Insuring a Used Car

A standard auto insurance policy is a package of different kinds of coverage. There is generally some flexibility in terms of both the types and amounts of coverage you select.

However, practically every state has enacted insurance laws that require drivers to carry at least some auto insurance. Many states even require that you present proof of insurance before you register a car. So the short answer to the question is that you will probably need to
insure your car, regardless of its value.

Every state requires that drivers carry liability insurance.
The liability coverage section of an auto insurance policy provides financial protection from liability claims against you when you (or certain other people) cause an accident that results in bodily injuries to other people and/or damage to their property. Every state has mandatory minimum levels of coverage in this area. The rationale behind such laws is that at-fault drivers should be able to compensate victims who suffer accident-related losses. But the required minimums in most states don't even come close to covering the costs of a serious accident. Consequently, if you wish to be adequately protected from liability claims, your liability coverage should probably exceed your state's requirements.

Other coverages are required in some states and optional in others.
Medical payments coverage and uninsured/underinsured motorist coverage are two such coverages. Medical payments coverage covers medical expenses incurred by you, your family members, and your non-family passengers. Uninsured/underinsured motorist coverage covers losses you and others suffer as a result of an accident caused by a driver who either has no insurance or insufficient insurance. If buying these coverages is optional in your state, base your decision on your needs, circumstances, and other factors. Consult your insurance agent for more information.

Collision and comprehensive insurance is optional in virtually every state.
The collision and comprehensive section of your policy covers physical damage to your own vehicle resulting from collisions and a variety of other causes (e.g., fire, falling objects). It may also cover losses associated with theft. However, your car's value plays a big part in assessing your need for this type of coverage. It may not be cost-effective if your vehicle is worth less than $1,000 because you'll have to satisfy a deductible, and the most you'll receive (even if your car is totaled) will be its actual value (i.e., after depreciation). That's not much, especially taking into account the premiums you would have been paying for coverage.


Life Insurance & Estate Planning - What Wealthy Families Want to Know

Newport Beach, Calif. (August 12, 2008) – An estimated $41 trillion in US assets will change hands by 2052.1 Families, especially wealthy families, have specialized estate planning needs but can be confused by complex estate planning strategies full of legalese so Pacific Life Insurance Company and Pacific Life & Annuity Company now offer a kit of “plain English” materials to show how life insurance can stabilize and strengthen estate planning techniques.

Alyce Peterson, vice president of marketing services for Pacific Life, explained that using life insurance in a client’s estate plan provides a death benefit that can be used to help pay for estate taxes owed.

A life insurance policy combined with an estate planning technique can also help:

* Avoid the forced liquidation of assets
* Replenish wealth as it passes from generation to generation
* Instill positive behaviors in heirs
* Equalize inheritances between family members
* Leave a charitable legacy
* Identify which assets to retain, sell or donate.

“Many clients become overwhelmed and even wary when faced with complex planning strategies and the legal language involved,” Peterson commented. “The plain English format of our new resource guide plus the fact finders addresses this problem.”

Financial professionals can get the “What the Wealthiest Families Know” Kit by contacting their Pacific Life Insurance Company or Pacific Life & Annuity Company representative or by calling 866-722-9555.

1 “Wealth Transfer: A Digest of Opinion and Advice” The Journal of Gift Planning Vol. 10, No 2, 2nd Quarter 2006

Pacific Life Insurance Company
Founded in 1868, Pacific Life Insurance Company provides life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans.2 Pacific Life counts more than half of the 100 largest U.S. companies as clients3 and is a member of the Insurance Marketplace Standards Association (IMSA), whose membership promotes high ethical standards for the sale of individual life insurance and annuities. For additional information about Pacific Life, including its current financial strength ratings from A.M. Best, Fitch Ratings, Standard & Poor’s, and Moody’s, visit the About Pacific Life section.

2 Product features and availability vary by state.
3 Data compiled by Pacific Life using the FORTUNE 500® list as of April 2008.

Pacific Life & Annuity Company
Pacific Life & Annuity Company offers a wide range of products, including life insurance, annuities, structured settlement annuities, and other investment products and services for individuals and businesses.4 Pacific Life & Annuity is a member of the Insurance Marketplace Standards Association (IMSA), whose membership promotes high ethical standards for the sale of individual life insurance and annuities. For additional information about Pacific Life & Annuity, including its current financial strength ratings from A.M. Best, Fitch Ratings, Standard & Poor’s, and Moody’s, visit the company Web site at www.PacificLifeandAnnuity.com.


Love, Marriage, and Insurance

Marriage can be one of the most significant events and times in a person's life, and just as important as it is to love and cherish your spouse, it's equally important to be sure you have enough insurance coverage so that you are both taken care of. That is why it's important to review your life, homeowners and car insurance coverage and see if any adjustments can be made to help you out financially in your new married life.

Life Insurance
Life insurance should be the first thing you consider or review when you become married. Life insurance helps your spouse financially in the event of your death by covering debts you may have incurred, and is equally important to have if you are considering having children or even buying a new home.

Health Insurance
Combining health insurances is another thing that you may want to take a peek at once you are married. If you have a good employer-sponsored health insurance plan, it may be more cost effective to move your spouse over to your plan. Then of course, your spouse may have a better plan than you, and you may need to switch to theirs. It's most important to review the features and benefits of both health insurance plans and compare them to see which will work best for you and your spouse.

Additional Coverage
When it comes to married couples' valuables, it is very important to be sure you have adequate coverage in the event something happens to your engagement or wedding rings. It's important to note that homeowners insurance and renter's insurance, though they do protect the physical structure of your home and its possessions, they don't always cover jewelry. Your homeowners insurance agent or insurance company, will be able to determine what kind of insurance coverage is best for your valuables, and may determine if a rider is needed on your homeowners policy to cover your valuables, such as jewelry.

