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Insurance

Jessica Stice

2013-04-29 16:17:37

Q-How often should I review my insurance coverage?

A-Take a moment and think about last year. What changed in your life? I suggest meeting with your agent for a personal insurance review at least every year or two because our lives and needs change. It's important to adjust your coverage to meet those changes. Whether it is for your home, life, auto or any other policy, talk to your agent about the changes you've had. They can also see if you qualify for any new discounts. Check the list below and see if any of these examples describe you. You may need an insurance review if you are: Getting married or divorced-Whether you're getting married, remarried, or divorced, chances are you'll need to adjust your policies. Divorces typically result in property changing hands and individuals moving off and on things like auto policies. Review all of this with your agent and make sure the right people are on the policies. Getting married is not only a good time to purchase life insurance; it is also a great time to readjust any current policies by increasing the amount or simply changing your beneficiary. You may also want to add them as a listed driver to any current auto insurance policies. Building or buying a new house-You will need a new policy for your new home, and you may also want to increase your life insurance coverage. This can help pay your mortgage payments in case something happens to any of the owners of the home. Having or adopting a child-It's a good idea to increase your life insurance coverage any time a child comes into your life. If something happens to you, you're providing income to help provide for their future needs. Opening a small business -If you open a small business in your house or in an owned or leased building, you may need to add a business insurance policy to your insurance portfolio. Remodeling your home-If you have recently remodeled, discuss increasing your homeowners policy to make sure your work and investment is covered. Accumulating new possessions-If you have received or purchased new items such as jewelry or art, you may want to modify your homeowners or add a personal articles policy also known as an inland marine policy. Moving into an apartment or condo-Renters insurance is a great idea if you live in an apartment or condo. While the landlord may have insurance, it will not cover your belongings. Retiring-Selling your home and moving to a condo? Check into condo coverage. Planning to tour in a new RV? Ask about RV insurance. Your life insurance needs may have changed, so let us help you check those options as well.

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Insurance

Jessica Stice

2013-03-25 15:59:30

Q-I have a lot of jewelry. Will this be covered under my homeowner’s insurance?

A-This can be a tricky question, and the answer may differ from company to company. Generally, however, unique or highly valuable items may be subject to different coverage limits under your basic property insurance policy. In other words, you may need another type of policy to cover these items because of certain limits on your property insurance. For example, if your homeowner's policy has a $2500 limit on jewelry and you own a $5000 ring, there would not be enough coverage and you may need to look into other options. There is a policy designed for this situation. A personal articles insurance policy (also known as inland marine insurance) can help protect you from the expense of repairing or replacing your rare or expensive personal possessions where your homeowners policy has limits. First of all, you may be wondering why this type of policy would be called inland marine insurance. Historically, ocean marine insurance provided protection for cargo on large ocean liners. Inland marine insurance developed when shippers began to be responsible for cargo being transported from ports to their final destinations. Today, the term inland marine is generally applied to any property that is transportable. When an inland marine policy is written, sometimes the insurance company will require an appraisal or proof of purchase for your item. Personal articles insurance can help cover the following items: * Jewelry * Guns * Silverware * Musical instruments * Furs * Photography equipment * Works of art * Bicycles * Golf equipment * Livestock * And more It's important to make sure you know your policy limits, so talk with your agent to get more familiar with any gaps you may have on your policy so they may be replaced with an inland marine policy.

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Insurance

Jessica Stice

2013-03-01 13:42:32

Q-I rent my house. Will my landlord's insurance cover my belongings?

A-When you rent an apartment, house, or other dwelling, a landlord's insurance policy normally won't protect your clothing, electronics, furniture, or other personal belongings. The owner of the home or apartment is generally responsible for coverage for the structure of the home, and that policy will not extend to cover your contents inside. The specific policy designed for renters is typically called an HO-4. This policy will help you pay for damage to your personal property from fire or smoke damage, lightning, wind, hail, vandalism, and more. When it comes to deciding how much coverage is enough, it's important to sit down with your insurance agent and talk about what you own. If you prefer to do it online, you can even inventory your belongings and estimate their value with an online personal property calculator. Replacing your personal belongings is probably much higher than you realize, so you may be surprised. In addition to covering your belongings, a renter’s insurance policy can also help to cover liability losses that could put your assets and future income at risk. Liability coverage will help you pay for bodily injury and property damage that you are legally liable to pay. What if: -A small kitchen fire gets out of control and all of your possessions become a pile of ash? If the fire is your fault, you could be liable for damages to your neighbors' property too. -Your otherwise friendly dog decides to nip the two-year-old little girl in the apartment next to yours. -Your friend's buddy trips over your bike and breaks his arm. In summary, a renter’s insurance policy can help cover your liability and part or all of your contents if a covered loss were to cause damage. Renters’ insurance can be as little as $10 to $15 per month. If you have any questions, or want help calculating the value of your belongings give our office a call.

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Insurance

Lori Johnson

2012-11-07 11:20:06

Q- It seems the amount of deer moving and crossing roads is at its peak this time of year. How many deer collisions happen on average and do you have any tips on avoiding them?

A- The most dangerous animal in North America isn't the bear or the shark, but may well be the deer, and the deadliest time of year is fall. On average, more collisions between cars and deer occur in October, November, and December. These are the months when deer are both migrating and mating, making them more active and more likely to end up in the path of an oncoming car. Additionally, deer populations are getting larger, while at the same time, their habitats are being displaced by urban sprawl. According to the National Highway Traffic Safety Administration, there are about 1 million car accidents with deer each year that kill 200 Americans, cause more than 10,000 personal injuries, and result in $1 billion in vehicle damage. By comparison, sharks have killed 10 people in the USA in the past 10 years, according to the International Shark Attack File. The number of deer/car collisions has actually decreased the past three years, likely because of the economy and people driving fewer miles. However, over the five-year period, 1,017 people died in vehicle-animal collisions, according to the Insurance Institute for Highway Safety. To put the numbers into perspective, during the time it takes you to read this paragraph, a collision between a deer and vehicle will likely have taken place. (They are most likely during the last three months of the year and in the early evening.) Avoid Deer Collisions while Driving: If you are driving through a high-risk state, there are steps you can take to minimize your risk: *Be aware of posted deer crossing signs. These are placed in active deer crossing areas. *Remember that deer are most active between 6pm and 9pm. *Use high beam headlamps as much as possible at night to illuminate the areas from which deer will enter roadways. *Be aware that deer generally travel in herds, if you see one, there is strong possibility others are nearby. *Do not rely on car-mounted deer whistles. *If a deer collision seems inevitable, trying to swerve out of the way could make you lose control of your vehicle or move into the path of an oncoming car. By evaluating the overall number of reported collisions in each state and weighing them by the total number of licensed drivers, a few states clearly led the list of deer-vehicle collisions. For the fourth year in a row, West Virginia tops the list of states where a driver is most likely to collide with a deer. The odds: 1 in 42. In Kansas, the odds: 1 in 172, Missouri 1:133 and Oklahoma 1:245. The state in which deer-vehicle collisions are least likely is Hawaii, the odds of deer strike being 1 in 13,011. So before heading out for a weekend trip on that beautiful, crisp autumn day, be aware of the deer!

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Insurance

Judd Schossow

2012-08-02 10:33:22

Q- Due to inflation, how do I need to adjust my insurance or financial planning?

A- The 21st century brought more than a new millennium to experience. Over the last two decades, inflation has continually outpaced wages and income and this trend shows no sign of slowing. This inverse relationship between wages and costs mean that you need more dollars each year to purchase the same items as you did the previous year. Financial and estate plans are not impervious to the pressures of inflation. Here are three aspects of your financial plan that you should consider adjusting: 1. Spousal income replacement With the advent of telecommuting, dual income households seem to be taking over the landscape. For some, higher levels of household income have permitted better lifestyles. For others, two incomes barely get the bills paid. If your budget and lifestyle are dependent on two incomes, you should review your life insurance coverage and make sure that both wage earners are insured. You, your spouse, and your family may be in financial jeopardy if your insurance plan has not been recently updated. 2. Purchasing a new home and taking out a mortgage Today, many homes are purchased with the help of a substantial mortgage. If you or your spouse suffered an untimely death, would your current life insurance be enough to pay off the balance of your mortgage? It’s important to make sure your life insurance policy’s death benefit provides the necessary funds to accomplish your goals—protecting your family’s lifestyle. 3. College education costs If you have college education plans for your children, you may be concerned about the rising costs of higher education. In 1977, the annual cost at Harvard University was $7,060. Thirty years later, you would have to save $32,556-an increase of more than 350 percent (Figures from Forbes, Nov. 1, 1977, compared to the Harvard Admissions Office, 2008-2009 academic year). Putting money aside for your child’s education requires a long-term financial commitment and a disciplined approach to saving. However, it also requires a contingency plan in the event of an untimely death. For this reason, you may want to include all or part of the projected education costs in your insurance plan. Life insurance planning doesn’t end with these three scenarios. In fact, you may have additional goals you want to hedge against in the event you or your spouse suffers an untimely death. Adjust your life insurance coverage for inflation to ensure your wishes will be fulfilled in the future.

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Insurance

Lori Johnson

2012-08-01 15:57:30

Q- When should you renew your insurance policies?

A- Most people know the importance of insurance protection. You don’t want to be without it when problems strike. What many don’t realize, however, is that protecting themselves with insurance isn’t a once and done event. You don’t wear the same pants you did when you were five years old because, besides no longer being in style, they simply don’t fit. A homeowner’s policy purchased when you house was furnished with bean bag chairs and bar stools is no longer going to “fit” once you’re lounging on Italian leather sofas while watching television on your wall mounted plasma screen. Life is constantly changing, and your insurance policies should reflect that. Does this mean that I have to immediately call my insurance agent every time I buy a new piece of furniture or my cousin Gwen moves in for 6 months? Not necessarily. While more significant changes should be reported immediately (such as getting married or getting a new car), items such as improving your home entertainment system or upgrading your car’s tape deck to an mp3 player, can be reported at your annual insurance review. Agents reach out to their clients because they want to make sure to check up on these changes and help avoid any gaps in their clients insurance, however it’s equally important for a policyholder to reach out to their agent to make sure they are covered. Schedule your own annual review, and call your agent as you get your annual renewal. If one agent handles all of your coverage, this task is relatively easy. Jot down any changes that have occurred over the last year, even if you’re not sure whether they are significant enough to mention. Doing so will ensure that all of your insurance policies are best suited to your current life situation. Some examples of changes that should be mentioned to your agent immediately are listed below. Ask yourself these questions every year: ? Have I gotten married or divorced? ? Have I had a new baby, or adopted a child? ? Is anyone in my house a new driver? ? Is anyone living with me who wasn’t before? Will they ever be driving any of my vehicles? ? Do I have a personal umbrella policy? Do I need one? ? Have I purchased any new properties? ? Have I started a home business? ? Have I purchased new furniture, electronics, or fine jewelry? These are just a few examples of life changes that are often picked up during an annual review. However, they are far from the only changes that can affect your coverage, so be thorough when documenting and reporting items to your agent. Some of the above examples might seem pretty obvious. Most people know that if their teenager gets his license, they need to notify their auto insurance carrier. However, not everything is as obvious. For example, take a couple who just had their first child. They decide that it’s time to purchase life insurance to provide for the child if something ever happens to them. This couple is doing the responsible thing. They understand the importance of buying life insurance when starting a family. That significant step in planning for the future is taught to the general public quite effectively, in the form of commercials, television shows, radio spots, and the like. But what about five years later when little Ellie is born? Having child number 2 doesn’t necessarily flip on the proverbial switch like the first time, shining that bright light on the right decision. Television shows don’t show “made for TV.” couples updating their life insurance policies for child number 2. Advertisements don’t highlight the importance of adding new children as beneficiaries. All anyone ever hears about through popular culture is the importance of getting life insurance if you don’t have it, especially if you are starting a family. If the Henderson family gets a life insurance policy when their first little one is born, and 4 children later, something happens to mom and dad, only #1 gets the money. Unfortunately, #1 also happens to be 18 by that time, and decides to run to Vegas with his new fortune. This particular tale might seem slightly “tall” but beneficiary issues create havoc, legal battles, and misdirected money on a daily basis. Sometimes it’s to the tune of thousands, other times it’s to the tune of millions. Protect yourself, your family, and your personal belongings by making sure that each of your insurance policies gets an annual check-up. You’ll rest much better once you do.

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Insurance

Judd Schossow

2012-06-01 08:50:02

Q: What are some things I should consider before buying life insurance coverage through my employer? Is employer coverage enough?

A: As you reach different stages in life, your life insurance needs change. Getting married and having children are just two examples of the kind of life-altering events that necessitate increasing your coverage. One place people often turn to when they need more life insurance is their employer. You may already be covered under an employer-paid life insurance policy. Many companies offer a minimal amount of life insurance coverage as part of their general benefits package. Don’t be lulled into believing that this is enough coverage. Typically these policies only provide coverage that is one or two times your base salary. According to The Life and Health Insurance Foundation for Education (LIFE), “most people need somewhere in the range of five to fifteen times their net income and sometimes even more.” If your employer offers a buy-up life insurance option, you could always obtain additional coverage to supplement the employer-paid policy. There are two definite advantages to this approach: • There usually are minimal health qualifications to be approved for the group coverage • The premiums are automatically deducted from your wages, which decreases the chance of missing a payment However, there are some other factors to consider before you buy your coverage through your employer: • The type of insurance offered under the plan – Most employers provide term insurance, which pays a death benefit only if you die during the life or “term” of the policy. Unlike permanent insurance, the premiums you pay for term insurance don’t earn interest, and the policy doesn’t build cash value. • The method used to calculate premiums – You need to determine whether your employer’s plan charges all employees the same premium, or whether premiums are calculated by age group, a practice commonly referred to as “age-grading.” • The status of your health – Employees with health problems who obtain coverage privately will likely pay more than they would if they purchased coverage under their group plan. However, healthy employees are likely better off finding insurance outside their group plan. • The inability to take your life insurance with you when you change jobs – When you leave your employer, you leave your group coverage behind too. This is a serious consideration if you’re older because there is the possibility that your health could deteriorate in the future, which would make it more difficult and unaffordable to purchase coverage on your own. This lack of portability makes it a good idea to own some insurance outside your employer’s plan.

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Insurance

Lori Johnson

2012-04-20 08:28:39

Q: What can I do to ensure my teen’s safety while driving?

