Saturday, December 20, 2008

4 Top Tips For Getting A Great Auto Insurance Deal

Auto insurance advertisements are everywhere, from the pages of the daily newspaper, to television and radio commercials. They each promise low rates, quick claims handling and personalized attention. But, how do you know that you are really getting the best deal? What does a smart driver need to know in order to find the best car insurance for their needs?

1. Consider Your Coverage Needs

Before diving headfirst into the murky waters of the auto insurance companies, you need to have a basic idea of the coverage you are looking for. At the very least, you need to be aware of the minimum limits each state imposes for various coverage options. For instance, liability insurance, which covers damage when you are at fault, is mandatory in almost every state. PIP or MedPay, which pays a percentage of your medical expenses and lost wages, is another coverage option that is required by most states. Also, keep in mind that if you are leasing or financing your car, comprehensive and collision coverage are mandatory.

Comprehensive coverage reimburses you for any damages other than those sustained by hitting another car (ex. theft and fire). Collision coverage protects you against any damages done as a result of impact from another vehicle, a curb, a telephone pole or any other object. If your car is old and/or already paid for, you can save a substantial amount of money by electing not to carry collision and comprehensive coverage. Just be sure to understand that if you are involved in an accident, these non-covered expenses will have to be paid for out of your own pocket.

2. Consider Your Driving Record

Do you have a history of fender-benders? If so, you may be better off getting more comprehensive coverage. Have you accumulated a heap of speeding tickets? Consider taking a defensive driving course. Remember that when you apply for car insurance, the company will contact the DMV for a copy of your driving record. Generally, car insurance companies look at the past 3-5 years of your driving history and base your premium on any previous accidents and infractions that occurred.

3. Start Shopping

After you have considered what kind of coverage you need and taken a look at your driving history, you can begin getting rate quotes. You can do this in person, on the phone or on the internet Be sure you are prepared with all the necessary paperwork. This includes your license, current insurance policy, your automobile’s VIN, and registration. The idea is to get as many quotes as possible, so you can compare the coverage and rates side-by-side. Many websites will offer you their rates along with the rates of their competitors, which can save you time. Be sure to keep a detailed list of each company and their coverage limits, deductibles and rates. Print out a copy of quotes you get online and ask for a faxed/emailed/mailed copy of quotes you are given over the phone or in person.

4. Making Your Decision

After you’ve done all the necessary research, it’s time to choose a company. While it may seem tempting, going with the cheapest is not automatically the best way to go. You should be certain the coverage you choose is adequate for your needs and the level of service is decent and reliable. When it comes down to it, getting the best deal in auto insurance has little to do with catchy jingles or funny commercials and everything to do with being a smart consumer. By taking a little time to do some research, you can save yourself hundreds of dollars a year and still maintain the level of coverage you need

Friday, December 19, 2008

Comparison Shop for the Best Supplementary Travel Insurance

Illness can strike and accidents can happen, even during a very short business trip or recreational getaway. While your health card entitles you to certain out-of-country emergency health care services, the coverage is limited.

It’s important therefore, to consider supplementary travel insurance. However, if you decide to buy supplementary travel insurance, make sure the policy meets your needs. To determine the coverage that suits you best, here’s a snapshot of the information to consider when comparison shopping:
  • Policies can vary greatly from company to company and from year to year. Your health, age, the medication you take, the destination and the length of your trip, are all factors that affect the price and the type of costs it will cover. If you’re 70 years of age or older, for example, or have any high-risk health problems, you may have to find an insurance company willing to write a travel medical insurance policy tailored to your situation.
  • Read each policy you are offered carefully. You’ll find that different insurance companies have different clauses for pre-existing conditions, medical exclusions, exemptions, and non-emergencies. Make sure you understand the terms and definitions of each one. Ask questions if you’re not sure exactly what a term means, how it applies to your medical history, or how it affects the coverage offered to you.
  • Do not make a choice based solely on the policy price. A low-cost policy may be less of a bargain, for example, if it limits the coverage of a medical emergency to just $25,000.
And don’t forget:
  • Take your travel medical policy with you when you travelling.
  • Keep your insurance company’s phone number and your health card with you.

Thursday, December 18, 2008

Insurance Products to Consider when Away from Home

It’s important for all the vacationers, business travelers, cottagers, and snowbirds, to consider the following insurance tips before travelling:

Travel Medical Insurance

Covers you for emergency hospital and medical expenses when out of the province. If an insurance company agrees to cover you for pre-existing conditions, you should get its agreement in writing.

Home Insurance
  • Check your home insurance policy for the expiration date and for other "away" requirements. Many policies will cancel coverage if your property is left unoccupied or unattended for extended periods of time.
  • Check coverage limits on valuables. Some policies contain limitations for loss or damage to these items if you are away for an extended period, or if you are taking the valuables with you.
  • If you’re travelling in the winter, make sure you drain your home’s plumbing before you leave or arrange to have your home inspected on a daily basis by a competent individual to ensure that heat is maintained. Insurance companies won't cover damage that arises from the freezing of indoor plumbing.
  • In the winter, arrange for someone to clear snow from your roof. Some home insurance policies do not cover roof collapse due to excess snow.
Automobile Insurance
  • Check the effective dates of your driver's licence and validation sticker to make sure they don't expire while you're away.
  • If you plan to rent an automobile, check with your insurance company, broker or agent to determine whether you'll need the supplementary insurance coverage offered by rental companies.
  • If you plan to take your own automobile and will be out of the country for more than 30 days, be sure to advise your insurance company, broker or agent. Also make sure you have the proper coverage and meet driver’s licence requirements for the jurisdiction in which you'll be travelling.
  • If you are leaving your vehicle at home and it won't be used by anyone, save money by suspending certain coverages from the policy, such as collision. Be sure to add the coverages back once you return.

Wednesday, December 17, 2008

You can save some money with these auto insurance tips

With gas prices fluctuating almost daily, it’s hard to budget how much it will cost you to fuel your vehicle. But there are tips you can follow to maintain or even lower your auto insurance premium. And any time you can save money today, it’s a plus for your family.

The following are examples of money-saving ideas:
  • Maintain a good driving record. Companies charge safe drivers (those free of at-fault accidents or violations) lower premiums for automobile insurance.
  • Shop around. Compare prices for identical coverages and coverage periods. If you don’t understand the language regarding the coverage, check out our auto insurance publication for definitions and examples.
  • Consider raising your deductible on comprehensive and collision coverage. Review your current deductibles to see if you can absorb a larger portion of a loss in the event of an accident or damage-related event. If you have a financial lien on the vehicle, you should check with the lienholder before pursuing this.
  • Consider the cost of insurance before buying a vehicle. With a movement toward smaller, more fuel-efficient vehicles, you would be wise to get a quote from your local agent before deciding which vehicle to buy. Some smaller vehicles might cost more to repair or offer occupants less protection from accidents, which could make their premiums higher than you might expect.
  • Ask about discounts. Ask your agent or company if you are eligible for discounts such as having two or more cars on a policy; driver education course credit; mature or good driver credit; airbags, anti-lock theft or other safety-equipment features; or having other insurance policies with the same company.

Tuesday, December 16, 2008

Choosing Motor Insurance Types

If you drive your vehicle on the road, or leave it parked in the street, the law says that you must have motor insurance. It is a criminal offence not to insure your motor vehicle.

Before you buy motor insurance, decide who will be driving your car, and how much cover you would like. There are three main types of motor insurance:

Third party insurance
This is the minimum amount of insurance cover that you must have by law for your vehicle. Third party insurance only covers you for damage to someone else's vehicle or property, or injury to someone else in an accident which involves your car. This includes accidents caused by your passenger. If your vehicle is damaged in the accident you will have to pay for the repairs yourself.

Third party, fire and theft insurance
This includes third party cover and, additionally, damage to or loss of your car by fire or theft.

Comprehensive insurance
This includes third party, fire and theft insurance. In addition, it will also pay for repairs to your car. There is a range of extra cover that some policies provide, including:
  • cover for your own death or injury, or that of your partner or other member of your family, up to a limited amount
  • cover for your personal belongings if they are stolen from your vehicle or damaged
  • cover for your medical and legal expenses
  • hiring a replacement vehicle.
The cost of an insurance policy is called a 'premium'. Ask for quotes from several insurers to help you to get the best deal for your circumstances. You will need to compare:
  • what each policy covers, and any exclusions (risks which are specifically excluded, for example, allowing drivers under 21 to drive your car)
  • the amount of any excess. This is the first amount of any claim, for example the first £50, that you will have to pay yourself. Some policies allow you to pay a higher excess in return for a cheaper premium. Most young drivers (under 21 or 25 depending on the policy), and inexperienced drivers are expected to pay a compulsory excess which is higher than usual
  • discounts offered, for example a 10% discount for older drivers
  • the no claims bonus which increases for every year that no claims are made on your policy, up to a maximum amount. Most insurers will let you transfer the discount, if you want to change your insurer. You will also need to compare the amount by which your no claims bonus would be reduced if you made a claim
  • any policy restrictions, for example, only named drivers are covered.

