What's Your Greatest Asset? - It's Not What You Think

Image via WikipediaYour dreams of owning a house, sending your kids to college, and saving for retirement are based on you having a long and fruitful working life. Your income and your ability to produce income is critical to making your dreams come true. Then why is it when the nonprofit Life Foundation conducted a survey asking "What was your greatest asset?", only one in six working Americans (16%) said their paycheck was.

Think about what would happen if tomorrow you became sick or injured and could not work. Your inability to work would be devastating to your life and your families.

If a 25 year old worker that earned $50,000 a year, were hurt or disabled, that worker would lose $3.8 million in future earnings. Yet fewer than one in three workers in the private sector have long-term disability coverage through work, according to the U.S. Department of Labor.

“Most people don’t realize that they have a three in 10 chance of suffering a disabling illness or injury that could keep them out of work for three months or more,” said Marvin H. Feldman, President and CEO of the LIFE Foundation.

What we forget to insure is our greatest asset, our income. Disability Insurance makes sure that financial hardship doesn’t follow the physical and emotional toll that comes along with disability. When you think about it, your most valuable asset isn’t your home, car or jewelry. It’s what allows you to pay for all these things—it is your paycheck.

How Much Does it Cost?

• Expect to pay between 1 percent and 3 percent of your annual salary for a good disability plan, according to DisabilityQuotes.com. That works out to $600-$1,800 for someone earning $60,000 a year.
• Disability insurance provides income to help pay your living expenses if you are unable to work for a significant length of time because of injury or illness. Generally benefit payments are 60 percent of your total salary.
• Short-term disability polices have a waiting period of 0-14 days and pay benefits for no more than two years. Long-term disability policies usually have a waiting period of several weeks to several months and benefits could be paid a few years up to the rest of your life, depending on the policy terms.
• States such as Hawaii, New Jersey, New York and Rhode Island requires employers to provide disability benefits for up to 26 weeks, according to the Insurance Information Institute. Some employers provide short-term disability insurance, although often the employees have to pay the premiums.

Discounts:

• Premiums are lower for policies with a longer waiting period before benefits begin and/or a shorter benefit period.

Shopping for disability insurance:

• The Federal Citizen Information Center gives a detailed overview of long term disability insurance, listing common terms and tips for buying.
• Insurance4USA.com provides online quotes.
• Your state insurance department can give you a list of registered disability insurance companies in your area. The National Association of Insurance Commissioners gives links to these state offices and has a database to search for financial details and complaint histories for specific companies.

Remember Disability Insurance will cost more than life insurance. Statistically you're more likely to file a claim for disability insurance than life insurance. Depending on the type of work you do, the rates will vary. The costs will vary greatly depending if you sit at a desk all day or work construction.

Medical Issues Can Ruin Good Credit

This is a guest post by Ed O’Brien. This is his third time writing for 50PlusFinance and we always appreciate his insightful perspective.

Many people mistakenly believe that paying doctor and hospital bills is not as important as paying other expenses. However, medical bills are typically reported to the credit bureaus just like any other debt. Unpaid medical debts can cause big problems in your financial life very quickly. Plus the stress of debt on top of poor health can be a dangerous combination.

Medical Bills Matter
Doctors and hospitals will report unpaid bills on your credit report which leaves black marks against your good credit. Unfortunately because medical bills will often pop up unexpectedly and can get quite expensive, debt can easily start spinning out of control. Add to the situation your inability to work and earn and income and a life-long struggle may be ahead to get back on financial track.

Consider also that medical debts you are not paying may eventually go to a debt collector who will be more aggressive in collection efforts and also add black marks to your credit score. Even with insurance, medical costs are high these days and are projected to only go higher in the future.

Staying Above Water with Medical Costs
In order to avoid major debts heading into your retirement years, it is better to prepare for the unexpected as soon as possible. The more you prioritize your plans for what may happen in the future, the more you are able to safely navigate the financial waters when your health makes a turn for the worse.

Here are some ways to get yourself in order before something should go wrong:

Understand Insurance Coverage
Most people will chose insurance coverage based more on price than benefits. Others who receive affordable insurance through their employers often have no clue what they even have. It is important for you to understand what kind of benefits you are paying for long before something happens. You will likely make wrong decisions concerning your health and treatment when you remain unsure about the financial side of things. Review your policy information and contact the insurance company for explanations on anything you don’t understand.

Contribute to an Emergency Fund

Financial experts urge consumers to sock away between 6-12 months worth of living expenses in a good interest-earning account. This money should be allowed to earn interest and should only be used during times of true emergencies, including health concerns. If you can’t work due to a work injury or medical illness, an emergency account may be your only viable resource. Contribute to the account monthly. You may even consider setting up automated deposits from your payroll department. What you do actually see will likely not be missed. It will allow you to build a significant stash of cash for when you need it.

