Last time, I started picking apart Dave Ramsey’s article called “The Truth About Life Insurance.”  I covered Ramsey’s claim that “cash value life insurance is one of the worst financial products available.”  And now I want to talk about his next comment, namely that is “sad” that 70% of life insurance policies sold are cash value life insurance, while the other 30% are term life insurance.

Term life policies, in case you don’t know, are policies that provide coverage for a period of time – maybe five years, or 10 years, or just while you’re working for your employer – some period of time, but definitely not until you actually die.  Cash value policies, on the other hand, provide coverage that goes until you die, whether that’s tomorrow or a thousand years from now.

Here’s something that Ramsey doesn’t mention in his article, probably because he doesn’t know it.  Out of every 100 life insurance policy payouts, 99 of them are for policy holders that owned whole life insurance.  That means that just one is for a policy holder that had a term policy. 

According to the Penn State University study, 45% term life policies are terminated or converted within the first year, and 72% are in three years and only 1% end in death claim. And what do the policy holders who owned term life but didn’t die during the term get?  You know the answer – they get absolutely nothing.  So, back to Ramsey’s argument; cash value life insurance is one of the worst financial products available today.  Really, Dave? 

I think that if someone offered to take my money, and then gave me a one in one hundred chance of ever seeing it again, I’d have to pass on a financial product like that!  But Dave Ramsey is only too comfortable suggesting that every person who watches his show, listens to his podcast or reads his newsletter take that chance.  If we all follow his advice than 99% Americans are going to die without leaving any legacy and potentially medical & funeral bills for children!

Next, Dave moves into the old “buy term and invest the difference” strategy.  No question, term life policies, when you’re young, are much less expensive (rather out of pocket dollars) than whole life insurance policies.  And when an insurance company pays one death claim for every 100 people who are faithfully paying premiums, they can afford to make them cheap!  Remember, insurance is a smart statically calculated formula: where you going to pay virtually NO claim – less premium.  Next time, I’ll show you why “buy term and invest the difference” almost never works!

The first law of insurance is to “insure first” that which you can least afford to loose;

1) Your Income

2) Your Health

3) Your Life

The only real security is that which you create for yourself and your family.

A few months ago, the word was spreading throughout the industry.  There were magazine articles, and nightly news reports sending out the story that term life insurance rates were on the rise, after more than 10 years of declines. 

But honestly, there’s very little historical information about the cost of life insurance.  It’s not like the stock market, that’s tracked every moment of every trading day.  And different life insurance companies charge differing amounts for the exact same coverage on the exact same person.  So in a sense, it’s hard to say what’s truly going on, except in the most general of terms.

One article I read talked about how in the mid 1990s, the cost of a $500,000 term policy for a healthy 40 year-old man was close to $1,000 a year.  By 1999, the article continued, the cost had dropped to about $425 per year for the same coverage.  And by 2009, the cost had dropped further, to about $360.  The alarming thing, according to the article, was that at the start of 2010 the cost had risen to $400.  

Much of the decline in price can be attributed to the fact that people are living longer these days.  The more time that exists between when you start paying for your life insurance policy and when the life insurance company has to pay your claim, the less expensive the life insurance can be.

And much of the increase can be attributed to what’s happening in the financial markets these days.  Insurance companies are facing the same tight credit market that the rest of us are.  Understandably, insurance companies have to be more concerned about their own financial futures than they needed to be just a few years ago.

So if the costs of life insurance really are on the rise, should you rush to purchase a new life insurance policy?  Ask a local agent, and the answer is very often going to be “yes.”  Ask us, and the answer is going to be “it depends.” 

Ask yourself these two simple questions,  First, is there someone or something that you care about that would suffer if you were to die?  Think about your family, your business, your favorite charity or religious organization.  And second, do you have enough money right now that you could set it aside for them? 

If you answered “yes” to the first question, and “no” to the second, then I’d say it’s time for you to buy life insurance, regardless of what’s happening with the overall costs of coverage.  Buy the policy that best fits your needs now.  If prices go down later, you can “refinance” your policy and lock in the new, lower premiums.     

And if you already have insurance, but haven’t checked prices in recent years, take a look at a new policy.  You may find that there’s money to be saved.  It all starts with a quick phone call to BeamaLife!

A recent article in The Wall Street Journal advised readers to “beware rule changes on Coverdells.”  Coverdells Education Savings Account, in case you’re not familiar with them, are investments that offer tax-free growth and withdrawals, as long as the money is use for qualified educational expenses.  They were once known as education IRAs, and sometimes they’re still referred to that way, although the money that goes into them is not deductible from taxable income. 

