5 days ago ·
by Donna ·
All business owners probably understand that it is crucial to insure their business against all sorts of eventualities. The issue comes when they have to pick the right coverage products to cover all their liabilities. This is why most coverage companies will conduct a premium probe. A premium probe is done to calculate the current needs of your business and make sure that you are paying for the appropriate insurance coverage. It is important to have a premium audit conducted when your policy expires or is canceled as this helps to figure out if your business needs have changed.
Why you need an audit
When an insurance company is offering coverage for the first time, they look into an estimated exposure basis and multiply it by a rate. This is just a general estimate of how much risk your business carries and is in no way accurate. When the premium probe is done, the right classification and codes will be used to determine your final premium and this way, you will be paying the amount that you should for the coverage that you need. Besides, the process of carrying out a premium probe also gives you some important information about the operations of your business. Normally, your insurer contacts you about getting a premium probe just before the term expires or before it is canceled.
Getting ready for the audit
When the auditor contacts you, they will give you a form to complete and also indicate the date that they will be coming around for the audit. There are some policies that are audited every year while others are audited less frequently. For instance, a worker’s compensation policy will most likely be audited annually, but general liability policies will be audited less frequently. When the auditor is coming around for the audit, make sure that you have the following records ready for them:
- Payroll reports
- Quarterly state unemployment filings
- Income statements and sales journals
- Disbursement ledgers such as check registers and others
- Coverage certificates
The auditor will most likely have given you a checklist of items that you should fulfill before the actual visit and you should make sure that you do before they get to the business.
Understanding the results of the audit
After they have conducted the audit, they will leave and go create an audit report that will be mailed to you. The report will give details about how your policy and premium will change if it will change. There are two things that can happen after an audit. The first is that you could end up owing the coverage company some credit, which will mean that you have to pay them some more. On the other hand, you may end up with some credit, meaning that you have been paying the insurer more than what was needed. It is, therefore advisable to be ready for both scenarios.
Getting your data ready
The audit process will be smooth if you can offer accurate figures related to your coverage. Before you engage an insurer, make sure that you have an exact premium rate so that when the audit is taking place, you do not have to keep using rough estimates. In most cases, when the underwriters are not getting accurate information, they might end up charging you a higher premium than you should pay to cover the uncertainty.
Different requirements for different audits
As stated, there are some policies that will attract audits more frequently than others. For instance:
- Workers Compensation coverage premiums are based on payroll data, which means that regular payroll audits will have to be conducted by the insurer.
- Commercial liability audits normally depend on sales levels. Audits will be conducted when you expand floor space and will be based on payroll data.
- Liquor liability premium audits are calculated as a ratio between the alcoholic beverage and non-alcoholic beverage sales.
All these are the important tips to have in mind when going into a premium audit. On the day of the audit, make sure that you have all the records ready for the company and also have a responsible person or yourself on site. Your presence ensures that any questions which the auditor may have are correctly answered.
2 weeks ago ·
by Donna ·
The terminology used by an insurance agent can be daunting. Most of us have heard the terms numerous times, but cannot explain what they really mean. Not fully comprehending these terms can be problematic for the average consumer. These terms indicate the type of coverage the policy issues. If you choose the wrong one based on ignorance, your entire future could be at stake. The good news is that you don’t have to stay in the dark. Learn the parlance of an insurance agent to get the best policy for yourself.
In the World of Auto Insurance
The first car insurance distinction to know is the difference between insurer and insured. Although this seems fairly intuitive, it is easy to confuse. The insurer is the insurance agency that issues the policy. The insured is the named party on the policy. It can also refer to other parties that the policy covers.
Another often used, but misunderstood term is deductible. In insurance-talk, the deductible is a sum of money the insured will pay to activate the policy coverage. For example, when you are in an accident, you’ll pay a deductible before the policy will pick up the rest of the tab. The deductible is set in the insurance contract. When you sign up for a new policy, you will likely have the choice of several deductible options. The of the deductible will affect your monthly insurance payment.
