Does Hitting Financial Milestones Mean You Need A New Policy?

Most people would agree that a 20-year old entering the workforce for the first time has different financial needs and priorities than a 40-year old with a family and a mortgage. What’s more, many people who buy a life insurance policy will seldom think about the terms of it again. However, life insurance policies can be dynamic, your requirements will likely evolve as you get older, and the policy should be checked periodically.

There are some typical financial milestones you’re likely to encounter in your life that will serve as good reminders that it might be time to reconsider your life insurance policy. Keep reading to find out what these might be:

A New Home

Taking on a mortgage will likely be your most significant source of debt in life until it’s paid off. Once you go from renting a home to owning one, the obligations set in. If your income is critical towards paying off that mortgage, the need for life insurance immediately escalates. Use this financial milestone as a reason to upgrade your life insurance policy.

A Growing Family

Another significant expense for a couple is children. It’s reasonable to upgrade your insurance policy to add more of a payout because the costs of raising a child and sending them off to college are steep. The right life insurance policy can ensure that each child will be able to have the funds to go to college, continue to be raised comfortably by your remaining partner, and that all the bills can still be paid.

A Change In Income

A key reason life insurance exists is to ensure that the life your family has gotten used to because of your income can persist forward should anything happen to you. As such, the amount of coverage typically offered will change if you have a significant change in income. If there was a significant pay increase, you’d want to increase your coverage so that level can be matched. If there was a significant decrease, you might want to downgrade the payout of your insurance plan, so you aren’t paying much into it each month.

Want to find out more?

Schechner Lifson Corporation is an independent insurance agency that can offer you help in deciding what level of life insurance policy is appropriate for you and your family. With experienced and caring agents, Schechner Lifson Corporation can make sure you get the right type of plan for you and your employees.

What Did The 2019 Insurance Barometer Study Tell Us?

Taking the pulse of the insurance world is a critical exercise in understanding how the industry is evolving and what customers can and should be doing to stay on top. Life Happens and LIMRA team up to create an annual Insurance Barometer Study, with the results of the 2019 version being published earlier this year. You can read the full 2019 Insurance Barometer Study here, but here are some of the most important takeaways from this report.

Disability Insurance: Not Enough Americans Are Covered

Disability insurance is a critical tool to ensure you don’t descend into debt because of an unavoidable accident that puts you out of work. While some employers offer disability insurance, it is by no means automatic. The 2019 Insurance Barometer Study found that only 1 in 5 Americans currently has disability insurance. You don’t want to be caught by surprise, so make sure you’re not in that group who has ignored disability insurance.

Perception Of Insurance Costs: Way Overestimated

Unfortunately, there are many factors behind households not having the right type of coverage. Whether it be a lack of understanding, paralysis of choice, or not knowing where to start – many Americans may choose to ignore their insurance needs because they don’t think they can afford the expense. To combat this, the 2019 Insurance Barometer Study asked average people how much they thought different policies would cost, and it showed that this perception is, in fact, false and insurance is much more affordable than the average person thinks. For example, a majority of Americans overestimated life insurance cost by a factor of 3, while over 40% of millennials surveyed overestimated the cost of a life insurance policy by over a factor of 5.

Desire To Learn About Insurance: High!

The takeaway from the 2019 Insurance Barometer Study is that the number of American consumers who are eager to learn more about insurance is high. The Barometer Study points to the fact that there are 42 million people who are currently seeking out financial guidance in the United States. More specifically, the ways in which people are learning about these financial tools are expanding, with almost 40 percent looking for financial help do research via social media.

Find out more information about insurance policies by contacting Schechner Lifson Corporation today!

How Being A Caregiver For Family Can Affect Your Finances

Should a family member or loved one require full-time care, the strain on you may become significant, and the decision about what to do, difficult. Whether it’s an elderly parent who can no longer take care of themselves, a family member who was in an accident, or a loved one with special needs, the emotional and financial tolls can be great.

When looking to avoid the costs of hiring a full-time caregiver, many people will choose to take the role of caregiver themselves. While the personal benefits of doing so are immeasurable, many people fail to take into account many of the direct costs that they will still have to incur.

Out-Of-Pocket Costs

Even without paying for a nurse or a live-in facility, when you become a full-time caregiver, you will still incur a significant level of out-of-pocket costs. According to the AARP, these out-of-pocket costs could average nearly $7,000 per year. These costs account for equipment for medical care and comfort, as well as household accommodations.

Lost Opportunity for Income

On top of the direct costs added to your household’s budget, caregivers could potentially lose a portion of their income. Depending on the situation, the caregiver might have to reduce the number of hours they work or even leave their job temporarily.

