Preserve Your Money Using These Great Payday Loan Suggestions

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Regardless of who you are or what you do in your life, chances are very good you possess faced hard fiscal occasions. Should you be in this scenario now and need aid, the next article will provide tips and advice concerning payday cash loans. You ought to locate them very useful. A well informed decision is usually the best option!

Those of you who would like to get a payday advance can be wise to exhaust other options well before figuring out to achieve this. Payday loans cost an arm as well as a leg in attention and should only be utilized for a last option. Try to look for one more way to get some funds very first.

While you are trying to get a payday advance, you can find a few various things that will figure out how much you will get. The financing organization will primarily take a look at revenue and employment reputation. The money you get may also depend on which loan company you plan to use.

Compile a long list of every single debt you possess when acquiring a pay day loan. This includes your healthcare bills, unpaid bills, mortgage payments, plus more. With this listing, you are able to determine your monthly bills. Do a comparison in your monthly income. This will help you ensure you make the best possible choice for repaying the debt.

Prior to applying for a pay day loan, be sure you will be able to cover it rear right after the bank loan phrase comes to an end. Typically, the borrowed funds expression can stop right after no more than fourteen days. Pay day loans are just for people who will pay them back again rapidly. Make sure you is going to be obtaining paid out a while immediately before you apply.

Be sure that you keep a version of the payday advance arrangement. As a result, if something goes wrong, you will have created proof of the terminology that you decided to. Cash advance firms occasionally make a few mistakes, like getting dollars away from your banking account just before the arranged payback day. For that reason, it is crucial that there is a copy of your payday advance deal, to help you issue any errors.

Payday loans are often known as funds advancements. Despite the fact that a money advance might not audio as scary like a pay day loan, it is the exact same thing. When selecting the service you should remember that it is a loan and must be handled consequently on your finances.

Look into the restrictions about payday cash loans in the status where you reside. Some suggests do not allow online payday loans, due to extremely high interest rates that, are section of the financial loan deal. These says think that as well as the predatory the outdoors of the payday loans, in addition they encourage inadequate fiscal techniques, within the buyers who utilize them.

Online payday loans are a very good way to have cash in a hurry. There are lots of companies that offer the service, as well as the expenses related to these kinds of lending options vary. Appear to get the best deal around the bank loan to help you pay it back easily and without any considerable recurring financial debt.

Take notice of anything positioning issues up if, your pay day lending approach will take a lot more than thirty minutes. This marketplace is so regulated, programmed, and computerized that it must be almost a research now. Any paycheck financing procedure using over half an hour or so ought to, most likely be aborted in support of one more lender who knows whatever they are doing.

If at all possible, find out what amount of a paycheck lender’s clients are perform repeatedly organization. Specific institutions with high patterns of cyclical consumers needs to be observed out for, but also for two factors. It may suggest they are predatory and capturing some individuals. On the other hand, it may also suggest they have very good charges and excellent service.

When you are having trouble repaying a cash advance personal loan, proceed to the organization in which you obtained the cash and then try to work out an extension. It might be tempting to create a examine, hoping to beat it for the lender with the following paycheck, but remember that not only will you be charged extra fascination about the original loan, but fees for not enough bank resources may add up rapidly, getting you below far more financial tension.

Payday cash loans are brief-word lending options and should simply be useful for unforeseen expenditures. These personal loans really should not be utilized to spend house monthly bills or common cost of living. If you are using a payday loan for some of these expenditures, you run the danger of defaulting in your cash advance or any other regular bills.

If one makes your choice a brief-term bank loan, or even a payday loan, is right for you, utilize quickly. Just make sure you remember each of the recommendations in the following paragraphs. These tips supply you with a firm foundation for creating positive you safeguard on your own, to enable you to get the bank loan and simply pay out it rear.


Going from Alicante to Madrid

I needed to find a reliable way to get from the airport in Alicante to Madrid. I was due to fly into Alicante on a Monday, and I was only going to stay t here for one day. Then on Tuesday morning, I had to find a way to get from here to Madrid. I knew that I could have taken a flight, but I am not crazy about flying at all. It was a miracle that I was able to handle flying into Alicante as it was. I had looked it up and it would only take about four hours to get there.

When I looked at my options other than flying, I saw where I could take the railway or I could hire a private driver to take me to Madrid. I was not worried about round trip transportation because I was planning on staying in Madrid for several weeks. I had rented a small villa there, and I was basically just running away from some problems for a short period of time. Continue reading


Income Relating: Now It Applies to Medicare

At times, important new terms slip into our financial vocabulary without much fanfare. One such example is “income relating,” as it relates to Medicare. If you had paid attention to the fine print of U.S. statutes, you might have noticed that this term made its debut for in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. However, it did not become effective until 2007, and the high-income enrollees that it affected have felt its impact ever since.

