Supplemental Insurance Fills Coverage Gaps

Even the best health insurance policies may leave you with gaps in coverage.

In some cases, these additional out-of-pocket expenses can be substantial, often leaving you in a financial bind.

Coverage gaps can include policy deductibles and co-insurance requirements as well as lab tests and alternative medical procedures.

In addition, there may be the additional burden of lost wages if your health condition keeps you from working, even temporarily.

Cash benefits

The purchase of a supplemental health insurance policy – designed to cover many of the additional costs that come with illness or injury – is one way to fill the gaps and cover unanticipated expenses.

Supplemental insurance pays a preset cash benefit to the policyholder once a triggering event occurs, including specific types of accidents, injuries or illnesses as defined in your policy.

Some policies offer coverage based on a daily, weekly or monthly payment, while others may simply pay out a lump sum.

Unlike most regular health insurance plans, supplemental plans often pay benefits directly to you, allowing you to make the very individual decision on how these dollars will be used.

Medigap plans

One of the most well known types of supplemental health insurance for seniors is Medicare Supplement. These policies are often referred to as “Medigap” plans because they are purchased for the purpose of filling in the coverage gaps left by Medicare.

Depending on the plan you choose, Medigap insurance policies may also cover costs not covered through Medicare, such as dental and vision care as well as benefits for hearing loss.

As a senior or as someone who has suffered a serious accident or illness, the last thing you want to think about is whether you will be hit with extra costs. Depending on your own situation, purchasing supplemental health insurance may give you peace of mind and save you money.

Thinking of Selling Your Life Insurance Policy?

Unemployment remains high and the housing market is still in the doldrums. Although the stock market improved in late 2011 and early 2012, it remains volatile.

So it’s no wonder some investors are considering selling their life insurance policies for cash.

But is it a good idea?

Selling your policy

First, let’s review how one sells a life insurance policy.

Selling a life insurance policy is referred to as a life settlement transaction. Under such a transaction, someone buys your life insurance policy for a lump sum. The new owner of the policy continues paying your premiums until you die, at which point the new owner collects your death benefit.

This can provide immediate income, which may be beneficial in difficult times. But taking cash in exchange for your life insurance policy may not make as much sense as it used to, thanks to two factors.

First, there has been a steep decline in the price life settlement investors are prepared to pay for life insurance policies, so you might not get as much cash as you had hoped for your policy.

Second, thanks to a 2009 Internal Revenue Service  ruling that raised the tax bill for many individuals who sell their life insurance policies, you may end up being heavily taxed.

These two factors point to the fact that the current life settlement market favors buyers.

If you’re interested in selling your life-insurance policy and are concerned about whether it’s the right approach for you, why not consult a financial advisor? He or she can help you determine if there are better options than selling your policy.


For example, if it’s cash you need, you may be able to withdraw or borrow funds from your life insurance policy. You also may be able to make premiums more manageable by restructuring the coverage.

Higher Deductible Could Be the Most Affordable

One of the key cost-related factors in choosing a health insurance policy is the deductible. This pre-determined amount is usually paid to the policy holder annually before the policy’s benefits are initiated for coverage.

While a higher deductible will help reduce premium payments, in some circumstances it may mean that you – the insured – could end up paying more in out-of-pocket expenses.

With this in mind, there are several factors that should be taken into consideration prior to determining the best plan for you.

The first thing to consider is available financial resources. In many cases, even though the policy premium may be well within your budget, the deductible amount could be out of your ballpark. Especially if the funds you rely on to pay the deductible are not readily accessible.

Having considered this, you should then tackle a cost-versus-benefit comparison.  In particular, you need to take a close look at the features and benefits of plans offering identical benefits with varying deductibles.

This kind of analysis will give you a clear idea of the total estimated annual costs for each of the plans you are looking at. Then factor in other criteria that could impact overall coverage, such as co-insurance payments and the price differential between care received from in-network versus out-of-network providers.

You may that find your careful analysis indicates that a policy with a higher premium may actually be more affordable when you factor in a lower deductible amount.

Guard Your Personal Information From Would-Be Thieves

The really bad thing about identity theft is not simply that your personal information has been stolen; it’s that the thief is using that information for his or her own gain at your expense.

It’s not just your credit card that’s at risk. Hackers can access your Social Security number, medical records, date of birth, driver’s license number, even your eye color.

The identity thief can start new credit card or bank accounts using your name; he can combine your information with his own to create a completely new identity. Thieves also can use your medical information for fraudulent purposes or assume your identity if they are arrested or caught speeding.

