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FINANCIAL

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APRIL 21 | 2016 | DEFENDER

Special Edition

keys to financial literacy By JASEMINE KNOWLES Defender

April is National Financial Literacy Month, a time to shed light on money management. Barbara Paige, a financial advisor with Ameriprise Financial Services, offers five keys to becoming financially literate.

Barbara Paige

Set and keep personal goals. Whether you’re planning to have zero credit card debt, trying to fund a vacation or struggling with paying off student loan debt, Paige said setting financial goals is one step toward making your life a little easier. “Start by thinking about the things that are important to you,” she said. To figure it out, ask yourself five questions and use them to make a list of your short, medium and long-term goals. • What part of your home or life would you like to change? • When would you like to retire or have a workoptional lifestyle? • What is most important to you in retirement? • What are the causes you would like to be more involved with? • What would you like to have more of in your life? “Think about how you would prioritize your goals so that you can balance your life today with your dreams for tomorrow, since you may not be in the position to achieve all of your goals at once,” Paige said.

Know your cash flow. Paige said it’s critical that you know how much money you have. “Your cash inflow (money received) is fairly easy to measure, as it’s just your salary plus any other sources of income,” she said. “However, measuring cash outflow (money paid out) may take a bit more effort.” Paige said most people know how much their monthly household and essential living expenses are, but other cash outflows – such as quarterly auto insurance payments, auto drafts for memberships, annual

property taxes that are not included in mortgage escrow and miscellaneous daily expenses – can often be overlooked. To get a complete picture of your cash flow, track your expenses for a few months with a spreadsheet or a money management app. Once you get a good grasp of your monthly finances, establish a budget and stick to it. “Some people view budgeting as a restriction when really it can help you to take control of your money,” Paige said. “Creating a budget puts you in the driver’s seat instead of just going along for the ride.”

Plan for financial uncertainty. Whether it relates to your job, personal life or the larger economy, uncertainty often has financial consequences. To manage what you can’t predict, Paige said speak with an advisor and come up with a financial plan. “A financial advisor can help you to refine your goals, assess your cash flow and create a plan to help guide you to where you want to be financially,” she said. “However, unexpected events like a job loss, prolonged illness or injury, premature death, or liability exposure, could possibly derail your plan.” Paige said people often shy away from discussing such topics because they may require potentially uncomfortable conversations and tough decisions, but this avoidance can leave you vulnerable.

Minimize your taxable income. You can receive income in the form of money, property or services. Generally, an amount included in your income is taxable unless it is specifically exempted by law.

“Some people pay more in taxes [than they need to] because they may not be aware of tax management strategies that exist or perhaps because they aren’t properly diversified from a tax perspective,” Paige said. “It’s important to diversify your assets with respect to tax treatment, especially in retirement. If you have assets with different tax treatments [taxable, tax-deferred and tax-fee] you could have a more tax-efficient way to get money when you need it and reduce taxes and penalties.”

Develop an investment strategy. Paige suggests creating a plan that’s designed to help you meet your unique goals. “It’s important to consider your goals in conjunction with your time frame and your risk tolerance,” she said. Though there is no guarantee that any investment strategy will be successful, Paige said your level of risk should feel comfortable to you. “Investing is not a one-size-fits-all approach,” she said. “Everyone’s situation is different so the way someone else invests may not be the right fit for you.” Diversification is another key concept when it comes to an investment strategy. “After you have a strategy, you will need to periodically review your portfolio to make sure it remains in line with your needs and expectations all while avoiding making emotional decisions about your investments,” she said. “The short story is, get invested, establish your risk tolerance, diversify, stay invested and make necessary adjustments along the way.” For more information visit: www.ameripriseadvisors.com/Barbara/paige.