A: Besides graduation day, the day a teenager gets their driver’s license is one of the most important days of their lives. It’s something they’ve looked forward to for years, that feeling of freedom once they hit the open road. Unfortunately, parents don’t always share the same vision. As your child begins to get behind the wheel, there are some things a parent can do to help maintain your child’s safety, and your sanity. Kids learn from the examples they are given, which means that children can pick up their parents’ bad driving habits. On the other hand, if you come a complete stop and stop signs and consistently wear your seat belt, there’s a good chance your child will follow suit. Safe and responsible driving is just another thing parents pass down to their children. Department of Education statistics show that students perform better in school when their parents are involved in their education. This holds true for driver’s education, as well. Parents who understand the process of getting your license and keep updated on what their child is learning in driver’s ed can offer more relevant advice and create opportunities for their child to practice necessary skills. Teenagers also need a framework for understanding what consequences exist when drivers are not safe and responsible. Parents must help their teen driver understand that getting tickets and into accidents will raise their insurance premium and put their driving privileges into jeopardy. Furthermore, unsafe driving can lead to life-changing injuries to themselves and others. Most insurance providers offer some sort of “good student” discount, which is a good way to tie in school performance with driving. Sometimes, all the preparation in the world cannot prevent an auto accident from happening. This is why parents must also advise their teen on what to do if they were to get into an accident. Tell your child to immediately call the police and then call home after an accident happens. Also, have your child keep a pen and paper in their glove box alongside other important documents, to take down the names and addresses of those involved and witnesses to the accident. Finally, be sure to remind them that they should never admit fault to the accident with anyone other than the police and their insurance company. If the threat of rising insurance costs isn’t enough to encourage your teen to drive safely, then maybe some sobering statistics will show them the way. An accident study from the National Safety Council has determined that nearly 50% of the traffic deaths in the U.S. are connected to drinking alcohol, with 16 to 24 year olds making up half of that population. Even more shocking, injuries from traffic accidents is the leading killer of young people aged 6 to 27. On the brighter side, wearing your seatbelt and driving a car equipped with air bags nearly doubles your chances of surviving a serious accident. Remember that driver’s education doesn’t stop once your child gets their full permit, it’s an ongoing process. The more knowledge you share about defensive driving and the dangers of getting behind the wheel after drinking, the more they will practice responsible driving in their own lives. Believe it or not, your teen will take your words to heart, which can help you worry less after you fork over the keys.

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Insurance

Judd Schossow

2012-03-26 08:29:47

Q: There are so many options and things to consider when deciding on life insurance policies. Can this be broken down in some way to help me better understand the policy that’s best for me and my family?

A: Last month, we discussed 2 of 4 major concepts to consider when purchasing life insurance (“Need” and “Amount”). Let us continue with Concepts 3 & 4… Concept 3: Type Different benefits within your policy have different options and you can even enjoy some of them while you are living. •Do you want cash values to build within your policy? If you view your insurance policy as equal parts savings and a hedge against risk, then you might want to consider a permanent policy like a whole life or universal policy. These policies all offer cash value growth and permanent coverage (for as long as the premiums are paid) and access to the cash values through loans or policy surrenders. •How risk tolerant are you? If you have higher risk tolerance, variable or equity indexed policies may be the right choice for you. If you have a low risk tolerance, the fixed whole life and universal policies might be a better fit. •Do you want the least expensive coverage and, if so, are you comfortable with coverage for only a limited number of years? If one of your priorities is to buy insurance coverage that is inexpensive, then a term policy may be right for you-as long as you are comfortable with the lack of cash value growth and the fixed term of coverage. Concept 4: Purchase The last thing you need to consider is where to buy your life insurance policy. • Does your employer offer group coverage? Group coverage can be easy and affordable, but it does not offer permanent protection nor cash value growth, and is rarely portable if you lose your job or take a new position. • Should you buy direct from an insurance company? Without a licensed agent to help you compare rates, underwriting policies and policy benefits, you may be jumping into a policy that doesn’t meet your needs. Buying life insurance online is a fast way to get locked into an unsuitable policy. Remember, life insurance is a very important decision…it is critical to map out and thoroughly discuss the policy that is best for yourself, your lifestyle, and your family.

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Insurance

Judd Schossow

2012-02-28 12:25:44

Q: There are so many options and things to consider when deciding on life insurance policies. Can this be broken down in some way to help me better understand the policy that’s best for me and my family?

A: Financial topics of any nature can be a minefield of emotion, confusion, frustration, and denial. Even an easy decision like whether or not to buy life insurance can turn into a volatile topic because it forces people to contemplate their own demise while trying to assess their family’s need. It’s easy to feel overwhelmed by facts and figures. To make the best decisions for you and your family and to avoid morbid distractions, try to stick to a few major life insurance concepts. Concept 1: Need Within this concept, you explore whether or not you actually need life insurance. •If you die, will your family need to replace your income? A life insurance policy provides your family with an easy way to replace your income and maintain their way of life. •Would you like to set up a college tuition fund for your children through a life insurance policy? Life insurance can satisfy your desire to give your children an edge in life with their education. •Could your survivors use the life insurance money to pay taxes or debts? Life insurance can help your survivors pay off their inheritance taxes, mortgage, credit card and other debts. Concept 2: Amount When determining how much life insurance you need, decide how much death benefit to buy. •How much is your annual salary, and how many years of that salary would you like to replace? Your spouse will need time to deal with your loss. The larger your death benefit, the more time he or she will have to grieve. •What are the anticipated tuition costs for your children? By working with historical tuition costs and increases, you can estimate the amount of money your children will need for college when they turn 18. •What is your current debt? Unless you buy a larger home or a more expensive car, your debt will decrease through the years. To ensure you estimate enough of a death benefit of a death benefit to pay off debt, base your number on your current debt. Next month we’ll discuss the benefits and things to consider on Concept 3 “Type” and Concept 4 “Purchase”…

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Insurance

Lori Johnson

2012-01-30 12:58:55

Q: Are there any tax advantages to having permanent life insurance policy?

A: Most of us are aware of the benefits of obtaining a life insurance policy-the death benefit. The death benefit protects your family from the financial hardship that may arise after your death. But there is a second benefit of life insurance. Permanent or cash value life insurance can offer unique tax advantages that cannot be found through other options. Permanent life insurance, including whole life and universal life, provides long-term life insurance for the policyholder. Most policies feature a level premium over the life of the policy. You will always know your premium amount so you will not be surprised by increases, as you might be if you renewed a term policy. Because of the permanent nature of this type of insurance, you also have the added benefit of accumulated cash value. That cash value can be used by the policyholder through loans and other withdrawal options, and can be an important addition to your retirement planning. There are several unique tax advantages of permanent life insurance that are not found with other financial tools. • Cash value accumulates free of taxation. You will not be required to pay income tax on interest or other earnings that are credited to cash value. • Borrowing the cash value may be done without having to pay income tax. Loans are generally treated as debts and are not subject to income tax. In addition, these loans may not need to be repaid. If you build up a large amount of cash value and maintain a minimum death benefit to cash value ratio, you can borrow against the cash value for systematic payments that can supplement your retirement income. Be aware, however, that the cash value may be subject to income taxes when there is a withdrawal from or surrender of the policy, or if the cash value to death benefit ratio is not maintained. Also, loans accrue and they can reduce the overall value of the policy. And lastly, if the policy is a modified endowment contract, the loan may be taxable upon issuance. • Your beneficiaries receive the death benefit free of income taxation. This tax advantage is true of both term and permanent policies. • By arranging the beneficiary designations in accordance with current laws, you can avoid potential estate taxes and probate costs. By placing ownership and naming beneficiaries outside your estate, you may be able to avoid the proceeds of the policy going into your estate and thus being subject to estate taxes. Keep in mind, however, that to avoid estate inclusion for existing policies, you must transfer the policy at least three years before your death. Permanent life insurance policies offer unique tax advantages, as well as the traditional death benefit enjoyed by all life insurance policies. Consult your insurance agent and attorney to discuss the advantages of this financial product so that you and your loved ones may reap all the benefits it has to offer.

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Insurance

Lori Johnson

2011-12-27 11:46:47

Q: Many people, when thinking of life insurance, imagine that it is something for the young only. They believe that life insurance is a tool best used by newlyweds with mortgages, parents of young children and spouses who are both employed. What does that mean for seniors? Does that mean there is no need for life insurance for those who are retired?

A: The answer to that question depends on your family’s needs as well as your financial picture upon retirement. Your Family’s Needs One of the biggest concerns among retired individuals is whether or not they have enough money set aside to last their entire lives. Since life expectancies are predictable, but an actual lifespan is not, retirees are left with an uncertain bet that the amount of money they saved for retirement is enough. Sometimes, this bet is funded with a straight life annuity or pension that pays out like a straight life annuity. Both of these instruments could impact the surviving spouse’s income if the annuitant or pensioner dies and there is no death benefit. When a surviving spouse stands to lose a portion of his or her income after that death of their spouse, then a life insurance policy can provide a much needed source of continuing income to replace the lost amount. Another consideration is whether or not you would like to use death benefit proceeds to create a trust for your grandchildren. Leaving a trust account for their college or adult years can help take some of the financial burden from your children and your grandchildren as it may allow them to avoid student loans and other debt. Funding the trust with life insurance proceeds takes the funding burden off of your spouse and creates a fixed amount for the trust. Financial Planning Life insurance policies are great tools for making charitable donations upon death. If your spouse is not in need of the death benefit proceeds you can set them up either in a charitable trust or by simply naming a charity as your beneficiary. This allows your surviving spouse to see all the good your donation will do, without it impacting his or her financial picture. Depending on how well-planned your retirement has been you may accumulate some debt in your later years that can be paid off with your life insurance policy death benefit. Debt as simple as a car loan, small home equity loan or even a loan for new furniture can cause undue stress to your surviving spouse and a life insurance death benefit is an easy solution to get rid of it. Another financial planning consideration is estate taxes. While life insurance death benefits are generally not taxable, the rest of your estate may be. Instead of forcing your surviving spouse to liquidate assets or take funds from a retirement account to pay estate taxes or income taxes for the year you pass away, why not buy a life insurance policy to fulfill that need? Conclusion There are some many different ways that a life insurance policy can improve your surviving spouse and family’s lives, no matter what your age is. That it is an expense everyone should consider. Without knowing what needs the future will bring, and what health complications could impact your ability to get insurance, the time to buy is now.

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Insurance

Judd Schossow

2011-11-21 12:42:18

Q: I am moving out for the first time and want to make sure to cover all the bases financially. It is my goal not to get in to the kind of financial trouble that so many have unfortunately found themselves in over the last few years. I want to stay away from credit cards, and have a limited budget. What things should I consider as I prioritize my spending?

A: In the September ‘11 issue, we covered some of the important aspects of managing a budget and buying a car. In continuing our discussion, this issue we will discuss protecting your home and belongings. Protecting Possessions First, take a quick mental inventory of the things you own. If it all had to be replaced at once, could you afford it? Don’t forget things like your computer, iPod, cell phone, TV and all the items in your drawers and closets that you currently depend on — chances are, the cost would be much more than you imagined. Whether you need homeowners insurance or renters insurance, it’s less expensive to protect your belongings than replacing them in case of a tornado, fire or theft. To help keep track of your personal property and its value, use our handy home inventory kit. Life Insurance for a Financial Foundation Buying life insurance when you’re younger and healthier is a smart choice. Not only is it more affordable, but it can provide benefits to you while you are living — like cash value for emergencies — and death benefits for your family to help cover the cost of student loans or other debts. Owning life insurance can help you build a secure financial foundation, while protecting those you care about from the burden of your financial obligations.

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Insurance

John Eck

2011-10-24 13:57:56

Q: I read your article last month. It was good but I would like to have more of the basics of annuities. Can you provide these?

A: I would be happy to do so. Over the years, these are some of the most frequent questions I have received. Q: What is an annuity? A: The word “annuity” means “an amount payable annually.” An annuity refers to a contract offered by insurance companies that allows an annuity buyer to save funds for retirement on a tax-favored basis and then choose to receive a guaranteed income, payable for life or for a certain period, such as five or 10 years. Q: Who offers annuities? A: Annuities are offered by insurance companies. Insurance companies are licensed to underwrite life insurance and annuities in the state in which an annuity buyer resides. Each insurance company is a qualified legal reserve life insurance company who is subject to financial requirements specifying the minimum reserves the company must maintain on its policies. Q: Who sells the annuities? A: Annuities are sold by licensed agents. Licensed life insurance agents, most financial planners and stock brokers can sell annuities. Q: How does the law protect annuity investments? A: In order to safeguard the funds of annuity contract holders or policy owners, state laws demand insurance companies meet strict financial requirements. According to these legal financial requirements, the insurance companies are legally bound to set up a reserve, which must be equal to the withdrawal or surrender value of their total block of annuity policies or contracts at all times i.e. insurance companies providing annuities must set aside funds equal to the surrender value of every annuity contract in force. Additionally, the state laws also require certain levels of capital and surplus to further protect the annuity holders or policy owners. Q: How many types of annuities are there? A: There are two classes of annuities: immediate annuities and deferred annuities. These two classes have various sub classes including fixed deferred, variable and equity-indexed annuities. Q: What is an immediate annuity? A: The annuity where the benefit payments begin very quickly, normally within one year of the time it is purchased is termed as an immediate annuity. An immediate annuity is commonly purchased with a single premium. Q: What is deferred annuity? A: Deferred annuity is where a policy holder pays a premium to the annuity providing the insurance company issues a contract promising to pay interest, or gains made on the deposit while deferring the income and the taxes until you actually withdraw the money or begin receiving an income. Three major types of deferred annuities are fixed deferred annuities, equity-indexed annuities and variable annuities. Q: What is the death benefit on a fixed deferred annuity? A: The death benefit on most fixed deferred annuities is equal to the full contract value, i.e. premium plus accrued interest compounded annually and credited daily minus any prior withdrawals, calculated as of the date of death. Q: What is the death benefit on an equity-indexed annuity? A: The death benefit on most equity-indexed annuities is equal to the full contract value, i.e. premium plus accrued gains compounded annually minus any prior withdrawals, calculated as of the date of death, or in some cases, as of the last contract anniversary. Q: What are “qualified” and “nonqualified” annuities? A: Qualified annuities are sold as part of a tax-qualified plan such as an IRA, Keogh, SEP, or company pension plan, and Nonqualified annuities are not used to fund a tax qualified plan such as an IRA, Keogh, SEP, SEP IRA, or TSA. Q: What makes annuities different from other investments? A: Their tax deferred status, the avoidance of probate, and the promise of guaranteed income for life make annuities different from other types of investments. Q: What is tax deferred status of annuities? A: The tax deferred status of annuities means that an annuity holder defers the income and the taxes until he/she actually withdraws the money or begins receiving an income. Q: What is probate and why do people prefer avoiding it? A: A probate is a judicial process to establish the validity of a will. The process of probate can delay the passing on of assets to heirs. Assets in an estate are subject to probate and can’t be passed on to heirs unless the probate court certify the validity of the will and authorize the executor to execute the will. People avoid probate because the judicial process can take anywhere between six and 12 months to conclude, and the legal expenses can be significant. Annuities and life insurance policies are not subject to probate and may be passed to a designated beneficiary directly without going through probate.

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Insurance

Lori Johnson

2011-10-20 12:31:49

Q: I’m a football fanatic, and this time of year I’m a very avid tailgater…an AVID tailgater! What are some things to consider so I know my “fandom” doesn’t get in the way of proper precautions?

A: Last month, we discussed the ever so popular “tailgating” events for this time of year, and things to consider when buying and insuring that tailgating vehicle (or vehicles). Tailgating vehicle alternatives While RV’s are always a popular choice for many tailgaters, some fans opt for another type of large tailgating vehicle, like a school or church bus. While these giant vehicles are a great way to transport all your friends, family and supplies to the game, there are a few things you should know before purchasing one. First and foremost, you’ll have to apply for a Commercial Driver’s License with your local DMV office if you want to buy and drive a bus. (Nothing more than a normal driver’s license is required to drive an RV). You should also contact the manufacturer of your bus or other large vehicle and find out how many people can safely fit in the vehicle. Additionally, take your bus or other tailgating vehicle to professional who can ensure that all the seat belts, the air brake system, airbags and tires are in proper working condition. This will ensure that your friends, family members and any other passengers make it to the game safely. Play it safe Although tailgating is all about having fun, you’ll want to take a few precautions to make sure you and your guests are completely safe throughout the event. In particular, you should be extremely cautious when it comes to transporting your tailgating equipment to and from the game. If you plan to tow items behind your vehicle, make sure that the weight is distributed evenly throughout your trailer. Secure or tie down all of the cargo to ensure that nothing falls out of the trailer during the trip. Make sure that all of your trailer’s tires are the same size and type, and check the pressure on each tire before your trip. Also ensure that your trailer brake lights are functioning properly. Each state has different towing laws, so be sure to check with your DMV about the requirements in your area. You may need to obtain a special permit or license depending on the size and weight of your trailer. Additionally, you should call your insurance company to make sure you have enough coverage for your trailer and any expensive tailgating equipment you are towing.

