Tools for the First Time Buyer

from book CHOOSING THE RIGHT LONG-TERM CARE INSURANCE by JK Lassers

If you’re a first time-buyer, the agent wants to hook you in immediately so that
you will attend carefully to the sales pitch. He or she does that in a variety of
ways, most of them shady.

THE SCARE
Agent: “Look at these statistics showing that you and your husband have a four
out of five chance to end up in a nursing home. Your children will not want to
take care of you, either.” The agent knows that these statistics will certainly
frighten you, and hopes that you’ve recently spatted with your daughter as well.
Your rebuttal: “My children and even my grandchildren have assured us that
we will never spend a day in a nursing home. Both of our children have large
winter and summer homes with enough room to take care of us if that time
ever comes. In the interim, we have the kids’ old rooms to house live-in help if
one of us needs ongoing care.”

THE THREAT
Agent: “If you can’t afford the premium, how will you afford long-term care
when you need it?” Two thousand dollars a year sounds like a lot of money to
most of us, even though our life insurance may cost considerably more. Besides,
the agent knows that death is inevitable, even if the need for long-term
care may not be.
Your rebuttal: “The insurance company takes risks. Well, I take risks in my
life, too. At this stage of the game, I feel that I have complete knowledge of all
the facts. I’m a grown-up and I can handle the risks.”

THE PREDICTION
Agent: “You have to buy now because you’ll be too sick later to qualify for the
coverage and you’ll need it for sure.” Look around you, the agent is implying,
see all your sick neighbors and friends? That twinge you have today may be the
harbinger of a condition that will prevent your buying the insurance. Then
you’ll regret not acting.
Your rebuttal: “Mr. Agent, if you hurry down to the local convenience store
before it closes, you can buy a lottery ticket and win $10 million. Better hurry
or you’ll regret not acting.”

THE COMPARISON
Agent: “Aren’t you embarrassed and don’t you feel squeamish when your
friends and neighbors talk about the long-term care insurance that they’ve
purchased, which will keep them out of the poorhouse?”
The agent is playing to your 13-year-old self, when you wanted to do everything
that your best friends did and have what they had.
Your rebuttal: “We don’t envy our neighbors, and we don’t expect to go to the
poorhouse, either. We have three healthy and happy children who respect and
keep in constant contact with us. Many of my friends and neighbors wish they
could say the same.”

THE FLUFF
Agent: “Look at these brochures, which show you that you’ll have to pay about
$7,000 a month just for a double room at the nursing home down the block.
And how about these pictures from another nursing home over in the next
town? Do you want to live like this?” Bringing out photos from the most expensive
and the least appealing nursing home alternatives is intended to shock
you right into bringing out your checkbook.
Your rebuttal: “The fancy nursing home brochure is pretty, but there isn’t a
nursing home in the United States that can provide care 24 hours a day, 7 days a
week, with sensitive and caring individuals. I know that fact to be true. We witnessed
the rapid turnover of help when our parents were in a nursing home, and
we also observed many unskilled personnel who were insensitive. We want to
stay at home, but if not, we’ll look for the best alternative when the time comes.”

THE APPEAL TO GUILT
Agent: “Your accountant, who referred me to you, will be disappointed if I have
to tell him that I left this appointment without a signed application.” You owe
it to your accountant to buy a policy from me. He will think less of you if you
don’t act fast.
Your rebuttal: “Don’t be concerned. I will help my accountant deal with that
disappointment. I will also tell him about the high-pressure tactics you tried to
use during our interview.”

(from book CHOOSING THE RIGHT LONG-TERM CARE INSURANCE by JK Lassers)

The Insurance Contract in Plain English

An insurance policy is a legal contract, and every contract contains four basic components:

1. One person (or party, in legal parlance) must make an offer, and the other must accept it.

2. Both parties must be of legal signing age and mentally competent.

3. The subject matter or activity covered in the contract must be legal.

4. Each party must assume some obligation toward the other or give something of value like money or a promise to the other.