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FINANCIAL

DEFENDER | APRIL 21 | 2016

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5 tips on shopping for a mortgage I

Table of Contents JP Morgan Chase Bank

The pathway to good paying jobs 3B Make money work: Investment FAQs 4B Wells Fargo Bank

Keys to retirement: Saving early, consistently 5B Personal loans 101: Choose the right tools 6B Cyber security tips for shopping, banking 8B Capital One Bank

Using credit wisely 9B Things to know about life insurance 10B BB&T Bank

Serving local business communities 11B

f you’re looking for the best financing deal for a mortgage, it pays to shop around. A mortgage is a product just like a car, so the price and terms may be negotiable. Here are five tips from the Federal Reserve. 1. Know what you can afford. Review your monthly spending plan to estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance and monthly maintenance and utilities. Make sure you save for emergencies. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage. 2. Compare loans from lenders and brokers. Shopping takes time and energy, but not shopping around can cost you thousands of dollars. You can get a mortgage loan from mortgage lenders or mortgage brokers. Brokers arrange mortgage loans with a lender rather than lend money directly; in other words, brokers sell you a loan from a lender. Neither lenders nor brokers have to find the best loan for you. To find the best loan, you have to do the shopping. 3. Understand loan prices and fees. Many consumers accept the first loan offered and don’t realize that they may be able to get a better loan. Lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have

the same loan qualifications. Lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees or a higher interest rate. 4. Know the risks and benefits of loan options. Mortgages have many features. Some have fixed interest rates and some have adjustable rates. On some you pay only the interest on the loan for a while and then you pay down the principal (the loan amount). Some charge you a penalty for paying the loan off early and some have a large payment due at the end of the loan (a balloon payment). 5. Get advice from trusted sources. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at www.hud.gov or by calling 800-569-4287.

Message from the Publisher The Defender is pleased to once again provide valuable information on a subject that is important to all of us – money. Money is crucial to our survival. We need it for food, clothing, shelter, healthcare and transportation. We need it to provide for our families and improve our communities. The question is, are you making money work for you? Your money works for you when you invest it, save it and spend it wisely. It doesn’t work for you when you spend more than you earn, stay behind on your bills, struggle with credit card debt and fail to make a budget and stick with it.

In this special financial edition, we explore major financial issues and share advice from experts in the field. They offer insight on becoming financially literate, understanding investments, protecting your assets online and buying life insurance. Our partners also share their extensive knowledge, and we would like to thank BB&T Bank, Capital One, JP Morgan Chase and Wells Fargo. Each year, we look forward to compiling our annual financial edition. We feel it is a needed community service that benefits our readers in Houston and beyond.

Sonceria Messiah-Jiles

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FINANCIAL

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APRIL 21 | 2016 | DEFENDER

The pathway to good paying jobs

By JPMorgan Chase

espite persistent unemployment, companies are having trouble filling readily available jobs. A conversation with Gina Luna, market leader for JPMorgan Chase, sheds light on the skills gap.

• How significant is the gap in Houston?

The skills gap is still very significant in Houston, despite the challenges the energy industry is going through. Energy’s slump has not impacted demand for skilled workers in the petrochemical industry, nor • What is the skills gap? in industrial or commercial Like many cities around construction. It remains an the world, Houston doesn’t urgent problem. The industrain enough skilled workers tries need tens of thousands to fill jobs that are readily of skilled employees over available. These openings are the next several years Gina Luna, Market Leader JPMorgan Chase for middle skills jobs, meanThe skills gap is not ing they require more training than high school, but a new phenomenon, and while it cannot be remedied less than a four-year degree. overnight, it is an issue that we can address and have a We are not training workers fast enough, or meaningful impact in the near-term and the long-term. with the right skills, contributing to a skills gap that • What is being done to address the impacts everyone. If we can’t fill these jobs, it slows skills gap? our economic growth. And it has a hugely negative Houston has the nation’s first business-led, commuimpact on people who are unable to compete for nity-wide, integrated workforce effort. It’s called Upskill good-paying jobs that will support themselves and Houston and is steered by the Greater Houston Partnertheir families.

ship. It brings together companies, the public sector, non-profit organizations and educators to make sure training programs prepare people for jobs that are open and available. To help fund this work, JPMorgan Chase has committed to provide $5 million in grants for workforce development initiatives in Houston. It is part of our $250 million commitment worldwide, the largest ever private-sector effort aimed at addressing the skills gap.

