This Stunning Modern House Was Built With Fire Safety in Mind

The record-breaking 2020 fire season has seen huge wildfires tear across California. In fact, five of the six largest fires ever recorded in the state have occurred this year, endangering residents, prompting evacuations and leading to thousands of lost buildings.

Unfortunately, researchers are forecasting even longer, more extreme wildfire seasons in the years to come — which means fire safety is now fast becoming a feature more treasured than even the most extravagant of amenities. And home builders are starting to cater to that need, coming up with ingenious ways to ‘fire-proof’ their projects.

One stunning example of that is this newly-built $5 million home in Marin County, Calif. that prioritizes fire safety — something that’s likely to become a new standard for million dollar homes throughout the Golden State.

Newly-built home in Marin County, CA focuses on fire safety
Newly-built home in Marin County, CA. Image credit: Thomas Henthorne

The builder picked all of the outdoor finishes with fire safety in mind, using only steel, glass and concrete. Even the decks are made from Fibergrate (a type of molded fire-resistant fiberglass and stone).

In fact, the only wood you’ll find in this home is the wide-plank engineered oak floors. As expected, there is also a fire suppression system throughout the home.

Newly-built home in Marin County, CA focuses on fire safety
Newly-built home in Marin County, CA. Image credit: Thomas Henthorne

Yet fire safety is not the only area in which this home excels. With its dramatic walls of glass, soaring steel beamed ceilings, and high-end designer finishes, the property is a stunning example of modern 21st century architecture.

Set in the coveted Country Club neighborhood of San Rafael — roughly 11 miles north of San Francisco — the house boasts a modern industrial design, with its walls of glass opening up the indoor areas to the outdoor greenery and flooding the home with sunlight and captivating views. The space is anchored by a stunning ultra-modern kitchen and features wide-plank oak flooring and a modern fireplace.

The house boasts a modern industrial design with soaring steel beamed ceilings.
The house boasts a modern industrial design with soaring steel beamed ceilings. Image credit: Thomas Henthorne
Walls of glass open up to beautiful nature views and flood the home with light
Walls of glass open up to beautiful nature views and flood the home with light. Image credit: Thomas Henthorne
dining room of an ultra-modern house in california
Walls of glass open up to beautiful nature views and flood the home with light. Image credit: Thomas Henthorne

The fire-resistant home comes with 4 bedrooms, 3.5 bathrooms, and quite a few ultra-modern features. It has its own solar system (powered by 28 solar panels) and battery back up systems for when the power is out, and has been outfitted with smart home technology like a Doorbird Entry System, Nest thermostats, smart lighting, automatic blinds and more.

Adding to that wow factor is a dramatic, Instagram-worthy foyer at the entrance, which has ‘living walls’ of exotic plants on both sides. Same goes for the outdoor pool, which comes with a built-in spa, automatic safety cover and gas heater.

living wall in the foyer of a luxury home
Dramatic entrance has walls of greenery on both sides. Image credit: Thomas Henthorne
The fire-resistant house features plenty spaces to entertain guests
The fire-resistant house features plenty spaces to entertain guests. Image credit: Thomas Henthorne
modern bedroom with glass walls overlooking the pool
Walls of glass open up to beautiful nature views and flood the home with light. Image credit: Thomas Henthorne
Newly-built home in Marin County, CA
Newly-built home in Marin County, CA. Image credit: Thomas Henthorne

The home is currently on the market with a $4,995,000 price tag. Thomas Henthorne with Golden Gate Sotheby’s International Realty is exclusively representing the property.

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The post This Stunning Modern House Was Built With Fire Safety in Mind appeared first on Fancy Pants Homes.

Source: fancypantshomes.com

Have You Met Mr. Market?

Do you know the allegory of Mr. Market? This useful parable—created by Warren Buffett’s mentor—might change everything you think about the stock market, its daily prices, and the endless news cycle (and blogs?!) built upon it.

The Original Mr. Market

The imaginary investor named “Mr. Market” was created by Benjamin Graham in his 1949 book The Intelligent Investor. Graham, if you’re not familiar, was the guy who taught Warren Buffett about securities analysis and value investing. Not a bad track record.

Graham asks the readers of his book to imagine that they have a business partner: a man named Mr. Market. On some days, Mr. Market arrives at work full of enthusiasm. Business is good and Mr. Market is wildly happy. So happy, in fact, that he wants to buy the reader’s share of the business.

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But on other days, Mr. Market is incredibly depressed. The business has hit a bump in the road. Mr. Market will do anything to sell his own shares of the business to the reader.

