Top Life Insurance Buying Tips

• Term insurance costs less because an insurer only has to assume the risk on your life for a fixed amount of time, and not your whole life. If your need for life insurance will not last forever because you plan on saving money in other ways or paying off your debts, a term life insurance policy may work well for you!
• You can purchase some term policies with a Return of Premium (ROP) rider. This means that an insured person who survives the policy will get all of their premiums refunded. The rider (option) costs a little more, but means a substantial check will come back at the end of the policy contract. Consider paying a bit more per month for 20 years, and then getting a huge chunk of it back at the end of the policy!
• If you want some permanent life insurance to cover you during retirement years, consider mixing 2 policies for the best policy at the lowest price. A younger family may choose a larger term policy for immediate coverage, along with a smaller face value whole life policy that can be paid off over several years. The term policy will cover the young family. The whole life policy, with lower rates at a younger age, can be part of retirement planning.
• Stay healthy. We cannot control every health issue, but most companies offer lower rates for people with good health habits. A normal weight, non-smoker will have a much easier time finding inexpensive life insurance rates than an obese smoker.
• Shop around for the best rates. It is very easy to compare the top life insurance companies in your area with online life insurance quote forms.

The Importance of Comparing Life Insurance Quotes

Remember that life insurance rates will vary by many individual factors. An applicant’s age, general health, zip code, and the amount of life insurance will affect premiums,but do not assume that every company will be about the same price.

This article was written by Barbara Waltz, an industry expert and one of the founders of a well known insurance blog.

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Given all these factors, most people don’t even consider life insurance an option. That may be a mistake. There are a number of good reasons to have a life insurance policy in tough economic times, regardless of how young and healthy you may be.

• Young people are exactly the ones who should be taking out life insurance policies. You’ll get lower premiums, which you may be able to lock in until age 65. That means a significant long-term savings. Additionally, you’ll easily qualify if you are young, healthy, and have no pre-existing medical conditions.
• No one likes to think about it, but even the young can die. If a life insurance policy is in place, the benefit will help your heirs take care of your debts that might otherwise leave them struggling financially, or it could simply help to defray the exorbitant cost of burial in the United States.
• Life insurance policies also give the insured peace of mind that their major goals will be addressed in the event of their untimely death. With adequate benefits in place, the insured individual can be confident their children will be educated or their spouse will be financially secure.
• An affordable life insurance policy can also offer peace of mind to those who do not have health coverage. In the event of a catastrophic medical incident that results in death, you won’t be leaving your loved ones with the mountain of medical debt that inevitably piles up for the uninsured in the American health care system.
• Life-insurance policies can also be forward looking. Many newer policies are drawn up in such a way that later in life they can be converted to deliver long-term care benefits in the event that you become disabled in old age. This not only will spare your loved ones the cost of your care, but it will also give you greater control over your own destiny for the entirety of your life.

As with all insurance coverage, the most important thing is to do your research and to understand all the terms of any policy before signing on the dotted line. Remember that if you have multiple policies with one carrier, you generally get discounts on your premiums. Consider consolidating your homeowners, auto, and life insurance policies to maximize your coverage while minimizing your costs. Above all, don’t fall into the trap of thinking you’re too young to need life insurance. Now is the time to lock in the coverage and to make sure your loved ones are protected should the unthinkable occur.

This is a post by Chris Wilson who is an insurance editor. He writes about various insurance topics.

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Insurance can effectively help you in protecting yourself and your family from the future losses. In today’s world everyday you face so many risks. Insurance can minimize the potential risks like risk of being disabled due to an accident, risk of death, risk of property damage and so on.

In order to secure your future with the help of insurance, first you should know about the different types of insurance that are available in the market. Nowadays, numerous types of insurance policies have filled the market. But, the most important ones that every individual should go for are given below:

• Life Insurance: If you buy a proper life insurance policy, then you can protect your family members from the financial hardship that may occur due to your sudden death. If you insure your life and something bad happens to you, then the insurance company will offer the amount of death benefit to your family members. If you survive after completion of the insurance term, then also you receive survival benefits.
• Auto Insurance: It is utmost essential for you to buy an auto insurance policy if you own any vehicle. Auto insurance can give you compensation in case of collision. In case of an accident, not only the vehicle and the driver, but also the people who were in that car at the time of accident and the third party injured in the accident; get coverage under the auto insurance policy. You can also insure your car to protect it from natural calamities and incidents of theft.
• Home Insurance: You can protect your home from natural disasters, incidents of fire and theft by opting for a right kind of home insurance policy. If you are a homeowner, then you can buy any homeowners insurance policy. But, if you don’t own a home and live in a rented house, then also you can insure your place by opting for a Renters Insurance Policy.
• Health Insurance: In order to secure health care facilities for yourself and your family members, you should go for health insurance. Health insurance policy can provide you coverage not only for the chronic diseases, but also for the medical treatments and hospital stays in case of an accident.
• Disability Insurance: Disability insurance can tremendously help you in case you meet an accident and are unable to work. If you have a disability insurance policy, then you are sure to get financial support in the days of disability in the form of insurance coverage.

