June 27, 2014 12:16 am EST

Here Are Six Reasons Millennials Should Consider Life Insurance

1. You have dependents. First of all, life insurance is not for you. It’s for those you leave behind. The people who depend on you—your dependents. Dependents don’t have to be children. For insurance purposes, these are people who father with son on shouldersrely on your income, who would have to go without, should something happen to you. This could be a spouse, a live-in boyfriend/girlfriend with whom you own a house. You should also consider your children, parents, grandparents, siblings with special needs, etc.

If you have any dependents in a long-term care situation (or those you could envision requiring this help in the near future), either due to old age or disability, life insurance is a necessity. Most young people simply do not have the financial means necessary to cover these sorts of long-term care expenses. An insurance policy can help with that.

Additionally, if you have a stay-at-home spouse, consider the ramifications of your death. Not only would this person be forced to secure employment outside of the home, but pay for childcare as well. How quickly do you think your spouse could find something that would cover these expenses?

Life insurance gives you peace of mind, knowing your loved ones wouldn’t be financially affected by your death.

2. Costs are lower. Life insurance premiums are risk calculations based on mortality. Since average life expectancy is somewhere around 79 years old, there’s less risk for a company to insure a Millennial in good health. Less risk for the company, means relatively inexpensive premiums for you. Coverage can usually be obtained for pennies on the dollar. (Think about the cost of a fancy latte every week.)

Premiums are based on the age of the applicant and rates usually increase with age. If you purchase a policy as a 20-something, it will be at a lower rate than if you wait until you’re 40. You could save a couple hundred dollars a year, for as many as 30 years, if you act now versus later.

Plus, qualifying for coverage as a healthy Millennial can be a lot easier and less expensive than applying after you’ve been diagnosed with a health condition. Don’t wait. A health issue can crop up over night and qualifying for a life insurance policy can be a very different experience once you’ve been diagnosed.

3. You’d like an additional savings vehicle. If you always have a reason to dig into your savings, consider purchasing a permanent life insurance policy that not only has a death benefit but a savings component as well. You can borrow against it as well as use it in retirement, depending on the policy and company behind it.

Think of a permanent life insurance plan as a portfolio asset that will help secure your loved ones and your retirement. Your generation understands the importance of saving for its future. A permanent life insurance policy can help you do that with minimal effort on your part plus there’s no limit to what you can contribute to the savings portion, unlike a 401(k) or a Roth IRA. Once you’re retired, you can draw on the savings portion of the policy tax-free.

4. You’d like to supplement your company-backed insurance. Millennials who are fortunate enough to have a good paying job with excellent benefits may receive life insurance through their company. While this provides some peace of mind, consider purchasing other, independent coverage. If you become sick and are no longer able to work, your work policy will no longer cover you. Since you’ve been diagnosed with a terminal illness, you may not be able to secure a life insurance policy at this time. Now, when your family needs the benefit the most, they no longer have it. Plus most basic coverage will not cover everything your family needs at a time when they are ill-equipped to provide for themselves.

5. You want your funeral expenses and debts covered. Even if no one depends on your income, such as a spouse or children, you should consider your debts and your burial expenses. The average funeral alone costs between $10,000 and $15,000. Some debts would be waived with your death while others would be collected through whatever assets you left. Are your parents in a position to handle these sorts of expenses or will this create a financial hardship for them?

Millennials will want to decide what amount of coverage they need to pay for both funeral expenses and their recoverable debts when deciding an amount of insurance coverage.

6. You’d like to leverage riders for more coverage. Life insurance is not all about the death benefit paid out to your loved ones. There are also riders that can be added to policies to address needs for things like long-term care and disability. You are more likely as a young person to be injured in an accident than you are to be killed in one. If you were injured and unable to work for a certain period, or permanently disabled, do you have a plan in place to cover your expenses? A disability rider to your life insurance policy could safeguard against the unexpected.

Frankly, most people will never need the financial comfort provided by a life insurance policy while they’re young. But if your family is the one who does, your forward thinking and planning will ease their concerns during a very difficult time. How will you plan for your future?

April 4, 2014 6:00 pm EST

Here Are A Few Things You Need To Know About Whole Life Insurance

life isurance blank bar chart and glases

What is whole life insurance?

