personal finance
Guest Post – COVID-19 Impact on Life and Disability Insurance
First, we would like to thank every service person who reads this for their tireless work and dedication during this pandemic. It is because of people like you we have confidence that the United States will lead the world out of this current crisis.
The impact the virus has had on the insurance industry, which usually moves at a glacial pace has been astonishing and compassionate. Under normal circumstances, all life and disability policies have a 30- day grace period from when premiums are due to when they need to be paid. Currently, this has been extended by at least 60 days for a total of 90. The procedure to obtain the extension differs by company but is very easy and accessible. Please contact us should you need assistance with your company.
Regarding underwriting, the process by which insurance policies are approved, the benefit amounts available without a medical exam or lab work have been increased substantially for both disability and life insurance. For disability insurance you can now obtain as much as $6,000 per month of specialty specific disability insurance without an exam if you are under age 51. The situation is even better for life insurance, as you can now obtain up to $1M of level premium term life insurance without an exam and have the coverage in effect within a few days if you are under age 46 (unless you have medical issues). Premiums are extremely competitive. For a male age 35 a $400,000 policy with premiums guaranteed level for 20 years, the monthly premium is $20-$40 per month depending on your risk class. For comparison, SGLI is $24 per month for $400,000. Since most individuals with a family should maintain 7- 10 times their annual income in life insurance protection, SGLI is not adequate. Hopefully these changes will become permanent but as of now that is uncertain. Please contact us for any assistance:
- Andy G Borgia CLU
- D.K. Unger
- DI4MDS
- 888-934-4637
- www.di4mds.com
Finance Friday Articles
Here are my favorites this week:
Covid-19 Reminds Us of the Need for an Emergency Fund
No, You Didn’t Just Lose Half Of Your Retirement Savings
Here are the rest of the articles:
Actions to Take When Under Financial Pressure
Behavioral Finance Lessons from Bear Markets
Buying Foreign Stocks After a Fall
Does Experience Matter During a Bear Market?
Employee Versus Independent Contractor (people screw this up all the time when they start moonlighting)
Hard Times Teach Us About Money
Keeping My Balance During a Market Decline
Retirees and Pre-Retirees: You’ve Got This
Tax Loss Harvesting with Vanguard: A Step by Step Guide
The CARES Act – What Doctors Need to Know and Care About
The Danger of Not Checking Your Portfolio (I’ve Made a Huge Mistake)
The Relationship Between Earnings and Bear Markets
What Happened to Small Cap Value?
Would You Rather: Buy Too Early or Buy Too Late in a Bear Market?
Finance Friday Articles
I like these principles/quotes from the Vanguard article about dealing with market volatility:
Market volatility is normal and expected. History tells us this too shall pass. Consider this: To date, every significant market fall has been followed by a rebound. We anticipate downturns; we just can’t predict how low the market will go or when it will bounce back.
I trust my asset allocation because it’s based on my time horizon, risk tolerance, and goals.
I don’t know if market volatility will be the “new normal,” but I know it’s normal—so normal, in fact, we’ve posted several blog posts about it before.
Here are this week’s favorites:
Bear Market! What (If Anything) Should You Do?
Surviving Your Very First Market Crash
The Hardest Part of a Buy & Hold Strategy
Here are the rest of this week’s articles:
3 reasons not to move your portfolio to cash
10 Personal Finance YouTube Channels You Should Be Watching
Even Warren Buffett Can’t Nail the Bottom
FIRE Confessionals: How A Bear Market Has Impacted The Financial Independence Movement
Five Stock Market Alternative Investments 2020
Intra-Specialty Salary Differences on Merritt Hawkins
Recession, Coronavirus and the Future of FIRE
School’s in Session – 6 Takeaways from the Downturn
Social Security in a Down Market: Does it Make More Sense to File Early?
The Corona Crisis vs. The Great Depression
The Federal Reserve Doesn’t Control Mortgage Rates, The Market Does
The Simple Path to Wealth: Is It Really That Simple?
The Unpleasant Surprise of the Bond Market During COVID-19
What COVID Taught Me About Money
What Doctors Should Care About in the CARES Act (the Coronavirus Relief Package)
What Matters Most When Investing
What the $2 Trillion Stimulus Plan Means For Your Student Loans
Federal Tax Deadline Changed and Finance Friday Articles
Please note that tax day is now July 15th. This means you have until then to contribute to retirement accounts for 2019.
Here are my favorites this week:
How Are Diversified Portfolios Holding up During the Crash?
Should I Sell When the Market is Low? Dealing with the Bear Market
Here are the rest of this week’s articles:
6 Financial Takeaways From the Coronavirus Outbreak
9 Reasons NOT to Tax-Loss Harvest
A recession at hand—and a quick end
Bond ETF discounts during recent volatility
Diversification, Beating the Market, and Telling the Future
How Ben Carlson is Managing His Own Money Through the Crisis
How Does the Market Crash Impact Retirees?
How Much Time Does It Take To Manage Your Own Rental Properties?
