Is Life Insurance Through Work Good Enough?

If you're fortunate enough to have a life insurance policy through your job, either at no cost or at a subsidized cost, you may have wondered if this coverage was enough to completely take care of your life insurance needs. Many employers may offer a certain amount of life insurance to employees through a group policy and may also allow you to add additional amounts for you or your spouse. You'll be responsible for paying the additional premium amount in this case. This may sound like a great deal on the surface – free or low-cost insurance through work – but there's another side to this plan that should be considered.

How Much is Enough?

Your employer may offer a great deal on no-cost or low-cost life insurance coverage, but the face amount of the policy offered may only be something like $100,000, $50,000 or even less. This is far less protection than someone with a spouse and kids will need in the event of the policyholder's untimely demise.

Many experts recommend your life insurance coverage be equal to eight to twelve times your annual income. Policyholders with large families will probably need even more. Another suggested method of determining your life insurance needs is to multiply your annual salary times the number of years you have until retirement.

What if Your Job Goes Away?

While it may be possible to cover your increased life insurance needs through supplemental coverage through your employer's group policy, having all of your life insurance through this one single source may be a mistake. It's recommended that any supplemental coverage you obtain comes from a separate third party provider. Then, if you quit your job, you're fired or your employer goes out of business and the insurance you have through your company is discontinued, you'll still have continuous coverage. Your third party policy will continue on and can be increased to make up for the coverage that was lost.

Another consideration is your state of health if and when you do lose the coverage provided through your job. If you've developed a health condition prior to losing your employer-provided life insurance coverage, you may find it difficult or impossible to replace the insurance you lost with a new private policy. The best time to buy life insurance is when you're young and healthy, before a health problem makes this prohibitively expensive or even impossible.

Should You Get Life Insurance for Your Child?

A question that many new parents find themselves asking and often pose to their insurance agent or broker is whether or not they should get life insurance for their child. You may perhaps have seen a Gerber Life Insurance television commercial, or something similar from another insurance provider, that touts their child insurance program as a way to:

• Lock in a lifetime of low premiums for your child at an early age.
• Guarantee your child's future insurability, or their ability to buy more insurance at a later age, regardless of their health.
• Since most of the child policies sold are of the whole life type, which have a built-in cash accumulation component, these policies are sold as a savings vehicle.
• Provide money for funeral expenses, counseling, medical expenses or help with money lost from taking time off work.

Before You Buy Your Kids Life Insurance

The main purpose for life insurance is to replace ongoing income lost through a family provider's death and to pay off outstanding debts left behind. Experts recommend that both parents have life insurance while their children are growing up, even if one of the parents is a stay-at-home mom or dad. This is because the cost of hiring someone to perform the duties of a stay-at-home parent while the income-earning parent continues at his or her job is significant.

Kids, of course, don't typically have an income that would need to be replaced and, in fact, when a child is no longer in the family household, costs generally decrease. They also don't have debts that need to be paid off. As far as having money for funeral expenses, there are other ways of saving for these types of contingencies that make more sense. Paying in regularly to a household emergency fund will provide a more balanced method for creating a financial safety net and that fund can be used for any type of emergency that comes up.

Locking in Insurability

Children developing medical problems early in life could have difficulty qualifying later for life insurance. Getting coverage before this happens guarantees that they have some coverage now and can buy more later, regardless of health problems.

This alone may be reason enough to consider insuring your young children now, although “guaranteed insurability” is limited to a multiple of the amount of the original policy, and may be much less than what's needed for adequate protection.

3 Ways to Avoid Holiday Stress

While the holidays are ideally a time of family, friends and fun, all too often they represent a time of frenzy and stress. If the holiday season brings to mind heavy traffic on the roads, endless shopping that you may feel ill-prepared to afford and unwelcome guests at the table, it may be easy to give in to the blues. Sweet temptations will try to lure you away from your diet. Big meals where over-indulgence is too easy and a disruption of your regular exercise routine can both increase holiday stress.

Some holiday stress may be unavoidable, but it shouldn't be allowed to develop into extreme stress, anxiety or depression. We want to share some ways to help you lower your stress meter and, hopefully, bring more happiness to this season of joy. Consider these tips on avoiding holiday stress.

1. During a time that's meant to be filled with the spirit of peace, gratitude and goodwill, it's easy to get caught up in endless to-do lists designed to somehow produce the perfect picture-postcard holiday. Unrealistic expectations of what the holiday season “should be” will likely create stress and resentment. Let go of the expectation that things should be a certain way (because that's the way “we've always done it”) and let go of old traditions you've held on to since the kids were small. Create new traditions and let some of the old ones go.
2. Gift-giving is a major part of the holidays for many, especially where children are involved and Santa Claus is still a cherished belief. Start your shopping early in an effort to avoid the crowds and the “Christmas rush.” Spending more money than you can realistically afford on gifts could potentially stress you out for months (or years) to come if expensive gifts are bought with credit cards. The best gifts aren't necessarily the most expensive but, rather, the most thoughtful. A simple voucher for something like a full body massage or dinner and a movie may be a perfect alternative to store-bought objects. It's not generosity to spend money on gifts for others if it breaks your budget. This just creates more stress.
3. Take it easy and have some fun. Don't feel pressured to accept every party or dinner invitation and make sure to take some time out for yourself. Express gratitude for what's given and try not to dwell on what may be missing. Happy holidays!