Personal Financial Tips

Archive for January 13th, 2012

There are many advertisements out there regarding home equity credit loans. We are barraged with television ads, billboards, radio spots and direct mail- I received three last week. Many wonder if home equity credit loans are a good idea. There are some things to think about before making this decision.

You can make the necessary payments- as with any loan, financial discipline is very important. This is even more so because a home equity loan acts as a second mortgage. Essentially, you are using your home as collateral, making it vital to make necessary payments. Because the lender has your home to back the loan, this gives you the opportunity to borrow at a much more favorable interest rate. The most attractive aspect of a home equity loan is that you can consolidate higher interest credit lines or loans. This gives you the option to use the extra income for your everyday needs, or pay off debt much faster.

You are making a major purchase or home repairs- we often do not have the money to buy larger items, therefore they need to be financed. A loan using the equity in your home can give you the lowest finance charge, as well as more favorable or flexible terms. Home repairs are part of home ownership, and very few owners have adequate savings to take care of them. Home equity loans are a good way to pay for these expenses, as cheaply as possible.

Do not use a home equity credit loan to supplement day-to-day spending, or on frivolous purchases. If you look at a home equity loan as permanent debt, you will keep digging yourself further into debt, often to the point of bankruptcy. You don’t want to put your home at risk. Also, if you know a major purchase or home repairs are imminent, it is a good idea to save the loan for those purposes. Basically, be smart with the money you borrow. We can get trapped by the low interest rate and feel we will be paying it off quickly and easily. Home equity loans are good tools for financial stability, if you use it wisely!

Medical malpractice insurance is a big part of health care, and since most of us are not doctors, many of us don’t think much about it. Doctors of course do. The high cost of medical malpractice insurance has forced many doctors to stop practicing all together. One Brooklyn obstetrician was forced into retirement because her malpractice insurance bill was $160,000 per year. She had never been sued or even had as much as a settlement against her.

What exactly has made medical malpractice insurance go up so much? Did you know that 10 cents of every dollar a doctor makes goes to paying for malpractice insurance?

Malpractice insurance costs doctors tens of thousands of dollars per year. This is the cost of doing business for a doctor even if he or she has never made a mistake or been sued. Some high costs states have premiums upwards of $200,000 per year and in other states it costs around $20,000. The reason for this is that in many states juries have awarded wronged patients excessively generous rewards knowing that the insurance companies can pay. The cost of these lawsuits is then passed onto the physician. One study has shown that the cost of malpractice litigation is 30 billion dollars per year and has risen 10% annually

All these factors cause doctors to take various steps that directly affect the cost of health care. Since a physician can get sued at any moment, they order excessive tests to cover themselves, and avoid some fields of medicine altogether. This of course drives up the cost of health care. Medical specialties with the highest premiums include obstetrics and anesthesiology. Many doctors avoid these entirely, and who can blame them?

What should a doctor who simply wants to practice medicine and help his or her patients do? With many insurance providers dropping the medical practice insurance coverage, how many choices does a physician have?

There are many things to consider when purchasing a medical malpractice insurance policy. Find out about the financial stability of your provider. Are they financially secure, or will they declare bankruptcy and leave you holding the bag? Check out the contractual limitations within the policy. In other words, read the fine print or better yet, have your lawyer do it. How long has the company been in business? What is their level of experience in handling malpractice claims? Make sure you are covered for additional liabilities such as things that happen on your property and in your facility.

When obtaining medical malpractice insurance, do your research. It is also a good idea to consult an attorney who has experience in malpractice suits and with insurance policies. For more information and links to the companies mentioned above, please visit Medical Malpractice Insurance.