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Insurance

Lori Johnson

2011-09-29 14:51:44

Q: I’m a football fanatic, and this time of year I’m a very avid tailgater… an AVID tailgater! What are some things to consider so I know my “fandom” doesn’t get in the way of proper precautions?

A: As Fall quickly approaches, the air grows cooler and the leaves begin to turn, many sports fans look forward to their favorite time of year—tailgating season. For some fans, tailgating simply means sitting on the bumper of their car with friends, enjoying a few snacks and drinks before the game. But for the more devoted tailgaters, football season calls for elaborate, well-organized tailgating events that often include a dedicated tailgating vehicle. If you’re thinking about joining the ranks of these enthusiastic tailgaters and purchasing a tailgating vehicle of your own, here are a few tips you may want to keep in mind: Buy wisely Even if you plan to buy a relatively inexpensive tailgating vehicle to be used only on game days, you should still make smart choices about your purchase. Some vehicles may seem like an incredible deal, but oftentimes there’s a catch—such as no car title. You should never buy a vehicle if the seller does not possess the title. This could be a sign that the car was stolen, badly damaged or even declared a total loss. To make sure you don’t get stuck with a lemon, you should consider requesting a CARFAX Vehicle History Report on the vehicle. These handy reports include an abundance of valuable information, such as title information, flood damage history, lemon history, odometer readings, lien activity, vehicle use and total loss history. After reviewing the report, you may discover that the vehicle you’re considering isn’t worth the expense—even if it does seem like a bargain. Get it insured With countless vehicles coming and going from a big sporting event, accidents are bound to happen. That’s why it’s so important to insure your tailgating vehicle. Even though you may drive your tailgating vehicle just a few times a year, comprehensive auto insurance is well worth the cost. If your vehicle is severely damaged or totaled, insurance coverage could prove to be priceless. Next month, we’ll discuss tailgating vehicle alternatives and how to play it safe while having fun...

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Insurance

Lori Johnson

2011-07-01 08:19:00

Question: Can posting on Facebook hurt me financially?

Answer: Social networking Web sites, such as MySpace and Facebook, are growing increasingly popular with young people and adults alike. These sites allow people to reconnect with old friends and colleagues and to make new connections. However, as with most other websites, these sites allow the posting of communications that the poster’s may come to regret. These posts can cause hard feelings and may result in significant financial loss. In the winter of 2009, a teenager from Oceanside, New York sued Facebook, four of her high school classmates, and their parents for $3 million. The suit accused the four classmates of bullying and humiliating her in a forum on Facebook. They allegedly posted derogatory and false statements about her that were intended to hold her up to “public hatred, ridicule and disgrace.” Whether or not the allegations prove to be true, the teenagers and their parents need legal defense and possibly resources to pay judgments against them. They may look to their homeowner’s insurance policies to cover these costs, but will the policies respond? A standard policy will probably not cover this. The policy pays amounts for which the policy holder (the insured) is legally liable, plus the costs of legal defense, for bodily injury or property damage done to someone else. The policy defines bodily injury as meaning bodily harm, sickness or disease; it defines property damage as injury to, destruction of, or loss of use of physical property. Neither of these definitions includes saying or publishing something that injures another’s reputation or feelings. Consequently, the policy is unlikely to cover a post on Facebook. The girl from Oceanside did not allege that her classmates hurt her body, made her sick or passed her a disease; she accused them of making her life miserable. The policy does not cover that offense. Insurance companies may offer special personal injury coverage that can be added to homeowner’s policies. This coverage pays for the insured’s liability for several offenses, including oral or written publication of material that violates someone’s privacy. If any of the Oceanside classmates’ parents have this coverage, their insurance may cover the claims. Next month we’ll discuss another potential source of coverage providing additional insurance in situations where a loss has used up the amounts of liability insurance under homeowner’s or auto policies.

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Insurance

Lori Johnson

2011-05-01 10:46:00

Question: Is life insurance for my child really a good idea? What are the benefits of purchasing this type of policy at such a young age?

Answer: Some people are superstitious about insurance. They may be afraid to buy life insurance for their children, just as some people are fearful to buy it for themselves. Others feel sure that nothing bad could ever happen to their children/grandchildren, so they avoid spending the money to insure a child’s life. The real truth is that there are reasons beyond the unthinkable to insure a child’s life. A good life insurance policy, purchased when a child is young, healthy and far from any negative events, can pay big dividends for the child later. In fact, most of the many reasons to insure your child’s life are really about ensuring that your child can have a long, happy, prosperous life, regardless of what he or she encounters in terms of illness or accident later. Here are a few of the reasons to consider insuring your child: •Permanent life insurance accumulates cash value, and that value grows tax-deferred. When the child is old enough for college, the cash could help pay for it. Or, it could help the child purchase his or her first home. If the policy was left untouched through those life transitions, it could even help fund your child’s own retirement! •Buying permanent life insurance now guarantees your children will not be without insurance later, when they are more likely to need it. Later in life, if they should develop an illness or sustain serious injury, it could be cost prohibitive, or even impossible, to obtain coverage. •Insuring a child’s life with a permanent life policy also means that the child’s coverage can continue regardless of military service, health conditions-or taking a college major in skydiving! When you shop for life insurance for a child, there is still more to consider. For instance, you can make sure the plan you buy offers a rider to purchase additional insurance. With that option, at such specified times as marriage or the births of your grandchildren, your child may purchase additional insurance at standard rates, without reapplying. Such a rider generally offers the opportunity to increase coverage on a no-questions-asked basis. Advances in the science of statistics, too, will more firmly establish the mortality rates of various physical conditions, hobbies and professions. Your child becoming a member of any of those identified groups would also result in a premium hike, or the inability to purchase insurance at all. Life insurance is one of the greatest lifetime gifts you can give to your children or grandchildren. And, while reasons for having life insurance can vary as you progress through the different stages of life, permanent life insurance can be an important component to their financial foundation at any age.

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Insurance

Cory Zacarello

2011-04-01 13:55:00

Question: How does tornado season relate to my homeowners policy, and what advice would you offer to policyholders during the stormy season?

Answer: Living the huge majority of my life in Southeast Kansas, I have grown up accustom to life in “tornado alley.” At the ages of six and fourteen, witnessed two tornadic storms both of which were of the touchdown variety. This only fueled my interest and fascination of my love-hate relationship with tornadoes. As an agent I often get the question, “Do I have tornado coverage/ insurance?” The correct answer would be yes, being one of your covered perils would be wind. However, the pitfall that many policy holders might be unaware of is a potential of a separate deductible for wind and/or hail. Keep in mind that usually keeps the cost of your premium down, but in the long run as a consumer we should be diligent enough to find out exactly the amount of our wind/hail deductible. Most of the time home policies are stated “all perils.” Hence, in that case you have your answer. Some insurers might offer it as a percentage (ie. 1 or 2%) of the coverage of your dwelling. This could lead to deductibles into the $2,000 & $4,000 range on a home insured for $200,000 as an example. Other companies may give you the option by offering a split deductible or all perils. This would allow you to know in advance what you might be on the hook for come storm season. If you don’t know your specific case, I urge you to contact your agent for a personal insurance review so that there are no surprises come claim time. Personal insurance reviews, (PIR’s) are generally a free service offered. If you haven’t had one I suggest you consult with your insurance professional. Most reviews average 30 minutes at most and in the long run, it might be the best 30 minutes you spend so you are able to find out just exactly what type of insurance coverage’s you have on all of your insurance policies, not just the home policy.

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Insurance

Lori Johnson

2011-03-01 10:26:00

Question: What can you tell me about insurance for contract laborers?

Answer: These days, many employees are becoming home-based contractors for their former employer, or even striking completely out on their own. You may be among them. If you are, remember this: once you are on your own, you will not be covered by your employers’ insurance packages. Because you are busy thinking of all you need to do to start up a new venture-whether you’ll be using familiar job skills or new ones entirely- insurance may be the last thing on your mind. Think again. If you forget an essential part of a computer program you are contracted to write and your client loses business because of it, the client may sue. If your new personal shopping service supplies an item that injures a client...lawsuit! In each case, an Errors and Omissions policy could have saved the day. And then there is the possibility of fire, flood, theft...in short, all the usual risks of living and then some. As the owner of a small business, there are three ways you might cover those risks 1.Homeowner’s insurance endorsements: suitable for a small home business with minimal equipment and no business visitors or business deliveries. 2.Home office policy/in-home business policy: this offers business liability and lost income replacement, as well as other usual risk coverages. 3.Business owner’s policy: This provides the most comprehensive safeguards similar to those found in commercial policies, but with prices designed for the home-office market. If you are like most new home-business owners, you may think your homeowner or renter’s coverage will be enough. Reconsider that thought, because in many instances, your current homeowner’s policy won’t be enough. It may even exclude business use of your home entirely. Even if it does cover business use, it is likely to be for very small amounts, $2,500 on premises, and as little as $250 for losses off-site, such as a stolen laptop. If someone slips and falls on the icy sidewalk the day after a winter storm and they are visiting you for business purposes, your homeowner’s policy probably will not provide coverage. Before you begin your consulting arrangement or new business, sit down and discuss with your insurance agent all the risk factors you could be facing. You may not be able to afford to cover every risk right away, so ask for your agent’s help to prioritize the risks. If, for example, customers will not be visiting your office for a while, leave that liability coverage out for now. But if you will visit customers and bring equipment along, cover this risk; you need that equipment to do business, after all, and your business will suffer if it is lost or damaged. Remember to consider your vehicle use, too; will you use public transportation to visit clients, or your personal car? Will your personal policy work, or would commercial insurance better provide the best protection? If you are buying a van or truck especially for business needs, there is ample reason to consider commercial vehicle insurance. Finally, consider the possibilities if you becoming ill or are injured and cannot work. By going out on your own, you have lost the safety net of the disability insurance your former employer most likely carried. If you have a working spouse, you may be able to delay obtaining disability insurance for a time, but it is one of the coverages most people feel a lot more comfortable having, working spouse or not. Once you have prioritized and decided upon your initial insurance package, remember to speak with your agent periodically and to add those coverages that you put off for cash flow reasons, or simply did not need at the time. Getting to the Heart of the Matter Use questions like these to determine the nature of your new work arrangement or business and to help prioritize your insurance purchases: •What type of equipment do you have and how much did it cost? How much to replace? •Is the equipment dangerous? •Does your business own any property? •Where do you conduct business- -home or client offices or your own premises? •Do you need a vehicle for business? •Do you have or plan on having employees? •If you make an error, can a customer sue you? •If building damage happens, from fire to flood, will it shut down your business? •Do clients visit your home to transact business? •Do you take expensive equipment to client sites? •If you are injured and can’t work, where will you derive an income?

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Insurance

Lori Johnson

2010-11-01 13:31:00

Question: Why do we need auto insurance?

Answer: In its simplest sense, auto insurance is smart planning — planning that can help protect you from expensive, sometimes devastating surprises. Think of auto insurance as part of your total financial plan; a powerful tool that can help: •Safeguard the investment you’ve made in your car •Pay for medical bills after an accident •Shield you from the costly damages of an accident-related lawsuit •Guard the valuable assets you’ve worked hard to collect (such as your home, retirement funds, stock or bond investments, etc.) •Protect you from uninsured or under-insured motorists •Pay for damage repairs due to theft, vandalism, or natural disasters; and, of course, •Strengthen your peace of mind, every time you take to the road. Types of Coverage: Liability- The lowest amount of coverage required is called liability and this is the sort of coverage that most states require you to have. Liability covers the expenses if you get into a car accident and hurt someone or damage their car. Liability insurance is the least expensive of the types of insurance but in most cases it is the most valuable. It is the most valuable because it is the coverage that will pay the damages done to another person’s property. It is important that you have liability insurance as in most states it is illegal to drive without it. If you are caught driving without liability you can have your license suspended, revoked or pay large fines. Collision- Collision insurance covers the damages done to your car if you hit something. This can be another car, a telephone pole or anything else. Collison insurance is important so that you will not have to pay for repairs in case you are in an accident. Collision insurance is especially important if you have a newer car, or a car with a lot of expensive modifications. Many people with older cars choose to not purchase collision insurance because the costs of repair can be higher than the cost of the car itself. Comprehensive- Comprehensive insurance is important because it covers the damages to your car that are not covered by collision insurance. For example, if a natural disaster occurs and your car is damaged, comprehensive coverage will pay for the expenses to repair it. When you purchase a newer car, many lenders will require you to have collision or comprehensive coverage in addition to liability. Significance- Overall, auto insurance is so important because it protects you and your property. It also safeguards the property of the other drivers who share the road with you. Accidents happen no matter how cautious you may be while driving and in order to be a responsible driver, you must be able to take financial responsibility those accidents. What Will You Pay?- Both collision coverage and comprehensive coverage have several factors that will influence how much you have to pay for the coverage. •The age and value of your vehicle. •The age and experience of the driver. •The age and experience of any others who will be driving your vehicle. •A new driver will increase your rates. •How many tickets you have had. •How many accidents or claims you have had. Many of us need automobiles to get from place to place, so we all know how useful they can be while also recognizing the fact that driving an automobile is dangerous. You might be careful in obeying traffic laws, but you never know when someone else will not and be the cause of an accident that involves you. Then again, mistakes do happen and you never know when something may occur that you will be at fault. These are reasons why it is important to have auto insurance.

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Insurance

Lori Johnson

2010-09-01 09:41:00

Question: My husband and I are newly weds. We know we have a lot to consider when combining our insurance policies and planning for our financial future. What are some things we should consider as we move forward?

Answer: A new marriage brings joy, security, contentment and anticipation about what the future may hold. You’ll be experiencing changes, making many decisions and preparing for a long and happy life together. It is important to contact an insurance professional to help you set goals and take action to help ensure a secure financial future as you begin your journey. Life insurance for a financial foundation: Now there are two of you, at least … and there may be more on the way in the future. Now is a good time to consider purchasing life insurance. Life insurance can provide benefits while you’re living, and help your family after you are gone with things like the mortgage and car payments, child care and college costs. There are a variety of life insurance products, including term or permanent coverage, designed to meet your changing needs. Homeowners insurance: Along with marriage comes combining households. You may be moving from a rental to your first home or moving into a current home and selling the other. In any situation, you want to be sure you have homeowners insurance or renters coverage to protect your assets in case of unexpected loss. It provides coverage for your home, personal property and liability for any lawsuit or claim brought against you. Auto insurance: It’s also important to update your auto insurance, so you and your spouse are covered under the same policy. If you’re blending families and have teen drivers, you will want to make sure they are included under your auto insurance policy, too. Auto insurance provides protection against financial loss resulting from collisions, vandalism, break-ins and other situations where damage or injury may occur to you or others. Investing: As you start your lives together, remember that the earlier you begin to save and invest, the more likely you’ll be to have enough money to live comfortably, help with education of your children and fulfill your dreams after you retire. Keep your documents current: It’s important to keep legal, financial and insurance documents up-to-date, and in a safe location known to family members. As your life changes, this information will need to be reviewed and changed as well. As you marry, you are embarking on an adventure in your life … a new direction with many exciting times ahead. I wish you well on your journey and a smooth transition.

