Category Archives: Life

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Can Space Tourists Get Life Insurance? by Aaron Crowe

Astronaut

The Oct. 31 crash of a Virgin Galactic rocket that killed a pilot hasn’t stopped the company from continuing its quest to offer space tourists a chance to see the Earth from above, giving potential riders a chance to reconsider their life insurance options.

While life insurance might be the furthest thing from any space tourist’s mind, a loophole that allows current life insurance policyholders to retain such coverage if they fly into space remains, though the insurance industry may look to close it.

Skydivers, pilots and people with other high-risk jobs or hobbies must buy extra coverage on their life insurance policies. Space tourists, however, who either already have life insurance or are applying for a policy don’t have to mention their upcoming trip to space because insurers either don’t ask about space tourism or don’t exclude it from coverage.

The loophole means they’d likely have to pay if the policyholder died on a space trip.

There are little or no established life underwriting guidelines specifically for space flight, and such activity would probably be covered under common aviation clauses and exclusions, says Rob Drury, executive director of the Association of Christian Financial Advisors.

“For a life insurance company to deny coverage for space travel would require a specific exclusion of such activity,” Drury says. “If the current treatment of aviation activities is an indication, the greater likelihood is that a proposed insured would be underwritten at a higher risk class.”

Once a policy is issued, death benefits must be paid for any death regardless of cause, unless there is a finding of fraud, misrepresentation, or suicide within the policy’s contestability period of the first two policy years in most states, he says.

Coverage is provided by omission, meaning the underwriter doesn’t ask about an applicant’s plans to fly into space.

“If someone wants to run the bulls at Pamplona, his insurer might not like it, but they must pay in the event of death if the activity isn’t specifically excluded,” Drury says.

Astronauts are rated at $10 per $1,000 of coverage in addition to their approved rate based on amount of coverage, age and other factors, says Ellen Davis, president of Life Health Home Insurance Group. Space tourists can’t buy coverage yet, Davis says.

However, if the insurer doesn’t ask an applicant about space travel, then it would be covered under travel outside of the United States, she says.

Virgin Galactic’s SpaceShipTwo crashed during a test flight. The craft is designed to carry six passengers on two-hour suborbital flights that offer a few minutes of weightlessness. The company announced after the crash that it plans to continuing selling tickets at up to $250,000 per seat.

The good news is that while flying in a rocket sounds risky, even for insurers, not many people have died riding into space. No one has died in suborbital manned flights. There have been three fatal orbital space shots, including the space shuttles Challenger and Columbia with 14 deaths, and a Soyuz flight that killed one person.

Mention that to your underwriter next time you’re applying for insurance as a space tourist.

Aaron Crowe is a freelance journalist who specializes in content about personal finance and insurance.

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The Sandwich Generation: Part 4

Considering the needs of your children

Your children may be feeling the effects of your situation more than you think, especially if they are teenagers. At a time when they are most in need of your patience and attention, you may be preoccupied with your parents and how to look after them.

Here are some things to keep in mind as you try to balance your family’s needs:

  • Explain fully what changes may come about as you begin caring for your parent. Usually, children only need their questions and concerns to be addressed before making the adjustment.
  • Discuss college plans with your children. They may have to settle for less than they wanted, or at least take a job to help meet costs.
  • Avoid dipping into your retirement savings to pay for college. Your children can repay loans with their future salaries; your pension will be the only income you have.
  • If you have boomerang children at home, make sure all your expectations have been shared with them, too. Don’t be afraid to discuss a target date for their departure.
  • Don’t neglect your own family when taking care of a parent. Even though your parent may have more pressing needs, your first duty is to your children who depend on you for everything.
  • Most importantly, take care of yourself. Get enough rest and relaxation every evening, and stay involved with your friends and interests.

Finally, keep lines of communication open with your spouse, parents, children, and siblings. This may be especially important for the smooth running of your multi-generation family, resulting in a workable and healthy home environment.