Monday, December 15, 2008

Things to Remember for Motor Insurance

  • you must give your insurer or the person who sells you the insurance as much information as you can about yourself and your vehicle. You must, for example, tell your insurer or the person who sells you the insurance about any driving convictions, any medical condition which could affect your driving ability, or any motoring accidents, even if you have not claimed on your insurance as a result. The information you give will affect the level of your premium, and whether your insurer will pay out on any claim
  • if you want to include anyone else on your insurance, you must give details about them to your insurer, or the person who sells you the insurance
  • you must tell your insurer, in writing, about any change in your circumstances, for example a change of occupation. You should tell them as soon as the change occurs, and not wait until it's time to renew your policy
  • if you take out an insurance policy in your name, you should be the person who drives the vehicle most. If you take out motor insurance in someone else's name because it's cheaper, and they are not the main driver, the insurer can refuse to pay out on a claim
  • if the vehicle has been bought on credit, the finance company will usually insist that it is insured in the name of the person who has taken out the credit agreement.
  • Motor insurance policies normally run for a year. Your insurer does not have to send you a notice reminding you to renew, but most insurers do send out reminders
  • When you take out or renew motor insurance, you will get a cover note at first. This will be valid for 30 days or until you get a copy of the full insurance certificate. It is a criminal offence to drive without a cover note or full insurance certificate, so do not rely only on a telephone conversation where someone has told you that you are covered
  • The police can ask you to show them your insurance certificate or cover note. If you can't produce the right document, they will give you seven days to do so at a police station of your choice. If you are stopped under the 'fixed penalty system', they can specify the station. If you can't produce a document within seven days, the police can seize your vehicle and sell it (although you can claim back the proceeds of the sale)
  • You can cancel an insurance policy if you sell your vehicle, if it is stolen, or if it is written off. You should check your policy to see if you have a right to a refund of your premium.

Sunday, December 14, 2008

Choosing Travel Insurance

There are a variety of types of travel insurance, including trip cancellation, trip interruption, emergency evacuation, accidental death and dismemberment and loss or damage to baggage and personal effects. Millions of dollars are wasted each year by travelers who purchase unnecessary travel insurance or travel assistance policies. Although these products may be valuable to some travelers in limited circumstances, you should check the terms and exclusions of any travel insurance or travel assistance policies carefully before purchasing them.

Buy Only the Insurance You Need

Frequently, several types of insurance are ''bundled" together and sold as comprehensive travel insurance. If, after reviewing this chapter and comparison shopping among several travel insurance policies, you decide to buy some type of travel insurance coverage, make sure you purchase only what you need.

Existing Insurance Coverage

The first question to ask yourself when determining what type of travel insurance you need is: "What kind of coverage do I already have?" In particular, consider the following:
  • Your homeowner's or renter's insurance policies may provide liability or baggage and personal property protection while you are traveling.
  • Your health insurance policy probably provides at least some coverage while you are traveling, but you need to check the specific limitations and exclusions of your policy.
  • Your life insurance policy may cover accidental death or injury.
  • Your automobile insurance policy may cover you while you are using a rental car.
  • Your credit card may offer some protection, including loss damage waiver when you rent a car, or coverage if you want to cancel or change a flight.
Primary Versus Excess Coverage

Many travel insurance policies provide what is known as "excess" or "secondary" coverage. This means that if any other coverage can be applied to the loss first (such as homeowner's insurance if your personal property is stolen), then the travel insurance will provide coverage only for amounts not paid by the primary insurance, such as deductibles. Some travel insurance policies offer primary coverage, which is most useful when your own coverage is insufficient or has a very high deductible. The premiums you pay for primary coverage are generally higher than for excess coverage.

Beware of the Exclusions

The biggest drawback of travel insurance is that most policies contain a number of exclusionsand travelers often don't learn about the exclusions until they try to use the coverage. Whenever you review a travel insurance policy, check the exclusions and definitions carefully to determine how much protection the policy really offers.

Friday, December 12, 2008

Be Aware of False Advertising Scams

An increasingly common scam involves the sale of “cheap” auto insurance to unsuspecting consumers, tricking them into coverage that’s invalid, or doesn’t exist. Here’s an example of a common scam scenario:

Crooks advertise the sale of cheap auto insurance in newspapers or flyers. The advertisements may even resemble those of a legitimate insurance company or individual licensed to sell auto insurance. Typically, these advertisements claim they can find you auto insurance coverage at rates lower than what you have been paying or quoted in the past. Some advertisements do not identify the name of the insurance company, insurance agent or broker. Where a name is provided, it is often being used fraudulently, or it is phoney. Con artists commonly advertise the sale of cheap auto insurance along with other businesses.

Here are a few easy ways to protect yourself:
  • Be suspicious if you are asked to pay a referral fee. Licensed insurance agents and brokers do not charge you fees.
  • Do not pay the insurance premium through a transfer or money wiring service. This is not a practice in the insurance industry.
  • If an insurance agent or broker completes the insurance application form on your behalf, check it for accuracy. By signing the application, you are agreeing to the statements made to the insurance company.
  • If you suspect fraudulent activity, contact the police.

My Auto Insurance Rates Keep Going Up. How Can I cut some of the cost?

Here are a few suggestions for ways to reduce your premiums:
• Shop around for insurance. Just because your current company once offered you the best deal doesn’t mean it’s still competitive.
• Increase your deductibles.
• Reduce your collision or comprehensive coverage on older cars.
• Find out what discounts are available from your company (or from a different company).Discounts are often given to people who:
  • use public transit or carpool to work
  • take a class in defensive driving (especially if you are older)
  • own a car with safety features such as airbags or antilock brakes
  • install antitheft devices
  • are students with good academic records
  • have no accidents or moving violations, or
  • have multiple insurance policies with the same company—such as automobile and homeowner’s insurance.
• Find out which vehicles cost more to insure. If you’re looking to buy a new car, call your insurance agent and find out which cars are expensive to repair, targeted by thieves, or involved in a higher rate of accidents. These vehicles all have higher insurance rates.
• Consolidate your policies. Most of the time you will pay less if all owners or drivers who live in the same household are on one policy or at least are insured with the samecompany.

Thursday, December 11, 2008

How Can Insurance Help Protect a Rental Property Business?

A well-designed insurance policy can protect rental property from losses caused by many perils, including fire, storms, burglary, and vandalism. (Earthquake and flood insurance are typically separate and, in some areas, coverage for mold claims may not even be available.) A comprehensive policy will also include liability insurance, covering injuries or losses suffered by
others as the result of defective conditions on the property.

Equally important, liability insurance covers the cost (including lawyer’s bills) of defending personal injury lawsuits. Here are some tips on choosing insurance:
  • Purchase enough coverage to protect the value of the property and assets.
  • Be sure the policy covers not only physical injury but also libel, slander, discrimination, unlawful and retaliatory eviction, and invasion of privacy suffered by tenants and guests.
  • Carry liability insurance on all vehicles used for business purposes, including the manager’s car or truck.
  • Make sure your policy is “occurrence based,” not “claims based.” Here’s the difference: a claims-based policy must be in effect on the date you make the claim—even if it was in place when the incident leading to the claim occurred. Under an occurrence-based arrangement, you can make the claim after the policy has ended, as long as the claim arose while the policy was in effect—which is obviously to your advantage.

Wednesday, December 10, 2008

When should I Start Looking for Homeowners Insurance?

A house may be the biggest investment you make in your life, so you’ll want to fully insure it against damage (by fire, wind, vandalism, earthquakes, floods, and mold, for example). A comprehensive homeowners’ insurance policy should cover the replacement value of your house and other structures, and partial replacement of valuable items of personal property like art and

But beware: So-called “replacement cost coverage” for your house pays you only a preset amount, so you’ll want to make sure that’s enough to cover your actual rebuilding costs. You’ll probably want some liability coverage as well, in case visitors to your property slip and fall or are otherwise injured.

Start shopping for homeowners’ insurance soon after your purchase agreement has been signed. Don’t make the mistake of putting this off until escrow is about to close—finding a good policy at a reasonable price is getting harder and harder, due to recent losses and clampdowns in the insurance industry.

The problem is particularly acute in states such as California and Texas, where expensive mold claims have pushed the industry into a state of panic. Homebuyers who have filed past claims for water damage (a precursor to mold) or who are buying a house with a history of mold problems may find themselves unable to get any insurance at all. Homebuyers with a history of making frequent claims on their insurance policies have similar problems. Some homebuyers now add a contingency to their purchase contract stating that the deal can be cancelled if they can’t find adequate insurance.

Shop carefully—and if you’re in a state with a troubled insurance industry, buy a policy with a
high deductible. This will lower your premium cost and prevent you from racking up a history
of claims that could endanger your ability to renew your policy or get future insurance.