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Of course, the reader is always free to decline Mr. Market’s offers. And the reader certainly should feel wary of Mr. Market. After all, he is irrational, emotional, and moody. It seems he does not have good business judgement. Graham describes him as having, “incurable emotional problems.”

How can Mr. Market’s feelings fluctuate so quickly? Rather than taking an even emotional approach to business highs and lows, Mr. Market reacts strongly to the slightest bit of news.

If anything, the reader could probably find a way to take advantage of Mr. Market’s over-reactions. The reader could buy from Mr. Market when he’s feeling overly pessimistic and sell to Mr. Market when he’s feeling unjustifiably euphoric. This is one of the basic principles behind value investing.

But Mr. Market is a metaphor

Of course, Mr. Market is an imaginary investor. Yet countless readers have felt that Mr. Market acts as a perfect metaphor for the market fluctuations in the real stock market.

The stock market will come to you with a different price every day. The market will hear good news from a business and countless investors will look to buy that business’s stock. Will you sell to them? But a negative headline will send the market tumbling. Investors will sell. Please, they plead, will you buy my shares?!

Don’t like today’s price? You’ll get a new one tomorrow.

Is this any way to make rational money decisions? By buying while manic and selling while depressive? Do these daily market fluctuations relate to the true intrinsic value of the businesses they represent?

“Never buy something from someone who is out of breath”

Burton Malkiel

There’s a reason why Benjamin Graham built Mr. Market to resemble an actual manic-depressive. It’s an unfortunate affliction. And sadly, those afflicted are often untethered from reality.

The stock market is nothing more than a collection of individuals. These individuals can fall prey to the same emotional overreactions as any other human. Mr. Market acts as a representation of those people.

“In the short run, the stock market is a voting machine. Yet, in the long run, it is a weighing machine.”

Benjamin Graham

Votes are opinions, and opinions can be wrong. That’s why the market’s daily price fluctuations should not affect your long-term investing decisions. But weight is based on fact, and facts don’t lie. Over the long run, the true weight (or value) of a company will make itself apparent.

Warren Buffett’s Thoughts

Warren Buffett is on the record speaking to Berkshire Hathaway shareholders saying that Mr. Market is his favorite part of Benjamin Graham’s book.

Why? Because:

If you cannot control your emotions, you cannot control your money.

Warren Buffett

Of course, Buffett is famous for skills beyond his emotional control. I mean, the guy is 90 years old and continues his daily habits of eating McDonalds and reading six hours of business briefings. That’s fame-worthy.

Warren Buffett

But Buffett’s point is that ignoring Mr. Market is 1) difficult but 2) vitally important. Your mental behavior is just as important as your investing choices.

For example: perhaps your business instincts suggested that Amazon was a great purchase in 1999—at about $100 per share. It was assuredly overvalued at that point based on intrinsic value, but your crystal ball saw a beautiful future.

But Buffett’s real question for you would be: did you sell Amazon when the Dot Com bubble burst (and the stock fell to less than $10 per share)? Did Mr. Market’s depression affect you? Or did your belief in the company’s long-term future allow to hold on until today—when the stock sits at over $3000 per share.

The Woefully Ignorant Sports Fan

I know about 25 different versions of this guy, so I bet you know at least one of them. I’m talking about the Woefully Ignorant Sports Fan, or WISF for short.

The WISF is a spitting image of Mr. Market.

When Lebron James has a couple bad games, the WISF confidently exclaims,

“The dude is a trash basketball player. He’s been overhyped since Day 1. I’m surprised he’s still in the starting lineup.”

Skip Bayless: ESPN's different rules for me and Stephen Smith
Stephen A. Smith and Skip Bayless: Two Gods of the WISF world

Wow! That’s a pretty outrageous claim. But when Lebron wins the NBA finals and takes home another First-Team All-NBA award, the WISF changes his tune.

“I’m telling you, that’s why he’s the Greatest of All Time. The GOAT. Love him or hate him, you can’t deny he’s the King.”

To the outside observer, this kind of flip-flop removes any shred of the WISF’s credibility. And yet the WISF flip-flops constantly, consistently, and without a hint of irony. It’s simply his nature.

Now think about the WISF alongside Mr. Market. What does the WISF actually tell us about Lebron? Very little! And what does Mr. Market tell us about the true value of the companies on the stock market? Again, very little!

We should not seek truth in the loud pronouncements of an emotional judge. This is another aphorism from The Intelligent Investor book.

But I Want More Money!

