The following simple steps will help you determine how much car insurance you need to carry. And it will also help you get the best coverage at the lowest price. If you are confused about any of the terms we use, be sure to review the glossary in "Little-Known but Important Insurance Issues."
Step 1: Starting Out
When it comes to auto insurance, you want to be adequately covered if you get in an accident but you don't want to pay any more than you have to. So how can you navigate your way through this murky subject?
Keep telling yourself there is money to be saved. How much? Hundreds, even thousands, per year. For example, one of our editors typed all of his insurance information into a comparative insurance service. The quotes (for very basic coverage on two old cars) ranged from $1,006 to $1,807 — a difference of $801 a year. If you're currently dumping thousands into your insurance company's coffers because of a couple of tickets, an accident or a questionable credit rating, shopping your policy against others may be well worth the effort.
Look at it this way — you can convert the money you save into the purchase of something you've desired for a long time. Hold that goal in your mind.
Step 2: How Much Coverage Do You Need?
To find the right auto insurance, start by figuring out the amount of coverage you need. This varies from state to state. So take a moment to find out what coverage is required where you live. Make a list of the different types of coverage and then return for the next step. (You will find a list of each state's requirements and an explanation of the various types of insurance in "How Much Auto Insurance Do You Really Need?" Also, check out "Little-Known but Important Insurance Issues" as it has a glossary of basic insurance terminology.)
Now that you know what is required, you can decide what you need in addition. Some people are quite cautious. They base their lives on worst-case scenarios. Insurance companies love these people. That's because insurance companies know what your chances are of being in an accident, and how likely it is for your car to be damaged or stolen. The information the insurance company has collected over previous decades is crunched into "actuarial tables" that give insurance adjustors a quick look at the probability of just about any occurrence.
So how much insurance should you buy beyond your state's minimum?
Experts recommend that if you have a lot of assets you should get enough liability coverage to protect them. For instance, if you purchase $50,000 of bodily injury liability coverage but have $100,000 in assets, attorneys could go after your treasures in the event of an accident in which you're at fault and the other party's medical bills exceed $50,000.
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.
Another issue to consider is that the limits of any uninsured and/or underinsured motorist coverage that you purchase cannot exceed the limits of your liability coverage. Such coverage, he said, can be valuable, as it will cover lost income if you're out of work for several months after being injured in a major accident.
Your driving habits may also be a consideration. If your past is filled with crumpled fenders, if you have a lead foot or a long commute on a treacherous winding road, then you should get more comprehensive coverage. Keep in mind that you don't have to buy collision and comprehensive coverage. If your vehicle is older, if you have a good driving record and if there is a low likelihood that it would be totaled in an accident, but a high likelihood of it being stolen, you could buy comprehensive but not collision.
Step 3: Review Your Driving Record and Current Insurance Policy
Before you begin shopping for insurance you should check the following: the status of your driving record, your current coverage and the premiums you are paying.
You should know how many tickets you have had recently. But time plays tricks and our memories repress painful incidents. If you can't remember how long that speeding ticket has been on your record, check with your state's DMV. If your record will soon improve, and the points you earned will finally disappear, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record.
Also, you should contact your auto insurance company or pull out a recent bill. Jot down the amount of coverage you have and what you are paying for it. Take note of the yearly and monthly cost of your insurance since many of your quotes will be given both ways. Now you have a figure in mind to try to beat.
Step 4: Solicit Competitive Quotes
Now that you have made several practical and philosophical decisions, it's time to start shopping. Begin by setting aside about an hour for this task. Bring all your records — your current insurance policy, your driver license number and your vehicle registration. Drink plenty of coffee. Have a phone at your elbow. And, of course, power up your computer.
Begin with the online services. If you go to InsWeb.com or other online insurance quote sites, you can type in your information and get a list of comparative quotes. These forms take about 15 minutes to complete. If this bores you, just remind yourself how much you will be saving and that you can use the money to buy something nice for yourself. If the entire shopping process takes you two hours to complete and you save $800, you're effectively earning $400 an hour.