Tuesday, December 9, 2008

Shopping for Car Insurance Estimate

Shopping around for a car insurance estimate is not something most people look forward to. It is one of the least exciting chores that is required in order to have a car on the road, but it is worth seeking out the most competitive car insurance estimate available. Although getting a car insurance estimate from a number of companies isn’t a desirable task; many people spend far more than they absolutely have to each year on their auto insurance because they simply haven’t taken the time to compare rates and policies with other auto insurance companies. It would be hard to find someone who would walk into an appliance store and decide to spend $200.00 more on a washer that offers the same exact quality and features as the one next to it that costs far less. It doesn’t make too much sense to do the same thing with car insurance.

Most of the time, a car insurance estimate will include collision, liability and comprehensive coverage on a vehicle. Most households have two or more vehicles and every car should be included when seeking out a car insurance estimate. There are a few things that can be done to make getting a car insurance estimate easier and more accurate especially when dealing with more than one car insurance company.

One of the best things to do before looking for a car insurance estimate is to see exactly what the state requirements are as far as what the necessary minimum coverage is in order to have adequate coverage. This is something that might be better to do without the assistance of an insurance agency if possible because their job is to sell insurance and they make more money with the more coverage they are able to sell.

In order to spend less time on the phone when looking for a car insurance estimate, it is a good idea to have a number of items handy including a driver’s license, vehicle identification numbers, make, model and year of each car and even the name and contact information for the company that is financing all vehicles if applicable. There are also a number of factors that can be taken into consideration when seeking a car insurance estimate that may mean additional savings per year. Features on each auto including airbags, auto alarms, anti-lock brakes and other things may mean discounts on auto insurance. Some insurance companies will even offer discounts for having more than one policy with their company as well as insuring multiple cars through with their coverage. Additional discounts may be found through other things like accident-free driving record, defensive driving course incentives and other discounts.

Other circumstances may cost a driver more with certain companies when looking for a car insurance estimate. Men under the age of 25, single drivers, younger drivers under the age of 21, the number of miles driven per day and even the kind of car that is driven can cost a person more money on car insurance when shopping around. The best part about this is that not one car insurance will probably charge the same amount of money for the same coverage so shopping around will prove that there are better choices available.

Monday, December 8, 2008

Get Auto Insurance Rate Quotes

Auto Insurance rates will vary depending on the insurance agency, your driving record, and the type of insurance you are looking to purchase. I you are looking for affordable car insurance or truck insurance then read on.

There are ways to reduce your premiums without giving up coverage. One of the easiest things to do is get auto insurance rate quotes online. This will allow you to comparative shop stress free.

Raising your deductibles is the easiest way to reduce your rates. The higher the deductible, the lower the premium will be. The deductible is the portion you will have to pay in the event of accident, before your insurance coverage steps in. It’s important not to carry a deductible that’s more than what you are able to pay. Your insurance company will not honor its portion of the claim until you’ve paid your deductible. However, the higher your deductible the lower your premium cost will be, so you need to find a

Always remember to ask your insurance broker for any available discounts. Quite often we forget to ask and they don’t seem to volunteer the information. A clean record on the current policy for a certain period of time, having your homeowner's coverage with the same insurer, taking a defensive driving course, having an accident free driving record, and having an approved anti-theft device will reduce your auto insurance rates.

The type of car you drive can also reduce your rates. Stay away from cars that have a high class rating. Rates vary among the different makes and models of vehicles. The different rates are based on the risk of accident, cost to repair, higher theft rates for a particular model and replacement costs such as with a new vehicle. So be sure your vehicle isn’t going to be in a category that increases your rates too much.

A safe driving record consisting of no accidents and no traffic violations will get you the most substantial discount. Most insurance companies are very good at recognizing good driving habits. These are the drivers they want to insure because their risk is much lower.

If the car is old and not very valuable, comprehensive insurance is probably not worth buying as it can quickly add up to more than you’d ever receive in the event of an accident. You can save up to 20% by eliminating collision insurance. You may want to opt not to carry collision insurance as well which can save you and additional 20%.

Check around to make sure you are getting the best auto rates you can. Online auto insurance shopping has taken the guess work out of buying insurance and you can very quickly see if you are being hosed. So if your insurance is coming due now is the time to start shopping!.

Sunday, December 7, 2008

Tips for Saving Money on Car Insurance

Car insurance is required by all licensed drivers but many of them don’t know how to find the best rates available. Being complacent and purchasing car insurance without carefully investigating your options or maintaining the same car insurance for the remainder of your life could mean that you are paying too much for your car insurance. Comparison shopping, ensuring that you are receiving all the discounts you qualify for and maintaining a clean driving record are just a few of the money saving tips that can save you a fortune on car insurance.

Comparison shopping for car insurance, even after you are already insured, cannot be underestimated. It is critical that you investigate all of your options before choosing an insurance provider to ensure that you are getting the best possible rate on your car insurance. There are so many factors considered in car insurance policies such as where you live, your driving record, your age and the type of car you drive just to name a few. With all of these factors to consider, it is very possible that you will find that there is a car insurance provider who will offer you a considerably lower rate than other providers.

Even after you have secured insurance for your car, it is wise to periodically check the rates that other providers will offer you. Car insurance as well as your circumstances are perpetually changing and you may find that the provider who is willing to offer you the best car insurance rate varies periodically. Many car insurance providers offer a host of discounts to their clients who qualify for these discounts. These discounts can relate to your driving record, safety features of your car, your age or other factors.

These discounts can result in a tremendous cost savings on your car insurance policy but while many insurance providers offer these discounts, they don’t always advertise them. This means that you may have to do research to determine what type of discounts you may qualify to receive. Carefully, review your car insurance policy to determine which discounts you are already receiving and then contact your car insurance provider to inquire about other discounts that may be available. For example if your driving record is devoid of accidents or tickets, you may qualify for a good driver discount.

Also, if your car has certain safety features such as daytime running lights, you may also qualify for car insurance discounts. Your age can also qualify you for certain car insurance discounts. Some insurance providers also offer discounts to those who insure their house with the same company as they insure their car. Taking advantage of this type of discount can save you money on both your car and home insurance. Being aware of the discounts that are available and ensuring that you are receiving these discounts, can save you a great deal of money on your car insurance.

Finally, maintaining a clean driving record is very important to receiving the best available car insurance rate. While it is true that each car insurance provider is unique in the factors that contribute to lower rates, the one factor that is consistent among all providers of car insurance is that a clean driving record is critical to your rate. Although accidents are sometimes unavoidable, it is imperative that you adhere to all traffic regulations and that you drive safely at all times. This will reduce the number of traffic violations that you incur as well as the number of accidents that you cause. Following these tips will help you to maintain a clean driving record that will keep the cost of your car insurance low.

Many drivers lament paying their monthly car insurance bill because they feel as though the insurance isn’t necessary. Although car insurance is a financial burden that seems superfluous, it does pay off if you are ever in a serious car accident that has significant financial ramifications. For this reason, you should never consider allowing your car insurance to lapse and it is recommended that you search diligently to find the best available rate on your car insurance.

Saturday, December 6, 2008

How Can You Lower Your Car Insurance Premiums?

Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.

Consolidating policies

By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a ‘bulk buy’ discount.


A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.


By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.

Your Vehicle

The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance – you may be able to buy the car but can you afford to run it?


You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!


Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.


Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.

No Claims Discount

Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.

Advanced driving skills

By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums. Two key variables NOT within the policyholder's control.

Your Sex.

Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.

Your Age

The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.

One final piece of advice.

A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.

Sunday, November 30, 2008

Why Americans Spend So Much on Healthcare

The United States spends far more per person on healthcare than any other country—about twice as much as other developed nations. Yet people in the United States don’t appear to be getting their money’s worth.

The United States lags far behind other developed countries on almost every important medical statistic—life expectancy, infant mortality, cancer, diabetes, heart disease, and so forth.
So, what is the problem with American healthcare?

Is it our inefficient medical bureaucracy, where 2 to 3 million Americans are employed by medical providers and insurance carriers—not to deliver healthcare, but merely to pass the buck for that care to someone else?

Is it the cost of medical malpractice insurance, which adds more than $27 billion a year to the cost of providing healthcare—enough to pay annually a high-deductible insurance premium for more than half of the 45 million Americans without health insurance?

Is it our employer-based system, whereby the ultimate providers of healthcare for most people (employers) have little incentive to spend even $1 today on wellness and preventive care in order to save $100 tomorrow—because the odds are that the employee will be long gone or receiving Medicare by the time serious diseases like cancer and heart disease develop?

The partial answer is yes to all of these questions, but the main reason Americans spend two times what they should on healthcare is not because of something wrong with American healthcare.

Today, more than 61 percent of Americans are overweight or medically obese—a figure that has doubled since the 1980s. Being overweight is just one of the symptoms of having a terrible diet—most Americans are also deficient in the basic vitamins and minerals necessary to keep their minds sharp and avoid major diseases like cancer.

If you are overweight or obese, please get immediate help in changing your lifestyle. Already, 59 million Americans have diabetes or prediabetes, mostly due to being overweight—if you are one of them, you have a 65 percent chance of dying from heart disease or stroke. Moreover, before
you die, if you are obese, you will likely consume much of your estate in medical expenses and will needlessly and selfishly be torturing those you love the most.