Just out of curiosity, I logged into my Fidelity account in late March 2020. The COVID market was at the bottom of its tumble, and my 401(k) and Roth IRA both showed scarring.

Ouch. Tens of thousands of dollars disappeared. Years of saving and investing…poof. This is how investors lose heart. Should I sell now and save myself further losses?

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No! Absolutely not! Selling at the bottom is what Mr. Market does. It’s emotional behavior. It’s not based on rationality, not on the intrinsic values of the underlying businesses.

My pessimism quickly subsided. In fact, I began to feel silver linings. Why?

I’m still in the buying phase of my investing career. I buy via my 401(k) account every two weeks. And I buy via my Roth IRA account every month. I’ve never sold a stock. The red ticks in the image below show my two-week purchasing schedule so far in 2020.

Buy when high, buy when low. That’s the Lazy Portfolio way!

If you’re investing for later in life, then your emotions should typically be the opposite of the market’s emotions. If the market is sad and prices are low and they want to sell…well, great! A low price for you increases your ability to profit later.

And Benjamin Graham agrees. He doesn’t think you should ignore Mr. Market altogether, but instead should do business with him only when it’s in your best interest (ooh yeah!).

“The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him, but only to the extent that it serves your interest.”

Benjamin Graham

If you log into your investment accounts and see that your portfolio value is down, take a step back and consider what it really means. You haven’t lost any money. You don’t lock in any losses unless you sell.

The only two prices that ever matter are the price when you buy and the price when you sell.

Mr. Market in the News

If you pay close attention to the financial news, you’ll realize that it’s a mouthpiece for the emotional whims of Mr. Market. Does that include blogs, too? In some cases, absolutely. But I try to keep the Best Interest out of that fray.

For example, here are two headlines from September 29, 2020:

Just imagine if these two headlines existed in another space. “Bananas—A Healthy Snack That Prevents You From Ever Dying” vs. “Bananas—A Toxic Demon Food That Will Kill Your Family.”

The juxtaposition of these two headlines reminds me of Jason Zweig’s quote:

“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap).”

Jason Zweig

More often than not, reality sits somewhere between unsustainable optimism and unjustified pessimism. As an investor, your most important job is to not be duped by this emotional rollercoaster.

Investing Based on Recent Performance

Out of all the questions you send me (and please keep sending them!), one of the most common is:

“Jesse – I’m deciding between investment A, investment B, and investment C. I did some research, and B has the best returns over the past three years. So I should pick B, right?”

Wonderful Readers

Great question! I’ve got a few different answers.

What is Mr. Market saying?

Let’s look at the FANG+ index. The index contains Twitter, Tesla, Apple, Facebook, Google, Netflix, Amazon, NVIDIA, and the Chinese companies Baidu and Alibaba. Wow! What an assortment of popular and well-known companies!

The recent price trend of FANG+ certainly represents that these companies are strong. The index has doubled over the past year.

Mr. Market is euphoric!

And what do we think when Mr. Market is euphoric?

How do you make money?

Another one of my favorite quotes from The Intelligent Investor is this:

“Obvious prospects for physical growth in a business do not translate into obvious profits for investors”

Benjamin Graham

You make money when a company’s stock price is undervalued compared to its prospects for physical growth. You buy low (because it’s undervalued), the company grows, the stock price increases, you sell, and boom—you’ve made a profit.

I think most people would agree that the FANG+ companies all share prospects for physical growth. But, are those companies undervalued? Alternatively, have their potentials for future growth already been accounted for in their prices?

It’s just like someone saying, “I want a Ferrari! It’s such a famous car. How could it not be a great purchase?”

The statement is incomplete. How much are you paying for the Ferrari? Is it undervalued, only selling for $10,000? Or is it overvalued, selling at $10 million? The product itself—whether a car or a company—must be judged against the price it is selling for.

Past Results Do Not Guarantee Future Performance

If investing were as simple as, “History always repeats itself,” then writing articles like this wouldn’t be worthwhile. Every investment company in the world includes a disclaimer: “Past results do not guarantee future performance.”

Before making a specific choice like “Investment B,” one should understanding the ideas of results-oriented thinking and random walks.

Farewell, Mr. Market

Mr. Market, like the real stock market, is an emotional reactionary. His daily pronouncements are often untethered from reality. Don’t let him affect you.

Instead, realize that only two of Mr. Market’s thoughts ever matter—when you buy from him and when you sell to him. Do business with him, but make sure it’s in your best interest (oh yeah!). Everything else is just noise.

If the thoughts of Benjamin Graham, Warren Buffett, and the Best Interest haven’t convinced you, just look at the financial news or consider the Woefully Ignorant Sports Fan. Rapidly changing opinions rarely reflect true reality.

