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A medical power of attorney (or healthcare power of attorney) is a legal document that lets you give someone legal authority to make important decisions about your medical care. These decisions could be about treatment options, medication, surgery, end-of-life care, and more. The person you name in your POA to make these decisions is called your healthcare agent or proxy. We never know when something unexpected could happen to us, like a sudden injury or illness. With a medical power of attorney, you’re creating peace of mind for yourself and your loved ones by choosing someone you trust to make important decisions for you in the event you’re unable to.

When creating a medical POA, most people choose to make it durable. Having a durable medical POA means your agent’s authority to act on your behalf continues if you’re incapacitated — meaning you’re unable to communicate your wishes. Your agent would be able to make medical decisions for you during a time you’re unable to speak for yourself. Many courts assume a medical POA is durable by default, but it’s best to be explicit when writing your document.

When you name someone to make medical decisions for you, you gain peace of mind and control over your healthcare. It’s crucial that you have a healthcare power of attorney in place. You name someone in your healthcare power of attorney to make decisions regarding Your medical care, Your healthcare expenses, Your healthcare insurance, Your healthcare plans, Your right to make decisions regarding Your funeral arrangements, Your last wills and testaments, Your conservatorship, and Your Powers of Attorney (a common type of POA).

How to create a medical power of attorney

When creating a POA, you and your family members must work together to think about the issues that you need a power of attorney to make decisions about. (You need to do this so your agent can be named in the POA.) You may also want to consult an attorney to make sure your POA will be enforceable in court. Medical powers of attorney are, basically, a blueprint for how you want your medical decisions made. Deciding who can make those decisions in your absence can be a difficult and stressful thing to do. However, it is important to do this so you can rest assured that your wishes will be honored. It can also be helpful to give your healthcare agent permission to make decisions for you without your permission if you are unconscious or unable to make the decision yourself.

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Choosing your health agent

You can designate someone as your health agent by filling out a Health Agent Registration Form or by visiting your local probate court in the state in which you live. Your health agent should be someone who you trust with making important healthcare decisions on your behalf. To be your health agent, you must be of legal age (usually 18 years or older), have a physical or mental disability that causes you to be unable to make your own health care decisions, and not is a sibling of your POA. For example, your brother can’t be your health agent. Health agents make decisions about your medical care, health insurance, and/or medical treatment and require information to do so.

What does your healthcare agent have to do?

A healthcare agent has the legal authority to make decisions on your behalf. If you’re older than the age of 18, you should also name a healthcare proxy to make medical decisions for you. Make sure you know who your healthcare agent and proxy are before making any changes. You can use a medical attorney or CPA to help you. A CPA can act as a medical agent, guardian, or trustee. A CPA can provide support or advice to your healthcare agent or proxy and serve as an independent witness

How does my loved one benefit from having a medical power of attorney?

A medical power of attorney gives your loved one the ability to make important decisions about your care. But don’t take our word for it: see for yourself. Your healthcare agent or proxy will have complete decision-making authority over your medical care and treatment. That means they can make important decisions on your behalf, without you being able to intervene. This power of attorney will be separate from any other powers of attorney that you have for property, credit, or anything else.

What documents do I need?

You need to be able to name a healthcare agent or proxy and fill out a few legal forms. How do I become a legal POA? You should take responsibility for your health care decisions. Be sure to Become and remain a legal adult. Make sure you’re not under the influence of alcohol or drugs, mentally or physically incapacitated, or if you or a minor child are incompetent.

How to revoke your medical power of attorney

You can revoke your medical power of attorney (or change your POA) at any time by filling out a form. The document can be revoked at any time. But if your healthcare agent has made a decision for you in a healthcare emergency, it may be difficult to revoke that decision. Revoking a medical power of attorney will usually require a court hearing or a court order. In either case, you may need to pay the costs of that hearing or court order upfront.

How to Get a Medical Power of Attorney

To make sure that you or a loved one has access to your medical information in case of an emergency, it’s essential to have a medical power of attorney. A legal document signed by you (or your agent) creates the legal framework for someone else to make decisions about your medical care. Having a medical power of attorney in place will help you or your agent communicate your wishes if you become incapacitated and can no longer speak for yourself. There are two types of medical power of attorney: living and medical. The living power of attorney is what you’re probably familiar with, but the medical power of attorney is a more comprehensive document that’s signed by your agent.

Benefits of having Medical Power of Attorney

Benefits of Medical Power of Attorney include: Let your loved ones make important decisions about your medical care, Protect your decision-making rights, Keep your healthcare decisions secret, and Give your proxy the power to make certain medical decisions if you cannot. If you’ve decided to get a medical power of attorney, the best time to do it is now. You don’t need a legal representation right away, and anyone you name as a healthcare agent will need to have one. If you have questions about what’s involved or want more information, then call today at 1-800-283-1015. Find out more about medical powers of attorney and other life insurance questions you’re often asking about by calling 1-800-283-1015.

Conclusion

Healthcare decisions are hard to make, especially if you’re not comfortable talking to your doctor or you don’t like the way your symptoms are affecting you. When you create a healthcare power of attorney, you give someone else the power to make the decisions you may not feel able to. This lets your loved ones help you make the right decisions, whether that’s deciding on a treatment plan for a medical condition, picking the right hospice care, or deciding whether you’re able to live at home or in a care facility.

If you have more questions about setting up a healthcare power of attorney, you should talk to an experienced healthcare attorney. They’ll review the legal documents you’ll need, discuss your options, and guide you through the process.

