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Apache is functioning normally

June 7, 2023 by Brett Tams

Donating to charity isn’t just a way to have a positive impact on society – it’s also a savvy approach to reducing your tax liability. Schwab suggests people who donate to charity on an annual basis may want to consider a tax-smart strategy known as “bunching,” which involves making at least two years’ worth of charitable contributions in one year. Doing so can allow you to itemize your deductions for that year and increase the size of your tax deduction over the two-period. Consider working with a financial advisor if you need help with tax planning or charitable giving.

Standard Deduction vs. Itemizing

Each year, tax filers must choose between taking the standard deduction or itemizing their deductions. If your individual tax deductions exceed the standard deduction in a given year, itemizing is likely the preferable approach. The opposite also rings true. If the total value of your itemized deductions is less than the standard deduction, you’ll want to claim the latter.

2023 Standard Deduction

Single filers and married couples filing separately: $13,850
Married couples filing jointly: $27,700
Heads of household: $20,800

2022 Standard Deduction

Single filers and married couples filing separately: $12,950
Married couples filing jointly: $25,900
Heads of household: $19,400

Choosing between taking the standard deduction or itemizing is key when determining how to best maximize the tax benefit of your charitable contributions.

When to Bunch Charitable Donations

If you regularly donate to charity but your total itemized deductions fall short of the standard deduction, you may want to consider bunching your contributions. Doing so means you’ll make multiple years’ worth of contributions in the current tax year, pushing your itemized deductions above the standard deduction threshold. You’ll then take the standard deduction in the following year(s) since you won’t be making any additional donations.

To illustrate the potential benefits of bunching, Schwab ran the numbers on a hypothetical couple with no children. Schwab assumed the couple made $10,000 in charitable donations in both 2022 and 2023. Their other deductions for both years total $13,000. By taking the standard deduction ($25,900 in 2022 and $27,700 in 2023) in both years, the couple’s two-year deduction adds up to $53,600 – more than would have been had they itemized in both years.

However, if the couple made two years’ worth of donations in 2022, their itemized deductions would have added up to $33,000. They could have then taken the standard deduction in 2023 and their two-year deduction would have added up to $60,700.

By bunching their charitable contributions, the couple would have lowered their combined taxable income in the two years by $7,100.

Bottom Line

Tax filers who regularly donate to charities should consider how to maximize the tax benefit of their goodwill. Schwab recommends making multiple years’ worth of donations in a single year, so your total itemized deductions exceed the standard deduction. This strategy, which is known as bunching, then calls for you to take advantage of the standard deduction in subsequent years when you won’t be making any donations. Doing so can increase the size of your total deductions over that two-year period and lower your taxable income.

Tips for Reducing Your Tax Bill

A financial advisor can help you assess your tax situation and potentially limit how much you end up owing Uncle Sam. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Capital gains can increase the amount of money you ended up owing the government each year. However, harvesting tax losses can help offset those gains. And if your tax losses exceed your capital gains, the IRS permits you to deduct up to $3,000 worth of excess losses from your total income for that year.
If you’re approaching retirement and thinking about moving to a new state, consider the tax environment for retirees in that state. SmartAsset’s retirement tax friendliness tool provides an in-depth look at the places with the best and worst tax environments for retirees.

Photo credit: ©iStock.com/donald_gruener, ©iStock.com/aschecky, ©iStock.com/shapecharge

Patrick Villanova, CEPF®
Patrick Villanova is a writer for SmartAsset, covering a variety of personal finance topics, including retirement and investing. Before joining SmartAsset, Patrick worked as an editor at The Jersey Journal. His work has also appeared on NJ.com and in The Star-Ledger. Patrick is a graduate of the University of New Hampshire, where he studied English and developed his love of writing. In his free time, he enjoys hiking, trying out new recipes in the kitchen and watching his beloved New York sports teams. A New Jersey native, he currently lives in Jersey City.

Source: smartasset.com

Apache is functioning normally

June 7, 2023 by Brett Tams

If you owe federal income tax and can’t pay in full, the IRS Fresh Start program can help you get caught up. Fresh Start was established by the federal government in 2011 to offer some relief to taxpayers and curb predatory practices by the IRS. Under the Fresh Start Initiative, eligible taxpayers can enroll in a payment plan to clear their tax debt or negotiate an agreement to pay less than what’s owed. Either one could help you get back on track financially if you have an outstanding tax bill. You can also talk to a financial advisor about how to manage your tax liability going forward.

Understanding IRS Fresh Start

The IRS Fresh Start program or Fresh Start initiative was established in 2011 to help eligible taxpayers manage past-due tax debts. The program is designed to aid people who don’t have a prior history of unpaid taxes and aren’t subject to a federal tax lien.

Fresh Start offers help in one of four ways:

Payment plans
Offers in compromise
Currently not collectible status
Penalty abatements

The main goal of the Fresh Start program is to help individuals and business owners resolve their federal tax debt, without being unfairly penalized by the IRS. That includes allowing taxpayers who might otherwise be subject to a tax lien to avoid that scenario.

IRS Fresh Start Tax Relief Options

As mentioned, there are four avenues taxpayers can use to get tax relief through the Fresh Start initiative. Each one is designed to meet a different type of need.

If you’re interested in seeking tax relief through Fresh Start, here’s how the options compare.

