Monthly Archives: April 2013
The following is a guest post.
Unfortunately, the life insurance options that a terminally ill patient is going to be afforded will not be any of the traditional sort. Standard month-to-month premiums on a policy with longevity isn’t something that an insurance company will hand out when the time period over which premiums will be paid is likely to be short.
However, there are a few non-traditional options that can be obtained; especially if you seek out the council of a certified life insurance agent who specializes specifically in terminally ill cases. These specialists will provide invaluable insider’s knowledge on what options are available, with all of the need-to-know details.
Some of these options will include the following:
This is a whole term policy that has several conditions for death benefits to be claimed and paid out to your beneficiary; these conditions will vary from insurer to insurer, so be sure that you utilize your specialist when shopping around.
Typically, an insurer will set a predetermined time period that must be surpassed for a full death benefit payout to occur. In most cases, this time period is 2 years. If you die within the designated time period, then the payout will be minimal—usually, the beneficiary will only receive the premiums you’ve paid, and in some cases, a percentage of the total death benefits. For example, a $100,000 policy may only payout $3,000 in death benefits plus your premiums.
However, if you die after the designated time period, your beneficiary will receive a full death benefit payout from the policy.
These policies can definitely be a good way to go, but it’s still important to consider all options, especially if you have a very limited life expectancy. If this expectancy is very short, a significant cap might be place on the amount of coverage you can obtain—sometimes it can be as little as $10,000, which might only cover funeral costs.
LIMITED PAYMENT POLICIES
These policies compensate for the short period of time they will be active by charging expensive premiums. Usually, the insurer will take into consideration your total life expectancy and dictate an expected amount of months to receive payments. Total coverage and premiums will be calculated based off of this expected time period.
SINGLE PREMIUM POLICIES
Some insurers offer the option to make one huge lump sum payment in exchange for a certain amount of coverage, annually. Typically, these policies aren’t usually recommended; if you can afford to put such a large amount into a policy like this, then it might be a better idea to invest it into a trust, or some other investment opportunity that will benefit your loved ones. This largely depends on what coverage is available and what stipulations the insurer dictates for receiving a payout.
BE DILIGENT… BE PREPARED!
The best option for you is going to largely depend on your own diligence, as well as the due diligence of a life insurance agent that you can trust. Shop around, fully understand your options, and if you should find no luck with obtaining coverage, seek out the guidance of a financial expert for even more investment options. Above all, don’t lose hope!
The millennial generation has embraced the art of binge TV-watching. They made fun of it on Portlandia, and the Wall Street Journal has analyzed it. According to them, 73% of viewers who watched the first episode of Breaking Bad watched the entire season (although it didn’t say in how many days or weeks). I think we need to apply some of that dedication to our investment practices. How much time do you spend watching television versus time spent researching investment opportunities? If you spend more time watching TV than researching investments, it may be time to tip the scale in the opposite direction.
There are plenty of investment opportunities that don’t start with “mutual” and end in “funds”. You guys know I don’t think mutual funds are the way to go, but I haven’t been very strong about telling you what I am doing with my money. Since I am just over two months away from paying off my debt, I need to make those decisions and put them down on paper so I can continue to refine them.
First, I plan to invest in real estate. That’s a no-brainer because it is one of my goals in life to become landed gentry. The good news is I don’t plan to buy too much house or let my mortgage be more than 20% of my monthly gross income. Since there will be additional funds to invest (now that I am no longer spending like a maniac), I also plan to invest in individual stocks and ETFs. The ETFs help because I am very new to active investing, and want to experience and understand overall market returns. This stuff is not new to me, even though I have studied it for a long time, it means little when you are not invested. Another option is forex trading. My family travels to countries in the Middle East where the currencies can fluctuate wildly, and there are many opportunities to make money during different swings in the market. It’s risky if you don’t know what you’re doing, but with the right research it can pay off nicely.
So there you have my basic investing plan: real estate, individual stocks, ETFs and forex (maybe). I still love watching television, but I want to spend at least as much time doing financial research each day as I do watching television (it’s Sons of Anarchy right now).
The other day, I realized that my computer is almost 7 years old. In technology time, that’s like referring to James Buchanan as one of our modern day Presidents. This computer is so old, that I almost can’t watch video on it anymore. Which is a problem, because I love television and movies. Even though I’d like to replace it, I don’t need to right this second, and I’m fine with that.
I have old stuff when I can afford new stuff, but I don’t even feel like buying new stuff. (!!!)
This is a first. My purse is getting beat up and looking a little shabby. Meh. I thought about getting myself a sweet birthday present after I am debt-free like an iPad mini or a DSLR camera but then I thought, Nahhh, I really don’t feel like it. I don’t want anything really, just time to hang out with people and have a good meal and I’d call that a celebration.
When I started this blog, I thought I wouldn’t be able to get out of debt because I would always want to buy things. I like fashion. I love picking out that one cool piece and pulling it off. But everything is relative. My focus has changed. New things are nice. I probably will have to replace my computer within the year. But in a bizarro parallel life, I would have had a new Macbook Pro at least two years ago by now, I’d still be wearing the latest, trendiest stuff and I’d still feel a little anxious every morning because there was always another bill looming.
After a few years of not having the latest stuff, you can pick up a few good habits that will keep you financially comfortable. Buy stuff lightly used. Wait for the off-season to buy sports gear and camping equipment. Don’t give in to the urge to immediately replace something just because it’s starting to show signs of wear. Think of it as a badge of honor.
There’s a moment that will come when you will pay off all your debt. It’s July 1st (knock on wood) for me, and I couldn’t be more excited. But like any reformed spender, I want to make sure I will be responsible when I get back to living normally, spending and saving and not throwing everything at debt. I have a plan for using my credit cards without getting into trouble again.
If You Don’t Have It, Don’t Spend It
After the hard lesson I learned piling up and then paying down credit card debt, my first rule is knowing how much money I have to spend. Know exactly what’s available for you to spend on variable expenses like food, gas and entertainment, while still having enough to cover housing and any other monthly bills. If you only have $50 extra this week, you can hold off on shopping or paying for a future trip until you have the money.
Take Advantage of Perks
The next is to take advantage of what’s out there. You can apply for a credit card to take advantage of rewards, companion flights and other perks. As long as you are only spending the money you have and not using it as a short term loan, your credit card can be just another tool. Think of it in the philosophy of “first do no harm”. You use tons of other things in your life as tools without causing harm to yourself. You use your cell phone daily right? You take care of business, talk to family and friends and just use it as an all around guide. But do you also use it to repeatedly call your ex, thus embarrassing yourself, or prank call your old place of business, thus getting a restraining order taken out on you? Of course not. You use your phone within reason, usually without too much emotion. Just do the same thing with your credit cards.
OK, so you’re going to put a short term loan on your credit card even though you know it’s not the best idea. The best thing you can do is look for interest free credit cards to take advantage of their short term zero interest rates. As long as you pay it off before the interest is due (and hopefully use that money to make more money), then you are still using your credit card responsibly. So that wasn’t too hard, was it?