How To Get Started in Telemedicine
Inject Discipline Into Your Investing Right Now
It’s Never Too Early to Start: The Rapid FIRE Approach of One Enterprising Medical Student
Random Thoughts on the Crash As We Catch Our Breath
The Impact of Coronavirus on Real Estate Markets
The Marginal Value of the Backdoor Roth. Is it Worth the Trouble?
The Market Is Rocky. Will Target-Date Funds Change Their Strategy?
What I’m Doing With My Portfolio During the COVID-19 Pandemic
What better to write about than this? Here is what I’m doing during the COVID-19 pandemic and its associated market volatility.
Sticking to My Investment Plan
Whether you are a do-it-yourself investor or use a financial advisor, everyone needs an investment plan. Otherwise you are just playing G&G, guessing and gambling.
The simple version of my investment plan was to invest aggressively, which meant 100% stocks, until I hit “my number.” That happened about 4 years ago, at which point I downshifted from an aggressive allocation to a more moderate one. Currently that is a 75/25 stock/bond asset allocation. I don’t invest in real estate (other than owning my house outright) and I don’t include the value of my pension or the equity in my house in my overall asset allocation.
At its most basic, this means that what I’m doing during the COVID-19 pandemic is sticking to my desired asset allocation of 75/25 stocks/bonds.
Rebalancing When My Asset Allocation is Off By > 5%
With all of this market volatility, similar to what happened in 2008-9, I see stock market declines as an opportunity to purchase more stocks when they are on sale. The market will eventually recover. It always has. And if it doesn’t, we have bigger problems and my portfolio probably won’t be the biggest thing I’m worried about.
When do I buy? I’m not a market timer. I just follow my plan, which says that I rebalance whenever my current asset allocation has deviated from my desired asset allocation by more than 5%. For example, a few days ago the declines in the stock market had moved me from 75/25 stock/bond to 68/32 stock/bond. I was > 5% off, so it was time to rebalance INTO the decline. This 5 minute video from Vanguard talks about rebalancing into a stock market decline, if you are interested in watching it. Was my timing perfect? Probably not, but that probably doesn’t matter very much in the long run.
How did I buy? I exchanged 7% of my bonds for 7% of stocks on the TSP and Vanguard websites. I did this all within my TSP and Vanguard IRAs so that none of the transactions would have any tax costs associated with them. You should always try to rebalance within retirement accounts unless you have taxable losses you can harvest. That said, I don’t tax loss harvest because now that I’ve hit my retirement number I just don’t care that much. I choose life over tax loss harvesting.
That’s It!
It is as simple as that. I stick to my plan and rebalance when I’m off by 5%. That’s what you should do. Stick to your plan.
If you don’t have a plan, you better get one. Here’s my stuff that might help or go to the White Coat Investor. He also offers a course to help you do it and recommended advisors if you want help. He also re-posted this article entitled, “How To Survive the Coming Bear Market.” Read it if you think my advice to rebalance into the decline is crazy.
Finance Friday Articles
Here are my favorites this week:
5 Ways To Make Lemonade Out Of A Lemon Market
Lock In Good CD Rates Before They Disappear
Here are the rest of the articles:
3 mistakes to avoid during a market downturn
Coronavirus Sell-Off Presents Tax-Loss Harvesting Opportunity
Different Ways to Make Five Million Dollars in Real Estate
Grab the Wheel to Deal With Market Volatility
Happiness Economics: What Actually Makes us Happy?
Harder Than It Looks – 3 Alternative Ways to Deal with the Stock Market Decline
How Real Estate Gets Impacted By A Decline In Stock Prices
How to Turn Your Financial Life Around
Lessons From Japan’s Lost Decade(s)
Perspective in a challenging time
Returns From the Bottom of Bear Markets
The Work From Home Survival Guide: Because Your Sanity Is Important
What’s Causing All the Panic Buying & Selling of Stocks?
What’s Different For Dual Income Couples?
Simple Steps I Take to Protect My Credit and Identity
My personal information has been stolen at least twice. As a result, I think it is important for everyone to consider taking basic steps to protect their information. Here are the simple steps that I recommend you use to try and protect your identity and credit:
- Open all mail. If someone opened a fraudulent account in your name, you might start to get mail that makes absolutely no sense to you. Don’t just chuck stuff that looks like junk mail.
- Use two factor authentication for all financial account logins. This is now required by the TSP, and it is for good reason.
- Use a password manager. I use Dashlane, although there are others. This ensures that your passwords are cryptic but that you don’t have to remember them.
- Consider establishing active duty credit alerts on all of your credit reports with all of the credit agencies.
- Check your credit report every four months, checking one from each of the three credit agencies. Some people check all of them at the same time once a year, but I think that by staggering them and doing one every four months it is more likely you’ll pick up something fishy sooner rather than later. Check for mistakes and accounts you don’t recognize. Both could be a sign of identity theft. Just go to AnnualCreditReports.com to get your free credit reports.
