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529 plans is not the best when it comes to financial aid

beamalife — Thu, 04 Feb 2010 09:03:01 +0000

It’s all very good to begin with. A 529 plan provides you with tax-deferred opportunities to save up for your child’s education. The initial deposit you make in a 529 account comes from your pocket that is your income tax paid dollars. But, the money you thus invest in a 529 plan grows tax-deferred through channels set up by the state and yields same return of conventional mutual funds and bonds families tend to invest in.

But let’s face it. No matter how much we manage to save for the college education of out children, we still fall short in the end, considering the ever increasing education costs. So, the child is going to need financial aid in the end. Some say that the more you save up for your child’s education, the less would be the financial-aid he would be receiving. This is unfortunately true in the case of the 529 plan. Financial aid is awarded in the form of grants or subsidized loans and the amount of aid depends on the ‘financial need’ of the student. The total resources and family funding is deducted from the cost of attending college in order to calculate the financial need. This could effectively mean the 529 savings plan you have invested in would reduce the amount of financial aid dollar to dollar. Fortunately, it is not so. While there would be no dollar to dollar cut in the aid, there would be a deduction of up to 5.6% of the amount in 529 plan owned by parents. You might be surprised to learn that this is still good, because the deduction would be 20% if the account was owned by the student himself.

Further to this little problem, there is an added stipulation. While the earnings on your 529 account are tax-deferred and so is the distribution to the university, the earnings are still considered taxable when calculating the financial aid for the student. Supposing you invested $10,000 in your 529 plan and your earnings add up another $10,000. Now, if you pay $5000 in a semester’s fee, the 2,500 dollars in the amount which reflect earnings are considered as earnings of the student. This means that at a 50% assessment (assessment levels of student contributions are much higher than that of the parents) $1,250 is still deducted from the ‘financial need’ of the student in addition to the 5.6% (parents’ contributions) of the total money in the 529 account.

Despite all the confusion, we are still generally speaking here. There are many stipulations in the law as well as rules implemented by individual colleges that could defer the amount of financial need of a student. Also, it doesn’t mean that investing in a 529 plan is not a good option. While financial-aid is essential, you must realize that most of it is in the form of loans rather than grants. This means that you or your child will have to pay interest tomorrow, while you can earn interest today through a 529 plan. A careful assessment of your financial condition and the number of years till college will help you decide how much to invest in a 529 plan and how much to expect in aid. The bottom line is, of course, start saving now!

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Life Insurance Quotes | Term Life Insurance : BeamaLife.com

Whole life insurance explored

beamalife — Thu, 04 Feb 2010 08:40:41 +0000

Whole life insurance is insurance as we know it and it covers a person’s death for however long he lives. Whole life insurance is a more guaranteed form of life insurance and is thus more costly than the term life policy which only runs for a particular amount of time. So, if there is a hundred percent guarantee that the policy will pay out, why will insurance companies offer such a policy anyways? Well, apart from the risk factor that a policy holder might die early, the premiums paid will appreciate in value through bonds and other investments made by the insurance company and by the time the policy is paid out or surrendered, the investment will reach the figure of benefit anyways.

This where whole life policy wins over term life policy, where you do not get your money back after your term finishes. Another reason to choose whole life insurance policy is simply to rest easy. You can forget about insurance after you’ve taken out a whole life policy. Same is not the case in term life. Terms run from one year to as many as thirty years. But many people still find themselves in need of insurance after their term finishes. But getting insurance coverage after you’ve aged by so many years could be heavy on the pocket.

Now that we’ve established that, the next question would be about how to obtain whole life insurance quotes and how to arrive at the best whole life insurance rates. Whole life insurance application process generally includes a medical test and a lot of detail about your lifestyle and family medical history. However, a general quote can be obtained for comparison through several online channels. There are also simplified issue life insurances that ask only a few questions and others that do not ask any questions at all except for the age. These quotes are easier to obtain, but the benefit in these cases is far lesser than a completely underwritten whole life policy and these insurances are used only to cover funeral expenses and outstanding debts if any.

The best whole life insurance rates can be obtained through a bit of digging around. Asking people you trust about the policies they’ve taken out, visiting the website of your state’s department of insurance, getting your hands on some consumer guides, offline or online and applying for quotes from various companies while studying their insurance plans thoroughly are steps towards arriving at the best rates and best policies.

