How to Teach Your Teens About Credit Cards

As the world becomes more complicated, you have the responsibility to guide your children the best you can. One of the most trying subjects to teach your kids about is how to appropriately manage money.

More specifically, teenagers develop great interests in the almighty credit card. Credit cards are not to be taken lightly at any age, but especially during adolescence. How can you educate your teens about the use of credit cards?

These strategies will help them learn to use credits cards responsibly:

  1. Ask where the money will come from. Insist your teens know specifically where they’ll get the money to pay off the credit card charge before they charge anything.

  2. Encourage responsibility. Explain that your teens are responsible for paying their credit card bill on time. In addition, require them to pay off their credit card balance within 30 days. Discuss how interest charges and other fees work and that paying such fees is like giving away their money for nothing.
    • Take care to listen to how your teen takes part in this discussion. If you determine your teen requires more maturity or understanding of the information, avoid giving them a credit card and explain briefly how you arrived at your decision.

  3. Consider starting with a limited balance credit card. Have your teenager save money until a certain amount accumulates, like $100.00. Then, accompany them to your banking institution or a store to obtain a pre-paid card for the $100.00.
    • Even though your teen paid for the card with their own money, it’s a good idea to tell them to make every effort to stretch out their use of the card. A benefit of this method is that your child saved the money upfront before actually charging items.
    • They can, therefore, understand that the credit card balance is tangibly their own hard-earned money. The downside of this method is it may not teach your child the responsibility of charging only what they can pay off within the next month.

  4. Provide a credit card to replace weekly allowance. Consider converting their allowance to a monthly credit card balance. This method allows them to learn about credit card management. Consider this example:
    • You normally pay your teen $30 cash weekly allowance. When they turn 16, state you’ll now provide a credit card rather than the $30 cash weekly. Explain that they can charge up to $120 per month (4 weeks times $30 equals $120) as you’ll pay up to that amount monthly to cover their credit card purchases.
    • Stress that if they charge over $120, they must come up with the difference to pay off any balance over the $120 when the statement arrives.
    • If they charge over $120 for the month and are unable to come up with the difference, they must surrender the credit card until they pay you the difference owed (even though you’ll go ahead and pay it off to avoid monthly fees).
    • Using this method to teach your teen how to handle credit cards is a helpful lesson in managing their money with limited funds. Your teen learns to limit spending to stay within their means.

Teaching teens how to handle credit cards is challenging. The good news is that if you start early with your kids about how to earn, save and spend money, they’ll easily progress to understanding the above concepts with your help and guidance.

Praise your teens’ efforts when they manage their finances and credit card issues well. You’ll build their confidence for the future when you teach them how to handle credit cards wisely.

For Greater Success, Focus on Systems Instead of Goals

You might understand the power of setting a goal, but that’s just the beginning. A goal is where you want to end up, but it doesn’t tell you how to get there. Creating systems that move you toward success is the real path to success.

For example, a successful business always has a system for generating sales. There are sales goals, but the system is what moves the company toward that sales goal.

You already have a lot of systems. You have a system for mowing and trimming your grass. You have a system for making sure you have clean clothes on Monday morning.

When you set a new goal, it’s important to create new systems.

Follow this process to create effective systems that lead to your success:

  1. Know your goal but focus on how to get there. Let’s imagine that your goal is to run a marathon in nine months. How exciting! But, let’s focus on how you might get there. Let’s also imagine that you haven’t run in years, and you have 20 pounds to lose if you want to increase your odds of success.
    • With research, you discover that you need to ultimately have a long run of 20 miles every other week to have a good chance of finishing a marathon. You also know that you need to work up to a weekly mileage of at least 40 miles per week. Armed with this knowledge, you can create a plan.
    • You know that you need to lose 20 pounds, so a diet of some sort might be in order.
    • You also believe that you need to learn more about running.

