16
Nov 2022
16Nov 2022 Life insurance
What To Do If Your Identity Is Stolen: 15 Key Steps

What+to+do+if+you+are+a+victim+of+credit+fraud

It’s very important to understand what to do if your identity is stolen. In today’s world, it seems like every few months, there is a news report about a security breach. And these breaches have the potential to leave masses of people susceptible to identity theft and credit fraud.

There are multiple ways someone can steal your identity, from lost purses or a wallet to using public wi-fi. Thieves may even steal your information from ATMs.

One of the largest breaches in recent times was the Equifax breach which was estimated to have affected over 143 million people. That’s almost 1/2 of the population of the U.S! Crazy right?

It may have left many people wondering what to do if someone steals your identity. Well, knowing that security breaches can and do occur, here are some key things you need to do.

You can minimize the impact and protect yourself from potential credit fraud when you know how to report identity theft.

15 steps for what to do if your identity is stolen

If someone steals your identity, this can affect many things. From debit cards to your bank accounts and bank account numbers, and driver’s license numbers, a lot of your personal information can be compromised.

Because this can happen without you realizing it, it’s important to prepare and know how to report identity theft.

From knowing the answer to “how do I file a police report for identity theft?” to “how do I notify the post office?”, you’ll find answers here.

There are many preventative measures you can take. Such as having identity theft insurance and identity theft protection service, monitoring credit reports, etc. Also, find out where to look to see if theft has occurred.

Victims of identity theft unfortunately have to work hard to fix a problem they didn’t create. But having preventative measures in place can help with ID theft.

1. Check your credit immediately to confirm if your identity was stolen

If you have concerns about identity theft and want to know what to do if your identity is stolen, check your credit immediately with a free credit report. You want to make sure everything on your credit report is as expected.

Get your free credit report

You have access to a free copy of your credit report from all 3 credit bureaus each year via annualcreditreport.com.

Many banks are also now offering this service for free with your accounts. Alternatively, you can choose to pay for one.

The bottom line is that you need to stay on top of checking your credit to make sure nothing strange is going on there. If things are amiss, keep reading.

2. Alert the credit bureaus immediately

Alert the credit bureaus to report the situation and place a fraud alert or freeze on your credit reports to prevent any additional damage.

A credit freeze (or security freeze) lets you restrict access to your credit report. This means lenders will not be able to access your credit to approve any unauthorized lines of credit until you remove the freeze.

You can get a freeze on your credit from each of the 3 major credit bureaus – Equifax, TransUnion, and Experian.

It’s a good idea to learn how credit works and check in on it at least once a month regardless. Checking your own credit does not impact your score.

3. Get a credit monitoring service in place

Just because a breach has happened does not mean identity theft or credit fraud will happen right away.

If you’re determining what to do if someone steals your identity, know that it could take months or years before you are affected.

Usually, when a company is impacted by a security breach e.g. Equifax, they typically offer free credit monitoring of some sort for a period of time.

However, there are several other companies that can do this for you as well. I don’t blame you if you don’t want to go with the company that caused all the trouble in the first place!

How credit monitoring helps you

When you have your credit monitored it will alert you when someone applies for a line of credit or adds one in your name. The monitoring will help you keep track of exactly what’s going on with your credit.

Keep in mind that even if you have a credit freeze, it’s a good idea to still have credit monitoring. Because the fraud could happen on your existing accounts which a credit freeze does not impact.

4. Report the problem to the FTC

As soon as you realize that your identity was stolen, you should report it to the Federal Trade Commission (FTC) right away.

By making this report to the FTC, you’ll get guidance on how to create a recovery plan. They’ll provide you with guidance on how to:

  • Close new accounts created in your name
  • Remove bogus charges from your accounts
  • Correct your credit report
  • Clear your name of criminal charges
  • Manage theft on specific accounts e.g. government benefits, student loans, bankruptcy filed in your name, etc.

By filling and documenting this report quickly, you may also be able to limit your financial liability as well.

5. File a police report

Identity theft is a crime. So you’re probably asking, “how do I file a police report for identity theft?”

When figuring out what to do if your identity is stolen, having a police report from your local law enforcement agency can help support any claims you file to dispute theft.

By filing a report with your local police department, you may also be aiding the police in fighting existing identity theft cases.

When you file the police report, be sure to have a copy of your FTC report and proof of your identity being stolen, in addition to your address and ID, according to US News.

You’ll also want to get a copy of this report to share with the credit bureaus, your creditors, and service providers to keep on record as part of your case file.

So now you know the answer to, “how do I file a police report for identity theft?” and you’re one step closer to getting your life back to normal.

Stolen identity action steps graphic 1
Stolen identity action steps graphic 2

To better prepare, you should gather all the documents that relate to the theft.

According to the FTC, you can do this by writing a request for the documents to the company where the theft happened. You must also include a police report, an FTC identity theft report, and identification when you do this.

7. Be sure to notify the IRS

It’s also essential that you make the IRS aware of any identity theft. Someone could attempt to use your information to create a fake tax return and get money from a tax refund.

You can go to the IRS website to find out what to do if your identity is stolen and how to notify them about the fraud.

8. Let the DMV know

You’ll find out your driver’s license can also be affected by this, so it’s essential to understand what to do if someone steals your identity related to your license.

If you suspect someone has stolen your license, contact your local DMV and let them know about the situation. You can add a flag to your license to prevent fraud.

9. Notify your health insurance of the fraud

When deciding what to do if your identity is stolen, you’ll find that you may also need to let your health insurance know about the fraud. Someone may be trying to use your insurance for medical procedures or medicine.

You should ask for any associated medical records and let your medical providers know.

10. Contact the Social Security Administration

If your identity is stolen, your social security can also be affected. If you think someone could be using your social security number, you can contact the Social Security Administration (SSA). They can check their records to make sure there isn’t any fraud.

11. Contact the post office

Be sure to contact the post office as well. This is to ensure that no one tried to authorize a change of address in your name. You can also fill out paperwork to make sure they are aware of the situation and have a record of the theft.

12. Change online passwords and pins associated with your financial information

It’s a good idea to change the passwords or pins you have associated with your personal and financial information as soon as possible.

You may not know right away exactly what information the thief took and so it’s better to take all precautions.

You can set calendar reminders for yourself to change your passwords every few months. Make sure that you create strong passwords that are not easy to guess. Also, avoid using devices you don’t trust.

13. Contact your creditors and service providers

You’ll also want to contact your creditors or service providers to report the situation. You can then begin the dispute process with them for any fraudulent claims made in your name.

You can provide the FTC and police reports you filed to them as well to help further validate your claim. Identity thieves can set up services like utilities in your name and so it’s important to contact your service providers as well.

Also, be sure that you notify any companies that are reporting inaccurate information to the credit bureaus due to identity theft. That way your credit isn’t impacted.

14. Review your bank and credit card accounts and statements

Take some time out to review your bank and credit statements for any discrepancies.

You may be able to catch the theft early by doing this. Especially if the transactions have not yet been reported on your credit profile. Be sure to also make your bank’s fraud department aware of the situation.

15. Look for any fraudulent accounts in your name, dispute, and close them

As you review your credit profile, look for any fraudulent accounts in your name. If someone contacts you due to debt owed on a fraudulent account, provide them with your FTC and police reports.

You can also ask for the details used to set up the account and file a formal dispute with them for any balances due.

If you are able to learn more about the identity thief, you can report this information to the police and FTC.

The FTC also provides sample letters to help you request that a debt collector stop collecting debts that you don’t owe.

Get your life back to normal faster by knowing what to do if your identity is stolen

If your personal and financial information happens to be part of a security breach, don’t panic. It’s frustrating, but if you take the above actions quickly hopefully you can minimize the impact on your finances by knowing how to report identity theft.

It’s also important to take precautions even if you have not had your identity stolen. Be sure to store your financial records properly and stay on top of reviewing your bank, credit, and service statements.

If someone steals your identity don’t stall on taking action. The sooner you start working on addressing it, the quicker you’ll resolve it.

And while you’re at it, be sure to review other aspects of your financial health, such as your retirement plan and your budget.

The post What To Do If Your Identity Is Stolen: 15 Key Steps appeared first on Clever Girl Finance.

11
Jul 2022
11Jul 2022 Life insurance
Is Insurance For Handbags A Real Thing?

Insurance for handbags
Image source: garpinina – stock.adobe.com

Do you find yourself drooling over the latest Dior or Louis Vuitton bags? Are you working on building a collection of luxury purses? And did you know you can get insurance for handbags?

If you have one hundred or just one luxury handbag, you probably want to protect it. Bag insurance helps protect your bags by covering costs if you lose or damage them.

In this article, we’ll see how insurance for handbags works and whether or not you should get it.

What kinds of bags might need handbag insurance?

Insurance can protect designer bags and vintage bags. Let’s go over the details.

Why would someone want to insure a handbag?

Put simply, designer bags cost a lot of money. Even a small clutch might retail for several thousand dollars. More expensive ones — such as Hermès Birkin bags — could cost you over $10,000.

Replacing a bag could wipe out your savings. So insurance helps reduce your out-of-pocket expenses for lost or stolen bags. This means your insurance company will help pay to replace or repair the bag.

