What is Supplemental Life Insurance and is it Worth the Cost?

Is supplemental life insurance worth the cost? Maybe, but private insurance might be better.

Imagine you just landed a great new job. You’re really pumped for the first day of work. You put on your brand new suit, pick up your swanky briefcase, and head to the office…only to sit in onboarding meetings for the whole first day.

These meetings can be boring, and they can take forever if your new employer is large and onboards many employees at once. Typically, they go over things like employment expectations and requirements. But they’ll also usually walk you through the employer’s various benefits package options.

Many times, you’re left with lots of choices at the end of onboarding, including:

• Which health insurance plan to choose.
• How much to contribute to your 401(k).
• Whether or not to use an FSA or HSA.
• Whether or not to purchase supplemental life insurance.

We’ve talked elsewhere on Dough Roller about the first three options. But now, let’s focus on the fourth option: Whether or not to purchase supplemental life insurance.

You might be thinking, “What is supplemental life insurance?” We’re here with answers. First, let’s discuss what this type of insurance is, and then we’ll talk about whether or not it’s worth the cost.

What is Supplemental Life Insurance?

Supplemental life insurance is, as you might guess, a form of additional life insurance. It’s not meant to take the place of a good term life insurance policy. But it will give your family additional coverage should the worst happen to you.

You can get supplemental life insurance two ways: through your employer, or privately.

Employer-provided supplemental life insurance

Some employers offer both term life insurance coverage and supplemental life insurance. Term life insurance through your employer generally works like regular term life insurance. It may be cheaper, though, since it’s a group policy. The company takes on less risk when insuring a larger group of people, and this can translate into savings for you.

In 2014, about 94 percent of U.S. companies surveyed offered their employees life insurance coverage of some sort. Employers generally offer these ancillary benefits based on what their employees need most.

Supplemental life insurance is similar to a group term life insurance policy, but is typically more limited. The limits will depend on your particular policy. Here are some common terms to look for:

• Accidental Death and Dismemberment: Some supplemental policies are specifically for accidental death and dismemberment (AD&D). This means they will only cover you if your death is caused by an accident. Some of these policies, though, will also pay out if you’re in a serious accident but don’t pass away. For instance, if you lose your eyesight, hearing, or a limb due to a covered accident.
• Burial Insurance: Some supplemental policies are strictly to cover the costs of burial and funeral services in the event of your untimely death. These policies typically offer between $5,000 and $10,000 of coverage.
• Non-Portable: Any life insurance policy you purchase through your employer may be non-portable. That means that you can’t take it with you when you move on to a different employer or retire. We’ll talk more shortly about why this can be such a big problem for many consumers.
• Spouse or Domestic Partner Insurance: Sometimes employers will allow you to purchase supplemental life insurance for your spouse or domestic partner. This policy might complement your own term life insurance policy. The limits on policy amounts may be lower, and these policies may be subject to some of the same limits described above.

Your employer’s terms will vary, depending on the plan they’ve chosen. So you’ll want to examine the fine print for these limitations before you decide to purchase a policy.

Private supplemental life insurance

Just like you can get this type of insurance through your employer, you can also buy it on the private market. In this case, it’s like buying private term life insurance. You just shop around to see who offers you the best deal, and then purchase your insurance privately.

This type of insurance can have the first two limitations above. That is, you can purchase AD&D insurance or burial insurance on the private market. In fact, you may be able to buy these policies as a rider on your original term life insurance policy when your purchase term insurance.

The main advantage of private supplemental life insurance is that it is portable. Meaning, you will keep the coverage as long as you are paying the premiums. You can also purchase this insurance for your spouse or domestic partner in his or her own name.

In some case, private supplemental insurance can also be cheaper. For instance, say you’re really young and healthy. In this case, life insurance of any sort will be pretty cheap for you. So before you sign up for the employer’s coverage, you might check to see if you can get an individual policy more cheaply.

A note about portability

The non-portability of both term life insurance and supplemental life insurance through your employer can be a real bone of contention. In short, you shouldn’t depend on employer coverage alone for this reason.

Let’s say you start working with your employer straight out of college. You’re young and in great shape. But it’s still cheaper to purchase life insurance through your employer, so you get a $50,000 term life insurance policy plus a $10,000 burial policy.

Over ten years, you move up the ranks, so you stick with your employer for a while. In the meantime, you gain a little weight, become a little less active, and maybe develop a chronic or acute health condition. Then, you leave employment to start your own venture.

Now you realize you’re stuck replacing your life insurance coverage on your own. And since you now have a house and a family, you likely need more coverage than you did ten years ago. Only now that you’re older and less healthy, your term policy is significantly more expensive.

In this case, you may have been better off paying for your own term health insurance all along, knowing you wouldn’t be able to take your employer’s insurance with you.

If your employer offers incredibly cheap coverage, it’s fine to opt in. Just know that you may also want to bulk up your private coverage so you aren’t stuck paying a lot more for the same coverage when you leave or change employment.

Is Supplemental Life Insurance Worth The Cost?

Now that you know what supplemental life insurance is, you need to determine whether or not it’s worth the cost. This depends on a variety of factors, including how much insurance you already have, the limitations, and the costs.

Your current coverage

Buying life insurance should be a holistic experience. That is, you don’t want to look at all of your policies separately. You need to look at the policies as a whole, and total up your life insurance coverage.

It’s a good idea before you go to your enrollment meeting or shop for private supplemental life insurance to look at your current coverage. Determining exactly how much life insurance to get can be tough. One rule of thumb says to have ten times your annual salary in coverage. But that may be too much or not enough, depending on your circumstances. Read this article for a more thorough discussion of this issue.

If your current coverage is enough or even more than enough, paying more for supplemental life insurance may not make sense. You could, instead, put that premium amount towards saving for retirement or other financial goals.

Even if the premium is small, you shouldn’t pay for insurance you won’t need.

But if your current insurance isn’t quite enough, or if you’d be comfortable with more coverage, you might want supplemental life insurance.

This type of insurance can also be helpful for a couple of specific situations:

1. Faster payout for burial insurance. Your $500,000 term life insurance policy can take a few weeks to pay out to your family. In the meantime if you passed away, they’d have to deal with your burial costs immediately. Some burial insurance has a built-in accelerator clause, so the funds would become available really quickly. That can give you extra peace of mind, even if you’re comfortable with your current term policy.
2. AD&D pays out even if you don’t pass away. If your employer offers an Accidental Death and Dismemberment option, it can be worthwhile even if you have plenty of insurance. Be sure to read the fine print. But this type of policy could pay out even if you don’t pass away, which can make it very valuable. Of course, a long-term disability program could do the same thing. So balance the costs and benefits when deciding on your coverage.

