college – Susman

July 16, 2013

April 11th The Date That Changed the Conway Family Forever

For most individuals birthdates and anniversaries are memorable dates that are marked on a calendar. They are memorable because they represent a number of positive changes that impacted our lives. The Conway Family has those types of dates marked on a calendar, but they also have the date April 11 mentally marked.

People die in car accidents every day. Be sure your family has life insurance to protect them.

April 11^th is a particularly memorable date for The Conway Family because that is the date their lives changed dramatically.

The Conway Family was a friendly, loving family. The father, James, worked full-time at the local factory, while S andy, the mother, stayed at home to raise their two children, Peter age 6 and Gina age 10. S andy was extremely active in the school’s PTA, children’s sporting events, and other organizations throughout the community. That was the general picture of The Conway Family until April 11.

One evening while James was on his way home from a late night shift the unfortunate happened. A drunk driver failed to stop at a red light and slammed into James’s car. The impact killed James instantly and forever changed the lives of The Conway Family.

After the initial shock of the incident wore off, S andy was left with a tremendous task of piecing everything together. There were bills to pay, mortgages to h andle, and food to purchase; all of which were usually purchased with the money James brought home.

James had always been the main bread winner of the family and while S andy knew the truth was she would eventually find a job; the task seemed extremely difficult with 2 children and the money needed to come in right now. Luckily, James made one very important and potentially family lifesaving decision – he purchased life insurance.

James purchased a decent life insurance policy that allowed S andy to collect a considerable amount as part of the policy’s death benefit. This single decision helped The Conway Family considerably. It allowed S andy to pay the mortgage bills that allowed her to save the house and keep a roof over the family’s head. It allowed her to purchase food and clothing, and it even allowed her to set up a small college fund for the children.

That single decision on James’s part to purchase life insurance was a true lifesaver. It prevented his family from being fatherless, homeless, and husb andless in the event of his untimely passing.

April 15, 2011

A Short Course in Budgeting for College Students

One “extracurricular” activity that every student should master while in college is personal money management. Typically, a student’s day-to-day spending is done on an improvised basis, meaning that overspending is often the norm rather than the exception.

It is estimated that during a school year the average college or university student will spend approximately $4,000 for books, supplies, transportation, and personal expenses (Trends in College Pricing—2009, The College Board). However, there is often room for economizing. The first place to look is at food and telephone calls. Difficulty may occur in controlling these expenses, especially if pizza is ordered regularly at 2 am and long-distance friends are simply a phone call away.

While many students may assume it costs less to live off campus than in a dorm, they may be in for a surprise. In college towns with a high dem and for off-campus housing, accommodations within walking distance of the campus may tend to be expensive. Some l andlords require a one-year lease—a period longer than the school year—thus, subleasing privileges should be included as part of an “economical” lease. However, off-campus students can save money by sharing housing and doing their own cooking.

Money Smarts 101

The following may serve as important steps toward helping your student underst and college finances:

1. Before your student leaves for college, sit down and have an open discussion of expectations—both your child’s and yours.

2. Consider providing a lump sum each semester, making it clear how long the money must last.

3. Explain when checks or money transfers can be expected, the amounts that will be received, and any rules concerning the use of funds.

Since most students rely on savings and checking accounts—regardless of whether they include parental funds, their own, or a combination of both—it is important for them to underst and how these accounts work. The ability to balance an account accurately and make needed corrections is especially critical.

Many undergraduates may keep most of their funds in hometown financial institutions. However, managing financial affairs long-distance can be difficult. Verifying an account balance quickly with an out-of-state bank can be both costly and time-consuming. So, it may be a good idea to keep a smaller account on campus.

While some parents may fear a credit card can give a student who has difficulty managing his or her affairs too much of a cushion, others find a credit card can provide a useful backup, especially in an emergency or for certain expenses. For instance, it can help with car rentals, plane fares, and railroad tickets. In addition, trying to get money to college students in different locations can be frustrating, and it is often impossible for anyone to cash personal checks away from home.

Making the Grade

Ideally, college students should take full charge of a semester’s spending. Life becomes much easier for parents when college-age children can manage their own finances, and the students will learn valuable life skills in the process.

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This article appears courtesy of Karl Susman. Karl Susman is a representative of the New Engl and Life Insurance Company. He focuses on meeting the individual insurance and financial services needs of people on the West Coast. You can reach Karl at the office at (424) 785-4337. New Engl and Life Insurance Company, 501 Boylston Street, Boston, MA 02116

April 1, 2011

Consider Inflation When Assessing Your Insurance Coverage

When Brenda and Jake purchased their life insurance policies 20 years ago, they thought they did things the right way. They assessed their insurance needs, taking into account their home mortgage, the projected college education costs of their children, and their living expenses. Well, that was then. . .this is now.

Recently, as they contemplated retirement, Brenda and Jake reevaluated their insurance needs and were surprised to discover their insurance coverage is inadequate. How could this be? The answer, in a word, is inflation.

Because inflation affects purchasing power, it may also affect life insurance needs. For couples like Brenda and Jake, inflation means that life insurance coverage that was adequate years ago may now be insufficient. With this in mind, consider three of the more common uses for life insurance proceeds that may be affected by inflation:

Paying Off Your Mortgage. If you have recently purchased a new home or upgraded a home you already own, you may need to consider increasing your life insurance to help cover your mortgage payments. Insurance proceeds may be used to help pay off the mortgage in the event of the insured’s death.

Funding Future College Expenses. Compared to the previous year, the average annual cost of tuition, fees, room, and board for the 2008–09 academic year increased by over 5.5% at both private and public four-year colleges (The College Board, 2009). To be prepared, be sure to factor inflation into your college savings strategies. In addition, have a contingency plan in the form of adequate life insurance to help cover college expenses in the event of an untimely death. Review your strategy periodically, and consider increasing your coverage to reflect the anticipated future cost of higher education.

