible, determines how much you may have to pay out of your pocket before benefits are paid. One distinction to note is that an elimination period is stated in days, not dollars. The most commonly selected elimination period is 90 days. This typically means that you must receive 90 days of care that you pay for out of your pocket before benefits are available.

Not that difficult when put simply, right? I hope you feel better prepared in your search for the right policy and that I have also remove some of the confusion. long-term care insurance is here to help you live the lifestyle you want 10, 20, even 30 years down the road.

3 Life Insurance Myths That Could Hurt Young Families

3 Life Insurance Myths That Could Hurt Young Families

When you’re just starting out, it often seems that a dollar never stretches far enough. And with new commitments, such as buying your first home or having children, comes the responsibility to make sure your loved ones will be provided for financially, no matter what life may bring.

If you were to die unexpectedly, life insurance is there to make sure your loved ones can maintain their standard of living, stay in your home, send your kids to the same schools and keep their plans for the future on track. It also gives the grieving spouse or partner time to make decisions, or in some cases find work outside the home, without worrying about finances.

But common misconceptions often prevent young families from purchasing the life insurance they need.

Myth 1: I only need life insurance if I’m the primary breadwinner in my family. Whether you bring home the largest paycheck in your household or a smaller one, your family relies on your income to maintain its quality of life, and it would be missed if something were to happen to you. Even if you don’t work outside of the home, having life insurance is a smart choice. Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management, which can be costly to replace for a surviving spouse or partner.

Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management, which can be costly to replace for a surviving spouse or partner.

Myth 2: If I buy a term life insurance policy and find that I still need protection when the term ends, I can always renew the policy. Term policies are quite popular with many young families, and for good reason: They typically offer the greatest coverage for the lowest cost. Term insurance provides protection for a specific period of time (the “term”), and can be ideal for people who feel they have financial needs to cover that will disappear over time, such as a mortgage or a child’s education.

However, many families realize that even after the kids are grown and the mortgage is paid off, their need for insurance continues—to provide income for a surviving spouse, eliminate debts, pay taxes, etc. Because life insurance premiums increase with age, renewing your policy when the term expires can be very expensive. Moreover, poor health may make renewal impossible.

Myth 3: I only need term life insurance. Term life insurance makes sense for many young families because their need for coverage is great and their budgets are often limited. But that doesn’t mean it’s the only type of insurance you should consider.

Permanent life insurance policies provide a death benefit as well as other unique features such as lifelong protection and the ability to accumulate cash values on a tax-deferred basis, similar to assets in most retirement-savings plans. You can access the cash values for important uses like a child’s education or a business opportunity. (Keep in mind, however, that withdrawing or borrowing funds from your policy will reduce its cash value and death benefit if not repaid.)

If these features appeal to you, it might make sense to buy a large face amount term policy, giving you the death benefit protection you need, and combine it with a smaller permanent policy. When your budget permits, you can gradually increase your permanent insurance coverage. If you’re not sure which would be better for you, you can answer a few easy questions on our Product Selector.

And remember, insurance agents and advisors are there to help you. They can step you through your life insurance needs and solutions at no cost or obligation. If you don’t have an agent, you can use our Agent Locator here.

Engaged? 7 Financial To-Dos to Check Off Your List

Engaged? 7 Financial To-Dos to Check Off Your List

You’ve picked out the rings, maybe even the venue … things are rolling toward your Big Day. But don’t forget an important element of your new life together: getting your financial lives in sync. Talking about finances with your fiancé or partner may not seem like the most romantic topic, but what better way is there to show your loved one how committed you are to a lifetime of happiness together? Here’s how to get started:

1. Have “the talk.” Tell each other where your key financial information (like checking, savings, and investment accounts, mortgages, insurance, etc.), and important non-financial information and valuables (like birth/marriage certificates, titles/deeds for house/cars, jewelry, safe deposit key, etc.) are located. It’s important to understand each other’s financial dreams and plans, so that you know exactly what to do in any unforeseen situation.

2. Meld your financial responsibilities. While your chemistry may be great as a couple, take steps to make sure your finances mesh well together too. Avoid unnecessary arguments or confusion down the road by determining upfront your spending and saving habits, whether you’ll open a joint checking account and if the responsibility of paying the bills will fall to one person or be handled together. The key is clear communication with one another.

3. Contribute to an emergency savings fund. A financial rainy day is never in the forecast, so it’s important to always have at least six months’ worth of income in a savings account, or money market fund, which can pay for the unexpected. If that seems impractical, stash away as much as you can!

4. Get life insurance. If you have someone who depends on you financially, you need life insurance. You may have some life insurance coverage through work, and that’s a nice benefit to have. But often it’s only one or two times your salary. And while that may sound like a lot, think of what would happen to your spouse or partner financially if you died—they may be paying the mortgage and car and bills on just one salary instead of two. Plus, life insurance through the workplace generally goes away when the job does.

Getting an individual policy that you own makes sense. It’s very affordable when you’re young and healthy (a healthy 30-year-old would pay around $13 a month for a 20-year, $250,000, level-term policy) and you’ll have that coverage as long as you keep paying the premiums. For an estimate of how much life insurance you need, visit the easy online Life Insurance Needs Calculator.

5. Evaluate your disability insurance needs. Without your paycheck, how long would you be able to make your mortgage or rent payment, buy groceries or pay your credit card bills without feeling the pinch? If you’re like most, it wouldn’t be long at all: Half of working Americans couldn’t make it a month before financial difficulties would set in, and almost one in four would have problems immediately, according to a Life Happens survey.

Disability insurance ensures that you if you’re sick or injured you’ll continue to receive a percentage of your salary until you can return to work. Your ability to work and earn an income is one of your greatest assets and is something that you need to protect. Check out how much you might need with this online DI calculator. Plus, ask your HR person at work what type of coverage you might have through your job, and what percentage of your salary it would cover and for how long.

6. Where there’s a will, there’s a way. This is also the time to put in place a will, which specifies how one’s estate will be managed after death and designates executors, guardians and trustees. And don’t forget to get a living will, too, to make sure your spouse knows whether or not you want to be kept on artificial life support. You and your spouse should also designate a power of attorney—someone authorized to manage your affairs, typically financial ones, if you’re not able to handle them yourself.

7. Meet with an insurance professional. Many people don’t know that you can sit down with an insurance agents and talk through your needs at no charge—and no obligation. If this all sounds overwhelming, why not reach out for professional advice? To find an agent advisor in your area, visit our Agent Locator.

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