Should You Consider Additional Insurance?

Posted on Monday 30 January 2012

What does TPD Insurance stand for?

Total and Permanent disability insurance is a type of life insurance often used in the workplace and commonly shortened to just disability insurance. Briefly it covers you in case of any major accident that prevents you working on a permanent basis.

The unfortunate truth is that one incident can potentially unemployable or unable to work for the rest of your life. So what would you do if you became totally and permanently disabled tomorrow? You would be completely out of pocket with no chance of a stable income as you would be unable to work again. Bills could go unpaid and there might be no way to pay for that extra health care you might need. TPD insurance can help you if this situation was to occur.

This insurance is often used as an add on to an existing life insurance policy which you might hold within employment or outside of work on your own behalf.  The insurance covers only covers you for permanently disabling issues, not those that only put you out of work temporarily no matter how long that time period may be. This includes things such as the loss of a limb, deafness, brain damage and complete blindness; generally anything which will stop you from being able to do everyday tasks on your own. You will often find that different vendors offer TPD insurance on different conditions than others. Therefore you should be wary when looking at what disability insurance to take out and if the conditions it covers may occur in your current working place.

Why should you consider Total and Permanent Disability Insurance?

Although you might deem it improbable there is always chance that you can get injured or sick at work, and not all of the conditions out there are only temporary. With life insurance you can only help your family if your injury at work is fatal, whereas TPD insurance means you are covered if you are terminally injured. The lump payment will help you and allow you to enjoy the remaining time with your family, making sure you continue to live the happy life you deserve.

Depending on your line of work, TPD insurance can be an essential consideration. Most Australian life insurance providers provide a total and permanent disability option. Shop around for what you think is the best deal, taking in to consideration the rates and maximum payouts for each plan. Some companies offer this information online, including MLC’s TPD Insurance which offers a maximum payment of $5 million.

savvy @ 8:00 AM
Filed under: General Finances
How to Save on Filing Your Taxes This Year

Posted on Thursday 26 January 2012

Mary Ann Rosenthal is an artist, writer and grandmother to four beautiful children under the age of five. She is dedicated to helping her friends and family save money and works with her son Aaron at CyberMondayDeals.com. The deals website helps consumers save money on Cyber Monday and all year round. Users can vote and comment on the coupons they like, even share discounts that you’ve found online. Pay the site a visit to see how you can save!

Get yourself organized

OK-OK. . . the time has come THIS year to finally get yourself organized. Take a trip to the local office supply and graduate out of the shoe boxes you have been saving your receipts in. What? No receipts? The first step in saving money at this time of year is to start saving every receipt! Organize them monthly in one of those accordion style, categorized portfolios. Go with a pre-printed organizer system at first and then in future years, as your taxes, savings and income become more complicated, fill in your own category labels.

Free File from the IRS
If you make $57,000 in Adjusted Gross Income or less this year there is a free electronic filing tool available. It was developed by the IRS in partnership with a group called the Free File Alliance. It is available at http://www.freefile.irs.gov/

You simply plug in the numbers. Gather last year’s e-file PIN number or the 2010 adjusted gross income, your Social Security numbers, W-2s, 1099s showing interest and/or credits, business receipts, income receipts, unemployment compensation, 1099-DIV and 1099-R, and any other income and you should be able to do this quickly and safely.

Shop for a tax filing professional
If your income level or the complicated nature of your business invites another type of tax filing support then you may need to find a professional to help you with your tax preparation. Do your research and find out the qualifications of any income tax preparation professional you find. Like with any major service provider, getting three estimates, as well as personal recommendations is a good idea. And carefully weigh your ability to communicate with this person with their ability to ask the right questions about your business and income sources.

Free tax preparation and e-filing
Finally, there’s a plethora of tax filing services out there from software to free online help from certified accountants to retail store kiosks at big box retailers. Make sure the service or software solution you select is one that you understand. Have them explain to you what they will do. If it is an online product or what it is they are offering. Do they e-file your return for free? Or is that part up to you in addition to mastering the software. At this time of year many of the top name brand companies are eager to get new customers. Check the deals sites for money saving offers, but not until you have made an educated decision about which product fits the bill.

savvy @ 6:24 PM
Filed under: General Finances
Spring Cleaning Your Finances

Posted on Wednesday 25 January 2012

We’ve been having unseasonably warm weather here in Atlanta.  So much so that it almost feels like spring (it was 65 degrees today).  So here are a few tips from our friends at TD Bank.

