Change Your Health Plan

The end of the year is when many companies go through open enrollment. This means that you have the chance to change your health plan. Don’t just keep things the same because you’re too busy, make sure to review your coverage and how much you’re paying for it.

Do you really still need maternity coverage? Has your emergency fund grown enough that you can afford a higher deductible? Make sure you have adequate coverage, and look for ways to limit premium costs.

If you are in reasonably good health with few health needs, a high deductible health plan can really help you save money. Raise your deductible, and watch your premiums drop. However, you want to make sure that the additional money you pay out of pocket is affordable.

Contribute to a Health Savings Account

If you have a high deductible plan, you are usually eligible to open a Health Savings Account (HSA). You can receive a tax deduction for contributing to a HSA. This is a great way to reduce your taxable income while saving up money for health care costs.

Your money grows tax-free, and as long as you use the money in your account for qualified health care costs, you never have to pay taxes on it. (If you withdraw money otherwise, the rules are the same as a traditional IRA.) The good news is that, like an IRA, some companies let you contribute into the next year.

Check with your benefits department but to see if you have until the middle of April the following year to make contributions.

Use Your Flexible Spending Account Money

Many health insurance plans come with a Flexible Spending Account (FSA). You can put money in these accounts, and receive a tax benefit, and then use it for health care expenses. However, unlike the Health Savings Account, which rolls over year to year and grows, the money in the FSA doesn’t roll over. It’s a use it or lose it situation.

So now is the time to use that money. Make your doctor appointments, or buy needed supplies. Remember, though, that if you want to be able to use FSA money for over the counter medications, you still need a doctor’s prescription.

Start Living Healthier

Make a resolution — and a plan — to start living healthier. Your health costs will be much lower long term if you take care of yourself. Create a plan to exercise more and eat better.

Ben’s getting a head start on his health resolutions by swearing off all sweets for the holidays. While you don’t have to swear off sweets forever, you can adjust some of your habits so that you are living in a healthier manner. Also, remember that relaxation, and stress relief can be great ways to improve health.

Look for ways to make small changes to your lifestyle so that you won’t need to spend as much money on health care. Many chronic — and expensive — conditions and diseases can be controlled or avoided with the help of better health habits.

Unfortunately the costs of healthcare keep going up so my employer keeps raising the premiums, the lower the deductible of the plan the bigger the cost hikes.  This table shows the annual rate increase of each plan and also the plan’s deductible.

The plan with the lowest deductible has by far the highest premiums and the highest increases each year.  From 2011 to 2012 the cost of the premiums for the low deductible plan went up 22 times that of the increase of the high deductible plan – ouch.

Here are the monthly costs of each plan to my employer, you can see that they have to pay more for the low deductible plans and pass that cost onto us.  Their costs go up every year so that means our health insurance costs go up as well. 

High Deductibles Here to Stay?

When I first started a few years ago we were about to have a baby so I chose the plan with the lowest deductible. I knew we were going to be spending a lot of money and the premiums for the low deductible plan were much more reasonable back then.  I put all the numbers in a spreadsheet and it made the most sense to choose the low deductible plan.

Fast forward to 2012 (when we anticipate another big year of expenses) and after running the numbers, it makes no financial sense at all to use any plan other than the HDHP.  Based on what I saw in my comparison, it seems like the HDHP may always be the best plan in the future.  Here’s how I came to that conclusion:

Comparing Health Insurance Plans

How I determined the best insurance plan for us was by comparing both the lowest potential cost and the highest potential cost.  The lowest potential cost would be if we paid just the premiums and never used the insurance once during the year – the HDHP was the lowest by far.

Then I estimated the highest potential cost by adding the amount of the deductible to the annual premiums. (This isn’t a totally accurate estimate of costs because once we reach the deductible, they pay 90% of the cost and we’re responsible for the remaining 10%.  However, that’s the same for each plan so for comparison’s sake it doesn’t make enough difference in our case).  The annual premiums of the HDHP are low enough that even after adding them to the deductible of $2400 it still turned out to have the smallest of the highest potential cost.

Health Savings Account Balances

Since we opted for the high deductible health plan, it means that we qualify for a health savings account (HSA).  Ours has been great so far but a word of warning to anyone considering a HSA. If you have a big medical expense before you’ve deposited enough in your health savings account, you have to find the money to pay for it from somewhere else.

