Category Archives: Insurance

Shopping For Insurance

Our insurance costs for auto and home have been killing our budget. It is one of the categories in our budget I have identified as HOT. The goal is to save money!

Well this became even more important when I received our homeowner’s insurance rate for next year. Our current policies for auto and home are with Safeco, A Liberty Mutual Company.  Our policy renews in December. Our rate increased from $1560 to $1700. This is the second year of an increase. Last year it went up from  $1400 to $1560. I was so appalled by the new figure, I decided it was time to shop around and find the best rate.

I spend Sunday afternoon filling out online quote forms. Today, it seems like every single insurer called me. I have received quotes from Geico, Nationwide, Progressive, and Allstate. Allstate has been the best quote so far. Below is the situation.

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Allstate’s homeowner’s insurance beat Safeco’s policy. It is $908. The deductible is 1% of the home value. I have requested a second quote with a higher deductible to see the savings. At $908, switching to Allstate is a no brainer.

Allstate’s car insurance is also lower. Right now our annual premium with Safeco includes comprehensive/collision coverage for a whopping $2060 with a $500 deductible. Yes! Crazy amount. My husband turned 26 and I turned 25 in the past couple months, so I believe our new rates reflect our aging age! :) Allstate’s rates are lower. As you can see the same coverage with $500 deductible is $1538. Savings, but it’s not high enough savings for it to make a real difference in the budget. So, I requested a second quote for a higher deductible. The $1000 deductible equates to a $1344 premium. $192 difference. I would make that savings up by not having any claims in 2 years.

So HERE IS THE DILEMMA. If I drop comprehensive/collision coverage, my premium goes down to $716. That is a $1344 difference from current policy and a $628 difference from 1000 deductible.

Our KBB book values are at the top. The money we would save, would establish the new car fund. In just 3 years, the fund would be $1884 from the savings. The risk is if something happens and it’s our fault, the damage to our car would not be covered.

Year 1 $628.00
Year 2 $1,256.00
Year 3 $1,884.00

Any advice for a fellow blogger considering this move?

What is Income Protection Insurance in Australia?

Did you check out Richard’s guest post on investing in Australia? He talks about the advantages of investing. For those living in Australia, it’s very informative. Plus, his site is even more informative.

Now back to today’s topic. More on life in Australia! You’re probably wondering why the focus on Australia? Well, I’ve always heard it’s an awesome country. Met some Aussies during our Carnival cruise and they were wonderful. Always wondered why life down under is so great.

So, when I ran into something called income protection insurance, it perked my interest. For us Americans, income protection insurance is very similar to disability insurance. I have this coverage through my work. Do you?

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Protect your income with Suncorp income insurance.

This insurance pays benefits to policyholders who are incapacitated and hence unable to work due to illness or accident.

Incapacity is defined by four bases including own, suited, any, and activities of daily living occupation. It’s different tiers that define what tier of incapacitated a person is. There are benefit limits define what percentage of your gross earnings you receive.

The claim has to be valid. I have a coworker at work who took a few months off to deal with a medical issue and received disability benefits. Another director was diagnosed cancer and he took a year off to deal with chemotherapy and recovery. He received disability benefits. Very glad he is back! From my research there usually is a deferred period- the time between a valid claim and the commencement of benefit payments.

Are there any restrictions?

Policies only pay out if the policyholder is unable to work due to illness or an accident.

Income protection in Australia will usually replace up to 75% of a person’s gross income.

There are two types of income protection including indemnity (provided by superannuation funds) and agreed value (pays out the benefit agreed to reflect your income at the start of your policy. it is not affected by fluctuations in income). Agreed value is the most expensive option. Superannuation funds are cheaper and offer less features and less flexibility.

You can determine how much you need by determining your monthly costs. Income protection insurance is meant to provide you an income to pay for your monthly costs.

Remember always become more informed before buying a policy and read the terms and conditions carefully.

Sources:

http://en.wikipedia.org/wiki/Income_protection_insurance

http://www.choice.com.au/reviews-and-tests/money/insurance/personal/income-protection-insurance.aspx

 

What is Life Insurance?

**The following post contains a sponsored link

I haven’t really tackled life insurance because it’s not a really big priority in our lives right now. But I think it’s important to understand the basics of life insurance.

What is life insurance?

Life insurance is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designtaed beneficiary a sum of money (the “benefits”) upon the death of the insured person (Source: Wikipedia). Policies and contracts vary from situation to situations. Some life insurance policies pay funeral expenses, others are triggered upon death or a terminal illness.

What types of life insurance are there?

Contracts fall into two major categories. You might have heard of term insurance? Term insurance provides a lump sum payment. Term insurance is an example of a protection policy.

Have you read about whole life, universal life, and variable life policies? These are investment policies commonly bought in the US. The main objective is to facilitate the growth of the capital through monthly or lump sum premiums.

Where can I get life insurance?