Designer bags

Designer handbags are the most common types of bags to insure. For example, you might want to insure these popular bags:

Vintage bags

Your brand-new designer bag isn’t the only one worth insuring. Vintage bags might be worth enough to insure.

Consider the condition and materials of your bag to see if it needs insurance. For example, a mesh purse made of real gold could be worth thousands.

Where can you get insurance for handbags?

Generally, you can get handbag insurance from two sources:

The type of coverage or policy you need will depend on several factors. For example, how many bags you have and their value.

Homeowners or renters insurance

Do you have a homeowners or a renters insurance policy? Your bags are likely already covered!

Standard homeowners and renters policies cover your personal belongings. In most cases, that includes your handbag collection.

However, the standard coverage has limits for luxury items. Most policies set a per-item dollar limit. That means your insurance company won’t pay more than that to replace your bag.

For example, you have a Gucci handbag worth around $3,000. Your insurance covers up to $1,500 for luxury goods.

When your bag is damaged in a fire, they pay $1,500. Unfortunately, you’ll have to cover the remaining $1,500 out of pocket.

How to deal with bag insurance coverage limits

While your homeowner’s policy may have limits, there is a solution for insurance for handbags. Most policies let you add on coverage. This is through insurance riders or floaters.

An insurance rider or endorsement changes your policy’s coverage. Generally, riders increase the overall coverage of your policy. For example, your policy limit is $1,500 per item. Therefore, you add a rider to increase coverage to $3,000 per item.

An insurance floater is almost the same thing as a rider. The difference is that a floater is used to cover individual items. These may also be called scheduled personal property riders.

Insurance floaters require an appraisal of each insured item to accurately determine coverage.

Let’s say you have a Goyard bag and want to ensure it’s covered by a floater policy. Your insurance company needs you to get a third-party appraisal. The appraisal comes back at $3,500, so your insurance company covers this amount.

Who should get a scheduled personal property rider?

Handbag owners can use riders and floater policies to protect their bags. However, when does it make sense to simply increase your overall coverage limit? Versus scheduling individual items?

The big difference is how many handbags you have and their value. Raising your policy’s personal property limit might make sense if:

  • You have multiple handbags.
  • The value of each bag falls under the increased limit. For example, you increase your limit to $2,500 per item, and all your bags are worth around $2,200.

On the other hand, consider a floater policy if you:

  • Only have one bag to insure.
  • Have an extremely valuable bag, such as a Birkin bag.

Standalone insurance for handbags policies

Piggybacking bag insurance off of an existing policy isn’t the only way to protect your investment. Some insurance carriers offer standalone bag policies.

A standalone policy is a type of property insurance that specifically covers your handbags.

However, policies will vary between insurance companies. So definitely shop around until you find the one that fits your needs.

For example, some insurance companies may cover both your bag and its contents. Or, they might offer a high coverage limit to cover multiple bags on one policy.

Like riders, most standalone policies require an appraisal of your bags.

Who should get a bag insurance policy?

A standalone handbag policy might be a good fit if your homeowner’s policy doesn’t offer enough coverage for your bags.

Likewise, a standalone policy could be a good idea if you find an insurance carrier with a policy that works for you.

For instance, you find a policy that includes coverage for multiple, expensive bags. This could help you save money on insurance costs.

How does a bag insurance claim work?

When it comes to insurance for handbags, claims work like other property insurance claims. So this means you’ll need to file a claim with your insurance company.

Be aware that you may have a deductible. Your deductible is the amount of repair or replacement costs you have to pay before insurance coverage kicks in.

Many homeowner insurance policies have deductibles of around $500 or $1,000. On the other hand, there may be standalone policies without deductibles.

The claims process

The procedure of filing an insurance claim is similar across most policies. Follow these steps to file a handbag insurance claim:

  • First, file a police report for thefts or vandalism.
  • Gather your documentation, including appraisals and policy documents.
  • Communicate with your insurance company to open the claim file.
  • Provide any requested documents, such as the police report, photos of the damage, or appraisal information.
  • Pay your deductible, if any. This means covering the initial cost of repairs up to your deductible amount.

Is insurance for handbags worth it?

Insurance for handbags is often worth the investment if you own expensive designer bags. Your insurance policy can help cover the replacement cost. So even if you can’t replace the bag, you’ll get compensation.

On the other hand, your bags may not have enough value to need extra insurance coverage. Your standard homeowners or renters policy should cover many affordable designer bags within the standard coverage limit. In this case, extra coverage could cost you more.

Pros and cons of handbag insurance

Are you trying to decide about insuring your bags? Let’s get into the pros and cons of insuring handbags to see if it’s a good fit.

Pros

An insurance policy for your designer handbags could protect your investment. For example, some advantages of insurance include:

  • You can file a claim if you lost or damage your bag.
  • You’ll get peace of mind when using your bag.
  • Premiums for insurance for handbags are often affordable.

Cons

Are there any downsides to insuring a handbag? Some reasons you might want to skip insurance include:

  • You have to keep paying premiums.
  • Your insurance payout might not cover the full cost to replace a bag.
  • Insurance generally doesn’t cover every accident.

Should you insure your handbags?

In the end, it’s up to you to decide to insure your bags. But, there are some questions you can use to help you decide if it’s a good investment:

  • How many designer bags do you own?
  • Are your bags worth more than the limit on your existing insurance policy?
  • Do you have a high-dollar or irreplaceable handbag?
  • Can you afford to replace or repair a bag on your own?

So remember to shop around to find the right policy. Look for policies that cover replacement costs. It’s also a smart idea to compare the cost and coverage of a rider versus a standalone policy.

Now that you’ve read about insurance for handbags, check out our articles about luxury purses, like the Lady Dior and Chanel handbags!

The post Is Insurance For Handbags A Real Thing? appeared first on Clever Girl Finance.

7
Mar 2022
7Mar 2022 Life insurance
Term Life Insurance VS Whole Life Insurance? What’s Best for You?

Life insurance. It’s one of those things that no one ever likes talking about, but it’s essential to ensuring any wealth you’ve built is preserved for your future generations as an inheritance. Something that isn’t discussed enough is term vs whole life insurance pros and cons.

In a study by the Life Insurance and Market Research Association (LIMRA), it was determined that over 100 million households (40%) are uninsured and underinsured. In addition, 44% of households in the U.S. would face financial hardship if the primary wage earner died.

These stats highlight why having life insurance is essential. No matter what type of life insurance you choose, it’s a way to shield your investments and assets to make sure they’re distributed properly to your designated beneficiaries if something happens to you.

Even if you have no investments or assets at the time of your death, having life insurance can ensure that your loved ones are taken care of when you are no longer here.

So, the two types of life insurance are term life insurance and whole life insurance. But which should you get? Let’s get into the difference between term life insurance vs whole life insurance, and the benefits of term insurance and whole, so you can make a financially sound decision.

Term life insurance vs whole life insurance: What’s the difference?

Let’s take a look at each, along with the term vs whole life insurance pros and cons:

What is term life insurance?

A term life insurance policy is life insurance coverage that covers you for a set period of time and has no cash value account associated with it.

As a result of this, the premiums are often lower than a whole life policy, which is one of the benefits of term insurance. When you choose a term life policy, you’ll choose a certain duration of years to be covered; typically a 10 or 20-year term policy. So it’s long-term but not lifetime insurance.

This insurance breaks down into two different types of term life insurance:

Group term life insurance

Group term life insurance is insurance that an employer offers to its employees as a benefit. It covers the employees of the company instead of a single individual.

However, the coverage of this policy can run short of what your needs may be, so you may want to consider purchasing an individual policy. Or you could expand your existing coverage and pay the premium difference that your employer provides.

Individual life insurance

Individual life insurance is more expensive but provides more coverage that will fully protect your loved ones when needed.

You also get to customize your coverage with this type of policy rather than settling for what your employer offers with their group plan. It’s good to research and calculate how much life insurance you need for your unique situation.

What is whole life insurance?

Whole life insurance, also called permanent insurance, is life insurance coverage that combines life insurance with investments and lasts the entire lifetime of the person insured.

This is one of the big differences when considering term life insurance vs whole life insurance. This addition of investments is called “cash value” and is placed in a cash-value account. It is also known as cash value life insurance.

With a whole life insurance policy, you’ll pay monthly premiums for coverage, but a portion of that amount will be put into an investment account. Your beneficiaries will receive any excess premiums at the time of your death.

With a policy like this, the premiums are often higher due to the additional benefit of the cash value account.

What is a cash value account and how does it work?

When you pay your insurance premium, they will use part of it to actually pay for your insurance. But the other part goes into an investment account that accumulates wealth over the life of the policy, aka, your lifespan. This account is called a cash value account.

With a cash-value account, you can withdraw money from your policy in the form of a loan plus interest. This is a great feature, but one catch is that if the loan hasn’t been paid back at the time of your death, the death benefit amount paid to your beneficiaries is decreased by the outstanding loan amount.

Here are a few ways you can use a cash account:

Other types of permanent life insurance

Index universal life is another type of universal life insurance. You can’t lose money with an index universal because the cash value interest rate can’t go down, but it can go up. However, there’s a limit to how high it can go.

