Make most of your life insurance cover, add these Term insurance riders

Make most of your life insurance cover, add these Term insurance riders

December 1, 2018 11:17 AM

Under a term insurance policy, the policyholder also enjoys the prerogative of choosing different options along with the policy in order to get enhanced and overall protection.

When you plan to buy a life insurance policy, you must always consider buying a term insurance plan.

When you plan to buy a life insurance policy, you must always consider buying a term insurance plan. This is no doubt one of the simplest and most cost-effective insurance products available in the market today. Term insurance plans are designed and customized in such a manner that in the event of the sudden death of the policyholder, the beneficiaries receive the sum assured as a lump sum or monthly income, whichever the dependents choose.

Under the term plan, the insured pays the premium to the insurer until the policy tenure against which the insurer provides insurance cover to the policyholder. Under a term insurance policy, the policyholder also enjoys the prerogative of choosing different options along with the policy in order to get enhanced and overall protection. These options are better known as riders.

What are Term Insurance Riders?

Based on specific needs and requirements of the policyholders, insurers give an option to policyholders of customizing their term insurance cover with add-ons, also known as ‘riders’. Riders are basically like accessories which can be attached to the main insurance cover to enhance its overall value and functionality. They are additional features that need to be purchased along with the basic policy. Riders in a term insurance are very important to customize the policy for enhancing the sphere of benefits.

As per your individual needs, you may choose the right rider for your term cover by paying an extra premium amount. A rider usually comes into play on an occurrence of the specific event for which the rider is purchased. As a policyholder, it is very important for you to choose the right rider with the term insurance to enjoy the required benefits.

1. Accidental Death Rider

Not all would know the fact that India continues to be the accident capital of the world with over 150,000 people being killed each year in just road accidents. The numbers are even higher than most developed auto markets across the globe including the US. However, roads are just another example as accidents often happen at construction sites, home, and many other potentially safer places as well. While a simple term insurance plan gives you a normal death benefit, an accidental death rider offers a supplementary sum assured if the policyholder passes away due to an accident. This rider is very important for people with high-risk jobs as it provides the dependents with extra financial help.

2. Waiver of Premium Rider

A very popular rider among the policyholders, the waiver of premium rider keeps the term insurance plan active even if the policyholder is not able to pay the premium due to some unavoidable circumstances. The rider mostly comes into action when the policyholder losses on the monthly income due to a certain unexpected event like partial or complete disability due to an accident. The rider can also be availed during a critical illness when the policyholder losses on the monthly income and fails to pay the premium amount. During such an event, the rider takes the financial burden off the shoulder of the insured by waiving the premium till the term plan tenure.

3. Critical Illness Rider

Some major critical illnesses like cancer, heart attack, kidney failure, coronary artery bypass, and paralysis are some of the diseases that can surely dry out a person’s finances if there is no adequate cover in place. For all such situations, it is best to have a term plan with a critical illness benefit as a rider. It is a rider that helps to cover the cost of critical illness during both, hospitalization and non-hospitalisation expenses. Critical Illness rider provides much-required cash flow during the recovery period as well. On diagnoses of the illness, the rider provides the policyholder with a lump sum benefit. If unfortunately, the policyholder dies during the critical illness, the term insurance plan benefit is paid to the nominees.

4. Income Benefit Rider

In case of sudden death of the sole breadwinner of the family, it becomes very difficult for the dependents to replace the income. With the help of income benefit rider in a term insurance plan, the family receives a regular income for a fixed number of years. The income benefit rider is an addition to the existing life insurance policy as it provides the beneficiaries with an amount equal to the policyholder’s monthly income. The dependents get additional income for approximately 5-10 years along with the total sum assured. The rider is best suited for salaried people who are also the sole breadwinners of the family.

(By Santosh Agarwal, Head-Life Insurance, Policybazaar.com)

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MONEY SMART WOMEN

Keep Your Options Open as a Stay-at-Home Mom

When taking time off from the workforce, it’s important to preserve your earning power and plan for retirement.

