My grandfather was always insistent that we manage our own escrow account. Never let the bank pay your house taxes and home owners insurance, do it yourself. They’re making money off you when you could making that money for yourself. Here’s how you do it.

Add up your annual payments for your house taxes and home owners insurance. Take that total and divide by 12. That’s how much you need to put in savings every month in order to have the money to pay those things when they come due once a year. Actually, I also put our car tags, life insurance and auto insurance in with those totals, too, that way I’m always sure to have money in savings for whatever bill comes due at odd times.

In my case I put $550 a month in savings which goes toward paying those items. Whenever I get a bill for auto insurance (every 6 months) or the truck license plate tags (annually) I always have the money in a special savings account called Escrow. I never have to scramble to work extra hours to find money to pay them. There’s never a sense of panic, we always have the money tucked away. (more…)

The medical bills are piling up in the mail box. You can’t afford to pay them even with health insurance. Let alone without any insurance at all. So now you are considering bankruptcy as the only way out. Filing bankruptcy in the long run wont really solve the problem. What if you get sick again, and the bills start piling up again? You can always file again in 7 years but you may end up with two bankruptcies on your credit report. What is the solution to this stressful problem?

You can get someone else to pay for them. Especially if you are unemployed, and have large amounts of medical debt. Apply for the medicaid program through your state government. Whether you are a man or a woman you may qualify for aid. Although women, & pregnant women usually have a somewhat higher approval rate. You may even qualify if you have a mental disability like depression. Submit all of your bills along with the application. (more…)

There are any number of financial crises that could lead a family to the edge of bankruptcy. It may be an unexpected medical expense that was not covered by health insurance, or it may be the result of a failed business in which the family invested personal funds and lost a lifetime of savings.

Of course, it can simply be the result of poor financial choices over a long time that have accumulated into a gigantic mess called bankruptcy. Spending more than you earn through the use of credit cards and personal loans can quickly add up and leave you buried under a mountain of personal debts.

The sad truth is that most people do not see this coming until it is too late. Then they find themselves owing tens of thousands of dollars to credit card companies, as well as other creditors (and even to the Internal Revenue Service). This doesn’t even include a mortgage, which is often another financial burden on top of everything else. (more…)

Dependent children require resources for health, maintenance, support and education. Some support is provided through guidance while other support requires money. Parents must provide both but what happens if the parents aren’t there to provide either?

The first step is crucial: have reasonable life insurance.

Could you imagine raising someone else’s child if the parents left no money? Most current statistics state raising a child to the age of 18 costs $250,000. Costs are higher in the earlier years due to doctor visits, diapers and daycare. On the back end, higher education could require additional money beyond age 18.

Even if only one parent is gone can the remaining parent alone afford mortgage payments, taxes, utilities and the costs of raising children?

What would the quality of life be for the surviving parent?

A family with one young child should consider having $500,000 in coverage.

What are your life insurance options? Three common forms are term, universal and whole life. Universal and whole life insurances are more expensive because they never terminate if you properly pay your premiums. Part of the premiums builds cash value, which one can borrow against or withdraw.

For many families term insurance is the best option because it is much cheaper and ends when needs for life insurance often diminish. It does not continue indefinitely nor does it build any cash value. If the term is 20 years, you pay the same premium for 20 years and after 20 years the policy ends.

How much does term insurance cost? $500,000 of coverage for a healthy, non-smoking parent is often less than $40/month.

It’s a good idea to have coverage on a stay-at-home spouse to help cover child-care costs and future retirement earnings if that parent were to return to work when dependent children are older. (more…)

It’s bad enough to be in a car accident that results in a total loss, but to add insult to injury you find out from your insurance company that your two year old car is worth only 40% of its original value and then to top it off your finance company tells you that after two years of making payments you’ve barely made a dent in your loan.

The result? You get a $10,800 check from your insurance company to pay off a $22,000 car loan. Welcome to the danger zone for car loans. (more…)

Everyone wants to do their best for their family and loved ones – but thousands of families have not purchased insurance to provide financial protection should the main breadwinner die or fall ill. This puts the family at risk of being plunged into poverty should the worst happen.

It’s not as if there’s a shortage of life insurance, critical illness or income protection policies. The problem is too few people are buying them. The insurance industry believes that the insured shortfall in the UK is a staggering 2.3 trillion pounds.

So lack of family protection is clearly a problem. There are two main risks in life: either living too long and dying too soon. It’s absolutely crucial to have some cover in place – especially if you have a young family. It’s a well to build yourself your own little welfare state because no one else is going to do it for you.

Now is also a really good time to buy as fierce competition within the insurance industry has led to some very competitive premiums. The cost of life insurance has fallen by about 40 per cent in the last five years. So it’s never been cheaper.

So, where do you start? Well, before searching for the best offers on the internet or seeing your financial adviser, you should do a little homework. You need to know what type of policy might suit your needs.

Life Insurance – The purpose of life insurance is to provide a tax free lump sum if you were to die. This money is normally used to repay any outstanding mortgage, pay off debts and provide capital for dependents. If you have a mortgage but no dependents, then you don’t have to insure for the mortgage as the property can be sold to repay the debt.

There are two main types of life cover – “level” and “decreasing”. Level means that the insured sum remains constant – level – during the entire duration of the policy. Decreasing means that the sum insured steadily decreases from the initil sum insured down to nothing by the time the policy terminates. This latter type of policy is used almost exclusively in connection with the protection of repayment mortgages.