Payment plans: The IRS offers short- and long-term payment plans, also referred to as installment agreements, to eligible taxpayers. Short-term plans must be paid in full within 180 days while long-term plans may allow you up to 84 months to repay tax debt, depending on how much you owe.
Offer in compromise: An offer in compromise allows you to repay tax debt for less than what you owe. You must be able to prove a financial hardship that prevents you from paying what you owe in full. If approved, you’d need to be able to pay the IRS an agreed-upon amount to settle your tax debt in a series of periodic payments.
Currently not collectible status: Currently not collectible status allows you to claim financial hardship and temporarily pause your obligations to repay your tax debt. While your account is marked as currently not collectible, the IRS cannot take any collection actions against you and must halt any levies, including bank account levies and tax refund offsets.
Penalty abatement: When you fail to pay taxes on time, penalties and interest can accrue. Penalty abatement allows you to get some relief from penalties if you owe a significant amount of tax debt.

Who Qualifies for IRS Fresh Start Relief?

Generally speaking, you may qualify for help through the Fresh Start program if you:

Owe federal income tax
Don’t have a history of unpaid taxes
Are not yet subject to a federal tax lien
Cannot pay your tax bill in full

If you’re specifically interested in a payment plan, your ability to qualify can depend on how much you owe. You may qualify to apply online for a long-term payment plan if you owe $50,000 or less in combined tax, penalties and interest, or for a short-term plan if you owe $100,000 or less. Business owners can apply online for a long-term payment plan if they’ve filed their tax return and owe $25,000 or less in combined tax, penalties and interest.

The IRS approves Offers in Compromise on a case-by-case basis. To apply, you’ll need to have filed all required tax returns and made the required estimated payments. You can’t be in a bankruptcy proceeding and you must have filed a valid tax extension. Approval is based on your:

Ability to pay
Income
Expenses
Asset equity

The IRS encourages taxpayers to explore payment plan options before applying for an Offer in Compromise.

You’ll need to contact the IRS to apply for currently not collectible status if you’re experiencing a significant financial hardship. The IRS may ask you to file any past-due tax returns if you haven’t done so and you’ll likely need to provide documentation proving your hardship situation. Late payment penalties and interest will continue to accrue on your account.

If you receive an IRS notice for back taxes, the notice may include instructions on how to apply for penalty abatement. You’ll need to call the IRS and provide some information to the IRS about your taxes and financial situation. You can also submit Form 843, Claim for Refund and Request for Abatement if you’re not able to call.

IRS Fresh Start Advantages and Disadvantages

The Fresh Start program is designed to offer some benefits to people who are dealing with unpaid tax debt. Specifically, this program can help you to avoid:

IRS levies
Federal tax liens
Wage garnishments
Criminal penalties

Once you qualify for Fresh Start relief through a payment plan or Offer in Compromise, you’re automatically sheltered from those types of outcomes since you’re making an effort to resolve your debt with the IRS.

Claiming currently not collectible status can also create some breathing room financially if you’re experiencing an extreme hardship that leaves you unable to pay what you owe. Penalty abatement, meanwhile, can reduce some of what you owe in penalties to the IRS.

Fresh Start is not a perfect solution, however. If you enroll in a payment plan, then penalties and interest will continue to accrue until the balance is paid in full. So, the total paid can exceed more than your actual tax balance due.

If you’re interested in an Offer in Compromise, it’s also important to keep in mind that getting approved can be challenging. The IRS wants to collect as much of your unpaid tax debt as possible. If you’re unable to provide sufficient proof of a hardship that keeps you from paying in full, you may be denied. In that case, you’d have to reconsider a short- or long-term payment plan.

The Bottom Line

IRS Fresh Start can help you get out of a tax debt hole if you owe money to the federal government. If you also owe state income tax, you’d need to reach out to your state tax authority to discuss repayment options. The most important thing to remember if you owe taxes is that some action is better than none since your obligation to pay won’t go away.

Tax Planning Tips

Staying on top of your tax situation can help you avoid being hit with a surprise bill when it’s time to file your return. Talking to a financial advisor about how to minimize your tax liability can ensure that you’re paying enough to stay in favor with the IRS, without paying more than you need to. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The simplest way to avoid IRS tax penalties and interest is to pay what you owe by the filing deadline. If you don’t have cash readily available to pay, you might consider getting a personal loan to pay instead.

Photo credit: ©iStock.com/dragana991, ©iStock.com/bojanstory, ©iStock.com/FatCamera

Rebecca Lake, CEPF®
Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.

Source: smartasset.com

Apache is functioning normally

June 6, 2023 by Brett Tams

Taxes are unavoidable but that doesn’t mean you have to pay more than you owe. What happens to your tax liability with proper financial planning? The simple answer is that it can allow you to minimize what you owe while preserving more of your income to fund your financial goals. Talking to a financial advisor is a good first step in creating a strategy for effectively managing tax liability.

Understanding Tax Liability

Tax liability refers to the money that an individual, business or organization owes to a federal, state or local tax authority. A simpler way to think of your tax liability is the difference between your taxable income and the tax deductions you’re able to claim.

As a general rule of thumb, earning a higher income can result in a higher tax liability. The U.S. uses a graduated tax system, which means that income and tax rates move together. As income increases, so does your tax rate.

The amount you pay in taxes is determined by your income, but capital gains can also affect your tax liability. That’s important to know if you’re focused on investing and building wealth, as higher net-worth individuals may face a steeper tax liability if they’re reaping capital gains from investments.

What Happens to Your Tax Liability With Proper Financial Planning?