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Insurance

John Eck

2006-12-01 15:48:00

: What if my automobile has been stolen...will my insurance pay for a rental? ANSWER: If you carry comprehensive coverage on your stolen vehicle, you will be reimbursed on a rental up to a certain limit. However, if your auto is in the repair shop due to an accident, your insurance company will pay for a rental if you have purchased optional Substitute Transportation coverage. QUESTION: Regarding a rental, does my automobile insurance policy extend coverage to a rental car or truck? ANSWER: Some insurance companies don't cover rental cars automatically. One thing is certain, if you don't have collision or comprehensive on your current automobile policy, you will not have them on a rental car either. There may also be gaps in your insurance that will not cover the time a rental vehicle is absent from the rental fleet while it is being repaired or replaced. Check with your insurance consultant to ensure your protection. QUESTION: Why does one's premium go up when they get a ticket or have an accident? ANSWER: Statistics have shown that people who have recently been involved in an accident or have received a ticket are more likely to have another accident than those individuals whose driving records are incident free. Consequently, insuran

ANSWER: Well, the larger the deductible the greater your savings, and risk, will be. Select a deductible based on the largest amount that you are comfortable paying for repairs to your vehicle in the event of an accident. QUESTION: What if my automobile has been stolen...will my insurance pay for a rental? ANSWER: If you carry comprehensive coverage on your stolen vehicle, you will be reimbursed on a rental up to a certain limit. However, if your auto is in the repair shop due to an accident, your insurance company will pay for a rental if you have purchased optional Substitute Transportation coverage. QUESTION: Regarding a rental, does my automobile insurance policy extend coverage to a rental car or truck? ANSWER: Some insurance companies don't cover rental cars automatically. One thing is certain, if you don't have collision or comprehensive on your current automobile policy, you will not have them on a rental car either. There may also be gaps in your insurance that will not cover the time a rental vehicle is absent from the rental fleet while it is being repaired or replaced. Check with your insurance consultant to ensure your protection. QUESTION: Why does one's premium go up when they get a ticket or have an accident? ANSWER: Statistics have shown that people who have recently been involved in an accident or have received a ticket are more likely to have another accident than those individuals whose driving records are incident free. Consequently, insurance companies charge a premium that most accurately reflects the likelihood of an individual having another accident within their policy term.

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Insurance

John Eck

2006-11-01 11:31:00

: What is the difference between collision and comprehensive coverage? ANSWER: Comprehensive - This optional coverage pays for damage to your auto caused by perils other than a collision. This includes fire, theft, hail, vandalism, riots, damage caused by animals (deer jumps out in front of you), and glass breakage. There are various deductible options that you can select for this coverage. Keep in mind that not every non-collision related loss is covered under Comprehensive. For instance, your damages are not covered if they are caused by wear and tear, freezing, mechanical breakdown or road damage to tires by potholes. Also, certain property such as tapes and compact disks are not covered. Finally, make sure to notify your insurance company of any customization you do to your vehicle after it is purchased or it may not be covered. Note that sound equipment like CD players, AM/FM cassettes, and TV's are sometimes covered under your auto policy if they are permanently installed. Collision - This optional coverage will pay for damage to your auto regardless of who causes the accident including a hit/run occurrence if your car is legally parked. Collision Coverage applies if your auto is hit by another vehicle or if your auto hits other objects that cause damage to your vehicle. There are various deductible options, which you can select for this coverage. QUESTION: Do I Need Comprehensive & Collision Protection On My Automobile? ANSWER: Many people wonder if they should always purchase Comprehensive & Collision protection. In order to make the decision, you need to know the current value of your auto and the cost of coverage. Generally speaking, vehicles decline in value as they age. Only you can decide if physical damage coverage is necessary after considering whether the cost of insurance is more economical than the cost of repairing or replacing the car at your own expense. Nonetheless, here are some guidelines to help you make a decision that is best for you. • If your auto is leased or financed, you are probably required to maintain Collision as well as Comprehensive coverage. • If the value of your vehicle is only slightly higher than the deductible chosen, then it makes no sense to purchase Collision or Comprehensive coverage. QUESTION: Doesn't 'no-fault coverage' take the place of Comprehensive & Collision if the accident isn't my fault? ANSWER: This is a very common misconception about 'no-fault coverage' which was part of the law passed in Kansas many years ago affecting auto insurance. No-fault coverage only helps pay for medical injuries and related costs. It never pays for property damage to any of the damaged vehicles. QUESTION: If my friend drives my auto, is my aut

ANSWER: You are correct. Buying the right limits of auto insurance is serious business. It should be more than responding to a commercial or a tip from a friend. But, like most things, information serves us all well in making the process more simple and feeling good about the decisions we make. In regards to how much liability protection you need, always keep in mind, even the most careful driver can make a mistake and cause an accident. The next time you get in your auto, it's possible you could be involved in an accident in which someone else is seriously injured. You don't even have to be 100% at fault in the accident to face financial liability. You are buying Bodily Injury coverage to protect your assets (and assuming you don't wish to file bankruptcy, protecting even your future assets) in the event of a judgment against you. Your per person Bodily Injury limit should be at least as large if not larger than the value of the sum of the following assets: • Equity in your home (Market Value - Mortgage) • Cash Value of your vehicles • Stocks • Bonds • Bank Accounts • Value of your business • All other assets What most auto owners fail to think about is how inexpensive a Personal Liability Umbrella Policy can be. Most companies do not provide limits in excess of $500,000 on the auto policy. For very little money, you can increase this with an umbrella up to 1 to 10 Million dollars. Think about it! The umbrella also raises the limits for the Property damage liability. Consider just how much it would cost to replace one of those big 18 wheel tractor trailer rigs loaded with high-priced cargo if you made a little mistake and caused the accident. QUESTION: What is the difference between collision and comprehensive coverage? ANSWER: Comprehensive - This optional coverage pays for damage to your auto caused by perils other than a collision. This includes fire, theft, hail, vandalism, riots, damage caused by animals (deer jumps out in front of you), and glass breakage. There are various deductible options that you can select for this coverage. Keep in mind that not every non-collision related loss is covered under Comprehensive. For instance, your damages are not covered if they are caused by wear and tear, freezing, mechanical breakdown or road damage to tires by potholes. Also, certain property such as tapes and compact disks are not covered. Finally, make sure to notify your insurance company of any customization you do to your vehicle after it is purchased or it may not be covered. Note that sound equipment like CD players, AM/FM cassettes, and TV's are sometimes covered under your auto policy if they are permanently installed. Collision - This optional coverage will pay for damage to your auto regardless of who causes the accident including a hit/run occurrence if your car is legally parked. Collision Coverage applies if your auto is hit by another vehicle or if your auto hits other objects that cause damage to your vehicle. There are various deductible options, which you can select for this coverage. QUESTION: Do I Need Comprehensive & Collision Protection On My Automobile? ANSWER: Many people wonder if they should always purchase Comprehensive & Collision protection. In order to make the decision, you need to know the current value of your auto and the cost of coverage. Generally speaking, vehicles decline in value as they age. Only you can decide if physical damage coverage is necessary after considering whether the cost of insurance is more economical than the cost of repairing or replacing the car at your own expense. Nonetheless, here are some guidelines to help you make a decision that is best for you. • If your auto is leased or financed, you are probably required to maintain Collision as well as Comprehensive coverage. • If the value of your vehicle is only slightly higher than the deductible chosen, then it makes no sense to purchase Collision or Comprehensive coverage. QUESTION: Doesn't 'no-fault coverage' take the place of Comprehensive & Collision if the accident isn't my fault? ANSWER: This is a very common misconception about 'no-fault coverage' which was part of the law passed in Kansas many years ago affecting auto insurance. No-fault coverage only helps pay for medical injuries and related costs. It never pays for property damage to any of the damaged vehicles. QUESTION: If my friend drives my auto, is my auto insurance still going to pay? ANSWER: Whenever you give permission for a friend or associate to borrow your car, your auto insurance will still pay as though you were driving it. There could be coverage issues however if your friend gave permission to someone else to drive. Only you as the insured can give the permission to use the vehicle. QUESTION: Should I put my teenager on a separate policy with lower bodily injury limits to save money? ANSWER: Hopefully your agent will advise against doing this. It would be wise to have all children that you consider as dependents on your policy. An injured party will most likely go after the parents’ assets if the at fault minor child has insufficient insurance coverage. Also, bear in mind that inexperienced drivers have accidents at a much higher rate than experienced drivers do. QUESTION: What happens if I am a passenger in a friend's car and I'm injured as a result of an uninsured motorist? ANSWER: If you are a passenger in a friend’s auto and you are injured as a result of an accident, and if you also have an auto titled in your name and have liability insurance on that auto (as the state requires you to have), then you will receive medical benefits from your own insurance company. This is the basic principal of the 'no-fault coverage' discussed earlier. If you do not have an auto titled in your name and no personal auto insurance, then you will most likely be covered by your friend’s auto insurance (assuming he/she is not part of the many uninsured motorists in Kansas). That's all the space I've been given this month. More next month.

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Insurance

Jeff Otto

2006-08-01 13:21:00

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Insurance

John Eck

2006-03-01 10:52:00

Storm season is coming on. My neighbor has a tree in his yard that doesn't look too steady. If a tree falls on my house from my neighbor's yard, who pays for the damage?

Generally the insurance responsibility lies with whoever's property is damaged. In other words, if a tree falls on your home, no matter where the tree came from, your insurance company should pay for your home repair.Coverage is generally only available for the removal of trees blown down if they actually damage the home or outside personal property such as swing set or fencing.  Coverage for the tree or landscaping is only covered by certain perils such as vehicles or lightning (not wind ).An exception would be if the damage occurred as a result of negligence; for instance, if the tree was dead before it fell, and you had proof that your neighbor knew the tree was dead. Under those circumstances, the damage becomes your neighbor's liability. As a rule, state insurance officials suggest that you file a claim with your insurance company and let them deal with it.

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Insurance

John Eck

2006-02-01 15:30:00

What does "HO" stand for on policies and what do they mean?

ANSWER: Different types of homeowner policy forms are referred to generally as HO-1, HO-2, HO-3 and so forth.  There are seven basic kinds of home insurance policies and are pretty much the same regardless of which companies provide the coverage.  Some companies may have slightly different limits and exclusions within the policy, but the perils insured against for each form are similar.• HO-1. Basic homeowners. Covers your dwelling and personal property against losses from 11 types of perils: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; damage by glass or safety glazing material that is part of a building; and volcanic eruption.• HO-2. Referred to as ‘Broad Form’ coverage. Includes all the perils as the basic plus six more: falling objects; weight of ice, snow or sleet; three categories of water-related damage from home utilities or appliances; and electrical surge damage.• HO-3. Referred to as the 'Special or Open Peril Form'.  this form covers all perils to the home unless the peril is specifically excluded in the form (such as earthquake, war, flood, etc.)  This is possibly the most common type of Homeowner policy written.• HO-4. Referred to as the 'Renters form'.  This insures a renters contents against the perils listed under the 'Broad Form' coverage• HO-5. Referred to as the 'Special or Deluxe Form'.  This provides the same coverage as the form HO-3 but it extends the coverage to the homeowners perosnal effects as well as the structure.  This is the most comprehensive form.• HO-6. Condominium coverage. Covers personal property from 17 listed perils along with certain building items in which the unit owner might have an insurance interest.• HO-8. Basic older home. Covers dwelling and personal property from 11 perils. Differs from HO-1 in that it covers repairs or actual cash values - not rebuilding costs. This is for homes where some historic or architectural aspects make the home's replacement cost significantly higher than its market value.An important thing to remember is that it is very important to insure your home to the amount it would cost today to rebuild it.  Even though the market value may be lower, by insuring to replacement value, you are assuring yourself that you will be paid what it will take to fix your home after a loss with you only paying the deductible.

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Insurance

Steve Henry

2005-12-29 10:45:00

: Part D Medicare Prescription drug coverage is so confusing, how am I supposed to know which one to pick?

ANSWER: When Medicare reform legislation was signed into law by President Bush in 2003; it ushered in some of the most significant changes to the Medicare program since its inception. The basic goal of these changes was to provide expanded health coverage choices for those eligible for Medicare and try to address the prescription drug needs of many Medicare-eligible Americans.One of those changes-the new Medicare Part D benefits-directly targets the prescription drug issue. The Medicare Part D plans provide insurance coverage for prescription drugs. Medicare beneficiaries may purchase the Part D plan available in their area through a private insurance company; those who buy a plan will pay monthly premiums and a co-payment or coinsurance for each prescription filled. These costs will vary based on the Part D plan chosen.A COMPLEX PLANThe Government came up with a simple plan or model and let the insurance companies design a plan around this basic model. Some of the basic features of the Medicare model plan:• A monthly premium (estimated to be        about $35)• $250 annual deductible• The Medicare beneficiary pays a 25 %       coinsurance for all expenditures between        $251 and $2,250• The beneficiary pays 100 percent for all        expenditures between $2,250 and $5,100• The beneficiary pays the greater of 5    percent coinsurance or $2 for generic    drugs and $5 for brand name drugs for    expenditures above a $3,600 annual out-   of-pocket threshold. (The thresholds will    increase annually, based on average    expenditures.)Private insurance companies have designed their plans to add to this, which is confusing. There are at least 15 companies in Kansas with over 40 different plans from which to choose. This variety makes it all the more important for you carefully examine your options. The best way to make sure you pick the right plan is to sit down with a Medicare "Certified" insurance agent to evaluate your prescription drug needs and the costs and benefits available under Medicare Part D plans available in Kansas. An agent can help you determine what makes the most sense for you and your situation. The agent usually gets paid a small flat fee to help you make a choice. There is no motivation for the agent to oversell you on anything. Important things to consider when purchasing a plan;1. Are your drugs in the plan's formulary? (Circle the drugs names on the formulary list and note the tier and co-pay for each.)2. What is the deductible, if any?3. What is the premium?4. How does the plan's coverage of your drugs change as your prescription drug costs add up throughout the year?5. What the total amount you would pay with and without a Medicare drug plan?Final considerationsDo you have enough information to make a decision? Are you comfortable with your decision?There is no doubt that this is all confusing, if you haven't made a decision yet, you are in good company. Don't rush a decision until you feel certain it will help you. The current open enrollment lasts until May 15, 2006, without any penalty.If you are still have questions, ask for help.

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Insurance

John Eck

2005-12-29 10:13:00

: Should I expect my premium to rise if I reported an accident to my insurance company in which I was not found at fault?

