Showing posts with label Tips and Information. Show all posts
Showing posts with label Tips and Information. Show all posts

Top 5 Money Saving Tips For The Spenders

Money saving for some people can be very difficult, especially for them, the spenders.

Various reasons they put forward, such as the cost of living is constantly increasing, until unable to resist the temptation to shop various luxury goods.

Are you one of them?

However, it's up to you to believe or not, but it is a narrow thinking!

Without them even knowing, actually the spenders have spent a lot of money for goods that are not needed, even worse, they forget their primary needs, and when they knew it, they had run out of money.

money_saving


The next thing that happens is that they solve the problem by borrowing money to others or to the bank. Yes, this step will only add to their financial problems only.

Therefore, as a spenders, you need a special strategies which are effective, about how you can save your money for critical needs in the future.

The best ways to save money 

There's a joke that the best ways to save your money is don't use that for anything. But we know it's almost impossible. Money is not everything, but in the world where are we living now, everything need money.

So here is 5 tips that you can try for being excellent to control your finance.


1. Do not be easily fooled by the tempting promotion or advertisements

The work of the advertiser is trying to make ads that they show interest to others, including you. Suppose there is a latest gadget ads with a series of advanced features.

Once you see these ads, you feel that the gadgets you have already worn out, and you are interested to buy the gadget. Then you decide to buy the gadget.

In the next month, the latest series of products reappeared, and they offer a gadget with other features. Here is the problem, many people are into what we refer to as 'victims of advertising', they again stuck buying the product. The money that should be saved for future needs or emergencies are used for purposes that may be considered unimportant.

Or promotion of a product, with the words "buy 3 get 1 free". Try to think about why you buy the same type of goods if in fact you only need one item only.

So consider using your money wisely. Remember, sparing no means stingy. Try to save some of your money and make this as your regular habit.


2. Be a hunter for the discount and voucher

The spender delighted to spend their money. One is usually preferred are shopping. Well, for those of you who can not resist the desire to shop, then try to be a regular customer at a store or boutique that provides discounts or vouchers for regular customers.

Thus, you have leftover money from the discounted price. But remember, do not use the remaining money to go shopping again, because of course these tips will not work.

Immediately save your money, before the shopping desires come back.

3. Visit the website to sell stuff and put your own unused stuff there


Rather than keeping secondhand goods that are not used anymore, you can sell it. As a spender, of course, you have many goods that are not needed, and you store it the warehouse or in the corner of your home.

Try to think of making money from such goods, then you can save the money generated from the sale. This step also indirectly train you to become a businessman. Who knows, of selling unused goods, you can become a successful seller in the future.

Try accessing the site for the sale of second-hand stuff on the internet, and you can list and offer items that you want to sell there. It's much better than letting the stuff into the trash.

4. Use the website for the exchange of goods between the member

You need to have a way to replace the money to get the goods you want.

By utilizing internet sites such as the exchange of goods between member, you can get the goods you want without spending any money.

It is also one of the ways where you can get stuff at a great price, but without the need to buy it. Try to exchange the items that are not used, but you have to be honest in order to keep your credibility well.

Thus, the less you spend money to shop, then your chances to saving will be even greater.

5. Do not just use expensive and well-known brands

Using expensive and famous brands is often the desire of most people. For the rich, this may not be a problem, because they have a lot of money. But for ordinary people, is a big mistake to use such luxury items just to prestige.

If you want to look gorgeous in front of your friends, you do not need to always use branded goods and expensive. Be yourself.

When you go shopping or buy something, the important thing is look at the price and not brand. Many brands are not popular in the community, but has a very good quality and also the same function. Try searching for stuff like that if you need it.

Obviously this will save a lot of your spending.

Why Under 25 Drivers Should Pay More For Auto Insurance Compared To Those Over 25?

When you asked some of car insurance agency, concerning the cost of insurance for the drivers younger than 25 years, then you will find that the price is more expensive compared to the insurance for the people aged over 25 years.

Then you think, how could this happen?

It is true that the driver with a young age and older age is more often have an accident, but you believe that age is not the only reason for the establishment of auto insurance rates.

under 25 drivers


You need more answers with evidence, rather than some unclear answers out there.

Most young drivers get their driver's license at the age of 18 or 19 years.

When you get your license, you may not have much experience on paper before test driving is performed. The longer you have your driving license, then you already have an important experience in driving.

It is the time required by the insurance company to declare that you are a good driver or even they could have doubted your driving skills.

The time required was approximately 6 years and you've aged 25 from the time you get your driving license.