Periodically, go through your files and piles of paper and shred documents you no longer need. This can help reduce clutter and clean out space you need for other things.

Go green! If you’re not already set up with electronic banking, you should. It’s faster, easier and saves trees. Most companies can bill you through email and deduct your monthly payment automatically, helping you to reduce paper clutter and help the environment.

Here are a few suggestions on getting rid of documents during your Spring Cleanup:

Banking:

  • Bank deposit and transaction receipts – once you have received your monthly statement and reconciled all transactions, you can shred these receipts.
  • Canceled checks – only save canceled checks if they are needed for tax reasons.
  • Credit Card receipts – once a purchase shows up on your credit card statement, and you have no intention of returning it, you can shred the receipt; unless you need it for tax reasons.
  • Bank and credit card statements – after reviewing for any discrepancies and/or payments are applied correctly, you can shred these statements.

Taxes:

  • Tax returns – keep tax return documents for at least seven years, including receipts for donations, support documentation, completed forms, etc.
  • Pay stubs – once you have received your W2 for the tax year and everything matches up, you can shred your pay stubs.
  • Dividend reinvestments – keep these statements for seven years after filing your tax return.
  • Brokerage statements – keep a copy of your year-end statements for tax purposes; shred the rest.
  • Home improvements – keep these records for tax purposes in the event you sell your home.

Purchases:

  • Big ticket items – keep receipts for big ticket items that you would file an insurance claim for if something were to happen (jewelry, expensive electronics, furniture, appliances, etc.)
  • Receipts for other items – keep receipts for items that are still under warranty.
  • Bills – once verified for accuracy and the payment has been applied, you can shred bill statements such as utilities, phone and internet, unless you write a portion of these off for a business expense.
savvy @ 8:15 PM
Filed under: General Finances
New Rules and Regulations

Posted on Sunday 15 January 2012

The Financial Services Authority (the body that regulates the financial industry in the UK) has recent unveiled a new set of regulations designed to ensure that mortgage lenders don’t return to the “risky” habits that helped precipitate the credit crunch in 2008.

These new regulations could make it more difficult for people to get home mortgages, despite the low rates that can be found through the likes of Santander. The new rules focus rather on the reliability of the borrower, as opposed to the rates posed by the lender.

The first element of the new rules is that all prospective borrowers will have to prove their income. Self-employed individuals will have to present two years of returns, whilst all other prospective borrowers will not only have to prove their income (essentially meaning the end of self-certification mortgages) and present their monthly fixed spending (on things like council tax, insurance, home bills etc).

The FSA did state that it could not force banks to take discretionary spending into consideration – discretionary spending being the amount that an individual spends on holidays, clothes etc – because it recognised that people’s habits may change after taking out a mortgage.

After proving your income, borrowers will then have to pass a “stress test”, in a similar way that many of the banks have had to in the last year or so. The stress test will take average predictions of future interest rate rises for the next five years, add an extra one percent for unexpected occurrences, and then see whether the borrower will still have enough income to meet the monthly repayments.

Interest only mortgages will continue to be available, but borrowers must prove that they have a scheme (such as an ISA or a second property) for paying back the original capital at the end of the term. If such a scheme is not in place, the majority of applications will be denied.

In general, the new rules are a codifying of steps already taken by the majority of major lenders. If you have a high enough income to afford the home you’re buying, the new rules shouldn’t make too much of a difference to you, if you’re on the borderline, however, things could be more difficult and you may have to wait. It is also worth mentioning that high loan to value mortgages (where the lender covers almost the entirety of the value of the house) will also be outlawed, so you’ll probably need a deposit of at least 20%.

The proposed regulations will be under discussion until May 2012, and will then, all being well, be introduced in 2013. For further information, check out the FSA website.