So how does this work with an insurance contract? The insurance company makes an offer to provide auto insurance, for instance to you. Let's say you sign the insurance policy. Now, assuming you are old enough and not insane, you must follow the rules and procedures in the policy. You must also pay the company some money a premium for the insurance. In return, the company must pay you for certain costs if you have an auto accident and if those costs were spelled out in the contract.

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

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.

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.

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.

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.

Principles of Insurance

The exact time or occurrence of the loss need to be uncertain. The value of losses ought to be relatively unsurprising. In order to determine premiums or in other words to calculate price levels, insurers must be able to estimate them. Insurers require to know the price it would be called upon to pay once the insured event occurs. Most types of insurance have maximal levels of payouts, with several exceptions such as health insurance.

The loss should be significant: The legal principle of De minimis (From Latin:about minimal things) dictates that negligible matters are not covered.The payment paid by the insured to the insurer for assuming the risk is known as the 'premium'.

Potential causes of chance that may give rise to insurance claims are named "perils". Examples of perils might be fire, theft, earthquake, hurricane and numbers of additional possible risks. An insurance policy will set out in details which perils are covered by the policy and which are not. The damage must not be a catastrophic in scale, If the insurer is insolvent, it will be unable to pay the insured. In the United States, there are Guaranty Funds to reimburse insured victims whose insurance companies are bankrupt. This program is managed by the National Association of Insurance Commissioners (NAIC).

Indemnification (compensation)

Anyone wishing to transport risk (an individual, corporation, or organization of any type) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, defined as an insurance 'policy'. This legal agreement sets out terms specifying the total of coverage (reimbursement) to be rendered to the insured, by the insurer upon assumption of risk, in the event of a loss, and 100% the specific perils covered against (indemnified), for the duration of the contract.

When insured parties experience a loss, for a specified peril, the coverage allows the policyholder to produce a 'claim' against the insurer for the amount of damage when specified by the policy contract.

Financial viability of insurance companies

Financial stability and posture of the insurance company need to be a major factor When purchasing an insurance contract. An insurance premium paid currently provides coverage for damges which can arise few years in the future. Due to that, the financial strength of the insurance carrier is most significant. In the past few years, a few of insurance companies became unable to pay, neglecting their policyholders with out coverage (or coverage merely from a government backed insurance pool with less the Priciples and History of InsuranceS-favorable payouts for losses). A number of independent rating agencies, like Best's, provide facts and rate the financial strength of insurance firms.

Risks Assessment

The insurer uses actuarial science to quantify the risk they are prepared to consider. Information is gathered to approximate future insurance claims, ordinarily with reasonable accuracy. Actuarial science employs statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are utilized by insurers, in combination with other factors, to decide rate composition.

The Gambling Analogy

Certain people erroneously assume insurance a type of wager (particularly as associated with moral hazard) which executes over the policy period of time. The insurance company bets that you or your property will not suffer a damage while you put money on the opposite outcome. Virtually all house owner's insurance does not cover floods. Using insurance, you are managing risk that you may not otherwise prevent, and that does not lend itself the chance of benefit (pure risk). In other words, gambling isn't an insurable risk.

The "insurance" of Social Solidarity

A few of religious groups among them the Amish and Muslims refrain from insurance and instead depend on support provided by their society when disasters strike. This could be thought of as "social insurance", as the risk of any given person is assumed collectively by the community who will completely bear the cost of reconstruction. In closed, mutual help communities in which other people might actually step in to rebuild total lost property, this arrangement could function. The majority of societies could not effectively support this type of models and it will not function for catastrophic risks.

Purchasing Life Insurance Online

These days, you can buy virtually any product or service online. Now, the life insurance industry has entered the fast lane. Potential buyers are encouraged to visit websites and apply for policies online. It takes only a few minutes to choose a policy, enter your personal details and get a quote. No longer must potential customers spend time shuffling paperwork with insurance sellers.