What can job seekers do to take advantage of this opportunity?

• Petrochemical jobs: www.energizehouston.org • Construction professions: www. constructioncitizen.com • Health Care professions: www.gulfcoastcc.org/ healthcare • United Way of Greater Houston: Dial 211 for Helpline specialist • Workforce Solutions: www.wrksolutions.com/ upskillhouston. • Capital Idea workforce development program: www.capitalideahouston.org

CHASE IS PROUD TO SUPPORT THE HOUSTON DEFENDER

SO YOU CAN MAKE OUR COMMUNITY A BETTER PLACE. Chase is proud to have served Houston for over 150 years. Together, let’s celebrate a community we call home. Visit Your Local Chase Branch Today. JPMorgan Chase Bank, N.A. Member FDIC © 2016 JPMorgan Chase & Co.

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FINANCIAL

DEFENDER | APRIL 21 | 2016

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Make money work:

Investment FAQs Knowing how to secure your financial well-being is one of the most important steps you can take in life. According to the U.S. Securities and Exchange Commission, you don’t have to be a genius to do it. You just need to know the basics. “There is no guarantee that you’ll make money from investments you make,” says the SEC. “But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.” Here are frequently asked questions from the SEC. Q. Why should I invest? A. For most people, the only way to attain financial security is to save and invest over a long period of time. You just need to have your money work for you. That’s investing. There are two ways your money can work for you. One, your money earns money. Someone pays you to use your money for a period of time. You then get your money back plus “interest.” Or, if you buy stock in a company that pays “dividends” to shareholders, the company pays you a portion of its earnings on a regular basis. Now your money is making an “income.” Two, you buy something with your money that could increase in value. You become an owner of something that you hope increases in value over time. When you need your money back, you sell it, hoping someone else will pay you more for it. Q. What are stocks? A. Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called “equities.” The stock market is where buyers and sellers meet to decide on the price to buy or sell securities, usually with the assistance of a broker. Q. What kinds of stocks are there? A. There are two main kinds of stocks, common stock and preferred stock. Common stock entitles owners to vote at shareholder meetings and receive dividends. Preferred stockholders usually don’t have voting rights but they receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated. Q. What are the benefits and risks of stocks? A. Stocks offer investors the greatest potential

for growth (capital appreciation) over the long haul. Investors willing to stick with stocks over long periods of time, say 15 years, generally have been rewarded with strong, positive returns. But stock prices move down as well as up. There’s no guarantee that the company whose stock you hold will grow and do well, so you can lose money you invest in stocks. Q. What are bonds? A. A bond is a debt security, similar to an IOU. Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to the issuer, which may be a government, municipality, or corporation. In return, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal, also known as face value or par value of the bond, when it “matures,” or comes due after a set period of time. Q. What types of bonds are there? A. There are three main types of bonds – corporate bonds, municipal bonds and U.S. treasuries.

Q. What are some other types of investment products? A. Other types include mutual funds, exchangetraded funds, annuities, certificates of deposit, money market funds, commodities, hedge funds, real estate investment trusts and international investing. Q. How can I avoid investment fraud? A. A basic understanding of how scam artists work can help you to avoid fraud and protect your hard-earned money. Learning how to invest safely also can assist you in reaching your financial goals and will mean a huge difference in your retirement years. Take steps to avoid being scammed. They include: research before you invest, know the salesperson, be wary of unsolicited offers, protect yourself online and become knowledgeable about different types of fraud and red flags that may signal investment fraud. Q. What are red flags to look for? A. Red flags include: • If it sounds too good to be true, it is. • “Guaranteed returns” aren’t. • Beware the “halo” effect, when a con artist comes across as likeable or trustworthy. • “Everyone is buying it.” • Pressure to send money “right now.” • Reciprocity, in which fraudsters try to lure investors through free investment seminars or lunch. Q. Where can I go for help? A. If you have a question or concern about an investment, contact the SEC Office of Investor Education and Advocacy at 800-732-0330. For general information on investing visit www. investor.gov.