Income relating means that the U.S. government will take a retiree’s reported income into account when determining the cost or value of “entitlement” benefits. It is similar to the better known term “means-testing” and is applicable to retirees with high income. Beginning in 2007, this concept increased the Medicare Part B premiums for high-income retirees, effectively reducing the value of their Medicare entitlements.

SEE: Medicare: Defining The Lines

A New Kind of Effective Income Tax

In creating this concept, Congress was careful to separate it from the income tax payment structure. Seniors do not pay higher Medicare premiums to the IRS. Rather, in most cases, these premiums are deducted from Social Security benefits. However, income relating is a devilishly complex new type of income tax in disguise for three reasons:

  1. It is aimed at one segment of the population only – Medicare recipients – who generally are age 65 or older.
  2. Within four narrow new taxable income tiers, it has the impact of confiscating 100% of reported income in addition to the impact of regular income tax. That creates perhaps the highest effective tax brackets that any U.S. taxpayer has ever faced.
  3. It has a delayed impact. For example, the income that high-income seniors report on IRS Form 1040 for the year 2013 will determine their Medicare Part B premium costs for the year 2015.
Example – Opting Out of Medicare Part B
To understand the kinks all this can throw into a tax planning process, imagine this example: John and Jane Doe, a high-income senior couple, are meeting with their CPA for a year-end tax planning session. The advisor says: “I’ve just made a preliminary assessment of your modified adjusted gross income (MAGI) for the year, and it is $204,000. But I must warn you that for any income you report above this amount, you will pay your regular federal and state income tax. In addition, your Medicare premiums will increase two years from now dollar-for-dollar for about the next $1,000 of income. So, any income in that tier will actually cost you more than it’s worth.” John and Jane must then decide whether it makes better financial sense to opt out of Medicare Part B.

Tax Tiers

Currently, there are five such tiers, and they are summarized for 2015 premium in Figure 1, below.

Tier Begins at MAGI* of… Additional Monthly Medicare Part B Monthly Premium/Person
For Single Filers For Joint Filers
≤$85,000 ≤$170,000 $0.00
>$85,000 to $107,000 >$170,000 to $214,000 $42.00
>$107,000 to $160,000 >$214,000 to $320,000 $104.90
>$160,000 to $214,000 >$320,000 to $428,000 $167.80
>$214,000 >$428,000 $230.80
Figure 1
* The MAGI thresholds will be inflation-indexed in future years.

Source : Medicare Premium Rules for Higher Income Beneficiaries

How to Avoid Tax Tiers

Affluent seniors who wish to escape this impact by opting out of Part B face a healthcare catch-22. Part B covers a smorgasbord of widely used services including doctors, outpatient services, physical and occupational therapy, x-rays, lab tests, and some home health services. The “medigap” policies that most seniors purchase to supplement Medicare are designed to dovetail with Part B and can’t normally be accessed without Part B in place. Therefore, opting out rarely works.

In addition, although there are ways to avoid tax issues on municipal bonds, seniors can’t use municipal bond income to avoid one of the punitive tiers. Even if this income is tax-exempt on the 1040, it is specifically included in the MAGI test for Part B income relating.

One other piece of bad news for seniors: The legislation behind Part B income relating authorizes a data-sharing arrangement between the IRS and the Social Security Administration that help Social Security estimate premiums each year and deduct them from benefits. This same cozy arrangement could make it easier for Congress to link Social Security retirement benefits to reported income, too, at some future date.

Is There Any Good News?

Is there any good news in this picture for high-income seniors? Definitely.Year-end tax planning will become more important than ever. It just won’t pay to receive income in one of those terrible tiers, if it can be avoided. Tax-advantaged techniques such as Roth IRA conversions may make more sense for high-income seniors. Conveniently, these conversions became available to the affluent for the first time in 2010.

It’s worth noting that the taxable portion of Social Security benefits has been “income-related” for some time, and several leading voices in Congress are calling for high-income seniors to sacrifice some of their future benefits to secure the system’s long-term solvency.

The Bottom Line

The bottom line of income relating may be that you can never retire from income tax planning. Previously, that has meant trying to keep the IRS out of your pocket. Now, it may mean Medicare and Social Security, too.


Healthcare Planning: What Medicare Will Cost in Retirement

You’ve saved, calculated and planned and are ready for retirement. It’s time to enjoy your golden years. But are you as ready as you think? Are you prepared for the inevitable healthcare costs that come with getting older? Many people are on track for a comfortable retirement up until their first medical emergency. Retirement planning is also about healthcare planning.


