15. Risk and Insurance
MIT 14.73 The Challenge of World Poverty, Spring 2011
View the complete course: http://ocw.mit.edu/14-73S11
Instructor: Abhijit Banerjee
License: Creative Commons BY-NC-SA
More information at http://ocw.mit.edu/terms
More courses at http://ocw.mit.edu
You Need to Get Life Insurance
For most people, making financial decisions that only come into play after they have passed away is a surreal experience. The decision to purchase life insurance is one of those experience. Unfortunately, many people can’t cope with the thought of dying and either don’t purchase a policy or make the decision to cancel it because they can’t stand the monthly reminders when they pay their premium. Others, pressed to pay existing bills to get through the month, cancel their policies hoping to save money and beat the odds.
Stopping payments on an impaired risk life insurance policy doesn’t make good sense when your primary concern is taking care of your family. These policies are designed to keep your family afloat in case you pass away. Especially important for the primary earner in the family to have, they keep the wolf at bay and cover the costs of the funeral and other unexpected bills related to your passing.
The minimum amount of coverage that you carry should be enough to pay for the funeral and related medical care costs as well as provide an additional lump sum payment to give your family time to grieve before they are forced to make hard financial decisions. The daily expenses of life won’t stop streaming in just because you are gone. Keep in mind that grief takes time to process and members of your family may need counseling to help them through.
Before making the decision to cancel a financial life sustaining insurance policy to reduce your monthly bills, think about how difficult it will be for your family to thrive without your help and income. There are many different insurance companies in the marketplace and you should explore different ones to find a more affordable option before canceling coverage. Nonsmokers in good health can often find a great policy at an affordable rate.
Life Insurance Tips For Pilots
Being a pilot is exciting, whether it’s for a professional career or the sheer pleasure of it. One drawback however, may be the price you pay for life insurance. Don’t let this stop you though, because everyone needs proper coverage. Simply modify your strategy a little bit from the way everyone else does things.
Find A Specialist In Aviation Life Insurance
The single most important thing you can do if you need pilot life insurance if talk to an experienced specialist. Aviation insurance is common, and you should be able to find someone who knows how to navigate it economically. While it’s not going to be cheap, it doesn’t have to be staggering either. An experienced professional can guide you to the best terms and most advantageous policies.
Fill Out All Forms Properly
Insurance companies are sticklers for detail, so make sure you are thorough and accurate when you fill out their paperwork. You need a policy that’s going to take care of your loved ones, so devote the necessary time and energy to completing the process with precision.
Get A Complete Physical
Despite your somewhat risky hobby or profession, you’re probably in excellent health. Get proof of this with a complete physical, no matter what the insurance company insists upon. Demonstrate that you are in ideal health, and get fully tested. Many things contribute to a lower rate with life insurance!
Emphasize The Positive
You should be eligible for discounts in other areas of your life insurance policy, so take advantage of them if you can. Non-smokers and people who maintain a healthy body weight are often given kudos by insurance companies, as are people who belong to a fitness center. Learn what other points you can emphasize beyond piloting.
Being a pilot shouldn’t mean you don’t have the life insurance you need. Just dig a little deeper as you search for the best insurer and terms, and continue flying high.
Personal Finance: Paying The Price For Financial Ignorance
One of the worst things you can ever do when it comes to personal money and personal finance, is to remain ignorant regarding how to handle your money and get your finances in order. Those who aren’t financially literate, find themselves in serious financial crisis often in their lives. Then, they claim that life has been unfair to them when in fact, they haven’t done anything to change the circumstances. Here we are going to go over some of the most basic financial tips that will help on our quest for financial freedom.
Debt should always be your priority when you’re in it. Make your payments and avoid the ostrich syndrome of burying your head in the sand pretending it will all go away. The longer you ignore debt, the more interest it incurs, the more late charges and eventually, it could be sold to a collection agency where more fees may also be added on. Soon, that small $100 debt may reach thousands and it’s easily prevented if you just take a few steps to correct it before it’s too late. This is especially important regarding your credit cards.
Pay off debts with higher interest rates first. Talk to your creditors and try to arrange a repayment plan that won’t affect your cost of living.
Never take out a payday loan except in dire emergency. Frequently, people will play with their credit line in order to maintain a lifestyle to keep up with the Jones’. The truth is, they can’t afford this and soon, they are regretting it. Live simply and life beneath your means. You’ll appreciate the extra sleep you get not having to worry about debt.
Pay your debts off and stay out of debt as the first step in managing your finances. Second, become financially free. We aren’t lecturing you regarding your savings, or lack thereof here. We are encouraging you to decide what your triggers are for emotional spending and avoid them.
For some, it’s shopping when stressed or upset. For others, double lattes are a must. Find those triggers and find ways to work around them and you’ll find ways to save your money.