Archive for April, 2009

Tips for first-time life insurance buyers

Tuesday, April 28th, 2009

Making an important decision can be intimidating. When faced with complexity and too many options, you may prefer not to think about the all important details before the purchase. Buying life insurance for the first-time is a decision that could shape you enduring view of life insurance. If you make a poor decision, you would regret it. A good decision would leave you with a favourable opinion. Most people only understand life insurance after they are in possession of a life insurance contract. These tips should give the first-time buyer enough confidence to avoid buyer’s remorse:

1) Put life insurance in perspective
You should whether you really need life insurance. That you’re alive is not sufficient reason to get life insurance. Its role in your financial plan should be understood before you make your first acquisition. Ask yourself the following questions:
i)Do I have financial dependents?
ii)What is the likelihood that my family situation, career or business situation would change in the near future?
iii)Do I have other protection products like health insurance and disability income in place?
iv)Why am I making this purchase right now?

These questions would help you answer other questions that come along like what type of insurance and how much of it you will purchase. As a first-time buyer it is important to get it right initially, since that can save you a lot in the long run.

2) Estimate your coverage properly
Having an idea of how much you need would prevent you from being convinced to purchase more insurance than you need. There are needs estimators online that you can use freely. These would give you a representative coverage figure. Working with a trusted agent or advisor in determining your need is also crucial. However, having a basic idea of the process would let you know just how trustworthy your advisor is.

3) Learn the options and examine them according to your needs.
There are myriad options available where life insurance is concerned. Endowment insurance, term insurance, whole life with dividends and fixed universal life are some of the plans available. Each has its own context. Ignore those who over-simplify life insurance by saying that term insurance is always better or permanent life insurance is king. Your needs and preferences are what should determine your purchase. You should ensure that your decision is based on fact and substantiated opinions. Options vary among plans and insurers. It is critical to

compare and contrast various plans and companies. All insurers are not the same.

4) Determine if you would like optional supplementary benefits with your plan
These benefits range from critical illness riders to disability income benefits. The benefits may vary according to the plan that you choose. You can have a comprehensive package that includes health insurance provisions, life insurance and a retirement savings plan. Alternatively, you could just have basic life insurance with a double indemnity benefit.

5) Understand the clauses and provisions that may be included in a policy contract
Contracts may contain non-forfeiture options or reinstatement provisions for example. It is important to know and understand these provisions. The policy loan provision is also critical. Would you be charged if you withdraw or borrow from the cash-value where permanent insurance is concerned? These are the understated aspects of life insurance that can either cost you or work to your benefit. You must be aware of them.

It is important to treat purchasing life insurance as a process. It does not have to take weeks or months. However, it should only occur when you have sufficient information and are comfortable that you’re getting value for money. Doing a bit of research and getting some objective feedback from knowledgeable people that you trust should be part of your information gathering. Comparison shopping is the next core activity and includes comparing plans and insurers. Insurers have different strengths. Certain insurers may even have better investment strategies than others. That will affect how stable the company is or how cash-value plans accumulate. Once you follow this advice, your first policy would be a financial blessing, not a curse.

Posted in Health Insurance, Life Insurance | 5 Comments »

Low Cost Individual Health Plans - Where to Get Them

Friday, April 24th, 2009

A group health insurance plan is always going to be your least expensive insurance option, but sometimes you just can’t get one and need a low cost individual health plan instead. How can you save on individual health care coverage and still get a good policy?

Lower Costs with an HMO

A Health Maintenance Organization, or HMO, is the lowest cost alternative for an individual health plan. With an HMO, you pay a monthly premium for comprehensive care that includes doctors’ visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy. Preventive care, such as office visits, immunizations, well-baby checkups, mammograms, and physicals are also covered by most HMO plans.

You may have to pay a small copayment of $5 to $15 for each treatment, but your expenses usually work out to be much less than with a traditional fee-for-service insurance policy.

The disadvantage of an HMO is that your choice of doctors and hospitals are limited to those that have agreements with the HMO to provide care. In addition, you usually need a referral from your primary care doctor before you can see a specialist.

Go Online to Find the Best Plan

Did you know that health insurance premiums can vary by hundreds of dollars from one company to another?

