Kelly Rowland on Life Insurance and Financial Security for Your Family
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September is Life Insurance Awareness Month. The vacation was started in 2004 by the nonprofit educational association Life Happens to encourage conversations about life insurance.
According to a recent study, 43% of Americans do not have life insurance and only 33% believe they have enough life insurance or other assets to protect their family in the event of death.
This year, Life Happens is teaming up with Kelly Rowland to highlight the value of life insurance. Rowland is a singer, songwriter, producer, humanitarian, businesswoman, entrepreneur, actress and mother. She told Insider why this partnership means so much to her.
Clear the taboo around life insurance
In many black households it is taboo to talk about certain topics. Life insurance is one of them.
Growing up, Rowland says she “hasn’t heard a word of it [life insurance]. I had a great aunt who bought it. Everyone was like not talking about it. âShe added that no one wanted to talk about death, and they equated life insurance with death.
Rowland said his family would have saved money if they had life insurance instead of having to figure out what to do after someone died.
A study by Life Happens and LIMRA showed that although African Americans are more insured than any other group, they are underinsured., which means they don’t have enough life insurance to replace income, debt, or build wealth.
The study also found that 66% of African Americans viewed life insurance as mere funeral and burial expenses, and not as a tool for building wealth – even though permanent life insurance policies include a cash value component that you can use over the course of your life.
How life insurance works
Life insurance is a contract between you and the insurer. You pay premiums (monthly or annually) for a payment, called a death benefit, that your living parents will receive upon your death.
There are two main types of life insurance: permanent life insurance and term life insurance. The difference between term life insurance and permanent life insurance is similar to the difference between renting an apartment (term life) and owning a house (permanent life).
Like rentals, term insurance lasts for a set period of time, and when it’s over, you can reapply for coverage, but premiums will most likely increase as you get older and your health deteriorates.
Permanent life insurance lasts your entire life. It includes a death benefit for your beneficiaries and a cash value that you can use while you’re alive. It’s like owning a home, where you earn equity that can be used as collateral – and your home can be passed on to your heirs, leaving an inheritance.
You can also use the cash value of permanent life insurance over your lifetime, for things like paying your children’s school fees, financing a business, or buying a home. secondary. Most people use the cash value to fund their retirement by paying themselves monthly income when they stop working.
There are different types of permanent life insurance, such as whole life insurance, universal life insurance, and variable life insurance. They all have death benefits as well as a cash value that increases with a tax deferral. The big difference between types of permanent life insurance policies is how they handle cash value – in the insurance company’s portfolio, the stock market, or indexed funds.
Famous, rich or not, life insurance matters
Rowland said that whether you are famous or not, the people in your life depend on you, and it’s about being responsible. She said, “Whether I’m here or not, I want my children to know that I have [them]. ”
Rowland emphasized the need to have open conversations about life insurance in our communities, not filled with fear, for the sake of our families.
She said there are so many financial gems our community is missing – like life insurance which is more than funeral and burial costs and saving money. She said it’s important to get the word out because, at the end of the day, life insurance saves money.
Life Happens provides free tools and resources for consumers to take action, such as free online calculators that offer comprehensive real-time assessments of your individual life insurance needs.
Your life insurance needs change with age, and you’ll need to consider children, marriage, divorce, retirement, and caring for aging parents. Consider consulting with a financial advisor, an estate attorney, and an accountant to make sure you have the right coverage for your goals and life changes.