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Posted on March 19, 2012
Do You Have Enough Insurance? Life? Home? Auto?
Without the proper types of insurance, a mishap could drain away your savings. But buy too much and you'll pay excessive premiums for years. Really though, how much auto, homeowner's, life and disability insurance do you really need? Use these guidelines to help figure it out. AUTO INSURANCE Most states require a certain amount of automotive coverage, but these legal minimums are well below the amount that drivers really should have. If you cause an accident in which other people are injured, the claims against you easily could run into the high six figures. Rule of thumb: Have at least as much in liability coverage as you have in assets. For example, if you have $300,000 in savings and $400,000 equity in your home, carry at least $700,000, less if you have umbrella coverage. Residents of some states, such as Florida, Iowa and Texas need not include a home in this calculation because state law protects the primary residence in the event of a lawsuit. You can choose other components of auto insurance based on your circumstances. Consider this, there's no need to pay for medical payment coverage if you have health insurance. Now you might not want collision or comprehensive, if you drive a vehicle that is more than five years old. (Collision coverage might be required by a lender or lease agreement.) HOMEOWNER'S INSURANCE Homeowner's insurance protects your home and its contents against damage and theft. It also protects you financially, in the event someone is injured on your property and sues you. Rule of thumb: for property damage, the minimum amount of coverage you need is what it would cost to rebuild your home if it were destroyed. This figure might be substantially higher than the original cost of construction, particularly if the house is old or has had substantial renovations. To estimate rebuilding costs, multiply your home's square footage by construction costs per square foot in your region (your agent or a local real estate broker should be able to provide this figure.) This yields the construction costs for a typical home, not for features that make your home special, like a chef's kitchen. For a more accurate figure, ask your insurance agent for a "true replacement cost estimate." (Also ask your agent about flood insurance if you live in a flood-prone area.) Liability. As with auto insurance, this component of homeowner's insurance should be at least equal to your assets, including savings and the equity in your home. Only reduce this figure if you have umbrella coverage (see below.) Umbrella Liability Insurance Umbrella liability insurance protects you from lawsuits by supplementing liability coverage in homeowner's and auto insurance (as well as boat, vacation home and other liability coverage you may have.) Generally, if your assets exceed $700,000, you should have an umbrella policy. Most insurance companies offer umbrella policies with coverage starting at $1 million. It is generally cheaper to buy through your home and auto insurance. This costs about $180 per year. Each additional $1 million adds $70 or less to your annual premium. Once this coverage is in place, you can reduce liability coverage on your auto and homeowner's policies. LIFE INSURANCE Most people add up future expenses, subtract current savings then buy enough insurance to make sure their expenses are covered. This approach can result in your family just scraping by. Consider buying enough to keep your family comfortable and financially secure. Rule of thumb: multiply your annual salary by the number of years remaining until you expect to retire. If you earn $100,000 per year and expect to work for 15 more years, buy $1.5 million in life insurance. This quick calculation doesn't take into account future salary increases, but since your family would receive insurance benefits as a lump sum, they could invest it and use the profits to offset the effect of lost raises. (For a detailed life insurance needs estimate, use the "Income Replacement Method" tool on the Life Insurance Analysis Center Web site www.underwriter.com.) A non-working spouse should have coverage to reflect his/her economic value to the household. If you have children and child care costs $300 a week, buy enough to cover the cost. Also some spouses each buy enough to pay off their mortgage. Go to insurance.yahoo.com to figure out the minimum your family needs. Important: Once your mortgage is paid and the children are out of the house, you may no longer need life insurance if you have adequate savings. Before you cash out or cancel a policy, find out if a life settlement company will buy it from you. To find one, ask an independent life insurance agent or a financial adviser. Some policies can fetch more than $100,000. Long-term Disability Select a policy that pays full benefits if you're unable to work in your chosen profession. Buy enough either privately or combined with an employer's policy to replace 60% of your income. The policy should pay benefits for five years and can even pay up to full retirement age, which at this time, you will be eligible for Social Security and retirement benefits. Check out this article written by Paul J. Mauro, CLU, ChFC, Legacy Financial Advisors, Inc. at www.bottomlinesecrets.com.
Posted on March 1, 2012
Go Green!
