by onlinefinancialnewsletters | Mar 20, 2015 | Personal Protection
Imagine this: You’ve collected your W-2, your mortgage and student loan interest statements and your investment earnings documentation. You log into your online tax preparation software and spend the next hour inputting your information. When you hit “submit,” you breathe a sigh of relief; your taxes are complete for another year. Then you get an email saying the IRS has rejected your tax forms. Someone somewhere has already filed in your name.
Tax refund theft is happening more frequently these days than ever before. According to a government accountability office report, scammers snapped up more than $5 billion in 2013 tax returns last year. The IRS expects that number will grow even larger as identity thieves utilize some of the 6.5 million Social Security numbers stolen last year alone. In fact, some states are already seeing a spike in suspicious 2014 returns. According to The Washington Post, most of those were filed using TurboTax, one of the largest providers of tax preparation software.
Officials state filing early is one of the best ways you can protect yourself, essentially by beating criminals to the punch. Hopefully you won’t find yourself among the defrauded. However, if you are, here’s what you need to do to remedy the situation.
Report the fraud to the IRS.
The IRS identity protection division handles fraudulent tax return cases. You’ll need to fill out an Identity Theft Affidavit, which will create an alert on your account. The IRS may ask you to file your return on paper while they work to confirm your identity. You’ll then receive an identity protection personal identification number—or PIN—that you’ll need to use along with your Social Security number on future tax returns. You may also want to report the fraud to your local police department and the Federal Trade Commission.
Review your credit report.
If a thief had enough of your personal information to file a fraudulent tax return, he or she may also attempt to open new credit cards or take out loans in your name. Check your credit report at all three credit-reporting agencies as soon as you become aware of the fraud. At minimum, follow up annually. You can request a free credit report from each agency once a year at AnnualCreditReport.com. You may also want to put a freeze on your credit account. This will restrict anyone from pulling your credit report without your authorization, which will make it more difficult for an identity thief to open credit cards or loans in your name.
Change your passwords.
It may be easier to use the same password on all your financial accounts, and never change it, but you’re increasing your vulnerability to identity theft when you do so. If your information is compromised at one company, criminals will try to use it at others. Don’t let them get lucky. Create unique passwords for every account, and make them a long mix of numbers, letters and symbols. You might also want to take advantage of multi-factor authentication settings when available. These require a user to provide a code or other information in addition to their password when signing into an account, thereby increasing your protection.
by onlinefinancialnewsletters | Feb 23, 2015 | Personal Protection
Americans love their pets. According to the American Pet Products Association, pet owners in the U.S. spent more than $58 billion on their cats, dogs, rabbits, horses and other critters in 2014. Of that expenditure, $15.25 billion was for veterinary care and $13.14 billion on related supplies and medications. We can all agree, that’s a lot of scratch! But while some pet moms and dads have to pay for routine wellness exams and unexpected vet visits and treatments out of their general household budget, others are thinking ahead. They bought pet insurance, and can rest assured their furry family member’s healthcare needs are covered.
What is Pet Insurance?
Pet insurance helps you pay veterinary bills if your pet suffers and injury or illness. Some plans even chip in on routine medical care, though it’s usually most helpful when unexpected accidents strike. Those are the ones that usually require expensive procedures—such as cancer treatments that cost tens of thousands, hip replacements in the neighborhood of $10,000, and ACL repairs that carry fees upwards of $2,500. Any of these would decimate the average American’s emergency savings account. However, pet insurance makes these treatments financially possible.
How Much Will it Cost?
Just like your own healthcare insurance, pet insurance is not free. However, it’s likely more affordable than you may think. According to insure.com, you may find basic policies for as little as $10 a month. Policies with broader coverage will carry a higher price tag, of course. According to Insure.com, accident coverage—that would cover your pet’s care if it were hit by a car or fell out a window, for example—can be had for $15 a month. Accident and illness policies start around $20 a month. A premium policy, covering a broad range of services as well as reimbursement for various treatments and preventative care, will cost more. It’s even possible your employer may offer discounted pet insurance as a supplementary benefit. Ask your company’s human resources officer.
Can All Pets Get Health Insurance?
As was the case with human health insurance before the Affordable Care Act, not all pet insurers are going to cover all pets. Plans vary, but some will not apply if your pet is more than 10 years old, is a certain breed (like Great Dane) or species (like horse), or has serious pre-existing conditions. Purchasing pet insurance before your cat or dog needs it is the best way to ensure he or she will be eligible for coverage. Buying a plan while your pet is younger is also a good idea.