Another factor you should discuss with your homeowners insurance agent when applying for your rider policy is whether the extension provides "actual cash value" or "replacement cost coverage". Though replacement cost coverage is more expensive than actual cash value, it is better to have it because actual cash value factors in time depreciation for the item. Which means you will only be paid back what the item was worth at the time it was stolen or damaged, not the price you initially paid for it.

Car Insurance
It's important to inform your auto insurance company or agent that you are married, because many auto insurance companies offer discounted rates for couples who have "tied the knot". Also, check to see if they offer any other discounts, such as multi-car or multi-policy-who knows, you may be able to save more than you thought!

If you are interested in getting a life insurance, homeowners insurance or car insurance quote, log on to Insurance.com. Here you will be able to evaluate multiple rates from best-in-class life insurance providers - helping you find the best life, homeowners and car insurance coverage for you and your spouse.

Ways To Save When Buying Life Insurance

When it comes to shopping, savvy shoppers get the most for their money. This stays true not only when shopping for groceries or food, but for life insurance as well. So to help you get the most bang for your buck, Insurance.com has compiled a list of ways you can save the most when you're in the market to buy a life insurance policy.

  1. Is term life insurance for you? If most of your goals are short-term and you're not as interested in saving for the long run, term life insurance is for you. Term life insurance typically offers you the most coverage for the least amount of money, and is set up based around spans of time. For example, you may get a term life insurance plan that is set to pay out after five, ten or 20 years.

  2. If your main goal is to save money, and you don't mind paying a higher premium, it would be wise to look into a whole life insurance policy. Whole life policies offer a "cash value" feature that helps you save money each time you make a payment on your premium. However, though you can withdraw funds from the cash value, your death benefit will decrease. If you take out a loan and it exceeds the amount you have already paid for on the premium of your whole life insurance policy, you will receive a tax bill. Also, it's good to note that as time moves on, the cost of insuring you will go up, and your cash value will begin to decrease.

  3. No-load policies. To find lower premiums for variable life insurance, be sure to keep an eye out for "no-load" or "low-load" life insurance policies. These policies have fewer added fees, such as agent commission or fees for marketing, which makes a higher percentage of your premium go to your cash value. To find theses policies, check with a financial advisor who doesn't collect commission from life insurance companies, or inquire around. Some insurance agencies even sell these directly to the customer!
  4. If you're healthy, stay away from guaranteed issue policies. Guaranteed issue policies, also know as "simplified" or "quick" policies, may sound too good to be true, because they really are. They do not require a medical exam, making them seemingly ideal, but ultimately much riskier for the insurer. If you are healthy, you will get much better rates by buying a life insurance policy that requires a medical test.

  5. However, the problem for those who buy into guaranteed issue policies is that many may end up paying more in premiums than their beneficiaries receive from their death benefits. The National Association of Insurance Commissioner (NAIC) is trying to find a solution or way to put an end to this. Regulation of rates is not something they plan on doing, but a disclosure statement warning consumers is in the works.

  6. Check online. When shopping around for any kind of insurance, looking online is a great way to compare prices and see what different companies have to offer. The more information you give, the more accurate your insurance quote will be.
  7. Make a change for the better. If you are overweight, are a smoker, have heart disease, high blood pressure or diabetes, finding affordable life insurance may be difficult. This is because the better your health is, the easier and more affordable it will be for you to buy life insurance. Insurance companies will issue lower premiums if the policyholder is in good health standing. The less things that may give you a risk of dying sooner, the more affordable your life insurance policy will be. Also, if you do have an outstanding medical condition, you are a smoker or overweight, and you are trying to better your health, be sure to document it. By showing the insurance company your medical files and that you have been trying to improve your health, you may save yourself some money in the long run.

  8. Many life insurance companies have different categories for medical conditions or combinations of medical conditions, when it comes to issuing you a policy. They also have different tests and medical exams you may need to go through before they will issue you a policy. This may have a major impact if you're a smoker. Even if you quit the day you apply, you will still be considered a smoker, because to be completely "nicotine free," you would have had to quit smoking for two to five years prior. Smokers do generally pay at least three times more than nonsmokers for a life insurance policy, so by quitting, you're not just saving money from not buying tobacco, but also by bettering your standing.

    Being overweight is another reason you may have a higher life insurance premium. Though you may not be obese, once your weigh reaches a certain level, you become more of a death-risk. So by taking the steps to lose weight and get healthier, you are not only helping yourself live longer and feel better, but also helping to get more affordable life insurance rates.

  9. Buy what you need. It's not a good idea to under-buy insurance, nor is it beneficial to over-buy, so when you're in the market for insurance, be sure to evaluate what your exact needs are and go from there. A good way of doing that is in the form of an equation: Short-term needs + long-term needs - resources = how much life insurance you will need.
  10. Rider policies are helpful. A rider policy is an extension to an insurance policy that helps you extend you coverage. If your needs change, it may be more cost-effective to purchase a rider policy for additional life insurance-it also doesn't affect your cash value. Be sure to shop around though, you may save more by actually buying a second policy.
  11. Buy early. Instead of waiting until there is a real problem with your health, buy life insurance early in life. As you age, the price of your life insurance will increase, so the younger you start, the more you will save. To keep your premium low, you may want to inquire about a "level premium" policy. Which keeps your premium rates the same for a set amount of time.
  12. Run your credit report. If there are problems with your credit, you may be denied for an insurance policy or your premiums will sky-rocket because you are considered high-risk. If your credit score is low, the insurance company's main concern is that you will let your policy lapse due to non-payment of premiums. So by rebuilding your credit, you are not only helping that financial aspect of your life, but also the one concerning your insurance.
  13. Fractional premiums. Some insurance agencies charge less depending on how you schedule your payments. By paying fractional payments-those are fewer payments over the year-you may pay less over all. For some life insurance companies the same also goes for electronic funds transfer (EFT), which is when they take out the amount of the premium directly from your checking account.
  14. Being responsible saves you money. This goes along with making a change for the better. If you are in an expensive rate class due to high cholesterol (for example), but make a point of going to your doctor regularly and establish a history of lowering your cholesterol, your life insurance company may be willing to lower your premium.

