IS FOR PEOPLE WHO LIKE MONEY
Volume 1, Issue 1 November 2010
Volume 1, Issue 1 November 2010
Money matters before you turn fourty. How you first begin managing money will affect your bank account for the rest our your life — Benjamin is a bi-monthly magazine dedicated to helping you start a healthy relationship with money before you have two morgages and a bratty tween. Nobody wants to end up broke. Whether you’re navigating student loans options or negotiate your salary for the first time, Benjamin will set you straight and turn you out on the right path.
Editor in Chief Elizabeth Heywood Creative Director Elizabeth Heywood Art Director/ Designer Elizabeth Heywood Online Publishers issuu.com Contributors Macro Econ: The news and how it’s affecting your wallet >>Christine Hauser
2 November 2010
for the New York Times Buying your first car >>dmv.gov
lizes the type families Baskerville, Futura, and Rockwell. Imagery from Flickr.
So you’re not the greatest with money >> Amy Fontinelle for investopia.com The five insurance policies you need and the fifteen you can do without >>Lisa Smith for investopia.com Design Notes This publication uti-
C O N T E N T S MACRO ECON: UNREST IN EGYPT UNSETTLES GLOBAL MARKETS
FIRST TIMERS: BUYING YOUR FIRST CAR
SO YOU’RE NOT THE GREATEST WITH MONEY...
THE FIVE INSURANCE POLICIES YOU ACTUALLY NEED (AND THE FIFTEEN YOU CAN DO WITHOUT)
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MICRO ECON: What happens in the news can have a direct effect on your bank account.
Unrest in Egypt Unsettles Global Markets 4 November 2010
January 30th - Images of turmoil in Egypt continued to overshadow financial markets on Monday, as crude oil prices rose and shares on Wall Street squeezed out gains that were helped by the latest economic report and corporate earnings. The stock market broke through the closely watched 12,000 level last week, but then several days of gains were reversed with a 166-point loss on Friday as investors reduced their risk ahead of a weekend of uncertainty in Egypt. Crude oil, which had jumped nearly 4 percent on Friday, surged again on Monday. Oil prices rose $2.85, or 3.2 percent, to settle at $92.19 a barrel in New York trading. “When the Egypt situation arose it seemed like Friday was more of a day of protecting positions ahead of the weekend,” said Thomas Bentz, an energy analyst with BNP Paribas. “We had the initial pullback,” Mr. Bentz said. “But obviously things are still uncertain in the region even though there has been no loss of output or crude movement in the region. The market is building the fear premium back into prices. We had an early correction but prices have rebounded.” In London, one crucial benchmark for oil closed above $100 a barrel on Monday for the first time since 2008 because of the concern about Egypt. Brent crude rose $1.59 a barrel to $101.01 on the ICE Futures exchange. Treasuries prices were lower and yields were higher. Companies with exposure in the Middle East, like those related to shipping, energy operations, and emerging markets were watching events closely. But sentiment appeared to be stuck in a holding pattern rather than buffeted by volatility early in the day. “The situation is going on still in Egypt, and at least right now shipping continues unabated with shipping through the Suez Canal and Sumed pipeline,” Mr. Bentz said. ”Obviously it is still kind of a wait and see.” The Dow Jones industrial average was up 68.23 points, or 0.58 percent, and the Standard & Poor’s 500-stock index rose 9.78 points, or 0.77 percent. The Nasdaq composite index gained 13.19 points, or 0.49 percent. Shares were mixed across Europe. The FTSE 100 in Britain was down 18.43 points, or 0.31 percent, while in Frankfurt, the DAX lost 25.32 points or 0.36 percent, while the CAC 40 in Paris was up 3.18 points, or 0.1 percent.
“things are still uncertain in the region even though there has been no loss of output or crude movement in the region. The market is building the fear premium back into prices. We had an early correction but prices have rebounded.”