Since we mentioned monthly payments we should discuss the premium. This term is just a fancy word for the money you must pay monthly or annually to maintain the policy. Premiums differ from agency to agency, and according to the type of coverage.
The term coverage can refer to a few different things. What the coverage means depends on which word it is paired with. Collision coverage means that the policy covers damage to your vehicle following an accident. Comprehensive coverage covers damage to your vehicle that occurs outside of a car accident.
There are other uses of coverage that are immediately recognizable. Medical payments coverage takes care of any health care bills or funeral costs. This coverage usually applies even if the accident is your fault. Bodily injury coverage is triggered when you are at fault. It covers the medical expenses of other parties. Finally, uninsured motorist coverage pays for the injuries of your vehicle’s occupants when an uninsured driver is at fault.
Learning About Life Insurance
One final area of insurance with confusing terminology is life insurance. This area is rife with unintelligible terms. The face amount is what is payable at death. This is usually the first number people look at when shopping policies.
When it comes to coverage, you may be confronted with term life or whole life terminology. With term life, coverage is effective for a predetermined period of time. If the insured dies within this time, his or her beneficiaries will be entitled to the policy funds. Whole life coverage continues throughout the insured’s lifetime. However, the premiums need to be satisfied to keep the policy active.
Traversing Health Insurance
Health insurance shares some general insurance terms with other types of coverage. When looking at health insurance plans, you’ll see the same references to deductibles and premiums. However, there are a couple of terms that are unique to this field of insurance.
You’ll need to have a good understanding of the co-payment. This is a small payment you’ll make for each visit to the doctor. You should also be aware of the meaning of co-insurance. This term will dictate how much you pay after the deductible is met. Typically policies will require you to pay 20% to 40% of the total medical bill.
Using the Jargon
Now that you understand some of the most commonly used insurance terms, you should have no problem choosing a policy. You can also feel confident speaking to an insurance agent without missing a beat. Knowing the jargon helps you comprehend what you are getting into. It also can help you to customize a policy that meets all of your needs.
3 weeks ago ·
by Donna ·
Hail can be a common form of precipitation in many parts of the world, it forms during thunderstorms. When the storm has windy updrafts, it can literally carry water droplets and these droplets may be frozen into hard pellets. This freezing process then creates what is known as a hailstone. Hailstones can be large or small. They can also grow as a result of additional frozen water as the added water clings to the hailstone. As this process continues, eventually the stone will grow too large for the winds to hold it up. When they are no longer able to keep it aloft, the stone, along with other stones, can fall to the ground suddenly. This kind of precipitation can be highly dangerous. It may come on quickly and unexpectedly without warning even in areas that rarely have such problems.
When Hail Strikes
As the storm continues, hail can hit an area fast and with great force. It can hit the ground as well as living things such as pets and children. At the first sign of such a storm, it’s best to know how to stay safe when the storm continues outside. All people, even those who live in areas where it is uncommon, should know what to do if they see it and how to respond in order to avoid problems. There’s no need to panic even if you are in the middle of a hailstorm. Fortunately, there many ways to avoid being hurt. Proper precautions and swift reaction can help all members of any party know what to do the instant they feel a hailstorm about to strike their area.
The first thing to do is look for shelter. If you’re at the beach or a park of any kind, head to the nearest covered space. Bathrooms and public showers can serve nicely. They will keep the hailstones away from your head. If you’re in an area where storms are common, you may see shelters specifically set up for this purpose. Make a note of them as you head to the beach. If you’re on the road when the storm strikes, it’s best to look for any shelter you can find. Hailstorms are frequently accompanied by heavy rain. Driving in heavy rain is very dangerous so it’s best to slow down as much as you can. If needed, you should pull over as soon as you suspect this kind of precipitation is over your head. Hailstones tend to make the roads slippery and create potholes you might not see immediately. They can also cause unexpected ice as they are frozen. Any covered structure as the storm continues such as a storefront or a hotel lobby is a good choice that can help you stay safe even as the storm continues to pound overhead.
