The Keys to Cutting Your Auto Insurance Rates

Everybody wants to reduce auto insurance costs.

Understanding what matters most to underwriters might be the best place to start.

Following are some things to consider:

Statistical Safety Record:

Without a doubt, the most important item is safety, but that includes criteria that may not be obvious.

For example, new drivers tend to have safe records because they haven’t established a history. Therefore, they are unproven. Counter the impact by taking a driver’s education course to show you’re safety conscious.

Experienced drivers should focus on remaining accident-free and abiding by traffic laws.


Gender, age and even zip code have a major impact on auto insurance rates. Some can be dealt with, while others can’t. For example, younger male drivers statistically have more accidents, so they tend to pay more. Likewise, if you live or work in an accident-prone area, expect to see higher rates. Installing an approved security system and parking indoors at all times might help.

Miles Matter:

Perhaps one of the most frequently forgotten criteria is the number of miles driven each year. While you may not be able to reduce the total number of miles driven to and from work or school, it is still possible to reduce the total cost of coverage.

Consider carpooling once or twice a week, taking public transportation or squeezing in a little exercise for quick commutes.

Over time, it all adds up to fewer miles and less costly auto coverage.

Shared Concern:

Last but not least, other drivers that have access to your automobile are likely to impact rates.

In some cases, it is actually more cost-effective to purchase a second vehicle and help pay for an individual insurance policy than include a secondary driver, especially if liability is a major concern.

Four Smart Ways to Keep Track of Your Belongings

Keeping track of your belongings isn’t always as simple as it may seem, especially when it comes to providing proof of purchase and value for insurance purposes.

In the event of a claim, it’s important to have an up-to-date inventory readily available. Perhaps the most common method is to write down a list of all items owned, including model numbers, age and condition.

Following are a few ways to keep track of your belongings:

Purchase on Credit: Purchasing an item with a credit card is one easy-to-use method of tracking the acquisition of new items. Depending upon your lender, it may also extend the warranty of the item.

Picture It: When purchasing a new item, take a photo of it and scan the bar code. Software is available online for free to record all the pertinent data, including model number. Be sure to back up the data on a secure storage server on a regular basis.

Keep Records: Expensive items such as art, jewelry and other collectibles may have fluctuating values, so it is a good idea to have a professional appraisal done. Keep a copy of the appraisal plus all photographs in a safe area, and be sure to ask your insurance agent about specialized riders if an item is over the limit for normal household values.

Update Annually: Be sure to schedule an annual update. Eliminate all items that were disposed of during the year and verify new acquisitions. Record the current condition status of items, including repairs, enhancements or other modifications that may impact their value. Make a backup copy to be stored in a secure online location, safe-deposit box or other protected place.

Three Very Good Reasons to Have Life Insurance

If you think you don’t need life insurance, you may want to reconsider the whole concept.

Life insurance proceeds can help your family members if you die before they do.

Following are some of the items that life insurance proceeds can cover:

Medical and Funeral Expenses:

Chances are you’ll incur significant medical expenses prior to your death, as a lengthy illness can rack up close to $1 million in medical bills.

And even the most basic funeral service is costly.

Do you really want your family to worry about these things when they’re mourning your death?

Debts, Including Taxes:

You will probably die with a number of debts that need to be settled.

Some of these debts include inheritance taxes and related fees.

If your family doesn’t have the cash to pay these debts, they may have to sell your other assets to do so and make ends meet.

Worse, failure to settle these matters promptly can lead to penalties or forfeiture of your estate.

A life insurance policy can provide cash for the settlement of these obligations.

The money from that life insurance policy can help your estate stay with your family.

Income While Your Family Is Adjusting:

If you’re the main provider in your family, your death can diminish your family’s income and force members to lower their standard of living.

Family members may have to give up goals you’d planned together, such as buying a home or going to college.

A life insurance policy can minimize this situation by replacing your lost income – and give family members time to deal with their grief, get back on their feet and find other sources of income.

An insurance agent can help you determine if you need life insurance, and if so, how much is most suitable for your individual situation.

Between 60 and 65? Health Insurance Options Revealed

While early retirement – planned or unplanned – can mean no more commute or mandatory overtime, it could also mean no more group insurance coverage through an employer.

And anyone who is age 60 or over but not yet age 65 and eligible for Medicare could be left in a quandary without health insurance benefits.

