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Are Return of Premium Polices the Premium Choice?
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Return of premium insurance policies have gotten a lot of attention because they guarantee that the insured will get the total amount spent on the insurance policy’s premium payment if he or she stays alive for the full term of the policy. On the surface, return of premium policies seem like a no-brainer. Instead of wasting your money on term life insurance policies that won’t give you any return on your premiums if you outlive the policy, you are certain to get the full amount of your payments back. By taking a closer look at return of premium policies, though, you can take a more critical look at these insurance policies to see if they are the premium choice for you. Paying for Return of Premium Policies Return of premium insurance policies give you a guarantee on the premiums that you invest, but there is a cost for this. When you decide to take a return of premium insurance policy, one of the first things that you should notice is how much higher the payments are than those for regular term life insurance. These higher payments don’t bother many people because they are fairly certain that they will get all of the money back. They think that instead of spending less money that they will never see again, they will spend more money that will be returned to them in the future. The Danger of Making High Payments for Many Years This is sound thinking if you have enough money to pay for the return of premium policy for the duration of the policy, but the future is always uncertain. You might be able to afford the higher payments now, but it is almost impossible to determine what your financial situation will be like in 15, 20, 25 or 30 years with any accuracy. Things happen that are completely out of a person’s control. You could lose a job or suffer medical problems that would make it impossible for you to make the high payments. The problem is that many policies will only give you a return of premium if you pay for the entire policy. Some return of premium policies are only 15 years long, but you do not get returns that are as good as those on longer policies. Since most people get the policies because they expect to be alive in 30 years, they decide to take the longer-term policies that pay off better. Returns on Death Benefits Making high premium payments with the expectation to get the money back makes sense, but you should also consider what kind of benefits your family will get if you do not outlive the policy. Unfortunately, if you don’t outlive the policy, your family might not get more from a return of premium policy than they would a term life insurance policy with lower payments. This means that you could throw away hundreds of dollars a year. When you take out a return of premium insurance policy, you are betting that you’ll outlive the policy, which is usually between 15 and 30 years. If you don’t outlive the policy, though, the extra money that you spent on the return of premium policy would have been better spent through other investments. Protection from Taxes Despite the possible negatives of a return of premium insurance policy, many people still decide that they are the best choice. Not only are they betting that they will outlive the policy and be able to get all of their money back, the money that they get back when they outlive the policy is protected from taxes. If you invest $1,000 a year on a 30-year policy, you will be saving taxes on $360,000. The amount that you save will depend on how much money you make and where you live, but regardless of these variables, the savings can be significant. Knowing the pros and cons of return of premium insurance policies can help you understand if they are a good bet for you. The bottom line is that if you can afford to make the payments throughout the duration of the policy and you outlive the policy, then return of premium insurance policies can be a good choice for you. If this seems a little too risky for you or you don’t think that you can afford the high payments, then a regular term life insurance policy is probably best for you. Leave Comment |
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The Holidays and How a Higher Body Mass Index May Affect a Term Life Insurance Policy
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For many people, the time of year between Thanksgiving and New Year’s Day is a mixed blessing. During this time of year, families and friends get together to celebrate. One of the best aspects about it is the great holiday food — and lots of it! Many people struggle this time of year, for they know they will put on “holiday weight.” Of course, the plan is to take it off as part of a New Year’s resolution. Not a big deal right? It happens to all of us. However, if you are planning to purchase a term life insurance plan after the start of the New Year, you may want to change your tune. What is Term Life Insurance? In general, there are two types of life insurance available: whole life insurance and term life insurance. Simply stated, whole life insurance covers a person for a longer period, whereas a term life insurance policy