But how does Ladder work? Is it safe? And most importantly, should you use it? Our Ladder life insurance review will answer all of these questions and more.

Ladder Review Score

Name: Ladder

Description: is a term life insurance platform focused on providing you low-cost, flexible life insurance.

Overall

4.8

• Pricing
• User Experience
• Ease Of Use
• Customer Service

Summary

Ladder is a term life insurance platform focused on providing you low-cost, flexible life insurance.

Pros

• Quick and easy to apply for coverage
• Low-cost coverage
• Lots of flexibility in coverage amount
• No medical exams for up to $3M in coverage, just a few health questions
• Useful educational resources

Cons

• Can’t add policy riders
• Not everyone can get insurance via Ladder
• Inability to bundle life insurance with home or auto

• Get A Free Insurance Quote

What Is Ladder?

Ladder is a life insurance platform that focuses on term life insurance. The company is relatively new, launching their product in 2017, but it’s already available in all 50 US states. This means that wherever you are geographically, you should be able to apply to get coverage through Ladder.

Ladder does have a few restrictions on who can get coverage, such as limiting possible clients to those between the ages of 20 and 60. With these restrictions in place, it’s important to understand that Ladder may not be a possibility for you, depending on your age.

The main idea of Ladder, however, comes from their flexibility. As your needs change over time, you can adjust your coverage accordingly by “laddering” up and down, hence the name “Ladder.”

How Does Ladder Work?

Based on basic information about your habits, history of illness, and current financial situation, Ladder uses their online application to determine your life insurance eligibility and costs. This all takes place entirely through their website, which also means you can avoid a possible trip to the doctor’s office.

With this data, Ladder can give you a life insurance quote in just a few minutes! But, that’s not even the full extent of what makes Ladder unique.

What Makes Ladder Unique?

Ladder is unique in two main ways: first, they operate completely online. This means you don’t have to interact with human insurance agents to purchase coverage and instead they rely on answers to application questions and algorithms to determine your life insurance options. 

Second, Ladder lets you easily decrease or apply to increase your coverage as your needs change. Say you have a second or third child. Suddenly, your life insurance policy needs a greater death benefit (the amount paid out if you die during the term) to account for the additional person your income would have to support. If that happens, you can simply apply to increase your coverage and pay a slightly higher monthly premium (“laddering up”).

Let’s instead now say you bought your original life insurance policy ten years ago when your kids were pre-teens. Now, they’ve grown up and are off to college, the workforce, etc. and are financially independent. You probably don’t need as much coverage as you did when you were supporting them, and Ladder makes it easy to decrease (“ladder down”) your coverage.

If this feature doesn’t seem like that big a deal, understand that you would typically have to get an entirely separate life insurance policy to change your coverage amount. This not only takes a lot of time and effort on your part, but it also can cost a lot of money in fees.

Pros & Cons Of Ladder

Ladder Life Insurance Pros

• Quick and easy to apply for coverage
• Low-cost coverage
• Lots of flexibility in coverage amount
• No medical exams for up to $3M in coverage, just a few health questions
• Useful educational resources

Ladder Life Insurance Cons

• Can’t add policy riders
• Not everyone can get insurance via Ladder
• Inability to bundle life insurance with home or auto

How Much Does Ladder Cost?

Your specific life insurance quote will vary a lot, depending on your situation. However, if you compare Ladder to other term life insurance companies, Ladder has some of the lowest premiums available.

As we’ve discussed already, part of this is because they primarily operate as an online company. This lets Ladder save money on overhead costs like physical locations, which in turn passes on lower prices to you as a consumer. The other reason Ladder can offer lower premiums than other companies is because of their selectivity, but more on that later.

Is Ladder Safe?

The short answer to this is yes, Ladder is safe. They encrypt all of your information from the application, and important details like your SSN are kept entirely confidential. Any shared medical information is done so only for verification or auditing purposes. It is never sold to a third party.

How Does Ladder Make Money?

Ladder makes its money the way most insurance companies do: selling you insurance. They don’t charge hidden fees, and their employees are salary-based rather than commission-based. This means Ladder’s staff aren’t given a financial reason to sell you a specific product or service, so you can rest assured that their goal is to help you get a good deal.

How Is Ladder Customer Service?

Ladder has incredibly useful customer service. You can call between 8 am and 5 pm PST Monday through Friday, use their live chat feature, or submit a help ticket via a brief form.

The ability to call their customer service team makes it much easier to resolve any issues that may arise, and all in all, it’s a useful resource.

What I Wish Was Different About Ladder

I have very few criticisms of Ladder. But, the ones I do have are both related to the same issue: lack of accessibility.

If you are over the age of 60 or need to add insurance riders, Ladder won’t be able to meet these needs. While there is a benefit to the overall cost, since this selectivity is a big part of how Ladder can offer those it does cover such low prices, it’s still a shame more people can’t use it.

How Does Ladder Fare Against Competitors?

Ladder really doesn’t have any competition when it comes to providing adjustable term life insurance. As for insurance more broadly, Ladder does lack the ability to bundle life insurance with home or auto. However, this is made up for in the lower premiums Ladder offers for life insurance.

If you want to shop around for different types of insurance on your own, check out the comparison tool Policygenius.

How To Get Started On Ladder

When you first go to Ladder’s homepage, you’re greeted with a helpful “Get Started” button. This takes you to the start of their application, which lets you describe yourself in greater detail and gives you a relevant life insurance quote.

You then have to fill out relevant biographical information like age, sex, height, weight, tobacco usage, and history of family illness. This is all standard industry information and helps determine how much risk you might have.

Next, you start giving information about your financial situation. Questions like “what is your annual household income?” and “How many children do you have?” are important because they can determine how much coverage you should purchase.

After this point, you can choose the amount and duration of your coverage. The amounts range from $100,000 to $8 million. The durations range from 10 to 30 years, increasing in 5-year increments.

One nice thing Ladder does is provide an average coverage amount and length for people in similar financial situations. This is an incredibly useful baseline to use if you have no idea what to select in terms of coverage.

Now, you get an estimated price per month. For this Ladder life insurance review, I used similar information to the average American. With a household income of $52,000, and a $200,000 mortgage, 20 years of coverage for $500,000 cost around $28/month for a 30 year old male in good health.

Getting A Quote

After receiving a rough estimate, you must answer a few more questions to determine whether you can apply immediately.

First, Ladder asks if you plan to do any of the following in the near future:

• Skydiving
• Scuba diving
• Racing
• Mountain climbing
• Hang gliding
• Ultralight flying
• Other “Extreme Activities” (bungee jumping, rodeoing, etc.)

These are all high-risk activities that can impact your likelihood of death, and therefore your coverage.

Then, Ladder asks for information about any international or flying plans you may have in the next two years.

Finally, you have to answer a few more questions about drug use, criminal activity, rapid change of weight, medical history, and any prescription medication recently used. After that, you finished. Congratulations!

It’s worth noting that this whole process took me around 5 minutes to complete. There are no medical exams for up to $3M in coverage. If you’re applying for more than $3M, you may need to use a free saliva kit sent by Ladder to verify certain medical information.

Should You Use Ladder?

Although Ladder has some limitations in not allowing riders or people of certain ages, for most people, Ladder is a fantastic choice! 

Ladder offers low prices, a fast and easy to use online application, and a helpful customer service team to deal with any issues along the way. Combine this with the flexible laddering system and useful educational resources to learn more about life insurance, and you’ve got a phenomenal product.

That said, not everyone needs life insurance, but if you’re looking to get term life insurance, you should absolutely check out Ladder.

You might also be interested in reading our full reviews of a few of Ladder’s competitors, including Bestow and Haven Life.

FAQs

Lucas Woodley

Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.

The post Ladder Life Insurance Review appeared first on Finance Plan Today.

What Is Sproutt?

Sproutt is a one-stop-shop for comparing and buying life insurance. Using its online questionnaire, Sproutt can quickly give you a quote on a life insurance policy.

Specifically geared towards people who are young and healthy, Sproutt is probably best if you’re in your 20s or 30s (maybe early 40s) and live a relatively active lifestyle. But, despite this emphasis on fitness and health, Sproutt still lets you get insurance from the comfort of your own home.

However, Sproutt is more than just an online mall for life insurance. Their site’s tools offer a ton to differentiate them from their competition. If you’re interested in finding out how healthy you really are, you should check out Sproutt’s QL Index.

How Does Sproutt Work?

Sproutt works as a “middleman” of sorts between you and a life insurance company. By partnering with several companies, including AIG Insurance, Principal, and North American, Sproutt can give you impartial advice on the best rates.

Since they’re partnered with multiple companies, you may find Sproutt very useful as you shop around for life insurance policies. With all the different rates in front of you, comparing life insurance is rapidly becoming easier than ever.

So, how does Sproutt determine which policy is the best fit for you? The short answer is with technology and computer algorithms.

Through a series of questions, Sproutt makes sure it matches insurance providers to healthier and less at-risk people. Since it costs life insurance companies every time they have to pay out on a policy, lower risk clients mean companies are sometimes willing to offer lower rates.

This effort to provide lower costs to healthy individuals is part of Sproutt’s goal. They place a lot of emphasis on promoting healthy lifestyles. So, by helping people save money if they are fit, Sproutt creates a clever way to use savings to incentivize health.

After you establish your level of health and your overall lifestyle, if Sproutt accepts you as a possible client, you’ll see your different policy options alongside recommendations for how to increase your healthy habits.

It’s important to note that Sproutt does not automatically accept people. There are high-risk individuals who get turned down in an effort by Sproutt to maintain their relationship with insurance companies.

Remember: Sproutt’s benefit to those companies is the boost in low-risk clients they provide. 

If massive amounts of high-risk people suddenly all get insurance through the Sproutt, life insurance companies would likely catch on fast and raise rates, ruining the low prices for everyone.

What Makes Sproutt Unique?

We’ve talked a lot about Sproutt’s focus on health, now let’s discuss how exactly they do so.

 Before we dive deep into the main feature, it’s worth mentioning that Sproutt partners with some life insurance companies that offer coverage without a medical check. This can remove yet another hurdle in the form of foregone doctor’s visits, making the process of getting life insurance even easier.

Now, it’s finally time to talk about Sproutt’s most unique feature: the Quality of Life (QL) Index. This handy test takes around 10 minutes to complete and gives you feedback on your current state of health.

Not only does this feedback come with tips on how to improve, but it also helps inform your life insurance offers. By improving your health, you’ll score better on the QL Index, which helps you get lower life insurance rates.

So, if you’re looking for a reason to go for that extra run, knowing that you’ll save money as a result can be a powerful motivator. 

Pros & Cons Of Sproutt

Sproutt Pros

• Easy to use website
• Completely free
• Useful health/lifestyle tools to focus on health
• Low costs for those who qualify
• Customer support via phone
• Offers no-medical insurance options

Sproutt Cons

• Not suitable for all ages, lifestyles, and levels of health
• Somewhat restricted options for coverage amount and providers

How Much Does Sproutt Cost?

All of Sproutt’s tools and services are entirely free. It’s that simple. But, this begs the question, “How do they make money if it’s all free? Is there something shady going on?” 

Is Sproutt Safe?

Before you get too worried about Sproutt selling your private information for money, know that Sproutt has no complaints on file with the Better Business Bureau (BBB). 

The BBB is an agency that rates companies based on trustworthiness, and Sproutt currently has an A- rating with zero complaints. This means it’s unlikely that you’ll get in trouble using Sproutt.

How Does Sproutt Make Money?

So, with shady backroom business deals out of the question, how does Sproutt make money? The answer is, simply put, commissions.

Sproutt receives a commission any time you purchase an insurance policy through the site. This is how they’re able to make money.

This system is also mutually beneficial: companies want more low-risk clients. So, they’re willing to pay Sproutt to bring those clients to them. 

Since Sproutt partners with several companies, it reduces the odds that they are going out of their way to recommend one company over another unless it’s the best objective deal for you. It’s a win-win-win!

How Is Sproutt’s Customer Service?

Sproutt’s customer support is staffed by a team of licensed professionals. You can reach them via phone from 9 am to 7 pm ET, Monday through Friday. This is great to see, as customer support via phone often makes it much easier to resolve complex issues.

The support team is also very flexible and useful. You can speak with them about issues navigating their site, choosing rates, or any other questions you may have.