Saturday, November 29, 2008

Ways to Reduce Your Pharmacy Bill

There are plenty of ways you can reduce your pharmacy bill. The Cost Containment Research Institute ( has compiled a list of 17. Here are a few ideas for you to consider:
  • Shop around by phone. Make a list of your medications, including strength and number taken daily, and call at least six pharmacies to compare prices, keeping in mind whether the pharmacies are on your plan.
  • Use a pill splitter (but do your research first). Many drugs are cheaper if you buy them in larger doses, then cut them in half. Ask your pharmacist or doctor first, though, since many drugs cannot be split without reducing their effectiveness. Most pharmacists say you should split only pills that are scored (i.e., those with a predesigned breakoff line). However, Toby Rogers from Rxaminer says, “We split a lot of pills that aren’t scored; you should be able to split pills that aren’t a ‘long acting’ type or encapsulated.”
  • Save by buying a 90- versus a 30-day supply. Most pharmacies offer higher savings if you buy a larger supply. In addition, people with insurance prescription coverage may save even more by getting a larger-day supply.
  • Over-the-counter drugs may be as effective as the prescription drugs. Most prescription cold medications average $20 to $60 for a onemonth supply and contain the same decongestant that is available over the counter for less than $2. Some doctors still prescribe 20-milligram Pepcid to their patients, which can cost $60 for a onemonth supply. Pepcid AC comes over the counter in 10-milligram strength; taking double the dose costs approximately $23.
  • Stop using drugs you no longer need. You should review all your prescriptions with your doctor at each visit. You may be taking drugs you no longer need. Also, report any side effects and ask questions about possible drug interactions. Don’t hesitate to ask your pharmacist questions; it’s free and can often save you money.
  • Take only those drugs you really need. When your doctor prescribes medication for you, make sure you understand exactly what it’s meant to do and for how long. If you are prescribed two drugs for the same symptom, ask whether you really need both; if you develop new symptoms ask your doctor if the prescribed medicine could be causing it.
  • You may qualify for a free drug program. There are over 1,100 drugs that are made by 100 manufacturers that have free drug programs. Most major drug companies provide free medications but rarely, if ever, publicize their programs. An estimated $2 billion worth of free medication is given away annually. You can get a complete list of drugs and manufacturers’ programs at
  • Veterans have their own drug benefits. Recent laws grant veterans medical benefits for certain illnesses, like diabetes and hypertension, provided the veteran is subject to qualifying conditions such as Agent Orange exposure. Check with the Veteran’s Administration to see whether you qualify for benefits.
  • Buy home test kits. Kits for determining ovulation, pregnancy, and colorectal cancer can be purchased as home tests at half the price of similar kits from your doctor’s office.
  • Look for special deals by local governments. You can save on prescription drugs through special deals offered by state and local governments and even religious organizations. The states of Illinois, Kansas, Missouri, Vermont, and Wisconsin have initiated a web site where residents can buy 100 commonly used drugs from Canada, Britain, and Ireland at a discount of anywhere from 25 to 50 percent. The address for the site is

Friday, November 28, 2008

Tips for Shopping Overseas Pharmacies in US is one of the best web sites for checking out prices from quality pharmacies overseas, as well as the quality of an individual pharmacy itself. Tod Cooperman, M.D., who founded, has the following tips for shopping overseas for
prescription drugs:
  1. Shop from Canada. As long as the pharmacy is licensed in Canada, there should be no concerns about the quality of the drugs. They are as good as what you would purchase from a U.S. pharmacy, and in fact many are manufactured here.
  2. Look beyond Canada. High-quality prescription drugs are also available from Australia, the EU countries, Israel, and New Zealand. These countries have drug regulations equal to or better than those in the United States.
  3. Use to monitor the quality of foreign pharmacies. The site is free to explore and paid memberships are available for more in-depth information. The web site does not accept funding from pharmaceutical companies, but pharmacies do pay to be rated voluntarily. does not receive any money on sales.
  4. Be secure. Read the fine print on any web site before you enter your confidential information—the general rules for privacy in the United States do not apply to overseas pharmacies.
  5. Avoid buying drugs advertised in spam e-mails and pop-up ads. Cooperman says these companies are impossible to trace.
  6. Don’t expect to save on generic drugs from other countries. Generic drugs are actually cheaper in the United States than in Canada, since Canada sets its prices on generics from a two-competitor system, whereas the United States has a free-market system with as many as 12 companies selling generics.
  7. Watch for counterfeit drugs. If you’re dealing with a reputable pharmacy, counterfeits should not be a problem. However, examine your pills when they first arrive to see whether they look different from those you normally get. If they crumble or if the consistency seems different, take it as a warning.
  8. Remember to calculate shipping costs. To save on shipping, buy larger quantities, such as a 90- versus a 30-day supply, if you expect to be on the drug for at least that long

Thursday, November 27, 2008

How You Can Finance Your Long-Term Care

There are four basic ways to finance your long-term care:
  1. Family support and caregiving. This is the way long-term care has been provided for generations. While all of us like the idea of taking care of our parents as they age or being taken care of by our children, this is simply not a viable option for most Americans today
    who have jobs and/or children of their own.
  2. Personal savings. This is not a viable option for most people because they do not have millions of dollars available, nor do they know how much long-term care they will need. It is also selfish if your estate will be needed to support your spouse or children after you are gone.
  3. Home equity options. This is an increasingly popular method, particularly with the advent of reverse mortgages, but it has the same limitations as personal savings. In addition, most people would prefer to live out their later years in a place other than a full-size home (e.g., in a retirement community).
  4. Private long-term-care insurance. This is my favorite choice for financing long-term care. Insurance is the ideal method to finance unknown risks that can be predicted in the aggregate using actuarial information.

Wednesday, November 26, 2008

Some Factors to Consider when Purchasing a Disability Insurance

Here are some factors to consider when purchasing a disability insurance policy, either through your employer or by yourself.
  • “Own occupation” or “any occupation” What is the definition of disability in your policy? Does it mean being able to work in the occupation in which you were engaged when you became disabled, or in any occupation? For example, if you are a surgeon who injures your
    hand and can no longer work as a surgeon, perhaps you could work as a teacher. The tighter the definition of disability, the higher the monthly premium.
  • Guaranteed renewable and noncancelable. Look specifically for these two clauses in any individual policy, and don’t expect any guarantees past your plan year from an employer-sponsored group policy.
  • Tax-deductible premium or tax-free benefits. In general, if your premium is paid by your employer or yourself (with an FSA, discussed later in the chapter) with pretax dollars, disability benefits are taxed as income when you receive them. If your premium is paid with after-tax dollars, benefits are not taxed when you receive them. The conventional advice in the insurance industry is to pay your premium yourself or with an after-tax payroll deduction so disability benefits are not taxable income when you receive them, as that is when you will need the extra income the most.
  • Elimination period. This is the amount of time you must be disabled before benefits begin, typically 90 to 180 days, which is often covered by a short-term-disability policy. Some states have mandated state short-term-disability coverage, so check before you buy any—residents of California, Hawaii, New Jersey, New York, and Rhode Island are guaranteed their full after-tax salary (up to a reasonable maximum) for 6 weeks if they become disabled, then 50 to 60 percent for 20 more weeks.
  • Supplemental or overlapping coverage. Some policies guarantee you a fixed benefit, say $5,000 a month, reduced by any benefits you received from government entities like Social Security. This is usually a good option to lower your current premium, since it shifts the risk of ever obtaining government benefits onto your private disability carrier. Do not depend on Social Security or any governmentmandated disability benefits when you calculate your disability requirements.
  • Premium waiver, partial disability, and so on. Premium waiver specifies that your premiums will be automatically paid when you are receiving benefits. Partial disability specifies your benefits in case of only partial disability. These and other terms should be reviewed with your benefits administrator or an insurance agent licensed to sell disability

Tuesday, November 25, 2008

8 Things to Look for an Agent of Individual Health Insurance

Here are eight things to look for when picking an agent or agency to represent you or your employees in purchasing an individual/family health insurance policy:
  1. Shopping. If you like to shop online, the agent should have an online web site where you enter your family information to get instant online price quotes on different policies offered by different carriers. This allows you to shop at your leisure until you are ready to make a decision. A good online insurance web site will not ask for your name or contact information until you have seen quotes and are ready to choose a policy.
  2. Appointments. Agents you contact should be appointed to sell health insurance from several or most of the major health insurance carriers in your state—and they or someone at their agency should have a professional relationship with the underwriters at each carrier.
  3. Knowledge. The agent should know and be able to clearly explain all of the information contained in this chapter.
  4. Selecting a carrier. Should you or a family member have or have had a health issue, the agent should know which carriers in your state may have a bias against certain preexisting conditions. Once a carrier is selected, the agent should be able to contact the carrier without mentioning your name and ask the underwriters whether your medical issue raises any red flags.
  5. Access. You should be able to speak to the agent or a licensed associate on the telephone or via e-mail at your convenience, or to visit that individual in person. Your health information is personal and confidential, and you should feel secure when sharing it with
  6. Monitoring. The agent or agency should have a process in place to monitor your application once submitted and, after consulting with you, be able to withdraw your application or amend it before it gets formally rejected, uprated, or approved with an exclusionary rider.
  7. Negotiation. The agent should have a personal style and communication ability that makes you feel comfortable—as he or she will be the one representing you to the underwriter if you have an issue with your application.
  8. Volume. The agent or agency should be a significant producer of policies for the carrier selected. This will enable that person to better negotiate on your behalf during the underwriting process and to help you solve issues with the carrier at a future date.