“If you have any feedback about what is the medical power of attorney that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Chances are, you wonder what will happen if your aging parent loses their ability to make health or financial decisions. How can you or others in your friend and family circle help them in that situation, or know what to do? These questions are all part of an ongoing conversation you may already behaving as a caregiver – and part of the answer might lie in a legal document called a power of attorney, or POA. A POA gives someone the legal ability to make decisions on behalf of another adult, such as an aging parent or loved one.

Often, the term “financial power of attorney” gets a bad rap because of the complexities involved, but what most people don’t know is that a POA is really just a legal agreement. It is a document that you design with your loved one and one that they and you sign. It is legally binding. This document is much like a will, but unlike a will, a POA is not a legal document that needs to be probated or get a signature from a judge. Instead, it is an “empowering” agreement, meaning that it does not give anyone the legal power to act on your behalf. The document is often described as giving someone the “ability to act for another.” That’s actually quite misleading because a POA does not give someone the legal right to act on your behalf.

How Does a Financial Power of Attorney Work?

A POA allows someone to designate you or another trusted family member to make important financial decisions on their behalf. For example, you might name your aging parents or loved ones as beneficiaries to their IRA or 401(k). Or, you might designate that your spouse or other adult relative make decisions on their behalf when they can no longer manage financial matters for themselves. The POA can specify that the financial decision-maker make payments to another person (like a relative) to manage other matters that may be needed in addition to what they are handling. Most banks and financial institutions allow you to designate another individual to make certain financial decisions for you.

When Does a Financial Power of Attorney Take Effect?

With a POA in place, one of the two persons listed in the document may make decisions for the other person until the first person has become incapacitated (committed to a hospital or nursing home). (The term “committed” means a person is “committed” to one of these places, so if the person is still physically able to care for themselves, they may choose to stay at home or even return to work.) This person could then assign a caregiver to handle all financial matters on the person’s behalf until they are no longer able to do so. Once you’ve created the POA, you can access and use it when the time comes. However, as with any legal document, some of the details matter when it comes to interpreting the POA.

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When Does a Financial Power of Attorney End?

What are some ways that an adult child can go about creating a POA? Well, it depends. For starters, an adult child may use the power of attorney document to get paid on a parent’s behalf. The parent may not be able to make payments directly, and the person with the POA can authorize the bank to make the payments. This may involve such things as paying the utility bills, etc., so your family member may want to make sure that they can sign an I.D. card at the bank and authorize the payment on their behalf. A parent can also ask their family member to act on their behalf, to make financial decisions for them in the event of illness or in their absence. This power of attorney is named for the “Guardian,” who can be a family member, the POA itself, or a trusted individual.

Who should have a Financial Power of Attorney?

There are a few questions to consider before you get the POA document. How old is the person you’re making a POA for? Are they capable of making decisions? Who do you trust with the POA? Your financial advisor, a lawyer, a healthcare professional, or someone who has special knowledge of your parents or loved one’s financial situation? If you are feeling lost about whom to ask, here are a few factors you’ll need to consider. Do they have the means to make decisions for themselves? If the person you want to help you with a POA isn’t able to make decisions for himself, you need to make sure he or she can do so, at least in a way that won’t put them in danger of financial ruin. Some of the most common choices are to use a combination of advanced medical directives and a POA.

How to Make Your Financial Power of Attorney Form

Who needs to be named as a family POA? There are only two people you should be naming as family POA: 1) the person who is directly affected (e.g. the parent, spouse, adult child) and 2) someone who is unrelated to the direct affected person (e.g. your mom’s best friend’s brother’s friend). In the event the direct affected person has a mental health issue, this person should be named as a conservator. Why is a POA necessary? All of these POA forms should be reviewed annually. One example is: if you are named as a POA for someone who is over 65, check your POA to see if you need to update it if their age changes.

Pros of Financial Power of Attorney

POA powers provide peace of mind. POA gives you legal control over the things that are important to you. As the adult in the room, you don’t want to leave these decisions to chance – you want to make the most important decisions yourself. Of course, depending on what you want your family and friends to do, the POA could be an important step to protect them, and perhaps your loved one. But to get this, you need to be clear and set the stage with your family and friends. It takes time, but it is well worth the effort. For example, to provide financial power of attorney, you may want to delegate the management of your family’s financial affairs to a trusted individual, whether a friend, lawyer or accountant.

Cons of Financial Power of Attorney

There are a few reasons to avoid a POA for your aging parent, such as concerns about not knowing the answer to certain questions. For example, a POA might give the agent power over the terms and conditions of Social Security and Medicare, or they might own certain invehttps://my.wealthyaffiliate.com/content/edit/814888#stments, such as mutual funds. You may not want to give away these investment options to another person.

Conclusion

As a family member, advocate, or friend who wants to help out an aging family member or friend, this quick and easy guide is designed to answer many of the questions you might have. If you’re already seeing your family member or friend needing to make decisions, or if you’re in the middle of a complex family dispute about their care, I’d recommend you read these documents, along with a care checklist for seniors, that will help you as a family member. It’s much more challenging for family and friends to take care of loved ones as they age, and you can help each other.

“If you have any feedback about what is the financial power of attorney that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Most people have more than one credit report. Credit reporting companies, also known as credit bureaus or consumer reporting agencies, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company. Lenders use these reports to help them decide if they will loan you money, what interest rates they will offer you. Lenders also use your credit report to determine whether you continue to meet the terms of an existing credit account.

What is a Credit report?

A credit report is a piece of information in your credit report that lenders use to decide whether to extend credit to you or not. How does a credit report help me get a loan? A credit report helps lenders decide if you are a “safe” credit risk, so you may be able to get a lower interest rate. This means lenders will lower your monthly loan payments by giving you a lower interest rate. A credit report also helps lenders determine whether you can pay off your loan if you default on one. This means lenders will likely decide if you can continue to make payments, or if they will decide that the loan is past its useful life and the lender will write it off.