This is different than how things work with a flexible spending account (FSA).  In an FSA, you have access to the full amount of the funds that you committed to deposit over the course of the year, even on January 1^st.  Since this isn’t that case with an HSA, you want to make sure you have some extra cash lined up the first year you open it to cover costs that might come up before you’ve built up funds in your account.

For example, if your deductible is $2400 that means that ideally you’d have that much money available on January 1^st to cover any expenses that came up. Fortunately for us, this is our second year and last year I actually contributed the maximum amount possible into our HSA this year, $6150.

We did have some expenses to pay out but we still have a large chunk of that money sitting in the account.  So we’re covered pretty well because our deductible is $2400 and we have about double that in our health savings account. 

Preparing for a HSA

Not all employers offer high deductible health plans and health savings account, but with health care costs continually rising, I imagine someday most people will have that as a choice.  At some point it will be probably prohibitively expensive to use health insurance plan with low deductibles because the premiums will be too outrageous. 

One thing you could do in anticipation of having access to an HSA would be to start saving some money on the side so you’ll have it around that first year when you have no balance in your HSA to cover expenses.

One of the benefits of a health savings account is that the money you contribute is pre-tax, so every dollar you put into that account reduces your taxable income.  You wouldn’t see that tax benefit from any money you start saving now outside of an HSA but it woud provide you a cushion during that first year of having high deductibles.

HSA Costs

Something else to consider are are the costs of the HSA.  Every month this year our health savings account charged us a $3 fee, which seems pretty steep to me to pay just to have an account.  Often once you reach a certain minimum balance, in our case $5000, that fee is waived. 

Starting next year, our employer is covering the cost of that fee. So if your company offers an HSA option or is going to, talk to your employer’s human resource department about having it covered.

So, based on what I’ve experienced, high deductible health plans are here to stay.  If you don’t have one already, and are anticipating using a HDHP and an HSA in the future, keep in mind the HSA costs and that you have to cover that cash gap after first opening the HSA.

What’s your experience been with a HDHP and a HSA? Does your company offer them as options? Do you wish they would?

You’re going to be stuck with most of these choices for a whole year – why not take a little extra time to research your options ahead of time so you can understand your potential choices and make the best decision for you? 

Health Insurance

As the cost of health insurance goes up, the plans that employers offer are charging higher premiums for lower deductibles.  For some people, it seems like your premiums go up every year.  Of course, one way to lower those insurance premiums is to choose a plan with higher deductibles.

Something that’s time consuming but worth your while is to look back at how much you spent on health care last year (insurance premiums, out of pocket, and co-pays).  Think ahead to the coming year and try to approximate whether you’ll see the doctor less, the same, or more.  I agree, it’s an inexact way of doing things, but it’s better than simply guessing.

One you have a feeling of how much you think you’ll spend you can run scenarios with the premiums/deductibles offered by your health insurance plan to see which will best meet your projected healthcare spending.

If you anticipate few healthcare costs or if your premiums are insanely expensive, one option you might have is a High Deductible Health Plan coupled with a Health Savings Accounts 

Health Savings Account vs Flexible Spending Account

The good thing about a Health Savings Account (HSA) is that it lets you save money for health care expenses pre-tax without having to worry about losing the cash you set aside, which could happen with a Flexible Spending Account (FSA).

If you’re not familiar with an FSA, it’s also an account you can contribute to pre-tax for health care expenses. The main downside to an FSA is that any money you contribute but don’t use by the end of the year is forfeit.

So compared to an FSA, an HSA seems like a no-brainer – until you find out that in order to qualify for the HSA you have to enroll in a high deductible health plan (HDHP).  An HDHP can end up saving you a lot of money if your health care expenses are low year after year. These plans usually have pretty low premiums so if you never go to the doctor then all you’re out are the costs of your monthly health insurance rates. 

However, the deductibles in a HDHP can be very high, so if you end up with a year full of doctor’s visits then you may be paying many thousands of dollars before your deductibles kick in.  Since an HSA does let you roll your contributions over from year to year, if you’ve been part of an HDHP with an associated HSA, then you may have the money built up to cover those expenses.

Here’s a chart with more of a comparison of the details of a Health Savings Account vs Flexible Spending Account.

