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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

Buying a Home! (Part 2)

Should You Use a Real Estate Agent?

A knowledgeable real estate agent or buyer’s broker can guide you through the process of buying a home and make the process much easier. This assistance can be especially helpful to a first-time home buyer. In particular, an agent or broker can:

  • Help you determine your housing needs
  • Show you properties and neighborhoods in your price range
  • Suggest sources and techniques for financing
  • Prepare and present an offer to purchase
  • Act as an intermediary in negotiations
  • Recommend professionals whose services you may need (e.g., title professionals, inspectors)
  • Provide insight into neighborhoods and market activity
  • Disclose positive and negative aspects of properties you’re considering

Keep in mind that if you enlist the services of an agent or broker, you’ll want to find out how he or she is being compensated (i.e., flat fee or commission based on a percentage of the sale price). Many states require the agent or broker to disclose this information to you up front and in writing.

Photo by Deb Duncan

Choosing the Right Home

Before you begin looking at houses, decide in advance the features that you want your home to have. Knowing what you want ahead of time will make the search for your dream home much easier. Here are some things to consider:

  • Price of home and potential for appreciation
  • Location or neighborhood
  • Quality of construction, age, and condition of the property
  • Style of home and lot size
  • Number of bedrooms and bathrooms
  • Quality of local schools
  • Crime level of the area
  • Property taxes
  • Proximity to shopping, schools, and work

Drop me a note for some expert advice on what to look for in a home and what you should avoid like the plague!

Ellen

Today’s Vocabulary Lesson

Earnest Money: The deposit money given to seller or his agent by the potential buyer at the time of the purchase offer. If the offer is accepted, the money will become part of the down payment.

Easement: A right to the limited use of land owned by another. An electric company, for example, could have an easement to put up electric power lines over someone’s property.

Encumbrance: Anything that affects or limits the title to a property, such as outstanding mortgages, easement rights or unpaid property taxes.

Equity: The value in which the owner has in real estate over and above the mortgages against it. When the mortgage and all other debts against the property are paid in full, the owner has 100% equity in his property.

Escrow: Funds and/or deed left in trust to a third party. Generally, a portion of the monthly mortgage payment is held in escrow by the lender to pay for taxes, hazard insurance and yearly mortgage insurance premiums.

Go to the Mortgage Glossary at Mortgage Link to see the rest of the alphabet!

Ellen

Today’s Vocabulary Lesson

Commitment: An agreement, frequently in writing, between a lender and a borrower to loan money at a future date, subject to certain conditions.

Comparables: Refers to similar properties used for comparison purposes in the appraisal process. These properties will be reasonably the same size and location, with similar amenities and characteristics, so that the approximate fair market value of the subject property can be determined.

Condominium: Ownership of a single unit in a multiunit building or complex of buildings. Along with this goes a share of ownership of the common areas.

Contingency: A condition that must be met for a contract or a commitment to remain binding.

Conventional Mortgage: Any mortgage loan that is not insured by FHA, guaranteed by VA, of funded by a government authorized bond sale or grant.

Convey: To transfer real estate from one person to another.

Credit Report: The report to a prospective lender on the credit standing of a prospective borrower

Go to the Mortgage Glossary at Mortgage Link to see the rest of the alphabet!

Ellen

5 Things You Must Know Before Obtaining a Mortgage: #5

Industry research has revealed that there are 5 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.

5. You should seriously consider dealing with a Mortgage Expert

Photo by Deb Duncan

Consider dealing only with a professional who specializes in mortgages and understands your needs and desires. Enlisting The Mortgage Link’s services will make a significant difference in the cost and effectiveness of the mortgage you obtain.

Go to my web site at Mortgage Link for more information or send me an e-mail. By working with me, you can reach your goals faster.

Contact me today and find out how much home you can afford or how much money you can take out of your home to renovate, send your kid to college, or invest for the future.

Ellen

This is the final segment of a 5-part series on how to keep the stress low and the savings high when you get a mortgage. By paying close attention to resolving these five common issues, you will improve your chances of getting the property you want, and get the kind of mortgage you can handle in the long term.

Check back for my next series, “10 Ideas Before Selling Your House.”