Life Insurance- It's not a policy, it's a promise!

A life insurance policy can fill a wide variety of needs. One of its most important functions is to replace earning that would cease if you or your significant financial partner dies. Many people are not comfortable with the idea of buying a life insurance policy. They would rather put their insurance premium dollars towards a savings or investment strategy. Here are some simple questions you can ask yourself to help determine if life insurance is a good option for you:

  • Do you have children in the household you would like to support through college?
    • Parents are willing to do a lot for their kids. Many will sacrifice vacations, downsize their homes, or take on second jobs to pay for a college education. And let’s face it, college is expensive. Secure what you are working so hard for with a specific term life policy. Term means for a period of time; usually 10 to 20 years. It may be used as a security nest egg if the parent(s) die. You usually carry enough coverage to fund your children’s future education.
  • Do you have family members who are responsible for your debt?
    • If you passed away today, someone would still be responsible for your vehicle loan, mortgage, credit-card debt, or other financial obligations. Your life insurance portfolio should address this concern and protect your loved ones from undue financial stress.
  • Are you and your spouse looking forward to a relaxing or adventurous retirement?
    • Proper coordination between your savings/investment portfolio and life insurance plan can help make sure your spouse enjoys the retirement you both look forward to. Reaching this vision may not be possible if your income disappeared between now and retirement. A strategically placed life policy can truly complement your retirement savings plan.
  • Would you like to pass on assets to your heirs without them being taxed?
    • If your heirs have to pay estate taxes, they may not have the cash to pay the bill without selling off assets first. By purchasing a life insurance policy and designating your heirs as beneficiaries you may provide them cash tax free. This will help your loved ones avoid selling off assets in your estate in order to pay the tax bill. It’s important to consult with a qualified estate-planning advisor before making a purchase decision.
  • Will you need to be someone’s caretaker when they can’t care for themselves?
    • Many people offset the high cost of personal care for a loved one by providing that care themselves. But if they are not around to provide that personal care, the cost is often absorbed by the patient’s savings and assets quickly depleting everything they’ve worked for over the years. A paid death benefit can help provide the monetary resources you need to get the quality care that your loved one deserves. Talk to your financial advisor about your benefits.

One thing is for certain, Life Insurance Policies can come in different shapes and sizes. The trick is finding one that fits your specific needs.

Be leery of those suggesting an overall “one-size-fits-all” plan or philosophy when it comes to life insurance. You are not a faceless drone marching in life’s market helping investment brokers and insurance agents check off a box. You are you, and you need what YOU and your family need.

Would a term policy be right for you; giving you coverage for a specific period of time? Or are you better suited for a permanent policy that will stay with you for the duration of your life? Or how about a blend of the two to address different needs that you will experience through the various stages of life.

Come visit with one of our life insurance agents to discuss what your future plans are and how we can help your family achieve its goals. A team of experts can walk you through the process and help you build the right plan…and we will be here to review that plan as things in your life change!

Contact an Extraco Insurance agent.

 

See also

4 Ways You Can Save By Bundling Your Insurance With Your Banking

Do you have full coverage? What you need to know when buying car insurance

 

Reece Flood headshot

Reece Flood
Insurance Consultant at Extraco Banks

 

*Insurance Products are not deposits, not insured by the FDIC or any Federal Government Agency, not guaranteed by Extraco Banks or its affiliates, and may go down in value. 

 

What you should know if you are buying insurance for the first time

Buying health insurance can be confusing, even for those of us that have been doing it for a long time. So what if you're right out of school and signing up for health insurance for the first time in your life. Many of the younger clients I have helped sign up for health insurance did not know the difference between a deductible and coinsurance.

Terms like “deductible” and “coinsurance” are part of basic health insurance lingo. Knowing what these terms mean will help you understand what you are buying now so you don’t end up with high and confusing medical bills later.

Here are a few important health insurance questions that millennials should ask themselves before they begin shopping for coverage.

What is a deductible?

This is how much you pay out of your own pocket for most medical services before your insurance kicks in.

What is coinsurance?

You pay your plan’s coinsurance once you’ve met your deductible. Coinsurance is your cost share of any claim that you receive for a medical service. For instance, you might pay 20 percent of the negotiated cost of your service and your insurer pays the remaining 80 percent. Often, the lower your monthly premium is, the higher your coinsurance will be.

What are premiums?

Premiums are the payments you make every month for your health insurance policy.

What is a copay?

You may be charged a copay at the time of your doctor visit or when you fill a prescription. Copays are typically higher for visits to specialists, urgent care clinics, or emergency rooms.

