6 Signs You May Be Underinsured

Presented by Matthew A. Clayson

says are you underinsured for life insurance

How do you know if you are underinsured? If you’ve purchased life insurance, you’ve taken an important step in protecting your family’s financial future, but you still may be underinsured. Such coverage can help your loved ones maintain their living standard in the event you should pass away prematurely, or at least eliminate some of the stress of making ends meet.

But how do you know if you have enough coverage? That can be a complicated question. And possible answers are likely to change over time. Life insurance is not a “set it and forget it” financial solution. As circumstances change, so do your coverage needs.

You may need to revisit the amount (and type) of life insurance coverage you have if:

  1. Your family has grown.
  2. Your stay-at-home spouse is not insured.
  3. You only have group life insurance through work.
  4. Your income rose.
  5. You have significant debt.
  6. Your financial goals have changed.

Life Insurance Policy Review

There is no one right answer. The appropriate death benefit amount differs for everyone depending on their assets, income, and financial goals.

How Many are Underinsured?

Underinsurance is common. According to Life Happens, a nonprofit consumer education group, 41 percent of U.S. adults — both insured and uninsured — say they do not believe they have enough life insurance protection.1 Some started off with sufficient coverage, but failed to increase their policy amount as their income and financial obligations grew.

Of course, the “right” amount of coverage is relative. People purchase life insurance for different reasons. Often, it’s used to replace the policyowner’s lost income if he or she should die unexpectedly, so their surviving spouse and kids can pay the bills. Others buy whole life insurance to provide for a spouse in retirement or cover long-term care expenses. And some use it as an estate planning tool to pass money along on a tax-favored basis to their heirs, so they may not realize they are underinsured.

1. Your family has grown -If you added a new family member to your flock, it may be time to increase the size of your life insurance policy. According to the most recent government estimates, it will cost the average middle-income, married couple nearly $311,000 to raise a child through age 18. That does not include the cost of a college education. If you aim to cover your kid’s college education, braces, and future wedding in the event that you are no longer around, those expenses should be factored into your death benefit as well.

2. Your stay-at-home spouse is not insured-It’s a common misconception that stay-at-home parents do not need life insurance coverage. True, they don’t produce an income. But if they should pass away when the kids are still young, the breadwinner would need to pay for day care or a nanny.

One more reason to insure a stay-at-home parent: It protects the earnings potential of the breadwinning parent, so he or she would not have to scale back hours or take a less-demanding job to keep their household afloat.

3.You only have group life insurance-Employer-provided life insurance is a great benefit for many, but the amount provided may not be sufficient to protect your family from financial loss. Group life insurance is typically not portable, either. And, if you develop a health condition between now and when you leave your job, you may no longer be eligible for the lowest rates, or qualify for private insurance at all.

To estimate how much life insurance coverage his clients should have, Guarino said he starts by calculating the cash-flow needs (through retirement) of each spouse and any dependent children with the assumption that the other spouse has passed away. He then compares that figure with their cash flow sources.

4. Your income rose-A bigger paycheck is a good thing, but if your family depends on your income to cover their living expenses, your life insurance coverage needs to keep up. It may be time to review your coverage needs if your salary has grown substantially since you purchased your policy.

Remember, the purpose of life insurance is to provide a big enough safety net that those you leave behind would be able to maintain their lifestyle if you were no longer around. If that lifestyle has changed, your coverage amount should, too.

5. You have debt-You may need more coverage if you have private student loans, mortgages, medical bills, or other debts.

Remember, the purpose of life insurance is to provide a big enough safety net that those you leave behind would be able to maintain their lifestyle if you were no longer around. If that lifestyle has changed, your coverage amount should, too.

6. Your financial goals have changed-Many couples purchase budget-friendly term life insurance when they start a family, primarily because it costs less. But as their income and financial goals change, they may no longer have the kind of protection that’s right for them. Term life insurance provides coverage for a specific length of time. The beneficiaries receive the death benefit only if the policyowner dies before that term is up, so you may still me underinsured.

By contrast, a permanent (or whole) life insurance policy costs more because it guarantees a death benefit to your beneficiaries when you pass away at any age, as long as you maintain your policy. It may also enable policyowners to accumulate cash value that can be used to help meet their retirement and other long-term accumulation goals. If you currently have a term life policy, but wish to leave a legacy to your heirs (or a favorite charity), you may not have the type of coverage you need.

Conclusion

Underinsurance is common in U.S. households. To be sure your family has the protection it needs, review your coverage regularly to ensure that you have both the amount and the type of policy that’s right for you.

Winter Losses Are Preventable

prevent winter loss to your business

Before the Storm Starts…

Call your Cleary Insurance representative. Ask how your coverage will help you in a variety of scenarios, including burst pipes, roofing incidents, business interruption, ice dams, or accidents involving company cars. We can work with you to uncover gaps in your coverage and help you develop plans for your greatest risk areas to prevent winter losses.