Stay rational and happy investing!

If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

Source: bestinterest.blog

How Does Coronavirus Affect Life Insurance?

Coronavirus hasn’t entirely ended life as we knew it, but it’s certainly caused changes, some of which are likely to be with us for a very long time.

For some the coronavirus is literally a matter of life and death, and it raises an important question: how does coronavirus affect life insurance?

No one likes to think about the possibility of losing their life, or that of a loved one to this virus, but for over 150,000 families here in the US, it has turned out to be a reality.

Let’s examine the impact it may have on your existing policies, and perhaps more importantly, how it may affect applications for new life insurance coverage.

How Does Coronavirus Affect Life Insurance You Already Have?

There’s good news if you already have a life insurance policy in place. Generally speaking, the insurance company will pay a death benefit even if you die from the coronavirus. With few exceptions, life insurance policies will pay for any cause of death once the policy is in force. There are very few exceptions to this rule, such as acts of war or terrorism. Pandemics are not a known exception.

If you’re feeling at all uncomfortable about how the coronavirus might impact your existing life insurance policies, contact the company for clarification. Alternatively, review your life insurance policy paying particular attention to the exclusions. If there’s nothing that looks like death due to a pandemic, you should be good to go.

But once the policy is in place, there are only a few reasons why the insurance company can deny a claim:

  • Non-payment of premiums – if you exceed the grace period for the payment, which is generally 30 or 31 days, your policy will lapse. But even if it does, you may still be able to apply for reinstatement. However, after a lapse, you won’t be covered until payment is made.
  • Providing false information on an application – if you fail to disclose certain health conditions that result in your death, the company can deny payment for insurance fraud. For example, if you’re a smoker, but check non-smoker on the application, payment of the death benefit can be denied if smoking is determined to be a contributing cause of death.
  • Death within the first two years the policy is in force – often referred to as the period of contestability, the insurance company can investigate the specific causes of death for any reason within the first two years. If it’s determined that death was caused by a pre-existing condition, the claim can be denied.

None of these are a serious factor when it comes to the coronavirus, unless you tested positive for the virus prior to application, and didn’t disclose it. But since the coronavirus can strike suddenly, it shouldn’t interfere with your death benefits if it occurs once your policy is already in force.

How Does Coronavirus Affect Life Insurance You’re Applying For?

This is just a guess on my part, but I think people may be giving more thought to buying life insurance now they may have at any time in the past. The coronavirus has turned out to be a real threat to both life and health, which makes it natural to consider the worst.

But whatever you do, don’t let your fear of the unknown keep you from applying for coverage. Though you may be wishing you bought a policy, or taken additional coverage, before the virus hit, now is still the very best time to apply. And that’s not a sales pitch!

No matter what’s going on in the world, the best time to apply for life insurance is always now. That’s because you’re younger and likely healthier right now than you’ll ever be again. Both conditions are major advantages when it comes to buying life insurance. If you delay applying, you’ll pay a higher premium by applying later when you’re a little bit older. But if you develop a serious health condition between now and then, not only will your premium be higher, but you may even be denied for coverage completely.

Don’t let fears of the coronavirus get in your way. If you believe you need life insurance, or more of it, apply now.

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That said, the impact of the coronavirus on new applications for life insurance is more significant than it is for existing policies.

The deaths of more than 100,000 people in the US is naturally having an effect on claims being paid by life insurance companies. While there’s been no significant across-the-board change in how most life insurance companies evaluate new applications, the situation is evolving rapidly. Exactly how that will play out going forward is anyone’s guess at the moment.

What to Expect When Applying for Life Insurance in the Age of the Coronavirus

If you’re under 60 and in good or excellent health, and not currently showing signs of the virus, the likelihood of being approved for life insurance is as good as it’s ever been. You can make an application, and not concern yourself with the virus.

That said, it may be more difficult to get life insurance if you have any conditions determined to put you at risk for the coronavirus, as determined by the Centers for Disease Control (CDC).

These include:

  • Ages 65 and older.
  • Obesity, defined as a body mass index of 40 or greater.
  • Certain health conditions, including asthma, chronic kidney disease and being treated by dialysis, lung disease, diabetes, hemoglobin disorders, immunocompromised, liver disease, and serious heart conditions.
  • People in nursing homes or long-term care facilities.

Now to be fair, each of the above conditions would require special consideration even apart from the coronavirus. But since they’re known coronavirus risk factors, the impact of each has become more important in the life insurance application process.

