Six Tips for First-Time Life Insurance Buyers

Looking to buy life insurance for the first time? If so, you're probably asking yourself questions such as "How much do I need?", "What kind of policy is best?" and "Which company should I buy from?" There's no question buying life insurance for the first time, like any other new experience, can be more than a bit daunting. Below are six important tips that we hope will make the process smoother, eliminating frustrating false starts and unnecessary bumps in the road.

Term Life vs Whole Life Insurance

Life insurance is a complex topic and one which you are well served to become educated about before visiting with a well intentioned and commission-motivated insurance salesperson. Insurance salesmen are trained to sell you insurance. They may have good intentions to teach you about insurance, but in the end, they get paid a commission if they sell you insurance, so they are going to do everything they can to sell you insurance which makes them the highest commission.

How to Evaluate Health Insurance Plans

 Whether you are looking for private health insurance plans or deciding between multiple corporately offered health insurance plans, the principles are the same. In order the compare health insurance, you need to get the research out of the way and know exactly what aspects are important to you and your situation. The following are the common comparisons which need to be made.

Life Insurance and Foreign Travel

Imagine you are completing an application for life insurance and a seemingly innocuous question regarding your future foreign travel plans appears.  Of course, you answer honestly and state you may visit relatives in Israel or Colombia at some point in the future.  Unbeknownst to you, you just raised a super-sized red flag for the insurance company and perhaps provided a reason for them to decline your application.

This practice of risk assessment as it relates to foreign travel has been used by life insurance companies for many years.  Only recently has the practice become an issue, and now a hot button for legislation at both the federal and state levels.

How to Find Self-Employed Health Insurance

If you are self-employed, or planning to start your own business now or after you retire, the following tips will help you find the best self-employed health insurance coverage options that will fit your budget.
 
Keep the Health Insurance You Have, For Awhile
The easiest way to ensure that you continue to have good health insurance after you leave your corporate job is to keep the same coverage by invoking your rights under health provisions in the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986.
Under COBRA, you can leave your job and keep your current coverage for up to 18 months at group rates, so long as the company you’re leaving employs 20 or more people and you weren’t fired for gross negligence or incompetence. For more information about COBRA coverage, check with the U.S. Department of Labor
Even so, expect the price tag to be a shock. Once you’re self-employed you’ll have to pay the full cost of the coverage, which is likely to be much higher than the amount you were paying as an employee. According to the Kaiser Family Foundation, workers typically pay only 28 percent of their insurance costs.

How Health Insurance Works

Health Insurance is a contract that offers financial protection for medical expenses. Health insurance is often offered by employers as a benefit to the employee, this coverage is referred to as group health insurance. People who are not offered health insurance benefits through their employer have the option to purchase individual or family health insurance (provided the insurance carrier approves their policy). Both group and individual insurance requires the payment of a premium. By paying the health premium the insured protects his or her financial exposure to medical bills and ensures that one will receive proper coverage during a time of illness or injury. Healthcare expenses in the US increase at rapid rates. In the state of Ohio an average night in the hospital can be over $7000 a night and in Nevada hospitals can average over $9000 a night. Anthem Blue Cross of California estimates a ruptured appendix can cost over $48,000 if one is un-insured.  

How to Get Health Insurance

While you may not need life insurance, and you might be willing to risk not having earthquake insurance, don't gamble with  insurance. Just a couple of days in the hospital can drain almost anyone's savings. Health insurance can be expensive, but with a little research, you can find coverage that fits your budget.

Difficulty: Moderate

Instructions

1. 1
   Sign on with the health insurance provided by your employer: it is likely to be the cheapest option you can find. Search for your own insurance if you're self-employed, or if your company doesn't offer it.
   
2. 2
   Investigate coverage under COBRA (Consolidated Omnibus Reconciliation Act of 1985) if you've recently left your employer. Through COBRA you can extend your coverage for 18 months beyond your separation date, though you have to pay the premium yourself.
   
3. 3
   Find a health insurance broker to compare plans and costs for you. The National Association of Health Underwriters (nahu.org) can help find one in your area.
   
4. 4
   Purchase a fee-for-service plan. The biggest plus is that you have complete control over which doctor you see and determine for yourself when you need to see a specialist. However, there is a significant out-of-pocket cost for this kind of care, the premiums are generally higher, and if your doctor charges more than what is considered customary, you may have to shell out additionally for that care as well.
   
