Customize Your Insurance – Part IV

Unlike auto insurance, it is important to make sure that your home insurance is always kept up-to-date. If you haven’t updated your home insurance policy lately, you could be headed for some serious problems if something were to happen. Unlike cars, the value of homes has been rising and will continue to do so. This means if your home insurance is up to date with the current financial trends, than neither is your coverage.

What most people don’t think about it the amount they need the insurance to cover. You need to cover the cost it would replace you to rebuild your home, not your current home’s value. Say you bought a home 5 years ago and its value was $500k. Your insurance was most likely for $500k. But now with rising costs, 5 years later it would cost you $750k to rebuild your home in the event of destruction. Your insurance policy is not going to cover that $750k you need, rather they will just cover the $500k which you are insured for.

Think you don’t need insurance if you rent? Wrong. Renters too need insurance, obviously not for the property of the building which they live in, rather for the personal items which the own inside of the building. When looking for a renters policy make sure to get actual replacement cost coverage. This way your policy pays you what it will cost for you to replace all lost items, not the depreciated value of those items.

Regardless of whether you are looking for renter’s insurance or home owners insurance it is suggested that you ask the insurer to include an umbrella liability policy. This should cost you about $200 per year extra, but will give you up to $1 million in liability coverage should there ever be an accident or an injury on your property.

Customize Your Insurance – Part III

Auto insurance is probably the most well known and most feared type of insurance. Most state’s have low requirements for your insurance such as $30,000 of coverage for bodily injury, $50,000 total coverage for the accident and $20,000 coverage for property damage, including your vehicle. This is, in my opinion, not enough. What happens if you were to injure someone severely and they sued you? There is no way that low budget insurance plan will cover more than 10% of their lawsuit.

If the car you are looking to buy and insure is an expensive car, it is suggested you look into your policy’s “replacement cost” coverage. Most plans will only give you what they believe your car’s value was just before the accident, not what it will actually cost you to replace the car if you were to go out and get the same car again.

Looking at it from the opposite end, if your car is what many considered to be a “beater” or a “jalopy” you can easily save some money by dropping collision coverage. If the car is already in bad shape, will you mind driving around with a dented bumper? I didn’t think so. Save your money and drop the collision if the appearance isn’t so important to you.

As mentioned earlier in Part II, consider a policy which requires a higher deductible be paid in the even of an accident. Go for the $1000 deductible instead of the $500. This will result in a lower premium and save you money.

Customize Your Insurance – Part II

In Part I of this article we discussed Life Insurance and some of the things to look for when shopping for life insurance. In this next part I will discuss health insurance. For those who are forced to pay for health insurance out of their own pockets this can easily be the most expensive and painful type of insurance to own. More and more Americans these days are completely forgetting about health insurance and paying for illness, doctor’s visits and trips to the hospital out of their pockets, which is not recommended.

As mentioned before many people are going without health insurance in America these days, this is completely unacceptable. The purpose of any type of insurance is to prepare for the worst and to be sure you and your loved ones are taken care of in that worst case scenario. If your children got sick would you really want limits on the level of health care they can receive?

The best way to keep your monthly payments down in to search for health insurance plans is to sign up for a plan which has a high deductible. A higher deductible always results in a lower premium. Assuming you are a healthy person, taking the highest possible deductible which you can afford to pay. If money is a serious problem for you and any type of health insurance is a struggle it is suggest that you take a look at a minimum policy that offers at least “catastrophic coverage.” This way you can sleep sound knowing if anything unexpected does happen, you won’t be stuck with possibly tens of thousands of dollars in medical expenses.

How long can you afford to live if you are involved in an accident or a serious illness that prevents your from working? Exactly! Many employers offer coverage in their plans but it is a good idea to check out the exact details of what you are being offered. This is what you should look for: Coverage should cover at least 70% of your income to in order to allow you to continue living a comfortable life while dealing with the stresses you may be facing. It is also very important that your coverage is for “owner’s occupation.” This protects you should your illness or injury prevent you from returning to your pre-accident job. Avoid policies that only offer coverage if you can’t return to any type of occupation, also make sure your policy is “guaranteed renewable” so that’s your provider can’t cancel your policy on you. The final part to look for is the “elimination period.” This is the amount of time you must wait after your injury or illness before your policy starts making payments. 2-3 months is typical.

Customize Your Insurance – Part I

Insurance is a word that usually doesn’t sit well with people. Why? Well we all know of insurance as something that costs us money. There are no buts about it, insurance costs us money. Whether it’s home insurance, life insurance, car insurance or what have you, you will be spending money on it. Some people chose to avoid insurance just because they don’t want to deal with the costs. In my opinion this is not a good idea. So instead of telling you to avoid insurance altogether, I’ll be explaining to parts of insurance which you can avoid in order to save. I will cover 4 types of insurance: Life, health, auto and home. They will all appear in different “parts,” I, II, III and IV.

Please realize that insurance is a very important matter and is not one to be taken lightly. This article is meant merely as a guide to use when deciding what you may and may not need.

Life insurance is a great way to make sure your family members and loved ones are properly taken care of if anything tragic was to happen to you. A lot of people have a hard time deciding on a policy that fits them best without too much confusion or paying too much. First thing to do is to decide whether you actually need life insurance or not. Ask yourself this question “How many people depend completely on my income for their lives?” If you answer zero than continue reading as this will not help you.

When looking for life insurance chances are companies will spam you with dozens of different types, pay no attention to these, the only type of insurance you should be looking for is “term life insurance.” Everything else is a waste of time and money, don’t even bother. Now we look at another decision, how long of a term do you want your policy to last? It is suggested that you enroll in a term which will last until your youngest child is old enough to finish school and enter the workplace, 22-24 years of age is optimal.

How much should my policy be worth? Is the next question you should be asking. Well that’s up to you but a good figure to work with is from 10-20 times that of your annual income. This will give your beneficiaries not only plenty of money to live on, regardless of when you pass but also give them money to invest in bonds which can earn quality interest. This way on a $500,000 policy your beneficiaries can earn $25,000 per year off bond investments without even touching the principle money. Obviously they can earn even more if your policy is worth more.

Reputable companies are also a must when investing in a life insurance policy. The number of “fly by night” insurance companies is staggering, and what could be worse than leaving your loved ones with a false sense of financial security?

Find a penny, pick it up. All day long, have good luck. It’s a common phrase we’ve all heard and have probably taken for granted. I know I did, until last year. In the summer of 2004 I decided to start something new in life. I decided I would start picking up EVERY piece of change I ever saw, put it in my pocket and take it home with me where it would be put in a collection jar.

I never realized how lucrative picking up spare change could be. Every other month (6 times per year) I take my change jar to the bank and turn it in, each turn-in a net anywhere from $60-$75…that’s an extra $420 (on average) per year, in my pocket. Why more people don’t take part in this, I have no clue. Maybe some feel it’s too much work, or they’re too bothered by it to take the time to bend over to pickup that dime. That’s fine, all the more money for me to find.

Picking up and keeping your spare change is an excellent way to help funnel a few more dollars into your monthly budget and add to your bank account. Look at it this way…If the average teenager spent 4 years of high school and 4 years of college collecting all the spare change they find they could net approx. $3500. Putting that money into a 5 year Online Bank CD could yield them up to $4500 by the time they are 27. Granted there are other more lucrative options, but this presents a 0% risk for their money.

In short, next time you see that penny on the ground, bend over and pick it up – it may pay for your next date, night on the town or help you out in a tight jam down the road.