The unrest in Egypt was curbing risk appetite and supporting safe havens like gold and the dollar, yen and Swiss franc, Edel Tully, UBS precious metals strategist, said in a research note. Energy stocks pulled up the broader market, followed by materials stocks. Both rose more than more than 1 percent. Exxon Mobil, the largest American oil company, reported a 53 percent increase in its fourth-quarter profit, helped by higher crude prices. Profit in the quarter was $9.25 billion compared with $6.05 billion in the period a year ago. Analysts surveyed by Thomson Reuters had expected $1.63 a share. Total revenue was $105.2 billion, up from $89.8 billion in the quarter a year earlier. Its shares traded up 1.84 percent. Chrysler, the smallest of Detroit’s automakers, said Monday that it ended 2010 with a $199 million loss in the fourth quarter, as it pledged to return to profitability this year on the strength of new products. And the Intel Corporation cut its first-quarter revenue forecast by $300 million Monday because of costs associated with correcting a design flaw that it discovered in a chip. Intel said it did not expect the problem to have a material effect on full-year revenue. The share dipped more than 1 percent after the announcement. New economic data released by the Department of Commerce said consumer spending rose 0.7 percent in December, and nominal personal income rose 0.4 percent, in line with forecasts. Wage and salary income increased by 0.3 percent. While the data was essentially a sideshow to the global events, investors were still watching for signs of whether tentative improvements in the United States economy could be sustained. “You have to keep your eye on it,” Jason D. Pride, the director of investment strategy for Glenmede, said. “The U.S. economy has officially transitioned from recovery to expansion.” ¶
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6 November 2010
First Purchase: Step-by-step instructions to help you make those first major purchases.
Whether you’re ready to trade in that old hand-me-down station wagon that your parents gave you when you left for college or it’s simply time to toss that bus pass, you’re in for an adventure.
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Start at the Beginning
During the Search
The beginning is not the point at which you start looking at cars. The beginning is the point at which you start doing research. Before you begin searching for the perfect first car, you should first ask yourself several questions:
It’s time to head out and begin looking for your first car. You’re probably going to visit several dealerships; many people feel more comfortable doing business with a licensed dealer. Try checking out the dealership ads in your local paper for special sales that may be going on. It’s true that doing business with a licensed dealer gives you a bit more assurance due to your rights under the Lemon Laws. But, you shouldn’t rule out a private sale from an individual; some very good deals can be found by purchasing a used vehicle from someone who has properly maintained the vehicle and is just looking to sell it. Check your local newspaper and trade journal for people advertising to sell their cars. If you find a used car you like, consider requesting a vehicle history report for it and find out if the vehicle is salvaged, has been in an accident, or has had odometer changes. Regardless of the route you choose, try to take someone along who’s been through the buying and selling process before. Prices are usually negotiable, so you’ll want someone who knows the ropes to accompany you. And, if your Uncle Billy just happens to be a mechanic, well, he should be your first choice. It’s always wise to take a test drive and a peek under the hood before committing to a purchase, especially if you’re buying a used vehicle, or from a private vehicle seller.
How much money can I spend on a car? This includes the price of the car, the price of making it legal, such as getting it titled and registered, and the cost of insurance coverage. Don’t spend every penny you have saved for the car, and don’t purchase a car you can’t afford to maintain. What kind of car is best suited for my individual needs? Your needs could include anything from how many passengers you expect to carry to how often and how far you’ll be driving the car. For example, you’ll want something that gets good gas mileage if your everyday commute to work or school is a long one. Should I buy a new or used car? Most of us want our first cars to be brand new; however, your budget and other personal needs are going to have the final say as to whether your car is new or used. Once you’ve confidently answered these questions, you can begin thinking of the exact models and makes of cars you’re interested in. Do some research on these vehicles, such as reading up on their safety ratings, as well as the rate of theft for those particular vehicles.
8 November 2010
“doing business with a licensed dealer gives you a bit more assurance due to your rights under the Lemon Laws. But, you shouldn’t rule out a private sale from an individual.”
The Paperwork Yes, the paperwork is so important that it deserves its own section. Whether you’re buying your first car from a dealership or a private seller, once you’ve selected a car you’re going to have some paperwork to complete. It’s usually less stressful to deal with paperwork when you purchase your car from a dealership because dealers are trained to handle it all. However, that doesn’t mean your only role is to sign on the dotted line. When you drive off the lot in your first car, you should understand everything from the warranty to the title. Make sure the dealer reads the paperwork with you, and don’t be embarrassed to ask the important questions. If you’re buying your first car from a private seller, the paperwork is up to you and the seller. The most important part of the transaction is usually the Bill of Sale, which documents the sale of the vehicle. A proper Bill of Sale will include thorough contact information, vehicle information, and the selling price. Many states require Bills of Sale to be officially notarized.