The good news is that there are some options available, even though one of the most significant factors in qualifying for health insurance is an applicant’s age. In fact, individual health insurance coverage is available to applicants up through age 64½. However, at that point, applicants are no longer allowed to apply for individual coverage, as they will soon be eligible for Medicare benefits.

With this in mind, an individual in the age group between age 60 and 64½ needs to take special precautions to ensure that he or she has health insurance coverage prior to the age restriction. Otherwise, the individual could be left “in the gap” for several months until Medicare benefits begin at age 65. And that could be taking a very big risk.

There are a variety of individual health insurance plans available to those in this age category.

In addition to just individual coverage, applicants could also consider going with a high-deductible health insurance plan coupled with a health savings account.

This could help to reduce insurance premium costs, while still allowing a savings component to pay for some services that may not be covered in the insurance plan.

How to Design the Ideal Disability Insurance Plan

With so many employers cutting back on insurance benefits for employees, it is becoming more prevalent for individuals to go without coverage.

But the odds of incurring a disability due to illness or injury are still high. In fact, at age 32 the chances of becoming disabled are four times more likely than death. And, with one’s ability to earn an income being an extremely valuable asset, it makes sense to insure it, just the same as one’s home or auto.

When designing a disability insurance policy, there are several parameters that go into the plan. These features can be chosen based on the applicant’s needs with regard to income amount, length of coverage needed and other criteria.

Most individual disability insurance plans will allow an applicant to choose the length of time the person will receive his or her income benefits once he or she becomes disabled. Some common benefit periods are two years, five years or up to the time that the insured reaches age 65. Any disability insurance policy that pays benefits for longer than two years is considered to be a long-term policy.

Applicants may also choose a monthly benefit amount to be received. Typically, this amount will be a factor of the person’s normal wages or earnings. In most cases, the insured will receive a benefit that is equal to 50% to 70% of the person’s regular income earnings.

An individual will also need to choose a waiting period. This can be considered similar to a deductible in that it is the length of time that an insured would need to wait until his or her policy benefits begin to pay. Waiting periods can range from just a few days up to several months or longer. The length of the waiting period will affect the policy premium in that a longer waiting period will result in a lower cost for the policy.

Certain causes of illness or accident may be excluded under some policies, so it is a good idea for those purchasing a disability insurance policy to read all the small print in order to be sure what they will, and will not, be covered for.

Protect Your Business from Costly Lawsuits

Once upon a time, general liability insurance was reserved for a select few business owners in high-risk industries. Today, all that has changed.

Lawsuits are a common threat for large- and small-business owners alike. As the cost of defending a claim continues to increase faster than the rate of inflation, even the most cautious business owners may face financial ruin – even if the case is eventually dismissed.

Fortunately, the solution – general liability insurance – is simple and cost-effective.

General liability insurance is simply a policy that provides additional protection against the assets of a business in the event of an accident, injury or other damage.

The policy typically covers the cost of legal representation and face value of a judgment in the event of a successful lawsuit.

It does not protect the personal assets of the business owner, just the company assets.

Purchasing general liability insurance is fairly straightforward, but it does require a bit of advance planning and preparation.

Following are some things to keep in mind:

For example, an insurance company will need a copy of your business name, industry classification, address and other pertinent information.

An insurance company can help you find the policy that meets your needs, taking into account limitations and exclusions.

It may be more affordable to bundle general liability insurance with a business owner policy if the business requires only a minimal liability policy.

Why You Should Do an Annual Policy Review

Small-business owners are accustomed to doing annual employee reviews, audits and reviews of existing inventory.

Unfortunately, many forget the most important annual review of all – to look at your insurance needs.

There are several reasons your business might need to increase or decrease insurance coverage.

Following are some of those reasons:

Property and Casualty Coverage: Have you purchased or disposed of property or equipment? If so, it may be time to update your existing policy to reflect changes to capital investments.

General Liability: Expansion of the physical property, new locations and expanded product or service offerings may require additional layers of liability protection.

Health, Disability and Other Employee Benefits: New hires, especially those in critical positions, may change the overall status of health insurance premiums for the entire company. Take time to carefully analyze the needs of employees versus expenses to find the right balance between cost and benefit.

Commercial Auto Insurance: Whether you have an entire fleet of company-owned vehicles or simply use employee vehicles to run errands, take time to audit transportation trends. Be sure to speak with your insurance agent about mileage adjustments, accidents or other changes.