5. 5
   Sign up for a managed care plan where your insurance provider determines which doctors you can see. There are three basic kinds of managed care:
   
6. 6
   Preferred provider organizations (PPOs) have a list of doctors to select from when choosing a physician who will be your first contact for health care. If you see doctors in your insurer's network, you pay a low co-payment. However, if you see a physician not in the network, your co-pay is higher. You also generally don't need prior approval to see a specialist--PPOs give you the most flexibility but cost more in monthly premiums and out-of-pocket costs.
   
7. 7
   Point-of-service (POS) networks are similar to PPOs, except that your primary care physician makes decisions about which specialists you can and can't see. You can still see a physician outside the POS network, but face higher fees and more paperwork to do so.
   
8. 8
   Health maintenance organizations (HMOs) are the most restrictive, yet least expensive managed care programs. Most require that you see a doctor in their network, but offer low or no copays in exchange. Many HMOs also require you to see your primary care physician before getting referred to a specialist.
   
9. 9
   Find out if benefits are limited for preexisting conditions, or if you have to wait for a period of time before you're fully covered. Other plans may completely exclude coverage of preexisting conditions.
   
10. 10
    Compare the prescription drug coverage offered by various plans. Many plans have tiered benefit systems, and usually offer a preferred list of prescriptions that have a lower co-pay. Search for any medication you are taking on this list; drugs not on the list can have a co-pay that is twice as high. Also, see if any plans limit the amounts of new prescriptions or refills on a given drug.
    
11. 11
    Check to make sure your regular doctors are on your plan's preferred provider list. All plans provide a database of their provider list on their Web site. Go with a plan that lists most or all of your regular doctors. Be aware that most PPOs will pay up to 20 percent less for out-of-network doctors.
    
12. 12
    Investigate what sorts of delays you may encounter with managed care. Some plans are notorious about keeping members waiting to see a doctor. Ask a doctor you intend to visit how long a typical wait is before you choose a plan.
    
13. 13
    Shop around. Call several agents and compare policies and premiums.
    
14. 14
    Look into other potential sources for health insurance. Alumni associations, professional groups, fraternal organizations and other associations often offer health coverage to their members.

Read more: How to Get Health Insurance | eHow.com http://www.ehow.com/how_109662_health-insurance.html#ixzz0zv53U57r

How to Choose the Right Insurance Company

To help answer this question, we consulted two insurance experts: Dennis Howard, director of the Insurance Consumer Advocate Network (I-CAN) and a retired insurance adjuster, and Doug Heller, a consumer advocate at The Foundation for Taxpayer & Consumer Rights, a California-based consumer advocacy group. Both had several ideas for consumers determined to make sure their car insurance investment is directed toward a trustworthy company, one that will pay on time and in full.

1) Visit your state's department of insurance Web site. Although you may not be familiar with it, your state, and every state, has a department of insurance. Most departments have Web sites, and many publish "consumer complaint ratios" for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints a car insurance company received per 1,000 claims filed.

Both experts recommended that consumers use complaint ratios to screen prospective insurers. "Just because they're a big name doesn't mean that they'll be a 'good neighbor' or that you'll be 'in their hands,'" Heller noted.

If you've done your homework, you should already have a list of car insurance companies with the lowest premium quotes. Now jot down the companies with the lowest (or best) complaint ratios. Then, compare your two lists — the companies that rank best on both lists merit your strongest consideration.

If you can't find complaint ratios for your state, Heller recommends examining the complaint ratios published by other states. Keep in mind that a single insurance company's practices can vary significantly from state to state — a subpar ratio in one state doesn't necessarily mean the situation is the same in your state. But watch for general trends. If an insurer is getting a lot of complaints in several other states, you probably don't want to get involved with this company. The I-CAN Web site provides links and contact information for every state's department of insurance.

Also note that insurance department Web sites often provide basic rate comparison surveys. These can give you a rough idea of which insurers might interest you on a financial basis without the hassle of typing in all your personal information (as you must when you use one of the online quote sites).

2) Find out which insurers body shops recommend. One of the best ways to identify reliable insurers, according to Howard, is to contact local body shops that you trust and ask for their recommendations. Body shop managers have a unique perspective to offer, since they regularly interact with insurance adjusters. They know which companies have the smoothest claim processes, which affects how quickly the work can be completed on a damaged vehicle. And they know which companies are pushing aftermarket parts, in lieu of genuine original equipment manufacturer (OEM) parts, to cut costs.

