Archive for the ‘Insurance’ Category:
Homeowners insurance facts
For most of us purchasing a home is the biggest investment to mike during the whole lifetime. And it’s reasonable that such an important investment needs reasonable coverage. That’s why you need homeowners insurance.
What’s included in homeowners insurance?
In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks: More »
Estate planning and life insurance coverage
As we all know, life insurance is a very important and effective tool for minimizing risks and assuring your family with the necessary financial power in special circumstances. And of all things, life insurance plays a very important role in a family estate planning as it can affect it in two different ways.
Analyzing your life insurance needs
The most common connection between life insurance and estate planning is probably the actual need for it. Life insurance can assure your family with the necessary income replacement or other immediate costs that can affect mortgage loan payout or even some of your important assets. It also provides emotional comfort and peace of mind, giving you and your family the confidence and security no matter what. And things like that are really important these days.
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Your business needs to be cared about
Having any type of business is a huge responsibility. And sometimes it is correctly said that not everyone should be involved in business. It is important to stay wise and keep your eye on everything, Safety and supervision can never be out of proportion here. But that is not everything you need to think about. There are other important details that need to be taken into consideration. You might have already heard about liability protection but you don’t know what exactly that is and how to behave with it. Let us take you into the world of insurance for a moment and show you what there is for you to choose from.
You probably wonder who it is for. More than 78% of the businesses located in the United States of America are categorized into partnership or sole proprietorship. But if you think about it this bring more pressure and risk in lives of small business owners. When you have a good insurance you can at least know that your professional part of life is highly protected. Financially it could be ruined but it will stay safe with a good insurance.
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Which is better: term or permanent life insurance?
The biggest financial decision you are likely to make is buying a home, closely followed by less expensive must-haves like a vehicle. But the one deal you should aim to get right is the decision on life insurance. This is the difference between leaving your dependents with an adequate amount of cash to see them through the times of economic hardship after your income is lost, and leaving them with nothing. In this, the decision on term as against permanent insurance is the key. Put the wrong key in the lock and you open a door into real financial hardship. So what’s wrong with term insurance? Think of this as like a bet. If you die within the term, your dependents are the winners. If you prove healthy and live too long, you lose the premiums you paid and your dependents get nothing. Now, when it comes to permanent insurance, this builds up a cash value. The longer you have the policy in place, the more valuable it comes as the premiums you pay attract investment returns. During your own life, you can take some of this money back or borrow using the fund as collateral. When the sad day finally comes, the benefits are paid out to your dependents less whatever drawings or borrowings you have made.
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Health insurance for children has been changed for the better
As soon as President Obama took control of the White House, the combined majorities in both chambers were used to enact the Children’s Health Insurance Program Reauthorization Act of 2009. As has become the norm, the Republican party opposed the law. So, now that we have one year of experience, it’s interesting to revisit the Act to see whether this allegedly socialist measure has worked for good or the evil predicted by the GOP. The purpose was to help the millions of children whose parents had fallen on hard times and could no longer afford private family health plans. In effect, the recession was creating an underclass of children who were potentially uninsured. By making an immediate transfer of funds to individual states, local governments were able to expand their own medical coverage programs to admit more families in need. The current estimate is that about 2.5 million children were allowed into either Medicaid or the Children’s Health Insurance Program. This was achieved by a simple change.
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Cheap auto insurance in Massachusetts? It is simple!
The market for insurance in the US is somewhat very different from the other world. In most every other line of business, companies are allowed to compete with each other across state lines. This helps to keep pricing to lower levels and the quality of the product to higher levels and protect the consumer. But unfortunetaly the insurance industry is licensed and regulated state-by-state. There’s no such thing as a federal insurance policy. You have to buy a policy written by a company licensed in the state where you live. This is slightly frustrating because, if you live near the border, your friends and colleagues at work probably tell you how little they pay or complain you have the better deals. Either way, it’s not very fair. Worse, the companies often decide not to set up in all fifty states, but pick and choose where they will operate. The result is that many states only have a small number of licensed insurance companies. Because there is no real competition, their premium rates tend to be high. This produces a big political divide. In Republican states, this is the free market at work and no intervention is necessary.