While many people think they can rely on Medicare for all their healthcare costs once they hit 65, they’ll still have to pay some expenses out of pocket. Plus, Medicare’s premiums — like other forms of insurance — fluctuate in price over time. “Medicare’s base premium is increasing 16% in 2016 from $104.90 to $121.80,” said certified financial planner (CFP) Jamie F. Block of Wealth Design Retirement Services. “Depending on your income you could pay as much as $389.80 per month. If you are married, you will double the cost at $9,355.20 per year.” (For more, see: Medicare Changes for 2016.)

The premium for Medicare doesn’t cover Medigap, prescription drug coverage, or Advantage Plans. Medicare and other plans also don’t cover vision and dental expenses. Like the rest of your body, your eyes and teeth will need increased medical care as you age. Hearing aids are also typically not covered by medical insurance. “All of these ancillary expenses can add up over the years,” Horack said.

Additional Coverage

Whether you decide to purchase additional coverage or go without, factor in the potential cost in case something happens. There are calculators you can use to see how much you and your spouse need to save. Some sources say that if you retire at age 65, you should have almost $240,000 set aside just for healthcare costs. If you have to go to a nursing home or rehab facility, the costs will be even greater. Most Americans are overwhelmingly under prepared to retire. (For more, see: What is the Size of the Average Retirement Nest Egg?)

You might also consider purchasing other forms of insurance. Long-term care, disability and critical illness insurance are all great ways to prepare for the costs of getting older. Life insurance is another way you can protect your family in case of your untimely demise. These forms of insurance come with extra costs, but can save you money in the long run.

If you plan to retire before 65, you need to figure out how you’ll get health insurance. Can you join your spouse’s plan? Should you buy health insurance from the marketplace? Many older people will find that buying a private plan will be pricier than they anticipate. (For more, see: Top Signs You Aren’t Ready to Retire Yet.)

“Your health is a double edged sword in retirement,” Horack said. “If you are not healthy, it’s possible you will not work as much or as long as you would like, so you may not be able to save enough for retirement. Then you may spend lots on healthcare and die early. However, if you are healthy, you run the risk of living a much longer time, which requires more money to fund your living expenses.”

The Bottom Line

At the end of the day, saving enough for retirement is still about saving money. But knowing the realistic costs you might incur as you age will be a great motivator to save more than you are currently. Talk to a financial advisor if you’re concerned about running out of money or want to know how much to save. If you save too much, it will just become part of your estate. If you save too little, the consequences are much less clear and much scarier.


Critical Illness Insurance: Who Needs It?

If you’re lucky, you’ve probably never had to use critical illness insurance. You’ve likely never even heard of it.

But in the event of one of the big three health emergencies — cancer, heart attack or stroke — critical illness insurance could be the only thing protecting you from financial ruin. Many people assume they’re fully protected with a standard health insurance plan, but the exorbitant costs of treating life-threatening illnesses are usually more than any plan will cover.

Read on to see if it’s something you and your family should consider.

Critical Illness Insurance 101

As the life expectancy in the U.S. continues to grow, insurance brokers are finding ways to make sure Americans can afford the privilege of getting older. Critical illness insurance was developed in 1996 as people realized that surviving a heart attack or stroke could leave a patient with insurmountable medical bills.

“Even with excellent medical insurance, just one critical illness can be a tremendous financial burden,” said CFP Jeff Rossi of Peak Wealth Advisors, LLC.

Critical illness insurance provides coverage if you experience one or more of the following medical emergencies:

  • Heart attack
  • Stroke
  • Organ transplants
  • Cancer
  • Coronary bypass

Because these illnesses require extensive medical care and treatment, their costs can outstrip a family’s medical insurance policy quickly. If you don’t have an emergency fund or health savings account, you’ll have an even harder time paying those bills out of pocket. (For related reading, see: Failing Health Could Drain Your Retirement Savings.)

Since many people are now choosing high-deductible plans, they’ll owe even more than if they had a traditional plan. Critical illness insurance can pay for costs not covered by insurance. The money can also be used for non-medical costs related to the illness, including transportation, child care, etc. Typically, the insured will receive a lump sum to cover those costs.

There are exceptions to critical illness insurance coverage. Some types of cancer may not be covered, while chronic illnesses are also frequently exempted. You may not be able to receive a payout if a disease comes back or if you suffer a second stroke or heart attack. Some coverage might end once the insured reaches a certain age.

Like any form of insurance, make sure to read the policy carefully. The last thing you want to worry about is your emergency plan.

Why it May Be Important

Since medical bills are the number one reason for bankruptcy in the U.S., protecting yourself against that fate should be a strong consideration. If you have a family history of any of the illnesses mentioned above, it’s probably an even better idea.