is for shorter durations. Typically, a person may take out a term life insurance policy to protect the financial needs of a loved one in the event of an unforeseen death. For example, a parent may take out a term life insurance policy while the child is in high school for say $250,000. How Does Holiday Weight Affect Term Life Insurance? Since term life insurance covers only a short duration, a company will only renew your policy after evaluating questions about your general health. The insurance provider takes into account your smoking status, prior history of illness and present health. Life insurance companies are also concerned about your weight. As a major problem in the U.S., obesity results in many major illnesses, including heart disease and diabetes. Your life insurance company will often use your Body Mass Index (BMI) to determine the risk for obesity. The more a person weighs the higher the BMI number. Adding a few pounds over the holidays gives you a higher BMI, which leads to more perceived risk and causes the insurance company to offer a policy at a slightly higher weight. The point here is that if you are considering the purchase of a term life insurance policy, it would be a good idea to make that purchase before the holiday season begins. A Tip for the Holidays — Exercise! People should exercise for their overall health. Studies have shown that exercising during the holiday season at least a few days per week will help decrease your appetite, as well as burn off that holiday ham and eggnog. In addition, be sure to drink plenty of water to keep your body operating and peak condition. If you still plan to apply for term life insurance after the holiday season, begin a New Year’s resolution immediately! It will save you money right away when you apply for a policy. |
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How Your Pets May Affect Your Homeowners Insurance Policy
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Roughly one-third of all households are home to cats and dogs. If your home is among them, then you likely consider your pet to be a full-fledged member of the family. As it turns out, so does your homeowners insurance provider. You've probably never thought about it, but owning pets — especially dogs — may affect your homeowners insurance policy. In fact, depending on the type and number of pets you have, you might even have trouble finding approval for insurance coverage. Why Are Homeowners Insurance Providers Interested in Your Pets? Unfortunately, the answer isn't just because insurance providers are dog and cat lovers. While this may be the case, they are actually interested in your pets because they can increase your probability of filing a claim and collecting on your policy. This may ultimately require your insurance provider to pay you money, and despite what they may tell you — they hate doing that. More specifically, pets can affect the liability portion of your homeowners insurance policy. Liability coverage protects you in the event that someone sues you because of injury or damage that occurred due to your negligence. In other words, an accident caused by you, your family or your pet will be covered by your homeowners insurance provider. This includes both accidents that occur on the premises and elsewhere. If found liable, your insurance policy will help cover legal defense fees, as well as any resulting settlement fees. Assessing the Insurance Risk of Your Pet In general, the larger the dog the more you are likely to pay in higher insurance premiums. Breeds that will cost you the most include Rottweilers, Pit Bulls, Doberman Pinschers, German Shepards, Malamutes, Great Danes, Chow Chows and Saint Bernards. Provide Full Disclosure of Your Pets to the Insurance Provider You may be tempted to simply neglect to tell your insurance provider about your four-legged friend when applying for your policy. While this may save you money in monthly premium fees, it could end up costing you thousands of dollars in the end. Any claim you file because of injury or damage caused by a pet that is undisclosed to the insurance provider will be denied. This means that you are stuck paying the entire bill for your legal and settlement fees. Don't think your dog could ever be the cause of an accident? No matter how docile your pet, there's always a possibility. According to the Centers for Disease Control and Prevention, there were approximately 4.7 million dog bites reported in 2005. That's almost 13,000 dog bites a day. With the injuries of these dog bites resulting in $317.2 million in insurance claims, it's no wonder insurance companies are interested in knowing if pets will be living on the premises. Protect yourself, your home and your pet and provide full disclosure to your homeowners insurance provider. |
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Saving Money When Adding a New Driver to Your Auto Insurance Policy