Variable universal life insurance has no limit on how high or low it can go. So there’s the potential to make a profit on the cash value, but it is riskier than an index universal.

You’ve already heard about traditional whole life policies, and that will be explained in more detail soon.

Pros and cons

When it comes to term life insurance vs whole life insurance, how do you decide what is best for you? Well, just like any big financial decision, it comes down to the advantages and disadvantages. So let’s dive into the term vs whole life insurance pros and cons.

Benefits of term life insurance

It’s always better to start with the good news first, right? So here are a few benefits of term life insurance:

Specified coverage terms

With a term life policy, coverage lasts for a specified number of years instead of for your entire life. For example, you can choose a policy term of 10 years.

So if you have a life insurance policy of $150,000 for a 10-year term and you passed away, then your family would receive the $150,000 from the policy. This makes term life insurance more affordable than a whole life policy.

Fixed payment premiums

One of the benefits of term life insurance is that your premium payments are a set amount for the specified coverage period. You can choose terms ranging from 10, 15, 20, and 30 years and the premium will be that price through the entire term.

Can convert to a whole life policy

If you decide to, you can convert your term life insurance into a whole life policy. However, you will have to convert it before the deadline clause. Be sure to know the details of the conversion clause because it can save you from having to do it later if you need it.

More affordable policies

Because there is no cash value accumulation like there is with a whole policy, the premiums are lower. This could be a good option if you are searching for a more affordable policy that fits into your budget. Price is one of the big benefits of term insurance.

Disadvantages of term life insurance

Now that you know the benefits of term life insurance let’s dig into the disadvantages of term life insurance.

You could potentially be denied

When you renew your policy, your insurance company may require you to answer questions about your health and submit to a physical exam all over again.

If you were to develop a health condition it could increase the cost of a new policy. Also, the insurance company may prevent you from renewing your policy due to your age.

Limited coverage due to age

One of the big disadvantages of term life insurance is limited coverage. As you get older, the number of years your life insurance coverage may be renewed is limited.

For example, if you obtain insurance at 20, you can choose coverage for 10, 15, 20, and even 30-year terms. But at 60, providers may limit you to shorter terms of 10 or 15 years.

Premiums increase

Premium costs for a term life policy can increase with each policy renewal. So if you choose a ten-year policy and then decide to buy another, the life insurance cost could increase significantly with each renewal.

Benefits of whole life insurance

There are many benefits of whole life insurance; here are a few of the biggest reasons you should consider a whole life insurance policy:

Lifetime coverage

The biggest difference when comparing term vs whole life insurance is the type and length of coverage you get.

Remember with term life you will have coverage for a certain timeframe, but with whole life, it is lifetime coverage. That is great for peace of mind when it comes to protecting your family financially.

Whole life policies have cash value

Another one of the biggest benefits of whole life insurance is you have the benefit of cash value accumulation. Again, you can borrow from your cash value account to supplement retirement, future premium payments, or your child’s education.

Earn dividends

If you invest in a dividend-paying whole life policy, you have the potential to earn annual dividends based on your policy amount.

This is when the company pays an annual amount to its policyholders if they perform well. Although the amount may vary, it’s still one of the best benefits of whole life insurance.

Disadvantages of whole life insurance

Let’s get down to the nitty-gritty of the disadvantages of whole life insurance.

Premiums are higher

Since you will have lifetime coverage and cash value with your policy you will pay a higher premium. So you will need to review your budget to see if you are able to afford the coverage you will need to invest in.

Benefits can reduce

Again, if you borrow from your policy and there is an outstanding balance, the amount of benefits will reduce.

You will need to determine if it’s worth risking that chance when borrowing from your policy fund. Assess your financial situation first before diving into your cash fund.

You could earn more with better investments

You are likely to get better returns investing in an index fund for example. Building generational wealth through strategic investments may earn you more return than what a whole life policy could offer.

So now you know the disadvantages of whole life insurance and the term vs whole life insurance pros and cons, but do you even need life insurance? Let’s discuss.

Is it necessary?

You probably have insurance on your home, rental property, car, cell phone, pet, jewelry, and even your vacations, right? So why not your life? After all, your life is your most valuable asset!

You’ve heard about term vs whole life insurance pros and cons. But, if making the decision to purchase life insurance is difficult, answer these questions first:

  • Does anyone rely on my income for their daily living?
  • If I pass away today, is there enough money to cover the mortgage and other bills and debts?
  • How would my income be replaced to provide for my family and support the education or college tuition of my kids or dependents?
  • Will my family have enough to cover my funeral expenses without causing financial hardship?

Two main reasons to get life insurance

Depending on how you answered the above questions, here are 2 main reasons why you may want to consider getting life insurance:

  1. For the cost of your burial and final expenses.
  2. To replace lost wages from your passing.

Which should you get?

Term life insurance vs whole life insurance can be tough to compare. But it’s important to come back to what your needs are. As stated earlier, life insurance is a way to shield your investments and assets and make sure they’re distributed properly to your designated beneficiaries in the event of your passing.

It is not designed to be a money-making scheme. And if you are leaning towards whole life insurance solely for that reason (cash value), you should seriously consider the high premiums and sub-par returns on whole life insurance investments, which is one of the disadvantages of whole life insurance.

Ideally, your goal should be to pay off your debt and bulk up your savings and investments. Once you are able to achieve this level of financial wellness, you are less likely to need insurance for your entire life. This is because you would have built up considerable assets if you follow a solid financial plan.

And so the benefits of term insurance may outweigh whole life insurance in some cases. You can put the money you would otherwise be paying to higher premiums towards achieving the financial goals you have laid out in your financial plan.

There are instances where lifelong coverage (whole life insurance) may work for you. For instance, if you are a high-income earner with a need for life insurance. Or you have maxed out your 401k, traditional IRA and ROTH IRA, and 529 savings options and are seeking additional diversification.

Still unsure? To help you better make the decision of term life insurance vs whole life insurance, it may be worth meeting with a licensed life insurance professional who will act in your best interest. That way you can take a closer look at your options.

Term vs whole life insurance: Pick what’s best for you!

The cost of insurance, especially term life insurance, is much lower than most people think. So it’s a good idea to have a conversation with your family about life insurance. But there are both benefits and disadvantages of term life insurance and whole.

You don’t want to put money into a life insurance policy if it is not necessary, but you also want your family’s financial needs to be taken care of in the event of your passing. Be sure to determine what works best for you when it comes to choosing term life insurance vs whole life insurance.

Learn everything you need to know about life insurance with our completely free “Life Insurance 101” course!

The post Term Life Insurance VS Whole Life Insurance? What’s Best for You? appeared first on Clever Girl Finance.

8
Feb 2022
8Feb 2022 Life insurance
Is Pregnancy Life Insurance A Thing?

Pregnancy life insurance

Starting a family is one of the most exciting parts of life. It can also be one of the most terrifying — especially for new parents. There are so many things to prepare before having a baby, from furniture to diapers. That said, you should also think about pregnancy life insurance.

A life insurance policy helps protect your child if you or your partner passes away. It covers daily needs as well as future costs like education. You might be able to get life insurance even if you’re already pregnant. This guide will help answer all your questions about pregnancy and life insurance.

Can you get life insurance while pregnant?

Yes, you can still qualify for life insurance when you’re pregnant. How far along you are in pregnancy can play a role. It may be more difficult to get life insurance as your body changes through pregnancy.

What factors affect life insurance eligibility?

Life insurance companies want to insure healthy people. A young, healthy person is less likely to pass away than an older person in poor health. This makes the younger person less risky to insure.

Insurance companies look at several factors when deciding to insure someone, including:

  • Age
  • Overall health such as weight
  • Health history, including pre-existing conditions like heart disease or diabetes
  • Smoking and tobacco use
  • Dangerous hobbies such as rock climbing or skiing
  • Hazardous occupations including firefighters and miners
  • Driving records and citations
  • Where you live

Pregnancy doesn’t change which factors the company uses. However, it could change your current health. For example, you might develop a chronic condition during your pregnancy. This could limit access to life insurance until your pregnancy is over.

Does my life insurance company need to know I’m pregnant?

You should let the insurance company know you’re pregnant when applying for a policy. Pregnancy is an important piece of health information. Your life insurance company needs to know you’re pregnant to assess their risk.

Disclosing pregnancy for new policies

Life insurance applications require you to answer questions honestly. That means disclosing any medical conditions you have — including pregnancy. Not including this information could be considered fraud.

What happens if you don’t tell the insurance company that you’re pregnant? Your policy might be void. If you’re injured or pass away, your beneficiaries may receive reduced benefits.

The reduced amount helps cover additional premiums you didn’t pay. Your policy could be terminated or a claim denied. This would mean your beneficiaries receive nothing.

Disclosing pregnancy for existing policies

You should only need to let your life insurance company know you’re pregnant if you’re getting a new policy. You don’t need to tell them if your policy is in force.

Existing policies cover you even as your health changes. That’s why it’s important to try and apply for life insurance before getting pregnant.

What do I do if my application is denied because of pregnancy?

Getting life insurance while pregnant isn’t always easy. It’s not uncommon to have your application denied. The good news is you can almost always still get life insurance.

Your best bet might be to wait until after your pregnancy to reapply. Let your body go back to normal after childbirth. This helps reduce health risks caused by pregnancy. You may also see lower premiums than if you got a policy while pregnant.