Once you’re inside, you may still be danger. Hailstones can shatter glass easily in an instant. You need to stay away from any windows and skylights when you’re inside. If you have window coverings such as shades and shutters, now is the time to put them up. They’ll help keep the hailstones away from the windows. They also help to protect your family and pets from any flying glass as they can catch the stones. These stones can also damage your roof and even create holes Holes allow the hailstones to hit you and hurt you. If possible, your best bet is to stay away from the roof. Heading to the basement or floors away from the roof is a good iea. If you have enough time, think about heading out to remove your vehicles to shelter. Put your cars in the garage. This keeps them safe from hailstones and avoids damage to the body and tires.
Every member of the family should know what to do in case of a hailstorm. You should also have a radio or charged cellphone on hand at all times. This lets you check the weather. You can find out if the storm is stopping or it if will continue for a while. This way, you can figure out if you can head out again or it’s best to stay inside.
3 weeks ago ·
by Donna ·
Starting a farm business is an exciting experience, especially if you are passionate about farming. There are hundreds of reasons to invest in agriculture. For instance, if you invest wisely in poultry or cattle raring, you will gain good profits every year. However, in order to earn a good profit from your farm, you must maintain it properly and buy the right farming equipment. You should research before launching your farm, which will help you gain adequate farming knowledge. Moreover, it is advisable to install the proper security measures to protect your farm from criminals. For example, if you have hundreds of animals, vehicles and expensive equipment on your farm, you must put advanced security measures to deter burglars. Keeping your farm business secure will make it tough for robbers to steal your farming machinery, livestock and other essential items. This article provides six crucial ways that you can use to safeguard your farm.
1. Talk to an Experienced Farm Insurance Company
Every agricultural business that is profit-oriented requires farm insurance. The insurance will cover the livestock, crops, ranch and farm equipment. Therefore, it is advisable to consult a reputable farm insurance agent in your region. Once you tell your farming needs to a reliable insurance agent, he will recommend the right coverage for you. Some of the factors that the insurance companies consider include the number of livestock reared on your farm, the size of your ranch, type of tools and anticipated profits. Investing in the best coverage will give you peace of mind.
2. Install an Advanced Security System
Installing the best security system is another perfect method that you should use to boost security on your ranch. For instance, you should buy high-quality CCTV cameras and install them on your property. The cameras will help you see every activity on your farm from wherever you are. Furthermore, it is advisable to invest in a good lighting system. If you keep valuable machinery in your stores, you need an alarm to protect your property. In the event of a robbery, the alarm system will inform you and the nearest authorities.
3. Keep Vehicles, Tools and Machinery Safe
As a farm owner, protecting your equipment should be your top priority. Vehicles and farming machinery are expensive. Generators and other crucial tools can be stolen easily. Your stores and commercial structures should be well-built. You should lock away tools and vehicles that are not in use. However, apart from building good structures and fencing your farm, you need to consult a trustworthy insurance agent to recommend the best insurance policy to protect your machinery. With the right cover, even if thieves steal your tools, you will get compensated.
4. Invest in Equipment Breakdown Coverage
Tractors and other farming tools are likely to get damaged after using them for a long time. Even if you maintain and repair them regularly, they can still break down. Once they get damaged, your farming operations may get disrupted, which will affect the level of production. Therefore, it is advisable to consult your insurance agent to help you add the best coverage to your policy. The equipment breakdown coverage will cover your tools. Once they get damaged, you will get compensated. Your farming operations will not come to a halt.
5. Secure Your Livestock
As a farmer, you need to know that robbers can steal your animals, especially if you are grazing them far from your house. You should check the condition of the gates and fences regularly. The gates should remain closed all the time to keep intruders out. Moreover, you need to keep an accurate record of your animals. You can use earmarks, microchips and tattoos to identify your livestock. You can also take videos or photos of the most expensive animals. Your farm insurance should cover your livestock to avoid losses in the event of a robbery.