Insurance Limits

Adding to the financial costs, many insurance policies will have a limit on how much they will pay out during these times of medical hardship. A family who has budgeted for a certain amount of out-of-pocket medical costs will feel the financial effects when those limits are reached, and they are responsible for paying the rest of the accumulating costs.

Benefits

On top of that direct money saved, studies by the American Psychological Association have found that people with family caregivers, rather than professionally hired caregivers, tend to have reduced instances of hospital intakes and lower average hospital stays when they are admitted. Those benefits are hard to quantify in terms of happiness and quality of life. It’s important for families to really weigh all the pros and cons of every arrangement to determine what’s best for them.

If you’re navigating the multitude of caregiving options available for your family member and aren’t sure how your insurance policy will factor in – get in touch with Schechner Lifson today to discuss your options!

Which Policy Is Best For Me: Whole Life Vs. Universal Life Insurance?

Life insurance is one of the most important purchases you can make in your life. Due to its significance, individuals make decisions on what type of life insurance to buy seriously, wanting to protect their loved ones as much as possible, and not leave them with a financial burden.

Despite these best intentions, the world of life insurance can be quite intimidating. A crucial decision when purchasing life insurance is choosing between whole life vs universal life insurance.

Need help getting started on this decision? Read on.

What is the difference between whole life vs. universal life insurance?

When purchasing life insurance, a whole life insurance policy is guaranteed and locked in. Upon signing the paperwork, your monthly payment rates will remain the same throughout your life, and the amount paid out to your beneficiaries is preset. There is no guesswork involved with whole life insurance, and the terms are spelled out clearly.

Comparatively, universal life insurance includes more grey areas. For starters, people with universal life insurance can choose to adjust their monthly payments. If the budget becomes constrained, they can choose to pay less. If they decide they want to increase their payments, this is an option as well. However, these payment adjustments will affect the amount paid out at the end of the policy. So, with that added flexibility comes variability in the actual benefits.

Which is best for me?

Choosing between whole life vs. universal life insurance is an inherently personal choice, based on your preferences. Some individuals like the stability in knowing exactly what they’ll have to pay each month, planning for exactly how much their beneficiaries would receive upon their passing.

For those individuals who require more flexibility in making payments, the universal life insurance option may be more beneficial. Once retirement funds have been filled, and mortgages have been paid off, reducing your monthly payments later in life with less of a payout may make more sense. Of course, these decisions would be best made with the appropriate guidance if you feel you need a more objective perspective.

To find out more information about your life insurance options, contact Schechner Lifson Corporation. Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.

Know The Difference: Qualified Vs. Non-Qualified Plans

As soon as you enter the workforce, you’re told it’s important to start planning for retirement. While retirement may seem like it’s a long time coming, one of the most critical things you can do early on in your career is to start building your nest egg. However, what do you really know about your retirement plan? And do you know if it’s the best possible plan for your situation?

When analyzing potential retirement plans, it’s essential to understand the difference between qualified vs. non-qualified plans.

Qualified Plans

First, let’s start with qualified retirement plans. When people talk about qualified plans, they’re referring to a plan that specifically qualifies with the guidelines of the Employee Retirement Income Security Act (ERISA) from 1974. If your plan is a qualified one, that means it gets all of the benefits spelled out by ERISA, which include tax benefits. These plans, which include 401(k) plans, 403(b) plans, profit-sharing arrangements, and HR-10 plans, work by deducting funds from an employee’s paycheck before tax and funneling them into one of these plans. The employee will not have any tax obligations to the funds they put into these plans until they withdraw them later in life, ideally by retirement.

Non-Qualified Plans

Next, non-qualified plans are the types of plans that do not meet ERISA guidelines, such as deferred compensation or executive bonus plans. Because those ERISA guidelines aren’t met, such as those that don’t meet requirements of participation, vesting schedules, or others, the funds that are sent to the retirement plan are taxed beforehand. This difference means employees aren’t putting as many funds away into the non-qualified plan, but it also means that when they withdraw them later in life, they aren’t subject to taxes at that point.

Which is better: qualified vs. non-qualified plans?

Both qualified and non-qualified plans have their inherent advantages and disadvantages.

For qualified plans, employers must offer them to all eligible employees at the same rate, while your money put into these qualified plans are able to grow with a greater investment due to lack of taxes upfront. Ideally, when you withdraw the funds later in life and do get hit with the taxes, you’ve spent a lifetime saving and can afford to pay those taxes. If you’re young and just starting out in the workforce or had a late start to your career, these taxes may be less affordable.

Regarding non-qualified plans, there’s no ceiling on how much you can contribute to them (compared with the less than $20,000 in funds the IRS allows you to put into qualified plans today). Further, if you’re a higher-paid employee, non-qualified plans might be available to you because they don’t have to be offered at the same rate (or at all) to all employees. The downside is that you are taxed right away on these funds and you’re not covered by the required protections of ERISA.

