life insurance http://www.wisebread.com/taxonomy/term/6779/all en-US A Simple Guide to Planning For a Loved One's Long-Term Care http://www.wisebread.com/a-simple-guide-to-planning-for-a-loved-ones-long-term-care <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-simple-guide-to-planning-for-a-loved-ones-long-term-care" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-179165125.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>As we get older, so do our parents and other loved ones. In some cases, that may mean they'll require long-term care, especially if they fall ill. When this happens, families are faced with a tough decision: hand over the reins to a nursing facility, or manage their care from the comfort of their homes. There's no shame in either decision. But there are several important things to consider when planning for long-term care.</p> <h2>Weigh Your Options Well Ahead of Time</h2> <p>Perhaps the most vital part of planning for long-term care is that you're well prepared. Making hasty decisions on how to provide your loved one with the care they'll need when they're no longer able to care for themselves will not only be stressful for you, but also for them. You'll want to make sure your loved one is provided with the quality of life they deserve. Certainly, ailments can befall your loved one unexpectedly that will require quick decision making, but if you can help it at all, it's best to investigate your options before you're faced with a crisis. That way, you can enter the situation with a clear head, prepared to make the right choices.</p> <h2>Discuss Insurance Options With Your Loved One<strong> </strong></h2> <p>Talking about long-term care with your loved one, especially a parent, is not an easy conversation. But as difficult as it may be, it's necessary. There are financial implications to consider, which will be somewhat lessened (hopefully) with insurance.</p> <p>Jeff Salter is the CEO and founder of Caring Senior Service, a national in-home care service, and he suggests planning a discussion about insurance options, including what your loved one may already have, and what you both may need moving forward.</p> <p>Long-term care insurance can still be expensive in and of itself, and costs only increase with age. Many advise that people purchase a plan in their 50s before any major medical issues arise &mdash; and even then, it's not cheap. For example, the American Association for Long-Term Care Insurance estimates an insurance policy offering $164,000 in immediate coverage would cost a healthy, 55-year-old male approximately $1,060 a year. A healthy female of the same age could expect to pay approximately $1,390 a year for the same coverage. The sooner you can lock into one of these policies, the better. (See also: <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it?ref=seealso" target="_blank">Is Long Term Care Insurance Worth It?</a>)</p> <h2>Find Alternative Ways to Pay Without Insurance<strong> </strong></h2> <p>In the worst-case scenario, you don't have the option of long-term care insurance. This can be a daunting prospect, but it's not the end of the world. Salter suggests two solutions that will provide monthly income that can go toward the cost of care.</p> <p>The first is cash value for life insurance, which is essentially the cash amount offered to the policy owner by the issuing life carrier upon cancellation of the contract.</p> <p>The second is taking out a reverse mortgage on the elderly family member's house.</p> <p>&quot;With [the second] option, seniors can remain at home while receiving monthly income that goes toward all of the healthcare-related expenses,&quot; he says. &quot;There are no ongoing costs, and seniors cannot be forced to leave their homes should they outlive the payments from the loan.&quot; (See also: <a href="http://www.wisebread.com/how-to-avoid-getting-scammed-with-a-reverse-mortgage?ref=seealso" target="_blank">How to Avoid Getting Scammed With a Reverse Mortgage</a>)</p> <h2>4. Consider the Cost of Home Modification<strong> </strong></h2> <p>When your loved one falls ill, it may limit their ability to function as they once did. This could mean that they're confined to a single floor in the home. Third-party care facilities take these safety measures into account for limited-mobility patients, but if you're providing long-term care in your own residence, you may need to outfit the home so it's more elderly-friendly.</p> <p>&quot;If the decision is to have the long-term care in the current residence, the family might need to plan for modifications to the home for either specialized medical equipment or for access issues around bathrooms, kitchens, and getting in and out of the house,&quot; explains John Bodrozic, co-founder of HomeZada, which specializes in digital home management. &quot;These could be things like ramps for wheelchairs, bathtubs with access doors, nonslip flooring, and other modifications, depending on the occupant's specific needs.&quot;</p> <h2>5. Factor in Home Maintenance<strong> </strong></h2> <p>If the care of your loved one takes place in their own residence &mdash; whether by you, another loved one, or hired help &mdash; it's keen to remember that someone will be tasked with maintaining the property for hygiene, safety, and resale value reasons.</p> <p>&quot;Things like cleaning leaves from gutters, replacing smoke detector batteries, and changing air filters are simple tasks, but usually require ladders. It's not suitable for people with long-term medical issues to handle these tasks,&quot; Bodrozic says.</p> <p>You may be able to handle these tasks on your own, but if these are projects that you plan to farm out to hired help, you'll need to include the costs in your monthly care budget.</p> <h2>6. Let a Professional Help You<strong> </strong></h2> <p>If you don't know what you're doing with regards to long-term care, don't freak out &mdash; you're not alone. Most people who are faced with this situation are first-timers are who overwhelmed with not only accepting the fate of a loved one, but trying to accommodate them as best as possible so they can live out their days in comfort.</p> <p>Daniel Sagal is a senior living adviser at Los Angeles-based Total Senior, which focuses on health care planning and services for seniors. If you don't think you're equipped to make the best decision, or you're having trouble coming to grips with it all, he suggests consulting someone who can help you through it, like a senior care adviser or care manager. Some services are free while others require fees, he says, but both will typically help families navigate the options for senior care.</p> <h2>7. Beware of Scams<strong> </strong></h2> <p>Like a lot of industries, there are people out there gunning to take advantage of you, and it's not terribly hard to become a victim of a scam when your emotions are already on the fritz.</p> <p>Sagal explains.</p> <p>&quot;...Before providing your information or allowing someone to guide you to senior care options, be sure to do your research. Look at their online reviews, make sure they have a credible website with real information/content, ask for references, and check around with health care professionals.&quot;</p> <p>Doing your due diligence now can ensure a more comfortable situation for everyone later.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/a-simple-guide-to-planning-for-a-loved-ones-long-term-care">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-ease-your-parents-into-assisted-living">6 Ways to Ease Your Parents Into Assisted Living</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-support-your-broke-parents">How to Support Your Broke Parents</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-your-kids-know-about-your-finances">How Much Should Your Kids Know About Your Finances?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-your-financial-planner-isnt-telling-you-about-retirement">5 Things Your Financial Planner Isn&#039;t Telling You About Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family advisers caregivers elderly health care home care life insurance long-term care nursing homes parents relatives seniors Tue, 14 Feb 2017 10:30:32 +0000 Mikey Rox 1889845 at http://www.wisebread.com Why Your Group Life Insurance Is Not Enough http://www.wisebread.com/why-your-group-life-insurance-is-not-enough <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-your-group-life-insurance-is-not-enough" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-516008468.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've done it &mdash; you've finally landed a job that offers amazing benefits such as free life insurance. While employer-offered life insurance (also called group life insurance) is worthwhile, it shouldn't be your only source of insurance.</p> <h2>How Do I Get Group Life Insurance?</h2> <p>Many employers will offer a free level of life insurance for employees. Depending on your place of work, this can cover anywhere from $25,000 to your base pay. Since this is a free option, all employees should sign up for the benefit. It's free money if something were to happen to you. However, don't let that be your only coverage. (See also: <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people?Ref=seealso" target="_blank">5 Reasons Why Life Insurance Isn't Just for Old People</a>)</p> <h2>Is Group Life Insurance Enough?</h2> <p>If you are single, a $25K &mdash;$50K check sounds like a nice chunk of change for your parents or other loved ones you leave behind. However, in most cases &mdash; yes, even for single people &mdash; it's simply not enough. Final expenses can be greater than you think. Funerals can range in price, but a recent survey by the National Funeral Directors Association found a median price of $7K.</p> <p>Furthermore, if your private student loans, mortgage, or car loans have a co-signer, then that co-signer will be stuck with your debt after you die. To avoid this, you can either remove co-signers from loans through refinancing, or purchase term life insurance that will cover the cost of your remaining debt.</p> <p>For healthy, young individuals that do not need much coverage, term life insurance rates are very affordable, with some policies costing less than $20 a month. But for individuals who are married and/or have children, you'll likely need more coverage, To calculate how much coverage you need, add up the following:</p> <ul> <li>Funeral cost;<br /> &nbsp;</li> <li>Cost of paying off any debt not forgiven upon death;<br /> &nbsp;</li> <li>Time you want your loved ones to have income and not worry about work &mdash; for example, even if your spouse works full-time in a successful career, they might need several months to grieve your loss;<br /> &nbsp;</li> <li>Future college costs or other child-rearing expenses.</li> </ul> <p>For many families, the total will be around seven to 10 times your annual paycheck.</p> <h2>Can I Get Supplemental Life Insurance Through an Employer?</h2> <p>Many employers will offer supplemental life insurance for purchase. Since you are purchasing the policy through your employer, it could be slightly cheaper than purchasing individual life insurance. However, your company technically owns the policy. Therefore, if you quit or are fired, your group life is gone, too. Some employers will give you the option to continue carrying the policy after you leave, but it will be at a higher price.</p> <h2>Individual Life Insurance Versus Group Life Insurance</h2> <p>While signing up for free group life insurance is a must, it is much better to sign up for supplemental term life insurance individually. The policy will stay with you even if you move jobs. Furthermore, you can lock in a low premium now when you are still young and healthy.</p> <p>Say you were to secure a low-cost policy with your employer's group life insurance at the young age of 25. Your rates should be quite low. Now fast forward eight years. You want to quit your job and have your own term life insurance policy. You will still get a great rate because you are under 40, but your monthly premium will be more at 33 than it was at 25.