United Insurance!

Term Life Insurance Laddering Approach

2011-09-25T05:42:00.001-07:00

In a blog post in April 2009, I wrote about Layering Term Life Insurance to provide different levels of coverage over a period of time. Layering or laddering several different term lengths can help address different time horizons associated with different needs for life insurance.
As an example, a 35 year married man with two young children (ages 7 and 13), earning $75,000 annually, has 20 years left on his mortgage (currently $250,000). He and his wife expect both children to attend college. Here’s how a laddering plan would work for this client:

Purchase a 30 year term policy with a $2,250,000 death benefit (Income x 30 years).
Purchase a 20 year term policy with a $250,000 death benefit to pay off the mortgage (as the mortgage amortizes as he pays it down, extra benefit can go toward supplementing college funds).
Purchase a 15 year term policy with a death benefit of $150,000 for the younger child’s college expenses.
Purchase a 10 year term policy with a death benefit of $150,000 for the older child’s college expenses.

Essentially, he would have a $2,800,000 death benefit for the first 10 years, then the benefit would drop as each shorter term policy expired (as the need for each policy was eliminated), leaving him with $2,250,000 of benefit for the final 10 years.
I have done this laddering for several clients over the years, using separate policies. However Legal & General America, through their Banner and William Penn companies has developed riders you can add to a base policy, rather than doing it though separate policies. In the above example, one would purchase a 30 year base policy of $2,250,000, then add the following riders: $250,000 for 20 years, $150,000 for 15 years and $150,000 for 10 years. As each rider expires, the cost of the rider would disappear as well.
While serving the same purpose as purchasing separate policies, this method could prove to be less costly, as there wouldn’t be separate policy fees that are built into each separate policy’s premiums. I expect to see other companies following Legal & General’s lead and come up with their versions of these riders.
As our term life insurance quote engine isn’t capable of quoting with these riders, feel free to contact us at 866-691-0100 ext. 105 if you would like to get quotes with these riders.

Applying for Life Insurance – Do Medical Exams Scare You?

2011-09-25T05:41:00.002-07:00

I wish I had a dollar for every prospective life insurance client I spoke with who was nervous about getting their blood drawn. I have even had a few people decide against purchasing life insurance because they couldn’t confront “the needle.” Medical exams, including blood tests, are part and parcel of the life insurance application. It provides valuable data to the underwriter as to what type of risk you present to the life insurance company. Along with a review of your application and medical records, the underwriter will determine your health class and premiums you pay for the policy.
For those of you who are a bit more than squeamish about getting poked in the arm with a needle, here are some tips for relaxing during your blood draw I found at labtestsonline.org:

Breathe: Take three slow breaths, counting to three for each one and breath through your nose. Breathe out through your mouth, counting to six. Breathe deeply to your abdomen and not to your chest – you will get deeper breaths.
Relax your muscles: Focus on individual muscles and “tell” them to relax.

Focus: Find an object or point (spot on the wall?) to focus on.

Count slowly (and silently) to ten: Breathing while you do this is highly recommended.

Talk to someone in the room: This will take your attention away from the “event.” Sometimes, it helps just to acknowledge your anxiety about the blood draw.

You should also realize that the person giving the exam is trained and is more than used to dealing with our fears and anxieties. They have “seen it all,” so you shouldn’t be embarrassed about your behavior. They will usually do what they can to get you to relax. When all else feels, just grit your teeth and go through what you need to go through because, by applying for life insurance, you are doing a selfless thing for your family. The fact that you have to endure the needle makes it that much more selfless. Pat yourself on the back – you deserve it.

If you have been putting off applying for life insurance, you can start by getting your life insurance quotes now. Just follow the directions above and you should get through the process relatively unscathed.

Life Insurance Awareness Month – with an Assist from Lamar Odom

2011-09-25T05:41:00.000-07:00

As a fan of the Los Angeles Lakers (sorry Celtics fans), I have seen some great players over the years – Jerry West, Wilt Chamberlain, Magic and Kareem, Shaq and Kobe, to name-drop a few. When he plays his heart out, I can utter the name Lamar Odom in the same breath with the others. Up until recently, I considered Lamar to be one of the greatest underachievers in the history of the game. He elevated his game this past year and won the prestigious Sixth Man Award, one he richly deserved.
However, in September of this year, Lamar Odom will be making an assist that will elevate him to an even higher level for me. He will be the spokesperson for Life Insurance Awareness Month, sponsored by the Life and Health Insurance Foundation for Education (LIFE). I believe by putting his celebrity to better use than in the TV reality show Kloe & Lamar, Mr. Odom will be promoting the concept of protecting your family with life insurance to a huge sports-watching public.

Lamar has a great story about the value of life insurance to tell – his mother passed away from colon cancer when he was twelve years old. Because she had life insurance, he was able to continue attending his private Catholic high school, where his mother had enrolled him so he didn’t have to go to the public school in his rough neighborhood. As a single parent, she knew the value of a good education and, in spite of her modest income, she purchased a life insurance policy to ensure that Lamar would be able to continue his education in the event of her death – which, unfortunately happened much too soon.
When Lamar graduated high school as one of the best basketball players in the country, he probably could have immediately entered the NBA, but to honor his mother (and because he valued his education), he enrolled in college. Had his mother not purchased her life insurance policy, Lamar might not have been able to attend college.

The Greatest Assist in his Life

Lamar has had some great assists on-court throughout his career from players like Kobe Bryant, Pau Gasol and Derek Fisher, but the greatest assist he has ever received was the one his mother gave him when she purchased her life insurance policy. That’s why Lamar has agreed to be the spokesperson for Life Insurance Awareness Month. ”Too many Americans haven’t done the kind of planning that my mom did,” says Lamar. ”They don’t have life insurance because they don’t think they’ll ever need it. I’m sure my mom didn’t think that she’d die at age 35, but that didn’t stop her from doing the responsible thing.”
When Lamar’s mother died, he had no idea how important his mother’s unselfish act was, but he fully realizes it today. ”Purchasing life insurance was one of the first things I did when I entered the NBA,” he says. ”As a husband and father of two beautiful children, I want to make sure the people I love will be provided for.”
If you don’t have life insurance, take an assist from Lamar Odom and score – protect your family’s future with a life insurance policy. To get a free life insurance quote, click the Start Your Instant Quote button now.