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Term Life Insurance | Whole life Quote : BeamaLife.com

Understanding Term Life insurance quote

beamalife — Thu, 04 Feb 2010 08:33:14 +0000

Term life insurance quotes are available online, we all know that. All we have to do is fill up a form and a term quote lands in your email in no time. But, considering the number of term quote providers out there, there is the question of ‘which ones can you trust?’ And rightly so, because the best companies might not use the best marketing strategies and those that use might not be the best policy for you. So how do you decide which one is best for you? Companies are rated by independent financial analysts like AM Best, Moody’s, etc. These ratings can help you choose between quotes, and decide whether a company offering a cheap term life insurance quote has the potential to live up to its promises or not, after ten twenty and even thirty years.

Another issue is the reliability factor of the given term quote itself. More often than not, the quote is subject to change, not because the quote providers are drawing the figures out of air, but because insurance companies tend to tweak your applications and add up a lot of factors towards drawing up the final premium rates. There is no general questionnaire that you can expect either. Supposing your medical history showed an accident that occurred while rock climbing, an additional risk factor is added based on your passion for adventure sports. The family medical history is screened for a plethora of hereditary diseases and every occurrence of such a disease adds up.

A term life insurance quote that you obtain online is basically automated. The most common questions you are likely to be posed with are your age, height and weight, whether you are a smoker or not and bam, you have a list of term quotes from different companies. You can consider term life insurance quotes as a general assessment of the price range of your policy. But you should not depend on them for your own financial assessment due to the reasons we have already explored.

Term life insurance quotes should be compared using some basic variables of a provider. The prices of the company being the first, you should also be wary of the underwriting process. For example, some companies might offer insurance for those who had a history of cancer while some don’t. Other points would be the ratings and the quality of customer service of a company—remember you are going to be associated with this company for decades.

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Life Insurance Quotes | Whole Life Insurance : BeamaLife.com

Save on Life Insurance Premiums: Go Vegetarian

beamalife — Thu, 04 Feb 2010 08:17:10 +0000

Vegetarians are rare, vegetarians have fewer options in food, vegetarians are healthy, vegetarians get cheaper insurance. You heard that right. Insurance companies are now coming to terms with the fact that vegetarians have more life expectancy and are less prone to chronic diseases, heart problems and are also more resistant to cancer.

Life insurance premiums are calculated based on several factors. Basically, they use mortality tables to deduce the premium as well as tax free death benefit. The factors are mainly your family medical history and some lifestyle habits. Most companies consider your driving records, addiction levels to smoking and alcohol, the place of living, etc. Even the traffic levels and crime rate of the place you live and work are considered sometimes. But it is quite recently that eating habits are added to the long list and rightly so. Overeating and obesity shows in your medical records, but the fact that you could be a vegetarian doesn’t.

You might be wondering, what’s the big deal about being a vegetarian anyway? It is a huge deal because the life expectancy of vegetarians is much higher than meat eaters. And the reason is quite simple. Vegetarian food doesn’t have some of the harmful ingredients and fatty acids that meat does. The digestion of vegetarian food is also quite simple and doesn’t need our body to produce harmful acids to break the compounds. Scientists claim that the risk of a vegetarian contracting cancer is 40% lesser than the non-vegetarians. Also, the risk of heart disease is reduced by 30% on an average for any vegetarian. Healthy diet choices play an important role in the body’s overall health and should not be ignored by insurance companies.

All companies do not consider this variable in calculating premiums, however. The reason is that, the medical tests a person needs to undergo while procuring insurance doesn’t show whether he/she is a vegetarian or not. Smokers can be identified through the GP levels in the body and a comprehensive result can be obtained about alcohol consumption. Also, since insurance covers a long time in a person’s life, there is no way to determine his food choices throughout the period. But, some argue that unlike other addictions, a person once a vegetarian will remain a vegetarian. There are some animal loving corporations that introduced policies with up to 6% discounts for vegetarians! So…eat your veggies and save not just on food, but on insurance too!