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FINANCIAL

APRIL 21 | 2016 | DEFENDER

Keys to retirement:

Saving early, consistently By JIM CHAPMAN Wells Fargo

oung employees might view putting aside money for retirement as something that’s too difficult to do. It’s something they believe can be done later, since the Jim Chapman retirement date is so far away. But just the opposite is true. Simply enrolling in the plan at a young age and having those payroll deductions accrue in a pre-tax savings account is a solid strategy for starting down the path of saving for retirement. Results from our latest Wells Fargo Retire-

ment Study show the difference this approach can make. Workers ages 55 to 59, who began contributing to a retirement plan at an average age of 31, had amassed a median of $150,000 toward their goal of a median of $500,000, three times as much as what workers in their 60s or older had saved, who started saving at an average age of 37. This strategy also creates an environment for consistent savings, another key contributor to success in saving for retirement. Of those responding to our 2016 retirement study, 45 percent of workers 40 or older and 47 percent of retirees told us they had started saving for retirement from the first day they began working. This group of workers 40 or older who kept saving throughout their careers have amassed a median of $160,000 in retirement savings, exactly $100,000 more than workers who have

not consistently saved. We were pleased to see that income level didn’t deter people from consistently saving. In our study, 31 percent of those saving for retirement from the beginning earned less than $50,000 a year. People without a workplace savings plan can still be consistent savers. Subject to eligibility requirements, you can set up an automatic savings program and make systematic contributions up to $5,500 annually to either a Roth IRA (with after-tax dollars) or traditional IRA (with pre-tax dollars). Consider this: Annual contributions of $5,500 become $110,000 in 20 years! Putting yourself in position for a secure retirement is a marathon not a sprint, something that starts with that first step. Jim Chapman is a director for Wells Fargo Institutional Trust and Retirement and is based in Houston.

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Sometimes your biggest meeting of the day isn’t around a conference table. Working together, we can help you manage your money so it works hard for you and the people who matter most in your life. From credit management to college savings and even retirement planning, we can help create a financial plan for you and your family’s future. To learn more, come in or visit wellsfargo.com/together.

FINANCIAL

DEFENDER | APRIL 21 | 2016

Choose the right tools for your financial goals

Family Features

f you happen to find yourself in a tight spot, borrowing money can help set you back on the right path. However, doing so without a full understanding of the facts can hinder your finances in the future. “When faced with a financial emergency, most people don’t think through how borrowing money might affect them down the line,” said Susie Irvine, president and CEO, American Financial Services Association Education Foundation, a nonprofit which heightens consumers’ awareness of personal financial responsibility. “With so many options available, it’s relatively easy to get a loan, but the impact on your credit and what it actually costs you over time can vary a great deal.” The two most common types of small-dollar borrowing are traditional installment loans and payday loans. Knowing the ins and outs of each type of loan and how they work can help you make the best decision for your financial situation. Traditional installment loans are one of the oldest forms of finance transactions and provide credit to individuals and families who need access to credit to meet an immediate need, such as vehicle repairs, household appliances or medical expenses. Averaging around $1,500, traditional installment loans are “plain vanilla” loans with transparent, easy-to-understand repayment terms, due dates and payment amounts – which usually average $120 per month over a term of about 15 months. With regular, manageable payments of principal and interest, the borrower has a clear roadmap out of debt. Best of all, traditional installment lenders

