INSURABLE INTEREST – To buy an insurance policy on some- one’s life, you must have an insurable interest in that person, which means that you would suffer a financial loss if he or she died. The law assumes you have an insurable interest in your own life and the lives of your spouse and dependents. Others must prove they have an insurable interest if they want to buy a policy on your life. The buyer only needs to prove
an insurable interest at purchase. If circumstances change—such as through divorce or the dissolution of a business partnership—the person named as beneficiary, even if he or she is also the policyholder, can usually still collect a claim at the death of the insured. When you buy life insurance, you must make two important decisions—who will own the policy and who the beneficiary or beneficiaries will be. The customary approach is for
the owner and the insured to be the same person, but it’s not the only alternative. It’s a good idea to check with your tax or legal adviser to see if it makes more financial sense for someone else to be the owner.
You can choose any beneficiary you wish—and if you
own the   Read more…

First, you should determine what expenses the policy should cover. For most people, the death benefit should pay immediate costs related to your death, help meet your dependents’ daily living expenses, and set aside money for future needs, such as education. Of course, your dependents may need more or less, based on your existing assets, their own income and assets, and whether they’ll receive income from Social Security or other sources. Keep in mind, though, that the life insurance policy that’s right for you at one stage of your life may not provide the coverage you need at another. For example, you may decide to convert a term insurance policy to a permanent policy to lock in lower premiums. If you have universal life, you may want to take advantage of the option of increasing your death benefit. When an insurance review is a regular part of evaluating
your financial plan,
you’ll be more likely to make changes when they’re appropriate rather than risk waiting too long to update. A life insurance calculator can help you come up with a ballpark figure as you begin exploring your life insurance needs. But it can’t take you as an individual into account. You should   Read more…

As your life goes through different stages, your life insurance needs will change. Everyone’s experience is different, but here are some of the key concerns you might face. Young couple, new homeowners – Buying a home together is exciting. But it’s also
a major financial commitment that may depend on two incomes. If one of you were to die un- expectedly, you want to be sure that the surviving spouse is able to keep the home you love. If both of you have life insurance, you’re protecting each other and your investment. Young working parent – Since your kids depend on you to support them,
if you were to die, their financial security might
be at risk. Even if your spouse or relatives will be there to raise your children, they may not have the financial resources to provide the things for your children that you wanted them to have. Life insurance can help you make sure that whoever raises your children after you’re gone can maintain the standard of living you want for them. Supporting kids and parents – These days, more and more people find them- selves raising children while at the same time supporting their parents in their old age.   Read more…

The first step is analyzing the sources of retirement income you can anticipate, how much you can expect these sources to provide, and the changes—if any— you should consider making in the way you’re investing and managing your money. As you transition from work to retirement, you may want to rethink your approach to asset allocation, or the percentages of your investment portfolio you assign to different asset classes. Since your taxable and tax-deferred investments are held in different accounts, you may—like many people—have been allocating them separately, rather than as components of a single portfolio. That may work fine. But rather than owning several assets classes in each type of account to help manage risk, you may want to concentrate certain types of investments in your taxable accounts and other types in your tax-deferred or tax-free Roth accounts. So, for example, instead of owning equity, debt, and some alternative investments in both retirement and nonretirement accounts, you may want to emphasize equities in one and bonds and cash in another. Among the factors you’ll want to consider in making these choices are how any earnings will be taxed, whether withdrawals are required, and the rates at which assets have   Read more…