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It's that dreaded moment in every parent's life — the day your child gets his or her driver's license. Yes, your child is growing up and becoming independent, and part of that process means navigating the hectic streets and highways without supervision. It's a great time for junior, but for parents it means increased insurance premiums. Of course, you could attempt to teach your child further responsibility by requiring him or her to pay a portion of the insurance bill, but either way you're going to want to save as much money as possible. Here are some tips for saving money when adding a new driver to your insurance policy: Take Advantage of Student Driver Discounts Prepare yourself for sticker shock — auto insurance premiums for new drivers are substantially higher than what you're likely paying for yourself. Obviously, this is because young drivers are inexperienced and therefore more likely to get in a car accident. To help ease the sting a bit, many auto insurance providers offer "good student" discounts. Typically, to qualify for the discount your child must be enrolled in school full-time and maintain at least a B average. Both high school and college students are eligible. If your young scholar meets these criteria, then you can expect to save up to 10 percent on your child's auto insurance premium. In most cases, a copy of your teenager's latest report card will be requested by the insurance provider in order to be eligible to receive the student discount. Choose Your Child's First Car Wisely Despite the protests of your child, a safe, sensible car is likely a smart choice for a first car. While teenagers may play the "social outcast" card, a less flashy car can save you plenty of money on your insurance policy. Sports cars, expensive cars and SUVs are usually considered higher risk vehicles, and therefore come with higher insurance premiums. For the most savings, help your child select a sedan or compact car that includes a multitude of safety features (and still matches his or her unique style). A car with airbags, anti-lock brakes, stability control and excellent crash test ratings will not only save you money, but it may even save your child's life. Take Measures to Deter Theft of the New Vehicle Vehicles that are less likely to get stolen are more likely to save you money on your auto insurance premiums. Adding a security system or a tracking system (such as lo-jack) to your teenager's vehicle will help to put your insurance company at ease. Also, if you have a garage, you might be able to take advantage of additional savings. Vehicles that are parked in a home garage are less likely to get stolen, and insurance providers often will reward you with a discount for doing so. Shop Around for a New Auto Insurance Provider It is recommended that you re-evaluate your insurance options every year or two. With a new driver coming onto your policy, now is the perfect time to shop around for better rates. Not only might you be able to save a decent chunk of change on your teenager's portion of the policy, but you may find extra savings on your own coverage as well. Call several different well-known companies and ask them for price quotes. You might also want to consider asking friends and family for suggestions on insurance providers that offer good rates to teenagers. |
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Winter-Proofing Your Home
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As cooler temperatures begin to creep across the U.S., now is the perfect time to start winter-proofing your home. Water damage and freezing conditions are to blame for roughly 17 percent of all homeowners insurance claims. Prevent a future headache by preparing now. There are simple steps you can take to protect your property. Here are a few of the more important measures you should consider: Winter-Proof Your Rain Gutters Rain gutters are a great place to start winter-proofing. With all the freshly falling autumn leaves and debris, unclogging your gutters can help prevent ice damming. Trapped water in gutters can turn to ice during the winter. Over time, this ice builds up (or dams). As the ice melts, it has the potential of seeping through the walls and causing water damage in your home. To assist with the flow of water, consider installing gutter guards. These relatively inexpensive doohickeys help prevent future debris from winding up in your gutters and potentially blocking water. Winter-Proof the Rest of Your Yard Reinforcing outdoor steps and handrails is another method for winter-proofing your home. Broken stairs are especially hazardous when covered in ice or snow. Additionally, ice can expand within the cracks of steps or handrails, further compromising the safety of the structure. Seal Holes and Cracks Outside and Inside Your Home Properly Insulate Your Attic from Winter Weather Simultaneously reduce your heating bill and protect your roof from damage by properly insulating your attic. Excessive heat escaping through the top of your house can cause ice to melt and refreeze on the roof. This can cause ice damming, or might even cause your roof to collapse. Experts typically suggest that your attic should be five to ten degrees warmer than the temperature outside. Properly insulating your home will also reduce the possibility of a pipe to freeze and burst. Be Prepared in Case Winter Damage Occurs |
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How Will Southern California Fires Affect California Homeowners Insurance?