Key Employee Insurance: Critical employees, including the primary business owner, may require special insurance to protect the company in the event of a disability, injury or other situation where specialized knowledge or skill is required, especially if the business plans to seek outside investment or financing.

Umbrella Policy: Savvy small-business owners may want to invest in two umbrella policies – one for the business and one for their personal coverage. Umbrella insurance, also known as excess liability, provides protection against claims that may exceed the normal policy limits. As the business grows, it is important to increase the limits of coverage without breaking the bank. Umbrella insurance allows business owners to reduce risk without making major changes to the primary policy. Instead, the insurance can grow as your business grows, simply by adding an umbrella policy to enhance the existing coverage options.

Workers’ Compensation: Workers’ compensation costs are not set in stone. Instead, they are a reflection of the overall industry, individual record and general classification structure of the company. Doing an annual audit ensures that the latest information remains up to date and potential deductions are taken into account.

Bonds: If your business deals with issues of trust and security, bonds are already a big part of your business. Changes to employee status can have a profound impact on your bottom line and business reputation. Make a point of knowing how employee conduct both on and off the job may impact your company.

Equipment Coverage: Contractors and others concerned with the loss of equipment, vandalism or destruction of property should invest in ample equipment coverage, especially if it is an expensive investment or critical to the operational success of an endeavor.

How a ‘Laddering’ Strategy Can Pay Off

Extended life expectancies and volatile markets have led many retirees to annuities – and many of them are using a strategy called “laddering” to take advantage of potentially rising interest rates.

An annuity is essentially a contract with a life insurance company.

You pay the life insurance company and it, in turn, guarantees you a stream of income.

With an immediate fixed annuity, you pay the insurance company a lump sum and it promises you regular, fixed payments for life that are usually based on current interest rates.

In today’s low-interest-rate environment, depositing a significant amount of your portfolio in an immediate annuity may not seem wise.

If you believe interest rates will rise in the future, though, you can potentially protect yourself by laddering your annuities.

With laddering, you invest in a number of immediate annuities in stages over a period of time.

For example, you might buy an annuity every year for five years or every five years for 15 years.

This strategy has two potential benefits.

First, if interest rates rise, the annuities you purchase later will be based on a higher interest rate and thus generate a higher income stream.

Second, the older you are when you buy a fixed immediate annuity, the higher the payout you’ll receive.

There are no set rules for staggering your annuity ladder, but in general you may want to consider completing your ladder about halfway between your current age and your life expectancy age.

So, an investor who is 65 and has a life expectancy of 85 may want to complete his or her ladder in 10 years.

It is best to consult an insurance agent to help you determine if an annuity ladder is suitable for your needs, and if it is, construct it so it best meets your retirement income needs.

Nearing Retirement? Why It Pays to Consider Annuities

Many investors approaching retirement don’t think they need annuities, but the lifetime income they offer can add security to portfolios that consist primarily of stock and bond funds. This is particularly important when markets are volatile.

An annuity is essentially a contract with a life insurance company. You pay the life insurance company, either in a series of payments or a lump sum, and it, in turn, guarantees you a stream of income for a specified period, often life.

Annuities have long been considered important retirement planning tools, but today, in wake of the downturn of 2008 and 2009, they’re getting even more attention. That’s because so many investors were forced to delay retirement.

Any market downturn that hits just before retirement, or during retirement, can leave even conservative investors with a much smaller nest egg and little time to recoup the losses.

According to the Financial Research Corporation, a 65-year-old retiree with a $1 million portfolio of stocks and bonds who withdraws an inflation-adjusted $45,000 a year has a 25% chance of running out of money before age 92. On the other hand, if the same retiree invests $600,000 in stocks and bonds and $400,000 in an immediate annuity, and withdraws the same inflation-adjusted $45,000 a year, he or she only has a 6% chance of running out of money before age 92.

In other words, if you invest a portion of your retirement funds in an annuity, you’ll have a dependable income stream for life – and that’s important in a retirement portfolio.

Are You Protected From Employee Claims?

Employment practices liability insurance (EPLI) helps protect small business owners from claims that arise from employees in relation to how the owners conduct their business.

For example, employees might file a claim for discrimination, wrongful termination, sexual harassment or wrongful discharge. With the average settlement for this type of claim now approaching $180,000 to $250,000, it is easy to understand why more small business owners than ever are taking steps to protect themselves from this growing threat.

