5 Reasons You May Need Life Insurance

1. Your parents co-signed your student loan

You wanted to go to college, but you didn't have the money and your parents didn't either. After all, who has $30,000+ laying around to spend on tuition, room, board, books and fun? You took out a private student loan, and your parents co-signed. They may have to foot the bill if you die prematurely. {some financial institutions may forgive the loan, but don't count on it, buy life insurance to protect your parents}

2. You are married

You are living the American Dream. You graduated college, found your dream job and got married. You are living with the one you love and life keeps getting better. When you get married, mine and yours is now ours, including financial obligations. If you were to die tomorrow, would your spouse be able to pay off debts {car loans, student loans, mortgage, etc} with his/her income? If there are no debts, would your spouse be able to live on one income? Buying life insurance enables your spouse to maintain their standard of living and not stress about making the next rent or mortgage payment and shows your love for him/her.

3. You have children

Enough said. You have a lot of responsibility raising kids. If you or your spouse dies, who will take care of the kids? Who will pay for their basic needs? Will they be able to go to college? Buy life insurance to ensure your children are cared for.

4. You stay home with kids

Some people don't realize the value of a stay-at-home parent. It's a luxury. A stay-at-home parent is a teacher, a chef, a janitor, a chauffeur, an events coordinator, an assistant, a facilities manager, a psychologist. A stay-at-home parent wears so many hats. If you or your spouse stays at home. How much would it cost to replace them? It wouldn't be easy.

Here's a fun infograph depicting how much a stay-at-home mom is worth, found here. 

5. You own a business

Do you have a plan in place when you die? Who will take over your business? Can your partner(s) buy out your portion of the business? Can your employee hire someone to fill your role as CEO? You can purchase life insurance to benefit your partners {they can buy you out} or your employees {they can hire someone to run the company}. If you started a business, it's important to plan how it continues, especially if you pass away prematurely.

Those are 5 reasons to buy life insurance, however it's not limited to those. There are many other reasons to buy life insurance. The important thing is to plan & purchase. That will save your loved ones from stress in a challenging time. Our agency offers life insurance; we represent 20+ companies. If you want a quote, email me: sara@riskadvice.com. It only takes a few minutes, but it could save you or your spouse a lifetime of headaches.

Happy Fall!

Third quarter has ended and the fourth quarter of the year is upon us.
The onset & preparation of Fall, Halloween, Thanksgiving, Christmas is upon us and the New Year is around the corner.

Do you have any fun fall traditions? Pumpkin picking, apple picking, holiday parties, corn maze tours, visiting the city of Salem, Thanksgiving day run to burn the calories, Sunday afternoon football parties, Christmas concerts, the list could go on?

Many families spend the fall enjoying the cooler weather, the beauty of the fall foliage, and enjoying the warm days before the winter arrives. Families may also spend afternoons raking leaves, pulling out the Christmas lights and decorating their front porch for the season.

In preparation for the fall season, now is the time for an insurance check-up .
Here are a few thoughts:

1) When was the last time you reviewed your homeowner insurance policy?
If it's been over a year, it's a good idea to pull out your policy and review it. Better yet, call your local agent and ask for a policy review. Do you need your golf clubs scheduled on the policy? What do you have for liability coverage? Did you update your electrical or build an addition?

2) While you're reviewing your homeowner insurance, pull out your auto policy. Review it too.
Are you getting a low mileage discount (if you drive less than 10,000 miles per year, you may be eligible for a low mileage discount)? Are you getting a discount for having a car alarm? What is your liability? How much property damage do you have? {our recommendation is at least $100K, but you can pay an additional $5-$20/year for $250K of property damage coverage} Would you need a rental car if you were in an accident? If not, remove the coverage and save yourself $60 annually. Is your insurance payment set up on EFT? If not, doing so could save you $60/year. Is your home & auto policy with the same company? If it is, you are probably eligible for a discount.

Go ahead and review your insurance, and if you want an honest opinion, please contact me at sara@riskadvice.com. I'm happy to share my insurance knowledge.

And for those who visit the orchards. Here's a picture I snapped at Russell Orchards in Ipswich, MA.

Happy Fall

Great Enterprise from a Small Opportunity

On our facebook page today we posted the quote: "Small opportunities are often the beginning of great enterprises." This was said by Demosthenes, an excellent Greek public speaker (384 BC-322 BC). He made a living as a lawyer, but he also wrote a few books and became increasingly involved in politics.