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Yesterday, the car insurance renewal package from Ameriprise arrived and to my surprise, not only the premium for 2008 doesn’t increase, it actually comes down a little. In January 2007, when I switched our auto and home insurances from Liberty Mutual to Ameriprise, the premium for a half-year coverage of our two cars was $559, one car with full coverage and the other liability only. The new rate for 2008 is $555 in total, with the $4 reduction from our Odyssey.

Well, it’s always possible that if I didn’t have that incident and hadn’t been assessed two points, my rate could be lowered even more. I don’t know if that would really be the case, because in the past 10 years, I almost never saw my rate go down even when I didn’t have any violation. It either kept going up (like my first insurer Amica which eventually forced to switch provider) or stayed the same (Liberty Mutual). So I was pleasantly surprised to see a bill the same size as last year. At least it won’t make me regret for not taking an action

*Photo from Safeauto.

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insurers look a lot more closely at how you’ve managed credit over time rather than how much credit you’ve applied for recently.

In addition, insurance companies also found that

1. People with low scores are more likely to file insurance claims than people with high scores.
2. People who have a history in making late payments tend to have more claims.

The difference between lenders and insurers is lenders care more about whether one can keep paying back the money borrowed and getting too many credits in a short period of time is a sign that the borrower may have problem with money. Insurers, on the other hand, don’t have this worry. Their biggest concern is claims. Though it’s hard to verify whether the above findings are true or not, they do tell me that we need to keep a balanced credit history, i.e., not to emphasize one area (for example, no late payment) and ignore the other (such as obtaining too many credit cards too quickly), as different people will have a different interpretation of the credit report.

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• Have a flat tire
• Run out of gas
• Get locked out of your vehicle
• Get stuck in mud, snow, a ditch, etc.
• Have a dead battery

The switch not only saved us more than $300 in auto insurance premium (you can easily compare how much you can save on auto insurance at places like NetQuote), but also eliminated the need of my AAA membership. That’s another $60 per year saved.

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For the ID theft insurance, the article quoted the National Association of Insurance Commissioners as

… identity-theft insurance won't protect you from becoming a victim any more than fire insurance would stop your house from burning down and "does not cover direct monetary losses incurred as a result of identity theft."

So if the policy doesn't cover "direct monetary losses," what does it cover? Take a look at AIG's Personal Identity Coverage which provides the following services:

• Identity theft specialists are on call to guide individuals through the process of restoring their identity profiles and credit records.
• A guide, complete with form letters to send to creditors and bureaus, is provided to each identity theft victim.
• Coverage is provided for lost wages as a result of time off work related to a covered stolen identity event.
• Expenses related to the recovery of an identity, including defense costs for certain civil suits, re-filing for loans and reimbursement of fees are covered.

The Identity Theft Resolution Service from MatLife (with no additional cost to auto & homeowner policy holders) includes the following features:

• Direct assistance with filing police reports
• Assistance in placing fraud alerts with credit bureaus.
• Identification Recovery, which provides direct assistance with notifying governmental agencies should your documents be lost anywhere in the world or due to natural disaster or fire.
• A full year of active credit monitoring follow-up to ensure the thorough resolution of your identity for you and members of your household.

In terms of coverage, the AIG plan does offer reimbursement of lost wages due to time off from work to clean up the aftermath, and that's a big plus compared to the MatLife plan which only helps monitoring your credit for one year (is it because it's free for existing customers?). Just like any other products, different ID theft insurance plans give you different coverages and it's the details of what you will get in the event you need it that separate them (Go to Insurance Information Institute for a list of ID theft insurance providers).

At the end, the author noted that 

A consumer who is concerned with identity theft would regularly check credit reports to look for unauthorized activity, would guard personal account information, shred documents with account numbers or any significant details, review bank statements and more. Those actions go much further towards protecting the consumer from identity fraud than insurance.

Indeed, you probably will be better off getting a credit monitoring service to prevent the identity from being stolen than trying to recover some loss after the damaged is done.