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The recent wildfires throughout Southern California have caused over $1 billion in estimated damages. As many struggle to pick up the pieces, the inevitable onslaught of homeowners insurance claims are pouring into the offices of California insurance providers. Those properly insured can find consolation in the fact that their insurance policy will cover most, if not all, of the cost to rebuild their homes. With over $1 billion in potential losses facing California homeowners insurance providers, many are worried that homeowners will see a rate hike because of the fires. While this is a possibility, state officials and experts say increased premiums are unlikely. Experts Believe Homeowners Insurance Fees Will Not Increase Another factor that works in favor of California homeowners is the fact that the insurance industry in California is one of the most scrutinized and highly regulated in the nation. State authorities may be reluctant to approve rate increases. This is especially true given recent efforts to decrease California insurance rates in the past year. Skeptical California Homeowners Fear Higher Insurance Rates Despite the reassurance by state officials, many homeowners are worried about increased rates. Given past experience with rate hikes, few can blame them. After the 1994 Northridge earthquake, many insurers threatened to pull out of the market. The state had to create a special authority to sell earthquake coverage in order to convince them to stay. Others point to increased rates and canceled coverage on the Gulf Coast after Hurricane Katrina in 2005. While profits have rebounded since then, many believe insurance providers will attempt to recoup current losses by raising rates. Dropped Homeowners Insurance Coverage Also a Possibility Looking at the issue with the glass half full, the high profit margins enjoyed in California will likely make insurance companies reluctant to leave the market. Even so, Allstate Corp. announced earlier this year (prior to the fires taking place) that they would no longer underwrite new homeowners insurance policies in California, attributed to the risks imposed from natural disasters. Allstate is also attempting to gain approval for a 12 percent rate increase for current customers. Despite this, no other companies have yet to show indications of dropped coverage or increased rates. Whether or not this fact holds true remains to be seen. |
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Why the Cost of Job-Based Coverage is on the Rise
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Look around at the healthcare system today and it is any wonder that anyone in America has health care coverage. Employers will be the first to tell you that it’s no picnic to sort through the hundreds of proposals for health care coverage that they are bombarded with. Employers want to provide the best possible job-based insurance coverage that they can, but they are finding it increasingly more difficult as job-based coverage continues to rise. Those with job-based coverage can’t understand the reason for the rise in coverage but analysts, experts and even employers can narrow it down to three rather simple reasons for the rise in health care coverage, which not surprisingly, are all linked in some way. Medical Costs Growing — Wages Aren’t A driving force in the rising cost of job-based health coverage is the fact that many Americans aren’t growing financially. That simply means that salaries and wages aren’t increasing as fast as healthcare premiums are. As the standard of living increases and so does the out of pocket costs of healthcare, many families and individuals are struggling to make all ends meet with the weekly paycheck. Some families are simply struggling to get to the end of the week with what they have in their pocket while employers are struggling with whether or not they can afford to finance benefits any further, something that traditionally employers have done since the 1960’s. They (employers) are realizing that this is becoming nearly impossible as managed healthcare continues to make the switch the consumer driven healthcare. Being Healthy Costs Less Second to wage increases or lack thereof is the debate over leading a healthier lifestyle in order to keep job-based health coverage low. Let’s face it, Americans are growing more and more sedentary and employers have to pay for that in the form of rising premiums and benefits. With obesity becoming one of America’s top health concerns, waistlines are expanding almost as fast as the cost for job-based coverage. Employers are jumping on bandwagons to keep us healthy by offering incentive programs and wellness programs. The purpose and thought behind these programs is that if we can live healthier lifestyles, then the need to increase healthcare premiums and medical costs won’t be as great. Treating the Healthy and Unhealthy Finally, in the link between the cost of healthcare coverage and our lifestyle, is the cost to treat Americans, both the healthy and unhealthy. It isn’t only treatments though, as we discover more about what causes such diseases and how to prevent them, there comes the cost of all the new screening process, testing and procedures, which adds to the rising cost in job-based health coverage. As there becomes an awareness for early detection of such cancers and illnesses, doctors are making testing and screening part of an all over wellness recommendation, but the healthcare companies are not. Some testing and procedures are still not covered or covered at a small portion, which leaves the employees handling the bulk of the out of pocket expense. Let’s not forget how different the healthcare industry is today. A couple of decades ago, employees working for small businesses or part time employees had few options for healthcare if any at all but as more and more employers look for qualified employees they also are finding that providing job-based healthcare coverage is nearly as important as having skilled employees. If you look at the picture as a whole, our lifestyle changes, the shift in employment opportunities and the healthcare crisis in general it is far easier to understand why there is a rise in job-based healthcare coverage. |