The good news is that just as your information can be misused, there are ways to prevent it from happening.

One way thieves get their information is by dumpster diving – gaining access to your mail in the trash. For example, a thief can sign up for a credit card in your name using the application form from discarded mail offers. Shred all important documents, even those annoying credit card solicitations. There also are companies that can remove your name from solicitations’ lists.

Keep important documents, including your birth certificate and passport, in a safety deposit box. Don’t carry your Social Security card or checkbook with you.

Lastly, make sure your computer security software and firewalls are up to date. Encrypting files and using password-protected documents will give you added protection. When shopping online look for https:// in web addresses. The “s” signifies a secure link.

A Home Inventory Can Save You Time and Money

Whether you are a home owner or a renter, having an up-to-date inventory of your belongings can be an invaluable resource, particularly for insurance purposes.

The contents of your home are covered up to a certain limit by your homeowner’s policy. If you have a fire or burglary in your home, your insurance company will expect you to have a home inventory on hand. This accurate record of what you own can be used to prove your losses and itemize what needs to be replaced, including furniture, appliances, jewelry, electronics and art.

You may think you’ll remember your possessions; however in the middle of a traumatic event like a fire or burglary, you can easily forget what you have.

A home inventory also can usually ensure a quick settlement of your claim. As well, it will give you peace of mind that you do have the appropriate amount of coverage and raise a red flag for you if you don’t. Many of us forget how much it would cost to replace our possessions. Lastly, a home inventory is a great place to store receipts and other documentation.

Creating the inventory

There are a number of ways of creating a home inventory. At minimum you should have a written list, which can be stored on a USB flash drive in case your computer is stolen or destroyed.

This list should include details on size, condition and cost (with original receipts if possible). A video diary is an even better method; the pictures can be useful not just to the insurance company but also to the police in the event of a theft.

Online inventories available

There also is home inventory software available online, or your insurance company may have inventory forms and preparation guidelines available.

You also may want to invest in a safety deposit box to store your inventory offsite. That way, if your home is destroyed, your records will remain intact.

It may take some time to put together an inventory of all your possessions, but if you ever need to refer to it, you’ll find it time well spent.

Why All Companies Need D&O Liability Coverage

Directors and officers liability coverage is a key component of an executive liability portfolio.

This type of insurance protects the management team in both corporate and nonprofit organizations when they make business decisions that fall within the scope of their duties as directors or officers of the company.

D&O liability insurance provides coverage for claims made against directors and officers. This could include omitting important information, committing an actual or alleged error, or breaching corporate duties in a way that results in financial loss to shareholders.

Important for small companies

D&O coverage is not just for large companies. In fact, it is even more important that small and midsize business owners carry this coverage because of the amount of risk involved.

While larger companies without this form of protection can usually weather the risk, one claim may well sink a smaller business.

While you might think non-profit organizations would be exempt from a claim, that is not always the case.

Many non-profits actively seek donations. However, if a donor feels that the funds he or she has contributed have been mismanaged or the money was not used the way the donor had intended, he or she can sue to recover the donation. This would be a D&O claim.

Non-profits also need this coverage to protect their boards of directors.

Take, for example, homeowner and condominium associations, where boards of directors are usually made up of residents of the association.  Say the association board decides to increase monthly fees to redecorate the halls or add amenities, against the wishes of other residents of the association. The residents who do not agree with the board’s position may sue, citing self-interest on the part of the directors.  This also would be a D&O claim.

D&O is not General Liability

One important point: D&O coverage is not general liability coverage, although the two are sometimes confused.

For example, if a member of a homeowners association, who, coincidentally, is also on the board of directors, injures someone while clearing snow from the building’s parking lot, this would be a general liability claim.

The injury did not arise as a result of the member’s duties on the board of directors and D&O coverage is not applicable here.

Defense coverage key

One key benefit of a D&O policy is defense coverage, and this benefit alone is worth the cost of the policy. It means that the insurance company will defend you in the case of an actual or alleged event.

Directors and officers coverage varies widely among insurance carriers.

It is very important to have a trusted insurance advisor who can guide you to the best coverage for your needs.

If you are an officer of an organization that doesn’t have D&O liability coverage, you might want to consider investigating it.

The cost for $1 million in coverage can range from $750 to $1,000, depending on the size of the organization, and many believe it’s well worth it.

An ounce of prevention is worth a pound of cure.

The Fine Art of Managing Your Corporate Risks

Your insurance program should be as individual and unique as your business.

The process of defining a program that will best manage your corporate risks is called risk management. It should be included as part of your overall strategic plan.

