Insurance

How to Pay Less for Life Insurance

March 5, 2016 By Mark Kirkpatrick Leave a Comment

One of the best ways to start saving money is to stop spending so much of it. Now, products like life insurance fall into an interesting category, because they’re not strictly necessary for living – but if you’re reading this article in the first place, we’re going to assume you do want that kind of insurance for your family and just want to find out how to minimize what you’re going to pay.

Now, most people think about life insurance as one fixed rate that gets paid out if something particularly bad happens to them (or at least to someone covered by the policy), but it’s not that simple. In fact, most insurance companies are willing to offer life insurance in whatever amount you need.

The industry standard is 7 to 10 times your current annual income. Now, if you’re only living with yourself and your spouse, you could probably get away with 5-6 times your income. If you have several children to support, you might need more. The industry recommendation is for an average family, and should not be taken as an absolute.

Once you have your base amount, it’s time to compare sellers and see who offers you the best starting rate. The emphasis there is on “starting”, because we’re not done yet.

Life Insurance companies are fundamentally risk-averse. In fact, if you’re currently a smoker, you could pretty much instantly cut your payments in half if you stopped smoking. That’s literally hundreds of dollars a month for most policies, on top of what you’ll save by not buying them in the first place.

Here are some other ways to save:

Buy Early: As pointed out by the companies themselves, getting insurance when you’re young can lock in a low rate. Life Insurance isn’t something you buy once and forget, it’s something you might realistically be buying for most of your life. Starting with a low rate when you’re young – especially if you’re likely to increase your income over time – could ultimately wind up saving you tens of thousands of dollars.
Lose Weight: Life Insurance companies like healthy people. They like them so much that if you fall into one of the ‘healthy’ brackets, they’ll almost certainly give you a nice, tidy discount on your rate. Note that you don’t have to be in the healthiest bracket when you enroll (although that helps) – insurance companies can and will lower your premiums any time you qualify, and they’re happy to explain what the qualifications actually are. Losing weight doesn’t have to be hard, either – stay away from “miracle weight loss” claims and focus on actual science and good sense.
Make Annual Payments: You might also be able to get a nice discount if you choose to pay annually instead of monthly. Of course, for most of us, that means saving up throughout the year. Be sure to ask the insurance company how much you could save each year by doing this.

What If I Have A Serious Health Condition?

Look for companies that offer competitive rates. Many of them have employees who specialize in reviewing individual cases and making judgment calls about how much of a risk you are. Remember, they do want your business, and they have every reason to offer you a competitive rate. Still, it won’t hurt if you mention that you’re shopping around – and follow through by getting quotes from more than one company. Comparison shopping is always a good idea for life insurance, and it’s even better if there’s anything that might have a serious impact on your rates.

Savingadvice.com has a free forum which has a lot of user experience and advice that you may utilies to make the most of your finances.

Mark Kirkpatrick is a blogger and business enthusiast in Los Angeles, California. He hopes to help his readers stay ahead of shifting technology and health trends, while maximize their productivity and finance.

Give Thanks if You Have One or More of These Financial Things

January 26, 2016 By Alexa Mason 1 Comment

Everyone has had a period of time that they have felt bad about their current financial situation. However, it isn’t usually all that bad. Of course, it could be better, but always remember it could also be worse. There are a few things you may have that you should be deeply thankful for.

A Steady Job

One of the things many people can be thankful for is having a steady job. Regardless of whether it’s part time or full time job, a job where you receive a paycheck each week is something to be very thankful for. Considering that many people are without steady income, even a little bit helps.

Having Insurance

If you have any type of insurance – health, homeowners, renters, car, etc. – you should consider yourself lucky. Even if you’re insurance isn’t the best plan available, you’re still better off than a lot of people who don’t have insurance. For instance, just imagine how much money you might have to pay out of pocket if something happens.

Investment Fees are Lower

If you invest your money, you must be happy that investment fees are lower than they were ten or twenty years ago. Investing can be a great way to accrue more money – provided your investments pay off, that is. Investment has changed a lot over the years and a lot of the chances have made a more positive financial impact for investors.

Borrowing from Friends or Family

Do you have friends and family who have offered to lend you money in times of need? Not everyone has those opportunities, so be lucky if you have financially stable friends and family members you can rely on. In turn, they’re probably just as thankful if you’re someone who can offer to help them out.

Low Mortgage Rates

Anyone who is paying a mortgage, trying to refinance a house, or thinking of buying a house is probably happy to see that mortgage rates are incredibly low. Right now rates have dropped below 4% and economists expect that rates will remain low for the foreseeable future. Even the slightest dip in interest rates for mortgages is a financial relief.