What I Wish Was Different About Sproutt

I have very few criticisms of Sproutt. But, the ones I do have are both related to the same issue: lack of accessibility.

If you are over the age of 40 – 45, have less-than-stellar health, or regularly engage in risky activities like skydiving, Sproutt likely won’t give the best deal for you. This is even assuming you don’t get rejected outright.

While there is a benefit to the overall cost, since this selectivity is a big part of how Sproutt can offer those it does cover such low prices, it’s still a shame more people can’t take advantage of the service.

How Does Sproutt Fare Against Competitors?

Sproutt’s main competitor when it comes to price comparisons for insurance is Policygenius. However, unlike Sprout, which focuses specifically on life insurance, Policygenius offers coverage for life, home, auto, renters insurance, etc.

On the one hand, this means Policygenius has the potential to save you much more time. If you’re shopping for multiple types of insurance or are interested in bundling different kinds together, Policygenius may have the edge over Sproutt.

But, if you’re looking specifically for life insurance and you’re a young and healthy person, Sproutt will probably find you better rates than Policygenius.

Similarly, Sprout’s coverage amounts are more modest than Policygenius’, which might make more sense for a younger person.

How To Get Started On Sproutt

When you first go to Sproutt’s homepage, you’re greeted with a helpful “Get Started” button. This takes you to the start of their questionnaire, which lets you describe yourself in greater detail and gives you a relevant life insurance quote.

You then have to fill out relevant biographical information like age, sex, height, weight, tobacco usage, and history of family illness. This is all standard industry information and helps determine how much risk you might have.

Next, you start giving information about your financial situation. Questions like “what is your annual household income?” and “How many children do you have?” are important because they can determine how much coverage you should purchase.

After filling out a bit more information like your willingness to do a medical exam, you’ll see your coverage recommendations.

If you’d like to adjust the coverage amount or duration, you can do so easily on Sproutt’s site. As you adjust your coverage, you can watch your monthly cost change accordingly. This is a great way to customize your coverage to a plan that suits you best.

Should You Use Sproutt

Ultimately, if you’re someone in Sproutt’s target demographic, you’ll probably be hard-pressed to find a better place to compare and buy life insurance. For someone younger than 40 – 45 and in good health, Sproutt can be a great way to get affordable health insurance.

Although not everyone will be accepted or able to use it, Sproutt’s user-friendly website and colorful questionnaire make buying life insurance simple. If you’re in the market for life insurance, you should absolutely check out Sproutt.

Lucas Woodley

Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.

The post Sproutt Review appeared first on Finance Plan Today.

Policygenius Review

Name: Policygenius

Description: is a one-stop insurance shop that lets you compare rates and policies across companies to find the best deal for you. As an insurance comparison tool, Policygenius is currently one of the best and easiest to use on the market.

Overall

4.8

• Pricing
• User Experience
• Ease Of Use
• Customer Service

Summary

Policygenius is a one-stop insurance shop that lets you compare rates and policies across companies to find the best deal for you. As an insurance comparison tool, Policygenius is currently one of the best and easiest to use on the market.

Pros

• Completely free
• Simple and easy policy comparison
• Gives several options for coverage
• Useful Coverage Amount Calculator
• Educational resources
• Brighthouse SimplySelect
• Responsive customer support

Cons

• Does not give offers from every single insurance company

• Get Your Free Quote

How Does Policygenius Work?

Policygenius lets you easily compare insurance rates based on some basic information. Because they’re a third-party company, you can see offers from several different companies, all in one place.

Policygenius does not offer any insurance themselves. Instead, they are a useful tool to help you shop around for the best rate.

By filling out a bit of information like your age and gender, combined with industry-standard info about tobacco usage for life insurance or current deductible and coverage for home and auto, Policygenius gives you a list of different quotes from insurance companies.

This list of quotes makes it easy for you to see what options exist for your desired amount and type of coverage.

If you find an offer you like, Policygenius also lets you apply for insurance from their website. That’s right—you can both find and apply for coverage in one go!

How To Get Started On Policygenius

After you go to Policygenius’ site, you’ll see the above dashboard of different insurance types.

Just choose which type of insurance you’re looking for and fill out the brief questionnaire. They’ll ask for very basic demographic information as well as info needed to help determine premiums.

Each form only took me between two to three minutes.

Once you’re done, Policygenius will give you an offer, usually in less than 24 hours. Depending on the type of insurance you want, this part can happen instantly!

After exploring their entire website, I can say it’s super simple to navigate. Policygenius’ user interface is clean, informative, and straightforward. So, you shouldn’t have any problems finding your way around.

Policygenius Pros And Cons

Pros

• Completely free
• Simple and easy policy comparison
• Gives several options for coverage
• Useful Coverage Amount Calculator
• Educational resources
• Brighthouse SimplySelect
• Responsive customer support

Cons

• Does not give offers from every single insurance company

Life Insurance Comparisons

Policygenius focuses on term life insurance, where you pay for monthly coverage through the policy’s duration. While they also have a few permanent options, these are often much more expensive than term policies.

As you go through Policygenius’ life insurance form, you’ll have to answer questions about the following: 

• Are you buying life insurance for the first time or looking to replace your existing policy?
• How soon do you want coverage (months)?
• Gender
• Age
• Zipcode
• Citizenship and marriage status
• Height / Weight
• Tobacco Use
• History of risk factors (alcohol abuse, cancer, depression, etc.)
• Ideal coverage amount
• Policy length

All of these factors can affect your offers’ premiums. Since life insurance is much more straightforward (you receive a flat amount if you die), your best option is usually the cheapest.

After filling out their form, you’ll start seeing insurance offers instantly.

In most cases, you’ll also have to verify the provided information with an in-person medical exam. But, this isn’t always the case. Let’s talk about one way to avoid those in-person exams, SimplySelect.

Brighthouse SimplySelect 

Brighthouse SimplySelect is one of Policygenius’ newest insurance partnerships. What makes Brighthouse’s coverage so unique is that customers can complete the medical requirement over the phone.

This may not seem like a huge deal. But compared to most other insurance companies without in-person medical checks, Brighthouse SimplySelect offers much lower rates.

There are a few caveats, though. Firstly, Brighthouse SimplySelect only offers coverage of up to $2,000,000. While this should be more than enough for most Americans, if your circumstance requires more coverage, you’ll have to look elsewhere.

Brighthouse SimplySelect is also an exclusive partner with Policygenius. So, you’ll only be able to get their life insurance plan if you go through Policygenius. Depending on your situation, this may be reason enough in itself to give Policygenius a try.

There are also restrictions on where and to whom SimplySelect is available. For example, if you’re over 50 years old, you’ll be unable to take advantage of this feature. Also, it’s not available in every state (including New York and California), so check if SimplySelect is currently in your state.

Home Insurance Comparisons

Policygenius lets you either buy homeowners insurance on its own or bundle it with auto insurance. While bundling is often cheaper overall, you may have specific reasons not to. We’ll be going through standalone homeowners insurance here, though the process is similar for bundling.

As you go through Policygenius’ homeowners insurance form, you’ll have to answer questions about the following: 

• Your current annual costs (if you have homeowners insurance already)
• Home address and primary residential status
• Duration lived (more than three years)
• Whether there’ve been renovations in the last decade
• Heating system
• Other risk factors (pets, basement, pool, trampoline)
• Additional coverage needed (flood, earthquake, etc.)
• Protective devices currently installed (smoke detectors, fire extinguishers, etc.)

All of these factors can affect your offers’ premiums. Since homeowners insurance can be complicated, Policygenius also asks you to upload scanned copies of your current insurance policy.

After filling out their form and uploading the necessary documents, you’ll start seeing insurance offers in about 24 hours. You also get a recommendation for whether or not you should consider switching policies.

Renters Insurance Comparisons

Renters insurance is one of the most important things you can buy if you’re living in a rental home. It can help save you in the event of a lawsuit or accidental damages.

Unfortunately, after putting in my name, age, and current address, Policygenius determined they did not have any insurance companies that offered coverage in my area.

Get your free renters insurance quote now.

How Much Does Policygenius Cost?

Policygenius is itself, entirely free. The educational resources, coverage calculator, quote comparison, it’s all free. Which then begs the question, “How do they make money if it’s all free?”

How Does Policygenius Earn Its Money?

Policygenius is actually amazingly transparent about this. They explain how they make money in the FAQ section, but we’ll provide a basic overview.

Simply put, Policygenius earns money through commissions. When you purchase an insurance policy through the site, they receive a commission from the insurance agency.

Though the specifics of how much they earn depends on several things, Policygenius encourages customers to contact their support staff if you’re interested in how much they make on a given product.

How Much Do Policies Cost On Policygenius?

Even though Policygenius earns commissions whenever a customer signs up for life insurance, it doesn’t mean you actually pay any more for coverage. This is partly because of how the law requires insurance brokers like Policygenius to report prices.

Every state has what’s called a “department of insurance.” These bodies make sure insurance prices stay constant across insurance brokers to avoid shady practices by brokerages.

As such, whether you buy insurance through Policygenius or another third-party comparison site, the prices are the same. Note that this is not the same as identical prices across insurance companies, which usually offer different rates for people of different profiles.

I’ve listed the insurance companies Policygenius recommended me, alongside their costs, for life and homeowners insurance below.

Life Insurance

As a 19-year old in relatively good health with no history of tobacco use or other major risk factors, my rates will likely be much cheaper than what you’ll find. With that said, Policgenius showed me the following life insurance options for $500,000 of coverage over 20 years:

• Protective – $18.75/month
• BannerLife – $19.12/month
• AIG – $19.23/month
• TransAmerica – $19.35/month
• PacificLife – $19.38/month
• Principal – $19.52/month (no medical exam required)
• Mutual of Omaha – $23.87/month

Policygenius also showed options for a permanent policy, with rates starting at $303.00/month.

Homeowners Insurance

After reviewing my geographical information and my home’s current coverage, Policygenius showed me the following homeowners insurance options:

Note: This was for $180,000 of dwelling coverage, $55,000 of personal property coverage, and $250,000 of bodily harm/property damage coverage.

• Hippo – $84/month ($1008 annually)
• State Farm – $87/month ($1044 annually)
• Geico $88/month ($1056 annually)

Who Does Policygenius Show Rates From?

Your offers depend on where you are, as most insurance companies have better or worse coverage in different parts of the US.

Luckily, Policygenius will always order your offers from cheapest to most expensive, so you’ll always see some of the best offers first.

As we said earlier, however, Policygenius has not yet partnered with every single insurance company. There’s a limited number of possible companies you’ll get rates from through Policygenius.

For life insurance policies, Policygenius has several partners. They’ve currently written reviews of some of their most well-known life insurance partners, including: 

• AIG
• Banner Life
• Lincoln Financial
• Mutual of Omaha
• Pacific Life
• Protective
• Prudential
• SBLI

For homeowners insurance policies, Policygenius is currently partnered with: 

• Allstate
• Amica
• Chubb
• Farmers
• Geico
• Hippo
• Progressive
• State Farm

For renters insurance policies, Policygenius has several partners. They’ve currently written reviews of some of the most popular renters insurance companies, including: 

• Allstate
• Geico
• Lemonade
• Liberty Mutual
• Progressive
• Stillwater
• State Farm

This isn’t a complete list of all the insurance companies out there. But, Policygenius has many of the biggest and highest-rated ones, so you should be able to find some reasonable offers.

Does Policygenius Work In My Location?

While Policygenius has the proper licenses to operate everywhere nationwide, this doesn’t necessarily mean there will be insurance companies that cover every location.

The amount of coverage available depends partially on the type of insurance you’re looking at and partly on where you are.

On the one hand, for common insurance types like life and auto, it’s a pretty safe bet you can find coverage in your area.

But for slightly less common insurance types, the results may vary. For example, I live in a suburb in North Carolina, where rental properties are less common. Because of this, it’s not surprising that Policygenius did not have renters insurance available for my area.

If you’re curious about whether you can get a specific type of insurance, it’s easy to go on Policygenius’ website and fill out their brief questionnaire.

Is Policygenius Safe?

The short answer is, yes, Policygenius is safe. They only partner with insurance companies that are well-rated by insurance raters. Their personal requirements for any potential partner is at least an A- rating.

This means any insurance company that you see through Policygenius has already been vetted by both Policygenius and financial raters like Standard and Poor’s.