A few things to keep in mind: 1) When you use quote sites, you may not get instant quotes. Some companies may contact you later by e-mail, and some that are not "direct providers" may put you in touch with a local agent, who will then calculate a quote for you. (A "direct provider," like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We'll discuss the pros and cons of each later.) 2) It's not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you'll probably find it faster to pick up the phone, since most insurers in this state currently don't provide online quotes.
You can also try getting quotes from some of the insurance companies listed on the Edmunds.com Web site — Liberty Mutual, Geico or Progressive. These forms will take about 10 minutes each to complete.
Step 5: Record and Compare Quotes
While you're researching companies, make notes in a separate computer file or on a piece of paper divided into categories. This will keep you from duplicating your efforts. When you visit the different online insurance sites, you should take note of several things:
* Annual and monthly rates for the different types of coverage — make sure to keep the coverage limits the same so that you can make "apples-to-apples" comparisons
* An 800 number to call for questions you can't get answered online
* The insurance company's payment policy (When is your payment due? What happens if you're late in making a payment?)
* Discounts offered by the insurance company that pertain to you
* The insurance company's consumer complaint ratio from your state's department of insurance Web site (more on this later)
* The insurance company's A.M. Best and Standard & Poor's ratings (more on this later)
Step 6: Work the Phones
Once you have exhausted your online options, it's time to work the phones. Those companies you haven't been able to get an online quote from should be contacted. At times, doing this process verbally can actually go faster than the online counterpart, providing you have all the information regarding your driver license and vehicle registration close at hand. When you get a quote, be sure to confirm the price. Also, ask them to fax or e-mail the quote to you as a record.
Step 7: Look for Discounts
While talking to the insurance companies' telephone salespeople, make sure you explore all options relating to discounts. Insurance companies give discounts for a good driving record, favorable credit score, safety equipment (for example, antilock brakes), certain occupations or professional affiliations and more. For more guidance in this area, check out "How to Save Money on Auto Insurance."
Step 8: Choosing the Right Insurance Company
You now have most of the information in front of you that you need to make a decision. However, there is something more to consider. You can clearly see which company is least expensive, but when you need them to cover a claim, what kind of job will they do? To put it another way, which is the most reliable insurance company?
Below, we offer a number of issues to guide your thinking and help you reach a decision:
1. Visit your state's department of insurance and check consumer complaint ratios and basic rate comparison surveys.
2. Get in touch with local body shops or dealerships you trust and ask which insurance companies they recommend.
3. Consider contacting an insurance agent for additional information about a particular company.
4. Check out the financial strength ratings for an insurance company by referring to the A.M. Best and Standard & Poor's ratings.
5. Look over J.D. Power and Associates' consumer satisfaction surveys reviewing auto insurance companies.
Step 9: Review the Policy Before You Sign
So, you've done your research, and you've decided on a company. Before you sign, though, read the policy. In addition to verifying that it contains the coverage you want, there are two clauses that you should look for in the contract:
1. Retain your right to sue. "Find out if you are giving up your right to go to court and will be forced into arbitration if there is a disagreement [between you and the insurance company]," one expert advised. "You're much better off if you don't give up this right…. It makes it easier for [insurers] to take advantage of you." If you find a clause to this effect, all isn't necessarily lost. "At least in theory, a contract is a mutual agreement, so you should be able to cross out that line in the policy," he said. If the company won't agree to the policy sans clause, then you should probably take your business elsewhere.
2. Avoid aftermarket parts requirements. If an insurance company has written in the policy that "new factory," "like kind and quality" or "aftermarket parts" may be used for body shop repairs, go to another company, one expert advised. If you own a relatively new car that you plan to keep for a while, you will probably be much happier if you spend a little more time researching companies on the front end rather than try to fight the company when you have a claim.