If you are interested in finding out more about life insurance, or getting a life insurance quote, log on to Insurance.com. Here you will be able to evaluate multiple rates from best-in-class life insurance providers - helping you find the best life insurance coverage that benefits you, as well as your beneficiaries, while still being within your budget.

Tips for First Time Insurance Buyers

When you buy insurance, you're really buying something that you hope you'll never have to use. But if you ever do need to file an insurance claim, you'll understand why having the right amount and right types of coverage is important.

Decide how much insurance you need
You can't stop bad things from happening. But you can protect yourself financially by purchasing insurance. How much insurance you need depends on a lot of factors including how much you owe and own, how much your assets are worth, whether you have dependents, and how much out-of-pocket cost you could afford to bear. You can estimate your coverage needs using calculators or worksheets available on-line, but it's a good idea to sit down with an insurance agent or broker who can thoroughly evaluate your needs.

Comparison shop
No matter what type of insurance you're buying, the process is essentially the same. Once you've decided what type of insurance and how much coverage you need, you can begin contacting insurance companies online, directly by phone, or through an insurance agent or broker to obtain quotes. Get quotes from several different insurers because premium cost can vary widely.

But compare the coverage offered, too. A policy might cost less because it offers fewer, or different, features and benefits. And make sure the company you've settled on is reputable, with good customer service and claims-paying ability. All insurance companies are rated by major rating agencies (e.g. Standard & Poor's, Moody's, A.M. Best) on their ability to pay claims. You can access these ratings online, through public libraries, or through car insurance company literature.

Understand what you're buying
An insurance policy is a legal contract that may be loaded with technical terms that are hard to understand. But read it anyway before you sign on the dotted line to find out about the coverage you're buying. For instance, the policy will tell you:

  • Who or what is covered
  • What coverage exclusions and limitations apply
  • When coverage begins and ends
  • How much coverage is provided
  • How much you'll pay for coverage (the premium)
  • How you report a loss or file a claim

It's always a good idea to ask an insurance professional to explain any terms, conditions, or benefits that you don't understand.

Evaluate your insurance needs periodically
As your life changes, your insurance needs change, too. So every once in a while (annually, some experts suggest), review your insurance to see if you need more (or less) coverage or an additional type of coverage. Here are some times in your life when you'll definitely want to re-evaluate your insurance needs:

  • You're getting married or divorced
  • You're starting a family
  • You're renting an apartment
  • You're buying a house or a car, or making a major purchase
  • Your child is going off to college
  • You're starting a new job or becoming self-employed
  • You're buying or selling a business
  • Your income increases or decreases substantially
  • You're taking care of an aging parent
  • You're retiring

Make your insurance policies work for you by taking the time to periodically review your needs and coverages.


Top 10 Things to Know About Life Insurance

We all recognize the importance of life insurance. After all, we want to make sure that our loved ones are taken care of when we die. But before you run out and purchase a policy, do some research ahead of time. That way, you'll be sure to get the best possible coverage at the right price. Here are some helpful tips to get you started:

1. Shop around
2. Never buy more coverage than you need
3. The healthier you are, the better the rates
4. Buy sooner rather than later
5. Realize the importance of periodically reviewing your coverage
6. You don't necessarily have to pay a commission
7. You may be paying more for monthly premium payments
8. Don't rely solely on the life insurance offered by your employer
9. Tell the whole truth and nothing but the truth
10. Buying more is sometimes cheaper

Shop around
When it comes to life insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it's now easier than ever. Try out one of the many insurance websites that can provide you with instant quotes. Make sure the website you shop from takes into consideration the factors in your medical history that can affect the premiums.

Never buy more coverage than you need
The key to purchasing the right amount of life insurance is to have just enough coverage to meet your needs. If you have more life insurance than you need, you'll be paying unnecessarily for higher premiums. On the other hand, it's important not to have too little coverage, resulting in you being underinsured.

The healthier you are, the better the rates
It's true – healthy people get better rates on life insurance. You will be asked to pay a higher rate for anything that shortens your life expectancy (e.g., if you smoke, take medications regularly, are overweight, have a bad driving record).

Buy sooner rather than later
If you've been putting off purchasing life insurance because you don't want to pay the premiums, you may be doing yourself a disservice in the long run. The younger you are when you purchase life insurance, the lower your premiums will be.

Realize the importance of periodically reviewing your coverage
Any life change signals the need for a review of your overall financial plan. When it comes to life insurance coverage, you'll want to make sure that this major life event (e.g., birth of a child, children are grown) won't leave you underinsured or overinsured.

You don't necessarily have to pay a commission
One of the reasons for higher premiums is that most life insurance policies pay commissions to the agent/broker. However, you may be able to purchase a no-load policy through an insurer that sells no-load policies directly to consumers.

You may be paying more for monthly premium payments
You may not realize it, but you may be paying more for your life insurance if you pay your premium in monthly installments. Many insurance companies charge extra fees if you make monthly premium payments instead of paying the annual premium.