The following will help you develop a program to meet your unique needs:

Identify and Prioritize: Risks are inherent in every business. A retail store has a high potential for losses due to theft, a manufacturer’s equipment can malfunction and a contractor should be concerned about accidents. Consider these exposures, then prioritize. Which exposure is likely to result in the greatest financial impact?

Deal With Each Risk Individually: Determine the best way to deal with each exposure. Insurance is only one way of transferring risk. Avoidance is another. For example, contractors may ‘avoid’ high-risk jobs. A third is reduction (sprinklers reduce fire damage.) When no alternative is available, insurance protects your assets so you can return to business as usual.

Implement Follow through and protect your business against each exposure.

Monitor: Continuous improvement is an essential part of your plan. Regularly evaluate its effectiveness and tweak it as needed; for example, if a new technology becomes available.

Risk management is a vital part of owning a business, and knowing your assets are protected will give you peace of mind.

Why It Pays to Protect the Health of Your Teeth

Studies have shown that more than 30% of Americans do not visit a dentist regularly.

While that may save them a few dollars, nearly 60% of these individuals are likely to have untreated tooth decay.

In addition to giving you pearly white teeth, properly caring for teeth and gums is important for a variety of health-related reasons.

For example, regular dental care can help in reducing the presence of infection-causing bacteria.

Proper care of your teeth can also help to prevent tooth decay or loss, gingivitis, and plaque.

An excessive buildup of plaque can cause pain and even bleeding. Left untreated, infection could potentially move into your jaw and become a very serious condition.

Similar to regular health insurance policies, dental insurance requires the payment of a premium in return for covered services.

Most dental plans typically cover annual teeth cleanings and checkups as well as certain types of X-rays.

There are two specific types of dental insurance.

Indemnity Plan: An indemnity dental insurance policy is a traditional fee-for-service type of plan. These policies usually allow the insured to choose his or her dentist from a large list of providers.

Managed Care: In a managed care dental plan, policyholders pay a set amount of co-payment for their services. In most cases, there will be no deductible to pay, but the insured will need to pick his or her dentist from a certain network of dental service providers.

Having a dental insurance plan is definitely worth the cost.

The annual premium is normally well below what would be charged out of pocket for the services that are covered. In addition, if you have regular cleanings and checkups, major dental conditions and issues may be prevented or detected and treated before they can cause more serious damage.

Where to Turn If COBRA Costs Too Much

As the economy continues to struggle, many companies are still laying off workers. And with the loss of employment, many workers are losing employer-covered health insurance.

For most of the newly unemployed, continued health insurance through COBRA may be an option. The term COBRA comes from a provision in the Consolidated Omnibus Budget Reconciliation Act of 1985. However, at an average cost of 102% more than the group plan price, those who are watching their expenses may be forced to choose other alternatives for health insurance coverage.

In some instances, eligible COBRA participants may be able to opt for a lower-cost plan. For example, if a person’s previous employer offered a preferred provider organization health coverage plan, then the COBRA premium may be reduced by going with a lesser amount of benefit. Oftentimes, though, this is still not enough. Another option is to seek out individual or family coverage through an insurance company.

Some ways of reducing the premium on these policies include opting for a larger amount of deductible or for a lower amount of overall benefits. In addition, you are often given a discount for paying the policy premium quarterly or annually, rather than monthly.

A temporary health insurance policy may be another way to go, especially if you plan to get a new job in the near future. Temporary plans offer benefits for only a short period of time, but they could provide the coverage that is needed to fill in the gap between employment, while giving you peace of mind.

Getting Married? Protect Your Happiest Day

If you’re planning a wedding, the last thing you want to think about is insurance.

You figure everything will work out just the way it’s supposed to. There is no question of the love you and your fiancé share and your intention to spend the rest of your lives together.

There are times, though, when things happen that are out of your control.

Your reception hall might go out of business with no warning.

You might lose a deposit from a vendor.

There could be a weather event that prevents you from having a beachfront ceremony, forcing you to postpone the date.

Your photographer could also lose your pictures, or wild party guests could cause damage to the reception hall, leaving you with the bill.

All these scenarios could cost you time, money and a lot of aggravation on what should be the happiest day of your life.

Fortunately, insurance is available to give you a safety net. Several insurance carriers have attractive, comprehensive plans that are very affordable.

The coverage comes on one policy. Property coverage includes cancellation/postponement, photo/video expense, gifts, special attire (like your dress), special jewelry and loss of any deposits. You can choose the level of protection you need for a cancellation or postponement. Limits range from $1,500 to $175,000.

