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June 24, 2022 • By Kevin Alvarez

Is My Employer’s Life Insurance Enough?

If you’re like a lot of people in the workforce, you might have signed up for your company’s life insurance program as soon as it became available. Registration was simple, and the insurance most likely costs you little or no money. Choosing to join might have been an easy decision.

But is basic life insurance through an employer enough to meet your needs? According to a survey, 29%1 of workers believe that it is. But you might be shocked to discover that it may not be.

How Does “Work Life Insurance” Work?

Employer-provided life insurance is a type of group life insurance because the plan covers everyone who chooses to participate at your company. Employers enter into a contract with a central insurance agency to provide life insurance coverage conveniently to all their employees.

Employer-paid life insurance often means that your company will pay the entire monthly bill for your insurance. But this isn’t always the case. In some instances, your employer will pay most of the cost, but you’ll still have to pay a small amount that’s typically deducted from your paycheck.

Why Do Employers Offer Life Insurance?

Group life insurance makes an excellent addition to an employee benefits package. Companies that offer free life insurance often have a hiring advantage over a business without a group plan.

One reason for the benefit’s popularity is that even workers with serious health issues usually find it easy to get insurance through group coverage. Everyone at the company automatically qualifies because the insurance company doesn’t mind accepting the risk of insuring a person with health challenges as long as most of the other insured coworkers are healthy.

How Much Does An Employer Provide?

The median coverage for a company employee is $20,000 or one year’s salary.1 Some companies may offer you a plan that pays two or three times your salary.

If you need more insurance, employers may give you the chance to purchase an additional amount of insurance through the company’s group plan. Even then, however, there are still a few points to consider before deciding whether employer-provided insurance meets all your coverage needs.

Does My Employer’s Life Insurance Meet My Needs?

Is the amount of coverage your employer offers enough for your family? Will they be able to get by on $20,000 or on the equivalent of one or two years of your salary?

One consideration may be whether you want enough insurance to help pay off your debts and provide for your children’s education. In addition, there may be other reasons why you need a larger insurance payout than what your employer’s insurance offers. For example, you may have an aging parent who relies on your income. In that case, you may want to factor in the cost of providing quality nursing care for that person after you’re gone. If you have questions about your needs, speak to a licensed agent.

Even if you are able to apply for more coverage through your employer-provide coverage, you may have to answer medical questions or get a physical. In that case, some medical conditions could prevent you from adding to your policy. Or you might be asked to pay more than you can afford.

Does My Employer-paid Life Insurance Carry Over From Job to Job?

Maybe the biggest drawback of relying entirely on life insurance from your employer is that, in most cases, the insurance provided by your company covers you only as long as you remain at the company. Typically, the insurance coverage stops when you leave, whether it’s because you resigned or because you were laid off or fired. If you see yourself leaving your job at some point in the future, you will need to think about how to replace the coverage you had. If you’re lucky, your new employer might also offer life coverage. But there’s no guarantee it will.

One Option: Convert Employer Insurance To Personal

One way around the problem of losing your life coverage when you leave your job is to convert your employer-provided life insurance to personal life insurance, if your company gives you that option. Usually, no medical exam is required when a person makes the change. But once your coverage goes from group to personal, you, rather than your employer, will be responsible for making your full monthly payments. And at that point you might be able to get a better deal on both the cost and the amount of coverage if you just leave the employer policy behind and shop around for a new insurance policy.

Should You Get Life Insurance Outside of Work?

The insurance provided by your employer is a great benefit. But it may not be enough. So, carefully calculate how much insurance your family needs and, if you need more coverage, consider purchasing a separate personal policy in addition to the group policy you have through your workplace.

SafeAmerica Can Help

Trustage Life Insurance

Life insurance can be a simple, affordable way to help protect your family if you pass away. It can provide your loved ones with money to help pay for things like mortgage or rent payments, day to day bills or medical and funeral bills. SafeAmerica has partnered with Trustage to provide you with affordable, member-only pricing on life insurance and more.

For more information and to get an instant online quote, click below. 

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1 2021 LIMRA’s Life Insurance Barometer, “Top Misconceptions About Life Insurance”. 

May 17, 2022 • By Kevin Alvarez

What Are Your Student Loan Repayment Options?

Even with news of payment extension to August 31, 2022, student loan repayment is on the  minds of millions of Americans.

If you're looking for a way to set up affordable student loan payments, there are income-based repayment plans that can help you get a handle on what you pay each month and provide a little room in your budget at the same time.

These plans let you make payments based on your income and the size of your family. Knowing what to expect, based on what you are making can relieve some of the pressure associated with paying back your student loans.

GreenPath Partner Experience Manager Doug Brady offers specific tips on student loan repayment options in the following webinar highlight:

The federal government uses incomes and family size to calculate your discretionary income. What is discretionary income? It's the difference between your annual income and 150% of the federal poverty guidelines for your family size.

Take a look at following plans, as well as your finances to understand the best repayment option for you.

