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Daniel T. Murray Blog Page 8

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You probably need life insurance. Lots of people do.

If you have small children, a mortgage, a spouse who’s dependent on your income—or any person who would be inconvenienced financially if you were hit by a bus tomorrow, you probably should have life insurance.

Experts generally recommend buying 10 to 20 times your annual income in term life insurance, which is the most affordable variety. You make $50,000? Great. You should probably have at least $500,000 in life insurance.

Luckily, it’s not prohibitively expensive. A 40-year-old healthy nonsmoking male may be able to buy a 20-year level term $500,000 policy for as low as $350 per year, AccuQuote.com estimates. (“Level term” simply means the annual premium will stay the same for the term of the policy—in this case, 20 years.)

But there are a variety of things that could make your life insurance policy pricier, from health conditions to hobbies to lifestyle choices. Here are some of the top offenders:

1. Tobacco use. If that same healthy 40-year-old male admitted to being a smoker, his annual premium could jump to at least $1,535, according to numbers fromAccuquote.com. Stop smoking, meanwhile, and it will take one year before you can get a nonsmoker discount, but you won’t get a top-tier price until you’ve been cigarette-free for at least three years. “They want to be really sure you’re off it,” says AccuQuote founder and C.E.O. Byron Udell. That said, if you need life insurance now, go ahead and pay the higher premium—and when you’ve stopped smoking, call your insurer and see if you can lock in the lower price.

2. Your weight. Being overweight increases your odds of dying, so the more overweight you are, the more expensive your life insurance will be. Depending on the carrier, as little as 10 to 15 pounds may be enough to knock you out of the top pricing tier, Udell says.

3. Your driving record. A couple of recent tickets aren’t going to seriously raise your annual premiums, but if you have more than two moving violations in the last three years, you likely won’t be able to get the best life insurance rates. “Insurers know that each time you get a speeding ticket, you were probably speeding about 250 times before you got caught,” Udell says. “If you’re routinely violating traffic laws, there’s a much greater likelihood you’re going to die in a traffic accident.”

4. Cardiovascular disease. This includes high blood pressure and other heart issues, which can lead to early death. “Sometimes they’ll write a life insurance policy with an exclusion for heart conditions,” says LearnVest Planning Services Certified Financial Planner™ Katie Brewer. “So they’ll give you insurance, but exclude you if you die of a heart condition.” If you have high blood pressure, but it’s controlled by medication, you should have no major problems. That means you can’t show up to your insurance exam with a blood pressure of 145 over 95, Udell says. “That’s not controlled. It’s the high blood pressure itself, not the medication, that concerns them.”

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Posted 10:15 AM  View Comments


Did you know that taking 15 minutes to get married could save you at least 15% on your car insurance?

According to a report, a 20-year old married woman pays an average of 22% less for car insurance than her single counterpart. And a married 20-year-old man pays 20% less than his single friend of the same age.

Your gender and age also significantly affect how much you pay, the report found.

As people mature, gain experience and take on more responsibilities, they become safer drivers, Mike Barry, a spokesman for the Insurance Information Institute, says.

Age is the biggest factor. At age 20, a single male driver will pay 49% more than a single man who is 25. An unmarried woman will pay 39% more at age 20 than at age 25.

The lowest premiums are charged to drivers at age 60. After that, premiums start to creep up again. By the time a single man is 75, for example, he's paying 20% more than a single man at age 60.

Gender discounts are not as large, but insurers do charge women much less than men during the first years they're on the road.

A 20-year-old woman pays 19% less than a man the same age. By the time they're both 25, the gender difference drops to 4% and narrows through age 30. After that, men pay slightly lower premiums.

"Insurers price their policies to reflect the claims risk," said Barry. "They look at claims filings and arrive at conclusions as to who is likely to file more -- and more expensive -- claims."

Shopping around can help cut costs, according to Adams.

"In addition to regularly comparing at least three quotes from different insurers, consumers should review potential discounts with their current insurer," she said. "This is even more important for younger drivers because they tend to pay the highest rates."

Students who carry a "B" average or better may qualify for discounts of up to 20%, depending on their carrier, she said. They can also reduce their premiums by raising the deductible they pay.

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Posted 10:15 AM  View Comments


What makes something worthwhile? When it comes to your home, it’s all about long-term benefits. These four actions will save you tons of time and money down the road!

Plant Trees. If you have a yard that can handle it, planting a few trees on your property will go a long way. Not only will trees provide comfortable shade and reduce your cooling bills during the summer, they'll also increase your property value by 7 to 15 percent over time. Win-win!

Keep Track of the Past. Ten years from now, are you going to remember the exact date you had your roof repaired? Probably not! Routine maintenance and upkeep is a lot easier when you have detailed records of everything that’s happened to your home, so record as you go.

Inspect “Hidden” Areas. How is the insulation in your attic looking these days? What about the pipes in your basement? These unseen areas of your house can fall into disrepair if you don’t check them out every once in a while! For a more detailed list of important spots, read: Inspect This! The BrightNest Home Maintenance Roundup.