There are many life insurance vendors including Life Broker, Met Life, Geico, State Farm, Liberty Mutual, Farmers, Allstate, etc.

Why should I get life insurance?

If I’m dead, why do I need life insurance? Do you have a spouse? Maybe you have kids? Life insurance may potentially be a safety net for your family if you happen to die. It could also pay for your funeral expenses. I know a lot of people that hit 30 and get life insurance. At that point in their lives, they are married and having kids, thus life insurance is an option.

Does your employer offer life insurance as part of your benefits?

Before you go shopping for life insurance, look over your company benefits. I have employee life insurance. Currently I’m insured at 2 times annual pay. As my company’s employee, during initial enrollment, I may have elected to go with any of the 7 options including $10,000, 1 times annual pay, 2 times annual pay, 3 times annual pay, 4 times annual pay, 5 times annual pay, 6 times annual pay. Maximum coverage available is $1,000,000 through my company. My company, also, offers the option of spouse life insurance. Options range between $5,000 to $100,000. Or a company employee can simply elect no coverage for their spouse. I can only increase my coverage by one coverage option level each enrollment period.

One of my coworkers jokingly said he didn’t have life insurance in his twenties because at the time he was worth more dead than alive if he had elected to go with the automatic company benefit policy of six times the annual pay.

Is life insurance shopping fun?

I don’t think life insurance shopping is fun. Frankly, you may or may never use it in your life. Joe at Retire by Forty wrote an article about how life insurance is fun, as long as you like giving up some of your blood. After shopping for life insurance in his 40s, he actually thought it might have been better to shop for life insurance when you are young. Taking out a small policy when you are young and healthy may be cheaper than when you are older and not so healthy.

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HAZARDOUS OCCUPATIONS & LIFE INSURANCE: THE BOMB SQUAD

It’s a little known fact that just about anyone, in any line of work, can obtain life insurance—even if their line of work happens to involve lighting and/or diffusing bombs! What actually matters to insurance companies is that they be compensated for the risk that their taking on an individual working such an occupation.

Enter stage left: High-Risk Premiums! Boy, just look at them! They’re so shiny and—boy howdy, look at that price tag! Gadzooks!

Yes. I just used ‘boy howdy’ and ‘gadzooks’ in a single sentence. Don’t you judge me.

In all seriousness, it is possible to get life insurance when you’re in a high-risk profession like the Bomb Squad—it’s just going to cost you; that part was no joke!

Who Determines How High-Risk a Job is? The Insurance Company? Pssshh! Scam!

Yes, the insurance company does weigh in on what their company deems to be high-risk, but that’s really only one part of a two-part process. Obviously, insurance companies have been around the block a time, or two, and have insured individuals in just about every profession that there is. Due to this, they have their own experience to refer to when deciding how much they want to afford someone in a dangerous occupation life insurance. Find out more about your own insurance needs at AAMI.

It is their risk, their money, and they’ll invest it only in good investments—just like anyone else.

However, a large part of the decision making process is influenced heavily by what the U.S. Bureau of Labor Statistics has to say about the profession in question. All of the work-related accidents and fatalities that occur get compiled into a report that the USBLS publishes every couple of years, or so, with a ranking system that paints a picture for insurance companies.

For well over a decade, actually, the blue ribbon winner of the “United States’ Most Dangerous Job” has steadily been fisherman. That’s right—fisherman. It makes sense, if you think about it, actually. They’re out there in incredibly temperamental seas, around very dangerous equipment, trying to catch fish while dodging the ones that could swallow them whole. Plus, it’s a far more common profession than being on a bomb squad—so, the numbers end up being higher just for that reason.

Everything that the USBLS reports comes from hard statistical fact, so when they say that a job is dangerous, all of the insurance companies fall right in line.

What Difference Does it Make to an Insurance Company? It’s simple really—any insurance company is a business and businesses need to make money.

The chance that a bomb squad member could get blown up within 6 months of establishing a policy is just too high and would inflict too harsh of a financial loss. After all, they barely paid into the policy.

This is where high premiums end up coming in, because they’ll still insure you, they just want to be certain they won’t suffer as big of a loss, should something happen.

How Should an Individual in a High-Risk Profession Handle Obtaining Life Insurance?

Find a certified insurance, or financial, expert to assist you. A good one; that does not work for any one insurance company—they’ll obviously just want you to buy from their company. However, a solid freelance professional will know their market like the back of their hand and will be ready to work their tale off for you—freelancing is all about word-of-mouth.

They’ll scour the life insurance market, dig up the best prices that you’re going to get, or they might even suggest an alternative route, like Group Life Insurance—life insurance offered through an employer, union, or association—or Guaranteed-Issue Life Insurance—life insurance provided, no matter what he circumstance, for a pretty high cost.

There are options! Fortunately, member of the Bomb Squad tend to be well taken care of by the people sending them out into harm’s way.

 

Insurance

Insurance (Photo credit: Christopher S. Penn)

 

***This was a sponsored post***

 

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