Maintaining Your St andard of Living. Over time, the costs associated with the normal expenses of everyday life, as well as the special pleasures most people look forward to in retirement—traveling, visiting children and gr andchildren, and engaging in favorite hobbies and leisure time activities—are affected by inflation. As a result, the lifestyle you hope to enjoy in retirement could be affected, too. Your life insurance coverage, based on yesterday’s needs and the current cost of goods and services, may be potentially shortchanging the future st andard of living of your loved ones. Factoring inflation into your life insurance program can help your loved ones maintain their lifestyle upon your death. In addition, if the policy allows, you can make withdrawals to fund your retirement years. However, any loans and withdrawals will decrease the amount of life insurance proceeds, and interest will be charged if the loan is not paid back before the insured dies.

Future Projections

Determining current life insurance needs is one thing, but figuring out how much coverage you’ll need in the future requires you to pay careful attention to inflation and how it can affect your family’s lifestyle. Regular reviews of your insurance coverage can make a great deal of sense. Plan to set aside time at least once each year to help ensure that your life insurance program is keeping up with inflation.

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March 30, 2011

Life Insurance–How Much Is Enough?

You are probably aware of the importance of having enough life insurance coverage to h andle the financial contingencies that may affect your family in the event of your death. However, determining the necessary amount of life insurance can be complicated. One general rule of thumb is that you should have enough coverage to equal five to seven times your annual salary. However, you may want to determine the “right” amount of life insurance coverage with a careful “needs analysis,” rather than using an arbitrary formula.

The needs analysis approach incorporates an evaluation of your family’s most important financial obligations and goals. This leads to planning insurance coverage to help address mortgage debt, college expenses, and future family income, as well as to provide liquidity for meeting future estate tax liabilities.

Mortgage Debt

The first point worthy of consideration is whether your life insurance proceeds will be sufficient to help pay the remaining mortgage on your home. If you are carrying a large mortgage, you may need a sizable amount. If you own a second home, that mortgage should also be factored into the formula.

College Expenses

Many people want life insurance proceeds large enough to help cover their children’s college expenses, and possibly, graduate school. The amount needed can be roughly calculated by matching the ages of your children against projected college costs adjusted for inflation. This calculation should be revised periodically as your children get closer to college age, and it may be a good idea to be as conservative as possible when estimating long-term savings goals.

Continuing Income for Your Family

The amount of income you will need to help provide for your surviving spouse and dependents will vary greatly according to your age, health, retirement plan benefits, Social Security benefits, other assets, and your spouse’s earning power. Many surviving spouses may already be employed or will find employment, but your spouse’s income, alone, may not be sufficient enough to cover the monthly expenses of your family’s current lifestyle. Providing a supplemental income fund can help your family maintain its st andard of living.

Estate Taxes

Life insurance has long been recognized as an effective method for establishing liquidity at death to pay estate taxes and maximize asset transfers to future generations. However, this use of life insurance requires qualified legal expertise to help ensure the proper results.

Existing Resources

If your current assets and retirement plan death benefits are sufficient to cover your financial needs and obligations, you may not need additional life insurance for these purposes. However, if they are inadequate, the difference between your total assets and your total needs may be funded with life insurance.

There are many factors to consider when completing a needs analysis. In addition to the areas already mentioned, some other questions you might want to address include the following:

1. How much will Social Security provide and for how long?

2. How do you “inflation-proof” your family income, so the real purchasing power of those dollars does not decrease?

3. What is the earning potential of your surviving spouse?

4. How often should you review your needs analysis?

5. How can you use life insurance to help provide retirement income?

6. How do you structure your estate to reduce the impact of estate taxes?

7. Which assets are liquid and which would not be reduced by a forced sale?

8. Which assets would you want your family to retain because of sentiment or future growth possibilities?

As you develop an insurance strategy, remember to analyze your existing policies. Calculate the additional coverage you may need based on your family’s financial obligations and any other resources, such as retirement benefits and savings. Remember, having the proper life insurance coverage can play a major role in any family’s financial protection.

MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisers regarding your particular set of facts and circumstances.

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March 25, 2011

Life Insurance—How Much Is Enough?

Mortgage Debt

College Expenses

Continuing Income for Your Family

Estate Taxes

Existing Resources

There are many factors to consider when completing a needs analysis. In addition to the areas already mentioned, some other questions you might want to address include the following:

1. How much will Social Security provide and for how long?

2. How do you “inflation-proof” your family income, so the real purchasing power of those dollars does not decrease?

3. What is the earning potential of your surviving spouse?

4. How often should you review your needs analysis?

5. How can you use life insurance to help provide retirement income?

6. How do you structure your estate to reduce the impact of estate taxes?

7. Which assets are liquid and which would not be reduced by a forced sale?

8. Which assets would you want your family to retain because of sentiment or future growth possibilities?

L0410101464(exp0411)(All States)(DC)

March 21, 2011

A Short Course in Budgeting for College Students

Money Smarts 101

The following may serve as important steps toward helping your student underst and college finances:

1. Before your student leaves for college, sit down and have an open discussion of expectations—both your child’s and yours.

2. Consider providing a lump sum each semester, making it clear how long the money must last.

3. Explain when checks or money transfers can be expected, the amounts that will be received, and any rules concerning the use of funds.

Making the Grade

L0510104870(exp0511)(All States)(DC)

April 11th The Date That Changed the Conway Family Forever

Money Smarts 101

Future Projections

Estate Taxes

Estate Taxes

Money Smarts 101

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