Don't rely solely on the life insurance offered by your employer
Many employers offer their employees some sort of group life insurance. But this amount of coverage is usually not enough to adequately meet your life insurance needs. In addition, group life insurance policies are not portable, meaning that if you leave your job, you can't take your life insurance coverage with you.

Tell the whole truth and nothing but the truth
If you're thinking about lying on your insurance application, think again. If your insurance company finds out that you lied about a health-related condition or your lifestyle (e.g., smoking habit), they may be able to terminate your coverage.

Buying more is sometimes cheaper
Life insurance usually costs less per thousand dollars once you get into higher coverage amounts (e.g., $250,000). If the numbers work out, you may be able to pay a lower premium while increasing your coverage.

How Much Life Insurance Do You Need?

You might be asking yourself this question: "How much life insurance do I need?"

Some financial advisors will tell you to multiply your annual income by seven. Others will tell you to buy only enough life insurance to replace the income you are expected to make between now and retirement. Some might recommend you buy only enough life insurance to cover your present debts.

While you probably can do all of those calculations in a minute, they won't give you the right answer. Simply put, calculating your life insurance needs takes homework. It requires you to do an inventory of all of your finances, and to think long and hard about how your beneficiaries would maintain their lifestyles without you. You also must consider inflation and, if you have children, future college education costs.

What not to do

What's the wrong way to calculate how much life insurance you need? Here are some common but misguided methods.

1. Multiply your annual salary by seven or eight: While it’s a simple formula, it fails to take into account your individual needs and obligations. Life insurance experts say there’s a good chance you’ll buy too little or too much coverage, simply by using a formula such as this.

2. Calculate your "human life value:" This method gives you the income you will earn from your present age until your retirement age, assuming a rate of interest that represents salary increases throughout that period. The problem is it does not take into account what your beneficiary's specific needs will be. You also end up with a figure that requires you to buy a huge amount of life insurance, possibly more than you may need. "There's all sorts of landmines in this," says Michael Snowdon, an instructor at the College of Financial Planning in Denver. "When you calculate this way, you're working with broad brush strokes."

3. Cover your debts. This involves buying only enough life insurance to cover debts such as your mortgage, student loan bills, or outstanding car notes. This method does not consider any future debts or needs, such as childcare or college education costs.

A classic formula

Many experts say the best way to pinpoint a smart life insurance figure is through a needs analysis, which can be broken down into a simple formula: Short-term needs + long-term needs - resources = how much life insurance you need. Snowdon says this method is "probably the most accurate approach in what is an inaccurate and imprecise science."

Experts advise you do an analysis at least once every three years, or whenever you have had a major life change. For example, if you have a new baby, you have to recalculate college education needs and child-care costs. If you own a home, a mortgage is likely your biggest financial burden. Because your mortgage balance decreases with each payment, it's important to include those revised figures in your calculations.

Five steps to a needs analysis

Step 1
Add up all of your short-term needs. These can be placed into three categories: final expenses, outstanding debts and emergency expenses. Among final expenses are medical, hospital, and funeral expenses, attorney or executor fees, probate court costs (if you do not have a will), and any outstanding taxes that would need to be paid if you died. Among outstanding debts are credit card balances, auto loans, college loans, and all other outstanding bills. Emergency expenses should include a cash reserve for medical emergencies and repairs to your home or car.

Calculating final and emergency expenses can be complicated, because you don't have a crystal ball that tells you how much your medical or hospital expenses will be, or if you even will have any.

Step 2
Next, add up your long-term debts, which include your mortgage and college tuition.

Calculating an education fund is tricky because you have no idea where your children will be going to college. Perhaps the best method is to use the present average college cost in the United States and the number of years away your children are from entering college. The average college costs for the 2002-2003 school year were $4,081 annually for a public, four-year institution, and $18,273 annually for a private, four-year institution, according to The College Board.

The U.S. Department of Education reports college costs traditionally have risen at about 5 percent annually, so you need to figure out what the cost will be when your child goes to college. (To calculate what costs will be in the future, see the last section: “A must-know: the equation for the future value of money.” Also be sure to calculate what the entire education will cost while taking into account the increased costs each year.)

Step 3
Next, calculate family maintenance expenses. These include such necessities as childcare, food, clothing, utility bills, entertainment, travel, and transportation. Calculate this figure based on a year's worth of expenses, then multiply that times the number of years you want to provide this income.
Once you've done that, add your short and long-term debts and your family maintenance expenses.

Step 4
Now that you've tallied all of your income needs, figure out what resources you have to meet them. To do this, add all available savings, stocks, bonds, mutual funds, existing life insurance (such as group life through your employer), and Social Security. You and your spouse can find out how much you'll get through the Social Security Administration (SSA) by visiting the SSA’s website, where you can get an estimate of how much you should have in Social Security benefits. Also add your present salary, and assume 5 percent compounded interest each year if you expect salary increases over time.

It's important to count only liquid assets (those that could be quickly converted to cash) among your resources. You shouldn't count items such as your home or automobile, because selling them for cash when you're gone would mean changing your family's lifestyle.

Step 5
Subtract your resources from your total expenses. The figure you get should represent the amount of life insurance you should buy.

Don't be daunted

Snowdon says the final figure that shows how much life insurance a person needs can be quite alarming. If you end up with an astronomical figure that requires a premium that is too high, he recommends you go through the analysis again and select areas for which you think you can allocate less money.

"Many people will look at the final figure and say, 'I can't do that,'" Snowdon says. "You have to look at it, figure out which is the most crucial, start making adjustments, and go from there."

A must-know: the equation for the future value of money

Calculating your life insurance needs will require two equations you may have picked up in Finance 101: the future and present value of money.