Step 10: Cancel Your Old Policy
After you lock in the insurance policy you want with the company you select, you have two more things to do. The first is to cancel coverage with your existing insurance company. Second, if your state requires you to carry proof of insurance, make sure you either have it in your wallet or the glove compartment of your car (some experts discourage this, however — if your car is stolen, the thief has everything he needs to prove the vehicle is his).
Now, there's one last thing to do: reward yourself for saving so much money on car insurance.
Checklist
* Determine your state's insurance requirements.
* Consider your own financial situation in relation to the required insurance and consider buying more to protect your assets.
* Review the status of your driving record — do you have any outstanding tickets or points on your driver license?
* Check your current coverage to find out how much in premiums you are paying.
* Get competing quotes from an Internet insurance Web site such as InsWeb.com, YouDecide.com and InsureOne.com.
* Make follow-up phone calls to insurance companies to get additional information about coverage.
* Inquire about discounts you might qualify for such as a multiple policy discount.
* Evaluate the reliability of the insurance company you're considering by visiting your state's insurance Web site.
* If you have chosen a new insurance company, remember to cancel your old policy.
Philip Reed |edmunds
Showing posts with label Insurance. Show all posts
Showing posts with label Insurance. Show all posts
Thursday, August 27, 2009
Tuesday, August 4, 2009
How to Buy the Best Auto Insurance Online
Since the advent of the internet and it's emergence of the 1990's, the idea of moving your service out of the high-street and onto the information superhighway has never been more prominent. Many land-based operations have sought to take their businesses and reputations online as either a replacement or addition to their existing services.
Selling a service online has far reaching benefits for many different businesses. There are no overheads, your products and services can reach a larger target audience and much of the service can be automated to save on unnecessary employee costs. This offers benefits back to the consumer as well. Because profit margins aren't being swallowed up by extortionate rents and other costs, the savings can be passed back to the customer to make a service more competitive amongst its rivals.
One such area is the world of online insurance quotations. The days of visiting several offices over a period of hours have long gone to be replaced by a series of one-stop shops that gather information from everybody and present the prices to the consumer with just the click of a button.
Most insurance companies still have their own individual web sites to deal with existing customers or potential new business familiar with their brand. But for the most part, most online business comes through the increasing number of price comparison web sites where auto insurance makes up a massive percentage of the market. The use of a price comparison web site means the consumer can look at all the prices and services of many different companies without having to spend large amounts of time doing so.
Using a price comparison site is incredibly easy. First, you'll need to locate a site but popular choices in the UK are Confused, Compare the Market and Money Supermarket. All of these sites are free to use but consumers must register first. This helps the site to feed information back to your e-mail address based on your site activity.
To find a quote for auto insurance, simply click on the insurance option and the online form will gather relevant information to ultimately deliver a series of quotations.
You will have to give personal information such as your name, address and age as well as information about the vehicle you want to insure. You will be asked about your driving history, any claims or accidents you may have had and also any driving convictions that are on your drivers license. Once all the relevant information is gathered, the data is assessed and a series of prices for insuring your vehicle will be displayed on the screen.
These prices will vary depending on the type of policy the insurance company is offering plus any additional features that are included in that particular policy such as breakdown recovery or a protected no-claims bonus.
The site will send a reference number of the page you visited to your e-mail address so you can access it again, and this reference number can also be used to save time when actually taking out a policy as the insurance companies have it stored to their database as well.
To learn much more about the different types of insurance rates, visit AllAboutInsuranceRates.com where you'll find this and much more, including auto insurance, life insurance, commercial insurance, and how to get the best car insurance rates.
Leo Fitzpatrick | ezinearticles
Selling a service online has far reaching benefits for many different businesses. There are no overheads, your products and services can reach a larger target audience and much of the service can be automated to save on unnecessary employee costs. This offers benefits back to the consumer as well. Because profit margins aren't being swallowed up by extortionate rents and other costs, the savings can be passed back to the customer to make a service more competitive amongst its rivals.