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On the home insurance application form, there is a section for me to provide the membership number and membership level (already entered "Goldstar" but I actually have an Executive membership, don't know if this will make any difference). But no such information can be found on the auto insurance form. At the bottom of the cover letter, however, it does indicate that the following discounts have been applied to the quote:

• Anti-lock breaks;
• Auto/Home
• Anti-theft device
• Education level
• Dual airbage
• Costco
• Multi-car
• Safe driving history

So even without the membership number, the Costco member discount probably is already factored in the quote. For the anti-theft device part, I may get some extra discounts with the window etching we had on our cars. When we bought the van last year, the dealer promised that we could get up to 15% discount on insurance premium with that feature and we did save a little bit with our current insurer Liberty Mutual (though I don't think it's 15%). I wasn't asked for any additional anti-theft device during the phone conversation with Ameriprise last week.

Finally, Ameriprise offers credit card payment option for the premium. That means I can get another 2% back if I pay the bill with my Fidelity 529 MasterCard. With Liberty Mutual, I can only pay with check or through bank transfer, no benefits at all. So far the comparison between Liberty Mutual and Ameriprise has made us lean towards Ameriprise and we pretty much decided to make the switch if nothing happens to change our mind between now and the end of the year.

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I waited till last Saturday to give them a call to get a better quote (BTW, you can compare auto insurance at places like NetQuote to get an idea how much you will pay first). After the home insurance quote but before the car insurance, the CSR told me I had to provide both my and my wife’s SSN for a credit check in order to get an accurate quote. Though the home insurance premium came out better than we paid Liberty Mutual ($207 vs $253 for our townhouse), I wasn’t ready for the credit pull before knowing I can really save some meaningful money with them. I asked the CSR to assume the best credit first and let me see how competitive their rate can be before the credit inquiry. With exactly the same coverage as I currently have with Liberty Mutual, the full year premium is $1252, compared to Liberty Mutual’s $1516, a good amount of savings that justified a credit check. So I gave her our SSNs and the rate of auto insurance inched a little higher to $1332. Asking the CSR what caused the increase, she said it could be a number of factors and wasn’t give me anything specific. Later on I suspected it could the high balance on my credit cards due to 0% BT. Though I paid off two of the three offers last week, the balance won’t be cleared until sometime next month the earliest. When the CSR ran the credit check, she still saw some $32,000 balance on my credit cards. There could be other reasons, but this definitely affected the price, more or less. The home insurance, however, didn’t change after the inquiry.

The quote was for full coverage for both cars. If I only insure my 2000 Honda Accord with liability, the premium dropped to $1118, more than $200 lower. I still haven’t decided whether to keep the comprehensive for my car. It’s 6 and half years old and has more than 82,000 miles on it already and I only drive the car to work every day on local roads. The chance of having an accident is much lower than two years ago when I had to commute nearly 120 miles round trip every day to work. Of course, people can have accident anywhere.

I have asked a hard copy of the quotes and other related information being mailed to me and I have till the end of January to make a decision on whether to keep the comprehensive coverage for both cars. But I’ll definitely switch from Liberty Mutual to Ameriprise if nothing happens between now and next January that makes me change my mind.

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Following the link in the email, I went to Ameriprise and gave exactly the same coverage we currently have with Liberty Mutual:

• Bodily Injury: $50K each person, and $100K each accident;
• Property Damage: $50K each accident
• Uninsured/Underinsured Motorists: Same as above
• Medical Expense Limit: $250K
• Medical Expense Deductible: $1K
• Collision Deductible: $1K; other damage deductible: $1K

If both cars get the comprehensive coverage, the six month premium from Ameriprise is $714, compared to $1516 for a full year with Liberty Mutual. If I drop the full coverage on the 2000 Honda Accord, the premium became $600. Though the online quote isn't very accurate (it said I can get more accurate estimate if I provide my social security number, but I didn't), the number still slightly favors Ameriprise. Besides, the above quote is for auto only, and what we paid Liberty Mutual is to insure both cars and home with them. So if I do switch, it's possible to save a couple of hundreds. On top of the savings on premium, another bonus with Ameriprise, as mentioned in the email, could be

As a Costco member, you can charge your insurance premiums to your American Express Costco Cash Rebate Credit Card or TrueEarnings Card and earn a rebate on all eligible purchases.

With my Executive membership, there could be an extra 3% (1% from TrueEarnings card and 2% from Executive Member rebate??) discount of the premium, making the switch more attractive. However, I have a couple of concerns about the switch. First, this will be my fourth auto insurance company since 2001 (I have switched from Amica to AAA to Liberty Mutual) if I make the switch; second, I probably have to give them my SSN to get a better estimate and they may check my credit history. It won't be a big deal if eventually I use them, but what if the saving is not good enough? A credit inquiry may only get me a quote.

I intent to give them a call to get quotes for both auto and home insurance and see if they can do it without checking my credit.

Finally, anybody has any experience with Ameriprise? I have never had any business with them before and have no idea how goog they are.