Following is some information to help small business owners choose EPLI:

Determine Coverage: EPLI can provide coverage for employees, independent contractors and even leased employees as well as third-party providers such as salespersons. Coverage for off-site, remote and independent contractors is especially important, given the lack of direct supervision associated with performance.

Determine Deductible and Other Limitations: EPLI can be purchased in amounts ranging from $1 million to $25 million with corresponding deductible levels. Many policies will also include specific exclusions that limit or omit coverage during events such as a merger or major downsizing. Criminal conduct or other deliberate actions are also excluded.

Determine Your Small Business Risk: Every small business should have a written code of conduct as well as other pertinent personnel policies in place. Your agent may ask to review these before making a final determination on the cost of the policy, so be sure to keep them up to date and reflective of the day-to-day operations and expected conduct of employees. Nonprofit organizations are also at risk.

Determine Effective Dates: Policies are written on a “claims made” basis, and a policy must be in effect before a claim will be considered. Retroactive claims are available only as a special policy addendum and are most frequently used in combination with an acquisition or other unique event.

Annual Review: EPLI may be part of a comprehensive directors and officers policy or a stand-alone policy. It is important to do an annual review. Be sure your insurance changes with the company, including new situations, growth or downsizing, or other unique needs and demands. Ask your agent to coordinate each form of insurance so they complement rather than compete with one another.

Prevention is Still the Best Policy: The very best plan of action is to try to prevent this type of litigation from occurring in the first place. In a perfect world that may be possible, but today even the most diligent business owners face financial ruin from an unfounded lawsuit. According to the Society for Human Resource Management, 57% of respondents to a survey indicated their organization had faced an employment-related lawsuit in the prior five-year period. Even if a business owner wins, though, the owner may still be on the losing side simply due to the cost of defending the company. In fact, it’s not uncommon for employers to settle out of court in an attempt to cap out-of-control costs. By working with a knowledgeable agent, it is possible to develop a plan of action and human resource guide that reduce the bad behavior and unanticipated outcomes that could result in an employee-related lawsuit.

Why Film Insurance Isn’t Just for Hollywood

Film insurance used to be a rarity reserved only for big-budget Hollywood films.

Today, all that has changed as film and media go mainstream.

Small business owners, museum archives and even rare family events are just a few of the important types of documentation to be found on film.

Protecting against the loss of a major investment or rare footage is more important than ever, especially given the proliferation of computer imaging techniques capable of altering images with the click of a button.

Following are three tips to help you purchase film insurance:

Consult Your Agent: Ask your agent if you need a stand-alone policy or rider. Depending upon the value, importance, rarity and other factors it may be possible to add a rider to an existing policy rather than purchase an independent policy. Rare footage, significant investments or expensive film projects are often better served by an independent policy.

Decide on Principal Production, Postproduction or Both: Once you determine the need for a film insurance policy, it is important to understand the differences between principal production and postproduction. Principal production provides insurance for the actual creation and shooting of the film, including script, actors or those items that would impact the producer. Postproduction may include major mishaps related to the computer-generated upgrades or modifications used to restore or enhance old archives.

Understand the Risk: Every situation is unique, so it is important to properly identify risk. For example, a business owner may encounter an inadvertent intellectual property infringement or perhaps an especially difficult actor during the filming process. Rough terrain, perilous filming situations, aging or out-of-date transfer of old film archives, or even a 3-D project gone bad can each impact the price, deductible and exclusions of the policy. Film insurance is a specialty product, but one that is exceptionally affordable.

Should Couples Consider Shared-Benefit Coverage?

Many long-term-care (LTC) insurance policies are designed to protect individuals and insure just one person.

When it comes to couples, though, what happens if one spouse or partner needs more coverage than that offered by the individual policy?

Many insurance companies have addressed this need with shared-benefit LTC options.

LTC policies that offer shared benefits enable spouses or partners the ability to use some or all of the other’s benefits when their own have been exhausted.

And they can often do so for a premium that’s less than purchasing additional coverage outright on each separate policy.

For example, if a policy offers three years of benefits to each spouse or partner and one has used the pool of benefits dollars for three years, then the benefit for that individual will continue by dipping into the other partner’s pool of benefit dollars.

While these “shared care” types of LTC policies typically cost more than buying two separate policies, they allow policyholders to buy a policy with a shorter benefit term with a “pool” of benefits that both insured individuals can share.

