Beyond Better Insurance

My employer offers an HMO and a PPO. How do I decide? Both provide excellent care, but you may want to choose an HMO if its network of doctors and hospitals matches your needs. Health insurance with a Health Maintenance Organization (HMO) is generally less expensive. You’re required to select an HMO physician to be your primary health care provider. This doctor will coordinate all of your medical care, including referrals to specialists within your HMO network. If you seek treatment from a non-network physician, you will generally pay most of the cost yourself.

A Preferred Provider Organization (PPO) is more flexible than an HMO plan, but it still operates with a list of physicians and hospitals that are “within the PPO network.” You may visit an out-of-network provider, but you will pay the difference between the PPO network and out-of-network prices. Both plans usually offer a prescription drug benefit, as well. Some companies are offering options that allow you to combine features of both HMO and PPO plans.

I can’t afford full health insurance, but I want coverage for major emergencies. A high deductible health insurance plan or catastrophic health insurance offer coverage for major illnesses or accidents. For example, a plan with a $5,000 deductible requires you to pay all of your medical expenses up to $5,000 before your insurer begins to pay. If you choose a high deductible plan, try to save a small amount of money each month in a Health Savings Account (HSA) so that you’re not overwhelmed by routine medical expenses.

I have health insurance, but it seems like I’m always paying for something. Sad but true. You may owe a co-payment for doctor’s visits or a trip to the ER. Usually, this is a flat fee, but it can get expensive if you don’t stay within your plan network.

Secondly, payment for expenses is subject to your annual deductible, which is the amount you pay toward your medical expenses before the insurance company begins to pay claims. Some HMO plans do not have deductibles but do have co-payments.

Lastly, there’s co-insurance, which is the percentage of your medical costs that you pay after you reach your annual deductible. 80/20 co-insurance is a common option, and that means that your insurer pays 80% of your bills and you pay 20%—after your deductible. So, anything you can do to reduce your medical bills will help you reduce your out-of-pocket expenses, too.

I don’t have health insurance. What can I do? Almost every hospital has a financial aid office that will evaluate your personal situation and determine your ability to pay for required care. Generally, a hospital will provide sliding scale fees if your income is 400% or less of federal poverty limits and may eliminate bills entirely if your income is 200% or less of federal poverty limits. But hospitals have to make money, too, so they may not publicize these programs or provide much assistance in applying. Be prepared with recent copies of your tax returns and W-2′s to prove your need.

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount (at regular intervals or in lump sums).

Life insurance companies will generally place you in a risk category to determine how much you should pay for your premium. The categories are determined by your overall health and your lifestyle, including whether or not you smoke. Some companies use a “Super Preferred” or “Preferred Plus” class for the very healthy, and others have a “Substandard” or “Rated” class as well.

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As an applicant for life insurance, you’ll be placed in a risk category, such as “Preferred” or “Standard,” along with a subcategory of “No Nicotine” that indicates whether or not you have smoked or use nicotine.

Rates for “Preferred, No Nicotine” will be lower than “Preferred, Nicotine” despite the current health of the applicant, because of the higher long-term risk of illness or death due to smoking-related diseases.

Are you considered a smoker? The questions about smoking and tobacco use are very specific when you apply for life insurance. A typical application will ask, “Have you used a tobacco product in the last twelve months?” You’ll need to explain whether you use cigarettes, cigars or even chewing tobacco. Most importantly, you must state how often you use each tobacco product.

Whether you smoke several cigarettes a day or half a pack, you are a smoker and should answer the questions completely and honestly. But, here’s the thing. If you only have a cigarette once a month when you’re having a beer, you’re still considered a smoker by most life insurers. The health risks are basically the same for occasional smokers – and the rates are often the same as well. However, cigar smokers who light up 3 or 4 times a year often get a break and are classified as non-smokers. From a life insurance standpoint, the celebratory cigar does not make you a “smoker” in the true sense of the word.

To tell the truth During the life insurance application and underwriting process, you may be required to get a medical examination to verify your health. Depending on the company and the type of insurance you purchase, the exam may include blood and urine tests as well as a full check-up.

Can a smoker “cheat” the system? Your body generally rids itself of nicotine within 72 hours. So, if the blood test and urine sample are given 72 hours after you last smoked, the nicotine level may be low enough to escape detection, but know that companies are looking for a negative reading for nicotine – not just a low level. If you’ve submitted your application as a non-smoker and have a positive result for nicotine, your company can raise the rate or choose not to issue a policy.

What happens if you are caught? If you’re a smoker and you don’t tell the truth on an application, you can be charged with insurance fraud. In addition, if your insurer makes the discovery while investigating a claim that’s made after your death, they could contest the validity of your policy contract – and deny the claim for benefits based on your misrepresentation of the facts. If they discover your lie during the 2 year contestability period, they might choose to cancel the policy, if they don’t offer policies to smokers.

What if you start smoking again after the policy is issued? It is important to be truthful when filling out your life insurance policy, but if you start smoking after it’s issued, you are not required to tell your insurance company. If you die, and your life insurance premium was based on the nonsmoker rate, and you later began smoking, your death benefit will not be jeopardized. However, it’s important to note again that if your cause of death is found to be a smoking-related illness, your beneficiary could have problems when making a claim.

What will a DUI conviction do to my car insurance rates?