  2. Formulate a support goal. You know that you need to ultimately have a long run of 20 miles every other week, work up to 40 miles per week, and lose 20 pounds. You also need to learn more about running. These are support goals.
    • Your “systems” will be the way you choose to accomplish these support goals.
    • One way to develop your systems is to work backwards.

  3. Work backwards. Obviously, you can’t just go out and run 20 miles if you haven’t run in years. You’re also not going to lose 20 pounds in a day. Trying to run 40 miles the first week will lead to injury and a loss of motivation.
    • If you need to have a 20-mile run every other week, the week or two prior to running 20 miles, you need to run 19. Before that, 18. Keep working back until have a number you can do your first week. Build a schedule.
    • Over the next 9 months, you need to work up from just a few miles to 40 miles. Again, build a schedule.
    • Perhaps on Sunday, you will create a menu for the week and do your shopping as a way of helping to lose those 20 pounds.
    • You might also decide to read for an hour each week about running.
    • Now, your goal each week is to follow your plan. Monitor how well you’re sticking to your plan. The end goal is just the destination. The key is to focus on your systems in order to get there.

Each goal will require different systems. For example, if you’re a real estate agent and want to sell $10 million worth of real estate this year, your systems might be to:

  • Call 25 expired listings each week.
  • Send out 100 postcards each month looking for new buyers and sellers.
  • Go to three networking events each month.
  • Ask everyone you know if they’re interested in buying or selling a home.

Effective systems are doable and will guarantee success. Create systems that make it impossible to fail. Poor systems or poor compliance lead to poor results.

Set your goals and then focus on developing effective systems. If you create good systems and follow them, you’ll achieve success.

Using Annuities to Make Your Retirement Funds Last

The conundrum of retirement finances continues to vex those planning for a future with little steady income. If you draw out too small an amount each year, you’ll have lived more frugally than necessary. If you withdraw too much money, then you may exhaust your funds.

Have you considered securing your retirement future using annuities to make your funds last?

Here are a variety of annuity options that will help you extend the life of your retirement funds:

  1. Life income option. This annuity option guarantees you income for the rest of your life, regardless of how long you live! In essence, you’re guaranteed to never run out of money as long as the company issuing the annuity is in business.
    • Your income depends on your age when you start the payout phase to receive benefits, and how much you invest into the annuity. Talk with your insurance agent to receive a proposal.
    • Although you’ll have the peace of mind knowing you’ll never run out of money, keep in mind that if you die soon in the payout phase, the issuing company retains the rest of your funds, per your contract.

  2. Life option with a guaranteed term. With this annuity option, it is guaranteed that your benefits will be paid for at least a certain amount of time, such as 10 or 15 years. Your beneficiary will continue to receive funds for the remainder of the term if you should die before the term ends.

  3. Single premium immediate option. You purchase this type of annuity with a single premium payment and start the payout phase immediately. In other words, when you retire, you can withdraw part of your savings and purchase an annuity with one large payment.
    • What’s interesting about this single premium option is that if you also select the life income option at the time you paid your single premium, you can begin receiving annuity payments immediately which will continue to pay out for the rest of your life!

  4. Return of principal guarantee option. This type of annuity guarantees you or your beneficiary the return of your principal. A truly remarkable option, what this means is that regardless of how much money you paid in to your annuity over time, that principal will absolutely be paid out to either you or your beneficiary.
    • Again, you can combine this type of annuity with a life income option. Then, if you die before receiving back your entire principal, your beneficiary will be paid the balance of your principal.

  5. Joint-life option. This annuity is set up to take into account both you and your spouse’s life expectancies. Thus, the amount you’ll receive will be less than what you receive in the regular life option (see #1). However, if you die, your annuity funds would pass directly to your spouse.
    • Some annuity policies even allow for the beneficiary to continue placing money into the annuity, thus building the total amount to provide additional retirement funding later. Thus, these annuity funds will last as long as your beneficiary chooses.