However, if you got your license at the age of 24 and you do not have the essential experiences before, assuming you are a good driver, then you will see a slight reduction in insurance costs, but you probably will not see a dramatic decrease in of car insurance until you are 30 years old.

The Facts About Teen Drivers

It is surprising that is in 2013 teenagers aged 15 to 19 years only seven percent of the total US population, but they accounted for approximately eleven percents or $ 10 billion dollars for the cost of treatment of injuries due to motor vehicle accidents.

Center For Disease Control And Prevention (CDC) states that in 2014, the total of 2.270 teens, 16 to 19 years old in the US were killed and as many as 221.333 were treated in intensive care unit due to motor vehicle accidents.

motor vehicle crash


National Center for Health Statistics also stated that the main cause of death of teens aged 15 to 20 years old is motor vehicle crashes. For more detail about teen driving statistic, you can read it here.

Based on these facts, it explains why insurance companies will require that teens person under the age 25 years to pay more, because they also have a greater risk of having an accident while driving. You may deny it, but that's a fact.

The good news is that with online services like Uber, teenagers reduce the use of cars and they also delay ownership of their cars to use the service. Similarly, the incidence of accidents which often occur on prom night has been reduced because they share a large vehicle or limousine ride as they go and leaving the the prom night.

By having of car insurance, as young adults, of course, your expenses will increase. Some expenses such as paying the insurance premiums, as well as other routine expenditures such as the purchase of spare parts or buy lubricants and fuel. 

Do You Ever Think If The Insurance Company Will Runs Out Of Money And Can't Pay Their Claims?

Many companies that have been running for a few years or a big company that has operated for decades suddenly closed down due to bankruptcy. Various questions arise, what causes these companies go bankrupt? While other companies can survive and developing rapidly with the income continues to increase every year.

Here are the factors that cause the company ran out of money:

run out of money

  • Can't afford to meet customer needs
    A company should be able to meet consumer needs so that the service or products offered can be accepted by the market. However, if it is ignored, then what is presented by the company will be useless, because it is not able to attract consumers, this due to does not fit their needs.
  • Overly focuses on product development
    The focus on product development is a good thing and should be maintained. However, what happens if too focused on it? Besides being able to forget the key needs of consumers, the company that are too focusing on product development will lose sensitivity to what is going inside the company, the market situation, and others.
  • Excessive fear
    The fear of bankruptcy, fear of loss, fear of not being able to serve consumers, fear because of the inability to overcome the problem, it is a natural thing as long as it is still in normal portion. However, if these fears exceed normal limits, it will hinder the company's performance and can lead to destruction.
  • Stop for innovation
    Innovation is something that must be done by each entrepreneur. Without innovation, the products are sold for a long time will seem boring and outdated and for the people who become the target of marketing of a product, this would not be a good sign.
  • Not observing the movement of competitors
    Not or less observing the movement of competitors, it will cause a company can not compete and lagging far behind. A company still must consider the measures undertaken by competitors.
  • The price is too expensive
    Some people believe that high prices will create a company's products look nicer and more luxurious than the original. However, what happens if there is a new company that release products are similar to the company's product and sell it much cheaper?

What if the insurance companies fail?

So, you already buy an insurance and you want to know what if the insurance company ran out of money? The important thing to note is that if the insurance company bankrupt or liquidated then you as a insured have the primary right over the distribution of wealth from the insurance company.

The investment fund of an insurance client can not be used to pay the liabilities of the company to third parties, except the payment to the client. Only if there are excess funds, it can be used to pay to a third party.

Examples of real cases is AMI as mutual insurance in New Zealand. For more details about what had happened to AMI, you can read it here.

This company has insured many houses in Christchurch. With a low premium, of course, many customers are interested. Then bad event had happened at that time, a major earthquake hit Christchurch. Many properties were damaged and people are suffering enormous losses.

It is a risk, and insurance companies should bear the loss because of natural disasters such as earthquake. However, there are times when the company was not able to cover all the claims, because it takes a lot of fund. Because of this, the company was finally sold. Then the government pays the remaining claims.

Internal Audit In Insurance Companies

What is the purpose of audit on the insurance companies?

To minimize the risk of irregularities in business operations and to support operational speed problem resolution, as well as increasing labor harmony whole company, it would require a unit with the job description to take on the role of monitoring and / or control, known as Internal Auditor.

The purpose of internal audit is to provide facts about the actual state of the company. These facts include the financial, management and so on, summarized into a report.

Internal audit reports typically include degree of compliance with the provisions of SOP and monitor the implementation of risk management. This report can also be equipped with a trend analysis of the entire company's risk profile as well as suggestions for improvement. Report submitted to the Directors and other relevant executive.