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By JANET BODNAR, Editor-at-Large 
November 29, 2018
From Kiplinger's Personal Finance

When I first met Variny Yim, she had just had her second child and moved across the country to California. But she was still commuting to Washington, D.C., as part of her job as director of a nonprofit association. She was considering leaving that job, and the cross-country commute, to spend more time with her children, and she asked me for advice on balancing work and family. I completely understood her desire not to work full-time (I had followed the same path myself), but I advised her to “keep one foot in the door.”

Those six little words ended up making a big impact. “I have literally lived your advice,” Variny told me recently. She quit her D.C. job, but over the years she has taken a series of part-time and consulting positions—and even managed to write a novel (The Immigrant Princess). That path, she says, “has enabled me to keep my skill set current while also giving me the flexibility to be a full-time mother.”

Taking time off from the workforce is emotionally satisfying and can make economic sense (no child care expenses), but it comes at a cost—not only in current income but also in future earning power and retirement savings. Before you make the move, “understand what’s at stake financially for you and be proactive about planning for it,” says Adrienne Penta, executive director of the Center for Women & Wealth at Brown Brothers Harriman. “It’s important to preserve your earning power to the extent you can.”

That doesn’t necessarily mean working part-time. It can also mean staying in touch with your network or hiring a babysitter so you can attend an industry seminar or event. And don’t sell short any activities unrelated to your former career. “Women don’t give themselves enough credit for volunteer activities they’re involved in,” says Penta.   

Smart money moves. At-home parents tend to take on the role of family CFO, but that means more than just paying the bills. “Stay-at-home moms need to have access to money they can spend on whatever they want,” says Judy Rubin, a partner with Plaza Advisory Group, in St. Louis. That could be a monthly amount you and your spouse agree on or even your own account.

You and your family are now dependent on the income of one earner, so to protect that income, you need disability and life insurance coverage for your spouse—one rule of thumb is to buy term life insurance equal to seven to 10 times your family income—and insurance on your own life to cover child care and other expenses if anything were to happen to you. And make sure that you (and your children) are the beneficiaries of your spouse’s life insurance and retirement accounts.

One key way to provide for your financial security is to have a spousal IRA. Assuming your spouse is working, he (or she) can contribute up to $6,000 to a spousal IRA in 2019, or $7,000 if you’re 50 or older. Spousal IRAs pack a triple wallop: They help you make up for years out of the workforce, they provide an independent pot of money that belongs to you should anything happen to your spouse (or your marriage), and they give you an opportunity to manage your own retirement assets.

And if like Variny, you earn money on the side (she subs as a certified spinning instructor), you can save a portion of that for retirement in an IRAor a solo 401(k)—or as seed capital to build your side gig into a real business.

The bottom line, says Variny, is that “you cannot turn a blind eye to finances”—a truth that hit home when she later divorced and became a single parent. Tracking her finances online has been a godsend, and she also works with a financial planner. “As painful as it can sometimes be, I absolutely love visiting my dentist, my auto mechanic and my financial planner,” she says. “It’s all about prevention and long-term maintenance.”

How Does Life Insurance Work?

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Answers to Common Life Insurance Questions

If you have questions about how life insurance works, we’re here to help, with some great insights from State Farm^® Agents Denise Elliott (Durango, Colorado) and Ken Quach (Houston, Texas). They get a lot of questions not only about how life insurance works when you die, but how it works in the here and now too.

The Basics

The main reason people buy life insurance is to protect their family. As Elliott puts it, “It’s like having someone who will take care of your family financially if you couldn’t due to an untimely death.” In simplest terms, you buy a life insurance policy and name a beneficiary to receive the death benefit. If the policy is active when you pass away, your beneficiary will receive that death benefit.

Term vs. Permanent

Term life insurance is pretty straightforward. Policies are purchased for a specific period of time, commonly for 10, 20, or 30 years. If the policy is in force at the time of death, your beneficiary receives the death benefit chosen when the policy was purchased. If you’re still alive at the end of the term, your policy ends.
Permanent life insurance, which includes variations such as whole life and universal life, is lifelong coverage and, like term coverage, provides a death benefit to your beneficiary if you die. It also offers several living benefits, including accumulation of cash value at a guaranteed interest rate, taxes able to be deferred, and protection from creditors.
According to Elliott, “Years ago, we typically only recommended life insurance if you had a family to protect. Now, the cash value buildup¹ in permanent life insurance policies can be a helpful financial tool.
“If I don’t use it for anyone else in my family, I can use it on myself. Where else can you go and buy one policy to take care of your debts if you die and still have the ability to borrow money to take care of your needs while you’re alive?”

