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The Importance of Life Insurance for Millennials

So, it turns out life insurance isn’t just for the elderly. Whether you’re planning to scale the Andes or binge another season of House of Cards, it’s pretty important for everyone to have it. However, less than 20% of millennials indicate that they would purchase life insurance. As a millennial, the feelings of being invincible and having all the time in the world are all too common; and much like the last piece of pizza, nobody wants to believe those feelings can ever disappear. But being prepared for the curveballs life may throw you can be beneficial in the long run. This is where life insurance comes into play. By insuring your life, you can help ensure the quality of your loved ones’ lives as well.

Common myths and misconceptions surrounding the purchase of life insurance

Too expensive: On average, for someone who is 35 and under and doesn’t smoke, term life insurance can cost less than 30 dollars per month to get 250,000 dollars worth of coverage. To put this into perspective, a month of life insurance can cost less than a movie date.

Options are limited: There are many different courses of action when deciding what life insurance policy you should get. Whether you’re thinking on a budget, within a certain time frame, or for the long-term, you have got yourself some options.

Not a priority: Sure, rent, groceries, and that Spotify subscription can seem like more immediate expenses to devote your money to. However, by incorporating life insurance into your monthly budget, you also plan for those more distant expenses to make sure your family won’t be stuck with unexpected costs, such as funeral arrangements and co-signed loans, if something were to happen to you.

Reasons you should get life insurance in your 20’s and 30’s

Lock in those low premiums: Just like good scotch, life insurance gets more expensive with age. When an insurance company develops a policy for an individual, they consider the likelihood that the person will file a claim and cash in on their policy before the term expires. As various medical conditions become more probable and health deteriorates along with age, your initial premium will increase along with that risk. Buying while you are young and healthy is a good way to plan for future insurance needs because monthly premiums will be lower. A monthly fee in your 20’s can cost less than 30 dollars per month; whereas a monthly fee in your 40’s will cost around 50 dollars per month, that’s almost a 100% increase in price over 20 years.

Those student loans aren’t going away: Well, it’s 2016 and with that comes crippling student loans. Most young people don’t have the credit to sign these loans on their own and will need someone to co-sign with them. In fact, the average student debt for millennials is around 30,000 dollars and continues to increase. If something were to happen to you, the responsibility to pay off these co-signed loans will fall upon the co-signer which can be financially debilitating.

Funerals are expensive: Funerals can range in price from 7,000 to 10,000 dollars. That’s about a year’s worth of groceries for a family of four. Even the casket alone can cost up to 2,000 dollars. Having life insurance can help alleviate these costs and eliminate the financial stress from the grieving process of loved ones.

You have dependents: If there is someone who depends on your income, whether it be a spouse, child or parent, having that income stripped away unexpectedly can be a shock and can seriously impact the day-to-day life of these dependents. For example, getting life insurance now can help make sure your kids will have financial assistance for college or your spouse will be able to pay your mortgage if an unexpected death were to occur.

You can choose the plan that’s best for you: There are two types of general plans, term and permanent plan life insurance. Term is a life insurance policy for a set time frame such as 10, 20 or 30 years. Permanent life insurance will cover you for your entire life as long as the premiums are paid. With a permanent policy, you can decide between whole, universal or variable, all of which change depending on how you want to invest your money and the flexibility you would like to have. Term policies tend to be seen as a better choice if you are on a tighter budget; whereas permanent policies are seen as more expensive but have a better return over a longer period of time.

Benefiting while you’re still alive: If you opt for a permanent plan, this can double as a savings account, providing you cash value while you are still alive. This can help keep your money safe and provide you with more financial security throughout your lifetime as well.

The bottom line: Getting insurance while in your 20’s and 30’s can help more than just yourself and prepare you for future expenses. By thinking about the long-term while you are healthy and young, you can help strengthen your loved ones’ financial security in unexpected circumstances and get more bang for your buck.

Curious about what kind of coverage you should get? Check out this calculator to discover the best plan for you.

The Five Steps to Take After an Accident

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Step 1:  Take stock of your condition and the condition of your passengers.  If it’s an emergency, step one is obviously “Call 911”. 

Step 2:  If possible, move your vehicle to the shoulder or place of relative safety.  This is especially important in the winter months, where many accidents occur due to icy conditions.  If your car slipped and lost control, it stands to reason that you’re in a lot of danger from other cars suffering a similar fate if you don’t get out of the way.

Step 3:  If there is another driver involved, try to collect as much information from him/her as possible.  A full name, phone number, insurance company and policy number is ideal, but even getting the name of the other driver and his/her insurance carrier can be the difference between getting your claim taken care of and suffering what basically amounts to a hit and run if you can’t find the other driver in the future.  It can also be important in this step to not admit any fault, regardless of how the accident came about.

Step 4:  If you’re not at fault, it’s especially crucial that you wait for the police and file a report.  When drivers are shaken up they might be gracious enough to admit to you on the spot that it was “totally their fault!” but recollections after the fact can be extremely defensive and unhelpful.  If you were indeed not at fault like you claim, a police report is an official record of events that tells your insurance company how to file it.  The industry these days is getting much better about not charging insureds for “no fault” accidents.