Most individuals sell their vehicles “as is,” meaning you’re agreeing to purchase the vehicle in the condition it’s in. In other words, once you pay for it, it’s yours. If, however, you’re buying from a seller who wants to offer you some sort of guarantee, make sure to get it in writing and notarized. If you’re confused about how to handle paperwork during the buying and selling process between individuals, contact the agency in your area that handles motor vehicle-related transactions.
Bada bing, bada boom! You’ve just bought your first car! If you purchased the car from a private seller, you’ll need to take a few more steps. Take all of your paperwork to your DMV to handle the titling and registration process. However, if you purchased it from a dealership, all of the paperwork has been handled for you, and you’ll probably need to make few, if any, trips to the DMV. You’ll be given a temporary license plate to use until your permanent one arrives. ¶
About Those Vehicle History Reports* *Why you should order one Purchasing a used car is a big decision. All sorts of problems can arise from seemingly nowhere. So how can you be sure you’re putting your money towards the right car? Check the vehicle history report. By using the Vehicle Identification Number (VIN), you can see if the car has been reported to be wrecked or stolen. You can also find out if there was any reported flood damage or if there are any recalls on it. Reviewing vehicle history reports can even reveal odometer fraud. dmv.org searches AutoCheck’s vehicle history database and provides a detailed vehicle history report in seconds. Just enter the vehicle’s VIN number in the search box above.
*How you can order one To order vehicle history reports, all you need is the VIN number (Vehicle Identification Number). Click here for help on locating a car’s VIN. If you don’t have the VIN of the car you want a vehicle history report on, you can always order a DMV.ORG Unlimited Vehicle History Reports Option and run the report later. Where does the information come from? All this information is stored in a database using the VIN number. Vehicle history reports are overviews of a vehicle’s history. VIN numbers hold registration records, which will describe how the car was utilized in the past, such as in a fleet, the police force or as a taxi. A vehicle history report can show you if the vehicle was rebuilt or if the car was salvaged. As a consumer, one of the worst things that can happen to you is for you to discover you’ve wasted thousands of dollars on a vehicle that is full of nothing but trouble. Vehicle history reports are powerful tools that could help you greatly minimize that risk. ¶
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BASIC SKILLS: Those little things you need to know now.
So, you’re not the greatest with money...
10 November 2010
Unfortunately, personal finance has not yet become a required subject in schools or colleges, so you might be fairly clueless about how to manage your money when you’re out in the real world for the first time. If you think that understanding personal finance is way above your head, though, you’re wrong. All it takes to get started on the right path is the willingness to do a little reading - you don’t even need to be particularly good at math. To help you get started, we’ll take a look at eight of the most important things to understand about money if you want to live a comfortable and prosperous life.
1. Learn Self Control If you’re lucky, your parents taught you this skill when you were a kid. If not, keep in mind that the sooner you learn the fine art of delaying gratification, the sooner you’ll find it easy to keep your finances in order. Although you can effortlessly purchase an item on creditthe minute you want it, it’s better to wait until you’ve actually saved up the money. Do you really want to pay interest on a pair of jeans or a box of cereal? If you make a habit of putting all your purchases on credit cards, regardless of whether you can pay your bill in full at the end of the month, you might still be paying for those items in 10 years. If you want to keep your credit cards for the convenience factor or the rewards they offer, make sure to always pay your balance in full when the bill arrives, and don’t carry more cards than you can keep track of.
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2. Take Control of Your Own Financial Future If you don’t learn to manage your own money, other people will find ways to (mis)manage it for you. Some of these people may be illintentioned, like unscrupulous commissionbased financial planners. Others may be well-meaning, but may not know what they’re doing, like Grandma Betty who really wants you to buy a house even though you can only afford a treacherous adjustable-rate mortgage. Instead of relying on others for advice, take charge and read a few basic books on personal finance. Once you’re armed with personal finance knowledge, don’t let anyone catch you off guard - whether it’s a significant other that slowly siphons your bank account or friends who want you to go out and blow tons of money with them every weekend. Understanding how money works is the first step toward making your money work for you.
3. Know Where Your Money Ends Up Once you’ve gone through a few personal finance books, you’ll realize how important it is to make sure your expenses aren’t exceeding your income. The best way to do this is by budgeting. Once you see how your morning java adds up over the course of a month, you’ll realize that making small, manageable changes in your everyday expenses can have just as big of an impact on your financial situation as getting a raise. In addition, keeping your recurring monthly expenses as low as possible will also save you big bucks over time. If you don’t waste your money on a posh apartment now, you might be able to afford a nice condo or a house before you know it.