</p> <p>To sum it all up, cash in on your employer's free group life insurance perk, but also secure term life insurance when you are still young. This will allow you to lock in the best rate possible.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/new-job-dont-make-these-7-mistakes-with-your-benefits">New Job? Don&#039;t Make These 7 Mistakes With Your Benefits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-times-when-its-okay-to-drop-insurance">6 Times When It&#039;s Okay to Drop Insurance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-unexpected-things-covered-by-homeowners-insurance">11 Unexpected Things Covered by Homeowners Insurance</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries benefits coverage dependents employers life insurance premiums Tue, 31 Jan 2017 11:00:10 +0000 Ashley Eneriz 1877983 at http://www.wisebread.com 5 Things Your Financial Planner Isn't Telling You About Retirement http://www.wisebread.com/5-things-your-financial-planner-isnt-telling-you-about-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-your-financial-planner-isnt-telling-you-about-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_financial_planner_485026010.jpg" alt="Couple learning what their financial planner isn&#039;t telling them about retirement" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Personal finances can get complicated fast, which is why many people seek the assistance of a financial adviser. Especially when considering your retirement, it can give you extra confidence to know that a professional is helping ensure you make the best decisions for your future.</p> <p>It may therefore come as a surprise to know that historically, financial advisers haven't been required to put your best interests first. But in April 2016, the Labor Department finalized a new rule that requires financial advisers who deal with retirement accounts to respect what's known as the fiduciary standard, meaning they <em>have</em> to put the client's interests first.</p> <p>Before, financial advisers just had to follow the suitability standard, which meant they were only required by law to provide clients a &quot;suitable&quot; plan, which might satisfy your basic requirements but isn't necessarily the best plan for you.</p> <p>When they're doing their job well, a financial adviser can help you invest your money wisely and plan for retirement. But it's always important to do your own research and stay informed. When it comes to retirement, here are some things your financial planner may not have brought to the table.</p> <h2>1. Fees May Grow With Your Assets</h2> <p>Financial advisers often charge based on a percentage of the assets they are managing for you. Unfortunately, the fees compound over time, just as your returns do. By the time you're ready to retire, that could mean you're paying thousands of dollars a year in fees.</p> <p>As your nest egg grows, keep an eye on your fees and renegotiate your rates, so you don't end up paying too much for their services.</p> <h2>2. Retiring Abroad Can Halve Living Costs</h2> <p>If you're feeling tight on funds for retirement and you're not sure how to make your money go further, there's an important alternative that you should be considering. Retiring abroad can <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=internal">cut your retirement costs in half</a>. (See also: <a href="http://www.wisebread.com/x-exciting-world-cities-you-can-afford-to-retire-in?ref=seealso" target="_blank">4 Exciting World Cities You Can Afford to Retire In</a>)</p> <p>However, many U.S.-based financial advisers are entirely focused on domestic retirement and that's what they'll help you plan for. Plus, it may be in their interest to keep you close so you don't decide to move your funds elsewhere.</p> <p>If retiring abroad is something you want to truly consider, seek an expert who brings that specialty expertise to the table. You should also do your own research, including finding online forums for expatriates to answer your questions about retiring abroad. (See also: <a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford?ref=seealso" target="_blank">5 Incredible Places to Retire</a>)</p> <h2>3. Travel and Retirement Go Hand in Hand</h2> <p>If you've written off the idea of traveling as being too expensive, and these views are being reaffirmed by a conservative financial planner, it's time to re-evaluate. Retirement affords you great flexibility and the price of travel may be within closer reach than you realize.</p> <p>See also: <a href="http://www.wisebread.com/how-one-woman-retired-at-60-and-traveled-the-world?ref=seealso2" target="_blank">How One Woman Retired at 60 and Traveled the World</a></p> <p>Costs in many countries are often much lower than at home, and if you plan carefully &mdash; especially if you're able to start socking away money early in your career &mdash; your monthly budget may be able to absorb the extra expense of plane tickets, accommodations abroad, food, and entertainment. <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">Rewards credit cards</a> can help you <a href="http://www.wisebread.com/9-ways-to-use-travel-rewards-cards-to-get-free-trips" target="_blank">earn free travel</a>, too.</p> <p>See also: <a href="http://www.wisebread.com/how-to-travel-full-time-for-17000-a-year-or-less?ref=seealso2" target="_blank">How to Travel Full-Time for $17,000 a Year (or Less!)</a></p> <h2>4. An HSA Could Lower Your Health Care Costs</h2> <p>If you have a high-deductible health insurance plan, you may be eligible for a Health Savings Account. As with an IRA, HSA contributions are tax-free and they grow tax-free. You can leave money in the account for years and if you withdraw the funds to pay for qualified health care costs, you will still not pay taxes on the money. If you have a balance at age 65 and want to use it for nonmedical expenses, you can, but the withdrawals will be taxable. (See also: <a href="http://www.wisebread.com/how-an-hsa-saves-you-money?ref=seealso" target="_blank">How an HSA Saves You Money</a>.)</p> <p>Keep in mind that only people enrolled in qualifying high-deductible health care plans are eligible. But if you're one of them, an HSA could be an important part in reducing your health expenses during retirement.</p> <h2>5. You May Be Able to Ditch Your Life Insurance</h2> <p>Having a life insurance policy is useful if someone else will be financially hurt when you die. However, depending on your particular situation, you may no longer have dependents after you retire. Or you may have investments and pensions that pay 100% to the surviving spouse. In that case, your spouse won't suffer financially from your death and you probably don't need life insurance.</p> <p>There are a lot of variables to consider when planning for retirement, and a financial planner can clarify your options. But while a financial planner can be a helpful resource, they aren't the ultimate authority on what's best for you. Stay informed and choose what's best for you and your family.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/5-things-your-financial-planner-isnt-telling-you-about-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico">How Almost Anyone Can Afford to Retire in Mexico</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-keys-to-an-early-retirement">4 Keys to an Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries">Retire for Half the Cost in These 5 Countries</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-incredible-places-to-retire-abroad-that-anyone-can-afford">5 Incredible Places to Retire Abroad That Anyone Can Afford</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement expats fees fiduciary financial advisers financial planners health care life insurance living abroad retiring overseas travel Tue, 10 Jan 2017 11:00:09 +0000 Nick Wharton 1870053 at http://www.wisebread.com Are Your Assets Costing You Too Much? http://www.wisebread.com/are-your-assets-costing-you-too-much <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-your-assets-costing-you-too-much" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_daydreaming_money_481974106.jpg" alt="Woman learning if her assets are costing her too much" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The more assets, the merrier is generally a good philosophy. But there are times when assets can actually be a drain on your financial wellbeing. Some assets cost a lot to possess and don't bring you much in return.</p> <p>Consider whether these common assets are worth their weight.</p> <h2>Your Home</h2> <p>A home can be one of your biggest assets. It can also be one of your biggest financial enemies. Ideally, you are making payments on your home, building equity, and increasing your net worth as you go. But often, homeowners find that their monthly mortgage payments are hindering their ability to make ends meet. To make matters worse, home upkeep and repairs, electricity, and other utilities may be costing you more than you bargained for. Homeownership is a great goal, but don't buy a home if it will make your life more challenging financially.</p> <h2>Your Cash</h2> <p>It may seem crazy to say that good old cash can work against you. But if you have a lot of it and there's inflation, over time it will lose value. It's great to have a healthy dose of cash on hand, but at a certain point it becomes smarter to invest your money in something with a higher rate of return. If you have large quantities of cash in bank accounts that provide a low interest rate, chances are you are making a financial mistake.</p> <h2>Your Car</h2> <p>You can count an automobile toward your net worth, but you can virtually guarantee it's going to decline in value over time. Add in the cost of maintenance, gas, and insurance, and it's likely that a car is a true drain on your finances. But you need a car to get around, so it's best to look at the true cost of ownership before buying. This means taking into account fuel mileage, reliability history, and the cost of parts and labor.</p> <h2>Your Collectible Items</h2> <p>You've got a Van Gogh hanging in your living room. There's a Mickey Mantle rookie card in your man cave. Your jewelry collection would make Elizabeth Taylor envious. All of these valuable items are nice to possess, until you take into account the expense of owning them. From storage to insurance to the cost of restoration, high-end collectibles can be a financial headache. For example, according to a Wall Street Journal report, managing an art collection could cost you between 1% and 5% of the value of the pieces annually. You may cash in big time if you ever sell these items, but the cost of ownership is high and may not be worth it.</p> <h2>Your Investments</h2> <p>It might seem backward to think of your investments as a drain on your finances, but it can happen if you're not investing in the right way. Are you investing in things that will grow in value over time, or in low-risk things that may be outpaced by inflation? Do you own a property that's costing money to maintain but not bringing in revenue? Are you paying a hefty amount in fees and commissions? Are you paying a high-priced broker or accountant to manage things even though you can probably do it on your own?</p> <h2>Your Life Insurance Policies</h2> <p>Many people don't think of life insurance as an asset, but it can be under certain circumstances. Of course, it's only a good asset for you if you believe the eventual benefit will outweigh the cost. Many life insurance policies are simply not very good &mdash; costly premiums, and low payouts.</p> <h2>Your Intangible Assets</h2> <p>Sometimes you have assets that don't really bring you any monetary gain, but may cost you money to obtain or possess. One example of this is a copyright or patent. These are things that may require upfront costs in the form of research and legal assistance, but the financial gain is uncertain. A patent has no real value until you sell it or develop a product based on it. When you acquire these types of assets, it's important to come up with some plan for monetization. Otherwise, they are simply a vehicle for sunk costs.