Insurance

Here’s When You Need Payment Protection Insurance

May 16, 2021 By Kathryn Vercillo Leave a Comment

There are so many different types of insurance available for different reasons. Some of them are absolutely critical if you’re a savvy consumer. On the other hand, many either aren’t necessary or depend significantly on the situation. If you’re not familiar with a type of insurance, then it can be extremely difficult to determine whether or not you need it. For example, many people don’t know about Payment Protection Insurance. What is it and when do you need it, if ever?

What Is Payment Protection Insurance?

Payment Protection Insurance (PPI) is a type of insurance designed to protect you in the event that you become unable to make payments on a loan.

Payment protection insurance may be known as different names including:

Payment protection plan
Credit protection or credit insurance
Mortgage protection insurance

The general idea is that:

You take out a loan.
The loan has a set repayment plan. For example, mortgage payments on your house.
Something terrible happens and you can’t meet those payment requirements.
If you have Payment Protection Insurance, then it may cover those payments for a period of time.

In other words, you pay for insurance to help you make payments in the future in the event of unpredictable difficult financial situations,

How to Get Payment Protection Insurance

You might get PPI through various sources. For example, your mortgage lender may offer this as a service to you. Likewise, your credit union may have Payment Protection Insurance. The Firefighters Community Credit Union offers PPI to their members. Working with a credit union often allows you to tailor your insurance to your exact needs which can definitely be an asset when choosing types of insurance.

This particular credit union notes that they offer PPI on a number of different types of loans including:

Second mortgages
Car loans
Personal loans

If you become disabled or unable to work for some reason during the repayment period of the loan, then your insurance should kick in. It will cover the loan payments for a specific period of time as outlined in your agreement. If you pass away, some or all of the loan may be forgiven, which can be an asset to your heirs.

Other Types of Payment Protection Insurance

There are various clauses and types of Payment Protection Insurance. That described above is most common. However, you should read the fine print to find out what kind of insurance you’re getting.

For example, in some instances, the purpose of Mortgage Protection Insurance is sometimes to protect the lender, rather than to protect you. The rule might be that if the homeowner dies before paying off the loan, the insurance pays the lender. This benefits the lender. That said, it might also benefit the homeowner’s estate. It really depends on the terms of the plan.

The key thing is to understand that there are different types of PPI. There are similar types of protection that have key different things to consider. Therefore, before you even ask yourself if you need Payment Protection Insurance, you really need to ask yourself what it is you’re trying to get.

When You Need Payment Protection Insurance

You probably don’t need to get Payment Protection Insurance if you’re taking out a small loan. If you expect to be able to repay your loan quickly, then chances are that you’ll do so before encountering any strange issues that prevent repayment. Moreover, you likely have other options in the event that something does happen with a short-term small loan.

Large and Long-Term Loans

However, if you’re taking out a large loan and/or a loan with a long-term repayment plan then you might at least want to consider PPI. For example, let’s say that you’re taking out a twenty-year second mortgage on your home. A whole lot can happen in the next twenty years. It’s certainly feasible that you could become ill or disabled, preventing you from earning the income you expect to earn for those repayments. As a result, you might want to consider insurance that protects you in the event such a thing happens.

Likelihood of Payment Problems in the Future

If you think that there’s a good chance that you’ll have problems with repayment in the future, then it could be well worth it to consider Payment Protection Insurance. However, many sure that you are very clear about what does and doesn’t qualify for the insurance to kick in.

The Money Advice Service says that PPI typically covers lack of payments due to:

Illness
Disability
Circumstances that stop you from working such as becoming a full-time care provider to a loved one
Job loss due to redundancy, but note that this may require additional coverage outside the original PPI terms
Death

That said, there are a lot of exemptions to PPI. If you’re unemployed or self-employed, this plan isn’t going to help you. Only certain illnesses are covered by this insurance. Moreover, if you have pre-existing conditions, then these likely won’t be covered. Additionally, most policies have a period during which you aren’t covered (such as the first 90 days after the illness or disability.)

So, if you have a suspicion that illness, disability, or job loss could lead to payment problems in the future, then you might want to consider the protection of PPI. However, if you know that this is due to a pre-existing condition, then you might need to weigh your options carefully. There’s no point paying for insurance if it won’t cover you!