One such area is the world of online insurance quotations. The days of visiting several offices over a period of hours have long gone to be replaced by a series of one-stop shops that gather information from everybody and present the prices to the consumer with just the click of a button.
Most insurance companies still have their own individual web sites to deal with existing customers or potential new business familiar with their brand. But for the most part, most online business comes through the increasing number of price comparison web sites where auto insurance makes up a massive percentage of the market. The use of a price comparison web site means the consumer can look at all the prices and services of many different companies without having to spend large amounts of time doing so.
Using a price comparison site is incredibly easy. First, you'll need to locate a site but popular choices in the UK are Confused, Compare the Market and Money Supermarket. All of these sites are free to use but consumers must register first. This helps the site to feed information back to your e-mail address based on your site activity.
To find a quote for auto insurance, simply click on the insurance option and the online form will gather relevant information to ultimately deliver a series of quotations.
You will have to give personal information such as your name, address and age as well as information about the vehicle you want to insure. You will be asked about your driving history, any claims or accidents you may have had and also any driving convictions that are on your drivers license. Once all the relevant information is gathered, the data is assessed and a series of prices for insuring your vehicle will be displayed on the screen.
These prices will vary depending on the type of policy the insurance company is offering plus any additional features that are included in that particular policy such as breakdown recovery or a protected no-claims bonus.
The site will send a reference number of the page you visited to your e-mail address so you can access it again, and this reference number can also be used to save time when actually taking out a policy as the insurance companies have it stored to their database as well.
To learn much more about the different types of insurance rates, visit AllAboutInsuranceRates.com where you'll find this and much more, including auto insurance, life insurance, commercial insurance, and how to get the best car insurance rates.
Leo Fitzpatrick | ezinearticles
Saving Money on Auto Insurance
If you have a bike, you required insurance, still if you do not predict needing it. You must have problem coverage any time you drive a vehicle, as well as a motorcycle. If you have finance on the bike, you will perhaps need more than just problem coverage. Though, before you buy a plan, make sure it is the finest and most reasonable option.
egin by discussion to the company that has your auto insurance policy. Talk to other riders and visit motorbike devotee websites to get thoughts about companies that offer insurance coverage.
If you find the quotation marks too high, there are a few things you be able to do to lower your charge. First, stay your driving documentation clean. Still if you have not at all ridden a bike, your automotive driving proof also plays a part. Owners of motorcycles recognize how critical it is to protect themselves, and their motorcycles for possible accidents. Motorcyclists are just like added consumers and love a great deal.
Most companies do not like the term cheap these days, they are fearful that the consumer will think the plan is poor quality, or with treatment insurance that it is not sufficient coverage. Insurance companies have their means of dropping the price of the premium for insurance. In adding up to dropping rates, they offer saving policies, and other choices in coverage that would in shape any driver's particular need.
usefulinsurancetips
Saturday, July 11, 2009
5 Important Things When Buying Life Insurance
Finding the middle ground between being "insurance poor" and unprotected requires assessing real needs and choosing products that are affordable. This article introduces different types of insurance products and the role that they can play in a personal financial plan.
1.Buying Life Insurance
Conventional wisdom says that life insurance is sold, not purchased. In other words, some people are reluctant to discuss the importance of owning life insurance, and others are simply unaware of the need to have life insurance. Although many large companies provide life insurance as part of their benefits package, this coverage may be insufficient.
Who needs life insurance? If there are individuals who depend on you for financial support, or if you work at home providing your family with such services as child care, cooking, and cleaning, you need life insurance. Older couples also may need life insurance to protect a surviving spouse against the possibility of the couple's retirement savings being depleted by unexpected medical expenses. And individuals with substantial assets may need life insurance to help reduce the effects of estate taxes or to transfer wealth to future generations.
