Paying For Life Insurance

Using The “Debt Snowball” Method For Police And Law Enforcement Officers

Most Police and Law Enforcement Officers have realized the importance of providing adequate life insurance coverage for their loved ones. Although for others, finding the money to pay for life insurance has become a challenge despite their personal desires to provide for their families.

Mounting credit card and other revolving debt has become such an overwhelming reality for many LEO’s to the point where they would rather ignore the issue instead of doing something about it. It’s human nature, like electricity and water… we tend to seek the path of least resistence. But this tendency won’t make the debt go away. It requires action.

The “Debt Snowball” is a widely used and accepted method of paying off debt. Many Police and Law Enforcement Officers have successfully reduced their debt by using this method. The following are some general guidelines. If you decide this method might work for you, contact us below and we would be more than happy to provide you with your own, personal Debt Snowball strategy for free!

HOW THE DEBT SNOWBALL WORKS

  1. List all of your debts in descending order with the highest interest rate first.

  2. The next step is the hardest. Determine the most money you can set aside from your budget that can be applied to your debt. The more you apply, the more money you’ll save, and the faster you’ll pay off your debt.
Your first thought might be “where do I find the extra money?”

The first place to look is at your bank statement, where are you spending your money? Look for unnecessary expenses or impulse purchases and eliminate them. Add up your trips Starbucks and local eateries. How much are you spending on entertainment and eating out?  You may be surprised.  Another area to consider are contributions you may be making into a 401k, 457 or other investments and/or retirement plans. It may make sense to temporarily stop making contributions and re-direct these contributions to your Debt Snowball. The earnings in your investment accounts are most likely less than the interest you are paying on your credit cards creating a negative net rate of return from your investments. For the same reason, you may want to consider taking a loan from your 401k to pay-off your debt. The interest you pay on the loan will be far less than then interest you are paying on your credit cards and the payments themselves are going back into your 401k.
  1. The next step is to apply a small portion of the new found money to a low-cost, Term Life Insurance Policy for the benefit of your Loved Ones. The reason we are placing the life insurance first is simple. If money is tight now imagine how tight life would become for your loved ones if you had an End-of Watch, especially if it occurred Off-Duty.

  2. Now take the rest of the money and add it to the regular payment on credit card one. On all your other cards pay only the minimum required payment. Continue to do this until the first debt on the list is paid off.

  3. Next, take the combined payment you were making on the first card and add them to the minimum payment you’ve been making on the second debt. Pay that total amount on the second card each month until it’s paid off, then move on to the third card. Continue to pay only the minimum payment on all the other cards except the one you’re “snow­balling”. Repeat this process until all of the cards are paid off.

During the Debt Snowball process, your cash out-flow remains the same. Once all your credit cards have been paid off, you will have freed up hundreds if not thousands of dollars each month which may be invested back into your 401k, savings accounts or other opportunities.

There are several critical steps that must be adhered to in order for this plan to work:

  1. You must not use any credit cards while you are in the Debt Snowball process

  2. We suggest you destroy the revolving credits cards but do not close the accounts

  3. You must agree to apply the payment from each credit card to the next as they are paid off

  4. You must agree to make no further purchases on a revolving credit basis, including department store purchases.

  5. If you have loved ones at home that rely on your income you should seriously consider purchasing adequate life insurance to replace your income should you meet an End-of-Watch on or off-duty.

The Debt Snowball works if you remain diligent in the process and make no comprises. In other words stick to the plan and you will be free from the oppression of credit card debt and protect your family from the unforeseen.






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