Salespeople will try to sell it to you anyway, but Life insurance benefits are just meant to support family members when one of the breadwinners dies. That’s why if you don’t support anybody else financially, you don’t NEED this coverage. You may want to start a policy for the future, because the premiums are cheaper when you’re younger and healthier, but don’t let anybody tell you you need it. The one exception is if you are getting tested for a dangerous health condition like the BRCA 2 breast cancer gene. Unlike health insurers, life insurers ARE allowed to raise your rate or deny you coverage based on pre-existing conditions, so in order to qualify for a policy, you should get life insurance before you’re tested. You get to keep that policy if you test positive. You can drop it if you test negative. Make sense?
When you purchase car insurance, beware of a sleazy tactic called “sliding.” That’s when an insurance agent slides extra coverage into your policy that you didn’t request. Roadside assistance, rental car coverage –things like that. The agent may claim the coverage is free or try to sneak it in. Often the coverage only costs a few bucks a year, but it adds up and the agent pockets more commission. Truly bold agents have been known to tell customers the extra coverage is required by law. Here’s a great and little known resource for all insurance questions: Check with your state insurance commissioner to see what kinds of coverage really ARE required. And if you have a complaint about any type of insurance, you can file a complaint with your state insurance commissioner and they will dole out justice pretty fast and furious I have found.
It can be tempting to skim —or skip— the pages and pages of closing paperwork they present you with when you settle on a new home. But that could be an expensive mistake! Here’s one sleazy practice to look out for, especially if yours is a subprime loan: Predatory lenders sometimes add expensive homeowner’s insurance to your mortgage even though you already have insurance of your own. No doubt they are getting some sort of kickback. It’s TRUE that your mortgage lender can force you to GET homeowner’s insurance to protect their investment in your home, but they don’t have the right to make you get it from THEIR pet company. Buyer beware!
Let’s talk about the dangers of hiring unlicensed contractors. First of all, in most states, by working without a license, they are breaking the law. But did you know that in those same states, by hiring an unlicensed contractor YOU are breaking the law too? Yes, you can actually be arrested for hiring an unlicensed contractor. Another legal risk: an unlicensed contractor who gets hurt on your property could sue you –and win. These are the extremes. But even the average experience with an unlicensed contractor can be devastating. Most consumers who have contacted me for help over the years have complained that their unlicensed contractor did shoddy work. Others reported that the unlicensed contractor they hired made off with their money and did no work at all! Bottom line: it’s not worth the risk.
If you choose a managed care plan like an HMO or PPO for your healthcare needs, beware of something called “balance billing.” There are a couple different variations. Many managed care plans negotiate discounted prices with their member doctors. Some doctors then turn around and try to bill the patient to make up the difference. They try to bill you for the BALANCE. Balance billing also happens when a managed care health plan goes bankrupt and doesn’t pay at all. In that case, the doctor may try to bill you for the entire amount. Balance billing is actually illegal in many states. If not, it’s usually contractually prohibited. Bottom line: As long as you see a plan doctor for covered services, a co-payment should be your only responsibility.
I used to host a You Tube show called “Free For All” about cool, quality goods and services you could get for free. My favorite, by far, was the Godiva chocolate freebie, so I’d like to share it with you here. Just join Godiva’s rewards club and you will get a special birthday treat, free shipping, invitations to chocolate tastings, AND a free chocolate truffle every month. Just stop into a Godiva store to pick it up. Wow, I sound like a commercial, but really I’m more of a chocaholic and just thought this was cool. I will link you to the Godiva Rewards program from EasyMoneyShow.com/67.
LINK: Join Godiva’s membership club, for all sorts of freebies here: www.godiva.com/get-chocolate-rewards
Last week I told you how applying for lots of credit cards at once can hurt your score. This week, what to do if you already HAVE lots of credit card accounts. The answer? Leave them be. ESPECIALLY if you are about to apply for a loan, particularly a mortgage. Reason being, one factor in your credit score is the ratio of credit you have been approved for versus the credit you have used. You want to have as much credit as possible and use as little as possible. It’s especially bad to close longstanding accounts, since “length of credit history” makes up 15 percent of your score, the third biggest chunk. Of course, if you are paying annual fees to keep cards open that you don’t use, you will want to close them at some point. What to do? Wait until a time when you are not about to apply for a loan, so that when your score goes down a few points, it will not hurt you.
Bankers grow suspicious if you suddenly apply for multiple credit cards. They think, Hmmm, does this guy have a gambling problem? Is this woman trying to finance an independent film? The FICO scoring model takes this into account and dings your score several points if you apply for a slew of cards at once. AND, by the way, applying for lots of credit cards at one time I can almost guarantee you that you won’t be approved for ANY of them. Why? See banker’s fears above. This happened to me once years ago in my 20s when I was afraid nobody would approve me, so I applied to everybody. Instead, use online tools to research what sort of credit record different cards require and then apply for just one you are likely to qualify for. By the way, next week, in a related top tip, I’l tell you whether closing existing credit card accounts helps or hurts your score.
Every time you find yourself with a $10 bill in your wallet, don’t spend it! Instead, put it aside in a grown-up cash version of a piggy bank. That pile of $10 bills will grow and pay for something you need or want. Think about it, a lot of $20 bills pass through our hands, since that’s the main currency dispensed by ATMs. So saving those would be too much. But $10 bills? They don’t come around that often, so they’re perfect for saving and starting a nest egg. A friend of mine tried this $10 bill trick and in a year she had enough money to pay for tickets for herself and her daughter to visit Ireland where they have relatives. Which reminds me, this is a great little game to start with kids who are learning math and the value of money.
Pharmacies make an estimated 15 million medication mistakes every year and that includes filling the wrong strength of medicine and even the wrong medicine altogether. SO know the “3 S’s” of any medication you take: Size, shape and strength and double check those whenever you refill a prescription. Have a new script? Look up a picture online real quick before you swallow the first pill. And if it’s a generic, it can be made by multiple manufacturers, so be sure you’re looking at the right one.