2.Types of Insurance
Term insurance is the most basic, and generally least expensive, form of life insurance for people under age 50. A term policy is written for a specific period of time, typically 1 to 10 years, and may be renewable at the end of each term. Also, the premiums increase at the end of each term and can become prohibitively expensive for older individuals. A level term policy locks in the annual premium for periods of up to 30 years.
Declining Balance Term insurance, a variation on this theme, is often used as mortgage insurance since it can be written to match the amortization of your mortgage principal. While the premium stays constant over the term, the face value steadily declines. Once the mortgage is paid off, the insurance is no longer needed and the policy expires. Unlike many other policies, term insurance has no cash value. In this sense, it is "pure" insurance without any investment options. Benefits are paid only if you die during the policy's term. After the term ends, your coverage expires unless you choose to renew the policy. When buying term insurance, you might look for a policy that is renewable up to age 70 and convertible to permanent insurance without a medical exam.
Whole Life combines permanent protection with a savings component. As long as you continue to pay the premiums, you are able to lock in coverage at a level premium rate. Part of that premium accrues as cash value. As the policy gains value, you may be able to borrow up to 90% of your policy's cash value tax-free.
Universal Life is similar to whole life with the added benefit of potentially higher earnings on the savings component. Universal life policies are also highly flexible in regard to premiums and face value. Premiums can be increased, decreased or deferred, and cash values can be withdrawn. You may also have the option to change face values. Universal life policies typically offer a guaranteed return on cash value, usually at least 4%. You'll receive an annual statement that details cash value, total protection, earnings, and fees.
Drawbacks to this type of insurance include higher fees and interest rate sensitivity. Universal policies include up-front fees as well as ongoing administrative fees totaling as high as 5% to 7% of your premiums. You may also find your premiums increasing when interest rates decline.
Variable Life generally offers fixed premiums and control over your policy's cash value. Your cash value is invested in your choice of stock, bond, or money market funding options. Cash values and death benefits can rise and fall based on the performance of your investment choices. Although death benefits usually have a floor, there is no guarantee on cash values. Fees for these policies may be higher than for universal life, and investment options can be volatile. On the plus side, capital gains and other investment earnings accrue tax deferred as long as the funds remain invested in the insurance contract.
Universal Variable Life insurance is the most aggressive type of policy. Like variable life, you control your investment in mutual funds. However, there are no guarantees on universal variable policies beyond the original face value death benefit. These policies are probably best suited to affluent buyers who can afford the risks involved.
Key Terms and Definitions
* Face Value -- The original death benefit amount.
* Convertibility -- Option to convert from one type of policy (term) to another (whole life), usually without a physical examination.
* Cash Value -- The savings portion of a policy that can be borrowed against or cashed in.
* Premiums -- Monthly, quarterly, or yearly payments required to maintain coverage.
* Beneficiary -- The individual(s) or entity (e.g., trust) that is designated as benefit recipient.
* Paid Up -- A policy requiring no further premium payments due to prepayment or earnings.
3.How Much Insurance Do I Need?
A popular approach to buying insurance is based on income replacement. In this approach, a formula of between five and ten times your annual salary is often used to calculate how much coverage you need. Another approach is to purchase insurance based on your individual needs and preferences. The first step is to determine your unique income replacement needs.
Currently, a large portion of your income goes to taxes (insurance benefits are generally income tax free) and to support your own lifestyle. Start off by determining your net earnings after taxes. Then add up all your personal expenses such as food, clothing, magazine subscriptions, club memberships, transportation expenses, etc. The remainder represents annual income that your insurance will need to replace. You'll want a death benefit amount which, when invested, will provide income annually to cover this amount. Then, you should add to that the amounts needed to fund one-time expenses such as college tuition for your children or paying down mortgage or debt.
Income replacement for nonworking spouses is an important and often overlooked insurance need. Coverage should provide for your costs for day care, housekeeping, or nursing care. Add to this any net earnings from part-time employment.