6. Invest in Product Liability Coverage
Agribusiness is one of the most profitable ventures in the modern society. However, in order to surpass your competitors in the industry, you must invest in the best policies. For instance, you need to invest in product liability coverage to protect your farm business. You need to understand that you are always liable for any service or product you sell or manufacture. As a farmer, you should approach a reliable insurance agent to help you assess the risks associated with your farming business. The insurance company will recommend the best policy to cover all those risks.
Lastly, it is advisable to digitize all your farming operations. You should record every item manufactured and sold by your company. Also, you should hire honest employees to run your ranch. Once you secure your farm and invest in the best equipment, your business will grow.
2 months ago ·
by Donna ·
There is a lot of great information about insurance. However, there are also a lot of insurance myths. For example, many people think that they will have to pay more for insurance if they drive a red car. They may also think that their belongings are covered by their landlord’s insurance if they live in an apartment. That is why it is important to separate the fact from the fiction.
Myth: Your Insurance Will Increase if You Have a Red Car
Fact: This is one of the most common insurance myths. The color of your car does not have any effect on the amount of money that you will spend on car insurance. The safety features of your car as well as the make and model will determine how much money you will have to spend on insurance.
Myth: If You get Into an Accident While in a Rental Car, Then It Will be Covered By Insurance
Fact: Rental reimbursement will not automatically cover the accident. It is a form of insurance that you will have to purchase separately.
Myth: You Will Not Have to Make any More Car Payments if You Total Your Accident
Fact: The value of a car can depreciate quickly. In many cases, a car is worth less than what a person owes on the car. There is a type of insurance called loan/lease gap insurance. It will pay the balance of your vehicle if you total it, and it is worth less than what you owe on it.
Myth: Your Landlord’s Policy Will Cover Your Vehicle
Fact: Your landlord’s insurance will pay for damages that are done to the structure. You will have to get a renter’s insurance policy for your belongings.
Myth: The Market Value of Your Home is the Maximum Homeowners Insurance Coverage That You Need
Fact: The cost of rebuilding a home is usually more than the market value. You will not only need to consider the cost of your home, but you will also need to consider the cost of labor. You will also need to consider the cost of construction.
Myth: Floods are Typically Covered by Home Insurance
Fact: Floods are not covered by your home insurance policy. You are required to purchase a separate policy if you live in an area that is prone to floods. Even if your area is not prone to flooding, it is still a worthwhile investment.
Myth: You Will Get New Belongings if Your Old Ones are Destroyed
Replacement Cost Value and Actual Cash Value are not the same. If your belongings are damaged, then you will need Replacement Cost Value to get new ones. Actual Cash Value will cover what the belongings are actually worse.
Myth: The Stated Value of Your Scheduled Items is What You Will be Paid
Fact: If you have jewelry or other high-value item, then you may only be reimbursed up to what the current Replacement Cost Value is. The stated value is not a guaranteed amount.
Myth: Your Car Insurance Will Cover You the Entire Time You Work for a Ridesharing Service
Fact: There is a small gap between the time that your car insurance coverage ends and the ride sharing coverage begins. For example, you turn on your ridesharing app and are looking for passengers. You may not be insured until you get a passenger. Every ridesharing company has a different policy.
Myth: There is no Need for an Insurance Agent
Fact: An insurance agent can help you get the best plan for your needs and budget.
3 months ago ·
by Donna ·
Making a claim against your auto or homeowners insurance will likely trigger a visit from claim adjusters. The adjuster acts as a go-between tasked with the responsibility of gathering information and reporting back to the insurance company for processing. Most adjusters in the modern era don’t have the authority to settle claims on the spot.
Settlement amount determinations are normally made by experienced claims reviewers employed by insurance companies. Since those reviewers are not capable of visiting every customer making a claim, insurance companies use adjusters to do the work. Claim adjusters are often contractors offering services to multiple insurance companies. On rare occasions they may actually be employed by the insurance companies they represent.