Policygenius Customer Support

Policygenius’ customer support is staffed by a team of licensed professionals. You can reach them via email, phone, or live chat from 9 am to 9 pm ET, seven days a week.

They’re also very flexible and useful. You can speak with them about issues navigating their site, choosing rates, or any other questions you may have. 

Should You Use Policygenius?

Shopping around for different quotes is always a good way to save money. As an insurance comparison tool, Policygenius is currently one of the best and easiest to use on the market.

They’re simple to use, offer a wide range of insurance types, and best of all, they’re 100% free.

However, it’s important to use Policygenius wisely. Since they don’t show quotes from all insurance companies. Neither does any other insurance broker. Just recognize that you may still want to shop around a bit more to find the best quote.

But overall, Policygenius is a fantastic place to start your search and learn more about different insurance types. Their stellar customer support can help walk you through the process of buying insurance without the fancy jargon.

If you’re looking for insurance, you should seriously consider Policygenius.

Lucas Woodley

Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.

The post Policygenius Review appeared first on Finance Plan Today.

LifeLock presents various tools to help you both deter and recover against identity theft. Overall, LifeLock is a great option for those considering identity theft protection options, but it’s important to note the firm’s rocky history. 

LifeLock Review

Name: LifeLock

Description: provides robust tools to help staunch identify theft and to get you back on your feet after an attack. They offer incredible protection, ranging from identity theft insurance and alerts to credit monitoring and 24/7 customer service. However, they haven't had a clean history, paying $100M in fines for deceptive practices, and their services aren't cheap. 

Overall

4.5

• Price
• Protection
• Customer Service
• Value

LifeLock Review

Identity theft is scary nowadays. LifeLock provides robust tools to help staunch identify theft and to get you back on your feet after an attack. They offer incredible protection, ranging from identity theft insurance and alerts to credit monitoring and 24/7 customer service. However, they haven’t had a clean history, paying $100M in fines for deceptive practices, and their services aren’t cheap. 

Pros

• 60-day money-back guarantee
• $25k to $1M in identity theft insurance
• Wide variety of monitoring and alerts
• 24/7 customer service

Cons

• Poor security history
• Insurance doesn’t cover all types of identity theft

• Free Trial

What Is LifeLock?

LifeLock is an identity theft protection company founded in 2005 and acquired by Symantec in 2017. The company was renamed Norton LifeLock in 2019, offering a wide variety of products with Norton 360 protection, identity theft monitoring, alerts, insurance, security, and credit monitoring. 

They currently serve over millions of people, but they have had a bumpy history in the past. In 2015, LifeLock paid $100 million to settle a charge by the Federal Trade Commission for deceptive advertising and failure to secure customer’s personal information. 

How Does LifeLock Work?

As a part of Norton 360, LifeLock combines internet security, identity theft protection, and insurance into one package covering threats from many angles.

With the standard package, LifeLock alone provides social security and identity theft alerts. Their algorithm searches across the internet to hunt sources of privacy breaches, including false information connected to your identity and information on the dark web. Furthermore, they provide credit reports and credit monitoring to supplement your protection. 

For more expensive packages, Norton 360 comes in to offer advanced device security. Norton antivirus software stops over 7 million daily threats on average through ad blockers and virus protection. The technology also helps secure your information on public Wi-Fi via Secure VPN. 

LifeLock provides other degrees of security through their identify theft insurance coined “Million Dollar Protection.” Although the amount of insurance varies through the pricing tiers, each offers varying stolen fund reimbursements and $1M coverage for lawyers and experts. 

However, the key takeaway is that LifeLock helps prevent identity theft and provides the resources needed to get your life back on track. In today’s technological world, it’s almost impossible to completely stop hackers and thieves, but it’s possible to recover after an attack. 

Pros & Cons Of LifeLock

LifeLock offers a treasure trove of benefits for its consumers that can provide layers of defense and recovery against identity theft. However, the service is not cheap and lacks a family coverage option, making LifeLock even more expensive for families. 

Perhaps the most significant concerns are that LifeLock hasn’t had a perfect track record under the law and that its insurance doesn’t cover all angles of identity theft. For instance, while you’re insured against loss of income, legal costs, and fraudulent withdrawals, you’re not protected against false medical bills. 

Pros

• 60-day money-back guarantee
• Million Dollar Protection insurance package offers $1M in coverage for lawyers and experts and $25k to $1M for stolen funds reimbursement
• Additional credit monitoring tools
• Wide variety of protection tools helping to fight identity theft
• Restoration department enables you to recover after an attack
• 24/7 customer service

Cons

• Pricey. Can cost hundreds of dollars per year
• Lack of family coverage option. Thus, coverage for families is costly
• Poor security history. Fined $100M in 2015 by the FTC for deceptive practices
• Insurance doesn’t cover all facets of identity theft

How Much Does LifeLock Cost?

LifeLock is not a free-to-use tool. There are four different tiers with varying benefits and perks. As you spend more per month, you get access to additional Norton 360 tools that provide further protection.

LifeLock Standard ($11.99/mo)

The cheapest LifeLock plan offers basic amenities, and for your first year, you only pay $9.99/mo. 

• Up to $25k coverage for both stolen funds and personal expense reimbursement 
• Up to $1M coverage for lawyers and experts
• Social security and data breach alerts
• Stolen wallet protection
• Credit and dark web monitoring
• Address change verification

Norton 360 With LifeLock Select ($14.99/mo)

The next level of protection finally introduces Norton 360 benefits, and for your first year as well, you only pay $9.99/mo. This plan includes the perks included with LifeLock Standard.

• 24/7 live support
• Norton 360 security and secure VPN for up to 5 devices
• Antivirus software
• Ad-tracker blocker
• Parental controls

Norton 360 With LifeLock Advantage ($24.99/mo)

The third most expensive tier now improves on some of the previous amenities while introducing more as well. For your first year, you only pay $19.99/mo.

• Up to $100k coverage for both stolen funds and personal expense reimbursement 
• Up to $1M coverage for lawyers and experts
• Expanded Norton 360 security and secure VPN for up to 10 devices
• Bank account alerts
• Annual full credit report
• Extended alerts to crimes committed in your name

Norton 360 With LifeLock Ultimate Plus ($34.99/mo)

These names just get longer and longer as you pay more money. The crème de la crème of the tiers (or the more expensive) has the most robust protection features, including a discounted $29.99/mo offer for your first year. 

• Up to $1M coverage for both stolen funds and personal expense reimbursement 
• Up to $1M coverage for lawyers and experts
• Priority 24/7 support
• Credit monitoring, scores, and full reports from all three bureaus
• 401K, investment accounts, and bank account application alerts
• Sex offender registry reports
• Unlimited Norton 360 security and secure VPN

Is LifeLock Worth The Cost?

Well, this is honestly a difficult question to answer. Let’s run through some comparisons. 

From our chart, we can see that the Plus costs almost $300 more than the Standard plan. We can’t answer the “worth it” question for you because everyone’s situation is vastly different. 

Say you recently heard that your full social security number was stolen. Perhaps it might be worth investing in a higher tier plan to cover all your bases.

At the same time, you might just need basic credit score monitoring and updates. In that case, LifeLock wouldn’t be the best fit for you, and you could use free products like Credit Sesame instead.

I suggest you take a thorough look at what LifeLock offers and see what tier seems the best for you. 

For the most part, I think the Standard and Select plans provide reasonably good amenities and insurance in the case of identity theft. With a rate of $14.99/mo (Select) for $25k in coverage, you are getting a lot of bank for your buck. Furthermore, this estimation doesn’t even value the intangible benefits provided.

Is LifeLock Safe?

LifeLock nowadays is an okay-ish company. To login, the company offers two-factor and multi-factor authentication, helping to stop potential hackers. 

However, LifeLock hasn’t been perfectly clean in the past. Just a few years ago, in 2015, LifeLock was fined $100 million for deceptive advertising and failures to protect its consumer’s data. Considering that you’re giving this firm your name, address, and social security number, it’s a bit scary to think that they weren’t taking the utmost care of your personal information.

Are they completely, 100% safe? Hard to say, given their track record. 

It’s good to note that they also don’t store a lot of personal information, only to the extent of your name, email address, and other user-related data (i.e. cookies). Thus, given that they don’t store your SSN and that they already got in trouble, perhaps they have improved.

Will LifeLock Hurt My Credit Score?

Although LifeLock provides credit score monitoring for its higher-paid tiers, it will not hurt your credit score. According to my conversation with their customer service team, LifeLock doesn’t pull credit reports from any of the bureaus. Thus, the LifeLock scoring system is entirely independent of your actual credit score.

In reality, LifeLock can only help your credit score by immediately notifying you when someone opens a fraudulent account under your name. 

How Does LifeLock Make Money?

LifeLock makes most of its money from people signing up for its products. Seeing that they have millions of users, they make a lot of money from everyone’s paid monthly plans. 

How Is LifeLock’s Customer Service?

LifeLock offers 24/7 customer service over both the phone and live chat. 

If you need to contact LifeLock via the phone, you can call at (800) 416-0599.

How Could LifeLock Improve?

LifeLock could improve by making sure it establishes a safe, non-fraudulent identity. As a consequence of their 2015 sentencing, it’s hard to place your trust in a company like this until they have proven themselves over.

The company could offer a family identity-protection service. For a family of four, you and your spouse must pay separate individual memberships. While you can add your children for $5.99/mo, a Standard plan would cost approximately $30/mo, whereas Plus would hover $80/mo. That’s extremely expensive for most families. 

However, in terms of perks, LifeLock offers some of the best technologies and coverage plans to protect and secure your identity. Moreover, not many firms can say they have 24/7 customer service, which helps put LifeLock at a 5-star rating in this category. 

How Does LifeLock Fare Against Competitors?

Cost/mo.	$11.99-34.99	$9.99-19.99	$7.50-25.00	$12.95-17.95
Identity theft insurance	$25k-1M	$500k-1M	$1M	$1M
Free trial
Credit score monitoring
Mobile app
A.I. monitoring
24/7 customer service
	Sign Up	Sign Up	Sign Up	Sign Up

How To Get Started On LifeLock

To start with LifeLock, all you need to do is create an account and sign up for one of their plans. During sign-up, you’ll have to provide your name, address, SSN, and other basic personal information. Afterward, you’ll get access to robust features to keep your life in check in the case of identity theft. 

A great note is that LifeLock offers a 60-day money-back guarantee.

Generally speaking, LifeLock will send you alerts if there’s any suspicious activity. For example, if LifeLock detects a new credit card has been opened, they’ll send you an alert asking to confirm if that’s your card. If not, then LifeLock will automatically take measures to staunch further identity theft damage. 

As LifeLock puts it, a credit freeze alone might not be enough to stop the bleeding. With their plethora of recovery options, LifeLock can help patch you up after an attack. 

LifeLock also features an excellent mobile app with a 4.6/5.0 star rating per the Apple app store on 6/24/2020. The app is well-designed and displays some of the essential features mentioned previously, such as credit, dark web, bank account monitoring. 

Should You Use LifeLock?

This is honestly a difficult question to answer. Everyone’s situation is different, and LifeLock isn’t an absolute necessity by any means. 

Like I mentioned earlier, if you fear that your identity is compromised, then LifeLock is a good investment. However, if you only need basic monitoring, then free credit score monitoring like Credit Sesame will do a great job. 

Keep in mind that LifeLock hasn’t been the cleanest company in the past. This fact is important considering the information you’re providing them. However, it’s clear that LifeLock is making efforts to put their past behind them and to focus on their future.

John Ta

John Ta is an undergrad at the University of Pennsylvania and the founder of Penn’s first undergrad personal finance club, Penn Common Cents. As a first-generation college student, he had to learn everything about personal finance on his own and seeks to mend the financial literacy knowledge gap seen almost everywhere. John is currently studying for an MS in Chemistry and a BA in Physics (business & tech concentration), Biochemistry, and Biophysics and is interested in the intersections of finance and healthcare.

The post LifeLock Review appeared first on Finance Plan Today.

The company offers term life insurance policies and helps Americans protect their families with coverage ranging from $50,000 to $1,000,0000 in 10 and 20 year term periods.

You can even get a free quote online in just a few minutes.

