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For over 250 years, life insurance has been an important tool used by American families to protect their loved ones. Nevertheless, there are still millions of families, especially Hispanic families, that are still trying to determine if buying life insurance is worth it. The answer to that question is a resolute “yes.” Ask any family that has experienced the unexpected death of a loved one and you’ll find that none regret the fact that they had life insurance at that moment.

How life insurance works

Remember that life insurance is a special type of contract. It promises to pay money (called a death benefit) to one or more individuals if another person dies. The person receiving the money is called the beneficiary and the person covered in case of death is called the insured person. A beneficiary receives the death benefit, based on what’s outlined in the contract, if the insured person dies during the time the life insurance policy is active. Assuming there are no unusual circumstances and that the fees for the insurance policy (called premiums) are up to date, the money is usually paid quickly and in full to the beneficiaries. Unlike investment income, death benefits are 100 percent tax free.

Do I really need life insurance? If so, how much?

When the question of life insurance ownership comes up, many Hispanics ask themselves the questions below.  If you answer YES to at least one of the following questions then you need life insurance:

  • Do you have a spouse?
  • Do you have children?
  • Do you have any debt?
  • Do you have grandparents, parents or siblings that you support financially?
  • Even if no one depends on you financially, do you want to leave money aside to cover your funeral expenses?
  • Do you want to leave money to your heirs or to your favorite charity, organization or school when you die?

It’s hard to find people that don’t answer yes to at least one of these questions! Once you determine that you need life insurance, the question that follows is how much do you really need? The amount depends on your income, incurred debt, your number of dependents, how long they will depend on you and the dollar amount you want to leave to your heirs.  A useful online source that can help you determine the right amount of coverage is www.lifehappens.org, where you will find clear, easy to use information and the Life Insurance Needs Calculator (www.lifehappens.org/howmuch) that can help determine about how much protection you should purchase. When selecting your life insurance policy, keep in mind to purchase the right amount. Avoid purchasing less than what you really need because it won’t offer enough protection to your beneficiaries. Likewise, avoid purchasing excessive coverage so you’re not unnecessarily paying a higher premium.

Can anyone be a beneficiary? Can anyone buy life insurance?

The good news is that anyone can be named a beneficiary regardless of where they live or their immigration status. If you are a U.S. resident or citizen and you want to buy an insurance policy that will pay your family in Mexico in case you die, there is absolutely no problem doing so. You have the right to name your beneficiaries.  But be sure to tell them!  If something does happen to you it could be difficult to locate your family if they are in a foreign country. Give your beneficiaries the name of the insurance company, the policy number and the contact information of the insurance company.

When it comes to insuring an undocumented person, that process isn’t so easy. If you tell the truth on the life insurance application form and indicate that you are in the United States illegally, then it is almost certain your application will be rejected. If you lie on your application form or use false information, then once it is discovered (as it likely will be) the insurance company can opt to not pay your beneficiaries.

Don’t delay this important decision

The purchase of life insurance is the first step that you should take towards protecting your family financially. It’s an accessible financial instrument that can be tailored to almost anyone’s needs.  Don’t delay and visit www.lifehappens.org today to learn more about life insurance and the role it should play in your – and your family’s financial future.

September is Life Insurance Awareness Month, which makes it an ideal time to set aside a Saturday or Sunday afternoon to think carefully about your current financial health. Being in good financial health means different things to different people. But almost everyone can agree that it must be based on two important components: First, your lifestyle needs to match your income, and second, you need to have all of the building blocks of a good financial plan in place. These building blocks include saving money on a regular basis, managing debt responsibly, making prudent investments and protecting your family by having the right kinds of insurance, especially life insurance.

As an essential building block of a good financial plan, life insurance is the best way to prepare and protect your family if you were to die prematurely. Some Hispanic families think that having a savings account and living within your means is enough to deal with the shock of an unexpected death. But the cost of a typical funeral can easily run between $6,000 and $10,000. That range also happens to be the median net worth of a Hispanic family. Sadly, this means that a typical Hispanic family would have to spend all of their money just to pay for a funeral.

What happens after the funeral? The average Hispanic family would face severe financial hardship, maybe even have to start again at zero. Just when your family would be dealing with the emotional and psychological scars from your death, they would also need to deal with financial fallout. This unnecessary grief is easily avoidable with the purchase of a good life insurance policy.

When preparing a financial plan for your family, your first priority should be to deal with the worst case scenario – which means the death of one or both parents in the family. Like most people, Hispanics don’t feel comfortable talking about death, especially if it’s their own! But sometimes life just happens – people die unexpectedly every day and avoiding the topic won’t prolong your life. Yes, it’s difficult to think about it and even more so to talk about it, but addressing it and acting upon it is the only way to ensure that your family is protected.