</p> <h2>Your Inventory</h2> <p>If you run a business, any product you've manufactured but have yet to sell is considered an asset. But if you have too much inventory, that could be problematic. Inventory costs money to store. Some items might become obsolete or spoil, and result in no revenue. On the flip side, too little inventory can result in a lost sale. Smart business owners become skilled in inventory management, in which they can properly forecast sales to ensure the proper amount of product on hand.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/are-your-assets-costing-you-too-much">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50">Big Purchases You Should Make by 30, 40, and 50</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-credit-repair-mistakes-that-will-cost-you">8 Credit Repair Mistakes That Will Cost You</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-quiet-millionaire-parts-4-5-building-your-net-worth">The Quiet Millionaire: Parts 4 &amp; 5 - Building Your Net Worth</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-high-is-your-score-on-the-most-important-measure-of-wealth">How High Is Your Score on the Most Important Measure of Wealth?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-your-net-worth">What Is Your Net Worth?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets Cars cash collections costs expense fees housing life insurance net worth Fri, 06 Jan 2017 11:00:12 +0000 Tim Lemke 1864688 at http://www.wisebread.com 8 Personal Finance Resolutions Anyone Can Master http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-personal-finance-resolutions-anyone-can-master" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_new_years_498059820.jpg" alt="Friends making personal finance resolutions they can master" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Working on your New Year's resolutions? Unfortunately, an incredible <a href="https://blog.bufferapp.com/the-science-of-new-years-resolutions-why-88-fail-and-how-to-make-them-work">88% of New Year's resolutions fail</a>. The big problem is that most people's resolutions aren't specific enough, or they're too ambitious.</p> <p>Ready to get 2017 off to a good money start? Try out these eight financial resolutions. They're simple enough so that anyone can accomplish them in the new year.</p> <h2>1. Build a Household Budget</h2> <p>We know it doesn't sound like fun, but crafting a household budget is the best financial move that you can make in 2017. Why? A budget tells you how much money you should be spending each month on everything from groceries to eating out to streaming movies on Amazon. Without a budget, your odds of overspending will soar. Fortunately, <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps">making a budget</a> isn't nearly as challenging as you might think.</p> <h2>2. Pay Down Your Credit Card Debt</h2> <p>Your credit card debt might look overwhelming, but paying down this expensive debt in 2017 is actually a fairly easy task &mdash; if you commit. There are several different ways you can <a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies">attack your credit card debt</a>, from paying off the cards with the lowest balance first to prioritizing those with the highest interest rates. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">The Fastest Way to Pay Down $10,000 in Credit Card Debt</a>)</p> <h2>3. Build an Emergency Fund</h2> <p>What happens if your home furnace conks out? What if your car's transmission dies? Can you cover these unexpected expenses with cash? Or would you have to charge the repairs? If you have an emergency fund, you'll always have cash on hand to cover life's unexpected disasters. Financial experts say you should have at least six months' worth of daily living expenses saved in an emergency fund at all times. That might sound like a difficult goal, but you can <a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund">build this fund</a> as slowly as you'd like.</p> <h2>4. Cut Out One Unnecessary Expense</h2> <p>Vowing to cut your spending isn't the easiest New Year's resolution to keep; it's simply too vague. Instead, vow to <a href="http://www.wisebread.com/7-unnecessary-household-expenses-you-can-cut-today">cut one unnecessary expense</a> from your routine. For instance, you might vow to stop buying coffee on the way to work, and instead brew your own java at home.</p> <h2>5. Boost Your Life Insurance Coverage</h2> <p>If you were to unexpectedly die, would you have enough of a life insurance payout to provide financial protection for your loved ones? If not, it might be time to boost your <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">life insurance coverage</a>. Fortunately, this is an especially easy New Year's resolution to keep: Just call an insurance agent.</p> <h2>6. Protect Your Things</h2> <p>Whether you're a renter or a homeowner, you need to make sure that you have enough insurance to replace the items in your home, should they be stolen or destroyed. Resolve in 2017 to meet with an insurance agent to discuss either homeowners' or <a href="http://www.wisebread.com/5-reasons-you-definitely-need-renters-insurance">renters' insurance</a>.</p> <h2>7. Pay Your Bills on Time Every Month</h2> <p>Want a <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly">sky-high credit score</a>? Then pay your bills on time every month. Doing this will slowly, but steadily, cause your FICO credit score to rise. And a higher credit score will mean lower interest rates when you're borrowing money later.</p> <h2>8. Find a Better Savings Account</h2> <p>You might think savings accounts are a fairly boring place to stash your dollars. The truth, though, is that some savings accounts are better than others, and some provide far better interest. Make a resolution this year to <a href="http://www.wisebread.com/the-types-of-savings-accounts-which-is-right-for-you">find a savings account</a> that will help you build your savings at a faster clip.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/reach-your-money-goals-faster-with-a-simple-naming-trick">Reach Your Money Goals Faster With a Simple Naming Trick</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/youve-been-saving-money-all-wrong-heres-why">You&#039;ve Been Saving Money All Wrong. Here&#039;s Why</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting debt emergency funds goals life insurance money resolutions new year's resolutions saving money savings accounts Wed, 28 Dec 2016 10:00:11 +0000 Dan Rafter 1863676 at http://www.wisebread.com Term vs Whole Life Insurance: Here's How to Choose http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/term-vs-whole-life-insurance-heres-how-to-choose" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/child_father_hugging_88776971.jpg" alt="Family choosing between whole and term life insurance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you need life insurance. It's a way to provide financial protection for your spouse, children, or other dependents should you unexpectedly die. But knowing that life insurance is a smart move and knowing which type of policy to take out are two different things.</p> <p>Studying up on life insurance isn't fun. Fortunately, most consumers choose between just two different types of life insurance policies &mdash; term and permanent. And if they choose permanent life insurance, they usually opt for what is known as whole life insurance.</p> <p>What's the difference between the two? And which type of insurance is best for you? Here's a crash course in the difference between term and whole life insurance.</p> <h2>Term Life Insurance &mdash; The Cheaper Choice</h2> <p>For most people, term life insurance is the smart financial choice. That's because this insurance provides solid financial protection for loved ones, while also costing far less than a whole life insurance policy.</p> <p>As the name suggests, term life insurance remains in effect for a certain period &mdash; or term &mdash; of time. You can choose the term, usually anywhere from one to 30 years. The Insurance Information Institute says that most people choose a 20-year term.</p> <p>When taking out a term life policy, you'll provide a list of beneficiaries, such as your children or spouse. Your term life insurance will pay out your death benefit to your listed beneficiaries if you die &mdash; and your death meets the requirements spelled out in your policy during this term (suicide cancels a payout, for example). After the term ends, the policy ends, too, unless you pay to extend it. Your annual premium will usually remain the same during the term.</p> <p>If you take out a term life insurance policy, you'll have to decide how long you want your policy to remain active. Most people choose a term that will last until their dependents no longer need their financial assistance. They might take out a term policy that lasts until their children will have left their home and started their own careers, for instance. Others might choose a policy that ends only after they know they will have paid off their home and built up a significant amount of savings.</p> <p>How much you pay for term life insurance depends on many factors, including your age, health, the amount of coverage you want, and the length of your policy. TrustedChoice.com, a website that helps consumers find independent insurance agents, says that a healthy 35-year-old male nonsmoker who takes out a 20-year term life insurance policy with a value of $500,000 will pay an average of about $35 a month for a policy. A 35-year-old healthy female nonsmoker would pay about $61 a month for $1 million worth of life insurance with a 20-year term.</p> <p>That comes out to $420 a year for the male and $732 for the female taking out the more valuable policy.</p> <h2>Whole Life Insurance</h2> <p>Whole life insurance is a more complicated product. That's because it is really two different financial products in one. It provides life insurance benefits like a term life policy, but also comes with an investment component known as a cash value.</p> <p>Part of every payment you make goes toward growing this cash value on a tax-deferred basis, meaning that you won't pay taxes on any of these cash gains while they are growing. You can borrow against your life insurance account or surrender it at any time to take the cash that has grown in it.</p> <p>You will, though, have to repay any loans you make against your whole life policy, with interest.</p> <p>Whole life also lasts, as its name suggests, for your entire life. No matter when you die, a whole life policy will pay out its death benefits to your listed beneficiaries, as long as the cause of your death is covered under the policy. Your premiums will remain the same until you either cancel the policy or you die.</p> <p>Because it comes with an investment component and lasts for your entire life, whole life insurance is considerably more expensive. TrustedChoice.com says that a healthy 35-year-old male who does not smoke would pay an average of $98.50 a month or $1,119 a year for a whole life insurance policy with death benefits valued at $250,000. A 35-year-old healthy female who doesn't smoke would pay an average of $82 a month or $960 a year for the same policy.</p> <h2>Which Is Right for You?</h2> <p>Which type of insurance is right for you? If you simply want to provide protection for your loved ones until they are financially independent, a term life insurance policy is usually the better choice thanks to their lower costs.</p> <p>If you want a life insurance policy that also generates cash value, then you might consider the whole life version. Whole life might make sense, too, if you need to provide financial protection for a loved one who will be dependent on you for your entire life, such as a child with special needs.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/did-your-parents-give-you-a-whole-life-insurance-policy-heres-what-to-do-with-it">Did Your Parents Give You a Whole Life Insurance Policy? Here&#039;s What to Do With It.