Top Tips on How Can Increase Your Earning Sources

‘A penny saved is a penny earned’. This quote rightly taps on the importance of savings. To break it down, it simply means money which is saved holds equivalence with money earned. A penny saved today will expand your financial resource tomorrow.
Best ways to grow money short term are numerous and routine. They come under saving money without investing. Hence options and tips to protect your money are going to be classified under – How to make your money grow without investment and by channeling them under right investment options. To erect a formidable financial backing, it is essential to invest smartly, for instance in less risky and tax saving investments.
Increase Your Earning Sources

Growing your money without introducing them in the pipes of investment –

In this section the need for developing the habit of savings and inculcating them in your lifestyle is stressed.
It is a simple understanding; your expenses are going to be regulated according to your lifestyle and attitude. These are personal traits which differ from person to person.
Hence, to build a sound financial health the below mentioned attributes must be considered stringently and must be adopted as well.

  • Dread the Debt

Accumulating debts block your flow of money and thereby your savings as well. Some people have a ‘marsh’ kind of attitude towards borrowing debts. They keep on borrowing new debts to fend off their old debts. This habit will definitely tug you deep inside the marsh and affect your financial standing adversely.

  • Set an Emergency Fund aside

Ideally at least three months’ worth of routine expenses coverable amount must be saved aside for basic requirements like rent, school fee etc. Helps you stay prepared and composed in case of any financial emergency. Especially for salaried individuals who can allocate a specific amount every month.

  • Devising Financial Goals

Setting up monetary goals like fund for an overseas vacation, or for further education, or for a wedding affair etc helps you save money better. The reason is you fixate a motivation in form of that goal.

How to grow your money through investments?

Once you successfully inculcate the habit of saving, you can start thinking about channeling your money in the right options. There are innumerable income tax savings to lock your money in. The most important factors while choosing an investment are: –

  • Reviews
  • Risk
  • Return

For a first timer, you must surely seek advice from experts and people who are have their heads in the current economic and financial scenario. Gather reviews from different sources about various tax saving investments with satisfactory returns.
Initially one must always opt for low risk bearing investments which remain stable even in a volatile economic environment. One must not be a daredevil at the fresher’s phase and blow away all the preciously-saved money. So, choose wisely.
And the most important factor is returns. The purpose of exposing your hard-earned money is to gain more than the invested amount. Thus, pick decent-yielding and tax saving investments.
Government of India keeps on introducing various schemes and plans to encourage people to invest and increase the circulation of money in the economy. It helps in avoiding the stagnancy of money and dead investments.
Thus, below are some of the tax saving investments which can generate decent income as well as reduce your tax burden.

  • The National Pension Scheme – By investing in NPS you are surely going to secure your after-retirement life. Apart from that NPS allows you to claim deduction under section 80C as well.
  • National Savings Certificate – Introduced by the Indian Government, NSC is like fixed deposits. They are safer than FDs since they are invested in a Government’s scheme. They allow you deduction from your gross total income u/s 80C. However, the interest earned is lesser than the interest earned on FDs and they are taxable too.
  • ELSS – Equity Linked Savings Scheme mutual funds is one of the popular tax saving investments. They bear higher risk although, but they yield higher returns as well. It is deductible under section 80C
  • Insurance plans are also among tax saving investments. Life insurance policies and health insurance plans are deductible u/s 80C and 80D respectively.

Conclusion-

Before buying a financial product or investment plan, it is necessary to know about its tax structure. But do not buy a financial product just to save tax. If you buy a pure investment or tax saving plan, the tax restrictions will be no problem as the sum assured is a high multiple of annual premium paid. When you mix your investment and insurance, this when the problems come into picture. Purchasing a life insurance plan needs a long term commitment to pay annual premium. If you have purchased a wrong product, termination of such insurance plan will lead to unintended tax situations.
This article has been written by Financegab team who are the personal financial advisor & bloggers.

How You Can Use Technology to Improve Your Car Insurance?