Ellen

Want to share your ideas? Post a comment, or send me an email!

The Sandwich Generation: Part 3

Caring for your parents

Much depends on whether a parent is living with you or out of town. If your parent lives a distance away, you have the responsibility of monitoring his or her welfare from afar. Daily phone calls can be time consuming, and having to rely on your parent’s support network may be frustrating. Travel to your parent’s home may be expensive, and you may worry about being away from family.

To reduce your stress, try to involve your siblings (if you have any) in looking after Mom or Dad, too. If your parent’s needs are great enough, you may also want to consider hiring a professional geriatric care manager who can help oversee your parent’s care and direct you to the community resources your parent needs.

Eventually, though, you may decide that your parent needs to move in with you. If this happens, keep the following points in mind:

  • Share all your expectations in advance; a parent will want to feel part of your household and may be happy to take on some responsibilities.
  • Bear in mind that your parent needs a separate room and phone for space and privacy.
  • Contact local, civic, and religious organizations to find out about programs that will involve your parent in the community.
  • Try to work with other family members and get them to help out, perhaps by providing temporary care for your parent if you must take a much-needed break.
  • Be sympathetic and supportive of your children–they’re trying to adjust, too. Tell them honestly about the pros and cons of having a grandparent in the house. Ask them to take responsibility for certain chores, but don’t require them to be the caregivers.

Considering the needs of your children

Tomorrow’s post deals with the effect your added responsibilities have on your children, and how to cope with it.

Ellen

Want to share your ideas? Post a comment, or send me an email!

The Sandwich Generation: Part 2

What can you do to prepare for the future?

Holding down a job and raising a family in today’s world is hard enough without having to worry about keeping the three-headed monster of college, retirement, and concerns about elderly parents at bay. But if you take some time now to determine your goals and work on a flexible plan, you’ll save much stress–and expense–in years to come.

Planning ahead gives you the chance to take the wishes of the entire family into account and to reduce future disagreements with your siblings over the care of your parents.

Here are some ways you can prepare now for the issues you may face in the future:
Start saving for the soaring cost of college as soon as possible.

  • Work hard to control your debt. Installment debts (car payments, credit cards, personal loans, college loans, etc.) should account for no more than 20 percent of your take-home pay.
  • Review your financial goals regularly, and make any changes to your financial plan that are necessary to accommodate an unexpected event, such as a career change or the illness of a parent.
  • Invest in your own future by putting as much as you can into a retirement plan, where your savings (which may be matched by your employer) grow tax deferred until you retire.
  • Encourage realistic expectations among your children; their desire to attend an expensive college will add to your stress if you can’t afford it.
  • Talk to your parents about the provisions they’ve made for the future. Do they have long-term care insurance? Adequate retirement income? Learn the whereabouts of all their documents and get a list of the professionals and friends they rely on for advice and support.

Caring for your parents

In tomorrow’s post, I’ll go over some of the things you should consider when you become the caretaker for your parents.

Ellen

Want to share your ideas? Post a comment, or send me an email!

The Sandwich Generation: Part 1

Juggling Family Responsibilities

At a time when your career is reaching a peak and you are looking ahead to your own retirement, you may find yourself in the position of having to help your children with college expenses while at the same time looking after the needs of your aging parents. Squeezed in the middle, you’ve joined the ranks of the “sandwich generation.”

What challenges will you face?

Your parents faced some of the same challenges that you may be facing now: adjusting to a new life as empty nesters and getting reacquainted with each other as a couple. However, life has grown even more complicated in recent years. Here are some of the things you can expect to face as a member of the sandwich generation today:

  • Your parents may need assistance as they become older. Higher living standards mean an increased life expectancy, and you may need to help your parents prepare adequately for the future.
  • If your family is small and widely dispersed, you may end up as the primary Want to share your ideas? Post a comment, or send me an email!caregiver for your parents.
  • If you’ve delayed having children so that you could focus on your career first, your children may be starting college at the same time as your parents become dependent on you for support.
  • You may be facing the challenges of “boomerang children” who have returned home after a divorce or a job loss.
  • Like many individuals, you may be incurring debt at an unprecedented rate, facing pension shortfalls, and wondering about the future of Social Security.