A whole life insurance policy covers you for your entire life, not just for a specific period such as term insurance. Your death benefit and premium in most cases will remain the same. Whole life insurance also builds cash value, which is a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you can borrow against it.

Are there choices within whole life insurance?

Yes, the most common choices include traditional, interest-sensitive, and single-premium whole life insurance policies. A traditional whole life insurance policy gives you a guaranteed minimum rate of return on your cash value portion. An interest-sensitive whole life insurance policy gives a variable rate on your cash value portion, similar to an adjustable rate mortgage. With interest-sensitive whole life insurance you can have more flexibility with your life insurance policy such as increasing your death benefit without raising your premiums depending on the economy and the rate of return on your cash value portion. Single-premium is for someone who has a large sum of money and would like to purchase a policy up front. Like other whole life insurance options, single-premium whole life insurance accrues cash value and has the same tax shelter on returns.

What are the benefits of choosing a whole life insurance policy over other types of life insurance policies?

Unlike term life insurance, a portion of your premium money goes toward your cash value which in turn could pay off your entire policy only after a few years. Also, your premium will remain constant during the time you are covered unless you choose otherwise. And, unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams. Whole life is also a good choice because of the tax savings.

Should I purchase a whole life policy for an investment?

The rate of return on a whole life insurance policy is very low compared to other investments, even with the tax savings factored in. Most investment professionals would agree that life insurance should not be used solely as an investment tool and you should judge your policy choices on the protection and not the rate of return. But, if you are in need of life insurance, the tax benefits and cash value is an added bonus when purchasing protection for your loved ones.

March 20, 2014 3:35 pm EST

Which Is Right For You: Permanent Or Term Life Insurance?

Few people who have bought insurance – or even window-shopped for quotes - have escaped the debate over term versus permanent insurance.

And the wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today. So, the first and most important decision you must make when buying life insurance is: term, permanent or a combination of both? Let’s look at each.

Term life policies offer death benefits only, so if you die, you win (so to speak). If you live past the length of the policy, you (or, more specifically, your family members) get no money back.

Permanent life policies offer death benefits and a “savings account” (also called “cash value”) so that if you live, you get back at least some of, and often much more than, the amount you spent on your premium. You get this money back either by cashing in the policy or by borrowing against it.

Permanent life insurance is more expensive

As you might expect, permanent life insurance premiums are more expensive than term premiums because some of the money is put into a savings program. The longer the policy has been in force, the higher the cash value, because more money has been paid in and the cash value has earned interest, dividends or both.

The debate is all about that cash value. If you buy a policy today, your first annual premium is likely to be much higher for a permanent life policy than for term.

However, the premiums for permanent life stay the same over the years, while the premiums for term life increase. That extra premium paid in the early years of the permanent policy gets invested and grows, minus the amount your agent takes as a sales commission. The gain is tax-deferred if the policy is cashed in during your life. (If you die, the proceeds are usually tax-free to your beneficiary.)

The saying you always hear is, “Buy term and invest the difference.” The fact is, it depends on how long you keep your policy. If you keep the permanent life policy long enough (and the market ever fully rebounds), that’s the best deal. But “long enough” varies, depending on your age, health, insurance company, the types of policies chosen, interest and dividend rates, and more. The reality is that there is not a simple answer, because life insurance is not a simple product.

Guidelines to live by when buying

Even with all of these variables, there are some guidelines you can follow. The key is how long you plan to keep the policy. If the answer is less than 10 years, term is clearly the solution.

If it is more than 20 years, permanent life is probably the way to go. The big gray area is in between. Here is where you need an expert to run the term vs. permanent analysis for you. Of course, this assumes you keep the policy in force. Most people drop their policies within the first 10 years, but if you do your homework now, that shouldn’t be the case for you.

How to choose

Categorize your insurance needs by their use. If you need $60,000 for college and your youngest child will graduate in three years, you need $60,000 of term insurance as a short-term hedge against your death, thus insuring that your child can finish his or her education. Meanwhile, if your estate will owe $200,000 in taxes at your death, you probably need permanent insurance, because you’re not likely to die in the next 20 years (you hope). You also may want to re-evaluate your estate plan, but that’s a different issue.

March 7, 2014 9:03 pm EST

How Does Insurance Actually Work?

