What is the FDIC’s purpose?

The FDIC’s primary purpose is to ensure the integrity of the banking system and maintain public confidence in financial institutions. The agency was created in 1933 in response to the Great Depression, when thousands of banks failed and people lost all of the money they’d deposited; millions even lost their entire life’s savings. Congress created the agency to prevent such a profound crisis from happening again.  

The FDIC is responsible for preventing financial institutions from engaging in high-risk activities that put depositors’ money at risk. To accomplish this, the agency inspects and closely monitors banks to prevent risky behavior. The FDIC also has the power to liquidate and close down failing financial institutions in order to safeguard the economy.

The FDIC stands as a critical safeguard for individual account holders by protecting deposits from loss in the event of a bank failure or widespread financial crisis. In simple terms, this gives you as an account holder the peace of mind that you won’t lose your money if your bank goes under. 

What accounts are insured by the FDIC?

FDIC insurance covers a range of bank accounts that allow you to deposit and withdraw your money. These accounts include:

• Checking accounts 
• Savings accounts
• Money market deposit accounts
• Certificates of deposit (CDs)
• Negotiable order of withdrawal (NOW) accounts

How is the FDIC funded?

The FDIC is the rare federal government entity which draws no funding from the federal budget. Instead, the agency and any countermeasures it takes in case of financial emergency are supported by the Deposit Insurance Fund (DIF). Financial institutions covered by the FDIC are required to pay into the DIF on a sliding scale, based on their size and the riskiness of their investments. If and when the FDIC needs to rebuild its funds after a bank failure or economic crisis, the agency also has the power to raise money by increasing fees for all members, or to sue officers from the failed banks to recoup its deficit. Finally, the FDIC can borrow up to $100 billion from the U.S. Treasury or the Federal Financing Bank (FFB). 

What is the FDIC’s role in case of bank failure?

If a bank begins to falter, the FDIC has the power to step in and institute corrective measures, even up to the point of forcibly taking over the institution. This notably occurred during the 2008 financial crisis, at which time the FDIC liquidated and shut down some failing institutions. 

As a depositor, you have protection from the FDIC during such a crisis, ensuring that you are able to retrieve your money as long as it has been deposited into an account at an insured institution. In such circumstances, your insured funds either moved to another member bank that has agreed to take over your former account, or the FDIC issues you a check for your account balance, up to the $250,000 maximum covered by FDIC insurance. If depositors hold more than the insured limit, the FDIC may still be able to help, as approved and willing financial institutions might be able to buy the additional uninsured amount and return your remaining deposits. However, this process can take years, and there’s no guarantee of retrieving your lost money beyond the $250,000 covered by FDIC insurance.

What is the FDIC’s importance to you?

The security of your money is paramount, so making sure your checking and savings accounts are protected is important. You’ve likely seen the phrase “Member FDIC” on bank websites or your account statements; that lets you know your money is covered by FDIC insurance. This assurance can help you bank more confidently, especially in times of economic uncertainty.

The FDIC plays a crucial role in upholding the stability of the banking system by overseeing major financial institutions and providing insurance for depositors like you. When you bank with Stash, your deposits are covered by FDIC insurance, and you can count on robust security measures to keep your account secure. 

The post What Is FDIC Insurance? appeared first on Stash Learn.

In fact, the nearly 1.3 million active members of the military have a special set of circumstances that they have to keep in mind when they’re mapping out their finances. If you’re in one of the military’s seven divisions, you may have to leave your family at a moment’s notice when you’re deployed, with the average tour of duty lasting up to 12 months. Being in the military also means potentially risking your life, which could possibly expose your family to financial risk.

To help you plan, you can take advantage of some key benefits available only to members of the armed forces, including loans, mortgages, retirement plans, insurance, and discounts. Here are some things to keep in mind if you’re in the military and starting to build a financial blueprint.

Create a budget

Whether you’re part of the military or not, the first place to start when planning your finances is with a budget. One budget you might consider is the 50-30-20 one, which requires you to split your monthly income into 50% for your fixed, essential expenses, 30% for your variable, nonessential expenses, and 20% for saving and investing. 

When you’re creating your budget, take note of your regular paycheck, as well as any other income you have, from an approved part-time job or from a military stipend. Remember that if you have a family, you’re eligible to receive a monthly stipend for housing, depending on how many dependents you have. You’ll also receive a separation allowance if you’re away from your family for more than 30 days.

Maybe you’re saving up for a house, an engagement, or to have kids. You may want to prioritize your savings in that case, and allocate more than 20% of your income to your savings, if you’re able to do so.

Protect yourself

As a member of the military, you can protect yourself, your family, and your things with insurance.¹ Having insurance can provide financial security for you and your family should something happen to you. There are military credit unions designed specifically for service members that can help you bank and may get you the protection you need, including Andrews Federal, Navy Federal, Pentagon Federal, Security Service Federal, and the United Services Automobile Association (USAA).  

USAA, for example, offers a variety of services from auto insurance, homeowners insurance, life insurance, loans, brokerage accounts, and more. Navy Federal offers different kinds of bank accounts, credit cards, loans, and more. Before being deployed, you’ll want to make sure your life insurance policy includes an “act of war” clause in case something happens to you, says Brandon Young, a financial planner and the founder of Fulgent Wealth Management, based in Tempe, Arizona. “Many credit unions and military banks offer life insurance during deployment with such clauses,” says Young. 

Before being deployed, you should also call your auto insurance provider and let them know you’ll be away from your car for a while. “Most automotive insurance groups will allow a deployed member to save money on their auto insurance by contacting them,” Young says. “Generally their rate will have been reduced while deployed and sometimes for a few months after. ” 

You should also consider having a power of attorney (POA) document before deploying. A POA  names a spouse or other family member to handle any financial emergencies that come up in your absence.  “One scenario we see often is when a person is deployed and their account has fraudulent activity or some other issue,” says financial counselor Jennifer Stogner from Huntsville, Alabama-based Redstone Federal Credit Union. In that case, having a POA can guarantee that someone will be able to work with the proper authorities to fix that situation. 

Save for the future and retirement

Perhaps one of the most important things you can do is put money away for the future, whether you stay in the military or not. Since you’re employed by the federal government, you’re entitled to a federal retirement arrangement known as a Thrift Savings Plan (TSP). Your TSP is similar to a 401(k), meaning that you’ll contribute pre-tax income to the account and pay taxes when you withdraw from it in retirement.

If you joined the military after January 1, 2018 or if you’re covered under the Blended Retirement System (BRS), which made military retirement plans more similar to civilian ones, the government will match up to the first 5% you contribute to your TSP every pay period. So try to contribute as much as you can to your TSP. Remember that in 2023, you can contribute up to $22,500 to your TSP.

The TSP also allows servicemembers to purchase an annuity, which is a long-term investment handled by an insurance company providing regular payments during retirement. People might choose to purchase an annuity to help protect against outliving their retirement money. It can also ensure that a beneficiary will continue to receive those payments after you pass away. You can find more information about annuities here.

