There Are Ways to Save on Insurance: Just Ask

There are easy ways to save on insurance. Your insurance agent can be an invaluable help in finding ways you can save that are appropriate to your individual situation. So contact your agent at renewal time to discuss what may have changed in your life and how to save on insurance. Discounts are available for all policy types. The bottom line: just ask!

  1. What discounts are available?

    MultipolicyMany insurers reward consumers who have multiple policies with them, sometimes saving you up to 10%.

    Long-term customer

    This discount is usually applied automatically once you’re eligible. However, do ask your agent if you’re eligible and if the discount was added.

    Affinity

    You can usually save 3% to 7% as a policyholder belonging to certain organizations, companies, colleges, etc. You don’t buy insurance from or through the organization, but from your insurance agent. Each insurer has its own affinity list; ask your agent about your insurer’s.

  1. How to pay – and save

    When you are billed monthly, you may end up paying “convenience” or “installment” fees. Paying annually or semiannually eliminates these fees and can add up to a considerable saving. If you do want to pay monthly, opt for electronic fund transfers (EFTs) or electronic checks to reduce or eliminate fees. Some insurers also offer paperless discounts, so have bills and documents sent via email. Being green can save green!
  1. Work with your insurance agent

    Dealing with an agent instead of directly with the insurance company is an important savings tip. Why? Your agent’s loyalty is to you – the client. It’s his or her job to find you the best insurance for your needs. If a policy isn’t right, your agent has leverage with your insurer to make it right. But most importantly, your agent knows you personally – which is more than you can say for the stranger at the end of a 1-800 number.

Will Fully Automated Cars Be Fully Insured?

For those eager to try an autonomous vehicle, the future is now. Earlier this year, the Canadian province of Ontario announced it will take applications for driverless test car licenses, providing there is a licensed driver to take over if necessary. This raises a question: How will the insurance industry handle automated vehicle coverage?

Underwriting: Currently, an insured’s accident history and the average number of miles driven are used to price vehicle insurance. But soon the self-driving features of a particular model may become the important factors influencing insurance prices.

“Black boxes”: As well, monitoring driver activity may become the norm. Insurance companies currently offer policies based on driver behavior data gathered through telematics devices (black boxes.) While not in wide use now, these may become more usual as insurers push for increased monitoring of driverless cars.

Costs: Theoretically, the number of accidents should fall as automation increases. With human error taken out of the equation, the result should be reduced cost. Fewer accidents could mean cheaper rates for collision and other types of insurance.

Actually, costs may shift. Manufacturers and suppliers may be held more liable for accidents due to product failure.

Complex parts will be expensive to replace.

Repair costs may increase.

These new complications may make it difficult to ascertain if consumers will see a reduction in costs overall.

The Ontario initiative should yield not only accident stats, but also important insights into the public perception of driverless vehicles. Because, this, too, remains to be seen.

Explaining Away 3 Myths About Life Insurance

It may seem simple on the surface, but there are many misconceptions about life insurance, and some people still believe them. Here are several we can debunk:

Myth 1: You’re better off investing your money than buying life insurance. This is the “self-insurance” myth. It holds that by investing your money and letting it grow, you’ll ultimately accumulate so much money that life insurance isn’t needed – and, if necessary, you’ll be able to access it before you pass away.

In fact, it may take you a while to accumulate the money you need (and doing so isn’t guaranteed, given market volatility), and until that point, you’re at risk. Self-insuring is taking a big chance, particularly in the early years of your life. You could die without coverage, leaving your dependents in a difficult situation.

Myth 2: Your life insurance coverage should be twice your annual salary. It would be nice to have a simple guideline for determining how much life insurance you need. In fact, there are many factors to consider: Do you need to pay off debts, such as a mortgage and/or a car loan? Will you have medical expenses?

A cash flow analysis will help determine the ideal amount of life insurance to purchase so your coverage will be based on all factors, not just your income-earning ability.

Myth 3: Your premiums are tax-deductible. In almost all cases, this simply is not true. The only way life insurance can be considered tax-deductible is if the policyholder is self-employed, and the coverage is used to protect the assets of his or her business – a rare situation.

These are just some of the more common misunderstandings about life insurance, but they aren’t the only ones. Your insurance agent can help you identify other myths and ensure you truly understand life insurance before you make the decision about whether you need it.

Life Planning for the Special-Needs Child

More children are born with special needs today than ever before.

For example, approximately one in sixty-eight children in the United States has an autism disorder, and diseases like juvenile diabetes are also on the upswing.

This means higher medical bills and lifelong concerns for their parents.

It’s therefore important that parents start planning as early as possible after their child’s diagnosis.

While some special-needs children will go on to a high-functioning future, others will require lifelong assistive and medical care.

This means that parents must consider how to fund their child’s future medical needs as part of their retirement planning.

While many such parents rely on Medicaid, MediCal, or TennCare, they may not qualify if their income is higher than allotted limits.

But they may qualify for the Children’s Health Insurance Program (CHIP).

Your insurance agent can direct you to the state agency responsible for children’s health coverage, but if CHIP is unavailable in your state, there’s another recourse: as long as one eligible parent enrolls in a health care plan, that plan cannot deny access to offspring.

In an article in the National Academy for State Health Policy (NASHP) online, writer Maureen Hensley-Quinn notes, “Children are recognized in the ACA as a ‘diverse segment of the population’ whose health care needs should be taken into account in defining the Essential Health Benefit (EHB) package.”