Life Insurance for Stay at Home Moms

2011-09-25T05:40:00.000-07:00

“Are you working?” I asked the young mother of two whose husband was purchasing a life insurance policy for himself. She answered, “no, I’m a stay at home Mom.” The husband told me they had thought of purchasing a policy for her, but since life insurance is “income replacement,” they would wait until she went back to work before they would consider a policy for her.
I bluntly asked him, “if your wife were to pass away, what would it cost to replace her “services?” After looking at me with a “I can’t believe you asked that question look”, they started looking at how much it would cost to get a full-time child-care provider, a housekeeper (who cooks), a driver to drive the children to school (when they started) and doctor appointments, etc., etc. I told them the replacement cost of the average contribution a wife makes at home is worth about $45,000 a year (based on a recent survey done by Penn Mutual Insurance Company).
Was that amount worth protecting for them? After looking at that number, they decided to purchase a 20 year term life insurance policy with a death benefit of $500,000. As she was young (27) and healthy, that policy would only cost them about $19 a month. Where else can you purchase peace of mind for less than $20 a month?
Stay at home moms – if you would like to see life insurance quotes for you, click the Start Your Instant Quote button now.

Benjamin Franklin

2011-09-25T05:39:00.000-07:00

I thought long and hard on President’s day of a relevant topic to post, but I could not think of an adequate tie-in. However, all those thoughts of men in white wigs reminded me that, although never president, one of the founding fathers of the U.S. is also responsible for starting the modern-day insurance system in the U.S.
In 1751, according to PBS.org, Benjamin Franklin and his Union Fire Company met with other Philadelphia fire-fighting companies to discuss the formation of a fire insurance company. Out of those discussions, the Philadelphia Contributionship was formed, which was the first successful fire insurance company in the colonies. About seventy Philadelphians initially subscribed to the contributionship.
In May 1752, the board of directors, of which Franklin was a member, decided to form an insurance company. Members agreed to make equal payments to the contributionship, which would be used to pay for losses any member would sustain through fire to his property.
Mr. Franklin also proposed other forms of insurance, including life insurance and annuities, according to PBS.org. In his Silence Dogood letters, he recommended insurance for widows and orphans, much like a current-day pension. Late in life, he also proposed crop insurance, based on the same type of organization as the Philadelphia Contributionship.

Primary and Contingent Beneficiaries

2011-09-24T06:14:00.001-07:00

One question that comes up fairly regularly in filling out a life insurance application is who should my beneficiaries be and what’s the difference between a primary and contingent (or secondary) beneficiary?
A beneficiary is a person or entity entitled to receive the death benefits paid under a life insurance policy. A beneficiary can be primary or contingent (or secondary).
If the primary beneficiary is alive when the insured dies, then the primary beneficiary receives the death benefit. If the policyholder has named a contingent beneficiary, the contingent beneficiary will receive the death benefit only if the primary beneficiary is not alive when the insured dies. One can name several primary and contingent beneficiaries and assign a percentage of the benefit to each.
If no valid primary or contingent beneficiary is living or exists when the insured dies, the benefits will be paid as follows:

If the insured is also the policy owner, the benefits will be paid to the insured’s estate.

If the insured is not the policy owner, the benefits will be paid to the policy owner or, if the policy owner is not alive or does not exist, the benefits will be paid to the policy owner’s estate.

The policy owner maintains the right to choose or change the beneficiary unless the policy owner makes an irrevocable beneficiary designation, such as in an irrevocable life insurance trust.

Factors to Consider When Purchasing a Life Insurance Policy

2011-09-24T06:13:00.002-07:00

Insurance Company Financial Strength

Whether you are purchasing term insurance, return of premium life insurance, whole life, universal life or survivorship life insurance, one of the most important issues to consider is the financial strength of the insurance company that’s providing the insurance. After all, you want to make sure the company will still be in business when your beneficiaries need to receive the insurance benefit. To check the financial health of an insurance company, you should turn to one or more of the companies that make a business of analyzing companies in the insurance industry. The best known rating services include Standard and Poor’s, A.M. Best, Moody’s and Fitch. Learn about life insurance company financial ratings, here.
Each of these services grades the insurance companies on financial strength, using letter grades to indicate how secure they consider the company.The actual grades vary by rating company. S&P uses AAA as its highest, for example, and Best uses A++.
Insurance Company Rating Categories indicates the rating service’s opinion of an insurance company’s ability to meet its obligations to policyholders,based on that company’s reported financial performance over several years.
Along with financial health, you want to choose a company that is responsive to its policyholders. That’s why it is a good idea to check with your state’s insurance regulating body to make sure there are no serious complaints against any of the companies you are considering.

Availability of Riders

Another factor that can influence which policy to choose is the availability of riders (rider = extra benefit added to a policy) that you want to purchase. One rider that is important is waiver of premium where if you’re disabled, premium payments are made by the insurance company.
Perhaps you would want a convertible policy, which allows you to switch from term insurance to whole life with no questions asked, another way to guarantee that you can purchase insurance even if your health declines.

Cash Value for Permanent Policies

When deciding among permanent life policies, you should be interested not only in the death benefit, but in the potential growth of the cash value that these kinds of policies offer. Because these policies are more complex than term policies,you may have to dig a little deeper to make your comparison. We can help you with those kinds of policies. Contact Us re: whole life.
For whole life policies, your LifeInsure.com representative will get you a number of competitive illustrations showing how the cash value might grow, based on interest and dividend assumptions.
Contact Us Call LifeInsure.com toll free at 866-691-0100 or Email at any time

LIFE presents The Seven Wonders of Life Insurance

2011-09-24T06:13:00.000-07:00

As part of this years Life Insurance Awareness Month, LIFE (The Life and Health Insurance Foundation for Education, a non-profit organization dedicated to educating the public about life, health, disability and long term care insurance) has produced a great piece about the importance of life insurance and the way it provides security for families. Visit www.lifehappens.org if you would like to see the original article, The Seven Wonders of Life Insurance, and some great supporting videos. In the meantime, here are the key points made in the article:
Many people purchase life insurance to pay for funeral and other final expenses. With proper planning, life insurance can provide much more for your family. Here is what life insurance can do for you:

Life insurance can buy time.
It affords your family and loved ones the time they need to grieve. Without life insurance, they might need to scramble to come up with the funds to pay for final expenses.