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College or retirement? Don’t choose one, accommodate both

beamalife — Thu, 04 Feb 2010 08:05:00 +0000

You know you have a hard choice to make in front of you when you are deciding whether to save for your child’s college education or your own retirement. Only the best for my children—isn’t it the motto of every parent, after all? Especially, the parents who had a hard time funding their own education would never imagine putting their kids through such turmoil. But, let’s face it, there are loans, scholarships and financial aids that can get your child through college, but name one bank that would give out a loan for retirement! In a more generic sense, parents are supposed to have seen their kids through college before they start saving up for retirement. But, very few people start families early enough to meet that goal. In addition to this, college education costs are only rocketing every year. It is estimated by the College Board that an average private education would cost like $287,000 for four years and the same in a public entity would cost up to $133,000 by the year 2020. If you are one of those who are saving up for your kid’s college, didn’t that jolt you out of your senses? Increasing educational costs are rendering several couples without any retirement money or with mortgage payments to be made, forcing them to work throughout their life! There is an urgent need to solve the dilemma and working out both retirement and college into your balance sheet.

There are options, of course. Postponing retirement is first and obvious one. The next one would be to accept some lifestyle changes reducing the general cost of living. If it is a hard for you to do that now, you can always choose to do so after retirement. You wouldn’t need such a big house after your kids move out, would you? And what is the point of living in the hustle-bustle of the city when you are no longer working? You can work part-time during retirement—you can keep yourself from getting bored while earning a little to keep the general expenses flowing. You will have to increase your earnings. While killing someone to get that promotion is not necessary, you can always ask your spouse to return to work. We all invest in one bond or the other and while we’re at it, why not make our investments a bit more aggressive to get a higher return? Just a little bit, mind you.

You must accept the fact that even after doing all this, you might not be able to retire comfortably. It is not bad to put a little of the responsibility on your children’s shoulders. They are young and vulnerable now, but they’ll grow up. Besides funding all or a part of his education is bound to improve your child’s performance. Instead of mortgaging your own house, you can always help out in education loan payments! Be generous to your kids. But remember the fact that one day they will have to take care of themselves no matter how much you try to help them out.

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Affordable Term Insurance: let’s deliberate

beamalife — Thu, 04 Feb 2010 06:21:12 +0000

When we are talking about affordable term life insurance, there is always the minor hiccup to figure out how much is affordable for you exactly. While you have a plethora of term life insurance options online, some claiming to be most affordable and most giving you a list of direct quotes you can decide from yourself, there is still the question of ‘will what is affordable today still remain affordable tomorrow?’ The idea of term life insurance itself is to save a lot of money on hundreds of thousands of dollars worth life insurance when compared to a whole life insurance, while compromising on the fact that you will not be left with any insurance after your term finishes. So, if you are not going to get any insurance benefit after the term or a refund of all the money (except in return-of-premium policy) you invested in the policy, it basically comes down to giving away money for so many years so as to make sure your family is safe ‘if’ something untoward has to happen to you during the term. This is a big ‘if’ is facts and figures are to be considered. Experts say less than 1% claims are benefitted in the case of term life policies.

The affordability of term insurance rates thus is very debatable. More so because, lay offs or depreciation of income is a daily occurrence in today’s economy. Ideally speaking, 5% of your income could be allotted the insurance slot so that even if there is a financial hiccup, you wouldn’t be forced to terminate the expenditure on premiums. The term insurance rates, like the whole life insurance, depend on a lot of factors and in fact work on the same mortality tables. You can cut down on the term life insurance rates by cutting down on the types of coverage. A complete term life policy covers death by any means. You do not need certain types of coverage based on your lifestyle, so by careful deliberation you can choose not to include that coverage in your policy. This is effective till some extent but people tend to get greedy over them and cut out most types thinking ‘that can’t happen to me’. The other ways to get best term insurance rates are to give up on adventure sports, not take up a job that involves certain risks, quitting smoking and managing weight. You would be surprised to learn that some of these innately personal options can affect the rate of your insurance, but they just happen to be your best bet to get the best rates from a decent company.

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Life Insurance | Term Life Insurance : BeamaLife.com

What is Whole Life Insurance and How to Find the Best Whole Life Quote?

beamalife — Tue, 26 Jan 2010 06:20:32 +0000

All life insurance policies pay a death benefit, but certain policies, known as “cash value” or whole life insurance policies, so more than that. These policies accumulate a cash value over time, which you can withdraw or borrow from after a certain period of time.
Compared to term life insurance policies – pure insurance policies that offer a death benefit but no cash value – cash value policies are higher in terms of premium. The premium difference is invested in a way that earns interest for you, tax free. And while term policies provide death benefits over a pre-determined period of time (for example, 5 years, or 10 years), cash value policies are generally lifetime policies which, as long as they remain in force, will pay a death benefit regardless of when the insured dies.
There are different kinds of cash value life insurance policies, so you’ll want to know the specifics of how your policy works in detail. But generally, you pay your premiums, and a part of the premium goes into a cash value account. Once a certain account level has been reached, you have a number of options:

- You can stop paying premiums, and use the money in the cash value account to pay the premiums for you. Depending on how much money is in your account, the principal may stay the same, with the interest going towards your premium payments.