If any of these conditions apply to you, the best strategy is to work with insurance companies that already specialize in those categories.

There are insurance companies that take a more favorable view of people with any of the following conditions:

  • Over 65
  • Kidney disease
  • Certain lung diseases, including Asthma
  • Liver disease
  • Certain heart conditions

More Specific Application Factors

But even with insurance companies that specialize in providing coverage for people with certain health conditions, some have introduced new restrictions in light of the coronavirus.

For example, if you have a significant health condition and you’re over 65, you may find fewer companies willing to provide coverage.

The insurance company may also check your records for previous coronavirus episodes or exposures. Expect additional testing to determine if you’re currently infected. Most likely, the application process will be delayed until the condition clears, unless it has resulted in long-term complications.

Travel is another factor being closely examined. The CDC maintains an updated list of travel recommendations by country. If you’ve recently traveled to a high-risk country, or you plan to do so in the near future, you may be considered at higher risk for the coronavirus. How each insurance company handles this situation will vary. But your application may be delayed until you’ve completed a recommended quarantine period.

Other Financial Areas to Consider that May be Affected

Since the coronavirus is still very much active in the US and around the world, financial considerations are in a constant state of flux. If you’re concerned at all about the impact of the virus on other insurance types, you should contact your providers for more information.

Other insurance policies that my warrant special consideration are:

  • Employer-sponsored life insurance. There’s not much to worry about here, since these are group plans. Your acceptance is guaranteed upon employment. The policy will almost certainly pay the death benefit, even if your cause of death is related to the virus.
  • Health insurance. There’s been no media coverage of health insurance companies refusing to pay medical claims resulting from the coronavirus. But if you’re concerned, contact your health insurance company for clarification.

Action Steps to Take in the Age of the Coronavirus

Many have been gripped by fear in the face of the coronavirus, which is mostly a fear of the unknown. But the best way to overcome fear is through positive action.

I recommend the following:

1. Be proactive about your health.

Since there is a connection between poor health and the virus, commit to improving your health. Maintain a proper diet, get regular exercise, and follow the CDC coronavirus guidelines on how to protect yourself.

2. If you need life insurance, buy it now.

Don’t wait for a bout with the virus to take this step. It’s important for a number of reasons and the consequences of not having it can be severe. Compare the best life insurance companies to get started.

3. Consider no medical exam life insurance.

If you don’t have the virus, and you want to do a policy as quickly as possible, no medical exam life insurance will be a way to get coverage almost immediately.

4. Look for the lowest cost life insurance providers.

Low cost means you can buy a larger policy. With the uncertainty caused by the coronavirus, having enough life insurance is almost as important as having a policy at all. Look into cheap term life insurance to learn more about what you can afford.

5. Keep a healthy credit score.

Did you know that your credit score is a factor in setting the premium on your life insurance policy? If so, you have one more reason to maintain a healthy credit score. One of the best ways to do it is by regularly monitoring your credit and credit score. There are plenty of services available to help you monitor your credit.

6. Make paying your life insurance premiums a priority

This action step rates a special discussion. When times get tough, and money is in short supply, people often cancel or reduce their insurance coverage. That includes life insurance. But that can be a major mistake in the middle of a pandemic. The coronavirus means that maintaining your current life insurance policies must be a high priority.

The virus and the uncertainty it’s generating in the economy and the job market are making finances less stable than they’ve been in years. You’ll need to be intentional about maintaining financial buffers.

7. Start an emergency fund.

If you don’t already have one place, start building one today. If you already have one up and running, make a plan to increase it regularly.

You should also do what you can to maximize the interest you’re earning on your emergency fund. You should park your fund in a high-interest savings account, some of which are paying interest that’s more than 20 times the national bank average.

8. Get Better Control of Your Debts

In another direction, be purposeful about paying down your debt. Lower debt levels translate into lower monthly payments, and that improves your cash flow.

If you don’t have the funds to pay down your debts, there are ways you can make them more manageable.

For example, if you have high-interest credit card debt, there are balance transfer credit cards that provide a 0% introductory APR for up to 21 months. By eliminating the interest for that length of time, you’ll be able to dedicate more of each payment toward principal reduction.

Still another strategy for lowering your debts is to do a debt consolidation using a low interest personal loan. Personal loans are unsecured loans that have a fixed interest rate and monthly payment, as well as a specific loan term. You can consolidate several loans and credit cards into a single personal loan for up to $40,000, with interest rates starting as low as 5.99%.

