Archive for the ‘Financial Advice’ Category

You know you need life insurance, but how do you know which one is right for you?

Here are just a few scenarios when term life insurance may be the better choice…

  1. You want to pay as little as possible while ensuring that your family may stay in the same home without the expense of mortgage payments.
    • Buy a Decreasing Term Life policy otherwise known as Mortgage Insurance.

      As the amount due on your home decreases so does the benefit amount payable by the policy. (Not to be confused with PMI which is mortgage protection for the mortgage company in case you default on your mortgage. This is usually required if you owe more than 80% of the value of your home.)

      Note: Decreasing Term refers to the decreasing benefit amount not to the payments. Most policies are offered on a level-premium basis.

  2. You want to make sure your family is taken care of until your children have finished college.
  3. You can’t afford whole life and just want enough coverage until you can afford a permanent policy.
    • Get a short-term policy and if possible one that includes the Option to Renew or the Option to Convert or both. These options will increase your premium but they also ensure that you cannot be turned down from continuing your policy in the future even if you are uninsurable.

      This does not however prevent the insurance company from increasing your premiums nor does it limit the premium amount that may be charged, although the company may not charge you any more than they charge everyone else in your age group.

  4. You have other means of saving and just want to pay for life insurance only.
    • Purchase a term policy that should be long enough to cover you for your entire life.
  5. You want a certain benefit amount and coverage now but cannot afford the premiums of a level-premium policy. However you expect to earn more in the future.
    • Buy a 10-year renewable term policy that may be renewed every 10 years. Your premiums will increase every 10 years according to your age but you will have enjoyed a higher amount of coverage in your early years then you could normally afford.

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Are you exploring different options to get an affordable auto insurance quote?You can navigate the websites of different auto insurance carriers to compare quotes. Almost all the good companies have their own websites where you can get a quote. The forms take only a couple of minutes to complete and will ask you to provide needed details about your car. Once you are done, wait for your instant online auto insurance quote.

If you repeat the same process for a few of the websites, you can get insurance quotes that can be compared. Settle for the one that will not only give you your money’s worth but will offer adequate coverage too. Often consumers look for cheap auto insurance coverage, but what they fail to realize is that a cheap auto insurance quote may not give you the protection or the compensation you look forward to in the event of an emergency.

A majority of states have made it mandatory for you to have a compulsory minimum coverage. If you are shopping around for a low auto insurance quote, make sure your coverage is adequate. It doesn’t make sense to buy a policy that will not suffice in the time of need. The money you save on your insurance premium will be drained out in the event of an emergency if you are not adequately equipped.

Once you settle for a vehicle insurance quote, there are different ways in which you can make your automobile insurance premiums affordable. Some of the methods are given below –

Maintain a good driving record
Avoid speeding or other traffic violations that can add points to your license and increase your premium.

Drive a car that isn’t expensive
Expensive cars cost more to repair and therefore carry a higher risk to the insurance company. So, if you drive a luxury car or a sports car, even one that has a high safety rating, your premiums will usually be higher than those of a cheaper model.

Do you live in a crime prone area?
If you reside in an area where incidence of criminal activities is high, be prepared to shell out more cash.

Maintain a good credit score
If your credit score is good, you are looked upon as a financially responsible person. It is assumed that you will be just as responsible in your driving habits, so, you are more likely to receive an auto insurance rate to match.

The reason why there are more chances of getting an affordable auto insurance quote online, as opposed to by other means is due to the fact that overhead costs are lower for insurance purchased online, thereby allowing you to pay lower and more affordable premiums for your vehicle insurance.

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There is an old joke about life insurance. The agent tells the client “For someone your age, the yearly premium on a $5,000 policy is $8,000”.

Apparently, the old joke has become new. Health insurance, as we all know, is skyrocketing, but some know that better than others. For instance, Victoria Collier of the San Francisco Chronicle reported that one 59 year old man in San Francisco is facing a 38 percent increase in his monthly premiums. That is on top of the 41 percent increase he received last year, bringing his total increase to 94 percent in one year. Anthem Blue Cross stated the increase was due to fewer people in the health insurance pool, increasing medical costs, and a bad economy.