The good news is that critical illness insurance doesn’t have to be expensive. According to Rossi, a 50-year-old can have $15,000 worth of coverage for only $30-$35 a month. The average cost of a critical illness ranges from $7,000 to $14,000, so you don’t need to purchase the $100,000 plan to be covered. “Regardless of someone’s financial situation, if it helps them sleep better at night, it could be worth paying for,” Rossi said.

You can purchase critical illness insurance on your own or through your employer (many offer it as a voluntary benefit). Adding it on to a current life insurance plan may also save you money.

Disability coverage can also be a good backup in place of critical illness insurance if you can afford it. This is especially true for anyone whose livelihood would take a significant hit from a prolonged work absence.

The Bottom Line

With any kind of insurance, you have to evaluate the risk you’re taking and if the cost of mitigation is worth it. For some people, critical illness insurance might not be necessary; however, it can prevent some dire consequences. Talk to a professional, evaluate your health risks and decide what’s best for you and your family.


Split Dollar Life Insurance: How it Works

Split dollar life insurance isn’t an insurance product or a reason to buy life insurance. Split dollar is a strategy that allows the sharing of the cost and benefit of a permanent life insurance policy. Any kind of permanent life insurance policy that builds a cash value can be used. (See also: Understanding Different Types of Life Insurance)

What Is Split Dollar?

Most split dollar plans are used in business settings between an employer and employee (or corporation and shareholder). However, plans can also be set up between individuals (sometimes called private split dollar) or by means of an Irrevocable Life Insurance Trust (ILIT). This article primarily discusses arrangements between employers and employees; however, many of the rules are similar for all plans.

In a split dollar plan, an employer and employee execute a written agreement that outlines how they will share the premium cost, cash value and death benefit of a permanent life insurance policy. Split dollar plans are frequently used by employers to provide supplemental benefits for executives and/or to help retain key employees. The agreement outlines what the employee needs to accomplish, how long the plan will stay in effect and how the plan will be terminated. It also includes provisions that restrict or end benefits if the employee decides to terminate employment or does not achieve agreed-upon performance metrics.

Since split dollar plans are not subject to any ERISA rules, there is quite a bit of latitude in how an agreement can be written. (See also: Employee Retirement Income Security Act) However, agreements do need to adhere to specific tax and legal requirements. Thus a qualified attorney and/or tax advisor should be consulted when drawing up the legal documents. Split dollar plans also require record keeping and annual tax reporting. Generally the owner of the policy, with some exceptions, is also the owner for tax purposes. Limitations also exist on the usefulness of split dollar plans depending on the how the business is structured (for example as an S Corporation, C Corporation, etc.) and whether plan participants are also owners of the business.

History and Regulation

Split dollar plans have been around for many years. In 2003, the IRS published a series of new regulations that govern all split dollar plans. The regulations outlined two different acceptable split dollar arrangements: economic benefit and loan. The new regulations also removed some of the prior tax benefits, but split dollar plans still offer some advantages including:

  • Term insurance, based on Table 2001 rates, which may be at a lower cost than the actual cost of the coverage, particularly if the employee has health issues or is rated.
  • The ability to use corporate dollars to pay for personal life insurance which can leverage the benefit, especially if the corporation is in a lower tax bracket than the employee is.
  • Low interest rates if the Applicable Federal Rate (AFR), when the plan is implemented, is below current market interest rates. Plans with loans can maintain the interest rate in effect when the plan was adopted, even if interest rates rise in the future.
  • The ability to help minimize gift and estate taxes.

Economic Benefit Arrangement

Under the economic benefit arrangement the employer is the owner of the policy, pays the premium and endorses or assigns certain rights and/or benefits to the employee. For example, the employee is allowed to designate beneficiaries who would receive a portion of the policy death benefit. The value of the economic benefit the employee receives is calculated each year. Term insurance is valued using the Table 2001 annual renewable term rates, and the policy cash value is any increase that occurred during the year. The employee must recognize the value of the economic benefit received as taxable income every year. However, if the employee makes a premium payment equal to the value of the term life insurance and/or cash value received, then there is no income tax due.

A non-equity arrangement is when an employee’s only benefit is a portion of the term life insurance. In an equity split dollar plan, the employee receives the term life insurance coverage and also has an interest in the policy cash value. Plans may allow the employee to borrow against or withdraw some portion of cash value.

Loan Arrangement

The loan arrangement is significantly more complicated than is the economic benefit plan. Under the loan arrangement, the employee is the owner of the policy and the employer pays the premium. The employee gives an interest in the policy back to the employer through a collateral assignment. A collateral assignment places a restriction on the policy that limits what the employee can do without the employer’s consent. A typical collateral assignment would be for the employer to recover the loans made upon the employee’s death or at the termination of the agreement.

