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January 6, 2010

Taking Stock in the New Year

Filed under: Uncategorized — Tags: , , — admin @ 4:34 pm

2010 is here and if you ask around, many say it’s come none to soon! 2009 was a difficult year for a lot of folks, in Missouri and across the US, with a troublesome economy, and lots of questions about where our country was headed.

So more than ever as we look ahead to the new year it is time for resolutions and making sure you are organized and ready to face the months and the year ahead—in your house, within your family, and always important: your finances.

As you set resolutions for the new year, think about your financial picture. If you have an advisor that you work with, schedule a meeting with him just to check in and make sure your investments are still tracking your goals. If you don’t have an estate plan established, with a will and documents covering powers of attorney, you should do so. Maybe you have a resolution to be a better saver; see if you can set up some automatic withdrawal plans so that a portion of your paycheck goes into a savings account, or into a investment fund or an IRA, automatically.

It’s a great time to review levels of coverage, as well, for your life insurance policies—whether they are term life, variable life, or if you have several policies (as part of an employer’s benefit package and on your own, for example). Discuss with your advisor what your needs are, for your life insurance policy (an investment vehicle, to cover your spouse and/or children in the event of your passing, etc)—and be sure that together you agree that your children or spouse are covered at the appropriate level; an advisor can help you run scenarios on what college expenses or the like might be. Be sure that you are not “over-covered”—this is less common than being “under-covered”, but if you have too much life insurance, together you and your advisor may determine that your money could be better invested (tax wise and “potential for growth” wise) elsewhere.

And, it may be a wise time to ask your insurance provider if there is anything you can do to make your policy more cost-effective (changing deductibles, etc) for a homeowner’s or a health insurance policy.

The big picture: as you set resolutions and make a plan for goals for the year, don’t neglect your financial picture. A conversation with your advisor or some simple steps put in place now can have an impact on your entire year, so don’t delay!

December 1, 2009

Options for Missouri Life Insurance: Term?

Filed under: Uncategorized — Tags: , — admin @ 4:37 pm

Are you trying to decide on options for life insurance? There are a number of different choices out there, from universal life to variable life, term insurance to fixed insurance. In Missouri, all of these types of insurance are available from a number of different well-known and well-secured companies. How can you chose the right company and the right policy?

Part of the decision depends on what you are using life insurance for. If it is part of a wealth transfer plan, or used as an investment, you may wish to investigate some of the types of variable life insurance—depending on your risk tolerance (that is, how aggressively you want to invest your money based on returns vs. safety of the money), your investment horizon (that is, how long you have before you really need the money), your health situation (variable life policies can differ in rates/cost depending on the results of certain risk factors such as if you are a smoker, results of a physical, etc), and the amount of money you have to invest (some variable policies can be pricey, and sometimes you are paying for some of the guarantees that are a part of those policies).

If, however, you are seeking to purchase life insurance as a hedge against future emergencies—that is, to be able to provide a source of funding for a spouse or for children in the case of your death—you may wish to investigate term life insurance.

Term life insurance can be the most cost-effective method of purchasing some measure of insurance for your family. What you need to consider in determining the amount of insurance is what the policy will be used for—will a spouse have to pay off a mortgage after your death? Do you have children for whom you’d like to provide a college education? Some experts recommend a policy that covers up to ten times your income, but that is not realistic for every family. After all, you must meet the premiums monthly to pay for this term insurance, so you do not want to pay for too MUCH coverage.

Often, a financial advisor can help you to determine the right amount of coverage. Every family situation is different, so your advisor can take into account your priorities and the near-term and long-term needs for the proceeds of a policy. That advisor can also help you plan out what expenses may arise.

Life insurance, regardless of the type you choose, is important to your heirs who are often bereft at a loss. Any help you can give to ease the burden, financially, for them is important. Talk to an advisor to figure out how to cost-effectively include life insurance as a part of your financial plan.

November 23, 2009

Missouri: Should You Cut Costs by Cutting Life Insurance?

Filed under: Articles — Tags: , — admin @ 12:30 pm

It’s a tough economy out there and though there are signs that it’s getting better, many of us are in the position of doing whatever we can to reduce household expenses.

There’s a lot that can be done to make a difference—maybe you’ve determined that you don’t need cable tv, at least not in every room of your house. Have you shopped around for the best phone company rates? The best cellphone rates? Some folks are finding that they are able to get some rate adjustments by negotiating with credit card companies (or “playing offers” against each other to have those companies compete)—there are some options out there, especially if you’ve had a good payment history.

And, maybe you’ve considered getting rid of your life insurance policy as a way to save money, reasoning that you are in good health and that those monthly premiums could be better spent.

Some people may find that canceling their life insurance makes sense—for instance, perhaps as a couple each spouse had a life insurance policy. The children have grown, college has been paid for, there’s money in the bank for an emergency. In that case, it may make sense to cancel a life insurance policy—especially if the proceeds are used to pay off a mortgage, so that the surviving spouse is taken care of in the event of the other spouse’s death.

But that is really the key. Life insurance is purchased in order to take care of a spouse, a child/children, an heir in the case of an untimely death. Thus, even though you might realize some day-to-day savings, you should be quite sure that your heirs ARE taken care of if they no longer have that policy to count on. Emergency expenses (such as hospital bills, and many others) can arise and can quickly wipe out savings—and are by their nature, unpredictable. Before making any decisions about canceling a policy, therefore, it makes sense to talk to an advisor.

You should also ensure that you will not be penalized or lose any accumulated cash value through an early cancellation or termination of your policy. A better option, in many cases, is to consider a different type of policy. If you have not chosen a term policy, you may be able to switch, and realize cost savings through that way. Perhaps you can lower your monthly premiums by lowering the face value of your policy, or shortening the time horizon (for instance, can you convert a 30 year policy to a 15 year policy)? There are a variety of options out there that can lower your costs while still offering your family and your heirs some measure of protection.

In short, canceling your life insurance policy is not as simple or as pain-free as canceling your cable service. There are long-term ramifications, so be sure to discuss the options with your advisor before making any decisions.