As is always the case in life, no two situations are identical. Ask your personal insurance agent to help you select a pet insurance plan that offers the solutions you need at a price you can afford. Your pets—and your wallet—will thank you.
by onlinefinancialnewsletters | Feb 9, 2015 | Personal Protection
According to the Association of Trial Lawyers of America, civil lawsuits, including those involving personal liability claims, cost the U.S. economy $233 billion each year. The average compensation payout for a civil injury suit is $60,000. The average awarded in a punitive damage lawsuit is $50,000. Most of us don’t have that kind of cash to spare. If we accidentally injure another person—or they injure themselves on our property—we could lose our savings, our home equity and our other assets. Fortunately, insurance offers some protection.
Homeowner’s and Auto Insurance
While your homeowner’s and auto insurance policies offer some liability protection, it may not be enough in the event of a serious incident—or even a minor incident when experienced lawyers get involved. According to an article by CBS Money Watch, most homeowner’s insurance policies only cover personal liability claims up to $300,000. Most auto insurance policies provide up to $250,000 per person and $500,000 per accident for bodily injury—though few drivers actually purchase that much.
Experts advise you review your current liability coverage under both your homeowner’s and auto insurance policies with your agent. While most states set minimum liability requirements, it may make sense to increase your coverage limits. For example, to thoroughly protect your home, investments and other assets, it may be wise to increase the bodily injury liability limit on your auto insurance policy to the maximum, even if your state of residence requires less. You may also want to buy additional personal liability insurance equal to or greater than your net worth.
Additional Personal Liability Insurance
Don’t think you actually need additional liability coverage? You might be surprised. Experts suggest purchasing personal liability insurance of at least your net worth if you have teenage drivers at home, keep dogs as pets, regularly entertain on your property, have a pool at your residence, keep guns around or own a boat. All of these factors, and many others, can increase your chances of eventually facing a liability claim.
Additionally, auto and homeowner’s insurance policies never cover all the types of liability claims you may encounter. Typically excluded are defamation of character, libel, slander and false arrest. Personal liability insurance—in the form of an umbrella liability policy or personal excess liability insurance—does cover these charges.
Personal Liability Insurance is Affordable
Personal liability insurance is a valuable supplement to your existing insurance policies and may cost less than you expect. In fact, according to CBS Money Watch, you may be able to obtain $1 million to $2 million in supplemental coverage for as little as $250 to $300 per year. Contact your insurance agent or financial advisor for assistance with choosing the right policy as well as advice on how much coverage you need in your particular financial situation.
by onlinefinancialnewsletters | Jan 30, 2015 | Personal Protection
When you think about the dangers associated with identity theft, you likely imagine shadowy criminals using your financial information to apply for credit cards or take out loans. While these actions can devastate your credit score—and often take years to repair—there’s another hazard that goes beyond that important number. It’s the theft of your medical identity, and according to experts at the Identity Theft Resource Center (ITRC) in San Diego, more than 1.8 million Americans became victims of this crime in 2013.
In fact, according to the ITRC, stealing medical insurance information and using it to obtain treatment and medication or submit false billings is the fastest-growing type of identity theft. Reports of the crime are increasing at an annual rate of 32 percent, and unlike credit cards—which offer some protection should you discover bogus charges—you’ll be on the hook for the costs incurred.
These costs can be quite large. According to the Ponemon Institute, which studies medical identity theft, 36 percent of the victims of medical identity theft encounter out of pocket insurance costs that average $18,660. Some have even lost their insurance or been charged higher premiums as a result.
While you cannot prevent data breaches or ensure criminals will not steal your personal information directly from a medical professional’s office, you can take the following steps to promptly spot and address problems.
Read your mail. Whenever you receive a letter from your health insurance carrier or your medical provider, review it carefully. If you notice listed doctors, treatments or facilities that are not familiar, notify your carrier immediately.
Request an annual list of benefits. Once a year, ask your insurer to provide you with a list of the benefits paid out in your name for the previous 12 months. Verify that all the information included on that list is accurate.
Check your credit report. Of course, you should already be doing this to look for other signs of identity theft. Unfamiliar medical collections included in the report may indicate medical identity theft. Contact the major credit-reporting firms immediately if you discover one.
Keep your health insurance numbers confidential. You wouldn’t give your credit card or social security number to just anyone, so don’t hand out your medical plan number either. Avoid health fairs or free screening kiosks that request your insurance information. Never give your number over the phone (unless you’ve called the insurer’s direct line yourself). And if you lose or misplace your card, contact your insurance provider as soon as possible.
Request a copy of your medical file. While you may have to pay for this service, ask your doctor to provide you with a copy of everything in your medical file. This is your “paper trail” in the event that you must dispute charges for visits or treatments you did not receive.