If you see a doctor regularly for a chronic health condition or you are taking medications, you may want to sign-up for a plan that has low copays for those visits and for your prescriptions.

When can I sign up for health insurance?

Under the ACA, you can buy health insurance only during open enrollment. Open enrollment for ACA coverage in 2017 starts Nov. 1, 2016 and runs through Jan 31, 2017.

You may be eligible to enroll at other times should you have a qualifying event. These reasons include getting married or divorced, having a child, getting dropped from a parent’s plan because you are turning 26, changing jobs or moving to a new state.

Do I have to buy my insurance in the Health Insurance Marketplace?

If you are a U.S. resident and don't have access to health insurance coverage elsewhere – through work or your parents, for example – you can buy health insurance in the government-run Marketplace or directly from a health insurance company.

ACA premium subsidies are only available for polices purchased from the Health Insurance Marketplace.  These subsidies can lower the cost of health insurance for those who qualify. To be eligible for subsidies, a person’s income must not exceed 400 percent of the federal poverty level. For singles, that equals $47,080 for 2016 coverage. Income levels for 2017 have not yet been released.

What happens when I turn 26?

Under Obamacare, you may be covered through your parents' health insurance until you are 26, at which time you will have to get insurance on your own. You may qualify for special enrollment if your birthday falls outside of the open enrollment period.

Start shopping before you turn 26 so your new plan starts when your old one ends to avoid any gap in coverage. If you enroll in a Marketplace plan before the 15th of the month, your coverage will start the first of the following month. For example, if you need coverage starting Aug. 1, make sure you are enrolled no later than July 15.

Does it cost more if I have a Health Insurance Agent help me enroll in a plan?

The cost of health insurance is the same if you buy it on your own or if you have an insurance agent’s help. Navigating the different types of plans and various health insurance carriers can be a confusing and frustrating challenge. Getting the help of a licensed agent will help ensure that you have the right coverage to fit your needs at the right price.

 

See also

4 Ways you can save by bundling your insurance with your banking

 

Stacy Whitwell, SGS, PPACA
Insurance Consultant at Extraco Banks

 

Connect with Stacy Whitwell on LinkedIn

 

 

*Insurance Products are not deposits, not insured by the FDIC or any Federal Government Agency, not guaranteed by Extraco Banks or its affiliates, and may go down in value.

Why you should consider Umbrella Insurance -

It covers more than you think

Imagine if your dog were to bite a neighbor's child or if there's an accident on your rental property. Maybe a fire in your condo spreads to other units. What would happen if you or a family member missed a stop sign and struck and killed a pedestrian? If any of these things happened to you, there is a good chance your current liability limits wouldn't be adequate to protect your assets—or your future earnings.

So, what is Umbrella Insurance?

Umbrella insurance is a secondary coverage that protects more than one property or asset with an extra layer of liability protection. It kicks in when your underlying or primary policy doesn't provide sufficient liability protection. An umbrella policy provides an additional layer of liability protection that can be used with any of your other policies or even any policy from another insurance company including your boat, motorcycle, all-terrain vehicle and snowmobile.

For example, if liability limits are exhausted on your auto insurance, your umbrella insurance would kick in and provide you with additional protection of at least $1 million or up to the level of coverage you purchased. If you have $500,000 liability coverage on your auto policy and $1 million umbrella coverage, your total auto liability coverage is increased to $1.5 million.

How much coverage do I need?

A lot of factors determine the amount of coverage you need. Your financial status, lifestyle, and existing coverage are all relevant, but in liability lawsuits, a judgment could exceed your net worth. Contact an Insurance Agent at your local Extraco Banks for advice on the amount of coverage that’s right for you.

Can I get just an umbrella policy?

To qualify for umbrella insurance coverage, you must also carry auto insurance with a certain amount of liability coverage. Other policies you have must meet certain minimum liability coverage levels. Some other conditions may also apply. Talk to your local agent at Extraco Banks for more information about adding the extra protection of umbrella insurance.

 See also

4 Ways You Can Save By Bundling Your Insurance With Your Banking
Do you have full coverage? What you need to know when buying car insurance
What you should know if you are buying Insurance for the first time
Life Insurance - It’s not a policy, it’s a promise

Kyle Furrer
Director, Insurance at Extraco Banks

Connect with Kyle on LinkedIn

 

*Insurance Products are not deposits, not insured by the FDIC or any Federal Government Agency, not guaranteed by Extraco Banks or its affiliates, and may go down in value.