Bestow Life Insurance Overview

Bestow is an online life insurance agency that uses technology to quickly evaluate your application without requiring a medical exam. It takes less than 10 minutes to complete the app and receive an instant decision if approved.

I went through the process myself, and was blown away by how easy it was! It took me 9 minutes to fill out the entire application and get approved.

Getting a free quote is even faster, and you don’t need to disclose your name, email, or phone. That means you won’t be hassled or bothered if you ultimately use another company or change your mind.

North American Company for Life and Health Insurance® provides the policies offered by Bestow. They are a highly rated insurance carrier.

What types of insurance can you purchase using Bestow?

Bestow only offers term life insurance with a term period of 10 or 20 years.

Term life insurance differs from whole life insurance in many ways, but one of the most significant differences is that term life insurance policies generally cost meaningfully less.

For example, I was quoted $85.83 per month for a 20-year $1,000,000 policy.

Is Bestow Legit?

Yes! Bestow is a very legitimate company. Bestow has leading venture capital investors, including NEA (New Enterprise Associates), and closed on a $50 million round of funding in April 2020.

Also, North American Company for Life and Health Insurance®, the company that provides the insurance policies to Bestow customers, is rated A+ (Superior) by A.M. Best. A+ (Superior) is the second-highest rating out of 15 categories and was affirmed by A.M. Best for North American Company for Life and Health Insurance.

This speaks volumes about the company’s financial strength, and it means that you can feel confident that your policy will be in force and honored throughout the full term of the policy.

Consumer Complaints

When it comes to complaints and reviews, Bestow receives high marks. On TrustPilot, Bestow has earned an ‘excellent’ rating and a customer review score of 4.8/5.0.

Also, Bestow’s policy provider, North American Company for Life and Health Insurance® scores very well on the National Association of Insurance Commissioners’ Company Complaint Index.

This rating system is based on a baseline score of 1.0. A score of 2.0 means a company has a complaint index that is twice as high as expected in the market. A score that is closer to 0 means a company has very few complaints relative to what is expected in the market.

North American Company for Life and Health Insurance® received a score of 0.16, which means the company has a complaint index that is much lower than is expected for their industry!

Bestow Coverage Details

Policy Terms Available	2 years, 10 Years, 20 Years
Coverage Amount Available	$50,000 – $1,000,000
Medical Exam Required?	NO
Policy Types	Term Life Only
Get Your Free Quote Now

How Much Do Policies Offered by Bestow Cost

Your term life insurance policy’s price is based on many different factors, including your medical history. While Bestow doesn’t require a medical exam like many insurance companies, they still review your medical history to determine your risk factors.

Bestow applies a holistic review of your application to determine whether you qualify for coverage and at what price. They will review medical information, health information, and lifestyle information.

I was offered a price of $85.83 per month for a 20-year $1,000,000 policy.

My age, gender, medical history, and other lifestyle details are different from yours, meaning you may be offered a lower or higher price depending on your risk profile. There’s no guarantee that you’ll be approved for a policy, either.

I simply share my results so that you can get a very rough sense of a monthly payment.

How To Get A Free Life Insurance Quote

Getting a free term life insurance quote from Bestow is quick and simple! All you have to provide is your gender, birth date, height, weight, zip code, and whether you use nicotine products. From there, they’ll be able to determine whether you are eligible for coverage, and provide a price estimate.

There is no need to provide your name, email, or phone number at this stage, which means you don’t need to worry about them contacting you if you decide not to move forward.

Step by Step Process

Step 1. Enter basic information to determine eligibility.

Step 2. Determine Years of Coverage and Coverage Amount

At this step, you’ll decide if you want a 10-year or 20-year policy and whether the amount of coverage you need, ranging from $50,000 to $1,000,000.

Step 3. If You’re Happy With The Estimate, You’ll Fill Out The Formal Application

The application only takes a few minutes (the entire process, including getting the initial price estimate and receiving approval, took me 9 minutes). You’ll answer a series of questions in three different sections: personal info, health info, and lifestyle info.

Step 4. Complete Data Authorization Page

This is the final step of the application process and requires you to provide your social security number and release your HIPAA information. They need this information to quickly run a series of background checks, to help them determine whether you qualify for coverage or not.

Step 5. Receive Your Final Price And Coverage Details

If approved, this page will provide you the actual price and coverage information for your policy.

If you’re happy with the price and coverage, this is where you’ll add your beneficiaries and add your payment information. Once you sign and pay, your policy will be in force, and you’ll have life insurance coverage.

You’ll want to make sure you log into your Bestow dashboard to save a copy of your policy documents for your records. A best practice would be to keep it with any other estate planning documents that you have.

Customer Service

When it comes to customer service, Bestow takes it seriously. Customers may chat, call, text, or email to get assistance. The Bestow customer service number is (833) 300-0603, and they’re available from 8 am-7:00 pm CST Mon-Thurs and 8 am-6:00 pm CST Fri.

Even though North American Company for Life and Health Insurance® provides the policies, you will only work with Bestow throughout the life of the contract.

If you pass away, your beneficiary will contact Bestow directly to process the claim. At that point, the claims department from North American Company for Life and Health Insurance® would contact your loved one to complete the process.

Alternatives

The term life insurance industry is competitive and includes traditional insurance agents and online-only agencies like Bestow.

If you prefer to apply online and avoid a medical exam, other alternatives you can use to compare free quotes are Haven Life, Sproutt, Ladder, and PolicyGenius.

What If I’m Not Perfectly Healthy?

You don’t need perfect health or spotless family history to qualify for term life insurance offered by Bestow.

All insurance companies assess your risk and use it to determine the price of your policy. If a policy is more likely to result in a claim, the price will be higher. However, there are times when the issuer will determine that you aren’t eligible for their product.

But don’t worry if you aren’t approved. Just because one company denies you coverage doesn’t mean that another company won’t approve your application for term life insurance.

Who Shouldn’t Choose Bestow?

Bestow currently does not offer policies in the state of New York or Puerto Rico. They also only issue new 20-year policies to individuals aged 21-45. If you only want or need a 10-year insurance policy, those are limited to individuals aged 21 to 54.

If you don’t mind getting a medical exam, you can complete a traditional term life insurance application and compare prices. Bestow might be less expensive, but you won’t know unless you go through the process and compare prices.

Why Should I Consider Life Insurance

Have you gotten this far but are still on the fence about whether you should even consider life insurance? Let’s help you figure it out.

Life insurance is a product offered by a company to provide financial compensation upon the death of an individual. If the insured person passes away within the terms of the contract, a beneficiary will receive a monetary payout. This life insurance payout is typically in a single lump-sum payment.

At its most basic level, the point of life insurance is to help support your loved ones when they can no longer rely on your salary or income after your untimely death.

If you don’t have any person or organization that depends on your income, you might not want life insurance. Ultimately, it’s a personal decision, and it comes down to the amount of risk you are willing to accept.

I have a term life insurance because I lost my dad when I was 7 years old due to cancer, and I want to protect my wife and family in case something similar happens to me.

Pros and Cons

Summary

If you are looking for a term life insurance policy, Bestow is an option that should be considered, and you can get a free quote in minutes! A term life policy can help to protect the people who matter most to you. You can get your free quote here.

Compare your quote to prices offered by Haven Life and Sproutt to see which one is best for you.

Camilo Maldonado

Camilo is a personal finance expert and the Co-Founder and CEO of Finance Plan Today. I was raised in poverty by a single mother and had to learn everything about personal finance on my own. I have been featured on Forbes, Business Insider, CNBC, and US News. Earlier in my career, I worked as an investment banking analyst on Wall Street at JPMorgan Chase & Co., and I have an M.B.A. from Harvard University and a B.S.E. in finance from the Wharton School of the University of Pennsylvania.

FinancePlanToday.com

The post Bestow Life Insurance Review appeared first on Finance Plan Today.

This article will explain what renters’ insurance is, what it does and doesn’t cover, and how much coverage is necessary. Stay tuned to see how you can save thousands of dollars in potential damages with an affordable policy.

“I was required to get renter’s insurance & thought it was a waste of my money at the time… then I had an accidental kitchen fire. Without that insurance, I don’t know where I’d be.

It not only paid to replace all of MY stuff, but ALSO to rebuild the apartment and for the medical bills of neighbors who went to get checked out for smoke inhalation. Honestly, worth every penny.”

via r/personalfinance

Why Renter’s Insurance Is Necessary

Sometimes, unexpected events can derail our lives. You didn’t plan on getting robbed or for a friend to injure himself on your property. Those costs are expensive, often more than what your emergency fund can handle. That’s why it’s critical to have renter’s insurance.

With renter’s insurance, you have some protection against unexpected events, or “covered perils” in business jargon. There are three parts that each cover different things: personal property coverage, liability coverage, and additional living expenses (ALE) coverage.

We’ll go through what each coverage does and doesn’t do, as well as answer any questions you may have about how renter’s insurance works, how much coverage you should get, and how to file a claim.

Benefits Of Renter’s Insurance

Like our friend with the kitchen fire said, renter’s insurance is worth every penny. Whether it’s a theft, a fire, or vandalism, renter’s insurance helps pay for lost or damaged items. It even goes so far as to cover damage by aircraft or volcanic eruption!

Imagine somebody trips and falls in your apartment. They decide it’s your fault and try to sue you for the cost of their medical bills. Lucky for you, renter’s insurance can help cover those costs (both legal fees and medical bills).

Renter’s insurance can even help out with hotel and food bills if more serious damages require you to live somewhere other than your rental property for a little while.

Your coverage from renter’s insurance can protect against a ton of different things, and you don’t have to live next to a volcano to need it. It can be hard enough handling the fear from a break-in or the stress of a legal battle without worrying it might also cripple you financially. 

Legal fees, medical bills, replacing your things, the costs can add up fast. Renter’s insurance helps keep you afloat financially if you find yourself in need.

If you do ever end up in a situation where you have to replace your possessions, live in a hotel for weeks at a time, or pay another’s medical bills, you’ll be thankful your past self was smart enough to get renter’s insurance.

Think of it as life insurance for your things! Unless you can afford to replace everything in the event of a fire, it’s a no-brainer, which is why some buildings require tenants to have it.

How Does Renter’s Insurance Work?

If there’s an event that qualifies for coverage under renter’s insurance, you’ll get money to pay for damages and recover lost items. But, the exact amount you receive depends on whether you have actual cash value coverage or replacement cost coverage.

Actual Cash Value Coverage Vs. Replacement Cost Coverage

Though both of these options offer coverage for lost or damaged items, the way they operate is slightly different.

With replacement cost coverage, you’ll receive enough money to cover replacing the items. This means you get money equal to how much it would cost to buy the items new from the store.

With actual cash value, you’ll receive money equal to however much the items were worth at the time of loss or damage. This takes into account depreciation (an item losing value over time due to wear and tear), which in turn means you’ll likely receive less money with this option.

You may be thinking to yourself, “why does this make such a difference?” Well, the answer is because it often costs more to buy something new from the store than it would be used.

Also, companies may want to lowball an item’s value when determining how much it was worth when it was lost or damaged. That way, it costs less for them to replace.

But, actual cash value coverage is usually cheaper than replacement cost coverage. Plus, your possessions may not be things you’d replace with exact copies. Consider your personal situation and decide which plan makes the most sense for you.

While it’s true that money can’t always buy happiness, losing everything you own and not having insurance is guaranteed to make your life much worse.

What Does Renter’s Insurance Cover? – The 3 Types Of Coverage

Let’s dive more in-depth into the three types of coverage available with renter’s insurance—personal property, liability, and additional living expenses (ALE).

It’s important to know what is and is not covered by each of these categories, as it could eventually be the difference between thousands of dollars in saved costs. 

Liability

Liability coverage helps cover legal fees and medical bills if somebody gets hurt on your property and sues you. It can also pay to repair another person’s property if damaged by accident.

Though liability coverage is useful and can get you out of a tight spot if someone tries suing you, make sure you’re aware of the limits. Look over different policies and pay attention to the maximum payout offered. 

If you end up going over this amount, you’ll have to start paying out of pocket. Liability coverage will only be able to cover up to a given amount, usually around $100,000. If you get a bill for $110,000, you’ll need to figure out how to get the extra $10,000 on your own.