Other Insurance

Life Insurance

Buying life insurance through your employer can be an affordable way to get a good policy for a decent price.  Some employers will offer a base amount of life insurance at no charge but then allow you to buy additional insurance for just a few bucks a month. Sometimes for the first or second supplemental level of life insurance they won’t require a medical exam, so it can be a cheap and easy way to add life insurance.

Obviously, one of the main downsides of buying life insurance through your work is that if you lose your job you could risk losing your insurance.  Research the policy to see if you can keep it in the event your leave your employer.  It’s also smart to research the company offering the life insurance; you can go through the rating service from A.M. Best  to see how the insurer stacks up.

Disability Insurance

There are some benefits to buying a separate disability insurance policy outside of your employer’s group policy.  One obvious benefit of going with an individual policy is that you get to keep your same policy and coverage if you get a new job.

Or if you’re currently receiving disability from some other source, such as Social Security Disability Insurance, an individual policy is less likely to reduce your benefits as might happen with a group policy through work.

On the other hand, you will probably pay more for a separate policy so buying short term or long term disability through your employer is likely cheaper.

Prescription Drug Coverage

If you or your family spends a lot on prescriptions, make sure you factor those needs in when evaluating your health insurance. A plan that has a co-pay of $5 to $10 for generic drugs may be tempting but what will be the cost if find yourself needing a brand name medicine?

Many insurance plans offer a tiered pricing system when it comes to pharmaceuticals, be sure you understand the different levels and go with the one that makes the most sense based on your past and projected future medicine needs.  There can also differences in price depending on how you get your medicine, doing mail order through your prescription service vs picking it up at any random pharmacy.  Make sure you understand how the process works so you can plan ahead and save money on recurring prescription needs.

There two main types of life insurance, term life and permanent, or whole life – this article is going to look only at term life insurance.  One of the main reasons that people choose term life over whole is that the premiums are cheaper, that’s because term only lasts for a specific period of time.

Why Term Life Insurance?

Many of us have the biggest financial obligations to our family when our kids are young.  Often during this stage of our life we’re not only paying to raise the kids but also have expenses like car payments, medical bills, and maybe house payments.  If you were to pass away it may be tough for your spouse to cover all those costs, particularly if you’re the only one working and they stay at home with the kids.

Now fast forward to twenty years later when the kids have grown up and moved away and your house is getting close to being paid off.  The importance of your income to the family has decreased significantly.  Although you’d still be sorely missed if you weren’t around, it probably wouldn’t be as financially catastrophic as it would have been two decades earlier.

This is the kind of scenario that term life insurance is designed to cover. If you bought a 20 year term life policy to get you through that period of raising kids, then they would be covered if you weren’t around. Or maybe you’d want a 30 year term to make sure your house was paid off and the kids had made it through their college years.

Life Insurance Costs

As I mentioned earlier, term life insurance typically has much lower premiums than whole life.  Your premiums are usually paid monthly so if you are a young family starting out the term insurance option is likely a more affordable payment than a whole life policy would be.

The cost of your policy will vary not just based on the length of the term but also the type of term life insurance you sign up for.  There are several different varieties of term life, lets take a look at some of the major ones.

Annual Renewable Term Life Insurance

As the name suggests, each term only lasts for one year.  At the end of the year you have the option of renewing your life insurance policy.  The premiums typically rise as you get older, often rising at the end of each year.  Some policies include a maximum premium to cap the amount you’d have to pay.

Fixed-Rate Level Term Life Insurance

If you know that you want life insurance for a longer period than a year, you can go with fixed rate level term.  The nice thing about this type of insurance is that once you sign up for the policy the monthly premiums are the same for the length of your contract.  So unlike the annual renewable version, your costs don’t go up each year.  Common term lengths for this type of life insurance are 10, 15, 20, or 30 years. 

Typically the longer the term, the more expensive your monthly premiums will be.  This is mainly due to the fact that the older you get, the higher your chances of death are.  So if you want to insure your life for 30 years vs 15 years, the probability the insurance company will have to pay out is higher – so they charge higher insurance premiums.

Decreasing Term Life Insurance

If you like the idea of a fixed premium but would like a longer term and want to pay less you could consider decreasing term life insurance.  Your premiums stay the same throughout the life of your policy but your coverage amount decreases annually.