Life insurance provides a fresh start.
It allows your family to pay off debt (including the mortgage) so they can start with a clean slate.

Proceeds from a life insurance policy can generate income
Your family might choose to invest the death benefit in a conservative investment and live off the interest for years to come, leaving the principal intact.

Life Insurance can offer flexibility.
Your surviving spouse can take time off of work, if needed and/or perhaps switch to a new job that offers a more flexible work schedule, leaving more time to care for the family.

The funds from a life insurance policy can create opportunities.
They can provide funding to start a business or pay for schooling to train for a new career.

Life insurance can fund the future.
It offers a way to fund long-range goals like a college education for the children or to fund a retirement plan for a more-comfortable retirement.

Life insurance can leave a legacy.
It gives parents a chance to leave future generations with the legacy of long-term financial security.

Celebrate Life Insurance Awareness month by reviewing your life insurance policy to make sure you have enough coverage and, if not, get term life insurance quotes or universal life insurance quotes by clicking Start Your Instant Quote above and supplement your current coverage. If you don’t currently own a life insurance policy, now is a great time to start.

Life Insurance Rates Database – Open to The Public

2011-09-24T06:12:00.001-07:00

Not too long ago a consumer interested in life insurance would have to call on a bunch of agents to get quotes and compare prices (or have agents come see them). Twenty plus years ago an agent would look up the cost for someone in a rate book or rate manual and give a quote often for their company. You could trust that the person in front of you had a fair price or to compare you’d call on another one or two.
The next evolution which changed life insurance quoting was the personal computer, since an agent could check software on their computer and give you a printout, but it was still usually from one or two companies for which the agent had software. A consumer could then collect printouts from a few different companies. The Internet changed everything. One can learn about life insurance and get instant life insurance quotes from all the most competitive companies and can do it online, instantly and anonymously.
This is a perfect example of Internet shopping. Shopping for life insurance has evolved from having a life insurance advisor visit one’s home or office with a rate book, to seeing an agent or several agents with printouts from a computer, to present, where one now has the ability to view an entire life insurance rates database on one’s own computer screen through specialized life insurance sites, like LifeInsure.com. These sites allow one to see the prices anonymously and instantly.
This evolution in life insurance quoting has another unintended, but positive, consequence benefiting of the American consumer. Because of the full disclosure now available in life insurance quoting and the complete transparency, life insurance companies must compete. The best rates are shown instantly for all to see! Thus we have seen rates for term life insurance continue to get lower year after year. With life insurance on the Internet, that industry has not only seen an evolution but a revolution of full disclosure with the consumer winning.

Life Insurance Trends – What the Statistics Say

2011-09-24T06:11:00.001-07:00

Life Insurance Awareness Month, the time of year that the insurance industry reaches out to educate the American public about life insurance. LIMRA, an association that provides consulting, research and other services to insurance and financial services companies worldwide, publishes their Facts of Life, a statistical analysis of the life insurance industry. Out of all the life insurance statistics they provide, I find the ethnic studies to be the most interesting. This is from their 2011 study:

More than 80 percent of African Americans believe the main reason to buy life insurance is because you love your family:

In comparison to other ethic groups, African Americans are more concerned about not putting a burden on others with their funeral expenses and leaving an inheritance for their family. They are more likely to own life insurance for these reasons than other ethnic groups.

African Americans have a better understanding than other ethnic groups about how life insurance works, including how it protects the family and why families should own it.

When buying life insurance, African Americans, compared to other ethnic groups, place more importance on being certain they understand exactly what they are purchasing and less importance on getting a fixed price that cannot increase.

Seventy percent of Hispanics think they need life insurance:

Hispanics are less likely to feel insurance agents are knowledgeable and consequently are less likely to buy from an insurance agent than other ethnic groups.

Hispanics are more likely to cite paying for a college education as a reason to own life insurance.

Hispanics are more likely to prefer to buy life insurance direct from a company via the Internet than any other ethnic group.

These statements are from several of LIMRA’s life insurance consumer studies and are not based on my experience. While I find statistics like these to be fascinating, I believe that any time you group the experience of any ethnic group, you are liable to make broad generalities.
As people come to our Website and get life insurance quotes anonymously, we have no idea of the ethnic make-up of each visitor. When our visitors apply for a policy, all of our contact is via telephone or email, so we still don’t learn the ethnicity of our visitors.
LIMRA’s mission is to help their members improve their marketing and distribution effectiveness. I imagine the life insurance companies can use the data from these surveys to learn how to market to different groups. However, because of the relative anonymity of the world of online life insurance brokers, this is data that will never be used by us…and I like it like that.

LIFE presents The Seven Wonders of Life Insurance

2011-09-24T06:10:00.001-07:00

Life insurance can buy time.
It affords your family and loved ones the time they need to grieve. Without life insurance, they might need to scramble to come up with the funds to pay for final expenses.

Life insurance provides a fresh start.
It allows your family to pay off debt (including the mortgage) so they can start with a clean slate.

Proceeds from a life insurance policy can generate income
Your family might choose to invest the death benefit in a conservative investment and live off the interest for years to come, leaving the principal intact.

Life Insurance can offer flexibility.
Your surviving spouse can take time off of work, if needed and/or perhaps switch to a new job that offers a more flexible work schedule, leaving more time to care for the family.

The funds from a life insurance policy can create opportunities.
They can provide funding to start a business or pay for schooling to train for a new career.