Additional Living Expenses (ALE)

ALE coverage covers extra costs you may incur while unable to live in your rental home. This commonly includes things such as hotel bills, food costs (above the amount in your monthly budget), and additional gas if you’re forced to travel more to get to and from work.

Most renter’s insurance plans will cover at least the above costs, but shop around to see what other costs you might be able to get covered. This is one of the areas where the specifics of what’s covered can vary heavily, depending on your plan.

Personal Property – Named Perils Vs. All Risk

Personal property coverage is what’ll help replace any lost or damaged items in the event of a covered peril. This can come in two types: named perils and all risk. 

All risk and named perils both refer to what events you want covered by renter’s insurance.

All risk covers everything we’ve outlined above and is a blanket policy that offers a lot of protection. This may be the best plan for you if you live in an area that’s at risk for most everything renter’s insurance covers.

On the other hand, named perils allow you to pick and choose which events you want coverage from. For example, unless you live near an airfield, it’s probably not worthwhile to protect your items from damage by aircraft.

Getting named peril coverage can be a lot cheaper, too. But, you should look at where you live and what your potential risks are to decide which plan makes the most sense for you.

It’s also important to understand that it’s impossible to know which disasters or events will occur in the future, so I err on the side of caution.

What Might Renter’s Insurance Not Cover?

There are a number of ways renter’s insurance can help you save money, but there are limits to what it can do. 

If an earthquake, flood, landslide, or sinkhole damages your items, standard renter’s insurance won’t help you. You may want to buy an endorsement (added coverage for expensive items or particular disasters). The same applies to damage from rats, bugs, and other pests. 

Among the more extreme damages not covered by renter’s insurance, damages caused by terrorism or nuclear war (these used to be covered) do not qualify as covered perils.

If you live with a roommate, your personal property coverage will only apply to your own items. Liability coverage still protects you if you’ve borrowed a few things, but you probably shouldn’t bank on using one person’s insurance to cover multiple people.

The last things renter’s insurance may not cover are especially expensive items (jewelry, art collections, etc.). You can usually only insure such items up to a certain amount ($1,500 for jewelry, $2,500 for high-end electronics) through renter’s insurance. 

If you want coverage beyond these amounts for specific items, look into buying an endorsement, or a separate insurance policy. Getting a separate policy is common for an engagement ring or other items which are typically very expensive to replace.

Does Renter’s Insurance Cover Theft?

This question comes up a lot. Luckily, the answer is simple: yes, renter’s insurance covers theft.

Renter’s insurance also protects you from fraudulent credit card or checkbook use. If somebody steals your credit card or bank information, renter’s insurance can cover any purchases the thief makes.

How Much Renter’s Insurance Do I Need?

First, you’ll want to calculate how much your stuff is worth. This can be a lot more work than people expect, and the total is also often much higher. 

The average person has at least $35,000 worth of stuff, and most renter’s insurance policies cover between $30,000 and $50,000. 

This number will also probably be higher if you live in a house versus an apartment, but luckily renter’s insurance for houses also scales upwards to about $100,000 worth of personal property coverage.

By taking the time to figure out how much your possessions are worth, you can avoid not having enough coverage without overpaying for insurance. 

In terms of liability insurance, legal fees and medical bills can cost a small fortune. Landlords often require at least $100,000 of liability coverage, and as a rough estimate, this is pretty good. If you’re worried your circumstances might increase this amount, meet with an insurance agent.

How Much Does Renter’s Insurance Cost?

The Independent Insurance Agents and Brokers of America says the average annual premium for $20,000 of personal property and $500,000 of liability is around $20 a month. 

This number relies on many factors, including your deductible, coverage amount, overall safety, and risk levels of your geographic area. But, $20 a month does a good job showing the overall affordability of renter’s insurance.

It’s a small price to pay to protect everything under your roof in the event of a disaster.

Many insurance companies will also work with you to provide discounts and bundles. Your auto insurance provider might be willing to bundle your renter’s insurance. This usually comes with a nice discount on one or both as a result. 

Similarly, installing safety measures like smoke detectors can reduce your monthly premium. It’s always worth asking whether the insurance company provides any discounts or bundles that might save you money.

Where Do I Get Renter’s Insurance?

There is no shortage of insurance agencies from which you can get renter’s insurance. And, as we’ve said before in this article, you’re often able to get a better deal if you shop around at multiple companies or bundle renter’s insurance with whatever company provides your auto insurance. 

With that in mind, if you’re just looking for a place to start, here are a few possible companies:

• USAA
• Allstate
• Geico
• Liberty Mutual
• Nationwide
• Progressive
• State Farm

Each of these options has pros and cons. Research which company offers the best options for your situation and again, look at multiple places.

How To File A Renter’s Insurance Claim

If you find yourself with lost or damaged items, you’ll have to file a claim with the insurance company to get reimbursed.

First, you should survey the situation and do what you can to prevent further damages (plugging a leak, putting out a fire, etc.). If there was theft or vandalism, you should also call the police and report the incident to them, keeping track of who you spoke with in case it becomes necessary later.

Next, you’ll want to call your insurance company to report the claim. Do this as soon as possible, as it’ll make your life easier later. Most insurance companies also have a deadline of 48 hours for you to file a claim, so time is of the essence here.

Then, ask to speak with your insurance agent. Explain what happened. They’ll likely have a series of questions related to the severity of the damage, which will help determine how much you lost in value.

This is also your chance to ask them more about the necessary next steps, how long the process will take, your policy’s limits, and any other questions you may have regarding your claim.

What To Do After Calling Your Insurance Agency

After you’re done speaking with your insurance agent, it’s always good to take a picture or video of any damages. You may also want to write down any damages in case it comes up later. 

You’ve filed your claim with the insurance agency. You’ve spoken with your representative and informed them of the situation, and you’ve documented it in writing or on camera. You should also talk to your landlord and notify them of the situation (most states’ laws require this).

Within the next day or two, you should receive a call from an insurance claims agency, notifying you of a claims form to fill out. It’s important to be thorough here as well. Make note of everything you can (damages, anything lost, expenses, police report, etc.) as the renter’s insurance company will use this form in their investigation.

Once their investigation is finished, they should reach out to you with their findings and decision.

Is Renter’s Insurance Tax Deductible?

Unless you have a dedicated home office used exclusively to work from home, renter’s insurance premiums are not tax-deductible. 

If you do happen to have a specific room in your house or apartment that you use only for work (seriously, the IRS will investigate this), you may be able to write off your renter’s insurance as a business expense. But, speak with a tax professional first if you think this may apply to you. Better safe than sorry.

Common Renter’s Insurance Myths

“Oh, I don’t need renter’s insurance. My landlord has an insurance policy!”

Wrong. In most cases, your landlord’s policy will only cover damages to the actual building. Which, while useful, doesn’t help if you lose any personal property. It also doesn’t pay for medical bills if someone gets hurt—that’s still all on you unless you have renter’s insurance!

“Renter’s insurance only applies to things I keep in my house.”

Again, wrong. Most renter’s insurance policies also cover any items you have in your car or kept in a storage unit. This means you’re afforded extra protection if something is lost or damaged, even if it’s not directly in your home.

Note: This does not mean renter’s insurance covers your car or other property, only your possessions inside them.

“I don’t need to worry about saving money because I have renters insurance to protect me.”

Renters insurance is not a substitute for saving for retirement or having a budget! It will protect you in case you suffer from a theft, fire, etc., but you still need to make sure you are saving for retirement.

It also doesn’t protect your loved ones if your apartment burns down and you are killed. That’s why it’s critically important to have life insurance if you have anyone who relies on your income!

Remember, while renters insurance might not be required by law, you’ll likely always want it.

Lucas Woodley

Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.

The post Your Complete Guide To Renters Insurance appeared first on Finance Plan Today.

But, what if there were a trick.  What if there were an often-overlooked investment tool that could help you contribute to your retirement savings in AND lessen your tax burden.  That’s where the HSA account comes in.

An HSA account is one of the only investment tools that is 100% tax-free.  Not only is it tax-free, but it offers a triple-tax-advantage meaning that all the money that enters, grows, and leaves is NEVER taxed.

So, all this talk about big savings, but what the heck is an HSA account and how do I get one?  This article will walk you through the basics of an HSA, the benefits of an HSA, and any limitations to this type of investment.

But, let’s not get ahead of ourselves.  First things first.

What is an HSA Account?

HSA stands for Health Savings Account and is a medical savings account available for those enrolled in a high deductible health plan (HDHP).

The IRS has defined an HDHP in 2019 as a health plan with a minimum deductible of $1,350 and a maximum out-of-pocket expense limit of $6,750 each year.

For family coverage, the minimum deductible is $2,700 and the maximum out-of-pocket is $13,500 each year.

HSAs can be very helpful by reserving a large fund of money to cover heavy medical expenses without having to dig into any personal or retirement savings.

HSAs were established to provide consumers with a financial tool that could cover high medical costs while bypassing any tax liabilities.  Like other savings accounts, funds deposited into an HSA can be invested into a diversified portfolio of mutual funds, index funds, bonds, ETFs, etc where earnings rollover (or accumulate) year to year.

Unlike other savings or investment accounts, HSAs are completely tax-free (something we like to call triple-tax-advantaged), but there are specifications on how these funds can be used.

Funds in an HSA can be used at any time so long as they are used to pay for an eligible medical expense.  

Okay, so this is great and all, but you might be wondering: what happens to my HSA if I need all the existing funds to pay for my medical expenses?  While HSAs offer many benefits for medical costs, especially in the case of an unforeseen illness or catastrophe, what most people don’t realize are the secret benefits that HSAs can add to both your retirement savings and your annual tax contributions.

Secret Benefits of an HSA Account #1: Increased Retirement Savings

If you’ve read any of the recent Finance Twins articles, you’ve probably stumbled upon the famous Roth IRA, one of the best tools for retirement savings.  While you might be an expert on this topic, what you might not yet know, is that an HSA is arguably the best tool for retirement savings, beating Roth IRAs and 401Ks by a landslide.

So, you might be thinking: But Roth IRAs can be withdrawn tax-free, how could it get better than that?  Well, the good news is that it can!

Unlike Roth IRAs, HSA contributions are not only exempt from the sneaky capital gains tax but are actually triple-tax-advantaged.

HSA Accounts Are Triple-Tax-Advantaged:

1. First of all, HSA contributions are often made with PRE-TAX dollars, meaning you don’t have to pay taxes on the money deposited into your HSA. If, however, you decide to contribute to your HSA using AFTER-TAX dollars, this money will be deducted from your taxable income.One small lesson you may have learned from Accounting 101 (or from a 15-minute Crash Course on paying your taxes) is that lower taxable income = less taxes you owe the government!
2. Secondly, in HSAs, earnings grow tax-free.  This means that any and all growth in your HSA investments are exempt from additional taxes at the end of each year.
3. And finally, the icing on the cake is that HSAs have tax-free withdrawal. Tax-free withdrawal means that any withdrawals from your HSA that are qualified medical expenses are exempt from taxes, as well.

However, it is important to note that withdrawing money from an HSA for consumption not eligible for HSA qualification when you are NOT 65+ will result in a withdrawal penalty.

The current withdrawal penalty for non-qualified expenses is 20%.

Yikes, how does this help my retirement plan? For those aged 65+, there is no qualification for the use of withdrawn funds.

If you are 65+, you can withdraw funds from your HSA and use them on whatever the heck you want without owing an early withdrawal penalty.

For those that aren’t 65+ years old, if you use the funds for a qualified medical expense you won’t owe a penny to the government, but if you use the money to buy a new piece of furniture you’ll pay income tax on the money. This means that in the best-case scenario, you’ll get the triple-tax advantage, and worst case you’ll be no worse off than a traditional IRA!

Essentially, funds remaining in your HSA at this time become another retirement savings account.

In layman’s terms, the money enters tax free, grows tax free, AND ideally leaves tax free.  It doesn’t get better than that.  

Secret Benefits of an HSA Account #2: Reduced Annual Tax Contributions

Okay, so we’ve established that HSAs provide many financial benefits for medical expenses and retirement savings, but what if those aren’t the biggest concerns for you right now?

Does an HSA still offer benefits for me aside from retirement and medical-related expenses? Absolutely.

Even if those aren’t big concerns for you, HSAs still provide tremendous benefits that include reduced annual tax contributions.