The idea behind decreasing life insurance is to cover big expenses that will shrink over time.  The best example of this is a home mortgage.  Over the years the amount you owe on your house will go down (as long as you don’t have an interest-only mortgage) so a decreasing term insurance policy assumes that your family will need less money once that big expense is paid off. 

Of course this doesn’t take into account any other large expenses you incur over the course of your term, like medical bills or college debt, so keep that in mind if you’re considering decreasing term life insurance.

Convertible Term Life Insurance

One thing you have to do before buying life insurance is to be evaluated for your eligibility. If the insurance company find you to be insurable then you’re covered for the length of your term.  If your insurance term expires and you want to buy another term life policy you may have to go through the eligibility process again, depending on your contract.

If you’d like to buy term insurance now but know someday you may want to have permanent life insurance, you can look into a type of insurance called convertible term. This type of life insurance starts off as term but gives you the option of converting to a whole life policy later down the road, without having to go through the insurability process again.

How Much Insurance Do You Need?

The amount of coverage you need varies for each personal situation but here are a few general things to consider when trying to decide how much life insurance would be enough if you died:

• Expenses from an injury or sickness that eventually lead to death – ex: hospital expenses or long term care
• Any debts you would leave behind (credit card, mortgage debt)
• Expenses related to death – funeral costs and/or estate attorneys
• Future cost of living – funds your family would need to pay for daily living

Where Can You Buy Life Insurance?

When you’re pricing life insurance, one option is to work directly with insurance companies, some of the bigger ones are:

• Allstate
• Liberty Mutual
• MetLife

If you want to compare options and rates without calling up each company you can also use sites like these to compare term life insurance rates:

• Insure.com
• Accuquote.com

If you have some sort of unfortunate event that impacts your posessions and sets you back financially you can always work your way out of it.  However, if you’re injured and unable to work and generate income, then suddenly your ability to dig out of a financial hole and provide for yourself and your family is much more limited.

That’s where disability insurance comes into the picture and why we’re going to talk about it today.

What is Disability Insurance?
Disability insurance is another type of coverage that provides a benefit to you when you become disabled and cannot work. You receive a check based on the policy terms to pay for your living expenses. Just like with car insurance you pay into the “system” until you need to file a claim, then the company pays out the claim according to the coverage.

But disability insurance is an interesting product. When you file a claim for an automobile accident your insurance company has a fairly good idea of how much it is going to cost to make you whole. They know how much a car is going to cost if they had to replace it completely. That limits the amount they need to pay out.

That same is not necessarily true for disability insurance. We’ll get to how it works in a minute.

Why Do You Need Disability Insurance?
Disability insurance is often overlooked which is tragic. You are five times more likely to become disabled than you are to die. What’s sad is that if you’re unprepared for disability it is actually a much more difficult financial hardship for you and your family than death. If you’re disabled you still need food and shelter, and of course these cost money. If you die your costs are limited to your funeral arrangements.

When you combine the need for this type of coverage with a majority of people not being familiar with it you can run into serious financial dilemmas.

How Does Disability Insurance Work?
You send payments in to the insurance company just as you would with any other coverage. When you file a claim the monthly check your receive back from the company is dependent upon the policy. Some policies cover 60% of your gross monthly income. If you were bringing home $3,000 per month before you became disabled you would get a check for $1,800 every month for the length of the policy.

Policy length is determined by the coverage you select. Some companies provide coverage for a limited time frame such as 5 years. Others cover you until you reach retirement age.

Employer Disability Coverage and Additional Coverage
Many employers include basic disability insurance in their benefit package to employees. The coverage is usually up to your base salary; if you work in a job where commission is a significant portion of your pay you’ll need to purchase additional coverage unless you’d like to live off of a portion of your base for the foreseeable future.

When looking to augment employer coverage be wary of various clauses in policies. If your employer provides coverage then you need to find insurance that will work on top of that coverage. If you buy a 60% income replacement policy while your employer provides the same then there is likely to be a clause in your paperwork that says your employer’s coverage must be used rather than the one you purchased on your own.

Disability Insurance Alternatives

If you don’t have any disability coverage through your job then it’s even more important that you look into disability insurance alternatives.