ANSWER: It is unlikely you would see a premium increase solely because you were in an accident in which another person was at fault. However, you may receive a premium increase if that accident was one of several you have had throughout the year or in recent years. Even if you had several accidents and were found not at fault in each of them, the insurance company may assume there is something hazardous about your driving and thus charge you a higher premium.QUESTION: Do I need to purchase insurance before I buy a new car?ANSWER: If this is your first car, yes, you'll have to buy auto insurance before you drive your shiny new car off the dealer's lot. If you are financing the purchase, the lender will require that you buy a policy with comprehensive and collision coverages. Not all states require the purchase of liability coverage. You will want to check whether the state in which you reside does or does not.If you have owned a vehicle and already have an auto insurance policy, that will generally cover your new automobile for a period of up to 30 days after you buy it. Once that 30-day period is up, you'll have to talk with your agent or company representative to insure that new vehicle.QUESTION: What can I do to protect myself against uninsured drivers?ANSWER: Purchasing uninsured/underinsured motorist (UM/UIM) coverage can protect you against uninsured drivers. In many states, UM coverage is required by law.UM coverage will pay for medical bills and pain and suffering if you are hit by an uninsured driver. In some states, UM property-damage coverage is available. One thing to always keep in mind, in Kansas, UM coverage is only for you, and does not include any physical damage coverage.

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Insurance

John Eck

2005-11-01 16:19:00

: My car was rear ended last month. The person that hit me and their insurance carrier agree to being liable. The damage to my car was minimal - about $300 (I had to replace the bumper). I have incurred $3,100, however, in medical expenses from my chiropractor. These bills will be paid by the insurance carrier of the woman that hit me. They are willing to settle the claim for $5,000. I feel that I deserve at least $6,500 due to the amount of pain and aggravation this has caused me and the possibility of future back problems. I have not lost any work hours. Would it be worth pursuing this in court to try to get what I feel that I deserve? I know that lawyers normally get about 1/3 of settlement. Their first offer to me was $4,600, I then asked for $8,900 (figuring I could come down from there) then they offered the $5,000 which I mentioned earlier. The ball is in my court and I'm debating if I want a lawyer to help me hit it back over the net.

ANSWER:  The first thing to remember that it's not really just 1/3 of the settlement if you get a lawyer. It's normally 1/3 if the attorney just writes them a few letters and you settle. If the attorney actually has to file suit (take them to court), he or she usually gets 40% plus costs. This is important as it actually costs quite a bit of money to go to court.There's the filing fee, records fees, expert fees, travel fees, deposition costs, you name it. And it all comes out of your end of the settlement.Another thing to consider is that when you are just a person making a claim, everyone is required to be more interested in helping you. You might call it 'walking you through the system'. Once you have an attorney, you're fair game. It's not the insurance company vs. just a person, it's them vs. your attorney, and once they go into a defense mode, they will play to win. They may go down on the amount of your offer or withdraw it entirely, trying to offset their litigation (lawsuit) expenses. Plus their war chest to fight the case is virtually unlimited once the fight is on.Something to remember also, if you go to court, nothing is sure anymore.It's mostly you telling your story to twelve strangers. They could like you and give you more, dislike you and give you less, or REALLY dislike you and give you nothing (it happens, and more than you would think). It's all a "roll of the dice", as they say. that's why insurance companies try to avoid it, if at all possible.My own opinion is that what they are offering you seems like a lot of money, especially considering the amount of your property damage. I sincerely don't think you would ever see anything like $5000 net (your end) once you start down the road of paying an attorney and paying costs.If you are truly dissatisfied with the amount of their offer, you can always go the Alternative Dispute Resolution route. This would be either a non-binding mediation or a binding arbitration with high and low figures that are mutually agreeable to both of you. Mediation would give you the chance to see what an independent jurist, usually a retired judge, thinks of your case and try to come to a mutually agreeable figure between what you think it's worth and what they think it's worth. Arbitration would work sort of the same way, but whatever value the judge says is binding on both of you. Companies will usually put a little more money on the table to get you to arbitration as they know the file is going to close either way, and they've got the judge's opinion as cover if they have to pay a little more than they thought it was worth.

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Insurance

John Eck

2005-10-01 14:59:00

:  How do you reduce the cost of collision coverage?

ANSWER: You can do one of two things: raise your deductible or drop your coverage. The deductible is what you pay out of your own pocket before your insurance policy kicks in. The higher the deductible, the lower your premium. For example, increasing your deductible from $200 to $500 on collision coverage could reduce your premium by as much as 30 percent, according to the Insurance Information Institute.Collision coverage is generally not worth purchasing on older vehicles with high mileage because if you ever file a claim for significant damages, your insurance company will likely declare your vehicle a total loss rather than fix it. That's because the cost of fixing your vehicle far exceeds its market value. The value you get for the vehicle in the total loss may not justify the premiums you pay for the collision coverage.

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Insurance

John Eck

2005-10-01 14:59:00

:  I've just been in an accident. How will the insurer issue the check to repair my car?

ANSWER:  It depends on whether or not you're in a first-party or third-party claim situation. In a first-party situation, when the claim is being paid by your insurer, the check will likely be made out to you and the body shop.  In a third-party situation, when the claim is being paid by the other driver's insurer, it's likely that the check will be made payable to you alone.  Who receives the claim-payment check often depends on who caused the accident. If you get into an accident and have collision insurance, your insurer will pay the repair bill after you've paid your deductible.  This is known as a first-party claim situation.  In first-party claims, your insurance company has the right to pay whomever it deems necessary to settle your loss, subject to state insurance regulations.  For instance, if you own your car, your insurer might issue a check made out to you and the body shop you've chosen to repair your car.  However, some states, such as Massachusetts, have instituted a "direct payment plan" under which the amount of the claim will be paid directly to you and you can then use those funds to pay for work done at the repair shop of your choice. In first-party claim situations, you can't object to the repair shop being named on the insurance check if you've agreed to those terms within your auto insurance policy. Also, you might never see a check from the insurance company if you choose to have your car fixed at one of the insurer's recommended or preferred repair shops. Insurers have special relationships with these repair facilities, which may allow for direct payment from the insurer to the repair shop.  The approved repair shop often provides lifetime warranties on their repair.Car leases and loans can throw an extra wrinkle into the first-party claims-paying process because your insurer will likely issue a check made out to you and your leaseholder or lien holder.  That means you have to go to the bank or, even worse, mail your check to the financial institution for its signature.  There's no telling how long that can hold up the return of your fixed vehicle, but count on doing some extra legwork. When a lien holder's name is included on the check, it creates the burden of having the lien holder examine the vehicle in order to get the check endorsed.  It can also take extra time to get the check endorsed. Typically, you have to bring the vehicle to a dealership and get it to sign a statement that the vehicle has been repaired.  You then have to mail the repair shop's bill, pictures of your repaired vehicle, and the check to the lien holder or leaseholder.  The bank or lender will then endorse the check, send it back, and you can pay for your repair. With third party claims (other party at fault), the other insurance company owes you a rental vehicle (of like quality) until your vehicle is repaired.  If the decision is made to total the vehicle, no rental car is required to be provided once the offer is made.  Generally it is better to have the vehicle repaired.  Loss of value to the vehicle is usually not recognized as payable in Kansas regardless of fault.  Note:  In Kansas, the only type of accident that is 'No Fault' is if your vehicle is damaged while lawfully parked or if the other vehicle owner pays all damages to your vehicle.This process can be time-consuming, but it might not hold up your vehicle's repair; however, it might delay the delivery of your repaired vehicle to you.  A body shop might repair your vehicle but it generally won't return your vehicle until it's gotten paid. If your car is totaled, the insurer again has the option of making the check out to you alone, or to you and your creditor. If someone else smashes into your car and his or her insurance company is paying for the repairs, you are a third-party claimant.  This is typically less of a hassle than first-party claims because you have no obligation to that insurance company.  The insurer can't dictate to whom it pays the money because it doesn't have a policy contract with you.  In most third-party claims, insurers pay the claimant directly. If your vehicle has been totaled in a third-party claim situation, the at-fault party's insurance company will likely pay only you.  Of course, if you have a lease or a loan, it's your responsibility to make sure your creditors get the money you owe them. Knowing the claims-paying process can help expedite your repair and cut down on surprises.  And, if you have a car lease or loan and make a first-party claim, you might do well to make an appointment ahead of time with a dealership or your bank for the inspection of your fixed car.  That way, you can put the accident behind you, give the body shop its money, and get your car back.

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Insurance

John Eck

2005-09-01 07:39:00

:  Do I need to purchase insurance before I buy a new car?

ANSWER:  If this is your first car, yes, you'll have to buy auto insurance before you drive your shiny new car off the dealer's lot. If you are financing the purchase, the lender will require that you buy a policy with comprehensive and collision coverages. Not all states require the purchase of liability coverage, however, and you can find out which ones do by reading “Which states require drivers to buy liability insurance?”If you have owned a vehicle and already have an auto insurance policy, that will generally cover your new automobile for a period of up to 30 days after you buy it. Once that 30-day period is up, you'll have to talk with your agent or company representative to insure that new vehicle. QUESTION:  I've just been in an accident. How will the insurer issue the check to repair my car? ANSWER:  It depends on whether or not you're in a first-party or third-party claim situation. In a first-party situation, when the claim is being paid by your insurer, the check will likely be made out to you and the body shop. In a third-party situation, when the claim is being paid by the other driver's insurer, it's likely that the check will be made payable to you alone.QUESTION:  What can I do to protect myself against uninsured drivers? ANSWER:  Purchasing uninsured/underinsured motorist (UM/UIM) coverage can protect you against uninsured drivers. In many states, UM coverage is required by law.UM coverage will pay for medical bills and pain and suffering if you are hit by an uninsured driver. In some states, UM property-damage coverage is available. If your car is crunched by an uninsured driver and you have UM property-damage coverage, you'll be able to get your car fixed under this coverage, rather than using your collision coverage.Generally speaking, UM property-damage coverage carries a lower deductible than collision coverage.

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Insurance

Shon Chapman

2004-12-01 10:02:00

: I am closing on a new house and my lender asked me if I wanted to take out "mortgage protection" on my loan in case I die. How is this different from a life insurance policy?

ANSWER: The short answer is that it is not different. In fact, the lender is usually taking out a life policy on you to pay off the loan in the event of an unforeseen death. However, there are several differences. On credit life insurance or other similar types of coverage, they are asking you to pay an extra premium monthly in order to ensure that a loan is paid off in full in the event of an untimely death. They are essentially asking you to purchase a decreasing term life policy, with the lender automatically listed as the beneficiary. Decreasing term coverage is just that - during the course of the loan, the amount of coverage on the policy goes down, usually in accordance with the balance left on the loan. In other words, as you pay the loan down, the coverage also decreases. One of the advantages is that the underwriting (generally speaking), is usually easier than a standard life policy. Sometimes, someone with borderline health may pick up this coverage because they do not feel they can qualify anywhere else. On a life policy that is NOT credit life, you have the option of purchasing level or decreasing term, whole or universal life, and so on. You also have the option of determining how much coverage you need and for how long. Most importantly, you get to decide who the beneficiary is, instead of being forced to give the money to the lender.  If you have spent the proper time with your agent, and truthfully discussed your situation with him/her, you should already be properly covered. Hopefully, if that's the case, there won't be a need to purchase a credit life policy.

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Insurance

Shon Chapman

2004-09-01 11:07:00

: Why are my homeowner rates continuing to increase, even though I haven't filed any claims?

ANSWER: To answer this question, a person has to understand how insurance works. The cost of claims is shared among all policyholders. This makes each individual's premium relatively small. Today, the average homeowners insurance premium is $487.00  while an average homeowners claim is around $3,000.00 - six times the cost of the premium. Remember, no homeowner pays for his or her own experience. You're helping to pay for those policyholders who file claims. The majority of premium (over 70%) is used to pay claims while the other 30% is used for operational costs including selling, servicing, and issuing the polices. Less than 1% of all premium is left to establish an emergency fund for unforeseen storms and disasters. And while you may believe your insurance company is over charging you, the fact of the matter is that the overwhelming majority of companies have actually lost money on property insurance over the last ten years. When you combine all of that with the fact that home repair costs are increasing at a rate of over 7% per year, it is easy to see why and how your rates continue to climb. Talk with your agent to see if there are viable ways for you to reduce your premiums. It may be a good idea to consider a higher deductible in order to lower your premium. Just remember that you will have higher out of pocket expenses in the event of a loss. Also, make sure that you are getting all the discounts available from your company, including alarm discounts, multi-line discounts, or new home discounts. Finally, keep up the maintenance on your home. Remember, that your insurance policy is for emergencies - it is not a maintenance program!! If we all work to prevent as many losses as possible, (including remembering to safeguard against theft) we can keep costs and premiums lower.

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Insurance

Shon Chapman

2004-08-01 11:51:00

Question: I was told that it is not necessary to carry a life insurance policy on my child, but everyone I know has them. Do I need it or not?

ANSWER: The simple answer would be yes, you do need to carry some coverage on your child, if not for you, then for your child's benefit. Many people (even some agents) are reluctant to talk about the importance of life insurance. For obvious reasons, people are very uncomfortable discussing death and the effect it could have on their family. This is even more difficult for some people who find it "morbid" to discuss planning in the event of a child's death. However, there are several good reasons to plan ahead. First, (and most obvious), is that life insurance does provide a death benefit that can be used for burial and other final expenses. Generally speaking, life insurance provides a lump sum than can be far more than the total amount of premium paid in, even during the course of many years of premium payments. Eventually we all die. Why pay full price, when you can purchase the benefit for a small monthly premium at just pennies on the dollar?Second, many times parents like to "lock in" coverage for their children. This can be done for both medical and financial reasons. As you know, life insurance becomes more expensive with age. By purchasing a policy at the earliest possible age, you lock in a low rate for your child to take over when they start paying the policy. Or better yet, it may be economical enough that you can "pay up" the policy in 10 or 20 years. The policy would then be in force for the child's entire life with no further payments due on it. On the medical side, it is simply a question of locking in your child's health now. Many parents simply don't want to take the risk that their child may need coverage later but be unable to qualify because of a medical reason or even an accident. Many times, companies have fewer underwriting requirements for children under 18 years of age.

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Insurance

Shon Chapman

2004-07-01 14:36:00

Question:  My oldest child will be leaving for college in the fall. Do I need to alter my auto/home owners insurance policy in any way?

ANSWER:  If you've got a student heading to college, you have much to think about -tuition, moving day, the dorm and more. Often, parents overlook one key aspect of their child's departure, that of insurance.Pay close attention to the personal possessions they take to the dorm. Your homeowner's policy may protect their laptop computer against theft while they are living in the dorm, but not against various types of physical damage. Also they or you might need to endorse your policy to cover other types of valuables (such as jewelry) that they take to school.  When students live in an off-campus apartment, you will want discuss with your agent, the need for renter's insurance for their personal property and liability coverage's.If your student takes a car to school, he or she can stay on your automobile policy, but you might want to make some changes. For example, you may want to add endorsements that provide auto rental reimbursement or emergency road service. This protection can be quite useful.Before your student goes off to school, please make sure you and your student's insurance needs are well protected, and you'll have one less worry.

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Insurance

John Eck

2003-07-01 13:54:00

:  I have two automobiles.  My wife and I each drive and we also have a 17 year old licensed son in high school.  My cars get older and less valuable every year, but my car insurance still seems to go up each year.  Why is this and what other measures can I take to keep the costs lower?