It’s also important to save for emergencies and long-term goals. “Most servicemembers I worked with not only invested in their TSP, but they set aside additional funds within an IRA or a taxable brokerage account,” Young says. Investing some money in the market through a brokerage account can lead to higher returns than leaving your money in a savings account. However, all investing involves risk, and you can lose money. Stash urges customers to follow the Stash Way, our financial philosophy, which includes investing regularly in a diversified portfolio that includes stocks, bonds, and exchange-traded funds.

Capitalize on military discounts 

Your status as a member of the military can qualify you for certain discounts and financial benefits. As an active member of the military or as a veteran, you can have access to loans and mortgages backed by the Department of Veterans Affairs (VA), often with better terms than typical loans offer. Serving at least 90 consecutive days during wartime or 181 days during peacetime allows you to apply for those loans. “Over the course of a conventional 15-to-30-year mortgage, you will save thousands and thousands of dollars,” says Adem Selita, the founder of credit counseling service The Debt Relief Company based in New York. 

You should also always keep an eye out for any discounts for members of the military, Selita suggests. Certain schools, including St. Joseph’s University, Berklee School of Music, California Southern University, and more offer tuition discounts for active duty members of the military and the veterans. You can also get reduced rates from cell phone providers, retailers, amusement parks, and some travel. You can find out about military discounts here.

How Stash Can Help

Stash can help you achieve your financial goals, whatever they look like. With Stash, you can open a brokerage account and start investing small amounts of money in a diversified portfolio.

Investing made easy.

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The post Planning Your Finances as a Member of the Military appeared first on Stash Learn.

But getting a degree and entering the next phase of your life comes with a whole new set of expectations and responsibilities. Graduation often means starting your first full-time job and getting your first significant paycheck. That paycheck also comes with more financial responsibilities, like budgeting to pay your bills on time, saving, and even planning for retirement. 

New grads are entering a hot job market. There were a record 11.55 million available jobs as of March 2022, with the number of job openings outweighing the number of available workers. Still, inflation at its highest level in decades, which could eat into your pay once you get your first job.

Stash put together a checklist of six things new college graduates should know as they enter the “real world:”

#1 Create a budget

You might already have a budget from college. But if you don’t, and  you’re starting a full-time job or have a summer gig, the first thing you should do is make one, or alter the one you have to fit your post-graduate circumstances. 

One good template to follow is the 50-30-20 budget. First, you need to calculate how much money you have coming in each month. If you get two regular paychecks per month, their total is your monthly income. If you’re waiting tables or working a gig where your income varies, monitor how much you make in a month and use that as your benchmark. 

Then, you need to tabulate your monthly expenses. Maybe you just rented your first apartment or leased a car. Figure out how much you’ll spend each month on necessary, fixed expenses and include that in your budget. Under the 50-30-20 framework, your fixed expenses should be 50% of your income. You will also need to know how much you spend on nonessential, variable expenses like going out to eat or shopping. These expenses should make up 30% of your budget. The remaining 20% of your budget should be saved, for whatever your long-term goals may be. 

You can adjust the percentages as you see fit. Maybe you’re living with your parents and can afford to put a little more than 20% in savings.

#2 Start a rainy day and emergency fund 

You may be tempted to spend that first adult paycheck on a pair of sneakers you’ve always wanted or a big screen TV for the new apartment. While it’s fine to splurge from time to time (as long as it’s in your budget), you should also try to start saving small amounts of money for short-term and long-term goals. 

You’ll want to have a rainy day fund where you keep $500 to $1,000 in case you get hit with an unexpected expense, like a car repair or broken iPhone. Your rainy day fund should be liquid so that you can use it at a moment’s notice. You’ll also want to consider having an emergency fund, with three to six months’ worth of expenses, in case of something more serious like a layoff or medical emergency. This money can be kept somewhere that it can earn a return, such as in a high-yield savings account or a brokerage account. 

#3 Make a plan for repaying student loans

As of April 2022, 46 million Americans owed federal student loan debt, amounting to a total debt of $1.75 trillion. So if you graduated with some student loan debt, you’re not alone. While you probably don’t want to think about your student debt immediately after graduation, it’s best to start planning early.

Depending on what kind of federal student loans you have, you likely don’t need to start making payments towards your debt for six months. People with Direct Subsidized, Direct Unsubsidized, or a Federal Family Education Loan have a six-month grace period during which they don’t have to make payments. 

However, you should know when your first payment is due, and how you’ll make those payments. You’ll need to set up a repayment plan with your loan servicer. You may consider setting up your loan payments in advance so that you make them automatically. You should also include those payments in your budget when it comes time to make them.

#4 Start saving for retirement 

When you’re just leaving college, you’re probably not worried about your retirement savings. But the earlier you start putting away money, the better off you may be when it comes time to retire.

The sooner you start investing, the more money can work for you through the power of compounding. Compounding is any return earned on your principle, or your initial investment, plus your past returns. 

For example, say you start with $100 and put $50 a month away for 20 years, with an annual return of 8%.¹ You’d have just under slightly more than $30,000, but you’d only have put away a little more than $12,000. In this scenario compounding could add about $18,000 to what you save. 

Using the same example above, the person who starts saving in his or her 20s may be able to put away almost twice as much as the person who starts in his or her 30s, which could set you up for a more financially sound retirement. (Find out more about how saving early for retirement can help here.)

If you have a full-time job, your employer might offer you a retirement plan, such as a 401(k) or, if you’re a teacher or government worker, a 403(b). Know what your options are, and start putting a percentage of your paycheck into your retirement account. Your employer may even match up to a certain percentage of your retirement contribution. 

If your employer doesn’t offer you a retirement plan, you can still start saving by opening an individual retirement account (IRA). IRAs allow people to save for retirement independently, without having to rely on an employer. There are two different types of IRAs: traditional and Roth IRAs. The main difference between these two types is that you pay taxes on the money you contribute to a Roth IRA, so that you don’t have to pay taxes when you withdraw from the account during retirement. You contribute to a traditional IRA with pre-tax income, so you have to pay taxes when you withdraw during retirement. 

You can set up a traditional or Roth IRA with a Stash Growth plan ($3/month).  

#5 Start building credit

Your credit history is the sum of all the transactions that have been reported to credit bureaus in your name over the years; these are all recorded in your credit report. Your credit score is a point-based rating system that assesses how responsible you are with loans and debt over time. Having a credit score can give you access to things you might want later in life, like a mortgage, student loans for graduate school, and even a mortgage for a house. 

Credit scores run from a low of 300 to a high of 850, which is considered perfect credit. A score of 670 or above is considered good credit.  Paying your student loans, credit card bills, and others each month can help you maintain a strong credit score. Another general rule of thumb is to never use more than 30% of the total credit you have on all of your cards or credit lines.