Finally, estimate your own "final expenses" such as estate taxes, uninsured medical costs, and funeral costs.
4.Other Types of Life Insurance
Survivorship life insurance (also referred to as last-to-die or second-to-die) is a unique type of contract that insures the lives of two people. It pays a death benefit upon the death of the second insured. Therefore, it is typically less expensive than two individual policies. Survivorship life is often used for estate planning, where it may be possible to potentially leverage today's dollars -- via insurance premiums -- into a potentially significant death benefit that can be used to fund estate taxes, create wealth for future generations, or benefit a charity. These policies may be available if one insured is medically "uninsurable."
First-to-die life insurance insures the life of at least two people and pays a benefit upon the death of the first insured. This policy is useful for covering a mortgage or other large debt obligation where there is more than one debtor. In addition, it can be an ideal tool for funding a buy-sell agreement within a closely held business.
5.Conclusion
Life insurance is an important component of a sound financial plan. Buying insurance involves asking a variety of personal lifestyle and financial questions. If you are not already working with an insurance professional, you may want to consider the advice of a fee-for-service financial planner who can offer you an objective review of your insurance options. When you decide on what you want, there are many solid insurance companies to choose from. Consult your library or an independent insurance professional for companies with the highest ratings from the four ratings agencies: AM Best, Duff Phelps, Standard & Poor's, and Moody's.
Summary
* Term insurance is basic, inexpensive coverage with premiums that increase over time and have no cash value.
* Consider a term policy that is renewable and convertible to whole life should your needs change.
* Whole life provides level coverage with level premiums. A portion of those premiums goes into tax-deferred savings.
* Check rates on whole life policies and compare them to other investment opportunities.
* Variable life offers control over your investments.
* Premiums on variable policies are fixed, but face value and the value of your investments can fluctuate.
* Universal life offers more investment options, but is highly sensitive to interest rate changes. Universal variable life is highly flexible, but offers no guarantees beyond the original face value.
* Insurance needs are based on income replacement and personal preferences.
Checklist
* Determine exactly how much money your survivors would need from life insurance in order to maintain long-term financial security.
* Decide whether you prefer term life insurance or a policy that also includes a savings feature.
* Shop around for the best deal, and read the policy before making a purchase. Don't assume you'll be getting benefits that aren't clearly spelled out.
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[ via finance.yahoo.com ]
1.Buying Life Insurance
Conventional wisdom says that life insurance is sold, not purchased. In other words, some people are reluctant to discuss the importance of owning life insurance, and others are simply unaware of the need to have life insurance. Although many large companies provide life insurance as part of their benefits package, this coverage may be insufficient.
Who needs life insurance? If there are individuals who depend on you for financial support, or if you work at home providing your family with such services as child care, cooking, and cleaning, you need life insurance. Older couples also may need life insurance to protect a surviving spouse against the possibility of the couple's retirement savings being depleted by unexpected medical expenses. And individuals with substantial assets may need life insurance to help reduce the effects of estate taxes or to transfer wealth to future generations.
2.Types of Insurance
Term insurance is the most basic, and generally least expensive, form of life insurance for people under age 50. A term policy is written for a specific period of time, typically 1 to 10 years, and may be renewable at the end of each term. Also, the premiums increase at the end of each term and can become prohibitively expensive for older individuals. A level term policy locks in the annual premium for periods of up to 30 years.
Declining Balance Term insurance, a variation on this theme, is often used as mortgage insurance since it can be written to match the amortization of your mortgage principal. While the premium stays constant over the term, the face value steadily declines. Once the mortgage is paid off, the insurance is no longer needed and the policy expires. Unlike many other policies, term insurance has no cash value. In this sense, it is "pure" insurance without any investment options. Benefits are paid only if you die during the policy's term. After the term ends, your coverage expires unless you choose to renew the policy. When buying term insurance, you might look for a policy that is renewable up to age 70 and convertible to permanent insurance without a medical exam.