4. Start an Emergency Fund One of personal finance’s oft-repeated mantras is “pay yourself first”. No matter how much you owe in student loans or credit card debt and no matter how low your salary may seem, it’s wise to find some amount - any amount - of money in your budget to save in an emergency fund every month. Having money in savings to use for emergencies can really keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money
12 November 2010
and treating it as a non-negotiable monthly “expense”, pretty soon you’ll have more than just emergency money saved up: you’ll have retirement money, vacation money and even money for a home down payment. Don’t just sock away this money under your mattress; put it in a high-interest onlinesavings account, a certificate of deposit or a money market account. Otherwise, inflation will erode the value of your savings.
5. Start Saving for your Retirement Right Now Just as you headed off to kindergarten with your parents’ hope to prepare you for success in a world that seemed eons away, you need to prepare for your retirement well in advance. Because of the way compound interest works, the sooner you start saving, the less principal you’ll have to invest to end up with the amount you need to retire, and the sooner you’ll be able to call working an “option” rather than a “necessity”. Company-sponsored retirement plans are a particularly great choice because you get to put in pretax dollars and the contribution limits tend to be high (much more than you can contribute to an individual retirement plan). Also, companies will often match part of your contribution, which is like getting free money.
6. Get a Grip on Taxes It’s important to understand how income taxes work even before you get your first paycheck. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations. Fortunately, there are plenty of online calculators that have taken the dirty work out of determining your own payroll taxes, such asPaycheck City. These calculators will show you your gross pay, how much goes to taxes and how much you’ll be left with, which is also known as net, or take-home pay. For example, $35,000 a year in California will leave you with about $27,600 after taxes in 2008, or about $2,300 a month. By the same token, if you’re considering leaving one job for another in search of a salary increase, you’ll need to understand how your marginal tax rate will affect your raise and that a salary increase from $35,000 a year to $41,000 a year won’t give you an extra $6,000, or $500
per month - it will only give you an extra $4,200, or $350 per month (again, the amount will vary depending on your state of residence). Also, you’ll be better off in the long run if you learn to prepare your annual tax return yourself, as there is plenty of bad tax advice and misinformation floating around out there.
7. Guard Your Health “Due to the way compound interest works, the sooner you start saving, the less principal you’ll have to invest to end up with the amount you need to retire comfortably.”
If meeting monthly health insurance premiums seems impossible, what will you do if you have to go to the emergency room, where a single visit for a minor injury like a broken bone can cost thousands of dollars? If you’re uninsured, don’t wait another day to apply for health insurance; it’s easier than you think to wind up in a car accident or trip down the stairs. You can save money by getting quotes from differentinsurance providers to find the lowest rates. Also, by taking daily steps now to keep yourself healthy, like eating fruits and vegetables, maintaining a healthy weight, exercising, not smoking, not consuming alcohol in excess, and even driving defensively, you’ll thank yourself down the road when you aren’t paying exorbitant medical bills.
8. Guard Your Wealth If you want to make sure that all of your hard-earned money doesn’t vanish, you’ll need to take steps to protect it. If you rent, get renter’s insurance to protect the contents of your place from events like burglary or fire. Disability insurance protects your greatest asset - the ability to earn an income - by providing you with a steady income if you ever become unable to work for an extended period of time due to illness or injury. If you want help managing your money, find a fee-only financial planner to provide unbiased advice that’s in your best interest, rather than a commission-based financial advisor, who earns money when you sign up with the investments his or her company backs. You’ll also want to protect your money from taxes, which is easy to do with a retirement account, and inflation, which you can do by making sure that all of your money is earning interest through vehicles like high-interest savings accounts, money market funds, CDs, stocks, bonds and mutual funds
A Financial Basis for Life Remember, you don’t need any fancy degrees or special background to become an expert at managing your finances. If you use these eight financial rules for your life, you can be as personally prosperous as the guy with the MBA. ¶
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FEATURE ARTICLE:
Protecting your assets is an important step in creating a solid personal financial plan. The right insurance policies will go a long way toward helping you safeguard your earning power and your possessions. In this article, we’ll show you five policies that you shouldn’t do without.
