You're Alive. Insure It.
Plan D You shudder to think about dying. But imagine if you died suddenly—and left your family with no financial cushion?
"That's why life insurance should be at the top of your To Do list—but it isn't, because it makes you think about things you don't want to think about," says Jackie, 36, who has a 14-month-old daughter.
Jackie, a long-time DailyWorth reader, is determined to purchase life insurance policies for herself and her husband—and she is willing to share her experience with us.
Come to terms with it
Jackie, who works in sales for a food company, wanted to get started—but didn't know where to start.
We walked her through the two types of life insurance: term insurance (uncomplicated) and permanent insurance, also called whole life (complicated).
Term life insurance is similar to home insurance. You pay a monthly premium for coverage in case of catastrophe—fire, flood or in this case, death. If your house went up in flames, your policy would cover $X amount. If you died, your life insurance would pay your survivors $X amount (charmingly called the "death benefit").
- The policy only lasts for a certain number of years, i.e. the term.
- Like homeowner's insurance, you only get money if something bad happens. There's no cash value to the policy.
What Jackie found appealing about term is that it's straightforward—and inexpensive. According to Money: "A $1 million permanent policy for a healthy 40-year-old woman can run as much as $13,900 a year; she could get a $1 million 20-year term policy for $750 per year."
Next: Jackie discusses these options with her husband.
On a happier note: Wedding bells are ringing! This e-mail address is being protected from spambots. You need JavaScript enabled to view it your financial survival strategies—for being a bride, bridesmaid or guest.
HSA-HMO-HDHP -- HUH?
Dear DailyWorth,My family of four has health insurance through a group of small business owners. Our Health Savings Account keeps the monthly bill lower than an HMO, but I feel vulnerable. What should I do?
~ Susan G, New York City
Health-insurance expert Ellen Golden of Atlantis Health Plan helps individuals, sole proprietors and small businesses in New York City find health insurance.
Dear Susan, I can appreciate your feeling vulnerable!
What's an HSA?
Health Savings Accounts (HSAs) are a type of savings account offered in conjunction with low-premium, high-deductible health insurance plans. Anyone can open an HSA at a qualified financial institution. Your HSA money goes in pre-tax, grows tax-deferred and is withdrawn tax-free when used for qualified medical expenses. The maximum savings you’re allowed (single/family) is set by the federal government, as is the maximum deductible (single/family) charged by your Health Insurance Plan. Also your Plan can add additional charges, such as co-insurance on top of the deductible. Preventive care expenses may be covered before deductibles are met.
Make Sure You're Using It Right
It's true that a Health Savings Account (HSA) can keep your monthly premium down and, if used properly, can be a sensible option. However, used incorrectly, an HSA can get you into a financial bind. To be safe, find out both the deductible and co-insurance from your group’s High Deductible Health Plan (HDHP). Co-insurance relates to cost-sharing between you and your health insurance company.
Have you put that amount of money in your HSA so that if you end up in the emergency room tonight you’ll be covered? If so, then you’re using the HSA properly, and you shouldn't have to worry about being vulnerable. But if you don't have enough to cover those expenses, you could end up owing a lot of money – and be very vulnerable.
For more information about HSAs and HDHPs, and how they work, read this simple breakdown on the U.S. Treasury Department website.
Need Health Insurance Help In New York?
If you're an individual, sole proprietor or small business owner in New York, you can call Ellen Golden at 917-903-8627 or email her at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
for help with your health insurance plan.
Lack of Renters Insurance Could Burn You
Christa is a product developer and writer based in NYC, and loves when art and business come together in equal amounts in her life. You can find her on Twitter, on Curating a Creative Life, her own blog about creativity, and as a weekly contributing writer to The Journal of Cultural Conversation. We first met Christa when she covered DailyWorth for Examiner.com.
Got renters insurance?
No?
On the Saturday of Labor Day weekend, my apartment building caught fire, burning through three floors. I was on the 4th floor of a walk-up, no fire escape, no smoke alarms going off, buying iTunes on my laptop in my kitchen. As I was listening to Fleetwood Mac sing “Well, I’ve been afraid of changing ...” the kitchen floor started crackling. The adhesive that attached my kitchen tiles to my floor started to heave. I thought that the crew renovating the apartment below me was just working on the ceiling of that apartment. 