report payment activity to credit bureaus, improving a borrower’s credit score when payments are made on time. Payday loans are repaid in a single balloon payment at the end of the loan period. This payment is usually due in less than 30 days and frequently the term is as short as 14 days. Payday lenders do not assess ability to repay, relying instead on a postdated check or similar access to a borrower’s bank account as assurance the loan will be repaid. If a borrower cannot afford to repay a payday loan in full when it comes due, they are left with no option but to refinance the entire balance of the initial loan. Although payday loans may appear to provide a quick and easy solution, this single, lumpsum payment can lead to significant problems for the borrower. Payday lenders have also been sanctioned in many states, and at the federal level, for abusive practices. To learn more about affordable credit options that are available to help you better manage your money, visit installmentloanswork.com.

PERSO LOANS

Is an installment loan for yo u?

W he n de cid ing wh eth er to ob tai n a loa n, co ns ide r the be ne fit s an d res po ns ibi lit ies . Acco rdi ng to the Am eri ca n Fi na nc ial Se rvi ce s As so cia tio n Ed uc ati on Fo un da tio n, an ins tal lm en t loa n: • Ob lig ate s fu tu re in co me . Yo u’l l be requ ire d to set asi de a ce rta in am ou nt of fut ure inc om e for loa n pa ym en ts. • Re qu ire s di sci pl in e. Bo rro wi ng wi sel y me an s no t bo rro wi ng mo re tha n yo u ca n ha nd le.

Do n’t let the thr ill of bu yin g ob lig ate yo u to mo re tha n yo u ca n aff ord . • M ak es it po ssi bl e to me et un ex pe cte d ex pe ns es. Th e ab ili ty to bo rro w an d ma ke affor da ble pa ym en ts ca n be he lpf ul if an em erge nc y ari ses tha t req uir es ex tra mo ne y. • Al low s yo u to ob tai n prod uc ts an d ser vic es no w an d pa y for th em lat er. A loa n ca n pro vid e an op po rtu nit y to pu rch ase big ge rtic ke t ite ms an d us e the m rig ht aw ay.

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L EDITION

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About car title loans

ONAL S 101 Know loan language Amount financed – The total dollar amount of the credit that is provided to you. Annual percentage rate or APR – A measure of the cost of credit expressed as a yearly rate. Credit insurance – Optional insurance that is designed to repay the debt if the borrower dies or becomes disabled. Finance charge – The dollar amount you pay to use credit. Fixed rate financing – The interest rate and the payment remains the same over the life of the loan. Equal monthly payments of principal and interest are made until the debt is paid in full. Length of payment – The total number of months you have to pay the credit obligation. Late payment fee – A fee that is charged when payment is made after its due date. Monthly payment amount – The dollar amount due each month to repay the credit agreement.

he Houston area for over 80 years

A car title loan – also known as a pink-slip loan, title pledge or title pawn – is a small, short-term, high-rate loan that uses the clear title on your vehicle as collateral. It is a very expensive form of credit. Some lenders offer car title loans if you have equity in the vehicle, even without clear title. These loans typically are for 15 or 30 days and have a triple-digit annual percentage rate (APR), a much higher interest rate than most forms of credit. Car title loans often are for an amount that is 25 percent to 50 percent of the value of the car. On average, these loans are for $100 to $5,500. But they can be for $10,000 or more from some lenders. Here is some advice on car title loans from the Federal Trade Commission. • Review the loan terms. Car title lenders must give you the terms of the loan in writing before you sign for the loan, including the cost of the loan and the APR. In addition to the finance charge, car title loans also may include charges, like processing fees, document fees, late fees, loan origination fees, title charges, and lien fees. • Beware of “add-ons.” In addition to your loan, you may have to buy add-ons like a vehicle roadside service plan. The cost of the plan may depend on the value of the loan. If add ons are required, they become part of the finance charge/APR, making the costs of credit even higher. • Know your payment options. You generally have three options to pay: in person, through an online system, or through an automated repayment system. Lenders cannot make recurring automatic debits unless you agree in advance to these transfers from your bank account. The lender must give you a copy of your authorization of the recurring automatic debits. In addition, it’s illegal for a company to require that credit be repaid through pre authorized automatic transfers. If you can’t pay off the loan in the typical 30 day period, the lender may offer to “roll over” the loan into a new loan. But the roll over process always adds fees and interest to the amount you originally borrowed. • Avoid repossession. If your car is repossessed, you lose not only your transportation to work, school and other places you need to go, but also the money your car was worth. Some lenders require installation of GPS or starter interrupt devices on the vehicles for repossession, among other purposes. Some states have laws that force lenders who have repossessed and sold your car to pay you the difference between the sale price and the loan amount. Other states allow lenders to keep the full amount from the sale.

