Looking at Variable Life Insurance Coverage

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Variable life insurance is another form of permanent life insurance that has an investment account(s) attachment.  These investment accounts are usually flexible in their menu often allowing stocks, mutual funds and bonds.  These investments and their performance have a bearing on premiums owed and the death benefit.  A great perk with a variable life insurance policy is tax deferment (restrictions may apply) on investment gains until the policy is cashed in.  One big draw back is variable life policies are costly fee wise. Below are tips, things to consider, and questions to ask:

• If a policy needs to be surrendered when can it be done and what are the fees for doing so?
• Find out if the policy being considered (or if you have 1 currently what the rules are) allows borrowing off the policy and what the specifics are.
• Is the investment component of the account appropriate for your risk tolerance and long term goals?
• Is variable life insurance coverage appropriate in the time frame the money will be needed?
• When working with a financial advisor or insurance agent ask them about their experience with variable insurance policies.  Also ask them about who they generally recommend variable life coverage to.
• Choose a policy with a variable insurance company that has a clean record (call your state insurance commission and the Securities and Exchange Commission) and is financially strong (check with Moodys, S&P, AM Best).

About Universal Life Insurance Coverage

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Universal life insurance like traditional whole life is a life insurance policy type made for covering one’s entire life time (also known as being permanent).  It also has a cash component just like whole life insurance coverage.  Premiums are flexible (unlike whole life) allowing the policy holder the option to adjust them (though there is a minimum payment that has to be covered).  The death benefit can be increased or decreased if policy requirements are met.  If the policy holder wants to increase their death benefit they can expect to go to the doctor for another medical test.  If they want to decrease their universal life insurance policy’s value there is most likely a surrender fee  involved.

There are two important parts of universal life insurance that anyone should be aware of: cost of insurance charge and the interest credit.  The cost of insurance charge is the what the insurance company is owed for holding the policy which can be expected to go up as the policy holder gets older.  The interest credit is what the policy gets from how well the insurance company’s investments do (often the credit is based on a bond benchmark).   Universal policies may guarantee a minimum interest credit.

A few other notes about universal life insurance to be aware of are the policy’s premiums can be payed with by the cash component of the account and withdrawals are often  an option (with a fee).  This type of policy can have many rules and may give an insurance broker a nice commission so its pertinent to look over the policy thoroughly and ask for a full disclosure of fees.

Pet Insurance Coverage and Few Tips to Help

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Pet insurance is for protecting yourself against the high cost of trips to the veterinarian if your pet(s) get sick or hurt (accident).  This type of insurance is becoming ever more popular because ever increasing medical expenses involved with treating a pet.  Some policies offer life insurance for pets as well as theft insurance.   Below are tips and other good tidbits to know about insurance for your friend.

• Your employer may offer pet insurance.  If they do offer it, its usually on optional benefit you’ll have to elect.  Its worth looking into as you may have access to a competitive group rate.
• Understand and research what the most common ailments your pet could encounter and the costs for these treatments.  Talk with your veterinarian about this so you get an idea what pet coverage you should look for specifically.  Your vet may also provide you with a recommendation for a pet insurance company/policy.
• You’ll have an easier time finding pet insurance for a younger pet.  Many insurance providers won’t consider an older pet.  Start looking for the pet insurance coverage or soon as the pet is born if possible.
• If your pet has a pre-existing condition it will be tough to find insurance coverage.  So if you can’t get insurance look for a good discount program.  Your veterinarian is a good resource on advice in this matter as well.
• The breed  can have an effect on whether your pet is insurable and what the premiums are.  If they aren’t or the premiums are out of hand look at discount programs.  Some vet hospitals have wellness programs that may be beneficial in this regard.
• Discounts are usually available for insuring multiple pets.  Discounts are often available for spade or neutered pet as well.
• Choose a pet insurance company that is financially solid and has experience in serving the veterinary field.
• Look into each policy your considering closely and ask the insurance company things like: do they require medical exams to keep up coverage, are there dollar limitations on certain ailments, what conditions aren’t covered, and are preventative vet visits/procedures covered?

Whole Life Insurance Coverage

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As its name indicates whole life insurance is designed to provide insurance coverage for a life time.  In other words its for a whole life or  permanent.  The insurer will assure a set payment to the policy holder’s beneficiaries if the policy holder passes on (regardless of age).  This of course would only occur if the contract is kept up (premiums are paid).