Monday, November 24, 2008

How Underwriters Verify the Information on Your Application

Underwriters have several tools at their disposal to confirm information provided by prospective applicants.

The Medical Information Bureau

Insurance underwriters often check the information you put on your application against your Medical Information Bureau (MIB) report. Your MIB report is to your medical history what your credit report is to your financial history or what a Dun & Bradstreet rating is to the creditworthiness of your business. MIB, a central database on the health history of tens of millions of Americans, is shared by approximately 600 life and health insurance companies.

When you apply for individually underwritten life or health insurance, or when you participate in a group insurance plan in which an insurance carrier underwrites the health of your group, you typically give the underwriter permission to send your health information to the MIB. MIB keeps information on file for seven years.

MIB is not subject to HIPAA privacy regulations, but MIB is a consumer reporting agency subject to the Fair Credit Reporting Act. As with a credit report, if you are denied insurance based on an MIB report, you are entitled to a free report and the opportunity to have any erroneous information corrected.

Telephone Verification Calls

Most carriers do telephone verifications of the information on your application. After you apply, you should expect to receive a telephone call from the insurance company to verify at least a few questions on your application. A verification call is always recorded and is typically with a juniorlevel employee rather than with a senior underwriter with whom you can discuss your health issues.

Requests for More Information

If you have checked yes to any of the hundred or so checklist questions on specific diseases or treatments, the underwriter may request a specific medical report from one or more of your medical providers. This is usually done without your knowledge since your signature on the application gives the underwriter permission to obtain this information and gives the medical provider permission to share it. It also typically gives the underwriter permission to share such information with the MIB.

About 5 percent of the time, the underwriter is not comfortable with the paper trail of your medical history or wants a professional to examine you for a specific issue and requests an Attending Physicians Statement (APS). In such a case, you are directed to see a local physician for a medical exam, or a doctor who has seen you recently is requested to send his or her medical notes to the carrier.

Sunday, November 23, 2008

What Health Insurance Companies Look For in Your Application

Health insurance companies make their money over the long run by rejecting applicants who are likely to have large medical expenses that will cost more than those people will ever pay in premiums. Conversely, insurance companies want to accept applications from people whose medical expenses are likely to be average or below average. Think about health insurance from the perspective of a carrier—unlike your employer, a health insurance carrier is a privately owned company with whom you have no relationship. When you apply for an individual/family policy you are asking a third party to take an amazing risk on your continued good health.

If a carrier accepts you for, say, a policy costing $300 a month, it will probably receive about $9,000 in premiums from you over the 30-month average life of an individual/family policy—and pay out about $2,500 in claims for a healthy family during this same 30-month period ($1,000 a year). The carrier will also have to pay a commission of typically 6 to 20 percent on the first-year premium if you were represented by a health insurance agent. The gross profit per policy in this case is about $6,100 ($9,000 premium – $2,500 claims – $400 commission = $6,100).

If you or a member of your family develops a problem with your health, you are probably going to keep your policy for a lot longer than 30 months—since you won’t be able to get a job while you are ill or get cheaper health insurance anywhere else while you have a preexisting condition. Your treatment might cost $10,000, $50,000 or even $100,000 for each year you keep the policy until you hit the lifetime maximum of $1 to $5 million. Insurance companies will go bankrupt if they accept too many people with preexisting conditions who are likely to cost the company far more than they pay in premiums.

It is also very important that your application be complete and accurate before it goes to the underwriter for review. In this example, the carrier makes a gross profit of $6,100 if your family stays healthy; conversely, it potentially loses from $1 million to $5 million when it insures someone whose health deteriorates or who has an accident. The carrier has to sell 820 policies to healthy families to cover the cost of one family who hits a lifetime max of $5 million (820 × $6,100 = $5 million). The general rule of thumb when it comes to underwriting health insurance applications is “when in doubt throw it out”—meaning the underwriter will not consider an application with incomplete or confusing information.

Saturday, November 22, 2008

Comparing Different Health Insurance Policies

The most useful comparisons entail first estimating your future healthcare needs and then reviewing the major features of each policy item by item.

Estimating Your Future Healthcare Spending

To compare different health insurance policies, you have to first make assumptions about your future healthcare needs. If you haven’t had a major illness recently, the best way to do this is to look at what you spent on medical care last year. After you have prepared this list, think carefully about the health of each family member and estimate what you might spend next year.

You should be able to come up with your exact out-of-pocket expenses for healthcare last year (including your health insurance premium) and an estimate of next year’s spending (assuming you keep your current health insurance).

Comparing Policy Features

Once you have estimated what you may spend next year, you need to collect the following basic information for each policy you are considering. All of this information should be readily available in any brochure or web site describing an individual/family policy. Once you have the information, make up your own worksheet similar to the one shown here.
TIP: There is no way to financially compute the lifetime max amount you will need, since very few people ever come close to using this much money in healthcare. Ultimately, buying insurance (protection) is more about purchasing peace of mind than about securing a financial return; only you can value the peace of mind you get from having a given lifetime max on your health insurance. In general, if you don’t expect to keep the policy for a long time because you are over age 60 and approaching Medicare eligibility, a lifetime max of at least $1 million should be sufficient.

Friday, November 21, 2008

What to Look for in a Health Insurance Policy

Once you have selected some policies to analyze, look at these six major financial items in each policy:
  1. Doctor Visit Co-pay or Discount. The doctor visit co-pay is the amount that you pay each time you visit the doctor. In a traditional low-deductible plan, this ranges from $10 to $30 per visit per patient. Most higher-deductible plans do not offer any doctor co-pay, but do offer substantial network discounts off the $100 or more standard doctor visit fee. When considering a plan without a doctor visit co-pay, you should phone your physician first to ask how much you will pay per doctor visit (typically 30 to 50 percent off a typical $100 fee per doctor visit).
  2. Prescription Co-pay or Discount. This is the amount you will pay per prescription filled. Most healthcare plans offering pharmacy coverage break their coverage into three tiers: generic, formulary brand, and nonformulary. A typical plan for a 30-day prescription might charge a $10 co-pay for a generic drug, a $20 co-pay for a formulary-brand drug that is on a list (the “formulary”) maintained by the carrier, and a discount from full retail for a drug that is neither generic or on the formulary list. There is no standard pharmacy coverage, so the only way to know what you will pay is to ask your carrier or look up your prescription on its web site.
  3. Annual Deductible. This is the annual amount of your medical expenses that you must pay before your health insurance company begins paying providers or reimbursing you for claims. Traditional healthcare plans have deductibles of up to $1,500 as well as co-pays for doctor visits and prescriptions. Highdeductible plans have deductibles from $1,000 to $10,000—but much lower premiums.
  4. Out-of-Pocket Annual Maximum. Coinsurance is the amount, typically about 20 to 30 percent, that most insurance carriers expect you to pay on your annual medical expenses after you have met your deductible. Fortunately, most coinsurance clauses have an upper limit of about $10,000. Your maximum coinsurance obligation, plus your annual deductible is called your OOP max—referring to the maximum out-of-pocket annual expense you could incur under the policy. Some newer high-deductible plans, including many HSA plans, do not charge you coinsurance; they pay 100 percent of your medical
    expenses once you have met the deductible
  5. Lifetime Maximum Coverage. This is the maximum amount of benefits that could be paid out over the life of the policy. Some states require individual/family policies to have a certain lifetime maximum—California requires all individual/family policies to have a lifetime maximum coverage of at least $5 million per person. You may not think today there is a big difference between a $1 million and a $5 million lifetime maximum, but you might think differently if you needed an organ transplant, which typically requires decades of expensive follow-up treatment.
  6. Premium. This is the monthly amount you will pay for the policy and the options you have chosen. It is often paid quarterly, in advance, or monthly, with required automatic drafts from your checking account.

Thursday, November 20, 2008

The Two Major Components of Health Insurance

Health insurance is different from all other types of insurance. When you buy life insurance, automobile insurance, or homeowner’s property and casualty insurance, you do not expect to have a claim in the near future.

You purchase these types of insurance for financial protection against the occurrence of an unlikely event that you wish to avoid—like a death, an auto theft, or a fire. If such an event occurs, you generally receive money that you are free to spend any way you wish.

In contrast, with health insurance, you expect to have claims in the near future and you almost never receive money when you have one. Instead, your insurance carrier directly pays the medical providers that have taken care of you—typically paying them either a flat monthly fee or a small fraction of what they would charge you directly if you didn’t have health insurance.