If you’re a parent who already owns a Coverdell, the article continued, you should be aware that there is good news – you can invest as much as $4,000 until April 15^th, since the money deposited before April 15^th counts towards the previous year’s (2009) limit.  And, there’s bad news.   Unless Congress extends the current benefit, starting next year withdrawals that are used to pay for expenses from kindergarten to 12^th grade will no longer be tax free.

That doesn’t mean that Coverdells are bad investments, of course.  They’re still a good way to save for and finance education in the United States.  Even with their limitations, such as the fact that beneficiaries must be under age 18 when the money is contributed, and that the money can’t be refunded to the person who started the account, they’re still better than doing nothing.

But there is one savings vehicle allows you to tax-free growth and withdrawals without those limitations.  Imagine being able to contribute what you wanted, when you wanted, without any limits.  Imagine being able to use the funds for any level of education, for any member of your family – even yourself!  Imagine the funds not all being needed, and the overage being returned to you, the person who created and funded the account.   Imagine even being able to pass the funds along to your heirs in the event of your death. 

By now you’ve probably figured out what savings vehicle I’m talking about.  It’s whole life insurance, of course.  And not only can it help you to save towards and fund your children’s educations.  You can use the money for any other purpose you choose as well.  Many types of life insurance policies have loan provisions that allow you not only have tax-free growth of your capital, but also to borrow tax free against the balance of your account.  For education, or for whatever other purpose you choose.

Life insurance is the only savings vehicle that I know of with so many uses – including the most important: making sure that in the event of your death, your family’s financial needs are completely taken care of.

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 term life insurance 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 (866) 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!

The economics of life insurance relate to human life value, which in turn pertains to human capital. Human capital is a person’s income potential over their lifetime as well as additional factors such as fringe benefits, monthly expenses, and savings growth rate. The human life value concept is the primary reason for insurance and the basis of the ‘survivorship need’.

 The ultimate goal is to maintain your assets and pass them on to your family in the event of premature death or even if you live your full life. You want your family to receive the full value of your working life if you were to die prematurely. Also, you don’t want the government to end up as the biggest heir to your estate, if you die wealthy. Upon your death, tax on your assets is inevitable if you fall in the estate tax bracket. But understanding the economics of life insurance will allow you to cover what is due by creating a source of funds to pay estate tax liabilities through affordable premium payments in the form of a gift to an Irrevocable Life Insurance Trust. Furthermore, the death benefit from your life insurance policy to your loved ones has no federal estate tax, no state inheritance, and no federal or income state tax consequences if life insurance policy is structure in a correct manner.

The economics of life insurance also concerns tax-deferred growth. By law, the cash value growth inside a permanent life insurance policy is tax deferred. This makes a permanent life insurance policy especially whole life insurance a tremendous savings vehicle and provides great value for any individual with tax concerns. Lastly, the growing cash value inside a whole life insurance policy is increasingly used to fund children’s education, retirement savings and wealth creation purposes.

It’s a new year, and that’s the time when many people make resolutions to change their lives for the better in the coming months.  Many of the changes you might be considering can also be ways to save money on your life insurance.  Of course, there are the usual ways that most people would think of, like quitting smoking, or cutting back on drinking alcohol, or losing a few pounds.

But here’s one you may not have considered: going vegetarian. With all the talk about what’s happened to the American diet over the years, it isn’t a surprise to anyone that there are many health benefits to being a vegetarian.  But here are a few facts:

• Vegetarians are half as likely to develop heart disease as meat eaters
• Vegetarians have just 40% of the cancer rate of meat eaters
• Meat eaters are nine times more likely to be obese than vegetarians

When an insurance company evaluates your risk, which most of them do through a medical examination, there are a number of ways in which being a vegetarian will result in your being a lower risk, and therefore having lower life insurance rate and premiums. 

• Your cholesterol levels will be lower
• Your blood pressure will be lower
• Your risk for diabetes will be lower
• Your risk for heart disease will be lower

At this time there’s no “official” life insurance premium discount offered to vegetarians, like there is for people who don’t smoke.  But the health benefits are so clear that your acceptance is guaranteed to have fewer problems than you’d have as a meat eater.

Life insurance companies believe that it would be hard to verify that someone really was a vegetarian, or if they were just trying to get a discount they didn’t deserve.  Well, unless someone lights up a cigarette in the middle of a medical exam, it’s hard to prove that they’re a smoker, too.  So I think this is something that will change in the years ahead.

But even without an official discount, the benefits of being a vegetarian will lead you to a healthier life, and that means more time to enjoy all of the things that make your life worth living.  Best wishes for a healthy and happy 2010 from all of us at BeamaLife! Please call (866) 972-3262 to speak with life insurance specialist or complete life insurance quote request form for term insurance quote or whole life quote.