Final Thoughts

We’ve covered a lot of ground in this article. But that’s because the coronavirus comes close to being an all-encompassing crisis. It’s been said the coronavirus is both a health crisis and an economic crisis at the same time. It requires strategies on multiple fronts, including protecting your health, your finances, and your family’s finances when you’re no longer around to provide for them.

That’s where life insurance comes into the picture. The basic process hasn’t changed much from the coronavirus, at least not up to this point. But that’s why it’s so important to apply for coverage now, before major changes are put into effect.

The post How Does Coronavirus Affect Life Insurance? appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Term Life vs. Whole Life Insurance: Which Is Best for You?

A smiling mother lays on her bed with two smiling young children. They are looking at a tablet together.

Taking out a life insurance policy is a great
way to protect your family’s financial future. A policy can also be a useful
financial planning tool. But life insurance is a notoriously tricky subject to
tackle.

One of the hardest challenges is deciding
whether term life or whole life insurance is a better fit for you.

Not sure what separates term life from whole
life in the first place? You’re not alone. Insurance industry jargon can be
thick, but we’re here to clear up the picture and make sure you have all the
information you need to make the best decision for you and your family.

Life Insurance = Financial
Protection for Your Family

Families have all sorts of expenses: mortgage payments, utility bills, school tuition, credit card payments and car loan payments, to name a few. If something were to happen and your household unexpectedly lost your income or your spouse’s income, your surviving family might have a difficult time meeting those costs. Funeral expenses and other final arrangements could further stress your family’s financial stability.

That’s where life insurance comes in. Essentially, a policy acts as a financial safety net for your family by providing a death benefit. Most forms of natural death are covered by life insurance, but many exceptions exist, so be sure to do your research. Death attributable to suicide, motor accidents while intoxicated and high-risk activity are often explicitly not covered by term or whole life policies.

If you die while covered by your life
insurance policy, your family receives a payout, either a lump sum or in
installments. This is money that’s often tax-free and can be used to meet
things like funeral costs, financial obligations and other personal expenses.
You get coverage in exchange for paying a monthly premium, which is often
decided by your age, health status and the amount of coverage you purchase.

Don’t
know how much to buy? A good rule of thumb is to multiply your yearly income by
10-15, and that’s the number you should target. Companies may have different
minimum and maximum amounts of coverage, but you can generally find a
customized policy that meets your coverage needs.

In addition to the base death benefit, you can enhance your coverage through optional riders. These are additions or modifications that can be made to your policy—whether term or whole life—often for a fee. Riders can do things like:

  • Add coverage for disability or deaths not commonly
    covered in base policies, like those due to public transportation accidents.
  • Waive future premiums if you cannot earn an income.
  • Accelerate your death benefit to pay for medical bills
    your family incurs while you’re still alive.

Other
riders may offer access to membership perks. For a fee, you might be able to
get discounts on goods and services, such as financial planning or health and
wellness clubs.

One
final note before we get into the differences between term and life: We’re just
covering individual insurance here. Group insurance is another avenue for
getting life insurance, wherein one policy covers a group of people. But that’s
a complex story for a different day.

Term Life Policies Are Flexible

The “term” in “term life” refers to
the period of time during which your life insurance policy is active. Often,
term life policies are available for 10, 20, 25 or 30 years. If you die during
the term covered, your family will be paid a death benefit and not be charged any future
premiums, as your policy is no longer active. So, if you were to die in year 10
of a 30-year policy, your family would not be on the hook for paying for the
other 20 years.

Typically, your insurance cannot be canceled
as long as you pay your premium. Of course, if you don’t make payments, your coverage will lapse, which typically
will end your policy. If you want to exit a policy you can cancel during an
introductory period. Generally speaking, nonpayment of premiums will not affect your credit score, as
your insurance provider is not a creditor. Given that, making payments on your
life policy won’t raise your credit score either.

The major downside of term life is that your
coverage ceases once the term expires. Ultimately, once your term expires, you need to reassess
your options for renewing, buying new coverage or upgrading. If you were to die
a month after your term expires, and you haven’t taken out a new policy, your
family won’t be covered. That’s why some people opt for another term policy to
cover changing needs. Others may choose to convert their term life into a
permanent life policy or go without coverage because the same financial
obligations—e.g., mortgage payments and college costs—no longer exist. This
might be the case in your retirement.