The future value of money equation tells you how much your money will be worth in a given number of years while earning a given rate of interest. This equation is essential if you are calculating how much money you'll need in the future because of inflation, or what your death benefit will be if you choose to invest the money at a given interest rate.

The present value of money equation tells you what your money is worth before it has been invested for a given number of years at a given rate of interest. This is important if you have an amount of money you need in the future, and you need to know how much life insurance coverage you should buy now.

If this sounds complex to you, don't fret. As long as you have a calculator (preferably a financial calculator, which is used by accountants and finance professionals), these equations are no sweat.

Here's how the future value of money equation works: Say that average college education costs are $20,000 annually for a private four-year institution, and you want to figure out how much it will cost in four years if college costs keep going up 5 percent per year. You would multiply 20,000 by 1.05 (1 represents the present cost, and .05 is 5 percent inflation) four times (or 1.05 to the fourth power).

How to Buy Life Insurance

Buying life insurance is an easy way to protect your family after you're gone. If you know what to look for, you can get great coverage at a price you can afford.

Why buy life insurance?
Topping the list of reasons to buy life insurance is the financial protection life insurance offers. If you're single and just starting out, you may not need life insurance. But as you take on more responsibilities and your family grows, your need for life insurance increases. The proceeds from a life insurance policy can replace the income lost to your family upon your death. You might also want to buy life insurance to pay off debts and expenses, leave money to charity, and cover final and estate expenses.

Choose term or cash value
There are two basic types of life insurance: term life insurance, which provides life insurance coverage for a specified period of time (the term), and cash value (permanent) life insurance, which combines a death benefit with a cash value component. Cash value insurance offers lifetime protection, while term insurance may be the most affordable option if you're buying life insurance mainly for the financial protection it offers, and your need for life insurance is temporary (until your children leave the nest, for instance). Some term policies (called "convertible") will permit you to exchange the term life insurance policy for a permanent one at some point.

Decide how much coverage you'll need
The amount of life insurance protection you should buy depends on how much income your survivors will need, how much you own and owe, and the amount of other life insurance available to you. If you're married, both you and your spouse should consider buying life insurance. One of the easiest ways to estimate how much life insurance protection you should buy is to use a life insurance needs calculator.

Pick a number between 1 and 30
Term life insurance is usually offered for periods ranging from 1 to 30 years. Consider choosing a term that matches your need for life insurance protection. For instance, if your main reason for buying life insurance is to protect your 7-year-old twins until they're out of college, you'll want to buy a policy with a term of at least 15 years.

How much will it cost?
How much you pay for life insurance will depend on a number of risk factors, including your age, your health, whether you use tobacco, your family health history, and the type and amount of life insurance you're buying. Keep in mind that the premium you're quoted initially will increase later. For instance, when you buy term life insurance, rates are guaranteed only until the end of the term (annually for annual renewable term or at the end of a specified number of years for level term). While most life insurance policies can be renewed at the end of the term, you'll pay a higher premium for coverage.

Shop around
When comparing quotes for life insurance, make sure that the insurance coverage you're comparing is similar. And remember, any policy that you buy is only as good as the company that issues it. Find out what rating the company has received from major ratings services, such as A. M. Best or Standard & Poor's. These companies evaluate an insurer's financial condition and claims-paying ability. The company giving you a quote should provide you with this information. You can also contact your state's department of insurance to find out more about an insurer's record.

Submit an application
Once you're ready to purchase a life insurance policy, you'll fill out a life insurance application that contains questions about your current and past health history and lifestyle. You'll generally be required to take a medical exam, arranged and paid for by the insurance company. The answers you give on your application, along with the results from the medical exam and your past health history, will help the insurance company determine whether to offer you a policy, and if so, at what price.

Learn the lingo
Maybe a life insurance contract isn't as exciting as a best-selling novel, but read it anyway. Policy provisions, the amount of benefits, the premium, and other charges you'll pay will be listed along with other important information such as the beneficiaries you've named and the premium guarantee period. Make sure you understand everything in the policy. Under the laws of your state, you may have a "free look" period (typically at least 10 days) during which time you can cancel the policy without penalty.

Top 10 Most Dangerous Jobs

Do you work in a dangerous occupation? According to the Bureau of Labor Statistics, the top 10 most dangerous jobs are:

1. Timber cutters
2. Airplane pilots
3. Construction laborers
4. Truck drivers
5. Farm occupations
6. Groundskeepers
7. Laborers
8. Police and detectives
9. Carpenters
10. Sales occupations

Do you have the life insurance protection you need?
It's a fact that some occupations are riskier than others. But no matter what you do for a living, take a look at your life insurance needs. Life insurance can help you financially protect your loved ones after you die. If you're single, and no one is depending upon your income for support, you probably don't need life insurance. But if any of the following is true, consider buying life insurance:

  • You're married and your spouse depends on your income
  • You have children
  • You have an aging parent or disabled relative who depends on your income
  • Your retirement savings, pension, or other cash accounts won't adequately support your loved ones after you die
  • You have a large estate and expect to owe estate taxes
  • You own a business

Calculators and worksheets are available online to help you determine how much life insurance you need. You may want to contact an insurance agent or broker who can help you determine what type of life insurance is best for you and the amount of coverage you need.

Do you have the disability insurance you need?
If you work in a high-risk occupation, you probably know how important it is to have disability insurance coverage. But don't rely on government programs such as Social Security and workers' compensation as your main source of protection. In reality, government programs pay only limited benefits under restrictive terms (e.g. you must meet a strict definition of disability to qualify).