As you read the quote, think about the USA. Many people from all over the world, come to America. They come for religious freedom, they come for equal rights, they come to live and achieve the "American dream". As a result of the American dream, many people who came to the United States with next to nothing to their name, started small and wound up big.

In the late 19th century and early 20th century, many Swedes immigrated to the United States in search of inexpensive farmland, high paying factory jobs and the desire to get away from the state church of Sweden. One such person in search of opportunity was John W Nordstrom. He came to the United States from Sweden at the age of 16 in the late 1800s. He stepped onto US soil with $5 to his name and worked his way across the United States until he ended up with $13,000. At that point, he was ready to start a business. He and his friend Carl opened a shoe store called Wallin & Nordstrom. The store is known today as Nordstrom and is a top fashion retailer. They have been on the "100 Best Companies to Work For" list for quite a few years and they are currently on the Fortune 500 list. They are a publicly traded company under ticker symbol JWN (after the founder) and the Nordstrom family still has 20% ownership in the company.

Get a small opportunity, it may be the beginning of a great enterprise.

#MondayMotivation

Can Raising Your Insurance Deductible Save You Money?

If you drive a car in Massachusetts, you are required to have insurance on your car. If you own a home and have a mortgage, you are required to have insurance on your home. To many people, insurance is a "necessary evil", if you ask me, it is a necessity we should be thankful for. Many people around the world do not have the option to purchase insurance or cannot afford to purchase insurance, to protect their valuables. If their house burns down, they have to rebuild, without money from an insurance company.
This is starting to change with the implementation of microinsurance. In fact, a friend of mine started a wonderful company that offers insurance to people in developing countries, but more on that another day.
Back to saving you money.
Do you know you have a deductible? Do you know what a deductible is?
Taken directly from the dictionary: 

de·duct·i·ble

diˈdəktəbəl/

(in an insurance policy) a specified amount of money that the insured must pay before an insurance company will pay a claim.

Taken directly from the dictionary: 
Did you know if you submit a claim (request for payment) to an insurance company, and you are approved for said claim, they will send you a check minus the deductible?

Get your homeowner, renter or auto policy right now. I'll wait.

You have it? Ok. Look on the "Coverage Selections Page". What is your deductible? Many people have a $500 deductible. Some people have a $250 deductible on their renter policy and they may have a $1,000 deductible on their homeowner policy.

Would you put in a claim for $750 or for $7,500? Most people would say they would rather pay $750 out of pocket and put in a claim for $7,500.

If you have a $500 deductible, call your insurance agent and ask them how much you can save by increasing your deductible to $1,000 or $2,500. You may save $100-$200/year which is $10/month - $20/month. It's worth a shot.

DriveWise and Snapshot: Dollars for Data

What if your car insurance rate was truly dependent on how well you drive? I’m not just talking about number of years without a traffic accident or speeding violation, I’m talking about a comprehensive report card and a driving score that is produced after every road trip. There’s been an interesting trend in the auto insurance industry of late as companies have been examining ways to create usage-based coverage. Everyone thinks of themselves as safe drivers and with usage based rates, they’ll have the chance to prove it. Leading the way with this initiative is Allstate’s DriveWise program and Progressive’s Snapshot.

The Products

The DriveWise plugs in underneath the steering column

DriveWise is a program that provides savings based on driving patterns and also provides feedback via an online performance report. The potential for savings is significant, with 10% off the premium just for using the device and up to a 30% discount based on your Performance Rating. The Performance Rating is calculated on four main factors: low mileage, safe speed, safe hours and safe stops.

All of the following Performance Rating Factors could result in savings:

Low Mileage

• Less than 12,000 miles per year or roughly 35 miles per day

Safe Speed

• Avoiding high speeds

Safe Hours

• Weekdays between 11pm and 4am and weekends between 11pm and 5am are high risk times. If you don’t typically drive after 11 at night, your Performance Rating will increase.

Safe Stops

• Avoiding hard or extreme stops.

Recently, Progressive has launched an ad campaign promoting their Snapshot device and touting “Rate Suckers”, those bad drivers that jack up your premium. The Snapshot program seeks to separate the good from the bad and reward those that drive well. It uses a plug-in device that collects data for 30 days, viewable online, with the key areas for savings focusing on how often you slam the brakes, how many miles are driven and how often you drive between midnight and 4am. Progressive advertises savings up to 30% off the premium.

