Lump Sum Versus Payments for Your Auto Insurance
In the current economic climate, it seems that everyone is asking the question: is Life Insurance right for me? With all the options available through the internet, is Life Insurance right for you? Life insurance is not required, and many people actually prefer not to have it. However, it can provide a source of income should one need it in the future. The lump sum payment received from a life insurance policy will not be very much compared to what it would cost to replace that income in the future; it’s just another investment.
A pension guarantee is like an individual retirement account whereby an individual can invest a certain amount of his or her savings for a guaranteed life income stream over the years. Insurance actuaries know that people who live longer and make more regular payments over their lives are more likely to be covered financially by those that die younger and make fewer payments. On the other hand, people that die young tend to die at a relatively young age, so they are unlikely to be able to accumulate as much wealth as older individuals. Therefore, those that have investments through a pension plan stand to benefit the most from Life Insurance. In many instances, these policies will pay out even when the insured dies later in life.
The best way to determine if you need Life Insurance is to analyze how your lifestyle has changed over the years. How much have you increased your debts? How much can you reasonably expect to earn in the future? These are the questions you must ask yourself, and the answers you come up with will determine your needs. For instance, if you have increased your debts substantially because of irresponsible credit habits and high medical bills, then you may not need the coverage, as your payments and expenses would not be sufficient to cover them. On the other hand, if your investments have grown substantially but your debts have remained constant, you may find that a lump sum versus payments are the most cost effective method for protecting your finances.
Also important to your decision is the impact of any accrued taxes. If the taxes have reached a certain level and you expect to owe them, you must calculate the amount you are currently delinquent on versus the amount you are expected to owe them based on your current lifestyle. In some cases, the lump sum pays off the entire debt and will be tax free, while in others, the payment will simply take care of the accrued tax liabilities. If the former is the case, you may want to talk to a collections agency to find out whether or not you can settle the debt with the tax collectors instead.
When you receive a lump sum payment, you may also want to consider how the money will be used. A payment made in cash can easily go towards accrued interest. However, you may run into health care costs or other expenses that you will not be able to cover without an advance. In this case, a credit card or other short-term loan may be more beneficial.
It is important to know all the pros and cons of lump sum versus payments before you make a final decision. The best way to do this is by consulting a professional who can guide you through the process. You can also request free advice from financial experts on the Internet.