Social Security Disability Insurance

If you’re disabled and not able to work there is a program called Social Security Disability Insurance (SSDI) that you might qualify for.  They base your payments and eligibility for the program on how much and how long you’ve been contributing to Social Security.

One thing to keep in mind about SSDI is that it doesn’t kick in right away if you become disabled so it would be good to have something in place to help pay the bills in the mean time.  Another caveat about SSDI is that it only covers you if you’re fully disabled. If you have a partial or short term disability you won’t qualify for SSDI.

Individual Disability Insurance Policies

You can also buy short term disability policies on your own.  Although these are probably more expensive than a group policy you would purchase through an employer they do have benefits.  For example, most group policies will reduce your benefits based on other sources of disability insurance you’re receiving, such as SSDI. However, most individual policies don’t have this limitation.  Another benefit of an individual policy is that if you switch jobs you keep the same policy, vs employer policies that change when you get a new job.

You definitely want to research the different insurance providers, you can compare disability insurance quotes and see which one makes the most sense for you.  Here are some of the well known providers of disability insurance policies:

• State Farm
• American Family Life Assurance Company of Columbus (AFLAC)
• MetLife
• Northwestern Mutual

Renters insurance is something you should investigate if you’re living in an apartment, townhouse, or condo as a tenant. A good friend of mine recently had his apartment broken into and in hindsight wished he’d had insurance to cover it. 

The really unfortunate thing was he had renters insurance but cancelled it not long before he was robbed.  I asked him if he’d be willing to share his story here but the break in was only a few weeks ago and he’s still pretty upset so we’ll just go with a renters insurance overview.

What is Renter’s Insurance?
Renter’s insurance is an insurance product that will replace your belongings if the place you are renting and living in is destroyed. It is similar to the part of a homeowners insurance policy that provides coverage for items inside the home. Depending on the policy your renter’s insurance may provide the option for medical coverage if you are injured inside the home.

As with any insurance product you select the level of coverage you need (how much money you need to replace your belongings) and your deductible co-payment to make if you have to file a claim.

Why is Renter’s Insurance Important?
Renter’s insurance is critically important if you are renting as a tenant. Some renters believe that if the home is destroyed the homeowners policy that the landlord has on the property will also cover their belongings. Unfortunately this is not true. A landlord’s policy is to make the landlord whole in regards to the property itself. Your landlord’s policy only covers the physical structure that he owns not any of the renter’s belongings within the structure.

You might think you would never need insurance coverage for your belongings. You never leave grease cooking on a stove and you never leave the iron on unattended. But as a renter you are never really in full control of the situation. If you live in an apartment or condo that is connected to other residences, one of those tenants could start a fire that consumes the entire building. If you are without renter’s insurance coverage when this happen you cannot make a claim to replace your clothes, dishes, and electronics. You’ll be starting over from scratch.

What Events are Covered by Renter’s Insurance?
Each insurance company will have different clauses in their renter’s insurance policies. Before you sign on the dotted line and give the firm your money you’ll need to check to make sure you understand what is and isn’t covered.

Most policies will cover theft from the residence and destruction through fire or other disasters. However, just as with homeowners insurance you need to check on if you have coverage due to flooding and negligent maintenance by the property owner.

How Much Does Renter’s Insurance Cost?
Financially speaking there is no reason you shouldn’t have renter’s insurance. The cost of coverage is so incredibly inexpensive in comparison to the cost of having to replace all of your belongings on your own dime. Most renters insurance coverage amounts begin at $20,000.

Rates depend on:

• Type of structure you are living in (this helps the insurance company consider the risk of loss)
• Level of coverage you need (how much money it will take to replace everything you own)
• Your deductible (how much money you pay out of pocket if you need to file a claim)
• Insurance claim history (if you have had multiple claims the insurance company sees you as a higher risk)
• Other policies you hold with the company (you can receive discounts for having multiple policies with the same company; if you have car insurance with the firm you should receive a better rate than if you split your policies across several companies)

You should be able to find renter’s insurance through a reputable insurance company for less than $20 per month. The policy I found when we moved into rental town home was $13 per month. That’s about $155 per year. That cost is insignificant in contrast to paying to replace every single thing you own.

Where Can You Get Renter’s Insurance?
Most major insurance companies offer renter’s insurance. You can walk into an agent’s office to request a quote, but getting a quote online is usually best. Rates can vary based on how you request a quote – whether on the phone, in person with an agent, or online.