Purchasing insurance online is not only convenient, but simple too. More and more people, once put off by the life insurance purchase, are choosing to apply and buy policies over the Internet. Busy young families, business professionals and single men and women are buying online to save time and reduce hassle.

The first company to bring about the wave of change by setting up a do-it-yourself site was the Liberty Life Insurance Company, a subsidiary of RBC Insurance. Users are able to visit the site to get life insurance quotes, and to purchase their new policies. Online applications are processed instantly and if found acceptable, a policy will be issued within fifteen minutes. This quick turnaround is possible because application information is forwarded for automated underwriting, and reviewed in a secure electronic environment. There is no passing of files, and no human interaction at play.

As soon as the applicant is issued a policy, he or she will receive a secure ‘i-folder’ containing file details, documents and correspondence. Policyholders can perform a wide range of functions online using this folder, including changing nominees and updating payment methods. There is no insurance office to visit, no officer to meet and no paperwork to clear.

Online sites make the entire process of purchasing life insurance simple, safe and appealing to potential buyers. Since the process is virtually instant and very transparent, the customer feels in control of the situation.

There is a limit to the amount of life insurance that can be purchased online. Generally the available range is between $50,000 to $1,500,000. Policies are available in ten, fifteen or twenty year options at competitive rates.

If you’re still a little hesitant about buying life insurance online, it’s important to know that purchasers have the option of returning their policies within 31 days to receive a full refund if they are not satisfied.

Life insurance is an important part of planning for the future. If you’ve been putting off the task because of bureaucracy and paperwork, consider purchasing your life insurance online. It’s quick and easy to review insurance company information, compare quotes and get the information you need to make a smart decision.

When Is The Right Time To Get Life Insurance?

Life insurance is one of the most important types of insurance you can get, although many people don’t get it early enough or have inadequate cover. If you don’t have life insurance yet or you are not sure if your policy is good enough, then there useful tips will help you to decide when and what type of life insurance to get:

Get insurance now

Right now life insurance is at an all time low, so whatever age you are the time to get insurance is now. In fact, the younger you are then the cheaper the insurance is likely to be, because you are less of a risk to the lender. By getting insurance now you will have the peace of mind that should the worst happen, you will be covered.

How much insurance?

Although life insurance is relatively cheap, most people don’t have an adequate level of cover. You might think that £100,000 of cover for a few pounds a month seems good, but £100,000 is not that much. Although a payout of £100,000 might seem like a lot of money, that money might have to support your family for the next 15 or 20 years. Many people simply do not have an adequate level of cover to support their families after their death.

Working out how much you need

If you are looking for life insurance, then the best way to work out how much cover you need is to work out the amount your family needs to support them each year, and then multiply this by 25 to allow for tax over 15 or 20 years. This is the amount of cover your family would need to support their current lifestyle for a significant period of time. Obviously, the amount you need also depends on how much you can afford. Generally, the more you can pay the better.

Term insurance

The most common form of life insurance is term life insurance. This form of life insurance is cheap, and you pay a set amount each month for the term of the agreement. You work out how much you want your family to receive in the event of your death. If you stop paying the monthly payments you lose all the money you have put in, and if you are still alive at the end of the term then there is no payout. This form of life insurance is cheap but does not guarantee payout.

Whole life insurance

The other most common form of life insurance is whole life insurance. Basically, you are insured for your entire life. The amount you pay is put into an investment fund, with your premiums usually remaining the same for the first few years before going up. This type of insurance is more expensive but has the advantage that payout is guaranteed.

Other factors

Before you get life insurance, make sure that you work out exactly what sort of cover you need, and look at any other factors that will affect the price. If you smoke or have poor health then some insurance policies will charge more. Whatever type of life insurance you get, it pays to get insurance as soon as you can and for as much as you can afford.