What if you don’t have enough life insurance coverage? A supplemental insurance policy can help. But you shouldn’t rely on this policy too heavily, again, because of the portability issue. But you can go ahead and opt in to this policy, and then shop around later for the proper amount of term life insurance coverage.

Policy limitations

It’s absolutely essential that you understand all of the policy’s limitations when looking at supplemental life insurance. This is true for any insurance policy, of course. But it could be even more crucial for this type of policy, which can have so many clauses and exceptions.

The bottom line is that the less likely you are to need insurance, the less you should pay for it. If your AD&D policy pays out in exactly two types of accidents that you’re never likely to experience, it’s probably not worth the cost. But if the policy covers a broad variety of accidents and issues, it could be worth your while.

I’ll mention just one more time the portability issue, too. With any non-portable life insurance policy, be sure that you have backup or at least a plan for ensuring you’re covered properly if you move to new employment.

The cost

Before you sign up for any employer life insurance plans, shop around to see what you can get on your own. Again, if you’re young and healthy, you may get better coverage at a lower cost than you’ll get through your group policy. This is somewhat unusual unless you’re in excellent health, but it can happen.

Even if the private coverage you find is slightly more expensive, it can be worth a few extra bucks a month. You’ll get portable coverage that you know will last for the entire life insurance term.

For older adults, or those who are less healthy, the employer-based coverage is likely to be the cheapest option around. But, still, if a limited supplemental life insurance policy is pretty expensive, it may not be worth it. Just balance the monthly cost against your needs and the likelihood that you’ll use such a policy.

Remember, if this is an optional benefit through your employer, you’ll probably reduce your paycheck by the amount of the premium. So if it makes more sense to go with a private policy, you get money back in your paycheck to pay for the insurance on your own.

The Bottom Line

So now you know what supplemental life insurance is, but it’s still up to you to decide if it’s worth the cost. Just do your due diligence. Make sure you understand the policy you’re being offered and its costs. Then, shop around to see if you can do better on the private market.

If you’re exclusively shopping on the private market, consider adding supplemental insurance to your term life insurance policy. In some cases, you can add accelerated burial benefits or an AD&D rider to your existing policy, and this may be cheaper than purchasing it separately.

Either way, though, be sure you know how your supplemental life insurance policy fits into your overall life insurance picture and plan before you buy it.

Topics: Insurance

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APR vs. APY – How One Letter Can Mean So Much

Knowing the difference between APR and APY may not seem like a big deal on the surface. But it’s something that can save every consumer hundreds, if not thousands of dollars over the course of their lives. In this article, we’ll clear the air on the APR vs APY debate, starting with an explanation of how they are different.

You’ve no doubt heard of both of the terms, APR and APY. Most people, however, haven’t given much thought to how they are computed. Creditors will quote interest rates using either APR or APY. They almost always quote the number that looks better to you. Thus, it is important to know the difference.

We’re going to first define what each of these terms means. Then we’ll provide a real-life example of how it can affect you.

Annual Percentage Rate (APR)

APR is an acronym for Annual Percentage Rate. The term is mostly used when defining the interest that is paid on a mortgage, credit card or other loan. You can apply APR to any interest rate and it will always be equal to or smaller than APY. APR generally does not need any calculations to compute, it’s simply the rate applied to money borrowed.

Lenders usually apply this rate as often as possible. For example, if your credit card APR is 15%, they apply that percentage to your “average credit card balance” every day, after the grace period.

The credit card company divides the 15% APR by 365 days in the year. The result is a daily periodic rate of 0.041095. If you pay off your balance after interest is applied once, then 15% is an accurate representation of your interest rate. If you carry a balance from month to month, however, then you’re paying more than you think.

Annual Percentage Yield (APY)

APY is an acronym for Annual Percentage Yield. It is a common term used when defining the interest paid in a savings, checking, or other interest bearing account. Unlike APR, APY reflects interest paid on interest. Thus, APY is always higher than APR. Interest is generally compounded quarterly, monthly, or daily. As a result, the interest added to your account becomes part of your average daily balance.

The balance increases when interest is applied. Since your balance is now higher, more interest will accrue the following month. The amount of interest you earn will grow each month, unless you withdraw from the account.

APR and APY in Action

So, now that you understand the difference, let’s see how it would affect you in a real life situation. First, let’s say that you have a savings account with an interest rate of 3%.  A pretty awesome interest rate these days. For purposes of the example, it’s an easy percentage to work with. So let’s say you decide to make a deposit of $5,000 in this savings account.

Over a 12 month period, the bank would credit interest to your account once a month, at a rate of 0.25% (3% interest rate divided by 12 months). If you simply took the 3% and applied it once to the balance at the end of the year, you would expect to earn a total of $150 in interest. However, the actual rate is higher than 3% because interest is earned on interest.

Compounding Interest

Over the course of a 12 month period, your new balances would be as follows:

• Month 1 – $5,012.50
• Month 2 – $5,025.03
• Month 3 – $5,037.59
• Month 4 – $5,050.19
• Month 5 – $5,062.81
• Month 6 – $5,075.47
• Month 7 – $5,088.16
• Month 8 – $5,110.88
• Month 9 – $5,113.63
• Month 10 – $5,126.42
• Month 11 – $5,139.23
• Month 12 – $5,152.08

You can see in the model that the actual interest owed after a 12 month period is $152.08. This is of course more than the $150 the APR would lead you to believe. When we compound interest monthly, as in this example, the actual APY of a 3% interest rate is 3.04%. The more times an interest rate is applied to a balance, the higher the APY.  So interest compounded daily would have a higher APY then the example above, and interest compounded quarterly would have a lower APY.

Credit Cards

If you applied this $5,000 to a credit card balance owed, APY would become a less attractive model to use. In regard to a credit card account, you would probably have to pay off a certain amount of your bill every month, making the actual interest you would pay less than the $152.08 the example shows (assuming you didn’t charge more to the card). You will be paying off a portion of your bill with every statement, making the principal + interest amount lower each month.

Why APY is Valuable

APY always gives you a more accurate representation of how much money you will earn or owe at the end of a full term or year. Home loans, auto loans, savings accounts, CD’s and other similar accounts roll over from month to month. Therefore, interest accrues on interest. When you shop for a savings account, for example, it’s important to compare APY. For example, the EverBank money market account currently offers a bonus rate for the first three months, then the rate lowers to EverBank’s prevailing rate.

While comparing this offer to other banks would be difficult using APR, APY factors in the changes in rate and compounding. Thus, it is easy to compare EverBank’s first year APY of 1.31% (as of 09/08/2017) with say Ally Bank’s first year APY of 1.20% (as of 09/02/2017).

Finally, when it comes to mortgages, you’ll often see a quoted “rate” that is lower than the APR. The rate represents the interest rate on the loan, while the APR factors in other fees (such as points) that you’ll pay. The APR is always higher than the rate. The key is that when you compare mortgage rate quotes, make sure you are comparing an APR that has factored in the fees you’ll pay with the loan.