Working for an insurance broker, I am licensed with multiple insurance providers so we can offer policies with all the major carriers. So I know from experience that all medical insurance companies have had to raise their rates due to increasing health care costs. However, I know of only one that has consistently offered lower rates for the same quantity and quality of health care coverage.

There is a reason they can do this, and it’s not magic, and yes, they are for profit. In fact, they are a Fortune 500 company. It’s simply that they have been offering life insurance for individuals and individuals only for over 100 years. It is the one thing they do and they do it well.

Of course, they do not guarantee coverage for everyone but you may be surprised. Get a quote, then shop around. Compare policies and networks.

Check it out for yourself and let me know how it turns out, for the good or for the bad.

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Save 800 calories...buy life insurance

The $25,000 Burger

Unlike any other insurance, with life insurance you know you will use it one day, it’s just a matter of when. Unfortunately, in today’s economy, few of us have money lying around to spend as we please. So how, then, can the average person afford to buy life insurance?

The answer is… buy term life insurance.

You may not be able to buy as much coverage as you should, but even as little as $25,000 makes a big difference when a loved one dies, (especially compared to $0) if only to provide some time to adjust to the new circumstances. And, one month’s premium could cost you as little as a burger at McDonald’s (see Note below). That’s with no medical exam, approval in minutes, and the complete application filled-out online. It’s like buying life insurance through the drive thru …except without the calories or the guilt.

Note: At the time of this writing:

  • a 20 year old male can get a 10 year policy for as little as $4.55 a month or a 30 year policy for $6.51 a month
  • a Bacon Cheese Angus Burger (BCAB) lasts about 15 minutes,
  • a BCAB costs around $4.23, and
  • a BCAB has approximately 790 calories.

BTW, life insurance has 0 calories.

For a free quote for up to $250,000 of coverage with no medical exam go to gfaexpressterm.com and apply in minutes.

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Yeh, right!

Yeh, right!