Limits for other coverages listed are a percentage of the cancellation/

postponement amount. They range from $3,000 to $3,500 each.

Some carriers will also include a sublimit for professional counseling, if desired.

It is also important to add liability coverage. Your reception venue may ask for proof of this coverage.

This will provide protection for you should someone in your party cause injury or damage to someone or the venue itself.

Your wedding day is a very special day. Including insurance as part of the planning process will give you the peace of mind you deserve to focus on what really matters.

Think Twice Before Shopping for Insurance Online

The old saying “You get what you pay for” is so true with insurance coverage.

Today, many insurance companies allow you to quote your coverage online. No need to talk to a person. You just go online, choose your options or choose what you want to pay and you’re done.

However, you might miss some important information concerning your insurance coverage. Just because you are paying the price that you want doesn’t mean that you have the proper limit of coverage for your needs. Also, you may not be made aware of exclusions or conditions that come with an insurance policy.

There is something to be said for having a licensed insurance agent looking out for you.

Insurance agents get a wealth of training and education to become licensed. This is one element that makes them professionals. Agents study the ins and outs of each type of coverage. When a licensed agent meets with a client, he or she will know the right questions to ask to make sure you have the coverage you need. The agent will have your best interests in mind as you discuss what you have and what you need. This is not something you get when you do your own quote online.

A licensed agent also gives you better overall customer service. The agent can be a liaison with the insurance carrier and work on your behalf. The agent is also available to answer any coverage questions that might come up during the year.

Before you consider getting that quote online, look up your local insurance agent and get the service and coverage you deserve.

Is Your Business Properly Insured in Event of a Loss?

Running a business is stressful enough. Any kind of loss only adds to the problem. Your comprehensive insurance policy should include coverage for just such an occasion. This is called Business Income with Extra Expense coverage.

The Business Income portion of coverage will provide the amount of income you would have made had you not had a loss. The Extra Expense portion of coverage will provide a limit of insurance for new expenses due to the loss.

A typical policy says that the amount of Business Income loss will be determined based on the net income of the business before the direct physical loss or damage occurred; the likely net income of the business if no loss or damage occurred; the operating expenses necessary to resume operations with the same quality of service that existed before the loss or damage; and other relevant sources of information.

A typical policy says that the amount of Extra Expense will be determined based on all expenses that exceed the normal operating expenses that would have been incurred by operations during the period of restoration if no direct physical loss or damage had occurred (deductions will be made for the salvage value that remains on any property bought for temporary use during the period of restoration, once operations are resumed, and any extra expense that is paid for by other insurance, except for insurance that is written subject to the same plan, terms, conditions and provisions as this insurance); and all necessary expenses that reduce the Business Income loss that otherwise would have been incurred.

How to Handle Requests for Additional Insureds

This is most often seen when “the big guy” asks “the little guy” to take on this additional risk.

In the construction industry, a general contractor (GC) who builds new residential homes needs to hire many types of subcontractors to get the job done. These include carpenters, electricians, plumbers and any other specialty trade needed for a particular job. When these subcontractors are hired, the GC asks to be named as an Additional Insured on the sub’s policy. If someone goes onto a jobsite and is injured due to negligence, the injured person would sue the GC and the subcontractor because they are both at the location. The GC would want the claim handled on the sub’s policy, and as an “Additional Insured” this can happen because the GC has the rights of an insured on that subcontractor’s policy.

Vendors and landlords are a few other groups that also routinely request “Additional Insured” status to protect their interests.

Many small-business owners feel if they don’t agree to such terms, they won’t get the job. However, this can and should be negotiated at the time the contract is being created. Many large corporations use standard contracts whether they are dealing with another large corporation or a one-man operation. A good rule is never sign a contractual agreement without knowing the amount of liability you are asked to take on.

This is where your insurance agent can be worth his or her weight in gold. Your agent can review the terms of the insurance section of the contract and advise you on your options. You can then make an informed decision about the job.

The good news is that insurance carriers realize that adding “Additional Insureds” to your policy is part of the cost of doing business. The coverage is approximately $50 to $100 per “Additional Insured.” Endorsements are also available that allow you to add as many “Additional Insureds” for certain relationships for a higher one-time charge. Nonstandard requests can be reviewed by your insurance company, and the company may charge a bit more, depending on the contract requirements. If the insurance company agrees to take on more liability, the company will want to charge appropriately for it. Typically, business owners then pass that additional charge on to the person they are contracting with as part of the cost.

The prospect of adding third parties to your liability insurance can be scary. Having a trusted agent to rely on can give you the peace of mind to make the business decisions that are right for you.