The upshot of all of this is simple. The next time you are looking into a loan or savings account, make sure to compare the APY.

Topics: Banking

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Reside by Marcon at Cambie Village

RESIDE is an exclusive collection of one, two and three bedroom homes with a coveted Westside Vancouver address. With some of Vancouver’s best parks and amenities close by, this is a well-established neighbourhood. RESIDE will be home to 33 concrete homes and 2 floors of parking. RESIDE is situated near shopping, parks, top-ranked schools, entertainment and dining. Langara Golf Course and Winona Park are within walking distance for you to enjoy Vancouver’s great outdoors. Vancouver International Airport is less than 10 minutes away when you board the Canada Line at Marine Drive Station.

Marcon Developments began as a construction company and gave them the experience to deliver homes not only of high standards, but also of high value. Since inception, they have given the keys to homeowners to more than 10,000 new homes and helped dreams become reality. Marcon has developed some notable residences over the years, such as the first high-rise in Canada to achieve LEED certification. Building to these standards helps to future-proof your home, as well as allowing you to breathe easy from the first day you move in.

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Reside by Marcon at Cambie Village

RESIDE is an exclusive collection of one, two and three bedroom homes with a coveted Westside Vancouver address. With some of Vancouver’s best parks and amenities close by, this is a well-established neighbourhood. RESIDE will be home to 33 concrete homes and 2 floors of parking. RESIDE is situated near shopping, parks, top-ranked schools, entertainment and dining. Langara Golf Course and Winona Park are within walking distance for you to enjoy Vancouver’s great outdoors. Vancouver International Airport is less than 10 minutes away when you board the Canada Line at Marine Drive Station.

Marcon Developments began as a construction company and gave them the experience to deliver homes not only of high standards, but also of high value. Since inception, they have given the keys to homeowners to more than 10,000 new homes and helped dreams become reality. Marcon has developed some notable residences over the years, such as the first high-rise in Canada to achieve LEED certification. Building to these standards helps to future-proof your home, as well as allowing you to breathe easy from the first day you move in.

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Glitz – Availability, Prices, Plans

At a Glance

• located across from Richmond City Hall
• 9-storey mixed use: residential, commercial, retail
• 77 condos from 1-3 bedrooms
• Richmond Centre shopping
• close to Canada Line rapid transit
• countless dining options nearby
• walking distance to Minoru Park

Live Brilliantly
iFortune presents Glitz, a mixed use project across the street from Richmond City Hall that includes 77 condominiums, 100,000 sq ft of office space, and 12,000 sq ft of retail space. Home owners will enjoy the convenience of finding their daily necessities nearby at Richmond Centre or shopping at the McArthurGlen Designer Outlet just ten minutes away. A world of dining choices lay at your footstep, as does a variety of recreational activities at Minoru Park. At Glitz, live, work, and play in the heart of Richmond!

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Pricing for Glitz
Final pricing for Glitz has not yet been made public. To ensure timely updates for this attractive purchase opportunity, sign up to our VIP list above.

Floor Plans for Glitz
Contact me today to discuss availability and plans.

Amenities at Glitz
Residents will enjoy use of a 1,453 sq ft shared amenity space, a 12,000 sq ft outdoor common area, and a 2,422 sq ft childrens play area.

Parking and Storage
Glitz will provide off-street parking for 237 vehicles, consisting of 155 commercial, 82 residential, 15 visitor, and five handicapped spaces. Resident bicycle parking will be available in 94 Class 1 and 15 Class 2 stalls. There will also be two large and three medium loading bays.

Maintenance Fees at Glitz
To be included with finalized pricing information.

Developer Team for Glitz
iFortune is a developer, builder, general contractor, and project manager for a variety of types of projects of all sizes and complexity. The principals have over 100 years of combined local experience and a proven track record in the development and construction industry. iFortune Homes has significant development experience throughout the Metro Vancouver region. They are involved in every step of the development process, from sourcing the right team to acquisition of lands, arranging financing, obtaining approvals, designing solutions, managing construction, to marketing and sales.

GBL Architects is a progressive Vancouver-based firm of 38 architects, project managers and technicians with a 25-year reputation of providing a full range of architectural services to the private and public sector. GBL design with the belief that form plays a vital role in defining experience through an ever-changing dynamic between sculptural artistry and social responsibility. To that end, they regularly practice green design through the LEED Canada Program.

Expected Completion for Glitz
Sales start Fall 2017.

Are you interested in learning more about other homes in Richmond, South Vancouver, or the Cambie Corridor?

Check out these great Richmond Presales!

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The New 2017 Federal Income Tax Brackets and Deduction Limits (Updated September ’17)

I know it’s a little soon to be talking about filing your 2017 tax return (though, it’s never actually too early!), but a bit of news happened this week that could drastically change the amount of taxes you’ll pay next year.  Donald Trump recently released his plan to cut taxes for the upcoming filing year, and if his plan becomes legislation, it means a full overhaul of the current tax code.

It’s important to note that the below table is not official, and the information within it is only conjecture at this point because no law has been passed. It’s likely to take a bit of negotiating to get something done, so the final result may look different. But it’s still fun to look at now and see what’s potentially around the corner.

2017 Federal Income Tax Brackets (Single)

If Taxable Income Is ...	The Tax Is ...
$0 - $37,950	12% of the taxable income
$37,950 - $191,650	$4,554 + 25% of the taxable income over $37,950
$191,650 +	$42,979 + 35% of the taxable income over $191,650

2017 Federal Income Tax Brackets (Married)

If Taxable Income Is ...	The Tax Is ...
$0 - $75,900	12% of the taxable income
$75,900 - $233,350	$9,108 + 25% of the taxable income over $75,900
$233,350 +	$48,470.50 + 35% of the taxable income over $233,350

If you’re wondering where the rest of the table is… well, that’s it.  Three tax brackets, and tax rates of 12%, 25%, and 35%. Gone is the seven bracket system, and here you see a much more simplified setup, with the top rate being 4.6% lower than in previous years (39.6% was the top rate in 2017).

New 2017 Standard Deduction

Another big benefit from the newly introduced Trump tax code is the increase of the standard deduction. Your proposed 2017 standard deduction amounts are as follows:

• Married filing jointly and surviving spouses: $24,000 (previously $12,700)
• Single, or married filing separately: $12,000 (previously $6,350)

But with all of these tax decreases, there is one glaring negative. The administration is looking to kill off all but two tax deductions that can be claimed on your tax return: the home mortgage interest deduction and charitable donations. Say goodbye to claiming a home office, travel expenses for a new job, state income tax, etc. Part of the hurt from this change will be relieved by the higher standard deduction amount, but for filers who love to add line after line of deduction? Well, those days may be over.