Insurance works by pooling risk.What does this mean? It simply means that a large group of people who want to insure against a particular loss pay their premiums into what we will call the insurance bucket, or pool. Because the number of insured individuals is so large, insurance companies can use statistical analysis to project what their actual losses will be within the given class. They know that not all insured individuals will suffer losses at the same time or at all. This allows the insurance companies to operate profitably and at the same time pay for claims that may arise. For instance, most people have auto insurance but only a few actually get into an accident. You pay for the probability of the loss and for the protection that you will be paid for losses in the event they occur.

Life is full of risks - some are preventable or can at least be minimized, some are avoidable and some are completely unforeseeable. What’s important to know about risk when thinking about insurance is the type of risk, the effect of that risk, the cost of the risk and what you can do to mitigate the risk. Let’s take the example of driving a car.

Type of risk: Bodily injury, total loss of vehicle, having to fix your car

The effect: Spending time in the hospital, having to rent a car and having to make car payments for a car that no longer exists

The costs: Can range from small to very large

Mitigating risk: Not driving at all (risk avoidance), becoming a safe driver (you still have tocontend with other drivers), or transferring the risk to someone else (insurance)

Let’s explore this concept of risk management (or mitigation) principles a little deeper and look at how you may apply them. The basic risk management tools indicate that risks that could bring financial losses and whose severity cannot be reduced should be transferred. You should also consider the relationship between the cost of risk transfer and the value of transferring that risk.

Risk Control
There are two ways that risks can be controlled. You can avoid the risk altogether, or you can choose to reduce your risk.

Risk Financing
If you decide to retain your risk exposures, then you can either transfer that risk (ie. to an insurance company), or you retain that risk either voluntarily (ie. you identify and accept the risk) or involuntarily (you identify the risk, but no insurance is available).

Risk Sharing
Finally, you may also decide to share risk. For example, a business owner may decide that while he is willing to assume the risk of a new venture, he may want to share the risk with other owners by incorporating his business.

So, back to our driving example. If you could get rid of the risk altogether, there would be no need for insurance. The only way this might happen in this case would be to avoid driving altogether. Also, if the cost of the loss or the effect of the loss is reasonable to you, then you may not need insurance.

For risks that involve a high severity of loss and a low frequency of loss, then risk transference (ie. insurance) is probably the most appropriate protection technique. Insurance is appropriate if the loss will cause you or your loved ones a significant financial loss or inconvenience. Do keep in mind that in some instances, you are required to purchase insurance (i.e. if operating a motor vehicle). For risks that are of low loss severity but high loss frequency, the most suitable method is either retention or reduction because the cost to transfer (or insure) the risk might be costly. In other words, some damages are so inexpensive that it’s worth taking the risk of having to pay for them yourself, rather than forking extra money over to the insurance company each month.

The Risk Management Process
After you have determined that you would like to insure against a loss, the next step is to seek out insurance coverage. Here you have many options available to you but it’s always best to shop around. You can go directly to the insurer through an agent, who can bind the policy. The process of binding a policy is simply a written acknowledgement identifying the main components of your insurance contract. It is intended to provide temporary insurance protection to the consumer pending a formal policy being issued by the insurance company. It should be noted that agents work exclusively for the insurance company. There are two types of agents:

  1. Captive Agents: Captive agents represent a single insurance company and are required to only do business with that one company.
  2. Independent Agent: Independent agents represent multiple companies and work on behalf of the client (not the insurance company) to find the most appropriate policy.

Underwriting is the process of evaluating the risk to be insured. This is done by the insurer when determining how likely it is that the loss will occur, how much the loss could be and then using this information to determine how much you should pay to insure against the risk. The underwriting process will enable the insurer to determine what applicants meet their approval standards. For example, an insurance company might only accept applicants that they estimate will have actual loss experiences that are comparable to the expected loss experience factored into the company’s premium fees. Depending on the type of insurance product you are buying, the underwriting process may examine your health records, driving history, insurable interest etc.

The concept of “insurable interest” stems from the idea that insurance is meant to protect and compensate for losses for an individual or individuals who may be adversely affected by a specific loss. Insurance is not meant to be a profit center for the policy’s beneficiary. People are considered to have an insurable interest on their lives, the life of their spouses (possibly domestic partners) and dependents. Business partners may also have an insurable interest on each other and businesses can have an insurable interest in the lives of their employees, especially any key employees.

