Like many things, auto insurance rates are on the increase.  However, there are many ways to get discounts. As with life insurance policies, consumers should shop around for auto insurance using the web.

When reviewing your current auto insurance policy, you should consider if your eligible for several discounts that are often overlooked including:

– Low Mileage discounts if you drive less than 10,000 miles each year.

– Hybrid discounts if you’ve recently purchased an eco-friendly car.

– Early shopping discounts if you renew two weeks before your policy expires.

– “Good student” discounts for high school and college students with a B or better average

As millions of Americans host and attend holiday parties across the street or across the country, many are unaware of the risks they may be taking or of their own responsibilities to ensure their guests don’t hit the road drunk, according to a new national survey on homeowner’s insurance issues by Trusted Choice® and the Independent Insurance Agents & Brokers of America (the Big “I”).

For the survey, homeowners were asked if they believed they were legally liable if a guest caused an alcohol-related traffic accident after leaving a holiday party at the respondent’s home. Additionally, they were questioned about the liability responsibility of a guest destroying a house with a careless act such as leaving a candle unattended or smoking indoors. Respondents were also asked if they thought they would be legally liable if a guest was injured on the sidewalk in front of their property or suffered food-poisoning from catered food while attending a holiday party at their home. Alarming percentages of homeowners either thought they could not be held liable in these situations or admitted they didn’t know.

The Big “I” and Trusted Choice® provide the following tips for holiday hosts and guests.

Is a party host responsible if a guest drives drunk?

The Trusted Choice® survey found that about one-third of homeowners did not think or did not know if they could be held responsible in the event of an alcohol-related accident. In fact, in many states, individuals hosting holiday parties can be held liable. Many courts have found hosts liable for the damages their party guests cause as a result of consuming alcohol at their social gatherings and then driving motor vehicles. Many states have also enacted statutes that can be interpreted as mandating non-commercial social host liability. In these situations, if a guest or third party is injured in an accident that is related to alcohol consumption and the drinking can be linked to you, you could be held responsible for the payment of medical bills, vehicle repair costs, lost time from work and – in the worst case – claims for wrongful death resulting in huge monetary settlements.

Do Your Homework:  When hosting a holiday party, individuals should look to the liability portion of their homeowners or renters insurance policy to protect them if they are sued and found liable for an accident involving a guest who drank at their home. Consumers should regularly review their liability coverage limits to ensure they are adequately covered should an accident occur.

Consider an Umbrella Policy: While holiday partygoers and hosts alike should act responsibly and know their limits, consumers need to acknowledge that most risks cannot be entirely eliminated. But planning ahead and learning about what’s involved in hosting a reception is the best defense. Purchasing a personal “umbrella” liability policy – providing $1 million or more in additional coverage over the limit of a standard homeowners or renters policy – may be a prudent move for the frequent party host.

Consider the following tips to prevent holiday party accidents and protect yourself:

• Limit your guest list to those you know.
• Host your party at a restaurant or bar that has a liquor license, rather in a home or office.
• Provide filling food for guests and alternative non-alcoholic beverages.
• Schedule entertainment or activities that do not involve alcohol. If the party centers around drinking, guests will likely drink more.
• Arrange transportation or overnight accommodations for those who cannot or should not drive home.
• Stop serving alcohol at least one hour before the party is scheduled to end.
• Do not serve guests who are visibly intoxicated.
• Consider hiring an off-duty police officer to discretely monitor guests’ sobriety or handle any alcohol-related problems as guests leave.
• Stay alert, always remembering your responsibilities as a host.

Review your insurance policy with your agent before the event to ensure that you have the proper liability coverage.

Credit Insurance: A Safety Net Or A Waste Of Money?

This is an article from Eric R. Dinallo, the Superintendent of the New York State Insurance Department. I thought it was timely and wanted to share it with you.

Many consumers use credit more than ever during the holidays. Companies offering credit insurance, including credit card companies, understand this and use the holidays to heavily promote the sale of credit insurance.

Consumers considering credit insurance should fully understand the terms of a credit insurance policy before signing any documents. Consumers should always feel free to contact the Insurance Department if an insurer is unable or unwilling to answer questions to their satisfaction.

Credit insurance is sold in connection with a credit obligation or loan. If a specific situation, such as a job loss, prevents the consumer from repaying, the credit insurance policy protects the lender by making payments on the consumer’s behalf. There are different types of credit insurance:

Credit life insurance pays all or some of a loan if the consumer dies.