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It's the time to renew our auto insurance.

I have been with Liberty Mutual for three years and have both auto and home insurance with them. Under the current auto policy, we pay $1516 a year for the two cars and the coverage includes:

• Liability: Bodily Injury: $50K each person, and $100K each accident; Property Damage: $50K each accident
• Uninsured/Underinsured Motorists: Same as above
• Medical Expense Limit: $250K
• Medical Expense Deductible: $1K
• Collision Deductible: $1K; other damage deductible: $1K

Though the total cost isn't that bad considering that New Jersey has notoriously high auto insurance premiums in the nation, I plan to drop the full coverage on the car when renewing the policy. The car, which was purchased new in 2000, has more than 80K miles on it already. For the past six years, the idea of changing coverage never occurred to us, though we switched insurance a couple of times and didn't have any accident (the only claim we filed for the car was four years ago when it was hit by a deer). Since now I only use the car for commute (30 miles round-trip, local driving), the full coverage doesn't seem to be necessary. Under the present policy, the cost for the coverage for damage is $253. Changing to liability only may save us a couple of hundred dollars a year. 

So far I am quite happy with Liberty Mutual and there's no plan to change insurer just yet, but Costco says on its website that members can save as much as 20% on auto and home insurance. I don't know how believable that statement is; it doesn't hurt to give them a call to find out their rate.

Speaking of trimming the auto insurance bill, if you can’t change your ZIP code or build a garage for your car, you may find the following tips helpful:

• It pays to shop around. This is the rule-of-thumb not just for insurance, but for almost everything you shop. However, I will only use online quote as a screener to get an idea of the price range I may be in. Give the insurer a call for a second quote will give you the exact number.
• Buy a safe, reliable car. Yes, the maker and model of your car also have huge impact on your insurance bill. If you buy a low safety rating vehicle that costs a lot to repair, you will see it in your bill. Also, try not to buy those models that are attractive to thefts.
• Set a higher deductible. Don’t settle with $250 or $500 deductibles if you really want to save. As you can see, I $1000 deductibles for both the demage and medical expense. From my experience, I found this could be the single most effective ways to cut my insurance bill. Get quotes for $250, $500, and $1000 deductibles and you will see the difference when other selections remain the same. And with higher deductible, you may drive more carefully.
• Buy home and car insurances from one insurer. This way you can enjoy discounts for multiple policies.

Finally, you don't need a comprehensive coverage if your car is only worth several thousand of dollars, as what I want to do for my car.

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• Rebalance both taxable and tax-deferred investment plans;
• Max out 401(k) and Roth IRA contributions;
• Add money to 529 plan;

Today, there is another piece from CNNMoney that offers a 8-step course:

1. Rebalance your 401(k): Rebalance to keep each asset class within its target allocation, but don't make any upside-down change.
2. Revisit your estate plan: Review your will, add any new property, check your giving plan, and make sure that your guardianship plan for your kids still makes sense.
3. Sock it away: Maximize your IRA contributions and keep cash in high-rate accounts which are not difficult to find.
4. Give smarter: Keep a list of items you donated or want to donate and assess the fair values of your non-cash donation; otherwise, you may pay more penalty for overstated your donation under the new pension law.
5. Review your health plan: Be sure to sign up the flexible-spending account when you renew you health care plan.
6. Clean up your taxable account: Dump some hopeless losers before the year end to offset capital gain/dividend incomes that will be taxed. Best of all, the loss can be carried over into 2007. But be aware of the wash-sale rule.
7. Do a property insurance checkup: Don't be under-insured!
8. Check the new credits and taxes: New "kiddie tax" rule: for kids under 18, their annual investment income will be taxed at their parents' rates if it's above $1700.

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• It pays to shop around. I believe this is the rule-of-thumb not just for insurance, but for almost everything you shop. However, I will only use online quote as a screener to get an idea of the price range I may be. Give the insurer a call for a second quote will give you the exact number.
• Buy a safe, reliable car. Yes, the maker and model of your car also have huge impact on your insurance bill. If you buy a low safety rating vehicle that costs a lot to repair, you will see it in your insurance bill. Also, try not to buy those models that are attractive to thefts.
• Set a higher deductible. Don’t settle with $250 or $500 deductibles if you really want to save. I always select $1000 deductibles and found this could be the single most effective ways to cut my insurance bill. Get quotes for $250, $500, and $1000 deductibles and you will see the difference when other selections remain the same. And with higher deductible, you may drive more carefully.
• Buy home and car insurances from one insurer. This way you can enjoy discounts for multiple policies.

Of course, you don’t need a comprehensive coverage if your car is only worth several thousands of dollars.

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