Life insurance can fund the future.
It offers a way to fund long-range goals like a college education for the children or to fund a retirement plan for a more-comfortable retirement.

Life insurance can leave a legacy.
It gives parents a chance to leave future generations with the legacy of long-term financial security.

Business Insurance for a Lodging Establishment

2011-09-23T17:45:00.003-07:00

Commercial Auto Insurance

If the business will use a vehicle, then that vehicle must be covered by commercial auto insurance. Personal auto policies generally do not cover losses caused when a passenger vehicle is used for commercial purposes. This will be necessary insurance if vehicles are used in the business.
Other Insurance
Lodging businesses are only profitable while operating with guests. If there is a substantial disruption of your business, such as a fire, remember property insurance will only replace the property - not the lost income. The lodging business owner should consider business interruption insurance. Lodging businesses are increasingly computer dependent, consider specific network risk coverage.
Finally, it cannot be stressed enough that certain natural disasters, such as floods and earthquakes require separate endorsements or separate policies and are not covered by most property policies. So it may be that the old line, "location, location, location," as the most important factor in the value of a property applies to its insurance as well.

Before You Purchase Commercial Auto Business Insurance

2011-09-23T17:45:00.001-07:00

Commercial auto insurance is one of the most important aspects of your business insurance program. If your business uses a vehicle, or many vehicles, you need commercial auto insurance and you will want to ask your business insurance professional some important questions. You will also want to provide your business insurance professional with a complete picture of your vehicle use.
Consider the following points and ask the following questions.

How Many Vehicles and Drivers Will the Business Insure?

Commercial auto insurers often separate coverage types based on the number of vehicles and drivers to be insured. Fleet insurance is an option for businesses that will have a number of vehicles and drivers. The number of vehicles differs with each insurer and may depend on the class of vehicle. But, fleet insurance may be a less expensive alternative than individual, per vehicle policies.

What is the Policy Definition of Commercial Use?

Your personal auto policy will exclude coverage for commercial uses of your vehicle. A commercial policy will establish a definition of commercial use as well. It is important that you read the definition and discuss this with your insurance professional. If there is any question, it is better to obtain a commercial auto policy so that, in case of an accident, there is no chance of being uninsured.

How Can You Lower Premium Costs?

Commercial auto business insurance premiums can be lowered by:

Business Location - the location of the vehicles determines premiums for theft.
Driver Records - hire only qualified drivers with safe driving records.
Choice of Vehicle - sales people may want sports cars, but five-star safety rated, domestic, mid-sized sedans have the lowest premiums.
Deductibles - can your business afford part of the risk and maintain a high deductible? If so, your premiums will be lower.
Safety and Anti-Theft Devices - alarms, GPS tracking, air bags, seat belts, and other such devices can significantly lower premiums.

Insure U for Small Business Tips on Lowering Premiums

Special Commercial Coverages and Considerations.

Certain businesses must adhere to federal and state regulatory standards in the operations of their vehicles. For example, if your business will be hauling cargo interstate, there are specific Department of Transportation requirements for insurance that must be met. You will need to make sure you and your insurance professional have a thorough understanding of those requirements. Also, if you will be delivering or hauling for others or using other's equipment such as leased trailers or rental equipment, you will need hired or non-owned vehicle coverage.

Who is the Insured?

Make sure you know the insured. Sound simple? Maybe. But, all to often businesses set up a leasing company to lease equipment to the main company and the leasing company is the titled owner of the vehicles. A common mistake is to identify the main company and not the leasing company as the titled owner on the policy. Or, the dba of the company and not the full name of the company is listed. You want the full name of the company as an insured, the titled owner, any affiliates, and dba, and all employees as insureds on your commercial auto policy.

An Overview of Casualty Coverage

2011-09-23T17:44:00.000-07:00

Casualty insurance is typically combined with property insurance and often referred to as “property and casualty” insurance. However, there is a difference in the type of coverage. This is especially true after the events on September 11, 2001 and the hurricanes in 2004-2005.
Property insurance insures the location of the business while casualty insurance insures the business.
For example, if your business is on the seventh floor of a building and a natural disaster, such as a flood, occurs that wipes out the first floor, but causes no damage to the seventh floor, then any loss would not be covered by your property insurance because there is no direct loss to the location of the business. However, if you have business continuation or business interruption insurance you may have coverage for the indirect loss to your business.
Many of these products are developing in today’s world. Insurers are making it necessary to carry additional casualty insurance to cover certain types of losses. These types of coverage include:

Terrorism Coverage – Acts of terrorism or war are not covered by traditional insurance policies – or, so claims the insurers. The attacks on September 11, 2001, resulted in claims exceeding $30 billion. Insurers now specifically exclude terrorism and require the purchase of a terrorism policy.
Flood Insurance – Floods are generally not covered by typical property insurance policies and a separate flood insurance policy is necessary to protect against that risk.
Political Risk or Government Liability – If you do business overseas or have substantial government contracts, then you may want to look into this type of coverage. It protects against a sudden loss due to a sudden political change in a country or withdrawal of a contract without recourse.
Other Types – There are other types of casualty insurance that seem to be developed in response to the latest news: Cyber-Liability, Identity Theft, Cyber-Fraud, Employee Theft, etcetera.

Some of these casualty policies may be critical for the safe operation of your business. More often though, standard casualty coverage offered with a business owners’ policy will be enough casualty coverage and these types of policies are ‘flavors of the month.’
Casualty insurance also includes certain types of bonds or other limited insurance that have been long standing products and may be very necessary to your business.

Employee Theft and Dishonesty – This coverage protects your business from loss or damage caused by employee theft. If your employees have access to company funds or handle cash transactions you may want to consider this coverage for the employees.
Surety Bonds – This form of casualty coverage referred to as a bond insures someone you will contract with that you will complete the contract. If you are in construction or plan on bidding for government jobs, then you will be required to obtain a surety bond to insure your work.
Casualty insurance is a different type of insurance than property insurance. We will review different forms of casualty insurance and how these can work within your business plan.

