Do I need to purchase life insurance?
Generally, you do not need life insurance if no one else is financially dependent on you. However, if you have children and their financial well-being would be financially affected by your death, you need life insurance. If you’re married but childless, you may still want coverage. The same might be true if you feel your parents or other family members depend on you financially. The larger the financial responsibility you carry, and the more people depend on you in this way, the more you need life insurance.
How much life insurance do I need?
A fairly good rule of thumb is that you need coverage equal to at least seven years of current annual income, assuming you are married and have two or more children. Another way to determine the amount of life insurance to buy is to think about how much you will need to pay for major debts or expenditures, such as your mortgage, other loans, and college for your children. If, for example, you’d like your spouse to have enough of a life insurance death benefit to be able to pay off your mortgage and pay for your children’s college education, then simply add your mortgage amount to their estimated college costs and buy that amount of life insurance."
When should life insurance be purchased on my spouse’s life?
If you’re married and both you and your spouse work, each of you should have an individual life insurance policy.
Is it a good idea to buy life insurance on our children?
Most parents need life insurance, but, for children, you may want to consider buying a small term life insurance policy to cover burial expenses if you think it might be difficult to pay the $8,000 to $10,000 cost of a funeral.
As a single person, do I really need life insurance to pay funeral expenses and take care of my debts?
If you’re single, you may need life insurance for a variety of reasons. You may need insurance to pay for your funeral expenses and pay your debts if you die prematurely. It may take the burden of selling your assets to cover your debts.
What does a long-term care policy cover?
A typical long-term care policy covers extended care regardless of whether the care is medically related to a specific illness or injury. A typical policy will pay for care given either in a nursing care facility or at home. It is very important that you know which expenses will be covered and how, because you may want to choose a policy that either reimburses you for expenses versus one that pays you a flat daily rate.
Is there any rule of thumb to determine if I should buy long-term care insurance?
Long-term care insurance can easily cost more than $1,000 a year, which is one reason some experts say you shouldn’t buy the coverage unless you already have other types of insurance and cash to spare.
If I’m in my 30s or 40s, why should I be concerned about long-term care?
As with life insurance, it’s never too early to think about buying long-term care coverage. Such insurance is much cheaper when you’re young because the insurer knows it’s unlikely you’ll need to be hospitalized any time soon. For example, if you sign up when you’re 50, your annual premiums will be about 30% as much as those for a 75-year old, and you will be covered for 25 years more. In addition, it’s much easier to qualify for long-term care insurance when you are young.
What is a major medical plan?
A major medical plan is a health insurance policy that provides comprehensive benefits for both hospital, physician and private nursing services. There is typically a deductible, ranging from $100 to $5,000, and a co-insurance percentage, ranging from 10% to 50%. These two elements of the plan make up the insured’s potential out-of-pocket expense, which is the portion of the cost of services that must be paid by the insured. For many policies, there is a cap on the annual out-of-pocket cost to the insured of $1,000 to $5,000.
Does health insurance include a dental plan?
Most health insurance plans don’t automatically cover dental work. However, many health plans provide dental coverage for an additional fee. If you’re looking for dental insurance, check with the company that provides your health insurance first. It may be cheaper to add the coverage to your existing health insurance policy than it would to purchase a separate dental policy from a different insurer.
What is disability insurance?
Disability insurance is insurance that’s designed to protect your income and thus your standard of living. If you become disabled, you probably won’t be able to earn much income but you will continue to have living expenses. Your monthly outlays could even rise, especially if you need paid help at home, can no longer drive, or have to pay for prescriptions or therapy that aren’t completely reimbursed by your medical coverage. Disability insurance will provide monthly payments to help you meet your daily living expenses.
What's the difference between worker's compensation and disability insurance?
Worker's Compensation protects you if you are injured while performing your job. Disability insurance covers you for any injury or illness, whether it happens at home, on vacation or on the job. If your employer provides coverage that will pay you for only 30 days if you are unable to work, you might want to buy a supplemental policy that will pay after the first 30 days.
Who needs disability insurance?
Most people need to have some sort of disability insurance, which will provide them with money in case they can no longer work. When people without disability insurance become disabled, their income stops and their life savings can be drained. There are, of course, exceptions to this rule. If you’re married and both of you work, one of you may be able to skip disability coverage if the family could maintain its present lifestyle on the other’s paycheck.
Do I need disability insurance coverage even though I’m single?
Just about everyone needs disability insurance that will help pay their bills if they are injured or become too sick to work. Single people are especially vulnerable. Most married couples also need disability insurance coverage, unless both spouses earn a relatively large amount of money and could still "get by" comfortably if one of those incomes suddenly disappeared.
What happens in the event that I’m only partially disabled?
Some policies pay a partial benefit. The exact amounts and types of partial disability covered are spelled out in the policy. It’s important to realize, too, that if you are partially disabled, you will not be eligible for any Social Security benefit. Without coverage of your own for partial disabilities, you’re likely to receive no benefit payments at all.
How much disability insurance do I need?
Determining how much disability insurance you need is relatively easy. You need enough coverage to provide you with sufficient income to live on until you either go back to work or be able to receive or tap other financial resources, such as Social Security disability payments. The benefits you purchase on a disability policy are quoted as dollars per month that you receive if disabled. So if your job provides you with a $2,000-per-month income after payment of taxes, then you ask for a policy that provides a $2,000-per-month benefit.
In addition to the monthly coverage amount, you also need to select the length of time you want to be able to collect benefits. You need a policy that will pay benefits until an age at which you become financially self-sufficient. For most people, that’s around 65.