In general, once your insurance company sees that you have a DUI on your driving record you will see an increase in your auto insurance rates. And it’s not just a little hike in your rate; based on an analysis of car insurance quotes, premium amounts may increase 30 percent to 100 percent, or even more. For instance, in Colorado, your rates may spike up to 30 percent after a DUI violation, while in North Carolina, you get docked 12 points under the Safe Driver Incentive Points system for a DUI, which could cause your rates to jump 340 percent.

Driving under the influence (DUI) of alcohol is seen as a major offense and seriously risky behavior by car insurance companies, so for that infraction you will be paying a lot more for your car insurance premium and will lose any preferred status that you had obtained.

Your current car insurance company may even cancel you out at the end of your policy, and then you’ll have to find coverage with a new auto insurance company that takes high-risk drivers.

How long will a DUI affect my rates?

Insurance company guidelines, governed by state laws, dictate how long your rates will be affected by a driving DUI conviction.  As with most minor or major convictions, a DUI will keep your rates raised for at least three years.

If your state keeps the offense on your record longer than three years, and many do, it’s common for this offense to affect your car insurance rates for five years or more.  For instance, in California a DUI prevents you from receiving a safe-driver discount for 10 years from the date of your DUI conviction.

What is an SR-22 and will it affect my rates?

The SR-22 is a certificate of financial responsibility that many states require when you get your license reinstated after a DUI, though the certificates are not limited to just alcohol-related driving offenses.

When you are notified of the need to carry a SR-22, you should be told what the minimum car insurance limits are that the state will accept for this filing. When you purchase the required coverage and have your insurer file the SR-22, the form verifies with the state that you have the mandated coverage in place — the whole reason for the filing.

You must continue to carry the SR-22 for a certain number of years — typically three but it ranges from one to five.  If you cancel your insurance during this time period the state will be notified and usually your license and/or vehicle registration will be suspended.

The car insurance coverage that is associated with the SR-22 form will be rated according to all the factors that ordinarily go into rating a policy, regardless of the SR-22 form filing.  The SR-22 itself typically incurs a filing fee of $15 to $25.

Why does Property Insurance cover and why do I need it?

Commercial Property Insurance policies can also be known as a Business Property insurance – insures ones property, in addition to any stock or belongings, against loss and/or damage due to theft, accidents or other covered losses. This insurance policy covers your costs to replace and/or repair your property and can compensates you for items which can’t be replaced. Businesses frequently purchase this insurance coverage as a part of a BOP, or a Business Owner’s Policy, which offers a means for certain businesses to acquire two of the most beneficial kinds of insurance (general liability insurance and business property insurance) in one, cost-effective package.
Your business property insurance policy can cover you if the property is away from your premises, when it is damaged or lost, but generally this is covered on an Inland Marine policy.

How does property insurance protect your business?

Commercial Property Insurance is among the first kinds of insurance you need to consider when starting a business. This coverage insures you from the risk that your property could be lost, stolen and/or damaged. Should you not own the building in which you conduct business, you will solely require to insure the owned business contents. This commercial property insurance policy insures your investment in; furniture, fixtures, office equipment, inventory, computers, improvements to the building, and the supplies that are stored at your business. Commercial property insurance prices will vary depending how they are covered. Your options are a replacement cost or actual cash value (ACV) insurance policy. A replacement-cost policy assures that your settlement is dependant on that which you will need to expend to replace the items and an actual cash value policy reimburses you for the property’s depreciated value. A replacement cost business property insurance policies can have a higher price, but since they allow you to replace and all lost or damaged property with new items, these policies can help your business recover from a loss faster. If you lease business equipment, the company you lease will insist the property be insured for its replacement value. Most property insurance coverage is written on a replacement-value basis.

Typically, a property insurance policy will not cover the flood insurance or the earthquake insurance unless your specifically ask for this to be covered.

Additional Important Property Coverage’s that are included in a Business Owners Policy
 Crime – Covers you if an employee steals money, securities, and/or other property.

 Business Income &  Extra Expense - Another important insurance coverage which is typically  an add-on to Property Insurance. Business income reimburses your business for  sales lost during a downtime caused by covered damage to your property. Make  sure you read your policy to see what is covered and what isn’t. A Mechanical  Issue wouldn’t be covered. Extra expense reimburses you for expenses incurred to  avoid and/or minimize the suspension of business. An Example: Your buildings  roof collapses after a heavy thunderstorm. This Business Income Insurance  coverage reimburses you for the income lost while the building couldn’t be  occupied, the extra expense insurance coverage reimburses you for rent for a  temporary location while the building is being repaired.

 Equipment Breakdown - This important insurance coverage compensates the business for financial loss sustained when equipment breaks down all of a sudden and accidentally (not due to mechanical wear). All Equipment is susceptible to certain hazards for instance power surges, short circuits, boiler overheating or cracking, and mechanical breakdown. Equipment breakdown insurance covers equipment accidents from these sorts of hazards. This coverage reimburses the company for the cost to fix or replace equipment damaged by a covered accident. Additionally , it may protect you for business income losses which come from a equipment breakdown as well as the additional expenses sustained whenever you speed the restoration of business operations.

 Spoilage – Perishable goods coverage, aka Spoilage, is also designed to protect the worth of any food and/or other materials that spoil as a result of a breakdown. While Property insurance covers many standard perils, i.e. fire an “all risk” property coverage doesn’t pay for equipment accidents from these kids of losses. That why any Small Business dealing with food needs to have this coverage. Equipment breakdown and spoilage insurance coverage’s are specially designed to pay for damage caused by these types of accidents. As standard property insurance policies don’t cover equipment breakdown, make sure it is included.