Introduction to Property Insurance

2011-09-23T17:43:00.000-07:00

Property insurance insures your business against loss or damage to the location of the business and to its contents. It will also insure against loss or damage to contents under your control. Finally, if your business rents or leases a location or travels to other physical locations, then your business will be required by the property owner to carry property insurance by the terms of the lease or contract.
The more kinds of loss the policy covers, the higher the premium. Property insurance comes in two forms:

Broad Form – This type of policy identifies a number of different types of disasters and covers against loss from all identified causes in the policy.
Single or Specific Peril – This type of policy insures against loss only from the identified peril. This is typically a separate fire policy. However, other single perils can be insured against, for example, terrorism.

For most small businesses, a broad form property insurance policy is included in a packaged policy known as the “business owners’ policy” and will be the best coverage for the premium dollar. Some businesses, however, either because of specific risks or unusually high risk, may not be eligible for such a package. In that case, several specific peril policies may need to priced and examined.
Property insurance policies can be modified:

Endorsements – Endorsements add increased coverage or identify other business locations that are covered. This can include a customer’s location, for example, if your business is working at their location. Endorsements are a big benefit for your business and can be added, typically by a phone call, to a policy relatively easily if you have a good insurance professional.
Exclusions – Exclusions take away coverage. Your insurance professional or insurer will tell you that property policies are “always” written with the “such-and-such” exclusion. Exclusions are the business insurance purchaser’s worst enemy. The most recent example is after the hurricanes in 2004-2005. Many insurers claimed that the exclusion in their policies for “wind” damage excluded much of the damage from coverage. Regardless of what an insurer tells you: exclusions take away coverage.
Schedules – Schedules are lists of covered locations and property. These must be updated regularly and at any time a location or major covered equipment changes or is purchased. Good insurance professionals will contact you on a regular basis to discuss updating scheduled locations and equipment. If a location or piece of equipment is not a “scheduled” location or content, there is a possibility that a claim could be denied on that basis.

Property insurance can pay damages or loss based on one of two ways:

Actual Cash Value (or, ACV) – Actual cash value means that your loss or damage is valued at the value of the property loss. Sounds fair. But, if a $100,000 car lift in your garage has been depreciated over a five-year period it may be found to have an ACV of $20,000 at the time of loss. You can’t purchase a new lift for $20,000.
Replacement Value – Replacement value means that you are reimbursed the actual amount necessary to replace the equipment when it is lost. In the example above, if the new lift costs $120,000 to replace, then you get a new lift for $120,000.

Replacement value coverage typically carries higher premiums.
All of the above elements must be considered when reviewing and comparing property insurance for your business. A comparison made only on the premiums ignores critical aspects of the policy.

Understanding Insurance

2011-09-23T17:39:00.001-07:00

Many people find insurance policies to be unbearably complex documents, and not without reason. These contracts often appear to be piles of forms with impenetrable legal jargon and terms of art, with no clear order among them. This is true of all sorts of insurance policies, whether they are the homeowners, health or auto policies of individuals, or the Comprehensive (or Commercial) General Liability (“CGL”), Directors & Officers Liability, Commercial Property, Workers’ Compensation/Employer’s Liability, or Professional Liability policies purchased by businesses.

There is a method to the jumbled madness, however, and with the five easy steps below, the meaning of the pricey contract you bought will come into focus. While there is no substitute for the professional advice of attorneys and insurance professionals in this area, a little direct familiarity with your insurance policy will help you receive more benefit from that advice and from the policy itself.

Step 1: Swiss Cheese. Yes, I said Swiss Cheese. That’s the physical model you should have in mind when reading any insurance policy, no matter the type of coverage. Make sure it’s a slice, and not a block or a wedge. The cheese is your coverage; the empty spaces around it and within it are noncoverage. Don’t worry, this will make more sense in a moment.

Step 2: The Rectangular Border. The outer edges of the cheese slice represent the greater universe of coverage available to you, and the text of the policy corresponding to those edges is the “insuring agreement” or “coverage grant” (the phrases are used interchangeably). Usually you can find the insuring agreement at the beginning of the longest individual form within your policy. The insuring agreement is the insurer’s first and main promise to you, the promise to “pay,” to “indemnify,” or to “defend and indemnify,” and everything else in the policy is derivative or qualifying of it. If the policy were knighthood status, the insuring agreement would be the king or queen’s ceremonial sword tapping your shoulder as you receive your new title. Before then, you were just a commoner, that is, an uninsured.

There may be more than one insuring agreement in your policy. Homeowners policies, for example, typically contain both property and liability coverages. Where that is true, you should examine the coverages separately, as if they are independent policies, even though the two (or more) coverages in the policy may share certain endorsements or other forms.

Insureds too often get carried away with the overall size of their cheese slice, or the word “pay,” and want to jump immediately to the conclusion that they’re covered unless an exclusion says otherwise (yes, the exclusions are the holes in the cheese, but stop getting ahead of me). Unfortunately, the insuring agreement itself is limited in scope and the limitations present a number of frequently litigated coverage issues.

In CGL policies, for instance, there is plenty of room to fight over (1) whether a particular event constitutes an “occurrence” (typically defined as an “accident”), (2) whether the results of the event constitute “bodily injury” or “property damage,” and, if they do, (3) when, relative to the policy period, the bodily injury or property damage took place. While policies generally define the relevant terms, the definitions themselves leave room for debate, and even courts aided by the definitions often disagree over the policy’s meaning.

Similarly, in property policies, insurers and insureds often spar over what should be deemed “covered property” or a “covered cause of loss,” or when property damage occurred.

The crucial point is that the outer edges of the cheese slice are meaningful, even if there are lots of disagreements on the precise location of those edges. Do not jump immediately to the exclusions, discussed below, when trying to figure out if you’re covered for something. If the claim or loss with which you are dealing with falls outside the edges of the slice, you are not covered, end of story.