Life insurance with no medical exam

There is an alternative to waiting until after childbirth. Some life insurance companies offer policies with no medical exam required. This means you can apply for a policy and won’t have to take a medical exam.

No exam life insurance is often more expensive than comparable policies with an exam. The policy options may be less desirable.

For example, you may not be able to get a whole life policy. You’ll also still need to tell the company that you’re pregnant.

However, the underwriting requirements may be more relaxed than traditional insurance. So it makes getting life insurance while pregnant possible.

How does pregnancy affect life insurance rates?

Being pregnant changes your body. For many women, that means their overall health changes as well. See how these changes can affect your life insurance rates.

Pregnancy stage

The stage of your pregnancy could have a big impact on your eligibility for life insurance. Most women have fewer symptoms early in their term. As you progress, you may face more health issues. Applying for life insurance late in your term could make it less affordable.

Weight gain

One of the factors life insurance companies use when rating policies is weight. Someone who is overweight is often susceptible to other health issues. Pregnancy weight gain could increase your rates just the same as regular weight gain.

Luckily, some policies won’t factor in pregnancy weight gain. Ask your life insurance company if pregnancy weight will affect your potential policy.

Pregnancy complications

Only about 8% of pregnancies involve complications that could harm the mother or baby if left untreated. However, less severe complications can still affect your overall health. Common health issues that could affect your insurance rates include:

  • Gestational diabetes
  • Elevated cholesterol
  • History of high-risk pregnancy
  • High blood pressure
  • Anemia

Pros and cons of getting life insurance while pregnant

Considering the advantages and drawbacks of getting life insurance while pregnant can help you decide if you should apply. Let’s take a closer look at what makes pregnancy life insurance a good idea or not.

Pros of pregnancy life insurance

Applying for life insurance during your pregnancy could help you protect your future child. Some of the benefits of getting a policy during pregnancy include:

Cons of pregnancy life insurance

Trying to get life insurance while you’re pregnant isn’t always a good idea. Reasons you might want to skip applying for a policy until later include:

  • The insurance company may deny your application.
  • You may face higher rates due to health concerns.
  • Many policies won’t pay life insurance claims until the policy is a certain age. For example, your policy might need to be in force for six months. If you’re injured or die during childbirth, your beneficiaries might not get the proceeds on a new policy.

Should you apply for life insurance while pregnant?

You can apply for life insurance during pregnancy. Remember that you could face higher rates or even have your application denied. For most women, it’s best to apply when you’re not pregnant.

When’s the best time to apply for life insurance during pregnancy?

If you’re starting a family and want to get life insurance, there are three times you can apply. The best option is to get life insurance before you get pregnant. However, you can also apply during your pregnancy or wait until after the baby comes.

Before pregnancy

It’s best to get life insurance before getting pregnant. Your body won’t be going through rapid changes due to pregnancy. You also won’t be facing any post-partum health concerns.

Applying for insurance before pregnancy also helps protect your family if something goes wrong. For example, your policy must be in force for a year before the insurance company will pay claims. You apply six months before getting pregnant. The policy will be completely in force by the time you give birth.

During pregnancy

You can still get life insurance while pregnant, but it’s likely to be more expensive. Life insurance companies could see your changing health as an increased risk. That usually means you’ll pay higher rates than you would if you weren’t pregnant.

Applying for life insurance during your pregnancy can also be stressful. Taking a medical exam may not be something you want to deal with when preparing for a baby.

After pregnancy

If you’re already pregnant, you might want to wait until after the baby comes to apply for insurance. Remember to give your body a few months to heal and go back to normal before you apply.

Getting life insurance after your baby is born could lead to better rates. That’s because there’s less risk for your life insurance company once pregnancy is over.

Common questions about pregnancy and life insurance

Life insurance is confusing enough on its own. Adding pregnancy only makes it more complicated. We’ve got the answers to your pregnancy and life insurance questions, so you can protect your new family with life insurance.

Should my baby be my beneficiary?

It’s generally not recommended to list a minor as your beneficiary. Minors can’t legally receive the money from a life insurance policy.

In some cases, the state will appoint a legal guardian for your children. The guardian would receive the funds and be in charge of managing them. This could lead to mismanaged funds.

Listing your co-parent as beneficiary

A better alternative to listing your child as a beneficiary is to list your co-parent. A spouse, partner, or other trusted co-parent has shared responsibility for your child.

By listing them as the beneficiary, they receive the funds. They can then use your life insurance proceeds to continue caring for your child after you pass.

Creating a trust for your child

Creating a trust for your child is another option. Trusts are legal agreements that use a third party — the trustee — to manage funds. You would create a trust for your child and name a trustee to manage the money.

The trust becomes the beneficiary of your life insurance policy. If you pass away, the proceeds go to the trust. The trustee is then in charge of distributing the money for your children, such as to pay for education. Trusts let you choose certain restrictions and rules. This gives you more control over where the money goes, even after your death.

Does my partner need life insurance as well?

It’s a good idea for both parents to get a life insurance policy, if possible. Your policy only covers your life.

Let’s say your partner passes away without life insurance. You’ve lost their income, time, and support to help raise your children. You also won’t receive life insurance benefits to help cover what you’ve lost.

What extra coverage should I add to my policy?

Life insurance policies include optional coverage you can add to increase the benefits. This extra coverage comes from life insurance riders. Riders help you customize your coverage based on your needs.

Child rider

Losing a child is most parents’ worst nightmare. However, having a plan in case your child passes away helps reduce financial stress so you can focus on grieving. Many life insurance policies have a child rider option.

A child rider adds coverage for your children to your life insurance policy. There’s no need to buy a separate insurance policy for each child.

Disability income

Unexpected disabilities can prevent you from earning income. A disability income rider protects your family if you’re unable to work. The rider works by paying a supplemental income if you become disabled. Be sure to read your policy carefully to know what qualifies as a disability.

Purchasing pregnancy life insurance is possible

Most life insurance companies will let you apply for life insurance while pregnant. Remember that your health plays a big role in getting approved. Weight gain and health complications during pregnancy could lower your chances of approval. Or, you may face higher premiums due to your health.

The best way to get pregnancy life insurance is to plan ahead. Apply for life insurance now if you’re thinking of starting a family. That way, your policy is in force before you deal with health changes.

The post Is Pregnancy Life Insurance A Thing? appeared first on Clever Girl Finance.

8
Feb 2022
8Feb 2022 Life insurance
Determining The Best Term Life Insurance For You

best term life insurance

If you have anyone that depends on you, then you should definitely consider life insurance. Life insurance can be one of the best ways to protect your family from the financial catastrophe of losing you. When it comes to life insurance options, having the best term life insurance can help to do just that; protect your family’s future.

Dealing with tragedy is emotionally difficult, and no one likes to imagine it. Although it can be uncomfortable to think about the need for life insurance, it can provide reassurance that your family is provided for in the worst-case scenario.

If the unimaginable happened, it is easy to see how they would likely feel overwhelmed by the idea of handling new financial responsibilities.

However, you can take steps to find the right life insurance policy now. In turn, you’ll know that you’re helping your family to be financially protected no matter what happens to you.

Today we will explore what term life insurance is, how to determine the amount you need, and how to compare term life insurance rates, so you can fit it into your financial plans.

What is term life insurance?

Term life insurance is a type of policy for a set number of years. If you passed away within the set term, then your family would receive an agreed-upon payout amount. In most cases, you’ll have the opportunity to choose a life insurance term between 10 to 20 years.

For example, let’s say you take out a life insurance policy for $250,000 to cover a 20-year term. If you passed away before the 20-year term was up, then your family would receive the $250,000 payout.

Of course, the payout is contingent on the fact that you’ve kept up with your insurance premiums for the duration of your term.

How is term life insurance different from whole life insurance?

If you’ve been researching your life insurance options, then you’ve likely come across whole life insurance as another option. With whole life insurance, you are signing up for your entire life instead of a specified term.

With that, your family will receive a death benefit no matter when you pass away. That is, as long as the policy remains in force.

In addition to the death benefit, there is usually a cash value component associated with whole life insurance. The cash value component is interest paid to a policy.

As you pay your premiums, the insurance company adds these to a general account and invests to help ensure sufficient interest can be paid to a policy based on the terms of the contract.

Due to the extended nature of whole life insurance policies, the cash value component, and the associated commissions and expenses, this type of coverage is usually more expensive.

It’s important to understand your options and evaluate what’s best for your personal situation before committing to a policy. In many cases, you may be better off choosing a term life insurance policy and investing the difference between the two premiums.

For instance, by investing the difference in index funds, you are likely to get a better return on your investment than a whole life policy after you work out the fees.

You’ll also have more flexibility over your investment portfolio. You will also enjoy the peace of mind of a payout for your family if you pass away prematurely.

Who can benefit from it?

If you have anyone that depends on your income at all, then life insurance is a good idea. Of course, the hope is that you’ll live a long and happy life in which the lump sum of your term policy is never paid out. But you likely want to protect the financial stability of your family in the event of your death.

A few people that might consider life insurance include a married couple with a new mortgage or a young mother with children that intend to go to college.