According to the U.S. Department of Justice, medical identity theft is already a multi-billion dollar industry. Don’t become a victim. Protect your health insurance information, review all related records carefully, and contact me today about investing in identity theft insurance.
by onlinefinancialnewsletters | Jan 20, 2015 | Personal Protection
It’s a question you hear every time you rent a car: “Would you like to purchase insurance for this rental?” If you’re particularly cautious, you may even be tempted to answer in the affirmative, despite the fact that full supplemental coverage is prohibitively expensive, actually doubling the cost of rentals according to the United Services Automobile Association. Fortunately, there’s a good chance you don’t even need it. Consider the following before you approach the rental counter.
Your regular auto insurance may already cover your rental.
In many cases, the liability coverage you have on your day-to-day vehicle will extend to damages to other cars or property caused while driving a rental car. If you carry collision coverage as part of your regular policy, it may cover accident-related damages to the rental vehicle as well. Comprehensive coverage on your regular automobile can even cover vandalism or theft of your rental car.
What is actually covered depends on your particular policy, so you should consult with your car insurance agent before renting any vehicle. You should also keep in mind that even full coverage under your primary auto policy might not cover every charge—such as loss of use and administrative fees—the rental company will impose in the case of an accident.
You may already have rental car insurance through your credit card.
Some credit cards include supplemental benefits such as rental car insurance. In order to apply this benefit, you have to reserve and pay for the rental using that particular card. Terms and conditions vary widely, from primary coverage—that won’t require you to make a claim under your regular insurance policy—to secondary coverage—that will help you out with the deductible and other costs. In most cases, you must decline the supplemental insurance offered by the car rental company in order to obtain the credit card company’s insurance coverage.
Keep in mind, any coverage you receive from your credit card issuer is going to come with restrictions. For example, you may not be able to rent certain types of vehicles. Or the insurance may not cover damages that occur under particular situations (such as on a dirt road) or to specific parts of the car (such as the wheels). Card issuers frequently cap rental periods as well. Make sure you know what your credit card company offers before you rent a vehicle.
Sometimes, additional rental insurance coverage is still a good idea.
If your personal insurance policy does not include comprehensive or collision coverage, it may make sense to purchase liability coverage from the rental company. You might reach the same conclusion if your current car insurance policy carries a high deductible. Additionally, if you’re renting a car on a business trip, or intend to drive it into another country (other than Canada), you will likely need additional insurance coverage. Give me a call to discuss your particular car insurance policy’s declarations and limitations before proceeding.
by onlinefinancialnewsletters | Dec 10, 2014 | Personal Protection
If amassing the largest quantity of college debt is a contest, it appears that the Class of 2014 has won. According to one analysis of government data, the average graduating college student this year had $33,000 in student loans. After adjusting for inflation, that’s nearly twice the amount students borrowed two decades ago. And parents who cosigned loans for their children may be on the hook for it.
Not all students are eligible for federal financial aid in the form of subsidized college loans. Some have to turn to private loans for all—or at least a portion—of their tuition and fees. With a cosigner, these young people increase their chance of approval, and parents are often the first choice.
Unfortunately, it’s not as simple as providing a reference. When you cosign a student loan, you basically put yourself on the hook in the case of a default. Debt collectors will call you if your son or daughter misses a payment. Your credit will suffer. And if—heaven forbid—your child dies, you’ll find yourself responsible for the entire amount. It is often impossible to have private student loan debt discharged in bankruptcy.
Back in August, CNN Money reported the story of one couple who lost their daughter and face paying back the $100,000 in private student loans they had cosigned. Their credit is ruined, and they continue to struggle with the additional burden of debts that have ballooned to $200,000 due to interest and late fees. If they had a life insurance policy on their child, the story might have had a happier ending. One equal to the student loan balance, with the parents as beneficiaries, would have cost as little as $150 a year—a small price to pay for protection from financial devastation.
If you’re cosigning or have already cosigned private student loans for your child, you can avoid making this all too common mistake. Consider these tips for taking out a life insurance policy on your college-age child.
- First, check with the lender. Some larger private lenders—from Sallie Mae to Wells Fargo—have begun providing debt relief when a primary borrower dies. If that is the case with your child’s student loans, life insurance may be unnecessary.
- If the lender does not offer such protection, talk to your financial advisor about the best possible life insurance plan. He or she can explain the differences between policies and help you find adequate coverage at a price you can afford.
- In many cases, a term life insurance policy (in which you can choose the length of coverage) may be best. You’ll want a term that is long enough to cover you throughout your child’s repayment of the loans.
- The coverage you purchase should be equal to the balance on the loans. If your child has not finished school, your financial advisor can help you estimate the final cost of his or her education.
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