To find out more information about retirement plans, contact Schechner Lifson Corporation today!

Do HOA Fees Cover All Property Insurance Bases?

Homeowner’s Associations (HOAs) are an increasingly common component of the home purchasing experience across the United States. HOAs are private associations, typically set up by neighborhood real estate developers to help market, manage, and sell homes in a residential subdivision. Owning property overseen by an HOA will come with mandatory monthly fees, which can range from tens to hundreds of dollars each month. Thankfully, these fees are intended to benefit you as a homeowner. HOA fees typically cover costs for security, amenities, maintenance, and even some forms of property insurance.

What’s included?

New homeowners or those who are paying HOA fees for the first time may think that the included property insurance with their HOA means they can forgo purchasing additional homeowner insurance.

An HOA’s master insurance policy is intended to ensure a minimum level of protection, usually applied to common areas and public amenities. This coverage, however, does not apply to what is inside a homeowner’s individual unit, whether it be a town-home, condo, single-family home, etc.

Typical master insurance policies included with your HOA fees will only cover damage to the exterior of your house, or “walls out.” This coverage will include the structure of the home, the roof, lobbies, stairways, amenities, and the surrounding yard. The idea from the HOA’s perspective is these are the areas that need to be covered and repaired in a timely manner so that the rest of the neighborhood will maintain its curb appeal to visitors and potential home-buyers. As such, the HOA fees that go to property insurance will ensure these aspects of your home are repaired efficiently.

Your responsibility

Anything inside the home is not covered by the HOA fees and its master insurance policy. As a property owner within an HOA community, you’ll still need full home insurance to ensure your belongings inside the house are covered. Check your HOA bylaws and governing documents to get an in-depth understanding of what’s included and what the exclusions are.

To find out more information about home insurance and supplementary property insurance, contact Schechner Lifson Corporation. Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.

Home Insurance Myths Debunked!

Purchasing a home is probably one of the greatest joys there is. Finding home insurance is usually one of the first tasks on your lengthy to-do list. Your house is of great value, so protecting it, along with your possessions, should be a top priority.

As with any insurance policy, the hope is that you’ll never need to make a claim. With this mindset, many misconceptions about home insurance have ensued. Educating yourself on home insurance before you make a final decision is always a good idea.

To get started, let’s examine and debunk some of the most common and problematic home insurance myths.

Myth #1: The coverage limit on your policy should match your home’s value

It seems understandable that homeowners would want to look at the market value of their home to determine how much home insurance coverage to have. However, this only one aspect of what the policy is for. Sure, you want to be able to recover from an unexpected event, but the cost to rebuild your home is not necessarily equal to the value of the home. It may cost more to rebuild from scratch because your home was built with older materials, or the value of certain features in your home has decreased over time. Either way, the amount of coverage needed should be based on the cost to rebuild your home, independent of your property value.

Myth #2: Your insurance policy covers valuable possessions in your home

This home insurance myth is a dangerous one because those who fall prey to it could find themselves ill-prepared and troubled when they try to file a claim. An accident resulting in damage or loss could be met with limitations on the coverage of valuable items. For this reason, you should check to see what property is covered by your home insurance, adding supplemental coverage for valuable articles if necessary.

Myth #3: Businesses run out of the home are covered

If you’re running a business from your home, it’s common to think the business assets would be included as property under your home insurance policy. However, most standard home insurance policies will spell out that businesses and business-related property must be covered under a separately purchased plan.

Myth #4: My home insurance policy includes flood insurance by default

This is another dangerous home insurance myth, as standard home insurance will cover water damage but that’s separate from flooding. Plumbing issues and associated water damage is considered ‘water damage’ and is included in home insurance policies. Floods are the naturally occurring swells of water from storms or overflowing bodies of water which require a supplemental policy. Knowing the difference is important.

To find out more information about home insurance, contact Schechner Lifson today! Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible!

On the lookout for other insurance myths? See these articles on Disability Income Insurance Myths and The Red Car Myth.

Why Travel Insurance is a Must On Vacation

These days, enjoying unbeatable experiences seems to be the goal for many. Vacations are something everyone looks forward to for extended periods of time. Planning where to go, figuring out the best activities to do, and saving up money and vacation days are all on the to-do list. With all the planning and funds going into your vacations, it’s more important than ever to consider travel insurance to protect your plans.

In the past, you might have skipped travel insurance, but there are a lot of reasons to seriously considering protecting your trip on your next vacation. Here’s why.

Trip costs and what’s at stake

Travel insurance ensures that you’ll be protected, covering at least a portion of what you paid for the travel and its associated expenses should you need to cancel. Should a medical or family emergency occur, travel insurance will allow you to rest assured that you’re not out all of the funds you used to book the trip.