Progressive's Snapshot device

The biggest question I had about these programs was if they use the data to penalize drivers. I've been driving for only a few years and I’d like to say I’m a great driver, but maybe, perhaps, on occasion, I drive a little faster than I should. I also don’t want to have to worry about whether or not I should drive late on a Friday because my rate might go up.

There is mixed news on that front. The good news comes from Allstate, who say that the data collected in the Performance Rating cannot be used to increase your premium; worst case scenario, you simply don’t qualify for the discount. The bad news comes from Progressive, as they use this data to adjust your premium up or down depending on whether you are the “rate sucker”.

The Implications

Of course, usage-based rates come with a price; the price of privacy. In order to accurately gauge your usage, car companies will essentially be spying on you every time you drive your car. They will know whenever you drive, how fast you’re driving and where you’re going.

For some, this has alluring implications. The parents of teen drivers around the world may rejoice at the thought of knowing exactly where their children are at all times, being able to view their driving habits and then coach them when they get home. Think of conversations like: “No rolling through that stop sign at the intersection of Boardley and Farmersville! Do you know how many accidents they've had there??”. Allstate has announced that they plan on using other value added services that will come from a connected car, including products that would allow a grading system for teen driving.

Giving information in return for cash seems to be the big trend right now and it’s hardly surprising that this type of data collection is becoming popular. Stores around the world offer “store cards” that keep track of spending habits and private information in exchange for discounted prices and it appears this business method will only become more prevalent.

This screams Big Brother to some privacy advocates while for others it’s an easy way to get rewarded for low risk driving behavior and save some cash. What are your thoughts? Is it worth it to sacrifice a little privacy for discounts?

Study Finds Hands-Free Devices Still Dangerous

In prior posts, we have highlighted the dangers of distracted driving and even hosted Arbella Insurance’s Distractology 101 Driving Simulator at our Bourne office to give drivers firsthand experience with the hazards that are endemic with distracted driving. This week, we bring another installment of our Distracted Driving blog posts, this time focusing on a recent study conducted by AAA concerning hands-free devices.

The Distractology Simulator at our Bourne Office last summer

Typically, distractions are thought of as things preventing both hands from being on the wheel and both eyes from being on the road (think activities like texting and eating). The increasing implementation of hands-free and entertainment systems that allow drivers to control media by talking is designed to counteract these types of distractions with roughly 9 million of these infotainment systems in cars shipped this year and the number projecting to increase nearly 7 fold to 62 million in the next five years.

A startling study by AAA has found that using voice-to-text messaging is more distracting to drivers than using a handheld device to make a phone call. This seems to be due to the complexity and increased focus that is needed to verbally compose a text or email. Using both mobile devices and hands-free were found to result in slower reaction time and compromised brain function.

The study characterized distractions on a range of “small”, “moderate/significant” and “large”. AAA found that texting a friend verbally ranked as a “large” distraction, talking on the phone or to a passenger were “moderate/significant” distractions and listening to music or an audio book were “small” distractions.

Automakers have stated that if the decision were made to start limiting infotainment systems, drivers would shortly go back to using handheld devices which would be both mentally and physically distracting. These findings led the Chairman of the National Transportation Safety Board Deborah Hersman to call for a ban of all phone conversations behind the wheel.

The study was conducted using "good" drivers in their 20’s and 30’s and involved a lab test, driving simulator and driving through a residential area. Researchers were able to measure reaction time and brainwave activity via caps attached to the head of the driver. A Subaru Outback was equipped with computers and a researcher in the back that measured the responses of the drivers. The vehicle used a phone with a hands-free device rather than an in-vehicle system and in order to eliminate any potential faults with the voice recognition software, the person receiving the text messages converted them manually.



Generally, I have avoided using both hand held devices and the hands-free devices in the past. First and foremost because of the mental energy it takes to focus on another task while driving but also because I know that when people drive by and see me yelling at thin air, they are either going to assume I’m crazy or singing along to a Taylor Swift song, and I’d rather not reveal that I’m a T-Swift fan.

The latest study serves to show that hands-free devices are not risk free, and when driving, its best to focus on driving...because best case scenario, people will think you sing Taylor Swift songs while you drive.

