As we welcome 2018, it’s a great time to do a look-see ahead and make sure your finances are in order.
Have you done these things yet?
1. Shop for Level-Term Life Insurance
Buying what’s called “term life insurance” is simple and costs practically no money at all. It’s not uncommon for a healthy 45-year old man to get a $500,000 level term policy with a coverage period of 20 years and only pay about $50 a month. The rate never changes which is why it’s called “level term.”
You can comparison shop at HealthIQ, HavenLife.com, PolicyGenius.com, and other online comparison shopping sites. By shopping online, you avoid an insurance salesperson trying to up-sell you from level term coverage to whole life.
Certain health conditions make insurance more expensive or even unavailable to you. If you have such a condition, you’re what’s known as “rated” in the industry, which means you will pay more money than the example for the 45-year-old guy.
2. Get Disability Insurance
You’re three times more likely to become disabled than die during your working lifetime. Yet people have historically been more likely to buy life insurance, not disability insurance.
You can visit WhatsMyPDQ.org to assess your “personal disability quotient” (PDQ). This is a free service of the Council for Disability Awareness. Your PDQ will predict the likelihood of you needing to use disability insurance during your working lifetime.
Money expert Clark Howard now recommends that you only buy your own disability insurance policy if you make north of $200,000 a year.
For everyone else making less than $200,000, you want to take the group disability policy through your employer. Sites like PolicyGenius can help get you quotes from several different insurers.
3. Create a Will
The best guess is that 50% of us don’t have a will. For some folks, that may be OK — especially if you’re single, have nothing and own nothing.
But if you do have kids, you need a will for the simple fact that if you don’t have one, the state will decide who raises your kids.
That’s the reality in the absence of any written direction from you. The same holds true if you’re in a different circumstance, such as living together without the benefit of marriage. In many cases, your partner will not be considered to inherit your estate unless you put it in writing.
People automatically assume that all assets would go to their spouse upon death. But it doesn’t play that way. The reality is that the law varies by state. When you die without a will, the state decides who gets what.