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7 Kinds Of Insurance Every Business Needs

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Commercial Insurance Broker Toronto | KASE Insurance

When people start making plans to start their business, they sometimes overlook the fact that they need to get different types of coverage. Thousands of companies provide guarantees to protect owners against any unforeseen costs related to lawsuits, thefts, and accidents, among other things. Commercial Insurance Broker Toronto | KASE Insurance like companies, cover several policies under a single contract to make it easier for their clients. Here are the various plans every establishment owner should consider getting. [Read more…]

How Can Disability Insurance Help? All You Need To Know

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You may have got insurance for your home, car or health because this is something that everyone does. But have you thought about insuring your ability to make a living? Probably not, even though you will now realize that it matters the most! Getting disability insurance is a smart move in this context because it pays up a portion of your income if you cannot work for a prolonged period due to an injury, illness or workplace accident. In fact, anyone who relies on a paycheck and has dependents to support should absolutely have this coverage. Here are some facts that you need to know about disability insurance.

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How To Claim Insurance For Wrongful Death

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Losing a loved one is traumatic in itself, but it can be excruciating in case of unexpected or wrongful death. While it can leave you scarred for life, you may also face financial setbacks when a family member dies in an accident or a situation that could be avoided. The bereaved family has a right to approach the insurance company and claim financial compensation for the wrongful death of their loved one in such an event. However, it is better to know the law well enough before you file a wrongful death claim because it keeps you one step ahead of the insurance company. Here are some facts that you need to be aware about.

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Do I Really Need Disability Insurance?

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For most Americans, saving money is a priority. Unless you bring in an exceedingly high income –– or you have your priorities greatly out of whack –– chances are you think about ways to cut down on expenses and save yourself some cash from time to time. Unfortunately, young people in particular are prone cutting or omitting vital services from their budget. Consider disability insurance: it’s likely few people in their 20s or early 30s contemplate the possibility of suffering a debilitating setback. As such, it’s also probable that a great deal don’t bother applying for disability insurance coverage, or if they do, they don’t prioritize it. This oversight could prove extremely costly, though. For evidence to that point, here are three reasons why you should rethink disability insurance today:

Time is a Factor

As with just about any insurance program, the sooner you enter into it, the lower you can expect your rates to be. True, every case is unique, but in general younger people will pay lower premiums than their older counterparts. This is why it’s essential for young professionals to look into disability insurance programs now and to demonstrate a modicum of foresight. If you plan on starting a family in the future, signing up for disability insurance now will guarantee you cover yourself in times of need and lock in the lowest rate possible. Sitting around and waiting will only end up costing you in the end –– one way or another.

“Disability” is a Fluid Term

You may be wondering: if I don’t work in a high-risk work environment, why do I need to invest in disability insurance? It’s a good question, to be fair. And the best answer is the fact that “disabled” means a great deal more than most people realize ––  since different jobs require different levels of physical involvement. So what qualifies as “disabled” for one profession, might not for another. Think about doctors who utilize intricate equipment to perform surgery. If they then develop severe arthritis in their hands, they become unable to perform their duties as a result of physical disability. That’s why physician disability insurance is distinct from disability insurance for teachers, for example.

The Worst-Case Scenario

Of course, the most obvious reason why everyone should set aside some capital for disability insurance is the fact that the worst-case scenario without it hardly bears consideration. Indeed, if a person becomes physically unable to perform their job, it can then be extremely difficult –– if not impossible –– to support themselves. And that doesn’t even take into account the possibility of shouldering family-based financial burdens. Regardless of how substantial your emergency fund may be, it’s unwise to overlook disability insurance. In reality, paying a regular rate for disability insurance is a paltry amount when compared with the benefits it could provide one day. It’s never fun to think about calamity, but it’s irresponsible not to plan for it.

How does Investment Strategy Change with Age?

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As we all know, as we age and our lives change. Our financial responsibilities and investment strategies change along with it.

In most cases, there are two truths to abide by. You have saved as much as you can and invest according to your risk tolerance, time horizon, and goals.