Having a 401(k)

Those of you who work at a company that offers a savings plan are lucky, especially if your company offers a high percentage match. While this might be seen as money you’re not immediately seeing flow into your bank account, it will help you out once you retire. Considering the future of Social Security is up in the air, having a 401(k) to fall back on is a great thing to have. If your company offers a 401(k) plan that you’re not currently signed up for, you should look into it.

Scholarships, Sponsors, and Financial Assistance

Many people complain about certain state or federal programs that offer assistance to those with limited finances, and while some of these programs have their flaws, they also have some great advantages. For instance, financial aid or scholarships can help lighten a student’s tuition bill, financial assistance programs can help people have their medical bills or prescriptions covered, or sponsor programs can help children or adults achieve the school, career, or life goals they need to succeed. Anyone who has received help from these programs is almost always grateful for them.

You’re Debt Free

If you’re debt free, you’re one of the lucky few. So many people are swimming in school, medical, or credit card debt. Debt can be hard to get rid of, especially if you don’t have the funds to pay off those bills each month. Being debt free – or at least having a steady plan for paying off your debt without floundering – is one less thing for you to worry about.

Photo: Flickr: Cindi Albright

Should You Rent or Buy a Car?

January 25, 2016 By Alexa Mason 2 Comments

Buying a second car can be a stressful and costly task. However, depending on your reasoning for needing a second car, renting a car from a rental company may be better than buying another car. Of course, a rental car is never truly yours, but how often do you really use that second car anyway? Here are a few things to consider when you are wondering whether you should buy a second car or rent.

Do You Need a Car?

Do you really need that second car? Some people like the convenience of having a second car, but if you’re not going to be using it every single day, then it goes to waste. If you want a second car for occasional errands or trips, you’re better off renting a car instead of buying a second one. There’s no need to spend the money on a second car if you don’t truly need it every day.

Lowered Insurance Costs

Depending on the insurance plan you have for your first car, you might be covered if you rent a second car. Some insurance plans make you register a second car, which drives up your yearly rate. However, some insurance plans cover a rental car under the original plan. Additionally, most credit card companies also cover car insurance on rental cars. By renting a second car, you’re saving money that you might have spent insuring another car.

Maintenance Costs on a New Car

Depending where you rent your car, the rental car agency might cover any maintenance costs. Maintaining a car is very expensive, especially if your car is prone to breaking down or needing new parts. If you’re already paying for the upkeep on one car, why pay for a second? If you decide to rent, make sure you rent from an agency or dealer that cover the cost of maintenance. It could save you hundreds or thousands of dollars.

The Fuel Costs With a New Car

Many rental agencies only have newer car models. While a used car might seem like a good second option to buy, you’re going to be paying a lot of gas. Most newer car models are fuel efficient. So renting a newer car with a better gas mileage is a great benefit. No one likes paying for gas, especially when it seems to be rising higher and higher each year. So why wouldn’t you choose to rent a cheaper, newer car that has better fuel efficiency?

Free Gas With Rental Cars

If you’re only using your second car temporarily, renting might be the better option, especially if you rent from a company that offers free gas. For instance, when you rent a car from ZipCar, the cost of gas is included in the price. So, if you’re renting a car for $8 an hour for half the day, you don’t need to worry about how far you’re driving or how much you’ll need to budget for gas. All you have to do is use their prepaid gas card and you’re good to go.

Change Your Car With Rental Company

Depending on the car rental agency or your contract with them, renting a second car instead of buying one might allow you the opportunity to change car styles. Say you need to rent a sedan for a family trip one month, but you need a truck for a construction project the next month. By renting a car, you’re able to make that change. Buying a second car means you’re stuck with that model and might be forced to temporarily rent an additional vehicle to suit your needs. Renting affords more opportunity and is more beneficial for those with ever changing lifestyles.

Renting is Flexible

If you sign a one or two year rental agreement, you have the flexibility to use a different car once the rental agreement expires. If you buy a car, especially if you buy it under a loan, you’re stuck with it until you finish paying it off. Some people buy second cars and then decide a year later that they don’t actually need them. With a rental car, if you don’t need that second car, you won’t be stuck paying for it after your agreement is up.

Rental Cars Can Be More Cost Effective

Renting a car might be more cost effective overall, and you probably won’t have to take out a loan to afford it. If you were thinking of refinancing or taking out a loan to pay for a second car, you’re heading for financial trouble. Shop around and see what car rental agencies offer in terms of price. You might find that the prices are reasonable, and then you won’t have to consider the loan you would have taken out to purchase that second car.

