money really matters

Medical insurance is a big part of every American household. It takes about 5-10% of the income if covered by employer or more around 10-25% for self employed individuals. Self Employed individuals including myself are forced to shop for their medical insurance needs in the open individual market. With no proper regulation, they face lot of hazzles to get coverage for themselves and their family.  Without proper medical coverage is a major concern for many individuals.

The hazzle starts with coverage limitation for pre-existing conditions, even rejections in some cases, high premiums, high out of pocket expenses and much more. I myself changed insurers many times in the past 5 years just to keep low deductibles under the budget. With the new National Health Reform Act, we hoped for some relief and looks like some relief is here.

Drawbacks of Current individual insurance market

Let's first look at some major downsides in getting individual health insurance coverage which might help to appreciate the changes.

• An individual/self employed cannot buy coverage in the “group market” like small business or corporate companies. Employers usually cannot be turned down for coverage in the group market and also negotiation power.  Instead, the self-employed have to buy coverage in the open individual market which might allow flexibility to choose from different insurers but premium is not bargainable.

• Also Insurance companies many times rejects applicants with pre-existing conditions and are not required to cover them at anytime. They even cancel the insurance for many individuals when they get sick very badly. So people with serious health conditions was never able to buy coverage in the individual market. Even if they do, they can only get very expensive coverage in the high risk pool, if they can afford it. On top of that, there will be annual or lifetime benefits limitation.

• Treatment for pre-existing conditions can be excluded for up to 18 months for coverage offered to self-employed people in the individual market. Usually it is only 12 months for the coverage sold to small businesses or corporate in the group market.

Changes on the way by New Health Reform Act

That's correct. Changes are coming on our way and we can only hope them to be good. Below are some of the proposed regulations, most of them are expected to go active by next year.

• Insurance companies would no longer be able to deny coverage to kids with pre-existing conditions.
• Certain annual and all lifetime limits on benefits would be prohibited.
• Insurance companies would no longer be allowed to drop coverage when policy holders get sick.
• Prohibits insurers from requiring policyholders to get prior authorization for emergency services.
• Insurance companies must also spend at least 80 percent of their premium revenue on direct medical care for individual policyholders — or pay rebates, starting next year. 
• Insurance companies will not be able reject applicants with pre-existing conditions or set premiums based on a person’s health status.
• Individuals and Self employed people can buy coverage in the Health Insurance Exchange (just like members of Congress), where he/she can choose among competing insurance companies.

As per reports, National health reform act is expected to help around 13.1 million self-employed Americans. At the same time, there are things which still need to considered like Pregnancy coverage. I don't see any relief for young self employed who want to grow their family. Maternity insurance is another area individual insurance doesn't cover and hope they do something about it.

I am sure many of you heard of the famous line from GEICO Insurance ad, "A five minute call can save you 15% or more on car insurance". I don't know whether that's really works or not. But I am going to steal their tag line to stress a point, "A five minute call or googling can really save you some dollars every day".

That's right. Five minute which may be a small amount of time but reasonable enough to save you tens of dollars. It's saved me and saving me everyday. You can save too, just spend five minutes for a worthy cause to save yourself some money.

A five minute call...

Every year I have a tradition to call my service providers asking them for any promo's or discounts. I pitch my tone in a way, asking them whether they can save me money for being a loyal customer. I don't see anything wrong in it. If you are giving business to somebody and being with them as a long time customer, they should be able share some profit with the customer to show their appreciation.

So I called Vonage last week and happened to get good customer service rep in a long time. She was mindful and understanding. She couldn't find any promo but she gave did waive one month of service fee including all taxes which was worth $34. That will surely pay for a sunday lunch with my family.  She even encouraged me to call me back next month to see whether they got any offer if not they can do something about it. I like the way I was treated by Vonage. I surely deserve it for being customer for almost 6 year with them and recommended atleast 10 people to signup with them.

If you are loyal customer to your phone company, cable provider or pest control company, any business. I urge you call them every year and try out in a nice way by asking them to save money and share some profit with you. I don't see anything wrong with it. Let me know how it goes.

