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February 21, 2012 03:20PM

These days, everyone is looking for ways to save money on the various bills that they pay each month.  You may have been wondering if some of the home improvements and upgrades that you have done or were considering doing on your home may help to reduce your homeowner’s insurance premium.  Here is an overview of some of the upgrades that actually can help to lower the amount of money that spend on your homeowner’s insurance.

Home Safety and Security

Dead-bolt locks on doors, motion-sensitive lights, smoke detectors, burglar alarms, and sprinkler systems are items that some insurers may reward you for by reducing your premium.  The amount of the reduction you get depends on the degree to which the upgrade either prevents or limits a covered loss.

• Deadbolts and fire/burglar alarms that sound only in the home may receive a small discount, while fire/burglar alarms that notify police, fire, or other responding agencies may receive larger discounts.
   
• Motion-sensitive lights are one home upgrade that can help deter burglars from breaking into your home, which makes this upgrade something that insurers may often reward with a discount.

Heating System

If your heating system is more than 10 years old, you may want to consider upgrading to a newer and more energy efficient model.  Newer systems save you money because they use less energy, but they are also much less prone to overheating that lead to an explosion or fire.

Plumbing and Wiring

Another area to consider upgrading is your home’s plumbing and wiring.  In addition to saving you money on inevitable repairs in the future, upgrading your homes plumbing and wiring can translate to savings on your homeowner’s insurance.  Upgrading plumbing creates discounts because broken pipes and water leaks can lead to costly repairs.  Upgrading electrical wiring saves you money because newer wiring is safer, less prone to shorts, and less likely to start fires, which all mean less risk for the insurer.   Plumbing and wiring upgrades may result in savings depending on your insurer.

Roof Covering

Your roof is one area that insurers consider when calculating your premium.  If your roof is many years old, it may be make your home more prone to sustaining damage such as water damage from leaks and physical damage from severe weather conditions.  Newer roofs are typically constructed of materials that are much more wear-resistant and more able to withstand severe weather conditions such as storms, wind, and hail.  A newer roof means less risk for the insurer, which may result in a lower premium for you.

February 17, 2012 11:19AM

Most people know that life insurance is something that allows a spouse or other beneficiaries to be paid a sum of money (called the death benefit) upon the death of someone covered by life insurance.  Fewer people know about the different types of life insurance, the features, and the versatility of the different types.

In short, there are two types of life insurance: Term insurance and permanent insurance.

Term Life Insurance – Term life insurance is designed to cover a person for a specific number of years, during which the policy owner pays the same premium in exchange for coverage.  When the length of the term ends, the policy owner is typically placed into a different rating category for the next term, which usually means a change in premium.  Term policies are strictly protection policies, meaning that the only benefit comes from specified event, for which a sum of money is paid to a beneficiary.  Term insurance is typically very inexpensive and well-suited for young people and those without dependents or children, although term insurance does not build up any cash value.

Permanent Life Insurance – There are several different types of permanent life insurance, but the main types are whole life, universal life, and variable versions of the two.  One of the great things about permanent life insurance policies is that, unlike term policies, they can actually build up cash value.  You can borrow against this cash value after it has accumulated a certain amount.  Permanent policies can also carry an investment aspect to them, meaning that in addition to the protection aspect of a term policy, they also serve as a cash accumulation vehicle that facilitates the growth of capital.  Below is an overview of several of these types of permanent policies.             

• Whole Life Policies – Whole life insurance tends to be the most expensive of the three primary types of life insurance (term, whole life, and universal life), but the advantages are that the death benefit, rate of cash value growth, and the fixed premium are all guaranteed.  Whole life policies have less of a risk of lapsing because much like term policies, the owner has to make regular premium payments to keep the policy active.
   
• Universal Life Policies – Universal life insurance is the most flexible of between term, whole life, and universal life policies.  What makes it so flexible is that there is regular schedule of payments and the growth rate of the cash value is not fixed.  To keep the policy active, the owner must monitor the amount of cash value accumulated and make sure that there is an adequate amount to meet the charges and demands of the insurer.  Universal life policies are typically more expensive than term policies, but less expensive than whole life policies.
   
• Variable Life Policies – Variable life insurance policies have cash value that accrues interest at variable rate that depends on where the owner decides to invest the cash value.  The policy owner has the option to invest the cash value as he or she sees fit.  Variable universal life tends to be a better cash accumulation vehicle than variable whole life because variable whole life policies have fixed investment and premium schedules.