Individuals vs. Businesses

While individuals typically purchase life insurance to provide money for their family or a charity when they pass away, life insurance can be an essential planning tool for business owners too. Quach has helped a lot of business owners protect their future with life insurance, and he talks about one example — partnerships.
“A lot of people who go into business have partners, and there are several ways we can help them. For example, there’s a plan where each partner in the business can ensure their share of the business will be passed on to the remaining partner(s) if they die. In addition, their beneficiary (typically their spouse/family) would still get proceeds from the life insurance policy.”

Learn More

While we’ve scratched the surface on how life insurance works, we recommend sitting down with an agent to talk about your personal situation and the options that would make the most sense for you.

¹ Unpaid loans and withdrawals will reduce the guaranteed death benefit and policy cash value. Loans also accrue interest.

disclosure

State Farm Life Insurance Company (Not licensed in MA, NY or WI) State Farm Life and Accident Assurance Company (Licensed in NY and WI) Bloomington, IL Each insurer is financially responsible for its own products. SILI-1000.0
Neither State Farm® nor its agents provide tax or legal advice.

Here’s how you should be saving money during your lifetime

Here’s how you should be saving money during your lifetime

By assessing your life at various stages can enable you not only to plan ahead, while also target certain financial achievements to ensure your well-being.

This is according to Errol Meyer, the legal specialist from Standard Bank Financial Consultancy, who says that personal financial planning becomes easier and adjustments can be made as you go along.

Below, Meyer sets out how you should be saving during your lifetime.

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Starting out and becoming established (ages 18 to early 30s):

At this stage, education and getting a car, rather than thinking about retirement are usually priorities. But, this is the time to begin thinking that far ahead.

At this stage of life, you should concentrate on developing lifetime habits such as:

• Making sure that you pay yourself first. Decide what you want to save and put this aside before spending any money. You can build future financial independence earlier than you think if you decide, for example, to put away 33% of your earnings for the future.

• Learning not to compromise. Committing money to investments that stop you from drawing it out takes away temptation. A 12-month fixed investment is ideal. The money grows and you can’t get it.

• Putting together a budget. Deduct your compulsory savings and then set aside money for living and money for short-term goals.

• Consider starting a long-term fund. Investment portfolio’s that are aligned with lifestyle goals, such as education and buying a house are good ways to go. The earlier you invest the less the investment will cost and the more you will benefit.

• Wisely invest some of your budget. For example, cars just don’t hold their value. Buy a pre-owned car or downsize and you will have money available when you need it.

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Moving on and beginning to accumulate assets (mid-30s to 50)

With your education complete and career path decided, you are now focusing on family and other responsibilities such as focusing on home loans, saving for the future of your children and other needs.

Typically, this is the time of your life when you get established and your income increases accordingly. You should be looking at:

• Increasing your contributions to medium and long-term savings mechanisms and taking out life insurance.

• Diversifying savings and moving into shares, unit trusts and other products.

• Reassessing your retirement savings and adjusting them if necessary.

• Making sure that you have a will.

Review your investment plans regularly and get a professional financial planner to assess what you need for the next stage of your life. As you approach 50, it pays to be realistic about your health and plan for contingencies that could result if your health doesn’t stay good.

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Independent family and the road to retirement (age 50-65)

Ironically, life gets cheaper and earnings greater at this stage of your life. Children leave home and even begin their own families. Simultaneously, your earning power peaks. Retirement beckons.

The important things to consider now are:

• Making sure you have no debt as you approach retirement. After retirement, you have to live on investments and pensions. Major debts can be financially damaging.

• Consolidating your investments so that they are low-risk investments that offer steady, inflation-linked returns.

• Adjusting your long-term retirement strategy and thinking about increasing your contributions to a retirement annuity.

• Planning your estate and taking steps to ensure that your family rather than the taxman- benefits when you die.