Advances in technology are making almost every aspect of our lives easier than they were before. You can do all your banking online, watch your favorite television shows anytime you want, and order groceries to be delivered right to your door. It might not be something you think about often, but technology can also change the way you approach your car insurance.
How You Can Use Technology to Improve Your Car Insurance
If you’re concerned about the amount you’re paying for your insurance coverage, new technology could be the key to unlocking a greater discount on your premium. Many insurers are now offering Usage-Based Insurance (UBI) plans, which ask drivers to install a telematics device to their vehicles to track their driving habits. These devices can record information about your acceleration, braking and distance driven, and then relay that data to your insurance provider so they can get a clear picture of your driving habits. In return, you could be eligible for a lower premium. Many companies offer a discount just for signing up for UBI, and up to 30 percent in savings when it’s time for renewal. In addition, studies have shown that UBI can change your driving habits for the better.
Of course, providing this type of information to a large company could raise some privacy concerns, so the Financial Services Commission of Ontario lays out the rules that protect drivers who sign up for UBI. Based on these guidelines, any information collected by your insurance company cannot be shared with a third party without your express consent. In addition, the information cannot be used to increase your premium, only to set a discount, review rating criteria, detect and prevent fraud, and manage claims. That being said, data from your telematics device could be used as evidence against you in a claim if it reveals that you were speeding or braking suddenly before an accident.
If you are concerned about making a claim to your insurance company, a dash cam is another way that you can use technology to your advantage. Dash cams can record yourjourney and events going on when your vehcile is parked. This means that your dash cam can provide footage of a car that hit you or catch the license plate of a vehicle unlawfully leaving the scene in the event that you need proof to submit a claim.Like UBI, dash cam footage only works in your favour if you do not have any fault in a collision. Otherwise, you’re dash cam could prove a case against you.
Each year before its time to renew your insurance, you should be comparing quotes between providers. A lot can change in year – both with premiums and your life situation – so the great deal you got last year might not be your best option anymore. Luckily, technology also makes it easy for you to compare car insurance quotes online. When you’re doing your research this year, consider how UBI could lower your premium, and ask your chosen insurer if having a dash cam would be beneficial in the claims processes.

The Most Common Mistakes When Shopping For Life Insurance and How to Avoid Them

If you’re like me( or most people for that matter), it’s not that uncommon for you to say  to yourself “if I only knew then what I know now, I would have done things differently”. Well, this is your opportunity to  avoid some of  most common mistakes people  make buying life  insurance.
life insurance
Here’s your chance to be “in the know”, and avoid the 5 most common mistakes people make buying life insurance.
Follow the rules laid out in this article  and you will be in better shape than 90% of all life insurance consumers.

1. Lying to Agent about Medical /Driving History

While it may seem like an innocent slip of the mind to not mention a prescription, hospitalization, or most often, a smoking habit, the consequences can be significant.
The first consequence is most likely that you won’t get away with it. The insurance carriers can access your medical records, prescription history, and even your driving record.
So lying to the agent only gets you an bad quote that has almost no chance of becoming an offer.
​Being misquoted is just the start of what can go wrong when you are intentionally misleading.
Because different insurance companies have different underwriting rules for each condition (some are willing to make offers where others will not)​, it’s vital for an independent agent to know the true conditions he or she is working with.
​If this sounds like an insurance agent whining about having his time wasted, you are partly right. However, the more serious result is to the applicant seeking coverage. ​
This is because, if an application is sent to a carrier that is a bad fit based on bad information (once the truth comes out) it may get graded substandard or even turned down.
A turn down or declination from one carrier can hurt a future application with another company that likely, would have accepted you.
The info gathered by the first company will be handed over to the to the Medical Information Bureau (MIB), this information (and maybe a note about a deceptive application) will be available to all insurers for 7 years.
Lastly, even if you get away with lying on your application and the company contests the benefit payment in court on the basis of a deceptive application, your heirs  may find themselves in a position of having the benefit reduced to the premium payments you made plus interest. ​
Ultimately , the risks outweigh the potential gains.
Key Takeaways

  • Misleading an agent will only get you a better quote not a better offer.
  • Insurance carriers have access to your medical, prescription and driving history.
  • Carriers may context payment of a benefit due to material fraud on the application.

2. Choosing Permanent Insurance for a Temporary Need.

The fight  between proponents of Term v. Permanent  insurance continues to rage. Unlike most partisans, I think there is a place for both. However, the two kinds of insurance are designed to serve very different situations.
If you are looking to protect against a  a declining obligation (like a home mortgage) term insurance is the appropriate solution. It is also a far less costly answer  for the term it is needed.
Very often, people looking for for life insurance are “sold” cash value insurance at the cost of insuring a real need. While there are several advantages to permanent insurance that make it a useful and appropriate retirement planning tool, it should never compete for  dollars with insurance that covers a need.
When structured to do so,  cash value insurance is designed as a living benefit savings tool with the minimal death benefit necessary to keep it legally designated as insurance. This can be a very useful financial tool, but it is never appropriate as true “insurance”.
Most rules have an exception or two, the exception here is Guaranteed Universal Life (GUL) .  GUL is hybrid permanent insurance that doesn’t gain cash value and is priced between traditional whole life and term insurance. ​
When people use permanent insurance for temporary needs, generally they either cut corners on the benefit amount they need to cover true needs or they overextend themselves, and wind up walking away from the big cash value policy.
Life insurance buyers should should look at these two products separate and not in competition with each other. Cover the insurable need first and then consider if cash value life insurance is an useful arrow in your financial toolbox.
Key Takeaways

  • Pure insurance is meant to insure a need.
  • Non GUL permanent insurance should be structured for cash value not insurance need.
  • Permanent cash value life insurance and term life insurance should not compete with each other for dollars.​