Upfront Cost is Lower With Rental

By renting a second car, you’ll end up paying less money upfront. If you decide to buy a new car – or even a used car from a dealership – you generally have to pay a large down payment. With a rental car, your down payment will be significantly less since you’re not permanently purchasing it. Additionally, your monthly fees will be less than if you had bought the car.

Business Cars Can Be Tax Deductible

If you’re thinking of buying a second car for business reasons, renting one will allow you to claim it as a business expense. Buying a car would be considered owning an asset and as the years go by, the asset depreciates in value, meaning less money for the owner.

Photo: Flickr: Atomic Taco

Monthly Bills You Shouldn’t Pay

January 21, 2016 By Alexa Mason 2 Comments

Many of us fall victim to paying for monthly bills that aren’t truly necessary. Sometimes they’re for items or services that we believe we need and sometimes they’re bills that we don’t realize we could do without. Below is a list of monthly bills or expenses that you might be paying, but that you can probably cut:

Cable TV

The price of cable television seems to be rising every few months, and more and more channels seem to be falling into the premium cable packages. Paying $50 to $100 a month for cable isn’t a smart investment if you’re someone who only watches a few shows or who is trying to stay on a budget. If you’re still determined to watch your favorite shows, consider getting a Netflix or Hulu account. Even better, many networks will provide a free stream of each episode about a day after it airs, meaning you don’t have to worry about paying to watch some of your favorite shows.

Landline Phone Bills

Fewer people seem to have a landline these days, and if you still own one it might be time to cut it. While some people still prefer having a landline for various reasons, it’s one of the easiest bills to cut from your monthly expenses. Even cutting a small $15 bill a month might do wonders for your bank account.

Gym Memberships

Did you know that most people who sign up for a gym membership rarely use it each month? Gym memberships can be very expensive and it’s easy to sign up for one thinking that you’re going to be good about going to the gym. However, it’s not a good sign if your gym keeps charging you a monthly bill when you’re not using their services. If you have a membership you don’t use, think about cutting it.

Dry Cleaning Bill

Do you send your clothes out to be dry cleaned each week? Maybe you swear that you have a couple of items that need to be professionally cleaned every few weeks. One trip to the dry cleaners can end up costing you five times more than what you would have paid to wash a basket of clothes yourself. Many items, even fragile clothing, can be hand washed or taken care of at home. If you’re looking to cut a monthly luxury expense, your dry cleaning trips should be one of the first things to go.

Satellite Radio or Premium Music Subscription

Do you hate listening to ads on music stations? Maybe you don’t think paying an extra $10 a month is that big of an expense. Considering that you can listen to a lot of online music for free, that $10 could be better spent elsewhere. Programs such as Pandora or Spotify allow you to listen for free and honestly, the sudden interruption of ads is something you get used to.

Identity Theft Protection

Nobody wants to deal with having their identity stolen. It’s a horrible thing and can take years to fix. However, many identity theft companies charge hefty monthly fees in order to “protect” your identity. But that money you pay is not always worth it since sometimes even the best hackers and scammers can steal a protected identity. The decision to cut this monthly bill will be on a person to person basis, but it is important to decide whether or not your money is being spent wisely by investing in this type of protection.

Monthly Banking Fees

Many people are charged monthly banking fees and don’t even think twice about it. Have you ever paid a small fee because you didn’t have direct deposit or because you didn’t have a certain balance in your checking account? These are fees that can be easily avoided if you know what to look for when you open an account. To avoid these monthly fees, sign up for a free checking or savings account that doesn’t require a minimum monthly balance or direct deposits.

Payment Protection Plans

A lot of credit cards will offer you the option to sign up for monthly payment protection on your purchases. This is a fee they’ll charge to cover your credit card payments in the case of death, unemployment, or disability. However, many of these plans come with fine print that has very specific qualifications that might not apply to you or your situation. While payment protection plans can be great, they can also end up costing you a lot of money in fees that you don’t really need to be spending.

Paper Statement Fees

Do you like getting paper statements so that you can file them away for future reference? Have you ever noticed that some companies charge a small monthly fee for each paper statement you receive? While some people may resist going digital, receiving digital statements is usually an option with no associated costs. If you realize that one of your bills includes a monthly fee for paper statements, it might be time to think about switching over to receiving electronic statements.

Extra Insurance Coverage

A lot of people sign up for several types of insurance coverage such as home, auto, or renter’s insurance. However sometimes one insurance plan might actually cover certain items for another type of insurance. For instance, a lot of credit cards have a driver’s insurance policy on rental cars meaning that you don’t need to add that extra bit onto your auto insurance. When you receive your monthly insurance bills, check to make sure that you’re not paying for something you don’t need.