Auto Insurance Claims
The specific things claim adjusters look at differ depending on the types of claims being made. In the case of auto insurance, the adjuster begins by gathering information about the accident in question. He or she will want as many details as possible. The adjuster will want to know when the accident occurred, who was involved, the results of the accident, etc.
All of this preliminary information can be gleaned from interviews, police reports, and DMV accident reports in states that keep such records. An adjuster will sometimes review these records with the customer.
The adjuster’s investigation may require additional information as well. For example, adjusters may request access to medical records and wage information on accident claims that include personal injury damages. Even medical bills might be requested during the investigation.
A big part of the claims process is determining whether or not what the customers says happened is legitimate. This isn’t normally a huge problem for auto insurance, but fraud does occur from time to time. Adjusters are tasked with uncovering as much information as possible that might indicate a fraudulent situation. A final determination is ultimately made by the insurance company’s expert reviewer.
Homeowners Insurance Claims
When an incident involves homeowners insurance, the claim adjuster has to look at an entirely different set of data. At the top of the list is the actual damage being reported. Claim adjusters want to know what caused the damage, how much damage was actually done, and if any of the observed damage can be attributed to something other than what was reported by the customer.
For example, an insurance company will not be keen on paying the full value of a new roof if some of the post-hurricane damage cited actually existed prior to the storm. It’s up to the adjuster to sort out how much of the claimed damage is related to the named incident as opposed to other damage that previously existed.
Another part of the adjuster’s job is to determine liability. In short, liability describes how much the insurance company is required to cover based on the terms of the policy in question. The insurance company might not be liable if it turns out that a customer’s violation of the terms and conditions of that policy led or contributed to the damage.
Finally, the claims adjuster will look at the totality of the damage in question. This may imply damage to contents, other buildings on the property, etc. That peripheral damage will be considered by the insurance company in an attempt to come up with a reasonable settlement.
Fairness and Protection Are the Goals
The two most important goals of the adjuster are to protect the interests of the insurance company and be fair to the customer. This is a fine line to walk. A good adjuster wants the customer to be fully compensated as much as the terms of his or her policy allow. At the same time, the adjuster must protect the insurance company against inaccurate, inflated, or bogus claims.
3 months ago ·
by Donna ·
Life insurance is an important type of coverage that many people would benefit from. It provides you with essential benefits that can cover funeral costs, supplementation of lost wages and more. This monetary support may be essential for your loved ones’ financial well-being after your passing. However, there is a general perception or assumption that this type of coverage is too expensive for the average person. You may not think that you can afford to make the monthly premium payment, or you may believe that the premium would be too high. Some people think that it would be better to simply save the money in an interest-bearing account on their own rather than to pay a premium. However, there are a few good reasons why life coverage is more affordable than you might think.
Lock in Low Rates Today
A life insurance premium is typically calculated based on several important factors. The primary factors are your age, your gender and your health status. The type of life coverage and the amount of the benefits are also relevant factors affecting the cost of life insurance. When you purchase coverage today rather than in a year or two, you have the incredible benefit of taking advantage of your current age. You are not getting any younger, and rates typically increase each year that you age. When you buy coverage, you lock in a rate for the remainder of the term. This means that if you buy coverage with a 30-year term when you are 25 years old, you will still be paying the same low rate when you are 53 or 54 years old as you did when you were 25. In addition, many people generally slowly decline in health over the years. It is reasonable in most cases to expect to qualify for better rates based on your health status when you are 25 rather 35 or 45 years old. When you hear other people discuss the premium on their insurance coverage, keep in mind that they may have locked in a rate based on reduced health or an older age than you may be able to lock in if you purchase coverage today.