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Read: South Africa’s big debt problem: Dawie Roodt

Why Cheap Term Life Insurance Isn't Always So Cheap

Why Cheap Term Life Insurance Isn't Always So Cheap

You've heard a lot of talk about cheap term life insurance and you've decided that it's something you need to start investigating. That's definitely a step in the right direction. Like so many other tasks in life, you've turned to the Internet to get the ball rolling.

You've filled out numerous online applications for cheap term life insurance but as the quotes start to come back you're realizing that term life insurance isn't really all that cheap. What's going on?

Your health matters

A couple of factors might be causing higher than anticipated costs. First and foremost is the general state of your health. Getting an online quotation is one thing, but pricing an actual policy after the insurance company has reviewed your medical history is really what determines your true costs for your insurance.

Very rarely will an individual get life insurance without first having a medical examination. Getting a policy through your place of employment is the only time this may happen, but generally in this situation, your coverage will be minimal.

If you're looking for cheap insurance that'll actually be of financial value after you're gone, you'll likely have to supplement the policy you get through your job.

Let's take a look at the logic for a moment. If given the choice, life insurance companies would select as customers only those whose health is excellent. Excellent health means you should live longer. When you live long there is less chance that the insurance company will have to pay out your policy's death benefits.

In other words, if you outlive your cheap term life insurance policy, the insurance company comes out ahead. The company has collected your premiums, but it did not have to give any money back to your beneficiaries.

The categorization system

When determining the true cost of a policy, insurance companies use a classification system. Individuals with a clean bill of health generally get classified as "super preferred" and get the lowest-priced premiums. They're the ones who get the lowest rate premiums on their insurance. Several more categories exist and, unfortunately, each category comes with a progressively higher premium.

Some of the health conditions that raise a red flag in the eyes of an insurance company include use of tobacco products, being overweight, high cholesterol, high blood pressure, and a history of cancer, stroke, diabetes, heart disease or other type of chronic disease in your family, even if you do not have any symptoms of these conditions.

If you do have symptoms of the above conditions, you should expect that a lower rate premium isn't something for which you'll qualify.

The types of medical conditions listed above are more likely to cause premature death in an individual. If the insured individual dies during the policy term, the insurance company will have to pay out death benefits. And that's what life insurance companies look at when deciding whether or not an individual qualifies for cheap term life insurance.

Looking for low-cost Life Insurance try Term Life Insurance. We compare 95% of the UK market to find you cheap term life insurance without compromising on policy benefits and features.

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Why do you protect the TV but not your family

Why do you protect the TV but not your family

Click on the link below

http://www.lifehappens.org/videos/anthony-anderson-story

Anthony Anderson’s Personal Story

You may know Anthony Anderson from his hit TV show black-ish and as host of Eating America. But this September he’ll be taking on a new role as the 2015 national spokesperson for Life Insurance Awareness Month.

The annual campaign, which takes place in September, is coordinated by Life Happens to encourage the more than 100 million Americans who do not have adequate life insurance to get the coverage they need.

As spokesperson for the campaign, Anthony will share his personal story of how he and his family were directly impacted life insurance.

As a young boy growing up in Compton, Calif., Anderson saw the importance his family placed on life insurance. While his parents didn’t have much, they did have Mary—or as Anthony’s family called her, ‘The Insurance Lady.’ Mary was a fixture in the Anderson home, visiting the family throughout the year to review and update his parents’ life insurance policies. She even sold Anthony his first life insurance policy when he turned 18.

Now, a husband and a father, Anthony understands why his parents made life insurance a priority, and has made it a priority for his family to be protected.

“Even on their limited income, my mom and dad instilled upon all of us the importance of planning for the future and the fact that tomorrow isn’t promised to anyone,” Anderson says. “I know how hard it is to lose someone you love. An accident took my brother when he was 26 and shortly after, I lost my father to diabetes, a disease I, myself, live with today. It was rough getting through those deaths, but the fact that they both had life insurance made it so much easier.”

Life Happens does not endorse any insurance company, product or advisor. ©Life Happens 2015. All rights reserved.

Is life insurance a bad investment ~~ listen to a real life account

Is life insurance a bad investment 

Click below and listen to my short story

http://katch.me/Mike__Sheehan/v/9b496a59-3d94-35ae-963e-4a37c7476e19