Alternatives to Payment Protection Insurance

You might also forego Payment Protection Insurance if you already have other options that will cover payments for you in the event of illness, disability, or death. Examples of such alternatives include:

Emergency savings for just this type of situation
Assets that you can sell in the event of such an emergency
A partner or loved one who could help cover the bills if needed
You have employee benefits and/or sick pay that would help you during a down period
You have other types of insurance that cover the type of issues such as life insurance or disability insurance.

What types of insurance do you consider necessary? Let’s discuss in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

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Save More Money by Not Having Health Insurance

May 5, 2021 By Tamila McDonald Leave a Comment

To put it simply, health insurance is usually expensive. For some households, it costs so much that paying for it is a financial strain. For others, an outright impossibility. To many, it feels like a burden. Particularly if they aren’t getting much use out of the coverage. But does that mean going without healthcare to save money is a smart move? And, if so, how not having health insurance help you save without putting you at undue risk? If you’re interested in trying to save more money by not having health insurance, here’s what you need to know.

The Risk of Being Without Health Insurance

First, it’s important to acknowledge that going without health insurance can be risky. Even if you are healthy, a single accident, serious illness, or major injury can be incredibly costly to cover, particularly if you are trying to handle it out of pocket.

A single emergency room visit (before insurance) can cost between $623 and $3,102 on average, depending on where you live. However, certain kinds of emergencies can run tens of thousands of dollars for a single visit to the ER.

If you have a long-term condition, managing it can come with a significant price tag, too. On average, it costs $16,752 per year to manage diabetes, for example.

However, not everyone will have to go to the emergency room or handle a long-term condition. For those individuals, health insurance is meant to be a form of protection against the unknown, as well as a resource for preventative care, decreasing the odds that a potentially dangerous condition will go unnoticed or untreated.

Saving Money by Not Having Health Insurance

On average, annual premiums come in between $4,024 and $8,540, depending on the location. Factor in that many insured individuals also contend with high deductibles (up to $7,900 for an individual, more for couples or families, using certain Affordable Care Act plans), and many people may wonder whether the expense of health insurance is worthwhile. This is especially true for anyone who is generally healthy, has no history of a long-term condition, or is simply struggling to maintain their budget.

Depending on your situation, you may be able to save money by skipping health insurance while still giving yourself a level of protection. If you are wondering how, here are some options.

Setting Money Aside for Healthcare Costs

One of the simplest ways to forgo health insurance and still be ready to handle medical costs is to save for those expenses. It would be similar to an emergency fund, ensuring you have access to enough cash to handle your needs.

Precisely how much you would want to set aside can vary. At a minimum, it’s smart to be able to cover a typical emergency, so you may be able to use some averages to figure out how much to save. Consider your family health history, but also recognize that an accident or illness can occur outside of those parameters.

Additionally, it’s wise to understand how expensive even a single procedure can be potentially. For example, an aortic valve replacement can cost $135,984, and exploratory chest surgery may run about $137,533, and that’s just for single procedures. A heart attack – including related care and procedures – can run in excess of $150,000.

The benefit of this approach is that you’ll end up paying for services that you legitimately need instead of sending cash to an insurance company for coverage you don’t use. Additionally, the money you set aside could earn interest, allowing it to grow over time. However, you need to make sure that you plan for costs you may ultimately need to shoulder, many of which can be astoundingly large.

Alternatives to Traditional Insurance

In some cases, you may be able to use some alternatives to traditional insurance for some of your healthcare needs.

Two prime examples are low-cost (or even free) community clinics and memberships to local practices. The first option is more common in areas where a notable amount of the population is lower-income, while the other may be more widely available in larger cities.

Community Clinics

With community clinics, there may be a flat fee for doctor’s visits, though services are often limited to preventative care, long-term condition management, and treatment of common illnesses and injuries that wouldn’t require hospital-level services. If you’re near a free clinic, then these visits may not cost anything. However, you may need to meet certain income requirements to qualify for no-cost medical care.

Local Clinics

If you go with a membership to a local clinic, you may get access to free visits, discounted lab work, and lower-cost prescriptions. Again, services are usually limited to what the clinic itself can offer, but it can work for many typical healthcare needs.

Finally, it’s important to remember that many hospitals do have payment plan options for costs related to emergency visits, many of which are interest-free. This can give you some time to pay what’s owed. How much time usually depends on the size of the bill and hospital policies, generally ranging from a few months to several years.

