Insurance - Life Insurance, Home Insurance,Insurance Information, all about Insurance

When should I update my Life Insurance Policy?

2007-11-11T07:48:00.002-08:00

There are many reasons to update an existing Life Insurance Policy. Your life may have changed dramatically since you first purchased your life insurance policy. Contact your life insurance agent if your life has changed in any of the ways we listed below.

Major Purchase: If you make a major purchase you should contact your life insurance agent to set up a review and possibly update your life insurance policy. There are a couple items we consider major purchases. An automobile, swimming pool or boat is not considered a major purchase and should not be reflected within your life insurance review. A major purchase is a new home, refinancing your home, and a College Education. Purchasing a home or a College Education is a substantial investment and should be covered in your death benefit to ensure your family isn't burdened with the expenses.

Relating to a College Education when you have children you should consider a Life Insurance Policy review to ensure their College Tuitions are covered with your death benefit.

Marriage or Divorce: If you get married or divorced you should contact your life insurance agent to possibly change the policy figures but more likely to change beneficiaries. Your life will change when you get married or divorced so in any case of a life changing event you should contact your life insurance agent.

Other life changing events: Any event that will significantly alter your life like an ill family member, changes to you or your families health or coming into a decent amount of money be it professionally or by inheritance. A rule of thumb could be to consider a life insurance policy review when your life has seen a major change.

If you forsee the change in the near future it is better to act now than to wait so be sure you to contact your agent in a timely manner.

Why buy a 5 year term or 10 year term life insurance policy?

2007-11-11T07:48:00.001-08:00

Why you should consider buying a lesser term life insurance policy

The title of this article may be a bit off. Not everyone should buy a shorter term life insurance policy however, there are some very good reasons why individuals should if the circumstances match up. In this article, I'll mention some obvious and not so obvious reasons why you or one of your family members should consider purchasing a 5 year term life insurance policy or a 10 year term life insurance policy.

Free Term Life Insurance Quotes

It's cheaper!

Ok, this is the obvious reason one may consider purchasing a shorter term life insurance policy. The longer the term the more expensive your premiums. So a short term insurance policy is quite a bit cheaper. The reasons for this is that it is less risky for the insurance company to insure. Of course your policy premium still has a lot to do with your health but in general the shorter the term, the cheaper the premiums. Saying that, I would not recommend purchasing a shorter term simply because it's more affordable. You would find out that once the policy is up your rates would go up and it would be quite a bit more to purchase three 10 year term life insurance policies back-to-back then to purchase one 30 year term life insurance policy. So why would someone want a shorter term?

It's for certain circumstances

When you know when your burdens are significantly reduced you can purchase a term life insurance policy to end at the right time. For example, if you're last child is a senior in high school and your well on your way to become an empty nester you can assume that your costs associated with education, and every other expense associated with children will be gone in 5 years then why not purchase a policy to cover that period. If you are in your 60's and are close to medicare or possibly cashing out some investments then you may consider a shorter term life insurance policy. Maybe your close to paying off your mortgage and all of your other expenses are covered through a different policy you may want to consider purchasing a 5, 10 or even 15 year term life insurance policy.

I believe we've made our point. It's all about timing and each term life insurance product is designed to meet certain instances and circumstances. Not every life insurance company offers shorter term life policies so you may need to shop around.

Keep your Life Insurance Policy Current!

2007-11-11T07:47:00.000-08:00

There are many reasons why a Life Insurance policy lapses. The two most common reason an individual let's a Life Insurance Policy lapse is because they forgot to renew it or they don't think they can afford the insurance premium.

Allowing a Life Insurance Policy to lapse is a very bad thing. You may think you can simply call your life insurance company and reinstate your policy some time after it lapses similar to a cable, cell phone or electricity bill but the fact is you can't. If you allow your Life Insuracne policy to lapse it is very likely you will need to apply for a new policy. This can be very costly as you may have had a term life insurance policy locked in 10 years ago when you were young and healthy. There is no doubt your premium will now go up even with the same death benefit but how much the premium goes up depends on how well your health is. If your health isn't as good or you've taken up smoking or any change in your health will cause an increase in your life insurance premium.

Lets examine the most common reasons a Life Insurance policy lapses. Don't forget to renew it! Most life insurance companies have made it very easy to ensure you never forget to renew it. By implementing automatic withdrawal from your bank account you never have to write a check or mail a payment again. Your premium is deducted from your checking or savings account when the premium's due. The 2nd most common reason individuals allow life insurance policies to lapse is because they claim they can't afford it. This is a bad excuse as you can't afford not to have life insurance. When you die you will have expenses and you should be responsible to cover these expenses. There are ways to make a life insurance policy more affordable. The most common way is to adjust the frequency of your payments. Inquire about yearly, semi or quarterly payments as most life insurance companies will give you a discount for these payment types. Inquire with your insurance company about possibly lowering the death benefit. The most important thing to do is ask your company what options are availble but do not let your life insurance policy lapse.

Reasons why you shouldn't cancel your life insurance policy

2007-11-11T07:46:00.002-08:00

Maybe your very fortunate and no longer require life insurance. This can happen for many reasons but a common scenario is when an individual receives or earns a large amount of cash. Enough cash to easily cover all expenses your family may receive when you pass away. If you have millions of dollars in an interest baring account, a home thats paid for and very little other expenses perhaps you don't need life insurance. You should consult with your life insurance agent to see if this is feasible scenario but in certain instances it is.

So you no longer need your life insurance policy. Should you call your life insurance company and tell them to cancel your life insurance policy? Remember, this is the same life insurance policy you've paid $X in premiums every year for however many years. Essentially, it's as good as flushing money down the toilet at this point if you decide to just cancel the policy. Sure it protected you when you needed it but now that you don't need it why keep it?

There are a couple good reasons to keep your life insurance policy. As I mentioned above, you've already invested some money into it. Your family is already covered in the event you pass so why not make the beneficiary someone else? Perhaps leave your death benefit to your brother in law (the struggling actor) or someone else that could really use it. Another good option is to leave your life insurance benefit to a Charity. Personally, I love the Animal Shelters so I would consider leaving the death benefit to a local Animal Shelter. You may want to consult with your Accountant but I believe when the beneficiary is a Charity then your premium payments are tax deductible.

So even if you don't need the death benefit consider keeping your life insurance policy.

What is No Exam life insurance?

2007-11-11T07:46:00.001-08:00

A lot of people are talking about the new buzz which is no exam or guaranteed issue life insurance. No exam or guaranteed issue life insurance is a fairly new product in which an individual may purchase life insurance online with a credit card and receive coverage without having the annoying blood and urine tests done.

Get your free No Exam Life Insurance quote.

What does this mean? It means that almost anyone can purchase life insurance today and receive coverage the same day. Some people have problems scheduling time for testing and some people simply don't do needles very well. The convenience of being able to purchase insurance online and receive your policy in your inbox is very attractive.

There are some drawbacks and no exam life insurance isn't for everyone. No exam life insurance usually is limited to a certain death benefit. Most companies I have seen that offer no exam insurance have a maximum of $150,000 in coverage. It's necessary for a life insurance company to set a maximum to cover potential losses. The chance of an insurance company receiving a claim for no exam life insurance is much greater than standard Term or Whole life insurance policies because they make those individuals take medical exams and they only insure the healthy ones or they have such a high premium it's still profitable for the life insurance company.

Another drawback is the policy premium. Since the risk is greater for the life insurance company the premiums for no exame life insurance tend to be higher. To some, the higher premium and lower death benefit are good deals compared to going through a full medical exam.

Whole Life Insurance is Still a Preferred Choice

2007-11-11T07:45:00.000-08:00

For a long time in America, whole life insurance was what most people bought. Lately, insurance companies have been offering other insurance at lower rates, but in most cases, whole life insurance is still the most beneficial of all plans.

Good For Life Policy

While term life insurance is for a specified period, whole life insurance is designed for life time coverage. This makes it ideal for someone with a steady income who wants to plan for the future.

Whole Life Insurance Premiums and Death Benefits

Whole life insurance rates have the steady quality that drives long-term policy holders to this option. While term life insurance premiums generally go up each time the holder renews the policy, whole life insurance rates usually stay the same until time of death or cancellation of the policy. Some policies do have increasing rates, but the increases are defined in the contract when the policy is purchased. So there?s no reevaluation and no surprises.

The benefits paid at the time of death stay the same with whole life insurance, so the holders can rest assured that their families are taken care of.

Cash Value Turns Whole Life Insurance Into an Investment

A term policy begins and ends (with the policy holder loosing all the money he or she paid into it). A whole life insurance policy builds cash value. How? A portion of the premium is put towards investment in the company, so the policy holder also becomes a share holder. Over time, this builds into an amount of money that can be used. That amount is called the ?cash value?.

The policy holder can cancel the whole life insurance policy and take the cash or re-invest it in a new policy to better suit his or her needs. Or the holder can take the cash value, and stop payments, but still retain a portion of the death benefits (this is called "Paid Up Insurance").

Loan Values

As the cash value of a whole life insurance policy grows, policy holders can borrow money using the cash value as collateral. This allows whole life insurance policy holders to keep the insurance policy, but still use the money. If the debt is unpaid when the policy holder passes away, the benefits paid might be smaller.

Flexible Payment Methods for Whole Life Insurance

Single Premium: This whole life insurance quote is usually the most beneficial. It involves one single payment, and produces an instant cash value. The death benefits are defined and never change. Itâ€™s ideal for anyone who has a portion of money they want to put away for their family.

Limited Payments: This is when the premiums are only paid for a specified number of years. The amount for the premiums is specified in the whole life insurance quote and never changes. The cash value of the whole life insurance policy rises steadily.

Modified Premiums: The premium amounts increase over time, and then level after a specified number of years. All of the specifics are clearly defined in the whole life insurance quotes. The benefits amount stays the same, so it allows someone to purchase a larger policy than they can afford at that time.

Continuous Premiums: Continuous premiums never change and are due for the life of the policy holder. The cash value rises steadily. This is the most popular whole life insurance policy.

Other Whole Life Insurance Options

Whole life insurance companies often offer other options like â€˜term ridersâ€™, where holders can add temporary policies for short terms. Whole life insurance policies also sometimes offer child and spousal riders, so holders can add someone to the same policy.

Choosing the right insurance policy isnâ€™t always the simplest decision. Ask for the advice of an insurance agent who has the benefit of experience and can help you find decide if whole life insurance is right for you.

Variable Life Insurance

2007-11-11T07:44:00.000-08:00

When You're in It for the Long Term

Young, and ready to take on the world. This is who variable life insurance is made for. Variable Life Insurance is the greater way to glory, it's a security and an investment. It's much like whole life insurance, but different in that variable life insurance gives you more control over the cash value and death benefits amount.

How Does Variable Life Insurance Work?

With variable life insurance, the premium may go up or down, depending on the status of the market. Part of this payment goes to pay for life insurance. Another part (usually around 4%, but it depends on the policy) goes to build cash value in your "investment portfolio".

As the variable life insurance policy owner, you decide how to invest this money. You can invest in stocks, bonds, etc. As the market changes, so will your cash value and the death benefits. You'll decide how much of your investment is applied to the policy and how much is reinvested. You have more control over this policy than any other, which means you're more at risk. Then again, you have more potential to receive higher benefits when the market is up.

Each company issuing a variable life policy will issue a prospectus, which will define the policy. You should read it carefully before signing the policy. Both the Securities and Exchange Commission and The Commissioner of Insurance regulate these policies, and the agent must have a NASD in order to sell variable life insurance.

What if the Investment on a Variable Life Insurance Policy Goes Bad?

In extreme cases, when the investment choices for a variable life insurance policy loose their value, the policy can lapse, and it will no longer be considered a valid policy. Most companies offer a guaranteed minimum death benefit to keep this from happening. With these policies, the insured must pay a minimum premium each month.

What else does Variable Life Insurance Offer?

Since variable life insurance isn't a strict investment, all the monetary growth within the policy is tax deferrable. This also makes it an easy way to avoid estate taxes. People often purchase variable life insurance policies for their heirs, who can then either withdraw the cash value or borrow against it.

Withdrawing has the same effect it would with a whole life policy. The more cash value withdrawn, the more the death benefits would decrease.

Variable life insurance also gives you the opportunity to make changes in your investment choices without incurring taxes or transaction fees. Most companies limit the number of transactions to about 12 per year.

Most companies will offer a "survivorship" policy. In this case, two people are covered under the variable life insurance policy, and benefits will only be paid when both of them die. This kind of policy helps many people when they could not obtain life insurance by themselves due to health reasons.

Variable life insurance isn't for everyone. Talk to an agent to find out if it's right for you. The opportunity can be huge, but so is the risk, so review all your insurance options before making a decision.

Talk to your Insurance Agent to ensure Variable Life Insurance is right for you!

Return of Premium Life Insurance

2007-11-11T07:43:00.002-08:00

The Alternative to Collecting Death Benefits

We pay for health insurance in high hopes that we'll never need it. Insurance, by its definition, is something we hope not to collect on. And so after paying years and years of life insurance premiums, and being "lucky" for all those years, it's easy to feel like it was all just a big waste of money.

Return of Premium Life Insurance, eliminates this problem because you can collect money without dying. After paying 20 years of life insurance premiums, a person can receive the money they've invested back. Not just a portion of it (as with whole life insurance) but return of premium life insurance offers everything back - 100% of the premiums you've paid.

How Much does Return of Premium Life Insurance Cost?

The premiums for this kind of policy vary from state to state. They generally run between term life policies and whole life policies. Return of Premium Life Insurance has benefits from both of these. It has the affordability of term life and the cash building value of whole life. You can buy it for periods of anywhere from 3 â€“ 30 years.

Most companies can give you an estimate within 24 hours. The cost for return of premium life insurance is based on age, physical conditions, and habits (tobacco use) of the applicantâ€¦much like any other kind of life insurance.

Who Needs Return of Premium Life Insurance?

If you want to protect your family, but don't want to throw away the cash necessary to insure your life, return of premium life insurance is perfect. Not only do you get your money back at the end of the policy's period, but you won't have to pay income taxes on that money.

Return of premium life insurance is ideal for someone young who anticipates a lot of change before retirement. Whether you're just starting a family or still single, it allows for changes in the future.

What Happens if I Want to Cancel My Return of Premium Life Insurance Early?

Even if you don't keep your return of premium life insurance for the full term, you can still get a portion of your premiums returned to you. The longer you keep it, the higher percentage you'll get back. Canceling early will give you a small percentage back, and not canceling at all will give you 100% back.

On the other hand, you might want to keep the insurance after the end of the policy's period. Most companies will offer a continuance term after the original one ends. And since you'll be receiving a large sum of cash, it might be a good idea to invest it directly into a whole life insurance policy. The whole life insurance policy will also have a cash value, but not quite the same kind as a return of premium life insurance policy. You'll be able to borrow money against this policy, without loosing the coverage.

Return of premium life insurance is the easiest way to insure yourself without losing money. It's one of the few ways to collect the benefits, without actually using it.

Talk to your Insurance Agent to ensure Return of Premium is right for you!

Term Life Insurance

2007-11-11T07:43:00.001-08:00

The Affordable Plan for Life and Family

Term life insurance is the most affordable option for anyone who needs to provide a future course in the event of their untimely demise. It's called "term life insurance" because it lasts for a defined term at the time of the purchase. As long as the premiums are paid each month, the beneficiaries are paid the full death benefit if the policy holder dies during that period.

Term life insurance costs less than permanent life insurance policies like whole life and variable life. The reason is because the policy accrues no cash value (except in the case of Return of Premium Term Life Insurance, where you can get a full refund for all the premiums you've paid at the end of the policy period). Another reason is because the policy is guaranteed to end within a certain number of years. The insurance company hopes this will be before the policy holder dies.

What Will Term Life Insurance Pay

Mortgages, education, cost of living, or burial costs. Term life insurance is typically set up to pay for all the things that the regular "bread winner" of the household would pay. You can also use it to pay the taxes involved in a estate inheritance.

You can purchase term life insurance policies for terms of one to thirty years. The most popular option is for fifteen years. At the end of the term, the policy ends. Some policies come with a guaranteed renewal rate, so you can purchase a new policy when the old one ends. The rates will obviously be higher because of the age increase.

Will I Need a Medical Exam to Qualify for Term Life Insurance

In most cases, companies require policy holders to undergo a brief medical exam before qualifying for term life insurance. Insurance companies try to make it as simple as possible. Some companies will even send a qualified nurse to your home for the exam.

It might be possible to bypass the exam and receive immediate coverage depending on your age. You can expect to pay more for this kind of term life insurance, and if you have serious health problems, it might be unavailable. Remember that insurance is something you buy ahead of time. You couldn't make an accident claim on an auto insurance policy if the accident happened before you purchased the policy. In the same way, if you have serious health risks, term life insurance might be much more expensive or unavailable.

What Else Should I Know About Term Life Insurance

Some policies provide you with accelerated benefits options. They'll pay you benefits before death if you have a terminal illness. This would cost more, but in some cases, the added protection is worth the money.

Sometimes you can lower your premiums by presenting your health profile before purchasing a term life insurance policy. Show the company that you have less risk of dying than an average person.

Term life insurance isn't for everyone. But if you can't afford an investment insurance, but still want to protect your family if you die at an early age, term life insurance might be the answer.

Talk to your Insurance Agent to ensure Term Life Insurance is right for you!

Universal Life Insurance

2007-11-11T07:42:00.001-08:00

For the Investor Who Likes To Prepare for the Future

Universal Life Insurance is a lot like whole life insurance, but different in that the cash value of the policy earns interest. This way, universal life insurance becomes an investment, and not just an insurance policy.

With universal life insurance, your premiums are divided. Part of your payment covers the cost of insurance, and the rest becomes part of the cash value of the policy. The cash value in universal life insurance policies earns interest. Some policies offer a guaranteed minimum interest payment.

Universal Life Insurance is Ideal for Your Family

If you want protection for your entire family but want to leave your options open, then universal life insurance is the perfect choice. Universal life offers guaranteed death benefits (as long as the cost of insurance doesn't exceed the cash value amount) along with a solid investment that you can withdraw or borrow against.

