How to Save Money on Life Insurance
Saving money on a life insurance policy can make a big difference over time since you’ll be paying life insurance premiums every month for years to come.
Even if you’re concerned about the cost of insurance, buying life insurance is definitely something to consider if you have a family that depends on your income to pay their bills. Here are some steps you can take to save money on life insurance.
Figure Out Your Life Insurance Needs
While you don’t want to get too little life insurance coverage, you also don’t want to pay for too much. Realistically consider how much your family would need to replace your income if you died.
There are different formulas suggested to determine this number, such as seven times your annual income, or an estimate of annual expenses over a number of years. It’s a good idea to run the numbers several ways, compare the results, and see which estimate seems most accurate for your family’s situation.
There’s a chance your life insurance agent will try and convince you to buy more coverage than you think you need. It’s a tough call because you want to make sure your family is provided for and you’re basing your numbers on estimates. Just be sure to understand the costs of the different amounts of coverage and the additional benefits they offer.
Consider Term Life Insurance
Term life insurance will typically cost you less in premiums than whole or universal life. Term life is a good option because it’s relatively inexpensive compared to the coverage it provides you.
Just remember that at the end of the term, you are no longer covered. Try to get enough coverage to last until your dependents will no longer be your dependents and relying on your income. Remember that a longer term policy is likely to cost more than a shorter term.
Buy Life Insurance Young
Because life insurance companies calculate your likelihood of dying before the term of your insurance coverage is up, you can save money by getting life insurance when you are younger.
I was able to buy a 30 policy for the same price my dad would have to pay for a 10 year policy. The younger you are, the more money you are likely to save on insurance premiums.
Don’t think that you’re already too old to get life insurance because you’re worried it will cost too much. The more years you wait the more it will likely cost so it’s better to research it today than put it off.
Improve Your Health
You are likely to pay a less in premiums if you are healthier. Before getting life insurance, you will be asked about your health habits (smoking, drinking, etc.) and family history.
Someone is likely to take a blood sample, weigh you, and check your blood pressure. If you appear to be a health risk, it is likely that your premiums will be higher, since the insurance company will figure that you are more likely to die prematurely.
Eating healthy and exercising not only help you feel better but can also save you money on your life insurance policy.
Get Life Insurance Quotes
As you might imagine, shopping around is one of the best ways to save money on life insurance. When you’re reviewing policies you’ll want to make sure you are comparing apples to apples.
Look for premium prices on policies with similar payouts, term lengths and payment requirements. You should also read reviews of the life insurance company, and check with the Better Business Bureau.
The Internet has made it easier to find and compare life insurance, but it has also resulted in a higher number of sub-par companies offering policies online. Here are a few well known places you can look:
- State Farm
- MetLife
- GEICO
- AccuQuote
5 Lessons I Learned From ETrade
The online broker Etrade, is one of the top discount brokerages online today and for several years I had the opportunity to learn from them.
Etrade was one of the biggest clients of the software group I was hired into right out of college so I got to see some of the behind the scenes work that went into making their customers happy. I learned a lot from both a technical and business perspective while contributing to their projects; here are five lessons I learned working with Etrade.
1) Customers First
Etrade always put the customer experience first. When we were preparing estimates for new projects we would design the fastest and cheapest solution but Etrade would often come back and request enhancements to improve the customer experience.
Even though the revised estimates would raise the cost of the work, Etrade managers always approved them if it made things better for the customer. As a new programmer, the additional work would frustrate me but once we had the changes in place it was usually obvious their enhancements made sense for the customer.
2) Communication is Key
Any time we made a change to the way things worked, added new functionality, or even sent out an email to lots of customers about the account Etrade would have a plan in place for answering questions or dealing with concerns.
Anytime there was a customer question sent to us for research there was an emphasis not only on speedy resolution but also on keeping everyone updated so people knew their questions were being addressed.
3) Innovation is Important
Investors have several quality discount brokers to choose from so Etrade was always listening to their members and adding new functionality to help make them one of the best online brokers.
