Term Life Insurance, Is It Right for You?
Many of us think of life insurance as something that will last for the rest of our lives – but that’s not always the case.
So-called “whole” life insurance policies do stay in effect for your lifetime, providing you continue to pay the premiums.
“Term” life insurance, on the other hand, provides coverage for a limited period of time or “term,” and the length of the term is up to you. For example, if you choose a 10-year-term, the insurance company would pay your beneficiary a death benefit if you die within the next 10 years.
Why consider term life instead of whole life insurance? Term life might be appropriate if, for example, one or more of your dependents doesn’t rely on you financially.
In this situation, you may want to have coverage for your minor children only, as your spouse is not now dependent on you financially and will be able to care for himself or herself if you die. Coverage for your children may last until they’re grown, if you choose.
Term life insurance is usually the least expensive way to purchase a substantial death benefit, so if you are in this situation, purchasing term life may be the solution for you.
A few caveats: Term life insurance generally cannot be used for estate-planning or charitable-giving strategies, as other types of life insurance can.
There may also be issues with re-insurability. Say, for example, that you acquire a terminal illness during the term of the policy. If you want to continue holding life insurance when the term expires, you likely wouldn’t be able to do so. However, some policies offer a feature called guaranteed re-insurability to address this.
There are many other factors to take into account when buying life insurance, such as how much life insurance to buy. Your advisor can help you make those determinations.
Avoid These Three Mistakes When Buying a Health Plan
Whether you’re purchasing health insurance through your employer or an independent market, there’s no such thing as “one size fits all” healthcare. Choosing the right insurance plan for you requires careful consideration and research. While fine print can be confusing, it’s worth taking the time to understand the details of your health insurance plan, as well as your personal situation.
Here are three common mistakes many people make in selecting a health insurance plan:
Choosing an inconvenient network: HMO and PPO plans work within a healthcare network. Visiting a doctor outside that network can be expensive. Ensure your primary care doctor is covered by your health plan, but don’t forget to check on specialists and emergency care as well.
Over or under-insuring: A young, healthy individual without dependents may not need as much insurance as one with a family of four. Over-insuring yourself means you’ll pay higher premiums for care that isn’t used. But under-insuring can be even more expensive if you’re faced with a serious disease or accident; even a significant amount of coverage may not be sufficient. So don’t skimp, and be sure to examine the fine print for procedure-specific limits and out-of-pocket maximums.
Focusing on deductibles and co-pays: Trying to limit your out-of-pocket costs with low deductibles and co-pay amounts may seem like a good idea, but could cost you more in the long run. As long as you can afford it, raise your deductible amount and try eliminating co-pays. You might be surprised at how much you really save.