Should I Buy Term Life Insurance?

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Term life insurance is a popular type of life insurance and easy to understand. You pay a premium over a fixed number of years, and if you die during that time, your beneficiary will get paid. If you do not die, the policy simply ends. Some people do not like this type of policy. If they live, then they have spent money on premiums for nothing. However, this is the lowest cost life insurance you can get, and for most people, this is an ideal policy to have. The only question is how much should the policy be worth and how long should the term be.

The length of time for this type of policy is usually at least five years and as high as 35 years. One of the best times to buy life insurance is when you are married and just starting a family. If you are the breadwinner of the family and you die at an age where your children are still young, your death can have a profound financial impact on them. By taking out a policy that will cover the missing money that you would have earned had you lived, your children will be well taken care of. A good figure for this type of policy might be a million dollars over the course of 20 years. Perhaps, you may want an even longer term if you have several children of various ages. You will want to make sure they are able to go to college and get all of the financial benefits they would have received if you had lived.

Another good time to get life insurance is in your senior years. You can get a low cost policy that is worth five to 10 thousand dollars. This type of policy can have a son, daughter or other loved one named as the beneficiary. In case of your death, the costs of the funeral and burial can be paid for with the insurance money. Or you can get a no medical exam life insruance policy and avoid any blood work, which will lead to higher rates (get more info on life insurance without medical exam at TermLife360.com).  For those who do not have a lot wealth to leave their children, a death can be a financial burden. Having a low cost term life insurance policy in your retirement years can help ease the costs associated with your death for your family.

When you shop for term life insurance, always get several quotes. The cost of term life has dropped considerably over the last few years because of the Internet. The competition between agents is strong, and the Internet has led to lower expenses for insurance companies. Take your time and get a good deal for your life insurance.

Medicare Supplemental Plan F

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Medicare Supplemental Plan F

Medicare Supplemental Insurance is intended to provide relief from medical costs not covered by original Medicare policy. The intent of Medigap insurance is help to defray some of the cost of the medical services, supplies and co-payments not covered by basic Part A and Part B plans. This coverage is often refereed to as “gap” coverage because the supplement will cover the cost of many of these “gaps” in coverage. That can amount to a significant amount of dollars. This is especially true when a patient must treated in a hospital or needs skilled nursing care in their home.

There are a number of Medicare supplemental plans available. The most popular is Medicare supplement plan F. It is considered to be the best supplemental coverage plan because it provides the broadest range of coverage to the large boomer population. When comparing the various options,the Plan F pays for all your Medicare gaps as well as any co-payments or coinsurance fees. Those amounts can quickly add up.

The following items are the actual benefits that Plan F offers:
*Part A Coinsurance and Hospital costs and up to 365 additional days of coverage after all your Medicare benefits are exhausted.
*Part B Coinsurance
*3 pints of Blood
*Part A Hospice Coinsurance
*Skilled Nursing Facility Coinsurance Charges
*Deductible Charges for Part A and Part B
*Excess Charges for Part B
*Foreign Travel Emergency Charges

While Medicare and the Plan F cover many important medical costs, there are a number of other fees that are not covered. Those include:

Long-term care in nursing home and stays in an assisted- living facilities
Routine dental or eye car and dentures
Cosmetic surgery
Acupuncture
Hearing aids

These procedures are considered to be out of pocket expenses. Plan F Medigap policies are considered first-dollar coverage. That means that after Medicare pays its share of any covered expenses, Medigap F steps in and pays the remainder, leaving you with zero out of pocket expense.

The cost for Part F coverage varies between the providers. It pays to compare rates before making your decision. Don’t rule out any of the smaller insurance companies, as they often have the lowest rates for Part F coverage.

5 Steps to Marital Money Bliss

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This post comes from Angela Colley at partner site Money Talks News.

If you’re heading down the aisle, we have some scary statistics for you. Nearly 30% of married couples say money is the No. 1 source of stress in their relationship, according to a study by American Express, and money issues are largely blamed as a top cause of divorce by many experts.

How do you avoid the strain? Here’s how to get on the same financial track as your partner before you wed.

1. Look for red flags

Look for thoughts or actions on your partner’s part that may not mesh well with your own. Does your partner make big purchases on payday rather than put money in a savings account? Does he forget to pay the bills on time? Everyone makes money mistakes, but a pattern of behavior isn’t going to change just because you tie the knot. Pay attention, and talk about your concerns.

2. Discuss your money habits

Only 43% of couples talk about money before marriage, according to American Express. That’s sad, because talking openly about finances is one of the best things you can do for your relationship and future married life. Set a time to sit down and have that discussion. Here’s some fodder for that conversation:

  • How do you view money? Some people see money as a means to reach goals. Other people see it as a way to pay the bills and have a good time. You’ll want to be on the same page with this one.
  • What debts do you have? You don’t want to find out your partner has a huge load of debt after the wedding ceremony. Perhaps they’re student loans or maybe the result of childish irresponsibility. What is your partner’s plan to pay them off? Is that plan realistic?
  • What is your credit score? It might feel strange to ask, but you should know your partner’s credit score. If you plan to buy a house, take on new joint credit cards, or get other loans together, a bad credit score will mean you pay higher interest rates.
  • What are your future money plans? Do you plan on making a big purchase soon? Do you have other savings goals? Are you serious about setting aside money for retirement? How much have you saved?