Article prepared with reference to:

Insurance Journal:

http://www.insurancejournal.com/news/national/2013/06/12/295098.htm

Great White Spotted off of Cape Cod

As the summer begins, the beaches are slowly filling with people of all ages looking forward to a relaxing day spent sun-bathing, swimming and hanging out with friends. For some, this peaceful day became a bit more stressful recently when on Sunday, June 9th an Orleans lifeguard on duty spotted a dorsal fin 150 yards off of the shoreline of Nauset Beach around 10:15am. Reportedly attached to this dorsal fin was a great white shark making its way towards Chatham. According to Orleans Harbormaster Dawson Farber, the shark is estimated to be between 12 and 13 feet long and the shape and color of the fin are indicative of a great white.

A great white shark spotted last summer off Monomoy

The sighting caused the waters to be evacuated for an hour until it was declared shark-free once again. This is not the first time a great white has been spotted on the Cape shores, nor even the first time for Nauset Beach, as just last July they had to close their beach for a few hours due to a shark sighting.


Experts say the reason for the increased shark activity is due to the ever growing seal population in the area. The seals, although a popular attraction, can pose an indirect threat as they begin moving closer to shore and inadvertently bring the sharks with them. The explosive growth is caused by increased regulations and protections for the gray seal population which successfully resulted in the regional number of seals growing from 10,000 to 300,000 in the last 50 years.

Seals basking off the coast of Chatham

So there we have it folks, the first shark of the summer. However, it hasn't seemed to deter or worry too many beach-goers. Gerry Emmert of Brewster noted that the water was too cold to swim in anyway and others have expressed more concern about riptides than sharks. The Department of Marine Fisheries has advised to simply stay smart while at the beach; avoid swimming at dusk or dawn, stay close to the shore and avoid areas where seals are known to congregate.

Out of the Ordinary Insurance

When I think of insurance, the four most basic policies come to mind: home, car, health, and life. For the average person, these might be the only policies you ever consider buying. What else could you possibly need?

There seem to be some people in this world with incredibly special assets, or at least a special sense of humor. 

Bankrate, a firm that compiles information allowing customers to compare anything from mortgage rates to CD deposit rates, published an article in June detailing the world's strangest insurance policies. It did not disappoint. 

Dutch winemaker and owner of Chateau de la Garde in France, Ilja Gort, has a very special asset indeed: his nose. Gort had his nose insured for $8 million through Lloyd's of London, a syndicate of members that insures special risks. Gort claims his nose can distinguish between millions of different scents, an impressive and invaluable skill for a winemaker and taster. Per his policy, Gort cannot participate in winter sports, boxing, or fire breathing for fear of losing his sense of smell. Even more valuable was Costa Coffee chief taster Gennario Pelliccia's tongue, valued at $14 million by Lloyd's. According to Bankrate's article, the average tongue has 10,000 taste buds thus his are valued at $1,400 apiece! 

Ilja Golt and his precious nose. He should insure 

that funky mustache too!

For professional athletes and models, insuring bod parts is a different story. Soccer superstar, David Beckham, has a $70 million dollar policy on his legs. Real Madrid insured their own soccer phenom, Cristiano Rinaldo, and his lower half for $153 million. That means if Cristiano Rinaldo were to never play again due to injury, Real Madrid would collect $153 million in lost income due to his absence. ESPN published a similar article in October of 2009, writing that Joba Chamberlain of the NY Yankees, whose income at the time was merely $432,575, had a $5 million policy on his right arm. If here were to get injured, even if he "walks outside and gets hit by a bus", in the words of his financial adviser, he would collect on his policy. Supermodel Heidi Klum's legs are insured at a cool $2.2 million.

Unfortunately for some athletes, insuring their "golden ticket" body part is very difficult. Back in 2009, it would have cost Brett Favre $22.8 million to insure his right arm for one year. At the time, he was turning forty, had torn his biceps tendon the previous year, and was making $19 million per year. Takeru Kobayashi, the competitive eater, was denied coverage on his stomach despite no preexisting conditions. Apparently, wolfing down hot dogs is not a good enough reason to insure one's stomach. 

These are only a few of the strange insurance policies is stumbled upon. Lloyd's also offers insurance for the financial burden of having twins. One Michigan couple, already with a set of twins, purchased a policy and within months had twins again. You can also purchase a policy for bodily injury as a result of falling space debris through Lloyd's. Rest assured that no matter what your needs are, there is a company out there that will have them covered!

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Uninsured/Under-insured Motorist Protection

It is estimated that 4% of Massachusetts drivers are uninsured, compared to a nationwide average of 1 in 7 drivers (14%). To put that figure into perspective, there are 4,645,705 licensed drivers in the state of Massachusetts, meaning there are approximately 186,000 uninsured drivers on the road. Uninsured and under-insured motorists represent a clear and present danger to drivers everywhere, placing the burden of medical bills and property damage on the drivers they strike. Fortunately, Massachusetts has mandated that drivers have uninsured motorist coverage. Underinsured motorist coverage is optional, but is very cost effective.

