You might not think of life insurance as a gift, but it is.
In fact, it’s one of the best gifts you can give your new child. Why? If you suddenly die, your life insurance policy becomes wellspring of cash for your kid when he needs it most. However, there’s just one thing standing in your way: money. Life insurance isn’t free. Here’s how to afford it without breaking the bank.
Blended Whole Life
Blended whole life insurance is one way to provide permanent life insurance protection without spending a fortune. It’s a “secret” that not many insurance agents are willing to share. Why? Because blended whole life blends elements of term and whole life. Essentially, it’s priced more like term coverage, but offers the cash value of whole life.
Why whole life? When you no longer need the policy, you can cash it in for its cash value and receive all of your premiums back (provided that you’ve held it long enough for the cash value to equal your total premium payments) or transfer ownership of it to your child.
Define Your True Values
Sometimes, finding extra money in the family budget is about defining your true values in life. It’s difficult to squeeze more money out of an already tight budget, but think about what you spend your money on.
Do you need 2 cell phones? Can you really afford to go out to eat every weekend? You enjoy movies, but do you go too often? All of these little things can add up. Not only that, some large expenses might not be worth it. You own a home, for example, but it’s costing you a fortune in maintenance. Is it time to downsize? It sounds crazy, being that you just had a child, but you might actually be able to find a smaller home, or an apartment, with the space you need – but without all of the extra costs of mowing, repairs, taxes, and additional property insurance.
_________________________Random Quotes to Remember ~ "Don't be distracted by criticism. Remember--the only taste of success some people get is to take a bite out of you." -- Zig Ziglar
Raise Your Deductibles
One of the oldest, and simplest, tricks in the book is to raise your deductibles on all your insurance policies. This isn’t without risks, but if you rarely find yourself using your insurance policies (i.e. automobile, homeowner’s, etc.), it might be worth raising your deductibles and using the savings to buy insurance.
Adjust Your Withholding
Most people receive a large refund check at tax time. Surprise – the IRS doesn’t actually like doling out these checks. It would prefer you optimize your withholding. By using the IRS withholding calculator (irs.gov/Individuals/IRS-Withholding-Calculator), you can receive more money in your paycheck starting with your next pay period. That should really help you afford the additional insurance coverage.
Refinancing homes and cars isn’t a new tactic, but it’s underutilized. If the principal on your home or car is low enough, refinancing might make sense. It’ll permanently lower both the interest and the monthly payment. Don’t roll your eyes. The difference can be substantial – several hundred dollars. That’s more than enough to buy your next insurance policy.
Gillian Kearney is developing quite a forte at writing about family finances. Her articles mainly appear on family and personal finance blogs. Visit the Monkey Car Insurance for more information.
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