Managing your tax liability is important as it can directly influence how much of your income or investment earnings you get to keep. The more income and assets you have to work with, the easier it becomes to build wealth.

Proper financial planning can help you implement strategies that are designed to minimize taxes while maximizing income and assets. Having a solid financial plan in place can generate significant tax savings year by year. You can then use those savings to generate additional income through investments, grow your retirement accounts and increase your net worth.

Does financial planning require you to work with a financial advisor? Not necessarily. You could always go it alone. But there are some distinct advantages to having a financial advisor help you formulate a plan for managing tax liability.

Financial advisors have extensive knowledge about how tax planning can affect your financial plan. A good advisor is also familiar with the tax code and the latest tax rules. Even if you think you have a relatively straightforward tax situation, a financial advisor may be able to pinpoint areas where you can improve tax efficiency that you might have missed.

Financial Planning Strategies for Minimizing Tax Liability

There are different ways to approach tax planning in order to reduce your tax bill, depending on the specifics of your situation. If you’re working with a financial advisor to create a tax plan, then it may include any or all of the following.

Retirement Planning

Retirement planning is a focal point of a solid financial plan, particularly with regard to taxes. Aside from ensuring that you have enough money to retire, it’s also important to consider how much of your savings you’ll be able to keep once you start making withdrawals.

In terms of how you plan for retirement, your financial advisor may suggest any of the following:

Maxing out annual contributions to a traditional 401(k) or to a Roth 401(k) if you have that option.
Contributing money to a traditional or Roth IRA each year.
Funding a Health Savings Account (HSA) if you have that option with a high deductible health plan.

If you’re self-employed or own a business, you might open a solo 401(k), SEP IRA or SIMPLE IRA to save for retirement instead. It’s important to understand the tax treatment of different retirement savings options.

For example, traditional 401(k) plans and traditional IRAs allow for tax-deductible contributions. Qualified distributions are taxed as ordinary income in retirement. Roth accounts don’t offer a tax deduction, but you can make withdrawals tax-free when you retire.

A Health Savings Account is not a retirement account, per se. It’s meant to be used to save money for medical expenses, but it can double as a source of retirement income since you can withdraw funds for any purpose after age 65 without a tax penalty. You’ll just owe regular income tax on withdrawals.

Investment Planning

Investment planning is related to retirement planning, but it can include different aspects of managing tax liability. For instance, say that you’re investing through a taxable brokerage account, which is subject to capital gains tax. Your financial advisor can offer different strategies for managing tax liability, which may include:

Holding investments longer than one year to take advantage of the more favorable long-term capital gains tax rate.
Choosing tax-efficient investments, such as exchange-traded funds (ETFs), which can trigger fewer turnover events than traditional mutual funds.
Harvesting tax losses to offset some or all of your capital gains for the year.

Your advisor may also be able to guide you on how to deduct expenses related to investment properties if you own one or more rental homes. They could also help with executing a 1031 exchange if you’re interested in swapping out one property for another to minimize capital gains tax.

Tax Deductions and Credits

Tax deductions reduce your taxable income, which can help to push you into a lower tax bracket for the year. There are numerous expenses you might be able to deduct, including:

Mortgage interest
State and local taxes
Charitable donations
Business expenses
Self-employment expenses
Medical expenses
Student loan interest

Tax credits, meanwhile, reduce what you owe in taxes on a dollar-for-dollar basis. For instance, if you owe $1,000 in taxes and qualify for a $1,000 tax credit, the credit can wipe out what you owe. Some credits are refundable which can increase the size of your tax refund for the year. A financial advisor can walk you through the various deductions and credits you might be eligible to take in order to reduce your tax liability.

Withdrawal Planning

As you approach retirement, it’s important to consider how you’ll withdraw the money that you’ve saved. Your advisor can discuss different strategies for withdrawing money from a 401(k), IRA or taxable brokerage account so that you’re not overpaying taxes or draining your retirement reserves too quickly.

Your advisor may also discuss ways to tax-friendly ways to create supplemental income in retirement, such as purchasing an annuity or taking out a reverse mortgage. An advisor can also help you figure out when to take Social Security benefits to maximize your payment amount and how to coordinate those benefits with other sources of income in retirement.

The Bottom Line

Knowing what happens to your tax liability with proper financial planning is important for creating a long-term strategy for growing wealth. Handing over more money than you need to in taxes doesn’t offer any tangible benefit and it can be problematic if it leaves you with less money to save and invest. Having a trusted financial advisor to work with can ensure that you’re meeting your tax obligations without shortchanging your goals.

Financial Planning Tips

Tax planning can seem complicated if you’re not well-versed in the Internal Revenue Code. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Robo advisors can offer a more affordable way to manage financial planning, as the fees may be lower than what traditional advisors charge. However, it’s important to know what you’re getting for the money. For example, some robo-advisors offer tax loss harvesting but not all of them do. Additionally, robo-advisors aren’t really equipped to offer one on one advice about tax planning or investing. Those are good reasons to consider working with a human advisor instead, even if it means paying a slightly higher fee.

Photo credit: ©iStock.com/Wasan Tita, ©iStock.com/Extreme Media, ©iStock.com/Charday Penn

Rebecca Lake, CEPF®
Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.