While term and permanent policies have many differences, there are two things that term policies and permanent policies have in common:

• Both term and permanent policies protect your family and loved ones in the event of your passing, by replacing some or all of your lost income and preventing financial hardship.
   
• Both term and permanent policies are a great way to leave an estate for your children and loved ones because the death benefit is typically far greater than the amount of the premiums paid.

February 13, 2012 05:04PM

There are many changes that can occur throughout your life and the lives of those living in your home.  Many of these life events will affect your auto insurance rates, which can result in either an increase or decrease in your rates.  Details regarding a few of these life events are outlined below.

Events that Can Decrease Auto Insurance Rates

Marriage or domestic partnership – Auto insurers typically view people who are married or in a registered domestic partnership as a safer risk because research has shown that they are safer and more responsible drivers in general than drivers who are unmarried or not in a registered domestic partnership. 

Turning 25 years old – The difference between someone younger than 25 and someone that just turned 25 years of age is that insurers place drivers that have turned 25 into a different risk class that is viewed as less risky the class of drivers who are under 25.

A full-time student with a B average or better is added to your policy – Similar to married drivers and those over 25 years of age, students with a B average or better in school are considered by many insurers to be safer and more responsible drivers in general. 

Getting a job or license that qualifies you for a special discount – Certain occupations and licenses qualify drivers for special discounts.  Examples of such occupations and licenses include physicians and surgeons, police officers and firefighters, registered nurses, engineers, scientists, and teachers.

A driver on the policy has a change in employment status – If a driver on your policy becomes unemployed, retires, or begins working completely from home, the insurer typically assumes that there is no longer a daily commute for this driver, which means there is inherently less risk of this driver being involved in an accident.

Events that Can Increase Auto Insurance Rates

Drivers under 25 years old are added to your policy – As mentioned above, drivers who are not yet 25 years old are viewed as more risky to insurers because they are considered less experienced and less responsible drivers than those 25 years of age and older. 

Accidents, tickets, and claims – Drivers with at-fault accidents and/or violations, and those that have filed a claim in the past five years are typically viewed by insurers as more of a risk than drivers without this type of history.  More serious violations such as DUI or reckless driving can affect rates for up to 10 years. 

Increases or decreases in the mileage of your daily commute – Drivers with longer commutes to work each day are typically viewed insurers as more likely to be involved in an accident than drivers with a shorter commute.  If you move or get a different job that increases the number of miles that you drive each day, you will likely see a rate increase.  However, if your commute becomes shorter, you will likely see a rate decrease.  Additionally, moving to a different area can also mean a rate increase or decrease depending on the level of crime in the area and the past number of accidents or claims that have occurred in the area.

Changes in your credit history – In most, but not all states, insurers use your credit history as a factor in determining your rates.  They do this because poor credit history is seen as an indicator that someone might be unlikely to pay their premiums, and the increase in premium reflects this risk.  However, if your credit history improves drastically, you may see a decrease in your premium.

February 10, 2012 10:25AM

Advances in medical technology can be a double edged sword.  While there are many new technologies designed to make healthcare more efficient, much of this new technology involves very expensive equipment and research.  There is also an expectation in the United States that the best, newest and most advanced healthcare technology should be available, and this perception contributes to the use of expensive methods of treatment.

There are many who argue that administrative costs and the present mode of medical billing contribute to the rise in health care costs.  It is suggested that the current system of billing for health care services promotes the use of more unnecessary testing, and that more focus should be placed on the end result rather than on fees for services rendered.

Americans are becoming increasingly sick as well.  Obesity is a major problem, and the Center for Disease Control and Prevention state that one third of adult Americans were considered obese in 2007 to 2008. Lifestyle related health problems such as diabetes, smoking, and alcoholism have also contributed to the sharp rise in health care costs.

Medical malpractice insurance premiums have risen steadily as well, which adds to the cost of doing business for physicians and hospitals.  The practice of “defensive medicine” has also been cited as factor contributing to rising costs which may cause doctors to order more testing than may be necessary due to fears of malpractice lawsuits.

Along with the rise in costs for health care services, the costs for prescription medications are also on the rise.  General and administrative costs of doing business have affected pharmaceutical companies, as well as the cost of research and development.  The quest to find cures for diseases, and to combat problems associated with bad or defective drugs has become very costly.  Many would also argue that the profitability experienced by the pharmaceutical industry has contributed heavily to the high cost of prescription drugs.