The premium payments by the employer are treated as a loan to the employee. Technically each year the premium payment is treated as a separate loan. Loans can be structured as term or demand and must have an adequate interest rate based on the AFR. But the rate can be below current market interest rates. The interest rate on the loan varies depending on how the arrangement is drafted and how long it will stay in force.

Terminating Split Dollar Plans

Split dollar plans are terminated at either the employee’s death or a future date included in the agreement (often retirement).

At the premature death of the employee, depending on the arrangement, the employer recovers either the premiums paid, cash value or the amount owed in loans. When the repayment is made, the employer releases any restrictions on the policy and the employee’s named beneficiaries, which can include an ILIT, receive the remainder as a tax-free death benefit.

If the employee fulfills the term and requirements of the agreement then all restrictions are released under the loan arrangement, or ownership of the policy is transferred to the employee under the economic benefit arrangement. Depending on how the agreement was drafted, the employer may recover all or a portion of the premiums paid or cash value. The employee now owns the insurance policy. The value of the policy is taxed to the employee as compensation and is deductible for the employer.


Is Life Insurance a Smart Investment After You Retire?

Any discussion about life insurance as an investment after you retire is certain to draw strong opinions on both sides of the argument. Proponents of the idea point to the unique properties of life insurance, such as its guaranteed cash value, tax-deferred growth, tax-free death benefit and tax-free access to the cash. Opponents argue that life insurance can’t be a good investment because there are too many costs and the returns are minuscule. Both sides may have some merit, but their arguments don’t apply equally to all financial situations. The answer really depends on what you want to accomplish. In some cases, life insurance may be the only solution, which would make it a smart investment.

You Want to Maximize Your Pension

If you receive a pension at retirement, you are offered a few different options. The single-life option pays the highest monthly income, but there would be no income for your spouse if you die. The joint-life option would pay an income to your spouse, but you would receive a reduced current monthly payout. You could utilize a pension maximization strategy using life insurance to maximize your current pension income while providing for a lump-sum benefit that can be converted to lifetime income for your spouse. For example, if your single-life pension payout at age 65 is $5,000 per month, and your joint life option is $4,000 per month, choose the higher single-life option. You could then apply the $1,000 monthly difference, all or in part, to a life insurance policy. The death benefit would have to be big enough to replace at least the lower payout option of $4,000 per month. Because the death benefit proceeds are received tax-free, your spouse would benefit from a higher after-tax income.

The pension maximization strategy is somewhat complex in determining whether you would be better off with the single-life or joint-life option. A number of factors need to be considered, such as your and your spouse’s age, your projected life expectancy, your health, your tax bracket and the dollar difference between the two options. If you have health issues and can’t qualify for preferred rates, the strategy is not likely to work. It would be important to work with a qualified life insurance professional who can perform the complex calculations.

You Want to Maximize Your Estate

If your estate exceeds $5.43 million in 2015, it could be subject to estate taxes. With estate tax rates at 40%, your heirs may need to sell off assets to pay the taxes and any other costs related to settling the estate. That could be especially devastating if it resulted in the forced sale of a business or a valuable asset. Life insurance is the only solution that can provide immediate capital to pay estate settlement costs. Work with an estate planning attorney who can determine the most appropriate arrangement, which might include creating an irrevocable life insurance trust (ILIT) to own the life insurance. An ILIT removes the value of your life insurance from the estate so it is not included for tax purposes.

You Want to Maximize a Legacy

Use life insurance to maximize a financial legacy, especially if it is likely to be diminished by taxes. This strategy is often used to maximize the transfer of a qualified retirement plan (QRP) at death. For example, assume you have an individual retirement account (IRA) with a balance of $500,000, and you have sufficient other assets and income to cover your needs. You are considering passing the IRA on to your children, but when you turn age 70.5, you will need to start making required minimum distributions (RMD) regardless of whether you need them. That will reduce the value of the asset, and the fact that you have to pay taxes on the distributions diminishes their value even further. In addition, when your children receive the IRA, they will be required to pay income taxes on distributions.

If the IRA is a legacy asset, you could turn it into a tax-advantaged legacy by taking distributions currently and using them to purchase a life insurance policy. You would have to pay taxes on the distribution, but when you use the money to pay the premium on the life insurance policy, it would substantially increase the value of your legacy. Upon your death, your children would receive the income tax-free death benefit and the remaining balance of the IRA. Everybody wins with this strategy.

Term Insurance or Permanent Cash Value Insurance?

