Affordable Protection for Single Mothers

April 3, 2016

single-mom

It is never easy for a single mother to think about how their children will survive if something were to happen to the mother. The younger they are, the more difficult it is to fathom what could possibly happen. However, when we consider the terrorism that is rampant in the world, and the crime and violence occurring in the cities and towns in the U.S., it is not too hard to imagine.

Sadly, most single mothers, or parents, for that matter do not consider buying life insurance to preserve their income in the event of their untimely death. The average income of a single mother is $23,000 and if she has more than one child, it may be difficult for her to consider including a life insurance premium her budget. If the father is involved in the children’s lives, the single mother may think that life insurance is not necessary, as the father would probably assume responsibility of the children.

This may be true in some cases, but in many of the families, the father may not be capable or willing to assume responsibility for the children. In that case, it is imperative that the mothers investigate the possibility of purchasing life insurance to assist the person who would be responsible enough to care for the children. It would provide the needed financial assistance for the guardian to help support the children.

In the northeast, the cost to raise a child to age eighteen is approximately $455,000, which computes to $25,277 per year. This does not include the cost of a college education, which would be an additional $19,000 to $35,000 per year, depending on whether the child plans to attend a state school or an out-of-state school. The mother needs at least $600,000 per child of life insurance!

It is clear from considering the high costs to raise a child and send him to college that life insurance is necessary to cover these costs and to keep the children protected in the event of the untimely death of the mother. The amount of life insurance would seem pretty high, but it would meet the needs of the children. In reality, some single mothers may not be able to afford to purchase this amount of insurance. However, any amount that they could purchase would help the family.

Here is a situation where low cost term insurance would meet the need and would be a cost effective way of providing the coverage for the family. Term insurance would cover the family for only a certain amount of years. There would be no cash value, and the coverage would terminate when the mother would no longer need the coverage. Single mothers interested in more information about this should talk to their life insurance representative or feel free to contact me on the contact form of this blog.

Advertisements

Federal Employee Benefits – The Life Insurance Coverage

September 23, 2015

us-postal-service

If you are a federal employee, it is important to understand your benefits package to ensure that your income is adequately protected in the event that something should happen to you.

The U.S. government does a very good job of compensating those who work for the federal government. However, as with other employee benefit plans at some of the private sector businesses, the benefits available to employees do not adequately cover the family in time of need. That is why it is important to review the benefits packages and determine if there is a need for more coverage.

For instance, closely examining the FEGLI (Federal Employees Guaranteed Life Insurance) program, there are four major areas where the benefits are deficient.

1. The FEGLI program is a term insurance program only. There is no cash value available to the employee to borrow against for emergency needs. Term insurance is pure insurance in which a death benefit is available to the family in the event of death to the breadwinner. There is no cash value which accumulates in the policy.

2. Under the FEGLI program, the life insurance only covers the employee and his family only during the time that the employee is employed for the federal government or the face amount will reduce tremendously upon retirement.

Term insurance covers the family in the event of death of the breadwinner, but only during a specified period of time. Generally, the policy will cover the family for 10, 15, 20, 25, or 30 years, depending on which insurance company the family elects to sell them a life insurance policy. An insurance agent will recommend term insurance to cover short term needs, such as a mortgage which will be paid over a 30 year period.

3. Federal employees will find that their premiums for their life insurance will increase with age and salary increases, but the coverage decreases. This is called increasing premium term insurance, which becomes very expensive in later years, when there is more of a need for life insurance.

4. In the event that the employee becomes disabled, he/she may not be able to continue paying for life insurance, since the employee is not collecting wages.

I cam across this comment on a blog paost which illustrates why federal employees need a periodic review of their policies:

“My mother worked for the Federal government for over 30 years and had the FEGLI plan and passed away and my sister and I will be splitting a little over 5,000 dollars. When my father (mom was divorced) passed his insurance was with the state and my brother and I split over 50,000 dollars. What’s wrong with this picture?? Our government is so screwed up and you know that all those senators, etc. won’t have that cheap of insurance and we are paying for it. My mom worked hard those 30 years and sure didn’t get all the perks and paid vacations.” madashe*l, from Life Insurance: “The Good, the Bad, and the Ugly.”

These are problems which the employee must resolve in order for the family to be financially protected in the event of his/her death. Boston Mutual offers solutions to these problems with products which are specifically designed to meet the needs of federal state, municipal, and postal workers. For a free booklet explaining your options, please use the contact form to request the FREE brochure,

    Legacy Life Select: Permanent Life Insurance for Federal, State, Municipal, and Postal Workers.

Please copy and paste the title into the contact form.


The Power of Voluntary Benefits

July 14, 2015

The Power of Life Insurance


How Solid Is Supreme Court Decision on Obamacare?