How does the credit report work?

Most credit reports consist of two parts: a credit score and a credit history. A credit score is based on information about your payment history and whether you’ve borrowed money before. Your credit report also includes your credit report and scores. Your credit report contains an indicator of how you are doing in paying back your debts and the FICO credit score, which is used by some lenders as a credit reference. Is a credit report a good way to gauge my credit? A credit report can help you track your credit and make it easier to make decisions about your financial health and credit. A credit report that reports all debts, including personal loans, can be useful for determining how creditworthy you are.

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Where can I get my credit report?

Credit reports can be obtained from the three national credit reporting agencies: Equifax, Experian, and TransUnion. Equifax has more than 8 million customers, including 96% of the adult population of the United States. TransUnion has more than 24 million customers, including 93% of the adult population of the United States. Experian has more than 23 million customers, including 92% of the adult population of the United States. Each report is updated periodically so it may contain more current information about you. There are also numerous regional credit reporting agencies. Credit reports summarize your credit history. They are used by creditors to determine whether you are likely to pay them back for credit products you may buy.

How does information get on my credit report?

Credit reporting companies have access to information about you through sources such as Drivers license (or state ID), Social security card Bank account and routing numbers, Tax return, Telephone account and number, Financial account number (such as a bank account, investment account, savings account), Home or vehicle lease (typically for a purchase or a lease, not a refinancing or leasing agreement), Property address, Bank account number, Credit card number, and Mortgage/loan documentation (such as a loan agreement).

Importance of credit report

Before you can change any aspects of your credit report, you need to know what information is in your credit report. You can change items in your credit report by contacting the credit bureaus directly. But, to change information about your credit report that is inaccurate or outdated, you’ll need to have your credit report updated by one of the three major credit reporting companies: Equifax, Experian, or TransUnion. Each credit reporting company also produces its own version of a credit report that is different from the credit report produced by the other two companies. This version of a credit report may be used by lenders to evaluate your creditworthiness. Some reports also contain advertising that may be relevant to your financial life.

How to check your credit report

You have two credit reporting companies, Equifax and Experian, that report information to the three major credit reporting companies. Each of these companies, Equifax, Experian, and TransUnion, maintains a complete file on your financial life for all three major credit reporting companies. Since many creditors and credit bureaus also share information through these agencies, you may have multiple credit reports. Visit www.annualcreditreport.com to order a free copy of your credit report from each of the three major credit bureaus. The most recent report will be included in your report. You will need to place a request to receive the information. You can also request the files directly from each of the credit reporting companies.

How long does negative information stay on my credit report?

When you see a report with a negative item on it, it is a violation of the Fair Credit Reporting Act (FCRA) to have that item on your report for more than 180 days. The Fair Credit Reporting Act allows consumers to request a copy of their report after 90 days. For additional information on the FCRA, go to www.ConsumerCreditReport.org.

If a creditor disputes your credit history, the information stays on your credit report for about seven years, while the credit reporting company investigates the disputed account. They can also look at your credit history to evaluate your suitability for other types of loans, such as home loans. At that point, you can dispute the disputed information and it will be removed from your credit report. In the event that a creditor disputes your credit report, your credit record can be erased and you can put the negative report on the public record.

What happens if my credit report is wrong?

Your credit report can contain inaccurate information if you are not in good standing with your creditor. That could include missed payments, which could result in the creditor placing a “hard stop” on your account. If you make more than the minimum payments on your credit card, student loan, or any other account, your credit limit could be lowered and interest charged. This could be due to incorrect information on your credit report.

How can I boost my credit score?

Credit scoring gives a simple picture of how likely you are to be able to pay back the money, by assigning a number that is between one and 100. When you try to get credit for the first time, your score is based on your past credit record. If your credit history is less than excellent, you will see a low score. However, once you show that you can responsibly manage your finances, your credit score will rise. If you want a better score, you need to make more than the minimum payments on time and take action on some of your credit accounts. If your scores improve, you might get better interest rates and lower monthly payments for credit cards.

Conclusion

Information on your credit reports could affect your ability to borrow or get approved for credit. The Federal Trade Commission advises everyone to regularly check their credit reports to make sure the information is accurate. Credit repair information is offered free of charge to consumers who contact the website at www.ecfinance.org or 888-466-2273 to receive free credit repair resources.

“If you have any feedback about what is a credit report that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

A convertible note is a type of short-term debt that converts to equity, usually in connection with future funding round; in essence, the investor is lending money to a startup, and instead of receiving principal plus interest, the investor receives stock in the firm. The major benefit of issuing convertible notes is that it relieves the issuer and investors of the burden of determining the business’s worth when there isn’t much on which to establish a valuation – in certain circumstances, the company may be nothing more than a concept. Typically, the valuation will be set during the Series A funding, when there are more data points to work with.

What is a convertible note?

Convertible notes are a form of short-term debt that converts to equity, usually in connection with future funding round; in essence, the investor is lending money to a startup, and instead of receiving principal plus interest, the investor receives stock in the firm. The major benefit of issuing convertible notes is that it relieves the issuer and investors of the burden of determining the business’s worth when there isn’t much on which to establish a valuation – in certain circumstances, the company may be nothing more than a concept. But what is the benefit for the startup? Convertible notes allow companies with a pre-existing value to raise money without worrying about a significant dilution of the shareholders’ stake.

A convertible note is a type of short-term debt that converts to equity, usually in connection with future funding round; in essence, the investor is lending money to a startup, and instead of receiving principal plus interest, the investor receives stock in the firm. The major benefit of issuing convertible notes is that it relieves the issuer and investors of the burden of determining the business’s worth when there isn’t much on which to establish a valuation – in certain circumstances, the company may be nothing more than a concept.