When you’re just starting off after college, you might not have a credit history or score. So depending on your situation, now may be a good time to sign up for a credit card, if you haven’t yet. Something to consider is that you may only want to get a credit card if you’re absolutely certain you can pay your credit card bill in full each month.

Debit cards are an alternative to credit cards. They draw money directly from your checking account, rather than a credit line, and they can help you stay on top of spending while keeping you out of debt. They may not help you develop a credit history, however. You can learn more about the difference between credit and debit here.

#6 Consider insurance coverage

This new chapter in your adult life often comes with things like getting a first apartment, a car, or if you’re lucky a house, all of which you may want to protect with renters, auto, and homeowners insurance.  Apartment insurance will protect things like your furniture, clothes, headphones, and computer, as well as offer liability  protection in case someone injures themself in your home. Auto insurance, which is required in most states, can help cover medical costs, repairs, property damage, even the replacement cost of your car if you get into an accident, or if your vehicle is stolen. Having renters and auto insurance can protect you and your things in the case of accidents, theft, and more. 

You should also consider signing up for health and life insurance. If you’re on your parent or guardian’s health insurance plan, you may be able to stay on that plan until you’re 26. Or you may be able to enroll for health insurance through your employer. (Just make sure you don’t miss the enrollment deadline.) If neither option is available to you, you can get insured through HealthCare.gov, the health insurance marketplace established by the Affordable Care Act. You may also be able to get life insurance through your employer, but there are other ways to get a plan as well. 

#7 Start investing small amounts

No matter where you stand in your post-graduation life, you can start investing small amounts of money to save for your future with Stash. Stash allows you to invest regularly in stocks, bonds, and exchange-traded funds (ETFs). Just remember to follow the Stash Way® , our investing strategy which includes regular investing, investing for the long term, and creating a diversified portfolio. 

If you want to take the guesswork out of investing, another option is to consider Smart Portfolio. You can find this in the Stash app, or upgrade your subscription to our Growth or Stash+ plans. It’s a discretionary managed portfolio that Stash’s investment team of financial experts developed and recommends for you based on your risk profile. Smart Portfolios also align with the Stash Way®, to minimize risk.

The post Congrats, Grad! Here are Six Financial Goals Now That You Have That Degree appeared first on Stash Learn.

Having coverage from health insurance can ease your cost worries, whether you need to go to a routine appointment, or you have a more serious, unexpected health expense. That can be especially true if you work part time, or for yourself. If you’re a freelance worker, or your employer doesn’t offer you insurance, you can have access to health insurance too, and the following guide can help you navigate the open enrollment period.

Why do you need health insurance?

Health insurance can pay for your care and your dependents’ care in the event of emergencies, and also provide for routine care. 

Having health insurance can protect you from incurring massive, unplanned costs. For example, without health insurance a three-day stay in the hospital costs $30,000 on average and treating a broken arm can cost up to $7,500, and while the average annual premium for one person is $7,188 and $20,576 for a family. Having healthcare can defray those costs.

When you have health insurance, you’ll pay a monthly premium. In exchange, depending on your policy, you can typically get preventative care like annual physicals, cancer screenings, and vaccines without any additional cost. And, again, depending on your policy, you can go see doctors, typically at a fixed copay, or fee, for the visit. You may want to make sure that you go to doctors that are in your network to keep your costs down. (More on that below.)

What could your costs be? 

In addition to paying a monthly premium, many plans will have something called a deductible, which is the amount of money you’re responsible for in healthcare costs before your insurance provider takes on the remaining costs. For example, you might have a $2,000 deductible. As a hypothetical example, let’s say you need to get surgery that costs $20,000. You might have to pay up to that $2,000 before your insurer will cover the remaining cost. (But keep in mind that some things might be covered by your insurance whether you’ve met the deductible or not. This is typically true of something like annual physicals.)

Your plan might also require you to pay coinsurance, or a percentage of your healthcare costs, after you’ve hit your deductible. Typically plans have an out-of-pocket maximum for your coinsurance, which is the most you’ll pay for health coverage in a given year.

Your health insurance can also help you avoid paying the full ticket price for some prescription drugs, which can be very expensive upfront. Some prescription drugs are entirely covered by your insurance, so you may not have out-of-pocket costs for them.

Good to know: Some plans may offer only in-network coverage, which means you must use a pre-approved network of providers, otherwise your care may not be covered and you may have to pay the full cost for treatment. Some plans may also allow you to seek out-of-the network care in addition to in-network care, but at a higher cost to you.  

What’s an open enrollment period?

Health care insurance isn’t like car insurance, which you can purchase at any time.  You generally have to apply for it during something called an open enrollment period (OEP), which is the annual period of time during which you can sign up for major healthcare plan coverage. Remember though, you have to re-enroll for coverage every year, whether you want to make changes to your plan or not. 

If your employer offers you health insurance, you’ll probably hear from your human resources department. But if you’re unemployed, a contractor or freelancer, or your employer doesn’t offer you health insurance, you should be aware of the general deadlines for the Health Insurance Marketplace established by the Affordable Care Act, where anyone can get a plan.

Open enrollment for the 2021 Health Insurance Marketplace starts on November 1, 2020, and runs through December 15, 2020. (Some states may extend the deadline, though. You can learn more about deadlines here.)

What is a qualifying life event?

You can often adjust your coverage outside of the OEP if you experience a qualifying life event. Qualifying life events include life changes that can make you eligible for a special enrollment period outside of the OEP. 

Losing your health coverage, or experiencing a change in residence or household might qualify you for a special enrollment period. For example, if you turn 26 and are no longer on your parent’s insurance, or you get married, you may need to enroll outside of the OEP.

What to look for when signing up for health insurance

It’s important to know what to look for in a health insurance policy if you need to shop for a plan on your own. If you already have a doctor or doctors that you like, you may want to check if those doctors would be in-network or covered under certain plans. This is also true of any specialists you might visit. For example, if you go to therapy, you should check that your plan has mental health coverage. Additionally, if you take certain prescriptions, you should check if the plan covers those prescriptions, and how much of the cost it covers. 

When comparing different plans that meet your needs, you can also compare costs. Find out the monthly premium for each plan. Make sure there’s room in your budget for monthly costs. And know what you’re getting with each plan. For example, a lower premium might give you less coverage than you want, and cost you more in the end if you need care. 

Take a look at the deductibles and the coinsurance of the plans you’re considering. Remember, the deductible is the amount of money that you’ll be obligated to pay before your insurer starts paying, and coinsurance can also add another layer of cost. You’ll also want to see what your copays will be for in-network and out-of-network doctors. You may want to find a policy with extra coverage if you go to the doctors, or to specialists, often. If you have dependents who’ll also rely on your health coverage, make sure you find a plan that works for your entire family. 

Stash and Stride

Stash partners with Stride* to help you find health insurance coverage through the Health Insurance Marketplace. Stride works with major health insurance providers, and can help you navigate the Affordable Care Act’s Health Insurance Marketplace, providing you with competitively-priced options for health care coverage. If you work part-time for a company such as Uber or Etsy, your company might even work with Stride to make insurance more accessible. 