Needless to say adding and enhancing features kept me really busy. We always had several projects going at once and I worked some late nights and long weekends but the work seemed to pay off for the brokerage. The feedback for almost every project was great and definitely gave investors reasons to keep using Etrade.
4) Quality is Everything
The quality and availability of their online services was vitally important to Etrade and they enforced those principles via strict rules in their contract with vendors.
Of course this required extensive testing on our end to prepare for upgrades and installations. Unfortunately it also meant that we’d be up between midnight and four am on the weekends for installs, when the fewest amount of people were using the system.
Although it wasn’t much fun, I learned lessons about quality control that continue to serve me well and I’m sure Etrade customers appreciated having a site that was fast and functional.
5) Offer a Solution
When we started working with Etrade all I knew about them was that they offered online stock trading so I quickly opened an Etrade IRA in order to see our projects from a customer perspective.
As I got to know the company better and as they grew I saw how they focused on the whole investing experience. Instead of offering just a place to buy and sell stocks, they created more of an investing solution for their customers.
While things like adding a banking option or the ability to buy and sell options or mutual funds sometimes meant more work for me, I appreciated them as a customer because it gave me more investing choices.
Since I switched groups and then companies I no longer work with Etrade but I’m glad I had the opportunity to learn a few things from how they did business and can certainly understand why they’re considered one of the best online brokers today.
Best Credit Cards for Online Shopping
The best credit cards for shopping online will give you both purchase protection and rewards on the money you spend. While credit cards typically give you more protection from fraudulent vendors or disputed charges than debit cards, not all cards offer the same level of service.
Here are a few areas to consider when choosing which credit card to use for an online purchase.
Purchase protection: With purchase protection, if the purchase isn’t as represented, you have recourse. One of the great things about credit cards is that you can have the charge taken off (with a legitimate complaint, of course) before you pay for it. With a debit card, the money is gone from your bank account, and you may have to fight harder to get it back. Some cards will even reimburse you if something you bought on your card is stolen or damaged.
Return protection: In some cases, your card might offer return protection — even if the seller doesn’t. So you might be able to get your money back, even though the seller won’t reimburse. These usually have caps on the window of time after the purchase, the total item cost, and annual coverage amounts so make sure you understand how these policies work.
Warranty: Some credit cards will offer an extension of the standard warranty for items paid for with your card. You’lll need to keep your digital receipt and credit card statement if case you ever need to make a claim.
Shipping Discounts: If you shop in some credit card networks, some merchants will offer shipping discounts. This may not always be the case though; sometimes card shopping networks just have special events with limited time free shipping.
Insurance: Pay for a car rental online, using a credit card, and you may find that you have some level of rental care insurance automatically. The same can be true of travel insurance in some cases. Find out which of your cards offer insurance as a perk, and consider those.
Credit Card Rewards & Special Shopping
If you are going to be shopping with a credit card, it is a good idea to at least get some reward points out of it. Many credit cards also offer special shopping networks that can provide you with extra rewards when you buy through certain vendors:
Chase Ultimate Rewards: You can choose flexible rewards, and you get bonuses for certain spending. The discounts & bonuses are bigger when you shop via the Ultimate Rewards site.
ThankYou Points from Citi: Using a Citi card, you can rack up some pretty substantial points. The ThankYou Points network allows you to get extra points from certain merchants. On top of that, some Citi cards will give you ThankYou points for making your payments on time and for engaging in other financially responsible behaviors.
Upromise: If you have a Upromise card through Bank of America, you can purchase merchandise, airfare, and more when shop from the Upromise site. Get extra savings for college when you shop from certain merchants.
ShopAmex: Get special deals and extra rewards when you use your American Express card with the ShopAmex network.
ShopDiscover: Go through Discover’s site for your shopping, and you can get extra rewards, and even get gift cards for certain merchants. For example, with the Discover card, you can get double the gift certificate value when you trade in a statement credit for a gift card.
Remember, though, that in order for rewards to be effective, you have to pay off your balance each month, since interest charges can easily offset (and overcome) your reward earnings.
The biggest shopping season of the year is on the way! Before it arrives be sure to check out your current cards to see which has the most purchase protection benefits and the best card rewards.