Bride and groom arm in arm, smiling, high angle view, portrait © BLOOM image, BLOOMimage, Getty Images3. Set goals

Merging lives and money means merging goals. Before you get married, you and your partner should come up with a few financial goals you both want to achieve. Some things to consider:

  • What are our goals? Whether you want to buy a house, save for retirement, get a new car, or take a two-week vacation every year, having mutual goals keeps you working together and gives you both something to look forward to.
  • What’s the time frame? You’ve both figured out you want to buy your own home. But what if you want a house in the next year and your future spouse is fine with making the move in, perhaps, five years? Agreeing on a timetable has obvious benefits.
  • What is my part? Set clear actions for both parties to reach your goals. For example, if you make more money than your partner, maybe you’ll feel comfortable contributing more to your goals.

4. Make a plan

Sixty-six percent of survey respondents told American Express they share all monthly expenses, and 34% divide up their monthly bills based on factors like income. How do you plan to pay the bills?

Before you say “I do,” set up a household budget and decide who will pay for what. Deciding what is fair in your relationship ahead of time will cut down on arguments and stress later on.

5. Take a test-drive with your wedding plans

Remember when Monica and Chandler got married on “Friends”? Monica thought her parents would pay for her huge dream wedding, but when they didn’t, we found out Chandler had enough money in savings to cover the expense. By today’s standards that would be $28,427 on average, according to The Knot. In the end, Monica and Chandler decided to scale back and save some of that money for their future goals — a true sign of financial compatibility.

Consider the wedding as a way to test-drive managing money with your future spouse. Keep your partner involved in the planning and make big and small purchases together. If you can learn to agree on costs, you’re well on your way to managing money as a couple.

Your Home As Retirement Nest Egg?

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5/29/2013 7:15 PM ET By Philip Moeller, U.S. News & World Report

If you’re relying on equity in your house for your golden years, you might want to think again.

A home may still be a man’s castle, but it’s likely to be a threadbare one in financial terms. An Ameriprise Financial survey released earlier this year found that people may have unrealistic expectations about how much they can rely on home equity in retirement. And the U.S. Department of Housing and Urban Development recently formalized curbs that will reduce the amount of funds people will be able to get from reverse mortgages.

Ameriprise polled 1,000 people ages 50 to 70 who had at least $100,000 in investable assets (not counting their homes). It found people were upbeat about retirement but may have been basing their outlooks on misconceptions about the health of their finances and the expenses they would likely face in retirement.

“There seems to be a significant disconnect between the expectations that Americans have for their lifestyle in retirement, and the financial steps they’re taking — or not taking — to make those expectations a reality,” Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, said in a statement.

In terms of their homes, nearly half of those polled said they expected to use home equity to help fund their retirement. Ameriprise termed that response “a surprising statistic considering that housing values remain well below pre-recession levels in many parts of the country. Doing so may be even more difficult for the 37% of homeowners who say they’ve not yet or are not on track to pay off their mortgage before they retire.”

Even owners with substantial equity in their residences will face a tougher time in accessing that wealth, short of selling their homes. That’s because of HUD’s action, which was taken to stem large and growing losses in the Federal Housing Administration (FHA) program to insure reverse mortgages through what is called the Home Equity Conversion Mortgage (HECM) program.

Reverse mortgages are touted as a way for seniors (borrowers must be at least 62) to borrow funds against their home equity, while continuing to live in their home as long as they wish without having to make additional mortgage payments.

Over longer periods, loan charges and private-lender fees often exceed the home equity the owner has in the house. When the occupants die or leave, they and their families must repay all these accumulated charges to retain ownership of the home. However, HECMs are “non-recourse” loans, meaning borrowers can simply make no payments, walk away from the home, and turn ownership over to lenders.

The lenders, in turn, are protected from losses by federal insurance. But it turns out that these insurance losses have far exceeded the cost of HECM insurance premiums. One of the main reasons is that aging borrowers have struggled to pay property taxes and home-insurance premiums. This puts them in default. Lenders may look to tap any remaining equity to pay taxes and insurance expenses, but then must either carry mounting losses on the property or move to take possession of the home and sell it. The FHA is on the hook for insured losses when this happens.

To reduce its exposure, HUD last week said it would stop offering a popular HECM product for fixed-interest rate loans and restrict such loans to what’s called the HECM Saver loan. This type of reverse mortgage charges borrowers much lower insurance premiums than the loan that is being suspended. But it protects the government from loan losses by reducing the percent of a home’s equity that an owner can borrow. This leaves more equity under the control of private lenders — for charges and things like overdue taxes and insurance — and creates a cushion against FHA insurance losses.

In addition to the HECM changes, the agency says it will also be working to better evaluate loan applicants’ financial ability to keep up with property taxes and insurance. There have been embarrassing cases of HECM loan terms forcing older women from their homes after their husbands died.

In a statement to U.S. News, HUD Deputy Assistant Secretary Charles Coulter said, “HUD believes there are four fundamental changes that are required: restricting the amount of the up-front draw; implementing a financial assessment process to ensure seniors are equipped to meet their long-term financial obligations; requiring some combination of a tax and insurance set-aside and/or borrower escrow account; and addressing complications resulting from non-borrowing spouses.”

“HUD is actively developing policy to address these issues administratively and is also working with Congress to enable faster implementation of these critical changes,” Coulter added. “If we are unable to make these changes in a timely manner, HUD may be forced to take, sub-optimal, short term measures to improve the economics of the program.”