Since HSAs are normally funded pre-tax, this lowers your taxable income and, therefore, lowers the amount of taxes you have to pay every year that you contribute to your HSA.  However, Even if you contribute to your HSA with after-tax funds, these contributions will be deducted from your taxable income, also lowering your annual tax liability.  

Basically, any HSA contribution will reduce your taxes!

Secret Benefits of an HSA Account #3: Employer Contributions

As if the tax savings weren’t enough, there’s another perk that may be even more powerful: employer contributions to your HSA!

That’s right folks, your employer can contribute directly to your HSA account. That’s free money going straight to your account, similar to a 401K retirement savings plan. How much employers contribute usually depends on the size of the company.

For employers with fewer than 500 employees, the average contribution for a single employee is $750 and $1,200 for an employee with a family plan.

For employers with more than 500 employees, the average contribution for a single employee is $500, and for employees with family, the average contribution is $1,000.

However, any contribution from an employer is deducted from the total HSA contribution limit for the year so that total HSA contributions do not exceed the limits.

HSA Account Limitations

This must be too good to be true. There has to be a catch, right? Like all things, there are limitations to a health savings account.

It’s important to be aware of these, but don’t let them scare you away from contributing to one of the best investment tools out there.  

As mentioned previously, there is no penalty when withdrawing funds in an HSA if the funds:

1. Are used for eligible medical purposes or
2. Are withdrawn at or after age 65

However, withdrawals for non-qualified medical costs before you turn 65 are subject to income taxes and a 20% penalty.

If you don’t use a distribution from your HSA for qualified medical expenses, you must pay tax on it. Report the amount on IRS Form 8889 and file it with your tax Form 1040 or Form 1040NR. You may have to pay an additional 20% tax on your taxable distribution.

While I do not advise withdrawing prior to age 65 for non-medical reasons, it’s important to note that the high (and increasing!) cost of medical expenses make it likely that you’ll have more than enough medical expenses to cover your HSA.

Additionally, there are limitations to the amount one can contribute to an HSA each year. The limits are lower than those for an IRA.

For individual coverage, the 2019 HSA contribution limit is $3,500/year, and the 2019 HSA contribution limit is $7,000/year for family coverage.  Nonetheless, $3,500 every year adds up.

For example, contributing $3,500 each year at an average compound growth rate of 6% per year would grow to over $81,000 after only 15 years. To have a comparable amount in a Roth IRA, you would have had to contribute $106,579 if you were in a 24% tax bracket.

That means you get to keep more of your money instead of handing it over to Uncle Sam.

Should I Get an HSA Account?

As one of the most tax-efficient investment tools out there, HSAs can offer you many benefits; however, this investment tool may not always be the best option for everyone.

So, how do I know if I should get an HSA?

First things first, it is important that you meet the HSA qualifications.

HSA Account Qualifications:

1.    Not be enrolled in Medicare
2.    Not be a dependent on someone else’s tax return
3.    Must be enrolled in an HDHP on the first day of the month

As mentioned earlier, you must be enrolled in an HDHP to open an HSA.  HDHPs offer immediate savings since these payment plans include lower monthly premiums.

However, you are required to pay a higher deductible (or initial out-of-pocket payment) before your medical coverage begins.  Therefore, HDHPs are generally recommended for young individuals ages 20-45 who are healthy and don’t foresee major medical expenses.

A higher deductible means that the patient will need to pay the medical costs upfront before receiving health insurance benefits. Therefore, HDHPs are not for everyone since it can be difficult for some to pocket this money upfront and is generally not recommended for people with chronic health conditions.

However, if you do meet these HSA qualifications, then you should strongly consider opening one. The lower tax benefits can increase your retirement savings exponentially WITHOUT having to drastically change your current spending.

You also need to do research to understand the investment options available with your HSA provider to ensure that there are good low cost investment options.

In short, HSAs can be a very useful tool. Opening an HSA could be the secret to your retirement plan or even the secret to lowering your taxes. However, it’s important, as with all financial decisions, to weigh the costs against benefits.

My recommendation is to first determine if enrolling in an HDHP is the best decision for you and your family. If so, then opening an HSA could be an easy next step to increase your retirement savings and reduce your annual tax contributions.

How To Use An HSA Account To Maximize Its Benefits

So you have an HSA and then go to the doctor and get hit with a $150 bill for the visit. You have the HSA which you can use to pay for it. But what if I told you to pay out of pocket with your credit card instead?

In order to maximize the amazing tax benefits of the HSA, leave the money invested in the account as long as possible so it can grow tax-free. But you need to make sure that you save any medical receipts along the way. We have a guide if you are not sure how to start investing!

If you pay via credit card (ONLY do this if you are responsible with your credit and your card gets paid off IN FULL every month) you’ll also earn credit card points.

The HSA is the best retirement account that few people have heard of, and now you know why!

For more information on this topic, IRS Publication 969.

Rachel Johannesen

Rachel Johannesen is an all-star personal finance writer and student at the prestigious Wharton School of the University of Pennsylvania. In addition to personal finance, she is passionate about traveling and spending time with her family.

The post HSA Account – What You Need To Know About Health Savings Accounts appeared first on Finance Plan Today.

Today we will walk you through the difference between term life vs whole life insurance so you can determine the right policy for your family.

Before we begin, let’s cover what life insurance is.

What Is Life Insurance

Life insurance is a product offered by a company to guarantee financial compensation upon the death of an individual. If the insured person passes away within the legal terms of the contract, the beneficiary will receive a monetary payout specified in the contract. This life insurance payout is typically in a single lump-sum payment.

At its most basic level, the point of life insurance is to help support your loved ones when they can no longer rely on your salary or income after your untimely death.

Yes, I know this topic can be sad and painful to think about, but it’s incredibly important to have a back-up plan for your loved ones.

I learned that the hard way. My dad was diagnosed with brain cancer at the age of 32, shortly after he was married. Since he was the sole breadwinner at the time, he should have gotten life insurance to take care of my mom (they didn’t have kids yet). By the time he was diagnosed with cancer, it was too late for him to qualify for life insurance.

When I was a 7-year-old he died from cancer and our family never recovered financially and I was raised in poverty. I don’t want the same thing to happen to your loved ones.

Now, let’s cover the differences between the different types of life insurance and help you decide which type is right for you!

What are the Different Types of Life Insurance?

There are two main categories of life insurance everyone should be familiar with. They are:

1. Term Life Insurance
2. Permanent Life Insurance

The most common type of permanent life insurance is Whole Life Insurance, so that’s what we will focus on in this article.

Other types of permanent life insurance include:

• Universal life insurance – These policies are a type of permanent life insurance giving consumers flexibility in the premiums, payouts and the savings elements of the policy.
• Variable Life Insurance – These policies aim to combine life insurance and investments by investing the cash reserves.
• Variable Universal Life Insurance – As the name implies, these policies are essentially a combination of Universal and Variable Life Insurance.
• Single-Premium Life Insurance – A type of insurance where you pay the entire premium up-front in a lump sum. The minimum premium to participate is usually $5,000.

Most people will be looking at either Term Life Insurance or Whole Life Insurance so we will be focusing on those two.

What is Term Life Insurance, and How Does It Differ From Whole Life?

Term life insurance is a type of life insurance where you pay a specific amount (the premium) to keep the policy in effect for a specified amount of time (the term). The term and the death benefit amount is set by you (the person who purchases the policy). The premiums are determined by the underwriter (the insurance company).

In other words, the policy pays out a specific amount of money if you die while the policy is in force. However, the policy only lasts for a set amount of time.

Terms are usually 5, 10, 15, 20, or 30 years. Ultimately, you get to decide which term is best for you.

For example, you can purchase a 20-year term with a $500,000 death benefit or a 10-year term with a $600,000 death benefit. You get to pick the payout amount and the term.

The price of the policy varies depending on your choices and other risk factors. In general, the higher the payout and the longer the term, the higher the monthly payment (premium) will be.

As mentioned earlier, other risk factors like your age and health will also be factored into the price. Some policies require blood work and a medical exam, although some companies like Haven Life, Bestow, Ladder, and Sproutt also offer policies that don’t require a medical exam. Whether you ultimately need a medical exam or not, you can be sure that the insurance company will still review your previous medical information, drug prescriptions, underlying health issues, and even a motor vehicle report.

One typical exception to medical underwriting is if you get term life insurance through your employer. This is a great option for those with chronic health problems since that would make conventional life insurance coverage very costly.

At the end of the day, the insurance company gathers as much information as they can in order to determine what to charge you for your policy.

Why Would I Want A Term Life Insurance Policy If It Doesn’t Last Forever?

There are many reasons why term life insurance is the right choice for many people!

First, a huge benefit is that term life insurance has a fixed term. This type of policy is not meant to cover you for your entire lifetime. Many people assume that life insurance always lasts your entire lifetime, but that’s not the case here. And for many people, this is actually a good thing!

The purpose of term life insurance is to essentially buy yourself time to save up money for your loved ones. If you die before you have enough money saved up for them, then you have the policy to fall back on. Once you have earned, saved, and invested enough money, you no longer need to insure against your death. At that point, you’ll essentially be self-insured since your family can use the wealth you’ve accumulated to live off of.

This means that you won’t need to pay for a policy when you no longer need it.

Some people will still decide to purchase life insurance even if they don’t need the payout just to be safe. You never know what your situation will be like 20 or 30 years from now.

Put simply, if the assets you leave behind are enough to support your loved ones, you no longer require life insurance, but you still may feel more comfortable with a policy just in case. It’s a personal decision.

A common rule of thumb is to get a policy that will last long enough so that your youngest child will be done with college.

Pros of Term Life Insurance

• You can choose the term of the policy, so it only lasts as long as you need it. You won’t have to pay for insurance that you don’t need.
• Easy to understand! You basically only need to know 3 things: the term (years), the premium (your monthly or annual payment), and the death benefit (the amount your beneficiaries would receive).
• Generally less expensive when compared to whole life insurance.

Cons of Term Life Insurance

• The insurance expires when the term is complete, so it won’t necessarily last your whole life.
• Some plans have premiums that are not fixed, so make sure you fully understand the plan you go with.

What Is Whole Life Insurance, And How Does It Differ From Term Life?

In contrast to term life insurance, whole life insurance provides permanent coverage from the day the policy is purchased until the death of the insured individual, as long as you make and stay current on all of the payments. It does not matter if you live for another 10 years or 90 years. The catch is that the premiums (monthly payments) are much higher compared to a term life policy.

Upon your death, your beneficiary will get the death benefit as long as the policy is in good standing (all premiums paid). Typically, the premiums are the same throughout the entire life of the policy. This means that when the insured individual is young and healthy they are probably overpaying for the benefit, but once they are old(er) or in poor health, they will be underpaying the value of the benefit.

One key point is that you must ALWAYS make payments to keep the policy in good standing and in force. If you make payments for 25 years and then stop making payments and die a year later, you’re loved ones won’t receive the death benefit payout! We can’t stress enough that your account must be paid and current at the time of death. It’s important to know that many people do NOT keep up with the costly payments, and their policy gets canceled.

Another unique aspect of whole life insurance is that it accumulates a cash value. Each month when you pay your premium, part of the money goes towards the life insurance policy and another portion goes towards the cash value. As you pay more and more premiums over the life of the policy, the cash value will grow tax-free. You can also borrow money against the cash value of the whole life insurance policy. The cash value can also be withdrawn if you surrender (cancel) the policy, but there can be a hefty fee associated with this.

Pros of Whole Life Insurance

• The premiums are fixed and will never increase.
• The cash value of the policy can be taken out as a loan, and the cash value can grow tax-deferred. The ability to borrow against the cash value can also be a con since you have to pay interest to borrow your own money.
• Your beneficiaries are guaranteed to receive the death benefit payment regardless of when you die (even it’s in 90 years from now), as long as all of the premiums have been paid.

Cons of Whole Life Insurance

• Compared to Term Life Insurance, the premiums are very expensive (roughly 10x to 15x higher).
• Terminating or surrendering a whole life policy can be very costly.
• Whole life insurance is permanent, so you could end up paying for it even once you no longer need it.

Term Life vs Whole Life Insurance: Which One Is Right For Me?

For many people, the right answer is term Life Insurance!

There are a few reasons why I generally prefer (and have) a term life insurance policy. It all comes down to cost, the amount of coverage, and necessity.