Source: smartasset.com

Apache is functioning normally

June 2, 2023 by Brett Tams

This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Source: thesimpledollar.com

Apache is functioning normally

June 2, 2023 by Brett Tams

Top life insurance companies

Company	Best for	J.D. Power Score in 2022 U.S. Individual Life Insurance Study	AM Best Financial Strength Rating
Guardian	Life insurance coverage without a medical exam	787/1,000	A++ (Superior)
Mass Mutual	Whole life insurance	780/1,000	A++ (Superior)
Mutual of Omaha	Digital accessibility	801/1,000	A+ (Superior)
Nationwide	Customer satisfaction	791/1,000	A+ (Superior)
Northwestern Mutual	Universal life insurance	794/1,000	A++ (Superior)
Prudential	Policy personalization	773/1,000	A+ (Superior)
State Farm	Term life insurance	839/1,000	A++ (Superior)

How Bankrate picked the best life insurance companies for 2023

To find the best life insurance companies of 2023, Bankrate’s editorial team started by researching the largest life insurance carriers on the market. We also analyzed life insurance company ratings, including customer satisfaction scores and financial strength ratings from trusted, unbiased sources, including J.D. Power and AM Best. Next, we looked at whether or not each insurer offers a mobile app, online portal, 24/7 customer service and local agents to determine each company’s accessibility. We then factored in each company’s coverage capacity (the maximum dollar amount of each company’s death benefit), the number of riders for optional coverage and the availability of a no-medical exam underwriting option. More information about each carrier is available below to help you learn about their benefits and drawbacks.

You may notice that we don’t include average rates in our analysis. That’s because rates vary widely based on each policyholder’s age and health metrics, as well as the type of policy they choose, their death benefit level and any riders they add on. Life insurance companies don’t reveal average rates, since that information reflects the general health of its policyholders and could put privacy at risk. Life insurance rates are incredibly personal, so average rates aren’t a helpful metric when choosing a company. Additionally, rates don’t vary as much between life insurance companies as they do between auto or home insurance companies. Generally, insurance experts recommend that you choose a life insurance company based on the specific product you need, rather than the rate.

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Choosing the best life insurance policy is not a decision to take lightly. The insurance company’s history, as well as its reputation for customer service, financial stability and death benefit payouts are just a few of the things that can impact both your experience and policy value. We assessed NAIC ratings based on market share, financial stability ratings from sources like AM Best and customer satisfaction scores from J.D. Power. We also examined the number of endorsements and riders available, general accessibility, coverage capacity and whether medical exams were required as part of the underwriting process in order to make our picks.

Compare the best life insurance companies

Shopping for life insurance can be intimidating but Bankrate is here to make the process easier. When studying the largest life insurance carriers, there are some metrics that you can rely on to help effectively compare your options. Does one company offer a wide range of life insurance policy types, as well as riders and endorsements to personalize your policy, compared to another? What does the qualification process look like, and what might your estimated life insurance premium be?

From there, you can also compare companies’ financial strength ratings and customer service scores from trusted third-party agencies, such as AM Best and J.D. Power, for an unbiased view of which providers may excel in these areas and give you the best experience.

Guardian

Best for: Life insurance coverage without a medical exam

The Guardian Life Insurance Company of America ranks well in customer satisfaction and financial strength and offers the most term life insurance riders on our list. According to the National Association of Insurance Commissioners (NAIC), the company also has fewer than baseline policyholder complaints and offers multiple no-medical exam policy options.

Guardian provides easy policy management through its network of more than 3,000 financial representatives across the nation and online account management. Guardian carries an A++ (Superior) financial strength rating from A.M. Best and offers multiple coverage options depending on your life stage, goals, needs and budget.

Learn more: Guardian Life Insurance review

PROS

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Dividends available on some policies
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Easy online management
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Policies available for HIV-positive applicants
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Multiple no-medical exam policy options

CONS

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Must purchase coverage through an agent
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Rider details limited online

MassMutual

Best for: Whole life insurance

MassMutual won a Bankrate Award in 2022 and 2023 for best whole life insurance thanks to its A++ (Superior) financial strength rating from AM Best and for offering 13 whole life insurance riders, the most of any company we analyzed.

MassMutual, also known as Massachusetts Mutual Life Insurance Co., is a U.S. life insurance company owned by its policyholders, allowing select policyholders to earn dividends when the company does well. MassMutual offers an online application process for term life policies. Coverage takes effect immediately upon application approval, and applicants must usually complete medical exams for all term and universal life policies.

Learn more: MassMutual Life Insurance review

PROS

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Free coverage for qualifying low-income families
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Convenient mobile app
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Numerous riders
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Superior financial strength
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High coverage capacity (the maximum dollar amount of a policy’s death benefit)

CONS

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Limited online quotes
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Medical exams required for term and universal life policies
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No final expense policies

Mutual of Omaha

Best for: Digital accessibility

Mutual of Omaha ranked just behind the overall winners of Bankrate’s best life insurance study. The company ranks well above average in J.D. Power’s customer satisfaction survey and earned a financial strength rating of A+ (Superior) from AM Best. Mutual of Omaha offers no-medical exam life insurance options, and its digital features could make managing your life insurance policy easy.

Some people may be looking for the best online life insurance experience. In terms of accessibility, Mutual of Omaha offers a robust digital app, an online portal, local insurance agents and a 24/7 phone line for accepting your payments.

