Frequently Asked Questions
How Much Life Insurance Do You Need?
Here are some questions to ask yourself:
How much of the family income do I provide? If I were to die early, how would my survivors, especially my children, get by? Does anyone else depend on me financially, such as parent, grandparent, brothers and sisters?
Do I have children for whom I’d like to set aside money to finish their education in the event of my death?
How will my family pay final expenses and repay debts after my death?
Do I have family members or an organization to whom I would like to leave money?
Will there be estate taxes to pay after my death?
How will inflation affect future needs?
As you figure out what you have to meet their needs, count the life insurance you have now, including any group insurance where you work or veteran’s insurance. Don’t forget Social Security and pension plan survivor’s benefits. Add other assets you have: savings, investments, real estate and personal property. Which assets would your family sell or cash in to pay expenses after your death?
All policies are not the same. Some give coverage for your lifetime and others cover you for a specific number of years. Some build up cash values and others do not. Some policies combine different kinds of insurance, and others let you change from one kind of insurance to another. Some policies may offer other benefits while you are still living. Your choice should be based on your needs and what you can afford.
There are two basic types of life insurance: term insurance and cash value insurance. Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income.
Term Insurance?covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value.
You can renew most term insurance policies for one or more terms even if your health has changed. Each time you renew the policy for a new term, premiums may be higher. Ask what the premiums will be if you will lose the right to renew the policy at some age. For a higher premium, some companies will give you the right to keep the policy in force for a guaranteed period at the same price each year. At the end of that time you may need to pass a physical examination to continue coverage, and premiums may increase.
You may be able to trade many term insurance policies for a cash value policy during a conversion period – even if you are not in good health. Premiums for the new policy will be higher than you have been paying for the term insurance.
Cash Value Insurance?is a type of insurance where the premiums charged are higher at the beginning than they would be for the same amount of term insurance. The part of the premium that is not used for the cost of insurance is invested by the company and builds up a cash value that may be used in a variety of ways. You may borrow against a policy’s cash value by taking a policy loan. If you don’t pay back the loan and the interest on it, the amount you owe will be subtracted from the benefits when you die, or from the cash value if you stop paying premiums and take out the remaining cash value. You can also use your cash value to keep insurance protection for a limited time or to buy a reduced amount without having to pay more premiums. You also can use the cash value to increase your income in retirement or to help pay for needs such as a childs tuition without canceling the policy. However, to build up this cash value, you must pay higher premiums in the early years of the policy. Cash value life insurance and variable life are all types of cash value insurance.
Whole Life Insurance?covers you for as long as you live if your premiums are paid. You generally pay the same amount in premiums for as long as you live. When you first take out the policy, premiums can be several times higher than you would pay initially for the same amount of term insurance. But they are smaller than the premiums you would eventually pay if you were to keep renewing a term policy until your later years.
Answer:?There are several things you can choose to
do in order to decrease your homeowner insurance rates. For example, you might want to:
- Increase your deductibles. Do not smoke.
- Install alarm systems.
- Install a fire/police department alarm.
- Install dead bolt locks.
- Install smoke detectors.
- Buy a home constructed of masonry or fire- resistant materials.
- Locate in fire-protected areas.
|Question: What should I do if I’m in a car accident??
Answer:?Follow these steps to insure your safety and?your insurance protection:
Answer:?If you have suffered a loss, an insurance claims representative will be quickly called to review any damage and work out a fair and equitable settlement according to the terms of the policy. If you have taken some action to prevent further damage, such as boarding up damaged windows and doors, moving personal property to a secure area, or temporarily fixing holes in roofs, keep a record of your costs. The cost of such repairs can become part of the claim.
If damage is extensive enough, the homeowners policy provides funds if you have to rent equivalent temporary living space. The policy also covers certain additional living expenses in excess of your normal living expenses. Keep an accurate record of these expenses. To help with these items, verify with your agent or claims representative what limits are available for these expenses.
You may be asked to submit a property inventory of the entire household’s damaged or destroyed items. A Household Inventory can be of great value. Consider making a room-by-room listing or a videotape of the contents of each room. Store this information in a bank safe deposit box or someplace away from the premises. If you don’t have an inventory, a useful tip to help recall what was in the house is to roughly diagram each room, then recall where items we situated.
The claims representative will probably take photos of the damage and spend time with you discussing your coverage, property values, and how the claim will be handled. If you have any questions during the process, don’t hesitate to ask. This is the time when it is important to work with the claims representative so you will understand the settlement.
Often, an estimate from a contractor is necessary. The claims representative might meet with your contractor to discuss How the repairs will be made, what materials to use, and the costs. When the costs and contractor are agreed upon, payment for the repairs are often made jointly to you and to the mortgage holder, if any, named on the policy .You may also authorize direct payment to the contractor doing the repairs or rebuilding the property.
If new developments arise, contact the claims representative as soon as possible. It is important for all parties involved the settlement to share as much information as possible. In doing so, a fair and satisfactory settlement can be reached. Your agent is also an excellent resource and will often be actively involved in the claims process.
The insurance claim settlement process is designed for the prompt, fair handling of claims. The system works well, and claims representatives strive to be helpful, informative and fair.
These are some positive things you can do to help your child -and help protect your insurance rates at the same time.