Insurance Contract
The insurance contract is a legal document that spells out the coverage, features, conditions and limitations of an insurance policy. It is critical that you read the contract and ask questions if you don’t understand the coverage. You don’t want to pay for the insurance and then find out that what you thought was covered isn’t included.
Insurance terminology you should know:

Bound: Once the insurance has been accepted and is in place, it is called “bound”. The process of being bound is called the binding process.

Insurer: A person or company that accepts the risk of loss and compensates the insured in the event of loss in exchange for a premium or payment. This is usually an insurance company.

Insured: The person or company transferring the risk of loss to a third party through a contractual agreement (insurance policy). This is the person or entity who will be compensated for loss by an insurer under the terms of the insurance contract.

Insurance Rider/Endorsement: An attachment to an insurance policy that alters the policy’s coverage or terms.

Insurance Umbrella Policy: When insurance coverage is insufficient, an umbrella policy may be purchased to cover losses above the limit of an underlying policy or policies, such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

Insurable Interest: In order to insure something or someone, the insured must provideproof that the loss will have a genuine economic impact in the event the loss occurs. Without an insurable interest, insurers will not cover the loss. It is worth noting that for property insurance policies, an insurable interest must exist during the underwriting process and at the time of loss. However, unlike with property insurance, with life insurance, an insurable interest must exist at the time of purchase only.

February 22, 2014 3:57 pm EST

Here Are The Misconceptions About Annuities

Annuities are a little bit like Cadillacs; if all you know about them is what you learned when your grandfather drove one, you’re probably harboring some outdated ideas about them. Over the past decade, insurance companies have supercharged these combination investment/insurance products with a slew of new features that make them more responsive to the needs of a broader range of consumers. Check through this list of five common misconceptions and see whether you’re misjudging today’s annuities.

Buying an annuity means giving up control of my money.

Sure, you can still trade your cash for an annuity that pays you back in fixed monthly installments till you die, no substitutions allowed. But today, it’s no more necessary to buy an inflexible annuity like that than it is to buy a car without air conditioning. According to Bill McDermott of AXA Equitable, today’s annuities provide the ability to control your underlying investment portfolios, similar to how you can manage mutual funds, while giving you access to assets if your situation changes. Annuities today also offer added benefits that provide a guaranteed lifetime stream of income which won’t decrease when the market performs poorly, but which has the potential to grow when the markets perform well. “It is simply no longer the case that when you buy an annuity, you write this check representing the biggest amount of money you’ve ever had in your life, hand it over to an insurance company, and never see it again,” says Mark Foley, vice president for innovative simplicity at financial services firm Prudential Financial Inc. “If you want an annuity that is highly liquid, you can certainly find one.”

Annuities are too expensive.

There is a cost to buying the protections that annuities offer, such as investment returns guaranteed against market declines and monthly income checks that you receive no matter how long you live or how poorly the markets perform. Twenty years ago, these costs were often high. But since then, insurers have introduced annuities that cost far less than their predecessors. “It’s very common for people to compare an annuity sold through a financial advisor with a no-load mutual fund that’s sold direct from the fund company,” remarks Nationwide Financial’s Eric Henderson. “But that’s comparing apples to oranges. If you’re going to compare, you have to compare annuities sold through a financial advisor with funds sold through a financial advisor, or annuities and funds that are both sold direct. Annuities will be more expensive, of course, but you have to consider what you’re getting. Our clients who have purchased annuities with lifetime withdrawal benefits are breathing a lot easier right now than those who haven’t. Their asset base is down, but they know they’re going to get their promised level of income even if the market doesn’t recover anytime soon.”

Annuity riders that protect against market volatility aren’t worth the money.