How do convertible notes work?

A convertible note usually consists of one or more steps, usually two or three: The term sheet, which sets out all the particulars of the note and describes the term of the loan which sets out all the particulars of the note and describes the term of the loan. The disclosure statement, which details the terms of the note, including its price and risk profile, details the terms of the note, including its price and risk profile. The capitalization table, which shows the total amount of debt and equity to be raised. , which shows the total amount of debt and equity to be raised. The warrant structure, which converts the notes to equity.

While convertible notes are almost always structured as a debit transaction, they can also be a convertible note that is treated as equity. This means that once the convertible note has been issued, the company has established certain levels of equity valuation based on the future performance of the firm. I am optimistic about the role of convertible notes in the coming year, especially in the financing of early-stage startups. As startups are able to take on debt, these debt-like instruments become an increasingly attractive option for entrepreneurs and investors. In the coming year, we will see convertible notes used as a major option for startups to accelerate growth and propel their firms to the next stage of growth.

This post contains affiliate links. Please please read my Disclaimer for more information

How do you use convertible notes?

Here are some of the basic scenarios where convertible notes can be used: Issuing convertible notes prior to a funding round Pre-funding a round of financing. Winding down around. Using the convertible note as an after-hours liquidity mechanism. The downside of convertible notes is that they have no IPO protections and can hurt your equity valuation, especially if you need to convert the notes for financial purposes in the future. Here are some of the typical caveats to note. One-off financial transactions (e.g. issuing convertible notes after an investment) Unlike a private placement, which might require investors to take financial action.

There are two primary uses for convertible notes: raising funds and raising capital. If a startup is looking to raise capital, it can issue convertible notes to raise the funds they need to launch the business. Convertible notes are often used in connection with secondary market transactions in startups that are well-known but no longer private. A liquidity event is a good candidate for an exchange of convertible notes for shares in a public company because it opens the company up to new investors who previously wouldn’t have participated in the public market. In many instances, convertible notes are also used to allow employees of the company to take out new loans with their shares

What Is a Senior Convertible Note?

A senior convertible note, often referred to as a “lessor note,” refers to debt issued by a startup that the company must pay back before other investors. Like a convertible note, it may be convertible into equity at any time, but unlike a convertible note, the company will only be required to pay back a part of the debt and will have the ability to refinance the debt into equity at a later date. A senior convertible note is a similar instrument but has seniority over a convertible note due to its tenor. It is similar in that it converts into equity, but it’s issued at a slightly different point in time, typically for later funding round and usually at a premium to the par value (typically between 3 and 6 percent above the nominal amount, depending on the overall equity structure of the company and its intention to issue a convertible note at a premium). The major difference between a senior convertible note and a convertible note due to maturity is that a senior convertible note matures when the noteholder has sufficient “coins,” that is, stock in the firm, in order to convert the note to equity.

Why Should You Use a Convertible Note?

The major benefit of convertible notes is that it allows a company to raise capital when they aren’t ready for it yet, and can be an efficient and relatively simple tool to raise funds as you grow your company. Convertible notes also have the added benefit of allowing investors to gain upside potential from the company, which is often much greater than they would achieve on an equity investment. An even greater benefit is that convertible notes are more expensive than other types of debt funding options, so they provide a high degree of financial security. Also, the public generally perceives these kinds of funding rounds to be safer, so they are generally viewed as a good choice for taking venture capital but avoiding VC risks.

Pros of Convertible Note

Lower funding costs, and no other way to raise capital; Allows the startup to raise money without equity dilution – the investor still gets paid the amount of cash they put into the deal; The investor receives the debt repayment even if the startup goes bankrupt, and the note is transferred to new investors; If the startup has a working product or service, this can act as a clear valuation signal and help the firm attract larger investments. Because the company will likely raise the money in an equity round rather than debt financing, the convertible note funds do not count as a business expense, freeing the startup to put that money to work elsewhere.

Cons of Convertible Note

Somewhat risky – the investment vehicle comes with certain unknowns and is difficult to value; The investor has no right to sell their investment or demand their money back (in many cases, the firm won’t even make them whole for the conversion). Frequently, convertible notes aren’t well-received by investors; their implementation often requires substantial amounts of due diligence, and the value of the company will be lowered substantially by taking on debt. A typical convertible note is a one-year term loan, and it’s meant to be repaid in 12 months. What makes convertible notes so difficult is that it’s difficult to find a lender who will let an investment-grade credit company on the hook for a loan. Another thing to note is that unlike a traditional loan if the company defaults on its note, the lender won’t suffer significant losses, as they would if the company defaulted on a loan.

However, investors are still liable for the full principal amount they are lending, and a note is a loan, so repayment to the investor is still due and payable on maturity. The investors are also in a position to dictate the terms of the debt, such as issuing a fixed-interest-rate note or a floating-rate note, which means the investor has an incentive to inflate a startup’s valuation. Having an investor who is legally obliged to purchase your stock when you wish to raise capital is a good asset to have.

Who Should Use Convertible Notes?

I strongly recommend that entrepreneurs get additional legal advice when deciding to issue convertible notes – it can be a very lucrative, albeit risky, financial option. The only caveat is that the issuance of convertible notes should be handled by an experienced advisor. If you choose to issue convertible notes, it’s probably best to do so with no more than $1 million in funding. The convertible notes allow the business to fund itself before it begins to raise outside investment – but if the company does well, you may choose to go back to the capital markets for additional funding.