In addition, some shared-benefit LTC policies now offer a provision to protect a surviving spouse or partner.

For example, if one partner passes away, the survivor’s policy benefits will go up by the amount of the deceased spouse’s or partner’s unused benefit dollars.

Some policies even offer the option for the surviving partner to buy a new LTC policy without the need to go through medical underwriting – even if the individual has poor health and would otherwise be disqualified.

Purchasing a shared-benefit LTC insurance policy – especially one that offers survivorship benefits – can help to protect spouses or partners from greater-than-expected LTC expenses, as well as help to avoid the risk that a deceased spouse’s or partner’s unused LTC benefits will disappear.

How Your Premiums Are Calculated

Underwriting is a part of purchasing any type of insurance policy. When an applicant applies for insurance, the person is essentially asking the insurance company to take a chance on him or her. Thus, the insurer is taking a risk.

In the case of life insurance, the chance is that the applicant’s life will last as long as the average life expectancy for individuals of that particular gender and age. And if the insured lives as long as expected, then after death the money paid in premiums has created enough investment income for the insurance company to make a profit once proceeds are paid to a beneficiary.

Underwriters for different types of insurance look for different factors when initially underwriting a policy. For instance, with life insurance, underwriters look for conditions that could possibly cause an early death of the applicant. This could include heart conditions or other types of issues that are likely to cause an early death.

If an applicant has such a condition, chances are that the person will be denied life insurance coverage. This is because the early death of an insured would actually cost the insurance company a great deal of money in comparison to the small amount of money they are likely to receive through premiums.

Conversely, underwriters on health insurance policies look more for conditions that would not cause an early death, but rather would cause long periods of health or medical treatments. For example, someone with diabetes is likely to live a long life but will require years of medical treatment and medications, costing the insurer a great deal more than the insured has paid in premiums.

Why Annuities Make Sense for Retirement Savings

A major benefit of choosing an annuity as a retirement savings vehicle is the tax-deferral advantage. Tax-deferred assets grow untaxed, meaning that interest, dividends and capital gains earned on the investments appreciate until they are withdrawn.

Following are three benefits of tax deferral:

No Taxation During Accumulation: Because returns are not reduced by income taxes every year, tax deferral lets you experience potentially higher overall returns during the accumulation phase.

Compounding: This is the process by which the money you make from an investment can be reinvested to make even more money. As a hypothetical example, let’s say you have invested $10,000 and it earns interest of 10% per year. In the first year, you will earn $1,000 in interest. In the second year, you will earn $1,100 in interest. Why? Because not only does your initial investment of $10,000 accrue interest, but also does the additional $1,000 you earned in the first year.

Potentially Lower Tax Rate Upon Withdrawal: You probably will not withdraw the assets you are accumulating in a tax-deferred account until later in life when you could be in a lower tax bracket, so you will also possibly minimize the taxes you have to pay on withdrawals. Your advisor can help determine if an annuity is a good tax-deferred investment vehicle for you.

The legal and tax information contained in this article is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax counsel for advice and information concerning your particular circumstances. Neither we nor our representatives may give legal or tax advice.

How to Use Fixed Annuities in Your Portfolio

The basic benefit of investing in a fixed annuity is the potential for a guaranteed payment.

But just how should you use an annuity?

How much money should you put in an annuity versus other types of investments?

First, it is important to remember why you are investing in a fixed annuity in the first place.

Whether the economy or markets are performing well or performing poorly, a fixed annuity will provide you with a minimum amount of income every month.

This can be appealing to investors who are looking for a stable level of income.

So, when it comes to allocating a portion of your overall portfolio to a fixed annuity, most financial advisors will recommend that you look at how much income you will need and for how long you will need it.

A financial advisor will also recommend you look at whether your assets can provide that level of income without achieving substantial growth.

If you don’t need your assets to grow significantly, you can put more of your money into a fixed annuity.

On the other hand, if you need significant growth in your portfolio to provide you with income for life, your advisor may want to allocate less to a fixed annuity because better returns may be available by investing in a diversified portfolio of securities.

As a result, there is no single answer for how to use annuities in your portfolio.

Some investors will put no more than a third of their assets in annuities.

Others will put three-fourths of their assets in. That’s a big difference.

Your advisor can help you determine how much of your nest egg to allocate to a fixed annuity in order to receive the amount of income you will need.

Contact your advisor today for details.