This is because what we call “health insurance” in the United States consists of two separate but related components:
  1. Access to a network of physicians, hospitals, and other medical providers who provide services at greatly discounted rates
  2. Financial protection against the medical expenses of an accident or illness.

Here’s the first question you need to ask when choosing a health insurance policy: “How good is the network of doctors included in the plan?” Your policy won’t do you much good if you don’t like the physicians it covers, or if it works only at a hospital many miles from where you live.

Once you have located a few policies that offer access to the medical providers you desire, you need to analyze the financial protection offered by each policy—the monthly premium and how much you will pay out of pocket under different potential scenarios, from a routine physical exam to a catastrophic illness.

Wednesday, November 19, 2008

Why Haven’t I Heard of Individual/Family Health Insurance?

There are many reasons that most people haven’t heard of individual/ family health insurance policies:
  • Simple inertia precludes action. The majority of people living in the United States today have always received free or low-cost employersponsored group health insurance as a job benefit. Most people are unaware that better options exist because they have never had to go looking for them.
  • Families used to be covered by employers. Until recently, most employers providing employee health insurance included free or heavily subsidized coverage for the employee’s spouse and children. Today most private employers charge employees 50 to 100 percent
    of the cost for insuring their spouse and children. Many employees aren’t aware they are paying from half to all of the cost and not just a co-payment.
  • Employers won’t tell you. If you are currently paying your employer for the cost of insuring your healthy spouse or children, your employer doesn’t want you to know about much less expensive individual or family health insurance. The $4,000 or more you pay in annual premiums for your family goes to support other, less healthy group members. Your employer’s group health insurance premium would increase dramatically if healthy people were to leave the group.
  • People think individual or family policies cost more. The average cost of an individual/family health insurance policy used to be higher than the cost of an employer-sponsored policy, but today it is less than half the pro rata cost of a group policy in most states.
  • U.S. income tax laws did not encourage it. Until recently, people wanting to purchase their own individual or family health insurance had to earn almost $2 of pretax income to have $1 left over to pay their health insurance premium. As explained in Chapters 11 and 13, this is no longer the case now that employers are allowed to reimburse employees tax-free for health insurance premiums on individual and family policies. In addition, health insurance premiums only recently became 100 percent tax-deductible for self-employed people.
  • Insurance carriers don’t advertise. Advertising the availability of individual policies attracts mostly applications from unhealthy and/or unemployed people who typically do not qualify for, or cannot afford, individual health insurance. These applications are expensive to process and can cause regulatory problems for the carriers when most of them are rejected. Instead, carriers rely on a select group of agents who are trained to send in applications only from healthy applicants who can afford the premium.

Tuesday, November 18, 2008

Obtaining Individual/Family Health Insurance

Individual and family policies may be purchased directly from an insurance carrier or through an insurance agent licensed to do business in your state and appointed by insurance companies to represent them. A good place to start is an online search engine like or, which provide quotes for thousands of policies from many different carriers.

TIP: Be careful when you shop online for health insurance, and watch the fine print. Most web sites offering “online quotes” request personal contact information and then don’t deliver any online quotes—they sell your information to third parties along with your express permission to phone you. A good online insurance web site will not ask for your name or contact information until you have seen quotes and are ready to choose a policy.
Insurance companies are legally required to charge the same premium whether you purchase your policy directly from the carrier or through a licensed health insurance agent. You should always get quotes from several carriers before choosing a policy, and choose an agent appointed by several of the major carriers in your state, particularly if a member of your family has a health issue.

As we know, employers offering employee health benefits and their insurance companies must blindly accept every applicant regardless of their health—which is why employer-sponsored group policies are so expensive. In contrast, in almost all states, individual/family insurance
carriers may choose the individuals whom they accept after analyzing the health risks of each family member applying for coverage. This process is called underwriting. The underwriter for an insurance company examines the healthcare experience, age, current health, family history, and lifestyle for each member of your family. The underwriter then makes three decisions
regarding your application:
  1. Acceptance. The underwriter may accept your entire family, or accept only certain members of your family, based on their assessment of the health risk of each individual.
  2. Uprating. If the underwriter decides that a member of your family poses a moderate health risk, the underwriter may accept your application with a typical 15 to 200 percent rate increase over the normal monthly premium for a healthy individual in your age group.
  3. Exclusions. The underwriter may accept your application with exclusions for “preexisting conditions” for one or more family members. For example, if you have a child with moderate diabetes, certain carriers will accept your child excluding all claims related to, or resulting from, diabetes. Such preexisting conditions may be excluded for a certain period of time or for as long as you keep renewing the policy.

Monday, November 17, 2008

What Is Individual/Family Health Insurance?

An individual or family health insurance policy is a policy purchased from an insurance company or government entity covering a single individual or selected family members.

The terms individual policy, family policy, individual and family policy, individual/family policy, and individual or family policy all mean the same thing—a policy purchased by a consumer directly from an insurance carrier (similarly to auto insurance) covering an individual or a family. (The terms policy, plan, company, and carrier are also used interchangeably and mean the same thing.)

There are two main differences between employer-sponsored “group policies” and individual or family policies:
  1. Employers and their group-policy insurance carriers are legally required to accept all applicants regardless of their health. In contrast, insurance carriers offering individual
    policies can reject applicants with preexisting medical problems, and therefore can typically offer far lower rates to healthy applicants (except in five states).
  2. The premium paid by employers for their group policies is typically increased every year based on the previous year’s healthcare costs of the employee group. In contrast, the premium you pay for an individual or a family policy cannot be raised each year, nor can the policy be canceled based on your health or your prior year healthcare costs.

When you purchase an individual health insurance policy, you become a member of an insurance “group.” But it’s not the relatively small group limited to the employees of one company—it’s the large group of people in your state who purchased a similar policy from the carrier in a given time frame.

Monthly premiums paid for individual policies typically increase annually with the level of inflation or overall medical costs. The insurance carrier is allowed to ask the state insurance regulator for a rate increase based on the actual prior year’s health costs for everyone in your group.

However, unlike with employer group policies, these groups of individuals are so large that even the catastrophic illness of hundreds of members would not result in a significant increase in your monthly premium. In contrast, in a small company, if one of the employees gets an extremely expensive illness like diabetes or cancer, the following year the carrier could double the cost that employer is paying for health insurance.

Many companies are forced to pass increased costs on to employees or drop health insurance coverage because of catastrophic employee illnesses. Huge, sudden increases in health insurance costs can’t happen with individual/family health insurance because your “group” is so much larger.

Unlike employer-sponsored health insurance, individual and family health insurance is real “insurance” because it “guarantees protection or safety.” As long as you pay the premium, your policy cannot be canceled nor the premiums increased just because you lose your job, change jobs, or have a catastrophic illness in your family.
As with employer-sponsored health insurance, individual or family health insurance also includes access to a network of medical providers who charge 15 to 90 percent less to those in the network than to those outside the network, or to those who have no health insurance.

Sunday, November 16, 2008

Problems When a Dog Goes on a Commercial Flight

Put simply, a lot of things can go wrong when a dog goes on a commercial flight. Most problems occur on the ground, not during a flight. Here are some of the more common problems you should be aware of before you ship a dog.
  • The dog escapes from a cage. This can lead to tragic results, as it did in 1988 for a small dog named Loekie. Loekie, on a TWA flight from Dallas to Los Angeles, got out of his cage during a stopover in St. Louis. The dog was killed by a car on an airport road.
  • The cage gets tipped or crushed during transport. Sturdy travel kennels alleviate this problem to some degree, but mishandling—for example, putting a pet carrier on a regular baggage carousel—can toss an animal around.
  • The plane is delayed on the ground, with the dog in it. During flight, the cargo area in which pets travel is pressurized, and the temperature is controlled. But on the ground, no fresh air gets in, and the temperature can fluctuate dramatically in a short time. If you’ve ever sat in a hot, stuffy plane during the summer, waiting to take off or pull up to a gate, you can imagine how an animal feels in the even hotter baggage compartment.
  • Baggage handlers remove the dog from the plane during a stopover and then forget to load it on again. Animals are shipped in a compartment near the door of the plane where baggage is loaded. Unknown to the owner sitting on the plane, they may be removed during a stopover (so that other baggage can be unloaded more easily) and inadvertently not re-loaded.
  • The dog is shipped to the wrong place. Just like a suitcase, a dog can end up in the wrong place. Because few airports are equipped to handle animals well, a dog flown to the wrong destination can have a bad or even life-threatening experience waiting for another flight or for you to show up and claim it.
  • The dog is left in the heat, cold, or rain. An animal left outside at an airport may be subject to extreme heat or cold. An English bulldog died of apparent heat stroke in 1984 during transport; the dead dog was sent out on a conveyer belt with other baggage, where it was found by the owner.1 Many airlines no longer accept pets during the summer, and federal regulations prohibit shipping animals if they will be exposed to temperatures below 45 degrees or above 85 degrees for more than four hours.
  • The dog is left unattended, without food or water, in a “lost luggage” storage area. Because most airlines don’t have special places for live animals, animals can sometimes end up abandoned with misplaced baggage. Usually, employees care for the dog as best they can. But if a dog is scared and snappish, as it may well be, it may get little care. Employees may not even know a pet is there.

