Financial Freak Show

I know this is far from an entertaining topic but I’ll do my best to keep things saucy. Life insurance is something most of us should have in good order. With open enrollment season coming up for many employers I wanted to address the life insurance issue many people should consider. I was looking over a friend’s budget and noticed they we’re not paying out on any monthly life insurance premiums, since they have two young kiddos in the house I thought I would ask a couple questions. Turns out they’re both carrying life insurance through their employers. I asked why they went that route instead of carrying policies separate from their jobs. Apparently they saw they could buy it so they did, that’s about all the consideration they put into the decision.  

So the good news is they did have a reasonable amount of coverage in place and they were getting a heck of deal on it since the company covered most of the premiums. The bad news is they have no insurance in place if outside of the company. The main problem I see with this situation is that if they leave the company they’ll lose the coverage. True, as long as they remain healthy they could likely replace the coverage with a new term policy at that time but they also run the risk of not being able to get coverage at that time too (due to medical issues or the cost of a new unsubsidized policy.) I think having life insurance other than your employer’s plan is vital especially with two little ones at home. How many people nowadays are going to be at the same job 30 years from now…put a bullet in my head now please! It may be a good idea to look outside of your employer’s policies and see what all your options are.

So we decided they would look into getting a couple new 30 year term policies that they can carry with them no matter what happens to their work situation or their health. They’re also going to keep the current employer policies in place as  since it’s costing them less than $4 per month each for $350,000 in coverage (told you they had a hell of a deal!). Like I said, work insurance can often be a pretty sweet deal, just make sure it’ll meet your needs if you get canned or decide it’s finally time to tell your boss what you really think of him!  

Do you carry life insurance through your employer? Do you have outside insurance? Do you even have life insurance at all?

My wife’s hospital trip last week reminded me how sweet high speed WiFi access combined with Netflix can be and more seriously that my company’s health plan’s open enrollment period will be coming up soon. As the end of the year approaches now is a good time to assess your insurance plans (exciting stuff I know!) Now may be a good time to get your thoughts in order for any changes you want to make to your policies for next year – I hate making important decisions on short time lines. 

Just as important as reviewing your insurance needs is burning through any extra dough you may still have laying around in an FSA and if you don’t participate in an FSA you may consider signing up this year. Here’s a brief refresher on how FSA plans work in just case you were sleeping though the HR presentation last fall. A FSA plan allows you to stash away money pre-tax to use towards “health related” expenses. For many this is a pretty sweet deal and can save you some cash every year on things you’ll need to pay for anyway. The only catch to using an FSA plan is if you leave any money unclaimed at the end of the year your company keeps it…how nice. Why they don’t make you pay the tax and keep what’s left I don’t know but that’s how the FSA rule book plays. This also means money you did spend but didn’t submit for reimbursement before the cut off also goes away for good. Many plans do cut you some slack and allow you till March to submit for reimbursement but I recommend staying on top of it as best as you can.

So if you still have some cash sitting in your FSA order up some dentist chair time and get those gold teeth polished up and if that doesn’t fit your style I recommend you stock up on some Maalox to help you stomach next tax season.

Do you use an FSA? How has it worked out for you?