Whole Life combines permanent protection with a savings component. As long as you continue to pay the premiums, you are able to lock in coverage at a level premium rate. Part of that premium accrues as cash value. As the policy gains value, you may be able to borrow up to 90% of your policy's cash value tax-free.
Universal Life is similar to whole life with the added benefit of potentially higher earnings on the savings component. Universal life policies are also highly flexible in regard to premiums and face value. Premiums can be increased, decreased or deferred, and cash values can be withdrawn. You may also have the option to change face values. Universal life policies typically offer a guaranteed return on cash value, usually at least 4%. You'll receive an annual statement that details cash value, total protection, earnings, and fees.
Drawbacks to this type of insurance include higher fees and interest rate sensitivity. Universal policies include up-front fees as well as ongoing administrative fees totaling as high as 5% to 7% of your premiums. You may also find your premiums increasing when interest rates decline.
Variable Life generally offers fixed premiums and control over your policy's cash value. Your cash value is invested in your choice of stock, bond, or money market funding options. Cash values and death benefits can rise and fall based on the performance of your investment choices. Although death benefits usually have a floor, there is no guarantee on cash values. Fees for these policies may be higher than for universal life, and investment options can be volatile. On the plus side, capital gains and other investment earnings accrue tax deferred as long as the funds remain invested in the insurance contract.
Universal Variable Life insurance is the most aggressive type of policy. Like variable life, you control your investment in mutual funds. However, there are no guarantees on universal variable policies beyond the original face value death benefit. These policies are probably best suited to affluent buyers who can afford the risks involved.
Key Terms and Definitions
* Face Value -- The original death benefit amount.
* Convertibility -- Option to convert from one type of policy (term) to another (whole life), usually without a physical examination.
* Cash Value -- The savings portion of a policy that can be borrowed against or cashed in.
* Premiums -- Monthly, quarterly, or yearly payments required to maintain coverage.
* Beneficiary -- The individual(s) or entity (e.g., trust) that is designated as benefit recipient.
* Paid Up -- A policy requiring no further premium payments due to prepayment or earnings.
3.How Much Insurance Do I Need?
A popular approach to buying insurance is based on income replacement. In this approach, a formula of between five and ten times your annual salary is often used to calculate how much coverage you need. Another approach is to purchase insurance based on your individual needs and preferences. The first step is to determine your unique income replacement needs.
Currently, a large portion of your income goes to taxes (insurance benefits are generally income tax free) and to support your own lifestyle. Start off by determining your net earnings after taxes. Then add up all your personal expenses such as food, clothing, magazine subscriptions, club memberships, transportation expenses, etc. The remainder represents annual income that your insurance will need to replace. You'll want a death benefit amount which, when invested, will provide income annually to cover this amount. Then, you should add to that the amounts needed to fund one-time expenses such as college tuition for your children or paying down mortgage or debt.
Income replacement for nonworking spouses is an important and often overlooked insurance need. Coverage should provide for your costs for day care, housekeeping, or nursing care. Add to this any net earnings from part-time employment.
Finally, estimate your own "final expenses" such as estate taxes, uninsured medical costs, and funeral costs.
4.Other Types of Life Insurance
Survivorship life insurance (also referred to as last-to-die or second-to-die) is a unique type of contract that insures the lives of two people. It pays a death benefit upon the death of the second insured. Therefore, it is typically less expensive than two individual policies. Survivorship life is often used for estate planning, where it may be possible to potentially leverage today's dollars -- via insurance premiums -- into a potentially significant death benefit that can be used to fund estate taxes, create wealth for future generations, or benefit a charity. These policies may be available if one insured is medically "uninsurable."
First-to-die life insurance insures the life of at least two people and pays a benefit upon the death of the first insured. This policy is useful for covering a mortgage or other large debt obligation where there is more than one debtor. In addition, it can be an ideal tool for funding a buy-sell agreement within a closely held business.
