You, Disabled: What Are The Chances?
Posted by: BeamaLife Editor on 19 Mar, 2010
Preparing for risk always begins with recognizing that there is one, and then calculating the chances that it will actually happen. But, as an article that I read recently pointed out, “the odds of a disability are themselves odd.”
Some sources will tell you that you have an 80% chance of suffering a disabling illness or injury in your lifetime. Others put the chances closer to 50%, and still others as low as 30%. The number you hear – the number you choose to believe – is what will make the biggest difference in how you choose to handle this particular risk.
I like to think of it this way: if the weatherman says there’s a 100% chance of rain, you’ll grab an umbrella before you leave the house. If he says the chance is 50%, you may or may not. But the important thing is this: you know that it does rain, once in a while, almost everywhere, and so at some point in your life you buy an umbrella. Or several umbrellas.
Whether the chances that you will suffer a disabling injury are 80%, or 50%, or 30%, you need disability insurance protection. Because every year, in this country alone, 31 million people just like you get rained on. Maybe it’s a passing sprinkle, like a sprained ankle; inconvenient, but something you can recover from. Maybe it’s a thunderstorm, like a mild stroke; sudden, disrupting, but again, only temporary. And maybe it’s a downpour that not only never stops, but gets worse as time goes on, like multiple sclerosis.
Don’t let the fact that you get different numbers from different sources be the reason that you become complacent. Accidents happen. Illnesses do come. And without disability income protection, you’re left not only disabled, but disabled without any income. About a third of all U.S. employers provide disability insurance. But, since that coverage is employer paid, the benefits are taxed, so if you’re out on disability, you may be forced to make ends meet on 40% of your predisability earnings.
Who would you turn to if you couldn’t work? Don’t think that Social Security will rescue you, despite the fact that you’ve been paying into it for years. It can take more than a year for your claim to even be processed, and even longer if your claim is rejected the first time around. Workers compensation? Such claims are paid much more quickly, but the vast majority of disabilities are not work related, so workers comp is not an option.
What are the chances that you’ll suffer a disabling illness or injury in your lifetime? No one really seems to know that. But here’s one thing you can be certain about. You are your best advocate and your ultimate safety net. You can make sure that your financial future is secure.
If you don’t have your own disability income protection policy, now is a good time to apply for one. We’ll help you find the right combination of coverage and premium so that you’re prepared for whatever happens, come rain or come shine!
Long Term Care Is No Joke in New Jersey
Posted by: BeamaLife Editor on 15 Mar, 2010
I’ve lived in New Jersey for many years now, and I think I’ve heard every New Jersey joke that’s ever been written. Most of them are funny, and most of them are at least a little true. But here’s something about New Jersey that isn’t funny at all.
The number of residents age 85 and older is projected to grow by over 70 percent between now and 2030. Currently, 13% of our population is 65+, and 175,000 of our residents are over 85. And the numbers would be higher if we didn’t have a law that requires every third senior citizen to move to Florida!
Okay, so I made that part up, but seriously, that group of senior 85+ is the group most likely to need long term care services. And according to AARP, New Jersey is ranked 25th in projected growth of 85+ population. That means that 24 states out there are expected to see increases even higher than New Jersey does.
Right now New Jersey is spending 80 percent of its Medicaid funds on institutional care, with 935,000 citizens relying on Medicaid, and 16% of them being 65 years old or older. New Jersey is one of the states that permit Medicaid recipients to choose between nursing home care and in-home care, which is great because in-home care on average costs one third of what it costs to care for someone in a nursing home.
But in addition to those being care for by our state, 980,000 New Jerseyans are providing family care to a loved one at home, with the value of that care, according to AARP, is more than $11 billion. I’m telling you this because what’s happening here is happening in your state too – and chances are your state is not providing the care options that New Jersey is.
Does it surprise you that there are only about 7 million long term care policies in effect at this time? With Americans living longer, and with the costs of health care rising to rapidly, you’d think that everyone would be looking for ways to make sure that they can get the care they need in the way that they choose and at a price that won’t create a hardship for the rest of the family.
When we started this company, my focus was really on life insurance. But the connection between life insurance and long term care insurance in a sound financial plan is undeniable. Having enough of one can truly reduce your need for the other, and as we age, the importance of each changes as well.