Critical Illness Insurance – Critical Illness insurance pays out a tax free lump sum on the diagnosis of a a critical illness, such as a stroke. The types of illnesses covered are always listed on the poilcy and are usually extensive including the big three heart attack, stroke and cancer. There are no restrictions on how a payout can be spent, so you can do anything from clearing the mortgage to paying for private healthcare or investing it for income.

(more…)

According to the Vegetarian Society there are a great many worthwhile health advantages to vegetarianism. These include a much lowered chance of developing gall-stones, kidney stones, hypertension and diet-related diabetes. There’s a 30 per cent less heart disease risk and the risk of some cancers is reduced by as much as 40 per cent. You’re very much less likely to contract food poisoning and the chances of falling prey to the human mad cow disease are much reduced too.

There are now some Vegetarian Term Life policies on the market. Just a few at present, but it’s thought that their popularity will increase. Vegetarians are starting to be rewarded for their healthier life style by cuts in insurance premiums.

It’s a sensible move. After all if insurers find that vegetarians are so much less likely to die prematurely and in fact to live much longer. It’s a case of everyone wins.

A spokesman for one insurance company made the statement “In simple terms, vegetarians live longer and are healthier throughout their lifetimes.”

It’s not just the vegetarian diet, but the lifestyle of the type of person who is a committed vegetarian. They’re less likely to drink to excess, or smoke and probably more likely to take exercise as a matter of course. Even if the exercise is little more than tending their vegetable plot – recent reports of waiting lists for allotments are amazing and it seems everyone is finding vegetable and fruit growing to be rewarding in more ways than one. This particular insurance company has been offering a healthy discount – 25 per cent – on the first year of premiums.

(more…)

I know life insurance isn’t a cheery topic, but it’s important for you to appreciate the risks of under-insuring yourself. Most critical illness cover is sold as combined cover with life insurance because buying it that way is cheaper than buying two separate policies. The problem is that wrapping different types of cover up into one neat plan can give you less cover than you think – and less than you need.

The principle to understand is that when you buy a combined life and critical illness policy – you’re normally only able to make one claim. So if you make a claim for critical illness, the policy stops. This means that you immediately lose the life cover which was bundled into the same policy.

Worse still, if having made a critical illness claim the odds are that you would be refused life cover and if you were lucky enough to be offered cover, the cost would be horrendous! But if you had bought separate critical illness and life insurance policies, you can make a claim on your critical illness policy without having any affect on your life policy. This enables you to make a claim for critical illness and a separate claim can be made for your death.

Incidentally, most life policies also include what’s called terminal illness cover. This means that if you are diagnosed with an illness from which you are expected to die within twelve months of diagnosis, the life policy will pay out on diagnosis. The other technical point to be aware of is that all critical illness policies have something called a “survival period”. This means that after you are diagnosed with a critical illness, you have to live for at least X days, X being the survival period. Many insurance companies have set the survival period at 14 days but others have adopted 28 days.

(more…)

Putting on the pounds will pile on the premiums when you apply for critical illness and life insurance. New clients are finding the notch on their belt that was acceptable three or four years ago now rates them as obese – and with a premium loaded by 50 per cent or more as insurance companies attempt to catch up with the UK’s explosion in obesity.

But even if you succeed in shedding weight later on, your insurance company may not slim down your monthly payments in line. Rates of obesity have risen by around 300 per cent in the UK over the past generation and, on present estimates, it seem obesity will pose a bigger and bigger problem over the next 25 years. It is a proven fact that overweight people are more likely to suffer from heart disease, high blood pressure, diabetes, strokes, chronic depression and other life threatening conditions.

The key measure of obesity is the Body Mass Index (BMI). This relates weight to height, irrespective of gender. You can calculate it by dividing your weight in kilos by your height in metres and square the result.

(more…)

Car insurance companies are very strict on their insurance packages and most times, they look at your details to be able to award you the necessary insurance. Therefore, it is not uncommon to find car insurance buyers looking for ways to falsify their details in the bid to reduce their premium price and get cheaper car insurance quotes. In fact, research has shown that in the UK alone, over 10% of all drivers have lied at a point in time about their details or records while in the US, it is estimated at a whopping 27%. Details that are mostly lied about include the age and address of the driver. In some cases, drivers have been known to leave out speeding tickets, drunken driving records and bans on driving they may have received.

Sadly, many drivers seem to think this is the norm and therefore lie about all these when they are applying for an insurance policy. And this is further influenced by the thinking that the companies are mandated to pay and reward them. Most informed drivers know that falsifying your records is seen as fraud while the uninformed drivers think it is ok to lie about their records. The truth is insurance companies are beginning to catch up with this trend and are taking steps against the frequent occurrence of such acts. One of these steps is in the installation of software that will function as a lie detector and will compare all the different data for traces of irregularities. Besides this, insurance companies now have penalties that are meted out on culprits of this act. These include:

1. Cancellation of the Insurance Policy.

All culprits will lose their rights to any form of insurance with the company of they are caught. This means that all the monies paid prior to that time will not be retrieved or paid back and the driver will forfeit all attendant benefits.

2. All Claims will be lost and denied.

All drivers caught in the act of falsification will be denied all claims. During accidents, most drivers and car owners resort to the insurance company to offer some form of relief. Even if the claims are genuine, the insurance company will desist from making the required payment if it detects false information.

(more…)