Related: The “Old” 2017 Standard Deduction and Exemption Limits

Please remember that these rates are for the income you receive in 2017 and the tax return you will be filing in early 2018. Of course, nothing is official until the IRS confirms what the tax rates will be. This likely won’t happen for a good long while, so we will continue to monitor the situation.

Related: File your tax return for free with Credit Karma!

UPDATE – September 27th, 2017

Five months ago, Gary Cohn and Steve Mnuchin provided a peek at what the new administration was looking for in a tax reform plan.  Today, Donald Trump stepped up to the podium and provided a few additional details.  Somewhat striking is that the only noticeable “change” from the initial reveal is that the lowest income tax bracket went from a 10% tax to a 12% tax.  All other frame-work remained the same.

Here are a few new details that Trump provided today with regard to your potential 2017 Federal Income Tax Brackets:

1. The Child Care Tax Credit will be going up from $1,000. (No news as to just how high)
2. An additional $500 Tax Credit for non-child dependents has been added (for the elderly, for example)
3. There is a high likelihood that a 4th tax bracket (above 35%) will appear for the wealthy.  No specific details were provided
4. Confirmed removal of the state and local tax deductions
5. Keeping the mortgage interest deduction and charitable deductions
6. Elimination of the estate (death) tax
7. A one-time repatriation tax of an unspecified amount.  This is an attempt to bring money kept overseas back to the United States
8. A corporate tax rate of 20%

As a reminder, this is not a finished product.  If tax reform is signed into law AND reverted back to 2017 it will likely be different than the numbers you see above.  How different is unknown but we’ll continue to publish updates as they’re presented.

Topics: Taxes

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MEET THE BEACH WRIST-BANDING STARTS 9/28

First year student? Be first in line to get your Meet the Beach wristband Thursday 9/28 from 10am-4pm in front of RIMAC and Main Gym. We will continue Friday 9/29, same time and place (until supplies last). RSVP to our event Facebook page for updates on wristbands and all things Meet the Beach!   http://ift.tt/2hyoOBC

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401k vs. IRA: Where Should You Save for Retirement?

There are many decisions that we all must make about retirement. One of the most perplexing relates to the types of retirement account options available, and where we should put our money first. In this article, we’ll clear the air on the 401k vs IRA debate so you can make the best financial decision possible.

For many of us, there are a lot of choices. These include a 401k, Roth 401k, Deductible IRA, Roth IRA, and a Non-deductible IRA. And that’s not even counting 403b accounts, SEP IRAs, Self-Directed IRAs, and, of course, taxable accounts.

That’s enough to make your head spin. Of course, for many of us, the best option is actually a combination of 401k, IRA, and taxable accounts. So, how do you know which combination will maximize your retirement savings?

I recently came across a post on the Bogleheads forum (which is an excellent investing forum, by the way) that addressed this very question. According to the good folks at Bogleheads (named after the founder of Vanguard, Jack Bogle), retirement investing should be placed in the following types of accounts, in the order listed:

1. 401k/403b, up to the company match

2. Max out Roth IRA

3. Max out 401k/403b

4. Taxable Investing

While your situation may be unique, I think the above priority ranking is, as a general rule, quite sound. Let’s look at the rationale behind this list.

1. 401k/403b Up to Company Match

When your employer matches some of your contributions, it’s critical to take full advantage of the match. Otherwise, you’re just turning away free money.

The value of the match makes this the ideal first place to stash your retirement savings. The average company seems to offer around 3% in matched contributions. There are, however, companies that offer as much as 50% or even 100%, up to a specified limit.

Be sure to check with your employer to see what percentage they match, what the maximum is, and if there are any other stipulations.

Let’s say you’re the type of person to front-load your contributions early in the year. If your employer matches up to a certain limit each month, you could still leave money on the table. You may need to switch up your contribution schedule and spread it throughout the year, in order to get every penny that you can off this free money.

Also, pay attention to whether your employer’s matched contributions require you to be vested or not. If you stay with the company for your entire career, this isn’t an issue. However, if you decide to leave your job at some point, you may or may not be able to take your entire retirement account with you–which could be a very costly mistake.

2. Roth IRA

Once you’re saving enough in a 401k to get the company match, additional retirement savings should go to a Roth IRA, according to the Bogleheads. While I think arguments to the contrary could be made here, I like this approach for two reasons.

First, most people generally assume that taxes will go up in the future. So, unless you are in the top brackets today (tax brackets) or have reason to believe that you will be in a lower bracket at retirement, this is sound advice.

Many recommend paying the taxes on the income now, which is exactly what you do when you contribute to a Roth IRA with after-tax earnings. Then, you can sit back and enjoy both tax-free growth and tax-free retirement distributions later.

With retirement savings in both a 401k and Roth IRA, you have some investments that are tax-deferred and some that grow tax-free. This is a nice way to hedge your bets when it comes to future taxes.

Second, with any IRA, you can choose where to open the account. Many 401k plans charge extremely high fees and have limited investment options. For those who like to keep investing simple, Betterment is an excellent option for an IRA (you can read my review here).

If you like to trade, I think Scottrade is a great choice because of low fees and physical branches just about everywhere, but there are many brokers that offer IRA accounts.

Keep in mind that your income may disqualify you from opening a Roth IRA. You can check out the Roth IRA limits here.

3. Max Out 401k/403b

Once you’ve maxed out your Roth IRA, additional savings can go toward topping off your 401k. Even though you won’t be benefiting from additional employer contributions, the tax benefits still make this an excellent retirement vehicle to focus your efforts on.

Keep in mind the limits on contributions, which can change from year to year. For 2017, the contribution limit is still set at $18,000 (we don’t have 2018 numbers just yet, but will update our 401k contribution limits page when they are available). The catch-up contribution limit for those aged 50 and over remains unchanged at $6,000, bringing the total allowed contribution to $24,000 for them.

4. Taxable Accounts

Unless you qualify for a SEP IRA, the next and last stop is to put your savings in a taxable account.

For this, you can open an account with a mutual fund family like Vanguard or Fidelity. You could also open a brokerage account or use a service like Betterment.

Roth IRA vs Traditional IRA

You may be wondering what the difference is between a Roth and a traditional IRA, and why we suggest contributing to the former first.

A traditional IRA and a Roth both have the same contribution limits ($5,500, as mentioned above, unless you’re over 50). You also have more than a year to contribute to your IRA — instead of December 31 being the last day you can put money in your IRA for the 2017 year, you can actually continue contributing all the way until April 15 of the following year.

However, that’s pretty much where the similarities stop.

A Roth IRA, as we talked about, is built with after-tax earnings. Because of this, your money will grow tax-free. When you take contributions in retirement, that money can be withdrawn tax-free, as well. (This is why a Roth is a smart choice if you foresee being in a higher tax bracket in the future than you are in now.)