The Pros and Cons of Term Life

Even though term life insurance lasts for a
predetermined length of time, there are still advantages to taking out such a
policy:

  • Comparably lower cost: Term life is usually the more affordable type of life insurance, making it the easiest way to get budget-friendly protection for your family. A woman who’s 34 years old can buy $1 million in coverage through a 10-year term life policy for less than $50 a month, according to U.S. News and World Report. A man who’s 42 can purchase $1 million in coverage through a 30-year term for just over $126 a month.
  • Good choice for mid-term financial planning: Lots of families take out a term life policy to coincide with major financial responsibilities or until their children are financially independent. For example, if you have 20 years left on your mortgage, a term policy of the same length could provide extra financial protection for your family.
  • Upgrade if you want to: If you take out a term life policy, you’ll likely also get the option to convert to a permanent form of life insurance once the term ends if your needs change. Just remember to weigh your options, as your rates will increase the older you get. Buying another term life policy at 50 years old may not represent the same value as a whole life policy at 30.

There are some drawbacks to term life:

  • Coverage is temporary: The biggest downside to
    term life insurance is that policies are active for only so long. That means
    your family won’t be covered if something unexpected happens after your insurance
    expires.
  • Rising premiums: Premiums for term life
    policies are often fixed, meaning they stay constant over the duration of the
    policy. However, some
    policies may be structured in a way that seems less costly upfront but feature
    steadily increasing premiums as your term progresses.

Young Families Often Opt for Term Life

The rate you pay for term life insurance is
largely determined by your age and health. Factors outside your control may influence the rates you
see, like demand for life insurance. During a pandemic, you might be paying
more if you take a policy out amid an outbreak.

Most consumers seeking term life fall into
younger and healthier demographics, making term life rates among the most
affordable. This is because
such populations present less risk than a 70-year-old with multiple chronic
conditions. In the end, your rate depends on individual factors. So if
you’re looking for affordable protection for your family, term life might be
the best choice for you.

Term life is also a great option if you want a
policy that:

  • Grants you some flexibility for
    future planning, as you’re
    not locked into a lifetime policy.
  • Can replace your or your spouse’s
    income on a temporary basis.
  • Will cover your children until
    they are financially stable on their own.
  • Is active for the same length as
    certain financial responsibilities—e.g., a car loan or remaining years on a
    mortgage.

Whole Life Insurance Offers
Lifetime Coverage

Like with term life policies, whole life
policies award a death benefit when you pass. This benefit is decided by the
amount of coverage you purchase, but you can also add riders that accelerate
your benefit or expand coverage for covered types of death.

The biggest difference between term life and
whole life insurance is that the latter is a type of permanent life insurance.
Your policy has no expiration date. That means you and your family benefit from
a lifetime of protection without having to worry about an unexpected event
occurring after your term has ended.

The Pros and Cons of Whole Life

As if a lifetime of coverage wasn’t enough of
advantage, whole life insurance can also be a highly useful financial planning
tool:

  • Cash value: When you make a premium payment on
    your whole life policy, a portion of that goes toward an account that builds
    cash up over time. Your
    family gets this amount in addition to the death benefit when their claim is
    approved, or you can access it while living. You pay taxes only when the money
    is withdrawn, allowing for tax-deferred growth of cash value. You can
    often access it at any time, invest it, or take a loan out against it. However, be aware that anything
    you take out and don’t repay will eventually be subtracted from what your
    family receives in the end.
  • Dividend payments: Many life insurance
    companies offer whole life policyholders the opportunity to accrue dividends
    through a whole life policy. This works much like how stocks make dividend
    payments to shareholders from corporate profits. The amount you see through a dividend payment is
    determined by company earnings and your provider’s target payout ratio—which is
    the percentage of earnings paid to policyholders. Some life insurance
    companies will make an annual dividend payment to whole life policyholders that
    adds to their cash value.

Some potential downsides to consider include:

  • Higher cost: Whole life is more expensive than
    term life, largely because of the lifetime of coverage. This means monthly
    premiums that might not fit every household budget.
  • Interest rates on cash value loans: If you need emergency extra
    money, a cash value loan may be more appealing than a standard bank loan, as
    you don’t have to go through the typical application process. You can also get
    lower interest rates on cash value loans than you would with private loans or
    credit cards. Plus, you don’t have to pay the balance back, as you’re basically
    borrowing from your own stash. But if you don’t pay the loan back, it will be
    money lost to your family.

Whole Life Is Great for Estate Planning

Who stands to benefit most from a whole life
policy?

  • Young adults and families who can
    net big savings by buying a whole life policy earlier.
  • Older families looking to lock in
    coverage for life.
  • Those who want to use their policy
    as a tool for savings or estate planning.

To that last point, whole life policies are particularly advantageous in overall financial and estate planning compared to term life. Cash value is the biggest and clearest benefit, as it can allow you to build savings to access at any time and with little red tape.