The first reason is cost. Term policies are generally more affordable. This means that you will be able to afford more coverage during the years when your family is likely the most vulnerable.

You might decide that it does not make any sense to continue to pay the whole life insurance premiums once you’ve saved your nest egg and have a significant net worth. Once your house is paid off, you’re debt-free and have enough to retire comfortably, you might decide you do NOT need life insurance.

Additionally, the premiums for term life insurance are significantly lower than for whole life insurance. To see an example comparison in the premiums, we created the table below to highlight the price comparison for a healthy 29-year-old male.

Example Life Insurance Premiums

*Numbers are based on quotes for a healthy 29-year-old male

For this reason, it could make the most financial sense to take out term life insurance and invest the difference you would have paid for whole life insurance in low-cost index funds. You’ll be able to end up with more money than the cash value of a whole life insurance policy if you save and invest the difference on your own.

This example is an oversimplification because it doesn’t take into account factors other than cost, but it just highlights the fact that there is a significant price difference between the two products. Especially when you realize you’ll have to pay the whole life policy for the remainder of your life.

If Term Life Insurance Is Better, Why Do Many Insurance Salespeople Recommend Whole Life Insurance?

Incentives!

Be mindful of incentives whenever you meet with anyone selling anything. Their livelihood depends on it so your incentives might not always be perfectly aligned.

Remember, they are incentivized and rewarded for selling as many whole life insurance policies as possible. Even if your best option is term life insurance (and it could be), they’ll push whole life insurance hard because the commissions they earn are MUCH higher for permanent life insurance policies!

On a typical whole life insurance policy, an insurance salesperson makes a handsome commission for each policy (as much as a year’s worth of premiums). Yup, if you sign on the dotted line, they can earn roughly $7,560 to $8,400 (based on the policy above) from your policy alone. As you can see, your business is quite lucrative for them. They might have their own financial future in mind, not yours.

This just goes to say that you should be careful when making important financial decisions because the ramifications can be large. Determine what kind of insurance you need, and then find the best price possible. Obviously, not all salespeople are only looking out for themselves, but it’s something to be aware of.

How Much Life Insurance Do You Need?

You will need a policy large enough to cover 3 things:

1. Your Debt: Your policy should cover ALL of your debts and liabilities. Add up all of your debt including credit card debt, car loans, mortgages, unpaid taxes, etc.
2. Your Income: Calculate your gross salary and multiply it by 5. For example, if your salary is $45,000 that would be $225,000.
3. Your Future Obligations (Like Kids’ College): Finally, set aside money to help your children pay for college if this is something you’d like to do for them. Estimate the amount by taking the cost to attend a local 4-year college (tuition + room & board) and multiplying it by the number of children. 

Once you have calculated these three numbers, add them up. This final sum is the minimum amount of coverage that you should aim for.

We recommend that you take inflation into account, especially if you have a longer-term (20-30+ year policy). You can think of inflation as the increasing cost of living over time. I know $1,000,000 sounds like a lot, but in 20 years it won’t go nearly as far. At the same time, $1 million is a heck of a lot better than nothing! Don’t lose sight of that if you can’t afford a policy that’s as big as you would like it to be.

What If I Want a Larger Policy?

We recommend the above amounts because this will allow your family to be debt-free and have 5 years to recover your lost salary if you die unexpectedly. This will give your loved ones enough time to get back on their feet. It will also lessen the burden on your spouse to save for your kids’ college educations.

Keep in mind that you can always choose to have a smaller or larger policy. This is obviously a personal decision and it depends on your economic situation and the kind of coverage and lifestyle you’d like your loved ones to have. As we mentioned above, the larger the policy, the higher the cost will be.

There’s a chance you don’t even need life insurance!

Finally, remember that if you are debt-free and have enough saved for retirement, you do NOT need life insurance. You have insured yourself and can save on paying the premiums! Once you have reached financial independence, you are better off taking that saved money and investing it wisely! 

Where Can I Get A Term Life Insurance Policy?

For healthy individuals, we love online insurance companies like Haven Life, Bestow, and Sproutt because they generally don’t require a medical exam and you can get your results (and coverage) in as little as 15 minutes).

Read our full Bestow Insurance review and Haven Life review to learn more and get your free term life quotes today.

My recommendation, if you are in the market for a term life insurance policy, is to quickly get quotes from all 3 and compare them so you can go with the best one.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post Term Life vs Whole Life – Which Type Of Life Insurance Is Best? appeared first on Finance Plan Today.

Neither is the best place to learn, but fortunately, you’re in the right place now.

Today, we’ll be telling you what life insurance is all about! There are several different types of life insurance, but today we are just focused on explaining the general terms so that you feel comfortable deciding whether life insurance is something that could help protect you or your loved ones.

Confusion is often a big main reason why someone hasn’t gotten around to getting life insurance. For that reason, we are going to break things down and keep it simple, because this isn’t a topic that needs to be complex.

Let’s get started to see if it’s something you should be considering.

Why Does Life Insurance Matter? A Personal Story.

Planning for our deaths isn’t our idea of a good time. We are guessing it’s not yours either. Death is painful to think about, and no one ever feels ready to think about it or plan for it. But we learned the hard way why life insurance is important.

My dad passed away from brain cancer when I was a 7-year-old child. He had a rare form of brain cancer that took him from us when he was only 46 years old. My dad was able to leave my mom enough money to buy a new car but little else. As the primary breadwinner, his absence tore a hole through my core, and also through my family’s financial stability.

Before you start thinking that my parents should have done more to prepare financially for his death, you should realize that they spent their life savings on his cancer treatments trying to save his life.

My dad didn’t have life insurance. He was initially diagnosed with cancer when he was only 32, which meant no life insurance company would ever touch him or consider issuing him a policy.

Because of my dad’s lack of life insurance, I grew up in poverty. My mom never recovered from the financial blow.

I still feel incredibly fortunate that I was able to get free lunch at school every day.

My story isn’t meant to scare you into panic-buying life insurance. But it does provide a cautionary tale of what can happen when a catastrophe strikes you when you least expect it.

Through a lot of excruciatingly hard work and the guidance of so many other people, I was able to break the cycle of poverty. When I got into the best business school in the world for college, one of my first emotions was relief that I was never going to be poor again and my family would be okay. Years later, when I purchased a term life insurance policy for myself at age 31 from Haven Life, I felt that same sense of relief.

The point of life insurance is to protect your family so they don’t have to think, worry, or stress about the financial impact of losing a loved one. They’ve already lost too much.

What is Life Insurance?

Life insurance is a product offered by a company to guarantee financial compensation upon the death of an individual. If the insured person passes away within the legal terms of the contract, the beneficiary will receive a monetary payout specified in the contract. This life insurance payout is typically in a single lump-sum payment.

At its most basic level, the point of life insurance is to help support your loved ones when they can no longer rely on your salary or income after your untimely death.

Who Gets the Money If You Die?

The individual who purchases the policy typically decides who the beneficiary is. Most people will designate their spouse, estate, or children, but it can really be anyone you’d like to receive the payout.

Some people might even assign a non-profit organization they are passionate about as a beneficiary! There is a lot of flexibility here. We recommend reviewing this yearly to make sure it is up-to-date and reflects your wishes.

Are There Restrictions On What A Life Insurance Payout Can Be Used For?

No! The money can be used on absolutely anything! Some will usually go toward existing bills (funeral costs, medical bills, credit card debt, loans, mortgage, etc.). This is important so your family doesn’t deplete their emergency fund paying for all of the unexpected costs.

Another common use is to help to cover future expenses (groceries, daycare, college, etc.).

Ideally, the insurance should cover the lost wages of the deceased so that those remaining can maintain their quality of life. It’s important for the beneficiaries to create a budget and stick to it so that the payout lasts as long as possible!

Does Life Insurance Cover Suicide?

Life insurance policies typically have suicide clauses built into them to address this.

The typical policy will not pay out death benefits if the cause of death is found to be a suicide within the first two years of the policy being active and in force. Some states limit this to one year, so it can vary.

Does Everyone Need Life Insurance?

No, but most people who are married or have children (or other dependents like aging parents) will likely want to have coverage.

In general, you should purchase life insurance if other people depend or rely on your wages or earnings for their everyday needs.

As you get married and begin to have joint financial obligations (e.g. a mortgage), it is important to NOT leave your spouse (and other dependents) behind with no financial support.  

If you’re not married and don’t have children or anyone else relying on your ability to work, then you likely don’t need life insurance. However, that’s not always true since some people will still plan to work and donate a substantial sum to a charity that they are passionate about.

What If I Have Saved Up Enough Money To Retire And My Family Would Have Enough Money If I Died?

If you have true financial freedom and no longer need to work for money, then you might also not need to have life insurance coverage.

At this point, your family is essentially self-insured, and your loved ones will be taken care of even if you are no longer around to provide for them. However, even some people who don’t necessarily need life insurance, still decide to purchase a policy in order to feel like they are leaving something for their loved ones. Or they may think it will help their grieving family better cope with the tremendous loss. As the famous quote says, money can’t buy happiness, but it’s a lot more comfortable to cry in a BMW.

For some wealthy people with complex estate planning situations, certain types of life insurance might make sense, but for 99% of people, this isn’t relevant.

Should I Get Life Insurance if I Am a Stay-At-Home Parent?

Life insurance may be a GREAT idea for a stay-at-home parent who is taking care of young children.

The reason for that is that if the stay-at-home parent were to die, the cost of childcare could increase tremendously and could cause great financial strain. However, if the income of the remaining parent is enough to cover the additional cost of childcare and the future financial demands of the full family, then life insurance is not necessary.

When to Get Life Insurance

The best time to get life insurance is as soon as you have anyone in your life who depends on your ability to work (spouse, have kids, etc.).

If you wait until you are sick to get life insurance, you either won’t be approved or you won’t be able to afford the premiums. That means that the best time to get life insurance is when you are younger and healthy!

In order to get life insurance, companies will review your medical history to determine how much a policy will cost you and whether they even want to cover you.

This is why you should get life insurance as soon as you need it. Getting ready to pop the big question? Start looking at rings and term life insurance quotes at the same time.

You never know when you could get sick, so don’t wait. Our parents did not expect our dad to get brain cancer, but life isn’t predictable or fair. Don’t wait until it’s too late. The younger you are, the healthier you are, and the cheaper it will be.

But remember, that all life insurance policies are not created equal. Some may even do more harm than good.

Where Can I Get Life Insurance?

We often get asked for life insurance recommendations and we typically say Haven Life, Bestow & Sproutt. Before I purchased my policy, I received free quotes from each one and it literally took like 5 minutes. No medical exam necessary, which I appreciated. So, what are you waiting for?

Camilo Maldonado

Camilo is a personal finance expert and the Co-Founder and CEO of Finance Plan Today. I was raised in poverty by a single mother and had to learn everything about personal finance on my own. I have been featured on Forbes, Business Insider, CNBC, and US News. Earlier in my career, I worked as an investment banking analyst on Wall Street at JPMorgan Chase & Co., and I have an M.B.A. from Harvard University and a B.S.E. in finance from the Wharton School of the University of Pennsylvania.

FinancePlanToday.com

The post What is life insurance? Do I need it? appeared first on Finance Plan Today.

But, how do I know if I qualify for unemployment benefits? What exactly is covered by unemployment insurance? How do I file for unemployment benefits? And, how has COVID-19 impacted my state’s unemployment benefits laws? See the answers to all of these questions and more below. 

What Are Unemployment Benefits?

Unemployment benefits, which are the actual funds themselves, are provided through your state-specific unemployment insurance. 

As defined by the Department of Labor, “unemployment insurance is a joint state-federal program that provides cash benefits to eligible workers.” These cash payments can help you stay afloat and help supplement your emergency fund.

But, what does this practically mean for you as someone simply looking for help making ends meet? 

Basically, it means the specifics of unemployment insurance, such as who is eligible, the amount you will receive, and the duration for which you can collect benefits, are all governed by your individual state – so it’s essential to check your state’s policies. However, states do have to model their unemployment systems according to federal guidelines, which we will outline below.

Eligibility Requirements For Unemployment Insurance

(Note: The recently passed CARES Act has changed these requirements and given states more freedom to adjust their unemployment insurance plans. Please see our COVID-specific section below for more details about these changes and how they apply to you.)

