| |
According to statistics, some 45% of widows and 37% of widowers say their spouse did not have enough insurance. On average, one to two years after the spouses death, half the widowers are just getting by financially.
Only 41% of adult Americans have life insurance-more than 60 million are without it! Many people rely on their employers group insurance, however, if they lose their job, the life coverage ends as well.
The average life insurance need is about $459,000, but the average amount of life insurance purchased is $126,000. Most people are underinsured by more than $300,000.
Here are Six Financial Building Blocks that will help secure your financial future:
1. Protection First.
The first step in strengthening your family's financial future is to face some worst-case scenarios. What would happen if you or your spouse became sick or injured - or died? What if you lose your job? You'll need some ready financial resources - emergency savings, life, health and disability insurance - to fall back on. These are the building blocks of your financial security, and they should be in place before you begin to tackle savings issues like college and retirement.
2. Life Insurance is a must.
Here is a simple rule of thumb: If someone will suffer financially when you die, you need life insurance. Even if you don't work outside the home, you still provide services that are expensive to replace, like child care and household chores.
If you are a breadwinner, life insurance can replace some or all of your income. It can also help cover funeral costs, wipe out debts, pay off your mortgage and fund longer-range needs like college or retirement.
If you're a business owner, a properly structured life insurance program can safeguard the finances of your business and your family.
3. Save Money Regularly.
Make savings part of your monthly budget. The power of compound interest can really add up. Just $25 a week set aside over 15 years builds a nest egg of more than $31,000, assuming an average 6% annual return.
Don't just plan to save the "extra." There's rarely any extra.
There are many simple ways to save consistently. Your employer may offer a stock or retirement savings program funded by regular contributions from your paycheck. Many mutual funds allow you to invest in shares on a regular basis. This is called dollar-cost averaging, and it can be a good way to build long-term wealth.
4. Keep Debt in Check.
Live within your means, do more with less. Nothing saps the health of a savings program more than too much debt, especially credit card debt. Avoid it whenever possible. It's expensive! If you need to reduce credit card debt, try consolidating it onto the lowest rate card you can find.
Consider a credit counselor if your bills have gotten out of hand, but choose carefully. Some charge excessive fees. Try negotiating with creditors yourself. Some may be willing to reduce what you owe rather than risk writing off the entire debt.
5. Make Home Ownership a Priority.
Owning your home can be a great way to build savings. You'll get a tax deduction for the interest you pay on your mortgage, reducing your annual tax bill. And as you pay down your loan over the years your equity - the value of your investment - will grow. Home equity can be an important part of your net worth, and its value is likely to hold up even when stocks and bonds are doing poorly. A tip about homeowner's insurance: When insuring your home, the key is to cover its replacement cost, which is not necessarily the same as the price you paid or the amount of your mortgage loan.
6. Talk to your insurance professional.
To help you protect your family and finance their future, contact a professional at Rock Creek, Inc. they will help you analyze your need and develop an insurance program that is right for you and the well being of your family.
|
|
|
|
