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Baby Insurance Policy Question & Answers

2015 November 4
by Sarah Fields

George asks…

Parents: How much is the average life insurance you should have for your child?

I just had a baby boy and would like to know how much of a life insurance policy I should get for him?

Sarah Fields answers:

1 billllliooon dollars!!.. _….. Also, you might have issues… Don’t kill him…

Sandra asks…

How will baby boomers’ deaths affect the national economy?

We are the majority. Many baby boomers have focused on retirement and security in their older years. When we pass away and the insurance companies have to pay out our life insurance policies, how will that effect the economy?
Will it cause the dollar to go down?
Will it raise the amount of middle and upper income families?

Sarah Fields answers:

The baby boomers’ deaths will not affect the national economy nearly as much as their retirements will. Baby boomers as a segment of the population have not saved enough money (where money is a representation of work) over their working life to give themselves an adequately similar lifestyle over their retirements.
Plus, baby boomers hold high-level positions in companies simply because of their work experience and skills acquired over their careers. When millions of these boomers retire beginning in 2008, many jobs will be hard to fill with new people because there simply aren’t enough skilled workers in the US to supply all the spots companies would like to fill. Meanwhile, there is an absolute glut of unskilled workers, which continues to grow.

In short, underfunded retirements will force baby boomers to work longer or take reductions in retirement payments from social security and their own private sources, and skilled workers will probably see their wages increase substantially as employers struggle to hold onto the skilled workers they can find.

Ruth asks…

Are medical expenses tax deductible in the year they are incurred, or in the years they are paid off?

We had a baby this year, and our insurance policy through my husband’s work, a small employer, has very high deductibles & copays. This year we are responsible for $17,000, which is 40% of our annual family take-home income. It will take us a number of years to pay this off. Would we deduct this amount from our income tax this year, as the expenses were incurred, or over the next several years, as we pay them off?

Sarah Fields answers:

It’s deductible in the year you actually make the payment(s) to the provider(s).

If you take out a loan to pay off the balance due, the year that you take out the loan is the year that the bill is actually paid and therefore deductible, regardless of when you make the loan payments.

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