With St Patrick's Day right around the corner Go Green! and do something good for your planet and your wallet by recycling your old electronic equipment. Instead of tossing those old gizmos and gadgets when upgrading to a flashier faster version, consider checking out a trade-in & recycle program. National retailers now offer electronics trade-in and recycle programs, which can help cut down on electronic waste. In recent years the volume of electronic waste has grown dramatically - almost one billion personal computers alone will be replaced by the end of the decade. If this waste is not processed properly it becomes a major source of toxins and carcinogens, and may contain hazardous materials such as lead, mercury and cadmium. The programs do vary, but if your item is determined to have some trade-in value you will receive credit towards a future purchase. So before you toss, check out a program today. Not only are they "green" for the environment, but they might put some green back in your pocket as well.
Posted on January 12, 2012
USA.gov – A Valuable Resource
www.USA.gov has 14 sections with information ranging from health, money, jobs, education, environment and consumer guides. While there is a wealth of valuable information to discuss, for this newsletter we will focus on the sections that provide information about emergency preparedness, replacing vital documents and preparing for travel. 1. Are you prepared for when an emergency strikes? The U.S. Department of Homeland Security and other state and local government agencies work hard to protect and prepare our nation for emergencies. The Public Safety and Law section provides guidance on how to prepare for and recover from disasters. The Vital Records PortaVault is the perfect solution for emergency disaster planning. It is designed for situations that would require you to transport all your documents easily, in the event you need to quickly evacuate your home. Visit our website for more details on the Vital Records PortaVault. 2. Information on Replacement Documents: The Family, Home and Community section includes a link to the CDC website which provides information on how to contact various state agencies to obtain replacement birth, death and marriage certificates. 3. Learning about a country before you travel: The Department of State's Consular Information sheets are available for every country of the world. These information sheets describe entry requirements, currency regulations, unusual health conditions, crime and security situation, political disturbances, areas of instability, and special information about driving and road conditions. They also provide valuable information on U.S. embassies and consulates. The Consular Information sheets describe conditions to enable travelers to make informed decisions about upcoming travels. Visit the Travel and Recreation section for detailed information on how to prepare for a trip. And be sure to check out this site before you plan any major trip out of the country!
Posted on January 5, 2012
The Shredding Mistake – A little humor!
A young officer is working late at the Pentagon one evening. As he comes out of his office about 8:00 p.m. he sees a General standing by the classified document shredder in the hallway, a piece of paper in his hand. "Do you know how to work this thing?" the General asks. "My secretary's gone home and I don't know how to run it." "Yes, sir," says the young officer, who turns on the machine, takes the paper from the General, and feeds it in. (PAUSE) "Now," says the General, "I just need one copy....."
Posted on January 2, 2012
Personal Property Inventory
An inventory of your personal property is one of the most important things you can do to prevent problems, in the event you need to file an insurance claim. This inventory is also useful when reviewing your policy for adequate coverage of your personal possessions. To help you get started reference the Household Inventory Form and Valuables & Collectibles Form, included with your PortaVault. Key Points to remember when taking inventory:
- Be organized. Go room to room listing your possessions.
- Be creative. Photograph or video each room and its contents
- Be complete. Don't forget to open closets, drawers and cabinets and document the existence of items, even if you cannot determine their purchase price.
- Be specific. Record serial numbers, brand names and model numbers if available.
- Be honest. Use receipts to record purchase price or use your best recollection of the cost if you no longer have the receipts.
- Be safe. Store the inventory and photos in the PortaVault and keep a copy in a safe place outside your home.
- Be current. Remember to update the inventory and photos at least once a year.
- Be proactive. Don't wait for a disaster to strike before you determine what possessions you own and what they are worth.
Posted on December 15, 2011
Too Many Laws! – A little humor for you
Did you ever find yourself thinking there are just too many laws!? Well, there are even more laws than you may think - laws that were created and then forgotten. I've highlighted a few forgotten laws that have made me smile and I hope they will do the same for you! Marshalltown, Iowa - It is illegal for horses to eat fire hydrants. Texas - When two trains meet each other at a railroad crossing, each shall come to a full stop and neither shall proceed until the other has gone. Florida - The law states that if an elephant is tied to a parking meter, it must pay the same fees as a car. Utah - A state law prohibits fishing from horseback. Rochester, Michigan - Anyone appearing in public wearing a bathing suit must be inspected by a police officer. Wyoming - It is against the law to take a picture of a rabbit in the months of January, February, March or April. Iowa- According to the law, kisses may last for as much as, but no more than five minutes. Holyoke, Massachusetts - It is against the law to water your lawn when it is raining. Las Vegas, Nevada - It is illegal to pawn your dentures.