Online is usually the cheapest because the firm’s overheard is the lowest with an online quote. If you call a call center or an agent then they’re paying to employ the person that individual and potentially also paying a commission to them for selling the policy to you.

Travel insurance may be something you’re offered next time you book a trip. These days, travel can be fraught with uncertainty -from natural disasters to political instability. Since you never know what might happen to jeopardize your trip, and the money you paid for it, many travel companies offer travel insurance when you’re buying through them.

Of course there’s always the possibility that you could get sick injured, or that a family situation could result in the delay — or even cancellation — of a planned (and possibly paid for) trip. In order to protect against losing their money in such situations, some people decide to purchase travel insurance.

What is Travel Insurance?
Travel insurance is designed to protect you in the event that things do not go as planned with your trip. Most “regular” insurance policies won’t reimburse you if a hurricane makes it impossible for you to travel, or if you end up needing to attend a funeral. Additionally, your medical policy may not cover injury or sickness occurring overseas – which means that you could be on the hook for some of your medical costs while traveling. Travel insurance is a policy you can buy to help protect you while you are away from home.

Travel Insurance Coverage
Travel insurance policies come in a variety of shapes and sizes. You can choose different options, depending on what you think you’ll need. Check with your agent to find out what your specific policy covers. Some of the items that you can expect to get coverage for include:

Trip cancellation: In the event that a company (such as a cruise company) goes out of business, if the weather results in a cancellation, or if you have an illness or injury, or a close family member is sick or dies, you can be reimbursed for the cost of your trip. Understand that most standard trip cancellation portions of travel insurance do not apply if you simply decide to change things. That sort of coverage costs extra.

Trip delays: If you get stuck at your location for some reason, including the weather, you can be compensated with a daily stipend to cover the costs of lodging, food and transportation.

Baggage problems: If your luggage is lost or delayed, you can get reimbursed for the personal items and the baggage, allowing you to replace what you need.

Medical and dental: Covers the cost of doctor visits, hospital stays, dental procedures, lab work, surgery and other issues that might arise while you are on vacation. Realize, though, that routine physical exams, eye care, mental health and replacement of lost health items (hearing aids, contact lenses, etc.) are not usually covered.

Emergency evacuation: For the most part, this is insurance that covers the costs of being rescued from your situation. Many adventure travelers get this to pay the costs of being evacuated from a mountain or other inaccessible area. Emergency evacuation can also apply for emergency flights back home should you become sick or injured.

Rental car: Many travel insurance policies will cover rental car damage and liability.

Flight death: If you die in a plane crash, your beneficiaries can receive a payment. (Although your life insurance policy should cover this anyway.)

Repatriation of a body: You can get help with the costs associated with returning a body (a travel companion or even yourself) to your home country.

Costs for travel insurance vary, depending on the policy and how much coverage you get. I often get trip cancellation insurance (and only that) when I travel, since it is fairly inexpensive — only a few bucks per person — and it helps me feel peace of mind when my family visits my husband’s relatives on the other side of the country. Costs can run from 5% of the cost of your trip to much more than that, it’s definitely worth it to shop around and see where you can get the best deals.

Cheap Travel Insurance

Many times, you can get trip cancellation insurance when you book your trip but be aware that travel agencies and travel companies sometimes add a markup to the coverage.  Usually this mean you might be able to save money on travel insurance by using a third party like InsureMyTrip that lets you search and compare insurance rates from multiple providers.  Just remember, if the rate seems to good to be true, you typically get what you pay for. Make sure you understand what a policy covers and what it doesn’t before buying travel insurance.

Pet insurance costs might be a little high for your budget right now but if you have a dog, cat, or some other beloved animal you should give some thought to what you’d do if your pet was really sick or badly injured. 

Would you pay thousands of dollars to your veterinarian to nurse your pet back to health?  Would you end up wishing you’d taken the time to research and compare pet insurance plans?

Pet Insurance Costs

I’m not speaking from personal experience about pet insurance, our two little kids keep us busy enough without adding a little puppy into the mix.  However, I do come from a family of animal lovers.  We always had a dog, cat, or one of each roaming around the house when I was growing up and that fondness for animals stuck with us.