The deadline to enroll in health coverage is December 15th** and your coverage will start as soon as January 1, 2021. 

Get started with Stride and enroll today.

The post If You Don’t Have Health Coverage, Stride Can Help appeared first on Stash Learn.

If someone’s going through the day without life insurance, they may be just like the person in the scary movie who goes into the dark basement alone. Leave those financial nightmares to Hollywood producers. You can help protect your loved ones from the financial headaches they can encounter should something happen to you. 

Protect the people you love against all things spooky

Life insurance can shield your loved ones from a sudden loss of income if you die, by offering a payout to the person, or people, that you designated in your policy. These people are called beneficiaries. 

This year changed the way we do everything, including how we celebrate Halloween, it can be especially important to reflect on how your beneficiaries rely on you. Think of the many expenses your loved ones may need to face alone if you’re not around: 

• Funeral expenses. Funerals can be expensive. In fact, the average burial in North America costs between $7,000 and $10,000. If your loved ones aren’t prepared to cover the costs of your funeral, life insurance can help them afford to give you a proper ceremony.
• Day-to-day costs. Think of the people who depend on you and your income. Or the people who count on your spouse’s income. Even after you’re gone, they’ll still need to pay for groceries, clothes, medical care, and more. Life insurance can allow your beneficiaries to maintain their way of life. 
• Unexpected emergencies. Think of how you react when someone you love gets hurt or experiences another emergency. If you’re not around to take care of them, you want to help ensure that they’re still getting the help they need. A life insurance policy can do just that. A payout after you’re gone can help beneficiaries when they’re in a jam. 

If you purchase term life insurance, you can pick a certain time period of coverage, such as 10 or 20 years, and our beneficiaries can receive a payout from your policy if you pass away during that time. 

No tricks, just treats with Bestow life insurance

This Halloween, get ahead of the scary things that go bump in the night. With Stash’s partner Bestow,* you can apply for a term life insurance policy quickly online. 

With Bestow, you can get a quote for life insurance right from your home. Before you start handing out candy this Halloween, grab your own treat: a quote from Bestow.*

The post Don’t Let Life Creep Up on You. Help Protect Your Loved Ones with Life Insurance. appeared first on Stash Learn.

In fact, approximately 61 million people in the U.S. live with some form of disability, according to the most recent data from the Centers for Disease Control. What’s more, approximately one quarter of 20-year-olds can expect to be out of work at some point before they reach retirement age because of a disabling condition, such as a muscle or bone injury, cancer, mental illness, or even stroke. 

Missing work can especially be a problem because about 40% of U.S. consumers say they wouldn’t be able to come up with $400 in an emergency, according to the Council for Disability Awareness.

Fortunately there’s disability insurance, which can offer you income protection by replacing part of your paycheck if you are injured or become too sick to work. 

Your employer might offer either short-term or long-term disability insurance. And five states and Puerto Rico offer Temporary Disability Insurance programs for workers. So you check what coverage might already be available to you. But since the majority of private sector workers lack access to either short-term or long-term disability insurance, know that you don’t have to depend on your employer to get it. You can purchase disability insurance on your own, which can help protect your finances by replacing some of your income in the event of an illness or accident.

Disability insurance, the basics

Disability insurance can be for either short-term or long-term needs.

• Short term disability insurance can replace a portion of your income for a period of weeks or months.
• Long-term disability insurance can replace a portion of your income for a period of years, or even decades. 

Most commonly, disability insurance can cover approximately 50% to 60% of your income. But there is a wide range of coverage options depending on your policy, and some plans may pay up to 80% of your income, according to the Consumer Federation of America. 

Because it’s for a longer period of time, long term disability insurance will typically cover less of your income (usually between 40% and 60%), and monthly payouts are typically capped at a specific dollar amount, typically ranging from a few thousand dollars to as much as $25,000. 

Keep in mind that the more disability coverage you have, the higher your monthly premium for that coverage will likely be. 

Disability insurance, factors to consider

When you choose a disability insurance policy the insurer will conduct a process called underwriting, to assess the risk of insuring you. Among the things the insurer will consider:

• The type of work you do. It can be more risky to do manual labor than it is to do an office job, and insurers may assign a risk score to the type of work you do.
• Your gender. Women often pay more for disability insurance than men do since the cost of claims for women are usually higher. Men and women who are under the same group policy usually pay the same amount though.
• Your age. Your policy is likely to cost more the older you are.
• Your health. If you have underlying health conditions, underwriters will factor that into premium costs and coverage amounts.
• Your income. Policy underwriting will take into account how much money you make to come up with a coverage amount.

Also, if you are unemployed and not currently earning an income, or are currently disabled, you will not be able to apply for disability insurance in most cases.

You can get disability insurance if you are self-employed

You don’t have to work a 9-to 5-office job in order to get disability insurance. And if you work for yourself, it may be even more important to get disability insurance to protect your income and your financial well being. Underwriting requirements vary, but in order to qualify you typically need to prove you have income from self-employment by showing tax forms.

Stash and Breeze

Stash’s partner Breeze offers long-term disability insurance coverage. Breeze doesn’t use commissioned sales agents so you don’t have to worry about someone pushing a policy on you that you might not need. And Breeze has policies that can fit all lifestyles and requirements. Also, its costs and fees are transparent, so you won’t be surprised by costs.

Breeze’s underwriting process is fast and 100% online. You can find out about coverage options and get a quote within minutes, and plans can cost as little as $9 a month.

You can find out more about long-term disability from Breeze here.

The post Learn the Basics of Disability Insurance appeared first on Stash Learn.

Having the right insurance can help you stay on track financially, and it can be crucial to making sure you, your loved ones, and your property are protected if the unexpected happens, such as death, an accident, an injury, or theft. 

Stash has partnered with providers that offer access to life insurance, renters and homeowners insurance, disability insurance, and auto insurance.

Life insurance 

Life insurance can help protect your loved ones against loss of income and other financial uncertainties in the event of your death. In fact, purchasing life insurance can be an essential part of a smart financial plan, which should also include regular saving and investing.

Here are four reasons why getting life insurance may be a good idea for you.

1. It can help replace lost income. Your wages and salary can be essential to your family. Life insurance can help your spouse, partner, or children replace the income you contributed when you were alive. That can include day-to-day expenses, monthly bills, and other common financial obligations.

2. It can help with burial costs. It may be unpleasant to think about, but the average funeral costs up to $10,000 today.Life insurance can help offset some of those costs.

3. Paying for educational expenses. If you have children, you’ll want the best for them, especially after you’re gone. If your beneficiary puts your life insurance payout in a custodial account, or some other educational account, such as a 529, it can help fund their educational expenses. The money can also help your beneficiary cover the cost of your remaining student loans.