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/choosing-life-insurance-term-or-permanent">Choosing Life Insurance: Term or Permanent?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries cash value dependents family life insurance payouts term whole life Thu, 03 Nov 2016 10:30:09 +0000 Dan Rafter 1825853 at http://www.wisebread.com 5 Ways to Pay Off High Interest Credit Card Debt http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-pay-off-high-interest-credit-card-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_coffee_credit_cards_82594511.jpg" alt="Woman paying off high interest credit card debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit card debt is one of the most costly forms of debt, with interest rates between 20% and 30% in some cases. (Cardholders who have missed a payment might even incur higher penalty rates.) In contrast, secured loans such as car loans and home mortgages can have far lower rates. And unlike a home mortgage or student loans, interest on credit card debt is never tax deductible.</p> <p>So as with any costly loan, your first priority should be <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">paying it off as soon as possible</a>. And even if you have to take out another loan to do so, you can save money when you are able to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">transfer your debt</a> to a new account that has a lower interest rate than your existing credit card balances.</p> <p>See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=cc_article">The Fastest Way to Pay Off 10K</a></p> <p>Here are five ways that you can pay off your high interest credit card debt.</p> <h2>1. Credit Card Balance Transfer</h2> <p>If you have a balance on a high interest credit card, you can save money by transferring it to a <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">card with a lower interest rate</a>. Better yet, some cards offer <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">0% APR promotional financing on balance transfers</a> for a limited time, from six to as long as <a href="http://www.wisebread.com/retire-your-credit-card-debt-with-citi-simplicity-card?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">21 months</a>. Most cards will impose a balance transfer fee of 3% to 5% of the amount transferred. However, there are cards available that offer <a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">balance transfers with no fee</a>. These balance transfer offers are your best way to eliminate interest charges while you pay down your debt.</p> <h2>2. Personal Loan</h2> <p>Many banks and credit unions are willing to offer <a href="http://www.wisebread.com/best-lenders-for-personal-loans?ref=internal">personal loans</a> to applicants with good or excellent credit. So long as the interest rate offered is lower than your credit card balance, you can use these loans to pay off your credit cards and reduce your interest costs. However, the best rates will only be available to those who have excellent credit. If you have <a href="http://www.wisebread.com/best-credit-cards-for-bad-credit?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">poor credit</a> and a lot of debt, you may not be approved for a loan with a lower interest rate than the one you currently have.</p> <h2>3. 401K Loan</h2> <p>It's possible to <a href="http://www.wisebread.com/5-questions-to-ask-before-you-borrow-from-your-retirement-account?ref=internal">loan yourself money from your 401K</a> so that you can pay off your high interest credit card balances. When you withdraw money from your 401K account, you can pay yourself back over as long as five years using very competitive interest rates that will be lower than nearly all credit cards. And since you are essentially acting as your own lender, there is no need to have excellent credit. On the other hand, you will be missing out on the compound interest your investments would have earned, and you will face tax penalties if you fail to pay the back the loan on time.</p> <h2>4. Life Insurance Loan</h2> <p>There are some types of whole, universal, or variable universal life insurance policies that allow you to take out a loan against them. Any money you withdraw is then deducted from your death benefit. And while interest rates can be below that of high interest credit cards, any unpaid interest will be added to your loan amount and subject to compounding. Just like a 401K loan, you are borrowing from your own funds, so your current credit rating will be irrelevant.</p> <h2>5. Home Equity Line of Credit</h2> <p>If you have equity in your home, you may be able to borrow money against it for any purpose, including paying off your high interest credit cards. Current interest rates for <a href="http://www.wisebread.com/home-equity-loan-or-heloc-which-is-right-for-you?ref=internal">home equity lines of credit</a> are below 5%, which is far better than any standard credit card's interest rate. Your ability to secure a home equity line of credit will depend on your home's debt to credit ratio as well as your current credit history.</p> <p><em>Have you ever borrowed at a lower rate to pay off high interest debt? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-sources-of-fast-cash-besides-your-401k">3 Sources of Fast Cash Besides Your 401K</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">6 Scary Facts About Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards 401k balance transfer debt HELOC high interest home equity line of credit interest rates life insurance loans Wed, 07 Sep 2016 10:31:09 +0000 Jason Steele 1785333 at http://www.wisebread.com When Should Single People Get Life Insurance? http://www.wisebread.com/when-should-single-people-get-life-insurance <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-should-single-people-get-life-insurance" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_looking_up_29810428.jpg" alt="Woman wondering if single people should get life insurance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know the typical market for life insurance: People with families to protect. When these people die, their life insurance policies make payments to their beneficiaries, whether that be their children or their spouse.</p> <p>But what if you're single without children? Is buying a life insurance policy ever a smart move?</p> <p>In most cases, no, you won't need life insurance if you don't have a spouse or any children who count on your income to pay for their daily living expenses. But as with most financial matters, there are exceptions.</p> <p>Here are some of the most common reasons why a single adult without children might consider buying life insurance:</p> <h2>Policies Are Cheaper When You're Younger and Healthier</h2> <p>If you are a healthy and a nonsmoker, you'll pay less for life insurance when you are 24 than you will when you are 30, 35, or older. That's because you're at more of a risk to die.</p> <p>According to Trusted Choice, an independent insurance agent, a 20-year-old male nonsmoker at a healthy weight would pay about $32.53 a month for a $500,000, 20-year term life insurance policy. That cost rises to $35.69 a month for that same healthy male at 35-years-old. And it soars to $111.38 a month when this same male reaches 50.</p> <p>So, it might make financial sense to buy a life insurance policy when you are in your 20s. Then, when you do get married and have kids, you can change the beneficiaries on your policy to your spouse and children.</p> <h2>You Owe Money With Someone Else</h2> <p>Have your parents co-signed on an auto loan with you? Maybe they've co-signed for that mortgage loan that you are paying off each month. What happens to that debt if you should suddenly die? Your parents will be responsible for paying it off.</p> <p>However, if you have a life insurance policy with your parents named as the beneficiary, they could use the payout from the policy to pay off the debt that they owed with you. Taking out life insurance in this case would serve as a form of protection for whoever was generous enough to take on the risk of co-signing a loan with you.</p> <h2>You're Providing Financial Support to Others</h2> <p>Just because you're not married and you don't have children, doesn't mean that you are not providing financial support to someone. Maybe an elderly parent lives with you and counts on your financial support each month. If you should unexpectedly die, what would happen to that parent? By naming that parent as a beneficiary, you can make sure that they are financially protected.</p> <p>You might even be providing financial support to siblings, nieces, or nephews. The right life insurance policy can make sure that this support continues even after your death.</p> <h2>You Want to Leave a Gift</h2> <p>Maybe you simply want to leave a financial gift to someone who holds a special place in your life, even if this person doesn't really need your financial support. By naming that special person as a beneficiary &mdash; it could be a niece, nephew, partner, or friend &mdash; you'll be leaving behind something of great value should you die.</p> <h2>Term or Whole Life?</h2> <p>Once you've decided that you do want a life insurance policy, it's time to determine what kind of policy you want and how large of a policy you need. There are two main <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people" target="_blank">types of life insurance policies</a>: the cheaper term life, and the more expensive whole life.</p> <p>Term life insurance provides coverage for just a set period of time &mdash; usually 20 years &mdash; but can be bought for as little as one year, or as many as 30. Your premium will usually remain the same during the entire term. Whole life insurance instead lasts, as the name suggests, until you die. Whole life premiums also include an investment component, what is known as the policy's cash value. The cash value will grow during the life of your policy.</p> <p>It's best to meet with a financial planner to determine which type of policy makes the most sense for you. A planner can provide recommendations, too, on how much insurance you should take out to meet your financial goals and how best to structure your policy so that you can provide the most financial protection to your beneficiaries if you should die.</p> <p><em>Do you have life insurance?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/financial-iq-test-how-healthy-is-your-life-insurance-plan">Financial IQ Test: How Healthy is Your Life Insurance Plan?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-you-need-to-know-about-disability-insurance">4 Things You Need to Know About Disability Insurance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it">Is Long Term Care Insurance Worth It?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries dependents estate planning Health life insurance policies single unmarried Tue, 05 Jul 2016 10:00:09 +0000 Dan Rafter 1741536 at http://www.wisebread.com 7 Lessons About Money I Learned After Having Twins http://www.wisebread.com/7-lessons-about-money-i-learned-after-having-twins <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-lessons-about-money-i-learned-after-having-twins" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_twin_girls_000010839496.jpg" alt="Learning money lessons after having twins" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When I first found out that my wife and I were having twins, I figured that raising our boys would be expensive. Learning that the U.S. Department of Agriculture (USDA) estimated that middle-income parents would spend an <a href="http://www.cnpp.usda.gov/sites/default/files/expenditures_on_children_by_families/CRC2013InfoGraphic.pdf">average $25,880</a> on twins in their first year really shocked me.</p> <p>The USDA estimated that U.S. families could spend from $353,100 to $815,640, depending on the family&rsquo;s income level, to raise twins born in 2013 through high school. These estimates didn&rsquo;t even include college tuition!