Is it the Right Time to Buy Life Insurance?

Life insurance is a funny thing. You don't really want it until you need it, but if you wait until you need it to buy, then you've waited too long. Let's talk a little bit about the right time to buy life insurance.

Technically speaking, the very best time to buy life insurance is shortly after birth. The cost of a life insurance policy is directly tied to your age, becoming more expensive as each year goes by, so "the sooner the better," from a cost perspective, is the answer to when it's the right time to buy life insurance.

Insurance for Infants

While there are arguments both for and against a parent or relative buying life insurance for an infant, a whole life policy with accumulating cash value could, over the first 18 years of the child's life, amount to a substantial amount for someone graduating high school and about to go to college. At 18 years old, ownership of the policy can either be transferred to the insured or he/she can opt to cash out any accumulated equity. That policy, which may have been funded with a lump sum payment 18 years previously, could prove to be a very welcome source of income at an important time.

Insurance and Debt

A 20-something just out of college and just going into the workforce may, if without the needed savings, get a credit card to help with relocation expenses to and housing expenses for his/her new location. Anything charged on this new card is what's considered unsecured debt which, in the event of the cardholder's death, must be paid off by his or her estate. While it would be ideal for this person to take out an affordable term life insurance policy to cover the amount of this debt, the fact is that most individuals at this age are more concerned with the payment of current bills rather than taking on new ones. Plus, if you have no dependents for whom you're responsible, leaving behind a credit card debt may not be a big deal in your mind.

Spouse and Family

Once you've gotten married and started a family, things may change drastically in your mind regarding your financial responsibilities. With others now depending on your financial support for their standard of living, you'll likely feel obligated to take out insurance if you haven't already. The best time is now!

5 Steps to Understanding Your Auto Insurance

While everyone driving in North Carolina is required by state law to maintain a certain amount of auto insurance, it's been shown that many of these drivers are unaware of exactly what's required, what coverage is optional and what's contained in their personal auto insurance policies. You may find reading your policy confusing and boring and it may come as no surprise that many drivers never get around to reading their policies at all. Without knowledge of what your insurance policy covers, however, you'll be unaware of the protection you have if involved in an accident or other type of vehicle incident such as theft or vandalism. The best advice is to read your coverage through and, if anything seems unclear, to consult with your insurance agent for clarification.

What's in a Policy

Insurance policies are legal contracts that bind the insurer to perform certain actions under particular circumstances in exchange for an agreed upon amount of money (premium). Since the insurance company wants the terms of the contract to be as specific as possible it will be extremely detailed and will typically contain legal language that may seem confusing.
Auto insurance policies typically contain five sections:

1. Declarations
2. Coverage parts and insuring agreement
3. Exclusions
4. Conditions
5. Definitions

While these parts may have slightly different names from one insurer to the next, each section covers the same basic points.

Declarations

This section contains information unique to you, such as names and addresses of drivers in your household, the make, models and VINs of the insured vehicle(s), policy number and duration, coverage type and level, policy limits and deductible amount. This is probably the most important part of the policy and you must make sure it's accurate, otherwise a claim you make down the road may be denied.

Coverage Parts and Insuring Agreement

This section outlines what your insurer promises to provide in exchange for your premium payment. It outlines the coverage options you've chosen and your coverage limits.

Exclusions

This section details what's not covered by showing your policy limitations.

Conditions

This section sets out the legal responsibilities of both you and your insurer. It lists premium payment requirements, claim filing steps and disagreement-resolution steps.

Definitions

This policy part defines terms and outlines policyholder's and insurer's rights. It's what many call "the fine print."
Understanding your coverage will preclude any surprises if you make a claim and it gets denied.

4 Questions to Ask Your Car Insurance Agent

Asking the proper questions of your car insurance agent can save you money now and avoid frustration later when you expect your insurance to perform. If you're like many, your car insurance decisions are driven by premium price when, in fact, making the cost of your insurance the number one priority may leave you under-insured. This, in turn, will leave you over-exposed to the risks of driving and, quite possibly, this may be totally unintentional.

Sad to say, many drivers don't really understand their auto insurance coverage and have never even taken the opportunity to read their policy through. When their policy documents arrive they may have just filed them away and forgotten about them until the time comes that they're involved in an accident or other vehicle incident and need to make a claim. If your car gets stolen or vandalized and you learn upon filing a claim that you weren't covered by comprehensive and your claim is denied, this will obviously come as a huge surprise and let down if you had assumed you were covered for this type of loss. It's important to understand what your car insurance policy covers and to ask questions of your agent. Here's a list of questions we consider relevant:

1. Am I Getting What Coverage I Need?

In North Carolina, the law requires that you have a minimum amount of both liability protection and unisured motorist coverage. Beyond these requirements, you have the option of collision, comprehensive, medical payments coverage, personal injury protection, gap insurance and more. Comprehensive and collision insurance may not be a good deal for you if you're driving a low-valued car.

2. Am I Getting all the Discounts for Which I'm Eligible?

Most insurers offer numerous discounts for eligible applicants, but you may not find out about them unless you specifically ask.

3. Are My Liability Limits Realistic?

North Carolina's auto insurance liability limits of 30/60/25 could be easily surpassed in an auto accident that you cause. Any excess must be paid out of your pocket. Most experts recommend you increase your liability amounts by several times.

4. How Will My Deductible Affect My Premium Rate?

Raising your deductible will lower your premium rate, but you must be able to shoulder this amount in the event you need to make a claim. Find out how much you can save with different deductibles and choose a comfortable amount.