Question:  I have two automobiles.  My wife and I each drive and we also have a 17 year old licensed son in high school.  My cars get older and less valuable every year, but my car insurance still seems to go up each year.  Why is this and what other measures can I take to keep the costs lower?Answer:   You not only have a very typical situation, but also a couple of very reasonable questions and concerns.  Let's first discuss the coverage sections of an auto insurance policy.  The Liability section protects you in the event you are at fault in an accident.  The policy will pay for Bodily Injury and Property Damage to the other injured driver or other property damage caused by you up to the limits provided by the policy.  The State of Kansas only requires limits of $25,000 for Bodily Injury and only $10,000 for Property Damage (it's a good idea to check your coverages to see if you have adequate protection).  The next section, which is somewhat related to the Liability section, is called the 'Uninsured and Underinsured Motorist section'.  This will provide benefits to you in the event the other driver is at fault in an accident and he/she does not have adequate coverage, or NO coverage.  The limits are generally the same as your Liability limits.Kansas also requires that every auto insurance policy provide at least the basic medical coverage under what's referred to as 'personal injury protection'.  This will provide limited benefits for you and certain passengers in your cars no matter who is at fault in an accident.In order to pay for damage to your own cars in the event of an accident or occurrence, it is best to include two other coverages on your policy.   The 'collision' benefit pays for the repair or value of your vehicle in the event of an accident if it is your fault or if the other driver is at fault, but has no insurance.  It will also pay in the event your car is lawfully parked and is involved in a hit and run situation causing damage to your vehicle.  The other important coverage to include is 'comprehensive' which is often referred to as 'other than collision'.  As you might have guessed, this pays for repairs or the value of the car in the event it is damaged by an occurrence other than collision.   This could be damage caused by hail, wind, flood, theft, glass breakage, vandalism or many other types of losses.  There are exclusions in all policies that eliminate payments for such things as normal wear & tear, mechanical breakdown, war, and a few others.         In regard to your questions concerning the car getting older and rates going up,  the only policy sections which are concerned with the age of the car is Collision and Comprehensive.  These coverages pay for physical damage to the car itself. Lets assume that  you bought a new car in 2001.  If the cost of repairing the car from any type of damage did not increase (in other words, if the labor, mechanic rates and the cost of replacement parts would not increase from year to year), the insurance rates for the Collision and Comprehensive should not increase.  Two things must be considered.  Although the value of the car decreases each year, the inflationary costs of labor and parts generally increase; therefore, the cost of repairing damage to your vehicle will probably increase even though the value of the car may decrease.  Most damaged cars result in being fixed or repaired instead of being 'totaled out'.  This is generally the case involving the Comprehensive coverage (hail, vandalism, wind, etc).  Oftentimes, a client calls about this rate increase expressing the same concerns only to discover that a change occurred resulting in an increase to the Liability section instead of the Collision or Comprehensive sections.  Adding an underage driver is generally the likely culprit for the rate increase.  When experiencing an increase, compare each rating section with the previous billing.The second part of your question asks 'what can be done to lower the rates'.  Most all companies base the rates on the following: age, marital status and driving history of each driver and which car they each drive; the area of the state where the car is mainly driven, annual mileage, and its usage; the age, new cost and damage susceptibility of the vehicle being insured; and most recently, a big factor in rating has been the person's credit bureau 'insurance credit score'.  The last rating factor (credit score) has been the most controversial to most insureds.  Due to a lot of history and claim documentation, it has been proven that those with low credit scores seem to have more claims than those with the higher scores.  Based on the above rating factors, the things to do to keep the rates down include:•  Maintain an excellent driving record for all household drivers, with no moving violations or chargeable accidents.  A chargeable accident is one involving any payment on your behalf by your insurance company.  It doesn't matter if you were ticketed or not.  Keep your insurance always in force as many are now driving on a suspended license due to no insurance.•  The seventeen-year old driver would pay the least if an older vehicle was driven by him/her that only required liability insurance.  Many companies give 10% discounts for Driver Ed and up to 25% discounts for Good Students through college(Grade B or better).  The expensive costs are most often for the Collision coverage for the new automobile.•  Late payments, credit card accounts (# of ), repossessions, and bankruptcy can cause havoc to the insurance credit score.  Try to maintain excellent credit for the best rates.•  Factors such as your age, where you live, children's ages, and marital status are fixed situations and its best to concentrate on driving habits and credit to lower the rates.•  Defensive driving courses are offered in many localities and often result in 10% reductions.•  Have a discussion with the 17 year-old and explain that in your zip code area, it's illegal to drive until after he/she has a job and high-school diploma.If the last cost saving item works for you, you could hold seminars on what you said and how you were able to convince your child.  While new legislation and changes in property and casualty insurance have created a lot of additional paperwork for agents, they will still be happy to discuss these rate-lowering methods if you will contact them.

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Insurance

John Eck

2002-02-01 16:35:00

Question:  I have here questions: 1. Why should I own life insurance?2. What kind of life insurance is best for me?3. How much do I need?

Answer:  Why should I own a life insurance policy?   Although one can literally develop lists with hundreds of reasons to own an insurance policy on your life, they can all be boiled down to essentially three reasons: (1) you love some one, (2) you owe someone, and/or (3) you want to create value for yourself in the future.  Let's explore these three reasons in greater depth: You love someone.  A properly structured life insurance plan replaces your human life value when you die.  Making sure your loved ones are not faced with a financial crisis in an emotionally difficult time is a sure sign that you love them.  All of the hopes and dreams you and your family have that take money can be provided for. You've given them the gift of financial stability.  Life insurance is the only financial product that can guarantee that the right amount of dollars is available at exactly the right time [unless, of course, you already have that amount in a guaranteed account]. You owe someone.  Since life insurance is the only financial product that can guarantee the right amount of money is available at the right time, many creditors require life insurance as collateral for loans.  You can also make sure your mortgage doesn't out live you.  In business, you can ensure your partner has enough money to continue to own the business after you die and your family has the value of your hard work.  In addition, life insurance enables you to fulfill promises made to key employees for post retirement benefits.  You want to create value for yourself.   Most of us want to live as long as we can.  With that mindset, it is easy to view life insurance premiums as a "necessary evil".  However, cash value life insurance can also provide many living benefits as well as death benefits.  As an accumulation and distribution vehicle, cash value life insurance is unique.  It is the only financial instrument that allows you to accumulate money on a tax deferred basis, use the money while you're living in a very tax favored manner, and then pass money to heirs tax free.  Properly designed and funded, a cash value life insurance policy can become a great source of supplemental retirement funds, help fund a child's college education or many other opportunities for which you need additional money.  Question:  What kind of life insurance is best for me?Answer:  There are essentially four types of life insurance available: term insurance, whole life, universal life, and variable universal life. Which type is best for you depends on your answer to question one, your budget, and your time horizon [i.e. how long do you need the protection or how long till you need to begin receiving retirement benefits].  If you want to create value for yourself or key employee, a cash value policy is the only way, either traditional whole life, a fixed universal life, or variable universal life.  If you are using the policy as collateral on a relatively short-term loan, then term insurance is the best.  In general, the longer time horizon you have, the less cost-effective term insurance becomes.  Keep in mind that term insurance pays a miniscule portion of death claims (less than 1% in some studies).  If you really want and need the life insurance to be there when you die (why else own it), then cash value insurance is the best way to go.  If your budget is tight, a mixture of cash value and term may be appropriate.  Permanent cash-value life insurance is a business or family decision.  How much is needed, when is it needed, and how to we pay for it.  A lottery ticket it is not.  You pay a life insurance premium and you do not want to win.  Low term insurance premiums are advertised on every media, and for a good reason.  Very few buyers win [or lose, depending on your attitude].  If the need for cash is real at the time of one's death, then its best to plan for the cash to be there, regardless of the time of death.Question:  How much do I need? Answer:  Most life insurance companies will issue a death benefit equal to no more than fifteen (15) times your earned income if you are under age 50.  If you wish to replace your income for your spouse and children, then 10 to 15 times income makes sense.  After age 50, companies will look at different needs such as estate planning and payment of taxes to determine maximums.  If you are using the policy primarily as collateral for a loan, clearly the amount of the loan will determine the amount of insurance.  Other factors to look at include how much consumer debt you have, the amount and term of your mortgage, and final expenses. A "human life value" calculation that takes into account not only your potential earning power but also your spouse's earnings, and the age of your children is an effective way of arriving at an appropriate amount. You should also consider the hopes and dreams you would like to assure for your family if you were not here.  If you're really questioning the amount of life insurance you should provide to your family, ask yourself this question. "If you just finished visiting with your doctor and was told that you had less than 48 hours to live, but you still could purchase whatever amount of life insurance you desired for your family [and money was not a consideration], how much would you then buy?"Life insurance is an important financial decision, the foundation of solid financial planning.  All aspects of what you need and want to accomplish financially should be considered in your selection of life insurance. Some may feel life insurance is ‘old hat’.  Many of these people come from the ‘Baby Boomer’ generation.  The truth of the matter is that with the rise in incomes and personal net worth, life insurance has probably never made as much sense at it does today.

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Insurance

Dennis Manson

2001-10-01 17:30:00

Question: What is happening with the Medicare + Choice program?

Answer:  The Medicare + Choice (M+C) program was once a popular alternative to traditional Medicare for many individuals in certain areas of the country. This program allowed managed care plans such as HMOs to contract with Medicare to provide comprehensive services to HMO enrollees. The M+C program was seen as a sort of a "safety net" in the Medicare program for low-income and middle-class Medicare beneficiaries because it provided access to broader coverage at lower costs than would be otherwise available. Prescription drug coverage was very popular among the Medicare HMO enrollees.The M+C program recently, however, has encountered considerable turmoil. Numerous health plans stopped participating in the program in 1999 and 2000. The Balanced Budget Act of 1997 limited the payment to the M+C plans. This has forced many plans to reduce benefits and raise costs for Medicare enrollees, reduce the geographic area where they provide coverage, or altogether pull out of the program, leaving many individuals to find other coverage. It is anticipated that these declines in this program will continue for 2001.The most likely coverage category to be reduced by M+C plans is the prescription benefit. Prescription drugs were a major reason Medicare beneficiaries were attracted to Medicare HMOs in the first place. These reductions in the prescription drug benefits have only served to accentuate the limitations to the coverage of traditional Medicare. As Medicare beneficiaries look to replace the prescription drug coverage that they had through M+C plans, they are finding coverage through other sources to be either non-existent or very expensive.Question:  Will Medicare ever cover prescription drugs?Answer:  Prescription drug expenditures for Medicare beneficiaries who didn't live in a nursing home (or other institution) averaged $688 per person in 1996. These costs are certain to go up each year as the costs of prescription drugs continue to increase. According to the 1996 Medicare Current Beneficiary Survey, just over 50% of Medicare beneficiaries had prescription benefits throughout 1996. Nearly 30% had no coverage. The rest, roughly 20%, had coverage for prescription drugs only part of the year. Employer-sponsored health plans are the primary sources of prescription drug coverage. Seventy-seven percent of those that had retiree coverage through an employer had year-round prescription coverage. Almost 25% of individuals with a Medigap supplement policy had this coverage. Beneficiaries who have drug coverage use more prescription medications than those without coverage. Those that do not have coverage fill a third fewer prescriptions and spend 60 percent less on drugs.As the costs and need for prescription drugs continue to go up, so does the pressure on Congress to implement some sort of prescription drug coverage. This is happening at the same time that there is pressure to hold the costs on Medicare spending overall. Additionally, the initial costs projected by the government to provide a prescription drug benefit were too optimistic. Latest reports show that it will be much more expensive to provide this benefit than initially thought.Question: What are some of the possibilities of reforming Medicare?Answer: As Americans age 65 and older spend more and more on medical care and prescription drugs, the need for fixing the system is apparent. Medicare beneficiaries spend 22 percent of the income on health care, and that is estimated to rise to 30 percent in 2025. Many proposals have been floated on how to best reform the Medicare program. Only time will tell which ideas will galvanize into a practical solution to the challenges we face.In a recent report published by the Commonwealth Fund, four possible options for Medicare benefit reform were discussed. Option 1 would combine the Medicare Parts A and B deductibles into one deductible of $400, and add a "catastrophic ceiling" of $3,000 as the most any person would pay in a year for covered health care services. Option 2 would have a $200 deductible for each of Medicare Part A and Part B, reduce the Part B coinsurance to 10% (currently 20%), and have a $2,000 catastrophic ceiling. The third option would have only a Part B deductible of $200 (no Part A deductible), but increase the Medicare premium to $105 per month. The final option is to add prescription drug coverage to Medicare by paying for 50% of the costs and having a $2,500 catastrophic ceiling, and adding $26 to the monthly premium. The fourth option could be combined with any of the first three alternatives so each option would include prescription drug coverage. Please see the explanation below for a summary of the options.Four Options for Restructuring Medicare Coverage:Option 1: Basic catastrophic coverage and restructured deductible:• Combine the Part A and Part B deductibles into one annual deductible of $400.• $3,000 annual limit on beneficiary cost sharing and deductible expensesOption 2: Additional catastrophic coverage and lower cost-sharing rates:• Reduce Part A deductible to $200 per spell of illness• Increase the Part B deductible to $200• Reduce the coinsurance rate to 10 percent of approved charges• Add 10% coinsurance for home health• $2,000 annual limit on beneficiary cost-sharing and deductible expensesOption 3: Zero coinsurance and premium increase:• Eliminate Part A deductible and coinsurance, and Part B coinsurance• Increase Part B deductible to $200• Combined Part A and B premium of $105 per monthOption 4: Medicare prescription drug coverage:• Add coverage for 50% of costs of prescriptions• $2,500 limit on beneficiary cost-sharing of drugs• Add $26 to monthly premium• Lower the premium on a sliding scale for those below 150% of Federal poverty levelEach of these options are projected to reduce out-of-pocket spending for health care services for Medicare beneficiaries.Question: What do I need to know about Medicare supplement plans?Answer: The success of Medicare supplement plans can be clearly seen. Approximately 90% of Medicare beneficiaries have some sort of additional coverage to Medicare through the private sector, including Medicare supplement plans. By filling in the gaps left by Medicare, these plans have proven to be very popular and beneficial for consumers.Consumers should be very thorough in shopping for Medicare supplement plans. Although the benefit plans are standardized, there is a wide variation in premiums and customer service. Beneficiaries are able to save a  considerable amount of premiums by thoroughly evaluating their choices in the market. In addition, it is a good idea to check on the rates of other plans every two years or so after purchasing a Medicare supplement plan.

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Insurance

Dennis Manson

2001-09-01 11:37:00

Question: My husband and I are in our mid 40's. We have our own business. We buy our own health insurance. Like a lot of people, we're concerned about the future of Medicare. Will it be available to us when we need it, and if so, how much are the premiums projected to increase?

Answer: As with anything, it's all about how much is coming in and how much is going out. Medicare spending continues to increase at large levels. In 2000 it represented 2.5 percent of the gross domestic product (GDP), and it is projected to be 4 percent in 25 years. According to the 2000 Trustees Reports, the Medicare Part A Trust Fund will be insolvent in 2025. The number of beneficiaries will increase by 77 percent during this same period.In fact, the number of beneficiaries will rise faster than the number of workers contributing to the system beginning in 2010.  This bulging of Medicare expenditures hits our senior citizens very hard. If you consider how much Medicare beneficiaries spend out of pocket for health care, the trend is disturbing. Currently Medicare beneficiaries pay for about 22.7 percent of Medicare expenditures from their own pockets for such things as Part B premium, deductibles and coinsurance. By 2025 this is projected to go up almost 3 percentage points to 25.3 percent. Fortunately, much of these costs that come from the Medicare deductible and coinsurance are covered by Medicare supplement policies that can be purchased from insurers. The Medicare economic forecasts seem to bear little good news. Brace yourselves for the projections on the Medicare Part B premiums for the future.Twenty-five years from now, the premiums are projected to increase by more than 80 percent from what they are currently. The premiums will increase from $631 in 2000 to $1,151 in 2025. During that same time, the Medicare expenditures that beneficiaries pay will go up from $1,636 to an estimated $2,660. The challenges facing Medicare come from the so-called "aging of America," that is, a growing senior citizen population, sharply increasing medical costs and the Medicare system being underfunded. Yet these costs do not include the costs for prescription drugs because most are not currently covered under Medicare. Currently, many of our senior citizens are financially strained by paying the full-cost for drugs, but adding the coverage to Medicare will only tax an already over-strained system.