10 FINANCIAL

DEFENDER | APRIL 21 | 2016

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cyber security tips for banking, shopping Your home has locks on the doors and windows to protect your family and prevent thieves from your possessions. But do you have deterrents to prevent the loss or theft of your electronic assets when banking or shopping remotely online? “Think about all of the access points to and from your computer, such as Internet connections, email accounts and wireless networks,” said Michael Benardo, manager of the FDIC’s Cyber Fraud and Financial Crimes Section. “These always need to be protected. Otherwise, it’s like leaving your front door wide open while you are away so that anyone could come in and take what they please.” Consider these strategies from the FDIC. 1. Take extra precautions for logging into bank and other financial accounts. Use strong user IDs and passwords that are hard for a hacker to guess. Don’t use your birthdate, address or other words or numbers that can be easy for con artists to find out or guess. Don’t use the same password for different accounts because a criminal who obtains one password can then log in to your other accounts. Keep your user IDs and passwords secret, and change them regularly. 2. Consider using a separate computer solely for online banking or shopping, and not Web browsing, emailing, social networking, playing games or other activities that are more susceptible to malicious software – malware – that can access computers and steal information. You can use an old PC but uninstall any software no longer needed and scan the entire PC to check for malicious software before proceeding. 3. Take precautions if you provide information to third parties. Some people use online “account aggregation” services that, from one website, can provide a convenient way to pay bills, monitor balances in deposits and investment accounts, and even keep track of your frequent flyer miles. Thoroughly research the company behind the website and make sure that you’re dealing with a legitimate entity. 4. Check your bank accounts for signs of fraud. Check your deposit accounts and lines of credit at regular intervals to spot and report errors or fraudulent transactions. Many banks make it easier for customers to keep track of their accounts by of-

fering email or text message alerts when balances fall below a certain level or when there is a transaction over a certain amount. 5. Keep your software up to date. “All of your software should be checked and updated as generally recommended by the manufacturer or when flaws are found,” said Kathryn Weatherby, a fraud examination specialist for the FDIC. “This advice goes for everything from your operating system to your word processing software and Internet browsers.” 6. Install anti-virus software. Crooks and computer hackers are always developing new malware that can access computers and steal information. Install anti-virus software that periodically runs in the background of your computer to search for and remove malware. Set the software to update automatically. 7. Use a firewall program to prevent unau-

thorized access to your PC. In simple terms, a firewall acts as a gatekeeper that helps screen out hackers, malware and other intruders who try to access your computer from the Internet. 8. Only use security products from reputable companies. Some anti-virus software and firewalls can be purchased, while others are available free. Either way, it’s a good idea to check out these products by reading reviews from computer and consumer publications. Look for products that have high ratings for detecting problems and for providing tech support. 9. Take advantage of Internet safety features. When you are banking online, shopping on the Internet or filling out an application that requests sensitive personal information make sure you are doing business with reputable companies. You also can have greater confidence in a website that encrypts (scrambles) the information as it travels to and from your computer. Look for a padlock symbol on the page and a Web address that starts with “https://.” The “s” stands for “secure.” 10. Be careful where you connect to the Internet. A public computer, such as at an Internet café or a hotel business center, may not have up-to-date security software and could be infected with malware. Similarly, if you are using a laptop or mobile device for online banking or shopping, avoid connecting it to a wireless (Wi-Fi) network at a public “hotspot.” Wi-Fi in public areas can be used by criminals to intercept your device’s signals and as a collection point for personal information. Visit www.OnGuardOnline.gov for information on how to be safe online.