I had just gotten out of the shower so with sopping wet hair in my hang-around-the-apartment clothes, I grabbed my keys and intended to go downstairs and tell the contractors they were messing up my kitchen floor. I got halfway down the first flight of stairs and was completely consumed by black smoke so thick that I couldn’t see my hand in front of my face. » Terrifying. A few more minutes and I would have been trapped in my apartment with no way out. I got as low as I could, scrambled down the stairs, screaming, praying I wouldn’t die of smoke inhalation. Little did I know that I was running right by the very apartments that were burning. I’m lucky that I didn’t run right into the flames on the stairs or that the stairs themselves didn’t give.
So here’s what I learned that you need to know:
- Please buy renters insurance. Please. You may never need it, and you never know what your neighbors are doing in their apartment. I filed my claim on-line with Liberty Mutual in five minutes, they arranged for the movers, the fire restoration company, and the value assessment of my belongings. I received my first installment of the claim in a month, and the remaining amount will be to me in a few weeks. With any kind of building incident, the landlord is only responsible for the building itself, not your belongings. I have my policy through Liberty Mutual and I pay $181 a year for $25,000 worth of coverage. A bargain when you consider the stress and financial loss an incident like this can cause. And your belongings are insured wherever they are in the world. Worth every penny.
- Know your rights as a tenant. If there is an order issued to vacate or if the building is declared uninhabitable, you’re out of your lease. If not, then the situation is trickier legally. I have a close friend who is an attorney (and a darn good one) so her counsel and advice on how to handle my landlord really helped me. Get in touch with your city office over housing and read your rights carefully. In New York City, visit http://www.nyc.gov/html/hpd/html/tenants/tenants.shtml.
- Cash. You need that emergency fund. I am extremely fortunate in that I have a very good job and am a miser who saves 20% of my take-home income. I have not invested too much in the market so I had a stockpile of money in my savings accounts. This was critical to my peace-of-mind during this transition. At one point, I was out of pocket 6 months rent: 2 months from my apartment that I just moved out of (my deposit had not yet been returned by my landlord), my September rent and security from my fire-ruined building (I haven’t gotten that back yet), and the security and one month’s rent for my new place that I moved into after the fire. I needed to buy new clothes, new furniture, new just-about-everything, and if I didn’t have that cash, I would have had to wait for the claim. I was very lucky that Liberty Mutual took care of me so quickly. And in this kind of situation, you can’t count on luck.
- Mobilize your network of friends, family, and co-workers. People want to help people in a jam. Whether it’s someone to talk to, someone to tell you about an
available apartment, someone to borrow some clothes from, or some place to stay temporarily, let people help you. I don’t take help easily. I pride myself on making “self-preservation a full-time occupation”. You can’t do that when things like this happen. You need people and they want to be there for you. Let them. I got on Facebook, Twitter, every on-line community I belong to, and sent a mass email to everyone I know telling them what happened. I had a new apartment in two days, in my same neighborhood, no broker fee, in my price range, available immediately, and much better space than I had before. This would never have happened without a lead from a friend.
- Your belongings, no matter how precious, are just stuff. Your health is the critical element in every situation. If you’re breathing, count your blessings. And to make getting you belongings replaced easier, take digital pictures of them and save receipts. The insurance company can replace it all. You are irreplaceable. Remember that.
Forget the Gecko
The cost to insure your car has been going up in recent years. It's expected to continue to increase this year. There are steps you can take to keep your costs down:
- Ask your insurer if your policy is in line with your needs. For example, you're working at home now, they might reduce your bill. According to this article on SmartMoney.com, you could save up to 10 percent if you now drive less than 10 miles a day.
- Consider raising your collision deductible -- this will cut your costs even further.
- Call with two other quotes in hand. Nothing like the fear of competition to make them squirm.
Get started on those two quotes:
Progressive: 1-800-PROGRESSIVE
Geiko: 1-800-861-8380
AllState: 1-866-609-7200
State Farm: 1-877-734-2265
Want the full scoop? Motor on over to SmartMoney.com: Beating the Rate Hike on Car Insurance.