Do you have any tips that can help someone save more by not having health insurance? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

5 Ways to Know If You Need More Life Insurance

April 15, 2021 By Tamila McDonald Leave a Comment

When you get a life insurance policy. The policy is associated with a specific payout. Often, how much life insurance you need doesn’t remain steady throughout your life. Instead, as certain events occur, increasing your life insurance policy is generally a wise move. If you are wondering how you can figure out if you need more life insurance. Here are five signs that it may be time to up your policy.

1. A New Spouse or Child

When there is a new addition to your family, reevaluating your life insurance policy is a smart move. The payout would protect your family from financial hardship if you were to suddenly pass away, something that could be particularly crucial if you are the primary breadwinner.

A USDA report showed that raising a child that was born in 2015 would cost a middle-income family around $233,610 to $284,570 to rear. Thus, suggesting you don’t factor in the cost of college. If your spouse or the person designated as the child’s caregiver wouldn’t be able to support that expense. Your life insurance payout plays a big role in the child’s quality of life.

However, even if there aren’t children in the equation, getting married should trigger a life insurance reevaluation as well. If your spouse couldn’t maintain the same lifestyle if you passed away, adding more life insurance may be wise, giving them financial security and helping them avoid additional losses during a challenging time.

2. Getting a New Mortgage

Whether you purchase a new home or refinance your current one, a new mortgage should lead you to review your life insurance needs, particularly if you have a family. If keeping up with the payments would be too much for your family to shoulder if you passed away, without a life insurance policy payout, they may be forced out of their home.

By adding enough life insurance to help cover the payments or pay off the mortgage in full, you’re giving your family a safety net that can keep them in their home. That can provide them with a sense of relief during a hard period.

3. Starting a Business

Running a business can be incredibly expensive, at times to the point where your family may not be able to manage it if you pass away. If running the company becomes cost-prohibitive, your family may have little choice but to let the business go, even if it could bring them financial gains down the road.

Consider whether your business costs could negatively impact your spouse or children if you were no longer there. If so, then adding more life insurance may be a great move. It would ensure they could maintain operations while they determine next steps, preventing them from losing the business and what it could offer long-term simply because they couldn’t run it today. Feingold Companies offer business insurance, advice, and even a plan to help you secure your investment in your business.

4. Getting a Raise

Usually, one of the main goals a person has when buying insurance is to replace lost income for their household. As a result, life insurance policies are often based on the amount a person was earning at the time the policy was purchased.

If you’ve had a significant increase in your income, your old policy payout won’t cover your new income amount. If you want to bring that back into alignment, adding more insurance is likely your best bet.

5. New Medical Diagnosis for Family Member

If you have a family member who has a medical condition that may require ongoing and costly care, increasing your life insurance may be a smart move. It will ensure that the condition can be properly treated if you pass away, giving your family a source of funds to handle the costs.

This can be particularly important if your death could hinder your family’s access to health insurance. While health insurance companies do have to offer your family coverage due to the Consolidated Omnibus Reconciliation Act (COBRA), your household would have to pay the total cost of any premiums – including the part that was previously paid by your employer – to keep that policy in place. Depending on how much continuing that coverage would cost per month, it may be more than your family can shoulder without your income.

Although There May Be Alternatives

Additionally, even if your family could transition quickly to a new plan, such as one available through your spouse’s employer, if the coverage cost or quality would change, adding more life insurance could be a good idea. Higher premiums could be hard to navigate on just one income. Similarly, if the coverage means that caring for your ailing family member would cost more out-of-pocket, that could be a serious hardship.

Ultimately, all of the reasons above – as well as many other significant life changes – should at least trigger a reevaluation of your life insurance policy. That way, if you feel it falls short, you can update it accordingly.

Are you aware of any other signs that say you need more life insurance? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

Business Insurance 101: What Is It And How Does It Work?

March 15, 2021 By Susan Paige Leave a Comment

Running a business is never easy. Aside from the daily operations you need to pay attention to, you should be prepared for the different risks your company faces on a daily basis. These can include lawsuits, property damage, theft, loss of income and employee illnesses and injuries. Typically, a business with no protection against these everyday risks may result in significant financial losses. This is where business insurance comes to the rescue. [Read more…] about Business Insurance 101: What Is It And How Does It Work?

