Need more details? Contact us

We are here to assist. Contact us by phone, email or via our social media channels.

WHO WE ARE

WHAT WE DO

HOW TO REACH US

PERROTTO PRIVATE WEALTH
149-21 84TH STREET
HOWARD BEACH, NY 11414
718-551-7131 (D)
Dave@Perrottowealth.com

  • Black Twitter Icon
  • Black Facebook Icon
  • Black LinkedIn Icon

Investment Advisory Services are offered through Bright Futures Wealth Management and/or Cetera Advisors LLC registered investment advisers.  Securities are offered and sold through Cetera Advisors LLC, - A registered broker dealer. Member FINRA, SIPC. Bright Futures Wealth Management and Cetera Advisors LLC are not associated entities. Cetera is under separate ownership from any other company. Bright Futures Wealth Management is under separate ownership from any other company. Perrotto Private Wealth is under separate ownership.

This site is published for residents of the United States only. Financial Advisors of Cetera Advisors LLC, may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisors LLC site at www.CeteraAdvisors.com

 

Copyright © 2018 Perrotto Private Wealth Management. All rights reserved

Setting a budget for Life Insurance

November 27, 2017

Let me start out by saying, I know it may not be exciting budgeting for Life Insurance, like it is for a vacation, or fitting in a new car payment, but it’s much more important. Many people think about life insurance, but then decide to put it on the back burner because they think it’s expensive.

 

A 2015 study by LIMRA indicated that most consumers who chose not to buy life insurance did so because of the cost, but also that 80% of consumers “misjudged” the price of life insurance, “with millennials overestimating the cost by 213%, and Gen Xers overestimating the cost by 119%.” Those are some extremely large differences in the actual price and perceived price. So let’s break down, why you need life insurance, what you need it for, and how you can budget it into your monthly bills.


For the most part life insurance is about protecting your loved ones from financial disaster if you should pass away. Think about how much you make a year, and how your family would live without it if something happened to you. So plan for what your family needs. Most people overestimate the cost of life insurance by 3-4 times. Life insurance is less expensive than you think. A 35-year-old married man who wants to get $500,000 in coverage with a term of 30 years, who is also in excellent health could pay as low as $444 a year. That comes out to be less than 1.25 a day. It’s recommended to get coverage that is at least 5-10 times your income, but most importantly you should buy what you can comfortably afford. Now let’s go over what you need to cover; 


Personal debt (car, student loans, credit cards)
Mortgage
Funeral expenses
Monthly income your family will need for 5-10 years.


There is no such thing as discounts on life insurance, most insurance companies follow a pretty straight forward formula, but there are other ways you can save money. One of the easiest ways to save is to buy term. Term life insurance is the most affordable coverage you can own.  Think of term life insurance as paying rent, where permanent life insurance is owning a home. Also, pay annually. Insurance companies add fees for the extra administrative work needed to provide you that convenience of paying monthly or quarterly. Paying annually typically saves you roughly 5%. The biggest way to say is to compare quotes. Life insurance pricing isn’t the same across the board with insurance companies. Different carriers evaluate your application based on their own guidelines, and also have shareholders to answer to. Someone could pay 54.03 for a 20 year 500k term, and others will pay 74.58 for that same policy with another company, that is a 50% difference! You may be overpaying especially if you purchased life insurance directly through an agent that only represents one insurance company. Chances are you may be able to get a lower rate just by comparison shopping different companies.


Now let’s take a deeper dive. Let’s put life insurance into perspective. We insure almost everything else, our health, cars, home, valuables, and even our phones, but most of us don’t realize that life insurance is cheaper to insure than most of these.We budget for everything these days, things like daycare for our kids, paying our student loans, phone bills that usually run over 100 dollars, car payments that average 350 a month, and much more. Life insurance may not feel like a necessity when we are on a tight budget, but when you realize that you can get your family covered for pennies on the dollar, it’s easy to make that decision. If you can’t run a budget that affords life insurance now, think how your family will feel if they lose the breadwinner, and can’t afford anything. Make sure your family is protected.

 

Where do you begin to shop around for life insurance? Well you can either go online and compare and buy, you can buy from a captive agent (someone who only works for one company) or you can go to an independent agent that will shop you around to get you the best rating.  Admittedly, you’ll be shopping for the lowest price for the most benefits. If you are going to go at it alone, you may find cheaper plans, but you want to make sure you go with one that has high financial strength ratings (A rated or better). These companies have been around for a long time and have the financial backing to pay out the death benefit. You’re going to want to look at the different features many insurance companies offer. Some will allow you to smoke a cigar here and there without being claimed as a smoker, others will look past your weight, others will look past your family history. Each carrier has their own niche, and what makes them different from the dozens of others out there.


A good place to start your shopping is Perrottowealth.com. Just fill out the information and I will get back to you with a few quotes and show you the difference between them. 

Share on Facebook
Share on Twitter
Please reload

Featured Posts

Repairing Your Credit Score

January 7, 2019

1/4
Please reload

Recent Posts
Please reload

Archive