Most universal life insurance policies come with optional term riders, so you can temporarily increase your benefits amount without purchasing a new policy. You can also usually add people to the policy, like a spouse or children. This versatility makes universal life insurance great for growing families.

Universal Life Insurance allows you to Invest Tax-Free
You can defer capital gain taxes on your universal life insurance policy. These gains can be kept in the cash value of the policy until the time of death, and will only be subject to estate taxes. To use the cash value amount before death, you can borrow against it without paying taxes and without ending the policy.

Universal life insurance policies often allow you to choose how much of your premium to put into the tax-sheltered amount. Investments can be safe and guaranteed, or you can put them into something more like a mutual fund.

Other Options with Universal Life Insurance
With universal life, there are three kinds of premiums.

1. Single Premium You pay one amount for the entire policy. The policy remains in effect as long as the cost of insurance does not entirely deplete the cash value or investment.

2. Fixed Premium You make monthly payments for the premium for an agreed upon time. Usually, this universal life insurance policy is in effect long after you stop paying the premiums.

3. Flexible Premium You decide when to make payments and how much. If you go for a period without making a premium, the cost of insurance is deducted from the cash value of the policy. This type of universal life insurance gives you the chance to make one large payment when you first purchase the policy, and make sporadic payments according to your financial situation.

Most policies offer a "Waiver of Premium" option. This way, if youâ€™re disabled, you can continue coverage without continuing your premium payments.

Planning for the future is part of starting a family. It means more than just setting a few dollars aside for a rainy day. Universal life insurance gives you the ability to save, invest, and protect your family when you're gone. It helps you now, and it will help them in the future

Talk to your Insurance Agent to ensure Universal Life Insurance is right for you!

Mortgage Life Insurance

2007-11-11T07:41:00.001-08:00

Insuring Your Life's Biggest Investment

If you're like most people, your home is the largest investment you'll ever make. And if other people depend on this investment (like your family) then Mortgage Life Insurance could be a perfect safety net for their security. Mortgage life insurance is a term policy (it doesn't build cash value) designed to cover your mortgage in the event of your untimely death.

Your mortgage isn't only your largest investment, it's also the longest financial commitment most people will ever make. A lot can happen during the life of a loan. Health conditions, financial situation, and the value of your home will all change by the time a mortgage loan is fulfilled. A mortgage life insurance policy is long term protection, the kind a family needs.

Different Kinds of Mortgage Life Insurance

There are several ways to open a mortgage life insurance policy. Sometimes, banks and real estate companies will sell a mortgage life insurance plan. The security it provides is beneficial to them, so they often offer it as an extra when you close your loan. In most cases, your benefits decrease as the principal decreases, you're only covered for what you owe on the mortgage. Yet the premiums stay the same throughout the life of the policy.

You can also open a mortgage life insurance policy directly with an insurance company. Working with an insurance company, in most cases, offers more advantages than the policies sold by banks and real estate companies. One benefit, is that the benefit amount often stays the same instead of decreasing (depending on the policy).

Other Differences in Mortgage Life Insurance Policies through Insurance Companies

Beneficiary In most cases, you have the option to choose your beneficiary. Mortgage life insurance from other sources almost always name the mortgage owner as the beneficiary. Also, the beneficiary can choose how to use the money.

Conversion Options Companies can usually offer mortgage life insurance policies with a pre-defined option to change coverage and payment in the future, one without regard to age and health conditions.

Guaranteed Premiums Sometimes, a mortgage life insurance policy doesn't guarantee the premiums. Using an insurance company gives you more options to set a defined premium or a variable one.

Freedom of Lenders Since other options make your lender the beneficiary of your mortgage life insurance policy, you loose the policy if you decide to refinance with a new lender. This can be a problem if your health conditions have changed since your policy started, obtaining a new policy might be impossible. But many insurance companies offer you the option of keeping your policy even if you switch lenders.

Mortgage life insurance is the right move for most because it offers a discounted rate for a term life policy. It's secure for you and secure for your family. Among the millions of home owners in America, few can guarantee their stability for the next thirty years. Mortgage life insurance changes that, so anyone can feel secure that their families won't lose their home when the worst happens.

Talk to your Insurance Agent to ensure Mortgage Life Insurance is right for you!

Key Man Life Insurance

2007-11-11T07:40:00.004-08:00

For the Sake of the Company

If your business relies on one or two key players, key man life insurance might be an important part of your future. Whether that key player is you, one of your star sales persons, or an office manager, you owe it to your shareholders to insure the "key man". This way the company won't end in bankruptcy if the unthinkable happens.

What Is Key Man Life Insurance

Key Man Life Insurance is a life insurance policy written to help a company when its survival rests on one or two people. The company pays the premiums and is the beneficiary if the person dies.

Small companies often purchase key man life insurance when the owner's relationships with clients and vendors are what keep the company working. But it's not always the owner who is insured. Sometimes an owner retires and leaves the company in the able hands of someone elseâ€¦and that person becomes the "key man".

Key man life insurance policies sometimes cover a main salesperson. In small companies, clients often get used to dealing with one person and refuse to do business with anyone else. And sometimes a company relies on an employee's personal relationships for clients or discounts from vendors. In case of a sudden death, key life insurance would give the company a cushion to fall back on.

What Happens to the Benefits in a Key Man Life Insurance Policy

The money is generally either used to keep the company afloat while finding a replacement, or to make it easier to liquidate the company, pay off debts, and split the proceeds between shareholders (often the owner's family).

Owners insure themselves because several of their employees are dependent on the company, even though the company wouldn't exist without the owner. The key man life insurance policy would guarantee the employees a salary while they searched for another job.

Do Companies Really Need Key Man Life Insurance

In a small company, there's often a "one for all, all for one" mentality. For some, the lack of office politics makes it a more enjoyable atmosphere, and perhaps a more reliable one. People feel like they're less likely to undergo the mass layoffs commonly associated with large corporations.

Small companies are also more likely to hire people with certain situations that intrude on their work lives. A single mother might have to take off work if a child is sick or if school is canceled due to bad weather. Someone with chronic health problems may have to call in sick often. Small businesses often offer the flexibility to deal with such problems when large corporations do not.

For the reasons above, small business workers are often more dedicated to their employers. It's not uncommon to find cradle to grave employees, who never consider switching jobs, so they're completely dependent on the company. And if the company is dependent on one person, not having key man life insurance on that person is an injustice to the company on a whole.

Remember, you're not the only one who relies on your business. Key man life insurance is the protection you need for your company, your employees, and your family.

Talk to your Insurance Agent to ensure Key Man Life Insurance is right for you!

Guaranteed Issue Life Insurance

2007-11-11T07:40:00.003-08:00

When Your Medical History Doesn't Look So Good

Guaranteed issue life insurance is a policy that's guaranteed to anyone... without regard to health conditions. You might think this sounds awfully risky for the insurance companies. They get around it in two ways.

Guaranteed Issue Life Insurance

First of all, guaranteed issue life insurance policies have "graded benefits". This means that if the insured person dies within a specified amount of time, the beneficiaries only receive a portion (or none, in the case of contestable periods) of the death benefits. Most guaranteed issue life insurance policies only pay full benefits after the first two years of the policy. So if John Doe purchases a guaranteed life insurance policy in 2006, and dies of cancer in 2007, the beneficiaries will only get a portion (or none) of the benefit.

Another way companies make money off guaranteed issue life insurance is by charging more for the premiums. They also set age limits on the policies (typically, they won't insure someone over seventy years old.)

What Kind of Insurance is Guaranteed Issue Life Insurance

It's a whole life insurance policy, but the premiums are higher because no-one can be turned down. This means that guaranteed life insurance policies accrue a cash value over time (usually after the first couple of years). A portion of the premiums pay the cost of insurance, while the rest builds the cash value.

And since it's a permanent life insurance, the premiums do not change, nor does the death benefit. As long as the premiums are paid, guaranteed issue life insurance is good for as long as you live.

Are There Exceptions to the Graded Benefits with Guaranteed Issue Life Insurance

Most policies will still pay the full amount of death benefits if the insured dies in an accident. But this is generally the only reason. In other words, if you find out you've only got three months to live, guaranteed issue life insurance won't help you.

What Else Should I Know About Guaranteed Issue Life Insurance

Since the policies are open to anyone, guaranteed issue life insurance doesn't require a medical exam or even a medical history. The questions asked are very general, like name, age, address, etc.

Most guaranteed issue life insurance policies have a limited death benefit amount (you'll have a hard time finding a policy for more than $50,000). Guaranteed issue life insurance policies are most often sought to cover burial expenses, debts left in the estate, and medical bills.

You can use the cash value in a guaranteed issue life insurance policy to cover emergency expenses while you're still alive. You can withdraw the money, and end the policy or accept a lower death benefit. Or you can borrow against the cash value and keep your benefits the same once you've paid the loan.

Guaranteed issue life insurance isn't for everyone. But if you have trouble obtaining other insurance policies because of a health condition, and expect to live for at least two years, guaranteed issue life insurance might be your only option.

Talk to your Insurance Agent to ensure Guaranteed Issue Life Insurance is right for you!

Group Life Insurance

2007-11-11T07:40:00.001-08:00

Does your company offer group life insurance? If not, you might be ignoring one of the most cost effective ways to make your benefits package more attractive to potential and current employees.

Is Group Life Insurance Important

Today's employees expect more than a salary from their employees. In a recent survey by Wall Street Journal, participants were asked if they would rather: have no pay increase but retain current benefits, or get a raise and see benefits decrease. Fifty six percent of respondents said they would rather keep their benefits. This illustrates how important it is for employers to offer a competitive benefits package, aside from a decent salary.

Among the many benefits an employee can offer, group life insurance serves as an excellent way to attract new employees. It also increases the morale of current employees and creates loyalty within the company.

Who Will Group Life Insurance Cover

Group life insurance policies can apply to any existing or new employees and associates. And most policies can offer extra benefits that employees can opt for at a discounted rate if they want to pay for the added expense. This makes it easy for employers to offer more than one plan, but still only pay a minimum for premiums.

How Does Group Life Insurance Costs Compare to Individual Life Insurance

Group life insurance is often cheaper than individual life insurance for several reasons. First of all, it's a form of collective bargaining - it's buying in bulk. So you're getting bulk rates, and everything is cheaper in bulk. It involves less paper work for the agents and less time selling to each individual. These are the incentives for insurance companies to give lower rates on group life policies.

Employers especially benefit from group life insurance in a unique way. There's no mandatory medical exams in order to be qualified. For some, this is the difference between being able to obtain insurance and not being able to. Chronic diseases make getting life insurance difficult. The fact that they can obtain life insurance through your company could be enough of a reason to persuade hard working employees to stay in their positions.

What other Benefits does Group Life Insurance Offer

* Since group life insurance is part of the wages you pay, it's tax deductible. If you're going to use a tax write-off, it may as well do something for you. Adding benefits to employee packages increases morale and, consequently, work productivity.

* Many plans offer a Waive of Premium benefit. If an employee is totally disabled, he or she can continue group life insurance coverage without paying the premiums. This (again) is a tangible sign of appreciation for your employees.

* You can customize group life insurance policies to fit your company needs. Many plans offer customization to fit specific employees (per salary, years with the company, etc.)

Your company's benefits package is the main attraction to the work force. Adding to it will attract a better working class, and help you retain your hardest workers. Take steps now to add group life insurance to your benefits package.

Talk to your Insurance Agent to ensure Group Life Insurance is right for you!

Child Life Insurance

2007-11-11T07:38:00.000-08:00

The death of a child isn't something parents want to think about. But life insurance isn't necessarily all about death. Child life insurance is about the future and preparation. Taking steps today can help create a better tomorrow. And as parents or grandparents, our chief concern is making the future better for our children.

How Does Child Life Insurance Help a Child

Right now, when a child is young, strong, and healthy, life insurance is obtainable at a minimum cost. But if a child develops a problem like a chronic disease, life insurance can be almost impossible to obtain. So signing up for a low premium term life insurance policy now, with a guaranteed periodic purchase option, will make it possible for them to have life insurance as adults.

Another possibility for them is to purchase a whole life insurance policy, which will last for the rest of their lives. Their age and health status wonâ€™t make any differenceâ€¦nor will it matter if they serve in the military or have dangerous occupation hazards.

Such child life insurance is perfect for planning for the future because of the cash value the plan would accumulate. As an adult, they could borrow against this value or stop the policy and withdraw the money (to pay for college or any number of things).

Who Can Purchase a Child Life Insurance Policy

Parents, grandparents, and legal guardians can all purchase child life insurance policies. New parents often have heavy financial burdens during the first few years of a child's life, and buying insurance is difficult. So grandparents (who might be more financially stable) purchase insurance for their grandchildren.

When Does Coverage Start for a Child Life Insurance Policy

When you start a life insurance policy for a child, the coverage begins immediately. There are no necessary medical exams to go through,just a few health related questions on the application is generally enough to get a child qualified.

The rates for child life insurance vary. Whole life rates stay the same. Term life rates depend on the policy, how old the child is, and several other factors. Policy renewal agreements can vary also, so make sure itâ€™s spelled out before signing up for term policies. Some times you can purchase a term policy and then switch it to whole life at the end of the policyâ€™s period.

Child life insurance policies can last as long as you wish to sign for. Again, whole life policies for children don't ever end, while term policies are defined before you purchase it.

Who Receives the Benefits

In child life insurance policies, the parents or legal guardians are the beneficiaries. But the one who benefits the most is the child. He or she benefits from the security of a life insurance policy that will continue even if he or she is diagnosed with a life threatening disease. Secure your children's future now with child life insurance. It's good for them, it's good for you

Talk to your Insurance Agent to ensure Child Life Insurance is right for you!

Retirement Planning and Estate planning with Insurance

2007-11-10T07:00:00.001-08:00

Retirement Planning and Estate planning with Insurance:
Insurance coverage for Retirees and Seniors

Retirement sounds exciting and liberating but be sure to plan accordingly to limit your headaches. Retirement planning is a big deal and without help it can make your retirement a bad experience. Plan your insurance needs before you retire! There are certain insurance policies you need to maintain and certain policies you could consider changing once you retire.

Life Insurance
Your life insurance needs may change once you retire. You've worked most of your life to accumulate enough money to last the rest of your life. When accumulating or planning your retirement did you assume costs associated with taxes on your estate or costs associated with your funeral would easily be covered with your retirement savings? What about other expenses you may have? If you've assumed these expenses within your retirement savings then you may not necessarily need a life insurance policy. If you have accumulated enough retirement savings to pay for all your final expenses plus whatever else you wish to do with it then chances are you are covered. It's a good idea to consult with your retirement specialist to ensure your covered and depending on your assets and liabilities perhaps a short term life policy will cover you. Most of the time retirees have paid off their homes. If this isn't the case and there are only a few years on the mortgage you may want to consider a 5 or 10 year term life policy to cover any expenses the asset may not. Life insurance for retirees is case-by-case and truly depends on the size of your assets.

Homeowners Insurance
As I mentioned above there are often instances where retirees have paid for their homes and no longer pay a mortgage. You still need to cover your home in case of a loss. Likely your retirement savings aren't enough to pay for your retirement and completely replace your home so it's imperative you maintain your home insurance policy once your retired.

Auto Insurance
Like your homeowners insurance you should continue to insure your automobile. The last thing you should consider is paying for a new car or liability claims due to a car wreck. If your driving significantly less because your retired and no longer drive to work then you should talk to your Insurance company about discounts available to those that drive less than a certain amount of miles per year.

Health Insurance
You need to apply for health insurance as soon as possible. The longer you wait the older you get and the harder and more expensive health insurance costs. If you're retiring before 65 you will definitely need coverage. Once you reach age 65 you will be eligible for Medicare. So if you retire early at age 50 assume you will need enough retirement savings to cover at least 15 years of health insurance premiums. There are ways to adjust your premiums but that would entail higher deductibles or finding a group to join. Individual health insurance policies are expensive and especially for those over age 50 so do your diligence and start receiving quotes now.

Long Term Care Insurance
You like many others may consider purchasing Long Term Car Insurance when you retire. Long Term Car Insurance is an insurance policy that covers things generally not covered by health insurance or Medicare. Long Term Care covers things such as a live-in Nurse who would be hired to help do regular daily activities such as bathing, dressing and eating. Long Term Care does not cover health issues directly such as a heart problem or doctors visits. It is a great opportunity to purchase a policy that will allow you the liberties of staying and living at home and knowing you won't burden your loved ones with your daily activities. So Long Term Care Insurance is a policy that one should consider when planning retirement.

Organize your Insurance Policies

2007-11-10T06:57:00.000-08:00

Keep your Insurance Policies organized in case of an emergency

Be sure to organize your insurance information yearly. Organizing it yearly will keep you fresh on coverages and most important it reminds you what you have and where you have it. The last thing you want to do after a car accident, a health issue or a death in the family is to search for any information regarding insurance coverage.

Ideas for keeping Insurance information organized.

Write down or type out the contact information for each type of insurance you own. So for your Auto Insurance write down the contact person's name and phone number. Do the same for your Health Insurance, Life Insurance and any other Insurance policies you own. Give a copy of the contact information to several friends or family members in case of an emergency. Build a folder for each type of Insurance you own and save policy information in the folder. Consider keeping the folders in a fireproof safe or in a safe deposit box at your local bank.

Consider consolidating all your insurance needs with one insurance company. One point of contact can make getting the information you need significantly less stressful. In addition to having one point of contact most Insurance companies provide rate discounts for those that carry multiple lines of insurance with the company.

Insurance Rates & Insurance Premiums

2007-11-10T06:56:00.002-08:00

Why do insurance quotes vary depending on the company?

There are a couple reasons insurance policy premiums vary depending on the company offering the coverage. Insurance companies calculate policy premiums differently buy most are calculated using past risk assumptions and an equation actuaries use to assume risks.

Past risk assumption is what some may refer to as trends the company has seen in it's data that a particular occurrence may be a result of a particular factor such as age and location. A good example to explain the use of trends is in car insurance. Car insurance premiums can differ greatly depending on the company. I have received quotes for a car that ranged from $500 to $1100 every six months. All policies were the same as far as coverage is concerned and all companies were highly rated. So why is my policy $500 per six month for one insurance company and $1100 for another? For my particular quote, the company that quoted $1100 per six months evidently found issuing my policy to be significantly riskier than the company that quoted $500 per six months. The $1100 company must have had less than favorable returns on policy holders with the same variables as my age, car and location. Believe it or not, insurance companies are in business because it is a profitable business. They are in this business to make money and insuring a higher risk policy has the potential to cost the company more money therefore these premiums are more expensive.

