What to Look For When Buying Life Insurance

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Buying life insurance is an essential step when engaging in estate or financial planning. If you’ve never purchased life insurance before, it can seem like a bit of a daunting task. During the process of purchasing a policy, there are a few different terms and conditions that you should evaluate.

The first decision you’ll have to make is whether you want a life insurance plan that builds a cash value or not. Whole and universal life insurance are two plans that build a cash value as you pay your premium. They are also permanent life insurance that stays with you as long as you are alive and still making the premium payments. By comparison, with a term life insurance policy, a cash value does not accumulate and it only provides coverage for a specific number of years. While having a cash value with your life insurance policy might sound attractive, you should know that you’ll have to pay higher premiums to get it. Some prefer to pay a much lower premium with a term life insurance policy and keep or invest the difference.

When buying a life insurance policy, it is also important to understand how much the face value of the policy is. The face value is the amount of coverage that your beneficiary will receive when you pass away with the policy still in effect. For example, if you buy a policy with a $100,000 face value, your beneficiary will get $100,000 from the insurance company when you die.

Life insurance policies can also have riders attached to them to provide additional forms of coverage. For example, you sometimes have the option of adding an accidental death and dismemberment rider to your policy. With this rider, if you die from an accident, the face value of your policy may be doubled when it is paid out. If you are dismembered in an accident and you survive, the policy will pay you the face value of the policy at that time so that you can use the money while you are still alive.

When comparing life insurance policies, you need to make sure that you’re comparing apples to apples. Make sure that the policies are the same type of insurance, they have the same face value and that they have the same riders attached to them. At that point, you can truly compare the premiums offered by different companies.

Financial Tips for Living Debt Free on Any Income

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The financial crises occurring among our local and federal government agencies has created a real mess for the majority of the American people. Perhaps once or twice you have heard people claim they wish they could run their finances like the government. The real issue is that you would run yourself into debt if you were to follow the same model. One very real fact that many people don’t realize is that you can stay on top of your finances and avoid getting into debt with only the money you make. Consider the following financial tips:

Financial Tip #1- Do You Really Need It?

Know the difference between Want and Need. Avoid the things that you really want and only get the things you really need. Practice this method for a while, and then reward yourself from time to time with something you want. Ask yourself this question, “Can it wait until the next payday?” Many people will get themselves into trouble by borrowing money from their credit cards, their friends, or through payday loans to purchase items they can really live without. Be disciplined and save up the cold hard cash before you buy it.

Financial Tip #2- Create a Savings Account for Emergencies

Before even rewarding yourself with things that you want, create a savings account for emergencies. This will enable you to use cash instead of borrowing money when the time comes. Reflect on the times where you needed money the most and how much you needed. Remember also that multiple emergencies can happen in a short time span. Save enough money to take care of two or three emergencies you might have. When you have depleted this account, begin building it back up as quickly as possible.

Financial Tip #3- Get Out of Debt Permanently

Pay off your credit cards, and do this before setting up a savings account and buying the things that you want. Credit card interest rates are high, and interest is money that you pay without receiving any goods or services. Use your credit cards only in times of emergency and after you have depleted your savings account first.

By following these simple tips, you can free yourself of the burden of debt with only the money your currently make. The key is having patience. Impulsiveness leads to debt, and debt incurs even more debt. Make a goal to be debt free and financially secure.

Investment Tips

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Investment Tips

Investing is one of the best ways to generate wealth. You do not have to be Warren Buffett to make any off of investing as long as you follow some of the basic principles of investing. Here are some investment tips to start building wealth.

- Diversify

As always, it is essential to never put all of your eggs into one basket no matter how attractive a particular investment might be. Some investments will seem like a sure thing and people may even encourage you to invest all of your money, but that is never a good idea. Diversify your investments do not invest too heavily in one area so you will not be in dire straits even and when something happens. Allocate your assets to a combination of stocks, bonds, and other investments to get the best results.

- Educate yourself

The most important thing you can do for yourself before you invest any of your money is educate yourself about investing in general. It is recommended that you start reading the financial news like the Wallstreet Journal and you should also learn the fundamentals by reading popular investment books as well. Speak with a financial planner or stock broker about what they recommend and then research those options independently. Taking a few classes about finance and investing may also be quite helpful.

- Invest for the long term

Although day trading is seen as a way to make some fast money, it will usually do very little for your bottom line. The best investing strategy is to focus on creating long term gains that will last for years to come. Short terms losses and gains mean very little since the economy fluctuates all the time.