As you look at student loan repayment plans based on your income, it's important to not only understand what the plans are but the difference between them. Remember, if you don't sign up for an income-based plan, you are automatically placed into the Standard Repayment Plan.

Revised Pay As You Earn (REPAYE)

Under REPAYE, monthly payments are calculated as 10% of your discretionary income. As with many federal student loans, you will have to update your income and family size annually. Another important distinction is that married tax filing status is NOT considered under a REPAYE plan. Also, no PLUS loans (Payments made to parents) can qualify for this option.

Pay As You Earn (PAYE)

Under a PAYE plan, your requirements will also be calculated as 10% of your discretionary income. As with REPAYE, you are required to update your family size and income each year. The difference between a REPAYE and PAYE is that married tax filing status is considered when your payments are calculated. Plus loans do not qualify for this plan either.

Income-based Repayment (IBR)

With an IBR plan, your payment amount will be based on either 10% or 15% of your discretionary income. The lower interest rate typically applies to new borrowers. You can also be considered for the lower rate if your federal student loan debt is high relative to your income and family size. The annual update of your family size and income is required with this option as well and married tax filing status IS considered. PLUS loans do not qualify for this plan.

Income-Contingent Repayment (IBR)

With an ICR, payments are based on 20% of discretionary income. In general, ICR plans are less popular than other income-based options because they often lead to higher monthly payments . Under an ICR, PLUS loans are considered  — the only option for loans from parents.

The best income-driven repayment plan can depend on your particular situation, the type of loans you have, when you borrow the money for your education.

As you look at your loan, financial situation, and other factors specific to you, you can use a tool from the federal government to simulate which income-based plan will offer the lowest monthly payments and the lowest total amount repaid over the life of the loan. Access the federal student aid site to help decide which option works best for you.

For more information on your student loan debt, a trusted nonprofit agency is a good place to start. There are resources available to help you understand loans, debt, and to help you set a path forward to financial health. You can also access valuable counseling.

Brought to you by GreenPath Financial Wellness

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SafeAmerica Student Loans

January 21, 2022 • By Kevin Alvarez

Take These Steps With Your Student Loans

What steps should you take with your student loans – even with the extension of federal student loan payment relief measures? The pause continues on federal student loan debt collection and reduced interest rates on federal student loans to 0% until May 2022.

For those with government-held loans, the relief options provide a record-long “breather.”

It’s not too early to take steps in preparation for the relief programs to end. Borrowers should be ready to make student loan payments, even as policy makers discuss further extensions in the face of an increased number of borrowers becoming delinquent or defaulting on their loans.

Listed here are steps to move forward as protections end.

Take Inventory

How’s your memory in the midst of the longest payment freeze of federal student debt in history? As a first step, take the time to document how much you owe and who to contact about student loan balances.

To get current loan balances, log onto the National Student Loan Data System (NSLDS). The portal will display how much you borrowed, the type of each loan and interest rate, payment history, and the current loan servicer for each loan.

For private student loan information, jog your memory with your credit report, which tracks current and past credit obligations, including student loans. AnnualCreditReport.com provides borrowers with a free report from the three main credit reporting agencies: Equifax, Experian and TransUnion.

These resources are also useful to track current student loan servicers – the organizations that handle payment and administration of your debt.

Track Your Interest Rates

Student loan interest rates vary depending on the loan type and other terms such as the date the funds were first disbursed to you. Again, NSLDS is the go-to resource to discover the interest rates of your federal student loans.

To track interest rates on private student debt, contact each lender for fixed and variable interest rates. SafeAmerica Credit Union offers private student loans through our partner, Lendkey. Click here for current rates and loan programs.

Look at Affordability of Payments

After the lengthy payment pause ends in May 2022, consider overall affordability. Based on your current monthly income and expenses, you might find that resuming payments for federal student loans will stress your budget.

Explore options to lower monthly payments by switching to an income-driven repayment plan.

Private student loan lenders typically don’t offer income-driven plans, but they might offer alternative repayment plans on a case-by-case basis.

Loan forgiveness might be an option. In the last few months, the Department of Education overhauled the Public Service Loan Forgiveness Program. Teachers, nurses, first responders, service members, those working in nonprofit hospitals and other nonprofit and public service workers can potentially have their student loans forgiven

Explore whether you can take advantage of the changes to the public servant loan forgiveness program..

See if Loan Consolidation is Possible

Again, if affordability is an issue, consolidating your student loans sets you up with a single monthly payment.

For most borrowers, consolidation lengthens the repayment period, so your cost of borrowing will actually be higher since you will likely pay more interest over the long run.

This option will depend on your specific financial picture, so be sure to research all the pros and cons of loan consolidation.

Take the Steps that Work for You

It's great to have the added breather for your budget!

Looking ahead to later this year when the payment pause ends, our partners at GreenPath is a useful source of independent information.

Student loan counselors can suggest ways to manage an individual situation if you are feeling overwhelmed as you look to the May 2022 deadline.

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit


 

Greenpath Financial Wellness

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