Step 5:  Call your agent!  It is your agent’s job to be the middle man between you and your giant, bureaucratic insurance company.  Call your agent and fill him/her in on what happened, even if both drivers walked away deciding that there wasn’t any need to get the companies involved.  The more information we have, the more we can represent you if the other driver’s company comes calling.  This also allows the agent to talk you through whether or not it’s worth filing a claim or not.  If you have a $1000 deductible and it’s going to cost $950 to fix your fender, you shouldn’t be filing a claim.  You’d be surprised how many of these come in!

 

How to Actually Not Worry About Your Awesome Home Insurance

Insurance Information

Source: Tonystallings.com

How to Actually Not Worry About Your Awesome Home Insurance

Homeowners insurance in Minnesota is a little tricky. In terms of average cost, Minnesota is pretty normal; it’s only 8% above the national average. But Minnesota homeowners suffer from a unique problem: Minnesota is the worst place in the nation to file a homeowner’s claim. After filing one claim, a Minnesotan homeowner can expect a 21% increase in his/her premium. That’s over $200 more annually on average. For comparison, this figure is just 9% (about a $50 increase) more in neighboring Wisconsin.

So what’s responsible for these sky-high increases? Natural disasters are chiefly to blame for these increases. For the last twenty years or so, Minnesota has experienced an unprecedented increase in natural disasters. For example, there were 144 tornados in Minnesota in 2010; that’s over three times Minnesota’s national average. When natural disasters strike, insurance companies are forced to increase their premiums in order to compensate for their losses and also to anticipate future risk.

The other main reason for Minnesota’s huge premium increases after one claim is the Minnesota insurance law. In Minnesota, insurance companies cannot cancel someone’s policy after the policyholder makes one weather-related claim. In a lot of states, insurance companies are actually allowed to do this. While this might sound a little cruel, it actually makes business sense in a lot of cases. For example, if a policyholder files a claim for minor damage to their house, such as some broken windows (this is a bad idea), then their insurance company might drop them because the policyholder is simply taking advantage of the insurance company to get compensated for minor losses. In Minnesota, the insurance company would be obligated to continue covering the policyholder, even after an irresponsible claim had been filed. As a result, the only option that insurance companies have in order to stay afloat and be competitive in a certain area is to increase people’s premiums after they file a claim.

So what does this mean for you as a policyholder? As always, this highlights the importance of being careful about filing a claim. A claim should be filed to recover from a serious loss and shouldn’t be taken lightly. In Minnesota, this is treated more seriously than almost anywhere else. Before you make a claim, put yourself in the position of your insurance company for a minute. In a state with a whole lot of natural disasters, how much would you trust a policyholder who files a given claim? Is the loss serious enough to warrant such a claim? Remember, you won’t be able to drop someone if their claim is irresponsible, so you’d be forced to increase their premium. Try to keep this in mind when thinking about filing a claim.

References

“Average Cost of Homeowners Insurance (2010).” Value Penguin. Accessed 6/8/15. http://www.valuepenguin.com/average-cost-of-homeowners-insurance

Bjorhus, Jennifer. “Storms push insurance rates sky-high.” Star Tribune. Written 10/22/12, accessed 6/8/15. http://www.startribune.com/storms-push-home-insurance-rates-sky-high-in-minnesota/175089161/

“One home insurance claim may raise your premium by up to 21%.” Insurance Quotes. Written 10/9/13, accessed 6/8/15. http://www.insurancequotes.com/home/home-insurance-claim

What You Need to Know About Your Surging Premium

 

Insurance Diagram

What You Need to Know About Your Surging Premium

         Insurance can be fairly complicated. A lot of work goes into an insurance policy, on the part of both the insurer and the policyholder, in order to determine the proper amount of coverage and the appropriate premium. Also, insurance premiums often change, and your premium could change even if you didn’t make any changes to your lifestyle or possessions since your last term. But it’s easier to understand once you gain a basic understanding of insurance. Once you understand the basics, you can be smarter about your policy, and you’ll have a better idea of how this whole processes works for both your insurance company and yourself.

         To understand the concept of insurance, let’s go all the way back to ancient Greece. The Greeks were one of the first civilizations to use insurance and they used it to cover goods carried by merchants. For example, perhaps a merchant wants to send his goods across the sea. Without insurance, he would simply pay a carrier to transport the goods and the merchant would have to accept the risk of the goods getting lost or stolen. If the merchant’s goods were indeed lost, then he would be left with nothing. But the Greeks used insurance to solve this problem. In ancient Greece, a merchant could pay an additional fee, now known as a premium, to insure his goods. In exchange for receiving this extra money, the carrier would guarantee a safe delivery. Thus, if the goods were lost or stolen, the carrier would completely compensate the merchant. People were then able to transport their wares safely at a minimal fee.