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Insurance

John Eck

2001-09-01 10:08:00

Question:  We are a small business with 26 employees.  We feel we have the entire primary areas of insurance covered (i. e. property, liability, work comp, group health & dental, etc.).  The other day I heard mention of 'employee practices insurance'.  What is this? Do I need it?

Answer:  Most business owners have worked and invested much time to get where they are today.  They know that in the Midwest, storms happen and they want their property and vehicles insured against damage and destruction.  They want 'full coverage' on their property.  They also 'full coverage' and help with defense costs in the event they are in a lawsuit caused by their company's negligence.  When you mentioned in your question that you have the area of liability covered, what you probably meant was that you have purchased a liability policy together with all its exclusions and definitions.  One of the many exclusions in the liability policy is any action against the company caused by 'employment practices'.  Employment practices relates to the relationship between the employer and the  person being interviewed for the job, to the employee once he/she is hired and all the time period until the employee terminates (voluntarily or otherwise).  In other words, it is hiring practices, working and work site conditions, and termination practices.  It is not employee bodily injury situations (this is covered by work comp).Owners and managers that believe the myth that 'employment lawsuits' only happen to other companies are exposing their company's assets to serious financial risk.  While a company might believe it is able to absorb the cost and time of defending an isolated employee complaint, it is possible that they are not aware that compensatory awards for employment suits reached a high of over $204,300 per average award in 1995 which was an increase of 56% over the previous year and has been increasing each year since then.Title VII of the Civil Rights Act of 1964, followed by the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act, the Equal Pay Act, the Rehabilitation Act of 1973, the Civil Rights Act of 1991, and the Employee Polygraph Protection Act are just a few of the employee protection laws that give volumes to the legal protection system.  If your business does everything right, you probably won't have a judgement awarded against you, but out of court defense costs generally exceed over $50,000.  For those cases that do end up in court, one insurance company reports that employers lose 60% of the cases, the medium judgement awarded is $167,000 and the cost of the jury trial averages over $450,000.  A few examples of awards from this same reporting company are: Maternity leave victim - $935,000   Wrongful termination - Native born Indian settles out of court for $12,000    Woman wrongfully discharged - Intentional infliction of emotional stress  $95,000   Cancer victim employment discrimination, under ADA laws $272,000   Grocery Clerk sexual discrimination  $300,000  and Racial discrimination - Doctors office  $300,000There is much more public awareness due to the reporting by the newspapers, magazines, radio and television of high profile cases such as the Clarence Thomas/Anita Hill case and many others since that time.  Other high profile cases and large settlements have encouraged and inspired attorneys to enter the employment practices law arena.  Corporate downsizing resulting in terminations, disputes about what constitutes 'disability', a large backlog of EEOC complaints inviting disgruntled employees to seek out an attorney for quicker compensation are just a few more reasons many companies are considering Employment Practices Insurance.Wrongful employment acts generally mean any actual or alleged act of Discrimination, Sexual Harassment or Wrongful termination and most often the insurance company will pay for defense and judgements awarded in theses situations.  Many companies are expanding this definition to include Demotion, Failure to Promote, Retaliation, Wrongful Discipline, Negligent Evaluation/Training, and Workplace Harassment and even Third party harassment.As Employment Practices insurance is not inexpensive, other things you could consider as an alternative would be:· Having a designated human resource manager· Reviews prior to hiring/terminations· Conducting periodic employment practices procedures· Requiring you managers to attend specific training courses relating to employment practices· Establishing written guidelines for grievances, and other employment practicesOver 50% of all marriages terminate in divorce.  There is no insurance to pay the enormous costs associated with divorce.  As an employer, you like to think that you trust all 26 of your employees (how well do you know your occasional temporary workers?).  A continued trust and respect between the employee/employer will help in avoiding the types of lawsuits referred to above; however,  of your 26 employees, how many are on the signature card of your company checking account?  If the marriage between the employer/employee terminates and the unhappy employee feels he/she has been wronged, there is insurance to assist this situation.  I would recommend that you check out the premium cost and benefits for your company.

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Insurance

John Eck

2001-07-01 16:07:00

Question: Recently, I've been hearing about people buying Cancer Insurance.  I have health insurance through my work for my family.  What does cancer insurance cover that is already not covered through health insurance?

Answer:  First, both you and the company for which you work need to be commended for having health insurance.  Unfortunately, many families today do not.  Not knowing what health plan you have, I am assuming that the coverage provided is at least better than average.  Your health plan (as with all health plans being offered today) has a provision in the policy or certificate entitled 'Exclusions'.  You will find in checking various health insurance plans that these exclusions can range from ten to forty plus areas of non-coverage or very limited-coverage.  Experimental treatments, consulting or using hospitals or doctors not on the company preferred list and even cosmetic procedures are included in most company's 'Exclusion' provisions.According to the American Cancer Society (Cancer Facts & Figures - 1998), men have a one in two lifetime risk of developing cancer; women have a one in three risk.  Over two million new cases of cancer are expected to be diagnosed this year alone.   Treatment of cancer is costly.  Over $35 billion is spent each year to treat cancer.  Additionally, it is estimated that over $65 billion is spent to pay for costs that not covered by insurance.  These are only numbers, until you or a member of your family becomes a part of the statistics. Your health insurance should pay for most of the chemotherapy, radiation, surgery, consultations, x-ray testing and scans, and other hospital and clinic charges.  Of course, you have to pay the deductible, co-pays and other cost sharing amounts imposed by the policy.  These non-covered items are only the beginning of the 'extra expenses' however.  Cancer is a very 'special' type of illness.  Although the survival rate for cancer has increased dramatically over the last few decades due to newer treatments and medical advances, there is an indescribable fear associated with the diagnosis.   In addition to not knowing what is the very best treatment available, one does not know who is the best doctor/oncologist, where the best treatment center is, or even where to go for such information.  Another stressful unknown is how much it will all cost, especially since you want the best.  Good and better' isn't enough... after all, this has got to be fixed.  In addition to the non-covered expenses, the regular bills still come in each month.  The mortgage, car payment, utilities, groceries and other family expenses still require a regular paycheck. Will you still be able to continue working?  There are many additional expenses that now must be budgeted for and paid which result from the diagnosis.  In order to satisfy oneself that the 'best' treatment is going to be available, travel, lodging, phone calls, and additional household help is needed.  The expenses associated with trips to the  doctor, Anderson, Mayo Clinic, Memorial Sloan-Kettering Cancer Center, and other national treatment centers can take away a lot of savings.  Supplemental cancer insurance provides the extra cash to allow all the new bills to be paid and to reduce and eliminate the stress associated with the reduced paychecks.  An important item to understand is that all benefits paid under this supplemental insurance are paid in addition to any other individual or group health insurance you already have. Those who have battled cancer without the benefit of extra cash provided by supplemental insurance will tell you of the added stress, pain, and worry.  Supplemental cancer  insurance protection doesn't pay the hospitals, doctors, or radiologists.  It pays you direct.  You receive additional money based on the type of care and treatment needed,  sort of  like a disability insurance payment.  The money paid directly to you can be used by you in whatever way you need it.  There are policies that pay as little as $50 per day when receiving chemotherapy or radiation treatment, as well as policies which pay additional moneys to the patient equal to the total amount of actual charges billed for the treatment, which can be thousands of dollars per day.Question: How do I determine which is the best policy?Answer: Review the benefits of each prospective policy to determine which will pay you the most cash for major expenses caused by the illness.  Since chemotherapy and radiation are usually the most significant and expensive treatments, look closely at the benefits paid for these treatments.   Disregard such terms as 'unlimited' since many policies have other limiting features which may reduce the total benefits paid.Question: Is Cancer Insurance expensive?Answer: Perhaps the best way to answer this question is by comparing it to some other forms of coverage.  Dental insurance is somewhat popular and considered a necessity by many people.  A family dental policy costs around $65 per month.  Generally the benefits are limited to $1000 - $1500 per year.  Almost everyone on Medicare pays for a supplement policy with a cost of $65 to $200+  per month, which  too, has very limited benefits.  An excellent supplemental cancer policy costs a family between $40 and $65 per month and can pay hundreds of thousands of dollars per year

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Insurance

John Eck

2001-07-01 15:19:00

Question:  I have two automobiles.  My wife and I each drive and we also have a 17 year old licensed son in high school.  My cars get older and less valuable every year, but my car insurance still seems to go up each year.  Why is this and what other measures can I take to keep the costs lower?

Answer:   You not only have a very typical situation, but also a couple of very reasonable questions and concerns.  Let's first discuss the coverage sections of an auto insurance policy.  The Liability section protects you in the event you are at fault in an accident.  The policy will pay for Bodily Injury and Property Damage to the other injured driver or other property damage caused by you up to the limits provided by the policy.  The State of Kansas only requires limits of $25,000 for Bodily Injury and only $10,000 for Property Damage (it's a good idea to check your coverages to see if you have adequate protection).  The next section, which is somewhat related to the Liability section, is called the 'Uninsured and Underinsured Motorist section'.  This will provide benefits to you in the event the other driver is at fault in an accident and he/she does not have adequate coverage, or NO coverage.  The limits are generally the same as your Liability limits.Kansas also requires that every auto insurance policy provide at least the basic medical coverage under what's referred to as 'personal injury protection'.  This will provide limited benefits for you and certain passengers in your cars no matter who is at fault in an accident.In order to pay for damage to your own cars in the event of an accident or occurrence, it is best to include two other coverages on your policy.   The 'collision' benefit pays for the repair or value of your vehicle in the event of an accident if it is your fault or if the other driver is at fault, but has no insurance.  It will also pay in the event your car is lawfully parked and is involved in a hit and run situation causing damage to your vehicle.  The other important coverage to include is 'comprehensive' which is often referred to as 'other than collision'.  As you might have guessed, this pays for repairs or the value of the car in the event it is damaged by an occurrence other than collision.   This could be damage caused by hail, wind, flood, theft, glass breakage, vandalism or many other types of losses.  There are exclusions in all policies that eliminate payments for such things as normal wear & tear, mechanical breakdown, war, and a few others.         In regard to your questions concerning the car getting older and rates going up,  the only policy sections which are concerned with the age of the car is Collision and Comprehensive.  These coverages pay for physical damage to the car itself. Lets assume that  you bought a new car in 2001.  If the cost of repairing the car from any type of damage did not increase (in other words, if the labor, mechanic rates and the cost of replacement parts would not increase from year to year), the insurance rates for the Collision and Comprehensive should not increase.  Two things must be considered.  Although the value of the car decreases each year, the inflationary costs of labor and parts generally increase; therefore, the cost of repairing damage to your vehicle will probably increase even though the value of the car may decrease.  Most damaged cars result in being fixed or repaired instead of being 'totaled out'.  This is generally the case involving the Comprehensive coverage (hail, vandalism, wind, etc).  Oftentimes, a client calls about this rate increase expressing the same concerns only to discover that a change occurred resulting in an increase to the Liability section instead of the Collision or Comprehensive sections.  Adding an underage driver is generally the likely culprit for the rate increase.  When experiencing an increase, compare each rating section with the previous billing.The second part of your question asks 'what can be done to lower the rates'.  Most all companies base the rates on the following: age, marital status and driving history of each driver and which car they each drive; the area of the state where the car is mainly driven, annual mileage, and its usage; the age, new cost and damage susceptibility of the vehicle being insured; and most recently, a big factor in rating has been the person's credit bureau 'insurance credit score'.  The last rating factor (credit score) has been the most controversial to most insureds.  Due to a lot of history and claim documentation, it has been proven that those with low credit scores seem to have more claims than those with the higher scores.  Based on the above rating factors, the things to do to keep the rates down include:•  Maintain an excellent driving record for all household drivers, with no moving violations or chargeable accidents.  A chargeable accident is one involving any payment on your behalf by your insurance company.  It doesn't matter if you were ticketed or not.  Keep your insurance always in force as many are now driving on a suspended license due to no insurance.•  The seventeen-year old driver would pay the least if an older vehicle was driven by him/her that only required liability insurance.  Many companies give 10% discounts for Driver Ed and up to 25% discounts for Good Students through college(Grade B or better).  The expensive costs are most often for the Collision coverage for the new automobile.•  Late payments, credit card accounts (# of ), repossessions, and bankruptcy can cause havoc to the insurance credit score.  Try to maintain excellent credit for the best rates.•  Factors such as your age, where you live, children's ages, and marital status are fixed situations and its best to concentrate on driving habits and credit to lower the rates.•  Defensive driving courses are offered in many localities and often result in 10% reductions.•  Have a discussion with the 17 year-old and explain that in your zip code area, it's illegal to drive until after he/she has a job and high-school diploma.If the last cost saving item works for you, you could hold seminars on what you said and how you were able to convince your child.  While new legislation and changes in property and casualty insurance have created a lot of additional paperwork for agents, they will still be happy to discuss these rate-lowering methods if you will contact them.

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Insurance

Melissa Davis

2001-07-01 12:19:00

Question: Is long-term care insurance a wise investment?