Actuaries take these trends and either implement them into the equation or associate them with the equation used to generate policy premiums. The equation used is likely somewhat different for every company. It may not be an equation at all but a table with several factors of an insured when tabulated present an insurance premium. Each insurance company and there Actuaries develop algorithms or equations to calculate risk and insurance premiums. For this reason alone is why insurance premium rates differ depending on the insurance company. Shop around, find a policy offered by a reputable company that is affordable.

Online Health Insurance Quotes

2007-11-10T06:56:00.001-08:00

Consider getting a free online health insurance quote

We've seen lots of trends with the CompuQuotes website and one that we've noticed is that people are less likely to receive a free online health insurance quote than other types of insurance. The amount of people looking for health insurance is much higher compared to the amount of health insurance quotes delivered.

Is it because most people associate health insurance with a single company and why get a quote when your assumption is that only one company will insure you? Many people don't realize how many health insurance options there are. You could be saving thousands a year. Wouldn't it be nice to buy a car with the savings you receive on your health insurance?

The fact is that there are lots of very reputable health insurance companies with different prices. Your health insurance is like all other types of insurance in that each company has different calculations in how they determine your premium. Company A may have a premium of $200/month and Company B may have a premium of $400/month. You'll never know unless you get the free quote.

True the process of receiving a quote is a little longer. There is quite a few more qualifiers than auto, home or life insurance quotes. Either way, your health insurance is likely your largest insurance expense so doesn't it make sense to compare and shop different companies and take more time to save that money?

Don't waste any more time, We want to see more online health insurance quotes than any other type of insurance!

Company Health Insurance Benefits

2007-11-10T06:55:00.003-08:00

A viable alternative to Company Health Insurance Benefits

In most instances, an individual applying for a position in a company reviews the health insurance benefits the company offers. Good healthcare benefits can often times solidify a potential employee on a position and likewise a poor health insurance benefit program can turn a potential employee away. Assuming your employer offers a fantastic set of health care benefits there are still problems.

Assume you're employed with this company at age 30. Your in great health, things are going well and the company is thriving. After working for this company for 15 years the company has problems and either lays you off or the company goes out of business. Now your 45 years old and not in the best health. You may have had some depression issues or perhaps some back problems. You can get health insurance through COBRA but it is very expensive so eventually you would like to get off of COBRA and get a more affordable health plan. The job market isn't great so you decide to work from home on your own projects. You apply for a more affordable health insurance policy and you get declined due to your health history. This is an extreme example and your situation could be different. Maybe you leave to start your own company, maybe you leave to take care of a family member, the point is that when you leave the company you don't take your health benefits with you, they stay with the employer. Once you lose these health benefits you will need to find and purchase health insurance and hopefully you can find a comparable policy at close to the same premium.

A solution for Employers that make Health benefits even more attractive!

A new trend in healthcare benefits companies are offering is individual health insurance policies where the premium is expensed. The employee is encouraged to find and purchase their own health insurance policy and each premium is then expensed so the employer is offering great coverage and a viable alternative to standard health insurance benefits. If you leave for any reason, you take your health insurance policy with you continuing your insurability and as long as you keep the policy in force you have very little to worry about. Sure you'll have to cover the premium but odds are it will be cheaper than COBRA and you won't have to be concerned about applying and possibly being declined.

If this interests you, ask your employer to look into it.

Medicare and Medicaid Insurance Coverage Guide

2007-11-10T06:55:00.001-08:00

Please note that some information may be outdated. Please be sure to contact the appropriate parties if you have any questions regarding the accuracy of the data.

MEDICARE AND MEDICAID

Q. What is Medicare?

A. Medicare is a Federal health insurance program established in 1965 for people aged 65 or older. It now also covers people of any age with permanent kidney failure, and certain disabled people. It is administered by the Health Care Financing Administration (HCFA) of the U.S. Department of Health and Human Services. Local Social Security Administration offices take applications for Medicare and provide information about the program.

Q. What is the difference between Medicare and Medicaid?

A. Medicare is a Federal health insurance program for the elderly and disabled regardless of income and assets. Medicaid, on the other hand, is a medical assistance program jointly financed by the State and Federal governments for eligible low-income individuals. Medicaid covers health care expenses for all recipients of Aid to Families with Dependent Children (AFDC), and most States also cover the needy elderly, blind, and disabled who receive cash assistance under the Supplemental Security Income (SSI) program. Coverage also is extended to certain infants and low-income pregnant women, and, at the option of the State, other low-income individuals with medical bills that qualify them as categorically or medically needy.

Q. How many people are covered by Medicare?

A. Medicare currently covers approximately 35 million people, of whom about 3 million are disabled and some 150,000 are kidney disease patients.

YOUR MEDICARE COVERAGE

Q. What does Medicare cover?

A. Medicare has two parts: Hospital insurance (Part A) and Supplementary Medical insurance (Part B). Part A helps pay for inpatient care in a hospital or skilled nursing facility, or for care from a home health agency or hospice. If you are admitted to a hospital, Medicare provides coverage for a semiprivate room, meals, regular nursing services, operating and recovery room costs, intensive care, drugs, laboratory tests, X-rays, and all other medically necessary services and supplies. Covered services in a skilled nursing facility include a semi-private room, meals, regular nursing services, rehabilitation services, drugs, medical supplies, and appliances.

Part B helps pay for physician services, outpatient hospital care, clinical laboratory tests, and various other medical services and supplies, including durable medical equipment. Doctors' services are covered no matter where you receive them in the U.S. Covered services include surgical services, diagnostic tests and X-rays that are part of your treatment, medical supplies furnished in a doctor's office, and drugs which cannot be self-administered and are part of your treatment.

Medicare pays only for care that it determines is medically necessary.

WHAT MEDICARE DOESN'T COVER

Q. Are there services Medicare does not cover?

A. While Medicare helps pay a large portion of your medical expenses, there are various health care services and products for which Medicare will not pay. These generally include custodial care; eyeglasses, hearing aids, and examinations to prescribe or fit them; a telephone, TV, or radio in your hospital room; and most outpatient prescription drugs and patent medicines. Medicare also does not pay for cosmetic surgery, most immunizations, dental care, routine foot care, and routine physical checkups. Although some personal care services (for example: bathing assistance, eating assistance, etc.) can be covered along with skilled care, they are never covered alone except under the hospice benefit.

PAYING FOR MEDICARE

Q. How is Medicare financed?

A. Medicare Hospital Insurance (Part A) is financed mainly from a portion of the Social Security payroll tax (the HCA) deduction. The Medicare pan of the payroll tax is 1.45 percent from the employee and 1.45 percent from the employer on wages up to $125,000 in 1991. Medicare Medical Insurance (Part B), which is optional, is financed by the monthly premiums paid by enrollees and from Federal general revenues. The monthly premium in 1991 is $29.90. The premium pays about 25 percent of the cost of the Part B program and general tax revenues pay about 75 percent.

WHO'S ELIGIBLE?

Q. Who is eligible for Medicare?

A. Generally, people age 65 and over can get Part A benefits if they can establish their eligibility for monthly Social Security or Railroad Retirement benefits on their own or their spouse's work record. In addition, certain government employees whose work has been covered for Medicare purposes, and their spouses, can also have Part A.

In rare cases, involving those who became age 65 in 1974 or earlier, Part A may be available if these people meet certain United States residence and citizenship or legal alien requirements.

Part A is also available to most individuals with end-stage renal disease, and to those who have been entitled to Social Security disability benefits or Railroad Retirement disability benefits for more than 24 months, and to certain disabled government employees whose work has been covered for Medicare purposes.

Any person who is eligible for Part A is also eligible to enroll in Part B. Enrollees in Part B must pay a monthly premium of $29.90 in 1991.

MEDICARE ENROLLMENT

Q. How do I sign up for Medicare?

A. If you are already getting Social Security or Railroad Retirement benefit payments when you turn 65, you will automatically get a Medicare card in the mail. The card will usually show that you are entitled to both Part A and Part B, and the beginning dates of your entitlement to each. If you do not want Part B, you can refuse it by following the instructions that come with the card. If you are not receiving such payments, you may have to apply for Medicare coverage. Check with Social Security to see if you are able to get Medicare under the Social Security system or based on Medicare-covered government employment; check with the Railroad Retirement office if you are able to get Medicare under the Railroad Retirement system. If you must file an application for Medicare, you should do so during your initial seven-month enrollment period that starts three months before the month you first meet the requirements for Medicare.

GETTING MORE INFORMATION

Q. Whom do I call to get more information about Medicare?

A. If you want to know how and when to sign up for Medicare, or how to change an address or replace a lost Medicare card, contact any Social Security office.

ENROLLING LATE FOR PART B

Q. When I enrolled in Medicare Part A, I did not sign up for Part B. Is that coverage still available to me on the same terms?

A. You may still enroll in Part B during the annual general enrollment period from January 1 to March 31, and your coverage will begin on July 1. However, your monthly premium may be higher than it would have been had you enrolled in Part B when you enrolled in Part A. In most cases, if you defer your enrollment in Part B, you must pay a monthly premium surcharge. The surcharge is 10 percent for each 12-month period in which you could have been enrolled but were not.

You may not have to pay the surcharge if you are covered by an employer health plan. Delayed enrollment without penalty is generally available if you have been covered by an employer health plan based on your or your spouse's current employment since you were first able to get Medicare. In that case, you can enroll in Part B during a special 7-month enrollment period. The period begins with the month the employer group health plan coverage ends, or with the month the employment on which it is based ends, whichever is earlier. In the case of certain disability beneficiaries, the special period begins when Medicare replaces the employer group health plan as the primary payer of the beneficiary's covered medical services.

DO YOU HAVE BOTH PART A & B COVERAGE?

Q. How do I know whether I'm covered by one or both parts of Medicare?

A. Your Medicare card shows the coverage you have [Hospital Insurance (Part A), Medical Insurance (Part B), or both] and the date your protection started.

Q. What does the letter mean that appears after my health insurance claim number on my Medicare card?

A. It is a code used by Social Security to indicate the type of benefits you are receiving. There may also be another number after the letter. Your full claim number must always be included on all Medicare claims and correspondence.

BUYING MEDICARE

Q. If I am not entitled to Medicare based on employment, can I buy the coverage?

A. Individuals age 65 or over who are United States residents and either United States citizens, or aliens who have been lawfully admitted for permanent residence and have resided in the United States for at least five years at the time of filing, can purchase both Part A and Part B, or just Part B. The monthly premiums in 1991 are $177 for Part A and $29.90 for Part B.

GETTING MEDICARE-COVERED CARE

Q. Are there different health care systems Medicare beneficiaries can use to get their Medicare benefits?

A. Yes. You can receive services covered by Medicare either through the traditional fee-for-service (pay-as-you-go) delivery system or through coordinated care plans, such as health maintenance organizations (HMOs) and competitive medical plans (CMPs), which have contracts with Medicare.

Whether you choose fee-for-service or coordinated care, you get all of Medicare's hospital and medical benefits. The care provided by both systems is comparable. The differences in the two systems include how the benefits are delivered, how and when payment is made and how much you might have to pay out of your pocket. Most of the information in this booklet pertains to fee-for-service health care. For more information about coordinated care plans, request a copy of the leaflet titled Medicare and Coordinated Care Plans from any Social Security office.

FEE-FOR-SERVICE

Q. How does the fee-for-service system work?

A. Under the fee-for-service health care system you have freedom of choice. You can choose any licensed physician and use the services of any hospital, health care provider, or facility approved by Medicare that agrees to accept you as a patient. Generally a fee is paid each time a service is used. Medicare, within certain limits, pays a large portion of the hospital, physician, and other health care expenses.

HMOs AND CMPs

Q. How do coordinated care plans work?

A. In a coordinated care plan (HMO or CMP) a network of health care providers (doctors, hospitals, skilled nursing facilities, etc.) generally offers comprehensive, coordinated medical services to plan members on a prepaid basis. Except in an emergency, services usually must be obtained from the health care professionals and facilities that are part of the plan. Care may be provided at a central facility or in the private practice offices of the doctors and other professionals affiliated with the plan.

ENROLLING IN AN HMO

Q. Can I enroll in a HMO?

A. Yes. You may enroll in any HMO or CMP that has a contract with Medicare. The only requirements are that you live in the plan's service area and be enrolled in Medicare Part B. Medicare makes a monthly payment to the plan to provide you with Medicare-covered services. Some plans provide additional services, and most charge enrollees a monthly premium and nominal copayments when a service is used. Contact plans in your area for enrollment and coverage information.

DISENROLLING FROM AN HMO

Q. If I enroll in a coordinated care plan, can I later return to fee-for-service Medicare coverage?

A. Yes. You may disenroll from a coordinated care plan at any time. Your coverage under fee-for-service Medicare will begin the first day of the following month. You may also change from one plan to another simply by enrolling in the second plan.

CHARGES YOU PAY

Q. Do Medicare beneficiaries have to pay any charges out of their own pockets when they use covered services?

A. Yes. Both Part A and Part B have deductible and coinsurance amounts for which you are liable. You also must pay all permissible charges in excess of Medicare's approved amounts for Part B services, and charges for services not covered by Medicare. These charges do not apply to you if you are enrolled in a coordinated care plan. Instead, you generally must pay a monthly premium to the plan and nominal copayments when a service is used.

HELP FOR LOW-INCOME BENEFICIARIES

Q. Is assistance available to help low-income Medicare beneficiaries pay Medicare's premiums, deductibles and coinsurance amounts?

A. Yes. If your annual income is below the national poverty level and you do not have access to many financial resources, you may qualify for government assistance under the State Medicaid program in paying Medicare monthly premiums and at least some of the deductibles and coinsurance amounts. The national poverty income levels for 1991 are $6,620 for one person and $8,880 for a family of two. If you think you may qualify, you should contact your State or local welfare, social service or public health agency.

PART B DEDUCTIBLE AND COINSURANCE AMOUNTS

Q. How much are the Part B deductible and coinsurance amounts?

A. The Medicare Part B deductible in 1991 is $100 per year. This means that you are responsible for the first $100 of approved expenses for physician and other medical services and supplies. The deductible is paid when you are first charged for covered services. After the deductible has been met, then Medicare starts paying. Medicare generally pays 80 percent of all other approved charges for covered services for the rest of the year. You are responsible for the other 20 percent. If the physician or supplier does not accept assignment of the Medicare claim (that is, accept Medicare's approved amount as payment in full), you are responsible for all permissible charges in excess of the approved amount. You also generally are liable for charges for services not covered by Medicare. Them is no deductible or coinsurance for home health services.

PART A DEDUCTIBLE AND COINSURANCE AMOUNTS

Q. How much are the Part A deductible and coinsurance amounts?

A. The Part A deductible is $628 per benefit period in 1991. This means that if you are admitted to the hospital, you are responsible for the first $628 of Medicare-covered expenses. After that, Medicare pays all covered expenses for the first 60 days. For the next 30 days, Medicare pays all covered expenses except for a coinsurance amount of $157 per day in 1991. You are responsible for the $157 per day. Whenever more than 90 days of inpatient hospital care are needed in a benefit period, you can use your lifetime reserve days to pay for covered services. Every person enrolled in Part A has a lifetime reserve of 60 days for inpatient hospital care. Once used, these days are not renewed. When a reserve day is used, Medicare pays for all covered services except for a coinsurance amount of $314 a day in 1991. You are responsible for the $314 a day. Because the Part A deductible applies to each benefit period, you could have to pay more than one deductible in a year if you were hospitalized more than once.

SKILLED NURSING FACILITY CARE

Q. What if I require care in a skilled nursing facility after leaving the hospital?

A. If, after being in a hospital for at least three days, you receive covered care in a skilled nursing facility that has been approved to participate in the Medicare program, Part A will help cover services for up to 100 days per benefit period. Medicare pays all covered expenses for the first 20 days and all but $78.50 per day in 1991 for the next 80 days. You are responsible for the $78.50 per day.

BENEFIT PERIOD

Q. What is a benefit period?

A. A benefit period is a way of measuring your use of Medicare Part A services. A benefit period, which applies to hospital and skilled nursing facility care, begins the day you are hospitalized and ends after you have been out of the hospital or skilled nursing facility for 60 days in a row. It also ends if you remain in a skilled nursing facility but do not receive any skilled care there for 60 days in a row. There is no limit to the number of benefit periods you can have.

PROCESSING MEDICARE CLAIMS

Q. Who processes Medicare claims and payments?

A. Medicare claims and payments are handled by insurance organizations under contract to the Federal government. The organizations handling claims from hospitals, skilled nursing facilities, home health agencies, and hospices are called "intermediaries." You almost never have to get involved in the Part A claims process. The insurance organizations that handle Medicare's Part B claims are called "carriers." The names and addresses of the carriers and areas they serve are listed in the back of The Medicare Handbook, available from any Social Security Administration office.

MEDICARE APPROVED AMOUNT

Q. How does Medicare determine its approved amounts for physician services?

A. Medicare's approved amount, which is also referred to as the reasonable or allowable charge, is determined in the following manner for most Part B claims:

When a doctor submits a claim, the Medicare carrier compares the amount submitted with the doctor's usual charge for the service and with the amounts other physicians in the community usually charge for the same service. The lowest of the three becomes the approved amount. After you have met the Part B annual deductible ($100 in 1991), Medicare generally pays 80 percent of the approved amount and you are liable for the other 20 percent. A NEW SYSTEM FOR DETERMINING THE AMOUNT PHYSICIANS WILL BE PAID FOR PROVIDING SERVICES COVERED BY MEDICARE WILL BE INTRODUCED IN 1992.

ACCEPTING MEDICARE ASSIGNMENT

Q. What does it mean when a physician accepts assignment?

A. Physicians and suppliers who accept assignment of Medicare claims agree to not charge you more than the Medicare approved amount for services and supplies covered by Part B. They are paid directly by Medicare, except for the deductible and coinsurance amounts for which you are responsible. Some physicians and suppliers have signed agreements to participate in Medicare. In doing so, they have agreed to accept assignment of Medicare claims all of the time. Other physicians and suppliers will accept assignment on a case-by-case basis or not at all.