6 Tips For Choosing New York Auto Insurance

March 15, 2021 By Tamila McDonald Leave a Comment

No one really knows when an accident will happen. While you don’t have control over this occurrence, there are ways for you to have better control over its outcome. The best of these is by having a car insurance policy that covers your vehicle.

Once you start your search and application process, you’ll find that there are many auto insurance products for you to choose from. Not only can these options leave you feeling overwhelmed, but also confused. How do you know you’re choosing the best for your needs? How can you narrow down from among your many options?

Here are some insightful tips when choosing an auto insurance policy in New York:

Determine The Coverage You Need

Your chosen coverage will depend on your preferences and needs. This is why it’s highly recommended first to meet with at least three providers so you can choose properly.

Below are some of the terms or components you’ll have to consider:

Bodily injury liability, which will pay for the medical bills if you’ve injured another party in the accident;

Personal injury protection, which covers your personal medical bills after an accident;

Comprehensive, covers any damage to your vehicle even when you’re not driving it.

The coverage included on your New York auto insurance policy should be commensurate with the price or premium you’re paying for it, so you know you’re having the best value for money.

Select A Top-Rated Insurance Company

When choosing from many different providers, you can do no wrong with going for a top-rated insurance company, like AutoInsureSavings.org Long Island Source. There’s no substitute for the trust that you can place in a company when an accident happens. Otherwise, you may only be wasting the money you’ve paid on the premiums.

A good way to ensure that you’re going for a top-rated insurance company is to go through the feedback section on their website. Also, ask around from friends and relatives who also have purchased an auto insurance policy in New York. That way, you know that you’re placing your trust in a reputable company.

A top-rated insurance company should have an excellent rating in the following parameters:

Overall customer service;
The efficiency of filing claims;
Length of claims approval.

With this said, this is why AutoInsureSavings.org recommends Utica National and Progressive insurance.

Factor In The Additional Car Insurance Coverage You May Need

There are also certain companies that have additional car insurance coverage. These typically don’t come alongside a standard policy. So, you may want to ask possible providers for these options, especially if you know it’s something you absolutely need to have.

For example:

Roadside assistance coverage;
Associated legal costs;
Rental car reimbursements.

Beware Of Scams

As much as there are many reputable auto insurance providers in New York today, there are also so many scammers. While you may think that you’ll never be tricked into these fraudulent transactions, it’s more possible than you actually thought it would be, especially now since these scammers are getting more realistic that you may fall prey to them.

It’s for this reason that you’ve got to be extremely careful when shopping for your car insurance policy. Don’t rush your choice and your decision as it has to be something that you’ve thought of so well and carefully about.

Study The Premium Very Well

Car insurance premiums can be expensive, but there are ways for you to be more practical about it. The key is for you to study your premium very well and see which providers can give you a very good premium rate.

The premium rate may vary depending on certain factors such as:

The make and model of the car you own;
Your age;
Your driving history.

Take Advantage Of Available Discounts

If you’re not shy enough to ask, you may be eligible for certain discounts and you just didn’t know this. Hence, as you meet with different insurance companies, do ask about and take advantage of any available discounts for you.

Some of the common discounts given can be:

Student discounts–for students that are of legal age to own and drive a vehicle;
Lower mileage on your car;
Special discounts for retirees;
Occupational or association discounts;
Green car or environmentally friendly car discounts.

Conclusion

Owning a car is expensive. The costs of ownership don’t just involve the purchase of the car itself, but also all the other inherent expenses alongside it. Hence, the need for you to try and do everything that you can to lower these expenses.

One good place to start is your car insurance policy. The tips above will enable you to have the best value for money. This way, you get to select the best car insurance option for the price that you can (and are able) to pay for.

How to Sell Insurance from Home

February 1, 2021 By Susan Paige Leave a Comment

Most insurance companies and insurance brokers have been relying on face-to-face communications to sell their services. However, with the global pandemic where everybody is maintaining social distance, people are now working from home and face-to-face communication has been curtailed. As an insurance broker, you still want to remain in business and reach out to your clients, but you cannot meet up with them. The big question then is, how can an insurance broker sell insurance during Covid-19? [Read more…] about How to Sell Insurance from Home