Learn more: Mutual of Omaha Life Insurance review

PROS

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Easy online quote process
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Offers digital money management app
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High J.D. Power customer satisfaction score

CONS

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Does not provide dividends
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Not all life insurance can be quoted online

Nationwide

Best for: Customer satisfaction

Nationwide offers a user-friendly mobile app, streamlined online portal and a network of independent agents across the U.S. Combine those features with an above-average J.D. Power customer satisfaction rating, and Nationwide could be a great choice for customer satisfaction.

The multi-line insurer offers seven riders for universal life, the second-highest number of riders of any company on our list. Nationwide also received an A+ (Superior) financial strength rating from AM Best, making it possibly one of the best life insurance companies in the marketplace in terms of third-party ratings.

Learn more: Nationwide Insurance review

PROS

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No-medical exam options available for universal, whole and term life insurance programs, depending on eligibility
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Above-average J.D. Power customer service score
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Plentiful rider options

CONS

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Limited online quotes
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Policy acceptance not guaranteed
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No 24/7 help line

Northwestern Mutual

Best for: Customer service

Northwestern Mutual won the 2023 Bankrate Award for best universal life insurance company due to its high financial strength rating, highly-rated customer satisfaction and available financial planning services. Northwestern Mutual sells coverage through agents, which could be a good fit for those who prefer face-to-face interactions over a digital purchase process.

Earning an A++ (Superior) financial strength rating from AM Best, Northwestern Mutual shows a strong history of being able to pay claims. As a mutual company, it is owned by its policyholders. Northwestern Mutual offers a variety of term, whole and universal life insurance policies. Because universal life coverage is flexible, you may be contacting your agent more often. Northwestern Mutual ranks highly in Bankrate’s internal study of accessibility for providing a mobile app, online portal, local agents and a 24/7 customer service phone line that accepts premium payments.

Learn more: Northwestern Mutual Insurance review

PROS

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Dividends available on whole life insurance policies
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Flexible policy options
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Wide range of riders
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Easy-to-use online portal and mobile app

CONS

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Must buy coverage through an agent
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Limited information available online

Prudential

Best for: Policy personalization

Prudential is the third-largest U.S. life insurer based on market share rankings from the Insurance Information Institute (Triple-I). In our study, Prudential Financial ranked just behind our overall best life insurance company winners in customer satisfaction and accessibility. It offers plentiful rider options, easy-to-use online tools and live agent support.

The company has nine universal life insurance riders — more than any other carrier on our list. It offers a variety of term life and universal life insurance policies, giving customers a greater level of flexibility than some of its competitors. However, keep in mind that Prudential does not offer whole life insurance or no-medical exam policy options.

Learn more: Prudential Life Insurance review

PROS

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Live agent support available
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Online tools
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Plentiful rider options
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Variety of term and universal life policies

CONS

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Medical history required for quotes
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Limited online quotes
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Selective policy options
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Below-average J.D. Power customer satisfaction score

State Farm

Best for: Term life insurance

State Farm was another two-time Bankrate Award winner, scoring the prize for best term life insurance in 2022 and 2023, thanks to its top-notch customer service and accessibility tools. As one of the top life insurance companies, State Farm also received the highest customer satisfaction score from J.D. Power.

State Farm offers accessibility tools including a 24/7 customer helpline, easy-to-use mobile app, online portal and more than 19,000 exclusive local agents across the U.S. With an A++ (Superior) rating from AM Best, State Farm has a history of financial stability. The carrier offers a variety of term life insurance options as well as whole, universal and variable universal options.

Learn more: State Farm Insurance review

PROS

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Numerous policy and rider options
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No medical exams required for some policies
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Highest J.D. Power customer satisfaction rating

CONS

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$10,000 maximum for final expenses insurance
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Age-dependent exam plans
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Can only purchase from an agent; no online option

Source: thesimpledollar.com

Apache is functioning normally

June 2, 2023 by Brett Tams

This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Source: thesimpledollar.com

Apache is functioning normally

June 1, 2023 by Brett Tams

A senior couple walking together on a sunny day. The man is pushing a bicycle with a basket on it.

Nitat Termmee/Getty Images

There are a few different types of life insurance policies to choose from when you’re shopping for coverage. That includes whole life insurance, which is a permanent type of life insurance policy that remains in place for your entire life and guarantees a death benefit, as long as premiums are paid. But while whole life insurance can offer a number of unique perks, it may not be the best option for everyone. Before you make a decision on your life insurance coverage, it may benefit you to learn more about the pros and cons of whole life insurance, as well as how it works, in order to make the best choice possible for your unique circumstances.

Key takeaways

Whole life insurance is a permanent policy that remains in force for your entire life, as long as premiums are paid, and guarantees a death benefit.
Whole life insurance policies may cost two to three times more than term life insurance policies because of the expected payout.
Whole life insurance policies usually have a cash value component that you may be able to put towards premiums when enough funds accumulate.

What is whole life insurance?

Whole life insurance offers coverage for your entire life as long (in most circumstances) as you’re paying your premiums. In return, the death benefit is essentially guaranteed to be paid out to the beneficiaries in the event that the policyholder passes.

In addition, whole life policies include other benefits, like a cash value component, which is an account that accumulates funds over time. This account is funded by the policy’s premiums, which are what you pay to keep your policy active. As the policyholder, you can choose to borrow against the cash value component during your lifetime under certain circumstances.

How does cash value work?