4. Paying outstanding debts. You and your spouse or partner may have a mortgage or other debts, such as credit card or other loans you co-signed together. Life insurance could help your beneficiary with paying off the balance of those debts.

Renters and homeowners insurance 

If you’re a renter or a homeowner, insurance can help cover your home and your personal property (both inside and outside of your home) in the event of theft or other qualifying loss. Renters and homeowners insurance provides financial protection for your home and your belongings in case of certain incidents such as fire, windstorms, or vandalism. These policies can also protect you from liability claims, including medical bills, when someone tries to sue you for damage or injury on your property.

Disability Insurance

Disability insurance can give you paycheck protection by replacing part of your income if you are injured or become too sick to work. You can get short-term disability insurance, which can typically replace approximately 50% to 60% of your income for a period of weeks or months. Or you can get long-term disability insurance, which typically can cover slightly less of your income (usually between 40% and 60%) for a period of years, or even decades. 

Auto Insurance 

If you own a car, you most likely need car insurance. It is required in almost every state in the U.S. and can help cover medical costs, repairs, property damage, even the replacement cost of your car if you get into an accident, or your vehicle is stolen. If you plan on buying or leasing a car, you need auto insurance. 

Stash and insurance

You don’t grow wealth in a day, and you want to make sure you protect yourself and your assets as you grow your wealth. You can find out more about insurance from some of Stash’s insurance partners here. 

We’ve built a home for all your money needs in one app, uniting investing, spending, saving, and guidance under a single roof.¹ Stash offers you access to the essential building blocks for achieving financial security. 

Remember, as you’re building the financial future you want, Stash wants to be with you every step of the way to help you achieve your goals. 

The post The Stash Way: Consider Insurance for Your Long-term Financial Plan appeared first on Stash Learn.

School is likely to look a little different this year as a result of the ongoing Covid-19 pandemic. Whether your kids are headed back to the classroom in masks or whether they’re staying home and learning remotely, you probably want to do everything you can to make sure they’re safe and taken care of in the event that something happens to you or your spouse. Life insurance can be part of ensuring your dependents’ wellbeing. 

If you don’t have kids, now could still be a good time to reflect on your life insurance needs. Maybe you have student loans or other debt. Life insurance can be an important way to shield your family from the potential burden of your debt in the event that you pass away.

Meanwhile, the back-to-school season can be overwhelming. We’ll help you understand life insurance and how you can quickly get a quote from your home before you get swept away by your never-ending to-do list.

The ins and outs of life insurance

Life insurance is a type of insurance that can give a payout to a person of your choice if you pass away. This can provide your beneficiaries and through them your children and dependants with resources they may need every day, or to pay for future expenses. Good to know: A beneficiary is the person(s), trust, charity or estate you name on your life insurance policy. The beneficiary will receive the payout of your policy in the event of your passing. But minors cannot legally be beneficiaries of your policy, so it’s important to carefully decide how to name your beneficiaries if you have children who are minors.

There are two major types of life insurance: term and whole life insurance. Term life insurance is a life insurance policy that offers a specific time period of protection, or for a set “term”. Most commonly, you can purchase policies that last for 5, 10, 20, or 30 years. If you pass away during the term, your beneficiaries can receive a payout from your insurance policy.

Whole life insurance, on the other hand, can provide a cash payout to your beneficiaries regardless of when you die. Whole life policy monthly premiums are typically more expensive than those of term life policies.

How life insurance can help

Think of how much your kids depend on you or your spouse on a given school day. Here are some of the many ways life insurance can help your family after you’re gone: 

Every day expenses. If your family loses your income or your spouse’s, it could make it difficult to pay for daily needs such as groceries for lunch, new school supplies, and clothes, just to name a few. The payout from a  life insurance policy can help your family maintain their standard of living and cover those day-to-day costs.

Emergencies. Say your kid falls on the playground and breaks their leg or has an allergic reaction in the cafeteria. The payout from a life insurance policy can make sure that your family doesn’t drown in medical debt when they need care. 

Childcare. Your family might need to hire extra help to manage runs to and from school and extracurricular activities if you or your spouse passes away. Or they might need to hire someone to help out with online learning. The payout from a life insurance policy can help your kids and your spouse afford the help they need.

Education and extracurriculars. Education can be expensive, especially higher education. The cost of a college education has increased by more than 25% in the last decade and as of 2019, 43 million Americans owed federal student loan debt, amounting to a total debt of $1.5 trillion. The payout from a life insurance policy can help your family afford your kids’ education. Plus, if your kids play a sport or take music lessons, the payout from a life insurance policy can help them continue to do the things they love.

If you have student debt

Again, life insurance isn’t just for parents. If you have student loans (or other debt) from your undergraduate or graduate education, you might have taken on those loans with your parent or a loved one as a cosigner.

While it’s unpleasant to think about, your cosigners will be liable for paying back that debt if you were to pass away. 

Having life insurance can make sure that your cosigners will be covered (provided that you named your co-signer as your beneficiary) if something happens to you and they suddenly become responsible for your debt. A life insurance policy can cost a small amount of money per month and can protect your cosigner from taking a huge amount of debt.

Term life insurance with Bestow*

You can cross getting term life insurance off your list in minutes without even leaving the house to do so. Stash’s partner Bestow allows you to apply for term life insurance coverage virtually and quickly. 

With Bestow, you can get a quote for term life insurance easily. Bestow has partnered with two of the biggest life insurance companies so that you can apply for a policy from a trustworthy source. Get a quote now so that you can get back to packing pencil cases and helping with math homework.

The post Back-to-School Basics: Consider Getting Life Insurance for Your Family this Fall appeared first on Stash Learn.

Life insurance may be important for everyone, but it can be especially important for people with families who depend on them. No one wants to think about what their spouse or kids would do without them, but it’s something every parent should keep in mind. 

This Parents’ Day, reflect on what your loved ones may need should something happen to you. Life insurance can be one way to secure your family’s future. 

What is life insurance?

Life insurance is a type of insurance that can pay out when you die, providing your dependents with resources they may need¹. It can be especially important for parents who are the primary earners in the family to have life insurance. 

There are two major types of life insurance: term and whole life insurance. Term life insurance is a life insurance policy that offers a specific time period of protection, or for a set “term”. Most commonly, you can purchase policies that last for 5, 10, 20, or 30 years. If you pass away during the term, your beneficiaries can receive a payout from your insurance policy.¹ 

Whole life insurance, on the other hand, can provide a cash payout to your beneficiaries regardless of when you die.¹ Whole life policy monthly premiums are typically more expensive than those of term life policies.

Why parents should consider life insurance

If you’re on the fence about whether or not you need life insurance, think of all the ways in which your kids could need insurance if something happened to you or your spouse. Life insurance isn’t just for covering funeral expenses. 

A loss of income(s). Think about how your family would manage should they lose you or your spouse. Having insurance can make it possible for your family to maintain their standard of living—from getting groceries to paying off a mortgage—should they lose you and your income. 

