A fresh look for 2017: Re-assess your insurance needs


financial planning

Insurance isn’t a once-and-done thing – it requires a periodic assessment of the changing circumstances in your life and a thoughtful evaluation of whether you should add  protection against any new risks. As you budget for the new year and prep for tax season, it’s the perfect timing to think about these things.

With the start of a new year and the emphasis on resolutions, there have been a few good articles on insurance that caught our attention. The National Association of Insurance Commissioners issued a handy Insurance Checklist for the New Year. It offers some considerations about common forms of insurance – life, home/rental, health, auto.

When new life events occur, you should review of insurance coverage. You may need to add a new type of coverage, you may want to raise or lower deductibles on an existing policy, or there may be opportunities for savings or discounts. Your independent insurance agent will be able to inform you about various coverage options – but can only advise you based upon what he or she knows.

Here’s a list of life events that should trigger a call to your independent insurance agent:

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Death of an immediate family member
  • Military deployment
  • Purchasing a new home, condo, or a second home
  • Home renovation
  • Adding buildings to your property
  • Renting out your home
  • Moving to a new geographic area
  • Renting an apartment
  • A teen child getting an auto license
  • Getting a new car
  • Joining a carpool
  • Acquiring expensive electronics, antiques, jewelry, furs, or specialty collections
  • Acquiring a recreational vehicle – boat, motorcycle, snowmobile
  • Getting a recreational drone
  • Changing jobs and job benefits
  • Retiring
  • Starting a small business
  • Joining the sharing economy, such as renting property through Airbnb or driving for Uber

Lacie Glover at Nerd Wallet, USA Today offers good risk limiting advice for us all with her 10 smart insurance resolutions for 2017.  We particularly like #1 – making an inventory – and #9 – informing beneficiaries about your policy. We’d go one step further and suggest that you look at any insurance policies and financial accounts and make sure your contact information and beneficiaries are updated. People often forget to keep those things up to date – unfortunate consequences can ensue: you might not intend to leave your home, your 401K or your life insurance to an ex-spouse, but it could happen if you forget to update your beneficiaries when circumstances change. See our best practices for updating your beneficiaries for insurance policies and retirement plans.

 

Why it’s important to monitor your credit history every year


creditYour credit history is very important. A good credit report can help or hurt you when you look for a car loan, a mortgage or some insurance policies. You may be denied loans or credit cards if you history is poor, or you may end up paying higher rates on credit cards or for insurance coverage. (See: Credit-Based Insurance Scores: How an Insurance Company Can Use Your Credit to Determine Your Premium) Some employers may even look at your credit rating as a factor in whether or not to hire you.

You should monitor your credit rating yearly, learn more about what helps and hurts you, and review reports to be sure there isn’t anything inaccurate. Some reasons you should monitor your credit annually:

  • Find problems that are hurting your good rating and try to improve
  • Identify mistakes and get them corrected
  • Watch for signs of potential identity theft
  • Somebody else’s information might be mistakenly attributed to you
  • You might find accounts that are not yours

By law, you can get one free copy of your credit report every year. That includes one copy from each of the three major reporting companies: TransUnion, Equifax and Experian. But you need to be careful about where you get your free credit reports from. Here is the authorized source:

Annual Credit Report at 1-877-322-8228
AnnualCreditReport.com

You will hear a lot of promotions for “free credit reports” – but consumer beware! Many of them make reports free but have some type of a catch – see this short video to learn more.

 What if you find problems in your credit report?

According to consumer.gov, you can take these steps to fix any mistakes or problems:
Write a letter. Tell the credit reporting company that you have questions about information in your report.

  • Explain which information is wrong and why you think so.
  • Say that you want the information corrected or removed from your report.
  • Send a copy of your credit report with the wrong information circled.
  • Send copies of other papers that help you explain your opinion.
  • Send this information Certified Mail. Ask the post office for a return receipt. The receipt is proof that the credit reporting company got your letter.
  • The credit reporting company must look into your complaint and answer you in writing.

The FTC offers more information:

Retirement planning procrastination wastes the advantage of compound interest


Many people procrastinate when it comes to saving for retirement … but the earlier you start, the more compounding interest works in your favor.

Financial Engines conducted a survey to better to better understand why people procrastinate on their retirement savings. They learned that most of those those surveyed identified 25 as the right age to begin planning and saving for retirement, but that most had started much later than that: an average of 10.6 years later than they thought they should have.

They attributed that delay in retirement savings to various reasons:

  • 50% – stress
  • 40% – other, higher priorities
  • 24% – worried about being
  • 23% – unsure how to go about it
  • 20% – believed it was too difficult

While people think they can make up for it later — and sometimes they can — every year of delay squanders the advantage of compound interest. To reach the same savings goal, they would need to save more each year to make up for any missed investment growth, as well as any missed employer matches, if available.

The following graphic depicts the percent of income that would need to be saved each year to reach the savings goal.

delayYou can learn more about the benefits of time by playing with with this compound interest calculator.

But the better-late-than-never rule comes into play – even if you missed out on the advantage of an early start, the sooner you do begin the better, so don’t delay. Here are some tips offered by  Financial Engines for late starters:

late-startFor more information on the cost of procrastination, see their complete infographic.

Money Matters: 48 Mistakes, 7 Quizzes and 5 Cool Learning Tools


Money TreeApril is financial literacy month. How savvy are you about money? This fun article will let you chart your age based on your savings habits. To commemorate the month, we’ve put together a financial wellness toolkit for you to learn common money mistakes, to test your own financial knowledge and find good learning resources to improve your knowledge.

Common Money Mistakes

 Test Your Money Savvy

 Resources for Learning to Manage Money

360 Days of Financial Literacy
A free program by the nation’s certified public accountants to help Americans understand personal finances through every stage of life. Check out the more than 30 financial calculators.

InsureU
Unbiased insurance information for consumers sponsored by the National Association of Insurance Commissioners (NAIC). Information is organized by life stage and lines of coverage: auto insurance, home insurance, health insurance and life insurance.

MyMoney.gov
Making the most of your money starts with five building blocks for managing and growing your money. MyMoney.Gov offers tools and information on five key areas of money management: Earnings; Saving & investing; Protecting; Spending; and Borrowing.

Jump$tart Coalition for Personal Financial Literacy
a national non-profit of about 150 national organizations and entities from the corporate, non-profit, academic, government and other sectors that share an interest in advancing financial literacy among students in pre-kindergarten through college.

30 Steps to Financial Wellness
A 30 step path will help you achieve financial wellness.

Don’t lose money on prepaid debit cards!


debit-cards

Prepaid cards are popular because they are easy to get, you can avoid cash and you don’t need a bank account to get one. Plus, because they are debit cards and not credit cards, you only spend up to what is loaded on the card. They are popular for everything from gift cards to paychecks — and re-loadable prepaid cards are increasingly popular for travel and as a funding source for kids going away to college.

But – and there is a huge butnot all prepaid cards are created equal. If you are not careful, you can wind up paying outrageous fees and charges to buy the card, to use the card, to add money to the card, and more. Plus, not all prepaid cards are backed by the FDIC, so if they are lost, tough luck (although you might check with your agent to see if your Homeowners policy will cover a cash loss up to a limit – typically no more than $200). To make matters worse, prepaid card scams are proliferating so you need to be on the alert.

While prepaid cards can be a good choice in some circumstances, It’s really important to be a smart consumer and to educate yourself about the pros and cons before you buy. Here’s a quick video from consumer.gov that talks about how you can lose money.

And here are a few good resources to educate yourself about prepaid cards and how to be an smart consumer.