Convertible Note Terms (Valuation Cap, Discount Rate, Interest Rate, Maturity Date)

A convertible note will have several distinct terms. Each term can be negotiated between the issuer and the investor, and thus every convertible note issued may have different terms. Generally, however, the key terms are the following: The convertible note will generally have a term of one year or less; on the note’s maturity date, the investor will be able to convert the notes into shares of the company’s common stock (or any additional stock that may be created if the startup completes the funding round). The convertible note will also have a discount rate, which will adjust annually for interest and maturity. Typically, this discount rate will be close to, or slightly lower than, the investment bank’s Libor rate.

Conclusion

Each financing transaction is unique, and investors can’t expect to see all the details when it comes to startup financings. However, understanding the characteristics of each financing type will help investors make more informed decisions and have more informed discussions with entrepreneurs.

“If you have any feedback about what is a convertible note that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, the transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.

What is a cobra health plan?

It is not a regular insurance plan, but instead a plan provided by a health insurance carrier and administered by an insurance carrier, as a last resort for a member who is no longer eligible for group health benefits. The Cobra coverage allows you to choose continuation coverage for the period of one month. “Continuation coverage” means coverage for a period of time determined by the carrier and will be based on the renewal period of a regular health insurance plan. It is not covered for a period of time that remains continuous beyond that of a regular health insurance plan.

How does the cobra health plan work?

With a cobra plan, there are no employer contributions. A cobra plan is available to everyone at no charge. To be eligible, you must be employed by a participating plan and eligible for health care benefits. The coverage under the cobra plan is provided at the lowest available plan level within the applicable COBRA coverage and access points. If you prefer a plan with additional benefits, you can opt for that option on a per-payor basis.

How to Qualify for COBRA?

Any employer or insurer in the U.S. may participate in the COBRA program if they are covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the U.S. Health Insurance Portability and Accountability Act (HIPAA) regulations. Employees and/or family members who have less than 12 months of coverage will be required to qualify under COBRA. Healthcare.gov also provides guidelines for those who are eligible for COBRA, including a list of provisions for COBRA continuation coverage. COBRA works if your employer or plan allows you to choose a plan to continue coverage. However, you may be required to pay an unsecured portion of your premium for coverage and deductibles.

Who is eligible for the cobra health plan?

Individuals without a group health plan that offers the continuation of group health benefits are eligible to enroll in the COBRA continuation health plan if they do not qualify for group health benefits under COBRA. Employees and their families who are eligible for COBRA coverage under current law and eligible for continuation of COBRA benefits will be automatically enrolled into COBRA coverage. Workers and their families who are ineligible for COBRA benefits, or who did not previously enroll for COBRA benefits, may elect to enroll in the program. Participation in COBRA coverage is available to a broad range of employees and family members including those who were previously on an employer’s group health plan that is no longer in existence or whose employer has closed or withdrawn coverage (death, voluntary departure, etc.).

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Paying for COBRA

Depending on the duration of the employment, there are a number of COBRA options. Continuation-paid plan: This is the most common option for employees to pay for their insurance for a fixed period of time after leaving their employer. Most COBRA plans provide for a continuation-paid plan, in which the employee’s share of premiums for continuation-paid coverage remains with the individual employer (or group health plan administrator).

Pros of cobra health plan

COBRA coverage can be extremely affordable, sometimes less than one-half the cost of a private health insurance plan. COBRA will provide most or all of the same coverage and services that the family received from the health plan in the past. The option of COBRA health plan provides coverage and access to medical care for over 70 different health care providers that are pre-approved by the insurance company for health care. If an employee lost their health benefits from their group health plan, COBRA allows them to keep their private insurance coverage for a limited time. This allows for continuity of care. Cons of COBRA health plan The cost of the insurance will be more expensive than if the employee had remained on the insurance policy.

Cons of cobra health plan

Currently, cobra plans do not offer the most coverage, in my opinion. So, a lot of people are not going to be happy with the amount of coverage that they have. It is just not a good alternative to group coverage that is offered. Also, there is a shortage of companies that offer the plan. Most health care plans offered by companies are on the Obamacare exchange. In other words, insurance is not guaranteed, but you can have affordable health care coverage. If you are going to have health insurance, then it should be a very good option that is provided.

Is COBRA coverage expensive?

Costs depend on a number of factors, including whether your health plan is an HMO or an HMO or other preferred provider organization (PPO). Most group health plans today are either PPOs or an HMO. COBRA coverage is always more expensive than your current health plan but also has a special component in that, even though you are required to pay all premiums and a deductible, you are eligible for a $2,000 (or $2,500, for retirees) premium credit, that lowers the overall cost of your coverage. An additional cost-saver is that you are not liable for the first $500 in healthcare expenses for each employee or family member covered under your COBRA health coverage and $3,250 in health insurance expenses for yourself as a retiree.

Is COBRA insurance right for you?

Not every job requires a group health benefit plan. Some jobs have health insurance offered as an individual benefit. If you don’t have employer-based insurance or your group health plan has recently changed or will change soon, it is worth exploring COBRA insurance. At the same time, don’t forget about other insurance products that may be available to you or that you may qualify for. Insurers are changing their health benefits every year. Medicare, Medicaid, and other insurance plans may also be available to you as part of a group or individual plan. If you need a comprehensive health insurance policy with comprehensive coverage, check with a broker who specializes in helping clients navigate the insurance process and find the best product for their needs.

Conclusion

Traditionally, COBRA was a program administered by your group health plan, but the program has been slowly being phased out. According to some sources, as of 2013, the Program has been “rolled into the IRS rather than by the health plan itself.” In other words, this program is no longer administered by your group health plan. While the COBRA Program’s benefits may be lost during the transition from a group health plan to an individual health plan, you will find that there is still a way to keep your coverage. You should carefully investigate this option before you dismiss it. With the right knowledge, you can keep your COBRA benefits.