</p> <p>The good news is that there are plenty of ways to bring down the estimated costs of raising twins. Here are the seven lessons about money I learned after having twins.</p> <h2>1. Don&rsquo;t Buy Everything</h2> <p>&ldquo;Two of everything!&rdquo; is one of the first things that people tell me once they find out that I have twins. In theory, having twins should double your expenses. In reality, it doesn&rsquo;t. More than one parent of multiples advised me not to buy everything and they were 100% right. You can do just fine with only one of many items, including baby bathtub and pack-and-play.</p> <p>Even more, there are so many baby items marketed to parents that you can do without, such as the <a href="http://amzn.to/1Xe2RBD">Baby Brezza Formula Pro One Step Food Maker</a> retailing for $150. While you always want to give your babies the very best, keep in mind that sometimes less is more. You already have a long list of must-buy-two items, including car seats and cribs (you can get away with just one only for so long!), so don&rsquo;t hesitate to cut down on non-essentials.</p> <h3>Money Lesson</h3> <p><a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">Warren Buffett</a> said it best: &ldquo;If you buy things you do not need, soon you will have to sell things you need.&rdquo; Splurging should be the exception and not the rule.</p> <h2>2. Look for Niche Discounts</h2> <p>Somedays you may feel that you&rsquo;re the only parent of twins in your neighborhood. The reality is that the U.S. twin birth rate was <a href="http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_12.pdf">33.9 per 1,000 births</a> in 2014, up from 33.7 per 1,000 births in 2013. As more parents have twins, more businesses are extending special discounts to those parents.</p> <ul> <li>Babies R Us extends a 10% discount when you purchase two of the same item on the same in-store visit. Qualifying items include baby furniture, car seats, strollers, high chairs, and gates.<br /> &nbsp;</li> <li>Pampers offers a <a href="http://news.pampers.com/faq-item/do-you-have-pampers-multiple-birth-offer">one-time set of coupons</a> to parents of twins and multiples by mailing your name and address along with the hospital discharge copies to: Pampers Multiple Birth Offer, The Procter &amp; Gamble Company, P.O. Box 599, Cincinnati, OH 45201 or by calling 1-800-726-7377.<br /> &nbsp;</li> <li>Luvs Diapers also offers a one-time set of coupons as well and you can write to the same mailing address as above with attention to &ldquo;Luvs Multiples Birth Program&rdquo; or call 1-888-665-3257.</li> </ul> <h3>Money Lesson</h3> <p>Businesses seek ways to attract customers from different niches. There may very well be a discount out there for you, but it may require you to do some extra leg work, such as calling the company or mailing a letter.</p> <h2>3. Buy Life Insurance</h2> <p>Now that you are a parent, buying life insurance is one of the <a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">money moves to make</a> or you&rsquo;ll regret it 20 years from now. Right now is the cheapest rate that you&rsquo;ll ever be able to get life insurance, so you&rsquo;re better off locking into it now than waiting several years.</p> <p>If you&rsquo;re the main or sole breadwinner of your household, provide financial security to your dependents in case you&rsquo;re no longer there for them. Could your spouse tackle the monthly mortgage payments, car payments, and living expenses without you at all? Nobody likes to think about their own mortality, but things are very different now.</p> <h3>Money Lesson</h3> <p>Life insurance is the foundation of financial planning to help protect your family against life&rsquo;s pitfalls.</p> <h2>4. Start or Build Up Your Emergency Fund</h2> <p>With twins, I have learned how essential it is to have a cushion to lessen the blow of many surprise costs &mdash; such as certain vitamins and medicines not covered by health insurance, or changing to a more expensive baby formula due to sensitive digestive systems. Only 38% of Americans can pay unexpected expenses, such as $1,000 for an emergency room visit or $500 for a car repair, from savings. Achieving the right balance between interest rate and liquidity is often possible with a high-yield online savings account, which provide interest rates ranging between 0.75% and 1.25%. Make sure to read the fine print on access to funds to avoid surprises.</p> <h3>Money Lesson</h3> <p>Having a rainy day fund is essential to keep your monthly budget on track, so start (or build up!) yours today.</p> <h2>5. Adjust Your Withholding</h2> <p>Of course, since I&rsquo;m asking you to start paying for life insurance and putting money away in a savings account, I do need to give you a way to come up with those extra monies! The easiest one is to revisit how much you&rsquo;re currently withholding every month for taxes. In 2014, the IRS doled an <a href="https://www.irs.gov/uac/Newsroom/2014-Refunds-Ahead-of-Last-Year">average of $3,096</a> in tax refunds.</p> <p>Unless you got a refund entirely based on tax credits, you&rsquo;re withholding too much in taxes. Using the $3,096 average, you could have an extra $258 every month. Now that you have dependents, you may qualify for several exemptions and tax credits, including the <a href="https://www.irs.gov/Individuals/Child-Tax-Credit">Child Tax Credit</a> and the <a href="https://www.irs.gov/Individuals/Child-and-Dependent-Care-Information">Child and Dependent Care Credit</a>, to effectively reduce your tax bill.</p> <p>Remember that a refund is money that just sits in Uncle Sam&rsquo;s pocket making you 0% interest!</p> <h3>Money Lesson</h3> <p>Use the <a href="https://www.irs.gov/Individuals/IRS-Withholding-Calculator">IRS Withholding Calculator</a> or talk with your accountant to find out how much you should withhold every month. Then, accordingly adjust your W-4 with your employer.</p> <h2>6. Open a Traditional or Roth IRA</h2> <p>While the 401K is the most popular type of retirement account, the Roth offers much more flexibility when it comes to <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account">taking distributions before age 59 1/2</a>. As a parent of twins, having my retirement account as a last-resort fund that I could tap into without IRS penalty to help my sons is very important.</p> <p>For example, I could take up to a $10,000 distribution to help them to pay for their first home. As long as I don&rsquo;t go over that total limit, I can split the distribution as I see fit and can take one in separate years. Another penalty-free withdrawal from an IRA I can take is to cover qualified higher education expenses, including tuition, fees, books, supplies, and equipment required for the enrollment or attendance of my sons at an eligible educational institution.</p> <p>Bonus: Using an IRA, you can save an extra $5,500, or $6,500 if you're age 50 or older, in 2015 and 2016 for retirement.</p> <h3>Money Lesson</h3> <p>Saving in an IRA allows you to take early distributions without penalty for qualifying purposes.</p> <h2>7. Start Saving for Your Kids</h2> <p>Another great Buffet-ism is &quot;Someone&rsquo;s sitting in the shade today because someone planted a tree a long time ago.&quot; Imagine if you had an extra 18 years to save for college or retirement, wouldn&rsquo;t that be awesome? That&rsquo;s exactly the lesson that my wife&rsquo;s and my own parents passed on to us the moment they found out we were having twins. (See also: <a href="http://www.wisebread.com/8-money-moves-to-make-when-you-find-out-youre-pregnant?ref=seealso">8 Money Moves to Make When You Find Out You're Pregnant</a>)</p> <p>A little bit goes a long way. Even saving $100 every year for 10 years is much better than starting to save $1,000 10 years from now:</p> <ul> <li>With a 0.5% annual rate of return, you would end up with $1,025.57.<br /> &nbsp;</li> <li>With a 1% annual rate of return, you would end up with $1,051.88.<br /> &nbsp;</li> <li>With a 2.5% annual rate of return, you would end up with $1,135.45.<br /> &nbsp;</li> <li>With a 4.5% annual rate of return, you would end up with $1,258.57.<br /> &nbsp;</li> <li>With a 7% annual rate of return, you would end up with $1,443.48.</li> </ul> <p>When thinking about saving for your kids, especially for education-related expenses, evaluate all options, including custodial IRA accounts and 529 plans. Many of these type of accounts provide full or partial income tax deductions. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso">The 9 Best State 529 College Savings Plans</a>)</p> <h3>Money Lesson</h3> <p>Leverage the power of interest compounding over a long period of time and give your children a head start on saving for education or retirement.</p> <p><em>What money lessons did you learn with the arrival of your baby?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-lessons-about-money-i-learned-after-having-twins">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-frugal-living-skills-i-wish-my-parents-would-have-taught-me">8 Frugal Living Skills I Wish My Parents Would Have Taught Me</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-your-kids-contribute-to-family-money-goals">Should Your Kids Contribute to Family Money Goals?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-the-kids-move-out">7 Money Moves to Make as Soon as the Kids Move Out</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-you-need-to-know-about-cloth-diapers">Everything You Need to Know About Cloth Diapers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Family babies financial planning kids life insurance multiples retirement twins Wed, 17 Feb 2016 11:30:04 +0000 Damian Davila 1654792 at http://www.wisebread.com 4 Times It's Okay to Borrow From Your Life Insurance Policy http://www.wisebread.com/4-times-its-okay-to-borrow-from-your-life-insurance-policy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-times-its-okay-to-borrow-from-your-life-insurance-policy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_family_000035656690.jpg" alt="Family discovering it&#039;s okay to borrow from life insurance policy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Borrowing cash from your <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">life insurance policy</a> can be better than getting a traditional loan. There's no credit check and you're not obligated to pay back the policy (although not repaying the policy reduces the death benefit paid to your beneficiaries). If you do decide to pay it back, the interest is often lower than a bank loan.</p> <p>Of course, some will argue that you should never ever borrow or take money from your life insurance policy. But it might actually make sense under certain conditions &mdash; like these.</p> <h2>1. You Lost Your Job</h2> <p>You can be a hard worker and give your boss 200%, but there's no such thing as job security anymore, and employers aren't exactly loyal nowadays. Even worse, you may not be fortunate enough to receive severance pay, and unemployment compensation will likely be a percentage of your regular earnings. In a perfect world, we would all have a six to 12-month emergency fund to carry us through tough times. Unfortunately, this isn't always the case. If you have a small cash reserve and not enough income to keep up with basic expenses, borrowing from your life insurance policy can provide funds to keep your head above water as you search for another job.</p> <h2>2. You're Temporarily Unable to Work</h2> <p>If you're offered short-term disability through your employer, this is a policy you can't afford to skip. You're probably thinking, &quot;but I never get hurt,&quot; or &quot;I don't do anything to get hurt.&quot; That may be true, but you never know when you might be unable to work for more than two weeks because of an injury or illness. A disability policy pays between 50% and 70% of your regular salary, reducing financial worry and stress while you recover. Yet, not every employer offers short-term disability, and some employees don't think of purchasing a policy on the individual market.