A number of ACA plans offer benefits to support the health care needs of all children, including some benefits of interest to special-needs parents, such as habilitative services to help their children achieve higher levels of functioning.

Raising a special needs child can take a high physical and emotional toll on parents, and lead to their own health problems, perhaps making them more vulnerable to illness or injury.

For parents of special-needs children, both short- and long-term disability insurance is not just “nice to have,” but a “must have.”

If Medical Disability Strikes, Are You Prepared?

According to recent surveys, one-third of higher-income Americans ($75,000 and up) are living paycheck to paycheck, and MarketWatch recently reported the average family has less than $1,000 saved.

Even if you have health coverage, a critical illness such as cancer, stroke, or heart attack would reduce your family’s income by about $12,000, eHealth online suggests.

Being unable to work can create a significant income gap. You usually only receive about 60% of your salary from group long-term disability insurance furnished by your employer.

However, there are two forms of insurance that can protect you and your family in the event of a critical illness or a work-stopping disability.

Critical Illness Insurance (CII) and Disability Income Insurance (DII) help provide your family with a strong financial safety net.

After a major covered health event like cancer, kidney failure, or a heart attack, CII supplements typical health insurance coverage, providing a lump-sum payment to defray out-of-pocket costs and lost income.

DII covers the most common causes of disability, including illnesses and serious accidents, and pays a monthly benefit covering part of your salary, bonuses, and commissions. It helps you meet your expenses while you can’t work.

Many Americans will be working longer than they had planned. As we age, the likelihood of an illness-related disability or a work-related disabling injury increases.

No matter what your age, a disability or critical illness can cut short your career and financially devastate your family.

With CII and/or DII, both you and your family will be glad you planned ahead.

What Is the Translation, Please!

If you travel to Paris, it’s helpful to know French. If you move to Rome, it would be good to speak Italian. The world of business insurance is no different. To find your way around, you must know the language. Following are a few commercial insurance terms entrepreneurs should have in their phrase book.

ACORD certificate. The Association for Cooperative Operations Research and Development (ACORD) is the insurance industry’s standards’ developer. An ACORD certificate is simply a standardized certificate of insurance. If clients or customers ask for your ACORD certificate, they’re seeking to verify you’re insured.

Aggregate limit. This is the maximum amount an insurance company will pay for claims. It’s often set up as an annual limit, meaning this is the maximum total the insurer will pay during one year of coverage for all claims made during that time period.

Business owner insurance. This covers the equipment you use to run your business. It may also include coverage for any business interruption and lost revenue that occurred while equipment was missing or damaged.

Certificate of insurance. This is simply proof you have insurance for your business. It details the types, limits, and deductibles of the policy, as well as the name of your business, the insurer, and policy dates.

Deductible. When you file a claim with your insurance company, the amount you pay before coverage kicks in is your deductible. (A $500 deductible requires you to pay the first $500 of damages.) You can obtain lower premiums by setting a higher deductible.

Endorsement. Also called a rider, this is added to your insurance policy to customize its terms and conditions. It may extend coverage or modify it to meet the unique needs of your business.

Fiduciary. You are a fiduciary if another person has placed trust in you to manage and protect property or money. Business owners make decisions about employee benefits. Because of this responsibility, it is wise to have fiduciary liability insurance. This covers any legal liability from claims relating to pensions, 401(k)s, or other benefit plans.

General liability insurance. A must for business owners, this is basic coverage to protect you from liability in cases of bodily injury and/or property damage to third parties.

Primary policy. Your primary policy is the first response to a claim. If you have secondary policies, they would be accessed once your primary policy limits are reached.

Professional liability insurance. Also called errors and omissions (E&O) insurance, this protects you in case of mistakes in the services you provide. This coverage should be tailored to your business.

Umbrella. Similar to the ones used on rainy days, umbrella insurance protects you from a downpour of claims. It extends your liability insurance to cover major claims and lawsuits.

Waiver of subrogation. A client may ask you to waive subrogation rights. Agreeing to this means that if you and that client are sued and your insurer pays, your insurance company cannot go after your client to recover its loss.

Learn the ABCs of Asbestos, Taking Special Note of ‘B’

Contrary to popular opinion, asbestos is still around: asbestos liability remains one of the biggest threats to U.S. businesses, and the insurance industry estimates that asbestos-related losses could go as high as $85 billion. Here are the ABCs of asbestos – something you may not have thought you’d need to know about:

Asbestos: Naturally occurring in the environment, asbestos is a group of minerals that exists as bundles of fibers, which can be separated into threads. Because of their durability and resistance to heat, fire, and chemicals, asbestos fibers have been widely used in many industries, including construction, shipbuilding, and automotive.

After heavy use in many products, asbestos was discovered to be a health hazard. Consequently, the use of asbestos has been greatly reduced. However, older products, especially older buildings, still contain asbestos. It is still legal to use asbestos in some applications, providing the product contains less than 1% asbestos.

Business insurance: Asbestos can prove costly to business owners whose employees use or regularly encounter it. Be aware of safety regulations, and implement them, using the help of employee education programs. Liability lawsuits are still being filed by individuals exposed to asbestos, and liability insurance is a must-have – not a should-have. Check with your insurance agent to ensure your coverage is appropriate for your level of risk.

Claims: The initial discovery of the harmful effects of asbestos resulted in a surge of claims. By the 1990s, it seemed this wave had passed. Recently, though, it has resurfaced. Business owners should be prepared with proper insurance.