14 November 2010
Fear of the future sells insurance. Because we can’t predict the future, we want to be ready to cover our financial needs if something bad happens. Insurance companies understand this fear and offer a variety of insurance policies designed to protect us from a host of calamities that range from disability to disease and everything in between. While none of us wants anything bad to happen, many of the potential catastrophes that can happen in our lives are not worth insuring against. W0;e’ll take you through 15 policies that you’re probably better off without.
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BUY
Long-Term Disability Insurance The prospect of long-term disability is so frightening that some people simply choose to ignore it. While we all hope that, “Nothing will happen to me,� relying on hope to protect your future earning power is simply not a good idea. Instead, choose a disability policy that provides enough coverage to enable you to continue your current lifestyle even if you can no longer continue working.
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AV O I D
Private Mortgage Insurance The infamous private mortgage insurance (PMI) is well known to homeowners because it increases the amount of their monthlymortgage payments. PMI is an insurance policy that protects the lender against loss when lending to a higher-risk borrower. The borrower pays for this insurance but derives no benefit. Fortunately, there are several ways to avoid paying for this unnecessary policy. PMI is required if you purchase a home with a down payment of less than 20% of the home’s
value. The small down payment is viewed as putting you at risk of defaulting on the loan. Put down at least 20% and the PMI requirement goes away. Alternatively, you can put down 10% and take out two loans, one for 80% of the sale price of the property and one for 10%, although interests rates can prevent the economics of this maneuver from working out in the homeowner’s favor
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BUY
Life Insurance Life insurance protects the people that are financially dependent on you. If your parents, spouse, children or other loved ones would face financial hardship if you died, life insurance should be high on your list of required insurance policies. Think about how much you earn each year (and the number of years you plan to remain employed) and purchase a policy that will replace that income in the event of your untimely demise. Factor in the cost of burial too, as the unexpected cost is a burden for many families.
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AV O I D
Extended Warranties Extended warranties are available on a host of appliances and electronics. From a consumer’s perspective, they are rarely used, particularly on small items such as DVD players and radios. If you purchase a reputable, brand-name product, you can be fairly certain it will work as advertised and that the extended warranty is statistically likely to be unnecessary. If you spend $5,000 on a giant, flat-screen television, the policy is still unlikely to pay off, but might make you feel better. For everything else, forget it.
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BUY
Health Insurance The soaring cost of medical care is reason enough to make health insurance a necessity. Even a simple visit to the family doctor can result in a hefty bill. More serious injuries that result in a hospital stay can generate a bill that tops the price of a one-week stay at a luxuryresort. Injuries that require surgery can quickly rack up five-figure costs. Although the ever-increasing cost of health insurance is a financial burden for just about everyone, the potential cost of not having coverage is much higher.
20 November 2010
AV O I D
Automobile Collision Insurance Collision insurance is designed to cover the cost of repairs to your vehicle if you are involved in an accident. If you have a loan out on the car, the loan issuer is likely to require that you have collision insurance. If your car is paid off, collision is optional; therefore, if you have enough money in the bank to cover the cost of a new car, collision insurance may be an unnecessary expense. This is particularly true if you are driving an old car, because cars depreciate so quickly that many vehicles are worth only a fraction of their purchase price by the time the loan is paid in full.
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BUY
Home Insurance Replacing your home is an expensive proposition. Having the right home insurance can make the process less difficult. When shopping for a policy, look for one that covers replacement of the structure and contents in addition to the cost of living somewhere else while your home is being repaired. Keep in mind that the cost of rebuilding doesn’t need to include the cost of the land, since you already own it. Depending on the age of your
22 November 2010
home and the amenities that it contains, the cost to replace it could be more or less than the price you paid for it. To get an accurate estimate, find out how much local builders charge per square foot and multiply that number by the amount of space you will need to replace. Don’t forget to factor in the cost of upgrades and special features. Also, be sure the policy provides adequate coverage for the cost of any liability for injuries that occur on your property.
AV O I D
Rental Car Insurance Most auto insurance policies offer additional coverage for the cost of car rentals, touting it as a useful feature if your car is ever involved in an accident and needs to spend some time in the repair shop. This may sound like a good idea, but in reality, most people rarely rent a car, and when they do, the cost is relatively low and hardly worth insuring against. Although rental car insurance is relatively inexpensive, amortized over the course of a lifetime you are still likely to spend far more than you will benefit.
