Daily Financial Tips

Archive for January 10th, 2012

There are two types of Disability insurance a person can have: Long-Term disability and Short-Term disability. Depending on your work situation, you may be eligible for both types of coverage through your employer in the form of a group plan. For those who are not provided these benefits at work, you are able to obtain both Short and Long-Term coverage directly through an insurance company on an individual basis.

Individual Disability insurance must be applied for. The application process is fairly uniform amongst the various insurance companies and will traditionally require the applicant to complete a paper/electronic application, an insurance medical exam, a phone interview and provide tax returns as proof of income. Without getting too far into the details of this process, you can expect that obtaining a policy will take anywhere from 3-8 weeks on average.

The big dilemma that many people will face is whether to obtain Short-Term or Long-Term disability. Solely based on the potential loss of a Long-Term claim vs. a Short-Term claim, it certainly makes more sense to have Long-Term protection, but it is often not that simple. In order to clarify this issue, consider what each is truly protecting.

Traditionally, a Short-Term disability policy will be designed with a 7-14 day waiting period and 3-6 month benefit period. This means that benefits will become payable after 7-14 days of being disabled, and will continue to be paid for up to 3-6 months for any one illness or injury. In most situations, Short-Term coverage is intended to pay benefits during the waiting period of a Long-Term disability policy, but terminate once the Long-Term benefits become payable. It can be described as an insurance that provides you with sick leave. Being that Short-Term disability insurance pays for relatively short benefit periods, it is protection against a simple type of injury or sickness, but not something major.

A Long-Term disability policy will usually be designed to begin paying benefits after 90-days of being disabled and will continue paying benefits for 5-years, 10-years or until retirement age, depending on which benefit period you choose. Long-Term disability is the type of coverage that can truly save a person from facing a complete financial disaster. We live our lives expecting and assuming that our ability to work and earn an income will never cease. Without that ability to continue earning an income however, we are no longer able to support our lifestyles and financial responsibilities.

To clarify: assume a person has $5,000 of monthly benefit on his/her Short-Term and Long-Term disability policy. If this person incurs a Short-Term claim of 5 months, assuming a 14-day waiting period, he/she will be eligible for a total of $22,500 over the 5-month claim. Although this is a substantial amount of money and not having it can certainly create financial hardship, this is probably not sufficient to cause a bankruptcy or foreclosure. If this person incurs a longer claim of 4-years, the total benefit paid would be $240,000. Clearly, with Long-Term disability insurance you are protecting a much larger risk. A loss of $240,000 is much more likely to cause bankruptcies, foreclosures and a severe financial disaster than a loss of $22,500.

Both Short-Term and Long-Term disability policies can be custom designed to your situation and budget. It is important that when you consider obtaining individual coverage you work with a specialist who can truly assist you in finding the best fit for you.

While financing car loans the main aim of every individual is securing cheap rates and the best deal. If not handled with dexterity, a worthy case can get spoiled but a little cleverness can promise a favorable deal in an average or below average case. It depends on how you make the rules facilitate your particular situation.

The Right Way To Go About Financing Car Loans

It is important and very well known too that the credit worth has major impact on the kind of finance deal one gets. There is no reason of anxiety for those who have picture perfect financial background. But all others must work on removing any blemishes that are there on their records by bringing their credit cards debit balance to a minimum and avoiding late payments, skipping dues, incurring further loans and bouncing checks. A mere six month long sparkling record will get them better car financing schemes.

Having no credit history is a more tricky case, as there is no record of your repayment capacity. You can build one by getting a credit card and maintaining a good record for at least six months or by getting a co-signer. The latter is a person who has a good financial history and is willing to act as your security. So actually you ride on somebody else’s good record.

Then, it will be immensely good if you can get pre approval for car loans before you go shopping for a car. With this you will not only know beforehand which model falls into your range but also you will be able to negotiate the car price. Also, it reduces the extent of paper work that is involved to almost half while finalizing an agreement with the car dealership. Next, don’t get too excited by zero percent financing schemes because they ask for a perfect credit score with a total payment payoff in three years.

Again, it is no secret that financing car loans online can get you low interest due to more competition. The rates that market dealers charge are always two to three percent more than what is being offered online. If it is an authorized online lender then have no fear in sharing information and asking for finance.

Another way of getting low interest auto loans is selecting the secured credit option. The usual practice is placing the same vehicle, on which you are asking a loan, as collateral but you can provide any other asset too. Because the lender’s money is secured so he agrees on low rates too. Any payment default and he has the right to seize your vehicle.

Lastly, you can also save money if you select automated monthly reduction as your repayment mode. Every month on a fixed date your loan installment will be automatically deducted from your account. You won’t have to issue or deposit checks. Just make sure that your account carries enough credit balance on the date of withdrawal. Choose the right road for financing car loans and you will have a smooth ride sans any road bumps.

Medical insurance can be complicated enough – for seniors, it seems the
picture is often more confusing. Most seniors don’t work and many are in ill
health or have special medical needs. And many seniors rely on government funded
assistant living facilities – an estimated 1 million seniors live in around
30,000 assisted living facilities throughout the country.

Most seniors qualify for either Medicare or Medicaid, depending on their income
and situation. Medicare is available to those who are at least 65 years old, and
have legally lived in the US for at least 5 years before applying. Medigap
insurance is supplemental health insurance taken out by some seniors as a way of
supplementing their Medicare insurance.

Medicaid is funded by the government and administered by individual states under
their department of insurance. Qualification for Medicaid also depends on an
individual’s assets, income and type of residence. Medicaid will usually cover
most or all of the costs of nursing home admission and the accompanying care
that is necessary.

Some seniors, because of a particularly low income or a specific disability, may
also qualify for Supplemental Security Income (SSI) a program administered by
the Social Security Administration. This program offers several benefits
including providing monthly supplemental payments, food stamps and assistance
with hospital visits and drug costs.

If you don’t qualify for Medicaid, what is known as long term care insurance can
be purchased for long term stays in nursing homes or assisted living facilities.
If you are shopping for long term insurance, you should consider what other
benefits are covered under the plan, the costs of premiums and whether the
policy covers pre-existing conditions.

Seniors may also find themselves using the services of Health Maintenance
Organizations (HMOs) HMOs generally accept Medicare payment and offer lower cost
deductibles or co-payments. They also put an emphasis on preventative medicine
as well as the actual treatment, and many provide eye care, dental services and
emergency care when necessary.