July 1, 2015

52d2006877890.preview-620

We have a new decision in the Affordable Care Act which is precedent setting and will be very advantageous for many people in the United States who previously lacked medical insurance. But, how long will this law be in effect and how likely is it to be overturned?

This is an important question because there is a presidential election coming soon and the Republicans are not happy about the Supreme Court’s decision to allow subsidies for the poor and middle class applicants for health insurance under the Affordable Care Act.

There are only two ways to negate this decision. Congress would have to amend the Constitution, which would require a three quarters vote from Congress to overturn it. In the past, it has been very challenging, to say the least, to attain a three quarters vote from Congress. In other words, three quarters of the Senators and House of Representatives had to agree that a change needed to take place. It is unlikely the Congress would reach this agreement because so many of the Democrats were supportive of President Obama’s recommendations on the changes in health care.

For the most part, most of the Republicans in Congress are opposed to the Affordable Care Act, while the Democrats are in support of it. It is unlikely, though not impossible, for this law to be amended by Congress at this early stage. There would have to be a good reason for it to be detrimental to the enrollees in the program. There has not been enough time to allow Congress to observe whether or not the law is working for the citizens. In the past, it has taken years for a Supreme Court ruling to be overturned. For example, the Supreme Court issued a ruling in the case of Lochner v. New York (1905) that placing limits on the number of hours a baker could work was unconstitutional. It was overturned in 1937, a total of thirty – two years later.

The case involving Austin v. Michigan State Chamber of Commerce (1990), preventing corporations from making campaign contributions and purchasing political advertising from their general funds was overturned in 2010. However, the Oregon v. Mitchell (1970), overturned just a few months later in 1971, was the fastest constitutional amendment ever overturned.

The Supreme Court can also overrule its own rulings when another case involving the same issues challenges the Supreme Court. There is usually a long period of time from when the Supreme Court rules on a case until the time that it is overturned. This has happened many times over the course of U.S. history.

In conclusion, it is difficult to say at this time whether or not the Supreme Court decision will be overruled, as we do not know how long it will take for the Republicans to initiate a change.


College Funding Strategy

June 28, 2015

College Funding


A Victory for Proponents of the Affordable Care Act

June 26, 2015

Just as Obama’s second term is nearing an end, he was able to gain a ruling from the Supreme Court that government health care subsidies for the poor and middle class people were legal. The Obama Administration took steps to receive a ruling from the Supreme Court that these subsidies were legal so that the Affordable Care Act would remain even after his term as president of the United States had ended.

Needless to say, this infuriated the Republicans who took a stand against the Affordable Care Act at its inception. They argue that in the long run, the cost of health care would increase for the poor and middle class people and would render them unable to afford health care. These subsidies would be available for all applicants for health insurance regardless of whether they are purchasing in a state providing a state sponsored insurance marketplace or a state which opted not to form am insurance exchange.

If the Republicans want this decision overruled, it is going to take an amendment to the Constitution. The Republicans were not pleased with the Supreme Court ruling and accused the supreme court judges of “circumventing Congress and rewriting bad laws.” The Republicans have vowed to work on changing this recent ruling during the next election.

This is an important victory for poor and middle class families who do not have health insurance and for those who feared they would lose their health coverage after President Obama left office. An estimated six million people were at risk of losing their health insurance coverage.

Before Obamacare was enacted, fifty-seven percent of private insurance enrollees were uninsured. The states with the highest rates of uninsured enrollees were: Texas, Arizona, Montana, Arkansas, Alaska, Nevada, New Mexico, Nevada, Florida, Louisiana, all with over twenty percent of their enrollees without health insurance. Despite the enactment of Obamacare, several states have not instituted an insurance exchange and have not expanded their Medicaid program. The states in red in the chart below have not expanded their Medicaid program.

uninsured_state_before_after_obamacare_070714-4

From Wallethub


The Right to Reduce Employee Benefits

February 20, 2015

Businesspeople Applauding

Employers who are facing poor financial conditions may reduce the benefits which they offer employees, but there are guidelines which they must follow.

Generally, an employer cannot reduce benefits by more than fifteen percent. If the employer reduces the benefits by more than fifteen percent, the employees is entitled to leave the employer and sue for damages. Because reducing the benefits produces hardship for the employee, he/she has a right to ask the employer to reinstate the benefits, or ask for compensation in order to purchase a plan on their own. At times, employees accept a job with benefits as an inducement to take the job. A situation such as this would strengthen the employee’s position.

The Federal government has set down guidelines for reducing employees’ benefits and laying off employees. Additionally, each of the states have their own guidelines and it is important for the employer to investigate the guidelines and ensure they are acting within them. The only exception to this would be that if the employer promised certain benefits for a certain amount of time, the employer would not be able to change them. Therefore, employers should review the laws in their own state as well as the laws of the Federal government relative to reducing employees’ benefits.