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BUY
Automobile Insurance Some level of automobile liability insurance is required by law in most localities. Even if you are not required to have it and you are driving an old junker that has been paid off for years, automobile liability insurance is something you shouldn’t skip. If you are involved in an accident and someone is injured or their property is damaged, you could be subject to a lawsuit that could cost you everything you own. Accidents happen quickly and the results are often tragic - having no automobile
24 November 2010
liability insurance or purchasing only the minimum required coverage saves you only a tiny amount of money and puts everything else that you own at risk. Âś Bonus Tip For Business Owners: In addition to the policies listed above, business owners need business insurance. Liability coverage in a litigation-happy society could be the difference between a long, prosperous endeavor and a trip to bankruptcy court.
AV O I D
Car Rental Damage Insurance Many auto insurance policies already cover rentals, so there’s no need to pay for this twice. Check your policy before you pay. Depending on where you rent the vehicle, you may also be able to pay a small fee for insurance on your rental when you pick it up at the rental center. If this fee is less than what you’d pay for a year in your old policy, choose the fee over the policy.
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When Choosing Insurance
Shop Carefully
There are so many policies to chose from, and they all cost money. While a certain amount of insurance coverage is necessary and prudent, you need to choose carefully. In general, broad policies that offer coverage for a multitude of potential events are a better choice than limited-scope policies that focus on specific diseases or potential incidents. Before you buy any policy, read it carefully to make sure that you understand the terms, coverage and costs. Don’t sign on the dotted line until you are comfortable with the coverage and are sure that you need it.
Insurance policies come in a wide variety of shapes and sizes and boast many different features, benefits and prices. Shop carefully, read the policies and talk to the salesperson to be certain that you understand the coverage and the cost. Make sure the policies that you purchase are adequate for your needs, and don’t sign on the dotted line until you are happy with the purchase.
26 November 2010
Other polieies to avoid:
Flight Insurance Flight insurance coverage is completely unnecessary. Despite media portrayal, airline accidents are relatively rare, and your life insurance policy should already provide coverage in the event of a catastrophe.
Water Line Coverage
Credit Card Loss Insurance Federal law limits your liability if your credit card is stolen. Your out-of-pocket costs are limited to $50 per card and not a penny more. In fact, many credit card companies don’t even try to collect the $50.
Water companies have made an aggressive push to sell policies that cover the repair of the water line that runs from the street to your house. The odds are in your favor that you will never use this coverage, particularly if you live in a newer home. If you live an average suburban neighborhood and you do need to repair the water line, the distance to the street is short, the likelihood of a problem is low and repair costs are a few thousand dollars or less. The same goes for policies offered by other utility companies.
Mortgage Life Insurance
Life Insurance for Children
This coverage makes minimum payments on your bills if you are out of work, which sounds like an attractive proposition. A better plan is to save your money and build up an emergency fund instead. You won’t have to cover the cost of the insurance policy and, if you are never out of work, you won’t spend any money at all.
Life insurance is designed to provide a safety net for your heirs/dependents. Because children don’t have heirs to worry about and, statistically speaking, most kids will grow up safe and healthy, most parents should not purchase life insurance for their kids. Instead, use the money that you would have spent on life insurance to fund an education plan or an individual retirement account (IRA).
Flood Insurance Unless you live in a flood plain or an area with a history of water problems, don’t even bother buying flood insurance. If none of the homes in the area has ever been flooded, yours is unlikely to be the first.
Credit Card Insurance Purchasing coverage to pay your credit card bill in the event you cannot pay it is a waste of money. A far better idea is to avoid running up your credit cards in the first place, so you won’t need to worry about the bills. Not only do you not save on the insurance premiums, you’ll also save the interest on your debt.
Mortgage life insurance pays off your house in the event of your death. Rather than add another policy - and another bill - to your list of insurance plans, it makes more sense to get a term-life policy instead. A good life insurance policy will provide enough money to pay off the mortgage and to cover other expenses as well. After all, the mortgage isn’t the only bill your survivors will need to pay.
Unemployment Insurance
Disease Insurance Policies are available to cover cancer, heart disease and other maladies. Instead of trying to identify every possible disease that you may encounter, get a good medical coverage policy instead. This way, your medical bills will be covered regardless of the problem you face.
Accidental-Death Insurance Unless you are extraordinarily accident prone, an accident is unlikely. Major catastrophes such as car wrecks and fires are covered under other policies, as is any harm that comes to you while at work. Accidental-death policies are often fraught with stipulations that make them difficult to collect on, so skip the hassles and get life insurance instead. ¶
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