The Roth also has those income limits we talked about, in order to qualify. However, you are not required to begin taking distributions from your Roth at a specific age, and you can also withdraw your contributions at any time before retirement without penalty.

So, what about a traditional IRA? Well, with this account, you get the benefits now.

All of your contributions to a traditional IRA will be made with pre-tax dollars. Contributions are tax-deductible and earnings grow tax-deferred. However, when you go to withdraw in your later years, you will be taxed at then-current income tax rates.

If you want to withdraw funds from your traditional IRA before reaching 59 ½ years of age, you’ll likely be subject to a 10% early distribution penalty, in addition to taxes. Once you hit age 70 ½, you have no choice but to begin taking money from the account. These are called Required Minimum Distributions (or RMDs).

401k vs IRA

So then, what’s the big difference between a 401k and an IRA?

First of all, there’s the issue of contribution limits. There’s a big discrepancy between what you can put away in an IRA ($5,500 / $6,500) and what you can put into a 401k ($18,000 / $24,000).

By definition, 401k plans are established and sponsored through your employer directly. The contributions made are deferred directly from your paycheck, without you ever touching the money yourself. Roth IRAs, however, are between an individual and an investment firm. This means that your employer will not have a role in your Roth IRA and has no opportunity to match your contributions.

An IRA has many more investment options than a 401k. In fact, your options are almost endless with an IRA, whereas the average 401k has about 20 fund options . Also, keep in mind that 401k management fees are often much higher than those of IRAs.

When you leave your employer’s company, you cannot continue to contribute to their 401k. You can choose to leave it alone or roll it over into an IRA. An IRA, on the other hand, is yours to contribute to, regardless of who employs you.

There are some similarities, though. For instance, you can make extended contributions to both your 401k and your IRA, up to the tax-filing deadline the following spring. This means that for 2017, you can put money in these retirement accounts all the way up to April 15, 2018, and it will still count toward your 2017 contribution limit.

Finding Your Own Perfect Plan

As mentioned above, every situation is different. The above priority list, while a great plan for many investors, may not be ideal for everybody. Take into account your own employer’s offerings, your ability to contribute to retirement savings, and whether or not your income qualifies you for things like a Roth IRA.

You may need to tweak the list above to match your own situation. At the end of the day, though, I think it’s a very sound way to approach retirement investing.

Have you approached retirement savings in a similar order? How has it worked for you and would you recommend the same to others? Sound off below.

Topics: Retirement Planning

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Things You Need To Know Before a Bathroom Remodel

Content originally published and Shared from http://perfectbath.com

Renovations are always exciting. Yes, you might have to spend a lot. But if the work is excellently done, then you’ll definitely get your money’s worth. Remember to take note of the following things before you proceed on your project.

Image Source: Flickr

Consider these master bath must-haves
Sharing with your sweetie is simpler when you’ve made space for these features.

1. Toilet room:Gives this area privacy; best if it’s got a door.
2. Separate shower stall:Lets bathers and shower-takers clean up simultaneously.
3. Dual workstations:Place double sinks 36 inches apart or more, measured drain to drain, so that you’ll have elbow room. Give each sink enough outlets and lighting, as well as mirror, countertop, and storage space.
4. Wide pathways:Traffic lanes 36 to 42 inches wide allow two people to pass each other without having to squeeze by. Source: ThisOldHouse

Don’t make the toilet the first thing you see when open the door
Ask a bathroom designer what his or her best tried and true tip is, and this is what you’re likely to hear. The reasoning is simple. Oftentimes bathroom doors get left open, meaning that you or any guest in your home walking by will see the toilet — which, come on, isn’t the most aesthetically pleasing thing to look at. If you’re hoping for a spa-like vibe, putting the john front and center in the design can sort of kill the mood as you’re transitioning into the room. So, what should you make the focal point? Anything but the toilet. Source: Houzz

The golden rules of bathroom renovations

• Draw up a clear plan of the room to remodel, and make it to scale. This will be a great reference not only for you, but also for your subcontractors.
• Estimate the approximate total cost of your renovation beforeyou begin your work. This includes quotes from workers, for materials, new fixtures (bath, shower, toilet, and faucets), furniture, decor and lighting.
• Ask for at least two or three quotes from different workers.
• Shop around for your bathroom fixtures. You’d be surprised how much you can save.
• Prepare yourself for surprises and extra expenses along the way, especially if you decide to open up the space and remove walls.
• Do not touch a load bearing wall without first consulting with an expert. Source: Yellowpages

Find top of the line fixtures that will surely fit in your new bathroom. Call us today!

 

Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com

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3 Benefits of Home Automation

Living in a smart house may sound luxurious but the benefits are definitely worth the investment. Get to know how home automation can positively affect your daily routine by checking out the following:

Image Source: Flickr

It’s Energy Efficient
Having precise control over the power used as well as the temperature can ensure that your home is more energy efficient. This is why smart homes are a part of the appliances that you can use to be more environmentally conscious in your home. Depending on the system that you have in your home, it can suggest energy efficient settings. Source: Property24

Increases Peace of Mind
Perhaps this benefit will not apply to everyone, but for those who habitually worry about whether or not they have taken care of everything at home before leaving for the day, a home automation system is a perfect investment. In short, it offers peace of mind. This is quite beneficial for those individuals who leave each day, obsessively worrying if everything is in order. With so many stresses in daily life, it is nice to take at least one off the list by being able to see what is going on at home without physically being there. Source: Freshome

Convenient
Convenience is one of the biggest reasons that people build and purchase smart homes. These homes give users remote access to systems including heating and cooling systems, intercoms, music and multimedia devices throughout the home. Integrated hard drives allow homeowners to watch video or listen to audio in any room; video intercoms make it easy to communicate with others in the home or visitors at the door. All of these smart home technologies streamline common tasks. Source: HomeGuides.SFGate

Can you imagine how convenient it would be to have automated window treatments? It’s entirely possible! For more information, call us today!

 

Contact:
Universal Blinds
601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9
Canada
Phone: (604) 559-1988

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The Wela App: A Review

In this complete Wela app review, you’ll see how this intuitive financial software can help investors at every experience level manage their money better.

I’ve been using online personal finance software for the better part of a decade. First I used Mint and after a few years there, I migrated over to HelloWallet. Both provide an excellent view of my current financial situation but that’s about all they do. What if those programs were able to include advice as to how to actually improve my finances?

A company named Wela has decided to give it a shot, and below you’ll see our full Wela app review.

What Is Wela?

