1 Timothy 5:8 reads, “But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” Rob talks about ways you could be overpaying for insurance. <ul><li>How much do you think a 20-year policy providing $250,000 coverage for a 30-year-old should cost per year? It's about $160 a year but a recent survey showed that more than half of respondents, mostly millennials, overestimated the cost where nearly half thought it would be around $1,000. </li><li>The moral of the story - if you’re expecting a high price, you’re setting yourself up to overpay. Here's a list of 5 more ways you could overpay for life insurance without realizing it:<ul><li>1.) Buying a WHOLE LIFE insurance instead of a simple TERM policy. This happens when you get caught up thinking your policy should have a cash value during your lifetime instead of what it will do for your family when you die.<ul><li>NOTE - Whole life policies build a cash value that you can tap into for certain things while you’re still alive but that’s very expensive money. You’ll fare much better if you invest the difference between a whole and term policy into your retirement account.</li><li>Think instead about how much insurance you actually need to protect your loved ones (usually about 12 to 15 times your annual salary) and look for the least expensive term policy that provides that amount.</li></ul></li><li>2.) Not paying attention to costly add-ons which the industry calls “riders.” These can be useful in customizing your policy to fit a specific need but be aware they can also be very pricey.<ul><li>NOTE - One of the worst is something called a return-of-premium rider which has the insurance provider give back all of the premiums you paid when the policy expires. The problem is that single rider could double your premiums and you don’t get the earnings you might have had if you’d invested the difference instead.</li><li>Another costly rider is for accidental death which raises the benefit if death is the result of an accident but the restrictions as to what type of accident and its circumstances can severely limit its usefulness.</li></ul></li><li>3.) Getting a policy where the provider doesn’t require a medical exam. Most companies for most policies will require you get a checkup and have blood work done. If the company doesn’t require one, you can expect to overpay.<ul><li>NOTE - A policy that doesn’t require an exam can be a real blessing. For example, if you have a pre-existing condition that might limit your access to a standard policy.</li></ul></li><li>4.) Getting an annual renewable term policy or ART which appear very attractive because the premiums start out low but each year you have to renew the policy and each year, the amount of your premium goes up. At some point, you’ll be paying more than you would for a standard policy.</li><li>5.) Procrastinating. Your chance of dying at age 30 are far less than it would be at 50. Policies get more expensive as you age because of this. If you have dependents who rely on your salary, get term life insurance ASAP. Choose a policy that will last until your dependents are grown and on their own.</li></ul></li></ul>Next, Rob answers these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:<ul><li>If you have a rental property that brings in $2,600 per month that you can sell and make $700,000 and you have a mortgage for both the rental property and your primary home with a $280,000 balance, should you sell the rental and pay the $280,000 balance off and be debt free or keep the rental for retirement income which would have you going into retirement with the ongoing debt?</li><li>If you're currently in school and have about $70,000 of student loan debt with income-driven payment optionwhich is currently deferred, should you consider consolidating your student loans?</li><li>If you're currently considering equipping you home with solar and even buying an EV because creating a zero-carbon footprint is attractive to you, knowing that it has a substantial up-front cost but considering the increased value of house and the lower utility costs, what are the hidden downsides of this idea?</li><li>Should you consider changing your investment strategy for your retirement fund if you have heard from a fellow employee they made a lot of money in something you're currently not invested in?</li><li>Are there different types of term life insurance and if so, what are the basic differences?</li><li>If you're 66, still working and drawing Social Security, your home is paid, your employer does not offer a retirement plan, you don't have credit card debt but you realize you need to set up a backup plan and set up a budget, how can you get started working with the $500 per month surplus you usually have?</li><li>If you have $20,000 student loans left, should you use half of your $40,000 emergency fund to pay this off if it's coming due in February?</li></ul>Be sure to check out the rest of MoneyWise.org to connect with a MoneyWise Coach or access our books and our many free helpful resources. You can also find us on Facebook (MoneyWise Media) and join the conversation. Thanks for your prayerful and financial support that helps keep MoneyWise on the air. And if you'd like to help, just click the Donate tab at the top of the page.

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1 Timothy 5:8 reads, “But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.”  Rob talks about ways you could be overpaying for insurance.

5 Ways To Overpay for Life Insurance

FaithFi | Dec 9, 2021

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