Step 3: The Holes. The holes in the cheese slice represent the exclusions. Once you have decided that your loss or claim falls within the insuring agreement, your next analytical step is to see whether it falls farther, straight through a hole to the hungry mouse waiting below you, who had kind of been hoping for the cheese.

The main coverage form of your policy – the same form in which you found the insuring agreement – will generally contain most of the exclusions, but additional exclusions, or amendments to exclusions, are likely to be in endorsements.

Exclusions come in a lot of flavors, but there are some common ones you can expect in just about any policy. The most common exclusion, usually the first or second one listed, is for expected or intended harm. This makes intuitive sense, as most people understand that an insurance policy is designed to cover risk, not a fait accompli. In liability policies, this exclusion overlaps conceptually with the idea of an “occurrence.”

Pollution exclusions are very popular among insurers since Congress and state governments began imposing strict liability on polluters a few decades ago. These exclusions are also very unpopular with insureds, so there has been much litigation over them and subsequent re-wording by insurers. The wording matters, a lot. Check it in consultation with your attorney or insurance professional against the law applicable to the policy.

Property coverage policies have exclusions both for certain causes of loss and certain types of property. What is damaged and how it was damaged must be examined against the policy language. In some cases, you will wish you had not elected out of the meteorology elective you almost took in college, as the distinctions among flood water, rain water, wind and wind-driven rain become paramount.

Liability policies are laden with exclusions designed to make clear that the insurer is not a guarantor of the insured’s product or work, though the insurer will cover secondary losses from the product or work. These exclusions, often called “business risk” exclusions, overlap conceptually with the notion of “property damage,” as the latter assumes that the property at issue was undamaged at some relevant time and became damaged during the policy period.

Step 4: The Glass Dome on Top. You didn’t expect the cheese to sit out in the open air to rot, did you? No, there is a protective glass dome on top of it, and the dome corresponds to the policy’s conditions. The conditions are there to make sure that the cheese is not accessed for frivolous or unjustified reasons. You have to fulfill the conditions to open the protective glass and get to the cheese.

Some of those conditions relate to the timing of notice of the claim or loss, and others relate to cooperation or the submittal of a proof of loss. There are conditions concerning timely premium payments and the fulfillment of other coverage prerequisites. A good insurance agent or a lawyer will guide you through these requirements.

Step 5: The Accoutrement. The coverage grant, exclusions and conditions addressed above form the main part of any policy, but they do not operate in a vacuum. As mentioned, definitions help to guide the insured in understanding of the various terms used. Endorsements may add to, subtract from or modify the contract. Within the exclusions (the holes), may be exceptions to the exclusions (islands of coverage within the empty space). The declarations page, schedule of underlying insurance (if any), schedule of forms, limits of insurance, list of named insureds, and other forms appended to the policy must all be considered.

In the event of a serious coverage issue with your insurer, it’s time to call in the assistance of your insurance agent, an attorney or another qualified insurance professional. My hope is that this article will help you benefit from that assistance more fully and allow you to receive the full benefit of the coverage for which you bargained.

Before You Choose an Insurance Company

2011-09-23T17:38:00.000-07:00

Choosing an insurance company to provide your business insurance is an important part of your business insurance plan. Once you have chosen an insurance professional, you will need to choose among different policies and programs offered by different insurers.
Here are some things to consider in choosing an insurance company for your business insurance.

Price, Stability, and Service

Price, stability and service are three important considerations in choosing an insurance company.

Price: The cost of coverage can vary greatly from one insurer to the next without any difference in coverage. Have your insurance professional secure quotes from at least three insurers.
Stability: Insurance companies do fail and the results can be disastrous. Companies are rated for their stability by various rating services such as A.M. Best or Standard & Poor . Consider companies with a Best's Rating of B+ or better.
Service: You will want an insurance company with an excellent reputation for customer service.

Registered in Your State

You will want an insurance company with a physical location in your state. You will also want a company that is registered to sell insurance in your state.
Sometimes smaller insurers will sell policies through another company registered in the state. For your business, stay with a company registered and physically present in your state. You can search on your state insurance department website to determine if an insurer is registered in your state.

Listing of State Insurance Departments

Choice of Counsel Provsion

Some insurance companies have a choice of counsel provision in their policy that allows the insured to pick their own attorney to defend them in case of a lawsuit. This can be a valuable option and is typically only available for higher premium packages.
Regardless, find out how an attorney is retained to defend you in case of a lawsuit. Some lower value insurers make use of house counsel attorneys that are actually employees of the insurance company. You want the ability to choose your own counsel or be promised that skilled representation from an independent lawfirm will be provided to you.

Pick a Market Leader

The insurance business is one of fluctuating highs and lows in each market. Some insurers will enter markets for a short period of time to determine profitability and leave the market (and their insureds) if it appears unprofitable.
Stay away from market floaters or companies offering a "deal' because they are new to the market. Instead, find the leaders in the market that have stayed in the market for at least ten years. They will not be the cheapest premium. But, such companies typically offer extra services that make up for the extra cost.

Do I need to buy a separate life insurance policy for my child?

2011-09-22T05:36:00.002-07:00

If you want life insurance coverage for your child, you may be able to add a child death benefit rider (usually limited to $5,000 or $10,000) to an existing policy on your own life. Otherwise, you'll probably need to buy a separate policy on your child's life.But is it a good idea to insure your child's life? In some cases, yes. Term policies for children typically carry small premiums. In addition, your employer's group policy may include inexpensive term coverage for your dependents. Either one of these options can provide you with some peace of mind at a relatively low cost. In most cases, however, it's better to wait until your child reaches adulthood to start thinking about life insurance.Why? Because the main purpose of life insurance is to replace lost income when a person dies. Unless your child is a movie star or a model, he or she is likely earning little or no income. His or her death would certainly be a tragedy, but it would probably not cause your family any financial hardship. You would have to pay for your child's funeral expenses, but buying a life insurance policy just to cover those costs may not make sense. Instead, consider saving or investing the money you would spend on insurance premiums. That way, the money will be available in case a tragedy strikes, but it can be used for other purposes as well.Perhaps you have other reasons for wanting to buy a separate insurance policy on your child's life. You might be worried that you won't be able to insure your child down the road if he or she develops a medical condition (especially if certain diseases run in your family). However, few medical conditions make a person uninsurable. Only about four percent of all life insurance applications are rejected. And don't think that life insurance will be too expensive once your child grows up. Insurance policies for healthy young adults don't cost much more than policies for children.