What can you do to prepare for the future?

Check in tomorrow for some ideas about what you can do to be ready for whatever comes your way.

Ellen

Want to share your ideas? Post a comment, or send me an email!

Teaching Your Child About Money: Lesson 5

Lesson 5: Charitable Giving

For some people, one of the most difficult aspects of charitable giving is determining where to give their money. There are many worthwhile organizations in the community doing important work.

A common way in which people choose a charity is through their personal volunteer work with an organization, or through the recommendations of friends. There are also a growing number of resources available to help you find a charity that provides programs and services reflecting values similar to your own and your family, research nonprofits working in areas of particular interest to you and your child, and learn more about a particular nonprofit before making a giving decision.

Here are some resources that can help:

Charity Navigator – http://www.charitynavigator.org
Launched in 2002, this free Web site service provides an analysis and rating of the financial health of more than 1,700 of America’s largest charities.

BBB Wise Giving Alliance – http://www.give.org
The Alliance provides free online reports on about 600 national charities that include an evaluation of each charity against the 23 provisions of the voluntary CBBB Standards for Charitable Solicitations.

Teach your child about monetary giving and volunteering to charities. Here are some ideas to put the whole family in the charitable spirit.

  • ‘Adopt a Grandparent’ and visit a local nursing home. Newborns and toddlers can come along to provide company and lots of hugs. Older children can read with the residents and put on plays or skits.
  • Organize a food drive in your neighborhood. Even small children can help deliver and collect bags.
  • Many charities request local residents to send pledge sheets to the neighbors. Let the kids stamp, label and deliver the sheets. Organize a toy, book or clothing drive. Have the kids chip in by donating some of their unused toys and outgrown clothing.
  • Help your children write letters and draw pictures to mail to the elderly or others in town who are not able to get out much.
  • Volunteer to read to the blind. Let older children read while the younger ones cuddle and turn pages.
  • Walk, brush, feed and clean pets at a rescue shelter. Maryland Animal Shelters, Virginia Animal Shelters, Alley Cat Allies and many others would welcome your support.
  • Spend some time volunteering at a food kitchen. Let the kids help fix plates and clear the tables. Work together to make baked goods as a donation to a religious organization, community or charity fair.
  • Collect change and/or bottle return money to donate to charity.
  • Volunteer for Meals on Wheels and let the kids come along to help with deliveries. Many shelters and food kitchens need drivers to pick up donations at markets and restaurants each day. Have the kids pitch in and help.
  • Volunteer with Habitat for Humanity, Sukkot in April, Christmas in April or any of the other charities that help fix or build homes. Volunteers are need to build, paint, cook and serve food, watch children and much more.
  • Encourage your children to donate one item off their Birthday or holiday wish list to a less fortunate child.
  • Help your child donate a portion of his allowance and birthday money to the charity of his choice.
  • Before all giving occasions (holidays, birthdays, etc) clean out the toy boxes and help your children donate toys they haven’t used in a while.
  • Instead of exchanging duplicate gifts – donate one of the items to charity.

Want to share your ideas? Post a comment, or send me an email!

Ellen

Teaching Your Child About Money: Lesson 4

Lesson 4: Becoming a smart consumer

Commercials. Peer pressure. The mall. Children are constantly tempted to spend money but aren’t born with the ability to spend it wisely. Your child needs guidance from you to make good buying decisions. Here are a few things you can do to help your child become a smart consumer:

  • Set aside one day a month to take your child shopping. This will encourage your child to save up for something he or she really wants rather than buying something on impulse.
  • Just say no. You can teach your child to think carefully about purchases by explaining that you will not buy him or her something every time you go shopping. Instead, suggest that your child try items out in the store then put them on a birthday or holiday wish list.
  • Show your child how to compare items based on price and quality. For instance, when you go grocery shopping, teach him or her to find the prices on the items or on the shelves, and explain why you’re choosing to buy one brand rather than another.
  • Let your child make mistakes. If the toy your child insists on buying breaks, or turns out to be less fun than it looked on the commercials, eventually your child will learn to make good choices even when you’re not there to give advice.

