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Show Page 8 The Ogden Valley news Volume XXII Issue V May 1, 2014 Rising Gasoline and Food Prices Push Zions Why Disability Insurance Is Critical If not, you’ll have to buy an individual Alderman Bank CPI Higher for Second Consecutive Month By Jason policy. A few of the things to keep in mind: Most people understand why having life The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.7 percent from February to March on a non-seasonally adjusted basis. Over the last twelve months, prices have increased in Utah by 1.4 percent. The national Consumer Price Index, released by the Bureau of Labor Statistics, increased 0.6 percent from February to March on a nonseasonally-adjusted basis and has increased 1.5 percent over the past twelve months. As expected, Utahns paid substantially more for gasoline in March than they did in February, driving overall transportation costs 1.5 percent higher month-over-month. Utahns paid $3.35 per gallon of gasoline in March, up from $3.14 in February and $3.11 in January. This is the highest price for gasoline in the state since October 2013. Utahns should expect gasoline prices continue to rise, as well. Last year, gasoline prices rose each month from January to June, and most analysts expect similar trends this year, citing increased seasonal demand and the switch to more expensive summer blend gasoline. Although the state’s gasoline prices have been increasing, the average price for a gallon of gasoline in Utah has been below the national average for the past 5 months. Currently, the average price for a gallon of gasoline in Utah stands at $3.32, much lower than the current national average of $3.64. Consumers in Utah paid more for food at grocery stores in March, as well; food at home prices increased 1.0 percent from February to March due to higher produce and meat prices. Prices for food at home have now risen four of the past five months primarily due to sharply rising produce prices, which have risen about 4 percent each month over the course of the last five months. Produce, specifically citrus fruit prices, have risen substantially because of inclement weather across the globe. In fact, in March some consumers may have noticed that prices for limes increased substantially due to tight supplies caused by winter crop damage in Southern Mexico. In Western states that rely heavily on Mexico for limes, the shortage has sent prices soaring to a record $100 per case, up from an average of $14, hurting produce suppliers and restaurants alike. Rising beef prices have also played a part in higher grocery bills for many consumers. For the second straight year, drought conditions in parts of the U.S. have dramatically reduced the amount of cattle feed available, forcing ranchers to reduce their herds to sizes not seen in over 50 years. These supply constraints sent beef and veal prices up 4.0 percent in February, which is the largest monthly increase in more than ten years, according to the U.S. Department of Agriculture (USDA). Prices for cattle feed could continue to increase over the next few months, as well, sending beef prices even higher. Corn prices in commodity markets rose sharply last month after the USDA estimated that farmers will plant 91.7 million acres of corn this spring—a 4 percent decline from last year and the lowest total in four years. Last year, the U.S. had a record-setting yield from its corn harvest that led to sharp declines in corn prices, and this prompted many farmers to instead plan to plant soybeans this spring. In other categories, utility prices rose 1.3 percent from February to March, as prices for propane increased across the state. Housing prices also jumped considerably, increasing 0.6 percent, primarily due to appreciably higher hotel and motel prices. Clothing prices rose 0.6 percent as retailers rolled out their new spring and summer lines. Medical care prices increased 0.5 percent due to higher medical care service costs. Prices for food away from home rose 0.2 percent due to higher prices for alcoholic beverages, and other goods and services moved 0.1 percent higher. Education and communication prices fell 0.5 percent from a decrease in telephone service prices, and recreation prices decreased 0.1 percent. “We are now in the midst of the seasonal gasoline price increase,” said Scott Anderson, Zions Bank president and CEO. “Although these price increases are frustrating for consumers, this seasonal increase is no reason to fret. Our local economy will remain strong even as gasoline prices march higher until mid-summer when prices will begin to drop again as fall approaches.” Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by the Cicero Group. The Cicero Group is a premier market research firm based in Salt Lake City. The Zions Bank Utah Consumer Attitude Index will be released April 29, 2014. Additional information is available at <www.zionsbank.com> insurance is a good idea: Nobody wants to leave their survivors in a financial lurch if they were to die suddenly. But what if you suffer an accident or illness and don’t die, but rather, become severely disabled? Could you or your family make ends meet without your paycheck, possibly for decades? Although most people are entitled to Social Security disability insurance (SSDI) benefits if they’ve paid sufficient FICA payroll taxes over the years, the eligibility rules are extremely strict, applying can take many months, and the average monthly benefit is only about $1,150. So what are your other disability coverage options? Many companies provide sick leave and short-term disability coverage to reimburse employees during brief periods of illness or injury. Some also provide long-term disability (LTD) insurance that replaces a percentage of pay for an extended period of time. But employer-provided LTD plans usually replace only about 60 percent of pay, and the money you receive is considered taxable income, further lowering your benefit’s worth. Plus, such plans often have a waiting period before benefits kick in, will carve out any SSDI benefits you receive, and cap the monthly benefit amount and maximum payout period (often as little as two years). Thus, even if your employer provides basic LTD, you might want to purchase additional coverage. Just be prepared: LTD insurance can be expensive. Yearly premiums may cost 1 to 3 percent of gross income, depending on plan features, your age, and whether you have preexisting conditions. First, see if you can buy supplemental coverage through your employer’s plan—their group rate will be cheaper than an individual policy and you probably won’t need a physical exam. Or, see if any professional or trade organizations you belong to offer group coverage. SNAPSHOT cont. from page 1 growth since 1998. In the 1990s, population growth was influenced by net migration to a greater extent than today, mostly due to a strong economy. Hence, all projections place significant weight on predicted economic performance. Low cost-of-living and low unemployment create an incentive for in-migration. This report will provide the background context for a series of reports in 2014 focusing on the impacts of population growth. The series will examine infrastructure and planning, water, and education. The first report was released April 16. • The younger and healthier you are, the lower the premiums you’ll be able to lock in. • Some policies won’t pay benefits unless you can’t perform the duties of your own occupation, while others specify that you must be physically unable to perform any job (the latter coverage is much cheaper). • Look for a “non-cancelable” policy, which means the insurer can’t cancel or refuse to renew your policy—or raise the premium—if you pay on time. • The longer the waiting period before benefits are paid, the lower the premium. Thus, if you have enough sick time and savings to wait 120 days before payout, your premiums will be significantly less than for a 60-day waiting period. • Some policies only provide benefits for two years, while others pay until your normal Social Security retirement age—most cover somewhere in between. The shorter the term, the lower the cost. • Many plans exclude preexisting conditions, mental health or substance abuse issues. • For an additional fee, policies with a “future purchase option” allow you to increase coverage as your wages rise, without having to take another physical or rewrite the policy. • Check whether the benefit payout amount is fixed or if cost-of-living adjustments are made periodically. The latter type is more expensive but offers better protection against inflation if you’re disabled for many years. Bottom line: If you became seriously disabled it could easily wipe out your savings and put your family in financial jeopardy. Before you actually need it, investigate what disability coverage you already have and what other options are available. Note: Jason Alderman directs Visa’s financial education programs. To follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney. For a full copy of the report, visit www.utahfoundation.org/reports/snapshot-2050-analysis-projected-populationchange-utah/ The mission of Utah Foundation is to promote a thriving economy, a well-prepared workforce, and a high quality of life for Utahns by performing thorough, well-supported research that helps policymakers, business and community leaders, and citizens better understand complex issues and providing practical, well-reasoned recommendations for policy change. For more information about Utah Foundation, visit <www.utahfoundation. org/about/> |