Insurance Quotes & Advice

Despite what many of us believe, our homes are not our most valuable asset. For the majority of us, the income earning potential we have, over the course of our lifetimes is our single greatest financial asset. The risk of getting sick or disabled at some point in our career is higher than what most of us think.

While employers typically offer some form of disability coverage many people don’t realize they are able to purchase their own private disability coverage. It is also important to note that benefits from an employer purchased disability program are taxed like regular income while benefits from a privately purchased policy are tax free.

There are two basic types of coverage available, short term and long term disability. Short term disability will cover an individual from a period as short as two weeks, up to as many as two years. Long term disability will usually cover someone for between two to five years or up to the point an individual turns 65 and social security disability kicks in.

A 90 day waiting period before benefits begin is the most common, but longer waiting periods will significantly lower your premiums. Many companies will also have different languages written into their policies so careful research must be done. Some may discontinue benefits entirely as soon as you return to work while others may continue to pay a partial benefit if your income earning ability is still impaired in some way.

Talk to your financial advisor about how much disability coverage you should seek, however it is recommended that individuals should look to replace somewhere between 60% to 80% of your normal after tax income.

Many people purchase life insurance policies so that in the event of an untimely death, the needs of their loved ones are taken care of. However purchasing an annuity contract is the exact opposite. It is an insurance policy in the event you live too long, beyond the means of your assets.

An annuity is a unique financial product offered by insurance companies with the distinct feature of offering a guaranteed income stream for the remainder of your life. The U.S. Securities and Exchange Commission defines annuities as follows. “An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date.”

There are two basic types of annuities, fixed or variable with each having the option of being either being immediate or deferred. Immediate annuities will begin making payments in the period after the contract is entered while deferred annuities will begin making payments at some future date.

Fixed annuities will grow at an agreed upon rate whereas the value of variable annuities will be determined by the value of the underlying investments. For an added cost many insurance companies will offer a variable annuity that will have a guarantee that the value will not fall below the initial principle amount.

Like a 401(K) plan or IRA, income is earned on a tax deferred basis in that you don’t pay any tax until you start receiving your first distribution payments. But unlike those other two plans an annuity contract is not restricted in the amount of money you can place into it. Another key feature is that distributions from those retirement plans receive preferential tax treatment in that they are not taxed as income if used to fund an annuity contract.

With the uncertainty in the social security system in the future, coupled with the news that many companies are unable to fund their employees pension plans, annuities are becoming more and more important in planning for your retirement years. Talk to your financial advisor and insurance agent to see if an annuity is right product to meet your long term financial goals.

There are many ways to save money on home insurance and here are some common tips and advice to keep in mind:

1. Don’t over insure your home

The rebuilding cost and the market value of a home are two entirely different things.  Even if your home is completely destroyed you will still have the underlying land value.  Take that into account before you decide how much insurance to purchase.  If you feel the need for extra insurance, check to see if an umbrella policy might be more suitable as it will significantly increase your coverage.

2. Increase your deductible

If you feel comfortable with raising your deductible, you could get significant savings on your monthly premiums.

3. Make sure that you’re getting the discounts you’re entitled

Companies offer many types of discounts.  If you have been with the same insurer for many years, they may reward you for that loyalty.  Check with your agent to see what types of home improvements you can perform that might lower your premiums.  Depending on the area you live in, check to see if your home may contain certain characteristics that make it more disaster resistant.  Your company may offer a discount if you’ve been claim free for a number of years.

4. Use the same insurer for your auto insurance

Many companies will offer both home and auto insurance and will give a discount if you purchase both from them.  Check to see if this is cheaper than having separate policies from different companies.

5. Get quotes from other companies

 It never hurts to check if you could get a better deal from a competitor.

6. Review your policy coverage

If the value of your possessions have depreciated over the years you may not need as much coverage as you once did.  It is recommended that you review your policy annually.

These are some of the ways that you can save on home insurance. Now this is by no means an exhaustive list and it is always good to check out consumer advocacy groups to get tips on where you can save money on this and many other matters. Happy savings!