Internal audit is as one of the functions of internal control system of a company that should be implemented effectively in order to secure the assets of the company, ensuring that all business activities comply with laws and regulations as well as company policies.

The Insurance Company Has Adequate Reserves

Insurance companies need to meet regulations, to manage the finances which can meet to pay claims. Thus, the risk of runs out of money becomes very small even though the risk is still there, as in the case of AMI, New Zealand as described above.

Although the the state have the guarantee fund and the fund is sufficient to meet the claims of consumers, but insurance companies still required, under the rules of state to have adequate reserves. Overall the industry, such as reports FIO Annual Report, US Department Of Treasury has reported a good condition of the premium to surplus ratio.

You can find information about the insurer's financial assessment through the web like A.M Best.
 
AM Best web
A.M Best Web

AM Best provides grade on the financial condition of insurance companies and also the prospect of their financial condition in the future.

State insurance departments organize reserves required for each type of insurance company. In addition, state agencies will also help to ensure that financial practices are done in wisdom and able to protect insurance policy holders with sufficient funds to pay their claims. Each department of the related insurance will take action to fix the problem if the insurance company can not meet the financial responsibilities.

National Association of Insurance Commissioners (NAIC) is an organization that provides valuable information which is standard and has been widely adopted by countries with the aim to protect consumers from unfair accounting and bad financial practices by insurance companies.

NAIC can issue a Uniform Application for Certificate Of Authority which is the minimum statutory capital and surplus requirements.

Surplus Ratio

What is the surplus ratio and why it became important for insurance companies?

Surplus ratio is the ratio between Net Premiums and Capital & Surplus, or Net Premiums divided by Capital & Surplus. Surplus ratio is important because it is a benchmark of the financial health of insurance companies.

You can get annual report on the insurance industry from Federal Insurance Office, US Department Of Treasury.

premium to surplus ratio graph
P/C Sector Annual Premium-to-Surplus Ratio
Source: FIO Annual Report, US Depertment Of Treasury

If you look at the report, you will find that Net premium written / Average Capital and Surplus is 79%  for the end of period of 2012, and this is a reasonably good condition.

Conclusion

The conclusion is that the insurance industry have strict regulations as well as the business is clear. The risk of general insurance companies for not being able to pay the claims of its clients due to runs out of money is very small.

Although there are companies in a minor percentage which has fallen because they did not hold up in dealing financial pressure, but there are many mechanisms that have been prepared to face this kind of problem, so that the company could continue to meet its obligations to clients.

How Much Money Should I Put In Savings For An Emergency

So you ask about how much money you should savings for an emergencies? Once upon a time throughout your life, maybe you have experienced a bad events or unpleasant. The incident could be serious illness, vehicle collisions, accidents at home, your stuff is stolen, fire, and so on. You also realize, you have to spend huge amounts of money to overcome these events, yes, the events may appear suddenly as a part of the risk of life.

Until one day you actually experience it, and of course I do not expect you to experience it. You will realize how important you save money in situations like these, which may occur at any time in your life. Most people will use their credit card without thinking of the effect.

They hope to resolve the issue quickly with a credit card, but it turned out to create a new problem in their lives. Like a snowball, which will always bring trouble growing large.

savings money


Be aware of this case, although it is often underestimated by most people, but the difficulties that will be brought about is real.

Pay attention to your life today, whether you have a family? Say you have a child, then it becomes a serious consideration when you should set aside some of your money for emergencies.

Another example is when someone lives with a particular disease, then he certainly should have saved more for emergencies compared with healthy people.

Indeed, you might think that having savings is not that easy. When a lot of financial rules, economic conditions are not good in your country, the prices of basic necessities are increasing, high taxes, so the having money savings is difficult. Especially when you realize that your salary is only enough to support your simple life.

Strategies To Save Money For An Emergency

It can be complicated, but not impossible. The amount you should have in your emergency fund, may vary, so we suggest you read this note to determine the amount of money that should be there. So, here are some strategies for you to apply the most appropriate according to your lifestyle:

  1. Establish a fixed monthly percentage: If you have your finances under control, you will find it much easier to "get a monthly fee" so that you can grow this emergency fund. There is no set limit but, depending on your budget and your accounts, it can be between 1% and 5% of your salary. Add it as an additional field in your budget.

  2. Use an automatic transfer: Especially if you want to have this money in a particular savings account, you can set that, to just receive your fortnight, between $ 10,000 and $ 20,000 go directly to that account. For this it is important to take into account how much you expect to have in this fund, and that, divide it between 6 or 12 months, depending on how long it takes to build this fund.