- You can continue paying your premiums, maximizing the growth of your cash value account. Your life insurance policy then becomes more than just life insurance. It becomes an additional retirement savings or college savings account that you can draw on in later years.

- You can take a loan from your cash value account. You become like your own bank, lending money to yourself that will not be taxed and you don’t ever have to pay back. If you don’t pay the loan back, the loan amount is simply deducted from your death benefit when you die.

The higher insurance premiums associated with cash value accounts have led many insurance agents to recommend a course of “buying term insurance and investing the difference.” While this makes sense in theory, it’s a lot like being on a very strict diet. It’s very easy to get off track and the end up financially somewhere other than where you really planned to be.
While cash value policies are more out of pocket expensive, their premiums are set for the life of the policy. Comparable term life policies may begin with very low premiums, but when the policy expires, renewing the coverage could be far beyond what you’re able to pay. And regardless of when your death occurs, you know that with a cash value policy, your loved ones will receive the death benefit. With term life insurance, if you die outside the policies coverage period, there’s no benefit for your survivors.
Choosing the right type and amount of life insurance coverage is critical in your personal and family financial planning. At BeamaLife, we’ve created our own technology, and partnered with 100 of the top insurance companies. We’ll find the best life insurance rates and life insurance quotes that make the most sense for your financial goals and needs, and we’ll get you the coverage you want at the price you want to pay!

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Life Insurance | Whole Life Insurance : BeamaLife

When Your Term or Whole Life Insurance Policy Lapses

beamalife — Tue, 26 Jan 2010 06:09:34 +0000

Learn what are your options when your term life insurance or whole life insurance policy lapses and how to reinstate it.

There’s no question that life insurance is a critical part of your personal and family financial planning. But in today’s busy world, with as many things as you’ve got going on, it’s possible that you could forget about making your monthly premium payment.

When you pay your premiums regularly, your policy remains “in force,” but when you miss a payment, your life insurance company is required to give you a 31-day “grace period” in which to catch up. At the end of the grace period, if you haven’t submitted your back premiums to the life insurance company, your policy will lapse.

When you have a term life insurance policy that lapses, the coverage ends immediately and back to the last month for which you actually paid the premiums. With a whole life insurance policy, if there’s money in your cash value account, those funds will be used to pay your premiums until the funds have been exhausted. Either way, once the grace period is over, your coverage is over and your loved ones are left without life insurance protection in the event of your death.

If you’re in a financial or life position where you don’t truly need the insurance coverage any longer, there’s no real problem with letting the policy lapse. But, if your policy is lapsing because you can’t afford the premiums, but you still need the insurance coverage, letting the policy lapse could have serious consequences for your future.

Many insurance companies, when offering life insurance coverage to an individual, don’t check to see if the individual has had coverage before, or if that coverage has lapsed. But some life insurance companies do check to see if you’ve had coverage lapses in the past. If you have, they may choose not to offer coverage to you in the future, which means you’ll have a very hard time finding the protection you and your family need, even if you’re able to better afford it than you were in the past.

When your policy lapses, it isn’t necessarily the end of the world for your life insurance protection. You can request that your coverage be reinstated by your life insurance company. Each company handles the reinstate process differently, but in general, you’ll be asked to pay all of your back premiums, and you’ll only have about five years within which to request a reinstatement. As long as your health status hasn’t changed, reinstatement can be very simple. If your health has changed, however, it may not be possible to have your old policy reinstated – another reason to be sure that you keep the policies you have in force.

Forgetting to pay your premiums is one thing, while being unable to pay your premiums is a very different thing. Before you let your life insurance coverage get away from you, speak to a trusted BeamaLife advisor about your options at (866) 972-3262. It may be possible to reduce your coverage amount to lower your premiums, or there may be another type of coverage or a different insurance carrier with better premiums. At BeamaLife, we’ve created our own technology, and partnered with 100 of the top insurance companies. We’ll find the type of policy that makes the most sense for your financial goals and needs, and we’ll get you the coverage you want at the price you want to pay! Please complete life insurance quote from now for term life quote or whole life quote.

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