The Essential Guide To Insurance
Tuesday, February 27, 2007
Insurance can at times be somewhat of a minefield for many people; with so many different products available, choosing the right one and making sure that we are properly covered can be a challenge. Although this may be the case, it is also an essential part of our everyday living.
Buildings Insurance
Your home is likely to be your most valuable possession so it is important to ensure that adequate buildings insurance cover is set in place.
Buildings insurance covers the structure of the building plus anything you would normally leave behind when you move. This will include things like patios, drives, fences, walls and permanent fixtures like kitchens and bathrooms. Accidental damage caused by fire, storms, or burst pipes, for example will also be covered.
Having buildings insurance cover in place is not if fact a legal requirement although nearly every mortgage lender will insist that cover is taken out as they look to protect what is their asset too, albeit temporarily.
Many lenders will offer a block building insurance policy arrangement. The cover provided and premium rate are agreed between the lender and insurer, but instead of issuing each borrower with an individual policy number a master policy is set up, with both the lender and insurer having copies.
These premiums are not always the most competitive in price so it is advisable to shop around for quotes also.
The amount that each property will need to be insured for will of course vary. The valuer will provide a figure for the re-instatement value of the property, ie the cost of rebuilding in the event of total destruction. There is no specific link between this figure and that for the valuation for mortgage purposes, or the price that the purchaser has agreed to pay.
Contents Insurance
Contents insurance offers cover on the household goods and possessions inside your property and will often include the garden too if applicable. In other words, contents can be defined as everything that you would normally take with you when you move.
The lender will not insist that you take out a contents insurance policy however in many cases it is advisable. Not doing so could see you unable to replace your belongings in the event of disasters such as fire, flooding or burglary.
Many policies offer cover on a 'new for old' basis which means should anything happen to your possessions such as the TV or washing machine; you should be able to replace the damaged goods for a new model.
Mortgage Payment Protection Insurance (MPPI)
Mortgage Payment Protection insurance (MPPI) is also known as accident, sickness and unemployment (ASU) insurance and, as the name suggests, it covers your mortgage repayments if you have an accident, fall ill or lose your job.
Most policies will provide cover for a period of 12 months. Your policy should cover the full amount of your mortgage and linked expenses such as other insurance policies and pension plans.
Many providers of payment protection insurance will offer modular coverage. For example, you can choose unemployment only option if job loss is your main concern or an accident & sickness only module depending on what you feel is more important to you.
You won't be able to claim money against your policy immediately after you make a claim. Typically, you have to wait three or four months - what is known as the deferral period - before you begin to receive insurance payouts.
Often however, for an additional charge, some insurers will provide back-to-day-one cover that covers you from the first day you make a claim.
Payment is made 30 days after you made your claim and you need to have been off work for at least a month. In addition most policies have an excess period - usually 30,60 or more days - that is excluded from the payout should you make a claim.
Life Insurance
Life cover pays out a lump sum when you die, or earlier if you are diagnosed with a terminal illness. This lump sum payment may be used to pay off an outstanding mortgage or simply passed on as part of an inheritance.
There are two types of life insurance: Level term and decreasing term.
Level term insurance will often run alongside an interest only mortgage. It lasts for a set period and pays out the set amount you chose at the outset in case of death during the term.
Decreasing term insurance often run alongside a capital repayment mortgage. It offers a smaller payout year on year as the outstanding mortgage debt falls.
With both types of insurance there are many factors that the provider will take into account when calculating the premium. These factors will include; your age, weight, whether you a smoker or non a smoker and your medical history amongst other things.
A Five Point Plan When Taking Out Insurance
1. By speaking to a specialist adviser before you buy insurance could pay off. Ensure that you adviser is able to offer a range of policies from a variety of different providers.
2. Shop around for mortgage payment protection insurance (MPPI). Don't just agree to take out the policy offered by your lender without doing some research of your own. Policies offered by the lenders are not always the most competitive in the marketplace.
3. Don't forget to budget for your monthly insurance payments. For MPPI & Life insurance, the younger & healthier you are, the lower your costs, however payments can still easily add up to over £50 per month.
4. Never forget to find out what your excess is, or how much you need to pay before your insurance will pay out. Many policies have exclusions so don't forget to find out what these are too.
5. Many people fail to adjust their insurance policies accordingly when their circumstances change. If you insurance policies are not reflecting your current commitments then you could find that you and your dependents are underinsured.