Healthcare and emergency expenses. Consider how your family will cover unexpected expenses and emergencies without you. Emergencies happen. And while you might have money set aside for those instances in a rainy day fund, insurance can add extra financial protection for your family. A payout from life insurance can be a safety net for your family after you’re gone, for instance if your child breaks a bone or your home needs a sudden repair.

Childcare and education. You want the best for your children and their future. The average cost of childcare in the U.S. is $11,666 per year. Plus, the cost of a college education has increased by more than 25% in the last decade and as of 2019, 43 million Americans owed federal student loan debt, amounting to a total debt of $1.5 trillion.

If you get life insurance, you can help make sure that your child will get the education they deserve affordably. 

How parents can get life insurance with Bestow²

If you don’t have life insurance yet, you might be wondering how quickly you can fix that. With Bestow, you can sign up for term life insurance easily. Bestow has partnered with two of the biggest life insurance companies so that you can get a policy from a trustworthy source. 

This Parents’ Day, you can get a quote from Bestow, and help stabilize your family’s financial future.

The post It’s Parent’s Day! Consider Getting Life Insurance If You’re a Parent. appeared first on Stash Learn.

Still, life insurance can be an important building block for your financial plan. And It can help you and your family achieve financial stability, while giving you some peace of mind. Also it may not be as expensive as you might think.

Life insurance could be for anyone who:

• Has a spouse or partner, dependents, or aging parents who depend on them financially.
• Has a mortgage or some other big financial obligation to pay off.
• Is a stay-at-home parent who provides unpaid but essential childcare, transportation, and household work that keeps your family functioning.

Read on and we’ll explain.

What is life insurance?

Life insurance is a contract between you and an insurer that can pay money, usually a lump sum, when you die, to your beneficiaries. Just as auto insurance covers you in the event of a crash, life insurance can cover your spouse, partner, and dependents in the event that you pass away. 

You can think of life insurance as a life raft. It can provide your dependents and loved ones with financial resources to stay afloat, which is especially important if you were the primary earner in your family.

There are multiple types of life insurance, with two of the most popular being term life and whole life.

What’s term life insurance?

Term life insurance is a life insurance policy that offers protection for a specific period of time, or for a set “term.” Most commonly, you can purchase policies that last for 5, 10, 20, or 30 years. 

So, If you have a term life policy for 20 years and die within the 20 years, your beneficiaries can receive the payout from the term life policy. There are no restrictions on what your dependents can use the payout for, such as funeral or housing costs, or for day-to-day expenses.

Term life policies generally have lower monthly premiums than whole life policies. However, term life policies do not accumulate in cash value and expire at the end of the term.  That means you forfeit the funds that would have been paid out if you had died. Some policies may give you an option to renew for a new term when the old term expires, but the monthly premium is likely to be higher, because you will be older. 

Good to know: The payout for term life insurance is typically tax free.

What’s whole life insurance?

Whole life insurance, on the other hand, provides a cash payout to your beneficiaries regardless of when you die. (To help you remember how it differs from term, think of it as being valid for your  “whole life.”) Whole life policy monthly premiums are typically more expensive than those for term life policies.

In contrast to term life policies, whole life policies accumulate cash value over time from the premiums you pay, and this money typically grows tax-free. Some whole life insurance plans may even pay dividends as a distribution of the insurance company’s profits¹.  What’s more, policyholders can also borrow against the cash value of their accounts during their lifetimes. Assuming the account is current, there may be a payout when the policy holder dies. That payout will vary from policy to policy, according to state regulations, and depending on the cause of death.  Like term-life payouts, whole life policy payouts are also tax free. 

What do term life and whole life policies cost?

The cost of your policy can depend on the type and amount of coverage you want, how old you are, and where you live, among other factors. Term life policies for a healthy 35-year-old can average about $40 a month for several hundred thousand dollars worth of coverage. Whole life premiums, on the other hand, can cost significantly more for the same person.

The key differences

While both term life and whole life insurance have some obvious similarities, here’s a rundown of some key differences:

• Term life policies are for set durations of time, or “term”
• Whole life policies cover you for your entire lifetime.
• Term life policies are generally less expensive.
• Whole life policies accumulate cash value over time.
• Whole life policies can pay out dividends¹.

Which should you choose?

How should you decide between a term or whole life policy? The answer will depend on your particular situation and goals.

If you want to make sure your family is covered in the event of your death for a specific period of time, and prefer lower premiums, then a term life policy could be a good choice. Some life insurance experts say that because term life insurance is cheaper, it can allow you to take the money you save and use it to invest in stocks, bonds and funds.

If you want life insurance with coverage for your entire lifetime, and you want to use your policy as an account that gains value over time, and you are comfortable with possibly higher fees, then a whole life policy may be a better choice for you.

Why Stash partners with Bestow²

With prices starting at $8 a month and coverage starting at $50,000 (up to $1,000,000), Bestow has term life insurance options for Stash users as they look to continue their journey to making personal finance a source of hope. 

Bestow’s application and underwriting process is 100% online and requires no medical exam³, which can make shopping for life insurance easy and affordable. It’s as simple as filling out a form, and there’s no need to speak with an agent. But, if you do need to speak to someone for some guidance, the Bestow team can easily be reached on the phone, email, or chat.

You can go to Bestow’s website, and literally walk away from your computer with a quote for term life insurance coverage.

The post What’s Life Insurance and Why You May Need It appeared first on Stash Learn.

The truth is, it’s important to consider what your family might do without you and what you can do now to protect your family’s future, especially if you’re a mother.  Life insurance can help.

Why Do Moms Need Life Insurance?

Moms need life insurance, whether you have a 9 to 5 or stay at home or an expecting mother. A common misconception about life insurance is that it pays for funeral expenses and not much more. That’s true if you only get a small amount of coverage, but we’ll get to that later. But with a little planning ahead of time, moms can ensure that their families are taken care of.

If you’re currently employed, you may already have a basic life insurance policy through your job. That typically ranges from $25,000 to $100,000—roughly equal to your annual salary. That’s a good start, but probably not enough to cover your family’s needs (more on that later).

What about stay-at-home moms? Do they need life insurance? Absolutely! From cooking, cleaning, nursing, teaching, bookkeeping, chauffeuring, and more, studies have shown that if stay-at-home moms earned a salary, they’d make $178,201 a year¹! 

Our partner, Bestow, recognizes these contributions, and is proud to offer coverage to stay-at-home spouses who don’t have a traditional income to report. Your partner and kids would definitely feel the financial effects of your loss, and a life insurance policy from Bestow can help offer them some protection.

What Can Life Insurance Cover?

Life insurance is a federal income tax-free² benefit paid directly to your beneficiaries. There are no limits to what it can cover, but here are some things moms should consider in determining how much you’ll need, aside from funeral expenses.