  6. Term certain option. This type of annuity enables you to specify the term you want to receive funds. Maybe you want to receive your annuity spread over 15 years or even 30 years. The advantage of selecting a longer period of time or “term” to be paid is that you’re stretching your retirement dollars to last longer.
    • Another advantage of term certain annuities is that if you die early in the payment term (let’s say you die the 5th year of a 20 year payout term), your beneficiary will receive the remaining 15 years of payouts.

With some forethought and planning, you can set up an annuity to aid you in stretching your retirement dollars throughout your lifetime.

An Essential Guide to Safe Online Shopping

Online shopping is a fast and convenient way to buy almost any product you can think of. There are many advantages to shopping online, including lower prices, avoiding crowded stores, access to a wider selection of products, or simply to shop in the privacy of your own home.

However, shopping online also includes taking some risks. This activity requires you to share personal and financial information. Some online stores make no efforts to protect your information, while others are nothing more than scams in disguise.

Fortunately, you can mitigate the threats to your financial safety and still take advantage of the internet to do your shopping.

Follow these tips to feel secure while shopping online:

  1. Before you shop, ensure that your anti-virus software is up to date. Run a virus scan to make certain that there are no keyloggers or other malware lurking around in your computer, waiting for you to enter your payment information somewhere.

  2. Shop on the sites of major retailers. The safest way to shop online is to only trust major retailers and avoid lesser-known sites.
    • Double-check the URLs and security certificates of the sites you shop on to determine if you’re on an official site and not a copy designed to steal your information.
    • If you want to shop at a lesser-known retailer, take the time to do some research on this seller. How long have they been in business? What are the details of the website they’re using? Can you find reviews from other shoppers?
    • Make a list of shopping sites you trust and would order from again.

  3. Share only necessary information. A shopping website needs to know your name, address, and payment information. Asking for any additional information such as your birthday or your Social Security Number should be a red flag.
    • Do not provide more information via email if you are prompted to do so, since this is very likely a scam.

  4. Choose your safest available payment method. Some types of payments are safer than others:
    • Avoid using a debit card. Someone could quickly empty your bank account by stealing this card number.
    • Use a credit card if possible. Most credit cards have a daily limit on the amount of purchases that can be charged to the card. Plus, you can dispute a purchase you didn’t make. Check your statements regularly to ensure your card number hasn’t been stolen.
    • Gift cards are an even safer alternative. You can purchase gift cards through most major retailers. Even if someone were to steal your payment information, they could only access the funds that are on this card. Avoid buying gift cards on auction sites since scammers sometimes sell cards with no funds left.

  5. Beware of deals that could be a scam. Shopping around to find low prices is very easy but some deals are too good to be true. Use your common sense. It’s worth it to spend a little more on a purchase if you know you can trust the retailer instead of taking a risk.

  6. Print out your purchase details. Keep a confirmation of the order and receipt. Take a screenshot of your receipt page and check your email for confirmation of the order, your receipt, and information regarding shipment of your purchase.

  7. Safeguard your packages. Packages are often stolen, especially packages with the logo of a well-known online retailer. Use tracking to determine when your order will arrive and ask a trustworthy neighbor to keep an eye out for your package.
    • Consider investing in a large mailbox that can be locked if you often shop online.

  8. Act quickly if something goes awry. If you believe you’ve been scammed or that your information has been stolen, take immediate action to protect your financial accounts. Most accounts have limits on your liability if you discover and report fraud or errors quickly.

Taking advantage of the great deals you can find online is being a smart shopper! You can shop with confidence by keeping these tips in mind.

Tricks Restaurants Use to Make You Spend More

The restaurant industry is just like any other. What started out as a simple business model with only minimal competition has become far more sophisticated and competitive.

Restaurants are now doing everything they can to get a few more dollars from you before you leave their establishment.

Avoid becoming a restaurant victim!

