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Insurance

Monday’s need-to-know money news

January 6, 2014 By Liz Weston

Today’s top story: Improving your budget in 2014. Also in the news: The little things that are killing your budget, eliminating excuse making, and how to start digging out from under holiday bills. Credit card background

How to Budget Better in the New Year
Smart budgeting is essential to your financial health.

5 Small Things That Are Killing Your Budget
All those $5.00 subscription fees add up quickly.

11 Money Excuses to Stop Making in 2014
Cross these excuses off of your list.

How To Recover From Your Holiday Spending
Don’t let the holidays haunt you through the New Year.

4 Ways to Protect Your Money
Insurance, insurance, insurance.

Filed Under: Liz's Blog Tagged With: budgets, excuses, holiday spending, Insurance, tips

“I don’t need life insurance…my wife can just remarry.”

November 25, 2013 By Liz Weston

gravestoneFor a moment I was speechless. The journalist who said these words obviously thought he was being perfectly logical. He thought life insurance was a scam and he was too smart to fall for it.

In a way, what he said was kind of flattering. He obviously thought his wife would have no trouble finding his replacement.

The reality, though, is that middle-aged women with kids aren’t often a hot commodity on the dating market. And even if she were the suburban version of Angelina Jolie, the underlying message was disturbing. He was putting his wife in the position of having to remarry for money. If she couldn’t find someone suitable, she’d face a lifetime of reduced financial circumstances.

That’s a hell of a legacy to leave behind, particularly when term life insurance is so cheap and easy for most people to buy.

 

 

Filed Under: Liz's Blog Tagged With: Accuquote, Insurance, insurance quotes, Insure.com, life insurance

Do you have enough life insurance? Really?

November 21, 2013 By Liz Weston

A few weeks ago I asked my Facebook followers if they had enough life insurance and, if not, what was preventing them from getting more.

Only two people mentioned cost. Many of the rest weren’t sure how much they needed or where they could turn for objective, unbiased help. A few were pretty confident they had enough insurance…although in reality they may have needed more.

The two most important questions to ask about life insurance are, “Do I need it? And if so, how much do I need?” The answers to those questions trump all other considerations—regardless of what your friendly insurance agent might be trying to sell you.

Here’s what you need to know:

If you have financial dependents, you need life insurance. Minor children are financial dependents. So is a spouse or partner who needs your income to pay the mortgage. Stay-at-home parents need coverage, too, since a surviving parent would likely have to hire childcare help. Some people have elderly parents who rely on them for income or caregiving or both; those people need coverage as well.

If you need life insurance, you probably need a lot. As in five to 10 times your income. The amount will vary according to your earnings, your savings and estimated future expenses, so it’s worth taking the time to get a more personalized estimate. MSN has a life insurance needs calculator here. Bankrate has one here.

Social Security survivors benefits probably won’t be enough. Social Security can provide checks to your survivors, but they won’t replace your income and they have limits. Social Security survivor benefits end at 18 or 19 for the child, while parental benefits (the check a surviving parent gets for caring for a covered child) end when child is 16. Widow’s or widower’s benefits typically don’t start until age 60. You can see what your estimated survivor benefits are at http://www.ssa.gov/estimator/

Insurance you buy through work usually isn’t portable. Many employers provide a life insurance benefit equal to your annual salary, and some allow you to buy more coverage. This may be the most economical way to buy life insurance if you have health issues or other risk factors, but the big downside is that the policy is tied to the job. Lose your job, lose your coverage. If you can, it often makes sense to buy at least some coverage independently.

Permanent insurance is for permanent needs, which most people don’t have. Term insurance covers you for a certain time period, usually 10, 20 or 30 years. Permanent insurance is meant to provide you coverage for life. Insurance agents love to sell permanent insurance, which often has some pretty cool features. The problem is that the premiums can be 10 times what an equivalent amount of term insurance costs. Remember, if you need life insurance, you need to get enough life insurance. Settling for too little coverage could leave your family in a real hole. If you do have a permanent need for insurance—you have a special needs child or an estate-planning issue that requires it—talk to a fee-only financial planner about your options. Otherwise, shop for term insurance at places like Accuquote or Insure.com.

Filed Under: Liz's Blog Tagged With: Accuquote, Insurance, insurance quotes, Insure.com, life insurance

A health insurance shopping site that actually works

November 13, 2013 By Liz Weston

Health claim formYou don’t have to wait for the federal government to fix the Obamacare Web site to learn about your insurance options.

HealthSherpa is the creation of three guys who actually seem to know how to program. Instead of fighting your way through confusing interfaces, legalese and a long sign-up process, you just type in your Zip Code and bam! Your options start to show up.

HealthSherpa allows you to modify your results by the number of family members and your income (which determines whether you get subsidies to cut the cost–most people do).

HealthSherpa doesn’t have the links to Social Security and the IRS that would allow you to sign up for a plan directly on the site. But it does offer links and phone numbers to insurers that can help you sign up once you pick a plan.

If only Kathleen Sebelius had hired these guys in the first place…

UPDATE: As commenter Kitty notes below, you’ll still need to go through Healthcare.gov to sign up for coverage if you want the subsidies and other cost reductions available through Obamacare. The HealthSherpa site allows you to see and explore your options, which should make signing up a bit easier.

Filed Under: Liz's Blog Tagged With: health care reform, health insurance, HealthSherpa, Insurance, obamacare

Tuesday’s need-to-know money news

September 24, 2013 By Liz Weston

Offering AdviceControlling shared credit card use, the pros and cons of a high-deductible health plan, and ways to save while grocery shopping.

What to Do if an Authorized User Is Abusing Your Credit Card
Setting boundaries for shared credit cards. r

6 Tips for Navigating the New Health Insurance Exchanges
Don’t be intimidated by the new health exchnages.

Is a high-deductible health plan right for you?
When choosing a high-deductible plan makes the most sense.

Break the spell of spending mindlessly
Tips on how to become a conscious spender.

How to Trim Your Food Budget
Ways to save at the grocery store.

Filed Under: Liz's Blog Tagged With: affordable care act, Credit Cards, grocery savings, Insurance, obamacare, spending

No spouse, no kids. Time to cancel life insurance?

September 12, 2013 By Liz Weston

Dear Liz: I am 43 and divorced. I have a mortgage and an auto payment. I fully fund my 401(k) each year and am funding a Roth IRA. I also have emergency savings of $30,000 and a term life insurance policy for $350,000. What I don’t have is children or a spouse. I am thinking of canceling the policy, but is this a good idea?

Answer: The most important question to answer about life insurance is whether you need it. If no one is financially dependent on you, the answer is probably no.

Then again, canceling your policy is a bet that your life isn’t going to change — that you won’t someday have a partner who may need your income to pay the mortgage or other expenses, for example. If you’ve canceled your policy, you may find it difficult — not to mention more expensive — to get similar coverage later.

Term insurance is typically fairly cheap. Current quotes for a $350,000 30-year level term policy for a woman your age are typically between $40 and $60 a month. You’ll have to weigh whether the savings is worth what you’d be giving up.

Filed Under: Insurance, Q&A Tagged With: canceling life insurance, Insurance, life insurance

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