Your Control of the Premium
In addition to your age and health, your coverage type and benefits directly affect the premium amount. Term coverage is a type of insurance that expires at the end of defined period of time. A 10-year term will have a lower premium than a 30-year term will have in many cases. There is also another type of coverage, known as universal or whole life, which extends for the remainder of your life. You will lock in the rate now for the remainder of your life, which can be advantageous to some people. However, the rates for this type of coverage are usually more expensive. In addition to controlling your premium cost based on the term of your coverage, you also have control over the cost through the benefits amount. You can realistically choose benefits that range between $10,000 to $500,000 or more, and the premium varies dramatically based on your coverage amount.
The Cost Associated with Not Being Covered
You can see that the premium amount for your life coverage is dependent on several factors that are under your control as well as several factors that may yield more affordable rates now rather than later. In addition to these points, keep in mind that there is a cost associated with not being covered. While everyone will reach the end of life at some point, there is no way to know when that day will come for you. Even individuals who are young and healthy can pass away from an accident, a sudden illness or something else. With the knowledge that death could come for anyone and at any time, you are taking a risk by not buying coverage. Consider the financial strain that your loved ones may feel if you were to pass away today.
The premium for life coverage will be another regular expense in your budget. This expense is not a requirement in the same way that groceries or your mortgage payment are requirements. However, you must plan ahead for the care and well-being of your family. There is never a question about if death will come. Instead, there is only a question about when death will come. With this in mind, you can see that it makes sense to purchase at least a modest about of life coverage sooner while you may qualify for lower rates.
3 months ago ·
by Donna ·
In today’s world of high technology, identity theft is one of the most common dangers for anyone managing their financial/credit affairs online electronically. The convenience and at times necessity of online banking and bill management have left many users unsuspecting victims. While dangers do persist, there are safety tips that everyone can use to minimize this threat to personal information and financial data.
One of the simplest ways to keep personal and financial information out of the hands of individuals intending on stealing personal data is frequent credit report monitoring. Closely monitoring your personal credit report can help in the detection of unfamiliar and/or inaccurate debt that has been reported to credit agencies. The sooner fraudulent data is discovered on a credit report, the easier it will be to report and resolve the matter with minimal damage to personal credit.
Keeping your social security number out of the hands of malicious identity thieves is another safety tip that can greatly reduce the chances of becoming a victim. This may seem difficult to most people since nearly every credit card company and financial institution require a potential customer’s social security number to open and maintain personal accounts.
The Internal Revenue Service has a potential alternative to using your personal social security number for such transactions. A federal tax identification number can be issued through the IRS which can legally be used in place of the social security number. It is much more difficult for those engaging in such activity to access and use a federal tax identification number fraudulently.
Another method of preventing identity theft is to choose and use passwords wisely when engaging in online activity. Among safety tips, this is the most often misused measure individuals fail to take seriously when attempting to keep their personal information secured. It is recommended that passwords for banking, email and other sensitive information be changed often in order to offset the chance of becoming a victim. It is also pertinent to chose a password that is complex enough to deter identity thieves from being able to access personal data.
Equipping your personal computer with antivirus and identity theft protection software can serve as another safety measure against having personal information stolen. There are several inexpensive software applications that can be imperative as a first line of defense.
Properly discarding credit offers, receipts and other documents that arrive via the mail is an overlooked measure that many individuals fail to do. A common practice for identity thieves is to steal unsecured mail that has been either thrown away or left in the mailbox by the rightful recipients. Nefarious individuals have easy access to opening credit lines and other accounts in your name if they are able to have access to any of these items.
While there exists a vast amount of additional safety measures individuals can use to protect themselves from identity theft, the tips mentioned will greatly reduce the threat and help to keep such information out of the wrong hands.
3 months ago ·
by Donna ·
Homeowner’s and renter’s insurance policies offer personal property coverage. There are many categories that insurance companies use to assess reimbursement for theft or damage to an item. We will discuss the replacement cost and actual cost value. The coverage stated in your policy will determine which one applies to you. A good place to start is to know the difference between the two different claims payouts.
What is the actual cost value?