With this type of life insurance policy a cash balance is accumulated over a life time until it equals the death benefit.  This cash component is generally invested conservatively (often bonds but it can vary).   As whole life coverage does have a cash component   loans are frequently allowed.  There are parameters set in a policy before a loan can be taken.  Policy age and cash balance play a factor in borrowing off the insurance coverage.  Usually a policy can be surrendered for its cash value minus loan(s) and premiums still owed.

A great benefit of whole life insurance is that it is permanent and won’t need to be renewed.  This is great because future medical exams need not be done.   So it can work for someone looking for long term life insurance, especially if its for more than 20 years.

Its important note that whole life can have high fees.  So its vital to check with the insurance company and/or broker and have them disclose what they are.  Whole life insurance premiums are often many multiples of term life insurance.

Below you’ll find a few whole life insurance policy types:

• Non-participating:  All policy values are final at policy issuance.  There are no surprises with this whole life insurance type as premiums, surrender values etc are all spelled out and not adjustable.  The insurer takes on all the risk and no matter what they make on the policy nothing extra will pass to the policy holder.
• Participating:  This whole life policy allows the insured to benefit from surplus profits the insurance company gets on the policy.  These are often called dividends.  A policy holder may be able to reinvest these dividends into the cash value.
• Single Premium:  The entire whole life policy is payed up front in a lump sum.  Its important to know what fees are involved in the beginning years of the policy.
• Interest Sensitive:  Dependent on market conditions the interest accrued on your cash value will variate.  Also your premiums can variate but there is a ceiling on them.  The death benefit never changes and as is good for life.
• Limited Pay:  This whole life policy allows the the policy to be payed off early at a certain age instead of paying the premiums for life.

A Few Ideas on Saving Money on Homeowners Insurance

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All homeowners with a mortgage are required to have homeowners insurance but not everyone takes advantage of the money saving techniques below.

• Look into getting a discount for having things like: a security alarm system (especially true if it notifies police there has been a break in), smoke detectors, carbon monoxide detectors, fire extinguishers, a pool that has been secured with a fence and lockable gate, rails along the stairways etc.  Don’t be afraid to ask for a discount from your insurance carrier for things that make your home safer.
• Have multiple policies with 1 insurer.  For instance having both your homeowners and auto insurance with the same insurance company could save you some nice money.  Dealing with one insurer instead of multiple ones could make things more convenient for you as well.
• Regularly review the cost of your homeowner’s policy.  Request quotes from other insurers and ask how they can be competitive with your current policy.  If your happy with your current insurer but get a good offer from a competitor (that is less than your current policy), ask your current insurer to match the offer.
• Consider increasing your deductible.  Now you want to be very careful with this especially if your cash flow is tight because you’ll have to put more money out of pocket if a claim does occurs.
• Make your home more resistant to potential damage.   This is especially useful when your renovating or building an addition.  For instance if your upgrading your plumbing  or getting fire resistant shingles on your roof etc. ask your insurance company what savings are available for your homeowners policy.
• Realize that your credit history may affect your policy cost.  Not all insurers look at your credit but the trend is that more insurance companies are.  Potentially saving money on insurance is just another reason to pay bills by their due date, check your credit report for mistakes and be conservative on credit used.

I hope you found this useful as I’m always looking to provide useful insurance information and tips here.

-Phil

insurancecoverage.me

Liability Insurance Coverage for Homeowners & 4 Things you Should Know

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Liability insurance is the component of a homeowners policy (also know as premises liability insurance) that protects you the homeowner  from liability when another is injured on your property.  This coverage should protect your household members (in which you’re liable) if property damage occurs to an others property.   To illustrate an example in which coverage may protect you:  Your friend comes over, slips and falls on a toy left on your porch by your child.   Below are 3 things you should know about homeowners liability coverage.

• Believe it or not if a trespasser enters your property and is injured you could be on the hook or in other words liable.   Almost hard to believe, almost sad but true.  This should be reason enough to consider having the liability component of homeowners insurance or increasing the coverage‘s limit.
• Your homeowners policy may or may not provide you with free liability coverage.  Find out how much you’re covered for.  Bear in mind this may not be enough.  Commonly you’re able to protect your self for $300k, $500k or even $1 million.
• Its important to note that you usually will not be covered if you intentionally cause an injury.  Definitely review with the insurance company what is covered.  Ask them to get specific regarding how your covered in the event of an accident on your property;  then ask them how negligence comes into play.  Its wise to find out all the nuances so you’ll know if you’re properly covered.
• If you have or are looking to buy liability coverage find out if you are covered for paying the injured party’s medical bills.