</p> <p>If you don't have disability and can't work because of an illness, it might be impossible to make ends meet with a whole life policy as your backup plan. Between the cash value of the policy and any funds in savings, you might have enough to cover expenses until you're healthy to work again. It's not the most ideal solution, but a viable one nonetheless.</p> <h2>3. You Need Cash for a Home Purchase</h2> <p>Between a down payment and closing costs, buying a house is one of the most expensive transactions you'll likely ever make. You can purchase with a minimum 3% down if you have good credit. This is far less than 20%, but still a lot of cash to cough up, especially after factoring in the high price of closing costs, which range from 2% to 5% of the purchase price depending on where you live.</p> <p>If you have some cash saved for a house purchase (but not the full amount), borrowing from a whole life policy helps you purchase sooner rather than later.</p> <h2>4. You're Starting a Business</h2> <p>Punching a timeclock and dealing with a tyrant boss makes for a long, stressful work week (or career, depending how you look at it). Maybe you've had enough and you're ready to start your own business and control your future (which I highly recommend). Unfortunately, it often takes money to make money. If you're not comfortable blowing through your savings account in order to build your empire, borrowing from your life insurance policy can get your business off the ground. Use this money to invest in yourself, and once your company grows and you're earning more than ever before (because, ya know, fingers crossed!), you can pay back your life insurance policy.</p> <p><em>Are there other times that you think are okay to borrow from your life insurance policy? Let us know in comments.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/4-times-its-okay-to-borrow-from-your-life-insurance-policy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/life-insurance-what-to-consider-before-replacing-a-policy">Life Insurance: What to Consider Before Replacing a Policy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-you-need-to-know-about-disability-insurance">4 Things You Need to Know About Disability Insurance</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan">10 Smart Ways to Get a Small Business Loan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance borrowing money injury life insurance loans new business new house unemployed Mon, 17 Aug 2015 13:00:22 +0000 Mikey Rox 1518207 at http://www.wisebread.com 6 Financial Mistakes to Stop Making by Age 40 http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-financial-mistakes-to-stop-making-by-age-40" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_budgeting_000033505114.jpg" alt="Couple figuring out financial mistakes to stop making by 40" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>It doesn't matter if you're in your 20s, 30s, or 40s &mdash; everyone makes financial mistakes. But, the mistakes we make in our later years are often different from those we made as a young adult. Even if you've gone through some financial growing pains, there's room for improvement.</p> <p>Here's a look at six financial mistakes you need to stop making by age 40.</p> <h2>1. Buying More House Than You Can Afford</h2> <p>Some young adults rush to acquire the same lifestyle as their parents, and they get in over their heads buying homes they can't afford. I've seen it with several of my friends &mdash; they want to look like they ball, but can't maintain the proverbial court. But there's no rule that says we have to constantly move up. If you're living above your means, it's time to downsize and get serious about your money.</p> <p>Being house poor can have a tremendous impact on your personal finances. You might be able to swing the house payment every month, but if you don't have money for anything else, you're less likely to save for retirement &mdash; and there's a good chance that you'll end up with credit card debt. Besides, the cracks will eventually show &mdash; and that will defeat the purpose of why you went into debt in the first place. Not worth it at all.</p> <p><strong>RELATED:</strong> <a href="http://www.wisebread.com/4-steps-to-finding-your-mortgage-lender">How to Land a Mortgage Lender You'll Legitimately Love</a></p> <h2>2. Tapping Into Your 401(k)</h2> <p>Twenty-something adults can afford to tap into their 401(k)s if they endure economic hardships or need cash to buy a house (although it's not recommended by most money experts). Since they're young, there's time to replenish the account. Older adults, however, don't have this luxury. If you're approaching middle-age and hoping to retire in your late 50s or early 60s, this isn't the time to play around with your retirement account. Stop using your 401(k) or IRA as an emergency fund. As an alternative, you need to keep enough cash in your liquid savings to deal with unexpected expenses that pop up. (Which, incidentally, might mean telling your kids &quot;no&quot; sometimes.)</p> <h2>3. Saving Like You're Fresh Out of College</h2> <p>When you're just out of college and starting out, you may not have a lot of cash to put toward saving for retirement. Therefore, you might contribute the bare minimum after opening a 401(k) &mdash; maybe 2% or 3% of your income. This is okay in your younger years. But by the time you hit 40, you need to step it up a notch.</p> <p>Look into increasing your 401(k) contributions to 5% or 6%, especially if you're getting an employer match. This is essentially free money that can take your retirement account to the next level. (Plus, you deserve it!) Also, consider ways to diversify your retirement savings, such as opening an individual retirement account or dabbling in other investments, like stocks or real estate.</p> <h2>4. Putting Your Child's Needs Ahead of Your Retirement</h2> <p>All parents want to give their children the best. This might be the best private schools, extracurricular activities, educational vacations, or college funds. But be careful about putting your kids' needs over your retirement &mdash; after all, you can't afford to help them if your own financial situation isn't secure first.</p> <p>The sooner you start stashing cash away for the future, the more financially stable you'll be when you leave the workforce. If you put the majority of your disposable income into giving your children the best life possible, your retirement could take a backseat to their needs and wants. And if you don't save enough, this can result in working longer than you want later in life, or having to get a job after retiring to make ends meet. Not to mention you might not be able to afford helping your children as much as you'd like.</p> <h2>5. Never Reevaluating Your Life Insurance Needs</h2> <p>Your life insurance needs can change as you get older. A policy purchased in your 20s while you were single without kids or a mortgage probably doesn't offer the coverage you need today. It might be time to upgrade your policy to ensure your family has enough financial support in the event of your death, especially if you're the breadwinner.</p> <p>There are no hard or fast rules regarding how much life insurance to get, but the policy should be enough to cover your funeral and burial expenses, pay off any existing debt, plus provide your spouse and dependents with ongoing financial support.</p> <h2>6. Getting Comfortable With Credit Card Debt</h2> <p>At this point in your life you probably recognize the danger of using credit cards. But just because you no longer rely on credit cards doesn't mean you should get comfortable or shrug off your existing balances. If you still owe thousands, paying the minimum isn't going to cut it. Like, ever.</p> <p>Develop a plan to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=internal">get rid of credit card debt</a> once and for all. Go through your house and sell things you don't need. Instead of spending a work bonus going on vacation, use this cash to erase account balances. You can even temporarily reduce how much you're contributing to your retirement account, and use the savings to pay off credit card debt. Whatever means you need to eliminate this debt (outside of robbing a bank, of course), use it. You'll feel freer and more financially stable once that burden is off your back.</p> <p><em>Are there other financial mistakes we need to stop making by age 40? Let me know some of your suggestions in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-smart-money-moves-for-empty-nesters">7 Smart Money Moves for Empty Nesters</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt kids life insurance money mistakes mortgage retirement Mon, 10 Aug 2015 09:00:14 +0000 Mikey Rox 1519218 at http://www.wisebread.com Make These 7 Money Moves Now Or You'll Regret It in 20 Years http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/make-these-7-money-moves-now-or-youll-regret-it-in-20-years" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_no_money_000026428621.jpg" alt="Man regretting money moves he didn&#039;t make in 20 years" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Some people always leave stuff for tomorrow.</p> <p>Procrastination is okay when you're talking about cleaning up your bedroom, but when it comes to personal finance, delaying action can be your undoing. There are certain key financial decisions that you need to make <em>today </em>&mdash; otherwise you may have a hard time catching up tomorrow.</p> <p>Don't compromise your financial future &mdash; here are seven&nbsp;<a href="http://www.wisebread.com/8-money-moves-cpas-say-you-must-make">money moves</a> for today that you'll regret you didn't make in 20 years.</p> <h2>1. Buy Life Insurance</h2> <p>If you plan to become a hermit, vow to never have a partner or spouse, or avoid having dependents by any means necessary, then you may skip this section. For all others, please read along.</p> <p>Right now is the youngest that you'll ever be, and the lowest that you'll ever be charged for life insurance. That's a fact. When your entire family depends on your income to survive, you need to plan to provide for them in case of your absence. If you're the sole breadwinner, how do you expect your dependents to cover the remaining balance of the mortgage, for example?</p> <p>If you're planning to have a family or take care of your parents down the road, buying life insurance when you're single and healthy in your 20s or 30s allows you to effectively lock in a low rate. If you wait 20 years to purchase life insurance, the cost can become prohibitively expensive &mdash; if you can qualify for plan coverage at all.</p> <h2>2. Negotiate Your First Salary</h2> <p>According to a report from the National Association of Colleges and Employers, class of 2014 college graduates at the bachelor's degree level have an <a href="http://www.naceweb.org/about-us/press/average-starting-salaries-class-2014.aspx">average starting salary</a> of $48,127. At the lower end of the salary range, liberal arts and humanities majors have an average starting salary of $38,604, and at the higher end, engineering majors have an average starting salary of $64,891.</p> <p>If you're thinking that these salaries sound too low, you're right. It turns out that more than 60% of Millennials don't negotiate salary when receiving their first job offers. Recent graduates are leaving money on the table. A survey of 700 employers reveals that three-quarters of employers typically have room to increase their salary offers by 5% to 10% during negotiations.</p> <p>This means that the average starting salary of a liberal arts and humanities major could potentially be bumped up to between $40,534 and $42,464, if only the job applicant were willing to negotiate. To show you how important that initial salary bump is, let's imagine that you were to take those increases of $1,930 (5% raise) and $3,860 (10% raise) and invest them for 20 years in an investment account with a 5% rate of return compounded annually. At the end of 20 years, you would be approximately $65,532.79 and $131,062.87 richer, respectively.