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Which Online Companies Offer the Best Free Insurance Quotes
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Choosing insurance can be a difficult and overwhelming process. How much do you need? How much will it cost? Where should you begin? The easiest way to find insurance is to utilize an online company that gives you free insurance quotes. Although there are hundreds of companies like this out there, some are better and more reliable than others are. One of the most important things you should look for when choosing an online insurance quote company is that they are neutral. It is important that you are able to trust the company and not be “sold” on one insurance plan or another because the website owners will get a commission from your purchase. You need to pick the insurance plan that is right for you, your family and your budget, not what is right for someone else. Let’s look at which online companies offer the best free insurance quotes. Health Insurance Quotes from EhealthInsurance.com Ehealthinsurance.com — At Ehealthinsurance, you can find an affordable health insurance quote that fits your needs and apply for your policy right there on the spot. Ehealthinsurance offers health insurance quotes from some of the top health insurance providers within your area and allows you to select up to four policies at a time to compare side-by-side. You can get all the information on a plan, including deductibles, individual and family maximums, whether maternity coverage is an additional option (and how long you have to wait to use it), what type and length of hospital stays are covered, how much mental health coverage is available and much more. Aside from regular insurance options, you can also search for short-term insurance quotes, student insurance quotes, health savings accounts and small business health insurance coverage (you must have a certain number of employees to qualify). Reliable Automobile Insurance Quotes from Progressive.com Progressive.com — If it is auto insurance you’re looking for, Progressive will allow you to compare quotes from many different providers. Although they are also a car insurance company, they can be a helpful source in obtaining the lowest car insurance quote for your needs. You can even do side-by-side comparisons to see the true value of what you are getting for your money. If you decide to purchase the Progressive quote, you can do so directly from their website. The downside is that if you want to go with another company, you will need to get the quote from their company website to complete your purchase. For all Insurance Quotes Needs, Insurance.com Insurance.com — Insurance.com is a “one-stop shop” where you can compare top company rates for several different types of insurance coverage. Whether you want auto insurance, life insurance, health insurance, or homeowner’s insurance, you can get quotes, compare them through the Insurance.com website and even purchase the one that best fits your needs. No matter what type of insurance you are looking for, all of these companies can help you find quotes for affordable insurance that fits your needs. There is no need to second-guess the quote you are getting and, since you can buy the quote directly from the website, you know that it is the quote that you will receive. You won’t be talked into purchasing more than you need by a sales representative. |
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Which States Offer the Lowest Car Insurance Rates
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Car insurance is one of life’s annoying necessities. While most states require that you carry some form of coverage, many people still feel that they are feeding the car insurance companies their money for no good reason. Some people even go as far as to intentionally not purchase the insurance coverage required in their state. While this may be a cheap route, it is not recommended and you could face some hefty fines if caught. Although some form of car insurance is required in most states, there are a few states where the residents get off very lucky. States with Fewer Requirements for Car Insurance New Hampshire & Wisconsin — These two states have the least amount of car insurance coverage requirements in the U.S. Liability is not required, PIP is not required and they dodge “no-fault” insurance as well. The only coverage that these two states really require is uninsured motorist coverage. If you do wish to carry liability coverage in these two states, the minimum is $25,000 max bodily injury per person, $50,000 max bodily injury per accident and $25,000 max property damage per accident in New Hampshire and $25,000 max bodily injury per person, $50,000 max bodily injury per accident, and $10,000 