If you are currently paying for a major financial commitment such as a mortgage or a child’s education, then life insurance is something that can help protect those dreams even if you aren’t there.

The idea of life insurance can be scary to think about. After all, life insurance is preparing against the financial consequences of your death. It is important to look past the uncomfortable need for this insurance and take action to help safeguard your family’s future.

How to calculate your term life insurance needs

Are you ready to move forward and find the best term life insurance policy for your family? Then the next step is to determine how much coverage you need. Adding up the financial needs of your family in the event of your passing can be tricky.

Luckily, you can take advantage of a term plan calculator. This free tool will ask for information about your current debts, your children, and your financial desires for their future. Use this calculator to get a very accurate estimate of the amount of coverage that you need.

Term plan calculators

It only takes a few minutes to run through a term plan calculator to determine what amount of coverage you need for your family. So, here are a few term plan calculators to get an estimate of insurance costs:

Haven Life Term Plan Calculator

Ethos Life Term Plan Calculator

Fidelity Term Plan Calculator

What is the best term life insurance?

The best term life insurance depends on your specific needs. For instance, if you have dependents, debt, etc. So consider this when calculating how much coverage you will need as well.

There are many companies that offer a range of term life insurance policies. Here are a few of the most popular ones you can start with so you can compare term life insurance rates:

Ladder

With Ladder, you’ll be able to take advantage of term life insurance policies if you are between the age of 20 to 60. The company launched in 2017 and has taken a streamlined approach to term life insurance.

The application is easy to complete online and you’ll have many options to adjust your coverage once you’ve started your policy.

Haven Life

Haven Life Insurance Company is backed by Massachusetts Mutual Life Insurance Company which has over 160 years of experience. They offer some of the best term life insurance that is also affordable.

Another pro is they offer a policy called Haven Simple that doesn’t require a medical exam to finalize coverage!

Everyday Life

Everyday Life Insurance prides itself on making your policy more affordable as you age. They offer terms for up to 40 years and up to $10 million in coverage. No wonder it’s some of the best term life insurance available.

Ethos

Ethos is another company that offers fast and affordable term life insurance. They are backed by top-rated companies such as Trustage, Ameritas Life Insurance Corp., AAA Life, and Legal & General America.

The great news is they have a free non-binding application and offer a “30-day free look period with a money-back guarantee.”

Fidelity Term Life Insurance

Fidelity is no stranger to the finance world. So of course, they also offer some of the best term life insurance for their clients. They provide a quick quote in seconds so you can get a rough estimate of how much your policy may cost.

You can start the process online, and they offer a 15-minute phone call for an expert to walk you through the entire process.

Be sure to compare term life insurance rates so you can get the best price possible for the policy you need.

Is term life insurance right for you?

If you don’t have any dependents or debt, then you likely don’t need life insurance at this time. However, if you have any dependents that rely on your income or if you have a mortgage or other debt, then term life insurance can be a smart financial move. The right life insurance policy can help protect your family financially even if you are no longer there for them.

Term life insurance is truly a way to bring more peace of mind to your life as you work to build a better life for your family. Take action today and compare term life insurance rates to find the right policy and guard your family financially.

The post Determining The Best Term Life Insurance For You appeared first on Clever Girl Finance.

31
Jan 2022
31Jan 2022 Life insurance
What Is An Irrevocable Beneficiary?

Irrevocable beneficiary

A life insurance policy helps protect the financial well-being of the people you love. Most people buy life insurance to cover expenses for close family members. These family members are beneficiaries and receive the proceeds of the policy. Beneficiaries can be revocable or irrevocable. An irrevocable beneficiary is near impossible to change once put into place.

So, how do you determine if you should choose which type of beneficiaries to assign? Let’s take a closer look at life insurance beneficiaries and why you may or may not want an irrevocable one.

What is a beneficiary?

A beneficiary is a person you wish to receive the money paid out by your life insurance policy. If you pass away, this person gets the death benefit of your policy.

For example, you have a million-dollar life insurance policy. You name your spouse as the beneficiary. When you pass away, your insurance company awards a million dollars to them.

Can I name more than one beneficiary?

Yes! Beneficiaries aren’t limited to one person. Someone with multiple children will likely want to list each child. You can also name an entity, such as a charity.

Some people set up trusts for their estate and name the trustee as a beneficiary. Life insurance policies without a named beneficiary go to your estate.

You also decide if the beneficiary is revocable or irrevocable. This choice determines how easy it is to change them in the future.

Revocable beneficiary meaning

The policy owner can change a revocable beneficiary. That’s why most life insurance beneficiaries are revocable. Using a revocable beneficiary means you’ll be able to change your policy as your life changes.

For example, you have two children when you take out your policy. Years later, you have another child. Your first two children are revocable beneficiaries. You’ll be able to add your third child to the policy as another beneficiary. This is usually done in a simple form.

Irrevocable beneficiary meaning

An irrevocable beneficiary is the opposite of a revocable one. When you list an irrevocable beneficiary, you’re giving up your right to make changes. They aren’t designed to change — even if your situation does.

Let’s look at the example we used for revocable beneficiaries. If your children were irrevocable beneficiaries, it would be almost impossible to add your third child to the policy.

When should you choose an irrevocable beneficiary?

If it’s so hard to change irrevocable beneficiaries, why does anyone use them? There are times when a person is sure about their choice. By naming an irrevocable beneficiary, your plans can’t change.

Business owners might list their business partners on a business-owned policy. Or, a parent with a special needs child may want to ensure their financial future.

The biggest thing to remember is that you won’t be able to change your beneficiary. That means you can’t add a new one or adjust how much each receives. You need to be sure it’s right for your situation and that it won’t change in the future.

Should my spouse be my irrevocable beneficiary?

Spouses generally shouldn’t be irrevocable. Sometimes “till death do us part” doesn’t work out. Say you named your spouse as irrevocable and then got divorced.

Now, your ex-spouse would receive the death benefit, regardless of your current relationship. So, you may not want to list them this way in your estate plan.

Examples of irrevocable beneficiaries

There are a few times where irrevocable beneficiaries make sense. Let’s take a closer look at these situations.

Children

Life insurance is an important tool for protecting your children’s future. Many people decide to name their children as irrevocable beneficiaries. Of course, there’s always the chance the relationship could sour. However, many parents consider it their duty to protect their children no matter what.

Naming children as irrevocable can also protect them if you marry someone new. Your new spouse won’t be able to claim the benefits or change your policy if you pass away. You can be sure the money will go directly to your children.

Key man insurance

Business owners have a lot of financial considerations. A big one is what happens if a key employee passes away. For example, your business partner is in charge of product design. If they pass away, you’ll be without their knowledge or expertise. Your business may not be able to continue without them.

To combat this, many businesses use “key man” policies to protect against the loss of knowledge or skills if a partner dies. This is a policy taken out by the business on the life of the key person. The business is the irrevocable beneficiary.

If the key person passes away, the business receives the death benefit. This financial compensation can help the business stay afloat.

Irrevocable life insurance trusts

An irrevocable trust gives you more control of where your finances go after death. You can create rules about when and where your money goes from the trust. Parents might use a trust to give funds to children at certain ages. This prevents a young child from receiving a large death benefit all at once.

You can name your trust as your irrevocable life insurance beneficiary. This means your life insurance proceeds are sure to go to the trust. The instructions within the trust then direct the trustee where to send the money.

Collateral assignment

Some loans let you use life insurance as collateral. To do this, your lender is the irrevocable beneficiary of a life insurance policy. The insurance proceeds cover your outstanding debt if you die before paying it off. If you pay off the loan during your life, the policy dissolves.

Advantages and disadvantages of irrevocable beneficiaries

There are pros and cons to using irrevocable life insurance beneficiaries. So understanding the advantages and disadvantages will help you decide which type to use.

Advantages of irrevocable beneficiaries

An irrevocable life insurance beneficiary gives the policy owner peace of mind. You’ll know exactly where your death benefit is going after you die. Having this peace of mind can be invaluable if you’re a parent or caregiver.

They also help protect loved ones from changing family dynamics. Remarriage, for example, could complicate your children’s claims to your finances. An irrevocable designation guarantees life insurance money goes to your children.

Disadvantages of irrevocable beneficiaries

The biggest disadvantage is the difficulty to change them. Not being able to update your beneficiaries can cause problems as your life changes.

Naming a spouse, for example, could be difficult if your marriage doesn’t work out. Even if you remarry, your ex-spouse has the claim to your life insurance benefits.

Can I change an irrevocable beneficiary?

There is a way to change an irrevocable beneficiary. However, it’s difficult. After all, an irrevocable designation isn’t meant to be changed. Your beneficiary has to agree to the changes. This includes adding new beneficiaries to the policy.

Some states have extra restrictions for these policies. You may have to get your beneficiary’s approval before changing the policy. Be sure to check your state’s regulations before naming beneficiaries.

You can only change irrevocable beneficiaries with their consent. Your beneficiary will have to voluntarily give up their status.

How often should I review my beneficiaries?

It’s important to regularly review your life insurance policies — including beneficiary designations. A good rule of thumb is to look over your policies at any major life event, such as:

What’s the difference between a primary beneficiary and an irrevocable beneficiary?