Be Proactive. It’s easy to ignore small problems around the house. But if you get into the habit of ignoring issues like squeaky doors, peeling wallpaper and dripping faucets, you no longer have a "small problem." You have a Frankenstein monster of minor complications. The solution is easy: if something's broken, simplify your life by taking care of it right away.

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Posted 10:11 AM  View Comments


You buy insurance to protect your home and car from damage, but when an accident happens, is it in your best interest to file a claim? It seems like the answer should be a resounding "yes," but a middling "maybe" is a far better response. Why the ambiguity? The decision to file a claim can have a major impact on your insurance rates, even if the accident was minor or was not your fault.

The Claim Game
Regardless of the scope of the accident or who was at fault, the number of insurance claims you file has a direct impact on your rates. The greater the number of claims filed, the greater the likelihood of a rate hike. File too many claims and the insurance company may not renew your policy. Similarly, if the claim is being filed based on damage that you caused, your rates will almost surely rise.

On the other hand, if you aren't at fault, your rates may or may not remain unchanged. Getting hit from behind when your car is parked or having siding blow off of your house during a storm are clearly not your fault and may not result in rate hikes, but this isn't always the case. Mitigating circumstances, such as the number of previous claims you have filed, the number of speeding tickets you have received, the frequency of natural disasters in your area (earthquakes, hurricanes, floods) and even a low credit rating can all cause your rates to go up even if the latest claim was made for damage that you did not cause.

Most/Least Damaging Claims
When it comes to rate hikes, not all claims are created equal. Dog bites, slip-and-fall personal injury claims, water damage and mold are red flag items to insurers. These items tend to have a negative impact on your rates and on your insurer's willingness to continue providing coverage.

On the other hand, the much dreaded speeding ticket may not cause a rate hike at all. Many companies forgive the first ticket. The same goes for a minor automobile accident or a small claim against your homeowner's insurance policy.

Rate Hikes
Filing a claim often results in a rate hike that could be in the 20-40% range. The increased rates stay in effect for years, although the size and longevity of the hike can vary widely from insurer to insurer. At some firms the increase lasts just two years, while at others it may last for five. If your insurer drops your coverage, you may be forced to purchase high-risk insurance, which can come with extraordinarily expensive premiums.

To File or Not to File?
There are no hard-and-fast rules around rate hikes. What one company forgives, another won't forget. Because any claim at all may pose a risk to your rates, understanding your policy is the first step toward protecting your wallet. If you know that your first accident is forgiven or that a previously filed claim won't count against you after a certain number of years, the decision of whether or not to file a claim can be made with advance knowledge of the impact it will or won't have on your rates. Talking to your agent about the insurance company's policies long before you need to file a claim is also important. Some agents are obligated to report you to the company if you even discuss a potential claim and choose not to file. For this reason, you also don't want to wait until you need to file a claim to inquire about your insurer's policy regarding consultation with your agent.

Regardless of your situation, minimizing the number of claims you file is the key to protecting your insurance rates from a substantial increase. A good rule to follow is to only file a claim in the event of catastrophic loss. If your car gets a dent on the bumper or a few shingles blow off of the roof on your house, you may be better off if you take care of the expense on your own.

If you car is totaled in an accident or the entire roof of your house caves in, filing a claim becomes a much more economically feasible exercise. Just keep in mind that even though you have coverage and have paid your premiums on time for years, your insurance company may decline to renew your coverage when your policy expires.

A Strategy to Save on the Cost of Your Policy
Understanding the logic behind filing a claim only in the event of a large loss also provides insight into how to save a few dollars on your insurance premiums. Because you aren't going to file a claim in the event of a minor loss, having a low deductible on your policy makes no financial sense. If you already plan to pay for the first $500 or $1,000 dollars worth of damage out of your own pocket, set aside that amount in an interest-bearing savings account and raise your insurance deductible to match the number. Increasing your deductible will result in lower insurance rates, and the cash in the bank will cover your out-of-pocket costs in the event of an accident.

The Bottom Line
When you pay your insurance premiums regularly and on time, it may seem like you should be able to file as many legitimate claims as you want. Unfortunately, the industry doesn't work this way. Filing too many claims or certain kinds of claims can have an adverse effect on your insurance rates or even get your policy canceled altogether after the claim has been paid. To avoid unfair rate hikes and unpleasant financial surprises, do your homework and learn about your particular insurer's policies and industry practices long before you ever need to file a claim.

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Posted 1:21 PM  View Comments


In the very competitive home and auto insurance marketplace in Illinois, we feel the value of the Independent Insurance Agent cannot be over stated. The Independent Insurance Agent has the ability to consistantly market or shop your home and auto insurance with multiple insurance companies. The advantage is a result of varying discounts from insurance company to insurance company. Another main component of insurance pricing is the use of credit scoring. As a Independent Insurance Agent, most insurance carriers use their own individual credit scoring model, so obtaining pricing from multiple insurance carriers increases your chance of obtainin the lowest rate possible.
Posted 4:38 PM  View Comments


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Daniel T. Murray, Inc.
19150 Wolf Road  Mokena, IL  60448
708.479.2266
708.404.0997

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dan@danmurrayinsurance.com


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