A five Minute Googling...

Googling can be addictive. These days, everytime we think of something and need answers, we automatically go to google. Why not google when you think of buying something? I know many frugalers and money smart savers research and google before buying anything. Being a frugaler myself, I do it all the time and don't have too be scientist to do research. Just google for 5 mins and you will know whether your purchase is a deal or no deal.  I saved more than $100 on my online orders in last few weeks. See the list below,

1. Bought USI Electric Smoke detector - $54(w shipping) - saved $15
2. Bought Wireless Router from Buy.com - $39.99(free shipping) - saved $15
3. Ordered Perfume from Amazon for my in-law - $42(free shipping) saved -  $30
4. Purchased Laptop Battery - $49.99 with $5 discount from seller and also saved $30 compared to hpdirect.
5. Got new DC Adapter for vonage router - Free from vonage - saved $10

These are just few purchases from last few weeks. Almost all purchases only needed 5 mins of googling to price shop and order them.

You can also save money in this tough economy and keep it stored up in your saving account for future. Please share your experience about googling and 5 min calls. I can't wait to hear.

We have already seen Tests 1 to 5 in the previous posts to check and select the insurance company. In this blog post, we will end the series with the last tests which also plays key factors in the selection criteria.

Test 6: Renewal Rate Change

Many insurance companies offer an attractive discount rate for the first premium period to get you on their books. Once you are in, many companies will try to ripe you off by increasing the premium every other renewal. There might be other factors involved in the increase of insurance but most of the time they increase without giving any reasons.

After spending lot of time researching to buy insurance, nobody wants to change just after 6months or year and do go through the same cumbersome process. So, many of us try to stick with the same company even with increase because of this reason and insurance companies take it has an advantage for them.

You can check the renewal rate change rating in the above mentioned state websites which gives another clue about the insurance company. Try to score your insurance company according to their rate change ratings.

Test 7: Recommendations from your friends, local body shops

“Word of mouth” is a powerful marketing tool. It works well in almost all cases. Check with your friends and relatives or others that you can trust. See which companies they would recommend. Ask about their experience and get their perspective. You can even contact the local body shops or auto repair shops you always use and get their view point. They usually recommend insurance companies which encourages using OEM (manufacture parts) instead of aftermarket part. That’s another important factor to consider as you want your vehicle to be fixed with original parts instead of aftermarket parts.  Score the companies with the feedback from your friends and trust worthy person.

Finally, tally up the score for all the insurance companies in the list from each test criteria and you should have your own ranking for each of them. That surely would have narrowed down your list one or two companies which you can use.  Once you decide on which company you want to go, just go to their website to finalize your quote.

Conclusion

As it was bluntly mentioned at usnews.com, Car insurance is like betting against the odd. You pay a monthly fee to an insurance company.  They're hoping that you won't get into an accident. You're hoping that you won't, but betting that you will. If you "win," the insurance company will pay your accident costs. If you're not in an accident, the insurance company wins because they get to keep your money. Losing this bet isn't bad, though. You won't have to deal with being in an accident, and the longer you lose the bet by not getting into a wreck, the less you'll have to pay the insurance company. But, the day you're in an accident, you'll be glad you're covered by good insurance company.

Photo source: i-ehow.com
Sources: edmunds.com

In the last blog post, we saw the essence of true giving and free tools available to find an organizations that suits your lifestyle or passion to start thinking about donating. This post, we are going to see few different ways one can give and help. Also we will look at some Tax Implications of gift giving.

There are variety of ways to contribute, donate or give. A donation doesn't have to be big and it doesn't have to be money either. It is giving heart that matters. Let's categorize charitable gift giving into two ways as Direct and Indirect.

I. Direct Donations

Cash is king whether it comes to businesses or non-profit organizations. At this tough economic juncture, it is not just the individuals and corporations which are feeling the pinch. Many non-profit organization are experiencing big hit in their donation dollars. This year Good will, Salvation Army and many other organizations has reported a decline in their donation. They need our help more than ever in this tough times. Giving Cash is a great way to show your support and it has a direct impact to the cause. Many organization now accept credit cards for donation.  But there are certain limitation to cash gifts in regard to Taxes. We will look at them later below.