Recognize these restaurant tactics:

  1. All-you-can-eat. While some patrons come out ahead, most restaurant customers spend more than the value they’re receiving. Restaurants are great at filling buffets with inexpensive items that fill you up, like bread and salad. Purchasing and preparing food in bulk also cuts costs for the restaurant.
    • Some items you want might be unavailable on the buffet. You’ll want something to drink and you may want dessert. If you’re going for the all-you-can-eat deal, try to limit your other purchases.
    • Better yet, ask yourself if it would be less expensive to order something from the menu.

  2. Making you wait. If you’ve ever noticed, many restaurants have empty tables, but you still have to wait. The purpose is to encourage you to sit at the bar, have a few drinks, and maybe even order an appetizer. It’s easy to spend an additional $15 or more while waiting for a table.
    • Set a budget before you go into the restaurant and you’ll be less likely to fall for this trick.

  3. Specials. If you’ve ever visited the same restaurant on a regular basis, you might have noticed an item on “special” that costs more than the normal price. Specials are often used to promote high-profit items or to push food that’s about to expire.
    • Let common sense be your guide and avoid falling prey to specials. Ignore the word “special” and ask yourself if you would order it otherwise.

  4. Watch out for salty snacks. Have you ever noticed how bars offer free pretzels, chips, popcorn, or peanuts? Those cheap, salty snacks will keep you drinking, which results in big profits for the restaurant. The return on a keg of beer is commonly over 300%, which is definitely worth the cost of some cheap, stale pretzels.
    • Stay away from the salty snacks and drink water. Even though soft drinks sometimes come with free refills, the first glass can be expensive.
    • It’s also a potential health issue. How many different hands have been in that bowl?

  5. Your server is trained to upsell you at every opportunity. Whether it’s an appetizer, salad, dessert, or extra cheese, you’ll be offered the chance to spend more money. Servers are happy to do it, especially considering that they’re looking for a bigger tip.
    • Again, have a budget and stick to it. Appetizers are usually unnecessary. Also, most restaurants provide large enough portions that you can pass on dessert.

Restaurants are like any other business. They want to make as much money as possible. While dining out can be a good time, it’s important to be financially responsible. Stick with your dining budget and avoid spending more than planned. Your waistline will thank you, too!

Top 4 Types of Insurance You May Need (And 3 You Don’t)

While insurance can seem like a waste of money, there are certain types of insurance that are important. It’s rare that you actually get any benefit from making those monthly insurance payments. After all, how many times has your house been struck by an earthquake or a catastrophic fire? It just doesn’t happen very often, but sometimes it does.

On the other hand, there are several types of policies that don’t make a lot of sense for most of us.

Insurance you might want to consider purchasing:

  1. Homeowner’s or Renter’s Insurance. If you own a house, your investment in your home and possessions is worth protecting. If you have a mortgage, you’re probably legally obligated to carry insurance. Renter’s insurance is very inexpensive since it only covers your belongings and not the building itself. That’s your landlord’s responsibility.
    • If you have automobile insurance, your insurance company will often offer homeowner’s or renter’s insurance at a discount. It’s worth asking about.

  2. Life Insurance. Think about carrying a life insurance policy if anyone else is dependent on your income. Even if you don’t have a family of your own, it would be considerate to have enough insurance to cover your funeral costs.
    • Most employers offer some sort of inexpensive life insurance.

  3. Health Insurance. It’s nice to be able to see a doctor any time you’re sick or injured. Health insurance is expensive, unless you have a very generous employer. Health insurance, though, is a definite necessity to cover the expenses of a major medical emergency. Most of us cannot afford the huge bills from hospitals or prolonged medical treatment.
    • The most advantageous policy will depend upon your current health and age. There are many options to match your budget and needs.

  4. Disability Insurance. Will you have any income if you’re unable to work? It’s possible to receive social security payments, but that can take months and it certainly won’t cover the rent, mortgage, or other bills.
    • Disability insurance restores a percentage of your income, typically 50-80%, depending on the policy. Most policies will pay as long as you’re unable to work, up to age 65. Others are designed to pay for 5 or 10 years, regardless of age.
    • As long as you have disability insurance, your financial situation doesn’t have to change dramatically if you’re unable to work.