Whether you choose an HMO or another type of health care plan, you need to get quotes from several companies so you can compare them and choose the best one. The easiest way to do this is to go online to an insurance comparison website.

On an insurance comparison website, you simply fill in an online form with information about yourself and your health insurance needs. Then you’ll receive fast, accurate quotes from multiple insurance companies.

The best insurance comparison websites also offer a chat feature so you can get answers to your insurance questions directly from an insurance expert online or by phone (see link below). By going online for your health insurance quotes, you don’t have to take the time to call or visit multiple insurance agencies. Instead, the quotes come to you! It’s quick, it’s easy, and it’s free.

Posted in Life Insurance | 1 Comment »

The Facts About Living Without Health Insurance

Friday, April 24th, 2009

We all like to go through life thinking that nothing will ever happen to us. But of course, the odds are that sooner or later we will fall ill or experience an accident of some kind. It’s a horrible thing to think about, but we’d be very lucky if we made it through our entire life free from any mishap whatsoever.

However, you can limit the chances of anything untoward happening. You can try and stay healthy, get plenty of exercise and be careful in everything you do; but supposing you need hospital treatment at some point? You are certainly better off in the UK compared to some people in other countries - we do, after all, have a National Health Service that will treat us. But some countries aren’t that lucky.

What’s more, you might have to wait several weeks to be seen by the right specialist, depending on the severity of the condition. This is where it pays to have health insurance. If you do, you can often arrange to be seen and treated much sooner than you would be otherwise. And this can have a profound difference on your quality of life.

Many people think that they are saving money by not investing in health insurance. It’s true that you aren’t required by law to have it, but it can really pay dividends if you do. Let’s suppose you had a nasty fall and damaged your knee, for example. What would you do if your job required you to be on your feet all day?

Some jobs do provide full sick pay if you cannot work, but not all jobs do this. If you couldn’t work and you had to wait several weeks to see a specialist about your knee, that could add up to a lot of financial worries.

But if you had the appropriate insurance in place then you could see someone a lot sooner, and be back at work and earning in the shortest possible time. As you can see, not having health insurance can be a costly mistake if you do have an accident or illness that needs sorting out as soon as possible. Not everyone is able to give up work for an extended period of time without experiencing money troubles.

When it comes to buying health insurance it is important to think about what you need and what you can afford. The good news is that once you have got the policy you need, you can sit back and feel safe knowing that you are protected. And if you need it, it’s there to fall back on.

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Posted in Life Insurance | 1 Comment »

Have you insured your company’s key resource

Thursday, April 23rd, 2009

Do you own a small business? Do you have one or more business partners? Have you stopped to think about exactly what would happen to the business if one of your partners was no longer living? While no one wants to think that anything will ever happen to them or their business partners or loved ones, it’s a fact of life that no one lives forever. If one of your partners is no longer around, separate from the emotional consequences of losing someone you care about, you’re also likely to find yourself dealing with major financial implications for the business.

This is why it’s so important to make sure that you have sufficient key person insurance coverage in place for your small business. No matter how small or how new your business is, each partner should be covered by a sufficient amount of life insurance. Only you and your partners can make a determination of exactly how much insurance coverage is sufficient in your particular situation. Before making a decision, think about what the financial implications of losing one of the partners will be for the company.

If you have a buy-sell stock agreement in place, the business is going to have to come up with the money to purchase the deceased partners stock shares from his or her estate. Most small business operations don’t have large sums of cash lying around, so it’s important to make sure that the insurance policy will at least cover the cost of any necessary share repurchase, as specified in the terms of your particular buy-sell agreement.

However, this isn’t the only important factor you’ll need to consider. If one of your partners is no longer there, who will perform that person’s duties and responsibilities? It’s not likely that the other partners are going to have the necessary skills and/or time to take on everything the deceased individual once handled. That means the remaining partners will need access to money so they can recruit and hire someone to handle that portion of the business. Some of the life insurance proceeds, assuming there is sufficient coverage, can be used to offset this expense.

In many cases, business partners also put enough insurance in place to provide protection for their families. Often, entrepreneurs invest all their available resources into getting their business ventures up and running. A portion of the business owner life insurance policies may be earmarked to go to the deceased person’s family members in the event of a worst case scenario. Regardless of how the policy proceeds are likely to be used, it’s certainly important to make sure that each owner is covered by a life insurance policy.