    Open a specific bank account for the savings fund. Having the money saved will reduce the temptation to spend it on other things and at the same time, your savings will be earning interest. 

  3. If an emergency occurred and you have to use part or all of the fund, it is advisable to increase the percentage which is you save each month. Even if it is a minimal increase, it will take less time to recover what you had.

  4. If your income increases, then you also have to increase the percentage allocated to the emergency fund. The efforts made by you from month to month will be rewarded with peace of mind to overcome the crisis without financial setbacks.

  5. You can have two emergency funds, one for small or minor situations and another for major emergencies. The first emergency funds could be used to repair damaged equipment or for the treatment of colds or other minor situation. The second would be perfect to solve a prolonged illness, greater damage on the car or damage caused by natural disasters.

  6. An emergency fund is an alternative among many preventive options that exist. Consider combining the emergency fund with other options, such as medical or housing insurance.

The creation of an emergency fund is simple and should always be adapted to your income. It requires commitment and discipline, because it must protect the money and not spend it for other purposes. Remember that the main beneficiary will be you and yours.

The emergency fund should be seen as an investment rather heritage and be covered in personal finance, That money should not be spent, but must be kept so that it is available at any time. It is very important to respect it.

The Field, Financial and Medical Underwriting Process Of Insurance

With so many information about the importance of insurance, I am sure that you are already aware of this. But there is one question which causes you not yet to decide to immediately register your family to the insurance company, the question is "whether I have the qualifications to be insured"?

That's right is not it ??

Became the unfortunate thing if your family must be protected, but this was not done because of fear if your application is rejected.

So let me to explain the basic principles of selection to customers. The underwriting process (risk selection) in the insurance are conduct by:

underwriter insurance

1. The Field Underwriter

Marketers or insurance consultant is a field man who see physically to selects the health condition and the intention of the prospective customer.

Therefore, in filling an insurance submission file, the field underwriter always conducted interviews regarding:
  • Smoking behavior (frequency of smoking), including a history of being treated in the hospital or not? If yes, will be asked details about the name of the disease, when the last time the disease relapses, hospital name, year of hospitalization, and the actions taken by the doctor during the treatment.
  • Abnormalities experienced by prospective customers (e.g heart defects, stroke, increased cholesterol, etc.).
  • Whether the prospective customer ever conduct an examination of the heart / blood / urine / x-ray / USG / biopsy
  • Is there a family among prospective customers who has died because of had suffered from coronary heart / stroke / diabetes / cancer / congenital abnormalities.
  • Whether prospective customers ever used illegal drugs or addictive substances in the last 5 years.
  • Whether prospective customers drinking an alcoholic drink more than 750 cc per week?
  • Whether the prospective customer ever involved a criminal act?
  • Whether the prospective customer has a high-risk hobby?
  • How much income and regular expenses of the family?
All of this data is a guide for insurance companies in assessing risk in a person. All these data are considered fair / right by the insurance company (the principle of utmost good faith)

After that, the data is processed and the selection will be continued by the financial underwriter.

2. The Financial Underwriter

The insurer in this case is the insurer's financial team with the aim to see whether a prospective customer is able to:
  • Conduct regular premium payments related to income customers
  • If a potential customer choose the life insurance with death compensation above a certain amount, then the prospective customer will be required to include some data regarding the ownership of assets.
 After the selection by the team of financial underwriter, then the next step is medical underwriter.

3. The Medical Underwriter

Medical underwriter is the person providing recommendations regarding the feasibility potential clients to be accepted based on their health.

The data from the marketers will become 100% of reference for the team in selecting the the health a prospective customer.

For example, a prospective customer had been treated and then underwent intestinal surgery, then the doctor of the insurance company will make recommendations to marketers to conduct medical check-ups to potential customers (costs will be borne by an insurance company). Some of the decisions of the selection of these risks is:

1.Standar
Immediately accepted as a client, and the policy will be issued in accordance with the benefits taken.

2.Substandar
a.Exclusion
The principle of insurance companies is pre existing condition, means an existing disease (before a prospective customer become the customer) but relapsed after become a customer, then the claim will not be covered. Except for seasonal diseases such as dengue fever, malaria, typhus.
Similar to car insurance, if part of the car is already damaged before insured, then after insured, that part will not be covered.

b.Extra loading / extra cost of insurance
The principle of an insurance is to give fairness to all customers, the cost of the risk of a healthy person and a sick person will be different. People who are sick will have a higher risk costs. Therefore required additional premium in order to obtain the desired benefits.

c.Restriction
Suppose someone wants to take a certain amount of compensation for death, but because the person had been sick before, then the companies only allow claims for compensation with a smaller amount (this process has done when submission process to become customer, not the process after become a customer)

d.Declined
The submission may be rejected by insurance companies because of several things, such as the condition with very poor health, living in areas prone to conflict (have a level higher risk of death compared to other regions), an unhealthy lifestyle and so on.