Carrying all these insurance policies can be expensive. You may be able to offset some of the cost by avoiding other types of insurance you’re unlikely to need.

Types of policies you might want to consider avoiding:

  1. Credit Insurance. This is designed to pay your credit card bills upon your death or disability. It may pay all of your balances or a portion of them. This insurance is expensive and often unnecessary.
    • If you have life insurance and disability insurance, you’ll be fine. Credit card balances are unsecured debt anyway. That’s the risk the credit card companies take.

  2. Pet Insurance. Most experts suggest setting aside a few hundred dollars each year for pet care. Careful examination of several policies shows that few pet insurance policies will pay out more than the cost of the premiums.

  3. Child Life Insurance. The whole point of life insurance is to provide for dependents. Your children are unlikely to have any. Put the funds toward a college savings plan instead. If anything unexpected happens, you’ll still have money available.

There are a few other policies that rarely make sense: flight insurance, ID-theft insurance, and dread-disease insurance are just a few.

Insurance is a necessary part of a secure financial situation. It may seem like a regular waste of money since you may never see a payout, but that’s not true. Insurance is a cost-effective means of hedging risk. If you ever need it, you’ll be glad you have it.

Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Do You Really Need Long-Term Care Insurance?

One of the largest medical costs you’re likely to incur in your lifetime is long-term care. This means that someone has to live with you or that you require round-the-clock care. This type of care is very expensive.

For care outside of the home, a private room in a nursing home can cost over $75,000 a year. Long-term care insurance, while not cheap, can reduce that burden.

As with everything else, this type of insurance has its benefits and drawbacks. Have you considered long-term care insurance in your retirement planning? Increasing numbers of insurance companies are beginning to offer this product with a wide range of options, so you have many choices.

The biggest criticism of these policies has been their cost. However, this insurance can save you a tremendous amount of money in medical expenses.

When looking for a policy you’ll have several choices:

  1. Daily benefit amount. This is the maximum amount the policy will pay per day for care. You can typically choose from $50/day to $500/day. Policies often specify a maximum monthly amount instead. This is nice because you can then opt to receive more care on some days and less on others.

  2. Different amounts in different settings. Some policies will let you choose the different benefit amounts for different settings. Maybe you feel comfortable with $100/day at home but would rather have $150/day in a long-term care facility.

  3. Maximum Lifetime Benefit. This is the maximum the policy will pay out over your lifetime. There are some policies with unlimited total benefits.

  4. Comprehensive or facility care. Some insurance only covers care that you receive in a long-term care facility. Other policies are considered to be “comprehensive” and allow for a wider range of services. Most insurance sold today is comprehensive, but be sure to check before you sign on the dotted line.
    • Facility care policies are still available for those who feel confident that their family and friends are willing and able to care for them at home.

  5. Additional benefits: As with other types of insurance, there are many other options or “riders” that can be added to the basic coverage.
    • Inflation Protection is a popular option. If you’re unlikely to need to care until far in the future, this is worth looking into. How much are health care costs going to rise in the next 25 years? Likely a lot. There are many types of Inflation Protection, so be sure of what you’re actually getting.
Here are some additional costs that long-term care insurance may or may not cover. Do your research!
  • Modification of your home. This would include augmentations like ramps and grab bars.
  • Transportation to doctor’s appointments.
  • Training a relative or a friend to provide personal care properly.
  • In-home medical equipment.

Some policies will even pay your friends or family members to provide care to you. These payouts tend to be rather small and may only cover the cost that the care provider actually incurs. While most policies will not provide payment under these circumstances, some offer cash payment for each day you’re in the care of a non-medical professional.

Long-term care insurance is something every person should seriously consider. The cost of the policy can be high, but the cost of not having a policy can be catastrophic. Even a 65 year-old millionaire can run out of money in a hurry should he require long-term care.

