D.I.M.E.

I was talking with friends couple weeks ago about the life insurance coverage at their work.
It turned out that the company covers up to 100K, 
which is quite generous considering IRS says any company is not going to be able to deduct for coverage over 50K.
http://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Group-Term-Life-Insurance

So, is 100K enough?

It is certainly enough for a burial (~15K, not counting land plot) and cremation (~2K).
It is certainly not enough for to cover the 30-year mortgage for someone who purchased a house in OC within the last 5 years; or have children who are over the age of 10 and are planning to go to college.

D.I.M.E is a quick way to calculate the coverage needed.

D - Debt.   Car loan, Credit Card Debt, etc.
[usually not applicable for Asian Americans I know. Being very politically-incorrect here.]

I - Income.  Annual income multiplies by 20 years.
(or 10 years if the main income earner is retiring within the next 10 years.)

M - Mortgage.    How much is left to pay?

E - Education.   How much student loans one have left to be paid off.
and/or how much you are saving for your children to go to college?
(p.s. State College tuition has tripled in the last 6 years.)

Usually, for a full-time worker, this number is no less than 1 million, even without the mortgage.

5-year term life insurance should be relatively cheap to start until the age of 40. That is why AAA loves to advertise it. Then it become expensive so most people have a hard time replacing the coverage when the 20- or 30- year term are over, which is when the family may need the coverage the most.

Frankly, the coverage could be significantly less when one re-calculate for the coverage sum through the DIME at age 55 rather than at age 22. On the other hand, a family of age 22-ers recovers much more readily than a family with age 55 single-income provider.

Talk to me if this does not make sense.

Sincerely,
Mindy
2013 October

Whole vs UL

Use of Whole Life and Universal Life:

Donation/Charities,

Business Transfer,

Diversification,

Burial,

Tax-deferred and Tax-free,

Estate Planning,

Key Employee,

Account Receivable Loan,

Divorce Mandate,

Emergency Fund,
Education funds,

etc.

See http://www.investopedia.com/articles/pf/07/whole_universal.asp

How is the Millennial Generation doing? [2013]

http://finance.yahoo.com/blogs/daily-ticker/millenials-lost-generation-130643180.html

While the national unemployment rate has kept firm at 7.9%,
the jobless rate for Millennials (or the 80 million Americans born between 1980 and 2000)
continues to increase, reaching the alarming rate of 13.1% in January 2013.

Millennials now have the highest generational unemployment in the United States.

The Pew Center calls Millennials the “boomerang generation,"
because nearly 40% of all Americans between the ages of 18-34 still live at home with their parents;
numbers this high haven’t been seen in over 70 years.

And the boomerang trend is expected to continue or even worsen. The National Bureau of Economic Research reports that those who graduate during a recession will earn 10% less over a decade of work.

As a result, Millennials aren’t taking on debt or making economy-boosting purchases.
Young people aren’t buying houses or cars and they’re delaying marriage and children.

Many have also begun to wonder if college is worth the cost — outstanding student loan debt now tops $1 trillion. In 2011, two-thirds of college seniors graduated with an average of $26,000 in student loan debt.

...

While the unemployment rate for young workers is nearly twice as high as the overall rate,
it still pays to stay in school. Between 2011 and 2012 the unemployment rate for High School graduates was 31.1% while the unemployment rate for college graduates was 9.4%, a significant difference.

Of course young people have a harder time finding employment than their adult contemporaries; they have less experience and are new to searching for work. In both recessions and expansions young unemployment is historically nearly double the national rate.


While things don’t look great for the current generation of young adults, they are not hopeless. Let’s not disregard 80 million Americans.

ING's 2013 Information on Protection and Accumulation Planning

2013 ING We the People Campaign

Overcome Healthcare,
Longevity,
Social Security,
Federal Budget-Cut
and other Financial Challenges
through Protection and Practical Accumulation Planning.

see all pages at
 https://www2.ing-usa.com/stellent/public/166193.pdf