Photo: Flickr: Brendan Wood

The Healthcare Marketplace Is Open For 2016 Coverage

November 5, 2015 By Amanda Blankenship 1 Comment

It’s that time of year again. As if the holidays weren’t enough struggle, the Healthcare Marketplace is open once again. If you’re looking to find new health insurance or looking to get coverage under the Affordable Care Act, here are a few things you should know:

Healthcare Marketplace Facts

Anyone who doesn’t currently have health insurance through their employer, Medicare, Medicaid, the Children’s Health Insurance Program or another source can buy coverage through open enrollment from Nov. 1 through Jan. 31.

Government employees and volunteers are helping people sign up for health insurance. Generally the people that need to worry about getting health insurance which the marketplace is open are under the age of 65.

Health insurance plans for 2016 offer four levels of coverage. The levels are bronze, silver, gold and platinum. Each of them covers 60 percent, 70 percent, 80 percent and 90 percent of the costs, respectively.

All four levels of the health insurance plans offer preventive care, doctor visits, prescription drugs, hospital visits and maternity and newborn care. Certain insurance plans cover other things like vision, dental, or medical management programs.

Who has to get health insurance coverage?

Everyone. Well, basically everyone. The Affordable Care Act requires enrollment in a health insurance plan unless one qualifies for an exemption. Those who are required to buy insurance and fail to do so will be forced to pay penalties. The 2016 penalties will be twice as much the penalties people saw in 2015.
Who can be exempt?

To find out if you are exempt from purchasing a healthcare plan, visit the HealthCare.gov website. They will ask you a series of questions to find out if you have any exemptions that will prevent you from having to purchase an insurance plan.

How to apply

If you find that you are required to purchase a healthcare plan, visit the HealthCare.gov website for more information. Though the website has been known for its less-than user-friendly services in the past, the site has improved a great deal.

If you’ve not applied for a healthcare plan in the past through the HealthCare.gov website, you can apply for a plan. If you have an existing plan from last year, you can keep or make changes to your healthcare plan.

This is an important note – if you do have an existing plan, you must renew it to keep coverage. The healthcare plan needs updated information on your income, etc. If you’ve decided to make changes to your plan, you can do that as well.

Applying for coverage

You can obviously apply for coverage and renew your coverage through the HealthCare.gov website. However, if you would rather talk to someone on the phone about your insurance plan, you can call 1-800-318-2596. They ask that before you call that you get a Marketplace Overview. Also, note that the calling center is closed on Thanksgiving and Christmas Day.
Visit the HealthCare.gov website for more information.

HMO vs PPO and Why the Difference Matters

August 26, 2015 By Will Lipovsky Leave a Comment

Choosing between a Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) is not always an easy decision. One may save you money but limit your options or add inconvenient steps to getting health care for you or your family. Understand these important differences before you choose.

HMO vs PPO

An HMO is essentially a group of doctors who charge a reduced rate to the health insurance company. The insurance company may use other cost reducing tactics in addition to this negotiated rate, such as requiring referrals to a specialist or limiting you to a certain number of covered tests each year. In exchange for these limitations, you gain cheaper health care. You might pay lower deductibles, copays, premiums or all three.

An easy way to remember how a PPO is different is to remember the extra “P” stands for Preferred. In a PPO, the focus is on the medical provider that you prefer, rather than one chosen by the health insurance company. In a PPO, it becomes easier to see your doctor of choice, even when the doctor is outside of the network. You don’t need a referral to see a specialist, which saves you a visit to your primary care doctor when you know that a specialist is needed.

Health Care Insurance Costs

Obviously, these differences cost the insurance company more. The extra cost is passed on to you and other members of the PPO in the form of higher deductibles, copays and premiums. You might also end up losing some of the protections offered in the insurance for your maximum annual out of pocket expense because visits to out of network providers usually do not count towards that total.

Research shows that for Medicare patients, a PPO can cost twice as much as an HMO, depending on the plan. But for workers, PPOs are inexplicably cheaper. You simply will not know which one is cheaper until you get a premium quote and review the out of pocket expenses associated with the plan.

Blurring Lines

HMOs have become increasingly unpopular because of the inconveniences of getting referrals and limitations on certain tests and procedures. To compete with PPOs, more HMOs are easing restrictions on out of network providers. So when you investigate your options, don’t automatically assume the HMO will be too inflexible. Compare services and costs on a case-by-case basis before you decide.