Finance & Investments
Frequently Asked Questions


“Branden, from Cowdell Insurance, has saved us a lot of money! Both cars are insured for a ...” —Jenny A. more

General Investment FAQs

What are the benefits to working with a financial professional?

With the variety of investment choices available today, it is difficult to make a solid financial plan without researching your own needs and determining appropriate products to meet those needs. Unfortunately, our daily lives often prevent us from spending the necessary time to reach our financial goals. Working with a financial professional allows you to get assistance from someone who can pinpoint your needs and do the research for you. Taking a professional approach to meeting your investment needs and goals can save you time and allow you to make solid choices in regards to your financial plan.

Back to Top

What can a financial professional provide?

Personalized Attention
Financial professionals take time to get to know who you are. The most important information they receive is directly from their clients. Understanding your financial situation, goals, investment time horizon and risk tolerance enables your financial professional to assist you in creating a strategy that fits both your objectives and budget requirements.

A Resource for Information
Your financial professional is your personal financial instructor. From explaining financial terms to providing illustrations about various financial products, a financial professional's goal is to assist you in making educated decisions in the implementation of your financial strategy.

Recommendations and Assistance
A financial professional has the expertise, resources and time to keep abreast of market news, legislation and industry trends. A financial professional can analyze how these trends could affect your investment portfolio. They can provide you with current information and explain how these changes affect your investment strategy and objectives.
Specifically, an advisor can:

  • Explain financial products and how they work.
  • Compare various financial products vehicles and describe the pros and cons of each with regard to your personal financial goals
Continuing Support

As your life changes, so does your investment strategy. Your financial professional is here to help you continually, not just when you begin to invest your money. As trends and legislation change, your financial professional can update you on how these changes affect you. Your financial professional is available to address concerns and questions regarding swings in the market.

Back to Top

What information should I expect to provide when working with my financial professional?

To assist you in developing a financial strategy that's right for you, it is important for your financial professional to understand as much about your finances as they can. For your protection, the National Association of Securities Dealers (NASD) requires your financial professional to ask about your financial situation, financial goals, investment time horizon and risk tolerance in order to assure your choice of investments are suitable for your financial situation.

Back to Top

How often should I meet with my financial professional?

You should plan to meet with your financial professional at least once a year to reevaluate your plan strategy. If you have a major change in your life - an inheritance, a new child, a death, marriage, health concerns - you should meet with your financial professional to make any needed adjustments. Remember this is your financial strategy and you should know how you are progressing towards your goals.

Back to Top

What is the benefit of tax-deferred growth?

With tax-deferred growth, you do not have to pay taxes on your earnings until you withdraw your money. This allows you to keep more of what you earn and increase your savings.

Back to Top

How do I save for my children's education?

One of parents' biggest concerns is giving their child the best education possible. A solid education, a good job, a secure future - you want nothing less than a future filled with happiness and security for your child. It's never too early to start planning and it is never too late to evaluate your resources. There is a lot of information available on the Internet, through bookstores, and from financial agents in regards to saving for your child's future. Keep in mind that every family's situation is different and strategies should be tailored to an individual's situation.

Focus on the Goal
Your goal is to save for your child's education. You have an idea of how much college is going to cost you. Just as you would save for any other goal, save the same way for college. Estimate what you will need, figure in what you already have and how much you will need to save per month to get there. Utilize our calculators to assist you in determining how much you need to save. Also see our asset allocation models to see what strategies will help you reach your goal. If you can't afford right now to save the entire amount necessary, save the most you can.

Stay Disciplined Make a plan to save on a routine basis and make saving a priority. Saving routinely will keep you on track to meet your goal.

Back to Top

Life Insurance FAQs

Why should I purchase life insurance coverage on my children or my spouse?

Your priority is to provide for your family. This should be your priority when considering life insurance as well.

You must have the means to take care of your financial obligations, as well as providing care for your children should your homemaker-spouse die. The opportune time to buy life insurance for your children is when they are young and the rates are low. This enables them to continue the coverage when they are grown with financial obligations of their own. This also protects their "insurability", should they develop any sort of health problem later in life. There are many types of policies that can be made into "family plans" at a lower cost than separate coverages for each individual. Talk to your insurance professional to determine your needs.

Back to Top

How much life insurance should I purchase?

As a "rule of thumb" you should purchase an amount of life insurance equal to 6 to 8 times the annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed. Important Factors include:

  1. Income sources (and amounts) other than salary/earnings
  2. Whether or not the individual is married and, if so, the spouse's earning capacity
  3. The number of individuals who are financially dependent on the insured
  4. The amount of death benefits payable from Social Security and from an employer sponsored life insurance plan
  5. Whether any special life insurance needs exist (e.g. mortgage repayment, education fund, estate planning need) etc.

It is recommended that a person's financial professional be contacted for a precise calculation of how much life insurance is needed.

Back to Top

How do I know which is the right type of life insurance?

The answer will vary depending on your circumstances, need for the coverage, timing of the purchase and how much you are willing or able to spend. The best way to determine the right policy is to sit down with a qualified insurance professional to review the key points of your particular situation. This can be done through a very short (30 minutes or less) interview to determine your needs.