- Invest gradually

You do not need to invest a lot of money upfront to see gains. Many of the successful long term investors actually put money into the market little by little with every pay check they received. Investing something like a $50-$100 of every month can add up quickly and start earning money.

Investing is a complex subject and there is a lot more to it than what is written here. Determine your personal goals for investing and continue to learn from there.

Trip Cancellation Insurance

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You’ve planned a glorious vacation. You booked your hotel, bought your airline tickets, got your passport – all systems are go! That is, until your gastrointestinal system says ‘no-go.’ You get sick the day before you are supposed to depart. Now what happens to all the money you put down on your vacation? That’s where trip cancellation insurance comes in handy.

Trip cancellation insurance is one type of travel insurance. This type of insurance typically costs between five and seven percent of the cost of your vacation, according to the Insurance Information Institute, so it would cost you around $500 to $700 to insure a $10,000 vacation. Trip cancellation insurance typically covers you against financial loss in the event you have to cancel your trip due to severe illness, a death in your family or other significant events which are listed in your policy. Some trip cancellation insurance policies also cover you against loss in the event your tour management company or cruise line goes out of business and takes your money with them.

You should not confuse trip cancellation insurance with trip cancellation waivers. Trip cancellation insurance is an insurance policy that is sold by an insurance company. A waiver is a product sold by cruise lines and tour operators, and is not regulated by any state insurance commission. Waivers are typically far less expensive than trip cancellation insurance, but they also tend to have many more restrictions. When deciding between a trip cancellation insurance policy or a trip cancellation waiver you need to take your time and read the fine print. Don’t make any decision until you are completely comfortable with the coverage.

You must purchase your trip cancellation insurance policy prior to your departure date. Different insurance companies have different restrictions and requirements, but you should typically purchase your policy between seven and 30 days prior to departure. With more than 124 million travelers purchasing some form of travel insurance each year there is no shortage of insurance companies to choose from. In order to get the best price for the best coverage you should always compare multiple policies from a number of different companies. For the the greatest peace of mind you should also check the issuing company’s credit standing with an independent rating company such as A.M. Best, Standard and Poor’s or Moody’s.

Car Rental Insurance Tips

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You have many things to consider for your car rental insurance. CDW or Collision Damage Waiver and LDW – Loss Damage Waiver are the first to look at.

If you rent a car and it is damaged by accident or otherwise, you could be on the hook for the first portion of the damage, which is known as the deductible. This could range from a few hundred dollars up to the total price of the vehicle.
The best way to protect yourself against this risk is to buy Collision Damage Waiver (CDW). This is also called LDW or Loss Damage Waiver. The advantage of this type of insurance is that the renter of the vehicle is relieved of responsibility got the dollar value of the damage or loss to the car, all the way to the full price of the car. It is important to know that if you violate the terms of the car rental agreement, then this coverage does not take effect. An example of this would be if someone else drives the rental car and you did not list them as a driver when you rented the car.

Your credit card issuer may give you LDW/CDW insurance as part of your standard card benefits. Check your card agreement or call your company to find out if this is the case. This coverage, if it is offered, typically will provide coverage supplemental to your regular car insurance. Thus, if your rental car is damaged, your personal insurance will pay for the costs of repair up to the policy maximum. This is then followed by the coverage offered by your credit card issuer kicking in to pay the remainder of the damage costs. Keep in mind that this could impact the rates you pay for your insurance if your insurance company hits you with an accident surcharge on future premiums.

Another type of optional insurance is PAI or Personal Accident Insurance. This insurance gives medical coverage and accidental death coverage for the renter of the car and additional passengers that are riding in the rental car with you. You should check your own car insurance to check if car rentals are covered. If they are covered, it is possible that you do not need to buy PAI.

PEC or personal Effects Coverage gives you coverage for the theft or loss of your personal items from the car you rent.

Home Insurance Tips

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Having home insurance is not an option since many mortgage companies require clients to show proof of coverage. Many people try to get by on as little coverage as possible to save money without realizing that they are putting their home and finances in danger. Fortunately, there are a number of ways for people to maintain adequate homeowner’s insurance while also saving money.

The best way to find out how to save money on a homeowners policy is to ask the insurance company. Many offer discounts if people have multiple policies or an established history of paying on time to help defray costs. They can usually offer suggestions on home improvements that can lower insurance costs. Most of these suggestions are the same regardless of the company and are often very cheap and practical.