“If you have any feedback about what is a cobra health plan that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

An option is a contract that allows (but doesn’t require) an investor to buy or sell an underlying instrument like a security, ETF, or even index at a predetermined price over a certain period of time. Buying and selling options are done on the options market, which trades contracts based on securities. Buying an option that allows you to buy shares at a later time is called a “call option,” whereas buying an option that allows you to sell shares at a later time is called a “put option.” However, options are not the same thing as stocks because they do not represent ownership in a company. And, although futures use contracts just like options do, options are considered lower risk due to the fact that you can withdraw (or walk away from) an options contract at any point. The price of the option (its premium) is thus a percentage of the underlying asset or security.

What is options trading?

Options are traded on the options market, a computer-based trading platform. It is akin to a stock market, except that you are trading contracts rather than shares. The most popular contracts traded on the options market are put and call options. The purpose of trading options is to protect a trader against the risk of owning security at a particular price. If you own a call or put option, your trade expires at a certain time. For a call option, this would mean the option goes ex-dividend. You then lose the right to buy the underlying stock or ETF at that price for a given period of time (the “ex-date”).

The Different Types of Options

There are basically four types of options available on the U.S. stock exchange. Two of the – calls and puts – are bought and sold just like regular stocks, but they differ in how they’re constructed. The first one is called the “single” option. It is a naked call option that allows the owner to buy the underlying security at a predetermined price at any time up to the expiry date or expiration date. The only difference between a call option and a put option is that the owner of the option gets the right to buy the security at the expiration date. The second type is called the “divided” option. It is a stripped naked put option that requires the investor to buy and then simultaneously sells 100 shares at a fixed price per share at any time up to the expiry date.

What is a call option in stocks?

A call option gives you the right to buy shares at a certain price over a certain period of time. For example, if you are looking to buy shares of a company and you get a call option, you will receive a $30 strike price. As long as the company keeps the shares above $30, you will be able to sell the option anytime you want to. A call option is a contract that gives you the right to purchase shares of a company at a certain price (usually between $1.00 and $5.00 a share), at a certain date in the future. In the same way, you buy a stock that gives you the right to buy a company’s stock at a predetermined price, you can also sell a call option to someone else who will buy it at that predetermined price. In other words, you buy an option and ask someone to purchase it from you.

What is a put option in stocks?

With a put option, you can take a bet that a stock will decline in value over a certain period of time. A put option entitles you to purchase a stock for a given price at a later time. If the share price is above that price, then the investor receives the money back. But if the share price drops below the put price, then the investor loses the entire amount they invested and the stock is not delivered.

How does options trading work?

Options trading involves multiple scenarios. As an example, you may want to use options in your account when an ETF you own goes on a deep, multi-day decline. In this situation, you may want to sell calls on your position and receive a “cash-out” for selling the shares you would have otherwise owned. The strategy can help you keep the premium you receive on stock for an extra week or two if the underlying ETF keeps falling in value. Another scenario might involve selling an out-of-the-money call option on a stock that you don’t own at a large premium to the share price. Your premium can be used to buy shares in the company, if they go on a crash of any kind, at a discounted price.

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Why should you consider options trading?

Because you can create an excellent risk-adjusted return, and, more importantly, have more control over the price at which you’re going to get out of your position. Options are great if you want to take a bet on the price of a stock going down while being able to buy the stock at a cheaper price than it would be trading for at the open.

What are the options trading terms?

Options trading terms vary by contract but are usually explained in simple terms below: Selling: When an investor buys an option to sell the underlying security (like a call option). This will only be done if the underlying security is above the strike price (the price you agree to pay for the underlying security) and you’re willing to sell at that price in the future. This means you can only sell your option if you want to. When an investor buys an option to sell the underlying security (like a call option). This will only be done if the underlying security is above the strike price (the price you agree to pay for the underlying security) and you’re willing to sell at that price in the future. This means you can only sell your option if you want to.

How Options Pricing Is Determined

Options are priced in two steps: The first step is determining the price range that options are offered for trading, typically ranging between $0.01 and $0.50 per option. The second step is determining the number of contracts that will be sold based on the historical data on demand. The formula for determining the price range is as follows: (Price of the underlying stock when the contract is purchased) + (Length of the option contract) The length of time that the contract will remain open can be calculated by multiplying the time that the contract was open times the strike price, which is the price at which the contract will be settled.

Advantages and Risks of Trading Options

If you’re willing to accept the risks involved, you can make money trading options. However, most people don’t know how to do this. The reason is that options trading is not just a matter of picking the right option contract. The risks are real and can ruin your trading experience, and it can also harm your overall portfolio if you are not careful. For example, a call option is not risk-free because it gives the buyer the right to buy the underlying security at a certain price by a certain time. But if the price moves above or below the strike price, the buyer could make or lose a lot of money. So, the options are not risk-free. Another risk is the underlying stock’s volatility. If the stock price moves beyond a certain threshold, the buyer could lose a lot of money.

Conclusion

Options have traditionally been viewed as too risky for investors and too risky for small investors, but they are certainly gaining traction among investors. The popular trend of volatility in stocks has taken many by surprise as they speculate on price swings and this has brought more trading activity to the options market. Ultimately, investors should decide for themselves whether options are right for them.

“If you have any feedback about what is options trading that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

If it feels like your dollar doesn’t go quite as far as it used to, you aren’t imagining it. The reason is inflation, which describes the gradual rise in prices and slow decline in purchasing power of your dollars over time. The impact of inflation may seem small in the short term, but over the course of years and decades, inflation can drastically erode the purchasing power of your savings. Here’s how to understand inflation and the steps you can take to protect the value of your money.

How Does Inflation Work?