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Life insurance and the annuity option
Looking around the news, there is a story that the insurance regulators from five US states have just agreed a $2 million settlement with two Nationwide Life companies for failing to properly supervise the sale of annuities through one of their agents. This raises two questions. What exactly are annuities? and What can go wrong with them? An annuity is a variation on the traditional life insurance policy. As with any permanent policy, you pay a premium which is invested to build up a cash value. But, depending on the terms of the contract, you can receive payment of a lump sum or, more usually, a regular income from the insurance company before your death. For most people it’s the same as saving for retirement, except you buy a pension that pays out after you retire. To ensure the maximum control over annuities, they can only be bought through life insurance companies. In every US state, there is a Department or Office of Insurance to regulate local insurance companies. As you will understand from the news story, if an insurance company acts against the interests of its policyholders, the states can step in to fine the company and order the company to pay compensation to the policyholders affected. In the case of annuities, this is particularly important because the premiums are usually deductible from income before tax. The states therefore have a direct interest in ensuring annuities are not used for unlawful tax avoidance purposes.
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Should you bundle auto and homeowners insurance?
More or less every site offers advice on saving money when buying insurance. One of the standard tips is bundling auto and homeowners policies with the same insurance company. If you check around the companies, the discount varies between 10 and 15% and, if you agree an increase in the deductible from $500 to $1,000 this increases the discount to 25%. At this point, many people are sold on the idea. A saving of up to 25% looks like a good deal and frees up cash in the family budgets for a whole range of other basic necessities. So is it worth it? The first question is whether you are getting the standard auto and homeowners policies. If you are starting off in the same position as the stand-alone policyholders, you have more protection. But there can be problems with limitations and exclusions if the company produces a single policy to cover both home and vehicle. You must read such a policy very carefully before deciding whether it represents good value for money. Secondly, what are the rules about overlaps between the two policies? Suppose, for example, you have a traffic accident while carrying your laptop and other property potentially covered under your homeowners policy. Is all the damage and loss covered under the auto policy or are you expected to file separate claims for damage to the vehicle and loss of household contents? This could make a big difference if there are separate deductibles on the auto and homeowners policies.
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Passionate debate about healthcare reform
Watching politics is a fascinating way to pass the time. People always find new ways to repackage the same basic debates in ever different forms. The media float above the fray, supposedly with a dispassionate eye. The code of the professional journalist preserves a neutral position, identifying the key facts and giving both sides of the debate a fair hearing. Unfortunately, the arrival of Fox News and the rise of the Right Wing Jocks has produced an opinion-based approach to reporting the news. This is not simply skewing the coverage. It is actually introducing new levels of venom into the debate itself, raising the profile of news reporters and commentators as demagogues, and personalising the attacks made on government. No other issue has raised the heat of passion in the debate as the proposal to reform the provision of healthcare in the US. Many on the right of the political spectrum see these proposals as a direct attack on their individual liberties and as promoting big government. They approve the rise of activism that has seen groups around the US protesting in the Town Hall Meetings run during the summer and in the so-called Tea Party protests which focus on the rise of big government and the redistribution of wealth through alleged socialist measures.
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Regulation or deregulation in the insurance market
The world is a complicated place and, more often than not, it does not work well unless the right people hold the key positions. When it comes to insurance, you might think the key people are the legislators who sit on the relevant consumer or finance committees. In reality, the key person is always the Commissioner who heads the state’s Department of Insurance. Every state has such a person and the department is responsible for regulating the insurance market in the state. It licenses companies to write policies and, where appropriate, sets the terms for the conduct of business. This is where the role gets political because some commissioners see their role as being protective of the insurance companies, while other aim for consumer protection. The difference in political attitude shows up most clearly in the complaints process operated in each state. If a complaint is found valid after an investigation, the commissioner has sweeping powers to order the insurer to correct the situation. So the first sign comes in the number of complaints held valid. Then comes the pattern of responses in promoting fair trade practices. Finally, there is the degree of publicity given to the results. Some commissioners publish annual reports. The best name and shame the companies, showing how many complaints have been upheld against each. Others simply give overall statistics without naming the companies. If you live in one of the best states, you can get detailed help on identifying the safest insurers with whom to do business. It is never enough just to get online quotes. Always get some background on the main companies writing policies in your state.
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