Given the upward bias of the stock market over long periods of time, it’s been tempting to argue that buying optional riders on annuities to get guaranteed investment returns or guaranteed lifetime withdrawal benefits aren’t worth the cost. But the carnage in the stock market over the past year has shown that its not long-term average returns that matter, but the sequence of the actual returns. Many people who just retired or were planning to do so in the next few years have suffered such major hits to their retirement portfolios that they are in jeopardy of having enough money to see them through retirement. “You may be able to choose when you retire, but you can’t choose where the market is going to be when you retire,” says Hugh McHaffie, president of wealth management for John Hancock Financial Services. “There is real risk to being exposed to the markets, and I would say that individuals who bought these riders over the last five or six years are probably quite satisfied with the value they’re getting.” In fact, adverse market conditions are far more common than many investors had come to expect. Michael McCarthy of AXA Equitable notes that if your investment portfolio is split 50-50 between stocks and bonds and you withdraw six percent of your initial account balance each year, you have a 50 percent chance of running out of money within 25 years. And if the market gets hammered right around the time you retire, you could run out long before then.

When I invest in an annuity, I no longer get to invest in the stock market.

It’s true that with the typical fixed annuity, you forego exposure to the stock market and the inflation-fighting characteristics it brings to an investment portfolio. But deferred variable annuities offer investment options that can include substantial exposure to the stock market. The big difference between getting that exposure through a mutual fund and getting it through an annuity is that the annuity can protect you against market losses.

If the company that issues my variable annuity gets into trouble, my investments are at risk.

“Investing in a variable annuity issued by an insurance company is not the same thing as investing in the stock of an insurance company,” says Henderson. “When you buy a variable annuity, the money you have invested in the financial markets is in a separate account under your name and segregated from the company’s other assets and liabilities. Even if the company were to file for bankruptcy protection, it would still have reserves set aside to cover the benefits it is responsible for paying. I’m not saying that you should ignore the financial strength of the insurance company issuing an annuity; far from it. That strength is the ultimate backstop for any withdrawal guarantees you purchase with your annuity. But in many respects, the value of your investments within a variable annuity are no more at risk than the value of your investments in a mutual fund, and in most cases, they are at less risk.”

February 14, 2014 10:17 pm EST

Cutting Your Health Care Costs And Strategies For Your Family

As the cost of health care increases, so does the strain on household budgets. A majority of today’s families are barely getting by, and an increasing number of households are living with no health insurance at all. In fact, more than 46 million Americans now live uninsured–and that number increases by the year.

Health insurance is designed to protect you and your family from expense in case of accidents or illness. Doctor bills; hospitalization; medical tests and treatments; rehabilitation, and maternity/pediatric care…all fall within these bounds.

So what’s a family to do if it needs health insurance protection but doesn’t have much to spend?

Getting Cheaper Health Insurance

The less likely you are to need health care, the less you’ll pay for your health insurance coverage. Therefore, finding ways to reduce your claims risk increases your chances of getting the cheap health insurance rates you deserve.

If your family needs cheap health insurance and you’re not sure how to get it, use these money-saving strategies to reduce your health insurance premiums:

    • Take care of your bodies. Get regular exercise; eat a healthy, well-balanced diet, and see your doctor for routine check-ups and health care advice. Don’t drink or smoke. If you do what’s necessary to maintain your health, you’ll reduce your health care costs in the long run–reducing, in turn, your health insurance costs.
    • Set your deductibles high. What is a deductible? It’s simply the amount you have to pay on your medical bills before your health insurance kicks in and pays the rest. According to experts, it’s not uncommon for families to save up to 25 percent on health insurance premiums with a high deductible plan. The more responsibility you take for the cost of your medical care, the less responsibility your health insurance company has to carry–and the lower your health insurance rates will be.
    • Find a group policy. Group health insurance is always less expensive. This is because the financial risk to the health insurance company is spread amongst the entire group, instead of resting solely on you. Look for group health insurance through your employer, or through community or professional organizations to which you belong.
    • Buy early.The younger you are when you purchase health insurance, the lower your premiums will be. This is because your risk of health-related issues increases as you get older. Buying health insurance early on means your family saves on monthly premiums, as well as over the life of the policy.
    • Coordinate your coverage’s. If you and your spouse both work and have health insurance available, compare plans–and choose the best parts of each. Sharing expenses between more than one insurance plan makes things cheaper for both health insurance companies–and for you.

Your family’s health insurance premiums don’t have to eat into the household budget–or your bank account. Use these strategies to get cheap health insurance protection, and you’ll be prepared for whatever comes your way.