Your employer may offer group disability insurance at low or no cost to you. But you may also want to consider purchasing an individual disability insurance policy. Although you'll pay more for individual coverage than for a group policy, you often get more benefits. And keep in mind that if you leave your job or otherwise terminate your relationship with a group, you can't take your disability policy with you, and you usually can't convert it to an individual disability policy. This means that you may be left without disability coverage when you need it most.

Shop around for coverage
Since many different types of life and disability policies are available, it's important to shop around for coverage to find a life insurance policythat meets your individual needs. Since premium costs vary widely, get quotes from several insurance companies. Just make sure you're comparing policies that offer similar benefits.


Top 10 Auto Insurance Myths

The color of my car determines my auto insurance rate. My credit score has no bearing on my insurance premium. I have auto insurance coverage so my new car is already covered… right?

Maybe not! Below is a list of fallacies many car owners believe and drive by each day. The truth just might make you change course.

Myth #10 "No-fault insurance means it's not my fault!"
False. No-fault insurance means that your insurance company pays for your damages regardless of who's at fault.

Myth #9 "The color of my car affects my insurance rate."
False. The color of your car does not impact your car insurance rate. What does influence your rate is your vehicle's year, make, model, body type, and engine size, along with your credit history and driving record.

Myth #8 "If I lend my car to a friend and that friend is in an accident, his or her insurance company will pay for the damages… right?"

False. Your car, your responsibility! And guess what, even though you weren't present at the time of the accident, you still will receive a mark on your insurance record and your insurance premium could possibly go up.

Myth #7 "My insurance rate is set by the government."
False. The government does not set your car insurance rate. Where you live, your credit score, marital status and your driving record is what actually affects your premium.

Myth #6 "I recently paid my insurance premium, so the new car I just purchased is covered."
Not necessarily. Most automobile policies require that the policyholder notify the insurance company or agent within a specified number of days, if indeed coverage is desired for the newly purchased vehicle.

Myth #5 "It's a fact. Males under the age of 25 pay more for auto insurance."
True and False. Males under 25 years old can potentially pay more for car insurance than female drivers. However, across the board, teenagers and seniors pay more for auto insurance, in large part because these age groups are typically involved in more automobile accidents.

Myth #4 "My credit score has no effect on my insurance rate."
False. Your credit score really does matter! Many Insurance companies take your credit score into consideration when deciding to increase or renew your auto insurance coverage.

Myth #3 "Even without comprehensive coverage, I'm still covered for theft, windstorms, hail and deer accidents."
False. Many drivers believe that if they only purchase collision insurance-which covers damage to your car resulting from driving accidents--that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That simply is not true. You need to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all of these situations.

Myth #2 "My personal auto insurance covers both my personal and business use of my car."
False. If you occasionally use your personal car for business purposes such as transporting clients, going to and from meetings or hauling business equipment, then you will more than likely need to extend your personal car insurance to cover your business use as well. Plus, if your employees use their car while working for you, you will want to also obtain a separate non-owned car insurance policy.

Myth #1 "I've never had or been involved in a car accident, so I don't need automobile insurance."
False. Some drivers are lucky enough never to have been or to be involved in an accident. However, car insurance is the best protection you can have in the event of an automobile accident. It's also a legal issue. You are legally required to have some form of auto insurance, and failing to do so carries some fairly strict punishments.

To find an auto insurance plan that fits your needs and budget, get free auto insurance rate quotes. You'll be able to compare car insurance rates from over 12 insurance providers, helping you save time and money on your auto insurance.

8 Things You Should Know About Auto Insurance

Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated points of auto insurance.

1) Determine appropriate coverage.
Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For example, Snyder notes that half of your auto insurance bill covers liability and "that has to do with how you are going to use the vehicle, such as for commuting to work and your driving record. If you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a speeding ticket on your record. You can control the other half of your premium which covers damage or loss to your vehicle, comprehensive and collision coverage."

2) Shop around for insurance.
"In most states," Snyder reports, "there are hundreds of insurers competing for business, so it`s possible to save hundreds of dollars by obtaining quotes from different auto insurance providers." Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your insurance provider to get more than one quote. "It pays you to shop around, especially if you feel you`ve been paying too much."

3) Look for insurance discounts.
"Many insurers will give you a discount if you buy two or more types of insurance from them, for example auto and home insurance," confirms John Marchioni, senior vice president of Personal Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni: "Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices."

4) Consider taking a higher deductible.
"You could lower your insurance bill by increasing your deductible," Mahrt says. "But just make sure you can pay the higher deductible if you file a claim."

5) Look into "stacking" coverages if you file an insurance claim.
Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured motorist coverages means "you can collect from more than one of your auto insurance policies. Most states prohibit this practice, but there are about 19 states that either allow stacking or don't address the issue either through legislation or litigation," according to Kummer, director of personal insurance for the Property Casualty Insurers Association of America. "Be sure to check your auto insurance contract to see if it's allowed. "Be advised that you`ll likely pay a higher insurance premium if you have stacked coverage. "It could be 10% to 30% more depending on the litigious nature of the state in which you reside," says Kummer.

6) Check with your insurance provider BEFORE buying a car.
"Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and the likelihood of theft," answers Selective`s John Marchioni. Remember to avoid shopping by price alone. "You want an agent and a company that answer your questions and handle claims fairly and efficiently," emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.

7) Notify your auto insurance company as soon as you change companies.
"Be sure to cancel your old policy," suggests PCI`s Dan Kummer. "Do it the same day, but don`t cancel your old policy until you`ve lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without insurance." One last thought from Kummer on the subject: "Most auto insurers specify in your contract that you can terminate your policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that over the phone.

8) Pick the insurance payment option that best fits your budget.
"Generally, most companies will give you the ability to pay over time, but that comes at a price," says Kummer. "Your payment could increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up."