Image: Ambro  FreeDigitalPhotos.net


savvy @ 12:22 PM
Filed under: General Finances
Rental Returns

Posted on Saturday 14 January 2012

With recent falls in house prices, it’s a great time to go into property investing if you have the money to do it. With many people struggling to get onto the housing market, the rental market is particularly popular at the moment, meaning that if you can find the right house you could get a really good rental return on it.

Before you head to the nearest auction house, however, the first thing to do is some research. If you’re going to buy a property in order to rent it, make sure you know what other properties in the area rent for. That way you can use a tool like Santander’s mortgage payment calculator to work out exactly how much you can borrow, and what your budget is like.

You should aim to find a project that will offer a yield of around 8%. Yield is the rate at which you earn back money you’ve spent. So for a yield of 8%, you’d earn £8,000 of rent (after fees, insurance and everything else) having spent £100,000 on the entire project to begin with. Whilst you can make good money of 7 or 6%, it generally gets a little tight with most buy-to-let mortgages.

So, this should tell you that to get a good yield, you’ll probably need to buy relatively cheap properties, or at least, properties that aren’t found in central London or some of the other expensive regions particularly of the south-east. However, there are a couple of ways of making it work.

Firstly, if you’re not living off the rent from a particular house, you can always put any profit that you make back into the mortgage, this is a good way of gaining equity in a house rapidly and maximising the profitability of a low yield property.

A second option is to consider specialist rents. The most common specialist rent is students, most of whom are prepared to live in accommodation that might not be of the highest specification. Additionally, students can be a good option because they’re a captive market, and because a three bedroom house with two reception rooms becomes a five bedroom student house (although you may need additional bathrooms).

Accordingly, you can boost your rental return and increase the profitability of the house. However, the flip side is you may need more robust insurance, and if you’ve got several properties, the end of term can be chaos to make sure everything’s changed over at the right times and prepared for the new tenants.

Finally, remember that any investments you make to the house will benefit you in the long run. A new kitchen, for example, might cost £6,000 but will increase the value of the house by up to 10%, and it’s figures like this that should dictate the amount of renovation you do, and the specification of the finish. Most of all, do your research properly and you’ll never have any unpleasant surprises.

savvy @ 12:20 PM
Filed under: General Finances
How To Save Money For Life Insurance

Posted on Friday 6 January 2012

When you think about it the amount of money you spend on life insurance over a lifetime can be quite a considerable sum of money. If you were to die whilst covered your beneficiaries would come into quite a large amount of money. When put together it makes life insurance a very big part of your life. Far too big to be treated casually and one that you should put much thought into before accepting the word of a commission agent or salesperson. For instance, you will want to make certain that what you are buying is right for you and that it is you who is getting the best value for your money. In order to help you determine exactly what you need for the best value life insurance you will find the following information quite beneficial:

  • Keep in touch. Once you have taken out all the life insurance you feel you need don’t sit back on your laurels and never give it another thought. Life insurance is a financial product and this means it is subjected to everything that takes place in the financial world like investment returns and interest rates. As the world around you goes through various economical changes so too do many life insurance policies. One change happening at the moment is the big changes being made to life insurance for women by some life insurance companies. Contact your life insurance company at least once a year to discuss if any improvement could be made to your cover.
  • Loyalty is often the best policy. Once you have satisfied yourself that the policy you have taken out is the best you could have done it is often best to see it through. Especially in the case of whole life policies. When you change policies it means your current policy will have to be surrendered and a new one taken out. This will occur at an older age than you were previously and premiums increase with age.
  • Be careful where you buy your policy. If you have been offered life insurance cover by a friend who has just joined the business, make sure you test out the cover and costs by getting quotes from other sources before signing up. See what it would cost you by buying online, direct from the company, check with a financial planner. If you find a better offer tell your friend and see if he or she can match it.
  • Don’t be afraid to inquire. If you are unsure of any aspect of the cover being offered to you don’t be afraid to ask the hard questions. It is you who will be meeting the premium payments over many coming years and it is in your interests to know exactly what you are paying for. Know what it is you want and only pay for that.
  • Know your needs. If it works out that $500,000 will cover all your needs should you die, buy that amount of cover only. If you don’t need $1 million don’t be talked into buying it.
  • Look around a bit before committing yourself. If you were buying a new car the odds would be on you making comparisons with other models before you finally make up your mind. Life insurance should be no different. There are many life insurance companies in the market and our system is supposed to work on the basis of competition. Therefore use that competition to better your own position when buying life insurance. You could be surprised at the difference it makes.
  • Know the different types of life insurance. There are two basic life insurance covers available to you and they serve two different purposes. Term life insurance is the cheaper of the two but it only lasts for the term you take it out for. Once this term has expired you forfeit the money you had paid in premiums to the life insurance company. The other is whole life insurance. Although dearer, you will always get some of your money back with this cover. It is taken out for the whole of your life meaning if you were to live a short life or a long life the company will have to pay out at some stage. If you surrender the policy you will also get back its cash value. You are also able to borrow from it.
  • The younger you buy your life insurance the cheaper it will be. Life insurance companies sell their policies on the basis of the risk they are taking. A younger person is expected to be a better risk than an older person therefore a younger person pays a lesser premium than an older person. The same goes for your health. You are usually healthier when young and therefore the life insurance company places less importance on your health. As you age, illnesses could come along and you could finish up suffering from various health complaints. The life insurance company will want to find out what these complaints are, to determine if you will have to pay a further amount on your premium to cover your increased risk. In short, the younger you are when you buy life insurance the cheaper it will be.

When you are discussing your life insurance needs with a life insurance company you may be offered a choice of options to be added. Consider these options carefully and if you feel you don’t need them, don’t be talked into buying them. They will undoubtedly add an extra cost to your premium and if you can’t be convinced of the need, there is no reason why you have to have them added.

This article was written by Justin Toladro from Life Insurance Finder. Visit our site to compare life insurance and for more information on life insurance policies thats right for you.

savvy @ 8:00 AM
Filed under: General Finances
Financial Considerations for the Expecting Mother

Posted on Wednesday 4 January 2012

So you’re pregnant and expecting a child? Congratulations! This is an exciting time in the life of any mother and family. It also can be a hectic one. You probably have been busy visiting doctors, preparing the baby’s new room, sending updates to friends and relatives, and trying to determine your child’s name. There are certainly many tasks to accomplish as the arrival date gets closer and closer.

Among these necessary tasks, there is one that is less exciting and thus more overlooked: the task of sitting down with your husband and discussing the new child from a financial perspective. To be sure, every expectant parent knows that raising a kid costs money, and you hopefully have the current and future resources to feed, clothe, and care for your child as they grow. But beyond these basics, there are some other considerations that you should probably keep in mind. Here are a few of the key ones:

Insurance

A new child naturally means a new addition to the family health insurance plan. As such, the impending arrival of your baby necessitates the question: is you current plan the right one for your growing family? Some plans make it cheaper to add additional members than do others, while some are more likely to cover the types of care a young family may need. If you feel any uncertainty with your current plan, now may be the time to get a few free insurance quotes and take a look at your alternatives.

Savings

Ridiculous as it may seem, it is never too early to open a long-term savings account for your child – even if that child has not yet been born. This is especially crucial if you plan on paying for your child’s education some day, whether at an elementary, high school, or college level. With ballooning tuition rates that are unaffordable for even well-off Americans, it is crucial that you have a savings account or an investment portfolio that is built and dedicated to that cause.

Work

Most mothers take at least a few months off of work after their new child has arrived. While the exact amount of time you miss may be contingent upon your baby’s development and difficult to predict in advance, it is still important to consider the financial burden of the work you plan to miss – assuming, of course, that you don’t work for a larger company and have the opportunity for paid leave. Sit down with your husband and make a budget specifically tailored for the first few months after birth.

Keeping these tips in mind will hopefully help you better plan the financial future of your growing family. A new baby poses an exciting and memorable period in anyone’s life, to be sure, but it is always crucial to look ahead, think forward, and be prepared.

savvy @ 11:00 AM
Filed under: General Finances