— From the pages of FLL#37
Is it less expensive to buy life insurance while I’m young?
Your insurance premiums will increase as your life expectancy decreases—the older you get, the more life insurance is going to cost you. Whether you buy permanent or term life insurance, it will usually cost you less while you’re young.
If you’re at high risk for a medical condition that might make it too expensive or impossible for you to get insurance later (e.g., a family history of cancer), consider buying life insurance while you’re still young and healthy.
If you buy term insurance, ask about a renewability provision. Although your premiums may increase at renewal time because your life expectancy is shorter, you’ll be able to renew your policy without having to prove your insurability again. Please note that several factors affect the cost of life insurance, such as your current health, whether or not you are a smoker, and any pre-existing conditions.
Don’t most small businesses fail?
Although it’s true that many new small businesses go under within their first year or two, there are usually reasons that can explain their failure. If you’re aware of the pitfalls associated with the start-up of a new enterprise, you can take steps now to maximize the chances that your business will succeed.
Don’t start a business you know nothing about. If you’re a pastry chef, don’t open an auto-body shop. Your experience, skill, and knowledge of the business you wish to run are key to its success.
You’ll want to conduct extensive market research to determine if the product or service you will offer is currently in demand. Define who you’re marketing to and target your message to them.
Also, consider the most favorable time to market your product or service (e.g., toys at Christmas). Of course, another key to your success is location, location, location. Finally, plan your advertising campaign and consider how you will distribute your product or service.
Pay attention to your competition. Be sure your product or service offers your customers something your competitors do not.
Set up a written business plan detailing the design of your business growth. Organize a start-up team of people who have abilities you lack. Determine how you will obtain the capital to finance your project, and be sure you have adequate capital. More importantly, make sure you have enough to live on. Many new businesses do not generate income immediately. Finally, include an exit strategy in your business plan for closing the business should things not work out as you had hoped.
I’ve finally paid off my credit cards. Should I close the accounts or leave them open with zero balances?
It’s a good idea to close redundant or unused accounts you do not consider necessary. Here are a few reasons why:
- If credit is easily available, you may be tempted to use it. Any impulsive purchases could quickly mount up and result in serious debt problems.
- Open accounts may be used fraudulently if your account numbers are stolen or your cards are lost.
- You may have to pay annual fees for the cards even if you don’t use them.
- Whether used or not, open accounts may create trouble when you apply for other credit such as mortgages or loans. Lenders commonly review your credit history and may see you as a credit risk if you have multiple open accounts with a large amount of available credit. Potentially, you could still use them and build up unacceptable levels of debt.
It’s best to cut up and return to the issuer any cards you don’t want. Refuse to accept renewal cards you don’t plan to use. You’ll want to contact each card issuer to determine specific account closing requirements. Ask for a confirmation letter of the closing and check that it is listed on your credit report as having been “closed at the customer’s request.”
Mark A. Vergenes is President of MIRUS Financial Partners, 110 E. King St., Lancaster, PA (717) 509-4521 or firstname.lastname@example.org. Investment Advisor Representative offering securities and advisory services offered through Cetera Advisor Networks LLC., member FINRA/SIPC. Cetera is under separate ownership from any other named entity. MIRUS Financial Partners nor Cetera Advisor Networks LLC. give tax or legal advice. Article prepared in conjunction with Broadridge Investor Communication Solutions, Inc.