II. Indirect Giving

1. Give by Gift Cards

You can buy charity gift cards at sites like http://www.tisbest.org/, www.charitygiftcertificates.org and www.JustGive.org. and give to the reciepent. He/she can spend or use the gift card and donating to their favorite society. It is a great feeling for both you. You give him the gift, he/she gifts to the favorite charity. Also there are lot of webistes which accepts unused store giftcards and donate the proceedings to charities. If you have a macy's gift card which has balance of $2 or something. Many of us just threw it away because we won't be able to buy anything using the small money left over. Instead, you can just give it away to charities by using these websites.

2. Don't donate but Lend or Loan

I don't believe in just giving  away money unless it is tipping somebody. Because the recepient will be back again to street asking more. It is better to help them find a job and make them work feed themselves. Like the chinese saying, "Don't give them fish, instead teach them how to fish".  There are few organizations like Kiva.org and UnitedProsperity.org which provides the platform to do just that. They help the donor to lend/loan money directly to aspiring Entrepreneurs in the developing countries. I started myself few months ago in both these websites and started lending and helping people.

3. Shop and Donate

It is called Cause related Marketing and are Selfish giving. Starbucks is helping to fight AIDS in Africa. Macy's is giving to the Make A Wish Foundation. And Toys "R" Us is giving to Toys For Tots Many more retailers and manufacturers are partnering today with not-for-profit organizations in cause-related marketing campaigns. On one hand, these campaigns raise awareness, support, and donations for social causes such as global hunger relief. On the other hand, they enhance corporate reputations, customer loyalty, and financial gains for companies.

An example of cause-related marketing is an effort organized by Macy's, Pfizer, and other businesses on behalf of the American Heart Association. The program has raised over $32 million in donations for the charity, while generating over 1 billion media impressions for corporate sponsors. So just buy shopping in these stores, you are indirectly benefiting some non-profit organizations. Whether you call this has selfish giving or not, it is at least benefiting somebody thats what matters. There was an article/report posted in npr about this cause related marketing. Check it out.

III. Volunteer your time

Time is precious and it has value. If you strapped with cash, you can also give your time. There are lot of local charity organization like hospitals, resale shopes which migh need help during this holiday times. You can always take time to volunteer and even claim those hours in your Tax returs. Talking of taxes, now its time to check what are the ways we can benefit from gift giving.

Tax Advantages

Giving not only satisfy our inner soul but also helps to save and get some money in return as an appreciation from Uncle Sam. Tax incentives is an added bonus encouraging many to contribute.

For charitable contributions of less than $250, you must keep a canceled check, credit card receipt or electronic funds transfer receipt. Or you must have a letter from the charity acknowledging receipt of the contribution and stating its date and amount. For charitable contributions of $250 or more, you'll also need a written receipt from the charity substantiating the amount of cash contributed and a description (but not the value) of any property -- other than cash -- contributed.

And you must disclose whether the organization provided any goods or services (such as a theater ticket or dinner) in return for the contribution.
If you donate property, such as clothing, valued at less than $250, you must keep a receipt from the charitable organization showing the charity's name, contribution date, physical location of the contribution and a detailed description of the property (but not its value).

For larger donations, you'll need even more documentation, including a description of how you acquired the property (purchase, gift, inheritance), the date you acquired the property and the original cost of that property. Donated property worth more than $5,000 requires a qualified appraisal, as do lesser-value objects that aren't in "good" condition.

Conclusion

“Giving from a full heart is one of the most joyous things you can do...",  – from the book "The Secret".

Make this holiday season special by donating your time or money in any above ways. It will surely sooth your soul and even make your pocket happy by getting some back so you can continue giving.

Happy Holidays!!

Sources: Internet website relate to charity giving
Photo source: www.oregon-crna.org