A primary beneficiary is the main beneficiary of a life insurance policy. A contingent beneficiary is a secondary one. The contingent beneficiary only receives funds if the primary beneficiary can’t.

For example, a primary beneficiary passes away before the policy owner. The policy owner forgets to update the beneficiaries. The contingent beneficiary gets the death benefit when the owner dies.

Primary and contingent beneficiaries tell life insurance companies who should get the proceeds. Irrevocable and revocable designations determine if you can change a beneficiary. An irrevocable beneficiary will always be a primary beneficiary.

How do I designate an irrevocable beneficiary?

You designate beneficiaries when you first take out a life insurance policy. Most applications have a section for listing them. You will likely need their names, addresses, and Social Security numbers.

This is where you will usually choose irrevocable or revocable. Most people choose a revocable beneficiary when taking out a policy. This lets you make changes to your beneficiaries as needed.

Be cautious if you choose an irrevocable beneficiary!

Now you know what the irrevocable beneficiary meaning is, and the seriousness of it. Your life insurance beneficiary is the person or entity who gets your death benefit. Irrevocable beneficiaries are designed to be permanent. They’re nearly impossible to change. Most policies require permission from the beneficiary to make changes.

Are you thinking of using an irrevocable beneficiary? Be sure to talk with an estate planning attorney or other trusted advisor first. They’ll help you decide if it makes sense for your policy.

The post What Is An Irrevocable Beneficiary? appeared first on Clever Girl Finance.

3
Jan 2022
3Jan 2022 Life insurance
Do You Really Need A Million Dollar Life Insurance Policy?

Million dollar life insurance policy

For many of us, the idea of having a million dollars is hard to grasp — it just seems too big to be real. Would that million dollars be enough to cover your family’s expenses if you passed away? A million dollar life insurance policy might seem like more than enough coverage but is it?

Million-dollar policies are often touted as the best option for everyone. However, you might find that it’s far too much or too little for your unique financial situation. This article will help you decide if a million-dollar plan is right for you.

What is a million dollar life insurance policy?

Getting life insurance is an important step in securing your financial future. You can define a life insurance policy by its death benefit.

A death benefit is the amount your beneficiaries receive at your death. A million dollar life insurance policy is simply any policy with a death benefit of $1,000,000.

Types of life insurance

A 1 million dollar life insurance policy isn’t limited to a certain type of life insurance. There are several types of life insurance to choose from. They’re generally divided into two groups:

  • Term insurance
  • Permanent insurance

Term Insurance

A term life insurance policy covers you for a set number of years, known as the policy’s term. The most common terms are 10 years, 20 years, or 30 years.

Term policies make for straightforward life insurance. You pick the death benefit and length of the policy. As long as you pay the premiums each month, you’re covered until the term runs out.

At the end of the term, your policy expires and you’re no longer covered. Term life insurance is a popular choice.

According to 2020 data from the American Council of Life Insurers (ACLI), 4.2 million new individual life insurance policies were term insurance.

These plans made up 41% of new individual policies. Some reasons people choose term life over permanent policies include:

  • Term policies are less expensive than permanent life insurance.
  • Length of term and death benefit are customizable to fit your needs.
  • You can renew or convert your policy when the term expires.
  • Your premiums stay level or increase at specific intervals, such as every five years.

Permanent Insurance

A permanent life insurance policy stays in effect your entire life, so long as you pay your premiums. Permanent policies also involve a savings component, known as cash value. Part of your premium goes into a dedicated cash value account.

This money earns interest and some cash value accounts let you invest the funds. You can use your cash value to pay your life insurance premiums from the cash you’ve saved up in the account. Permanent life insurance gives you benefits like:

  • Earns cash value over time.
  • Lifelong coverage, so long as you pay your premium.
  • Guaranteed coverage regardless of changes to your health.
  • Your premiums are set and won’t increase over the life of the policy.

How much does a million dollar life insurance policy cost?

So, how much does a million dollar life insurance policy cost? Well, it depends. Higher death benefits usually mean higher premiums.

Other factors can also play a role in your total costs. Despite having the same death benefit, the cost of 1,000,000 life insurance can vary a lot. If you’re considering 1,000,000 life insurance, consider all the factors that affect costs.

What factors affect the cost of life insurance?

Insurance companies check several risk factors to determine your costs. They’re looking to cut the cost of insuring a large group of people.

People who are young and healthy are at a lower risk. It shouldn’t surprise you that your health is the most important factor.

This includes common health-related factors like your age, gender, weight, and medical history. Other factors play a role in a million dollar life insurance policy cost as well, including:

  • Length of term
  • Type of insurance
  • Driving record
  • Nicotine use
  • High-risk hobbies
  • Family medical history
  • Dangerous occupations

Length of Term

If you decide a term 1 million dollar life insurance policy is right for you, your costs change based on how long you want your policy to be active. Longer terms often cost more.

Type of Insurance

The type of life insurance policy you choose will change the cost of your premiums. Permanent life insurance has higher premiums than term policies.

Driving Record

Many insurers will look at your driving history. Drivers with fewer accidents or traffic tickets are less risky to insurance providers. Safe drivers with clean driving records are less likely to be in a fatal accident.

Nicotine Use

According to the CDC, smokers have a life expectancy that’s at least 10 years shorter than non-smokers. Insurance providers take this into account when approving a life insurance policy.

Tobacco users often have to pay higher premiums for coverage. Long-term nicotine users could have trouble finding a policy at all.

High-Risk Hobbies

The things you enjoy doing on your time off could increase your life insurance costs. People who engage in high-risk activities usually pay more for life insurance. So be prepared for increased costs if you enjoy mountain climbing or skydiving.

Family Medical History

Your family medical history could increase your insurance costs, regardless of your health. Insurance companies look for hereditary diseases or conditions when reviewing your insurance application.

Dangerous Occupations

Like risky hobbies, a dangerous profession could lead to higher insurance premiums. Some lines of work are more dangerous than others.

Life insurance companies take this into account when deciding your insurance costs. Dangerous occupations include electric line installation, police work, and mining.

Who should get a million dollar life insurance policy?

The right amount of life insurance is different for everyone. That’s especially true when considering higher death benefit amounts. Not everyone needs a million dollars in coverage.

Life events, like getting married or buying a house, can change your financial needs. Likewise, you may need more coverage if you earn a significant salary. For example, people who need a 1000000 life insurance policy might include:

Who qualifies for a million dollar life insurance policy?

Not everyone qualifies for a 1 million dollar life insurance policy. Life insurance replaces your income to cover your loved one’s financial needs when you pass.

To qualify for a larger death benefit, you have to justify why you need more coverage. Life insurance companies use your current salary, age, and health to determine your eligibility.

Some insurers will approve a death benefit that’s up to 30 times your annual salary. In that case, you’d need to make about $34,000 per year to be eligible.

Your age is also a factor in approval for a 1 million dollar life insurance policy. Younger people tend to qualify for larger death benefits. Someone young is less likely to need their life insurance benefits anytime soon.

Finally, your current health — and medical history — will affect your approval odds. If you’re healthy, you’re more likely to get approved for a million dollar policy. Most high-dollar policies require a medical exam before approving your application.

How to decide if a million dollar life insurance policy is right for you

It can certainly feel like more is better when it comes to life insurance, but that’s not always the case. Life insurance benefits should replace your income and cover debts if you pass away.

If your earning potential and debts are less than $1 million, you might not need that much coverage. On the other hand, a million dollars can sound like a lot, but it may not be enough.

It might surprise you to learn how many expenses your family faces. Weigh your potential expenses with the cost of premiums for a million-dollar policy. You want to find a balance between enough coverage and affordable cost.

How to calculate your life insurance needs

The simplest way to decide how much life insurance you need is to multiply your annual income by 10-30.

Of course, this method doesn’t go into detail. It can, however, be a great place to start when deciding how much life insurance to buy.

Once you have a loose idea of how much insurance you need, you can start factoring in your individual needs.

Add up the estimated cost of each obligation to get a more precise idea of your insurance needs. Some factors to consider include:

Using a life insurance calculator

Looking for an easier way to calculate your life insurance needs? Modern technology makes it a lot easier to find the right amount of coverage. You can use online life insurance calculators to quickly estimate your needs.

An easy-to-use calculator is this one from Life Happens. This nonprofit’s mission is to help families make smart insurance choices.

How to shop for a million dollar life insurance policy

Shopping for a 1 million dollar life insurance policy is much like shopping for any type of life insurance. You should plan to shop around for the best fit before committing to a plan.

Comparing policies and insurance providers gives you a better chance to get a policy that’s right for you. You could also end up saving money by shopping around.

What to look for when shopping for a million dollar life insurance policy

Million-dollar plans are usually more expensive than those with lower death benefits. Be diligent when shopping to find a policy — and insurance provider — that serves your needs. Look for these things when comparing policies:

  • Good provider rating
  • Premium costs
  • Medical exam requirements
  • Renewability or convertibility
  • Optional riders

Provider Ratings

Picking a good life insurance company is an important part of shopping for life insurance. There are several ratings you can use to help you decide if a company is a good fit.

Start by reading reviews of the company to see what current or previous customers have to say. You can also look at the Better Business Bureau to see recent complaints against the company.

