Browsing Category: Insurance

Don’t Forget to Use Up Your Healthcare Flexible Spending Accounts

With November already here, I thought I would just remind everyone to check their Flexible Spending Account balance. Having a FSA can be a great tax advantage if used properly. For those unfamiliar with them, Flexible Spending Accounts allow you take a portion of your pre-taxed earnings and set them aside for qualified expenses.

Many people have used them as a way to save money on medical expenses. FSAs have a downside of  expiring at the end of the year, meaning if you don’t use it, you’ll lose it.

Qualifying Medical Expenses with FSAs 

Please be aware that there have been a number of changes to what can be covered with your FSA. According to the IRS’ Internal Revenue Service:

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained.

The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles.

That means that you should start calculating carefully what you’ll most likely need for next year so you won’t have some of your money wasted. For our family contacts and eyeglasses are the biggest expenses we have. Otherwise we tend to have relatively small expenses. For next year I think we’ll budget for $500 for the year.

Thoughts on Flexible Spending Accounts

I’d love to hear from you about how you handle your FSAs. How many of you took advantage of your flexible spending account this year? How do you determine what is the right amount to set aside for the account?

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Life Insurance: Something Is Better than Nothing

Today’s post is a part of Life Insurance Day (thanks to the dedicated work of Jeff Rose) . 

One of the biggest fears and reasons people don’t get life insurance is that they’re afraid that they are too expensive. They’ve heard from others that to get a reasonable amount of coverage they need to pay a lot of money.

The good news is that you can get life insurance for your family at affordable prices.

Look at Essentials

If you’re still deciding on whther or not you need life insurance, think about any dependents like a spouse or children that depend on your income.

  • Grieving: Losing a spouse/parent is life altering and your family needs time to grieve. If you don’t already have savings to cover the time off from work, you may want to include that with life insurance coverage.
  • Final Expenses: Do you have a general idea of how much your final expenses would be? We used the estimate of $15,000 for funeral expenses.
  • Financial Assistance: Do you want to leave money for your spouse and children to cover debts and help with future expenses?

You’re probably under insuring yourself, but if your options are getting some coverage that you can afford and skipping on getting any life insurance coverage, go for the lesser of the two financial evils.

 Go for Term Life Insurance

When faced with the choice of term and whole life insurance, going for term can give you more coverage for less premiums. In case you missed the post on life insurance and couples, term life insurance basically works like this:

Term life insurance is offered for a specific “term” of years – for example, 10 years, 20 years or 30 years. That means if you buy a 30 year term life insurance policy at age 30, you will be covered until you are 60 years old – if you die at any time during the term, your family will receive the benefits of the policy.

That means you should choose a term that you feel comfortable with for your coverage. The money saved from going with term life instead of whole life insurance can be used to pay down debts or to invest.

Shop Around and Save Money on Life Insurance Premiums

When we were shopping for coverage online years ago I was surprised at what I found. For less than $20/month I could get $150,000 in coverage with a 30 year term life policy.

Shop around for a deal on your life insurance policy because it can vary greatly. If you want a free quote try reputable companies like MetLife.

Thoughts on Purchasing Life Insurance

On a final note, please increase your coverage as your financial situation improves. The goal is to build your finances until you can self insure, but in the mean time get some insurance to protect your loved ones.

I’d love to hear from you. How many of you have a life insurance policy? How much do you have in coverage? Around how much do you pay for it?

Photo Credit: woodleywonderworks

Business Insurance – What Do You Need?

Being a small business owner means wearing so many different hats to keep your business growing. One has to stay focused on doing great work and manage the finances properly. Something that can get lost in the mix is having the proper insurance coverage for your business.

If you haven’t thought about it or it’s been awhile since you’ve reviewed your policies, here is some information to get started.

Liability Insurance

Depending on where you live, you may be required to have liability insurance for your business. Basically liability insurance serves as protection for your business should files a lawsuit for negligence. Many insurance companies, like Direct Line For Business, offer business insurance.  Look over what you need for your business should something like a lawsuit occurs.