If you have long term care insurance, I applaud you! You’re among a select group that’s taken a very important step in planning for your later years. If you don’t, take the first step and find out how your current financial plan will help you or hurt you in the event that you need long term care. Call BeamaLife at (877) 972-3262 today to talk with one of our long term care insurance specialist!
Should you buy Term Life Insurance and invest the difference (as compared to paying a Whole Life Insurance premium)?
Posted by: BeamaLife Editor on 5 Mar, 2010
I was listening to a personal finance podcast the other day, and the question was raised again about what kind of life insurance someone should buy. The host went on for the next couple of minutes talking about how everyone should “buy term and invest the difference.” Now I’m a fair person, and I admit that there are many, many times when that makes more sense than any alternative.
But if there were a doctor out there who, for every patient, wrote the exact same prescription, it wouldn’t be long before that doctor would be out of patients at best, and in jail for malpractice at worst! In my experience, absolutes only work as descriptions of reality. One plus one equals two. The sun is the center of our solar system. Beyond things like that, absolutes just don’t work.
And when it comes to financial planning, it makes sense from my perspective to take a long, hard look at the patient before recommending a course of treatment. Whole life insurance sales, according to recent figures, are now selling at a rate that is much higher than the year before.
Here’s one reason why. In order to beat the return on your investment in a whole life policy, you’d have to average 10% or more on your investment of the difference between what you’re paying for term life and what you would have paid for a whole life policy. Can anyone show me an easy way to make that kind of return these days? I can’t think of one.
And here’s another reason. The Pollyanna mindset that says “let’s not worry about today, because tomorrow will be even better!” has all but disappeared as the various sectors of the economy have fallen like dominos over the past couple of years. Stocks are just now beginning to recover, but jobs are still nowhere to be found, real estate values are not even beginning to show signs of growth, and with looming changes in heath care and taxes, the average American has very little hope that the next five years will bring prosperity back.
At BeamaLife we’re experts in all kinds of life insurance products like term life or whole life insurance, and we know how to help you find the one that makes the most sense for where you are financially right now. So don’t buy into the “buy term and invest the difference” mentality. For many people, it’s more like “buy term, plan to invest the difference, spend the money on other things, and then find yourself without the coverage you need when you need it most.”
Call one of my experts today at (877) 972-3262 for a free, no-risk review of your life insurance. We’re your best resource for advice, and the surest way to get the coverage you want for a price that you can afford. Your family and your financial future deserve nothing less!
Are You Taking Your Retirement Advice from President Barak Obama?
Posted by: BeamaLife Editor on 1 Mar, 2010
Last month the White House decided to get into the business of giving financial advice. The White House’s “Middle Class Task Force” recommended that Americans, many of whom are in a terrible financial bind, begin investing in immediate annuities.
With the volatility of the stock market, the crash of the real estate market, and the staggering unemployment numbers, Americans are looking for any way to preserve their investments and set themselves up for a livable future. The most conservative investments, like certificates of deposit and money-market accounts, are returning almost nothing these days.
If you’re not familiar with these investment options, let me explain how they work. You buy an immediate annuity by making a large investment with an insurer. Then you begin to receive large payouts which last for the rest of your life. An example in a recent Wall Street Journal article shows how a 65-year old buying a $100,000 immediate annuity would receive roughly $7,500 per year.
Should everyone immediately invest in immediate annuities? I think that makes about as much sense as suggesting that everyone should take an aspirin every day, just because for some people, it’s a good way to fend off a second heart attack. Financial planning is never one size fits all.
Some financial gurus suggest, for example, that the best way to use life insurance as part of your planning is to “buy term and invest the difference.” And while that’s a great strategy for some, it’s a horrible mistake for others. In the same way, buying immediate annuities makes great sense for some investors, but is a sure way to a less happy retirement for others.
Today’s interest rates are super low, and as the Wall Street Journal article pointed out, these pension-like investments require you to make a very educated wager that hinges on something most of us know nothing about: how long we’re going to live. If you live a long time, an immediate annuity can be a great investment. But if you don’t, the one who will benefit the most from your investment is the insurance company.
Don’t get me wrong. As someone whose career has been built around helping people to make the right decisions – about life insurance, disability insurance, college savings plans, and yes, annuities – I’m happy to have the White House advocating that Americans take a look at a variety of financial options they might not have considered in the past. But rushing into something is almost always a mistake, and it pays to take your time and to seek the advice of competent professionals before making any major financial moves – especially when your family’s future is at stake.