Tips for getting the best insurance quotes.

General insurance tips:

  1. Have your current insurance policy with you when requesting your insurance quotes.
  2. Consider a higher insurance deductible.
  3. Place all of your insurance policies with the same company to qualify for a multiple policy discount.

For car insurance quotes

  1. Be sure all vehicle discounts are applied (Anti-lock brakes, Alarm system, daytime running lights, vin-etching, etc.).
  2. Take a defensive driving course.
  3. Be very accurate about your mileage to and from work.
  4. Ask about affinity discounts.

For a homeowners insurance quotes

  1. Be sure that your home is insured to its value
  2. Be sure all home discounts are applied (Alarm, smoke alarms, fire extinguishers, dead bolt locks, etc.).
  3. If your older home has been renovated, tell your agent.

For a life insurance quotes

  1. Consider level premium term insurance.
  2. If you are a smoker, quit for at least 13 months and request that your insurance company consider you for a nonsmoker insurance rate.

For a health insurance quotes

  1. Consider a higher co-payment or deductible.
  2. Join a group health insurance plan.

For a long-term insurance quotes

  1. Consider a longer elimination (waiting) period.
  2. Purchase coverage when you are young (premiums are lower).
  3. Pick a daily benefit based on where you live.

Life Insurance Extras

The types of options that a person may add onto their life insurance policy vary widely, but the common denominator is that they will increase the cost of the premiums. Yet they are usually well worth it.

One of the best known is referred to as the “Waiver of Premium” option. This allows for a waiver of premium payments for a specified time, should the policy holder be incapacitated due to an injury or illness. Since the insured party may be unable to earn an income, this protection can be a financial lifesaver, especially since it can cover family members as well. Some companies may specify conditions, such as becoming “totally” or “permanently” disabled, or may quote an age upon which this option may take affect.

Another popular extra is the Critical Illness Cover. If an individual is unable to work because of a critical illness (such as cancer), this allows part of the maturity amount to be distributed in a lump sum. It may also, occasionally, be paid out as a regular payment to mirror former income. Each policy has its own list of such illnesses, and if the patient recovers, the money does not need to be paid back. It can be purchased alone or in conjunction with whole life, term or endowment insurance.

The Accidental Death Benefit provides a large monetary coverage (up to 100% of the regular benefits) to beneficiaries, should the policy holder incur an accidental death. It can be added onto policies for spouses and children, and for a relatively modest premium, can offer up to a million dollars in coverage, in addition to the main insurance benefits.

Accelerated Death Benefits will allow the insured or their covered spouse to collect benefits if the insured is diagnosed with a terminal illness. For example, if a person is given less than a year to live, they may obtain up to 50% of their coverage, although the amount provided will decrease the total payable beneficiaries by that much upon death of the insured.

The Permanent Total Disability option provides for additional insurance benefits if the insured should suffer permanent total disability as a result of an accident or illness. This defines “permanent” as a condition that lasts at least 2 continuous years, of which there does not appear any chance of improvement or the ability to resume work.

These life insurance “extras” are just a sampling of what insurance companies may offer policy holders. They are usually called Rider Benefits because they run, or ride along, the main policy. All life insurance comparisons should include several companies, and individual situations should be discussed with qualified and experienced professionals. Some companies may include one or two options at no cost to make their policies more attractive and competitive, and this should not be construed as lessening the value of the extras in any way.

Life insurance coverage that’s appropriate for an individual and his or her family will offer peace of mind, and should be considered a top priority when planning finances.

Term Life Insurance Basics

There are several basic points to know when you are thinking about life insurance. When you are trying to understand term life insurance, you want to be sure that you understand the basics of how this type of life insurance works. That way, you can be absolutely sure that you have chosen the right type of life insurance for you

Term life insurance is the original form of life insurance. It is considered to be a form of "pure" insurance. This means that the actual policy itself builds no cash value. Without cash value, the policy cannot be sold for money. The other types of life insurance, such as permanent life insurance, whole life, variable universal life, and universal life, are all different in that they do have a cash value and can be sold for money before the policy is cashed in.

Term life insurance provides exactly what it sounds like – life insurance for a limited period of time. The term is the period of time, and it is decided upon when a person purchases the life insurance policy. A person can choose to purchase a term life insurance policy for one of several terms – such as a year, ten years, or thirty years.

When the term is over, the person who has the insurance has a couple of choices. They can either drop the policy and find another life insurance policy, or they can continue to pay for the policy. However, if they continue to pay for their same policy, the annual premiums will increase each year. If they choose to pay these increasing premiums, they can continue to be covered at the same rate that they have always been covered.

If the person who has the insurance policy dies during the term, the death benefit will be paid on the insurance policy. The benefit is always going to be paid to the person who is named the beneficiary. The person who gets the money may choose how to use it, although most of the time it is used for paying final expenses, medical bills, and other bills that have built up. The money can also be used for things like education and taking care of finances of the family members that were left behind.

Term life insurance is also usually the most inexpensive form of life insurance because it has the biggest coverage amount per premium dollar spent on the policy. As long as the contracts are up to date, and the premiums have been paid to the company, the term life insurance will pay the death benefit to the beneficiary. Term life insurance is similar to other types of insurance, in that the premiums are not refunded, whether or not a claim is filed. The premiums that are paid are money that is used to secure the death benefit, should it be needed by the beneficiaries. Term life insurance is the oldest form of life insurance, and still remains one of the most popular forms of life insurance.

Families and Life Insurance

Life insurance is something that you probably don't want to think about, because if you have a life insurance policy for yourself, most of the time no one will see it until you are gone. This is usually something that is very depressing, and therefore many people don't want to think about life insurance. However, when it comes to your family , life insurance is very important because it can provide you with peace of mind, and provide them with the money that they would need if something was to happen to you.