Wela postures itself to be the high-tech, forward-looking financial app that beginner investors can grow with. It drives this point home by allowing users to reach financial advisors via text, Twitter, FaceTime or phone. Wela works a little bit differently than all of the other financial apps and robo-advisors available today. This program combines the expertise of real financial advisors with artificial intelligence. It will create a personalized and friendly digital experience. For example, Wela will …

• Aggregates account information from over 19,000 financial institutions to keep you from having to remember passwords for accounts
• Delivers personal financial insights directly to your inbox
• Provides views of your total net worth at any time
• Provides financial planning tools for investments, college savings, retirement and more

The Wela app is free to download. Users can get as basic or as sophisticated as they want when using Wela. For instance, you can use it simply as a budgeting tool that allows you to see how money is coming in and going out every month. You can also use the high-tech nature of the app to actually compare your financial standing to your peers. And then work your way toward long-term goals for buying a home or retiring.

Meet Benjamin

Benjamin is Wela’s in-app digital advisor. Benjamin is there to run an analysis for you, set daily spending limits and deliver personal insights. This will help you reach your daily, weekly and monthly goals using a friendly dose of artificial intelligence. While it may seem gimmicky, this feature of the Wela app is actually pretty useful if you’re looking for a simple way to keep track of your spending and make small strides toward your larger financial goals on a daily basis. It also makes the process of taking charge of your finances seem fun.

What if you want to go beyond just tracking spending and budgeting for the future? Wela Strategies is the app’s fee-based extension. This service offers help with investment decisions that’s driven by real professionals. Wela’s investment arm offers some of the following perks:

• No minimums or fees up to your first $10,000 invested with Wela Strategies
• A personal financial planner to help with estate planning, tax planning and insurance planning
• Automatic rebalancing

Wela boasts a research-driven and easy-to-understand investment strategy that allows every investor to craft a personalized portfolio based on factors like risk tolerance, time, goals and expectations. The company really drives the point home that it is focused on helping investors create portfolios based on their current ages. Wela’s services are designed to grow and evolve with a person’s life stages.

Why Wela Works

The novelty of Wela is what makes it so appealing to beginner investors and millennials. It stands apart for intertwining algorithms and human knowledge to create a really impressive platform. The Benjamin feature is probably going to get people curious enough to download the Wela app and try it out. The fact that this is a low-commitment, easy-to-use tool for budgeting and getting a good starting point for managing finances makes it a smart option to download if you’re already looking for a free product like this.

It’s probably safe to assume that the cutting-edge and algorithm-heavy approach that Wela takes to providing customer service is what the future of digital financial management will look like. Should you download Wela? It probably won’t hurt to get in the habit of letting a friendly robot manage your finances as early as possible if you have many years of investing ahead of you.

Who knew the day would come when you could get solid financial advice from something that you download to your iTunes account? Busy, tech-savvy people who want to do some financial planning on the go will enjoy Wela.

• Download the Wela app for FREE today

Topics: Investing • tech

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{#TransparentTuesday} Black men.

 

Lately I’ve been purposefully
making eye contact with black men.

This might be a strange thing to read– it was a  strange thing to write– but it’s the truth.

For the last month, I’ve been deep-diving through educational books written by people of color on the problem of racism in our society. I won’t go into everything I’ve learned so far, because it’s far too vast, too deep, and too complex.

Instead I want to tell you about my experience with black men.

Like many white people, I initially learned about black men through indirect sources like rap music, movies, news, and statistics. I learned that black men were defined by their baggy outfits, unprovoked violence, loud music, and propensity for crime.

I learned that black men were inherently terrifying.

In order to maintain this belief, I made exceptions for every black man I knew personally. The black men I knew wore sweaters, or dance tights, or skinny jeans. They spoke eloquently and wisely. They went to training seminars, and held space for me when I cried, and shared their own ideas and dreams and heartbreak.

There was absolutely nothing scary about these men, so I didn’t really consider them “black.”

Which is a huge problem.

These men felt “normal” They felt just like me. And since I had been taught that “blackness” meant “otherness,” I assumed that surely I just had never met a “real” black man.

I imagined he would look different, he would look BLACK. I’m talking about the kind of young black men who seem shrouded in violence and anger, with dark clouds of violence emanating off them, their body language unnaturally fast, somehow looking guilty and threatening as they emerge from shadowy alleys.

As I unpacked the layers of my unconscious beliefs and biases around this topic, I realized that the kind of black man to which I refer is an absolute fantasy. It’s no more real than the image of a prince charming, hair combed perfectly, with a halo of soft light around him as he gallops in on a white horse to save the day.

The black man of my unconscious imagination is fantastically dangerous. Inhuman, almost, in the way my mind has painted him.

A few weeks ago, when I realized I was afraid of black men, I also realized that the black men I was afraid of didn’t actually exist. That is, the thing I’m afraid of– this hideously dangerous inhuman beast– does not, and has not ever, existed.

This really shook me.

Because for as long as I can remember, I have been crossing streets to avoid walking near a black man on the sidewalk. I have been careful to avoid eye contact with black male teenagers at the mall.

And I suddenly had no idea why.

I sat down and did some digging. What was I afraid would really happen on the sidewalk, or at the mall, if I came too close to a black man?

Assault, I suppose.

But… how? In plain daylight, at the mall food court? Am I afraid that a teenager will take my eye contact as a sign of aggression and jump me? Or that if I walk too close to a man on the sidewalk he’ll take the opportunity to lunge at me?

Oh, god.

How I wish the answer to these questions was no.

As I have wrestled with this over the last month, I have been floored at how utterly stupid and illogical and FUCKING WRONG this fear is, but there it is:

I have, for my entire life, lived in fear that a black man will see me, have some irrepressible violent urge, leap at me, and then… I don’t know, rape or theft or murder?

(As I write this, my skin is flushing a painful crimson. I am so horribly embarrassed and ashamed to admit this.)

I recognized that my fear was based in a completely untrue fantasy, and that I have been afraid of black men only because I was taught (through media messages as well as family and community messages) that black men are scary in a rather non-specific but urgent way.

I recognize that this is false, but the programming is deep in my body.

No matter what I tell my brain right now, my body still responds to black male strangers as though they are a threat.

And the worst part is knowing that these black men can feel it.

That they know why I crossed the street.

They see me check that my purse is zipped when they come around a corner.

They feel my mistrust.

I’m not unusual in this fear, or these habits. If you’re a white woman, this unconscious dance might all sound mighty familiar. Having just finished the book Between the World and Me, by Ta-Nehisi Coates, I am starting to realize just how much damage I’ve done.

These men are individual people, with unique likes and dislikes, interesting stories, and a desire to be loved and accepted. For my whole life, I have been making them feel mistrusted, suspect, unliked, “othered,” inhuman.

For this reason, I would like to formally apologize to all black men.

I am so sorry, and so ashamed that I made you feel like a threat. I am so sorry, and so embarrassed that in those moments you had to see yourself through my eyes, complete with the cloudy halo of violence, as you ate Taco Bell and spent time with your friends, or as you walked home after work, or really any time, ever.