The most common requirements for receiving unemployment benefits are some iteration of the following two criteria: 

1. You are currently unemployed for reasons other than having been fired for gross misconduct or resigning from work without good cause (this is often referred as having lost employment “through no fault of your own.”) 

Though “good cause” lacks a consistent legal definition as it varies by state, it is generally taken to mean some form of documented issue that was brought up to your employer yet persisted. If you’re curious whether your reason for quitting constitutes having good cause, some examples of good cause would be lack of safety in the work environment, discrimination based on race or gender, and medical emergencies related to the employee or immediate family members.

2. You have met your state’s requirements for wages earned and amount of time worked during the last year’s worth of work or the first four out of five quarters (often described in documentation as the “base period”). 

To clarify the latter part of this requirement, quarters are broken up into January – March, April – June, July – September, and October – December.

Unemployment Eligibility Quarters Example

If you were to file for unemployment during May of 2020 for example, which falls into the April – June 2020 quarter, first go back five quarters to the 2019 January – March quarter. Then, include the first four quarters in your analysis, using January 2019 – March 2019 as the first quarter (which means the first four quarters ultimately include everything from January 2019 – December 2019). 

While there are occasionally a few additional requirements to meet, such as in Alaska, New Jersey, and Pennsylvania, which all require employees to pay taxes towards unemployment benefits (it is usually funded entirely by your employer), these can be used as a quick rule of thumb to determine whether or not you might qualify for unemployment benefits.

New York Unemployment Benefits Criteria

It’s crucial to recognize that the range of unemployment benefits, as well as the necessary steps to follow in filing for unemployment, varies on a state by state basis. Here, we will go through the unemployment laws of one of America’s most densely populated states: New York. 

If you are a New York resident and you have recently lost your job, let’s first go through the specific eligibility criteria you must meet as described by the New York State Claimant Handbook: 

1. Lost employment through no fault of your own (our first criteria from the previous section).
2. Earned wages in at least two out of four quarters in your base period.
3. Earned a minimum wage of $2600 total within at least one quarter in your base period. 
4. Throughout the entirety of the base period, earn a total of at least 1.5 times your highest quarterly earnings (illustrated in an example below).
5. Be ready, willing, and able to work immediately. This means if you are offered a job that you have the necessary skills and background to perform, you must accept the offer. 
6. Be actively seeking work and keep written documentation of your searching efforts (things such as creating a resume, contacting employers, going to interviews, etc. all fall under the guise of “searching efforts”).
7. Attend required appointments at your local Career Center.

To help demystify the process, let’s do an example.

New York Eligibility Criteria Example

Say your base period was January 2019 – December 2019 (as it would be for anyone filing between April 1st, 2020, and June 30, 2020) and your earnings broken down by quarter were: 

$2,500 in Q1 (Jan. – Mar.) 

$5,000 in Q2 (Apr. – Jun.)

$1,500 in Q3 (Jul. – Sept.)

$1,000 in Q4 (Oct. – Dec.)

You earned wages in all four quarters, fulfilling the second requirement, and your highest quarterly earnings were over $2,600 ($5,000 in Q2), fulfilling the third. 

To check the fourth requirement, let’s take Q2, the quarter with our highest earnings of $5,000, and multiply it by 1.5 (1.5 * 5,000 = 7,500). This means, over the course of all four quarters, you would need to have earned at least $7,500 if your highest quarterly earnings were $5,000. So, by summing up our four quarters of earnings, we find that this requirement is also fulfilled (2,500 + 5,000 + 1,500 + 1,000 = $10,000)!

(Note: This last requirement maxes out when your highest quarterly earnings reach $11,088. At and beyond this point, you simply need to have earned at least $5,544 through the remaining three quarters in your base period in order to fulfill this requirement.)

Now that we’ve verified you meet the eligibility requirements for unemployment insurance, let’s go through how to file and claim benefits.

How & When to File For Unemployment Benefits In New York

It’s recommended that you file for benefits as soon as you have become unemployed, preferably within the first week, because there will be a one-week period after you have filed a claim where you will not receive any benefits. So, the sooner you can file and get the one week waiting period over, the better. 

You can file an unemployment claim either online using an NY.gov ID or via phone at 1-888-209-8124. Again, remember that this is for New York only, so make sure you find the right number for your state.

What Do I Need To Have When I File?

Here is the complete list of the necessary materials you will need in order to fill out a claim provided by the New York State Department of Labor: 

• Driver’s license and Social Security number 
• Contact info including a current phone number and mailing address
• Alien Registration card number (if you are not a U.S. Citizen and have a card)
• Names and addresses of all employers through the last 18 months
• Employer Registration number or Federal Employer Identification Number (FEIN) of your most recent employer (this information can be found on your W-2)
• SF8 and SF50 forms for federal employees
• Your most recent separation form (DD 214) for ex-military service members

How Do I Receive Benefits?

After following the prompted directions either online or via telephone, most of which simply consist of providing information from the aforementioned materials, you will choose to either receive benefits via direct deposit or debit card.

It’s worth noting that benefits paid via direct deposit do take a few days to transfer over. For that reason, it’s likely faster to use a debit card. 

If you choose to take payments via debit card, you will receive a debit card in the mail after your claim is approved. This card will allow you to withdraw your benefits as cash via ATMs. You will be prompted to set up a PIN in order to activate it. This can be done by calling 866-295-2955 (KeyBank Customer Service).

How Much Will I Receive In Unemployment Benefits?

With eligibility fulfilled and payment set up, you are set to start receiving unemployment benefits. But, how much will you get?

The exact amount will depend on your highest quarterly earnings and how many quarters you earned wages within during your base period, but there is currently a state-wide limit of $504 per week in NY. 

The breakdowns for wages and weekly benefits in New York are as follows: 

With four quarters of wages and highest quarterly earnings (also called “high quarter wages”) of more than $3,718, your weekly benefit is equal to your high quarter wages divided by 26.

With four quarters of wages and high quarter wages of between $3,576 to $3,718, your weekly benefit is a flat $143. 

With four quarters of wages and high quarter wages of between $2,501 to $3,575, your weekly benefit is equal to your high quarter wages divided by 25.

With four quarters of wages and high quarter wages less than or equal to $2,500, your weekly benefit is a flat $100. 

Going back to the previous example, our individual earned wages in all four quarters and had a quarterly high of $5,000. This would put him in the first category, as his high quarter wages were more than $3,718, so we can calculate his weekly benefit by dividing his high quarter wages by 26 (5,000 / 26 = $192.30). So, our original person would receive $192.30 per week. 

What If I Worked Fewer Than Four Quarters?

If instead, our individual had only worked three quarters and earned quarterly earnings of $2,500 in Q1, $4,100 in Q2, $1,400 in Q3, and $0 in Q4 (because he didn’t work), let’s see how this would affect his unemployment benefits. 

The breakdowns for wages and weekly benefits in New York change slightly if you only worked for two or three quarters in your base period, but they are still based on high quarter wages: 

With two or three quarters of wages and high quarter wages of more than $4,000, your weekly benefit is the average wages of your two highest quarters, divided by 26, or a flat $143 (you are given whichever number is higher). 

With two or three quarters of wages and high quarter wages of between $3,719 to $4,000, your weekly benefit is equal to your high quarter wages divided by 26.

With two or three quarters of wages and high quarter wages of between $3,576 to $3,718, your weekly benefit is a flat rate of $143. 

With two or three quarters of wages and high quarter wages of between $2,501 to $3,575, your weekly benefit is equal to your high quarter wages divided by 25.

With two or three quarters of wages and high quarter wages of $2500 or less, your weekly benefit is a flat rate of $100.

Going back to our new individual, we can see he would fall into the first category (his high wages are $4,100 in Q2), and so we take the average of his highest two quarters ($4,100 in Q2 and $2500 in Q1) and divide by 26. (4,100 + 2,500 / 2 = 3,300; 3,300 / 26 = $126.92) Here, this calculation results in benefits less than $143, so he would instead receive a flat rate of $143 per week. 

How Long Do Unemployment Benefits Last For?

After filing for unemployment and waiting for the one-week period, you will begin receiving unemployment benefits (though sometimes this wait can be closer to two or three weeks, in which case you’ll receive back pay for the additional weeks with your first payment). 

If you follow the steps below on how to claim unemployment benefits and keep up with the regular re-certification, you will be able to collect benefits for the duration of your unemployment, up to 26 weeks.

Most states will require you to file claims via telephone or online, either weekly or every other week. During this process, you’ll be asked to re-certify your unemployment eligibility, including reporting any earnings or job offers received during the week. 

Most of the time, you’ll also be required to request payment each week in order to receive benefits, which can also be done either online or via telephone and must be done within one week (i.e. you must claim your unemployment benefits for the week of 4/13 – 4/19 between 4/19 – 4/25). 

How Do I Re-Certify Eligibility?

Using our example New York resident, he would have to claim benefits each week either online using his NY.gov ID or via telephone at 888-581-5812 (NY State Department of Labor). Regardless of how he chooses to claim benefits, he will then be asked the following series of questions, which may vary slightly state-to-state but are generally similar: 

• Did you refuse any job offers or referrals during the past week? 
• Did you perform any services for a business or person (paid or unpaid) during the past week? 
• If you worked this past week, did you earn more than $504 in wages?
• Were there any days in which you were not ready, willing, and able to work, and if so, how many?
• Did you receive any vacation pay (not including pay from unused vacation days)?
• Did you receive any holiday pay (not including pay from unused holiday credits)?
• Have you returned to work?

If, based on the answers to these questions, our individual still qualifies for unemployment benefits, he will then receive them either via debit card or as a direct deposit. 

One other important note: At any point during your unemployment, the state department of labor can request your presence for an interview in which you could be asked to bring written documentation of your job search. If you fail to appear for this interview, you can be denied future unemployment benefits. 

For this reason, it is crucial to always keep written records of any job search efforts undertaken (information such as completed job applications, addresses and contact info of any businesses applied to, dates and locations of interviews or job fairs, etc. are all useful here). States also vary on how often you must search for work or engage in such activities (New York requires a minimum of 3 per week), so check your state’s policies online.

Coronavirus’ Effects On Unemployment Benefits

The recently passed CARES Act has largely increased the amount one receives from unemployment benefits amid the Coronavirus pandemic. First, in addition to the changes made to unemployment insurance, every individual who has filed as an independent in last year’s tax forms and who earns less than $75,000 per year will receive $1,200 cash (or $2,400 cash for joint-filers earning a combined income less than $150,000 per year), as well as an additional $500 per household dependent (read: child or someone under your primary care).

As for changes to unemployment benefits, the CARES Act provides $600 per week through July 31st in addition to your state-determined benefits, and it extends the duration one can claim benefits for by 13 weeks, up to a total of 39 weeks. This means in states like New York and California, whose unemployment benefits normally only last for up to 26 weeks, residents will be able to claim the full 13 extra weeks.

Who Else Is Eligible For Benefits?

The CARES Act also waives the one-week waiting period and extends eligibility to the following individuals: 

1. Workers who are self-employed or work as contractors
2. Workers whose places of employment are currently closed or has ceased operations due to Coronavirus
3. Workers whose hours have been cut and are now working part-time due to Coronavirus
4. Individuals unable to work because they are temporarily quarantined
5. Individuals who have left work in order to limit a high risk of exposure or to care for a family member

With new decisions regularly coming out from federal and state governments in response to COVID-19, it’s important to stay up to date on any new developments that may affect your unemployment benefits. In light of such a rapidly-changing system, we recommend consulting an attorney for more detailed specifics about your state’s unemployment laws.

Should I Apply For Unemployment If I Can Afford Not To?

This may be your first time in such a situation where you are collecting unemployment benefits. But, do not worry: millions of people across the country are in the same boat. Some people may feel a sense of shame or disappointment in collecting such benefits; however, it’s important to remember that unforeseeable circumstances happen to everyone – what’s most important now is to try to find stability during these difficult times.

In an ideal world, everyone would have enough money saved up in a high yield savings account to weather a stint of unemployment. Remember that you might have been contributing to unemployment insurance when you were working. If you qualify for benefits, it would be financially prudent to apply for them. Resorting to draining your 401(K) retirement account or Roth IRA in a time of hardship could end up haunting you later in life. Unemployment benefits exist for a reason.

Lucas Woodley

Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.

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