Back to Top

My mortgage company says I should buy life insurance from them, what is that about?

Most likely your mortgage company is offering something called "mortgage protection life insurance" or "decreasing mortgage protection" or a similar title. This sort of protection is a basic term life insurance policy that usually has a level premium, but the death benefit pays off your mortgage loan at your death. This level premium may or may not reflect the decreasing death benefit. What that means is that you will be paying the same premium each year for a death benefit that is decreasing over time (as your mortgage decreases with payments). This is the case with any sort of "credit life insurance", insurance taken out in conjunction with an installment loan. There may be better alternatives. You should talk to your insurance professional before purchasing any type of coverage to see what other alternatives are available.

Back to Top

What if I already have life insurance coverage through my employer?

That's great, and it's wonderful that you are fortunate enough to have an employer that recognizes the value of life insurance coverage for you and your family. Be sure to find out from your employer if this coverage is 'portable', meaning you can take your policy with you when you leave the company or become disabled. Not all policies are portable. When talking to your insurance professional, be sure that he or she knows you have this type of coverage so that can be factored into any determination of your additional needs.

Back to Top

Retirement Planning FAQs

How do I choose the right IRA?

Choosing the right IRA is dependent on several factors: your household income, your current tax rate, the length of time you plan to hold your investments, your estimation of your future investment returns, your estimated tax rate when you withdraw funds, and future tax law revisions. Because every person's situation is different, there isn't one simple answer. You need to compare your choices and decide which is best for you. Your financial professional can assist you in reviewing your financial situation.

Roth IRA vs. Traditional IRA
The main difference between a Roth IRA and a Traditional IRA is when you pay taxes. Contributions to a Roth IRA are made from after-tax income. Roth IRA contributions grow tax-free and are not taxed when withdrawn for qualified reasons. These include a first-time home purchase, disability and medical expenses, and any withdrawal taken after age 59-1/2, as long as the account has been open for at least five years. Withdrawals that do not qualify may incur taxes and/or penalties. You may also want to consult a tax professional.

Contributions to a Traditional IRA are tax-deductible (subject to certain income limits) and taxes are paid when you withdraw the money. Contributions grow tax-deferred.

Employee Savings Plan vs. Roth IRA
While the Roth IRA may provide significant benefits for many investors, it should be considered in relation to other retirement savings opportunities. If you are eligible to contribute to an employer's plan that matches all or part of your contributions, you may find the plan more advantageous than contributing to a Roth IRA. If your company is not matching any of your own contributions, a Roth IRA may provide more flexibility for you.

Non-Deductible IRA vs. Roth IRA
If your income prevents you from deducting your Traditional IRA contributions, you may be eligible for a non-deductible IRA or a Roth IRA. Since contributions are non-deductible for either the non-deductible IRA or the Roth IRA, the difference is in the distribution rules. The Roth IRA may be a better choice because withdrawals will be tax- free at age 59-1/2, and you are not required to begin distributions at age 70-1/2. Withdrawals from a non-deductible IRA are taxed as ordinary income at age 59-1/2, and minimum distributions are required at age 70-1/2.

Converting a Traditional IRA to a Roth IRA
If you're thinking of converting from a Traditional IRA to a Roth IRA, project your tax rate, income level, and date of retirement. If you're far enough away from retirement to offset the tax bite of closing your Traditional IRA when converting - and if you expect your tax bracket to be higher upon retirement - the Roth IRA may be a better alternative.

Back to Top

Can I contribute to my retirement plan at work and contribute to an IRA?

Anyone who has earned income may contribute to an IRA and also contribute to an IRA for a spouse who does not have earned income. However, not everyone can deduct his or her IRA contribution for his or her taxes each year. Since all Roth IRA contributions are made with after tax dollars, there is no deductibility opportunity for any person. On traditional IRAs, if you are eligible for a company sponsored retirement plan, even if you do not contribute to it, ability for you and your spouse to deduct your IRA contributions is based on your combined income level. These levels change annually so consult your tax advisor for the most updated information.

Back to Top

How much do I need to save for retirement?

Experts estimate that you will need at least 80% of your pre-retirement income to live comfortably in retirement. By the time you are ready to retire, you probably won't have the expenses you do now, such as a mortgage or a child's college tuition but costs such as medical care may claim a sizeable share of your retirement income. With this in mind, some financial planning experts estimate you may need as much as 100% of your pre-retirement income just to make ends meet!

Back to Top

Free Quote in Minutes

Find out how much you could be saving, at no cost to you.

Call 435-688-7283

Call 435-688-7283

Send a quick message

Smart Advice


More Insurance Articles

States we Write Insurance In

Alaska   Arizona   California   Colorado   Florida   Idaho   Maryland   Michigan   Minnesota   Montana   Nevada   New Mexico   Oregon   South Carolina   Texas   Utah   Washington   Wyoming

Insurance companies we represent

Dairyland logo CUIC Casualty Underwriters Insurance Company logo United Heritage Property and Casualty Company logo Safeco Insurance logo Stillwater Insurance Group logo United Insurance Group logo Foremost Insurance Group logo The Hartford logo ASI American Strategic Insurance logo Main Street America Insurance logo Progressive logo Kemper logo Sublimity Insurance logo Travelers logo