According to the U.S. Department of the Treasury, inflation is the increase in the price of consumer goods and services over time. The rise in price is measured by the Consumer Price Index (CPI), which is published by the Bureau of Labor Statistics. CPI measures the prices of a basket of goods and services, such as health care, shelter, food, and transportation. An average of CPI readings from January 1967 to December 2017 shows prices rising 2.4 percent annually. To put it another way, a $100 dollar bill would be worth around $135 in 2017 dollars, while in 1967, the bill’s purchasing power was more than $60. The CPI rose slightly in the first half of 2017, as shown in the chart below.

How does it affect you?

When prices are rising rapidly, the real purchasing power of your money starts to decrease. Inflation is typically measured by comparing the same product or service bought at different times, in the same currency. Over time, prices change as costs for things like food, fuel, and housing increase, along with prices of manufactured goods like clothes, computers, and automobiles. These prices often don’t even need to be passed on to consumers, as companies pass on cost increases to retailers and manufacturers. But eventually, prices rise enough to start to erode the purchasing power of your savings. And that’s why it’s called inflation. There are different types of inflation, and the factors that drive them differ.

The impact of inflation on your money

Inflation is generally measured by taking the year-over-year percentage change in the prices of a representative set of U.S. consumer goods and comparing that figure to the previous year’s level. For example, if a can of Campbell’s soup is selling for $1.39, the Bureau of Labor Statistics (BLS) would measure the change over the past 12 months as a percentage change of 1.9 percent. That figure represents the actual change in price for that item; if that number is 0.3 percent higher this year than last year, then prices have risen by 2.9 percent.

How to track inflation using a graph

Like many people, you probably never heard the term inflation until recently. That’s because the phrase isn’t included in the common English lexicon. But inflation affects most people, whether you realize it or not. Imagine you save your money each week in a traditional bank account. Say inflation rates vary over the course of the year and year after year, which makes your money purchase less and less. Here are the inflation rates you’ll find when you go to the online banking service Web bank. You have two choices: Prevent inflation from taking hold by keeping a strict budget and having consistent savings plan to provide the money you need each month. Reduce inflation by taking advantage of earning interest on money held in a traditional bank account or investment accounts.

Over time, many goods and services become more expensive, in part because production costs go up as volume grows. The prices of these goods and services also rise as they get more competitive, so if you are on a shopping trip and are comparing prices, you may find the same item at different stores that sell for the same price. But don’t be surprised if you see different prices — sometimes called inflationary “shifting” — for the same item. The Consumer Price Index (CPI), a measure of the prices of a basket of goods and services that’s used to adjust the Social Security Administration’s cost-of-living adjustment, is the best tool to track consumer prices over time.

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What Is Hyperinflation?

What happens when inflation gets out of control? The most extreme form of hyperinflation occurs when the rate of inflation drastically outpaces the overall rate of growth in the economy, leaving the buying power of money dramatically diminished. Consider Argentina, in recent decades. While Argentina experienced consistent annual inflation in the tens of thousands, it’s worth noting that in 2002, the Argentinian peso lost 97% of its purchasing power in a single year. The devaluation was so bad that the only way to buy essentials was to barter or accept large, inflated discounts from stores and other retailers. At its worst, hyperinflation can leave even those who are relatively well off out in the cold.

What Is Stagflation?

Stagflation, in this case, means higher prices and lower consumer demand, and the combination of factors contributes to slowing economic growth. “If you put that in layman’s terms, you could say consumers are struggling, they’re getting higher prices for goods, they’re not spending as much on goods and services,” says Tony Nash, research director at the International Council of Shopping Centers. The problem is especially acute in the United States, where many goods are manufactured overseas and shipped across the country for distribution and delivery, which raises prices. The reason for higher prices on imported goods is “deflation,” meaning that their producers have devalued their currency to reduce their prices relative to the dollar.

What Causes Inflation?

The problem is that no one really knows exactly why inflation occurs. There are many factors that impact the economy, and cause changes in consumer prices. An increase in supply due to increased productivity could cause inflation. A rise in oil and gas prices could also cause inflation. Consumer products also have an impact on inflation. For example, the price of gasoline tends to rise over time as fuel prices fluctuate. The other most common causes of inflation are a change in the supply and demand for currency. At times, inflation is caused by higher wages for workers, which leads to greater inflation of the money supply.

Demand-Pull Inflation

Inflation is caused by the “demand” side of the equation. The economy often expands because people need and want more goods and services, such as cars, houses, and even food. But then, those extra cars, houses, and food end up costing more to make and deliver. Inflation is known as demand-pull inflation because the way it is created is by people demanding a greater quantity of a certain good or service than the sellers can meet with existing products and services in the marketplace. The result? Your dollar buys a smaller amount of the same thing over time, which ends up depressing the purchasing power of your money. Put simply, inflation is when there is more demand than there is supply for a good or service in the economy.

Cost-Push Inflation

Cost-push inflation occurs when prices rise because of a shortage of supply. Such inflation typically results in higher costs for businesses to serve the public. For example, if a loaf of bread is $2 and there is no wheat to harvest and mill it, or if a brewer is being undercut by an imported product, cost-push inflation can result in an increase in the cost of bread. This price increase likely results in price increases for consumers, who are then asked to pay the higher prices. Of course, consumers are not the only ones affected by cost-push inflation. Inflation can also hurt businesses. Higher costs of inputs mean less profit, which means the businesses may stop buying new equipment, hire fewer people, and raise their prices. At the same time, consumers’ cost of living increases.

Conclusion

Determining your portfolio’s allocation to equities and bonds might seem easy, but it isn’t so simple. There are lots of factors to take into account, and it isn’t all that important that you get it exactly right. If you follow a consistent, long-term investment plan, however, you can put your money to work in ways that will maximize its growth potential. The $16,122 Social Security bonus most retirees completely overlook. If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example, one easy trick could pay you as much as $16,122 more… each year!