Can I name someone other than a relative as the beneficiary of my life insurance policy?

2011-09-22T05:36:00.000-07:00

You can name any legally competent person as a beneficiary of your life insurance policy, including your spouse, children, other relative or friend. You can also name an entity as a beneficiary, such as a charity, church or trust.

[Let Insurance.com help you find affordable life insurance now.]

It's a good idea to designate a contingent beneficiary as well as a primary beneficiary. If your primary beneficiary cannot be located or dies before you do, the life insurance proceeds go to your contingent beneficiary. Be very specific when naming a beneficiary; include full name and Social Security number to avoid any confusion.
Other important factors
Here are a few additional notes about designating a beneficiary:

Trusts. A trust is a legal document that transfers money from you to another person or institution who will manage the proceeds for the benefit of a third person. Make sure to have the appropriate legal paperwork in place when you designate the trust as beneficiary.
Power of attorney. If you give someone power of attorney, indicate whether or not that person can make changes to your designated beneficiary.
Community property states. Remember that in community property states, your spouse is entitled to half of everything. Such states include Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington and Wisconsin.

It's a good idea to review your beneficiary designation regularly to make sure it still reflects your wishes. Major life events such as births, deaths or marriages are good times to confirm you have the appropriate person or entity designated as the beneficiary of your life insurance policy.

Can I donate my life insurance policy to my favorite charity?

2011-09-22T05:35:00.001-07:00

Yes, you can donate your life insurance policy to charity. In fact, insurance can be a good way to leverage affordable premium payments into a substantial future donation. There are several different ways you can give your life insurance policy (or the death benefits from it), to charity. Each method has different advantages and disadvantages to both you and the charity.One way to help your favorite charity is to simply name the charity as a beneficiary on your policy. When you die, the charity will receive the death benefits. A disadvantage of this approach is that you will not get to take the charitable income tax deduction for the premium payments that you make. With this method, there are no gift tax implications. The proceeds of the policy will be includable in your taxable estate, but you will receive an offsetting estate tax charitable deduction.Another way to help your favorite charity is to donate an existing life insurance policy to the charity. You will be able to claim an income tax deduction for either the tax basis or the fair market value of the policy (whichever is less) for the year of the donation. You can then make deductible cash gifts to the charity, which the charity can use to make the premium payments. The proceeds of the policy may be includable in your taxable estate, but you will receive an offsetting estate tax charitable deduction.A third way to donate a life insurance policy to charity is to donate money to the charity and have the charity buy the life insurance policy. You make income and gift-tax-deductible donations to the charity, and the charity makes the premium payments. The proceeds of the policy will not be included in your estate for estate tax purposes.Note: Some states' laws do not consider a charity to have an insurable interest in a donor and will not allow a charity to purchase a life insurance policy on a donor.There are a number of different strategies from which to choose, as well as a number of tax rules and differing state laws that may influence your decision. If you are considering a substantial gift of life insurance to a charity, ask your attorney or tax advisor to help you decide on the best approach.

Can I do anything to lower the cost of life insurance?

2011-09-22T05:34:00.001-07:00

The price you pay for life insurance depends on your age, your health, and your lifestyle. So if you are older, you have health problems, and you are a smoker, you will always pay more for life insurance than someone who is younger, healthier, and a nonsmoker. That being said, there are ways to lower your life insurance premiums, even if you fall into a higher-risk category. Following are some simple suggestions for life insurance and term life insurance.1. Round upOften, you'll actually pay less for a little more life insurance as you approach multiples of $250,000 in coverage. For example, $240,000 of life insurance coverage might cost $275 per year, while $250,000 in coverage might cost only $260 per year. Find out the rate per $1,000 of coverage, which often drops once you pass a certain level of coverage. This figure will help you determine how to get the most life insurance for the least money.2. Find a "friendly" life insurance companySome life insurance companies do offer competitive rates for conditions such as diabetes, heart disease, and cancer. These companies employ underwriters who are trained in analyzing people on a case-by-case basis, rather than lumping everyone with a particular condition into one group.3. Consider quittingEveryone knows that you'll save money on your insurance premiums if you quit smoking, start exercising, and lose weight. But you might be surprised to find out just how much you can save. Many insurance companies charge smokers doublethe nonsmoker rate for insurance. (Don't even think about lying, though. If you end up dying of a smoking-related illness, your insurance company can opt not to pay your death benefit.) Similar discounts can apply if you lose enough weight to fall into a preferred category.4. Forget the ridersWhile riders may add value to your life insurance policy in certain situations, many are simply an unnecessary expense. Paying extra money to cover an event that's almost guaranteed not to happen just doesn't make sense when you're trying to cut costs. Additionally, many riders simply provide duplicate coverage once your overall insurance needs are met.5. Find out about hidden feesYou may not realize it, but your life insurance could end up costing you more if you choose to make "convenient monthly payments" rather than paying the entire premium up front. Before you choose a payment plan, compare the single payment price to the total cost of the monthly payments. Do the math, and decide whether the convenience is worthwhile.6. Shop aroundWhen it comes to insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it's now easier than ever. Save time by going to a website where you can compare multiple insurance companies at once.

Ain't love grand? Unmarried couples get car insurance discounts

2011-09-22T05:31:00.001-07:00

A growing number of states are adopting laws that give couples in domestic partnerships and civil unions many of the same rights as married couples.

[Compare car insurance quotes now.]