But what else is there? How do my financial life and my investment strategy change with time?

Starting career

Either you are just out of school or have been in the workforce for a few years. Regardless of which path you came from, there are two things on your list. Get rid of debt, or at least get it under control, and save for retirement.

There are several ways to plan for debt repayment.

  • Debt Snowball
  • Debt Avalanche
  • Balance transfers (credit cards)
  • Personal Loan (loan consolidation)
  • Refinance (student loans)

Check out this post on paying off your debt, here.

Step two is saving for retirement. If the company you work for offers a retirement plan, sign up for it. Max out your contributions if you can, but at the very least, contribute enough to get the employer match (if it’s offered).

Also, open a Roth IRA. If you have a little extra, contribute some to a Roth IRA in addition to your workplace plan.

Your investments. Time is your best friend at this point. Most of your investment allocation should be focused towards growth. Don’t put all of your eggs in one basket, diversify among stocks and bonds.

Again, the majority (at least 70%) of your portfolio should be in stocks, in some form or another.

Starting family

If you’re like the average American, your family starts to form around your 30th birthday. Hopefully, you’ve got a good head start on paying down your debt and saving for your retirement. Continue on that path.

With a family, comes saving for your kid’s college education, as well as other expenses (house, car, etc.). Contribute a little every month to a 529 College Savings Plan. The funds within this account can be invested aggressively, similar to your allocation in your twenties.

Your retirement savings is still in a good spot. Similar to your twenties, regarding the stock and bond allocation.

One last thing, get some disability and life insurance. If you have people that count on you, you need to protect them.

High earning years

More than likely, this will be your forties and fifties. At this point in your life, the average American is in their peak earning years, so take advantage of that and increase your retirement savings.

This will also be the time that your kids either go off to college or enter the workforce. Congratulations (kind of) you are empty nesters. You no longer have a college education to save for. More can go towards your retirement.

More than likely, though, you will have miscellaneous expenses from your kids that you will continue to pay for.

Your investment strategy will change slightly. You are getting closer to retirement so it’s time to start protecting what you’ve saved. A little less in stocks and a little more in bonds. Think 60/40 or 50/50.

Near retirement

You are in the home stretch! At this point, your debts (including your house, hopefully) should be paid off. All assets and your retirement savings should be looking healthy.

Your investment allocation will be similar to the last section. Definitely 50/50 if not 40/60, stocks to bonds.

Retirement

Congratulations, you’ve made it to your retirement. This can be liberating for some, but for others, this is an emotional challenge.

You’ve spent the last 40 or so years saving for retirement and now you are expected to start spending it. This is very tough for a lot of people.

From my experience and in my opinion, you should retain some sort of activity. Something that gets you out of the house, something that forces you to socialize, and something that makes you use your brain.

Staying social and sharp mentally could add some extra time to your life.

Your investments should be conservative. At least 40/60, but the more conservative the better. And it’s usually not a bad idea to keep some of your savings in cash, for emergencies such as health expenses (which will certainly go up at this point).

You don’t have many or any, more chances to earn more money, so it’s very important that you protect what you’ve saved.

Conclusion

The above information can be very useful to the average person. Paying off your debt and making your retirement savings a priority is very important.

Unfortunately, there is a retirement savings crisis in America. People aren’t saving nearly enough for retirement. They are counting on other sources, like Social Security or pensions to fund their retirement.

This isn’t enough. You won’t receive enough from Social Security to support yourself and pensions are few and far between, nowadays. We all need to do a better job of saving.

This article was created for informational purposes only. The above items are not to be taken for personal financial advice. Please consult with a professional about your personal situation.

To learn more about retirement savings and investing, and for our disclosures, visit our website: www.crgfinancialservices.com.

 

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Types of Life Insurance

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Insurance can take many forms, but one of the most important and often most overlooked is life insurance.

If you have a family or anyone that relies on you to support them, you need life insurance. Even if you don’t have a family, getting coverage now when it’s less expensive is a better alternative than waiting until you have a family, needing coverage, and paying more for it.

There are several different types of life insurance, however, and you need to know what they are before you can select the one that meets your needs.