Uninsured motorist protection is Part III of compulsory insurance in a Massachusetts auto policy.  This section of an auto policy protects you from injury if a driver whose policy has unknowingly expired or who does not have auto insurance has struck you. The uninsured motorist section explicitly covers only bodily injury and not resulting property damage. Uninsured motorist also provides for hit and run accidents if the at fault driver cannot be identified. The compulsory limits for this coverage are $20,000 per person and $40,000 per accident.

Under-insured motorist protection is optional for Massachusetts drivers, but it is highly recommended that drivers purchase this additional coverage. Many motorists take the high route and purchase insurance with minimum liability limits to save money because they believe it is unlikely they will be at fault in an accident. They transfer the burden of the cost of insurance and damages to drivers who purchase adequate insurance by skimping on their coverage. A driver is considered underinsured if they inflict bodily damage on you in an accident and their liability limits do not cover the damages that result. For example, consider a driver who is hit by another and incurs $100,000 dollars in bodily injury damages. The at fault driver’s policy states that his or her bodily injury liability limit is $20,000 and the insured driver’s limit is $50,000. The underinsured driver’s policy will cover the first $20,000 in bodily injury and the insured driver’s policy will cover the difference between his or her $50,000 limit and uninsured driver limit, $30,000. The additional $50,000 can be covered by your health insurance company or can be recovered through a lawsuit and a lien on the under-insured party's future earnings, put in place by a judge. 

Uninsured motorist protection mandated by the state of Massachusetts is simply not enough. As common as accidents seem, people will purchase the bargain insurance with minimum limits to save of a few dollars because they think they will never be at fault in an accident. When this driver hits you, you might never recover the damages that result. You can purchase uninsured and under-insured motorist protection for nearly approximately $5 per month. That $5 per month is significantly less than the tens of thousands of dollars in medical bills that you can be subject to if you are not carrying this coverage and have been struck by another driver with inadequate coverage. 

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Cyber Security and Liability

            Over the last ten years, the world has undergone a significant change. The advent of the Internet and the World Wide Web has implemented a new age; the age of information. Anything you might ever want to know is at the tips of your fingers, including personal information.

                                               

Cyber security has been a hot topic for virtually any organization, no matter how large or small. The state of South Carolina suffered a considerable cyber breach in October of 2012 in which 3.6 million social security numbers and 387,000 credit and debit card numbers were compromised. Due to the breach, South Carolina was forced to pay out more than $20 million (a number that is still increasing) and provide a free credit monitoring system for all those affected.

 The incident sparked conversation around the country as states began examining how they could protect themselves from such a breach and how they could alleviate the financial blow-back. Oregon’s Chief Information Security Officer Theresa Masse has been a leading voice in the conversation, advocating for the purchase of cyber insurance. She argues that most states are self-insured, and as such, have a limited pool of money to draw on. Masse’s belief is that states should be at least partially insured through certain high risk payout aspects like credit monitoring.

Standard business liability insurance policies generally classify trade secrets and other types of intellectual property as “intangible” and as such, the property is rarely covered if stolen. Cyber-liability insurance however covers the costs incurred by the loss of intellectual property or trade secrets (first party claims) as well as covers the damages a company must pay if a customer sues for lost or compromised information (third party claims). Some cyber policies will even pay for the costs associated with breaches caused by employees including notifying all those affected and handling forensic and legal costs.

You may reason that these sorts of cyber breaches only occur in the larger companies, who have more information to be accessed, and so criminals have more to gain by targeting them. Unfortunately for small businesses everywhere, this assumption is incorrect. Nearly half of the 621 data-breaches recorded by Verizon in 2012 occurred at companies with less than 1000 employees and 193 of these occurred at businesses with less than 100 workers.

So, how can you protect yourself and your business? First and foremost, utilizing a risk manager and investing in the security infrastructure of your business will work to prevent the severity and frequency of cyber attacks. Purchasing insurance is one of the more costly ways to mitigate risk but it is a necessary step, particularly for small businesses in which the consequences of a breach can be crippling.

 

Article prepared with reference to:

Business Insurance Magazine- May 20, 2013. “States Take on Cyber Security”