3. Relying on Life Insurance Provided Through Employer

Having affordable life insurance through your employer is a great benefit. However, it should thought of as extra coverage , rather than yourmain life insurance. The reason is simply that at some point you will very likely change jobs.
After changing employers, you may not be offered life insurance at the new employer,and not be able to keep the insurance from the previous employer.
Most  all group life insurance policies offer a conversion to permanent insurance for the individual leaving the employer. However, the terms are usually so expensive  that no one takes up the offer.
So, in the worst case scenario, you leave your job after an economic downturn, are forced to take a position without group life insurance, and then find that your health won’t allow for inexpensive individual underwriting. So, you’d be forced to either pay far more than you had been paying or go without life insurance for your loved ones.
This situation came about often during the Great recession of 2007-2010. It would have have been avoided had folks not looked at their employer sponsored insurance as primary but rather “bonus”.
Many  people in their thirties can get term life insurance that will last until retirement for the cost of a large pizza….and not have tobe concerned that the combination of a job change and age will make replacement unavailable.
Key Takeaways

  • Employer sponsored life insurance should be thought of as “extra” and not primary life insurance.
  • Employer sponsored life insurance does not transfer affordably to departing individuals.
  • Healthy people in their early thirties can get life insurance that last until retirement for the price of a pizza.

4. Not Using an Independent Agent

The use of an independent Agent is an issue that I touch on all the time. While it may be a bit self serving , it is also the unquestionable truth.
Because insurance companies have different risk appetites, the only way to get the most competitive deal is to be able to access to nearly all of them.
If you have a  “captive” agent ( an agent who  works for one company and has a financial reason to send all business to that company) represents a carrier who is severe in rating a health condition you have, you are in a bad spot.
Whereas, an independent agent/broker would send your application to the company who looks most  favorably at your condition, the captive will be forced to send the application to his carrier…and charge you for the service.
While some “captives” have a limited ability to use an outside brokerage, the truth is that the financial imperatives to write business with the “home” carrier often trump this option.
Key Takeaways

  • Because different insurance carriers have different appetites for certain risks, access to more carriers will result in better pricing.
  • So called “captive” agents have a financial incentive to send all applications to their home company.
  • Only independent brokers have the freedom to offer the best deal at all times.

5. Not Taking the Exam Seriously

This is an easy one, but it gets fouled up more than you’d believe.
The paramedical exam that is a routine part of fully underwritten policies iis very straight forward. That is, blood draw, urine sample, weight from a portable scale and Blood Pressure (occasionally EKG). It is most often done in 20 minutes and you are back to your day.
Blood and urine samples provide a  snapshot in time, so you cannot do a lot to improve things in a brief period of time. However, you can do surely hurt them for the “snapshot” taken.
The common culprits are:

  • Working Out
  • Excessive Alcohol
  • Fried Foods
  • Drinking Coffee
  • Lack of Sleep

​While living “clean” will not help much in the short run , avoiding these thing for a couple of days is a good policy.
….And a Bonus Mistake to Avoid
It may seem contradictory that this article  spends a lot of time on the subject of avoiding mistakes and saving money, and then says don’t be too cheap.
If you are confused, I understand. Let me explain.
​While I’m a firm believer in getting the best deal, the best deal may not always be about the absolute lowest cost. The truth is, defining the best deal depends on what you really need and what you get.
Simply put, policies are not all apples to apples comparisons. As mentioned earlier, life insurance companies view different risks differently. ​So unless you know your underrating grade with a particular company the pricing is not precise.
There are other considerations that affect pricing that may entice you to pay slightly more than the absolute lowest price. These include:

  • Financial Ratings of the Carrier ​- Does the Moody’s or AM Best rating of the company matter to you? Are you willing to pay more for a higher rating?
  • No Medical Exam Option- Some companies offer policies with no exam. Is avoiding needles,urine samples, and possible unknown results worth a few dollars a month? ​
  • Riders/Conversion Options- Is the right to get more insurance without re-qualifying later of value to you? How about the right to convert a term policy to a permanent policy at a later date withno exam?

​If these issues are important to you, then the definition of “best deal” changes from simply the least expensive. These are issues that can be addressed by an independent agent with access to multiple carriers.
Key Takeaways

  • The “best deal’ takes more into account than simply cost.
  • It may be worth paying slightly more if there is no exam or there is a strong permanent conversion product.
  • Only independent brokers have the freedom to offer the best deal at all times.

Conclusion

If you follow the advice laid out here you will be in better shape than nearly everyone else in the life insurance market. For help in deciding exactly what you want with regard to amounts, term, exam, rider & conversion options, you will always have the most options with an independent agent.
James Tobin, CFP is the founder of the Life Insurance Help Desk. In addition to providing expertise on life insurance matters, he teaches ESL and is a news junkie. Mr. Tobin reside with his wife in Norwalk, CT