3) Check the J.D. Power Ratings. J.D. Power and Associates collects data from individual policyholders nationwide and rates them according to coverage options, price, claims handling, satisfaction with company representatives and the overall experience. A quick visit to the J.D. Power Consumer Center will give you a feel for how the major carriers stack up. J.D. Power also publishes an annual survey of major auto insurers — Amica and Erie have finished at the top for the last three years. These are also companies that Howard recommends: "Erie is sold by independent agents, who are very knowledgeable about the product. I like their claims handling approach. Almost all other companies look at a claim and find a way to not pay it. Erie and Amica will look at it and try to find a way to cover it."

4) Consider insurers' financial strength ratings. As a final check, you can take a look at the A.M. Best and Standard & Poor's ratings. Both companies publish financial strength ratings for all insurance companies — these "measure" an insurance company's ability to pay out a claim (they have nothing to do with the way a company treats its customers).

For the general consumer, looking up these ratings is only a formality, since most of the well-known carriers are going to be a safe bet. Moreover, independent agents would be unlikely to recommend a company with dubious financial standing. Still, if you're considering a smaller, unfamiliar insurance carrier, you might consider this research time well spent. Insurance companies often provide this information on their Web sites, but if not, you can run a search at the A.M. Best and Standard & Poor's sites.

The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company's solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating.

The Standard & Poor's ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) and NR, which means "not rated." The letter grades might be modified by a plus or minus mark. Consider only those companies that have at least a BBB rating.

5) Still confused? Consider working with an agent. It used to be that everyone purchased auto insurance from an agent, but now, car insurance companies like Esurance, Geico and others allow you to purchase insurance directly — over the phone from a customer service representative or online. Still, many of the major players have preserved their national networks of local agents — even if you use State Farm's or Allstate's Web site, you will still be assigned a local agent.

There are two kinds of agents:

a) the captive agent, who represents only one insurance company (major carriers like AAA, Allstate and State Farm sell policies through captive agents).


b) the independent agent, also known as a broker, who represents several insurance companies and therefore does not have a vested interest in selling you a policy from one particular company.

The main advantage in having your own agent is that this person has a vested interest in keeping you happy. Accordingly, he can become familiar with your situation and guide you toward a suitable policy. Howard favors the use of agents and advised, "Don't rule out direct providers, but my personal preference is to have an agent, preferably an independent agent, write your policy for you.... An independent agent would become aware of less advantageous conditions with one company [and help you move to another]. You can change carriers without changing your agent. I encourage consumers to develop a relationship with their agent."

The prospect of good working relations with an agent may help you to make a decision: When Heller purchased auto insurance for the first time, two insurers gave him similar quotes, but he went for the slightly higher one because the agent had been highly recommended by a friend. "You shouldn't go direct without always checking out other options," he said.

But, he cautioned, "Never feel pressured by a broker or an agent. Take the time to talk with an agent or a broker as well as do your online research. You may not need an agent — you may find a better deal with a company that operates direct."

Independent agents sometimes charge a fee for their services, but you may be able to negotiate that. You should agree upon any fee in writing before making a purchase. Look for agents who are certified by Independent Insurance Agents of America (Big "I") or Professional Insurance Agents (PIA).

Of course, we know you have better things to do with your time than think about car insurance. Realistically, most people won't be able to do everything on this list before choosing an insurance carrier. But if you feel that you've been burned during the claims process in the past, consider at least one or two of these suggestions — you'll thank yourself if you're ever involved in another accident.

How to Choose Life Insurance

Life insurance is a product that almost everyone should own, but many people do not. There are plenty of people who don't even want to think or discuss it because it is associated with death.

Understand why people purchase life insurance coverage. People do this to protect debts (perhaps a mortgage), family costs or school fees (in the event of a parent passing away), to protect a business (against the loss of a vital partner), or as part of their overall estate planning. Virtually everyone in society with any family, assets or responsibilities needs some life insurance coverage.

Learn the two basic types of insurance: term and permanent.

• Term insurance is temporary and only lasts for a predetermined predetermined 'term' at the outset. This may be for a short period of time for a specific purpose or potentially twenty or thirty years. If you pass away a few days after coverage has ended, there will be no payout.
• Permanent insurance will cost more up front, but is intended to last a lifetime ensuring that someone receives a benefit from the policy. There are different types of permanent insurance, whole life, universal life and variable universal life 

Consult a professional advisor. They are knowledgeable in the different products available, and can help you determine what type of coverage you need for your particular situation. You might want to consider a broker, someone who works with a range of companies, rather than an advisor who deals with just one company. Brokers are independent and have a much broader market perspective.

Warnings

• Many people take the lowest cost option and purchase the bare minimum of cover. Look to be fully covered rather than just partially so.

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