Want to share your ideas? Post a comment, or send me an email!

Ellen

Teaching Your Child About Money: Lesson 3

Lesson 3: Setting and saving for financial goals

When your children get money from relatives, you want them to save it for college, but they’d rather spend it now. Let’s face it: children don’t always see the value of putting money away for the future. So how can you get your child excited about setting and saving for financial goals? Here are a few ideas:

  1. Let your child set his or her own goals (within reason). This will give your child some incentive to save.
  2. Encourage your child to divide his or her money up. For instance, your child might want to save some of it towards a long-term goal, share some of it with a charity, and spend some of it right away.Photo by Deb Duncan
  3. Write down each goal, and the amount that must be saved each day, week, or month to reach it. This will help your child learn the difference between short-term and long-term goals.
  4. Tape a picture of an item your child wants to a goal chart, bank, or jar. This helps a young child make the connection between setting a goal and saving for it.

Finally, don’t expect a young child to set long-term goals. Young children may lose interest in goals that take longer than a week or two to reach. And if your child fails to reach a goal, chalk it up to experience. Over time, your child will learn to become a more disciplined saver.

Want to share your ideas? Post a comment, or send me an email!

Ellen

Teaching Your Child About Money: Lesson 2

Lesson 2: Opening a bank account

Taking your child to the bank to open an account is a simple way to introduce the concept of saving money. Your child will learn how savings accounts work, and will enjoy trips to the bank to make deposits. Many banks have programs that provide activities and incentives designed to help children learn financial basics.

Here are some other ways you can help your child develop good savings habits:

  • Help your child understand how interest compounds by showing him or her how much “free money” has been earned on deposits.
  • Offer to match whatever your child saves towards a long-term goal.
  • Let your child take a few dollars out of the account occasionally. Young children who see money going into the account but never coming out may quickly lose interest in saving.

Want to share your ideas? Post a comment, or send me an email!

Ellen

Teaching Your Child About Money: Lesson 1

Ask your five-year old where money comes from, and the answer you’ll probably get is “From a machine!” Even though children don’t always understand where money really comes from, they realize at a young age that they can use it to buy the things they want. So as soon as your child becomes interested in money, start teaching him or her how to handle it wisely. The simple lessons you teach today will give your child a solid foundation for making a lifetime of financial decisions.

Photo by Deb Duncan

Lesson 1: Learning to handle an allowance

An allowance is often a child’s first brush with financial independence. With allowance money in hand, your child can begin saving and budgeting for the things he or she wants.

It’s up to you to decide how much to give your child based on your values and family budget, but a rule of thumb used by many parents is to give a child 50 cents or 1 dollar for every year of age. To come up with the right amount, you might also want to consider what your child will need to pay for out of his or her allowance, and how much of it will go into savings.

Some parents ask their child to earn an allowance by doing chores around the house, while others give their child an allowance with no strings attached. If you’re not sure which approach is better, you might want to compromise. Pay your child a small allowance, and then give him or her the chance to earn extra money by doing chores that fall outside of his or her normal household responsibilities.

If you decide to give your child an allowance, here are some things to keep in mind:
Set some parameters. Sit down and talk to your child about the types of purchases you expect him or her to make, and how much of the allowance should go towards savings.
Stick to a regular schedule. Give your child the same amount of money on the same day each week.

Consider giving an allowance “raise” to reward your child for handling his or her allowance well.

Want to share your ideas? Post a comment, or send me an email!

Ellen