Two-Thirds of Parents Are Making This Big Financial Mistake
More than a third of Americans with young children don’t have any life insurance, and another third have policies with payouts of less than $100,000, according to a new analysis by Bankrate.com
The survey found that 42 percent of all Americans haven’t purchased life insurance, and about half of those with insurance have policies worth $100,000 or less, including 25 percent of those with a household income over $75,000.
Of course not everyone needs life insurance, but people who have family members depending on them financially should have a policy. The amount you need varies, depending on your future financial obligations, outstanding debts, and current assets.
Related: How to Calculate Your Life Insurance in 3 Easy Steps
Part of the reason for inadequate coverage could be that people underestimate the benefits they’re receiving from work (which don’t roll over from job to job), or they’re failing to update their policy after major life changes like the birth of a child or the purchase of a home.
Another factor: They’re misinformed about the price of life insurance. Eight in 10 consumers have incorrect ideas about the price of life insurance, with millennials overestimating the cost by 213 percent and Gen Xers overestimating it by 119 percent, according insurer trade organization LIMRA.
In addition to your age and health, the price of life insurance could be impacted by your credit history, driving record, and lifestyle.
The LIMRA study found that 30 percent of Americans think they need more life insurance, but more than half said it was unlikely that they’d purchase a policy in the next year.
Chart of the Day: Boosting Corporate Tax Revenues
The leading candidates for the Democratic presidential nomination have all proposed increasing taxes on corporations, including raising income tax rates to levels ranging from 25% to 35%, up from the current 21% imposed by the Republican tax cuts in 2017. With Bernie Sanders leading the way at $3.9 trillion, here’s how much revenue the higher proposed corporate taxes, along with additional proposed surtaxes and reduced tax breaks, would generate over a decade, according to calculations by the right-leaning Tax Foundation, highlighted Wednesday by Bloomberg News.
Chart of the Day: Discretionary Spending Droops
The federal government’s total non-defense discretionary spending – which covers everything from education and national parks to veterans’ medical care and low-income housing assistance – equals 3.2% of GDP in 2020, near historic lows going back to 1962, according to an analysis this week from the Center on Budget and Policy Priorities.
Chart of the Week: Trump Adds $4.7 Trillion in Debt
The Committee for a Responsible Federal Budget estimated this week that President Trump has now signed legislation that will add a total of $4.7 trillion to the national debt between 2017 and 2029. Tax cuts and spending increases account for similar portions of the projected increase, though if the individual tax cuts in the 2017 Republican overhaul are extended beyond their current expiration date at the end of 2025, they would add another $1 trillion in debt through 2029.
Chart of the Day: The Long Decline in Interest Rates
Are interest rates destined to move higher, increasing the cost of private and public debt? While many experts believe that higher rates are all but inevitable, historian Paul Schmelzing argues that today’s low-interest environment is consistent with a long-term trend stretching back 600 years.
The chart “shows a clear historical downtrend, with rates falling about 1% every 60 years to near zero today,” says Bloomberg’s Aaron Brown. “Rates do tend to revert to a mean, but that mean seems to be declining.”
Chart of the Day: Drug Price Plans Compared
Lawmakers are considering three separate bills that are intended to reduce the cost of prescription drugs. Here’s an overview of the proposals, from a series of charts produced by the Kaiser Family Foundation this week. An interesting detail highlighted in another chart: 88% of voters – including 92% of Democrats and 85% of Republicans – want to give the government the power to negotiate prices with drug companies.