My sister brought home a cute little dog a few years ago, named Peanut, that’s become a major part of her life.  As a parent, I can understand why she was pretty upset when her “little kid” suddenly got really sick while back.  The vet recommended surgery to save Peanut’s life and being the caring person she is, my sister did whatever she needed to make him better.

The good news was that Peanut pulled through but the bad news was the vet bill that came along with his health.  As with any unexpected major expense, this wasn’t money my sister had been planning on spending. Fortunately she didn’t have to go into any high interest debt to pay the bill but it did set her back quite a bit financially.

So, if you’re a pet lover and think you could have a big expense like this someday, here’s a little more information about pet insurance.

What Does Pet Insurance Cover?

Pet insurance coverage depends on the type of plan you get, and the conditions that the policy covers. There are some pet health insurance plans that will cover everything, from check-up visits to heart worm medication to surgery. Other plans are more specialized, covering only major items such as poison extraction (if your pet swallows something deadly) or broken bones due to being hit by a car.

Also, some pet insurance policies won’t cover pre-existing conditions. The older your pet is, the more likely he or she is to have a condition that won’t be covered. Make sure you are clear on what you are getting in terms of coverage when you purchase a pet insurance policy.

The cost of pet insurance varies according to policy as well. In a lot of ways, the cost of pet insurance is figured similarly to the cost of insurance for humans. The size of the policy, what is covered, your deductible, co-pays, age and health are all considered when a pet insurance company provides you with a quote. Even your ZIP code an affect pet insurance rates. Some plans are as little as $5 or $10 a month, and others can be as much as $50 or more per month.

Is Pet Insurance Worth It?

As with all personal finance decisions, it is up to you to determine whether pet insurance works for you. Some people consider that they may pay $15 a month for 10 years, and have nothing happen to their pets. That’s a lot of money ($1,800) when you add it up. Some decide that they will wait until their pets are older to get pet insurance, since many young dogs don’t need as much veterinary care. However, if you wait too long, the insurance becomes expensive — or the pre-existing conditions make it pointless.

Others decide to self-insure. You can set aside money in a high interest savings account each month, waiting for it to grow over the life span of your pet. When something happens, you have the funds available to help pay the costs. If your pet reaches the end of his or her life without major medical problems, you have all that money, instead of the insurance company. Of course, your savings may not be enough if your pet has an accident while young.

In the end, you have to decide how much you are willing to spend on your pet, and whether the peace of mind associated with pet insurance is worth it. If you are interested in shopping around for pet insurance, you can check with the following sites:

• Petplan
• Pet Assure
• Trupanion
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Can a home security system help you save enough money on your home owner’s insurance to make it worth the expense?  The answer really depends on why you’re considering installing a security system.

One of the main benefits of having a security system is the sense of protection it can offer. You’re paying for the feeling that your home and your family have a lower risk of something bad happening – and a better chance of getting a break-in or house fire resolved more quickly. 

Of course it’s hard to put a price on your safety and peace of mind but there are some numbers you can think about when trying to decide whether a home security system is worth it.

Home Insurance Savings

When you’re looking at trying to save money on home insurance the best thing to do is call up your insurance company and ask them what security improvements could lower your premiums.  Adding prevention measures such as smoke detectors or a burglar alarm will each lower your rates individually.  Then if you combine them into one system and add in monitoring the insurance savings could around 15–20% off your current payment.

You can get your insurance agent on the phone and ask them about different scenarios to see how much each security enhancement could save you.  Ask them for recommendations about specific systems and security companies to see if some have a bigger impact on your rates.

The savings in your insurance premiums likely won’t be enough to pay for the cost of the security system but it can make a difference. For example, let’s say you sign up for security monitoring that costs $30 per month – $360 per year. If you pay $500 every 6 months for your homeowner’s insurance and installing the system cuts your premiums by 20%, then it effectively drops the costs to $260. It’s up to you to decide if you’re willing to pay that much annually for a security system.

Home Security System Savings

There are two main costs that go into getting a home security system: having the system installed and the monthly monitoring service. It’s possible to get discounts on both but you’ll have a harder time getting a deal on your monthly fee.

Home Security Discounts

You can have a lot of success in getting a free security system installed, or at least a significantly discounted home alarm system. The security companies use a model somewhat similar to what your cell phone provider uses. They’ll give the equipment away at a significantly discounted cost or free just to get you to sign the two or three year contract.

