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Choosing the correct life insurance policy is a very important decision.  Most people are not aware that there are choices.  People tend to believe that all life insurance is the same.  This could not be further from the truth. There are several important things that you should know about purchasing life insurance.  The first and most important thing to be aware of is that there are two basic types of life insurance policies available today.  They are term life and whole life policies.   The first, term life is better suited to young people.  This type of policy only provides a death benefit.  This means that if you die, your designated loved ones will have money for your final expenses and to possibly pay off a mortgage or provide a nest egg for the future.  The reason this is more suitable for the young, is that this type of policy is relatively inexpensive while you are young and good health.  The premiums are very affordable and will gradually increase about every 5 years, but this will give you coverage in the event that something happens to you prior to becoming more settled in your life. The latter, term life insurance policies provides a cash value that builds and can be borrowed against or taken out in your time of need.  This type of policy also provides a death benefit as well.  This type of policy is more suitable for the elderly, as most term life policies will only cover you until about the age of 80 and then will leave you uninsured after that.  Also, the additional cash value can help you pay off a mortgage or help supplement your income when you are on Social Security.  Most of the insurance offers that come in the mail, are offers for term life insurance policies.  A better way to shop for insurance and find a policy that will truly meet your needs is to contact a reputable insurance agent.  Your insurance agent can help you understand things like which policy type is right for you.  They can also help you figure out what size policy you will need to be able to leave your loved ones secure and cared for in your absence.  An insurance agent can give you the policy quotes and whole life insurance rates and let you know exactly how much each of the different types will cost you premium wise.  If you are not sure if you are covered well enough, or if you are not covered at all, be sure to take this step and secure your family’s financial future for years to come.

Robbie at The Lokey Volkswagen car dealership says “Your credit rating is fairly high.” Man, I wish I had a digital recorder in my pocket to play that back over and over.  I had some credit problems, but have worked very hard to build up my credit again. “Fairly high” is music to my ears.  I have been car shopping, and finally found a used VW Jetta that I can afford.  Several dealerships offered to run a free credit report for me, but knowing that my credit has been shaky in the past, I declined until I found the car I knew I wanted.  Which brings me to my point…..

So why is it that running a credit report will hurt your credit rating? They say too many in too short of a time span is frowned upon. Well that really makes it hard to shop and compare. What I wanted to do was run a free credit report online to see if it was better or not before car shopping. I want to see exactly what my credit score is now. But my friends and even one of the car dealerships advise not to run too many. I find this ridiculous. In this day and age, why can’t the credit bureaus accommodate this? Or maybe they do, maybe that is an old wives’ tale. At minimum, you should be able to obtain your own credit score without any penalty, and this could be possible, I am just ignorant about this. The entire system for determining a credit rating is a mystery, and it should be more transparent. When I actually saw my credit report (that the dealer said he was not supposed to show me??? It’s MY credit score!), I couldn’t make heads or tails of it anyhow.  But the bottom line, griping aside, is that ‘fairly high’ is fantastic and I’m gettin’ a Jetta. Sweet!

Three Terms to Help Cut Through Loans Jargon

The world of loans can be confusing one to the regular layman. Having had no formal financial education, it’s up to you to find out what the various terms and jargon surrounding loans actually mean. Here’s three terms that can help give you a better understanding of this financial conundrum:

APR

Probably the most important thing to consider when arranging a loan, the APR (Annual Percentage Rate) is the amount of interest you will have to pay per year on your capital (loan amount). The lower the APR the less you pay. So, if you borrow £100 and the APR is 10%, you’ll pay £10 per year extra on the capital if you make one annual repayment.

Arrangement Fee

This is the upfront fee that you’ll have to pay on certain loan products. Be wary of this on personal loans, because not many carry an initial arrangement fee. You’ll most commonly pay this on mortgages or large loans.

Consolidation

This is where you use a loan at a lower APR then all of your other credit accounts to instantly pay off those accounts. So say you have a two credit cards, one with £6000 on it at 16% and the other with £4000 at 12.9%, you take out a £10,000 loan at 6.9% (As offered from Alliance and Leicester Loans) and pay off the two credit cards. Your monthly repayments will also be smaller so you’ll start saving on interest straight away.

For more UK Finance made simple, take a look at Money Made Clear, by the Financial Standards Authority.

How to save

There’s plenty of evidence to suggest that however much personal debt Brits are currently racking up (and as much as the papers can seem a bit hysterical about spiraling debt there is undoubtedly a problem) the debt issue is, to some extent balanced out by the fact that Britons are also saving more money than ever before.

If you feel like you’ve got enough spare money saving really is worthwhile – having a bit extra stashed away is bound to come in handy and the security of knowing that whatever happens you’ve got extra funds to fall back on shouldn’t be underestimated. There’s a multitude of ways to go about saving, different products will suit different people; to help you decide on the best choice for you we’ve come up with a simple overview of a few of the most popular savings and investment options:

ISA

An ISA is essentially a tax free savings account and with the end of the tax year approaching now could be a good time to get one. We all have a total annual ISA allowance of £7,000 including a cash savings limit of £3,000 (going up to £7,200 and £3,600 in April) so if you haven’t already got one and like the idea of tax free savings (who wouldn’t) seizing the moment and taking advantage of this years allowance makes a lot of sense.

At the moment you can get either a Maxi or two Mini ISAs; if you’re interested in straightforward cash savings account then a Mini ISA is probably the way forward. Again, there’s a limit of £3,000 but its well worth taking advantage of and should you want to invest more why not get a Cash Mini ISA now and a further one in April, giving you the potential for £6,600 in cash free savings.

 Given that there are some extremely competitive deals out there (A&L Direct ISA offers 6.25% gross p.a. variable compared to 6.50% from their eSAver savings account, the ISA of course won’t be taxed, making it a better overall savings prospect) these are undoubtedly some of the best savings opportunities available.

Savings Accounts

Savings accounts are probably the most straightforward means of saving and should offer the most user friendly, flexible savings opportunity. Because the interest you earn on a savings account will be taxed the gross AER is unlikely to match up to that of a good Cash ISA but a savings account does offer a much higher maximum investment and, in many cases, instant access to your money. Do be aware however that some banks will apply an interest penalty when you make a withdrawal, denying you any interest for that month for instance – A&L savings accounts for instance offer very good rates provided you don’t make a withdrawal. It’s also worth baring in mind that interest rates can fluctuate depending on what’s happening in the wider economy