The financial security of the company should also be a big priority. After all, you want to know your insurer can pay your claim, especially if it’s a higher amount like a million dollars. You can look up financial strength ratings from independent agencies.

Premiums

The cost of life insurance is always going to be a big factor in the policy you choose. While you shouldn’t base your whole decision on cost alone, you also don’t want to overpay for coverage.

Collect life insurance quotes for similar policies from multiple providers. Comparing quotes lets you find the best combination of coverage and cost savings.

Renewability

While term insurance policies expire once the term is up, many are renewable. A renewable policy means you can renew the same policy for a new term.

One big benefit is you won’t have to take another medical exam, which could be helpful if your health has declined.

Another term insurance option is a convertible term policy. These policies let you convert your policy into permanent life insurance at the end of the term.

This can be a great way to get affordable coverage when you’re younger and guarantee coverage when you’re older.

Optional Riders

Life insurance policies often let you add optional coverage, called riders. A rider is an extra benefit for your policy. A common option is an accelerated death benefit (ABD) rider.

This lets you access your death benefit while you’re still alive. For example, you can use ADB coverage to help pay for treatment of a chronic or terminal illness, like cancer.

Determine if a million dollar life insurance policy is right for you

Choosing the right life insurance policy for your needs is a very personal decision. There’s no one-size-fits-all answer to protecting your loved ones’ financial future.

You can find the best fit for your family by taking the time to research potential policies. Be sure to ask insurance agents about the details of a 1,000,000 life insurance policy you’re thinking of buying.

The post Do You Really Need A Million Dollar Life Insurance Policy? appeared first on Clever Girl Finance.

23
Nov 2021
23Nov 2021 Life insurance
Is Dental Insurance Worth It?

Is dental insurance worth it

Some types of insurance such as health insurance are an obvious must-have for most. But when it comes to dental insurance, the answer is less decisive. Which can leave you wondering: Is dental insurance worth it?

Let’s explore the details of dental insurance so that you can decide whether or not it is the right fit for your mouth and your budget.

How much does dental insurance cost?

So, the big question – how much does dental insurance cost? As with all insurance costs, the amount you pay will vary widely based on your area, insurance provider, and preexisting conditions.

Typical dental premiums can range from $20 to $50 per month for an individual or $50 to $150 per year for a family.  That amounts to $240 to $1,800, which will vary based on your dependent and the type of plan you can access. In any case, that cost could significantly impact your budget.

It’s easy to see how dental insurance could take a bite out of any budget. 

What does a dental premium cover?

The exact coverage your dental insurance plan offers will vary based on your individual plan. But there are some general coverage guidelines you can expect to see. There is a breakdown of coverage with the average plan into three distinct parts — preventative care, basic procedures, and major procedures.

So, what’s covered? In many cases, preventative care is 100% covered. This coverage might include the cost of regular cleaning and exams to check on your dental health each year. For most, regular cleanings equate to two covered cleanings per year.

Next up are basic procedures. Although these aren’t entirely covered, you’ll typically only need to pay 20% to 30% of the cost. Since the cost of a filing to typically well over $100, having dental insurance could come in handy.

Last but not least, dental insurance will help you out with major procedures. Although most insurance plans cover just 50% or less of the cost, that could still save you hundreds of dollars.

What are the different types of dental plans to choose from

The coverage and flexibility you have in your dental insurance plan will vary widely. One of the biggest factors is the type of plan you choose. And the type of plan will dramatically impact whether or not dental insurance is worth it.

Here are the three different types of dental plans to choose from:

Fee-for-service plans

A fee-for-service plan, or indemnity plan, allows you to work with any dental provider. The insurer will cover a percentage of the fee. The ability to choose your own provider is a big win for many.

This is especially true if you already have a dentist you like that isn’t available through your PPO and HMO options. But the cost of these premiums is often much higher than the other plans.

Preferred provider organization plans

A PPO, or Preferred Provider Organization plan, offers you a better price if you stick with an in-network provider. Although you aren’t required to see a preferred provider, you’ll be able to save on costs if you stick to the list.

You are able to seek care from an out-of-network provider if you want to. But you’ll have to pay more when you see them. Plus, many of these plans come with a maximum reimbursement amount for out-of-network visits each year.

With a PPO, you have the best of both worlds. You’ll have choices in your providers. But you won’t have to overpay for a visit.

Health maintenance organization plans

Finally, there are HMO or Health Maintenance Organization plans. An HMO will require you to visit dentists within their insurance network. If you are comfortable with limited providers, the cost savings of this plan are exceptional.

Before you dive into an HMO dental plan, I highly recommend checking out the list of providers. Unfortunately, the list can be very limited. Although the cost savings potential is high, you might miss out on the chance to work with a dentist you feel comfortable with.

How to get the most out of dental insurance

The decision of whether or not dental insurance is worth it will vary based on your situation. But if you decide to go with insurance, it is a smart move to think ahead. Consider asking your current dentist what procedures are on your horizon. With an idea of the type of dental work you’ll need in the future, you can seek out a plan that works best for your needs.

But of course, there is always the possibility that you’ll have an unexpected dental procedure that might not be covered. As with all insurances, keep your personal risk tolerance in mind. If you want to avoid a major expense, you might decide to go with more comprehensive dental coverage.

Once you have your dental coverage in place, take some time to pursue the directory of providers. You can seek the best dentists in your network to save on costs without skimping on quality.

What do dental services cost without insurance?

The costs of dental services without insurance will vary based on your state and provider. But regardless of where you live, the expenses can add up quickly.

Here’s a look at some of the costs for the most common dental services:

  • Basic cleaning: $75 to $200
  • Dental x-rays: $100 to $250
  • Amalgam filling: $50 to $150
  • Tooth-colored filling: $90 to $250
  • Gold filling: $350 to $4,500
  • Dental crown: $500 to $2,000
  • Tooth extraction: $75 to $800
  • Root canal: $500 to $1,500

Depending on your dental needs, these costs can pile up.

Is dental insurance worth it and should you have it?

So, is dental insurance worth it? The answer to whether or not dental insurance is worth it will vary based on your unique situation. (Kind of like renters insurance.) The only way to find out is to dig into the numbers for your particular area. Take some time to compare the costs of services in your area to the cost of a dental insurance plan.

In some cases, you might come out ahead with the basic cleanings and X-rays. In others, dental insurance premiums can cancel out the cost of savings. But you’ll need to do a little bit of digging around about the dental costs in your area to find out.

If you decide to go without dental insurance, then I highly recommend ensuring your emergency fund is fully stashed. Although you might not run into any unexpected dental expenses, you never know when you’ll need to visit a dentist for a tooth-related emergency. Need help building out an emergency fund? Check out our quick guide. 

Dental insurance can be worth it when needed!

Dental insurance can be helpful when facing major dental costs. But you’ll need to weigh the costs in your area to decide if the premiums are worth it. Remember to try to check with in-network providers to save on costs and choose the plan that’s best for you and your budget.

Learn how to create a budget that includes all of your expenses (including dental insurance) with our completely free budgeting course! For more financial guidance and tips, tune in to the Clever Girls Know podcast and YouTube channel!

The post Is Dental Insurance Worth It? appeared first on Clever Girl Finance.

15
Nov 2021
15Nov 2021 Life insurance
What Is Credit Life Insurance?

Credit life insurance

Have you ever borrowed money to buy a house or a car? You were probably offered credit life insurance. Credit life insurance is an insurance policy that pays off a loan in the event that the borrower passes away. Lenders usually offer it for home mortgages, car loans, and student loans. You can sometimes get it with regular personal loans, too.

It is beneficial for some, and an unnecessary cost for others. However, if you’re thinking about buying it, here’s what you should know first.

How credit life insurance works

Despite the name, it doesn’t work like regular life insurance. If you’re paying off a loan and you unexpectedly pass away during the repayment period, it will automatically pay off the remaining balance.

In this case, your lender works with the insurance provider to get the money back. There is no penalty to your next of kin. Also, when you buy it, you get guaranteed coverage. Meaning, you don’t need to take a medical exam—or even answer any medical questions—to get this type of coverage.

Because it is not medically underwritten, it’s more expensive than traditional life insurance policies. The cost of it depends on how much money you borrow and other coverage details.

Is credit life insurance a requirement?

Credit life insurance is always optional. When you borrow money, your lender cannot require you to buy it. However, declining it can put your spouse or joint borrower at risk to assume your debt if something were to happen to you.

Who needs credit life insurance?

Credit life insurance is not incredibly common, and many borrowers view it as an added expense that is not worth a higher monthly payment. But in reality, it can be beneficial in some situations, because the unexpected can and does occur.

For example, a loan is not always forgiven when you die. As a result, it can be particularly beneficial for borrowers who do not want to burden their loved ones with loan payments if they were to pass away.

It can also be a good choice if a family member or friend has co-signed a loan with you. If you passed away, that co-signer then becomes responsible for the unpaid balance on the loan. However, with credit life insurance, the co-signer does not take over the payments.

When deciding whether to purchase it, also think about where you live. If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, you live in a community property state.

This basically mean married couples equally own any assets and owe any debts, regardless of who earns or spends the income. For married individuals, your spouse is responsible for your debts in the event of your death. Credit life insurance can pay off the balance of a loan so your spouse doesn’t have to.