Also,
you can gift a whole life policy to a grandchild, niece or nephew to help
provide for them. This works by you opening the policy and paying premiums for
a set number of years—like until the child turns 18. Upon that time, ownership
of the policy is transferred to them and they can access the cash value that’s
been built up over time.

If you’re looking for another low-touch way to leave a legacy, consider opening a high-yield savings account that doesn’t come with monthly premium payments, or a normal investment account.

What to Do Before You Buy a
Policy

Make sure you take the right steps to finding
the best policy for you. That means:

  • Researching different life insurance companies and their policies, cost and riders. (You can start by reading our review of Bestow.)
  • Balancing your current and long-term needs to best protect your family.
  • Buying the right amount of coverage.

If you’re interested in taking next steps, talk to your financial advisor about your specific financial situation and personal needs.

Infographic explaining the difference between term and whole life insurance policies.

The post Term Life vs. Whole Life Insurance: Which Is Best for You? appeared first on Credit.com.

Source: credit.com

Newly Renovated, 1915-Built Townhouse in Park Slope Asks $4.4 Million

A four-bedroom townhouse with park views and tons of charm has recently hit the market, and we’re dying to tell you all about it. The listing, brought to market by Compass’ Michael J. Franco, is right next to Prospect Park, Brooklyn’s second largest park, and has plenty of outdoor space (and a rooftop deck to boot).

The townhouse sits in one of Brooklyn’s trendiest, most desirable neighborhoods — Park Slope — with its leafy streets lined with brick and brownstone townhouses, many of which were built near the turn of the 20th century and have been lovingly updated over the decades by young families migrating from Manhattan. Much like its neighboring properties, the 2,600-square-foot townhome at 15 Prospect Park was originally built more than a century ago in 1915 and retains its old-world charm — but has been carefully updated to meet modern standards of living.

beautiful townhouse in prospect park, Brooklyn
Park Slope townhouse on the market for $4.4 million. Image credit: Compass//Michael J. Franco

With 4 bedrooms, 3.5 baths, a generously sized living room, and a finished basement, the Brooklyn townhouse also comes with a few rare features for a New York home: ample outdoor space and private parking (that includes a private garage and its own driveway).

The layout is split on three levels, with the first floor housing a large living room and open dining room — both with distinctive pre-war features like classic moldings and arches — and a renovated kitchen that opens up to a lovely terrace.

inside a beautiful pre-war townhouse in Park Slope, Brooklyn
Beautiful living space with distinctive pre-war features like arches and moldings. Image credit: Compass//Michael J. Franco
dining room of a pre-war townhouse in park slope, Brooklyn
Beautiful living space with distinctive pre-war features like arches and moldings. Image credit: Compass//Michael J. Franco
renovated kitchen in Brooklyn townhouse
The renovated kitchen. Image credit: Compass//Michael J. Franco
lovely terrace of a pre-war townhouse in Park Slope, Brooklyn
The Park Slope townhouse has a lovely terrace. Image credit: Compass//Michael J. Franco

The second floor is home to 3 bedrooms and a sizeable landing which is perfect for either a library or a home office, while the third floor is dedicated to the primary bedroom suite and its massive walk-in closet, renovated bath with skylights and soaring ceilings, with a separate sitting area/den. The third level also provides access to the townhouse’s own rooftop deck, which adds more outdoor space and looks like a perfect place to entertain guests.

bedroom of a charming brooklyn townhouse in park slope
Bedroom opens up to Prospect Park views. Image credit: Compass//Michael J. Franco
bathroom with skylight in brooklyn townhouse
 Renovated bath with skylights and soaring ceilings. Image credit: Compass//Michael J. Franco
roof deck of a brooklyn townhouse in park slope
Rooftop deck of the $4.4 million townhouse in Park Slope, Brooklyn. Image credit: Compass//Michael J. Franco

The property is listed for $4,400,000 with Compass associate real estate broker Michael J. Franco.

More beautiful New York City homes

This Brooklyn Condo Has a Dreamy Backyard that Will Make You Forget You’re in the City
Trophy Apartment Once Owned by Composer Leonard Bernstein Asks $29.5 Million
These 5 Unique Listings Will Remind You of Everything that Makes NYC Real Estate Special
This $16M NYC Penthouse Has Unobstructed Views of Central Park and the Manhattan Skyline

The post Newly Renovated, 1915-Built Townhouse in Park Slope Asks $4.4 Million appeared first on Fancy Pants Homes.

Source: fancypantshomes.com