If the customer is accepted, it will be written in the insurance contract that is signed by the person who has the authority.

Best Health Insurance Plan For Family Doesn't Have To Be Hard. Read These 3 Tips

There are three main factors to consider when choosing the best health insurance plan for family, for the sake of simplicity we call it 3C:
  • Coverage, 
  • Costs, and 
  • Comparison between plans. 
Each factor generates its own particular questions.

health insurance plan
When considering each of these factors, you can choose the most appropriate plan for you and your family. So here's the tips.

1. A Clear Understanding of the Coverage

Coverage means the range of health services offered by your health insurance plan, such as doctor visits, hospitalizations, maternity care, emergency room health care, and prescription medicine.

You will want to see what your plan offers, whether there are limits on some types of services, or a limit on how many times you can use those services each year.

Find out what services are covered beyond basic care and what services are not covered. If you need a specific type of care, such as orthopedic services, make sure your plan offers that kind of coverage.

Find out if the plan limits which doctors, hospitals and other providers you can visit, for examples:
  • If you have a preferred doctor, is it part of your insurance plan's network? 
  • What will happen if you want to see a provider who is outside the plan's network? Will you have to pay more? 
  • Are the doctors and hospitals that are part of the plan's network in a convenient location for you?

understand about insurance coverage
Good understanding about insurance coverage is necessary
If you spend a lot of time out of the state where you live, find out if you can get health care services in other states and how the network of providers is outside your state.

Check coverage for prescription medicine. Make sure the medicine you take regularly are covered, and if there are discounts for generic medicine or if you can get your medicine by mail.

2. Understanding the Details Regarding the Cost of Coverage

insurance cost rate
Is the cost is suitable for you?

It is important to understand the costs of your coverage. They are :
  • Premiums are the regular monthly payments you pay to your plan.
  • The deductible is the cost you have to pay for health services each year before the plan begins to cover costs.
    Let's say you have a $ 200 deductible. If you go to the doctor and the total cost is $ 250, you pay the first $ 200 to cover the deductible and the insurance company pays $ 50. Thus, you have covered the deductible for the rest of the calendar year.
    There are some services you can receive without having to pay the deductible, such as preventive care. 
  • Coinsurance or co-payment is the portion of the cost you will probably have to pay when you go to the doctor, get a prescription drug, or use another type of covered service.
    Coinsurance is a percentage, such as 20% of the costs allowed for a doctor's visit.
    For example, if the amount authorized by the plan for a doctor visit is $ 100 and you have already covered your deductible, your coinsurance would be $ 20.
    The co-payment is a fixed monetary amount. For example, you may have to pay $ 15 for each prescription drug or each doctor visit.

Consider the Health Insurance Marketplace

If you need health insurance, you can buy one in the Health Insurance Marketplace. This market makes it easier for you to compare and buy plans and is also a way to answer any questions you may have about health coverage. Through the market, you can:
  • Try the online shop and get help over the phone or in person to find the right plan for you and your family.
  • Compare health insurance plans based on benefits, costs and other features that are important to you.
  • Find out what kind of financial aid you could get to purchase health coverage.
You can compare the similar levels of each plan because the information for each will be displayed in the same way, using a language that is easy to understand.

You will see it when you buy coverage on your own or through your job, but not when you choose a Medicare plan. If you have health coverage and you have not seen the Summary of Benefits and Coverage, ask for a copy in the human resources department of your work or your insurance plan.

Providers who are outside the plan's network are doctors or other health professionals who are not part of your plan. Check if you have to pay more by visiting an out-of-network provider for your plan.

3. Do a Comparison of Some Insurance Plans

Once you understand the coverage and costs of the health insurance plan, you can start comparing different plans and choose the one that gives you the best value for the coverage you need.

Health law makes it easier to understand the coverage and costs of health insurance plans and compare them. Now, all plans must use the Summary of Benefits and Coverage (SBC) form.

compare health insurance plans
Make comparisons and take decision

Use this Health Insurance Cost Calculator to get an estimated cost of financial aid for which you could qualify, and an estimated cost of how much your monthly premium would be if you purchase coverage through the Health Insurance Marketplace.
Thus the guide to find a health insurance plan for the family, may be helpful and provide benefits to you.