The cash value component of a whole life insurance policy can be used in a variety of ways and has a few tax considerations to keep in mind. You may borrow against it, use it to pay premiums or make tax-free withdrawals, within policy limits. Withdrawals over the amount of the cash value may be considered taxable income and will reduce the death benefit amount that goes to your beneficiaries. Your beneficiaries will also not be able to access this cash value when you pass away, as it can only be used while you are alive.

Knowing how to leverage the cash value can be a useful tool. When you borrow against the cash value amount, you will not have to undergo a lengthy approval process from a bank or lender, and you will likely enjoy a lower interest rate. Borrowing against the cash value account may be the right fit for individuals in a pinch who want a loan with an easy approval process. Additionally, a loan against the cash value is not reported to credit bureaus, meaning it does not impact your credit score. Just remember that any amount that remains unpaid when you pass will likely be deducted from the death benefit total.

Best whole life insurance

Many regional and national life insurance companies offer whole life policies, so choosing the right one will require some research. Bankrate’s list of the best whole life insurance companies may be a great place to start your search. To determine this list, our insurance experts chose these providers based on the following considerations: customer satisfaction rankings from J.D. Power’s 2021 U.S. Individual Life Insurance Study, financial strength scores from AM Best, reported complaints from the National Association of Insurance Commissioners (NAIC), available coverage options and digital policy management tools.

The cost of whole life insurance

Generally, whole life insurance is more expensive than the same amount of term life insurance coverage. This is because whole life insurance policies are guaranteed to be paid out, as long as the policy remains in force and premiums are paid. As such, whole life policies might also come with a lower potential death benefit compared to a term policy.

However, whole life premiums remain stable and the policy comes with a cash value account, which policyholders can leverage for other financial needs. Your specific whole life insurance policy cost is determined by multiple factors, including the amount of coverage you choose, your age and your relative health.

Learn more: Affordable life insurance companies

Is whole life insurance worth it?

Some people may prefer whole life insurance because it remains in effect for the insured’s entire life and because the cash value component adds additional financial flexibility. However, these financial components also contribute to a higher rate compared to premiums associated with a term life insurance policy. Whether or not whole life insurance is worth it to you depends on your financial situation, budget and long-term goals.

On the other end of the spectrum, many people prefer the shorter-term coverage that comes with a term life policy. For instance, if you only want coverage for a limited amount of time — such as when your children are in school or while you still owe on a mortgage — you may want to apply for a term life insurance policy just for the period of time when the financial protection is most critical. Term policies are typically much more affordable, as a payout is significantly less likely to occur. If deciding between term life vs. permanent life insurance, knowing what your immediate and long-term needs are, budget and purpose for life insurance can help you make a choice.

Frequently asked questions

- A whole life insurance policy comes with a cash value account that can be invested, but since it is considered low-risk the cash value is usually minimal. Whole life insurance policies are designed to provide loved ones with a death benefit after your passing, rather than to act as an investment vehicle. While the investment component of insurance can be a nice added perk to a whole life insurance policy, other forms of investment may generate higher returns. A financial advisor can help you determine whether or not a whole life policy is right for your situation, taking into account its investment component.
- How much life insurance you need typically depends on your situation and the goals you have for your policy. You may also want to keep in mind your individual financial obligations when determining the amount of life insurance you need. For instance, if you have personal debt, a mortgage, or upcoming college tuition payments for your children, you may want to factor in those expenses. If you financially support someone into adulthood, such as a special needs family member, you may want to factor their living expenses into your life insurance coverage, as well. Typically, a licensed agent or certified financial professional can guide you in estimating how much life insurance you need, or you can use Bankrate’s life insurance calculator as a starting point.
- You may have less need for life insurance coverage if you’re single and have no dependents, since this likely means that you have less people who would be financially at-risk if you were to pass away. However, some policyholders choose to purchase life insurance to pay for their funeral expenses, or to leave money to a favorite organization or charity.
  
  This is one reason single people may choose to obtain a term policy, which can typically be converted to a whole life policy ahead of the policy’s expiration when you may marry or have dependents in the picture. Obtaining a policy when you are young and in relatively good health may help you secure good rates for such a time when insurance becomes more critical.

Source: thesimpledollar.com

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June 1, 2023 by Brett Tams

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Top offers on Bankrate vs. the national average interest rate

Loan term

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Loan type

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Top offers on Bankrate:

6.19%

National average:

7.15%

For the week of May 26th, top offers on Bankrate is X% lower than the national average.

On a $300,000 30-year loan, this translates to $XXX in monthly savings.

Today’s national 30-year refinance rate trends

For today, Thursday, June 01, 2023, the average 30-year fixed refinance interest rate is 7.19%, increasing 11 basis points from a week ago. Meanwhile, the current average 30-year fixed mortgage interest rate is 7.13%, rising 7 basis points from a week ago.

Source: thesimpledollar.com

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May 31, 2023 by Brett Tams

This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Source: thesimpledollar.com

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May 31, 2023 by Brett Tams

If you’re moving away for college and planning to bring a car, remember to check how this change might impact your car insurance. You might need to purchase your own car insurance policy, for example, or you may be able to stay on your parents’ policy if you meet certain conditions. Having the right coverage in place can help ensure you’re covered in case of an accident.

If you’re a teen driver or you have a teen driver listed on your policy, you might also be looking for ways to save. Adding a younger driver can make car insurance more expensive, but the good news is that some companies offer cheaper average rates than others for college students. In addition, several companies offer competitive student discounts.