Which brings me to my resolution to stay my path on the sidewalk when a black man walks toward me, and to purposefully, warmly, make eye contact.

I wish I could report that this was easy, and natural. That now that I have seen the error of my ways, everything is better.

But it honestly takes every bit of willpower that I have.

I see the man, and I resolve to stay relaxed, keep my body language open, continue walking the same path I would walk had he not been there, and make eye contact. For a moment, I feel good.

Then my body starts sounding the alarms.

“TURN LEFT,” my body screams. My breathing becomes shallow and I blanche at the awkwardness of trying to both breathe and walk at the same time. How can I make eye contact when it’s taking all my energy to keep walking this direction?

I make eye contact. Sometimes I smile. As often as possible I use my voice to say “good morning” or “hello.” Sometimes I go to use my voice though, and a squeaky gurgle comes out, and I wonder if my little experiment is doing more harm than good.

Many men have seemed surprised, and a few have begun to pause, to interact, as though I was going to act them directions, before realizing I was just saying hi. One man scared the shit out of me by trying to get my number, but for the most part I get confused-but-pleasant nods, smiles, or simple hellos back.

I have no idea if this is a good idea.

I have no idea if this is an appropriate goal, or an appropriate email.

All I know is that since I began this experiment, my body has relaxed a little, and it’s slowly getting easier.

I also know that the eyes I use to look at black men are different than they were a month ago. I see people now. Individuals, rather than a collective mass. The cloud of danger is gone, and now I can see them how I see everyone else: interesting, unique, utterly lovable.

I didn’t even realize that this wasn’t true before.

I didn’t even realize how much I had to unpack about race.

There is still so much work to do.

<3

Jessi

PS I specifically did not mention black women or women of color in this email because I don’t know how to talk about that subject yet. Next up I’m reading White Spaced, Missing Faces: Why Women of Color Don’t Trust White Women, so as always, I’ll keep you posted.

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Chicago Restaurant Tax (7525) Audits

So you have received a dreaded audit letter from The City of Chicago Department of Revenue. What do you do now?   The first thing is not to panic. Surviving an audit is one of the basic necessities of entrepreneurship. … Continue reading →

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8 Tax Benefits Every Parent Should Know

Children can bring tremendous happiness to a parent’s life. However, raising and educating those little bundles of joy can burn a noticeable hole in your wallet.

Fortunately, parents can take advantage of a number of tax deductions and credits designed to reduce the costs of parenting.

8 Benefits You May Qualify For

The IRS has established eight notable tax benefits that you may qualify for as a parent. Take a look at the tax benefits mentioned below and the stipulations for each. They might put quite a bit of money back in your pocket each year.

1. Is your child a dependent?

Listing your child(ren) as a dependent on your tax return can save a lot of money. In order for a child to qualify as a dependent for tax purposes, he or she must meet four criteria:

1. He or she must be your child, stepchild, adopted child, foster child, brother or sister, or a descendant of one of these (a niece or grandchild, for instance).
2. The child must live with you for more than half the year.
3. The child must be under 19 years of age at the end of the year. If the child is a full-time student, he or she can be up to 24 years of age.  If your dependent is totally and permanently disabled, there are no age restrictions.
4. The child cannot provide more than half of his or her own financial support.

2. Are you a low to moderate income earner?

The Earned Income Tax Credit (EITC) can provide a substantial tax credit on your earned income. It’s also available to people who aren’t parents, but the credit is greater for eligible low-wage taxpayers with children.

The maximum EITC that can be claimed for 2017 is $6,318, and the maximum income limit is $53,930.

Be sure to check the EITC law updates to ensure that you meet the specific guidelines and income limits for your unique situation.

3. Did you pay health insurance premiums for your child while self-employed?

Even if your child is not a “dependent,” you may be able to deduct any premiums you paid for health care coverage throughout the year if you had self-employment income. This includes the entire cost of any medical, dental, and long-term care insurance premiums for you, your spouse, and your dependents. In order to qualify, your child has to be under age 27 at the end of 2017.

There is also a catch. In order to deduct these premiums, neither you nor your spouse could have been eligible to participate in an employer’s existing, subsidized health care group plan. This is an important thing to remember if your self-employment income is a side hustle. It’s also important if your spouse is/becomes employed and is newly eligible to join a group plan.

However, if the former happens and your spouse’s new job takes away this eligibility from you, you can still deduct the months of premiums paid before they took that new job.

4. Was your child under 17 years of age?

You may be able to get a $1,000 Child Tax Credit on your tax return if your child is still under 17 at the end of the year. This credit is available for each qualifying child, too. And remember that a tax credit is different from a tax deduction. The Child Tax Credit is a dollar-for-dollar reduction in your total bill, which could mean substantial savings if you qualify.

This credit is limited to taxpayers who fall within a certain modified adjusted gross income. The credit begins to phase out if your income exceeds $110,000 as a joint filer, $75,000 as a single filer, or $55,000 as a married taxpayer filing a separate return. For every $1,000 that your income exceeds these limits, the $1,000 credit will be reduced by $50.

Also, to qualify for this credit, your child has to have lived with you for more than half of the tax year, be a U.S. citizen, and not have provided for more than half of their own living expenses.

If the amount of your Child Tax Credit exceeds the amount of tax you owe, you won’t get the difference back in the form of your tax refund. However, you may be able to get an additional refund through filing the Additional Child Tax Credit.

5. Did you pay someone to care for your child?

If your child is younger than 13 years old, you may be able to claim a tax credit for expenses related to their childcare throughout the year. The care, however, must have been provided in order for you to work or look for work.

The amount of the credit depends on your income, but it can be as much 35% of your qualifying expenses.

6. Is your child a student at a college or university?

The American Opportunity Credit is a tax credit for undergraduate college education expenses. It provides up to $2,500 in credits on money spent on tuition, fees, and related expenses. If you owe less in taxes than the credit for which you qualify (bringing your taxes owed to zero), you can have a portion (40%) of the remaining credit refunded to you, up to $1,000.

Likewise, the Lifetime Learning Credit allows you to earn a credit of up to $2,000 for higher education expenses. This credit is calculated as 20% of the first $10,000 of (qualified) education expenses, up to the $2,000 maximum.

The amount of credit changes depending on your income, but there is no limit to the number of years you can receive the Lifetime Learning Credit. Unlike the AOC, above, the LLC is not refundable. This means that if the credit earned reduces your tax owed to zero, you won’t be able to receive any of the credit back in the form of a tax refund.

7. Did you adopt your child?

You may be able to receive a credit of up to $13,460 per child for adoption-related expenses in the year in which the adoption was finalized. If this credit reduces your tax liability to zero, the excess credit can be carried forward for up to five years (so the money is not simply lost, nor is it refunded in the form of a tax return).