What are the different kinds?

  • Term Life
    • Renewable
    • Level term
    • Decreasing Term
  • Whole Life
  • Universal Life
    • Guaranteed Universal
    • Indexed Universal
    • Variable Universal
  • Variable
  • Simple Issue
  • Guaranteed Issue

What are the characteristics?

  • Term – This is the cheapest form of life insurance you can buy. There are no bells and whistles to this type of policy. You are paying for the death benefit, and that’s it. It can expire with term lengths ranging from 5 to 30 years.
    • Renewable term – Smaller term lengths, but the policy automatically renews at the end of each term. There is a step up in premium at each renewal, though.
    • Level term – Most common form of term insurance. Death benefit and premium payments stay the same over the life of the policy.
    • Decreasing term – Death benefit and premium payment decrease over the life of the policy. People buy this because as they accrue more assets, the less they think they’ll need for a death benefit to support their family.
  • Whole life – Is one of the more expensive forms of life insurance. You are insured for your entire life, and there are no expiration dates. Additionally, the policy will build up cash value through an investment component. The average rate of return is around 2%-3%.
  • Guaranteed Universal – Cheaper than most other types of life insurance, except for term. Generates little cash value, less than whole life. Late payments can forfeit the policy, wasting every past premium payment. The death benefit will not change.
  • Indexed universal life – Cash value component is marked to an index, like the S&P 500. Upon inception, you decide on the participation rate. If you select 80%, you will participate in 80% of the index. For example, if the market goes up 10%, you only go up 8%. However, if the market goes down 10%, you don’t go backward. Your return for that period is 0%. Additionally, there can be a cap placed on the amount of gains that you make. Premium payments and death benefit can be flexible.
  • Variable Universal – Cash value is tied to an investment account. Requires hands-on management. Can take partial distributions or loans from the cash value. Unlike the indexed universal, the cash value in a variable policy can go backward if the investment account declines.
  • Simple issue – All of the above policies require a medical examination. This is part of the underwriting process and helps the insurance company calculate your insurability. A simple issue policy does not require an examination. You take a questionnaire and that is it. However, you can be turned down depending on your answers. If you lie, you can be charged with fraud if caught. Don’t lie.
  • Guaranteed issue – This is the most expensive form of insurance you can get. Reason being is there is no underwriting of any kind. You get the policy you apply for. The coverage amounts/death benefits available are low compared to other coverages, however.
  • There are a number of smaller or niche types of insurance, a good example of these are marriage insurance, burial insurance, or final expenses insurance.

Which one should you buy?

Good question. I guess it all depends on what you are willing to pay and the features you want in an insurance policy.

In my opinion, life insurance should be viewed as any other type of insurance policy. You are paying for protection and that should be it.

If you want money to accrue in a cash value account, determine what it would cost for a whole life policy, compare that to the cost of a term life, and invest the difference between the two.

However, there are certain life insurance companies, usually the bigger, better-known ones, that have made dividend payments to whole life insurance customers.

Over the life of the policy, that dividend can grow large enough to where it actually pays your premium for you. But this isn’t the case with all customers and dividends are not guaranteed.

There are generally two things to consider when picking out a policy.

One, what are you looking for? Do you just want straight life insurance? Or are you looking for a few more features, like cash value or a chance for growth?

Two, what can you afford? Regardless, you should have some form of insurance coverage, especially if you have a family.

Conclusion

Life insurance is incredibly important. I stress this point even more if you have a family with people who count on you for support.

Consider each of the points illustrated above and choose the best form of insurance for your personal situation.

Life insurance product features and availability vary by state. Restrictions and limitations may apply. For federal income tax purposes, life insurance death benefits generally pay income tax-free to beneficiaries pursuant to IRC Sec. 101(a)(1). In certain situations, however, life insurance death benefits may be partially or wholly taxable. Please consult a financial professional for additional information. All guarantees are based on the claims-paying ability of the insuring company.

To learn more about life insurance and to view our disclosures, visit our site > www.crgfinancialservices.com.