There’s an old saying that goes, “there are two kinds of people in the world: those that divide the world into two types of people, and those that don’t.”  You have to love the logic of Aristotle, even when it sounds funny, like that old saying does.  But a recent Gallup poll did divide people into two groups – which one are you in?

The question the Gallup pollsters asked Americans what this:  which do you enjoy more, spending money, or saving money?  In years past, the numbers have always been very consistent, and nearly equal, with those who said they like to save money just a bit ahead of those who like to spend it.  But that’s all turning around now.

In this year’s survey, the overwhelming majority (59%) said they enjoyed saving money more.  Just 37% said they enjoyed spending money more.  And if you’re a member of the group of people that like to do math in their heads, congratulations!  You just figured out that 4% of the survey respondents had no opinion.  Don’t take any financial advice from these people…

The survey found that, regardless of income level, the numbers broke down along almost identical lines.  So from the working poor to the super rich, the different isn’t about how much money you have, it’s about your mindset.  And I’m sure that most people would agree that this is a very positive trend.

Now, I know that there’s a big difference between what we intend to do and what we actually do.  I know plenty of peoples who are always planning to lose weight, or to start living on a budget, or to get and advanced degree.  They just never get around to taking that first step.  But with spending, for many people, the first step was taken for them when the stock market crashed and real estate values dropped and layoffs began.

We’ve learned, and are still learning, a hard economic lesson.  Let’s keep this trend going!  Whichever group you’re in – the spenders, or the savers – if you haven’t taken a look at your finances recently, do it today because its black Friday.

BeamaLife.com help you to be in 59% who like to save money rather than spend. BeamaLife.com finds the best rates on life insurance protection, simply complete our Life Insurance Quotes request, and let us do the research for you. Whether you are looking for Term Life Quote, Return of Premium, Universal Life Insurance or Whole Life Quote we search through over 100 highly rated life insurance companies to get the right plan for you.

Okay, so I’m not the biggest fan of country music, but I know a wise saying when I hear one, and recently I read where country superstar Garth Brooks once said “The greatest conflicts are not between two people, but between one person and himself.”  And according to a recent study, that’s becoming more and more true for many Americans.

The Gallup Organization has been tracking people’s average daily spending habits for years, and what they’ve discovered is that whether it’s in person or online, at the grocery store or the gas station, Americans spend more money on average over the weekend days (Friday through Sunday) then they do on other days of the week.  With the typical person’s busy lifestyle, Monday through Thursday don’t offer too many opportunities for shopping or other spending, so the results don’t come as any major surprise.

What is surprising is that spending goes up dramatically during weeks in which an employee gets paid.  This “paycheck effect” is most likely due to the fact that many Americans of all income categories are living paycheck to paycheck, and can’t buy anything – including necessities – until the next paycheck clears.  Certainly part of this problem is the economy.  But a larger part is caused by the fact that most people don’t like to live within a budget.  And all of that spending, when it’s not part of your long term goals, makes weekends the worst days of the week as far as your financial future is concerned.

And that’s where Garth Brooks’ observation comes in.  We all struggle when there is a conflict between our short term wants and our long term goals.  None of us want to continue working long past the time when we should be retired.  None of us want to die leaving nothing but expenses to the ones we’ve left behind.  None of us want to have to depend on others when we’re no longer able to take care of ourselves.  So it’s up to us to create the plan for our future, and then to be disciplined enough to stick with the plan, no matter what.

At BeamaLife, we’re proud to provide you with the information and access to the tools you need to create the plan that will lead to the best future for yourself and your family.  I can’t promise that you’ll never face a difficult decision about how to spend your money, but I really believe that when you’ve got the right plan in place, and when you focus on where you want to be 5, or 10, or 20 years from now, you’ll have far fewer conflicts with yourself. Please call one of our life insurance specialists at (866) 972-3262 to determine the right kind of life insurance & financial plan for you and for your family’s financial security or please complete life insurance quote request form now.

ING – one of the largest financial services groups based in Europe with a significant presence in the United States, announced plans to split its banking and insurance/investment management operations with the goal of selling off its insurance operations over the next few years.

ING is selling its insurance business to gain approval from European competition authorities for the state-backed bail-out it received during the financial crisis.  The business decision to sell off assets was because of an intervention by the European competition authorities and may take years to unfold as ING will seek to get the best price for these operations to repay the Dutch government.

ING carries secure, investment-grade ratings from all rating organizations and continues to have a broad portfolio of consumer-friendly life insurance and annuity products.  I believe ING have some very distinct competitive advantages in the marketplace and are continue to market these products. In no way should we be concerned with the ING products that our clients currently hold or may be contemplating purchasing in the near future.