These policies tend to have more options and exceptions than other types of insurance, so be sure to really do your research or sit down with an insurance agent that you trust. However you go about your investigation, it’s never too late to start looking into long-term care insurance.

Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Term VS. Whole Life Insurance

Q: We have been unable to make a decision between term and whole life insurance. What are the differences? What criteria should we use to make a decision?

A: If you ask the insurance companies, nearly all will suggest that whole life insurance is the way to go. Considering they are the ones selling the policies, you should wonder whether their advice is in your best interest. The product insurance companies wish to sell is the one that makes them the most money.

However, the one that makes the best sense for you depends on your needs.

Whole life insurance develops a residual or cash value. This money can be utilized for nearly any purpose at any time. Whole life insurance is also intended to last until death. There will be payout eventually, assuming the premiums are paid.

Term insurance only covers the individual during the period of the term. The insurance company is betting that death will not occur during this time.

Consider these differences between whole and term life insurance:

  1. Term life insurance is considerably less expensive. Term life insurance is only in effect for a limited period of time, the term. The fact that whole life also has a cash value contributes to the cost.
    • Many experts suggest purchasing term insurance and investing the difference. If you live past the duration of the term and your investments grow considerably, this is the best possible scenario.

  2. It really depends on your time horizon. This is usually the most important criteria when choosing life insurance.
    • Do you need insurance for 10 years or less? Term life is nearly always the best solution.
    • 10-20 years is really a toss-up. There are calculators available online to help you make the best decision.
    • Do you need the insurance for longer than 20 years? Whole life is usually the better solution long-term.

  3. Whole life can serve as an estate planning tool. This type of policy is commonly used by the wealthy to minimize estate taxes. The proceeds of an insurance policy go to the beneficiary tax-free.

Take the time to make the best decision for your family and financial situation. There are many reputable insurance salespeople and providers. Ask for references and get the professional assistance you need.

Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

5 Upgrades Your Renters Want to See

As a property owner, you must protect your income investment by attracting and retaining quality long-term tenants. To accomplish this, it’s important to ensure that the property is updated with all, or at least some, of the amenities renters desire to have in their homes.

In renovating, focus on these most coveted home features that’ll help you attract and retain quality renters:

  1. Wood Flooring. If you have quality wood flooring in your rental property, you’re already ahead of the game simply because wood floors make such a big impact.
    • Of course, authentic wood flooring would be the ideal choice. This can cost between $3.00 per sq. ft. for maple flooring up to $8.50 per sq. ft. for Brazilian wood.
    • Laminate plank flooring gives the same look for a fraction of the cost. It can cost as little as $0.89 per sq. ft. from flooring outlets such as or

  2. Updated kitchen and bathroom. Every room in the house is important, but an updated kitchen and bathroom will make renters go gaga over your unit! Indulge in a tiled backsplash, and updated countertops and cabinets and you’re sure to wow prospective renters.
    • A tiled backsplash can cost anywhere from $250 to over $1,000 depending on the type of tile you choose. For an inexpensive fix, choose white subway tile – a tried and true favorite amongst renters. Or if your budget allows, spring for a mosaic glass tile backsplash.
    • Placing granite in a rental may be a waste. Unless you’re charging above market rent, you’re unlikely to make your money back in a timely fashion. However, you can give your renters the feel of granite by using a granite countertop paint kit or laminate from Lowes.

  3. Spring for molding. Molding can make any home seem luxurious and finely detailed. And while molding can cost quite a bit of money, if you’re willing to install the molding yourself you’ll be able to save quite a bit.
    • When in doubt, always choose crown molding. Other popular molding options are wainscoting and chair rail. If possible, also add molding to your doorways and over windows to create a cohesive look.
    • If you’re on a tight budget, opt for faux crown molding. The material is often plastic or faux wood, but the effect is still much the same. Chances are your renters aren’t going to climb onto a ladder just to touch the crown molding.