Answer:  Many Americans, unprotected by long-term care insurance, could be facing risky fates, financial specialists say. Those experts provide staggering statistics to support their claims:• Nearly half of all people 65 or older will eventually enter a nursing home.• An estimated seven in 10 people belonging to that same age group will require home care.• Of those who enter nursing homes, most will stay about 2 ½ years."Long-term care can wipe people out," said Randy Thurman of Retirement Investment Advisors. "I've seen people who don't have insurance really get hurt."Larry Awbrey of Financial Network in Oklahoma City, considers long-term care insurance an increasingly worthwhile investment."Modern medicine, combined with technology, is extending the average life expectancy. That's the good news," Awbrey said. "But what if something happens and you run out of money? That's the bad news. That's the thing that can torpedo all the financial planning we've done."With America's population rapidly aging - and more long-term illnesses inevitable - Awbrey no longer feels comfortable focusing only on the traditional components of financial planning. He still spends considerable time on his clients' investments, retirement strategies, estate plans and trusts. But he at least raises the issue of long-term care insurance - and the risks of not having it.  From there, he lets his clients decide what to do next."They usually ask themselves, 'Do we have enough money to pay for the care we might need for a long period of time? And if we do, do we want to use that money - and in effect disinherit our children and grandchildren?  Or do we want to pass the risk onto an insurance company for a reasonable premium?'" Awbrey said.“For the poor, long-term care insurance is not an affordable option.  For the extremely wealthy, insurance is often unnecessary,” Awbrey said.  “But for the vast population of middle-class Americans, long-term care insurance can be a critical investment,” he said.Those average Americans are typical clients of Christine Kreissler, a senior long-term care specialist for General Electric. A pioneer of long-term care coverage, G.E. has distinguished itself by never raising existing customers' rates in 27 years of business. With 650,000 policyholders, the company is also vastly larger than its competitors.Kreissler became a representative for G.E. three years ago, after researching long-term care policies for her parents. She discovered that her mother, who'd suffered a stroke, didn't qualify for coverage. But her father was eligible, so she arranged a policy for him. Then she bought policies for both herself and her husband and set out to spread the word.Often, Kreissler is greeted by people reluctant to discuss coverage for nursing home facilities they hope never to enter."Actually, most people end up buying this so that, hopefully, they won't have to go to a nursing home," Kreissler said. "They want to get good,quality care at home instead."In addition to nursing home stays, long-term care policies offer coverage for the following:• Home health care, including services like physical therapy and nursing.• Health care equipment for the home.• Temporary "respite" care, which provides relief for family members caring for policyholders.• Adult day care.• Assisted living care.• Hospice care.Policy prices vary widely, climbing with increased coverage and the age of the buyer. As with most insurance, the policies are cheapest for those who currently need them least.Financial planners often recommend that their clients consider long-term care insurance around the age of 55, when rates are still affordable. Waiting even a few years can result in dramatic price differences, Kreissler said.She offered the following figures, all based on the same plan with comprehensive coverage that includes discounts for good health and spousal enrollment:• At age 55, a client would pay $95 a month and spend a total of $28,000 for 25 years of coverage.• At 60, a client would pay $161 a month and spend a total of $38,000 for 20 years of coverage.• At 65, a client would pay $288 a month and spend a total of $51,800 for 15 years of coverage.By postponing coverage until normal retirement age, people face much higher costs for fewer years of coverage - "even under the best-case scenario," Kreissler said."If you're taking high blood pressure medicine, you might not get the preferred health discount," she said. "Suppose your spouse had a little stroke and no longer qualified, then you wouldn't get the spousal discount either.  These discounts, of 10 percent and 25 percent respectively, substantially lower the overall premium price,” she said. “By planning ahead - and securing manageable monthly payments - Americans can better protect their assets and manage their risks,” Kreissler said. “Most Americans already buy insurance to shield themselves against major risks like home damage, car wrecks and health problems, she said. “They should similarly prepare themselves for the risk of expensive long-term care,” she added. "Once you have reached the age of 65, you have a 43-percent chance of spending time in a nursing home," Kreissler said. “And because we're all living longer, that risk is climbing all the time."

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Insurance

John Eck

2001-07-01 09:02:00

: Recently, I've been hearing about people buying Cancer Insurance.  I have health insurance through my work for my family.  What does cancer insurance cover that is already not covered through health insurance?

Question: Recently, I've been hearing about people buying Cancer Insurance.  I have health insurance through my work for my family.  What does cancer insurance cover that is already not covered through health insurance?Answer:  First, both you and the company for which you work need to be commended for having health insurance.  Unfortunately, many families today do not.  Not knowing what health plan you have, I am assuming that the coverage provided is at least better than average.  Your health plan (as with all health plans being offered today) has a provision in the policy or certificate entitled 'Exclusions'.  You will find in checking various health insurance plans that these exclusions can range from ten to forty plus areas of non-coverage or very limited-coverage.  Experimental treatments, consulting or using hospitals or doctors not on the company preferred list and even cosmetic procedures are included in most company's 'Exclusion' provisions.According to the American Cancer Society (Cancer Facts & Figures - 1998), men have a one in two lifetime risk of developing cancer; women have a one in three risk.  Over two million new cases of cancer are expected to be diagnosed this year alone.   Treatment of cancer is costly.  Over $35 billion is spent each year to treat cancer.  Additionally, it is estimated that over $65 billion is spent to pay for costs that not covered by insurance.  These are only numbers, until you or a member of your family becomes a part of the statistics. Your health insurance should pay for most of the chemotherapy, radiation, surgery, consultations, x-ray testing and scans, and other hospital and clinic charges.  Of course, you have to pay the deductible, co-pays and other cost sharing amounts imposed by the policy.  These non-covered items are only the beginning of the 'extra expenses' however.  Cancer is a very 'special' type of illness.  Although the survival rate for cancer has increased dramatically over the last few decades due to newer treatments and medical advances, there is an indescribable fear associated with the diagnosis.   In addition to not knowing what is the very best treatment available, one does not know who is the best doctor/oncologist, where the best treatment center is, or even where to go for such information.  Another stressful unknown is how much it will all cost, especially since you want the best.  Good and better' isn't enough... after all, this has got to be fixed.  In addition to the non-covered expenses, the regular bills still come in each month.  The mortgage, car payment, utilities, groceries and other family expenses still require a regular paycheck. Will you still be able to continue working?  There are many additional expenses that now must be budgeted for and paid which result from the diagnosis.  In order to satisfy oneself that the 'best' treatment is going to be available, travel, lodging, phone calls, and additional household help is needed.  The expenses associated with trips to the  doctor, Anderson, Mayo Clinic, Memorial Sloan-Kettering Cancer Center, and other national treatment centers can take away a lot of savings.  Supplemental cancer insurance provides the extra cash to allow all the new bills to be paid and to reduce and eliminate the stress associated with the reduced paychecks.  An important item to understand is that all benefits paid under this supplemental insurance are paid in addition to any other individual or group health insurance you already have. Those who have battled cancer without the benefit of extra cash provided by supplemental insurance will tell you of the added stress, pain, and worry.  Supplemental cancer  insurance protection doesn't pay the hospitals, doctors, or radiologists.  It pays you direct.  You receive additional money based on the type of care and treatment needed,  sort of  like a disability insurance payment.  The money paid directly to you can be used by you in whatever way you need it.  There are policies that pay as little as $50 per day when receiving chemotherapy or radiation treatment, as well as policies which pay additional moneys to the patient equal to the total amount of actual charges billed for the treatment, which can be thousands of dollars per day.Question: How do I determine which is the best policy?Answer: Review the benefits of each prospective policy to determine which will pay you the most cash for major expenses caused by the illness.  Since chemotherapy and radiation are usually the most significant and expensive treatments, look closely at the benefits paid for these treatments.   Disregard such terms as 'unlimited' since many policies have other limiting features which may reduce the total benefits paid.Question: Is Cancer Insurance expensive?Answer: Perhaps the best way to answer this question is by comparing it to some other forms of coverage.  Dental insurance is somewhat popular and considered a necessity by many people.  A family dental policy costs around $65 per month.  Generally the benefits are limited to $1000 - $1500 per year.  Almost everyone on Medicare pays for a supplement policy with a cost of $65 to $200+  per month, which  too, has very limited benefits.  An excellent supplemental cancer policy costs a family between $40 and $65 per month and can pay hundreds of thousands of dollars per year

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Insurance

Lori Johnson

1969-12-31 18:00:00

Question: What do you buy for that special someone when you can’t think of anything else?

Answer: With increasing frequency these days, the answer is a gift card. The National Retail Federation has reported that Americans spend more than $26 billion on gift cards during the holiday shopping season, and the average consumer spends more than $120. The reasons are simple -- gift cards are easy to purchase, never come in the wrong size or color, and the recipient is guaranteed to get an item he/she wants with it. Like anything else of value, however, they come with risks. Some have fees attached to them, and some expire if the owner does not use them within a certain period of time. They are also vulnerable to theft, disappearance and destruction. If your gift cards are stolen during a burglary or burn up during a house fire, will a homeowner’s insurance policy reimburse you for them? The standard homeowner’s policy provides partial coverage for gift cards. It limits coverage for money, bank notes, coins, “stored value cards,” smart cards and similar cash-like items up to $200 for all property in that category. Also, the policy covers personal property, including cash and similar items. The list includes such causes as fire or lighting, windstorm or hail, explosion, smoke, vehicles, theft, vandalism, weight of ice, snow or sleet and others. A few examples will illustrate how this works. Joe receives a $50 gift card for an electronics store for Christmas and leaves it in his living room with his other gifts while he goes out to a holiday gathering. Someone breaks into his home and makes off with all the gifts. His policy will provide full coverage for the clothes, DVD’s and workout gear he got and the full $50 for the gift card. This is because the value of everything in that category of cash-like items was less than $200. Joe’s family can’t think of a thing to get him for Christmas, so he gets a sweater and a pile of gift cards to various electronics and sporting goods stores and coffee shops. He feigns enthusiasm for the cards and leaves everything under the tree when he goes out to visit friends that night. Unfortunately, he has forgotten to water the tree for two weeks; an exposed tree light wire ignites it. The resulting fire cooks his downstairs. The policy covers the damage to the home and contents, but it pays only the $200 maximum for the $300 worth of gift cards. Next year, Joe’s gift cards survive Christmas Day and, because he enjoys being stuck in traffic jams, he goes to the mall the day after the holiday to use them. However, when he steps up to a cash register with a Blu-Ray player under his arm, he cannot find any of the cards. He searches his car, every pocket in his coat, pants and shirt, and every place he went to in the mall, but he never finds the missing cards. Unfortunately, because disappearance is not one of the causes of loss listed on the policy, his insurance will not pay anything for them. Some insurance companies may offer to increase the amount of coverage and the covered causes of loss for these items, so check with a professional insurance agent to identify those companies and find out the cost. For a small amount of money, you may be able protect yourself against the loss of these common gifts.

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Insurance

Steve Henry

1969-12-31 18:00:00

: What Is a "High Deductible Health Plan" (HDHP)?ANSWER: You must have an HDHP if you want to open an HSA. Sometimes referred to as a "catastrophic" health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn't pay for the first several thousand dollars of health care expenses (i.e., your "deductible") but will generally cover you after that.  Of course, your HSA is available to help you pay for the expenses your plan does not cover. For 2006, in order to qualify to open an HSA, your HDHP minimum deductible must be at least $1,050 (self-only coverage) or $2,100 (family coverage).  The annual out-of-pocket (including deductibles and co-pays) for 2006 cannot exceed $5,250 (self-only coverage) or $10,500 (family coverage). HDHPs can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (and co pays & coinsurance) for non-network services.  QUESTION: What applies to my deductible?ANSWER: All covered medical expenses apply to the deductible each year including Doctors of

ANSWER: A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis. You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. You own and you control the money in your HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer. You will also decide what types of investments to make with the money in the account in order to make it grow.QUESTION: What Is a "High Deductible Health Plan" (HDHP)?ANSWER: You must have an HDHP if you want to open an HSA. Sometimes referred to as a "catastrophic" health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn't pay for the first several thousand dollars of health care expenses (i.e., your "deductible") but will generally cover you after that.  Of course, your HSA is available to help you pay for the expenses your plan does not cover. For 2006, in order to qualify to open an HSA, your HDHP minimum deductible must be at least $1,050 (self-only coverage) or $2,100 (family coverage).  The annual out-of-pocket (including deductibles and co-pays) for 2006 cannot exceed $5,250 (self-only coverage) or $10,500 (family coverage). HDHPs can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (and co pays & coinsurance) for non-network services.  QUESTION: What applies to my deductible?ANSWER: All covered medical expenses apply to the deductible each year including Doctors office visits, Prescriptions, and any major medical claims. HSA family plans have one deductible for the entire family. So, all covered medical expenses for the entire family apply to one deductibleQUESTION: How can I get a Health Savings Account?ANSWER: Consumers can sign up for HSAs with banks, credit unions, insurance companies and other approved companies. Your employer may also set up a plan for employees as well.QUESTION: How much does an HSA cost?ANSWER: An HSA is not something you purchase; it's a savings account into which you can deposit money on a tax-preferred basis.  The only product you purchase with an HSA is a High Deductible Health Plan, an inexpensive plan that will cover you should your medical expenses exceed the funds you have in your HSA.

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Insurance

John Eck

0000-00-00 00:00:00

Q: I recently retired. I have the opportunity to roll out of a qualified retirement plan from the company I worked for and into something else. Considering all, an annuity makes the most sense for me. I visited with several firms about whether to go with an index or a guaranteed fixed annuity. I received conflicting answers. Can you give me some facts on both?

A: I will try. First, let me provide a little information on annuities. An annuity is a contract between you and an insurance company that is designed to meet retirement and other long-range goals, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. (In reality however, most annuities today are not much more than a substitute for an individual’s savings that could be placed in either a bank, credit union or insurance company providing the annuity). Annuities typically offer tax-deferred growth of earnings and includes a death benefit that will pay your beneficiary a specified minimum amount which is generally the amount of the annuity premium paid plus interest earned to the date of death. While tax is deferred on earnings growth, when withdrawals are taken from the annuity, gains are taxed at ordinary income rates. If you withdraw your money early from an annuity, you may pay substantial surrender charges to the insurance company, as well as tax penalties (if taken prior to age 60). There are generally three types of annuities — fixed, indexed and variable. In a fixed annuity, the insurance company agrees to pay you a specified rate of interest during the time that your account is growing. The insurance company also agrees that the annuitized periodic payments will be a specified amount per dollar in your account, if annuitization is elected. These periodic payments may last for a definite period, such as 20-years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse. In an indexed annuity, the insurance company credits you with a return that is based on changes in an index, such as the S&P 500 Composite Stock Price Index. Indexed annuity contracts also provide that the contract value will be no less than a specified minimum, regardless of index performance, assuming that you leave the money with the company for a specified number of years. In a variable annuity, you can choose to invest your purchase payments from among a range of different investment options, typically a mutual fund type of investment. The rate of return on your purchase payments, and the amount of the periodic payments you eventually receive, will vary depending on the performance of the investment options you have selected. Since you did not mention you were considering a variable annuity, and because how they work is totally different from index and fixed annuities, I will not address them in this article. Here are some discussion points of both. Guarantees: The only guarantee in most index annuities is that you will at least get your principal back. This of course would be a loss, a significant loss, when compared to a one to three percent lifetime guarantee of a fixed annuity. Caps: The caps that index annuities have in place limit considerably the upside potential. When analyzing one of the best performing index annuities recently over a 10-year period of the hottest market ever in history, I found that it outperformed a fixed annuity with the same company by approximately 1% over the entire 10-year period. Once most people understand the risk/reward quotient, seldom does it make sense for the significant exposure to a zero rate of return that is inherent in the index products. Fees/Liquidity: Index annuities are more costly internally. The fees involved in the purchase of options in the market (the way in which index annuities realize their growth) are quite a bit higher than any fixed annuity. Often to actually use the money, the annuitant has to annuitize the contract which gives the annuitant no liquidity at all. Timing: Timing is everything when investing in index annuities. Two identical amounts going in a day apart on two different accounts can change the per cent return substantially. This is possibly because the index beginning period is the date the company receives the money so if the market index differs a day or week later, it will affect the total interest credited. Suitability: I have found that most people, when explained the intricacies of index annuities, are not suitable. Suitability requires (among other things) sufficient assets to overcome any loss; a thorough understanding of the complexities of the product; experience in investing in that particular type of product; a time horizon that will allow for some recovery when zero rate returns occur. If there was enough reward in the current list of index annuities, I could see an experienced investor, with a 10 to 20 year time to invest the moneys, with no liquidity needs, put a portion of available investment assets (money that can lost without causing hardship) into a good index annuity. With today’s caps however, such reward is not there. The majority of people do not understand the complexity of the product and the risk involved in them. Even though most folks might say they have money they can afford to lose…they really don’t. Quite often, investing in the “turtle” beats the “hare”. When a person has moneys in savings and has it earmarked for retirement, he/she would do best to put the most emphasis on the ‘sleep well factor’ rather than listening to a salesperson talking about the inflation fact, which always involves risk.