Term insurance is almost always used to solve a temporary need, which is why younger and middle-aged people buy it instead of permanent life insurance. Once they no longer have a need for the insurance, it can just go away. Term insurance is not the best option for retirees who are trying to maximize a pension, an estate or a legacy; it can become prohibitively expensive, and older people usually can’t qualify for longer-term coverage beyond 10 or 15 years. If you are going to need life insurance for the rest of your life, the best option is a permanent cash value life insurance policy. Although the premiums are much higher than term policies, they are fixed for the life of the policy; and as the policy ages, a larger amount of the annual premium is applied to the cash value. Regardless, the source of the premium dollars used for these life insurance solutions is generally funds that are transferred from one asset to another, just applied differently.


The Average Cost of Homeowners Insurance

$1,034. According to a 2015 study published by the National Association of Insurance Commissioners (NAIC​), that’s the size of the average annual homeowners insurance premium in the U.S. in 2012 (the most recent year for which data are available).

And it’s likely to increase. With the cost of insurance claims increasing at more than twice the rate of inflation since 1997, homeowners insurance premiums have gone up correspondingly. In the U.S., insurance rates have risen more than 50% over the past 10 years alone.

Of course, the national average premium is likely not the amount you will pay. Insurance premiums vary widely from area to area, not to mention from company to company. To zero in on the cost of homeowners insurance in your neighborhood requires a little more analysis.

(For a brush-up on the basics, check out The Beginner’s Guide To Homeowners Insurance.)

Location Matters

Why do homeowners insurance rates vary from state to state? It has to do, mostly, with the weather.

Rates in hurricane-prone states such as Florida can be almost twice the national average. Similar rate swings can be found in other storm-vulnerable states such as Texas, Louisiana and Mississippi.

Oklahoma, with more tornadoes per square mile than another other state, suffers a similar weather-related “rate hike” fate.

Conversely, states that rarely see large-scale natural disasters or weather events have insurance rates that fall below the average. They include Washington, Oregon, Idaho, Utah and Wisconsin. In Idaho, for example, you could expect to pay rates that are almost half the national average.

Go here and click on the name of your state for more rate information about where you live.

Other Factors

In addition to location (and weather patterns within), there are other factors that help determine homeowners insurance premium rates.

  • Buildings: First, there’s the value of your home – specifically the cost to rebuild it in the event it is destroyed. To that, add the value of any other structures on your property you wish to insure.
  • Personal Property: This refers to the replacement value of the contents of your house and other buildings. If a catastrophic event were to take place and you lost all of your belongings,homeowners insurance is designed to help replace them.
  • Deductible: All insurance policies have a deductible. After you file a claim, it’s the amount you agree to pay out of pocket before insurance kicks in. Generally speaking, the higher the deductible, the lower the premium. According to the Federal Citizen Information Center, your deductible should be at least $500. Nowadays, $1,000 is more common and can lower your premium as much as 25%.
  • Credit Score: Since they’re naturally concerned with your ability to pay your premiums, many insurance companies check your credit score and use that as one basis for deciding your rate. Having a high one (see What Is a Good Credit Score?) can help if such is the case with your insurer. The NAIC says not all states allow the use of credit-based insurance scores; check this link to find out if doing so is legal in your state.
  • Claims: Finally, the more claims you file, the higher your premium will likely become. Having a high deductible is one way to discourage yourself from filing a small claim that could result in a premium increase of 9% or more, according to CNNMoney. For more on this, see: Will Filing An Insurance Claim Raise Your Rates?

Deals and Discounts

You’re not necessarily stuck with the standard premium (or the first one quoted you). Negotiations are possible. For example, Insurance companies offer discounts for security (burglar) alarms, smoke and CO2 detectors, dead-bolt locks, sprinkler systems and in some cases even weatherproofing.

Another way to earn a discount is by purchasing multiple policies from the same company. This includes homeowners, auto, boat, vacation home and life insurance, to name a few. However, the discount for one-stop-shopping does not always outweigh the advantage of lower rates from different companies, so definitely compare before deciding.

Some companies provide a special discount for seniors, or for people who work from home. The rationale is that both these groups tend to be on premises more often – leaving the house less prone to burglary.

Loyalty often pays, too. The longer you stay with some companies, the lower your premium can become – or the lower your deductible will be.

The Bottom Line

Knowing the average cost of homeowners insurance in your area can help you plan and budget. Utilizing your knowledge about the various factors that affect rates can help you beat that average.

Different insurers use different algorithms that assign different weights to the various factors involved. For that reason, good old-fashioned comparison-shopping can pay off in the end.

Finally, take into account the amount of coverage you need, the reputation of the company and recommendations from neighbors and friends who have dealt with the insurer you are considering. In the end, peace of mind – at a fair price – is what you seek.