February 8, 2014 5:46 pm EST

The Differences Between Whole Life Insurance And Term Life Insurance

Deciding whether to purchase whole life or term life insurance is a personal decision that should be based on the financial needs of your beneficiaries as well as your financial goals. Life insurance can be a very flexible and powerful financial vehicle that can meet multiple financial objectives, from providing financial security to building financial assets and leaving a legacy.

Here are some of the main features of term and whole life insurance.

  • Features of term life insurance:
    • Provides death benefits only
    • Pays benefits only if you die while the term of the policy is in effect
    • Easiest and most affordable life insurance to buy
    • Purchased for a specific time period, such as 5, 10, 15, or 30 years, known as a “term”
    • Becomes more expensive as you age, especially after age 50
    • The term must be renewed if you want coverage to be extended beyond the term length
    • Can be used as temporary additional coverage with a permanent life insurance policy
    • Can be converted to whole life insurance
  • Features of whole life insurance:
    • Covers you for life
    • Provides death benefits as well as a cash value accumulation that builds during the life of the policy
    • You typically must qualify with a health examination
    • Can be purchased without a medical exam, but at a higher cost
    • Takes 12 to 15 years to build up a decent cash value
    • Can be a good choice for estate planning
    • Cash value is based on how much the return on investment is worth
    • A portion of the cash value can be withdrawn or borrowed during the life of the policy
    • Initially has more expensive premiums than term life insurance, but can potentially save you money over the life of the policy if in force for a considerable number of years
January 27, 2014 5:15 pm EST

Watch This Informative Video On The Affordable Care Act

It’s January of 2014, and there are still many confused about how to go through getting insurance because of the Affordable Care Act. Although the number of people signing up is significantly increasing as of the pass into the new year, some are still hesitant because they’re not sure of how it works, or are too afraid to ask questions and agreeing to stuff they don’t know about.

Have a look at the video above for a simple explanation of how it works.

January 23, 2014 8:40 pm EST

Reducing Risk When You Own A Business

Insurance companies evaluate potential customers by looking at the risks inherent in their businesses. If the business appears to have a higher degree of risk, that business will pay more for premiums or may have difficulty getting coverage at all. The key is to reduce the risk that a loss will occur.

Fire risk is one of the main factors in determining the cost of property insurance. Building or leasing a fire-resistant building should reduce premiums significantly. You also should make it a point to keep your premises neat and tidy. A location with piles of boxes and debris, for example, is a much higher fire risk.

Here are other ways to reduce risk:

•Check smoke detectors on a semiannual basis and maintain written records.

•Maintain all fire safety equipment.

•Maintain emergency lighting and illuminated exit signs in proper working order.

•Develop a daily inspection routine of the premises, taking immediate steps to correct any hazards.

•Avoid overloading electrical outlets.

•If you live in a flood-prone area, determine whether your property is above or below the flood-stage water level.

•Know the history of flooding in your region, the warning signs of flooding, and the items you need to be prepared.

•Keep disaster supplies on hand.


January 13, 2014 7:45 pm EST

The Meat and Potatoes of Term Life Insurance

Insurance can get confusing. This is an important reason it pays to have a knowledgeable person make you understand it before you purchase it. In simple terms, imagine buying a video game system from a salesman, and then he sells you video games for a different system. Both purchases are useless because what you bought isn’t compatible. If you had the right person explain it to you, you’d know that what you were buying before you bought it. Today’s explanation is Term Life Insurance.


A term life policy covers you for a specific period of time (such as 10, 20 or 30 years). If you die during the term period, the person you named when you bought your policy is paid the coverage amount. If you don’t die during the specified term period, your coverage simply ends. Term life generally does not build cash value nor does it include any features related to cash value.


When considering life insurance, term life insurance is a good first choice – especially for families just starting out. Term life insurance is an easy, affordable way to provide financial peace of mind for you and your family. It helps fill the gap left by the loss of your income and protects your assets.

Term life can also cover specific financial obligations that will disappear over time, such as a mortgage, wedding expenses, college tuition or loans. In short, term life insurance provides an excellent answer to the question: How will your family manage financially if you die prematurely?

Because term life insurance is temporary and does not typically build cash value, coverage is generally less expensive than permanent coverage. There’s no commitment, either. If you decide to end your coverage before the term is up, you can simply stop making payments and that’s it – there’s nothing more to pay or any other obligations.