Is Cheaper Better? Not Always

The effects of some life decisions aren’t apparent until years later, when the time to correct a bad decision has passed. Such can be the case when comparing term insurance to other options in the market. Term insurance may be one of the cheaper life insurance options, but cheaper is not always better.

If you need life insurance protection for a limited period of time, such as covering a 10-year loan, term life insurance may be perfect. Term insurance is a strategy many younger individuals and families utilize. It offers protection against the loss of income of a primary earner for a stated period of time, perhaps until the kids turn 18.

Many choose permanent insurance as their life insurance strategy. There are several types including whole life, universal life, index-universal life, variable life and variable-universal life. The initial premium for permanent insurance may typically be higher than term insurance with a comparable death benefit, but the premium remains level instead of increasing for term insurance – meaning that a policy bought at a healthy age 40 would remain the same cost to you when
you’re 80.

Here are some things to consider when deciding between term or permanent insurance:

• It doesn’t have to be an all-or-nothing choice. Some contracts offer a term/permanent hybrid.
• Permanent insurance allows a buildup of cash value that can be “borrowed” against and used to provide additional monies for college, retirement, major purchase, etc.
• Term policies can renew at the end of the term (subject to eligibility limitations).
  • Each renewal usually comes with an increased cost for the new term.
  • If you choose to renew, you will likely have to requalify medically. At some point, you may be declined, resulting in a total loss of coverage.

Don‘t live with regrets. When was the last time you compared your options? Simply reply to this email with the words Life Insurance. You might be pleasantly surprised at the new choices now available. Ask for additional information. The facts will make it easy to evaluate your decision.

Living to 100

It’s been said that “age is a matter of mind over matter,” and that might very well be true. A recent survey found that centenarians, on average, say they feel 83 years young.¹

When asked how they felt about living to 100, centenarians' top answers were “blessed,” “happy” and “surprised.” Not a single person selected “feeling sad” or “burdened” and only a few said they felt “lonely.” More than half said they live independently, without the support of a caregiver to help with daily activities.

The centenarians said that the keys to healthy aging include:

• Staying close to friends and family
• Maintaining a sense of independence
• Eating right
• Good exercise such as walking, hiking and strength-training exercises

There are currently about 55,000 people 100 years or older in the U.S., according to the Census Bureau. That number is projected to grow to 442,000 in 2050.²

Many pre-retirees do say that they worry about having enough income for retirement living expenses. While much of making it to your 100th birthday is out of your control, planning for your financial future doesn’t have to be.

Sources:

¹Healy, Michelle, “Centenarians may be 100, but they feel only 83,” usatoday.com, Retrieved May 19, 2014

²Kincel, Brian, “The Centenarian Population: 2007-2011,” census.gov, Issued April, 2014

Money Lessons for
Young Children

As important as financial skills are to navigating life, it’s important for children to grasp financial concepts like saving and spending. So, what can you do?

Here are some activities you may want to try:

Go to a store “just to look.” This teaches a child that going into a store doesn’t always mean you’ll buy something. They need to learn that it’s okay to leave a store empty-handed. “Just looking” allows children time to comparison-shop. This can help them prioritize their wants or gather product knowledge so they can decide what they really want to spend their money on.

Create three jars – labeled “Spending,” “Sharing” and “Saving.” Every time your child receives money, whether for doing chores, from a birthday, etc., divide the money equally among the jars. Money in the spending jar can be used for small purchases, like candy or stickers. Money in the sharing jar can go to a cause or to someone you know who needs it. The saving jar should be for longer term items, such as their first car. Consider matching their monthly savings and watch their interest peak. You just ignited their future understanding of the value of an employer matched 401(k) plan.

Have your child set a goal, such as buying a toy. Make sure it’s not so pricey that they won’t be able to afford it for months. Every time they add money to the spending jar, help them count up how much has accrued. Kids usually find counting their money fun, and the waiting teaches them the important concept of delayed gratification.

You want to set them up for success in managing their money as adults. Teaching good financial habits to young children can help carry them through their adult buying decisions.