Why does all of this work? How can these carriers afford to pay their customers whenever their wares are stolen? The answers lie in the numbers. We must understand that there were many sellers attempting to send their goods across the sea. When many sellers pay a premium to a small group of carriers (let’s call this an insurance company), then this insurance company is going to make a great deal of money. However, occasionally someone does lose their goods due to a bad storm or to thieves. In this case, the insurance company must compensate the merchant. This will come at a high cost for the insurance company, but these catastrophes are so infrequent that the insurance company will make enough money to stay in business. Neither the insurance company nor the merchant (the policyholder) wants anything bad to happen. Yet, the policyholder benefits from this comfort and safety, and the insurance company benefits from the premium. Insurance companies use the money they get from these premiums to invest and earn even more money. This whole process enables insurance companies to award massive amounts of money to people on a regular basis.

So what does this mean for you? When shopping for an insurance policy, you’ll want to consider two main things: your premium and the amount of coverage that you will receive. More coverage means a higher premium, but more importantly, less risk means a lower premium. If your insurance company thinks that your insured entity is likely to fail, then it’s going to be reluctant to cover you, and it’s going to charge you a lot for your coverage. The best way to keep your premium low is to reduce your risk. This means making sure that your article (your car, house, or your health) is in top condition. But some things that determine your premium aren’t under your control. For instance, an insurance company wouldn’t want to cover a large amount of articles in a small area; this is because all of these articles could be wiped out by one catastrophe. If you have an article in an area where all the other articles are insured by the same company, you will pay a higher premium because you are creating a higher risk level. So if your premium changes mysteriously, just remember this whole process. Insurance is all about risk, and good risk assessment is what keeps everyone insured at a reasonable price.

Ten Summer Road Trip Driving Safety Tips

 

Jerry Wang Photo

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Jerry Wang Photography.

Ten Summer Road Trip Driving Safety Tips

 

Before You Go

  1. Check the pressure on your vehicles’ tires, including the spare, monthly. A good way to do this is to use a tire pressure gauge that you keep in your car. The correct pressure for your tires is listed on the driver’s doorframe and in the vehicle’s owner manual.
  2. Make sure to inspect your tires for signs of excessive or irregular wear. One nifty test for this is the Lincoln’s head test. Simply place in the tire’s tread with his head upside down and facing you. If you can see the top of his head, you have less than 1/16 of an inch of tread and need to replace your tires. Likewise, if you find irregular wear tread patterns, you need to rotate and/or realign your tires before you leave
  3. Summer can be a harsh time for wiper blades with the often intense summer heat. Ensure that you examine your blades for wear and tear before you leave and replace them if necessary.
  4. Check the level on the cooling system and flush or refill it if the level isn’t adequate. You should see markings on the side of the coolant overflow tank indicating the high and low levels for your car. Additionally, a low coolant level can actually cause your car to have no heat.
  5. Check your oil, brake fluid, automatic transmission, and power steering levels before you leave. Ensure that each of these fluid levels are full and take your vehicle in to be serviced if any fluid leakage is present.

Children Safety

  1. Heatstroke is one of the leading causes of death among children, so ensure that you check for your children in the back seat every time that you leave your car. A car’s temperature can rise over 20 degrees in ten minutes and that temperature can reach 110 degrees at an outside temperature of 60 degrees. Additionally, a child dies when his/her body temperature reaches 107 degrees which makes bringing them with you essential.
  2. Power windows cause many injuries to children’s fingers, wrists, and hands. To ensure that your kids are safe, teach them not to play with the window switches and not to stand on passenger arm rests. Also, properly restrain your kids in car seats or seat belts and check that their limbs are clear from the windows before raising them. If possible, utilize your vehicle’s power window lock switch to prevent them from playing with the windows.
  3. Unused seat belts and belts that have a retractor that locks if pulled all the way out can lead to some kids being entangled within the belt. To ensure that this doesn’t happen to your child, always ensure that they are properly restrained and make sure to teach them not to play with seat belts. You can also buckle unused seat belts, pull the belt out the way to the end without yanking, to ensure that they cannot play with unused seat belts.
  4. Younger children often enjoy playing in or around cars where they can end up trapped in a trunk which can lead to heatstroke or asphyxiation since temperatures can rise very quickly. Always supervise your children when they are in or around vehicles and lock your car doors and trunks as well as ensure that your keys are away from your kids. Additionally, teach your children that trunks are made for carrying cargo and not for playing and keep your rear fold-down seats closed/locked to keep them from climbing into the trunk from inside the car.
  5. When the key is in the ignition and turned to accessory mode, it is possible for the vehicle to be set in motion if a child moves the gear selector while alone in the car. This occurrence can frighten children and cause them to jump out of the car which can lead to injury. To prevent this, teach your children not to play in or around cars and never leave keys in the car. For extra precaution, engage your emergency brake every time you park.

Suggested Emergency Roadside Kit

  • Cell phone
  • First aid kit
  • Flashlight
  • Flares and a white flag
  • Jumper cables
  • Jack (and ground mat) for changing a tire
  • Work gloves and a change of clothes
  • Basic repair tools and some duct tape (for temporarily repairing a hose leak!)
  • A jug of water and paper towels for cleaning up
  • Nonperishable food, drinking water, and medicines
  • Extra windshield washer fluid
  • Maps

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