Designating a Minor as a Life Insurance Beneficiary

Life insurance benefits cannot be paid to minors. If you make such mistake then ultimately, a judge will oversee how the funds are distributed to your young ones. To make sure this doesn’t happen, you must set up a revocable living trust and make the trust the beneficiary of your life insurance. In this same trust, you can include the proceedings to be used by your minors.

Investing in a Long Term Bond Funds

Bond funds are never a good help for investors. In an individual bond you can hold the investment to maturity and be assured that you will get your principal back (in case you don’t fall into a default), but in a bond fund no finite maturity date is there, and most funds are actively traded.

Especially it is not good times to invest in long term bond funds, as interest rate are so low. Rate might rise in future, even if it’s not in 2012. When rates will raise, the longer the maturity of a bond, the bigger will be the decline in the bond’s price. The bond prices are inversely proportional to the yields it fetches. When yields rise, prices drop.

If you own an individual bond, you can at least make the decision to hold on until it matures, so that you can receive all your principal back. But a bond fund may sell bonds at those lower prices, locking in a principal loss.