Um­brella in­sur­ance of­fers ex­tra pro­tec­tion

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Q. What’s um­brella in­sur­ance? — F.W., Mans­field

A. It ex­ists to keep you from get­ting soaked fi­nan­cially. It of­fers cov­er­age ex­ceed­ing the lim­its of the poli­cies cov­er­ing your house or apart­ment, car and more. Um­brella poli­cies can pay for any prop­erty dam­age and per­sonal in­jury you’re found re­spon­si­ble for caus­ing. Poli­cies also cover losses not typ­i­cally paid for by stan­dard in­sur­ance, such as cov­er­age for rental units or cov­er­age if you’re sued for slan­der­ing or li­bel­ing some­one. Imag­ine a sce­nario in which you’re sued and end up or­dered to pay $1 mil­lion. Your reg­u­lar in­sur­ance pol­icy won’t of­fer any­thing close to that, but an um­brella pol­icy can. Um­brella in­sur­ance won’t cost you a lot, ei­ther: A $1 mil­lion um­brella in­sur­ance pol­icy of­ten costs around $100 to $350 an­nu­ally.

Q. I’m think­ing of sell­ing two stocks I own. One doesn’t pay a div­i­dend, and the other hasn’t grown much in the past few years. Should I just move that money into CDs?

A. If you no longer have faith in the long-term growth po­ten­tial of ei­ther stock, do sell. But don’t sell be­cause they pay lit­tle or no div­i­dend. There are two main ways to make money in stocks: div­i­dends and stock-price ap­pre­ci­a­tion. A com­pany may pay no div­i­dend, but if it’s ex­e­cut­ing its strate­gies suc­cess­fully, its stock price might in­crease sub­stan­tially over time, re­ward­ing share­hold­ers. Some of the best stocks will of­fer both grow­ing div­i­dends and stock-price growth.

Cer­tifi­cates of de­posit are fine for short-term sav­ings, but with in­ter­est rates so low these days, they aren’t that great as long-term in­vest­ments.

Fool’s school: smart year-end tax moves

As the end of the year ap­proaches, look into what smart tax moves you can make. For ex­am­ple, do­nate cash, stocks or other as­sets to char­i­ties, es­pe­cially if you plan to item­ize your de­duc­tions. Also:

• Re­view your in­vest­ment port­fo­lio’s win­ners and losers. If you’ve sold some hold­ings and have sub­stan­tial cap­i­tal gains on which you’ll be taxed, you might want to sell some un­der­wa­ter stocks for a loss to offset some or all of those gains. (Don’t buy that stock back un­til af­ter 30 days pass, though, for the loss to count.)

• Spend any funds in a Flex­i­ble Spend­ing Ac­count (FSA) on qual­i­fy­ing ex­penses, as that’s use-it-or-lose-it money. Some em­ploy­ers may give you an ex­tra 2½ months to spend it, and some may let you roll over up to $500 to the fol­low­ing year.

• Con­trib­ute to an IRA (and/or your em­ployer-spon­sored re­tire­ment plan such as a 401(k)) if you haven’t done so yet. The max­i­mum 2018 IRA con­tri­bu­tion is $5,500 (plus $1,000 if you’re 50 or older), and it’s $18,500 (plus $6,000 if you’re 50 or older) for 401(k)s.

• Plan to grab any avail­able tax cred­its.

Name that com­pany

I trace my roots to 1930, when the Oak Ridge Tele­phone Com­pany was bought for $500. Over the years, I bought other tele­com com­pa­nies (such as Qwest, Savvis and Level 3 Com­mu­ni­ca­tions) and some se­cu­rity busi­nesses. I was added to the S&P 500 in 1999. In the early 2000s, I op­er­ated in 22 states and was fo­cused on ru­ral mar­kets. To­day, head­quar­tered in Mon­roe, Lou­i­si­ana, and with a mar­ket value re­cently near $23 bil­lion, I’m the sec­ond­largest U.S. com­mu­ni­ca­tions provider to global en­ter­prise cus­tomers, serv­ing cus­tomers in more than 60 coun­tries. Who am I?

Last week’s trivia an­swer

I trace my roots to the 1812 found­ing of the City Bank of New York, which later grew into the Na­tional City Bank of New York. I had a net­work of ATMs in the late 1970s. I be­came a ma­jor credit card is­suer af­ter buy­ing Carte Blanche in 1978 and am now the top is­suer glob­ally. I’m an in­ter­na­tional bank­ing gi­ant, with more than 200,000 em­ploy­ees, more than 100 mil­lion cus­tomers and a mar­ket value re­cently near $165 bil­lion. I rake in more than $70 bil­lion an­nu­ally. I’m the re­sult of a 1998 merger with Trav­el­ers Group. Who am I? (An­swer: Cit­i­group)

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