“If you have any feedback about what is inflation and how does it affect you that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Almost all consumer financial institutions offer them, although it’s up to each bank which CD terms it wants to offer, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties it applies for early withdrawal.

Shopping around is crucial to finding the best CD rates because different financial institutions offer a surprisingly wide range. Your brick-and-mortar bank might pay a pittance on even long-term CDs, for example, while an online bank or local credit union might pay three to five times the national average. Meanwhile, some of the best rates come from special promotions, occasionally with unusual durations such as 13 or 21 months, rather than the more common terms based on three, six, or 18 months or full-year increments.

How to choose a Certificate of Deposit

Certificates of Deposit (CDs) are a great tool for all consumers who want to earn some extra money on money that’s sitting around their bank accounts. That being said, there are a few considerations to keep in mind when choosing a CD. The lowest risk CDs are the shortest-term CDs, which typically offer only a few months of interest. The medium-term CDs offer anywhere from six months to three years, the longest-term CDs offer anywhere from five years to a few decades, and the highest-yield CDs are the longest-duration, providing the highest interest rate. How to open a CD Most CD products require a minimum deposit of either $1,000 or $2,000, with the remainder to be paid in the form of monthly interest checks.

How Certificates of Deposit Work

Certificates of Deposit usually offer interest rates as high as 3.5% but have a fixed rate until you decide to withdraw your cash. This term “until you decide to withdraw” generally applies to 2½ months or less, but many financial institutions extend that period to 3 or 4 months. Once you decide to take your money out, though, the rates quickly fall to near-zero and may require a deposit of $50,000 or more to earn a rate of even 1%. Although CDs are normally a lot safer than savings accounts, they’re still very risky investments. That’s why they’re typically treated with a degree of caution by the prospective depositor.

Certificate of Deposit Interest rate

The CD interest rate will be set by the bank when you open an account and will remain the same or increase from that point on. The difference between what a CD paid and the best available rate on a savings account today is called the CD premium. The CD premium is the difference between the CD’s fixed rate and what the best available savings or money market product has to offer. The CD premium can be paid as a bonus when you open an account, or the rate may increase when you renew the CD at the end of the term. When your CD gets paid as a bonus, you are getting the difference between the CD’s stated interest rate and the CD premium.

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Certificate of Deposit Term

The minimum term for CDs is set at several years and can vary a great deal based on the type of product and the bank or credit union issuing it. It’s standard for certificates of deposit to have terms of one to five years. However, CD terms of one to two years, or shorter, are also common and are often offered at higher rates. Certificate of Deposits (CD) is considered to be fairly safe with a few obvious exceptions. Many borrowers don’t pay attention to the term of their CD or in fact, may be required to make a minimum monthly interest payment in the form of minimum monthly required fees.

Certificate of Deposit Principal

These are the initial deposits you make to get the CD, but they will be converted to interest payments during the duration of the certificate, which is typically set at between 2 and 5 years. The interest rate on a certificate of deposit is determined by the bank. For example, a 3-year CD will pay interest between 0.20% and 0.80%, with 1-year CDs paying between 0.30% and 0.80%, 2-year CDs paying between 0.60% and 1.40%, 3-year CDs paying between 1.50% and 2.00%, and 5-year CDs paying between 2.00% and 2.80%. You can see an even wider range of CD interest rates for even more specialized products such as certificates of deposit tied to specific maturities or “guaranteed” money market accounts.

Why do banks offer Certificates of Deposit?

Typically, a certificate of deposit has a higher interest rate than a savings account. For example, if a savings account has a 1.01 percent interest rate, a certificate of deposit would likely have a higher rate and could provide an additional 2 percent to 4 percent of interest rate over time. CDs also have certain advantages over savings accounts, such as the ability to take out a portion of your deposit at any time and without having to pay a penalty. CD withdrawals are typically not subject to a penalty, but the interest rate of the product could be significantly lower if you withdraw the money before the term is completed. Certificates of deposit can be long-term, meaning your money will remain invested in a bank’s CD, and there are also short-term certificates of deposit.

Advantages of Certificate of Deposit

A CD offers three distinct advantages to the holder of the certificate: Secured The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. The yield on a CD also is guaranteed by the government. The account is secured with your cash and so the interest on your CD will not be taxed. (If you leave the money in your CD for less than one year, then it’s considered a checking account.) You will not be liable for any fraud or loss on your cash deposit, and this protection is covered under the FDIC’s deposit insurance. You will get a real interest rate on your money. You can withdraw money before the end of the term, usually several years. As a general rule, certificates of deposit tend to pay higher interest rates than a savings account or money market fund.

Disadvantages of Certificate of Deposit

Dealing with a financial institution There’s no point dealing with an institution that doesn’t have convenient branch hours. This will require you to take time off work to visit the bank. On the flip side, there’s no point dealing with an institution that offers interest rates that are either too high or too low or that doesn’t allow for easy, on-demand withdrawal. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts. Also, interest rates for CDs vary depending on where they are issued, so CDs can’t be set up to work with online accounts.

Conclusion

Banks often offer higher rates on CDs, but unlike with a savings account, they do so in exchange for some restrictions on the rate you can withdraw on demand. Keep in mind that these higher interest rates on CDs are often found in specialized accounts offered by banks. For example, some banks will offer CDs with shorter durations and/or higher rates than their traditional savings account offerings. So, regardless of the product, you’re looking for, start by focusing on checking and savings accounts, not CDs. And if you find a specific bank that offers a CD offer that you like, contact the bank to get a better understanding of the terms and conditions.

“If you have any feedback about what is a certificate of deposit that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.