Online Broker Reviews 2010
Online brokers are reviewed on a variety of categories every year by Smart Money magazine. This year’s brokerage reviews came out at the beginning of the summer and the results show that competition is good for you and me.
Brokerage Competition
Competition has gotten extremely hot between all of the online brokerages. The financial crisis took a significant dent out of the number of people looking to invest money — and that naturally affected the companies that investors use. In the past you had two different tiers of brokerages: online discount brokerages and retail brokerages that also had an online presence.
That line is getting more and more blurry. Your retail brokerage firms like Charles Schwab have cut their prices down to compete with the discount brokerage firms. And customer service should, in theory, improve. TradeKing was voted tops in customer service for the speed and quality of their responses. (One firm didn’t even respond to Smart Money’s requests last year — ouch!)
And you’re seeing competition not just in the prices of trades, but in additional services like investment research or banking options like certificates of deposit.
The brokerages are also consistently updating their trading platforms. Better speed, easier to use, and easier access to research are keys. Many of the larger firms are developing or have released smartphone applications (for iPhone and Android) that allow you to manage your investments from anywhere you have a data signal with your cell phone. The report voted Fidelity’s trading tools the best.
The bottom line is good for consumers because increased competition means better products to choose from and lower costs overall.
Brokerage Fees
Trading commissions have dropped significantly but brokers have found other ways to meet their numbers. So while online trade costs have dropped to as low as $2.50 per trade you’ll want to keep your eye on other fees. (Yes, $2.50 per trade at Just2Trade — targeted toward active traders. By far the lowest trade cost of all the brokerages.)
Fees to avoid:
- Trade confirmation fees (for recieving paper confirmations in the mail)
- Inactivity fees
- Extra charges for advisory services
Investments and Banking Services
If you’re looking for a new brokerage you’ll need to make sure it offers an appropriate number of options for the investments you’re targeting.
Fidelity and Charles Schwab offer the largest number of investments — about 15,000 — but there is a huge difference between the two firms. About half of Fidelity’s investments have a sales charge attached to them while less than 4% of Schwab’s have an associated sales charge. Sales charges are needless costs added to the total cost of your investment and are definitely something you should aim to avoid. Schwab came out ahead in the rankings because of this.
As I mentioned earlier many brokerage firms are also offering banking services. I’m not a huge fan of mixing these services because I have a different set of criteria for what I want in a bank and what I want in an investment provider. But if your investment firm offers competitive interest rates and can meet your banking needs then go for it.
Top Online Brokerages
The survey shows Fidelity coming out on top with 5 stars in all categories (investment products, banking services, trading, research, and customer service). Trade prices have been slashed to $7.95. Just make sure that you check for the sales fees on those mutual funds.
Here’s a list of the other top brokers according to the survey:
- E-Trade ($9.99 trades, 4-star research)
- TD Ameritrade ($9.99 trades)
- Charles Schwab (Advice & research)
- TradeKing – (Best customer service)
- Scottrade – (Quick & easy trades)
8 Ways to Save Money on Auto Insurance
Your car insurance bill is one that you’ll be paying every month for a long time. So even if it’s just a little each month, anything you can do to save money on auto insurance will add up over time.
There are many different factors that determine how much your insurance company will charge for the amount of coverage you’re looking for. Just remember, cheap insurance isn’t necessarily the best. Just like many things in life, you often get what you pay for.
Of course it’s smart to get insurance quotes and compare car insurance rates to find the best deal on the coverage you need. However, even once you’ve found the right company and setup a policy there are things you can do to save money on car insurance.
1) Pay Attention When Driving
It may be common sense, but avoiding wrecks will save you money. How do you avoid wrecks? Pay attention when driving. The stories you hear of kids and families injured or killed due to “distracted driving” are really sad and can often be avoided.
Don’t text when driving. Use a Bluetooth headset if you’re going to talk when driving (but don’t even do that unless you have to). Don’t eat breakfast or do your makeup during your commute. Simple advice, but you’ll stay safe and companies like Allstate and State Farm offer safe driving discounts.