 

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

General Liability Insurance: Do You Need It and What Coverage is Best for You?

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It is probably fair to say that some business owners are not even aware that their company needs the sort of protection provided by general liability insurance and there can sometimes be some confusion or misconceptions relating to what is and what coverage it provides.

Here is an overview of what general liability insurance is all about, including a look at whether you need it and what sort of coverage would be right for your business.

Protecting your assets and more

In general terms, general liability insurance is designed to protect your company’s assets and provide a safety net when you are forced to pay for certain obligation and liabilities that would otherwise leave you financially exposed, such as some medical costs.

You can get a tailor-made cover that is specific to your type of business such as general liability insurance for contractors with a view to paying for the sort of cover that is relevant to your needs, although certain aspects of coverage will probably be similar across a range of policies available.

An example of how general liability insurance can protect your business would be a scenario where someone suffers an injury on your premises and files a claim for damages against your business.

Having the right liability insurance in place should cover the cost of your legal defense together with the settlement of an award made against you if the claim is successful.

Without having that peace of mind and level of protection from general liability insurance your business and assets could be exposed and financial losses could even put your ability to continue trading in jeopardy.

Difficult to predict

You might decide that the nature of your business or the level of diligence you apply to any work that you do should ensure that you are highly unlikely to face any sort of claim and therefore, don’t need any liability insurance.

It may well be the case that you trade for years without suffering any sort of financial loss or claim that could have been covered by insurance coverage but if a situation arises and you are left financially exposed, it could be a chastening monetary lesson that could have been avoided.

It is that element of uncertainty that may well tip the balance in favor of either arranging general liability insurance outright or adding it as a key element of your business owner’s policy.

If you do decide to add coverage to an existing policy make sure you check whether the terms and level of cover are adequate for your needs.

Know your limits

Every insurance policy you take out will contain details of the maximum amount the insurance company is prepared to pay out in respect of a liability claim.

It is essential that you understand and acknowledge these limitations as you may need to increase the payout amount if the standard figure is insufficient, although the insurer will want a higher premium and might not be prepared to increase their risk exposure.

How these limits work is fairly straightforward. If your business gets sued and is ordered to pay $500,000, for example, and your coverage is a maximum of $250,000, that means you are on the hook personally for the difference.

The case for contractors

Although there is a reasonable argument for most types of business to have the protection of general liability insurance behind them there are definitely certain industries and sectors that are potentially more prone to claims.

Construction is a case in point. It is a rightly perceived as a high-risk industry where there are numerous opportunities for an injury to occur where a claim might follow as a result of the incident.

If you are a contractor you should consider protecting your business against third-party injuries while you are working on someone’s premises or at their home and getting coverage so that you have protection against a claim made for damage to property too.

It would be wise to be aware of the threat of litigation and financial loss and one way of reducing that risk would be to arrange general liability insurance. Will the right coverage you should be able to go about your business in the knowledge that you have a financial backup plan if something goes wrong.

Seek out a professional opinion and quote for your business so that you can get the most appropriate coverage for your business and enjoy greater peace of mind once you have got general liability insurance.

Personal Finance Ratios: What You Need to Know

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I strive for healthiness in all areas of my life: physically, relationally, and financially. The signs of physical health and healthy relationships are obvious, but what about financial health? How do you truly know if you are on the right track financially? Enter: personal finance ratios. These are calculations that allow you to determine where your financial weaknesses are; once you know your score, you can then make changes to be on the right track. Here are some of the most important personal finance ratios that everyone should know.

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Total debt to income ratio: Ideally 0%, but no more than 35% of monthly (net) income. Banks use this ratio to determine someone’s default risk on loans, especially mortgages. This would include all debt, such as mortgages, student loans, credit car payments, car loans, and personal loans. Most financial professionals consider student loans and mortgages as “good” debt and stress lowering at least the consumer debt, if nothing else. 