Even if you plan carefully and everything goes as planned, air travel is frightening and stressful for a dog. And you often can’t cope with problems as they come up, because you and your dog are separated during the critical times.

History of Insurance in India (The Insurance Act of 1938)

In 1937, the government of India set up a consultative committee. Sushil C. Sen, a well-known solicitor in Calcutta, was appointed the chair of the committee. He consulted a wide range of interested parties, including leaders within the insurance industry. It was debated in the legislative assembly, and, finally, in 1938, the Insurance Act was passed. This was the first comprehensive piece of legislation in India, covering both life and general insurers.

It covered deposits, supervision of insurers, investments, commissions of agents, and directors appointed by the policyholders, among other topics. This piece of legislation lost significance after life insurance was nationalized in 1956, and general insurance was nationalized in 1972. With the privatization in the late twentieth century, the Insurance Act of 1938 returned as the backbone of current legislation of insurers.

To implement the 1938 Act, an insurance department was established in the Ministry of Commerce by the government of India; later it was transferred to the Ministry of Finance. One curious element of the Act's classification of lines of insurance business was its inclusion of automobile insurance in the "miscellaneous" category. Later in the century, automobiles became the largest single item of general insurance. However, it continued to be included in the miscellaneous category, making it difficult to delineate the effects of losses due to pricing that drove this sector. For example, the Tariff Advisory Committee effectively fixed prices for a number of general insurance lines of business. Most premiums were below what would have been actuarially fair (especially for auto), but reporting auto insurance under the miscellaneous category masked this underpricing.

When the market was opened again to private participation in 1999, the earUer Insurance Act of 1938 was reinstated as the backbone of the current legislation of insurers, as the Insurance Regulatory and Development Authority Act of 1999 was superimposed on the 1938 Insurance Act. This revival of the earlier legislation has created a messy problem in that the Insurance Act of 1938 explicitly forbade insurers to participate in other financial services activities such as banking.

By 1956, there were 154 Indian life insurers. There were 16 non-Indian insurers, and 75 provident societies were issuing life insurance policies. Most of these policies were centered in the big cities of Bombay, Calcutta, Delhi, and Madras.

Saturday, November 15, 2008

History of Insurance in India (Colonial Era)

Life insurance in the modem form was first set up in India through a British company called the Oriental Life Insurance Company in 1818, followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. All of these companies operated in India but did not insure the lives of Indians. They insured the lives of Europeans living in India.

Some of the companies that started later did provide insurance for Indians, but they were treated as "substandard." Substandard in insurance parlance refers to life insurance for people with physical disability. In this case, the common adjustment made was a "rating-up" of five to seven years to the normal life expectancy of a British person in India. This meant, treating q(x), the (conditional) probability of dying between x and x + 1, for an x-year-old Indian male as if it was q(x + 5) or q(x + 7) of a British male. Therefore, Indians had to pay an ad hoc extra premium of 20 percent or more. This was a common practice of European companies that were
operating in Asia or Latin America.

The first company to sell policies to Indians with "fair value" was the Bombay Mutual Life Assurance Society starting in 1871. The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated by the British. The first indigenous general insurance company was the Indian Mercantile Insurance Company Limited, established in Bombay in 1907. At the time, insurance business was conducted in India without any specific regulation. Insurers were subject to the Indian Companies Act of 1866, but the insurance industry was otherwise unregulated.

After the start of the "Be Indian Buy Indian" movement (called the Swadeshi movement) in 1905, indigenous enterprises sprang up in many industries. Not surprisingly, the movement also touched the insurance industry, leading to the formation of dozens of life insurers along with provident ftind companies (pension ftinds).

In 1912, two sets of legislation were passed: the Indian Life Assurance Companies Act and the Provident Insurance Societies Act. There are several striking features of these legislations. First, they were the first legislations in India that particularly targeted the insurance sector. Second, they did not apply to general insurance, because the government did not feel the necessity to regulate general insurance. Third, they restricted activities of Indian insurers but not foreign insurers, even though the legislation was modeled after the British Act of 1909.

Comprehensive insurance legislation covering both life and non-life business did not materialize for the next 26 years. During the first phase of these years, Great Britain entered World War I—an event that disrupted all legislative initiatives. Later, Indians demanded freedom from the British. As a concession, India was granted "home rule" through the Government of India Act of 1935, which provided for legislative assemblies for provincial governments as well as for the central government. But supreme authority of promulgated laws remained with the British

The only significant legislative change before the Insurance Act of 1938 was Act XX of 1928. It enabled the government of India to collect information about (1) Indian insurers operating in India, (2) foreign insurers operating in India, and (3) Indian insurers operating in foreign countries. The last two elements were missing from the 1912 Insurance Act. Information thus collected allows us to compare the average face value of Indian insurers to their foreign counterparts. In 1928, the average policy value of an Indian company was U.S. $619 compared to $1,150 for foreign companies (Indian Insurance Commissioner's Report, 1929, p. 23).

Foreign insurers were doing well during that period. In 1938, the average size of the policy sold by Indian companies had fallen to U.S. $532 (compared to $619 in 1928), and that of foreign companies had risen somewhat to $1,188 (in 1928, the average size was $1,150).

Saturday, November 8, 2008

Health Insurance for Dogs

Health insurance for dogs and cats was virtually unheard of a few years ago, but it’s looking better and better to pet owners who have paid big veterinary bills. The average dog owner spends almost $800 a year on veterinary care, according to the American Pet Products Manufacturers Association. Surgery or other procedures can cost thousands. Veterinary
Pet Insurance, the largest provider of pet policies, reports that it has more than 400,000 policies now in effect.

One reason for getting insurance is that it reduces the chances that you’ll have to put a dollar value on the life of your pet. That unhappy task can arise if you are forced to choose between paying for the sophisticated and extremely expensive procedures now available (laser treatment, CAT scans, chemotherapy) or destroying a dog that might be saved.

The amount of the premium depends on the coverage you choose, where you live, and the dog’s age. You’ll spend from $2,000 to $6,000 on insurance over a dog’s lifetime, on average. Certain costs are generally not covered: congenital or hereditary defects, elective procedures, vaccination, food, grooming, behavioral problems, parasites, orthodontics, routine teeth cleaning, and conditions present before the policy effective date. Before you sign up, read the actual policy carefully and be sure you understand all the fine print.

You may also want to check out the veterinary equivalent of a health maintenance organization. For a monthly fee, your pet’s veterinary needs will be taken care of.

Friday, November 7, 2008

Why Singles Need Term Life Insurance?

Should singles consider getting term life insurance quotes? Contrary to what many believe, it makes sense for all adults, regardless of marital status, to have life insurance.

And since life insurance premiums increase with age, getting a term life insurance quote while you're young, single and healthy makes good financial sense. If you're single and think you don't need life insurance, consider the following reasons why it might make sense for you.

Do you have dependents?

Being single does not necessarily mean you have no dependents. You may have children from a previous marriage or you might have parents or grandparents who depend on you for financial support. In either case, these people will be impacted should you die prematurely. They'll lose you as well as a source of income.

A life insurance policy naming your children, parents and/or your grandparents as beneficiaries will ensure you're able to help out financially even after you're gone. Get a term life insurance quote and you'll see that the price you'll pay is worth the peace of mind you'll get in return.

Do you have loan obligations?

Life insurance is something you should definitely consider if you have a loan that is in your name and that of a cosigner. A cosigner doesn't have to be a spouse. It can be a friend, relative, co-worker, even a roommate. If you die unexpectedly and your name is listed on a loan, your cosigner becomes 100% responsible for repaying that loan.

You might want to consider getting a term life insurance quote for at least the amount that will cover your loan obligation and make the cosigner your beneficiary. Even if a loan is in your name solely, creditors can go after your assets later on in an attempt to settle your loan obligation.

Do certain medical conditions run in your family?

Here's something that often comes as a surprise to many single people. Your family history may make it difficult for you to obtain a reasonable term life insurance quote later on when you really do need life insurance. Certain medical conditions are genetic and even if you do not have any symptoms now, they may appear years from now.

While you're young and your health is good is the time to take advantage of the relative ease you'll have in obtaining life insurance. If you wait until symptoms develop, you may find you're uninsurable. When you're getting your term life insurance quote, ask about a guaranteed insurability rider. This rider will enable you to purchase additional life insurance without having to prove you are insurable.

Do you want a proper burial?

There is one more good reason why single people should get a term life insurance quote. If you died suddenly, someone would be responsible for the expenses involved in your funeral and burial. A nominal life insurance policy could relieve others of this type of financial burden.

Thursday, November 6, 2008

Hints to Assist You Get Life Insurance Quote Online

Like most other industries, life insurance companies have created a major presence online. You can now do most of the "ground work" online when you are looking for life insurance quotes.