5 Dental Insurance Plans with No Annual Maximum

Regular health insurance policies often have a maximum amount in medical costs that you’ll pay out-of-pocket. Dental insurance plans often do the opposite: They set an annual maximum on the amount they will pay for treatment in that year.

A typical annual maximum ranges between $750 and $1,500. Frequently, the cost of preventive procedures such as cleanings and X-rays is not subtracted from the maximum.

Obviously, the higher the maximum, the better for you – preferably, at the lowest cost.

Two Plan Types

Two types of dental coverage do not have an annual maximum – Dental Health Maintenance Organizations (DHMO​) and discount dental plans.

Dental Health Maintenance Organization

DHMO plans, also called DMOs or pre-paid plans, require you to choose a primary care dentist or dental facility from the sponsor’s network. If you need to see a specialist, your primary care dentist must refer you.

With a DHMO, you pay a fixed dollar amount (also known as a co-pay) for services. In most cases, preventive treatments, such as cleanings and X-rays, have no co-pay; they’re included in the plan premiums you pay.

Discount Dental Plan

Discount dental plans are actually not insurance at all, but membership in a group that has negotiated discounted rates with a network of dentists.

There are no maximums or, for that matter, deductibles. You pay for all services rendered plus a (typically small) membership fee to belong to the plan.

Specific Insurers

Most major dental insurers offer DHMOs and/or discount dental plans. Offerings vary by state, however. So, before you get too excited about a particular option, be sure to see if it is available where you live.

Delta Dental

Delta Dental, one of the top-rated dental insurers in the business, has a DHMO plan called DeltaCare USA and a discount dental plan called Delta Dental Patient Direct.

With DeltaCare USA, you select a primary care dentist who manages your dental needs. Like most DHMO plans, DeltaCare USA lets you obtain preventative care for minimal (and in some cases, no) co-payments. There are no claim papers to fill out. The in-network dentist does all the paperwork.

With the Delta Dental Patient Direct dental discount plan, you choose from a network of participating dentists who have agreed to charge discounted fees. You pay the dentist directly at the time of service. There is no paperwork to file. This plan is not widely available, so it’s important to search Delta first, before you get into the details.

Cigna Dental

Cigna’s Dental Preventive Plan may be for you if you want coverage for yearly checkups and not much else. According to Cigna, “Your low monthly premium ensures that Cigna pays for all your annual dental visits.”

The plan has no individual or family deductible and covers 100% of the cost of in-network preventive and diagnostic services. Discounts are available for restorative services and orthodontia.

Cigna’s DHMO plan provides most preventive and diagnostic procedures at low or no cost to you. There are no deductibles, no annual maximums, no waiting periods and no claim forms to fill out.


Aetna offers standalone dental insurance coverage only in Alaska, Arizona, Delaware, Illinois and Pennsylvania. Otherwise, it’s only available through your employer or some sort of group plan.

The company’s discount dental plan, called Vital Savings by Aetna, is widely available and serves as a low-cost substitute for dental insurance, with rates starting as low as $7.99 per month.

The company’s Dental Maintenance Organization plan is available to employees and members of participating organizations. The plan features no deductibles, no waiting period and no annual maximum. Preventive care is fully covered and discounts (co-pays) are available for other services.


HumanaOne Dental Value Plan (DHMO) has a small one-time enrollment fee, no deductible and no maximum. The plan does require you to choose a dentist from the network. There is a modest co-pay for routine office visits. Cleanings, checkups and X-rays are free. Other services are available for discounted prices (including an up to 25% discount for orthodontia), but these are available in only in areas with a Participating Specialty Dentist (PSD).


Careington offers a popular dental discount plan that the company claims saves members anywhere from 20% to 60% on most dental procedures. Members may use any participating dentist on the plan. There are no limits on cleanings or major work such as dentures, root canals or crowns. Careington monthly membership ranges from $6.95 for a single member to $15.95 for a family. A $20.00 non-refundable processing fee is charged when you apply for membership.

The plan includes a 20% savings on orthodontics as well as cosmetic dentistry.

The Bottom Line

If dental insurance is available through your employer, it is almost always preferable to (and less expensive than) buying insurance on the open market, no matter what type of plan it is.

But if that’s not an option, if you want to avoid annual maximums, your choices are likely limited to a DHMO plan or a discount dental plan. But before you reject the notion of a limit on your benefits, keep in mind that annual maximums are often sufficient to cover the dental care needs of most people – especially if the cost of semi-annual checkups is excluded from them.


Is Your Health Insurance Enough For Retirement?

Concerns over health care in retirement are on the rise, and looking at the health care cost increase over the past few decades, it seems such concerns are not unwarranted. Another unfortunate effect of the cost increase is that employers are dropping the option to continue health coverage into retirement. Currently, only about 35% of employers are offering this option, down from 66% two decades ago. This puts the onus of retirement health care planning squarely on the individual.

