What You Should Know about Identity Theft Protection Services

by onlinefinancialnewsletters | Dec 23, 2015 | Personal Protection

According to the Bureau of Justice Statistics Victims of Identity Theft report, about 17.6 million Americans had their identities stolen in 2014. This theft resulted in more than $15.4 billion in direct and indirect losses. While services—such as credit monitoring—can be convenient, some experts advise that these products don’t do anything one cannot do oneself.

Consider the following before you purchase identity theft protection:

• Credit Monitoring – A central offering of ID theft protection services, monitoring alerts you to potentially fraudulent new accounts listed within your credit report. Unfortunately, monitoring does not prevent crime; it just notifies you of its discovery. And because a service may not monitor all three of the major credit reporting bureaus, it’s possible they may miss some fraudulent accounts.It makes more sense to monitor your credit on your own. You can request one free credit report from all three reporting agencies each year at annualcreditreport.com. Unless you already suspect fraud, you can easily spread out your coverage by checking a different report every four months—providing yourself with a year of monitoring at zero cost.
• Identity Theft Insurance – While this might sound like a worthwhile investment given the growing incidence of identity theft, most consumer experts agree that this type of insurance is not worth the cost. It won’t return your stolen money. All it will really do is cover out-of-pocket expenses associated with repairing your identity—things like postage, copy fees and, if you’re really lucky, time away from work spent dealing with the theft.Before you even consider purchasing identity theft insurance, check to see if you have coverage through another policy. Such riders may be included in some homeowner and renter’s insurance products.
• Credit Freeze – One of the best tools for identity theft protection is something you have to do on your own. When you initiate a credit freeze at all three reporting agencies, you must give your authorization before anyone can check your credit. It generally costs about $10 per agency, but it will greatly reduce the chances that a thief will be able to open a fraudulent account in your name. Fraud alerts are another option. They require creditors to verify identification before granting credit. Though they are free, you must remember to renew each alert every three months.

 According to ConsumerReports.org, American consumers spent $3.5 billion on identity theft protection products in 2010 (the most recent data available). Before you commit to annual fees in the range of $120 to $300, you might want to consider doing it yourself.

Three Things to Know About Permanent Life Insurance

by onlinefinancialnewsletters | Dec 9, 2015 | Personal Protection

Benjamin Franklin, famous founding father of the United States, once wrote, “In this world nothing can be said to be certain, except death and taxes.” Unfortunately, despite its certainty, far too many Americans fail to prepare for their eventual demise—and they leave their families to pay the price. In fact, according to the Life Insurance and Market Research Association (LIMRA), while 85 percent of consumers agree that they need life insurance, only 62 percent have actually purchased a policy.

Permanent life insurance is a category that encompasses whole life, universal life, index-universal life, variable life and variable-universal life policies. While each type of policies differs in its details, all provide a death benefit plus cash savings. This makes permanent life insurance an attractive investment for many consumers. Of course, there are a few things you should consider before you join them.

1. Permanent life insurance may be more coverage than you actually need.

If you’re single, childless, or have grown children and have paid your mortgage in full, you might be better off with a less expensive term life insurance policy. It will provide you with a death benefit for a set number of years at a much lower premium. However, if you have a family or carry a lot of debt—including a mortgage—the higher cost of permanent life insurance can be worth it, providing your loved ones with a death benefit plus the cash value of the policy.

2. If you want to grow your investment, permanent life insurance may not be your best option.

If you want the greatest return on your investment, some advisors suggest buying a less expensive term life insurance policy and putting the difference into other investment vehicles. For example, a $1 million permanent life insurance policy might cost $13,900 a year while a $1 million 20-year term life insurance policy costs $750. If you invested the $13,000 difference the first year at 5 percent and let it grow for 20 years, you’d have $34,492.87. Do that every year and you’d have significantly more.

3. Permanent life insurance can be a good investment in the right situation.

Your heirs won’t pay taxes on the cash value of your permanent life insurance policy until after your death. This means permanent life insurance can be a useful investment for individuals with high earnings who have maxed out their other tax-deferred savings options. Additionally, permanent life insurance can be useful for older individuals who don’t have much in the way of savings but want to leave a monetary inheritance to their loved ones.

Whether you prefer whole life insurance (with a fixed premium), universal life insurance (with adjustable premiums) or variable life insurance (allowing you to choose how the cash value is invested), talk to your insurance professional about protecting your family from the inevitable today.