</p> <h2>3. Start a Retirement Account</h2> <p>The same compounding example can be applied to your nest egg. You need to start saving for retirement today, or you'll be kicking yourself for not doing so 20 years from now.</p> <p>More than one third of Americans have less than $1,000 in retirement accounts. This is a scary number that becomes even scarier when you realize that the old target of a $1 million nest egg is no longer enough. According to calculations from the Social Security Administration, 25% of Americans aged 65 or older will <a href="http://www.ssa.gov/planners/lifeexpectancy.html">live past age 90</a>, and 10% will live past age 95. Given the longer U.S. life expectancy, a 4% annual withdrawal would fully deplete a $1 million retirement account in 25 years (age 90, assuming a retirement age of 65).</p> <p>But it's not just a matter of saving for the sake of saving. To maximize your potential nest egg, you need to make these smart money moves:</p> <h2>4. Invest in Stocks</h2> <p>Famous investor Peter Lynch put it best, &quot;Gentlemen who prefer bonds don't know what they are missing.&quot; When you have a long term time frame for investing, stocks will outperform other types of securities.</p> <h2>5. Minimize Investment Fees</h2> <p>By investing in funds with low expense ratios, such as index funds, you get more bang out of your retirement buck.</p> <h2>6. Take Advantage of Employer Matches</h2> <p>The average U.S. worker foregoes $1,336 per year or an extra 2.4% in retirement savings. This is free money that could be in your retirement account, but only if you were meet the matching requirements of your employer's retirement plan. Find out how to qualify for your employer match.</p> <h2>7. Quit Smoking</h2> <p>Smoking is one of the single worst thing that you can do to your body&hellip; and your wallet.</p> <ul> <li>In 2015, the American Cancer Society estimates that you spend <a href="http://www.cancer.org/research/infographicgallery/tobacco-related-healthcare-costs">$35 in health-related costs</a> per pack of cigarettes.<br /> &nbsp;</li> <li>According to a study from Wallethub, smoking costs Americans between $1 and $2 million over a lifetime, depending on your home state.<br /> &nbsp;</li> <li>Under the Affordable Care Act, insurance companies can't charge more for health status. However, they can charge up to 50% more for smoking status. This means that a smoker would pay up to $6,000 for the same annual coverage that would cost just $3,000 to a non-smoker.<br /> &nbsp;</li> <li>Non-smokers receive discounts under most car, renters, and home insurance plans.<br /> &nbsp;</li> <li>Smokers pay about three times as much for life insurance than nonsmokers.<br /> &nbsp;</li> <li>Used cars polluted with secondhand smoke have a resale value about 7% to 9% lower than comparable cars without such pollution.</li> </ul> <p>If you quit smoking now:</p> <ul> <li>In 10 years your <a href="http://www.cancer.org/healthy/stayawayfromtobacco/guidetoquittingsmoking/guide-to-quitting-smoking-benefits">risk of dying</a> from lung cancer would be about 50% less than if you were to continue smoking, and<br /> &nbsp;</li> <li>In 15 years, your risk of coronary heart disease would be the same as a non-smoker.</li> </ul> <p>Make these four money moves and you'll thank yourself 20 years from now.</p> <p><em>What are other money moves you'll regret you didn't make in 20 years? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-the-moment-you-graduate">5 Money Moves to Make the Moment You Graduate</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-mistakes-you-need-to-stop-making-by-30">5 Financial Mistakes You Need to Stop Making by 30</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-simple-guide-to-planning-for-a-loved-ones-long-term-care">A Simple Guide to Planning For a Loved One&#039;s Long-Term Care</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance life insurance money moves negotiating procrastinating retirement smoking Thu, 30 Jul 2015 13:00:14 +0000 Damian Davila 1501966 at http://www.wisebread.com 5 Reasons Why Life Insurance Isn't Just for Old People http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-why-life-insurance-isnt-just-for-old-people" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/newborn_baby_000046762652.jpg" alt="Man getting life insurance to protect his child" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Life insurance isn't your average dinnertime conversation &mdash; no one likes to even talk about it. After all, life insurance is something that you only have to think about when you are old and grey, right?</p> <p>But nothing could be further from the truth. Life takes unexpected turns, and at any age it could be just as important as having a strong emergency fund or funding your retirement.</p> <p>Still need proof? Here are five compelling reasons why <a href="http://www.wisebread.com/universal-life-insurance-and-whole-life-insurance-a-comparison">life insurance</a> isn't just for old people.</p> <h2>1. You're Young and Healthy</h2> <p>Life insurance doesn't pay out until you die, but the best time to buy it is when you are young and healthy, since it's issued on rating scale. The healthier you are, the better the rating. The better the rating, the lower the price.</p> <h2>2. You Want to Boost Your Retirement Funding</h2> <p>401(k), IRA, ROTH, SEP-IRA &mdash; they are all great retirement options. But there are also hefty fees if you want to withdraw early from retirement accounts. Life insurance is the yin to retirement accounts yang. There are two kinds of life insurance: those that expire (term), and those that generate cash value (permanent). If you structure a permanent life insurance policy properly, you can actually use the cash value during your life to help fund your retirement, and even better, the benefits can be tax-free to you.</p> <h2>3. You Got Married</h2> <p>Being single can have many benefits. However, right after you say &quot;I do&quot; is probably the best time to start thinking about life insurance. What if one spouse works, while the other spouse might stay home? Or, maybe one spouse makes a lot more money than the other. However you slice it, life insurance can provide a very valuable asset if something was to happen to the higher-earning partner. You want to make sure you have enough life insurance to cover all your expenses, and then some.</p> <h2>4. You're Having a Baby</h2> <p>If you didn't think getting married was a compelling reason enough, that little bundle of joy should surely spur on the need. Kids bring on a ton more expenses &mdash; day care, education, clothes, food, and not to mention college. Tax-free life insurance benefits can become an important life preserver and ensure your child's well-being.</p> <h2>5. You're Open for Business</h2> <p>So, you've got a rock star business concept and are ready for world domination. If you've got a business partner, then life insurance should be your next step. You share expenses, knowledge, and more. What if something happens to one business partner? You've also got their family, their business interest, and the loss of a partner to think about. Business owners usually opt for <a href="http://www.wisebread.com/business-succession-planning-part-2-how-life-insurance-will-insure-the-life-of-your-business">life insurance on each other</a> in what is a called a &quot;buy-sell agreement.&quot; This agreement drafted by an attorney states who gets what when something happens. The most common form of currency to &quot;fund&quot; a buy-sell agreement&hellip;you guessed it: life insurance.</p> <p><em>Do you own life insurance yet? If so, why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/selling-your-life-insurance-policy-for-cold-hard-cash">Selling Your Life Insurance Policy for Cold, Hard Cash</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-the-21st-century-why-is-your-money-stuck-in-the-20th">It&#039;s the 21st Century — Why Is Your Money Stuck in the 20th?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-questions-couples-must-ask-before-retirement">5 Questions Couples Must Ask Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance business death family life insurance marriage retirement Thu, 11 Jun 2015 17:00:21 +0000 Shannah Game 1447185 at http://www.wisebread.com Big Purchases You Should Make by 30, 40, and 50 http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/big-purchases-you-should-make-by-30-40-and-50" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_empty_piggybank_000018649757.jpg" alt="Man planning big purchases at 30, 40, and 50" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It used to be that major purchases such as a house or a car were rites of passage into adulthood. Sure, times are changing, and the new generation isn't buying all the things their parents did. But there are some things you probably <a href="http://www.wisebread.com/the-7-scariest-big-purchases-people-make">can't avoid buying</a>. Here are the big purchases most of us should make by ages 30, 40, or 50.</p> <h2>By Age 30</h2> <p>By the time we reach 30 we've turned the corner from the youth to adulthood, and our possessions show it.</p> <h3>A Car</h3> <p>As more people choose to live in cities, and use mass transit or ride-sharing apps, it's become less necessary to own a car. That said, many of us still have a lifestyle that requires owning a set of wheels. If this is the case for you, by the age of 30, you probably should have purchased a car <em>by yourself for yoursel</em>f. (See also: <a href="http://www.wisebread.com/the-joy-of-buying-a-new-car-9-car-buying-tips?ref=seealso">The Joy of Buying a New Car: 9 Car Buying Tips</a>)</p> <h3>A Real Bed</h3> <p>This is something everyone avoids for years. Millenials have bought and sold cars well before buying a new bed for themselves. Once you are old enough to live on your own, an ugly used frame propping up a <a href="http://www.wisebread.com/deep-clean-your-mattress-for-a-better-nights-sleep">decades-old (and filthy) mattress</a> just won't do. A more comfortable bed will help you sleep better, and sleeping better will improve your overall health, which will cost you less in the long run. It's one of the best investments you can make in your 20s. Now that one can <a href="http://www.wisebread.com/how-to-buy-the-best-mattress-for-the-least-money">buy affordable and comfortable mattresses online</a>, there's no excuse anymore!</p> <h2>By Age 40</h2> <p>What lies around the corner from age 30? A nest and a family of one's own.</p> <h3>A Home</h3> <p>This can be the most emotional purchase you'll ever make, especially in areas of the country where it's virtually impossible for the average person to afford a home. For those of us who want to own our own home, working toward buying before age 40 is a worthy goal. It's wise to start making sound decisions in your 20s and 30s that will keep your financial state healthy, such as building your credit, in anticipation of a home loan.</p> <h3>Home Appliances</h3> <p>Not every home, whether bought or rented, will come equipped with everything you need. As you get older, you'll probably grow tired of washing your dishes in the sink, or going to the laundromat like you did in your 20s. Eventually, you'll break down and buy a refrigerator, dishwasher, a washer/dryer set, or woodworking tools for the garage. Make sure you do your comparison homework in order to get the best appliance deals.</p> <h2>By Age 50</h2> <p>By now the roots are set deep and the big purchases are behind us, but there are a few big buys that mark time's passage.