- Set up alerts so that you get notified whenever a transaction occurs without a credit card being present. Contact your credit card companies to get this set up. You can usually set dollar thresholds above which you want to be notified, or you can get notified about all transactions. When our credit cards have been hacked it has often been for modest amounts and things like gas purchases, so worrying only about high dollar purchases is probably not the way to go.
- Based on the Equifax hack and others, we have reported to the IRS that we are potential victims of identity theft. This means that we cannot file our taxes without a special pin that is mailed to us each year. This prevents others from fraudulently filing taxes in our name and stealing a fraudulent tax refund. Consider doing the same if this is applicable to you.
There are other steps you could consider taking that I have not personally adopted. For example, instead of an active duty alert you could place a freeze on your credit accounts. This prevents anyone (including you) from getting a credit card or loan in your name. It will also prevent you from doing things that require a credit check, like switching cell phone carriers or renting a house/apartment. Since I am still in the Navy, I decided to go with the active duty alert instead of the freeze due to the lower amount of hassle when we have to PCS in the future. Here’s a good post that explains the difference between the two options.
Websites like CreditKarma offer free, real-time credit monitoring. In the past I used their services, but don’t anymore. I honestly don’t remember why I turned it off, but I may consider signing up again now that I think of it.
Cyber incidents and identity theft are just par for the course nowadays and the price you pay for on-line convenience. Make sure you set up your own plan to limit the chances you’ll be personally affected by identity theft or cyber crime.
What is an Active Duty Credit Alert?
One option that military personnel have to protect their credit is to use an active duty alert. What exactly is an active duty alert?
A 12 month active duty alert is available if you are active duty in the US military. In addition to the normal fraud alert that civilians can use, your name is removed from prescreened credit or insurance offers you get in the mail for 2 years. It is designed to protect your credit while you are deployed, but you don’t have to be deployed to use it. We have this placed on our credit on a continuous basis to prevent fraud.
It forces businesses to take reasonable steps to verify your identity before issuing credit in your name. If you provide a telephone number when you place the alert, a business must either contact you at the telephone number you provided or take other reasonable steps to verify your identity. This helps them confirm that the credit application is really from you and not from someone who has stolen your identity. If you actually are deployed and are difficult to reach, you can assign a personal representative to answer for you, place, or remove the alert.
You can end the alert before 12 months, or request another one when the initial one expires.
You can place a fraud alert or active duty alert by visiting any one of the three nationwide credit reporting agencies – Equifax , Experian , or TransUnion. The one that you contact must notify the other two. You also can find links to their websites at IdentityTheft.gov/CreditBureauContacts.
Finance Friday Articles
Here are my favorites:
3 Reasons Why You Should Invest in Bonds
Can You Handle 100% of Your Money in Stocks During a Correction?
Four Opportunities Due to Coronavirus
Here are the rest of the articles:
3 tips for trading in volatile markets
20 Things You Need to Know About Asset Protection
All-Equity ETF Portfolio Doesn’t Add Up
Asset Allocation (Part 3): What’s in My Dream Bucket?
Bearing Up – 4 Lessons from Previous Bear Markets
Buying a $3 Million Umbrella Insurance Policy for $170 Per Year
Creating an Overreaction Plan for the Coronavirus
How the Coronavirus is Impacting Commercial Real Estate
It’s time to change the retirement planning conversation
Making the best of a market downturn
Partner, Parent, or Physician? A False Dilemma
Should We Buy Our Dream House?
The Best Cities To Buy Real Estate In America
The One Guarantee in the Stock Market
The Potential Impact of Coronavirus on Private Real Estate Investments
The Relationship Between Recessions and Market Crashes
Why Does The Stock Market Go Up Over Time?
Why Hospital Administrators Should Eat Last
Why I’m More Worried About the Bond Market Than the Stock Market
Why I Still Work (Even Though My Physician Husband Out-Earns Me)
Why One Mother Left Her GI Fellowship to Raise a Family
Finance Friday Articles
Here are my favorites this week:
Four Rules I Followed To Get Wealthy
Should I Try To Time The Market?
What to Do (With Your Portfolio) about a Likely Pandemic
Here are the rest of the articles:
3 mistakes to avoid during a market downturn
Asset Allocation (Part 1): What’s In My Security Bucket?
Asset Allocation (Part 2): What’s In My Risk/Growth Bucket?
Coronavirus Pandemic Won’t Have Long-Term Effects on the Stock Market
Freaked Out by the Stock Market? Take a Deep Breath
Lessons in Fear and Wealth from the Coronavirus
Not Breaking a Sweat from the Coronavirus
Questions Every Investor Needs To Ask Themselves Right Now
Should Capitalists Really Be Afraid Of A Bernie Sanders Presidency?
Survive a Market Crash! How We Thrived After 2 Financial Meltdowns
The 60 Day Qualified Dividend Rule
Top 5 Tax Loss Harvesting Tips
What Happens to Stocks After a Big Down Month?
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