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FINANCIAL

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APRIL 21 | 2016 | DEFENDER

Using credit wisely By Capital One

Capital One Bank® is proud to support this special section of The Defender and, through it, provide information to help readers and their families learn and practice effective money management skills. Maintaining your financial health is kind of like staying in good physical condition. Your credit requires balanced spending and responsible behavior. Take control of your finances by practicing the following healthy credit habits:

Habit 1:

Create and stick to a budget. Start by outlining all of your monthly expenses. Looking at your budget will help you map how much you can spend and how you can manage your credit card and other expenses.

Habit 2:

Borrow only what you can afford to pay back. Show future lenders they can depend on you by borrowing only as much money as you can afford to pay back.

Habit 3:

Pay your bills on time. It is important to pay your bills on time every month.

A history of late payments can be damaging. If you can schedule automatic payments on your bills, take advantage of it.

Habit 4:

Carry credit card balances responsibly. If you have a credit card, it is important to be responsible when it comes to carrying a balance. Some key tips: • Make your payments on time. • If you can, pay off your balance in full each month. • Pay off your outstanding balance as quickly as possible.

Habit 5:

Check your credit report and monitor your credit score. Check your credit report regularly to help you catch and correct potentially costly errors such as… • Accounts you don’t recognize CreditWise® phone app • Loans that have been paid off but still show up as “open” • Incorrect personal information (such as your address or employer) Checking your credit report is also one of the best

ways to spot potential fraud and identity theft. Everyone is entitled to a free copy of their credit report from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion – once every 12 months. Your free reports can be requested by phone, mail or by visiting the government-sponsored website: www. annualcreditreport.com. While your credit report will give you all the details of your credit history, it will not include your credit score, which you may request (and pay for) separately. CreditWise® from Capital One® lets you see your credit score for free and is available to everyone – whether they have a Capital One product or not. Visit (https://www.capitalone.com/ credit-cards/benefits/creditwise/).

COMMITTED TO

COMMUNITY Capital One Bank works every day to give back to the communities where we work and play. Through programs like financial literacy, education, affordable housing and small business development, we help provide people and communities with the tools they need to succeed. ®

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FINANCIAL

DEFENDER | APRIL 21 | 2016

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things to know about buying life insurance

Life insurance is an important purchase for most Americans because it can provide income replacement to beneficiaries in the event of a death. Life insurance policies are available from more than 2,000 life insurance companies in the United States. Here are some tips on getting the best value from the National Association of Insurance Commissioners (NAIC), an organization of the chief insurance regulatory officials.

Review your insurance needs. Choose the kind of policy that has benefits that most closely fit your needs. Consider the number of people who are dependent upon you financially and whether or not you need life insurance. Will you have substantial debts and taxes owed after your death? Do you have alternatives to life insurance, such as savings accounts or other investments that could take care of expenses after your death?

Know your options. There are two basic types of life insurance: term insurance and cash-value insurance. You may wish to combine cash-value life insurance with term insurance for the period of your greatest need for life insurance to replace income. Make sure the price is right. If the premium increases later and you still need insurance, will you be able to afford it?

Comparison shop. Life insurance is a competitive marketplace, and much of the competition focuses on price. After you have decided which kind of life insurance is best for you, compare similar policies from different companies to find which one is likely to give you the best value for your money.

Know your company. You can check the financial stability of any life insurance company through several reputable national rating companies. Check with your state insurance department to verify that the company is authorized to do business in your state. Read your policy carefully before signing. Never buy a policy you don’t understand. If you are given illustrations or booklets, save these materials with your policy. Make sure you understand the guarantees in your policy and the surrender penalties if you choose to drop the policy at any time. Ask your agent or company

about anything that is not clear to you.