Most major companies will either offer you a free system up front or you can negotiate for it. They really want you to sign that long term contract because they know once you start using the service you aren’t likely to stop. You build the cost into your budget and forget about it.

Once the original contract term is up, unlike cell phones, there isn’t usually a need for you to get new equipment in your home. The equipment they installed three years ago is fine, and instead of having to fork out new equipment again they just keep you on your steady monthly contract.

Discounted Monitoring Service

This is where you’ll receive push back on discounts. Again, think of the cell phone provider model. The major carriers give away phones or sell them at significant discounts, but you hardly ever see discounted monthly plans. The monitoring service is where the security company recoups the cost of the installation and eventually makes the monitoring profitable for them.

Any reduction in the monthly income from your house is likely to be met with resistance. The best way to get a discount is to pick up the phone and call a salesperson at the company. Be sure to have your research in front of you in terms of what other firms are offering, and proceed with normal negotiation tactics from there.

Occasionally you can find online specials, such as the Monitronic deals page.  You might also be able to find discounts through your insurance company. For example USAA has an agreement with ADT that can help save members money on the service.

Do You Need a Major Security Company?

If you do decide to install a home alarm system and check out your local Yellow Pages for home security you’ll probably see a large number of companies offering their services. The important thing to note is in may cases the companies you find in the Yellow Pages are tied one way or another to the major brands like ADT, Brinks, GE, Protection One, and Monitronics.

From a technology and logistics perspective it doesn’t make sense for the small security company down the road from you to be an independent firm with their own monitoring center. Instead they are usually an authorized seller or dealer for one of the major security companies.  Just ask any company you’re working with who does the monitoring on your home to be sure it’s one of the proven major players.

Hopefully this home security systems review gave you some items to consider when you’re comparing security systems and deciding if the cost is worth it to you.

Checking them out online means you have access to a fast quote that can help you compare a potential new rate to what you’re currently paying for your auto insurance premiums. 

If you hadn’t noticed there are lots of ads for auto insurance showing on TV and online these days.  Everytime we saw an ad on the Web we checked it out to see what information you’d need to get auto insurance quote online.  Here’s the information about you and your car that you’ll need to get a quote:

What You Need for an Online Auto Insurance Quote

You will have to provide personal information about you, your car, and your driving habits. Insurance companies offer quotes based on the type of driving risk they perceive you to be.

The information you provide will be enough for a quote, but it is important to realize that before you are actually issued an insurance policy, and a final price is locked in, your information will be verified. The more accurate you are when filling out information for a price quote, the more likely you are to get a premium quote that will match what you actually end up paying.

Some of the information you will need as you fill out your auto insurance quote form online includes:

Personal information including name, address, gender, marital status, and birth date: All of these factors help the company build a risk profile.

Social Security Number: This provides access to public records — and your credit report. Many auto insurance companies will use your credit history as a factor in setting your insurance premium.

Car details including make and model, year, miles driven each year, and the primary purpose of the car (commuting, business, pleasure): Auto insurance companies use this information to set rates. If your car has an anti-theft system, and safety features, you might end up with a lower rate.

Driving history: Basic information about when you first got your drivers license, how many claims you have had in the last three years, and how many violations (tickets, DUIs) you have had in the last three years is used to determine whether you are likely to cost the insurance company money.

All of this information is fed into a formula that can spit out a rate quote based on your risk profile. Some companies will provide you a quote immediately, while others will ask for your email address so your quote can be sent to you later. Others will ask for your phone number so that an agent can call you and talk to you about your quote.

Where to Find Auto Insurance Quotes Online

Pretty much every insurance company web sites will provide you with free quotes online. Additionally, there are aggregators that can provide you with comparisons – you enter your information only once, and then you receive a list of quotes.

Here’s a look at some of the sites we checked out that give you pretty quick insurance quotes:

Allstate

21^st Century

GEICO 

State Farm

Travelers

After getting your online quote, you can decide what to do next with your auto insurance.  Best case, you might find that you already have the best deal, which makes it easier for you.  If you’re current rates are pretty close to the quotes you get then you have to decide if the savings are worth making the switch. Of course if you find out that you’re paying more than what seems to be the market rate then it’s probably worth your time to investigate further and see how much you can save.