Health Care Costs in Retirement

The cost of health care during one’s golden years obviously depend on one’s general health going into retirement. On average, the Employee Benefit Research Institute (EBRI) estimates that an average 65-year-old couple can expect to pay $163,000 in out-of-pocket expenses for health care during retirement. This number does not include long-term care, such as a nursing home.

Retirees with some leftover employee benefits face an average cost of $552 per month before age 65, which drops to $227 per month after 65 (thanks to Medicare taking some of the burden). Those with no employee benefits looking to buy a private health insurance policy may be looking at four figures per month.


Medicare provides basic health care for retirees over age 65 and comes in four parts, A through D. Medicare part A is free (if you’ve paid into the Social Security pool for at least 10 years) and covers basic hospitalization. Everybody gets part A at age 65. Part B is optional with a monthly premium depending on income. This part covers doctor visits, physical therapy, diabetes testing and similar procedures.

Part C, also known as Medicare Advantage, is a private plan, run by an insurer, that is overall equal to parts A and B, except select areas where it may extend better coverage. For example, an insurer may include everything found in plan B, but add on prescription drug coverage for a higher premium. The insurer has some freedom in dialing back certain coverage elements to make up for the improved parts; read each offering carefully before deciding. Part D is standalone coverage for prescription drugs from a private insurer.

Medicaid is a support program for low-income, low-asset individuals who would otherwise not be able to afford the premiums of the regular Medicare system. Eligibility varies by state; see the Medicaid website for more information. Medicaid also covers long-term care costs, both for a nursing home and at-home care, which Medicare does not. Medicaid doesn’t cover prescription drugs, but it may pay the premiums to enroll in part D.

Medigap is another category of supplemental Medicare coverage offered by private insurers. There are 12 pre-packaged standalone policies very similar to those baked into the broader plan C offerings described above. The contents of each of these standalone policies are the same, as determined by the government. As a rule, anyone who opts for a plan C solution should skip Medigap; the level of redundancy is too high to make it worthwhile.

Health Savings Accounts

Health savings accounts (HSAs) are a tax-friendly way to set money aside for medical expenses during retirement. HSAs are similar to 401(k) retirement plans in that the contribution is taken straight out of the paycheck on a pretax basis, sometimes getting a matching contribution from the employer, and deposited into the account where it grows tax-free until used. It is also possible to set up an HSA with a bank or similar financial institution. An HSA builds a tax-free personal nest egg earmarked for medical expenses, no matter what comes down the road. The contribution limit in 2015 is $6,650 (married filing jointly), while those 55 and over get an extra $1,000.

Early Retirement

Those opting for retirement before age 65 face a particular dilemma; they don’t qualify for Medicare yet, but they are at the age when the risk of age-related ailments are beginning to spike.

One option for those aged 63.5 or older is to extend health coverage from their former employers through the Consolidated Omnibus Budget Reconciliation Act (COBRA) until Medicare kicks in. This extended coverage is more expensive than what an active employee would pay, but it is much less expensive than a private policy would be. An added benefit of COBRA is that it is identical to the previous plan, so the person keeps the same doctor and coverage of prescription drugs with no concerns about pre-existing conditions.

The State Health Insurance Exchange

Another option is to purchase insurance from the state’s health insurance exchange. The 2014 health insurance laws changed a lot in this regard, limiting insurers’ rights to deny applicants, putting a cap on how much more they can charge elderly customers compared to younger customers, and several potential subsidies for those earning 100 to 400% of the federal poverty limit ($11,670 to $46,680 for 2015). The website Healthcare.gov is a central hub for shopping for health insurance by state under the new laws.

Affordable Care Act

In addition to the changes mentioned above, the Affordable Care Act (ACA) has added free services for the elderly. These include screenings for several types of cancer, bone density, diabetes, cholesterol and more, while fixing the dreaded hole in prescription drug coverage in Medicare. Get an overview of the new ACA coverage from the U.S. Department of Health & Human Services.

Long-Term Care Insurance

Health insurance typically doesn’t cover long-term care, such as nursing homes or in-home care. Medicaid recipients get long-term care coverage, but those who fail to meet the criteria for Medicaid coverage are left to finance such care themselves. Nursing home costs run, on average, over $80,000 per year, and in-home services often cost $25 per hour.

Long-term care insurance is costly, but it can shield retirees from burning through their nest eggs prematurely in certain situations. For example, suppose an elderly man suffers a stroke and require extensive care, but his wife is unable to provide that level of care. With long-term care insurance, the couple would get in-home assistance without draining their savings.