  4. Spacious Closets. In terms of storage, renters are no different than homebuyers – they always need more storage space. If you can, move a wall back a few feet to make a walk-in closet in the bedroom. Or, at the very least, install a shelving system in the bedroom closets in order to make the closet space clearly defined and useable.
    • You can create your own closet system by simply installing a double-up adjustable closet rod (creates an adjustable 2nd rod) for about $10. Installing several shelves and a shoe rack will also do wonders for storage space.
    • All in all, this project should cost you less than $100 and the response you’ll receive from renters will be worth the minor investment.

  5. Get rid of the brass. Brass finishes scream “80s’ and unattended” to renters. It shows that the property has not been brought into the modern times, and therefore not worth paying premium rent to live in.
    • Replace brass doorknockers, doorknobs, lighting fixtures, and cabinet handles/knobs with pewter or brushed nickel finishes. It’s such a small update but it makes a big difference in how the unit is perceived by prospective tenants.

Just one or two of the updates mentioned above will immediately increase the aesthetic appeal of your rental property. However, when all of the updates are implemented together, the results are astronomical: not only will you increase your appeal to renters, but your property value will increase as well.

Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Common Insurance Buying Mistakes

Unexpected losses can put the best-laid financial plans in turmoil. Insurance coverage is necessary to protect against unexpected costs, property loss, and disability. There are no universal answers to the question of how much insurance is enough. Situations vary.

A single 22-year old, unmarried, in perfect health, without dependents has different needs than a 35-year old working mother of four. But both certainly need insurance coverage.

Some types of insurance are expensive, but that doesn’t mean they’re unnecessary. It’s important to determine your needs before comparing policies.

Consider these insurance buying mistakes:

  1. Choosing deductibles that are too low. By doubling your deductible, you could cut your monthly premium by a third. Save the extra money in your savings account. If you do have a claim, you’ll have the extra available to cover the higher deductible. If you don’t have a claim, it’s money in your pocket.
    • This applies to many types of insurance coverage. Compare deductibles and premiums. Do the math and make an informed decision.

  2. Opting for COBRA. The government has given you the right to continue with your employer’s health coverage for up to 18 months after leaving your job. But you’re required to pay 102% of the premium.
    • You can find a better deal on your own. Shop around and find a cost-effective medical plan. Employer-sponsored plans are overkill for many.

  3. Only carrying enough homeowner’s insurance to cover the market value. This is particularly true if you live in an older, larger home. It might cost far more to rebuild your home than it’s worth on the open market. Ensure that you’re covered for the rebuilding cost of your home.

  4. Buying life insurance when you don’t have dependents. It’s challenging to think of a reason for carrying life insurance when you’re single and dependent-free. Life insurance isn’t necessary for everyone. Avoid paying for policies that you don’t even need.

  5. Buying life insurance coverage for your children. Unless you’re financially dependent on your children, it doesn’t make sense to insure them. Life insurance is to financially protect the people that are left behind. If you’re children aren’t contributing financially, avoid insuring them.

  6. Failing to review a company’s complaints. It’s not all about the premium. Saving a few dollars each month might not be worth the hassle when it comes time to make a claim. See how other insurance customers rate their experiences. Paying a couple of dollars more each month might be worth it.

  7. Failing to review all the options each year. It’s common to stick with an insurer for decades. Avoid letting the past determine the future. Review all of your insurance policies each year. You’re bound to find at least one better option.

  8. Only shopping by premium cost. The monthly premium is often the only factor considered by those searching for a policy. But what are you actually getting for that premium? Remember to review the deductible and all the benefits the policy provides.
    • Avoid paying for features you don’t need.

  9. Failing to buy disability insurance. You’re at least 5 times more likely to be disabled than to die, regardless of your age. How will you pay your bills and care for your family if you’re unable to work? Disability insurance can be expensive, but it’s one of the most important policies to carry.

Avoiding mistakes is an effective way to ensure success. Insurance can be expensive, but shopping around can make the necessary coverage more affordable. Determine your needs and purchase insurance intelligently.

Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.