Saturday, July 28, 2012

Common Mistakes People Make When Getting Life Insurance

A recent study has shown that up to a quarter of the interviewed population is ready to cancel life insurance in order to save some money, especially during times of economic recession. Nevertheless, there are many more reasons why people should keep their life insurance policies; read this article and you will discover at least a few of them.

People don’t like to talk about their death, and don’t even like to think about what will happen after their death. While I will have to agree that this is a delicate and uncomfortable subject, a mature person should not ignore it, thinking about the financial stability of the remaining members of the family.

The statistics show that one in three adults has no life insurance at all; taking care of the financial needs of the kids of the deceased will be hard, in these situations.

Sure, life insurance is not mandatory (car insurance is) but the specialists say it is a good proof that you want to take care of your loved ones: your kids, your spouse, etc. When you sign a life insurance policy, you clearly demonstrate your care, respect and love for the people that matter to you.

Your life insurance needs will depend on a lot of factors. It means one thing for a person that has no kids and something totally different for someone with two or three kids, who need education and also a house to live in.

But how much should you insure your life for? A wise idea is to estimate the yearly revenue of the person who wants life insurance, and then multiply this number by the number of years until retirement. As an example, if you earn 40,000 USD per year, multiply it by 10 (ten years until retirement) and you get the recommended amount of money you should insure your life for.

Another mistake people do is to forget to stay up to date with the latest life insurance market news. The things in the insurance sector can change quite fast, and the offers that were considered to be good a couple of years ago might be outdated these days.

Keeping yourself updated will not only help you save money with your policy, but also pick a life insurance package that does the job. Many people sign a life insurance policy without actually understanding what the contract guarantees; they have not read the contract attentively, they did not ask questions, so they do not understand what they are insured for.

As an example, some people believe that they have bought a comprehensive life insurance policy, when in fact they have purchased an accidental death insurance package. And the official statistics show clearly that only 4% of the deaths are accidental, according to a survey produced by Millenium Asigurari Viata, a Romanian life insurance company.

So, instead of cancelling life insurance, it might be much better for you and your family members to get assistance from an insurance broker, who will definitely help you avoid these mistakes that are so spread among people. He is going to explain to you the benefits of each and every type of life insurance that is marketed; with his help, based on the real needs you have, you will be able to invest wisely your life insurance money.

At the same time, the broker will help you determine the exact amount of money you will need insurance for, taking into account several factors like your age, the number of kids that you have, and so on.

As with any other financial investment, comparing as many offers as possible is the key to spending your money wisely. Never sign the first contract you are given and never get too excited when the price is very low, as in most cases the services that you (or your loved ones) are going to benefit from will be very poor.

Monday, July 16, 2012

How Will Driverless Cars Impact Insurance Rates?

Of the 10.8 million car accidents in 2009, 95 percent were caused by driver error. Accidents have declined slightly in the years since, but scientists are working on developing computer-operated cars that will literally drive themselves. In theory, these driverless cars would be safer, more economical, and more convenient than human-operated vehicles. They may also cause insurance rates to plummet, or even make insurance unnecessary.

Will Driverless Cars Really Reduce Accidents?

Car accidents happen when people either drive inappropriately or break the rules of driving. If all people drove the speed limit, yielded appropriately, and had perfect reaction times, auto accidents would be extremely rare. The vast majority of collisions occur when a driver either doesn't see a potential threat or is unable to react to it in time.
In this sense, driverless cars would limit the risk of auto accidents significantly. On the other hand, there's bound to be a rough transitional period between the release of the first legal computerized vehicles and a time when all cars are driven by machines. A mix of drivers and driver-free cars on the road may lead to complications, especially if the computers are not savvy enough to predict erratic driving behavior on roadways.
What Will Happen to Insurance?

Assuming that driverless cars will one day replace regular human-operated automobiles, traffic and insurance laws will need to change to keep up with the times. Right now, a car's driver is held liable for damages that the vehicle causes. If computerized vehicles become standardized, this liability may shift to the car's manufacturer or the software designer. In this changing world of technology, insurance companies may need to redefine their focus.