Savings ratio: Between 10-20% of net income. This should be composed of your emergency fund, retirement fund, and college fund for children (if applicable.) Popular financial guru Dave Ramsey teaches that if you are working to pay off debt, you should have a basic emergency fund of $500-$1000  until you are debt-free, which I don’t necessarily agree with (I think it should be a bit higher.) He also teaches that you should wait to contribute to retirement once you are debt-free, which I also disagree with; if your employer offers a 401(k) match, to not contribute while you are paying off debt is like throwing away free money.

Housing ratio: around 25%-28% of net income. This would include not only rent/mortgage and utilities, but homeowners taxes, insurance, homeowners’ association fees, and money for ongoing home maintenance. If you live in an area with a higher cost of living, you may have to increase this amount slightly. 

Liquidity ratio: Cash divided by monthly expenses. This is just a fancy term for “emergency savings.” In the event of an emergency, such as a job loss, how many months would you be able to stay current on your bills? Ideally, you would have a minimum 3-6 months’ of expenses available in liquid accounts, although I am more comfortable with 9-12 months’ emergency savings.

Solvency ratio: Net worth divided by total assets.  Ideally your net worth would be 50% or more greater than your total assets. For someone who is just starting their career, this amount would be lower because most likely they have student loans and few assets, but as someone gets closer to retirement this amount should increase.

Being properly insurance is important because you never truly know what could happen in the future and want to be protected for anything that might happen.

Disability insurance amount: around 70% of your gross income.  If you were somehow unable to work, you would need a way to pay your bills.

Homeowners’ and auto insurance: the cost of replacing them and the belongings inside. If something happened to your house or vehicle, you would also need a way to purchase new ones. Ideally, this would be by insuring them for the cost it would take to replace them. At minimum, you should insure them for their fair market value.

Life insurance: This one is a bit more complicated, because it depends on your life situation. For example, I’m a single woman with no kids, so I don’t need as much life insurance as my friends with kids. If you’re debt-free with a large chunk of money in savings, you won’t need as much insurance as a person with a mortgage

Protect Your Family’s Valuables From Fire

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Protect Family Valuables From Fire

There are an average of over 370,000 residential fires every year according to the latest data from the U.S. Fire Administration. It’s easy to feel invincible and think that this couldn’t happen to you, but burying your head in the sand will not help you protect your family. Aside from fire safety and educating your kids about what to do in the event of a fire, protecting your valuables, irreplaceable items and important paperwork is essential to being prepared.

Protect Photos and Digital Documents

Start an account with a cloud-based online storage website to preserve your most-important digital documents. Upon initial setup, activate the necessary settings on all of your family computers to automatically back up the desired files as soon as any new ones are uploaded. By automating the process, you never have to worry about whether you backed up copies of the latest photos that you uploaded from your camera. By using the cloud, you also can access your documents from any device.

Keep a digital file folder with records of any big ticket items in your home such as artwork, computers, photography equipment, precious metals, jewelry, media equipment and anything else that you would claim as a reimbursable expense on your homeowner’s insurance policy. Digitize all receipts for these items, and include a photograph of each as proof of ownership in order to have the best chance of getting the most back for your most valuable material possessions.

Preserve Your Little Picasso’s Masterpieces

Kids artwork can overrun your house if you let it, but it also can be nearly impossible to part with. While this quandary is something every parent must work out for themselves, sentimentality reaches new heights if all of those finger paintings, drawings and collages are lost in a fire. Save the mini masterpieces for posterity and maintain organization of everything by digitally preserving them. Photograph or scan your favorites and keep them in a file with your family photos. At the end of each year, compile them all into a photo book, so you can all enjoy them whenever you want.

Keep Important Documents Safe

For things that you need easy access to like birth certificates, your marriage certificate, will, social security cards, deeds, titles, insurance policies and passports, invest in a fire-proof box or personal safe instead of storing them in a safe deposit box at the bank. While a bank has plenty of fire protection, the lack of accessibility is too much of a hassle for these important documents.

When shopping for a fire-proof box or safe, make sure it carries at least a 350 rating from Underwriters Laboratories (UL), the gold-standard in fire safety ratings. A UL 350 rating means that the temperature inside the box won’t exceed 400 degrees, which is the lowest temperature at which paper begins to burn. Also, always store important paperwork in zipped plastic storage bags to protect them from water damage in case moisture penetrates the box as the fire is being extinguished.