About the Author
Chris Copper Jnr enjoys writing on all areas of personal and commercial finance. He works for Any Loans who source Loans for people with credit problems.
Labels: insurance, insurance guide, life insurance
posted by sham @ 12:15 AM,
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Life Insurance: What It is ?? And How It Works ?
Thursday, February 15, 2007
Life insurance guarantees the financial security of your family and near & dear ones, no matter what happens. Life insurance helps in:
* Paying off any final expenses or personal debts (credit cards, car loans or a mortgage) * Compensating the loss of your earnings for your dependents.
* Contributing to the future education of your children * Protecting your estate by helping to pay the taxes due on an estate upon death * Leaving a legacy to your preferred charitable trust.
Who needs Life Insurance? The association of life insurance has always been with major life events like marriage, purchasing a house, or having kids. However, if these aren't associated with you, then try answering these questions. If YES is the answer to any of them, you'll want to consider life insurance:
* Is anyone financially dependent on you? Whether it's your other half, kids, grandchild, parents or dependent adult, life insurance will help them in protecting their financial well being in case any mishap. * Do you have a mortgage, or are you on any other debts? If yes, a life insurance policy can help you take care of these outstanding bills along with any other expenses, like legal fees and taxes, and medical expenses. * Are you the owner of any business? o For sole proprietors, you're liable for the debts your business owes. Not having enough life insurance to cover these debts, may cost your personal assets to be liquidated to pay them off, possibly leaving little or nothing left for your dependents. o If you're in a partnership, and the other partner is the beneficiary of the life insurance policy then the surviving owner has the cash easily available to buy out your portion of the partnership from the estate. * Do you want to leave a legacy? Life insurance policies can be used to leave money to your favorite charitable trust.
What's the cost of life insurance? There's nothing like a standard cost for the insurance policy. Insurance professionals closely review various factors like your age, gender, whether you're a smoker, and your past and current health record and family history before they come up with a final insurance rate. Then all these are balanced with the amount and type of policy that you're applying for.
Do you know the different types of life insurance available ?
There are two main categories of life insurance:
Level life insurance or term life insurance &
Decreasing life insurance or mortgage life insurance.
Level life insurance, as the name itself says, is a level cover that stays constant during the full term of the insurance and a level lump sum pay out would occur after death. The sum assured is decided from the beginning of the policy.
Decreasing life insurance is used most often to cover a mortgage and works exactly the same as level life insurance, however the sum assured decreases over the term of the policy. This is ideal to cover a mortgage or decrease any debts that maybe paid off over a period of time.
In this era of Internet, life insurance is more accessible than ever. The instant online insurance quotes offered by the best online brokerages avoid any hard sell tactics the industry was associated with in the past.
To Know more about Insurance, Visit www.6FigureVenture.com
posted by sham @ 11:46 AM,
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Why Does Health Insurance Cost So Much?
Friday, February 02, 2007
Why does health insurance cost so much? Year after year, many of the articles that appear in print detail the specific factors driving the cost of healthcare.
These factors include: general inflation, advances in drugs and other medical devices, rising hospital and doctor expenses, government mandates, increased consumer demand, litigation, fraud, and cost shifting.
The basic answer is that a magic bullet to solve the cost of insurance does not exist because the real difficulty is controlling the cost of healthcare. A simple way to dramatically decrease the dollars spent on healthcare is to reduce the demand for healthcare.
I have seen estimates that up to 40% of all healthcare related expenses result from preventable conditions. These preventable conditions are caused by lifestyle choices such as tobacco, obesity, stress, lack of exercise and poor diet.
Most of us, myself included, make lifestyle choices everyday that eventually increase our demand for healthcare. We are never going to be able to totally eliminate all lifestyle related healthcare costs. However, improved lifestyle choices would cause a dramatic reduction in demand. This would then result in a similar reduction in the dollars spent on healthcare.
Lower demand for healthcare would result in lower health insurance costs, increased productivity, and reduced absenteeism. If your organization has not done so already, your organizational leaders need to seriously consider the benefits of health promotion and disease prevention programs. Your return on investment will most likely be as high as 2:1 in the first year.
Michael Ertel is the President of Ertel & Company, Inc. and has over 15 years of experience in the health insurance business. He is the founder of MedicalInsuranceNow.com which is an internet based service that assists individuals, families, and small business owners by providing side by side comparisons of health insurance alternatives and the convenience of applying for health coverage online.
posted by sham @ 4:06 AM,
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