Loss of income

A Pew Research Center study found that in 46% of households, both parents work full-time jobs, and 17% of households have one parent working full time while the other works part time. A life insurance policy can help maintain your family’s current lifestyle, even on one income. And if you’re a single mother and are the only source of income in your household, life insurance can replace your annual salary for years to come.

Childcare

The average cost of childcare in the US is $11,666 per year. With only one parent, your kids might need more hours of childcare (whether it’s daycare, after-school care, or a nanny) to help your spouse maintain a full-time job. This is especially important if your spouse doesn’t have a flexible work schedule.

Housekeeping

There’s no shame in having help. Household chores are time consuming, and if hiring a housekeeper means that your spouse can spend more quality time with the kiddos and less time doing laundry, dishes, and dusting those ceiling fans, this is definitely worth considering.

Extracurricular Activities

The cost of sports, music lessons, and other activities is steadily increasing. The average cost of extracurricular activities per child is nearly $739 a year. And if you have a kid in high school, the number is even higher. Expect to pay about $1,124 annually. Dios mio!

Emergencies

Medical expenses, car repair costs, job loss—it’s important to pad your savings account for rainy days. A healthy savings account can turn a financial emergency into a minor inconvenience, reducing or completely eliminating stress. And who doesn’t want that for their family?

Bestow³: Fast, Affordable Life Insurance You Can Trust

There’s barely enough time in the day for you, let alone for soccer games, piano recitals, and homework assignments. No wonder moms put life insurance coverage on the back burner even though they plan to buy it.

Bestow can make shopping for life insurance easy and affordable. They’ve partnered with two of the largest insurance companies to get moms like you to confidently secure your family’s financial future. Their data and technology-driven approach removes the unnecessary hassle of buying term life insurance. It’s as simple as filling out a form. No more pushy sales calls or invasive medical exams — no time for that! (But, if you do need to speak to someone for some guidance, the Bestow Team is just a phone call away.)

Get a quote from Bestow now, and literally walk away from your computer with coverage, confidence, and peace of mind (or at least until someone spills something on the kitchen floor, again!).

*This post was originally written by our friends at Bestow. For more life insurance content, check out their blog⁴.

The post A Mother’s Guide to Life Insurance appeared first on Stash Learn.

Why should I even consider life insurance?

In times like these, life insurance can provide you and your family some peace of mind and necessary protection. Life insurance also should be an important component of your financial plan, helping you meet your future goals by providing financial support when you might need it most.

Why you might try applying now…

With 1 in 4 Americans ordered to shelter in place or to practice social distancing, getting life insurance coverage from traditional brokers can be a process. The process of applying for coverage with many traditional insurance companies requires doctors appointments, labwork, paperwork, in-person meetings, and you usually cannot purchase a policy instantly.

Bestow,* an insurance technology company, is disrupting the industry and making it incredibly easy to apply for life insurance online, from the comfort of your home. For you, that means:

1. No medical appointments
2. Instant decisions
3. Flexible coverage
4. No paper forms

So while you’re cooped up at home and adding items to your spring cleaning list, you might want to consider adding life insurance to your list too. Applying is quick and easy!

The post Don’t Forget This Item on Your Spring Cleaning Checklist appeared first on Stash Learn.

Life insurance can help protect your loved ones against loss of income and other financial uncertainties in the event of your death. In fact, purchasing life insurance can be an essential part of a smart financial plan, according to some experts, which should also include regular saving and investing.

And purchasing life insurance while you’re young can have particular cost benefits.

Here are five reasons why looking into life insurance is likely to be a good idea.

1. Your premiums can be lower.

The younger you are when you purchase life insurance, the lower your monthly premiums are likely to be. When considering term life insurance, your monthly premium is a fixed amount that stays the same for the term of the policy.

2. It can help replace lost income.

Your wages and salary are essential to your family. Life insurance can help your spouse, partner, or children replace the income you contributed when you were alive. That can include day-to-day expenses, monthly bills, and other common financial obligations.

3. It can help with burial costs.

It may be unpleasant to think about, but the average funeral costs up to $10,000 today. Life insurance can help offset some of those costs.

4. Paying for educational expenses.

If you have children, you’ll want the best for them, especially after you’re gone. A life insurance policy can help fund their educational expenses, whether that’s in a custodial account, or some other educational account, such as a 529. The money can also cover the cost of your remaining student loans, which can be really helpful if you had a cosigner.

5. Paying outstanding debts.

You and your spouse or partner may have a mortgage or other debts, such as credit card or other loans you co-signed together. Life insurance could help with those loans.

Planning your financial future is always a challenge, and the future is filled with unknowns. Life insurance could help your family manage their expenses without you. And the sooner you consider a policy, the cheaper it’s likely to be.

Ready to get covered? Click here to learn more from our partner Bestow.¹

The post How Buying Life Insurance When Young Can Help You Plan Your Future appeared first on Stash Learn.

Regardless of the progress you’ve made (or haven’t made—we’re not judging!) on the goals you set for the new year, we think there’s one more goal to consider adding to your list: getting life insurance. It’s easy, affordable, and could be an important part of your financial plan.

Term life insurance can help protect your family from financial loss and can supplement lost income, as well as provide funding for education and everyday living expenses in the event you’re no longer around to provide for your loved ones.

Here’s why you should consider buying life insurance this year:

1. If you have debt

If you have a cosigner on your loans, whether it’s student or personal loans, they could be liable to pay off the outstanding balance.

2. If you’re buying a home (or you currently own one)

Don’t forget your home! If you have a mortgage, a life insurance policy can help pay off the remaining amount you owe so your family can continue living in their home.

3. If you’re making a major life change

Did you recently get engaged? Are you planning on getting married? Starting a family? Regardless of your family situation, if your loved ones depend on your income, your loss could cause financial hardship.

If you are a one-income family, your family would lose its income without the primary breadwinner. Even in a two-income family, the loss of one income source can make it difficult to maintain your current standard of living.

4. If you’re hitting a milestone birthday

The younger (and healthier) you are, the more affordable it can be to buy insurance.

In life insurance underwriting (the process that determines whether you’re eligible for coverage and at what cost), your age is a major factor. Generally speaking, the younger and healthier you are, the less you’ll pay for life insurance premiums.

Consider getting insurance now, so you can lock in better monthly pricing on a life insurance policy that lasts ten to twenty years and save money on the cost of your monthly premium.

Bestow*, our life insurance partner, makes it easy to apply for coverage in minutes. That way you can check this item off your list for this year, the next, and the years after that.

The post Life Insurance: A New Year’s Goal Worth Having appeared first on Stash Learn.

My 6-year-old son and I both have pre-existing conditions, including asthma. The steroid inhaler my son needs to use every day has a $250 co-pay until our deductible is paid. That $150 urgent care visit last month found I was in the earliest stages of pneumonia. We don’t have a choice to forgo medical care due to cost, because it could literally cost us our lives.