PHYSICIANS WHO DON'T ACCEPT ASSIGNMENT

Q. What if a physician does not accept assignment of a Medicare claim?

A. Physicians and suppliers who do not accept assignment of Medicare claims may charge more than the Medicare approved amount and collect full payment directly from you. Medicare then pays you 80 percent of the approved amount for the covered service, less any unmet portion of the $100 Part B deductible. You are liable for all permissible charges in excess of Medicare's approved amount.

LIMITING A PHYSICIAN'S CHARGES

Q. Is there a limit to the amount a physician can charge a Medicare beneficiary for a covered service?

A. Yes. Physicians who do not accept assignment of a Medicare claim are limited as to the amount they can charge Medicare beneficiaries for covered services. In 1991, charges for visits and consultations cannot be more than 140% of the Medicare prevailing charge for physicians who do not participate in Medicare. For most other services (surgery, for example) the limit is 125 percent of the prevailing charge for nonparticipating physicians. In 1992 the limiting charge for all services covered by Medicare will be 120 percent of the fee schedule amount for nonparticipating physicians and in 1993 it will be 115 percent of the fee schedule amount.

FINDING PARTICIPATING PHYSICIAN

Q. How can I find a Medicare-participating physician or supplier?

A. The names and addresses of Medicare-participating physicians and suppliers are listed by geographic area in the Medicare-Participating Physician/Supplier Directory. You can get the directory for your area free of charge from your Medicare carrier (listed in the back of The Medicare Handbook) or you can call your carrier and ask for names of some participating physicians and suppliers in your area. This directory is also available for review in Social Security offices, State and area offices of the Administration on Aging, and in most hospitals. Physicians and suppliers are given the opportunity each year to sign Medicare participation agreements.

FILING A PART B CLAIM

Q. When a physician provides Medicare-covered services to a Medicare beneficiary, does the physician or beneficiary file the claim with the Medicare carrier for payment?

A. For Medicare-covered services and supplies received on or after September 1, 1990, the physician or supplier is required to submit the claim for the beneficiary. For services and supplies provided prior to that date, the physician or supplier was not required to submit the claim unless the physician or supplier participated in Medicare or had agreed to accept assignment of the claim.

WHAT TO DO WHEN YOU HAVE A PROBLEM WITH A CLAIM

Q. Whom do I call if I have a question about a Medicare claim for a doctor's services?

A. Call the Medicare carrier for your area. The carrier's name and toll-free telephone number are listed in the back of The Medicare Handbook and appear on all Explanation of Medicare Benefit (EOMB) forms.

Q. How long should I wait before contacting the Medicare carrier to check on the status of a claim?

A. Allow 30 to 45 days for the claim to be paid. If you have not received a check or an Explanation of Medicare Benefit (EOMB) payment statement after 45 days, call the Medicare carrier for your area.

APPEALING A CLAIMS PAYMENT DECISION

Q. What recourse do I have if Medicare denies payment for a claim or pays less than I think it should?

A. You have a fight to appeal Medicare's coverage and payment determinations for both the hospital (Part A) and medical (Part B) segments of Medicare. The appeals processes are explained in The Medicare Handbook.

AMBULANCE SERVICES

Q. Does Medicare cover ambulance services?

A. Medicare Part B can help pay for certain medically necessary ambulance services when: (1) the ambulance, equipment, and personnel meet Medicare requirements; and (2) transportation by any other means would endanger your health. This includes transportation from a hospital to a skilled nursing facility, or from a hospital or skilled nursing facility to your home. Medicare will also cover a round trip from a hospital or a participating skilled nursing facility to an outside supplier to obtain medically necessary diagnostic or therapeutic services not available at the hospital or skilled nursing facility where you are an inpatient.

MEDICARE COVERAGE FOR WHEELCHAIRS, PACEMAKERS, AND ARTIFICIAL LIMBS

Q. Does Medicare cover prostheses and medical devices?

A. Yes. Medicare covers these items when provided by a hospital, skilled nursing facility, home health agency, hospice, comprehensive outpatient rehabilitation facility (CORP), or a rural health clinic. Medicare also covers cardiac pacemakers, corrective lenses needed after cataract surgery, colostomy or ileostomy supplies, breast prostheses following a mastectomy, and artificial limbs and eyes. Coverage also is provided for durable medical equipment, such as wheelchairs, hospital beds, walkers, and other equipment prescribed by a doctor for home use.

NURSING HOME CARE

Q. Does Medicare pay for long-term care in a nursing home?

A. No. Medicare only helps pay for post-hospital extended care in a skilled nursing facility (SNF). A SNF is a specially qualified facility with the staff and equipment to provide skilled nursing care, a full range of rehabilitation therapies, and related health services. Medicare only pays when a skilled level of care is required as a continuation of a hospital stay and the care is provided in a SNF that participates in Medicare. Even if you are in a SNF that participates in Medicare, Medicare will not pay if the services you receive are mainly personal care or custodial services, such as help in walking, getting in and out of bed, eating, dressing, and bathing. A SNF that participates in Medicare will inform you at the time of admission about potential Medicare payment and your rights to seek payment.

CHIROPRACTIC SERVICES

Q. Will Medicare pay for a chiropractor's services?

A. Medicare helps pay for only one kind of treatment furnished by a licensed chiropractor: manual manipulation of the spine to correct a subluxation that can be demonstrated by X-ray.

PSYCHIATRIC COVERAGE

Q. Does Medicare pay for care in a psychiatric hospital?

A. Yes. Medicare Part A helps pay for up to 190 days of inpatient care in a participating psychiatric hospital during a beneficiary's lifetime.

CHECKING FOR CANCER

Q. Does Medicare pay for cervical- and breast-cancer screenings?

A. Yes. Medicare Part B helps pay for Pap smears to screen for the detection of cervical cancer and for X-ray screenings for the detection of breast cancer.

HOME HEALTH CARE

Q. Does Medicare cover home health care?

A. Yes. If you need skilled health care in your home for the treatment of an illness or injury, Medicare pays for covered home health services furnished by a participating home health agency. To qualify, you must be homebound, need part-time or intermittent skilled nursing care, physical therapy, or speech therapy. You also must be under the care of a physician who determines you need home health care and sets up a home health care plan for you.

COVERAGE LIMITS

Q. How long can home health care last?

A. Home health care can continue for as long as you are under a physician's plan of care and the services you require are the type of services Medicare covers, such as skilled nursing, physical therapy, and speech therapy. Home health aide services are also available if you are eligible. Daily skilled care is available on a limited basis to those beneficiaries who qualify.

WHO PAYS?

Q. How much does Medicare pay toward the cost of home health care?

A. Medicare pays the full approved cost of all covered home health visits. There is no coinsurance on home health care. You may be charged only for any services or costs that Medicare does not cover. However, if you need durable medical equipment, you are responsible for a 20 percent coinsurance payment for the equipment.

MEDICARE AND HOSPICE CARE

Q. What is hospice care?

A. Hospice is a special way of caring for a patient whose disease cannot be cured and whose medical life expectancy is six months or less. Patients receive a full scope of palliative medical and support services for their terminal illnesses.

Q. Is hospice care available to Medicare beneficiaries?

A. Yes. Medicare beneficiaries certified by a physician to be terminally ill may elect to receive hospice care from a Medicare-approved hospice program. Under Medicare, hospice is primarily a comprehensive home care program that provides medical and support services for the management of a terminal illness. Beneficiaries who elect hospice care are not permitted to use standard Medicare to cover services for the treatment of conditions related to the terminal illness. Standard Medicare benefits are provided, however, for the treatment of conditions unrelated to the terminal illness. Medicare has special benefit periods for beneficiaries who enroll in a hospice program.

PROs

Q. What are PROs?

A. Utilization and Quality Control Peer Review Organizations (PROs) are physician-sponsored organizations in each State that the Health Care Financing Administration (HCFA) contracts with to ensure that Medicare beneficiaries receive care which is medically necessary, reasonable, provided in the appropriate setting, and which meets professionally accepted standards of quality. Among other things, PROs are responsible for intervening when quality problems are identified and for making every attempt to resolve them. They ensure that beneficiaries are advised of their appeal rights and review all written complaints from beneficiaries or their representatives concerning the quality of care rendered. If you are admitted to a hospital, you will receive a notice explaining your rights under Medicare and how to contact the PRO if the need arises.

MEDICARE AND FOREIGN TRAVEL

Q. If I require medical services outside the United States and its territories, will Medicare pay the bills?

A. No. But there are three exceptions. Medicare will help pay for care in qualified Canadian or Mexican hospitals if:

(1) You are in the United States when an emergency occurs, and a Canadian or Mexican hospital is closer to, or substantially more accessible from, the site of the emergency than the nearest U.S. hospital that can provide the emergency services you need.

(2) You live in the United States and a Canadian or Mexican hospital is closer to, or substantially more accessible from, your home than the nearest U.S. hospital that can provide the care you need, regardless of whether an emergency exists, and without regard to where the illness or injury occurs.

(3) You are in Canada travelling by the most direct route between Alaska and another State when an emergency occurs, and a Canadian hospital is closer to, or substantially more accessible from, the site of the emergency than the nearest U.S. hospital that can provide the emergency services you need.

WHO PAYS FIRST?

Q. Is Medicare always the primary payer of a beneficiary's medical bills or are there situations when another insurer must pay first?

A. There are a number of situations in which another insurer is the primary payer of your health care costs and Medicare is the secondary payer. For example, Medicare may be the secondary payer if you are covered by an employer group health insurance plan, are entitled to veterans benefits, workers' compensation, or black lung benefits. Medicare also can be the secondary payer if no-fault insurance or liability insurance (such as automobile insurance) is available as the primary payer. In cases where Medicare is the secondary payer, Medicare may pay some or all of the charges not paid by the primary payer for services and supplies covered by Medicare. This issue is discussed in more detail in the publication titled Medicare Secondary Payer, available from any Social Security office.

MEDIGAP INSURANCE

Q. What is "Medigap" insurance?

A. Medigap insurance is private health insurance designed specifically to supplement Medicare's benefits by filling in some of Medicare's coverage. A Medigap policy generally pays for Medicare approved charges not paid by Medicare because of deductibles or coinsurance amounts that you are liable for. There are Federal minimum standards for such policies which most States include as pan of their programs to regulate Medigap policies. Because Medigap policies can have different combinations of benefits and the policies may vary from one insurance company to another, you should compare policies before buying. Compare the benefits and the premiums. Some policies may offer better benefits than others at a lower premium.

MEDIGAP TO BE STANDARDIZED IN 1992

Q. Is it true that Medigap policies are to be standardized?

A. Yes. During 1992 most States are expected to adopt regulations limiting the Medigap insurance market to no more than 10 standard policies. One of the 10 will be a basic policy offering a "core package" of benefits. The other nine will each have a different combination of benefits, but they all must include the core package. Insurers will not be permitted to change the combination of benefits in any of the 10 standard policies. Individual States will be allowed to limit the number of the different standard policies sold in the State to fewer than 10 if they wish to do so, but must ensure that insurers offer the basic policy. For more information on this subject, contact your State insurance department.

GAPS IN YOUR MEDICARE COVERAGE

Q. What are the "gaps" in Medicare coverage?

A. In general, they are charges for which you are responsible. They include Medicare's deductibles and coinsurance amounts, permissible charges in excess of Medicare's approved amounts, additional days of care in a hospital or skilled nursing facility, and the charges for the various health care services and supplies that Medicare does not cover. Medigap insurance can cover some or all of these charges, depending on the policy.

ONE MEDIGAP POLICY IS ENOUGH

Q. Do I need more than one Medigap policy?

A. No. One good policy tailored to your needs at a price you can afford is sufficient. Beginning in 1992 most States are expected to make it unlawful for an insurance company or agent to sell a second or replacement Medigap policy to an individual unless the purchaser states in writing that the first policy is to be cancelled. Medicare beneficiaries enrolled in coordinated care plans (HMOs and CMPs) or who are eligible for Medicaid usually do not need Medigap insurance. If you have insurance from an employer or labor association, you may also not need Medigap insurance.
MEDICARE SELECT

Q. What is Medicare SELECT insurance?

A. Medicare SELECT is the name for a new Medigap health insurance product that is expected to be introduced in 1992 in 15 States to be designated in 1991 by the Secretary of the U.S. Department of Health and Human Services. During the three-year period currently authorized under Federal law, Medicare SELECT will be evaluated to determine how it should eventually be made available throughout the Nation. Medicare SELECT is private insurance, it is not issued by the government and it is not part of Medicare. It is designed to supplement Medicare coverage.

Q. What is the difference between Medicare SELECT and other Medigap insurance?

A. The principal difference is that Medicare beneficiaries who buy a Medicare SELECT policy are expected to be charged a lower premium for that policy in return for agreeing to use the services of a network of designated physicians and other health care professionals. These health care professionals, called "preferred providers," will be selected by the insurers. Each insurance company that offers a Medicare SELECT policy will have its own network of preferred providers. Policyholders usually will be required to use a preferred provider if the insurance company is to pay full benefits. Medicare will continue to pay its portion of covered benefits regardless of whether a preferred provider was used or not. Beneficiaries who buy other Medigap insurance policies are not required to use doctors and other providers designated by the insurance company.

GETTING MORE INFORMATION ABOUT SUPPLEMENTAL INSURANCE

Q. Where can I get information about insurance to supplement my Medicare benefits?

A. Contact your local Social Security office, State office on aging, or your State insurance department and ask for a copy of the Guide to Health Insurance for People with Medicare. It describes Medicare's benefits and the types of private insurance available to supplement Medicare. If you need help in selecting supplemental insurance, check with your State insurance department. Some departments offer counselling services.

MEDIGAP COMPLAINTS

Q. Whom should I contact if I have a complaint about the agent who sold me a Medigap policy?

A. Suspected violations of the laws governing the sales and marketing of Medigap policies should be reported to your State insurance department or Federal authorities. The Federal toll-free telephone number for registering such complaints is 1-800-638-6833.

SECOND SURGICAL OPINIONS

Q. Whom do I call if I want a second surgical opinion?

A. If your physician has recommended surgery for a non-emergency condition covered by Medicare and you want the names of doctors in your area who provide second opinions for elective surgery, call your Medicare carrier. Many conditions that do not require immediate attention can be treated equally well without surgery.

REPORTING FRAUD

Q. Where do I report suspected cases of Medicare fraud?

A. If you have evidence of or suspect fraud or abuse of the Medicare or Medicaid programs, call your Medicare carrier.

CHANGING YOUR ADDRESS

Q. I moved. How do I get my address changed?

A. You should call your local Social Security office and ask that your Medicare file be changed to reflect your new address.

Indemnity Health Insurance

2007-11-10T06:54:00.001-08:00

Is Indemnity Health Insurance Better Than Managed Care Insurance?

Indemnity health insurance (sometimes referred to as a fee-for-service policy) was, at one time, the most popular kind of health insurance. In fact, it was the only kind of health insurance in America. It was out shadowed in the nineties by the introduction of managed care insurance. But many employers still offer indemnity today.

Is Indemnity Health Insurance More Expensive?

Indemnity health insurance is more expensive than a managed care plan on two different levels. First of all, the premiums (the amount of money you pay each month) are higher.

There are several reasons for this. Since itâ€™s not a managed plan (like an HMO), there tend to be more unnecessary proceduresâ€¦so the insurance companies end up paying more money. As with everything in life, the added expenses get passed along to the end users (the ones buying the insurance). The premiums for indemnity health insurance policies are also higher because managed care plans are more focused on group rates. They generally only provide insurance through large groups (like employers) and contract healthcare providers into a network where they receive lower fees. Without this kind of â€˜bulk buyingâ€™, the prices are naturally higher.

Indemnity health insurance is also more expensive because it usually covers a smaller amount. With an HMO or PPO, you might pay small co-pays for doctor and hospital visits. Indemnity health insurance usually only covers a percentage of medical billsâ€¦and thatâ€™s after youâ€™ve met a deductible. Such plans often wonâ€™t cover preventive healthcare like check-ups and vaccinations.

Why Would Anyone Choose Indemnity Health Insurance?

There are several reasons someone might choose indemnity health insurance over a managed care plan. The most obvious reason is because sometimes a managed care plan isnâ€™t available. Indemnity health insurance is offered more as an individual plan, or to small businesses when they wonâ€™t have enough policy holders to qualify for group rates with an HMO or PPO.

Another reason someone might prefer indemnity health insurance is that it offers more freedom than managed care plans. A person isnâ€™t restricted to a network of doctors and hospitalsâ€¦they can go anywhere in the country. Someone with indemnity health insurance also doesnâ€™t have to worry about referrals when going to a specialist. In most cases, they donâ€™t need approval from their insurance company.

What Else Should I Know About Indemnity Health Insurance?

As already mentioned, most indemnity health insurance policies have deductibles. This is the amount of money the patient must pay before the insurance company starts covering the costs. You can lower the premium payments by choosing a policy with a very high deductible.

Indemnity health insurance usually only pays a percentage of the medical costs after youâ€™ve met the deductible. Letâ€™s say your deductible is $500 and your policy covers 80% after the deductible. If a hospital visit costs $700, the insurance would pay 80% of $200 ($160).

Indemnity health insurance policies often have out-of-pocket maximums. That is, the maximum amount of money a patient would have to spend on covered procedures within a year. This amount is generally very high, and lowering it would cause higher premiums.

Finally, indemnity health insurance policies only pay the UCR (Usual, Customary and Reasonable fees). They base such fees on what health care procedures cost in your surrounding area. For example, letâ€™s say your hospital visit cost $700, but the indemnity health insurance policyâ€™s UCR is $650. Then the policy would only pay 80% of $150 (remember the $500 deductible) or $120.

So is indemnity health insurance better than a managed care plan? That all depends on your situationâ€¦and if a managed care plan is even available.

HMO Health Insurance

2007-11-10T06:53:00.002-08:00

HMO Health Care: The Good, The Bad, The Managed

What is HMO Health Insurance and why does it have such a bad reputation?

HMO health insurance (Health Maintenance Organization) is a form of Managed Care Insurance. The idea is that an organization (the one providing the health insurance) works with doctors and hospitals to form a network.

