April 22, 2020

Life Insurance Options

Types of Life Insurance – Choosing the Right Plan.

If you have people who depend on you for financial support, it’s important to make an educated decision about life insurance options. Life insurance isn’t a fun thing to think about, and it may seem like an unnecessary expense. But if you have people who depend on you for financial support, then life insurance is really about protecting them in case something happens to you – your designated beneficiary would collect a financial benefit upon your death. Life insurance can be confusing, so here’s a rundown of the basics. Types of Life Insurance Term: This is the simplest and generally the cheapest form. You buy coverage for a specific period of time. It can usually be renewed, but premiums will increase based on age and health factors. There is no cash value. All other types of life insurance are permanent, but there are several varieties. They all include a savings element that builds cash value, in addition to the death benefit. Once that cash value accumulates, it is accessible to the policyholder tax-free. The following are some of the common types of permanent life insurance. Whole Life: You purchase this policy to cover your entire life, as long as you keep paying premiums. Premiums remain constant throughout the policy, and the company invests a portion of your premium that becomes the cash value. These are more expensive than term policies in the early years, but they even out because the premium does not increase. Universal Life: This policy is similar to whole life, but has the potential for higher earnings on the savings component. It is more flexible in terms of changing premiums and face value throughout the policy. There is usually a guaranteed return on the cash value. Disadvantages include higher fees and the possibility of increasing premiums. Variable Life: A variable life policy generally has fixed premiums, and you have control over the investment decisions for the cash value portion. However, this is riskier because there is not guarantee for the cash value. How Much to Buy? One of the most challenging questions when buying life insurance, is how much to buy? Many people decide based on an income replacement calculation, between 5 and 10 times the amount of your current income. Think about your personal circumstances: Is yours the sole income in your household? Are there other expenses, such as college tuition, that may arise in the future? Don’t forget to include potential medical and funeral costs. Above everything, you want to be sure your family does not get stuck with bills, debts or expenses that they cannot afford. Depending on your needs, you may want to consider buying supplementary coverage beyond what  offers. Why Purchase Now? Buying life insurance may seem unmanageable right now, but it could be a smart decision. Unlike many other benefits, life insurance is actually more affordable right now than in the recent past. Plus, during this tough economic period, ensuring that your family will be financially secure in the future is more important than ever. If you have more questions about our life insurance benefit, please reach out to one of our licensed agents to help you through the process.

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Senate Passes $484 Billion Coronavirus Relief Package

On Tuesday, April 21, 2020, the U.S. Senate voted on and passed the newest coronavirus aid bill, which includes funding for small businesses, hospitals and coronavirus testing. This announcement comes almost two weeks after Treasury Secretary Steven Mnuchin said that small businesses don’t need to worry about not being able to receive funding from the U.S. government in the wake of the COVID-19 pandemic. What is included in the new bill? The bill provides $484 billion in total funding. Of those funds, $320 billion would replenish the federal small business loan program, the Paycheck Protection Program, which ran out of funds last week. The Paycheck Protection Program was initially created by the Coronavirus Aid, Relief and Economic Security (CARES) Act, and was designed to get cash in the hands of suffering small businesses quickly, with less stringent eligibility requirements than the existing SBA loan programs. Paycheck Protection Program loans are designed to incentivize business owners to keep employees on their payroll. In addition, $60 billion would be added to the Small Business Administration’s disaster relief fund. The funding would be divided to include $50 in loans and $10 billion in grants. Farms and other agriculture enterprises would be eligible for such funds under the new bill. Finally, the bill includes $75 billion in funding for hospitals and $25 billion in COVID-19 testing. What’s next? While the bill has passed in the Senate, it needs to pass in the House and be signed by the president to become a law. The House is expected to vote on and pass the bill later this week, and the president has indicated he will sign the bill into law.   Pinkerton Insurance Group will continue to monitor this situation and provide updates as necessary.  

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