Regularly review your policy. Review your life insurance program with your agent or company every few years to keep up with changes in your income and your needs. This includes a review of your net worth to reconsider the prospects your survivors may face when you pass away.

Consider replacement cost. It may be costly to replace your insurance if you change your mind during the early years of the policy. Don’t drop one policy and buy another without a thorough study of the new policy and the one you currently have.

Get more information. Order a copy of the “Life Insurance Buyer’s Guide” at www.naic.org.

Common insurance terms Annuity – A contract in which the buyer deposits money with a life insurance company for investment. The contract provides for specific payments to be made at regular intervals for a fixed period or for life. Cash value – The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company. Copayment – The amount you must pay out of your own pocket when you receive medical care or a prescription drug. Deductible – The amount the insured must pay in a loss before any payment is due from the company. Health maintenance organization (HMO)

– Managed care plans that provide health care services to their members through networks of doctors, hospitals, and other health care providers. Liability – Responsibility to another for one´s negligence that results in injury or damage. Preferred provider organization (PPO) – A type of plan in which physicians, hospitals, and other providers agree to discount rates for an insurance company. Insurance contracts with PPO provisions reimburse at a higher percentage if you use providers in the network. Premium – The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Provider – A hospital, pharmacist, registered nurse, organization, institution or person licensed to provide health care services. Term life insurance – A policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the policy or let coverage end. Whole life insurance – Whole life insurance policies are one type of cash value insurance. Whole life policies offer protection through a lifetime. Source: Texas Department of Insurance

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FINANCIAL

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APRIL 21 | 2016 | DEFENDER

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Serving local

business communities services. We deliver a unique blend of services for banking, lending, t BB&T, our misinsurance and wealth sion is to help clients management. In addition achieve economic to those personal banksuccess and finaning services, we provide cial security. Founded in 1872, our business clients with BB&T is among the largest fibusiness banking, capital nancial holding companies in the formation, risk manUnited States with assets totaling agement and employee $209.9 billion. The community benefits solutions. banking model is the foundation Jimmie Jones, our for local decision-making and community business the basis for responsive, reliable development officer, has and empathetic client service a proven track record delivered by highly competent of building successful individuals and teams. Jimmie Jones, Community Business partnerships within the Our 2,265 financial cenDevelopment Officer communities we serve and ters and subsidiary locations use helping businesses achieve their full financial a consultative approach and a comprehenpotential. His background includes a strong sive, integrated line of financial products and

By BB&T

mix of entrepreneurship, affordable housing development and banking expertise. We realize you have goals that are unique to your business, and through our consultative approach we take the time to have a conversation with you so we can provide solutions that best meet your needs. Learning more about your business will help us identify cash flow solutions for your companyâ€™s needs and goals. We invite you to partner with BB&T so we can share our knowledge and help you make the decisions that will help your business grow and prosper. Each day at BB&T we work to fulfill our mission and define why so many businesses rely on BB&T for objective advice and expert financial solutions. We are honored to have expanded our presence into Texas and Houston in particular, and we invite you to experience the difference a true partnership with BB&T can make today.

Around the corner is a location. And a state of mind. At BB&T, we believe a local approach to banking should never go out of style. For more than 140 years, weâ€™ve been sharing the knowledge our clients need to move in a brighter financial direction. Supporting our schools, arts and sports programs. Helping businesses grow and families become homeowners. And seeing our connection to this community grow stronger by the year. BBT.com

Jimmie Jones Community Business Development Officer Jimmie.Jones@BBandT.com

B A N K I N G

I N S U R A N C E

I N V E S T M E N T S

Branch Banking and Trust Company is a Member FDIC and an Equal Housing Lender. Loans are subject to credit approval. Only deposit products are FDIC insured. ÂŠ 2016, Branch Banking and Trust Company. All rights reserved.

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