5.Conclusion
Life insurance is an important component of a sound financial plan. Buying insurance involves asking a variety of personal lifestyle and financial questions. If you are not already working with an insurance professional, you may want to consider the advice of a fee-for-service financial planner who can offer you an objective review of your insurance options. When you decide on what you want, there are many solid insurance companies to choose from. Consult your library or an independent insurance professional for companies with the highest ratings from the four ratings agencies: AM Best, Duff Phelps, Standard & Poor's, and Moody's.
Summary
* Term insurance is basic, inexpensive coverage with premiums that increase over time and have no cash value.
* Consider a term policy that is renewable and convertible to whole life should your needs change.
* Whole life provides level coverage with level premiums. A portion of those premiums goes into tax-deferred savings.
* Check rates on whole life policies and compare them to other investment opportunities.
* Variable life offers control over your investments.
* Premiums on variable policies are fixed, but face value and the value of your investments can fluctuate.
* Universal life offers more investment options, but is highly sensitive to interest rate changes. Universal variable life is highly flexible, but offers no guarantees beyond the original face value.
* Insurance needs are based on income replacement and personal preferences.
Checklist
* Determine exactly how much money your survivors would need from life insurance in order to maintain long-term financial security.
* Decide whether you prefer term life insurance or a policy that also includes a savings feature.
* Shop around for the best deal, and read the policy before making a purchase. Don't assume you'll be getting benefits that aren't clearly spelled out.
Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story
[ via finance.yahoo.com ]
Monday, May 25, 2009
How To Resolve Your Health Insurance Claims Dispute
Are you having trouble getting your insurance company to pay for your healthcare? Resolving health insurance claims disputes is a long, difficult process, but given the rising costs of medical care, it's definitely worth the effort. Here are some steps you can follow to maximize your chance of success.
Here's How:
1.Gather all of your paperwork.
You will need the following:
o Policy documents describing what is covered and what is not
o Correspondence from the insurance company denying your claim
o Doctor's and hospital bills
2.Read your policy documents carefully.
You may be surprised to find that the medical services you received are explicitly excluded in your policy. However, in many cases, the healthcare procedure in dispute is either not specifically mentioned in the policy documents, or there is some grey area open to interpretation. Make a note of the sections of the policy document that specifically pertain to your situation.
3.Call your insurance company.
Explain to the claims adjustor why you believe your claim was denied in error. Make sure you get the name of the person you speak with, and do not hang up without getting a date by which your claim will be resolved. Call them back on that date if your claim has not been resolved.
4.Document all of your phone calls with the insurance company.
5.Don't give up.
If your claim has not been resolved through your efforts with the insurance company, contact your state's department of insurance to file an appeal. Each state has slightly different procedures for appealing insurance claims denials - check here for the procedure in your state.
By Kelly Montgomery
source : healthinsurance
Here's How:
1.Gather all of your paperwork.
You will need the following:
o Policy documents describing what is covered and what is not
o Correspondence from the insurance company denying your claim
o Doctor's and hospital bills
2.Read your policy documents carefully.
You may be surprised to find that the medical services you received are explicitly excluded in your policy. However, in many cases, the healthcare procedure in dispute is either not specifically mentioned in the policy documents, or there is some grey area open to interpretation. Make a note of the sections of the policy document that specifically pertain to your situation.
3.Call your insurance company.
Explain to the claims adjustor why you believe your claim was denied in error. Make sure you get the name of the person you speak with, and do not hang up without getting a date by which your claim will be resolved. Call them back on that date if your claim has not been resolved.
4.Document all of your phone calls with the insurance company.
5.Don't give up.
If your claim has not been resolved through your efforts with the insurance company, contact your state's department of insurance to file an appeal. Each state has slightly different procedures for appealing insurance claims denials - check here for the procedure in your state.
By Kelly Montgomery
source : healthinsurance