Tips Regarding Life Insurance Coverage

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Its natural to feel that talking about a subject like dying  and life insurance is morbid.  The reality is we are all mortal.  It is wise to face this reality and protect our loved ones in the event we do leave this world early.  With that said I’ve provided tips below that will help in seeking out life insurance coverage.

1. The first thing to do is to estimate how much coverage you’ll need to purchase.  This is important because you’ll want to make sure you’re not under insured or even over insured.  So you’ll want to sit down and think about all the things that will have to be payed for and come up with an itemized list.   Its in your best interest to think about this very seriously and deeply as you don’t want to miss anything.  Ask yourself questions like:  Do I want my mortgage payed off?  What other debts do I have that I don’t want passing to my spouse and family?  How about college tuition for the kids?  If you need help with this task enlist an insurance professional, financial advisor and or take advantage of an online calculator like:  LIFE (a non profit organization) Life Insurance Needs Calculator.
2. Consider the different types of life insurance coverages that are available.  Its important to understand on a basic level what the differences are between term life insurance, whole life insurance, variable life and universal life insurance.  Don’t let all the choices intimidate you,  just have a basic understanding before for you go shopping.  Most often term life insurance is the most appropriate but not always.
3. Your employer may offer you a life insurance program.   Find out how much coverage they provide to you for free (if any) and if you can buy more to cover your needs.  Just remember this usually isn’t the end all be all of your life insurance needs.
4. Buy life insurance from a reputable and financially sound insurance company.  Getting payed by an insolvent company is obviously less likely.  Your state regulates the insurance companies so find out if the prospective life insurance company participates in the  state’s guarantee  fund (which backs up insurance companies in the event they can’t pay) .  At the same time find out how much the guarantee fund covers for life insurance death benefits as well as cash value on policys.  Also take a look how the ratings agency’s  are viewing the insurance company.  Cross check the rating against at least these 4 agencys: AM Best, Fitch, Moodys and S&P.
5. If you’re going to work with a financial advisor or insurance agent etc. ask them to disclose what they are getting out of selling you a policy.  You could work with a flat fee professional or a commissioned pro.  Either one may be appropriate but its vital to ask about what fees at they are getting out of it.  They are supposed to act in your best interest.  Call your state insurance commissioner’s department to see if the advisor or agent has any complaints against them.  Ask for references and don’t be afraid to conduct an interview with tough questions.
6. Understand and ask for disclosure on what the insurance company is getting from you fee wise.  Certain types of policies will charge you fees that is in your best interest to know what they are.  This is especially true of variable and universal life insurance policies.
7. Your health correlates to what your insurance premium cost will be.  So keeping a health life style will not only make you look, and feel better, it increase your life expectancy which equals more affordable insurance premiums.
8. Use the worldwide web to your advantage in obtaining quotes.  You can go directly to an insurers website and ask for free quotes generally.  There are life insurance quotes services that may make this easier in obtaining multiple quotes.
9. Don’t forget about using your own personal network for help in with finding an insurer.  Ask for references from your friends and family and their experience in finding life insurance coverage.
10. Involve those that you’re protecting the life insurance with in this process of finding and understanding life insurance.  This will help them understand what you’ve provided too them and what to expect if you do pass.  It may also help them see the importance of life insurance and teach them how to search for their own policy.

What is an Insurance Rider? A Few Examples.

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Think of an insurance rider as add-on to an insurance contract that expands or restricts aspects of the coverage.  It is also commonly know as an addendum or endorsement.   Below we’ll look at examples of some common insurance riders:

• Auto Insurance GAP Rider:  Having this nice addition on an auto policy could save you.  Normally if you’re in an accident and the car is totaled the insurance company pays you what is determined to be the current value.  Now what happens if your car loan is more than the current value of your car?  Basically you owe the difference to the lender unless you have the GAP rider which provides coverage above the current value up to the loan value.
• Life Insurance Waiver of Premium Rider:  Want to protect paying for your life insurance if you become disabled?  The waiver of premium rider does just that.  If you become disabled premium payments are waived.  This is an especially good rider for when life insurance premiums are high.
• Homeowners Insurance Jewelry Rider: Many times homeowners insurance is quite limited in what it covers as far as jewelery is concerned.  The purpose of a jewelery rider is to add additional insurance coverage for jewelery above what your standard policy covers (often only $1000).  So if you have valuable  jewelery you may want to consider adding on a jewelery rider to protect against thievery or destruction.