Live a Better Life
Many health conditions that break us are actually of the preventable variety. Eating better and getting regular exercise is important. Sedentary lifestyles can trigger all kinds of expensive medical conditions including unhealthy weight, high blood pressure, depression, and heart problems among many other things.

Organize Your Life
If medical treatment requires you to be treated in a hospital for a period of time, other people will be relied on to get your important documents the hospital might need. Always keep relevant health information, including updated health insurance policy information in an accessible and clearly marked folder for easy retrieval.

Ask for Assistance
If you anticipate having issues paying your medical bills even if you have insurance, it is wise to contact your medical provider’s office right away and keep them informed of what is going on with your situation. Many will work with you on new payment arrangements that will keep you out of collections until the debt is satisfied. If you do not communicate, your bill will likely be expedited to the collection agency.

If you don’t have insurance or have a co-pay you can’t afford, speak with the medical provider’s office on the day of your visit and explain the situation. Many times doctors will allow for discounts or will waive service fees for their loyal patients. The worst that can happen is they turn you down with a ‘no’. At least you tried all available resources to save money.

Ed O’Brien is a seasoned writer in personal finance, specializing in credit repair. You can find more of his articles located at CreditRepair.org.

Push the Easy Button For Brokerage Account Shopping

Image via CrunchBaseToday we have a lot of choices where we invest. Whether it's at work with a 401(K), local brokerage, IRA'S or online brokers. Even if you do it yourself and your happy with your broker it always is smart to see what the competition is offering, you may get a better deal and save money.

Bankrate.com just made it easier for you to compare brokerage deals.

You can now compare trading brokerage accounts for free at Bankrate, pitting one companies’ costs and features against another. At a glance, you can see each broker’s:

· Commissions, whether online, phone assisted or broker assisted.
· Initial deposit requirements.
· Maintenance fees.
· Balance to avoid.
· Services and features description.

With big name brokers like ING Direct, Scottrade, TD Ameritrade, Merrill Edge and Zecco holdings, you’re just a few clicks away from trading online.

Click here to go to Bankrate.com and check out the Brokerage Account Shopping.

Google Wallet - A Credit Card In Your Phone

Image via WikipediaGoogle, Inc. has debuted an new application called "Google Wallet". This application allows consumers to use their phones to pay for products and services. It would eliminate the use of credit or debit cards. Google Wallet is set to launch this summer and allow the company to join in on the lucrative business of digital credit cards.

All the major cell phone manufacturers are rolling out new handsets that will include the electronics to allow you to pay for groceries, movie tickets, and restaurants by a simple wave of your phone over a digital sensor.

Google is jumping in on this technology with both feet because the profits from handling credit transaction will be a big profit center for the company. Add to that the growing world of local offers and coupons. Services like Groupon and local coupon companies will have a better way to link their products to consumers. Businesses will be well poised to link purchases, digital coupons, and location based advertising to everyone with a smart-phone.

Google said by 2014, it expects purchases made on smart-phones to quadruple to $630 billion dollars. Don't feel bad for Visa and MasterCard, they still will process about $6 trillion worth of credit card transactions annually. But I wouldn't be surprised that they are looking over their shoulder to see an approaching competitor where there wasn't one before.

The way the phone works is that they have something called near-field communication (NFC). This is a radio technology that allows phones to talk to credit card terminals. Using built-in microchips, the phones can conduct digital conversations with credit card reading devices. The phones will allow consumers to use coupons or loyalty cards, pay for goods and receive a digital receipt all within a few seconds.

Thanks to this new service Google will streamline the whole consumer point-of-sale process. The process should benefit the consumer. What's the positives and negatives to this new product.

Positives

• This system carried out further would just about eliminate your purse or wallet completely. No need to carry anything but your phone to go shopping. Why not digitally store your drivers license, AAA card, and health insurance card all in your phone.
• Your coupons and loyalty cards could all be in your phone, eliminating the need to carry those things around.

Negatives

• Google will have your shopping information. Along with your location where you shop. Plus the frequency and time. They will know all your purchases no matter where or when they occur. Whatever you purchase, they will know.
• What if your phone is lost or stolen. You can't do your shopping, you will have to have a credit card or cash as a backup.
• If your battery dies your stranded with no way to pay.

This new technology will take a while to catch on. It seems like just a more difficult way to perform a simple task. Credit cards are just a piece of plastic with a magnetic strip on the back, real simple. It reminds me of the same battle 3-D TV still has, finding  a way to be as easy to watch as regular TV. Sometimes new tech just makes things more complicated.