One of the theories as to why healthcare costs continue to rise at an alarming rate is “overcoverage“. Basically stated since insurance companies primarily pay the costs for healthcare, consumers have little knowledge or concern in regards to the costs of these services. Since ‘someone else’ is paying the bills, who cares how much it costs? However, if the money came directly from the pocket of the consumer, providers would have to compete more for healthcare dollars and consumers would have to budget their use of those services.
Health Savings Accounts (HSAs) were created with the purpose of solving this problem. How?
First it might help to know a little about the recent history of health care. If you are like the majority of Americans who have, or have had in the past, an HMO, you probably won’t be surprised to know that most people were less than satisfied with the plans.
Basically, HMOs were created for the purpose of bringing down the cost of health care expenses through the use of case management. HMOs signed up physicians to be a part of their network. The physicians provided discounted care to HMO members and the HMO would provide new patients to the physician. The belief was that the expenses paid by insurance companies would be reduced given that overpriced physicians would be removed from the group and unnecessary and expensive visits to specialists would be controlled through the Primary Care Physician (PCP).
That objective was successful from the standpoint of lower expenses for insurance companies; however it became very unpopular with patients. For one, it was often very difficult to get an appointment with one’s PCP since they were often overbooked by the networks which would require that a minimum number of patients be assigned to each PCP.
Second, the PCP was not able to dedicate a lot of time to complicated cases because of the number of patients scheduled to be seen from one day to the next. Moreover to discourage expensive visits to specialists, bonuses given to PCPs were reduced whenever a PCP referred a patient to a specialist.
Another complaint was that HMOs would many times offer lower rates at the start to attract new employer groups then raise rates mid-year. Employers who paid a percentage of the premiums for their employees were more likely to switch HMOs if they were offered a better price by another plan. When an employer switched plans it often meant the employees would have to switch PCPs and/or any other doctor that may have been treating them, in order to receive coverage. The same was true if a provider was unhappy with the HMO and left the network, or vice versa; either way the patient would have to shop for new care providers.
Preferred Provider Organizations (PPOs) were the next hoped for solution. They allow patients to choose to stay within the network or go outside the network for their provider(s). Since providers outside of the network used by the insurance company are more likely to charge more for their services, the insurance company passes the cost on to the patient by requiring a higher copay or deductible. The premiums are also generally higher for PPOs as opposed to HMOs.
However, although HMOs and PPOs have slightly slowed the rising cost of health care or health insurance, the rate of increase continues to be 2 and 3 times the rate of the cost of living. In fact, the number of individuals who cannot afford insurance continues to rise. When this occurs, one way or another the government (i.e. the taxpayers) ends up paying, either through Social Services programs or through Medcaid when the individual becomes medically needy.
So how do you encourage individuals to get insurance coverage that they can’t afford? This is where HSAs and HDHPs (High Deductible Health Plans) come in. Where someone may not be able to afford the premiums on a policy with complete coverage, a HDHP at least provides coverage in case of catastrophic events and leaves the outpatient expenses and prescription costs for the individual to pay. Since HDHPs only begin to pay once the high deductible has been met, the premiums for these policies are significantly reduced. With premiums reduced employers who otherwise would be forced to discontinue offering health insurance can continue offering group health insurance without medical underwriting. In addition, the consumer receives negotiated pricing for the visits to in-network physicians even before the deductible is met.
So, Uncle Sam doesn’t get stuck for a catastrophic health event, the insurance company doesn’t have to worry about how many doctors or which doctors a person visits, since the HDHP can be HMO based, PPO based, or other; and the consumer enjoys lower insurance premiums. But if a person could not afford complete coverage in the first place how will they pay for sudden doctor visits, and prescriptions before the HDHP begins paying?
Here is where HSAs (Health Savings Accounts) come in. Of course, HSAs do not give individuals the money to pay these expenses; nothing is perfect. However, HSAs provide both a mechanism and incentive for employees to save for those expenses. The method is a government approved savings account that works in conjunction with the HDHP. Depending on the amount of the HDHP deductible and how much the employee estimates his yearly out-of-pocket medical expenses will be, a set amount is withdrawn from the employee’s paycheck each pay period and deposited into the account. Whenever a medical expense occurs (doctor visit, prescription charge, etc.) the expense is deducted and paid for from the HSA.
The amount deposited into the HSA from the employee’s check is tax free so depending on the tax bracket of the individual the savings can be significant, from 20% to 40% or higher. So in a way an HSA (or rather the federal government) does provide at least some of the money for those expenses through tax savings.
Okay, that’s good news for those whose employer offers HSAs and HDHPs, but what about the self-employed or individuals who cannot get group coverage through their employer? Fortunately HSAs and HDHPs are available for individuals. Of course, as with all plans offered outside of group plans any preexisting conditions may result in denial of coverage or exclusion of coverage for the condition. (So what else is new?)

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Boat made from 16,000 plastic bottles

Boat made from 16,000 plastic bottles

These days everyone is going green. I just read the coolest article about a boat made of 16000 plastic bottles that will be sailing from california to australia.
Anyway it made me think about the fact that life insurance in general is a green industry.

Think about it. The green movement is all about saving the planet for future generations, accepting responsibility personally for the well being of those to follow. It is an ideal that requires action. Not that you have to be an activist to be green. Just doing your part, doing what you can; recycling, minimizing and reducing waste, and teaching others those same habits, makes you green.

Life insurance is about preserving the financial future of our loved ones, our children – the next generation. It requires effort and sacrifice, though not as much as you might think, but what you put into it is nothing compared to the returns your children will receive back, not the least of which is the value of your example in putting others first.

…And for those of you who are still fighting the “what’s in it for me?” way of thinking, just remember, there may come a time when you will need someone to take care of you. Wouldn’t it be great if the “green” ideal was something your children believed in?

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