One thing that will certainly change is the way insurance rates are calculated. Right now, insurance prices are determined almost entirely by calculating a driver's risk. In a future where all cars are operated by computers, risk factors will decrease tremendously and become standardized between drivers. Insurance rates should plummet, since insurers won't need to pay as much for claims. There should also be no reason for some groups, like young people and the elderly, to pay more for insurance as they will no longer have higher risk.
Of course, drivers may not be free of all responsibility and new risk categories might be established for new perils. Computers can short out, get viruses, or miss important patch downloads. If a car's on-board computer were to fail due to poor maintenance, the driver might still be held liable for the damage. The driverless cars also have the ability for drivers to override the car's decisions; if an accident occurs, the driver may still be held liable for failing to prevent it. The way insurance companies calculate liability and rates will need to change to reflect the new technologies.
Technology is changing and developing faster than ever. In a few lifetimes, people have gone from traveling by horse and carriage to cars; now those cars are evolving in new and exciting ways. We're a long way from seeing our roads dominated by driverless cars and low insurance rates, but it is a possibility on the horizon.
Claire Zermeno is a freelance writer for, a website where you can compare insurance quotes to get the cheapest deal possible. Take advantage of their service and lower your car insurance rate.

Tuesday, July 10, 2012

Get Free Tax Debt Help

Tax debt help can be found from not just paid professionals but also absolutely for free from a few non-profit organizations as well as universities and the local IRS offices. Let us take a look at few of the tax debt assistance that you could get for free:
  • Assistance center for taxpayers: Theycan be found at the local Internal Revenue System offices and can help you understand any communication you might have received from the IRS. Find their number at the official website of the IRS.
  • The Volunteer Income Tax Assistance Program: This community will help with IRS debt to those individuals who earn $49, 000 or less. They can really help you get your tax returns ready and also file electronically.
  • Armed Forces Council Tax: This is for military personnel and happens to be a part of the VITA program funded by the IRS. They have volunteers who are specifically trained to provide tax debt guide for those who work with the Air Force, Army, Marine Corps, Coast Guards and the Navy.
  • Tax help for the elderly: They help to resolve tax debt problems for those who are 60 years or older and get grants from the IRS.

Sunday, July 8, 2012

Six Tips to Teach Teens Financial Management

Managing money is one of the most important skills parents can teach to teens. A recent survey by Charles Schwab indicated that only 30 percent of teenagers were learning healthy financial habits from parents or guardians. Over two-thirds responded they would prefer experience over a money management class. Parents who make learning about finances a priority for their children can help them avoid struggle and confusion in the long term.

The following six tips can help plant the seeds for being smart with money, as well as intelligent, mature decision making.

1. Value

Teens can make money from doing chores or working an after-school job. When teens earn the money they wish to spend, it will have more value than it would if it was simply handed to them. This helps teens to learn appreciation for money and the discipline to work for what they want.

2. Savings

Putting aside a portion of what is earned is a great way to teach teens how to plan for purchases and investments. This is especially important in a society where instant gratification is the rule, and teens often spend money as fast as they get it. Learning to save will teach teens to plan and help them begin a more secure future.

3. Budgeting

Allowing teens to actively participate in paying household bills will illustrate how far money actually stretches. Working teens can take on the monthly bills for their mobile phones, putting gas in the car and any entertainment they wish to take part in, such as movies or concerts.
Tracking expenses will help the teens develop strong budgeting skills.

4. Credit

Using credit in a responsible manner is often a challenge for adults, which is why it is very important for teens to learn about utilizing it properly and paying bills on schedule. They should know about overdraft fees, higher interest rates and all the negative consequences of abusing credit, including being barred from buying a home or a new car later on.

5. Investment

Teens can learn about basic investment with a small amount of money. Something as simple as a short-term CD at the family's bank will teach teens about interest and how to make money grow. A visit with a financial advisor can be very educational, as can resources found on the Internet.

6. Confidence

Teaching teens financial management skills will help them to be more confident and disciplined when they leave home and head out into the adult world. Proper saving, investing and use of credit will also make them more attractive to potential employers and romantic partners in the future.

Teaching money management skills is one of the greatest gifts parents can give to teens. It is even more meaningful if the parents have struggled in this area themselves, and want their children to have a more secure and responsible life. Money makes the world go around, as the old saying goes. It also opens many doors. Parents should give their teens every advantage possible.