Public Liability Insurance

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Public liability insurance, as the name suggests, is specially liability insurance to cover third party victims, such as visitors or members of the public.

When looking for looking at public liability insurance, consider calculating whether it’ll be cost effective for your business. Weigh the premiums paid with the coverage offered. You don’t want to over pay for bad insurance. You want to strike a balance and find coverage that protects your business at a price that you can consistently afford.

Finding the Right Insurance Takes Effort

Whenever shopping for insurance,whether it’s  life, auto, or business, I highly recommend comparing prices and coverage.I’d also mention that having a spreadsheet or notes can be incredibly helpful as you can have an apples to apples comparison with the policies’ coverage. Some times it’s easy to get tunnel vision with price that we ignore the overall value of coverage.

We shopped around until we found insurance companies that were a good fit for us. We still price shop when it renewal time comes around, just to make sure we’re still getting a good value.

When buying insurance in general it’s important to analyze what your specific business needs. I’ve provided some general information, but every business is unique, so please complete your due diligence with whatever company you deal with.

Thoughts on Business Insurance

If you’re a business owner, what insurance coverage do you have currently?

Disclosure: Post topic from Direct Line For Business, the content is my own.

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Life Insurance for Single Parents

Parents have many responsibilities and being a multitasker and a planner is a huge part of it, especially when it comes to finances. Looking back, I’m constantly amazed at how well my mom handled raising us.  Being a single parent often means having to be more aware of one’s finances, including how to prepare should something unexpected happens. 

Losing a parent is devastating already, but losing one’s only parent can be extremely tumultuous. Preparing now can help alleviate some of the pain and help the family rebuild itself.

Planning for the Unexpected

First off, choosing guardians/ a guardian for your child(Ren) should be your focus. When we were deciding whom to ask to be guardians for our baby we created a list based on what was important to us. They included:

  • Religious/moral beliefs – Would you like to have your values passed down? To us this was extremely important. Our child will have to make her own decision as to who she wants to be; we just want her to have a solid foundation and be raised with love.
  • Child-rearing philosophy– Does the guardian have similar ideas when it comes to raising kids?
  • Personality – Is your child familiar with them and get along with them? Will there be constant clashes or will they be able to work it out?
  • Location – Will your child have to move?
  • Health – Will the guardian(s) be physically able to handle the responsibilities? Are they in reasonably good health now?

Getting Life Insurance

Another area to be extra concerned with planning is life insurance. Getting the right insurance coverage can give some peace of mind. Besides handling the day to day with us, my mom also focused on planning for the long term and for unexpected  events. She signed up for an insurance policy to protect us in case she passed away. We’re extremely grateful it hasn’t been needed, but we also appreciate that she took the time to get a policy as a safety net.

Factors to Consider When Calculating Life Insurance Coverage

When calculating what amount is right for you, it takes some time to mull over the details. There is no one rule that fits all families with life insurance.

  • Budget: It does no good for a single parent to get an insurance policy if the premiums are a strain on the budget. If you have a limited budget, then get a smaller policy that you can consistently pay on.
  • Final Expenses:  As uncomfortable as it is, thinking ahead about your final wishes now will make it easier on your loved ones.
  • Helping out guardians: If you want to leave something for guardians to assist them with raising your child(Ren) run the numbers to find something you’re comfortable with.
  • A gift for your child(ren):  Some parents would like to leave a financial gift for their kids when they become an adult.

Don’t feel bad if your current budget allows you to meet all of your goals. You can also get another life insurance policy later as your income increases. Just do what you can for now and build from there.

For us, we have gotten term life insurance policies. It allows us to get more coverage for a smaller premium that we would get with whole life insurance.

Thoughts on Life Insurance for Single Parents

For single parents who’ve already purchased their policies, what was the process like for you? How did you decide how much was right for you and your family?

Disclosure: Posts includes information sourced from Genworth Financial

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