This is one of the methods that an insurance company uses to reimburse your claim. It is the least expensive and benefits those on a tight budget. Using the actual cost value (ACV) method, you will not receive the full amount of money that your paid when you originally bought the item. An exception to that rule would be if you have some antiques in your home.
The insurance company has a way of compiling the actual cash value of an object. They start with determining the market value of an item. This begins with discovering how much you paid for it. Next, they consider how long you have had the object. There are other criteria that may be used such as the expected lifespan of an item and its condition. The ACV is the value of an item minus depreciation.
What is the replacement cost?
It is another method that an insurance company uses to pay out a personal property claim. This is the most recommended coverage to have because it has more benefits for the home owner. A claim is handled differently than an actual cash value request. The claim amount tends to be of a higher amount.
When using this process, the owner is offered how much it would cost to re-purchase the damaged item as if new. This type of coverage is used for many objects including insuring the house itself. Insurance companies use contractors with house structure claims due to their expertise in knowing the materials used and how to estimate the costs to re-do a home.
There are many things to consider when preparing to buy new coverage or switching insurance companies. Do you prefer replacement cost or actual cash value? In both instances, you need to already have the coverage before an incident occurs. Consider the cost and benefits of the different value assessments. Do you have many high-end products to insure or a small amount of less expensive items? This may make a difference.
It’s important to read your policy and fully understand the type of plan that you have. Don’t forget to ask an insurance professional if you have questions. It would be helpful to take an inventory of your possessions. Taking pictures of your inventoried items will make the process easier when you have to file a claim. Another factor to keep in mind is the deductibles that you would need to pay before insurance will make a payment. Lastly, remember that your insurance has limits and may not pay the entire cost of replacements.
4 months ago ·
by Donna ·
Most people don’t realize they need life insurance until it’s too late. When we die, our loved ones are left with the burdensome expense of a funeral, burial, or cremation if we don’t have an insurance policy in place. The average cost of a funeral and casket burial ranges from $10,000 to $12,000. Cremation services that include a funeral can cost $8,000 to $10,000. A cremation without a funeral will still run around $2,000. This expense should be a general starting point for you to determine precisely how much coverage you will need.
Life insurance isn’t just about paying for your memorial and burial. It is important to consider how the loss of your income can affect your family to determine the amount of coverage you may need. A professional insurance agent can help you calculate your family’s financial needs should you pass away. Your expenses, debts, savings, and assets will be taken into consideration using an insurance analysis tool. A general rule of thumb is to purchase a policy that is ten times your annual salary as a death benefit. This amount will ensure your family will have a comfortable nest egg for years to come. Other things to consider are:
- Child care costs
- College education
- Amount of debt to pay off
- Elderly parents who may need care
- Future inflation
You want to make sure to buy insurance as soon as possible. Insurance premiums increase as we age and the chance of health problems increases. There are two types of insurance policy’s whole life and term. There are several subcategories including universal life, variable universal life, variable life, and traditional whole life. Term insurance will pay your beneficiary a benefit only if you pass away during the policy term. You can choose to have the death benefit remain the same during the policy term, or you can decrease the benefit amount each year. Whole life also known as permanent insurance will pay your beneficiary no matter when you die. With a whole life policy, you usually get a death benefit along with a savings component. Having insurance that builds cash value such as the universal life policy, will reduce your monthly premium. You will also have access to that cash to be used whenever you need it.
Sadly, there are fewer Americans with term life or whole life policies now compared to thirty years ago. Many people that do rely only on a life insurance policy through their employer. In most cases, your employer’s plan isn’t enough. You can request a free quote online or speak with your local insurance agent who can also save you money. With so many coverage options available it can be daunting to determine which is best for you. Licensed insurance agents can educate you and guide you step-by-step through the application process. For an accurate quote, you will need to provide your agent with your family history, health history, height, weight, and financial information. If you are considering a term or a guaranteed universal life policy, you will need to have a complete medical exam.