The best car insurance for college students

While many of the best car insurance companies provide discounts to college students, some are more generous than others. Below, Bankrate’s insurance editorial team selected five top car insurance providers that offer competitive rates to college-aged drivers on their parents’ policy, according to 2023 auto insurance rate data pulled from Quadrant Information Services.

Each company is listed with its Bankrate Score, which shows how well each insurance provider performs overall, on a five-point scale. Our team calculates Bankrate Scores by analyzing each company’s average premiums, coverage offerings, discount options, complaints filed with the National Association of Insurance Commissioners (NAIC), mobile app, J.D. Power score for customer service and AM Best rating for financial strength. The closer a company scores to five, the better it performs across each category.

Insurance company	Bankrate Score	Average full coverage premium with a student discount on their parents’ policy	Average full coverage premium without a student discount on their own policy
Geico	4.4	$2,523	$4,048
State Farm	4.2	$2,689	$7,089
Progressive	4.2	$3,163	$7,088
Farmers	3.8	$2,762	$6,567
Allstate	3.8	$4,184	$7,089

*Rates calculated for 18-year-olds students, either on their parents’ joint policy with a student discount applied or on their own policy without a student discount applied

Geico

Why we picked this carrier: Geico offers a low average full coverage rate when adding an 18-year-old college student to their parents’ car insurance policy.

If you’re looking for cheap car insurance, you may want to get a quote from Geico. Geico’s average annual cost for full coverage car insurance for 18-year-olds on their parents’ policy is $2,523 per year with a good student discount. College students may also be able to qualify for other discounts to further bring down the cost, like Geico’s discounts for membership in several organizations. The company received a high Bankrate Score of 4.4 for its wide range of discounts and low average premiums. However, the company lost a few points for its lack of optional endorsements. Unlike some of its competitors, Geico does not offer a 24-hour helpline.

PROS

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Offers discounts for fraternity, sorority, honor society and other membership organizations
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Several student discounts available
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Low average rates for college students added to their parents’ policy

CONS

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No 24/7 helpline
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Few optional endorsements

Learn more: Geico insurance review

State Farm

Why we picked this carrier: State Farm offers a generous potential discount percentage for good students.

Parents with 18-year-old students on their State Farm auto policy pay an average annual cost of $2,689 for full coverage car insurance with a good student discount. State Farm offers savings for eligible college students who can maintain a GPA of at least 3.0. Students attending school away from their primary residence without a car may also be eligible for a distant student discount, and combining these two discounts could result in an even lower premium. The company received one of the highest Bankrate Scores on our list for its low average premiums, accessible mobile app and excellent online policy management. However, if you’re interested in buying accident forgiveness coverage, a State Farm policy wouldn’t be ideal. The company only offers the coverage as a perk earned by having a certain number of claim-free years on your record, which can’t be bought.

PROS

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Low average rates for college students added to their parents’ policy
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Good student and distant student discounts available
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Offers a safe driving program for teens called Steer Clear

CONS

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Gap insurance unavailable
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Accident forgiveness can’t be purchased, only “earned”

Learn more: State Farm insurance review

Progressive

Why we picked this carrier: Progressive’s Snapshot telematics program could be a great savings opportunity for college students who drive safely and infrequently.

Progressive’s average annual cost of full coverage car insurance for 18-year-olds on their parents’ policy is $3,163 with a good student discount. In addition to the standard good student and distant student discounts, Progressive also offers Snapshot, a usage-based car insurance program — which could help lower your rate based on your driving habits. The company earns a high Bankrate Score for its exceptionally wide range of coverage options, plentiful discounts and seamless online policy management. However, the company tends to have lower-than-average customer satisfaction ratings according to J.D. Power.

PROS

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Usage-based car insurance available
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Good student and distant student discounts available
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Offers an automatic teen discount for drivers age 18 and younger

CONS

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Typically ranks lower than the average in J.D. Power customer satisfaction
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Rates may differ between online and agency quotes

Learn more: Progressive insurance review

Farmers

Why we picked this carrier: Farmers offers several discount opportunities to students.

Parents with 18-year-old college students on their policy pay an average of $2,762 for their insurance each year with Farmers with a good student discount applied. Farmers also offers a youthful driver discount for anyone under 25 who is a child or grandchild of a current policyholder. While Farmers scored well in terms of mobile app and policy management, the company doesn’t have 24/7 customer support and is not available nationwide.

PROS

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Students who make the dean’s list or honor roll may be able to save
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Several student and young driver discounts available, such as the Youthful Driver discount
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Offers a telematics program called Signal

CONS

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Not available nationwide
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No 24/7 support

Learn more: Farmers insurance review

Allstate

Why we picked this carrier: Allstate has multiple discount opportunities for college students.

Although Allstate has a high average premium for a student on their parents’ policy, college students may be able to apply discounts to bring down the cost of auto insurance. College students who can maintain a GPA of at least 2.7 may qualify for a good student discount, which is more generous than many other insurers’ good student discount qualifications. The company’s Bankrate Score was impacted by its high premiums. However, it gained points for its A+ (Superior) AM Best financial strength rating and user-friendly policy management.

PROS

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Money-saving programs such as Smart Student and teenSMART available
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Several student discounts available
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Robust digital tools

CONS

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High average premiums
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Fewer additional coverage options than other carriers

How can college students lower their car insurance premium?