Pros of credit life insurance

Credit life insurance offers a few advantages that may be enticing to certain borrowers. Some of the biggest benefits include:

Peace of mind

The main reason to get this type of insurance is to protect your loved ones from assuming your loan debt if you unexpectedly pass away. This provides peace of mind for you, and for them.

This is also especially important if you are the breadwinner of the household because the debt could become a big financial burden to the ones you leave behind.

No medical exam

Anyone can automatically qualify for credit life insurance because there is no medical exam and no health questions asked. That’s an important advantage if you have health problems or pre-existing conditions that could make it difficult or expensive for you to buy other types of life insurance.

Easy monthly payments

Lenders can have your premium included in your monthly loan payment. That makes it convenient for you because there is no separate insurance payment to make each month.

Cons of credit life insurance

Credit life insurance has several notable disadvantages. Before you choose to purchase this type of coverage, it’s important to think about what potential downsides it has. Here are some of the cons to consider before purchasing it:

More expensive than other forms of life insurance

With a credit life insurance policy, any borrower qualifies for coverage. That’s good news for borrowers with health conditions, but that means the cost of it is typically more expensive than other types of life insurance.

Your loan amount decreases but your premiums don’t

Credit life insurance premiums stay the same until your loan is paid off. Therefore, you pay the same amount each month even though your loan balance decreases every month.

It only pays off the loan if you pass away

The only time credit life insurance applies is if you pass away during the repayment period. If you lose your job or become disabled and are unable to work, this policy doesn’t apply.

However, there are other types of credit insurance that will cover your loan payments in these circumstances, such as credit disability insurance. This type of disability insurance helps to cover your loan payments if you become disabled and are out of work with limited income.

Do I need credit life insurance if I have traditional life insurance?

Credit life insurance and traditional life insurance, like term life or whole life, are completely different, but they serve a similar purpose—to provide financial protection in the event of your death.

Credit life insurance will specifically pay off your loan if you pass away. With traditional life insurance, your beneficiary (typically a family member) receives a fixed amount of money after you pass away, called a death benefit. The beneficiary does not pay taxes on the money, and it can be used for any purpose.

If you were to pass away with outstanding debt, your beneficiary could use the money from your life insurance policy to repay the loan if they took over your payments. However, that would lessen the amount of money available to use for other necessary expenses, like funeral costs or income replacement.

Ultimately, credit life insurance does not replace traditional life insurance. If you already have regular life insurance, credit life insurance is still worth considering. This is especially true depending on how much life insurance coverage you have, and the size of the loan you need to repay.

Consider credit life insurance if it’s right for you

If you borrow money and have the opportunity to buy credit life insurance, think about the pros and cons of this type of insurance. It can be a good option if you want to protect your survivors from your financial burdens in the event of your death.

However, keep in mind that it can be more expensive than other types of life insurance. Plus, you won’t get any protection if you become unable to make the payments, such as in the event that you become disabled.

If you don’t already have regular life insurance, it might be worth purchasing a policy with enough coverage to satisfy your loan in the event of your death. That way, your loved ones won’t have to use their own savings to repay what you still owe.

Learn everything you need to know about life insurance with our completely free course! Also, subscribe to our YouTube channel and Clever Girls Know podcast for more top financial tips!

The post What Is Credit Life Insurance? appeared first on Clever Girl Finance.

1
Nov 2021
1Nov 2021 Life insurance
Do I Need Credit Disability Insurance?

Credit Disability Insurance

If you’ve ever applied for a personal loan, your lender probably offered to sell you credit disability insurance. While it might seem like an unnecessary cost, it can come in handy if you become sick or disabled and lose your income. Most people assume they’ll never be affected by a disability, but in reality, everyone is at risk of becoming disabled.

Data shows that 5% of working Americans are affected by a short-term disability each year, and only 40% have enough savings to cover at least three months of regular expenses.

While not everyone needs credit disability insurance, some people should consider it. This article will explain what it is, what it covers, and who needs it.

What is credit disability insurance?

Credit disability insurance is an optional insurance policy that is often available when you take out a personal loan. If you become disabled, it helps to cover your loan payments while you are out of work and have limited income. If you choose to purchase credit disability insurance, there are several ways you can pay for it.

The cost might be added to the principal of your loan, which is the amount of money you’re borrowing. Paying for credit disability insurance this way can be more expensive because you end up paying interest on the cost of the insurance policy.

Another option is to pay for it in monthly installments over the lifetime of your loan. If you choose to pay monthly, your premium will decrease as you pay off the loan balance. Before you can purchase credit disability insurance, you must also meet certain requirements.

For example, many lenders only offer this type of insurance to borrowers who work more than 25-hours per week and are under the age of 70. Every lending company and/or insurance company has different criteria.

How does credit disability insurance work?

Credit disability insurance can be purchased through your lender when you take out a personal loan. If you become disabled and are unable to work, you can file a claim and ask your insurance company to cover your loan payments. There are several important things to know about it.

First, you can’t get unlimited benefits. Depending on the terms of your insurance policy, your insurance company will cover your loan payments up to a certain dollar value or over a specified period of time.

Also, there might be a waiting period until you can use your coverage. Some insurance companies will only agree to cover your loan payments if you’ve been consistently paying off your loan balance for a certain amount of time, like 90 days.

What disabilities qualify for coverage?

In order to use credit disability insurance, you must have a qualifying disability that prevents you from working in any capacity. Usually, your lender or the insurance carrier will request to see medical proof of a disability from a doctor or your employer.

While every lender has different covered disabilities, here are some of the most common ones:

  • Childbirth complications
  • Cancer
  • Physical injury
  • Arthritis
  • Heart disease
  • Diabetes

Remember that credit disability insurance will only cover your loan payments up to a certain amount or over a fixed period of time. Meaning, if you have an injury or illness that is expected to keep you out of work for six months or longer, it’s possible that your benefits will run out before you return to work.

Pros and cons of credit disability insurance

Credit disability insurance can be a life-saver for many people. However, it also has several downsides. Before you choose to purchase, it’s a good idea to consider the pros and cons to help you make a decision.

Pros

Let’s dive into the pros of having this type of insurance and how you will benefit from it:

Protect your family financially

Data shows that more than half of American adults live paycheck-to-paycheck. And without a steady income, making your loan payments can be challenging, especially if you have other financial obligations. With credit disability insurance, you can continue to financially support your loved ones without assuming more debt.

Peace of mind

If you become disabled, credit disability insurance can offer peace of mind. You don’t have to worry about defaulting on your loan or ruining your credit score if you can’t afford to keep up with the payments. Plus, you can put more money towards medical bills, rather than spending that money on your loan.

Cons

We’ve said it before, and we will say it again there are cons to pretty much anything. Here are a couple of cons to this type of insurance:

Limited coverage

Credit disability insurance will only pay up to a certain dollar value, or a specific number of loan payments. If you are disabled for a long period of time, it’s likely that your benefits will eventually run out. In addition, there’s usually a waiting period before you can use this policy.

Potentially expensive

In terms of cost, it can be pricey, particularly if you add the premium to your loan principal. Remember, if you go that route, you not only pay for the insurance but will also be paying interest on that amount. So make sure you know how much it will cost before you buy it.

Who needs credit disability insurance?

Consider this: More than one in four 20-year-olds today will suffer from a disability at some point before they retire. With that being said, almost everyone can benefit from having credit disability insurance. Regardless of your age, health status, or occupation, major injuries, and serious illnesses can prevent you from working and bringing home a consistent income.

It can be especially helpful if you provide financial support for your family. If you’re unable to work and you’re paying off a personal loan, insurance can cover your loan payments, so you’re not sacrificing your lifestyle or dipping into your savings.

However, it is typically more beneficial if you have a long repayment period, like 60 months. If you are paying off your loan over 24 or 36 months, you could have a smaller chance of becoming disabled during that time. But at the end of the day, you choose the amount of risk you are comfortable taking.

Is credit disability insurance worth it?

Overall, the decision to purchase credit disability insurance is personal. It’s worth it for some people, and not worth it for others. But if you want the added peace of mind, it is certainly something to look into.

You might also be wondering if credit disability insurance is necessary if you have short-term disability insurance through your employer. The answer is—it depends. Short-term disability insurance replaces your income while you are unable to work due to a qualifying disability. You can use the money from disability benefits for any reason, including making loan payments.

However, the combination of short-term disability insurance and credit disability insurance gives you the greatest financial benefit. The income you get through disability insurance doesn’t need to be spent on loan payments if you have credit disability insurance, which ultimately puts more money into your pocket.

Protect your finances with credit disability insurance

The saying goes it’s always better to be safe than sorry. You never know what life may throw your way, so why not protect yourself with the right type of insurance. This can prevent you from defaulting on your loan and ruining your credit too. Just make sure you understand what the policy covers and how much it costs before you buy it.

Learn more about getting your finances in order with our completely free “Build a solid foundation course!” You will learn how to transform your money mindset, organize your finances, create financial goals, and make a customized budget. Also, tune in to the Clever Girls Know podcast and YouTube channel for more great financial tips and hacks.

The post Do I Need Credit Disability Insurance? appeared first on Clever Girl Finance.