Lower Your Homeowners Insurance Costs by Getting a CLUE

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Scoring a CLUE report might help you avoid nasty surprises with your homeowners coverage.

The majority of homeowners do not have a clue when it comes to the insurance industry database known as CLUE, despite the fact that this computerized tracking system can significantly impact their insurance premiums. If your property becomes red flagged within the system, for example, you may see your rates skyrocket for no apparent reason.

What is CLUE?

The Comprehensive Loss Underwriting Exchange is essentially a vast computer database that keeps track of insurance claims for properties all over the United States. Insurance companies who pay a fee to subscribe to CLUE are provided with up-to-date reports related to information about damage to properties or insurance claims to pay for repairs. Those insurers can then use that data to help them make decisions about who to insure, how much to charge for insurance, and so forth. CLUE also offers similar services to track auto insurance information.

Your Home’s Track Record

In a way, CLUE is kind of like a credit reporting agency. Each of us has a credit history, or should, and credit bureaus keep track of that history by filling our confidential files with information pertaining to things like income, our ability to repay loans on time, and how much debt we carry. When you apply for credit the lender will analyze your credit report and decide whether or not to lend to you. Similarly, insurance companies rely on CLUE to help them manage their risks when issuing homeowner’s or auto insurance policies. There are no laws that prohibit this kind of reporting and it is perfectly legal for insurers to use the data for underwriting or rating purposes.

What’s in a CLUE Property Report

Your home’s CLUE report will contain information like the name on your homeowner’s policy and a description of the home that’s insured. Beyond that basic data, however, it also shows claim information. If you filed a claim after a tree fell on your house during a hurricane, for instance, the CLUE report will probably show the date you filed your claim and how much the insurance company paid you to cover your losses. CLUE maintains those kinds of records for up to seven years. The insurance company will check your CLUE report when you apply for insurance and if they find you have multiple expensive claims, they may be reluctant to insure your home or even raise your premiums.

Nightmare Scenarios

About 10 years ago, when the use of CLUE was gaining widespread acceptance and popularity within the insurance industry, several news outlets reported on some of the more harrowing CLUE-related homeowner experiences. One couple said they bought a home, for example, and two months later their homeowner’s insurance premiums rose by more than $200. The insurance company explained that, three years prior to purchasing the property, there was a claim against it, and based on that claim the premium had been adjusted upward. Before long, the insurance company dumped them and cancelled the policy.

Negative Impact Even without Filing Claims

Other consumers said they wound up in the database even though they never filed a claim. Some homeowners told their insurance agents that there was damage to their home after vandalism or an accident, but that they were going to pay for the repairs out of pocket instead of filing an official claim. Just because they shared that information with the insurer, however, the damage report went into their CLUE report. One homeowner said that after he paid for flood damage himself – but told his insurance company about the incident – they cancelled his policy. That was despite the fact that he never filed a claim in 30 years as a loyal customer.

Access to Your CLUE Report

The bottom line is that if you own a home, it’s a good idea to obtain a copy of your CLUE report and scan it for errors that could impact your insurance. If you are planning to buy a home, you may want to ask the seller to show you a copy of a recent CLUE report, just to make sure you aren’t buying a property that could have exceptionally high insurance costs. CLUE reports are, incidentally, protected by the Fair Credit Reporting Act and can only be accessed by the owner or lender for the property.

To receive your report, call toll free at 1-866-312-8076 or visit the website personalreports.lexisnexis.com, and request it. Should you discover any mistakes or discrepancies, you can report them directly to LexisNexis – the company that now operates CLUE. They will be obligated to get in touch with your insurance company, investigate your complaint, and notify you of the results of their inquiry within 30 days. You also have the right to submit an explanation in writing – basically telling your side of the story – so that LexisNexis can include that statement in future CLUE reports.

Tom Kerr writes for CompareWallet.com in addition to others. He has been an avid writer for years, even winning awards for work he’s done.

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