2) Compare Car Insurance Rates
Car insurance companies are fighting for your business. They want you to call, to get a rate quote, and to switch. You may not be able to save as much by switching as some of the GEICO commercials suggest but it doesn’t hurt to check it out.
Some people avoid this step because they don’t want to spend the time on the phone or feel like they’re getting sold to. The great thing about the web is that it’s fast and easy to get insurance quotes online. You can get quotes from multiple companies on sites like esurance and insure me or you can look for more specific quotes directly from websites like:
- GEICO
- Allstate
- 21st Century
- Travelers
3) Raise Your Car Insurance Deductible
Of course, finding the right balance between cost and coverage isn’t easy but increasing your deductible can save you a nice chunk of change. When you’re comparing rates look at the differences in premiums between a $250, $500, and $1,000 deductible.
You can also adjust the deductibles differently for collision coverage vs. comprehensive coverage. You may decide that you need a lower deductible for collision but can raise your comprehensive deductible. Some people that drive older cars that are already paid off will even cancel comprehensive coverage altogether.
Just make sure you put the money you save with lower premiums into some sort of savings account in case you end up with some kind of incident and having to pay the higher deductible.
4) Check Your Payment Limits
In addition to your deductibles, your payment limits on things like personal injury protection, liability coverage, uninsured motorist, and rental reimbursement can have an impact on how much you pay for your policy.
The higher your limits, the more expensive your car insurance will be. Don’t drop them too low, you don’t want to expose yourself to big financial risks, but at least see what they are and whether you’re paying for more coverage than you need.
5) Consider Bundling Insurance
You won’t always save money by bundling your homeowners and automobile insurance together, but it is worth checking. You can call up your agent or a customer service representative to run you through your savings options when using multiple types of insurance. Or you can use the company websites to compare rates on both types of products both individually and bundled. Take the lower rate, bundled or not.
6) Keep Your Credit Score Safe
Unfortunately you can’t buy insurance for your credit score. And, fair or not, having a poor credit score can raise your insurance rates since some companies are using it as a factor when determining your risk. Here are some tips on improving your credit score.
7) Evaluate Extra Coverage
There may be some parts of your policy that are nice to have but aren’t a necessity. For example, rental reimbursement or towing coverage are things you might not need depending on the vehicle.
If it’s on a car that’s not absolutely essential for your daily routine, i.e. a truck for hauling or your kid’s car, you might not need a rental replacement and can skip the rental reimbursement. Or if it’s a new car with an extended warranty that covers towing you might not want to pay for towing & roadside assistance on your insurance policy.
8 ) Reduce Risk of Theft
Some areas have higher insurance rates than others based on chances of accidents, storm damage, vandalism, or theft. You probably aren’t going to move just to lower your car insurance rates but there are things you can do to help offset some of these risks.
For example, installing a car alarm can lower your deductible. Another cheaper option is to have your VIN number etched into your windows as a deterrent to car thieves. Every company may be different so ask your agent what similar things you can do to lower your premiums.
Before you spend the money for these enhancements, check with your insurance company to see how much they’d save you and whether they’re worth the cost. If you decide to go ahead with any of them be sure to call and let your insurance company know so they can give you the appropriate car insurance discount.
Your Mortgage Dating Guide
Other than deciding to get married, buying a house is probably the biggest financial decision you’ll make in your life. Many of us sink an enormous amount of time and effort into finding the perfect spouse, and rightly so. But how many people put enough thought into finding the right home mortgage?
I recently started contributing to a new website called Currency and my first piece gives you five tips to help you court bankers and find the “perfect” home loan. With tips on getting the best mortgage rates, saving on closing costs, and not buying more home than you can afford, you could potentially save thousands of dollars so check out my mortgage dating guide.
Web Money Tips
Here are a few other articles from around the web that caught my eye this week:
- Cameron Huddleston gives us a fall financial to-do list over at Kiplinger’s.
- Kimberly Palmer suggests ways to save on fall travel at Alpha Consumer.
- Jennifer Saranow Schultz from the NYT Bucks blog thinks now might be the time so sell your old stuff online.