The first thing you need to do is to decide what type of life insurance you are looking for. Then you need to seek no-obligation quotes from several companies that offer what you are looking for. The premiums will often vary significantly from one company to another, so little research can end up saving you a lot of money,

Here are a few helpful hints to assist you with your online research:

- Make sure that you get the right information about various life insurance categories. For example, whether it is temporary or permanent, either short term or long term, and is clear about it. Do they have comparable features and rates which will help you determine the right life insurance that is compatible with your needs.

- Are they helpful in guiding you towards finding what you need? This is when you need to assesss their customer ervice standards. Are they industry accredited? How long have they been in business?

- They should provide "plain language" explanations of their products to assist your decision, and not hide the details in a long and confusing document full of fine print.

- All reputable companies have permanently available internet information services, toll free numbers to call, and preferably sign up services available online as well. The best ones even have goog old fashion humans to speak to when you call!

- They should ensure that all the information you have given are safely protected. Using it only for providing your quote and should never be shared to a third party.

Life insurance can be a confusing subject for most people, so here are a few tips to help ensure that you end up with the policy that fits in with you particular circumstances.

- You should have a thorough review of your life insurance policy regularly, especially if you have sudden changes in ersonal conditions, health and your financial matters.

- Joint policies can be tricky, and need special attention. What happens in the event of a claim? Is the joint policy holder left uninsured, and liable to steep premium increases? Often it's better to keep policies seperate in order to avoid these possibilities.

- Check into the usefulness of a critical illness policy as well. It is usually much cheaper to combine critical illness with your life policy, than adding it on later. Illness can often be more financially debilitating than a death.

- Be aware of the tax relief incentives, but don't let the tax benefits blind you to the reason for actually having a life policy. First and foremost the policy is to protect your family in a time of need, and any tax benefits should be treated purely as a secondary bonus.

- Always ensure that you policy is worded so that the benefits go directly to the beneficiaries and not to your estate. The tax benefits are significant, no to mention avoiding the delays that could occur. Your insurance company should either write this into the policy or have the necessary documentation for you to do so.

- It is highly recommended that you talk to an independent adviser, to ensure you get the peace of mind from knowing that you are purchasing the right policy at the right price to adequately protection for your family.

These are some of the things you should know if you are applying for insurance online. Always remember that not all insurance companies online are legitimate, and to be very wary of any offer that looks too good to be true. Some simple research will soon tell you whether you are dealing with a reputable company or not. If you are still in doubt, take your business elsewhere.

Cheap Life Insurance for Children

Cheap life insurance is practically guaranteed if the insured is a child. Yes, as terrible as it may sound, even a child can get a policy in his or her name. Many people are taken aback by the thought of purchasing life insurance for their children or their grandchildren.

After all, life insurance benefits are not paid out until a person dies, and no one likes to consider the very real truth that children can die too. Death is not something that is reserved for the elderly. Life insurance for a child is cheap, and if you are purchasing it for yourself, you should expect that your insurance agent will at least mention this opportunity.

No one likes to think about it

Unfortunately, children are not immune to death. It can happen to any child, at any time. It can happen in an automobile accident or while walking to the bus. It can happen tragically, at the hands of another. It can happen as a result of a previously undetected condition such as leukemia.

While your life insurance agent won't dwell on the ways your child might die, the agent will certainly remind you that such an occurrence will result in unexpected funeral and burial expenses. Your agent will continue by reminding you that these costs will be considerable, and possibly even more so because the occasion is for a child.

Expect the agent to proceed with extreme caution because parents just don't like to think about the possibility that their children might die before they reach adulthood. The agent will subtly mention how cheap life insurance is for a child and how this insurance can be easily bundled in with your other policies.

Your agent may offer other reasons why you should consider purchasing cheap life insurance for your children. One high-pressure method is to suggest that purchasing a policy right now is an opportunity that may not happen again or that won't be available again for a number of years. This sometimes pressures parents into purchasing before the agent walks out their door. Don't allow this to happen because it's just not true.

Here's something to consider

There is one good reason why it makes sense to purchase cheap life insurance for your child now. Doing so can protect your child in the event he or she develops an illness later on in life which an insurance company might consider uninsurable or that may be insurable but will be so at a high price.

While such a situation is impossible to predict, purchasing cheap life insurance for your child now guarantees that your child will have the protection that life insurance offers. When your child reaches adulthood, he or she should be able to renew a policy at the rates given originally.

If you decide it makes sense to purchase cheap life insurance for your child, be sure you understand the rights the insurance company guarantees your child when he or she turns 18 years of age.

Wednesday, November 5, 2008

How To Select The Right Type Of Life Insurance

Life insurance is a means for providing financial protection for your family in the event of your death. A life insurance contract is relatively straightforward; you agree to pay a premium at regular intervals, and the insurance company agrees to pay a certain sum of money to your beneficiary upon your death.

There are three parties to a life insurance contract. First, there is the insured. This is the person whose life is being insured under the policy. Next, there is the insurer. The insurer is the insurance company who underwrites the risk. And third, there is the owner. The owner and insured are not necessarily one and the same. Someone can buy a life insurance policy to insure the life of someone else, such as their spouse.

The person who buys the policy is the owner, and the person whose life the policy is based on is the insured. When the owner and the insured are different people, premium payments are the responsibility of the owner.

Every life insurance contract also has a beneficiary. This is the person who receives the proceeds from the policy in the event of the death of the insured, and is assigned by the owner. There are two types. An irrevocable beneficiary can not be changed unless the beneficiary gives his or her permission; if it is revocable, the owner can change it at any time.

The policy is subject to certain terms and conditions. There are usually certain exclusions that apply, depending on the person being insured. But with almost every policy, death as the result of suicide during the first two years of the policy term is excluded from coverage.

Also, during the first two years of the policy, often referred to as the contestable period, the insurance company retains the right to not immediately pay out, even if the death is caused by a condition that is covered in the policy. The company can order an investigation into the death of the insured, to make sure that the death was not deliberate or the result of homicide.

The amount paid to the beneficiary is called the face amount. The maturity date is reached upon either the date when the insured deceases or reaches a certain age. Life insurance is most often used to provide income protection to the spouse of the deceased.

Regardless of the reason for buying the insurance, the owner (if not the same person as the insured), must have an insurable interest. In other words, the owner of the contract must have a reason for wanting to insure the life of that person, otherwise the contract is void.

When the person covered by the policy dies, the insurance company requires proof of death before paying the claim. A notarized death certificate is the most commonly accepted form of proof. The benefit is paid out either as a lump sum or as an annuity that is paid out over time.

Any annuity can be a good way to receive the benefits. It is possible for the beneficiary to set up a lifetime annuity, which would guarantee that person a certain amount of monthly income for the rest of his or her life.

There are two basic types of life insurance, temporary and permanent. Temporary insurance is known as term life. An example of a term policy would be a 20-year term life, which means that the policy will pay a death benefit if the person dies within the next twenty years.

Permanent insurance includes whole life and universal life. Whole life provides for a payout no matter when the person dies, but premiums have to continue to be paid, usually right up until the insured reaches the age of 100. Universal policies are somewhat similar, but they allow for greater premium flexibility. Universal insurance is somewhat complicated; you should talk to an agent before buying it.

How to Choosing The Best Life Insurance Company

As you age, you may start thinking about your financial future and about life insurance and the life insurance company you will need. This type of insurance will protect your family from having to pay expenses including funeral and burial costs, outstanding bills you may have, and medical bills that may have accrued if you are sick and had to stay in the hospital.

These costs can be high depending on your financial situation and could be a huge burden on your family. Finding the best life insurance company so you can buy a policy that will put your mind at ease and will allow you to live the rest of your life without having to worry about the future.

Life insurance policies come in many different forms and are available from different companies. You will be able to find out more information about a life insurance company by researching them online and by calling a representative from the company. You should ask important questions about premiums, coverage, and how to qualify for a policy. Depending on your age, you may have to pass a medical exam in order to take out a policy. The amount of your premium will also depend on the amount of coverage you will need. Some policies will only pay for medical bills and funeral expenses, while other bills will pay for much more.

When looking for a policy, you should also ask how long the policy will be in effect. After a certain age, the policy will no longer cover as much as it once did. If your employer offers life insurance, you should take it. This will cost less each month and you may be able to take the policy with you when you retire. The benefits may not be as extensive as if you went through a private insurer, but you will be able to help your family pay for certain costs in the event of your death. If you travel often for business, then you should consider getting the best life insurance.

Applying for a policy will not take too much of your time and the policy will go into affect after you sign the paperwork. As long as you maintain the policy by making monthly payments, you will be covered in case of an accident or illness. While no one wants to think about their own death, it is important to consider the lives of others you will leave behind.

If you have children or if you have other relatives that will be responsible for your bills after your death, you should be able to pay for most of it through a life insurance policy. The best life insurance company you choose will be able to explain pay outs and other information when you sign the paperwork.

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