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The purchasing of a new home means you need some additional insurance. Something you should consider is Mortgage Protection Insurance.

Mortgage Protection Insurance is like life insurance protection for your home or property. It pays your mortgage in situations like death, loss of your income source or job or become disabled.  The cost of Mortgage Protection Insurance varies from one person to another. There are other factors taken into consideration by insurance providers in assessing your insurance cost. Some of the factors include your type of work, your age, health status and value of the property and your mortgage payment among others. The mortgage protection Insurance is relatively easy to get and providers usually ask few questions on the application form, which means that overwhelming majority of home owners can get this insurance. It is beneficial to people who may be deemed uninsurable or for those considered “high risk” which generally carry higher rates. People who work in situations deemed as high risk occupations or people with health issues may also benefit from buying a Mortgage Protection Insurance.

Whether you choose to get this additional insurance or not, there are serious benefits to consider and you should always prioritize protecting yourself, your family, and your home.

 

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

April 11th 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.

Disability Income Protection—Are Your Bases Covered?

Like most people, you may have life insurance to help protect your family against the financial impact of your unexpected death. You may also insure your home, car, and other personal possessions against financial loss resulting from fire, theft, or damage. However, you may have overlooked insuring one of the more important aspects of your financial life—the ability to earn an income.

Thinking the Unthinkable

Have you ever contemplated how long the combined resources of you and your spouse might last if you were suddenly out of work due to a disability? What long-term impact would exhausting your savings during a disability have on your ability to provide for your family and even yourself during your retirement years? If those resources provide less than your monthly expenses, including taxes and regular savings, or if exhausting them would significantly impact your ability to provide for yourself and your family on a long-term basis, you may need disability income insurance. Whether you need an individually owned policy depends on the extent of your liquid assets, your spouse’s income, and other potential sources of disability income, such as employer-sponsored group disability insurance, Social Security, and veterans or union benefits.

Depending on your income and the risk level of your occupation, the maximum coverage you can buy will generally replace 45% to 75% of your pre-disability earnings. The higher your income, the lower the percentage of replacement benefit may be. Typically, premiums will depend on your age, your health, the risk level of your occupation, and the type of coverage.

Examine Policy Provisions

To make sure your disability income insurance offers the protection that you and your family need, your policy should include the following:

  • A definition of total disability that is consistent with the risk of your occupation. You may also want to look for a policy that pays some benefits in the event you are not totally disabled, but you suffer a “loss of income” due to a disability. Often these provisions are called partial or residual disability provisions.
  • A non-cancelable clause that states the insurance company cannot cancel the policy or increase the premium until a certain age (as specified in the policy).
  • Benefits that are payable for the maximum amount of time for which you are eligible based on your occupation and health. Most often, you can find policies that provide benefit eligibility for two years, five years, or all the way until you reach age 65, or even payments beyond 65 for the rest of your life.
  • A waiting period that is consistent with your overall financial resources. The waiting period is the amount of time you must be disabled before becoming eligible for disability benefits. The longer the waiting period you choose, the lower the premium on your policy will be. Typically, you may purchase coverage that provides eligibility for benefits after 30 days of disability or for as long as after two years of disability.

Act Now

Now is the time to investigate the relative benefits and costs of disability income insurance to determine how much you need to spend to attain adequate protection. In addition, it is important to review the particular details and provisions of the policy you are considering with a qualified professional to help ensure your financial needs will be met.

Copyright ã 2010 Liberty Publishing, Inc. All rights reserved.

L0910130926(exp0911)(All States)(DC)

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

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.

Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.

L0910132069(exp1011)(All States)(DC)

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

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.

Copyright © 2010 Liberty Publishing, Inc. All Rights Reserved.

L0410101464(exp0411)(All States)(DC)

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

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.

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

 

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.

Copyright © 2011 Liberty Publishing, Inc. All Rights Reserved.

L0410101464(exp0411)(All States)(DC)

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