Why Dad…Why? A Life Insurance Story!

kid-handshake

Let me start off by saying I am very appreciative of all the help that friends and family have provided me over the years!  I don’t mean to sound ungrateful at all, but rather want to use my situation to teach others.

My dad recently called me and told me that he had taken out a whole life insurance policy on me right after I was born and he was turning it over to me now that I have my own family.  I was stoked!  Free Money!

It was a $25,000 whole life policy that my dad paid $189/year in the event I passed away, they would have money to bury me.  Kinda morbid, but a reality.  The sales person talked about me having the ability to use it for college and the ability to take loans from the policy tax-free…blah…blah…blah…

Today I own a whole life policy that has a death benefit of $28,002 or I could take my cash value of $6,668.62 out to use for anything I want.

Here’s the problem…

If my dad would have just put that FIRST $189 payment into an S&P 500 fund it would have grown to $10,542.42 of cash.  THAT IS JUST THE FIRST PAYMENT!

If he would have put that same $189/year into an S&P 500 fund until he turned it over to me, I would have an account balance of $74,511.36!

Again, I am not ungrateful for the gift, but that can be the difference between the next generation going to college or not…having the ability to take on the risk of a business venture or not…spending more time with kids or not.

What would an extra $67,842.74?

 

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What Is In Your Home?

pexels-photo-534151.jpegIf I asked you to list the entire contents of your home, could you do it?  Do you know the make and model of your TV (or how many), refrigerator, or electric tooth brush?  How many sets of bed linens?  Exactly how many shoes do you own?  What about all the belongings in the garage or shed out back?

I hope you never have to answer these questions but in the event of a disaster or theft, this may be just the information that your insurance company could be looking for.  So how would you answer?

Taking a home inventory can be as high-tech or low-tech as you would like.

At a minimum, I suggest walking around the house with a camera and taking photographs in each room.  Better yet, use a video recorder and walk around the house shooting video as you open up your drawers and cabinets to get a full record.  Just be sure to keep these photos or videos outside your home!

There are also a lot of apps for iPhone and Android that can help you.  Some will guide you through the process and will help you collect make and model numbers.  Some now even send you recall alerts on your electronics and appliances.

Click your appropriate system for a review of several top-rated apps:
Apple:  https://www.thebalance.com/best-home-inventory-apps-ios-1294003
Android: https://www.thebalance.com/top-home-inventory-apps-for-android-1294002

While this may seem like a mundane task, it is amazing what the teenagers in your life will do for $20!  Whether low-tech or high-tech, having a record could come in handy some day!

Earthquake’s in Ohio?

Have you ever been in an earthquake?  How about an earthquake in Ohio?  They are actually more common than you think.  Granted, not the earth shaking, building destroying earthquake of Hollywood, but they are frequent.  Check out this map…

http://www.dnr.state.oh.us/geosurvey/html/earthmap/tabid/8291/Default.aspx

Did you know that most home owner’s policies do not cover damage to your home due to earthquakes?  Most insurance companies do offer this form of coverage as an add on.  If there are a lot of dots near your home, you may want to discuss the coverage with your agent!

Federal Health Care Changes

The following is some information I received from Anthem (my health care provider).  Deals with some of the rules around Children under 26 years of age.

OVERVIEW:

  • Kids can stay on your health insurance till age 26 (or older if state law requires)
  • Plans must allow a 1 time special enrollment to add kids
  • Kids are NOT required to be a dependent on your tax return to remain covered
  • Kids are NOT required to be students or unmarried or dependent on you
  • Spouses of children (Children-in-law) and grandchildren are NOT eligible
  • Stepchildren and legally adopted children ARE eligible

The following is the original text from Anthem:

September 1, 2010

Important Special Enrollment Notice

Federal health care reform law changes that may affect youImportant changes resulting from the federal health care reform law will affect health care plans that are renewing their coverage on or after September 23, 2010. In this letter, you will find important information about a special enrollment period for certain members under the new law. Note: This is not a summary of all health care reform changes that will affect group health plans.

Children can remain on their parents’ health insurance policy until they are 26 years old and related special enrollment right
The health care reform law allows you to keep your children on your health plan until they turn 26 years old. That means that the maximum dependent age will be age 26 under the federal law at the start of your next plan year. If the law in your state provides for a higher maximum dependent age, that requirement will continue to apply.

To be eligible for this coverage, children do not need to be financially dependent on you for support, claimed as dependents on your tax return, residents of your household, enrolled as students or unmarried to be eligible. Children-in-law (spouses of children) and grandchildren are not eligible. “Children” includes natural children, legally adopted children, stepchildren and children who are dependent on you during the waiting period before adoption.

  • If you want to add dependents to your health plan who are younger than 26 years of age, you have a one-time special enrollment right under the law. This enrollment right applies to adult children under 26 who were denied coverage in the past because they exceeded the maximum dependent age, or who were enrolled and lost coverage because they reached the maximum dependent age under the policy. The special enrollment period will take place no later than the first 30 days of your plan year. Contact your employer’s benefits administrator for the exact dates of this special enrollment period.
  • If you currently have single or employee/spouse coverage and you want to add children, you need to change your enrollment status to one that allows dependents to be added to your contract, such as family or employee/children coverage.
  • If you are not currently enrolled, but wish to do so to take advantage of the dependent coverage right, you and your adult child may both enroll during the special enrollment period if you meet eligibility requirements.
  • If you want your children to stay on your plan, you do not need to do anything.
  • If you do not want to keep your children on your plan until age 26, you will need to contact your employer’s benefits administrator to remove them as dependents under your policy.

No more lifetime dollar limits on benefits and related special enrollment right
The health care reform law requires health insurance companies to remove lifetime dollar limits on benefits from all plans. This applies to medical and pharmacy benefits only, not dental or vision.

  • If your coverage was previously canceled because you reached the lifetime dollar limit under your plan, you have a one-time special enrollment right under the law. You can enroll again and be covered without any lifetime dollar limit on benefits. The special enrollment period will take place no later than the first 30 days of your plan year. Contact your employer’s benefits administrator for the exact dates of the special enrollment period.
  • If you are covered by your employer’s health plan now, you do not need to do anything.
  • If you are not covered by your employer’s health plan now and are not eligible to enroll during the special enrollment period, contact your employer’s benefits administrator for more information on when you can enroll.

To learn more about health care reform, visit us online at www.healthychat.com.