Posted in Business insurance | 1 Comment »

Why is health insurance so expensive?

Tuesday, April 21st, 2009

Health insurance is expensive because it is not, in fact, what its name implies.

If it were true truly “health insurance,” it would mainly cover catastrophic illness, while containing incentives for maintaining wellness as priority #1 (e.g., paying for an annual preventive checkup), thus reducing medical emergencies.

Such a system would serve both the consumer and the insurer’s interests and radically cut costs. As surely as Americans know to pay their taxes on April 15, they would know the ABC’s of prevention.

But, of course, American health practices leave much to be desired, mirroring the lack of effective dissemination of health promotion and disease prevention information. Our miserable health habits, in turn, necessitate more and more expensive medical interventions, which health insurance covers from A to Z, sending costs soaring.

The average annual health insurance premium for single coverage in 2008 was $4,704; family coverage cost $12,680. Both were about 5% higher than the premium amounts reported in 2007. Smaller firms with less than 199 workers had a lower average family premium of $12,091 compared to larger firms (over 200 workers), with an average family premium of $12,973.

Add to that the ever-increasing co-pays and deductibles courtesy third-party payer cost-shifting and what you’ve got is a truly catastrophic situation.

So call “health insurance” for what it is: third-party healthcare financing, insulating the consumer from the true costs, thus encouraging greater consumption, with inefficient government paying the lion’s share, further distorting and bloating the U.S. healthcare economy - an economy that in 2003 spent $5,711 per capita, the highest in the world, with less than stellar health outcomes.

At the same time, our stellar medical advances have made us a victim of our own success. As U.S. medicine surged forward diagnostically and therapeutically, health costs likewise surged, surpassing $2 trillion in 2006 - 10% for prescription drugs, the biggest contributor to the growth of U.S. health costs - all of which is factored into the cost of health insurance.

World War II set the stage for this inflationary spiral when Congress circumvented the wartime wage freeze by making health insurance benefits tax-deductible for corporations only, which, in turn, incentivized costly “Cadillac” health plans. This arrangement encouraged healthcare consumption free of worry over cost, leaving healthy habits lagging far behind. It’s the factory model embedded in our modern psyche. You go, go, go, and if you start to fall apart, you’re made new courtesy generous benefits and a miraculous health care system.

The legal and regulatory framework governing our health insurance industry has further exacerbated the situation. For instance, many states mandate additional coverage requirements, rendering insurance costs excessive for the broad swath of consumers in the respective state, who do not need these extras. But, consumers may not seek out-of-state relief.

Imagine how much money consumers could salt away in tax-advantaged health savings accounts if the system were restructured so that prevention was emphasized and health insurance covered mainly catastrophic illness.

But, this remedy seems a pipe dream. And, the proposed “cure” for skyrocketing costs is always the same old tired solution of more government intervention. That, of course, will only lead to government rationing; when the one thing government should be doing to lower costs - effectively disseminating prevention information - is left far behind.

Posted in Health Insurance | 2 Comments »

Does Expensive Insurance Always Work?

Thursday, April 16th, 2009

Does it really follow that just because an insurance offer is more expensive than the other that it is already more effective and that they offer better services?

Of course, we are sure that you wouldn’t agree with that. Especially if you are someone who might have already had your own coverage in the past or if you have already asked some details about the topic to other people that you know, then you might have already encountered those who didn’t have to pay expensively but  are, nevertheless, satisfied with what they get.

When it comes to getting an actual insurance coverage, you should not be very hesitant about asking questions to the representatives and agents of the companies you meet with. Actually, you could even go as far as asking them about what are their advantages and disadvantages compared to other providers. If the person is honest, you will be able to get the details that you would need so you could decide which one would really be the best for you.

In addition to personally asking questions to those sales representatives, you could also go to the websites of the insurance companies so that you would be able to get more details about them. Besides, an initial meeting with one of their agents may not be enough to get everything you want to know about. With online methods, researches can be done easier than it has always used to be. And believe us - taking advantage of it is for your own good.

Posted in Life Insurance | 1 Comment »