In 2016, I filed my taxes and claimed an affordable-for-me $6,790 in medical expenses with insurance through the Affordable Healthcare Act (AHA). In 2018, I filed taxes in a state of near panic, claiming a whopping $24,365 in medical expenses through the AHA—same insurance company with no major illnesses, surgeries or hospitalizations that year. It’s an increase of nearly 259 percent.

And I’m not alone. In 2018, Americans spend a collective $3.6 trillion on healthcare or about $11,172 per person. About 20 percent of  working-age, insured Americans reported having a hard time paying their medical bills to the point it caused serious financial challenges, according to a 2016 survey by the Kaiser Family Foundation and the New York Times. (The survey is Kaiser’s most recent on the subject.) Challenges include being able to pay for food, clothing, and basic household items, or being forced to work additional hours or take on additional jobs. For the uninsured, that number spikes to 53 percent.

“The biggest barrier is that things cost too much,” says Caitlin Donovan, a medical billing expert and spokesperson for the National Patient Advocate Foundation, a non-profit that advocates for affordable, quality healthcare for people with chronic, debilitating or life-threatening illnesses.

“What’s hard about health care is that it’s unpredictable,” she says. “Nobody is saying I’m going to get cancer next year so I’m going to make sure my preferred oncologist is in network.”

But there are several things you can do to avoid or reduce massive medical bills, and potentially save yourself hundreds, if not thousands, of dollars without sacrificing necessary medical care.

Here are five things Donovan recommends:

1. Carefully consider your health insurance options

Whether you are insured through an employer or the AHA, carefully compare your options to make sure you aren’t consigning yourself to a year’s worth of financial headaches.

The cost of your premium, or the amount you pay each month for your insurance, should be weighed against the plan’s deductible, or the amount you pay out of pocket before the insurance company pays. So a low monthly premium with a high deductible could cost you more in the long run.

If you have pre-existing conditions, do your homework before signing up with a plan to ensure that your doctors and specialists are in that plan’s network, which will save you money, and that the plan’s prescription drug benefits cover the medications you take regularly.

Most major insurance companies have a website that lets you look up whether a certain doctor is in network, but Donovan recommends calling the provider directly to double check, especially if it’s a specialist you see throughout the year.

2. Stay in network for medical care whenever possible

All health insurance plans, including Medicaid, have a network of providers and facilities included in their coverage. If you see a doctor in that network, they bill the insurance company and you are left paying a smaller amount, such as a co-pay. But if you are treated by a doctor not in your network, you could be on the hook for the full cost, including the doctor’s office visit fee and any tests or medications you received.

That includes hospitals and the providers that work there.

Even if the hospital is in your network, their providers might not be, meaning your insurance coverage may not extend to the bills charged by the doctors who treat you, which could include out-of-network physicians, anesthesiologists or surgeons. It’s a practice called “balance billing” or “surprise billing”and it costs Americans thousands of dollars.

You can try to avoid using out-of-network providers in a hospital setting by making it clear to every doctor and nurse that you see that you only want to be treated by an in-network provider.

Some patients, Donovan says, even resort to putting up a homemade sign outside their emergency room area or hospital room saying “Do not enter this room unless you are in network.”

While it’s not a guarantee, Donovan says, “it’s been effective for some people I’ve talked to.”

3. Watch your medical bills closely for errors

Donovan kept close track of her medical expenses during her third pregnancy.

“One of the things I stumbled across was figuring out how much mistakes would have cost if I hadn’t have caught them,” she says. “It was over $500.”

For example, after the birth of her son three months ago, Donovan says she was charged $250 by one provider. She paid the bill, but upon closer examination realized that provider, who was in her insurance network, never even tried to bill the insurance company. She shouldn’t have been charged at all and it took her eight months to correct the error and get a refund.

“I’m a medical billing expert and I still made this mistake,” she says, adding that she caught another bill that didn’t line up with the explanation of benefits, which would have added $100 more in overcharges.

“If you’re not paying attention to it…you’re going to end up paying more money,” she says. “I’ve never seen a mistake work out in favor of the patient.”

4. Negotiate everything

While you can never be sure if the person on the other end of the phone will have a sympathetic ear, it is worth calling your healthcare provider if you get an unexpected or larger-than-expected bill. First, make sure your insurance has paid for everything they are responsible for, Donovan says, then check the Healthcare Bluebook, an online medical care guidebook that lists reasonable rates for a multitude of medical services.

“Then start working directly with your [healthcare] provider. They have an incentive to work with you because they need to get paid,” she says. “No one is crazy enough to think someone could get a $30,000 bill and pay it in full within 10 days in cash.”

Things to ask for include:

• If they will take the reduced rate paid by Medicare or Medicaid
• If they will take the rate quoted by the Healthcare Bluebook
• If they will give you a cash discount
• If they will set up a payment plan to spread out payments

Also talk to your healthcare providers about your financial situation and any concerns you have about medical bills, even if it makes you feel uncomfortable.

“It’s hard to talk about healthcare, it’s hard to talk about you finances, but you should do it with you provider because they can help you,” Donovan says. That help can include giving you samples of expensive medications or altering your treatment plans with a lower cost option that still gives you the treatment you need.

5. Don’t pay the collections agencies right away

“When you’re dealing with collections the first thing to do is to not pay the bill,” Donovan says. “If you pay a bill to collections, if something is in collections, that means you are claiming it and owning as yours.”

This may sound counterintuitive, but it can buy you time and save you money to avoid paying a bill even after it goes to collections. You may still have to pay your bill in the end, but there are some things you can do to avoid paying a large lump sum.

First, know that the three major credit bureaus have agreed to give consumers 180 days to resolve medical debt before it goes on your credit report. That doesn’t stop your bill from going to collections, but gives you time to resolve it, or at least delay it, before your credit takes a hit.

You can  validate the bill by telling the collection agency the collection agency you want to dispute the debt. They then have 30 days to mail you documents verifying your medical bill and what the bill is for. If they can’t or won’t do that, they have to stop trying to collect.

You can also try to negotiate payments with the collections agency by asking if they will set up a smaller payment plan or even reduced payment plans.”

Donovan has some additional tips for people looking to lower or avoid paying large medical bills:

Understand medical billing jargon, including co-insurance, deductible and copay, so you are clear on what you are billed and what you are responsible. Check out the HealthCare.gov glossary for more information on these topics.

Shop around for prescription drugs. Work directly with the drug manufacturer or pharmacy for a discount or consult GoodRx.com to see which pharmacy in your area sells your prescriptions for the lowest cost.

Use a primary care physician as your first line of defense. Donovan says there is a trend for patients to skip the primary care provider and head straight to a specialist, but the latter may charge hundreds of dollars more for care your PCP could also give.

Avoid potentially unnecessary testing. Ask your provider if it’s really necessary for X-rays, bloodwork, ultrasounds, or other testing. These services might not be medically necessary and can add significantly to your bill.

The post 5 Ways to Reduce Your Medical Costs appeared first on Stash Learn.