- Katherine Hobson talks a little about health care providers qualifying for stimulus funds for implementing electronic medical records over at the Wall Street Journal.
Blue Cash Late Payment Relief
One of the rules of the Blue Cash card is that you won’t earn cash back on spending if you have a late payment. Until now I had thought you lost your cashback for the whole year if your payment was late just once. Seemed kind of drastic to me but I figured that’s how they motivated people to pay their credit card bill on time. I discovered this week that if you miss a payment, all is not lost!
Blue Cash Payment Issue
The problem started because our online bill pay system lets us setup rules for each bill and I have a maximum pay amount rule for every bill we pay. If the bill is over the cap it won’t be paid and I’ll be notified.
Our bill pay system has been great because most of our bills were paid automatically while we were moving; but amidst the mess I overlooked the note that our Blue Cash bill hadn’t been paid. Our bill was huge because we charged a lot of the remodeling costs for our new house on our card. We had the cash to pay for it, we just used the card to earn the cash back.
Anyhow, since our most recent bill far exceeded the cap it wasn’t paid. When I called into change the address for the card I heard an automated account summary and realized that the payment had been due the day before.
Cash Back Rules
I was really bummed because we had just racked up a chunk of change in cash back earnings from the money we’d spent and I figured we had just lost it all. I paid the bill right away and called in to see if they could make an exception on the policy since we’d been a good customer for so long.
It turns out that although we had missed our due date, the billing cycle didn’t actually close for two more days and since I made my payment before the end of the cycle, technically it wasn’t a late payment. I’m not sure if it works this way for everyone or every month but our due date on our bill seems to be more of a “suggested” due date, the payment wasn’t considered late until four days after the date on our statement.
But more importantly the other thing I learned is that a late payment doesn’t lose your cashback for the whole year, only on the bill for which the payment is late. Of course you still don’t want a late payment because there are late fees and missing out on cash back for a month stinks.
My concern over forfeiting a year’s worth of rewards for one late payment has always been one of my least favorite things about the card. Not enough for me to take it off of the best cash back cards list but it did irk me. Now that I know I had mis-interpreted the rule I can earn my cash back in peace!
Money for College Students
Going away to college can be a lot of fun but it can also be kind of stressful thanks to all the responsibilities that you suddenly have to bear. One of big stresses when you’re settling into college life is figuring out how to pay for it all. Not just the big college tuition bill but all the daily expenses you have to deal with as well.
Now that the year’s begun and you’ve had a chance to get your bearings here are some money tips that will hopefully help make your life a little easier.
Student Spending
- Ways to Furnish your Dorm Room for Cheap
- How You Can Find Cheap or Free Entertainment
- Best Student Discounts
Student Budgeting
Student Insurance
Student Finances
American Express TrueEarnings & Rewards Cards
The TrueEarnings card is one of the latest American Express rewards cards covered recently on the credit card section of this site. Several months ago I had promised a monthly review of the latest additions to that section but then we decided to try and sell our house and all my plans went out the window.
In that time we became Costco members so a TrueEarnings card review was an obvious choice. Now that we’re semi-settled in our new house, it’s time for another look at this and other latest cards.
True Earnings from American Express
The True Earnings credit card can definitely save you some money if you are or will soon be a Costco member. The best rewards are the 3% cash back on the first $3000 of gas purchases, 1% back after that.
Although it doesn’t pay 5% cashback like the Blue Cash card, with True Earnings you start getting 3% back on gas right away, you don’t have to hit a minimum spending level. There is an annual cap on the cash back you can earn on gas so keep an eye on your spending towards the end of the year and switch gas cards if you need to.
Some of the other rewards are 2% cash back at restaurants (fast food, bars, and restaurants) and 2% back for travel (airfare and hotels). You can read more in the TrueEarnings review or on the TrueEarnings site.
NEW Business Gold Rewards Card(R) from American Express OPEN
New Business Gold Rewards from American Express OPEN isn’t a credit card, it’s a charge card, so there shouldn’t be any interest since you pay the balance each month (which hopefully you do even with credit cards as well). The annual fee is waived for the first year of the card.
