Saving You Money For Life

Once your application is submitted and your life insurance medical exam has been completed the life insurance company will begin to evaluate your case. This evaluation is called “underwriting.”

An “underwriter” will review your application and the results of your medical exam. Once all required information has been received, the insurance company will make a decision regarding whether, and at what rate, you qualify for the insurance.

Once the application and medical exam results have been submitted to the insurance company the underwriting process will begin and typically lasts 2-8 weeks. During this process, we will keep you informed on the status of your application. Once approved, your policy will be mailed to you along with any final items may be necessary to quickly make your policy active and in force.

Please note: Your coverage does not begin until you receive your policy and your first full premium has been paid, along with returning all needed items to place the policy in force.

However, most companies provide some temporary conditional coverage during the application process if certain conditions are met and the first premium is paid. We strongly encourage you to do so to obtain temporary coverage by remitting money with your application, especially if someone is financially dependent on you. However it is not required.

Important! If you are replacing existing coverage, you should never drop your existing coverage until your new policy has been approved, and your first premium has been paid.

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New legislation before Governor Bill Rittner would restrict insurance providers from doing physicals or taking a potential customer’s health record into consideration when determining rates for small businesses. It’s called House Bill 1355.

By restricting this factor in insurance rate determination, the bill would produce an affect unwanted by most small businesses: higher health insurance rates across the board. Individuals with previous health conditions or a high number of claims would not be ‘discriminated against’ with higher claims. Instead, everyone would pay more in order to cover the cost of claims.

According to the Colorado Association of Commerce and Industry, the statewide chamber of commerce, that House Bill 1355 could result in rate hikes for nearly two- thirds of Colorado small businesses. Those without pre-existing conditions may then drop their insurance coverage would again raise the costs of premiums.

Ralph Pollack, an official with the Colorado Association of Commerce and Industry, says, “We are concerned about the potential aftermath of this bill.”

The bill would apply to businesses with 50 or fewer employees and effectively reverse previous legislation allowing insurance companies to offer premium discounts to businesses with relatively healthy employees.

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This is taken from New York Life Insurance’s website. It’s a good description of how pension maximization works. If you have any additional questions, feel free to call me at 800-442-9899:

Your Spouse And Your Pension

You face a tough dilemma if you’re in line for a pension at retirement. It could cost you and your spouse thousands of dollars and take a big chunk out of your children’s inheritance.

It’s called the “pension dilemma,” because you may end up making a trade-off on your pension – deciding whether to take your full pension benefit and expose your spouse to a loss of benefits at your death, or taking less than your maximum benefit in exchange for continuing benefits after you die for your spouse. Fortunately, for many couples, there is another alternative. It’s known as pension maximization. But first, the pension dilemma: As an example, let’s say you’ll be eligible for a $1,000 monthly pension benefit at retirement. That’s the value of your benefit and the amount you will receive under the “single life option.” The only problem is that your benefits will be paid only as long as you live. At your death, your pension benefits die with you. That’s fine if you’re single, but not if you’re married. Should you die first, your spouse not only loses you, but also $12,000 a year in income.

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With so many insurance policies to choose from, it’s easy to get lost in all the choices available. Rather than make the wrong choice, some may purchase the most basic homeowner’s insurance policy, required auto insurance and health insurance if the boss is offering a price that’s affordable.

But sticking with these will have you missing out on two major forms of insurance that no one should be without: long-term disability insurance and life insurance.

Enough cannot be said about the importance of long-term disability insurance. If you are hurt away from job to such a degree that you can no longer work, then that work-subsidized health insurance isn’t going to do much for you. Long-term disability insurance will cover your current standard of living in the event that you can no longer work to support yourself and your family.

Life insurance, of course, isn’t as important to your own personal well-being as long-term disability but just as important to those who depend on you. Anyone who is financially dependent upon you–spouse, partner, parents, children, nephews, nieces, siblings–could suffer severe financial hardships if they depend upon you for support and your support were to be suddenly taken from them. Buying enough life insurance to ensure that your elderly parents, underage children and siblings are cared for in the event that you no longer can.

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I found another good article this week by Suze Orman. This one talks about making sure you’re properly insured. There’s some good advice about flood insurance and term life insurance. Enjoy!

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Insurance, like most contracts between consumers and a business, is built on trust, otherwise known as good faith. The insurance company trusts that you will disclose all the relevant facts and you trust that they will cover you when you need it.

A breach, of course, occurs when this trust is broken. If you, for example, don’t tell your life insurance provider that you used to smoke, then that is a breach of utmost good faith.

It is possible for you to commit a breach of utmost good faith without knowing it. For example, if a family member died of heart disease and you didn’t mention this when asked by your health insurance provider because you weren’t aware of that fact, this is an innocent breach of faith. If you were aware of the fact and didn’t fill out forms truthfully, of course, you would be guilty of fraudulent non-disclosure or breath of faith.

What happens if an insurer discovers a non-disclosed fact or a breach of good faith? First, your insurance policy is null and void. Your provider is no longer obligated to cover you. If the new information is discovered at the same time a claim is made, you may not receive payment of the claim. Depending upon the new information that came to light, your insurance provider may keep you on but charge higher rates or ignore the incident.

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I know this article is about a month late, but I finally have had a chance to catch up on some reading and I thought this was relevant even if it wasn’t Father’s Day. Enjoy!

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Luis Perez, formerly of Lawrence, Massachusetts, was extradited from Puerto Rico on charges of auto insurance fraud and filing a false Registry of Motor Vehicle document.

In an effort to elude prosecutors, immigration officials said, his passport was not valid and he had burned his fingertips in order to disguise his fingerprints. He had spent three years in hiding or on the run to avoid charges.

But Perez is not alone in these charges. More than 200 people were charged in 2004 after a 65-year-old grandmother was killed in a car accident staged to fraudulently cash in on auto insurance claims. Both a victim and victimizer, the woman is said to have purchased her seat in one of the crashing vehicles in order to file a claim later.

Perez was indicted on fraud charges by a grand jury in 2004. He was caught by immigration officials when trying to leave Puerto Rico; his invalid passport and burnt fingertips tipping off the officials. His bail is set at $250,000 and his pre-trial is scheduled.

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Six of China’s largest non-life insurance companies have overcharged their clients by nearly 6 billion yen. The overcharging came in the form of too-high premiums on fire insurance.

And this is just a low estimate. As insurance policies come due for renewable, it is expected that the list of overcharges will grow; the initial figure of 6 billion yen came from the earliest findings made by in-house investigators from a random sampling.

The overcharges come from the companies’ failure to apply appropriate discounts to insured buildings that made use of fire-resistant structures or refractory materials as stipulated in the policy. The companies have plans to refund all the extra charges.

The breakdown of overcharges for three of the companies looks like this:

Tokio Marine & Nichido Fire Insurance Co. – 2.02 billion yen on 26,979 policies

Sompo Japan Insurance Inc. – 1.07 billion yen on 42,730 policies

Aioi Insurance Co. – 1.03 billion yen on 22,139 policies

Investigations into the charges initially made by the Financial Services Agency in December came to fruition at the end of March when the six companies submitted reports to the agency.

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Jonathan Clements of “The Wall Street Journal” discusses common advice we shouldn’t take in this article. Some things include:

“Your top financial priority should be amassing an emergency reserve equal to six months of living expenses.”

“Buy the biggest house possible.”

“Buy cash-value life insurance.”

“Those in their 20s should not buy cash value life insurance just because it’s cheaper in your 20s. Instead, they should invest heavily in stocks, because they have decades until retirement and thus plenty of time to ride out market declines.”

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