When you have a life insurance policy, it is important to note that even though your name is on the policy you are not going to be the one who benefits from it, unless you end up selling the policy for money, or unless you get sick and your life insurance benefits kick in while you are still alive. When you have life insurance, the people who will benefit form the policy will be your family. Therefore, it is important to think about them when you are deciding on your life insurance policy and seeing what type of policy you would like to have.

First of all, if you are married, your spouse will get the life insurance benefits, as long as she is stated as the beneficiary, or as long as your will claims that she should get the money. Even in cases where there is nothing that says who should get the money, if you are still married your spouse will get the money. If you don't have a spouse, the money will go to your children, depending on the type of policy and what it should be used for.

It is important that you think about what the life insurance policy will be used for by your family as you are taking it out. This will help you to make sure that the policy is enough money and that you'll be able to be satisfied with it. First of all, the life insurance policy will take care of anything that you might leave behind. This will include any bills that you have out, as well as your final expenses. Remember that the cost of final expenses is usually going to be a lot of money, so you want to plan accordingly. Also, if you have medical or hospital bills before you die, your family can use the life insurance money to pay for that as well.

Any money that is left in the life insurance policy after you have died will be used by your spouse and your children.. They can use it to pay their own bills, to pay their mortgage, and even to pay for school. This means that no matter what happens to you, if you have the right life insurance policy, you can go on taking care of your family even if you are no longer able to do so. This is something that is very important because it will help you know while you are alive that you are doing all you can to care for your family.

what is insurance

Insurance is a precaution against a possible unwanted outcome: in life and in business, it's a way of managing risk and keeping things on the move.

We use insurance to protect against the possibility of loss, usually financial. When we buy insurance, we transfer our risk to someone else in exchange for a payment or premium. Then, if we suffer a loss, insurance puts us back into a position pre-claim (reinstatement).

And if you think about it, nothing happens without insurance! We couldn't run businesses or drive cars, own homes or travel anywhere without it, because the potential risks would be too great. Insurance gives us the peace of mind and security we need to operate.

It works because insurance companies group together a large number of people who all feel exposed to the same possible circumstances. The company knows that, in any one year, the total premium collected from the group of people should cover the cost of the claims made by the unfortunate few who actually suffer a loss.

History of insurance

The earliest authenticated insurance contract (i.e. That which displays the characteristics of insurance in the sense of a transfer of risk of loss due to a fortuitous uncertain event in lieu of payment of consideration / premium), is a marine insurance contract on a ship “The Santa Clara” dated 1347 in Genoa. The policy is in the Italian language and appears in the form a maritime loan to avoid the canon (church) prohibition against usury.

The earliest insurance contracts did not appear in the form of a modern insurance contract, but rather was drafted in the form of either a fictional sale or loan, until the insurance contract proper was recognized and accepted.

The earliest insurers were merchants underwriting risks for fellow merchants, on a part time basis.

Until the 1800-1900’s premiums were not determined by statistics kept etc. as in the modern sense, but was often arrived at as a result of haggling.

The contract of insurance was not created as a result of judicial or legislative innovation, but by the merchants themselves as a result of commercial expediency and need (Necessity being the mother of invention).

Early legislation was passed to counteract fraud or malpractices.

It is evident from the implementation of the earliest legislative measures enacted that there was a distinct divergence between the legal position and what occurred in practice.

Very few reported cases exist, or legal principles were established by the judiciary on the Continent, until Lord Mansfield C.J. took office in the Highest Court in England. During his tenure in office a large number of cases and principles were established by the eminent judge , many of which today exist unaltered( examples of which would be that insurances contracts are contracts of good faith , the duty of disclosure , the effect of misrepresentation and non-disclosure on the insurance contract , the effect of fraud on the insurance contract , warranties , etc , to name a few ).

Due to the fact that insurers were in fact fellow merchants who underwrote risks on a part time basis, with no accurate data or statistics or experience to determine premiums, such “insurers” were clearly in an unequal or weaker bargaining position than the insured’s at the time. For this reason a large number of decisions handed down, and principles enunciated were to a large extent for the protection of the insurer.

However despite the establishment of corporate insurers and the advancements made in the determination of risk, statistics, data sharing and collection, experience, and expertise in underwriting risks, many of the early principles have not been adapted to suit modern times or take into account insurers greater bargaining power. This is particularly evident in the instance of the duty of disclosure where Lord Mansfield CJ in the seminal case of Carter V Boehm explained the duty of disclosure on the part of the Insured as being a duty to disclose facts which were within the own peculiar knowledge of the Insured, and which could not have been reasonably discovered by the insurer by reasonable inquiry or facts which were common knowledge to both the parties to the insurance contract.

Those policy wordings have to a large extent, remained unaltered and follow the example of the Lloyds policy wordings which had been created more than 200 years ago. This is particularly evident in the field of marine insurance. Personal lines insurance policy wordings however have been greatly improved and simplified in recent times.

Despite insurance being a “contract”, the general principles in contract law are not applied, or followed in the insurance context. This is particularly evident when one has regard to the principles relating to misrepresentation, non-disclosure, breach of contract, and the remedies available to the parties. The clearest example of this would be that the remedies available to a party in the law of contract would extend to damages, whereas in the case of the insurance contract the parties would not have the remedy of damages available to them.

Very often one finds that sight is lost of the above when dealing with the insurance contract, and more often than not, a large number of parties who are exposed / involved in dealings / interpreting the insurance contract do not take account of the remarkable background of this contract.

Source: Ombudsman for Short-term Insurance (www.osti.co.za)


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