A recent study from the LIFE Foundation and LIMRA indicates that many Hispanics perceive life insurance premiums as expensive; and, given other financial priorities, they choose to spend the money on something else and forgo the purchase of a policy. Other Hispanics have very small policies that pay a modest amount of money upon death, leaving their families with little protection – a situation that can be easily avoided. There are many different types of life insurance policies and most Hispanics could offer sufficient protection to their families for less than they spend on their mobile telephone bill.

During Life Insurance Awareness Month take some time out of your schedule to think about your financial health and make the effort to fix the problems that are within your control. Purchasing a good life insurance policy that will take care of your family’s needs should be the first priority. If you aren’t protecting your family, why wait? Start today by reaching out to an insurance agent or researching life insurance on the Internet at LifeHappens.org or CosasPasan.org.

By Mike Periu

Life is filled with many unexpected events, and if you ask most Hispanic adults if their lives have turned out as they envisioned, very few – if any – would be able to say “yes”.  This is certainly true for the roughly 40 million people who were born in a foreign country, but in one way or another have made the United States their new home.  Many surprises, such as the arrival of a baby or an unsolicited job promotion are blessings that add joy to our lives.  But others, such as a debilitating injury from an accident or a lengthy illness require tremendous patience and perseverance to overcome.

Fortunately, there are resources that can help us overcome the challenges that come with life’s unpleasant surprises.

The most valuable resource is a loving family.  Our spouses, parents, cousins, aunts and uncles and other extended members of our family provide moral support and encouragement.  They can also help with life’s daily tasks such as picking up the kids from school or buying groceries, which may be too much for anyone who’s recuperating. The hardest part about relying on this resource for many Hispanics is taking that first step and asking for help. Sometimes our pride doesn’t let us ask our family and friends for help even though we may desperately need it. In most cases, your loved ones will be happy to help, even in a small way.

Another important resource is access to support groups.  These groups connect us with other people experiencing the same challenges we are.  Being able to speak to someone who shares the same feelings of pain and frustration can alleviate the loneliness caused by the effects of injury or illness.  Support groups also connect us with trained counselors and advisors that provide the tools to cope with the long-term consequences of injury or illness. There are specialized English and Spanish support groups located across the country and in most areas with a Hispanic population.

A final resource that all employed Hispanics should rely on is disability insurance, your financial lifeline in times of illness or injury.  Disability insurance pays you a portion of your salary if you are unable to work due to an accident or illness.

According to a recent study by LIMRA and sponsored by The LIFE Foundation, 73 percent of Hispanics believe most people need disability insurance, but only 26 percent actually have it.  This is shocking. This means that millions of Hispanics know that there is a resource available to protect them and their paychecks, but they don’t act on it.  Once you get into an accident or are diagnosed with an illness, it will be too late.  If you don’t think that this will happen to you, consider that three out of 10 people will experience an injury or illness that will keep them out of work for at least three months.  Without disability insurance, how will you make rent or mortgage, car payments, credit card payments and all of the other expenses that our daily lives require? Very few people have enough money in their savings account to cover even one month of living expenses in the event they stop working.  Credit cards aren’t a viable alternative and using them to “plug the hole” could put you on a path to bankruptcy.  Government programs like Social Security Disability Insurance pay very little and it can take up to eight months to process your claim. If you are denied, the appeals process may take up to a year and even then you may still be denied. Is it really worth the risk?

It’s difficult enough to deal with life’s surprises.  Knowing that you can count on your family, support groups and disability insurance should be a great comfort. Your family is already there. You won’t need to sign up for a support group until you actually become ill or injured. So the only resource you must focus on today is disability insurance.  If you have a job then you need disability insurance. It’s just that simple.

Según un estudio reciente elaborado por LIMRA y patrocinado por la Fundación LIFE, los latinos nos estamos quedando atrás en el uso del seguro de vida.  El estudio indica que más del 70% de los latinos reconocemos que es importante tener una póliza vigente de seguro de vida…

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“Mañana”, “ahora no”, “en otro momento”, “cuando tenga más dinero”,  “cuando sea mayor”.

Estas son las respuestas más comunes que recibo cuando pregunto acerca de la compra de un seguro de vida. Muchos latinos consideran de mala suerte comprar un seguro o creen que no lo pueden costear o simplemente no quieren esforzarse un poco para efectuar la compra.

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FOR IMMEDIATE RELEASE

Mike Periu discussed: Financial concerns of Hispanics, and why life insurance sales in this market may be coming up short on The Wealth Channel

:PRContact:

Financial expert Mike Periu appeared on The Wealth Channel.  Mike is a regular contributor to The Wealth Channel. This time he presented:  Financial concerns of Hispanics, and why life insurance sales in this market may be coming up short.

Please watch the video by clicking on the following link: bit.ly/xhGZ8C

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