Money – Protect and Grow

One financial product that is significantly cheaper than things like gas and food these days is term life insurance. It is estimated that term life premiums have fallen 30% or more in the past 10 years. Can you imagine buying gas at the same price you paid 5 years ago? It doesn’t get any better than that.

Why Is Term Life Insurance Cheaper?

As people are living longer term life insurance companies will have fewer claims in any given period. Add in competition and you will see why you can get a great price for your term life insurance protection. Term life covers you for a specific period, normally 10 or 20 years, is simple to uinderstand and it is easy to compare the price of one company to another.

But Do You Need Term Life?

Children don’t need life insurance, but parents with young children need a lot of term life insurance as the cost of bringing up and educating children mount every year. For 90% of people, term life is what they should buy. Term is simple and cheap and it provides coverage for a lot of personal needs that will fade away over time. Term life does not have lots of bells and whistles which is why it is cheap. If you die, your beneficiaries get the money.

How Much Term Life Insurance Do You Need?

Some brokers suggest 7 times annual earnings; others say 10 times. The best way is to look at your own family situation. Who do you want to protect in case you pass away early? Many people need term life insurance to cover the mortgage, college bills and other family needs. Then, how much annual income will your family need on a day to day basis?

What Sort Of Term Life Is Recommended?

Mostly recommended is level term life insurance where the premium remains constant. Most life insurance companies sell this level term life insurance and increase the premiums after the first 10 or 20 years has expired.

Term policies can run 10 or 20 years or to age 100, with the 10 and 20 year term being the most popular. If it turns out you don’t need the policy for that length of time, you can drop some or all of it.

Finding a good online broker to do the shopping for you is more than half the battle in getting the best deal for your term life insurance coverage.

ETF i.e. Exchange Traded Funds have become a very popular way for people to attain their financial goals. While they have been around in different forms since 1993 but, recently ETF’s have got the attention of most of the markets. So what’s there in the ETFs that other financial vehicles are unable to offer people with.

ETFs are really unique and also present many benefits as compared to any other traditional ways of investment. But the matter of fact is that with such a uniqueness and benefits it also carries a new kind of disadvantage as well. ETF is nothing but a group of securities which track recognized indexes. They have similarities with indexed mutual funds as they also offer shares in a very professional and managed portfolios of stocks or bonds. But the difference that they carry from mutual funds is that ETFs are traded more like stocks. Instead of mutual funds where transactions occur at the close of the market, ETFs are traded all day long. The price of  ETFs are decided by the demand and supply in the market.

Two biggest upper hands that ETFs offer are variety and diversification. ETFs gives one a way to keep their investments diversified through a broad range of markets. They allow you to select an industry where you want to invest as they mirror major indexes, niche markets and sometimes even the specific countries and thus saves one from the disturbance of purchasing the stocks individually.  It also makes it easier to allocate assets into selected groups. One of the biggest pluses of investing in the ETF’s is the availability of specialized ETFs which can easily be used in the allocation targets for bond mix and stock in one’s portfolio. This is the diversification of your investment, which is really spreading your investment money into various asset classes, which adds balance to one’s portfolio. Diversification doesn’t guarantee a profit but it is able to reduce volatility of anyone’s portfolio. -330

They are not the best idea for people who invest small amounts of money but, ETFs may be very suitable for people with large investment amounts. ETFs even offer better tax benefits than most of the available mutual funds.

Of course investment in ETF’s involves some risk, which must be taken care of before investing. These risks include market risk, global and economic developments in economy. Along with these one must also take into consideration the trading expenses while investing in ETFs.

With the growth in the popularity of ETFs there will also be a rise in the types of funds offered. Investment has never been perfect but the broad range of benefits provided by the ETFs make it a very good option for investment. So have a happy time investing in the ETFs…