Family

Wealthy vs Financial Fit. Here’s the Difference and Why It Matters | California Benefit Consultants

 

People can be wealthy without being financially fit, meaning they can have a lot of assets or money tied up in assets, but those assets aren’t “liquid.” Let me explain. Say you have a house that has escalated in value in the real estate market. You may have this large asset, but that doesn’t necessarily mean you’re financially comfortable from an income standpoint. You aren’t able to tap into that “wealth” to pay for your day-to-day expenses.

Considering Risk
The overall goal when I sit down with someone, or perhaps a couple, is to determine their wants and needs, and then give them a plan that helps them grow their assets, while achieving their income goals.

But one thing many people fail to look at is the risk during this growth period. Let’s say you’re married, and again your major asset is your home, perhaps even with a large mortgage. What if something were to happen to either one of you? Would you still be able to pay the mortgage and retain the house? Or would you need to sell your largest asset just to pay day-to-day living expenses?

That’s where life insurance comes in as a foundational piece to financial fitness. It addresses the issue of someone dying too soon—that’s a risk factor you don’t want to leave chance. And the truth is, it’s an affordable solution for almost everyone. A healthy 30-year-old can get a 20-year $250,000 level term life insurance policy for about $13 a month. Most of us can afford to find that kind of money in our budget.

What Do Romantic Partners Want?
Life Happens did the survey, “What Do Romantic Partners Want?” and we discovered some great news for most of us—people prefer a partner who is financially fit (64%) over someone who is wealthy (16%). And we explored a whole host of factors, from looks to money to relationships. And I think it’s only natural that when people are dating, all the factors that we explored in the survey come into play.

It’s when things become serious and you’re looking to settle down that you have to start asking some of the tougher questions, questions that may make you feel uncomfortable. For example, does the other person have a lot of debt or other financial obligations?

Remember, if you marry and sign on the dotted line, you become responsible for each other’s debt. I’ve seen divorces happen where one partner was racking up a huge amount of credit card debt without the other one knowing, and then in the divorce proceedings the other partner finds out that they are responsible for half that debt.

In the end, it comes down to being financially aware, asking the appropriate questions, even if they are uncomfortable ones. You need to go into a long-term relationship with your eyes and ears wide open.

 

by Marvin H. Feldman

Originally posted on lifehappens.org

Do Single People REALLY Need Life Insurance? | California Benefits Advisors

Many people make the assumption that life insurance is for married couples and those with kids. While it is true that not all single people need life insurance, there are a number of reasons when it can make (really) good sense.

 

1. You have student loan debt. Many people assume that your debt dies with you, but that’s not always the case. While the loans through the federal government are discharged (aka forgiven) if you were to die, personal loans that have a cosigner are generally not. That means if your parents, for example, co-signed your student loan through a bank, they would be responsible for paying the rest of the loan if something happened to you. There are instances when the bank has called for the loan to be paid in full immediately following a death. You don’t want to leave your parents dealing with grief and loan payments.

2. You’re living with your significant other. When you’re living together, a lot becomes shared financial responsibility. Consider this example: You need both your incomes to meet the mortgage or rent where you’re living. Have you thought about what happens if one of you dies prematurely? Would the other partner have to sell up? Find a new place to live immediately? And this is just one example of many shared financial responsibilities couple have. Adequate life insurance is an easy answer to those questions.

If your parents co-signed your student loan through a bank, they’d be responsible for paying the rest of the loan if something happened to you.

3. You plan on having kids … someday. It may not be now, but when kids do come, so do the expenses and bills. According the USDA, it costs $245,340 to raise a child to age 18, and that’s without factoring in the cost of college. Getting life insurance in place now means you have coverage in place for when you do have a child. Plus, you protect your insurability for the future. … and that leads us to the next reason.

4. You’re young and healthy. Age and health are two major drivers of how much you’ll be paying for life insurance. Why not lock in a low price if you have both of those working for you? Did you know that a healthy 30-year-old can get a 20-year $250,000 term life insurance policy for about $13 a month? Doable, right? Don’t wait until a health issue or age puts life insurance out of your reach.

5. You know you’ll be taking care of family members in the future. This may mean aging parents or perhaps you have a special-needs sibling that you help care for and support financially. What would happen to them if something happened to you and your support disappeared? Life insurance can ensure that there is money in place to fund those needs into the future. This is where it might be wise to consider a permanent life insurance policy (one that’s there for your lifetime, as long as you pay your premiums).

6. It will pay for your funeral. No one likes to think about such things, but the truth is if you die, someone will have to pay for your funeral. You wouldn’t want to leave your parents, partner or other family members struggling with grief as well as paying for a funeral and burial, which can cost an average of $7,100.

If any of this sounds daunting, just know that it does’t have to be. You can start by doing a quick calculation on your own to see if you need life insurance with this Life Insurance Needs Calculator. And just know that you can also talk things through with an insurance agent—at no cost. They will help you figure out how much you may need, and also find a policy that fits into your budget.

 

Originally posted on lifehappens.org