These doctors are contracted with the HMO for lower prices, and might subject themselves to the organization for â€˜utilization reviewâ€™. The HMO reviews the dollar amount or number of visits that a person would use in one month, and scrutinizes for excessive medical care.

When signing up for an HMO health insurance policy, you would choose a Primary Care Physician within the network. That physician then becomes your main source for healthcare, and must give you a referral before youâ€™re able to seek other medical help (like from a specialist). Women would choose an OBGYN when signing upâ€¦who would also be able to give referrals. And, of course, parents would choose a pediatrician for their children.

HMO Health Insurance Provides Less Expensive Care

With a setup like this, the HMO health insurance company is able to lower the over-all cost of health insurance (and increase the amount of benefits) in several ways. As mentioned before, the healthcare providers are contracted for lower prices in exchange for network inclusion. Itâ€™s like buying health care in bulk and then reselling it.

Since HMO health insurance reviews the utilization, they also save money by making sure patients do not receive unnecessary treatmentsâ€¦this lowers the over all cost of the insurance itself, and in turn allows them to increase the benefits amount.

HMO Health Insurance Can Seem Restrictive

The utilization reviewâ€¦it can be somewhat limiting. For example, Doctor Noname wants his patient to receive a CAT scan, but someone reviewing the case disagrees. The doctor then has to hassle with the HMO health insurance case worker before his patient can receive the care. Some people find this intrusive and difficult to deal with.

There are two ways to look at this. On the one hand, Dr. Noname is the one seeing the patient. He sees a personâ€¦not a case number. He is able to put the patientâ€™s symptoms into context with the patientâ€™s current health condition.

On the other hand, and this is something people often forget, HMO health insurance providers are looking at the big picture. Not necessarily always at the money saving aspect, but as a way of troubleshooting patient afflictions. Thatâ€™s really part of what a doctor doesâ€¦troubleshoots.

HMO Health Insurance is a Numbers Game

Think of it in terms of a car or an office machine. Not all technicians are the same. A rookie might spend an hour trying to figure out whatâ€™s wrong with a machine and someone with more experience might only spend five minutes. The HMO health insurance company adds years to a doctorâ€™s level of experience.

When you hire a small copier dealer to repair your office machine, the technician is free to troubleshoot in any way he sees fit. He could replace the wrong part and end up costing the customer money. But some big corporations (like Xerox) train their techs to follow troubleshooting proceduresâ€¦ones they put together by looking at the big picture. So even inexperienced technicians are able to quickly find a problem. And this is part of the concept behind HMO health insurance policy restrictions.

HMO health insurance might not be the best plan for everyone, but it allows companies to provide affordable health care for a large number of peopleâ€¦people who need good benefits with low premiums. This is what makes HMO health insurance an important part of the industry.

PPO Health Insurance - HMO vs. PPO

2007-11-10T06:53:00.001-08:00

PPO Health Insurance Plans
The Alternative to HMO?

PPO health insurance (Preferred Provider Organization) is very much like HMO health insurance. They are both â€˜managed care organizationsâ€™â€¦hence they take part in managing the healthcare for the insured persons. There are many similarities, and several differences.

How is PPO Health Insurance Similar to HMO?

PPO health insurance, like HMOs, form a network of doctors and medical providers. Those providers are contracted by the PPO to give a lower rate to insurance policy holders. They basically purchase healthcare at bulk rates and resell itâ€¦the Walmart of medical care. In this way, they pass the savings to customers. But the health care providers also benefit because of the huge market it brings them.

PPO health insurance providers, like HMO providers, also sometimes subject their network to â€˜utilization reviewsâ€™. This is where the organization tracks medical care either in dollar amounts or in number of visits per patient. They use it to keep patients from receiving unnecessary treatmentâ€¦not just to save money (although it does have this effect) but also for the safety of the patient. There are some doctors who would perform unnecessary treatment for money.

PPO health insurance providers also use the utilization review because it pulls statistics together to help identify afflictions. In this way, doctors with less experience come under the eye of â€˜big brotherâ€™. Although, some people think of such limitations as an intrusion.

How is PPO Health Insurance Different than HMO?

PPO health insurance generally allows policy holders to visit any doctor within the network without a referral from their primary care physician. HMOs usually want a referral before an insurance policy holder can visit a specialist. As a matter of fact, with PPO health insurance, policy holders arenâ€™t even required to choose a primary care physician.

PPO health insurance also (usually) handles patient billing a little differently. With PPO insurance policies, the patient often pays medical expenses and then is reimbursed. Sometimes the health provider invoices the PPO instead of the patient, but the responsibility to pay the invoice still rests on the patient, because treatments donâ€™t require as much approval as they would with an HMO.

Another difference between PPO health insurance and HMO is that PPOs generally allow you to visit doctors and health care centers outside the network. Although, they try to discourage it by paying a smaller percentage of the bill. How much less differs from policy to policy. Some states even limit the percentage of decreased rates.

Is PPO Health Insurance Better than HMO?

This all depends on your situation. PPO health insurance can generally provide all of the benefits someone would needâ€¦including specialized services, even if someone has a chronic condition. Some people choose PPO health insurance because it has fewer restrictions. But fewer restrictions mean more money. PPO health insurance costs more than an HMO, and the benefit amounts are usually a little bit lower. Some PPOs require policy holders to pay a deductible. But to some, the money is well worth the added freedom.

What factors affect Health and Life Insurance rates?

2007-11-10T06:52:00.001-08:00

Rates or policy premiums are affected by two major influences. The main influence is one's personal health or family health history. The second major influence that affects one's life or health insurance policy premium is age.

Not knowing exactly how much weight age holds in determining life and health insurance policy premiums we do know that two individuals (one 18 years old and the other 60 years old) with the same health and health history show that the 60 year old will always have higher health and life insurance premiums. The amount of weight age holds is likely calculated into a quoting algorithm put in place by actuaries.

Personal health and family health history is a major contributor when calculating health and life insurance premiums. More common for life insurance due to fraudulent activities most life insurance companies will request blood and urine samples to ensure no pre-existing conditions exist. A licensed professional will come to your home to draw blood and collect a urine sample as well as ask dozens of health related questions. Some policy questions involve high blood pressure, heart disease, cancer, diabetes, cardiovascular disease and other serious health risks. Now, there is a Guaranteed Issue Life Insurance policy where the life insurance company has taken an average assumption regarding risk and they will insure any healthy person without blood or urine samples. These Guaranteed Issue Life Insurance policies are capped to a certain benefit meaning the most life insurance you could get is $150,000 or so. If you have perfect health you will find that a standard term policy will have more affordable premiums than a Guaranteed Issue simply because you are paying for some risk with the Guaranteed Issue. The Guaranteed Issue is a good option for those that don't have time or don't deal with needles very well. Please note that with a Guaranteed Issue Policy you still have to answer health related questions and not telling the truth usually ends up with a voided policy or a policy that will not pay death benefits.

Unfortunately, one's health and family history isn't always controllable. Some diseases are hereditary and perfect health which equals affordable health and life insurance policies is not possible. Be in the best health your body or family history allows for and buy health insurance that provides good benefits and is still affordable.

Self Employed Health Insurance

2007-11-10T06:51:00.002-08:00

Things you should know when purchasing self employed health insurance

There are more small businesses and self employed than ever. New tax laws and the availability of the Internet encourage entrepreneurs to consider starting a new venture. For the most part, small business owners or self employed have had health and/or dental insurance provided by their previous employers. Your employer provided health benefits and your premium is often taken out of your paycheck or simply included in the position. After accepting the job you received a member card and a policy in the mail. When you or your family is ill you go to the doctor and pay your copay. One never really thinks about dental or health insurance coverage above and beyond what policy was issued by your previous employer as you had zero choices.

The biggest difference for small business or self employed is the availability to choose your own insurance policy. This means you have the opportunity to Educate yourself on the different insurance companies and types of coverage.

Along with the choice to choose your insurance provider you will need to consider the benefits or drawbacks of buying a personal insurance policy or buying a group/business policy. There are many differences with the two types of polices so one should refer to an agent for the respective insurance company.

Self Employed Health Insurance is an affordable benefit you can purchase for your family or your employers. If you believe your small business will grow quickly you should consider a group plan to offer potential employees. Self-employed or work from home businesses may find a personal policy more beneficial. As mentioned above, one should definitely speak with a professional agent and be sure to explain your situation in great detail so the agent can provide the best possible presentation.

Unemployed Health Insurance - COBRA

2007-11-10T06:51:00.001-08:00

If I change jobs or become unemployed, can I bring my coverage with me?

If you switch employers, you have the right to carry your group health insurance coverage with you to a new job for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

You must pay the full premium, but at group rates that are far cheaper than the individual rates you would pay for similar coverage. Health insurance under COBRA is available if you are in the following situations:

1. You leave a company and become unemployed or self-employed for up to 18 months.

2. You are a widow or widower or child of an employee who dies while working for the same company for three years or more.

3. You are the divorced spouse or child of an employee who has left the company he or she was employed at for at least three years.

4. You are the child of an employee who left a job and have not yet reached age 23.

NOTE: If you need COBRA benefits, you must fill out the appropriate forms from your employerâ€™s benefits department within 60 days of leaving your job. If you do not act within that time, you may be denied coverage.

Information provided by Insurance Information Institute

Average Insurance Costs - average cost of auto, home, health & life insurance

2007-11-10T06:50:00.001-08:00

As we all know, costs of insurance premiums differ depending on dozens of different factors. I will remind you that this is not concrete data, the figures below are what estimate to be average costs of auto, health, life and homeowners insurance premiums. How do we get our estimates? We take average cars, average home costs, average family size and ages to determine what we feel are sound averages.

So insurance costs differ and some of the reasons insurance premiums differ are related to ones location, ones age and even the frequency of payment can fluctuate an insurance premium. Yes, in some instances if you agree to pay for the whole year in advance you can get a discount on your insurance premium. Those that pay monthly will likely miss out on the discounts provided by paying less frequently. Location seems to play a big role in how actuaries and underwriters determine insurance premiums. This makes sense in certain instances such as a home insured in a coastal state where damage from catastrophes such as hurricanes and earthquakes are more common than inland states. In fact there are many reasons why ones homeowners insurance premium may differ. Health and Life insurance premiums differ depending mostly on one's age and current health state while auto insurance rates are determined mostly on vehicle type, drivers age and driving history.

So now we have the basic reasons why insurance costs differ lets look at some averages.

Average cost of Homeowners Insurance - $1000 per year
Average cost of Auto Insurance - $800 per year
Average cost of Health Insurance - $1800 per year for adult individually and $4800 per year for a family.
Average cost of Life Insurance - $500 per year

One thing we didn't mention above was the different types of insurance products one can purchase that effect an insurance premium. For example, Term Life Insurance is less expensive than Whole Life Insurance policies. An HMO or PPO is less expensive than an Indemnity Health Insurance policy.

Of course, your cost for insurance policies will not be the exact averages we've listed above so be sure to receive your own free insurance quotes.

Considering Small Business or Self-Employed Health Insurance

2007-11-10T06:49:00.001-08:00

Do you own a small business, or are you a freelancer or independent contractor that works for yourself? There are many personal and financial benefits to self-employment and small business management, but one tricky area for you may be the whole domain of health insurance. If you were previously employed, you probably enjoyed the benefits of health insurance through your work, where a percentage was paid by you and the rest through your work. However, now that you’re “on your own,” so to speak, finding, attaining, and paying for health insurance becomes a whole different ball game.

A significant number of small business owners and self-employed individuals either operate with a reduced amount of health insurance coverage, or with no insurance whatsoever, mostly for reasons of ignorance or rising rates. In fact, according to a Kaiser Family Foundation study, nearly 25 million self-employed Americans (and their families) are without health insurance.

You may not think you need any health insurance coverage now that you’re self-employed or managing your own business. However, statistics say that small business owners, freelancers, and contractors without health insurance are at high (in fact, double) risk for the financial implications of both sickness and injury should they occur. First, they have to bear the full costs for care and treatment related to their injury or sickness, and second, their injury or sickness could negatively impact their business if they’re out of commission for a period of time. You will certainly want to avoid these unfortunate situations.

This is where health insurance comes in, and it’s definitely something to consider if you’re self-employed in any fashion. You have a number of options where health insurance is concerned. Buying individual health insurance is one, although you’ll soon find that this option can be quite expensive. But if this is the route you may want to take, do some research and comparison shopping with different health insurance plans and policies. Acquiring an MSA (Archer Medical Savings Account) is another option, as is choosing COBRA (Consolidated Omnibus Budget Reconciliation Act), a federal law requiring employers to allow their employees who are leaving to purchase health insurance through their group plan. However, MSA and COBRA can also get quite pricey, particularly the latter if you are used to your employer covering a large portion of the health insurance expense.

You could also look into acquiring a health insurance plan through some type of professional organization or association, or find health insurance specifically geared toward the self-employed and small business owners through government-based, partially-funded (subsidized) programs.

Something else to keep in mind with respect to health insurance for the self-employed is that you’ll likely be able to take advantage of some tax breaks and deductions. In the past, if you kept track of (itemized) your expenses for tax purposes, you could usually claim the difference between what you spent on medical-related expenses that were not reimbursed and 7.5 percent of your adjusted gross income in a year.

However, since 2003, all self-employed individuals are able to claim all their medical expenses as business expenses, regardless of their adjusted gross income, and often even if you don’t itemize your deductions on your tax return.

It’s recommended to sit down with a qualified health insurance agent who specializes in self-employment cases to discuss your options and eligibility.

Health Insurance Options for the Self-Employed

2007-11-10T06:48:00.001-08:00

One of the biggest concerns self-employed workers often have is locating, as well as being able to afford, health insurance for to help cover their medical expenses. Health insurance rates and deductibles tend to be high for the self-employed worker, leaving many self-employed workers without medical coverage in which they could afford. The following paragraphs will discuss some of the health insurance options available for self-employed workers.

Please keep in mind that some of the laws regarding health insurance for the self-employed will vary from state to state. However, COBRA, or Consolidated Omnibus Budget Reconciliation Act, is a federal law. It simply requires any company employing more than 20 employees to permit those terminating their employment to continue their current health insurance coverage for a minimum of 18 months. This is good news for employees leaving a company in order to pursue self-employment. COBRA will enable these workers ample time to find other health insurance arrangements to best meet their individual needs.

One option a person pursuing a self-employed career can consider for health insurance is being added to a spouse's policy. If a spouse is gainfully employed, by a company that provides health insurance options, it is very likely it would be less expensive to be added to that policy, as opposed to trying to find one independently. Some companies are even offering health insurance coverage for domestic partners.

If a self-employed worker does not have a spouse or a domestic partner, there are other options they can consider when it comes to health insurance options. Some states now allow self-employed works to present themselves as a "group of one", thus purchase a health insurance policy at group rates. The premiums for "groups of one" are most generally less expensive than premiums on a typical individual policy.

If a worker is just beginning in self-employment, and simply cannot afford a health insurance policy of any time, seeking part time employment can be a solution. Many companies now offer health insurance benefits to their part time employees, although sometimes the employee must first work through a probation period. This option will allow the self-employed worker time to build their business, and still maintain health insurance while doing so.

When shopping for an individual health insurance policy for a self-employed worker, it is very important to do some research. As stated earlier, health insurance laws will commonly vary from state to state. What may apply to self-employed workers seeking insurance in Texas, may not apply to self-employed workers seeing health insurance coverage in Ohio. Doing thorough research when trying to find the best health insurance policy for a self-employed worker can be vital for this very reason.

During the research process, it is as equally as important to compare prices of different health insurance policies available for self-employed workers carefully. The ultimate costs of individual health insurance plans can vary greatly depending on several factors. These factors can include:

• age
• medical history
• the individual health insurance provider

In some cases, the individual health insurance provider will require an applicant to pass an in depth medical exam before they are approved for coverage. Because of the overall high costs involved with this type of health insurance plan, it is very important to compare costs of several different policies with extreme care.

What Kind of Health Insurance is Best for You?

2007-11-10T06:47:00.002-08:00

When it comes to choosing health insurance, many of us just pick the one that will take the smallest bite out of our paycheck each month. Choosing health insurance on the basis of premium cost is one way to go about making a choice, but it could end up costing you a lot in the long run. Before you make a decision that will affect you and your family’s health care for years to come, take the time to research your options and choose the one that will offer the benefits that your family needs.

There are a number of different types of health insurance, each suited to a particular need or type of use. Choosing the right one is a matter of knowing the kind of coverage that will suit your family’s needs the best.

Indemnity Insurance
Indemnity insurance, also known as fee-for-service health insurance, is the oldest type of health insurance. The insurance company establishes a schedule of fees that lists how much they will pay providers for various procedures. The subscriber – that’s you – is free to choose from any doctor they want, including specialists, to provide the medical care that you want. The doctor bills the insurance company, who pays the amount set out in the fee schedule. You’re then responsible to pay the rest out of your pocket. Usually, you’ll be responsible for a deductible – an amount you pay out of pocket each year before the insurance coverage kicks in – and may also have to pay a co-pay when you visit the doctor. Indemnity insurance offers you the most flexibility, but in general, you’ll pay far more for that flexibility.

Preferred Provider Organizations
Preferred Provider organizations, or PPOs, are networks of doctors and health care providers who agree to accept certain fees for certain services. With a PPO, you choose a doctor or medical provider from within the network when you need medical attention and your cost will be lower than if you choose a doctor who is not a part of the network. You don’t need a referral to access specialist services, and don’t usually have the advantage of having a primary care physician to manage your health needs. Your out of pocket expenses will include a deductible that you have to meet before insurance coverage kicks in and a co-pay when you visit a doctor or provider. If you choose a doctor outside the network, you’ll also end up paying the difference between what the plan will cover and what the doctor charges, as well as, typically, a higher co-pay.

Health Maintenance Organizations
HMOs, sometimes called managed care organizations, first came into being in the mid-1970s. They operate on the principle that prevention is the first step to good health. In order to ensure that patients get necessary care, HMOs generally require that you choose a primary care physician who manages all of your care. Your primary care physician will make referrals to specialists if needed, and you always have the option of seeking a second opinion. The HMO is generally the least expensive type of insurance as far as out of pocket expenses are concerned. In generally, your financial responsibility will be confined to a co-pay whenever you visit the doctor. HMOs encourage annual physicals, eye exams and screening tests in the name of preventing illnesses and early diagnosis and treatment.

