Financial Back to School Basic for Mom and Dad

 

Financial Back to School Basic for Mom and Dad

(ARA) - Every fall, millions of mothers and fathers spend countless hours purchasing back to school for their children. While some parents equip their children with the latest gadget - a personal digital assistant (PDA) or mobile phone, for example - most know that the fundamentals such as paper, pencils and folders is essential learn the tools to ensure the future of their children.

Unfortunately, many parents are unaware of a simple financial base for the school. They often buy the latest gadgets for their children, but fails to make an essential component of the future of their families and educate their children - namely, adequate life insurance.

If a parent is concerned about the education of your child, he or she must also worry about having the financial protection that underlie these life insurance plans can offer, "said Todd Gillingham, JD, CLU, CHFC, partner Thrivent Financial for Lutherans. "Without adequate insurance coverage at the best of all parents provided education plans are collapsing under the financial burden left on their surviving children.

Regardless of income or assets, life insurance is important to protect the financial future of loved ones and should be the foundation on which other goals are built, says Gillingham.

Studies show that about one third of American adults have no life insurance coverage and those with coverage, nearly one third have coverage of less than one times their annual income - not enough to protect long- After the family. Four of the 10 single parents have no life insurance coverage of any kind. Perhaps that is why the life and health insurance of the Foundation for Education found that nearly half of Americans (48 percent) say they are afraid that if they die tomorrow their relatives would not be financially secured.

The various financial vehicles such as 529 plans and education are the cover can often grab the headlines," says Gillingham. While these are important tools to spare, can lead parents to mistakenly ignore their needs for life insurance. This issue can not be economically devastating.

Without provides life insurance protection, financial security is often illusory. In case of premature death, life insurance helps families pay for living expenses - including mortgage payments and education - where income is lost a loved one. Without this protection, the resulting financial stress often undermines all other objectives.

Beyond subsistence, life insurance protects the sharp reductions in future pension and social security contributions reduced by replacing the assets of premature death. For example, the activity provided by the pension plan may be reduced by 50 percent or more, simply because the death of the individual breaks the long-term growth of the activities of the individual plan. Business owners and those who have a lot of money for life insurance to pass those tax funds effectively to their children, or a vehicle for charitable gifts to nonprofit organizations. Life without the special tax benefits, many families will lose a family business or can not leave a permanent mark in connection with or the organization to choose from.

These benefits aside, the main reason remains the protection of family life and financial programs, says Thrivent Financial in Gillingham. It affects the death when the expectations, goals that require sustained funding, such as children's education, are particularly vulnerable to the effects of death.

While shopping for school supplies this fall, remember this back-to-school education - the essentials first. Gillingham says, "adequate safeguards is a back-to-school basic parents should simply live without.