</p> <h3>Life Insurance</h3> <p>As you get older and have children, you'll want to be covered for whatever may happen. By age 50, you'll almost definitely want to consider life insurance &mdash; well before you develop any chronic health issues or are old enough for premiums to skyrocket. Think about what you need from your life insurance and start planning your beneficiaries' financial future. (See also: <a href="http://www.wisebread.com/universal-life-insurance-and-whole-life-insurance-a-comparison?ref=seealso">Universal Life Insurance and Whole Life Insurance: A Comparison</a>)</p> <h3>Contractor Work</h3> <p>At this point in your life, making renovations on your bathroom or kitchen, adding on to your home, or re-landscaping your backyard is common. In fact, some renovations <a href="http://www.wisebread.com/10-home-renovations-that-almost-pay-for-themselves">nearly pay for themselves</a> over time. If you've never hired a contractor, you'll need to create a budget and detailed timeline, along with a cash buffer for incidentals, accidents, and hotels if you cannot stay in the home at a certain point. Extra frugal? It's also worth <a href="http://www.wisebread.com/is-diy-home-renovating-for-you">considering DIY renovations</a>.</p> <p><em>Which major purchases do you think signify life milestones?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amanda-meadows">Amanda Meadows</a> of <a href="http://www.wisebread.com/big-purchases-you-should-make-by-30-40-and-50">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-decide-if-its-a-fund-worthy-emergency">8 Ways to Decide if It&#039;s a &quot;Fund-Worthy&quot; Emergency</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-not-buy-something-just-because-you-can-afford-it">Do not buy something just because you can afford it</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8000-housing-tax-credit-can-now-be-turned-into-cash-at-closing-according-to-fha">$8000 housing tax credit can now be turned into cash at closing according to FHA</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-the-end-of-6-real-estate-commissions">Is It the End of 6% Real Estate Commissions?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance appliances big purchases Cars housing life insurance real estate Thu, 07 May 2015 13:00:08 +0000 Amanda Meadows 1410180 at http://www.wisebread.com 6 Kinds of Insurance That Aren't Worth It -- And What to Do Instead http://www.wisebread.com/6-kinds-of-insurance-that-arent-worth-it-and-what-to-do-instead <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-kinds-of-insurance-that-arent-worth-it-and-what-to-do-instead" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_driving_000019761193.jpg" alt="Woman driving car with insurance plan that isn&#039;t worth it " title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Forewarned is forearmed, an old adage goes.</p> <p>Being prepared for the unforeseen is always wise, but some insurance companies may actually be cashing in on our fears of unpredictable events. Don't waste money on insurance you don't need &mdash; or by doubling up on coverage you already have. (See also: <a href="http://www.wisebread.com/14-things-insurance-agents-dont-want-you-to-know?ref=seealso">14 Things Insurance Agents Don't Want You to Know</a>).</p> <p>Here are six kinds of insurance that aren't worth their cost (and a few coverage alternatives, just in case).</p> <h2>1. Rental Car Insurance</h2> <p>You shouldn't pay twice for the same thing. Depending on your car insurance policy and your credit card, you may already be covered for rental car insurance.</p> <p>First, most primary auto insurance policies extend to rental vehicles up to your policy limits. For example, your liability insurance would pay for damages caused to other cars or properties. Review your insurance policy to get a clear picture of your coverages and policy limits. In case of questions, talk with your insurance agent or contact your primary auto insurance's customer service line.</p> <p>Second, many credit cards offer secondary coverage for theft or damage to the rental vehicle. Secondary coverage means that after filing a claim with your primary insurance, the secondary insurance picks up fees, such as deductibles, loss-of-use charges, and towing costs. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso">13 Awesome Credit Card Perks You Didn't Know About</a>)</p> <h3>What to Do Instead</h3> <p>To skip rental car insurance, stick to cars that meet the coverage limits and requirements of your primary car insurance and credit card. For example, some cards won't cover rental cars over $50,000 in value or with rental periods of over 30 days.</p> <h2>2. Extended Warranty</h2> <p>When you drop a couple grand on that brand new laptop, you don't even hesitate to accept that extended warranty insurance. But if you'd read the fine print on your credit card terms, you would have found out that you were already covered. Most <a href="http://www.wisebread.com/how-to-take-advantage-of-free-extended-warranty-from-your-credit-card-issuer">credit cards offer extended warranties</a> for an extra year.</p> <p>Consumer Reports indicates that when breakdowns occur during <a href="http://www.consumerreports.org/cro/news/2011/02/nine-more-reasons-to-skip-the-extended-warranty/index.htm">extended warranty periods</a>, the average repair cost for appliances is about the same as the average price for that warranty. This means that you're better off sticking with the free extended warranty from your credit card.</p> <h3>What to Do Instead</h3> <p>Just remember that to qualify for the extended warranty from your credit card company, you need to put the entire purchase amount on the card.</p> <h2>3. Collision Coverage for Old Cars</h2> <p>Talking about car insurance, here is another one that may be unnecessary.</p> <p>Let's imagine that you own a car with a Kelley Blue Book value of $2,500 and that your collision coverage is $500 per year.That's 20% of your vehicle's value for one year of coverage! If you were to wreck your car and receive a total loss settlement, the most that you would receive is $2,000 (assuming a $500 deductible). Is this worth it?</p> <p>This is a bad deal no matter how you see it. It gets even worse as the collision deductible gets higher, or the vehicle's cash value gets lower. Depending on your financial situation, <a href="http://www.wisebread.com/when-to-drop-collision-coverage-on-your-car">dropping collision coverage</a> for your old car may be a good idea. On the other hand, never drop your auto liability insurance.</p> <h3>What to Do Instead</h3> <p>Take what you would use on collision coverage and put it in a savings fund for your next car purchase.</p> <h2>4. Specified Disease Insurance</h2> <p>If you have a family history of a particular genetic disorder or are at risk for a terminal disease, you may lose sleep over the potential financial blow that might be coming someday. Most specified disease insurance writers claim that this kind of policy is worth it because it will cover expenses not reimbursed by your primary health insurer, such as out-of-pocket medical costs, child and household help charges, and experimental treatment expenses.</p> <p>The reality is that you may be already covered. The Affordable Healthcare Act ensures that most insurance plans cover the health care that <a href="http://www.cancer.org/acs/groups/cid/documents/webcontent/002562-pdf.pdf">cancer patients and survivors</a> might need. Current legislation requires that all plans sold in health care marketplaces must cover essential health benefits, including screenings, treatments, and follow-up care of cancer and other types of diseases. If you're concerned about a specific disease, find out your available options for coverage through your <a href="http://www.healthcare.gov">state's health care marketplace</a>.</p> <h3>What to Do Instead</h3> <p>Get peace of mind through a comprehensive plan that covers your illness and skip the specified disease insurance.</p> <h2>5. Life Insurance for Children</h2> <p>This is a very sensitive topic. As a father of two handsome and smart boys, I will do everything in my power to provide them health, stability, and wellbeing. Buying life insurance for children doesn't make sense because they are not the main breadwinners in the family. In most scenarios, your children are your dependents, not the other way around. (See also: <a href="http://www.wisebread.com/how-and-why-to-buy-life-insurance">How and Why to Buy Life Insurance</a>)</p> <p>Life insurance for children would only make sense if you're dependent on your young children for income. Even under these circumstances, some parents may feel uncomfortable signing up their children for life insurance.</p> <h3>What to Do Instead</h3> <p>If you're concerned that you wouldn't be able to cover the potential funeral expenses of your children, then create an emergency fund savings or investment account to cover those expenses. That way, you're covered in case of need and you have a head start for a potential college savings fund for your children. Consult your financial advisor to determine which is the right choice.</p> <h2>6. Private Mortgage Insurance</h2> <p>Private mortgage insurance, better known as PMI, is meant to cover any money owed to your lender in case you default on your mortgage. This insurance is not meant to cover you at all. PMI is required by law for homebuyers with down payments less than 20% of the sale price of the property. (See also: <a href="http://www.wisebread.com/why-you-don-t-need-mortgage-life-insurance?ref=seealso">Why You Don't Need Mortgage Life Insurance</a>)</p> <p>There are three reasons why PMI isn't worth it:</p> <ul> <li>The average PMI payment ranges from 0.5% to 1% of the total loan value. The small percentage can be deceiving. In 2014, the <a href="http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/">average U.S. mortgage debt</a> was $155,192. Assuming a 1% PMI, the <a href="http://www.investopedia.com/articles/pf/07/avoid_pmi.asp">average PMI payment</a> in 2014 was about $1,551. That money would be better used as a contribution to your retirement account or payment to credit card debt.</li> </ul> <ul> <li>PMI payments may not be tax deductible. Families with over <a href="http://www.irs.gov/publications/p936/ar02.html#en_US_2014_publink1000296058">$109,000 adjusted gross income</a> ($54,500 if married filing separately) per year can't deduct PMI payments on their tax declarations.<br /> &nbsp;</li> <li>PMI may be cancelled. Under the <a href="https://www.fdic.gov/regulations/compliance/manual/pdf/V-5.1.pdf">Homeowner's Protection Act</a>, you can request your lender terminate your PMI when your loan value reaches 78% of the original market value of the secured property. Keep in mind that there are several requirements, such as no junior liens and no dramatic market value swings. Plan ahead, work on improving your credit history, and make mortgage payments on time within the last two years, so that your lender doesn't come up with any &quot;buts&quot; to your request.</li> </ul> <h3>What to Do Instead</h3> <p>Save up for a 20% down payment on your property and skip private mortgage insurance altogether.</p> <p>For those with a high credit score, another option for avoiding PMI may be available: an 80-10-10 piggyback loan. Under this type of loan, a bank offers you a mortgage for 80% of the home value, and a second mortgage or home equity line of credit (HELOC) for 10% of the home value. This way you're able to come up with a 20% down payment but only with 10% out of pocket. Consult your local bank to determine your eligibility for a piggyback loan, find out terms (e.g. some banks may offer 80-5-15 or 80-15-5 piggyback loans), and figure out if a piggyback loan is right for you.</p> <p><em>What are some insurances that you wished you had never signed up for?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/6-kinds-of-insurance-that-arent-worth-it-and-what-to-do-instead">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-pay-as-you-drive-auto-insurance-worth-it">Is Pay-As-You-Drive Auto Insurance Worth It?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/repair-the-car-or-spend-the-cash">Repair the Car or Spend the Cash?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-mechanical-breakdown-insurance-worth-it">Is Mechanical Breakdown Insurance Worth It?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance car insurance health costs life insurance pmi warranties Wed, 08 Apr 2015 11:00:10 +0000 Damian Davila 1370391 at http://www.wisebread.com