Because car insurance rates for young drivers are significantly higher than the national average cost of car insurance, finding ways to save money may be critical. To find cheap car insurance for college students, you may want to get several quotes to give you an idea of what you will pay. Some other ways to save include:

Student discounts

Many car insurance companies offer discounts designed specifically for college students, such as:

Affiliation discounts for students

Many insurance companies also offer discounts for students who participate in certain organizations or associations, such as:

Other ways to save

In addition to student and affiliation discounts, there are other ways college students can help lower car insurance premiums using these additional savings programs:

Lower your mileage: When you spend less time on the road, there’s a lower risk of accidents happening, so many carriers will offer lower car insurance premiums to drivers who rack up fewer miles.
Drive a used car: Newer cars may be more expensive to repair or replace, so rates could be higher. A used car is generally cheaper to fix and may qualify you for lower car insurance premiums than a new car. Driving a vehicle with extra safety features is another way to potentially earn lower premiums, so explore models with safety features like anti-lock brakes, electronic stability control, forward-collision warnings and automatic emergency braking.
Explore pay-as-you-go insurance: Instead of paying full price for car insurance, you might be able to sign up for pay-per-mile insurance, which monitors your driving and charges your car insurance accordingly. It’s a popular option with several car insurance companies: Allstate offers its Milewise program and Nationwide has its SmartMiles program.
Car additions: Some additions and upgrades may make your car safer and help you save money on car insurance premiums.
- Dash cams: Dash cameras could help reduce car insurance rates by reducing the likelihood of crime involving your vehicle and also protecting you against false liability claims that could cost your insurer money. Discounts for dash cams aren’t common, but you may find a carrier that offers one.
- Navigation systems: A GPS navigation system can help keep you feel more prepared when driving, helping you drive slower and more safely, which could translate to lower rates.
- Anti-theft device: A car alarm or other anti-theft device may earn you extra discounts by lowering the risk of theft or vandalism.

Ways to save on driving

Driving can be expensive, especially so for college students on tight budgets. Keeping transportation costs low can help students afford to keep their cars and maintain insurance on the vehicle. Here are some ways to save on gas and vehicle maintenance.

How to save on gas

Gas can be pricey, especially if you drive often. Here are some ways to lower your gas costs:

Choose a car with good gas mileage: College students often commute between home and school, so a car with excellent gas mileage can easily save hundreds of dollars each year.
Use a rideshare service: Using rideshare services like Uber and Lyft can help you save on gas costs, and may be especially cost-effective if you opt for group ridesharing, where you split the cost with others.
Utilize public transportation: Public transportation can almost entirely eliminate transportation expenses. Buses, trains or subways are often a fraction of the cost of driving and are usually accessible at most colleges or universities.
Invest in a bicycle: A bicycle can be an even better substitute for public transportation, especially for students in urban areas. Using a personal bicycle is free after purchase, and there are also typically lots of options for low-cost bike sharing or rentals in more populated areas.
Carpool with your classmates or colleagues: If you must drive, consider setting up a carpool or car-sharing arrangement with classmates or colleagues who live along your route. They will probably appreciate the opportunity to save money and it gives you the added benefit of some company during the commute. Just be sure to talk to your insurer if you’re exchanging money for gas and maintenance, to make sure you’re still covered.

How to save on maintenance

Maintenance costs should be factored into buying a vehicle as well, as they can be a large portion of your car budget. Here are some tips to save on maintenance:

Find car deals for new graduates: Many car manufacturers offer special purchase deals for current college students or recent graduates to buy a new car. There may also be short-term leasing specials available for students for those not ready to purchase a vehicle.
Ask about student savings programs for oil changes: Another potential place to save is regular oil changes. College students can burn through many miles and require more frequent oil changes, but many of the larger chains, such as Jiffy Lube, offer students discounts.
Utilize free tire and air fill-up services: To save extra money on diagnostic and professional services, check your tire pressure yourself. Most gas stations offer free or cheap stations to check tire pressure and add air if necessary.
Research DIY repairs: There are several basic car repairs that can be done at home. Learning how to do essential maintenance can save money on parts and high labor costs. It will also save time to repair the car on your own schedule. These basic repairs are easy to learn and can save hundreds of dollars. Before attempting them, it’s worth researching potential safety hazards so that you can avoid complications:
- Change the battery.
- Change the oil.
- Change your spark plugs.
- Replace tail lights or headlights.
- Swap out windshield wipers.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with age 18 (base: 40 years) applied. The 18-year-old driver on their own policy is a renter. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Source: thesimpledollar.com

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Top life insurance companies

How Bankrate picked the best life insurance companies for 2023

Methodology

Compare the best life insurance companies

Guardian

PROS

CONS

MassMutual

PROS

CONS

Mutual of Omaha

PROS

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Nationwide

PROS

CONS

Northwestern Mutual

PROS

CONS

Prudential

PROS

CONS

State Farm

PROS

CONS

What is whole life insurance?

How does cash value work?

Best whole life insurance

The cost of whole life insurance

Is whole life insurance worth it?

Frequently asked questions

Is a whole life policy a good investment?

How much life insurance do I need?

Do I need life insurance if I am single with no dependents?

Top offers on Bankrate vs. the national average interest rate

Today’s national 30-year refinance rate trends

The best car insurance for college students

Geico

PROS

CONS

State Farm

PROS

CONS

Progressive

PROS

CONS

Farmers

PROS

CONS

Allstate

PROS

CONS

How can college students lower their car insurance premium?

Student discounts

Affiliation discounts for students

Other ways to save

Ways to save on driving

How to save on gas

How to save on maintenance