These are just a few examples of insurance riders.  Next time your shopping around for an insurance policy educate yourself on what riders are available with it.  It could save you some headaches later.

Talking about Disability Insurance Coverage

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Let me start by saying statistically people have a higher chance of becoming disabled during their working career than losing their life.   Also, to illustrate the importance of disability insurance coverage we can ask: what would you do if you become disabled and lose your income stream?  Now your employer might offer you a portion of your salary on a short term and or long term basis.  You’ve got to ask yourself: is this enough to cover my bills if I become disabled?  Many times your employer may allow you to purchase additional coverage through your benefits program.  On a long term basis you may be eligible for social security.  With the governments program you must realize that its not easy to get and often takes a long time to get it after several attempts.  Its also worth noting that if you are rewarded social security disability your monthly payment may not be that much money.  I’ve compiled a list of tips/hints  below to consider before buying disability insurance coverage.

1. Sit down and plan out the income level you’ll need to replace if you become disabled.  Its good to consider what responsibilities you want the disability insurance to cover in the event you’re unable to work.  These could be things like college tuition, mortgage, taxes, more than 1 income etc.  Also think about how long of a time period you wish to replace that income for.
2. Plan out when you would need to start drawing a benefits if disability occurs.  This could be right away or up to several months depending on whether you have savings to back you up.
3. If you work with an employer look at your benefits program first.  Usually you’ll get pretty favorable premiums because employers generally can negotiate group rates.  Call or visit your HR department to ask if disability insurance is offered.  Ask them to send you out literature so you consider it as well as use it to shop around.  Just bear in mind if you leave the employer you may lose coverage.
4. Research how taxation of different disability programs would affect your tax situation.  If the premiums are payed with after tax, the benefit when payed should be tax free.  Click here for more rules regarding taxation of disability insurance coverage payments.
5. The financial strength  of the company providing the disability payments is very important.  Using a financially sound provider not only will improve the probability of payments it will help the timeliness in getting these payments.
6. Familiarize yourself with what the federal government’s disability payment would be if you needed to utilize it.  Also find out if your state offers a disability program and what it covers.  This will be useful in planning out how much long term disability coverage is appropriate for you.  If  a disability insurance policy’s cost is a big concern look into social security offset rider.
7. Research different riders that are available and carefully consider which make sense to your situation.  These could include the residual disability rider, cost of living adjustment rider (COLA), etc.
8. Use the internet and insurance agents to shop around.  You don’t want to limit yourself so do a comparison of several different policies and insurers.
9. Before you sign a contract for disability insurance contract be sure to understand the ins and out of the policy.  If you don’t understand something about the policy ask questions.   Remember this income protection insurance coverage is to back up you up when you can’t help youself so its vital to understand it.

Vision Insurance Coverage

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Vision insurance  is appropriate for someone that has impaired vision.  Most commonly you’ll find this type of coverage offered in group health insurance plans.  Often this type of insurance coverage pays for glasses (frames and lenses) and or contact lenses up to a certain dollar amount.  The amount covered will vary by policy.  Vision insurance generally pays for a visit to the eye doctor as well.

If you’re in a group health insurance plan through an employer ask your HR department if they offer vision insurance.  The cost associated with premiums is generally pretty low from my experience in being in a couple plans in the past.  If you’re employer doesn’t offer vision insurance coverage you could perhaps suggest it as a morale booster.

Now if you’re self employed vision insurance coverage will be harder to come by.   If you buy health insurance you could ask that insurer if they offer a vision plan or if not they may be able to recommend a provider.  Use the internet to your advantage as well when searching for a vision plan.  Shopping around never hurt anyone especially those with insurance needs.

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• Looking at Variable Life Insurance Coverage
• About Universal Life Insurance Coverage
• Pet Insurance Coverage and Few Tips to Help
• Whole Life Insurance Coverage
• A Few Ideas on Saving Money on Homeowners Insurance