Medical emergencies in foreign countries

If you have to go to a hospital or doctor while traveling overseas, the cost could be immense. Not only are the costs high, but your existing medical policy won’t be much help in an international medical facility. These facilities may require payment upfront. Should an accident occur, having travel insurance can alleviate this burden and even cover the cost of transportation to the appropriate medical facility.

Lost baggage

If an airline has ever lost your baggage, you know it’s one of the most frustrating things that can happen on vacation. Airlines will do what they can to find your bags or cover the costs, but you’re still left without your essentials and valuables. Travel insurance allows you to plan for these higher value items to be covered.

To find out more information about travel insurance, contact Schechner Lifson! Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.

What Equipment Is Covered Under Boiler And Machinery Insurance?

For industrial businesses, the equipment they invest so heavily in is the backbone of their production and success. Top of the line equipment could easily cost millions, and the breakdown or loss of that equipment could bring business operations to a standstill. For these reasons, insurance coverage on such expensive and complex equipment is critical.

Heating and cooling systems, boilers, and other operation-focused equipment are typically running 24/7 at your place of work, the breakdown of this type of equipment could be detrimental to your bottom line due to their repair costs and lost productivity.

What is Boiler and Machinery Insurance?

Boiler and Machinery insurance was initially created to cover heavy-duty industrial machinery. Boiler and Machinery Insurance, sometimes abbreviated as B&M Insurance, covers a business for physical damage and costs of broken-down equipment. As such, B&M insurance is also sometimes referred to as just equipment breakdown insurance. If anything happens that takes critical equipment out of service, B&M insurance will pay out to fix the equipment, keeping the business afloat while repairs are taking place.

What type of equipment does Boiler and Machinery Insurance Cover?

B&M insurance isn’t necessary for all businesses, particularly those who don’t own and operate their own building and machinery. But for any business that has invested money in costly equipment, B&M insurance can be critical. Typical types of equipment that insurance companies can include in a B&M policy include:

• Boilers
• Computers
• Telecommunication equipment
• Copiers and printers
• Generators or other electrical equipment
• Refrigerators

Given how much is at stake if something unexpected arises and your operations come to a halt, you might not be able to afford to skip Boiler and Machinery insurance.

To find out more information about insurance policies for employers, contact Schechner Lifson! Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.

The Red Car Myth And Other Auto Insurance Fables

Buying a car is probably one of the first substantial investments you’ll make as an adult. And because of its significance, you’ll want to do your homework. Automobile insurance is one essential piece of the package that you should not overlook. Trying to avoid industry rumors, fables, and false information can sometimes make your research challenging. The most notorious piece of misinformation in auto insurance is the red car myth, which has people avoiding the purchase of a red vehicle for fear that this paint color will leave them with higher insurance premiums.

It’s vital that auto insurance customers are well-informed, so keep reading to dispel of the red car myth and other common auto insurance fables.

Myth #1: Red Cars Cost More to Insure

According to one study, nearly half of Americans believe that owners of red cars will pay more for auto insurance, showing the wide reach of the red car myth. Car insurance companies have repeatedly dispelled this falsehood, with many not even asking about the color of your car when providing quotes. The aspects of a car that will matter are the make, model, type, and age of the vehicle, among some other characteristics of the car. But color is not one of them.

Myth #2: Cheap Cars Are Cheaper to Insure

Another aspect that won’t be taken into account when determining your car insurance policy is the correlation between the price paid for a vehicle and the rates on the insurance policy. While more expensive model cars may have features that cost more to insure, the fact is that cheaper cars can be heavy, rare, or have other characteristics that still drive up insurance rates. So, while certain aspects tied to a vehicle will correlate with rates, it cannot be assumed that the cheaper the car, the cheaper it is to insure.

Myth #3: Car Insurance Won’t Cover At-Fault Drivers

Another common misconception is that auto insurance policies won’t cover at-fault drivers. However, most car insurance policies which U.S. consumers buy will help to pay for damages, even if the driver was at fault. Still, it’s always important to drive as safely as possible to help avoid accidents.

Myth #4: That Speeding Tickets Will Automatically Increase Insurance Rates

While it’s true that a driver who has a history of reckless driving will pay more for insurance, your auto insurance provider will not necessarily automatically increase your rates if you get a ticket. For drivers that have an otherwise clean record, their premiums may not increase at all for minor violations. Further, many insurance policies include accident forgiveness, promising not to increase rates for your first minor accident.

To find out more information about auto insurance, contact Schechner Lifson Corporation. Discover how we can make sense of the world of insurance, providing you with the best and most affordable coverage possible.

Looking for information about other common insurance myths? See these articles on Disability Income Insurance Myths and Home Insurance Myths.