It’s also a rewards card that gives you 1 point for each dollar you spend (3 points on airfare, 2 points on advertising, gas, and shipping); points you can redeem through the AmEx membership rewards program. The AmEx gold cards frequently have big sign up bonuses, for example the current one earns you 50,000 rewards points when you spend $10,000 in the first 5 months.
You can see all the requirements for the bonus on the official Gold Rewards page.
Premier Rewards Gold Card from American Express
You don’t have to be a business to get a Gold Rewards card, anyone can apply for the Premier Rewards Gold card. You’ve probably seen this one described as the 3–2–1 rewards card where you earn 3 times the points on airfare, 2 times the points on gas & groceries, and 1 point on everything else.
Like the business card, this is also a charge card and waives the annual fee for the first year. However, the signup bonuses for new customers doesn’t seem to be as big as the ones for the Business Gold Rewards, you can compare them on the Premier Rewards site.
American Express Delta Reserve Card
The Delta Reserve card isn’t as versatile with rewards as the cards above but if you’re looking for an airline card then this one has potential. In terms of miles earned per dollar spent it’s similar to many other airline cards but their Medallion Qualification Miles lets you earn a lot of points pretty quickly.
The downside to this card is the high annual fee but you do get a free domestic flight voucher for a companion every year which helps offset the cost. If you do a lot of flying this one can payoff, you can read the details on the Delta Reserve page.
That’s it for this month, an assortment of rewards cards. Next time we’ll look at some of the balance transfer cards available for people searching for zero interest credit cards.
3 Simple Ways to Invest $500 Online
This is a guest post by Ramsay at moneyedup.com. You can enter to win $500 by subscribing to their blog. Visit moneyedup.com to enter the giveaway.
In the past, investing money was limited to a few vehicles, most of which were accessible by working with a local company. Today, however, the Internet opens numerous investment options that you can take advantage of. If you have $500 to invest, here are a few of the ways to make that money grow using online financial tools and programs.
Individual Retirement Account
Investing in an IRA has been one of the most widely-used way to put away a chunk of change for retirement. An IRA account provides a way to invest money without losing as much of your earnings to taxes.
Depending on the type of IRA you have, the tax benefits will be slightly different. For example, a traditional IRA allows you to deposit money into the account pre-tax; in other words, that portion of your income is exempt from taxes. In addition, the account grows tax-deferred. You can also choose from a Roth IRA or SEP IRA.
There are many ways to invest $500 in an online IRA. Many investment institutions offer online IRA accounts, with minimum opening deposits that range from $100 to $1,000. Here are a few
- ShareBuilder IRA
- Etrade IRA
- TradeKing IRA
Peer to Peer Lending
Most people wouldn’t think that lending their $500 to cousin Joe would be a good way to grow their cash. However, with a slight variation on this theme, many investors are finding that peer to peer lending is a reasonable investment vehicle.
Much like lending your assets to a friend or family member, peer to peer lending platforms allows you to lend your money to an individual with their promise to pay it back, with interest. Unlike cousin Joe, however, you have legal agreements and protections in place, as well as the help of the broker that matched you with the borrower.
Depending on the service you use, you can expect to earn anywhere from 5-35% on your $500 investment. The actual return will depend on what service you use, how long the loan term is, the credit of the person you’re lending to, and the bidding process. Here are a few peer to peer lending companies
- Prosper
- Lending Club
Certificates of Deposit
If you want a more traditional and secure way to put away your $500, an online CD may be right for you. With so many banks moving their customers to an electronic money-managing platform, purchasing an online CD is easier than ever.
You can probably buy a CD online from the bank you already deal with. However, shopping around at various institutions will give you the full spectrum of options available and could increase your return. Remember that CDs have a specific term, so your $500 will not grow to its fullest potential unless you are patient.
Returns on CDs will likely be lower than you’ll find with peer to peer lending or stocks or mutual funds in an IRA but this investment vehicle is still considered to be one of the most secure and safe ways to grow your money. Here are some places you can find CD’s online:
- Ally Bank
- Discover Bank
Enter Your Email below to request free access to the member newsletter and article updates.
I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.
That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...