Those are the major options. Others include discount health plans, long term care plans and point of service plans. Each has its own advantages and disadvantages, so shop wisely before deciding on one coverage.

How Insurance Companies Are Working for Your Health

2007-11-10T06:47:00.001-08:00

Medical insurance is a major concern for most Americans. With the rising cost of medical care, health insurance is an ever increasing portion of the monthly budget. Depending on your employer and the region of the country where you live, a family health plan can set you back as much as $1000 a month. The high cost of health insurance is directly tied to the high cost of medical care. The costs of caring for a broken arm, for example, can run up into several thousands of dollars when you count in casts, X-rays, pain medication and lab tests.

While accidents and catastrophic illnesses can take a chunk of cash in one fell swoop, the costs of managing chronic conditions like diabetes, high blood pressure and heart disease is even higher. Between daily medication, periodic testing and emergency care for related conditions, it can literally cost hundreds of thousands of dollars a year to manage care for active diabetes.

That fact lies behind many of the initiatives and changes to typical health insurance over the past twenty years. These are some of the things that health insurance companies are doing to lower the costs of medical care – and encourage a healthier America.

Prevention lowers the cost of health insurance.
Nearly all major health insurance plans encourage and pay for routine medical care. It only makes sense – healthy people need less medical care. The best way to lower the cost of medical care overall, the insurance companies finally realized, is to make sure that their subscribers have access to preventive and maintenance care. Many health maintenance organizations offer annual checkups and medical screenings for conditions like high blood pressure and elevated blood sugar levels for free because catching health conditions early means managing them more effectively – and less expensively.

Knowledge helps reduce costs for all.
Nearly every major health insurance company in the country underwrites millions of dollars worth of research annually to help identify the best ways to provide and track treatments for various medical conditions. Working on the belief that preventive care reduces later medical costs, health insurance companies fund initiatives to offer health insurance for free or at reduced rates to underinsured populations, educate their subscribers around health issues and bring eye, dental and medical care to populations that can’t afford routine care.

In doing so, they lower the cost of health insurance for everyone by lowering the expense of caring for uninsured patients in medical crisis. Those costs, usually footed by the hospital or medical facility, are passed on to the insurance companies in the form of higher medical costs for everyone, and to the consumer as higher cost for health insurance.

Opening the door to alternative and complementary treatment opens the door to lower costs.
Many health insurance companies now offer benefits for subscribers that aren’t usually considered as “medical care”. These things include health club memberships, nutritional consultations, yoga and meditation classes and smoking cessation programs. Most cover counseling sessions for stress management since stress is recognized as a major contributing factor to illnesses. They may fund wellness clinics to educate consumers about the value of exercise and balanced diets, offer the loan of medical equipment for special situations and cover acupuncture, chiropractor sessions, massage therapy and even vitamin and mineral supplements.

By taking the initiative in education and research, the major health insurance companies are working hard to reduce health care costs for all. Check with your health insurance company to see what benefits they offer that could help you stay healthy.

I’m pregnant, can I get health insurance now?

2007-11-10T06:46:00.002-08:00

If you are already pregnant, unfortunately the options for insurance are slim to non-existent. It is a good idea to plan ahead and get health insurance in place before you become pregnant, but if it's already too late and you are pregnant without insurance, you may have a few options available.

Medicaid is an option for you if you are within the low-income guidelines set out by Medicaid. If you are a college student, the student health center at your college may be able to offer you some advice and leads for health insurance.

Another option for you is to attempt to get into a group health plan that will cover your pregnancy. You could do this by getting a job that offers an employer sponsored health insurance plan that provides for maternity coverage or by getting a group policy that covers maternity and pregnancy through a professional organization or chamber of commerce.

There are some states in the US that offer Children's Health Insurance Program that covers pregnant women. The CHIP program is a federal-state program that provides health benefits to children whose parents can't afford insurance but still make too much to take advantage of any of the existing welfare programs. Subsequently, after your baby is born, they may be eligible for health insurance under the Children's Health Insurance Program and in some states; the mother may also qualify for health insurance through the program with her child or children.

The federal law bars group health insurance plans that do cover maternity from considering pregnancy to be a pre-existing condition. What this means for you is that if you change health plans while you are pregnant, the new health insurance provider can not deny any of your claims related to your pregnancy, as long as they have maternity coverage. It's important to recognize the loopholes though that many women fall into while they are pregnant that could mean a lack of prenatal care coverage.

The downfall to this law is that it applies mainly to group health insurance plans and does not extend to individual health insurance plans. This could mean that if you are pregnant and on an individual health insurance plan and you change to another individual health insurance plan, you may not have pregnancy coverage at all, or you may have to wait for a period of time. However, in some cases you will be offered insurance to cover your pregnancy but it will likely be very expensive.

It is very important that you take responsibility for health coverage into your own hands. No one is responsible to ensure your coverage for health insurance—even your employer is not required to offer health insurance. Before you get pregnant, or if you think you may end up getting pregnant, get onto a health insurance plan with maternity coverage. Keep in mind that many insurance companies have a waiting period of eligibility, from one to three months, so it’s best to get onto the plan in advance of getting pregnant.

What Is Catastrophic Illness Insurance?

2007-11-10T06:46:00.001-08:00

A catastrophic illness can, even with full medical insurance, wipe out a family’s savings. The high deductibles and expenses associated with illnesses like cancer, heart attacks and strokes can quickly drain savings accounts and retirement accounts and make it difficult to pay for necessary care. Catastrophic illness insurance can help cover the necessary medical expenses and provide needed funds for care.

Many catastrophic illness policies are specific to a particular illness. There are policies that will pay benefits if you are diagnosed with cancer, have a heart attack or a stroke, or require long-term care because of age or disability. None of these policies will cover you for conditions that were pre-existing, but they can be invaluable if you are ever diagnosed with a covered illness.

What is the likelihood that you’ll need catastrophic illness coverage? Your likelihood of being diagnosed with cancer before the age of 60 is about six times greater than your likelihood of dying before the age of 60. You’re more likely to need cancer insurance than life insurance – but far more people carry the latter. Approximately 60% of those who reach age 65 will eventually require long term care – but less than 10% of us have insurance that will cover the costs.

The benefits from a catastrophic illness policy can be used to cover expenses that are not normally covered under medical insurance policies. Those may include the cost of in home nursing, or of converting a home to make it wheelchair accessible. They can pay for alternative and supplementary treatments that traditional insurance policies won’t cover, including nutritional counseling, therapeutic massage and complementary medical treatments. A catastrophic illness policy may cover the costs of experimental treatments or treatments like organ transplants that are only partially covered by typical health insurance policies.

How important is critical or catastrophic illness insurance? According to Dr. Marius Barnard, brother of Christian Barnard who performed the world’s first successful heart transplant, 37% of home foreclosures in Canada are the result of heart attacks, strokes and cancer. By contrast, less than 7% of home foreclosures were the result of the death of a family breadwinner. The settlement from a catastrophic illness policy could save your home, and save your family from years of debt to pay off the high bills associated with your illness.

There are many different types and configurations of catastrophic illness policies. Some can be purchased like whole life policies. Others offer term coverage for terms up to ten years. There are policies that will return the entire premium paid if you don’t make a claim against them before the age of 65. Some insurers even offer a referral service as part of their critical illness insurance package.

Pricing on critical and catastrophic illness policies varies from insurer to insurer and from policy to policy. Some policies only cover one stated illness. Others may cover up to thirty possible diagnoses, with a schedule of benefits for each diagnosis. Obviously, the cost varies according to the benefits and the conditions covered. To learn more about catastrophic illness coverage and long term care coverage, speak to an insurance agent.

Finding the Best Auto Insurance Policy

2007-11-10T06:45:00.002-08:00

Since having auto insurance isn’t optional if you drive a vehicle, you might as well put some time and effort into finding the best policy with the most coverage. Some mistakenly think that all insurance companies are equal, but they couldn’t be more wrong. Complete research on the different types of policies that each company has to offer you, and include the price of each coverage option and how reliable the company is.

Note that not all big name insurance companies operate in all areas of the country. Your mom may be happy with her insurance in Florida, and you may even be able to find the same company with a branch in your area, but you probably won’t get the same great rates she is getting. Policies and prices change by area and company. Make sure you start with a company that is licensed to operate in your area.

You may not think it is worth the time to do your research but finding discounts that you are eligible for can really add up month after month, year after year, saving you literally thousands of dollars. Keep in mind that the auto insurance industry is highly competitive which makes it possible for you to find a company that if offering you a great amount of coverage for a low price.

Going with the cheapest auto insurance company can be a huge mistake as well. You need to go with an insurance company that is reputable and reliable, so when you do need to file a claim they are there to help you in a timely manner. Why would you waste your money on a low price insurance company that takes forever to respond to claim, if they even do! Be careful because as with any industry there are agents and companies that aren’t out to help you, but simply there to make money and keep it in any means possible.

When you are purchasing auto insurance you are purchasing much more than coverage and protection. You are purchasing peace of mind that is only found when you know you have done your research thoroughly. If for any reason you don’t feel comfortable or satisfied with your company or their agents then don’t be afraid to take your business elsewhere. Most agents are willing to bend over backwards to make you happy with their services, and keep you as a life long customer.

The easiest way to get several quotes from different companies in a short amount of time is to jump on the internet. Auto insurance companies have made it simple to log onto their website and get a free quote in as little as five to ten minutes, depending on how quick you can put in the information. You can easily get five to ten quotes and compare the coverage and rates. If you are confused or have questions regarding a policy then don’t be scared to call up the company and ask. It is their job, and the want to please you.

Auto Insurance FAQ

2007-11-10T06:45:00.001-08:00

Am I required to have auto insurance?
In the United States and Canada you are required to have car insurance if you operate a motor vehicle.

What exactly is auto insurance?
Auto insurance protects you against losses that are incurred because of traffic collision, fire, theft or other damage. It also protects you against damages to other people and their property if you are found at fault in an incident.

What happens if I don't have car insurance?
While it varies from state to state and province to province in Canada, you can expect a hefty fine, potentially the loss or suspension of your license and vehicle registration and even jail time.

How are my insurance rates decided?
In some areas, the insurance premiums are mandated by the government, however in most areas, the premium is decided on based on actuarial calculations, which takes statistics into account. As well, your age, the car you drive, the area you live in, how you use the vehicle and your driving history coupled with the insurance coverage that you select.

Is my insurance valid on other people's cars?
If you are driving someone else's car and you have insurance on your own vehicle, chances are you can use your insurance on the car you have borrowed. However, it is important to check with your insurance company before assuming this is true.

What if I'm driving someone's car and I get into a collision that is my fault, but then I find out my friend doesn't have insurance?
It's your responsibility to find out if the vehicle you are driving is properly registered and insured before you drive it. If you have your own vehicle insurance, you can have the vehicle you were using covered under your own insurance, but you should check with your insurance company. If you do not have insurance, you are likely still liable for the damages to the other people and their property and will face the same fines and penalties.

What is liability insurance?
Liability insurance provides coverage for you if you are found legally liable due to negligence or an accident. Liability is offered in combined single limit and split limit policies. Combined single limit covers injury claims and property claims under the same coverage and with one limit. Split limit splits the liability coverage between property damage and bodily injury coverage and can each have separate limits.

What is collision insurance?
Collision insurance covers your vehicle in the event of a motor vehicle collision or accident

What is comprehensive insurance?
Comprehensive insurance covers your vehicle for damage that isn't caused by a collision, such as fire, theft, vandalism, impacts with an animal or weather.

What is GAP insurance?
GAP insurance covers you for the price of your vehicle if you owe more than the vehicle is worth and it is involved in a collision where a total loss (totaled) has occurred.

How do I know what the best insurance rate available to me is?
The best thing to do is to get a variety of quotes from different insurance companies, based on the same vehicle and coverage. Your quotes for insurance can differ by hundreds of dollars from different insurance companies.

How much do insurance quotes cost?
Nothing. You should never pay for an insurance quote.

Auto Insurance - About Fault

2007-11-10T06:44:00.004-08:00

The actual meaning of fault can be important in determining whether someone is entitled to damages, and if so, in what amount. The actual definition of fault will vary from state to state. There are a few different concept involved in determining fault.

The first is contributory negligence, where if the injured party was even partially at fault, he or she could receive nothing since the laws policy isn’t to reward people for their negligence.

The other is comparative negligence. The potential for injustice has been corrected in most states by changing the law from contributory negligence to a system of comparative negligence. The injured party is entitled to receive that percentage of damages that he or she didn’t cause, as determined by a jury. Say you were found 30% liable for $100,000 worth of damages and bills, you would receive $70,000.

There are many types of comparative negligence among the states that follow this law. Some states allow both sides to sue each other for the percentage they aren’t at fault. Other states require that a plaintiff be less that 50 percent at fault in order to receive any damages. The percentage that each party is at fault in an accident can be a big issue in settling an auto accident dispute.

Many often wonder if they need a lawyer after they’ve been involved in an accident. Lawyers are an integral part of the fault system in virtually every state in the United States.

Plaintiffs usually hire a lawyer on a contingency basis, meaning they pay the attorney a percentage of the amount of money the attorney collects on their behalf. This isn’t the only expense for a plaintiff. They also must pay such fees as the costs of a court reporter to record a deposition, and court filing fees. Costs can range from a few hundred dollars for smaller cases, all the way up to tens of thousands of dollars for larger cases. Clients are responsible for costs regardless of who wins the lawsuit.

Plaintiffs are also are sometimes held responsible for any medical treatment or doctor’s testimony that are necessary. More often than not, a client doesn’t have the money to pay for these doctors. The doctors generally will respond by taking a lien on the case, meaning the doctor gets paid out of the proceeds before a client receives a penny.

There is only one side to being sued, the defendant lawyers’ fees and court costs are usually paid for by their insurance company. Defense lawyers generally charge the insurance company at an hourly rate, usually at a great rate because of the high number of cases the firm will handle.

If you find yourself in court over an auto accident, you can expect to go through several steps before settling the dispute. After the initial accident there is an investigation that occurs, usually done by the local police department. If there are any injuries, medical treatment is given.

After there is a clear picture of what happened, an insurance adjuster will attempt to resolve the case. If the matter cannot be resolved at an adjuster stage, a lawsuit is then filed. As both lawyers learn the details of the case they will form conclusions as to who will win, and any possible settlements.

They then hold a settlement conference. If a settlement doesn’t occur, they hold a trial where a jury, judge, or arbitrator will determine who wins. If the loser is unhappy he can try to overturn the judgment with an appeal.

Is my US car insurance valid in Canada?

2007-11-10T06:44:00.003-08:00

Auto insurance that you hold in the US is often valid in Canada, our friendly neighbor to the north. Whether you drive over the border into Canada or rent a vehicle while you are in Canada, chances are that your insurance policy is valid. Your US driver's license is valid in Canada as long as you are only visiting there and are a resident of the United States.

It's important though to check with your insurance company to ensure that your policy will cover your vehicle in Canada, and if it will cover a rental car in Canada.

When you cross the border into Canada, you will be asked to show your auto insurance proof, which you should be keeping in your vehicle at all times anyway. It's important to note that Canada's driving laws are quite strict, for example, if you are caught driving under the influence of drugs or alcohol, you face exclusion from the country.

Another thing to consider about traveling to Canada and driving is that the road conditions may not be something that you are used to. During the winter seasons, Canada experiences harsh winters and the road conditions can be treacherous, even for the most seasoned of drivers. There is also a lot of wild life that roams freely throughout many of the rural areas in Canada. While elk, moose and deer may be a pretty picture for you to take on the side of the road as part of your vacation album, these animals can cause severe and even fatal collisions on the road.

When you are in Canada, if you are a member of the American Automobile Association (AAA) and you experience some trouble on the road, you can contact the Canadian Automobile Association (CAA) for help. The CAA covers AAA members when they are traveling in Canada. It's a good idea to have their contact information with you on your trip, which you can find by visiting their Web site.

Canada's driving regulations are a little different from those in the United States. If you want to know more about their driving regulations or about auto insurance requirements in Canada, you can contact the Department of Transport, Motor Vehicle Division in any of the Canadian provinces that you will be visiting or you can contact the nearest Canadian consulate, which are located in many large cities in the United States.

Likewise for those Canadians out there, your Canadian auto insurance is valid in the United States and on rental cars, but you should check with your insurance company to ensure that you have appropriate coverage.

It's important to remember that whether you are an American traveling to Canadian soil or a Canadian traveling to the United States, that the laws that govern vehicles and driving are quite different. Insurance requirements are different in each of the two countries, with some major similarities and differences. It's always best to check with your insurance company regarding your personal insurance policy to ensure that you will be covered in the event of a collision or claim that happens while you are on foreign soil.

What Is Auto Liability Insurance?

2007-11-10T06:44:00.001-08:00

One of the types of insurance that is available for your vehicle is liability insurance. Liability insurance is commonly one of the required insurances for you to have on your vehicle throughout the United States and in Canada. Liability insurance minimums were instituted because they cover damage that you do to other people and their property.

Liability insurance coverage is a fixed amount of coverage for damages that you are found legally liable to pay due to an accident or negligence. Liability insurance is available in two different policies, either as a combined single limit policy or a split limit policy.

A combined single limit policy covers damage to property and bodily injury under one specific sum of money, such as $1,000,000. For example, if a driver is in an accident with another vehicle and damages the vehicle and causes bodily injury to the other driver, the combined single limit policy with $1 million coverage would pay for both the injury and damage.

Split limit policies provide coverage divided into two categories: bodily injury and property damage. The policy holder can choose different limits for these two coverage aspects. In the example above in combined single limit, the insurance would pay for the injuries to the driver out of the bodily injury portion of liability insurance and the vehicle damage would be paid out under the property damage portion of the insurance.

Bodily injury coverage is often split again into a maximum payment per person and a maximum payment per accident.

Liability insurance is required throughout the United States and each state has their own mandated minimums. It's important to note though that the minimum required by the state for liability insurance often isn't enough to cover damages in a medium level collision, let alone a serious collision. It's a good idea to get as much liability insurance as you can afford with the lowest deductible you can afford. Even good drivers cause accidents and could be held liable for tens of thousands of dollars worth of damage to property and tens of thousands of dollars in bodily injury lawsuits and financial losses.