Building Preparedness

Whether it’s you, an internal team, or a trusted contractor taking care of your building during the storm, make sure you:

  • Know the locations of your water mains and supply lines. Mark them so they can be easily shut down in the event of a burst pipe or structural damage.
  • Get your heating and electrical equipment inspected and in good operating condition. Licensed, insured plumbers and electricians can help you with this before the storm starts.
  • Research or designate fully insured and reliable contractors for snow removal, salting, and sanding of parking areas and walkways. Or, if you choose to self-perform snow removal and maintenance, make sure your staff is properly trained and capable of operating necessary equipment, such as snow blowers. Document the building’s conditions before, during, and after the storm with checklists and photos.
  • Prepare your grounds. Remove any trees or branches that are in danger of falling on your building and note any areas that may become risky in icy or snowy conditions.
  • Check your supplies. Ensure that all snow removal equipment, backup generators, and company vehicles have enough fuel, and that you or your contractors have salt or sand available for your walkways and parking lots. If anyone is staying in your building, keep a well-stocked emergency kit in an accessible area.
  • Consider installing water sensing equipment. Modern water detectors will notify you when your pipes grow cold, or if there is excess moisture present. Some can even shut off your water automatically in an emergency.
  • Consider installing fully programmable and Wi-Fi-enabled thermostats. Today’s thermostats are more accurate, can be adjusted using smart devices, and can even send alerts should internal building temperatures dip to dangerous levels.
  • During the storm, keep all exits, air intake, and exhaust vents clear of snow and ice during and after snow events.
  • Monitor snow accumulation on your roof to prevent potential collapses, especially on flat or low-pitched roofs. If the snow starts piling up, professional roofers can help you keep your roof clean. First and foremost, though, stay safe! Be mindful of wind and weather conditions before asking anyone to work on your roof.

Business Interruption

Storms that cause winter losses become costly when businesses must close for repairs or power restoration. Working with distributors, vendors, suppliers, or even industry counterparts to develop contingency plans can help reduce your business interruption costs. In the past, we’ve seen coordinated efforts—such as co-packing arrangements with competitors and shipping extra product to customers in advance—reduce the impacts of a storm.

Prepare Your People

The key to successful emergency preparedness is communicating with your people to help prevent winter losses. Develop and test emergency communications systems and build redundancies into your methods. Be open and proactive about communicating your inclement weather attendance policy or work from home policies so that no employee feels the need to put themselves in harm’s way. Conduct training sessions on cold exposure and slip and fall safety, as necessary.

Donating Blood Impacts Your Community

Published by Alyssa Malmquist on January 17, 2024

donating blood photo of heart in hand

The month of January is National Blood Donor Month. It’s an annual celebration that highlights how much this act of service can impact and help others. Historically, January is when blood donation has been needed most. The American Red Cross notes that the winter months can bring critical blood shortages. Typically, the steep drop in donations happens because of the holidays.

Transportation can add another challenge, especially in places with harsh winters and snow. Many individuals get sick around this time of year, too, which also makes it difficult to donate. So if you’re able to, it’s worth the extra effort to donate in January.

But it’s always a good time to donate blood, especially given how much your donation can impact members of your community:

  • In the U.S., approximately 29,000 units of red blood cells are needed every day.
  • Someone needs blood or platelets every two seconds.
  • A car accident victim can require as many as 100 units of blood.
  • Blood and platelets can only come from volunteer donors.
  • One donation can help save more than one life.
  • Many cancer patients need blood transfusions, sometimes daily, during chemotherapy treatment.
  • Babies born early may need a blood transfusion to increase the number of red blood cells in their bodies.
  • Transfusions of plasma, which is found in blood, help heal bad infections, serious burns, or liver failure.

Giving blood can also boost your health. According to a study in the American Journal of Epidemiology, blood donation can help reduce iron in your system. This can improve cardiovascular function. In that research, people who donated blood had an 88% lower risk of experiencing a heart attack.

Plus, you’ll feel good knowing you’ve made a difference. A survey of more than 5,000 blood donors found that nearly 75% of donors give blood to help others. As a result, they feel more connected to their communities.

Responding to Rare Blood Type Needs

Most blood types fall into groups A, B, AB, or O. But some people have rare blood types that are difficult to match, so it’s essential to maintain a diverse blood supply. Blood transfusions are used in accidents and ongoing treatments. For example, people with sickle cell disease often need transfusion therapy.

The best blood type match for patients with rare blood types often comes from donors of the

same race or similar ethnicity. The American Red Cross notes that although blood is matched by type, patients are at lower risk of developing complications from transfusions if their donor matches their race and ethnicity.

How to Donate

If you’re ready to make a resolution to give blood during National Blood Donor Month, you can schedule an appointment at the Mass General Blood Donor Center or the Kraft Family Blood Donor Center at Dana-Farber Cancer Institute and Brigham and Women’s Hospital.

You can also check out this blood donation site, which will help you find a donation site close by. Once you find a place, it helps to call ahead or visit their website to schedule an appointment. Finally, you can always visit the American Red Cross’s website.

Here’s how donating blood impacts your community (massgeneralbrighamhealthplan.org)

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