If the insurance company is unwilling to lower rates or offer any discounts then it is time to comparison shop for another insurer. This should not be a regular occurrence since many insurers offer discounts for staying with them for a certain number of years, but doing so every once in a while can provide significant savings.

Installing a home security system that includes smoke and carbon dioxide detectors almost always helps lower a homeowner’s premiums. Most insurance companies will require proof of installation and activation before discounting the premiums and may offer even deeper savings for getting premium systems that are connected to a local police station or dispatch center.

A very simple way to reduce premiums is to raise the deductible on the policy. While this may mean a larger out-of-pocket expense for the homeowner, it can save hundreds of dollars on yearly policies. People can avoid having to worry about this expense by setting up a separate savings account for the amount of the deductible which they can then use without having to tap into their savings.

While it may not be feasible for everyone to pay off their mortgage, doing so is almost guaranteed to save money on insurance. Insurance companies figure that if a person truly owns their home outright they will be more likely to care for it and protect it, reducing the chances of having to file a large insurance claim. If the mortgage is too much to pay off at once, just showing that it is being paid down on a regular basis may be enough to qualify for a discount.

Getting the Best Car Insurance Policy

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If you plan on driving a car on public roads, you’ll be required to get some kind of car insurance to protect other drivers. Liability insurance is the only type of auto coverage that is required, but many drivers also purchase more extensive coverage that protects themselves. Since most people have to buy car insurance at some point, it is a very important part of your financial plan.

When shopping for car insurance, you need to see what type of coverage you are actually getting. If you want to compare car insurance companies, you have to make sure that you are comparing like policies. Some policies are liability-only, while others offer liability, collision and comprehensive coverage. Liability coverage space for the damage that you inflict on other drivers, cars and personal property.

Collision coverage provides you with protection against damage to your own vehicle. If you are in a wreck, the insurance company will pay to repair your car or replace it, based on the value of your car before the crash. If your policy has comprehensive coverage, this covers any damage to your vehicle that is not caused by a crash. For example, if a rock hits your windshield, this is the portion of the policy that would help with replacement.

In addition to making sure that the features of the policy are the same, you should also compare coverage limits. For instance, when you get liability coverage, it can come with many different limits. Most policies have limits on how much they will pay for damage to personal property and how much will be paid for other people’s medical bills. If you’re comparing one policy with a $100,000 medical bill limit to a policy with a $300,000 limit, you’re not really getting a true comparison.

When shopping around for a car insurance policy, you may also want to consider bundling it with other types of insurance coverage. For example, if you have a homeowner’s insurance policy and a life policy, you may want to get your car insurance from the same company. When you can bundle insurance policies together with the same insurance company, you often get multi-line discounts. If you have multiple cars that you can insure, this could also help you save some money. Look for a reputable company that you can work with for all of your insurance needs and it has the potential to make your life easier.

Saving Wisely for College

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A college education is more expensive than at any time in the past. At the same time, a college degree is more important than ever in a hyper-competitive job market. Many parents start saving for their child’s college education from birth but still struggle to pay yearly tuition. A number of public and private education savings programs have appeared in recent years to help families since this is such a widespread issue.

While there are a number of scholarships and financial aid packages available to college students, these will rarely pay for all the costs of higher education. Saving money early and wisely can help avoid the student or parents being forced to choose between taking on extensive loans or sacrificing a college education.

The traditional way of saving for college tuition is to start a bank account and add to it on a monthly or yearly basis. While this is a perfectly sound method it will only garner a small amount of interest over time. This same money can be placed into certificates of deposit (CD’s) to make even more money, though it will untouchable until the CD matures. Banks and credit unions offer CD’s at competitive rates, and there are more and more online financial institutions that offer even higher rates of interest on savings accounts or CD’s for greater convenience.

A very common form of education savings is to open a Section 529 College Savings Plan or Prepaid Tuition Plan. These are offered by every state in various forms. A prepaid tuition plan guarantees future tuition with the state college system, while college savings plans have more flexibility but do not come with any guarantees. Prepaid accounts allow people to purchase shares of tuition that will grow at the same rate as tuition – even years later. These accounts can also be added to by anyone and are exempt from taxes at the state or local level.

Investing money for college tuition can yield great returns but is also very risky. Since there is no such thing as a sure investment, it is up to the parents to decide how much they are willing to risk. This method can generate enough income for a four-year degree with very little startup capital for those who are willing to risk taking a loss and having to contribute even more money as the tuition bill draw ever nearer.