max property damage per accident in Wisconsin. Louisiana — This state is also in the top five states for lowest car insurance requirements. Louisiana requires liability only, with minimums of $10,000 max bodily injury per person, $20,000 max bodily injury per accident and $10,000 max property damage per accident. Ohio — This state follows close behind Louisiana, with liability only at minimums of $12,500 max bodily injury per person, $25,000 max bodily injury per accident and $7,500 max property damage per accident. General Requirements for Car Insurance California — Everyone in California gets off easy with only liability coverage required with a minimum of $15,000 max bodily injury per person, $30,000 max bodily injury per accident and $5,000 max property damage per accident. However, if you are a low-income driver, you can apply for special insurance qualifications through the California Automobile Assigned Risk Plan. With this plan, the liability minimums become $10,000 max bodily injury per person, $20,000 max bodily injury per accident and $3,000 max property damage per accident. Arizona & Nevada — These two states have general car insurance requirements similar to the general requirements in California, with liability only required at minimums of $15,000 max bodily injury per person, $30,000 max bodily injury per accident and $10,000 max property damage per accident. Lowest Car Insurance Rates Alaska & Iowa — These two states round out our list of states that offer the lowest car insurance rates. They require liability only, with minimums of $20,000 max bodily injury per person, $40,000 max bodily injury per accident and $10,000 max property damage per accident in Alaska and $20,000 max bodily injury per person, $40,000 max bodily injury per accident and $15,000 max property damage per accident in Iowa. If you live in one of the above states, consider yourself very lucky. Although no one likes to “hand out” his or her money, car insurance is important and you will be glad that you have it should you ever find yourself in a costly accident. |
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What Are the Most Trusted Online Sites for Health Insurance Quotes?
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Health insurance coverage is a growing problem in the U.S. Millions of people are either underinsured or uninsured due to job loss, self-employment, not qualifying for coverage through their employer (i.e. part-time workers), or unaffordable health care plans being offered through their employer. This leaves many people in a tough situation. While it may be easy to get through a normal day without health insurance, what happens when that same person gets sick or injured? He or she will be buried under a pile of medical bills with bankruptcy or loading his or her credit cards with medical costs as his or her only hope of ever getting out. If you need health insurance, below are three of the most trusted and reliable sources online to obtain health insurance quotes and to find an affordable plan that fits inside your budget. Easy to Compare Health Insurance Quotes Ehealthinsurance.com — This is a trusted and reliable company for getting health insurance quotes and applying for them directly from the quote page. To date, Ehealthinsurance.com has helped insure over 1 million individuals who otherwise may have gone uninsured due to the difficulty of finding affordable health insurance on one’s own. At Ehealthinsurance.com, you can receive rates from the top health insurance providers in your area, compare up to four policies side-by-side to examine exactly what you are getting for your money, review the details of each policy and apply for the policy you think best fits your needs. Whether you are looking for individual health care, family health care, short-term health insurance, student health insurance, a health savings account or a small business policy, Ehealthinsurance.com can help you find the right policy. HealthQuoteFinder.com — HealthQuoteFinder.com is another trusted and reliable source to find health insurance quotes for yourself and your family. They have been helping other families solve their health insurance issues since 2001 and are licensed with over 40 of the top health insurance providers. By using HealthQuoteFinder, you will receive five of the best quotes from these top health insurance companies, based on the information you provide on your short initial questionnaire. You can also find rates for life, group and short-term plans. Accurate Health Insurance Quotes NetQuote.com — NetQote.com is yet another trusted and reliable health insurance quote provider that has helped millions of people find affordable health insurance coverage. Although very similar to both Ehealthinsurance and HealthQuoteFinder, NetQuote requires a more detailed form to be filled out, which includes insurance info, applicant info, medical history and coverage type, in order to receive a quote. Although this may take more time up front, it will provide you with the most accurate quote. After all, leaving out important medical information such as medical history can only cause surprises down the road, after you apply for your policy. Any of these three online companies can provide you reliable insurance quotes and help you get the health insurance coverage that you need. Remember, a little out of pocket now, will save you thousands if and when you have major medical expenses that are covered under your policy. |
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