4 Ways you can save by bundling your insurance with your banking

Personal insurance and personal banking are seemingly separate categories of finances, but when coordinated together they can maximize each other’s strengths to your benefit. Here are a few examples of how you can bundle your policies and bank accounts to utilize this relationship to save money.

  • Electronic Funds Transfer: If you are paying your home or auto insurance on a monthly basis, you may want to consider having your payments drafted by the insurance company directly out of your account as opposed to receiving a paper bill by mail. Many insurance companies will reduce monthly billing fees if you select this payment option.

 

Start a deductible savings plan by opening up an Extraco Money Market account that’s connected to your Extraco Checking account. You can schedule this new Money Market account to pull a designated amount from your checking account each month. If you pull $10/month for 7 years, you’ll have $840 saved up. $50/month will accumulate to $4,200 in seven years. Therefore, when a claim does happen, you’ve already got some or all of the deductible saved and ready to go!

 

  • Clean up Your Credit: Statistical analyses have proven that there is a correlation between a person’s credit score and their propensity to file an insurance claim. While this correlation does not hold true to everyone, many insurance companies have started using “credit” as a rating factor that can affect what premium they are willing to offer you. 

There are many ways to improve your credit. Follow this link for Simple Tips to Raise Your Credit Score.

 

  • Escrow Account: Is your mortgage company paying your home insurance and taxes for you? That means you have an escrow account set up through the mortgage company where they take a portion of your monthly house payment and set it aside. Once your home insurance renews, or your property taxes are due, they will write a check out of this Escrow Account to pay the insurance or taxes in full.

    If you are not required to use the mortgage company’s escrow system, you might consider setting this up yourself at any Extraco Banks location. All you have to do is start a new Money Market account and have it pull a pre-designated amount from your Extraco Checking account. Just like your mortgage company is doing now, you estimate what your home insurance renewal premium and your taxes will be, divide by 12, and “collect” that much each month from yourself. Let that money work for you!

           

Stop by your local Extraco Banks location and visit with our retail team to help coordinate our banking and insurance services to your benefit.

Contact an Extraco Insurance agent.

 

See also

Do you have full coverage? What you need to know when buying car insurance

 

Reece Flood headshot
Reece Flood
Insurance Consultant at Extraco Banks
 
*Insurance Products are not deposits, not insured by the FDIC or any Federal Government Agency, not guaranteed by Extraco Banks or its affiliates, and may go down in value.

Do you have full coverage? What you need to know when buying car insurance

Do you pay for “full coverage” insurance on your car? If so, do you know what all is included under that coverage?

“Full Coverage” is not defined in the insurance industry so it can mean a lot of different things to a lot of different people and companies.

Typically, most think full coverage includes Collision coverage, which pays for physical damage to your vehicle caused by an accident, and Comprehensive coverage, which pays for damage to your vehicle from flood, fire, theft, vandalism or contact with persons, animals, etc.

A deductible is applied when submitting a Comprehensive or Collision claim. This is your out-of-pocket expense to get your car repaired. You select what your deductible will be when you sign up for a car insurance policy. Your deductible options can range from $100 up to $1000.

So there you have it. You’ve started a policy and picked out your Comprehensive and Collision deductibles! You are now “Fully Covered”, right!?

Well, not quite. There are additional coverages you should know about. One is your Limit of Liability. This is used if you cause an accident and other people are injured and/or property is damaged. While the State of Texas requires you have Liability coverage, it has very low minimum standards. Selecting only the State required limits can be a real problem in the event you cause more damage than the amount of coverage you’ve selected.

Another area to consider is Uninsured/Underinsured Motorist coverage. This portion of your policy can be used to pay for damages to your own vehicle, or bodily injury to anyone in your car in the event another person with no insurance, or not enough coverage, hits you.

You also have the option to select Medical coverage or Personal Injury Protection, as well as Towing/Service coverage and Rental Reimbursement. Some companies are even offering other bells and whistles such as Accident Forgiveness and Disappearing Deductibles.

So let’s ask the question again: Do you have “full coverage”?

The real questions should be, “Do you know what coverage you have, and are you comfortable with the limits you’ve selected?”

If you are not sure of your coverage, it may be time to sit down with one of our agents for a quick review.

Contact an Extraco Insurance agent.

 

See also

4 Ways you can save by bundling your insurance with your banking

Reece Flood headshot

Reece Flood
Insurance Consultant at Extraco Banks

  

*Insurance Products are not deposits, not insured by the FDIC or any Federal Government Agency, not guaranteed by Extraco Banks or its affiliates, and may go down in value.