Now car insurance companies are responding to these laws by offering new discounts to unmarried heterosexual, gay and lesbian couples who enter into legally recognized relationships.
Civil unions and domestic partnerships are similar; some states – such as California, Washington and Oregon – use the term domestic partnership, while other states generally prefer the term civil union. The legal relationships are an alternative to marriage in states that don’t issue marriage licenses to same-sex couples.
All companies must follow state laws for how to treat domestic partnerships or civil unions. But some insurance companies are courting the market more than others by getting the word out about discounts.
Esurance recently announced that it is offering new savings to couples who enter into civil unions in Illinois in light of the state's recent passage of the Religious Freedom Protection and Civil Union Act. The law gives couples in civil unions many of the rights already afforded to married people.
Insurance companies give discounts to married couples because claims histories show people who are married tend to be at lower risk for filing claims than single people.
The auto insurance discount could be 10 percent or more, but varies depending on a variety of other factors, such as driving record, accident history and vehicle make and model, Esurance says.

Growing list of states

In addition to Illinois, Esurance also offers car insurance savings for domestic partners in California, Oregon and Washington -- states where couples in registered domestic partnerships also have many of the same rights as married couples. The company also is looking at expanding the discount to other states, Eric Madia, the company's director of product and actuarial management, says. Esurance offers direct-to-consumer car insurance in 30 states.
Esurance was among the first insurers to offer discounts on car insurance for domestic partners who are on the same policy, Madia says. It began offering the discount in June 2004 in California, several months before the California Insurance Equality Act went into effect in January 2005. The law prohibits insurance companies from issuing policies that treat registered domestic partners and married spouses differently.
New Esurance customers can get the discount by telling the company about their domestic partnership or civil union when asked about their marital status, , Madia says. Current customers who qualify can log in to their Esurance accounts or call the company to change their marital status to civil union or domestic partnership to get a better rate.
The company may ask for a copy of the completed certificate of civil union or domestic partnership for proof.

Courting couples in civil unions

Esurance is among several car insurance companies making an effort to reach out to gay and lesbian customers.
The travel and alcohol beverage industries began reaching out to the communities two decades ago and some companies have developed incredible customer loyalty, says David Paisley, research director of Community Marketing Inc., a San Francisco-based marketing company that's helped companies connect with gay and lesbian communities since 1992. Gay and lesbian customers make up at least 10 percent of the consumer market, according to Community Marketing.
"Insurance companies are becoming more active," Paisley says. Allstate, Prudential and MetLife have all done consumer outreach, he says, and his firm is now doing research for a couple of insurance companies.
It takes more than advertising to court customers.
"All the research shows that the first thing any company in any industry needs to do is get their own house in order," Paisley says. "If you start advertising to the LGBT [lesbian, gay, bisexual and transgender] communities and don't have the right personnel policies in place, it can actually become a negative."
Seeing the hypocrisy, Paisley says, disgruntled employees may "out" employers whose cultures are unfriendly to gay and lesbian employees.

Mexico Auto Insurance

2011-09-21T10:09:00.001-07:00

Did you know?

•The Mexican Government does not recognize U.S. insurance policies.
•You'll be required to provide proof of Mexican auto insurance in case of an accident.

Many tourists make the mistake of assuming that their U.S. auto, RV, motorcycle or watercraft policy provides them with Mexico auto insurance. Without Mexico auto insurance, your vehicle could be impounded or you could be jailed.

The government of Mexico strictly regulates the importation of vehicles into the country. If you plan to driver further than the Border Zone or the Sonora Free Trade Zone (including the Baja California Peninsula), you will be expected to obtain a vehicle importation permit in addition to having Mexico Auto Insurance.

Our recommended Mexico auto insurance provider, International Insurance Group offers a wide variety of Mexico auto insurance coverage's for liability, damage, theft, travel assistance, towing, medical payments and more. The Deluxe and Platinum Packages offer the most comprehensive tourist auto, RV and motorcycle coverage available in Mexico.

Choose the Mexico auto insurance you need, for as long as you need it:

•Daily Policies
•6 or 12 Month Policies

For the exact length of your trip
For longer stays or when you are frequently in and out of Mexico at unpredictable intervals

Get Started

Why take the chance or wait in line at the border? Obtaining Mexico auto insurance is easy, affordable, and safe. You can complete your application online and have your policy in less than five minutes.

Mexico auto insurance coverage is only available to California residents through AIS. By clicking this button, you verify that you are a resident of California and will be directed to our recommended provider's website.

California Personal Watercraft Insurance

2011-09-21T10:08:00.001-07:00

AIS has been offering Californians' personal watercraft insurance coverage for many years. AIS shops multiple watercraft insurance carriers to find you the best combination of price and coverage.

With access to many reliable and high quality California personal watercraft insurance carriers, AIS can find great rates and coverage for any type of personal watercraft. We provide coverage for watercraft including, Jetskis, Waverunners, and other brands.

After you complete our online California personal watercraft insurance quote request, you will receive a phone call from an AIS representative! The representative will walk you through the quote process and present the best rates available for you.

Please click here to request a free California personal watercraft insurance quote!

California Boat Insurance

2011-09-21T10:07:00.003-07:00

For more than 10 years, AIS has been offering its clients California boat insurance. AIS works with multiple boat owners insurance carriers that offer coverages for many types of boats including sailboats and yachts.

About California Boat Insurance

Available boat owners coverages can help protect more than just your boat. Most policies include liability coverage which includes protection for your passengers and liability for water sports activities. Damage to furniture, the hull, sails, and machinery are generally covered by boat owners insurance.

Uninsured Boaters Coverage

Protect yourself against damage caused by an uninsured boater. This coverage will protect your fishing equipment and your personal property on your boat. Uninsured boaters bodily injury coverage pays for medical treatment, wage loss, and other damages sustained as a result of a boating accident where the liable boater does not have California boat insurance.

About Total Loss Replacement

Replaces your boat with the latest model (new for old), or if not available, a comparable model. Once the coverage is purchased, it can remain in place through the 10th model year.

After you complete our online California boat insurance quote request, you will receive a phone call from an AIS representative! The representative will walk you through the quote process and present the best rates available for you.

Please click here to request free California boat insurance quote!