While that may seem extreme, it is the case in a major collision, especially if someone is seriously injured or killed in the collision. Paying a little extra each month for higher auto liability insurance is much easier to swallow that having to come up with the funds for a huge settlement ruled in the other party's favor.

Talk to your insurance agent about liability insurance and find out what the minimum is for your state and ask your agent how much that would cover in the event you did have an accident for which you were found at fault. Chances are, that coverage doesn't 'cover' much of anything at all. You can then speak with your insurance agent about appropriate levels of auto liability insurance for the way that you use your vehicle, where you drive it and the risk you have of being involved in a collision.

Lower Auto Insurance Premiums

2007-11-10T06:43:00.001-08:00

Auto insurance can be expensive, especially if you have teenage drivers or have a bad driving record. Considering auto insurance is a must if you have a car, the price is becoming more of an issue for people all over the United States. Out of this need for cheap insurance grew the highly competitive industry of auto insurance.

We must accept that all auto insurance companies are different and some will be more reliable than others, or more expensive than others. You don’t want to go with the dirt cheap unknown insurance company because if you have an incident it will likely turn into a nightmare. Stick with a reliable company that has been in the industry for a considerable amount of time.

It is wise to get several different quotes from many companies and compare the rates and coverage. Don’t go with the cheapest auto insurance policy as soon as you get the quote, find out more about the company and the policy that you are begin offered. Make sure you fully understand everything and have done a thorough comparison before signing or agreeing to anything. Quotes are simply that, quotes. You are not obligated to purchase anything simply because you received a quote or asked a few questions regarding the policy.

There are a few tips that you should keep in mind when selecting a policy and comparing quotes such as the deductible amount, which is the amount that you will be required to pay prior to the insurance company paying out on a claim. The amount of your deductible has a huge impact on the amount you will pay each month for your premium.

It is common for people to totally forget about changing their deductible when they have had their insurance for a long time. However if you have a great driving record and feel comfortable increasing your deductible then you can save quite a bit of money. If you are financially strapped as it is, or have had prior accidents then this may not be a great idea.

We all know that the type of car we drive plays a major factor in the price we pay for auto insurance. There are certain types of cars such as sports cars and specific makes and models that are commonly stolen usually have higher insurance costs. Use common sense when purchasing your vehicle and keep in mind the high costs of insuring such vehicles. You are much more likely to speed and cause a wreck in a sports car than in a station wagon.

To lower costs of auto insurance you can install safety and anti theft devices. Making your vehicle safer and have a decreased risk of theft will lower your insurance costs. If you already have certain safety devices on your vehicle right now make sure your insurance company is aware of them.

When it is time for the renewal of your auto insurance policy take a look at the details. You may be able to drop some things or change amounts to lower your costs.

How Can I Lower My Auto Insurance Payment?

2007-11-10T06:42:00.001-08:00

When people look at their auto insurance payments, one question they commonly have for their agents and brokers is how they can lower the amount that they pay each month in insurance premiums for their car.

There are a few ways to decrease your auto insurance premiums, and you can make use of them all to ensure you are getting the best insurance rate possible for your vehicle.

The primary step to getting the lowest insurance rates for your vehicle is to get a variety of quotes from different insurance companies. The information you give to each of the insurance companies should be the same so you can get an accurate comparison. Also, you should ask for the same levels of insurance from each of the companies, including deductibles and limits. A slight change in a deductible can affect how much your insurance cost.

That leads us to another way to lower your insurance rates—request higher deductibles on your collision and comprehensive coverage. The increased deductibles will automatically lower your payment. However, it should be noted that if you do have to file a claim on your insurance on your collision or comprehensive policy, that you will have to pay the deductible before the claim is processed. If you can afford the deductible in the event you need to make a claim, then this is an easy task. However, if you can not afford a $1,000 outlay expense then raising your deductible limit may not be worth it.

When you are requesting quotes, or dealing with your insurance agent to lower your premiums, ask about discounts. There may be some discounts that you can qualify for that you didn't previously know about or perhaps the insurance company has a new discount offer that is available.

The best way to get and keep a low insurance rate is to maintain a good driving history and credit history. By not having speeding tickets, moving violations and collisions cluttering your driving record, you will get a much better rate, because you are seen as less of a risk than drivers who do have these factors.

Some insurance companies take your credit history into account when you apply for insurance for your vehicle, however not all of them do. If you have a less-than-perfect credit rating, seek out an insurance company that doesn't take credit history into effect. It is statistically more probable that people with a good credit rating have fewer claims on their insurance.

If you have a teenager on your insurance policy, find out how you can lower the premium by talking to your agent about good student discounts and discounts for driver's education courses. The cost of a driver's education course could save you more money in one year of premium payments than the cost of the course. It is definitely worth looking into.

Try a few or all of these suggestions to lower your vehicle insurance rate. Your insurance agent will be able to help you find the lowest rate for your auto insurance.

Comparing the Different Types of Auto Insurance

2007-11-10T06:41:00.000-08:00

The auto insurance industry is highly competitive and involves endless amounts of different policies from different companies. It may be hard to know which company and policy is right for you without over paying or being under insured. We all know how expensive auto insurance is but compare that to the high costs of car repair and medical bills and auto insurance costs are considered minimal. Not only is auto insurance the law but it will save you financially if you are involved in a vehicle related incident whether you are at fault or not.

Liability insurance is one of the most important and expensive coverage included in your auto insurance policy. Liability is also referred to as property damage insurance and is designed to protect you from paying out of pocket for damage you cause to someone else’s vehicle. Every state required you to have a minimum amount of this type of coverage, and it is generally very low. You should purchase as much liability as you can afford.

Personal injury insurance is also generally required by law, with a minimum amount for each state. Personal injury insurance is designed to cover your medical bills, around eighty percent, and a portion of the lost wages you suffered, around sixty percent, if you are injured in a car related accident. This type of protection will cover your family members or anyone who was in your vehicle, depending on your policy and insurance company.

The bodily injury insurance that you can include in your auto insurance policy is usually not required by the law but is very helpful in the event of an accident that you are held liable for. If you are found liable for an accident that results in injury exceeding the limits of their own personal injury coverage, then you bodily injury insurance will pay the difference rather that you being sued for medical expenses.

It is generally inexpensive to add on uninsured motorist protection but it is defiantly worth it. If you were to be injured and the costs exceed the limit of your personal injury protection, and the accident was caused by someone without insurance then you would be left paying the difference in the medical bills, or chasing the other driver around with a lawsuit which is also going to cost you out of pocket.

To save the added hassle in an already stressful time you can invest in uninsured or underinsured motorist protection and this will cover the additional costs. Always purchase this policy if you have the extra cash, if you ever need it you will be so glad that you did.

Collision insurance reimburses you for damages that are caused to your vehicle if you are at fault and will pay the actual cash value of the vehicle, minus the deductible. If you have a vehicle that you are still paying off this is usually required by your financial provider. Comprehensive insurance will cover the damage or loss of your vehicle due to theft and acts of god.

The Details of Auto Insurance

2007-11-10T06:39:00.001-08:00

Many Americans spend a lot of money on their cars these days. For some of these people it takes years of hard work in order to save up enough money to use for a large down payment or even to buy a car outright. When you spend your hard earned money you want to protect it with an adequate auto insurance policy.

If you have gotten a vehicle through a car loan with a bank then they will more than likely require you to obtain full coverage insurance policies. This is not only to protect you in regards to your investment but also the bank’s investment.

Auto insurance is an agreement between the company and the vehicle owner. The policy owner is required to pay a monthly premium which is vital to keeping your vehicle and personal assets covered. The insurance company is taking your monthly payments and in return they agree to pay for any damage or loss of the vehicle.

The type of car you own, as well as the price and repair costs are all determining factors for the premium you will have to pay. If you buy a sporty convertible you will likely pay much more for insurance that if you went with a family station wagon. Not only are you less likely to speed in a station wagon with your kids, but the costs of repair are probably far less than a sports car.

If you already have decided what kind of car you are going to get then the next thing you need to worry about of liability insurance you are required to have in your area. You can get all this information at your local Department of Motor Vehicles (DMV).

Insurance policies are available with many different types of coverage you can purchase. It can range from the state minimum of liability to full coverage including reimbursement of the vehicles value. You can purchase comprehensive coverage which will cover all claims involving accidents and theft of your vehicle. The more responsibility the insurance company is taking the higher the cost of the policy is going to be.

The easiest way to find the cheapest insurance with the most amount of coverage is online. Many auto insurance companies offer a free instant quote though their website as usually takes about five to ten minutes to complete. Make sure you have the information on your vehicle such as the vehicle identification number (VIN) and your personal information such as social security card and state driver license.

Other than the type of car you are going to insure there are a few other important factors that go into determining your car insurance premium. Things such as your age, driving history, and the amount of distance you will likely drive each year.

The car insurance industry is ever growing making it easier for you to find a company that is offering great low rates with reliable service. You may find a company that is asking for a significant amount less, make sure you double check the coverage and make sure there aren’t any raised deductibles or anything else that isn’t supposed to be there.

Do I Have To Use a Specific Repair Shop for an Auto Insurance Claim?

2007-11-10T06:38:00.001-08:00

One of the questions on the minds of people who are looking for insurance are about repair shops. There is a huge misconception and rumor that if you need your vehicle repaired through an insurance claim that you must use their specified repair shops to have your vehicle fixed. Is this the case? Do you have to use a specific repair shop for an insurance claim?

The answer is no, you do not. Most of the states have an anti-steering law that prevents insurers from dictating to you about the repair shop you use. You can also request that manufacturer's original parts are used to fix your car instead of another, cheaper brand.

However, if you choose a body shop that is not approved by your insurance company or one that they have recommended to you, you may have to pay some out-of-pocket expenses on the body work.

When you need to file a claim on your vehicle, there are a few things to keep in mind. First of all, you will need to pay the deductible amount on the insurance—a payment of between $250 and $1,000 usually against the price to repair your vehicle. If the damages to your vehicle are less than you deductible, or not much more than your deductible, then you might want to consider fixing the vehicle yourself instead of filing a claim on your insurance, which, if you were at fault in the collision, could raise your premiums.

Secondly, the insurance company will allow you to choose your own repair shop. However, they usually request that you have one or two estimates done for the price of repairing the damage to your vehicle. Here, you can choose a couple of repair shops that you want to use and submit the estimates to your insurance company.

If you need body work done on your vehicle, you will need to ask your insurance company which body shops they deal with and recommend. There are a few good reasons for this—the insurance company’s only deal with reputable body shops that do the job right for a fair price, as well, many of the body shops offer discounts to insurance company clients, or waiver of deductible in some cases.

When you are having your vehicle mechanically repaired, you really hold the reins. Ensure that the parts they are using to replace damage parts in your vehicle are manufacturer parts, unless you aren't concerned about the use of other parts. In some cases with some insurance companies, if you do request manufacturer parts to be used, you could end up paying a portion of the difference in price.

Filing a claim on your insurance doesn't have to be a big deal—follow the lead your insurance company gives you and take their help and advice. Believe it or not, they have done all of this before and can probably offer some really good advise about where you should take your vehicle.

However, an insurance company can not insist that you use a specific repair shop, only a body shop can they allocate to you—unless you are willing to pay some of the expense yourself.

Auto Insurance: What If I Hit a...?

2007-11-10T06:34:00.000-08:00

Auto insurance covers a variety of incidences that happen with your vehicle. Collisions happen every day and with a variety of objects, not just other vehicles. So what happens if you hit a vehicle? What happens if what you hit isn’t a vehicle? Read on to find out.

What if I hit a vehicle with my vehicle?
If you are involved in a vehicular collision that has been deemed your fault, your insurance will pay to fix the other persons vehicle with your liability insurance. Your liability insurance will also pay if there are any injuries in the collision to the other people and to you. If you have collision insurance on your vehicle, then your collision insurance will pay for your vehicle to be fixed, but you will be required to pay your deductible.

What if I hit a building with my vehicle?
If you hit a building, then your liability insurance will cover the damages to the building. Once again, your liability insurance will also pay if there are any injuries in the collision to the other people and to you. If you have collision insurance on your vehicle, then your collision insurance will pay for your vehicle to be fixed for the damages incurred when you hit the building, but you will be required to pay your deductible.

What if I hit an animal with my vehicle?
If you hit an animal with your vehicle, your comprehensive insurance will pay for the damages to your vehicle, and you will have to pay the deductible. If any property was damaged in the process other than your vehicle, such as a neighboring building, then your liability insurance would cover those damages. If you, or other people, are hurt in the collision with the animal, then your liability insurance would once again pay for the damages.

What if I hit a light pole with my vehicle?
The light pole would fall under the same category as a building; therefore your liability insurance would cover the damages to the building as well as any injuries as a result of the collision.

What if I hit a person with my vehicle?
If you hit a person with your vehicle, then your liability insurance would cover the damages and injuries to the person you hit with your vehicle. Your liability insurance would cover all the medical expenses and living expenses of the person while they recovered, or in the event of a fatality, would, in many cases, pay a death benefit to the family of the person who died as a result of the collision.

In essence, 90 per cent of the time that you hit something with your vehicle, your liability insurance pays for the damages and injuries caused to other people and their property. Your collision insurance only pays to fix or replace your vehicle in the event of a collision with another vehicle, building or person. If you hit an animal, then your vehicle is covered under your comprehensive insurance. It’s a good idea to have a fair amount of liability insurance in case of a major collision, to ensure that you are fully covered.

Determining the Amount and Type of Life Insurance to Purchase

2007-11-10T06:31:00.003-08:00

In this day and age, you are likely to see numerous advertisements, no matter where you go, offering low cost life insurance polices. Some of these advertisements may be perfectly legit, and others may be less useful. The following paragraphs will provide you with information to help you to determine which type, as well as how much life insurance coverage will suit you best.

When you are trying go determine how much life insurance you need to purchase, you should take many factors into consideration. These factors can include:

• your income level prior to death
• amount of income needed for surviving spouse
• burial/funeral expenses
• debt level prior to death

While these factors alone do not determine the amount of life insurance you may need to purchase, this data can help you to come to a reasonable figure. Other factors that can play a role in determining the amount of life insurance you may need to purchase are any income you may receive from sources other than employment, as well as any income producing assets you may own.

When you have specific reasons for purchasing life insurance, such as to be sure all of your debts are covered upon your death or to pay off a mortgage, determining the amount of coverage you need may not be as difficult. Calculating the amount of life insurance coverage you will need may only be a matter of adding up these figures.

Once you are able to determine the amount of life insurance you want to purchase, you need to decide on the best type to suit your individual needs. There are two basic types of life insurance known as term life insurance and permanent life insurance. While term life insurance policies only cover the insured for a set period of time, permanent insurance policies cover the insured for their entire life ... no matter how long they live. While a permanent life insurance policy may be more expensive, term life insurance later and life can be even more expensive. It is important to consider carefully, the duration you wish to be covered under your life insurance policy, before making any final decisions about which type of policy to choose.

If you feel that making these decisions about your life insurance on your own is just too difficult, there are professionals, as well as professional services available to assist you every step of the way in your decision making process. You can locate these service providers by searching the internet, or by calling and requesting the information from some of your local life insurance providers.

Having a life insurance policy is a wonderful way to plan ahead, and to help your surviving family members meet your financial obligations after your death. Without life insurance, the responsibility of paying your debts will likely fall upon the ones that you love most, who are already grieving. The right life insurance policy will help protect them from this, as well as provide them with the same financial security they were accustomed to while you were living

Life Insurance Benefits

2007-11-10T06:31:00.001-08:00

The life insurance industry is highly competitive which leaves us with so many companies and policies options to choose from, which can be confusing for just about anyone. When it comes to life insurance there are so many terms to learn and understand before you can proceed in investing in a policy. You also need to know this information so that it can help you determine exactly how much coverage and what types of options are best suited for you.

The easiest way to find out the details of different types of life insurance policies is to check out several companies online. They make it simple to access all of their information and even get free instant quotes on the life insurance policies that interest you. If you are still confused or have any questions then don’t hesitate to call the company you are interested in.

The dreaded phone call to the company alone can be a deal breaker for many as no one really wants to speak with a fast talking commissioned salesperson when you are already confused. Most of the bigger name companies have great customer service records and a long history of dealing with the public in an ethical manner; otherwise you are taking more of a risk with an unknown local or discount company.

Although there are some people who spend money like crazy, people rarely go on a spending spree and buy up a bunch of life insurance protection. Whether you are on a tight budget or have plenty to spare you should always spend the time to make an informed decision regarding any large investment or purchase. No one really walks into a car dealership and talks to a salesperson with the intent to purchase a car, without knowing at least why type of car they want.

In some ways purchasing life insurance is similar to buying a new car or other large item. Prior to purchasing you want to know everything that you are able to find out before you spend a dime or sign a single paper. When you perform your research you will find that there are two main types of life insurance, term life and whole life.

A whole life insurance policy is also referred to as straight life and is protection that covers your for your entire life, or until you reach the age of one hundred at which point you get the money that would have went to your beneficiary. A whole life insurance policy will pay the face value upon the death of the policy holder, or when the policy holder turns one hundred.

The two most popular types of whole life insurance are known as limited payment plans and continuous premium whole life. With a limited payment plan whole life you are able to pay off the policy early and you are able to accumulate cash value much faster.

With a continuous premium whole life policy you pay out the premiums over your whole life or until the age of one hundred.

Participating Vs Non-Participating Whole Life

2007-11-10T06:30:00.001-08:00

While there are seven different types of whole life insurance, there is a difference between them all. Two of these types of whole life insurance are quite different and can impact how your life insurance works for you.

Whole life insurance is just what the name implies—insurance for your whole life. There is a guarantee of a minimum cash value and growth that is included in the insurance policy. The biggest advantage of a whole life insurance policy is a guaranteed death benefit. There is also a guaranteed cash value, fixed and annual premiums, accessible cash values.

The downside to whole life insurance is that the premiums are not flexible. Also, the internal rate of return isn’t very competitive with other savings alternatives.