This credit includes the adoption of a child under the age of 18 or one who is unable to care for him or herself in a physical or mental capacity. It does not include expenses incurred in order to adopt the child of your spouse.

The amount of the credit is phased out according to your MAGI. Also, in order to claim the Adoption Credit, you must file a paper tax return because you have to include adoption-related documentation.

8. Do you pay interest on a student loan?

You may be able to claim up to $2,500 as a tax deduction for the interest paid on student loans this year. In order for your loan to apply, it must have been taken out solely to pay for qualifying educational expenses and the loan can’t be from a related person or under an employer plan. Also, the student must be enrolled at least half-time in an eligible educational program and working toward a degree, certificate, or other recognized credential.

In order to take this deduction or some part of it, your modified adjusted gross income must be less than $80,000 for a single taxpayer and $160,000 for a joint filer. Starting at $65,000 (single) and $130,000 (joint), however, the credit amount begins to phase out.

Does Your Child Need to File Taxes?

If you have a small child at home and are like most Americans, you probably haven’t given thought to whether your child needs to file their own tax return. However, depending on their financial situation, it may be in order.

Did your child earn income this year?

If your child has more than $6,300 in earned income ($7,850, if they are blind), he or she likely has to file a tax return. This is true even if he or she is listed as a dependent on your own return.

This “earned income” only applies to wages and salaries that your child has received throughout the year as payment for providing services to an employer. This is true even if the pay is for a part-time job.

So, if little Johnny has been killing it on that weekend paper route and managed to rake in $7,000 this year, he will need to file a return.

Did your child make investment income this year?

If your child earned income from investments, interest, and dividends totaling more than $1,050 ($2,600, if blind) this year, he or she will need to file a return for their unearned income.

There is the option to elect to report a child’s unearned income on the parent’s return. This is allowed if the child is under 19, or under 24 if they are a full-time student. If the parent does this, the child will not have to file their own return. However, note that the reported interest and dividend income may be taxed at the parent’s tax rate in this situation, rather than the child’s.

Some of you may wonder why the government provides tax benefits for having children. Well, the argument goes that we all have a vested interest in the outcome of the country’s children.

God-willing, you will one day grow old. When that day comes, today’s children will care for you and pay taxes that fund your benefits. Since raising a child can be tremendously expensive, tax policy can incentivize people to have children and raise them responsibly.

Presumably, this will lead to a population of well-educated, responsible, tax-paying citizens. And those citizens will keep our country running (and funded) for years to come.

As always, consult with a tax professional before making any decisions. If you do your taxes on your own, our list of the best tax software programs can all handle these deductions.

Topics: Taxes

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Shopping for Life Insurance with PolicyGenius

Finding the best life insurance policy is not something that should be taken lightly.  Ensuring you take care of your loved ones in the event of a tragedy is as crucial as any personal finance decision.  PolicyGenius offers an online search engine designed specifically to help you find an affordable term life insurance policy.

I’m going to show you just how easy it is to use in this review. The first thing you can do on PolicyGenius is figure out just how much life insurance you need.  They have a very handy calculator that estimates your families future needs based on the answers of a few simple questions.

1. What are your plans for your children’s education?
2. How much is your current income?
3. How much debt do you currently have?
4. How long will it take you to pay off your current debt?

After a few minutes of answering questions about your finances, PolicyGenius spits out the amount of life insurance you’re likely to need.  It will look something like this: What you see above is an estimation of my financial situation.  I have two children under the age of four and a mortgage with credit card debt.  With limited savings and liquid assets, PolicyGenius proposed a term life insurance policy for $1.93MM.  From here, PolicyGenius allows me to take the next step, and complete an application.  The application includes the term and the amount. It also provided me a list of available underwriters.

PolicyGenius Application Process

Policy Genius asks fairly general questions during the application process.  Do you have a family history of heart disease or mental illness?  Have you ever been diagnosed with high cholesterol?  What is your height, weight, and age?  The application from start to finish takes all of three minutes. If you’re quick with your answers, you can complete it in under two minutes.  Using the estimation above, PolicyGenius will provide you a plethora of available insurers, each showcasing the monthly cost.  The cheapest plan will be highlighted at the top of your search along with the second cheapest plan. When looking at the different policies available to you, you may want to adjust your coverage amounts.  You can do this by looking at the left sidebar of the page.  You’ll be able to toggle the coverage amount, the length of term and whether or not you want to pay monthly or annually.  Paying once a year will save you money on your overall premium.  For example, the numbers you see above are for $2MM in coverage and a term of 30 years.  If I only wanted a 10-year term for the same coverage amount, my monthly cost would only be $41.

PolicyGenius Resources and Help

If you’re having trouble deciding on the right insurer, PolicyGenius has amassed a bevy of information on each and every policy.  When you select “More about this Insurer” underneath the insurer’s name, you’re taken to a page with a LOT of information.  This page includes reviews, unique features, and a full video review on the company you’ve selected, created by PolicyGenius.  For example, they created this video to discuss AIG:

Completing the Application

After selecting the policy you want, on the terms you want, you have one final step to submit your application.  The last step includes basic contact information such as mailing address, phone number and email address.  30 seconds later, you’re ready to complete your application.  Within 48 hours, you can expect to hear from the insurance provider you have selected.  PolicyGenius will approve your application and ask for paymetn or ask for additional information.  That generally means one of two scenarios:

1. Your application requires a physical to be approved.  This is what happened to me when I submitted an application.  The physical is scheduled by the insurance underwriter, and takes about 10 minutes.  You can have someone come to your home, or go to a local office.  Physicals include blood samples, urine samples and a check of your blood pressure.
2. Your application needs fixing.  For some reason, the information you entered was flagged and step by step and agent will ask you to fill out a new application over the phone.  Sometimes this takes care of the problem, other times you may need to select a new provider.

You can create an account with PolicyGenius after completing an application.  This account will allow you to track your application status, communicate securely with your agent and provide you an insurance to-do list should more information be required. If you ever get lost along the way, PolicyGenius does a nice job of offering assistance.  They have a live chat feature that follows you around the site, as well as a phone number plastered on the top right of the screen.  That number is 1.855.695.2255.

Call them anytime to ask for help, and they’ll give it. PolicyGenius also has other types of insurance available, including Health Insurance, Renters Insurance and Disability Insurance.  Their quote engine isn’t quite as refined for these products as it is for life insurance but the quality of results is just as good.

Be Responsible About Your Family’s Future

Sitting down and planning out your death is not fun.  Quite frankly, it’s eerily unsettling to know that you’re plugging hard earned money away on something you’ll pray you never take advantage of.  But ensuring the security of your family should the worst happen is 100% necessary.  Take the responsible action and consider what happens to your family if you’re not around.  That might mean a hard look at the quality life insurance policies that PolicyGenius has to offer.

Topics: Life Insurance

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