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“I don’t need life insurance…my wife can just remarry.”

November 25, 2013 By Liz Weston

gravestoneFor a moment I was speechless. The journalist who said these words obviously thought he was being perfectly logical. He thought life insurance was a scam and he was too smart to fall for it.

In a way, what he said was kind of flattering. He obviously thought his wife would have no trouble finding his replacement.

The reality, though, is that middle-aged women with kids aren’t often a hot commodity on the dating market. And even if she were the suburban version of Angelina Jolie, the underlying message was disturbing. He was putting his wife in the position of having to remarry for money. If she couldn’t find someone suitable, she’d face a lifetime of reduced financial circumstances.

That’s a hell of a legacy to leave behind, particularly when term life insurance is so cheap and easy for most people to buy.

 

 

Filed Under: Liz's Blog Tagged With: Accuquote, Insurance, insurance quotes, Insure.com, life insurance

Monday’s need-to-know money news

November 25, 2013 By Liz Weston

Help at financial crisisToday’s top story: How to work towards a debt free 2014. Also in the news: PayPal and credit ratings, finding the cheapest holiday gifts, and how to avoid financial pitfalls this Thanksgiving.

Tips for Paying Off Debt in 2014
Starting the new year off on the right foot.

Can PayPal Hurt Your Credit?
Conversely, could bad credit prevent you from getting a PayPal account?

Where to Find the Cheapest Holiday Gifts
Presents that won’t lead you to the poor house.

Have a Happier Thanksgiving by Dodging These Spending Pitfalls
The bourbon in the pecan pie doesn’t have to be top shelf.

The greatest, most underused credit card perk
Two words: price match.

Filed Under: Liz's Blog Tagged With: credit card perks, debt, holiday shopping, holiday spending, PayPal

Friday’s need-to-know money news

November 22, 2013 By Liz Weston

Today’s top story: The dangers lurking behind Black Friday shopping. Also in the news: How to resist splurging during the holidays, the pros and cons of tech warranties, and what you need to know before signing up for a store credit card.

5 Dangers of Black Friday Shopping
One of the favorite days of identity thieves everywhere!

7 Ways To Resist The Urge To Splurge During The Holidays
Just because it’s on sale doesn’t mean you have to buy it.

Spending: What you need to know about tech warranties
Protecting your latest bright and shiny gadget.

5 Things to Know Before Signing Up for a Store Credit Card
Too many store cards can damage your credit.

4 Tips to Begin the Estate-Planning Process
Having a thorough plan is an essential.

Filed Under: Liz's Blog Tagged With: Black Friday 2013, Credit Cards, Estate Planning, Identity Theft, store credit cards, warranties

Will declining enrollment lower college costs?

November 22, 2013 By Liz Weston

Education savingsThe number of high school graduates peaked in 2011 at 3.4 million and will drop to about 3.2 million next year. That’s not a huge decline, granted, but it’s a big change from the two previous decades where colleges could count on an ever-growing population of “traditional age” students.

Still, the experts I interviewed for this week’s Reuters column about declining enrollment don’t believe we’ll see lower college costs any time soon. Less demand will moderate the increases, they say, and so will an improved economy. States are likely to restore some of the funds they cut during the recession and its aftermath, which should decrease the pressure to keep raising tuition.

The short version: college demographics, and college costs, are a many-faceted thing. There wasn’t just one factor that led to spiraling tuition costs, and a single factor won’t reverse that trend.

So keep contributing to that 529.

Filed Under: Liz's Blog Tagged With: college costs, college tuition, costs of college, declining enrollment, paying for college, Student Loans, tuition costs

Do you have enough life insurance? Really?

November 21, 2013 By Liz Weston

A few weeks ago I asked my Facebook followers if they had enough life insurance and, if not, what was preventing them from getting more.

Only two people mentioned cost. Many of the rest weren’t sure how much they needed or where they could turn for objective, unbiased help. A few were pretty confident they had enough insurance…although in reality they may have needed more.

The two most important questions to ask about life insurance are, “Do I need it? And if so, how much do I need?” The answers to those questions trump all other considerations—regardless of what your friendly insurance agent might be trying to sell you.

Here’s what you need to know:

If you have financial dependents, you need life insurance. Minor children are financial dependents. So is a spouse or partner who needs your income to pay the mortgage. Stay-at-home parents need coverage, too, since a surviving parent would likely have to hire childcare help. Some people have elderly parents who rely on them for income or caregiving or both; those people need coverage as well.

If you need life insurance, you probably need a lot. As in five to 10 times your income. The amount will vary according to your earnings, your savings and estimated future expenses, so it’s worth taking the time to get a more personalized estimate. MSN has a life insurance needs calculator here. Bankrate has one here.

Social Security survivors benefits probably won’t be enough. Social Security can provide checks to your survivors, but they won’t replace your income and they have limits. Social Security survivor benefits end at 18 or 19 for the child, while parental benefits (the check a surviving parent gets for caring for a covered child) end when child is 16. Widow’s or widower’s benefits typically don’t start until age 60. You can see what your estimated survivor benefits are at http://www.ssa.gov/estimator/

Insurance you buy through work usually isn’t portable. Many employers provide a life insurance benefit equal to your annual salary, and some allow you to buy more coverage. This may be the most economical way to buy life insurance if you have health issues or other risk factors, but the big downside is that the policy is tied to the job. Lose your job, lose your coverage. If you can, it often makes sense to buy at least some coverage independently.

Permanent insurance is for permanent needs, which most people don’t have. Term insurance covers you for a certain time period, usually 10, 20 or 30 years. Permanent insurance is meant to provide you coverage for life. Insurance agents love to sell permanent insurance, which often has some pretty cool features. The problem is that the premiums can be 10 times what an equivalent amount of term insurance costs. Remember, if you need life insurance, you need to get enough life insurance. Settling for too little coverage could leave your family in a real hole. If you do have a permanent need for insurance—you have a special needs child or an estate-planning issue that requires it—talk to a fee-only financial planner about your options. Otherwise, shop for term insurance at places like Accuquote or Insure.com.

Filed Under: Liz's Blog Tagged With: Accuquote, Insurance, insurance quotes, Insure.com, life insurance

Thursday’s need-to-know money news

November 21, 2013 By Liz Weston

Today’s top story: Preparing your home for the winter. Also in the news: Understanding the “kiddie tax”, why your chances of retiring early could be determined by your personality, and how to defeat the urge to binge shop.Education savings

Tips for Preparing Your Home for Winter
Don’t let your money go up in chimney smoke.

Understanding the ‘Kiddie Tax’
Those generous gifts could be generating taxable income.

Retiring Early May Come Down to Your “Financial Personality”
Are you a “protector” or a “pleaser”?

How to Defeat the Urge to Binge Shop
You might want to star by leaving your wallet at home.

Is Saving the Key to Happiness?
Money can’t buy you love, but saving it might just make you happy.

Filed Under: Liz's Blog Tagged With: kiddie tax, Retirement, saving, shopping, Taxes, winter

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