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Deals That Are Nifty by Sister Thrifty: Insurance

Deals That Are Nifty by Sister Thrifty

Great Steals and Deals around town and online to save you the big bucks and help you keep more of your hard-earned money!

Saturday, October 15, 2005

Insurance

Hi everyone!
Are you sad that you just recently discovered Sister Thrifty and that you've missed all the great consumer tips and shopping advice from past newsletters? Now you don't have to be sad anymore...of course, who am I to take away your perfectly good reason to eat chocolate and be depressed? Now you can read all of the newsletters from 2005 at http://sisterthrifty.blogspot.com You can also access it through the link
at www.sisterthrifty.com Woohoo! I'll be adding the newsletters from the
past two years soon. Some of the newsletters contain timely steals and deals that are no longer any good, but most of them contain general consumer tips that you don't want to miss!
Speaking of timeliness and missing something.....don't forget to set your clocks back one hour on Sunday, October 30th! They say you're character is revealed by how you choose to spend that extra one hour......uh....hmmm....I'm most likely going to be sleeping. What does that say about me?.....it says I'm exhausted!
To save 20% at www.Joanne.com use promotion code OCTPER520 in your online shopping basket. It's good until next Wednesday.
If you’d been asked what a credit score was five years ago, would you have known? Ten years ago, did you know what a credit report was? The credit reporting industry used to keep both of these a secret from us. The dossier collecting business is highly profitable in terms of selling your information, and it helped lenders decide whether to give you a loan without your knowledge. But there was a lot of discrimination, and eventually both of these became public. Our three-digit credit score went public when the owner of eloan.com decided to publicize our numbers for free. Banks were furious of course, but it led the way for more access. Tons of companies now sell us our credit scores and we can get our credit reports for free. The end result is that almost 90 percent of people know that paying bills on time affects your score the most. Three-quarters of people know that maxing out your credit score also plays into your score. Your income doesn’t affect your score at all. So, letting people know things really benefits the public. Thank goodness someone had the foresight to open this system up so people could improve their scores and ratings.
There is a lot of confusion these days over what types of insurance you really need. There are only three. But first let’s discuss the kinds of insurance you don’t need. One kind of insurance you should never buy is credit life insurance, also known as "croak and choke." Mortgage life insurance is the technical term. The salespeople pretend it’s a great idea, claiming that if you die your debts are paid off. Basically, with this insurance, the bank gets paid off and gets your money instead of your heirs.
In addition, the premiums are about 10 times as high as traditional types of life insurance. Mortgage life’s cousin is credit life insurance, and you are pushed to get this when you buy a car or other big purchase. These are sold as protection for you, but really they provide protection for the bank. So, it’s essentially like putting lipstick on a pig. Maybe it looks better, but it’s still a pig. Another popular item is the variable annuity. It’s almost never a good idea to buy one of these because there are monstrous commissions. What about cancer insurance? If you get cancer, you need health insurance and term life insurance, and that’s it. And, if you can’t work and need replacement of your income, you want disability insurance. Those are the only three you need. All the others you can chuck. What about your car?
You don’t need rental insurance when renting a car, first of all. If you get in an accident, you’ll owe regardless of whether you have insurance. And usually your credit cards or auto insurance company has some type of temporary rental car coverage. PEC or "personal effects coverage," which covers things stolen out of your rental car, is not necessary either.
Have you heard about the prescription drug benefit for senior citizens that is launching next year? It’s going to be provided by private companies to Medicare-eligible seniors, and they’ll have up to 20 choices for programs depending on where they live. The plans will have a monthly premium and it’s important to get in on the early side or there are financial penalties for signing up later. Enrollment starts Nov. 15 and the program goes into effect Jan. 1, 2006. It can get quite confusing, so it’s important to go over the terms with your parents. Seniors will pay a monthly premium that will vary from company to company. For every prescription a senior buys, the first $250 comes out of pocket. After that, Medicare covers 75 percent of the next $2,000 in drug purchases. The program pretty much stops there. If you go beyond $3,000 in drug purchases, it comes out of the senior’s pocket. And, after $5,000, the government gets involved again. So, you and your parents need to read up on this. The one thing you don’t want to do is to make no decision at all. Now, there is one group of people that should not participate in a Medicare benefit plan. The small number of people who are offered a good plan as a retiree should not get involved. It’s a potential break from the exorbitant prescription drug costs out there, but you need to do your homework.
Alrighty, that should do it for today! Be good out there and save those pennies!
CENTSerely,
Sister Thrifty

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