Have You Thought About Disability Insurance?
Most breadwinners with family responsibilities do not give disability insurance the same amount of consideration that they give to life insurance. However, heads of households may want to consider that just over one in four of today’s 20-year-olds will become disabled before they retire. This statistic alone should lead them to consider what would happen to their families if they were to lose their ability to work, even for a relatively short period of time. While some companies provide group disability insurance to their employees, the policies may be limited in their coverage. Private disability insurance is available as a supplement to group disability insurance, or it can provide protection for employees with nothing else to rely on.
NOTE: While those working in laborious jobs might be expected to be more vulnerable to injuries that lead to disability, cancer does not care what your job is.Read More
Which Life Insurance Policy Will You Need?
One way to calculate how much life insurance you need involves figuring how much investment capital it would take to replace all of your income for two decades or longer if it were invested in secure Treasury/municipal bonds and certificates of deposit. Another approach focuses on four categories of need. The first, funeral/burial expenses, ensures that beneficiaries will receive up to $20,000 in tax-free proceeds faster than they would from an estate. Next, mortgages and other debts are taken into account so that surviving members don’t have to face the prospect of needing to sell the family home. Lastly, add the (future) cost of education as well as your current pretax earnings (until retirement) to your family’s income replacement needs.
NOTE: Use the calculation of need in the above four expense categories to get an estimate of how much life insurance is appropriate, then fine-tune the numbers to reflect personal circumstances.Read More
Alerting Family Members About Your Life Insurance Policy
Even the best meaning and most conscientious people can have their best efforts count for little if they overlook some simple details. For instance: you have a life insurance policy, a will and an estate plan in place. But have you drawn up a “letter of instruction”?
In short, the benefits of a life insurance policy may do little good if no one knows about the policy. It is also possible that surviving members may unknowingly close a bank account that had previously been making automatic premium payments on a policy. In this case, the life insurance policy may be cancelled because of unpaid premium before a payout can be made. These problems can be prevented by a “letter of instruction” that should be kept with other important documents in a safe place. This “safe place” should be accessible and know to family and estate executives. If you are uncertain that your insurance policies include this important “letter of instruction” feel free to call the office of Scott Insurance in Stratford CT to review your situation.Read More