It’s important to remember that while whole life insurance comes in both non-participating and participating, not all insurance companies offer these two types of whole life insurance, or any of the seven types. It’s important to check with the insurance company you are dealing with to see if they offer the specific type of whole life insurance that you are interested in. Likewise, if you are using an insurance agent or broker, they can find an insurance company for you that offer the type of whole life insurance you want.

Non participating life insurance is very inflexible. Everything is determined when the policy is issued and after that, nothing can be changed. The death benefits, the premiums and the cash surrender values are all determined when you are setting up the policy. Once the insurance company issues you the whole life insurance policy, you can not make any alterations.

However, this also means that the insurance company is taking the risk of the future and the performances of the policy in comparison to the estimates made by the actuaries. (Actuaries determine risk levels of the client.) If the future claims are underestimated by the actuary, the insurance company must pay to make up the difference. However, if the estimates made by the actuary are too high, then the insurance company gets to keep the difference. This leads one to believe that the actuaries “aim high” on their risk estimates so that the likelihood of the insurance company needing to pay if the estimates are too low are greatly reduced.

Participating whole life insurance means that if the estimates of the actuary are too high, the insurance company shares the profits with the policy holder (you)—the greater the company’s success the better the profit and surplus. It is in the best interest of the insurance company to ‘aim high’ so they can retain a share of the profits with you. However, insurance company actuaries are very skilled at their jobs and are usually dead-on the money with their estimations.

In short, the choice between these two types of whole life insurance is yours to make—a decision not to be made lightly as your future may depend on it.

Using Whole Life Insurance Dividends

2007-11-10T06:29:00.000-08:00

While you can take out loans against your whole life insurance policy, there are other ways you can dip into your policy without reducing the death benefit. Depending on the terms of the policy and the insurer, you may have the option to withdraw dividends annually or reinvest them in your policy, raising the death benefit.

Terminology
Understanding the words and phrases you may find on your life insurance policy is your first step in using dividends.

Dividends are the funds earned by the insurance policy that are distributed to the policy holder. This is very similar to interest, though an insurance company does not guarantee any dividend or return on their investment.

Paid-up additions are purchased by your insurance policy with the dividends made during the year. To determine the number of paid-up additions (PUAs) in your policy, subtract the death benefit listed on last year’s statement from the death benefit on this year’s statement. The difference is the PUA amount purchased in the past year.

Requesting Dividends
Most insurers automatically return dividends and PUAs to your policy benefit if you do not exercise the option to cash them out. However, once you’ve made the change to withdraw dividends from your whole life policy, expect to see a check show up every year until you request a change again.

To request dividends or PUAs be cashed out, you’ll need the most recent statement of your policy, your policy number, the customer service telephone number and the amount of PUAs that are available (see “Terminology”).

Call your insurance company and follow the telephone prompts. Once you get through to a customer service representative, tell him or her that you’d like to change the way your dividends are used and request they be sent to you in the form of a check. You can also request they be used to pay your premiums or to pay down any balances on a loan against your insurance policy.

Dividends and PUAs are most often issued once per year, usually on the anniversary of the policy. The customer service representative you speak with can probably tell you how long you should wait for the check to arrive as well as how to contact them should it not arrive. Make sure you log this information and keep an eye on your mailbox when the check is due to arrive.

If you would like future dividends to be absorbed by the policy in the future, call the insurance company after waiting one year. Typically, you cannot make more than one policy change in a single year.

Consequences
Dividends and PUAs purchased with dividends are not subject to income taxes. If you instruct your insurance company to reinvest these into your policy you are not penalized.

If you choose to withdraw your dividends or PUAs purchased with dividends, those funds may be subject to taxation. If you are concerned about this added tax liability, you should contact an accountant or, at the very least, the IRS website. Sometimes, insurers are willing and able to send you instructions for reporting your exercised dividends on the proper line of the tax form you use.

Keep a copy of the statement that should arrive with your dividend check for tax preparation purposes. This documentation should be kept for no less than eight years, just in case you are audited.

Top 10 Tips when buying insurance - health, life, auto and homeowners

2007-11-10T06:28:00.000-08:00

1. Buy life insurance when your young and healthy.

2. Smoking will dramatically raise prices of your life and health insurance premiums.

3. Buy Return of Premium instead of regular term life insurance. (You get all your premium back once the term is done.)

4. Don't let your health insurance lapse. (You may not be eligible if your health is not the same as it was before)

5. Lock into a health insurance policy when your young. (Getting health insurance when your older is much more difficult)

6. Always go with a large known company. (This is true for all your Insurance needs)

7. Always negotiate your claims, especially with auto insurance. (Your auto insurance company will try to give you the least amount they can)

8. Research homeowners insurance prices in the area your considering before you purchase your home. (Some homeowners insurance can be extremely expensive depending on the location. Ocean front property in hurricane spots can run very high premiums).

9. Be sure your Doctor records events accurately. (A misdiagnoses can mean increased health insurance premiums or if your uninsured it can mean uninsurability.)

10. Security alarms, certain siding and roofing materials can dramatically lower homeowners insurance premiums. (Consider these factors when building your dream home.)

Term Life Insurance as an Investment?

2007-11-10T06:27:00.003-08:00

Most insurance investors don’t consider term life policies as a great way to save and make money. While it’s true that you will not be able to pull money out from your term life insurance policy, that does not mean it isn’t an investment. It is an investment in your heir’s future.

Depending on your age, general health and lifestyle, your life expectancy may be a few years or many decades. Invest your money in a term life insurance policy that will meet and exceed your life expectancy by a few years. If you believe you’ll need an insurance policy with a cash value, consider a universal life or whole life policy.

Calculating Short Term Need
How much will your heirs need? For how long? Determining how much term life insurance is needed seem like a difficult task but it really is quite simple.

Add loan balances for autos, homes and lines of credit. This includes revolving lines, like credit cards and financial aid loans for college and higher education.

Add to the loan balances funds for funeral costs, final medical bills, estate taxes and fees as well as any charitable gifts you’ll make upon your death. This is the short term need your family and estate will require from your term life insurance policy. It is best not to enroll in a policy that doesn’t meet these minimal needs.

Calculating Long Term Need
Long term financial needs afford a bit more flexibility. The easiest way to provide for the long term financial needs for your family is to include this amount in your term life insurance policy. You can add an investment plan to your will, so your estate delegate can grow your policy funds after your death.

When calculating your term life insurance needs for providing for your family in the long term, consider these factors:

Will your spouse or partner be able to work once you are gone? How much supplemental income will be needed to provide the same standard of living for him or her?

If your spouse or partner works after your death, will child care costs be incurred? How much and for how long?

Is your spouse or partner advanced in age or have distinct medical needs that require additional funding? Do you have children with expensive medical needs? How much money will be needed and for how long?

Do you have children that are likely to head to college in the future? Would you like to provide for their higher education in whole or in part?

Add all of your long term needs and provisions, then calculate your available resources.

How much income will your spouse or partner provide annually?

How much is the social security benefit, if any, you will be leaving?

Are there retirement benefits or pension plans you are leaving?

Are there other investments you will be leaving?

Subtract the long term needs from your resources and consider your investment options.

Term Life or Investment – or Both?
Now that you know how much money your heirs will need and for how long, the next choice to make is whether to leave it to them in your term life policy, make an investment that will grow or leave enough funds and instructions for investment to your family. For these decisions, you are best served by consulting with a financial planner.

How your Life Insurance Premiums are Calculated

2007-11-10T06:27:00.001-08:00

Understanding insurance can be a tricky business. However, it’s important to understand the factors that go into calculating your insurance premiums—this can help you decide what type of policy will best suit your needs, and whether or not you can save money on your policy premiums.

Calculating your insurance premium begins with you—your insurer will estimate the risk associated with your lifestyle, and assign you an insurance status on that basis. For insurance companies, this process is all about assessing the amount of risk associated with your lifestyle—higher-risk lifestyles mean bigger premiums because you’re more likely to end up making a claim.

When it comes to insurance, the risks are mostly concerned with your health—if you’re a smoker, are overweight, or have a pre-existing medical condition such as diabetes, high blood pressure or heart disease, then you can expect to pay higher premiums. Similarly, if you’re employed in a high-risk job or you have a high-risk hobby your premiums will be higher.

Before you buy a standard insurance policy, you’ll be required to undergo a fairly extensive medical examination. This will include checking your weight and blood pressure as well as testing blood and urine for signs of disease as well as for the presence of nicotine, illegal drugs and certain prescription medicines. For this reason, it’s pointless to try and lie on your insurance application—if you’re a smoker and you say you’re not, the medical examination will discover the truth. Note that some insurance policies will cover you without a medical exam. However these typically mean paying much higher premiums, since a company that will insure anybody without first assessing their physical health is taking a substantial risk.

There are, of course, some risk factors that you can’t control. Women typically pay lower premiums because on average women live longer than men. Your age affects how much you pay too—young people pay lower premiums because they’re more likely to continue paying insurance for many years before they die, and the older you are when you first get insurance, the higher your premium will be. Your family medical history may also be a factor—if your family has a history of life-threatening disease such as cancer or heart disease you may have to pay a higher premium.

Based on your lifestyle, sex, age, and the results of your medical examination, you’ll be assigned a status. This simply means that you are placed into a certain category for the purpose of determining what your premiums will be. If you’re young, healthy and don’t have a high-risk occupation, you’ll be in a low risk or “preferred-buyer” category. On the other hand, if you’re a smoker or are overweight you’ll be in a higher-risk category. Each insurance company differs when it comes to determining how you end up in a particular category, and they differ in the premium rates they offer to each category, so when you’re buying insurance it’s important to shop around.

Getting Life Insurance with a History of Medical Problems

2007-11-10T06:24:00.000-08:00

Life insurance is an important policy to have but if you’ve had medical problems or are taking prescription drugs, you might find it much more difficult to find an insurance policy. When you do find one, you may be surprised to find the premium rates are much higher of “healthy” life insurance policies. It doesn’t have to be this way. Getting life insurance with a history of medical problems doesn’t have to cost an arm and a leg, and doesn’t have to be a hassle.

Mental and Emotional Issues
Tell a life insurer that you’ve taken Zoloft, Prozac or another anti-depressant or anti-anxiety medication and you might be short-listed for the “Deny” stamp. To prevent eminent denial, ask your primary care physician to write a note that you have been completely released from care of depression and/or anxiety and that you are functioning well without medication.

If your depression and/or anxiety were brought on by a life event, like a death in the family or post-partum, it is important to note the significance, and briefness, of the illness and medication. It is not uncommon for insurers to ask for a copy of related medical records as proof. Don’t be afraid of this, insurance agents must evaluate the risk of reoccurrence of potentially life-threatening or life-altering illnesses.

Some long-term or more serious mental illnesses, like bipolar disorders or manic depression, won’t necessarily get your application denied, either. Again, documentation is key to being offered reasonable life insurance premium rates. Speak with your doctor and ask for assistance proving the effectiveness of your treatment and a statement that your disorder is well under control.

Major mental health disorders, especially those known to cause delusions and suicidal behaviors, may raise more red flags than minor mental or emotional disorders. It is not uncommon for life insurers to require at least two years after the last suicide attempt or lapse in treatment to approve the application. There may also be numerous clauses regarding suicide in the plan.

Physical Issues
If you’ve had heart or lung problems or have been diagnosed with a disease or disorder that can be terminal or contribute to a shortened life span, you might find it more difficult than “healthy” applicant to find life insurance. A health history, including results of any medical tests from the past decade, should be provided to the insurance company when you apply.

Some insurers will require a physical examination, especially in the case of an abnormal medical history. If you’d like to prove your case even further, you may opt to subject yourself to genetic testing or even gene therapy. Be aware, however, that even after taking all of these steps, the insurer may require a clause negating any coverage if you die from the preexisting or known condition.

Omission
You may be tempted to just leave out the truth of your conditions. Before you do, you should know that doing so could result in your policy being canceled without a refund of premiums paid.

Health Insurance and Life Insurance - An Explanation

2007-11-09T06:42:00.000-08:00

Health insurance is designed to protect someone against having to pay out of pocket for expensive medical bills by offering coverage for different medical procedures and treatments.

Life insurance is totally different and is designed to pay a lump sum of money to whomever the policyholder specified should receive the money in the event of their death.

Life insurance policies are generally sold as either a whole life or term life policy. The simplest form of insurance is term life insurance. This is also the most inexpensive form because it only pays out when the policy holder dies. Term life insurance can be bought for as short as one year to as long as thirty.

For there to be a pay out from a term life insurance the policy holder must die within the term of the policy. Commonly those who opt for term life insurance policy feel that they are in the later years of their life or if they feel like they are at more risk for a short period of time.

A whole life insurance policy is both a term life insurance policy as well as an investment plan. Every premium that is paid into a whole life insurance policy is divided into the two. The portion of the premium that is assigned for investment purposes such stocks and bonds is personally selected by the policy holder.

There are a lot of people who opt for whole life insurance because it offers the protection for their family as well as a savings that is commonly reserved for retirement. Be selective with these policies because they often come with both fees and commissions so they may not always be the wisest form of investment. Be sure to take all costs into consideration before signing anything.

The costs involved in both life insurance and health insurance are heavily based upon the policy holder’s ages and state of health and younger people generally get lower rates. Even though they are based on some of the same factors they are quite different in coverage.

Many people still think you have to choose between life and health other like they are similar to each other. Each different policy has their own specific importance and for some people both are necessary.

Many employers are offering health coverage with the ability to purchase additional life insurance. If this is an option for you then take advantage. Generally with employer’s health and life insurance policies are offered at a group discounted rate.

Choosing between the two comes down to personal needs and financial circumstances. If you are only able to afford one then you should go with health insurance. People get hurt and sick everyday. With the high prices of the hospital and ambulance one visit could leave you hurting financially for years.

You may consider buying a term life insurance if you are facing huge medical bills and have no health insurance. This won’t help you right now but at least it will help your family financially in the event of your death.

Life Insurance For Children - A Basic KnowHow

2007-11-09T06:31:00.000-08:00

The average parents, as well as grandparents, plan extensively for their child/children's futures. This includes purchasing life insurance policies for their dear little loved ones. The following paragraphs will discuss life insurance for children, as well as discuss some factors to take into consideration when making a life insurance policy purchase for a child.

Life insurance policies are designed with one main thing in mind -- to cover the final expenses of the deceased person. A parent never anticipates burying their child, but it does happen. Purchasing a life insurance policy for your child at an early age can help you prepare should something unfortunate occur to cause the child's untimely death. Funeral expenses can range anywhere from around $5,000 up to $20,000. An average family may not have that kind of money to pay. This is where life insurance can really help.

Another reason parents and grandparents purchase life insurance for their children is to help insure their little loved ones will have reasonable premiums once they become a certain age. Not only is it quite normal for premiums to be high on young people, who are just starting out on their own, life insurance also helps protect them against high premiums due to an illness they cannot predict. Some diseases can cause a person to become un-insurable. Purchasing the life insurance policy as a small child can help protect against these factors, as well as set in low premium rates for the insured.

Some people consider life insurance for their child as a great way to put aside money for their future. Some life insurance policies bought for children will allow them access to any cash value of the policy. Parents see this as a way to help their child with:

college tuition
beginning living expenses
help out in a financial jam

The cash value of the life insurance policy will be available to the child, to do with as he sees fit. While more and more people are finding more efficient ways to invest in their child's future, many are still using life insurance policies to do just that.

Before deciding on the best life insurance policy available for your child, it is best to do some research. Depending on the intended use of the life insurance policy, you can research which type of policy will suit your child best. Using the internet is a great way to research and help you to determine which life insurance policy will best suit your needs. By using your search engine of choice, you can actually generate a list of links that will lead to possible websites to help you with your research. You will just need to enter keywords, such as "Life insurance, children" to generate your search. If you still have questions, you can always contact a local life insurance agent, to ask questions. However, never purchase a policy without having first explained the main reasons for your purchase, as well as having all of your questions and concerns addressed and answered.

What is a Life Insurance Policy

2007-11-09T06:29:00.000-08:00

An insurance policy is a contract that is legally binding on all parties to its execution. When it comes to life insurance, it is imperative to completely understand the terms of the contract.

Usually the person who owns the life insurance policy is the person paying the premiums, but not always. The owner, whoever it may be, has the right to exercise control over the policy and the right to direct the life insurance company that sold the policy to take or refrain from action with regard to the policy itself. The owner may reserve the right to exercise their prerogatives with regard to the policy without the consent of beneficiaries.

Beneficiaries of a life insurance policy are usually the people who get the money when the insured person dies. The owner of the policy is the person who names beneficiaries. The owner can legally change beneficiaries as he or she sees fit.

In some cases owners are prevented by the law from changing beneficiaries. For example, some divorcees compel that a former spouse be named as beneficiaries of existing life insurance policies. In such circumstances, the owner’s right to change beneficiaries would be prevented as long as the court remained in effect.

Sometimes the life insurance contract itself can prevent the owner from changing beneficiaries. These are referred to as irrevocable beneficiaries.

The owner of the policy has the ability to make decisions regarding the cash value. Owner have the right to borrow against the cash proceeds, cash in the policy, and decide how assets will be dealt with once they are declared by the company.

The owner of the policy also has the right to choose to exercise policy options.

The payment of benefits upon the death of the insured is referred to as the settlement of the policy. There are many ways that beneficiaries can receive a settlement, the most common one being a one lump sum settlement. The name states it clearly beneficiaries receive a one-time-only payment of all money due under the policy.

Another type is an interest payments only settlement. This type of settlement sets up an account for the beneficiaries out of the death benefit and pays them the interest earned thereon. The principal then acts like a form of savings account available to the beneficiaries. Beneficiaries then reserve the right to withdraw principal as they choose.

Installment payments are another common choice of settlement. The owner of the policy can have the beneficiaries receive their benefits in payments over time. Benefits that remain on the account at the insurance company will earn interest as long as there are proceeds left to be paid out.

Be sure to know all exclusions involved in your insurance policy. All policies are different in the fine print. There are a few exclusions you should look for, a common one being the suicide exclusion. Many people assume suicide invalidates a life insurance policy. This isn’t necessarily true. The suicide exclusion usually states, “If the insured commits suicide within two years from the Date of Issue. We will limit our payment to a refund of premiums paid, less any indebtedness.”