Credit disability insurance, also called credit accident and health insurance, ensures payments to a creditor on a loan if the consumer becomes disabled.

Credit involuntary unemployment insurance pays a limited number of monthly loan payments if the consumer loses a job due to a layoff or similar event.

Credit insurance is typically sold to consumers at the point-of-sale. As an example, an appliance store will often facilitate the sale of a credit insurance policy by offering it to consumers when they buy major appliances.

How much does it cost and how are consumers charged?

The cost of credit insurance is typically determined by the type of policy, the amount of the debt and the kind of credit obtained. In some cases, the insurance premium is added to the loan, increasing the consumer’s monthly loan payment. With credit cards and revolving home equity loans where the amount of debt may increase over time and vary from month to month, the amount of the premium is based on the outstanding balance. Failing to make monthly payments could lead to cancellation of the policy.

Consumers need to evaluate whether the cost of credit insurance is beneficial to their overall needs and fits into their budget. They should consider these and other questions before deciding whether to buy credit insurance:

§         How much is the premium and will it be financed as part of the loan?

§         How much would the monthly payment be without credit insurance?

§         Will the insurance cover the full length and full amount of the loan?

§         Does the policy spell out exactly what’s covered and what’s not, and is there a waiting period before coverage begins?

§         Can the policy be canceled? If so, what kind of refund is available, or are there penalties?

Consumers should also weigh the pros and cons of credit insurance against the merits of a traditional term life insurance or disability insurance policy

Wishing you and your family a very Merry Christmas!

The holidays are a good time to reflect on everything good in your life. Here, at AccuQuote, we think the best gift that you can give someone is one that protects their future dreams. Of course, that gift is life insurance. If you don’t have a life insurance policy, please consider getting one in order to protect your family’s future.

I saw a story from the National Association of Insurance Commissioners (NAIC) that suggests you take time to review potential holiday mishaps and how your insurance might apply. I thought this was a good idea and wanted to share it with you. Here are some questions that they addressed that I thought would be helpful.

Auto Insurance

What if you and a family member are taking turns driving your car to a family gathering and you get into an accident while your relative is driving?

Auto insurance coverage follows the vehicle, so your car will generally be covered while your relative is driving, the same as if you were driving. For example, if your family member slides off the road due to a patch of ice, and you only have liability coverage, there would not be coverage for any damage to the car itself, no matter who was driving. In addition, keep in mind that your premiums might increase due to the accident.

What if you take someone else’s car (with their permission) to the store because it was the last one in the driveway, and you accidentally back it into your neighbor’s car parked across the street?

The existing auto insurance policy on the borrowed vehicle would provide primary coverage in the event of a claim. If no coverage exists, your auto insurance policy might provide coverage. Talk with your insurance agent or company to find out if your auto insurance coverage will extend to a friend or family member’s car you plan on operating.

Homeowners Insurance

What if someone breaks your car’s window and steals gifts from the back seat while your car is parked at the mall?

Standard homeowners and renter’s insurance policies provide coverage for this peril, subject to the policy deductible and coverage limits. Some automobile policies also provide coverage. If this happens to you, talk with your insurance agent or company to find out under which policy you should file your claim.

What happens if your coworker, a guest at your holiday party, slips and falls on your icy driveway?

Standard homeowners insurance policies provide limited medical payments coverage if your seeks medical attention. If the coworker sues you for additional damages, your standard homeowners insurance policy should provide liability coverage. Check with your insurance agent or company to be sure you have adequate liability limits.

What if your presents are stolen from under the Christmas tree in your living room?

Standard homeowners insurance policies provide coverage subject to the deductible and special sublimits for certain goods, such as electronics and jewelry. For example, if the wrapped package was a $300 gift card to an electronics store, there might only be $200 coverage; if the package contained $2,000 worth of jewelry or furs, there might only be $1,500 coverage; and if the package contained a silver-plated tea set, there might only be $2,500 coverage. Standard condominium and renter’s insurance policies provide similar coverage. Check your homeowners policy for specific sublimits.

What if someone steals the holiday decorations in your front yard?

Under a standard homeowners insurance policy, decorations are generally covered, subject to your policy deductible and coverage limits. These items would also generally be covered if you have a condominium or renter’s insurance policy.

This article taken from the Wall Street Journal posed an interesting question. What are your thoughts?

Not many people are buying cars built 60 years ago. No one is watching TV on a set manufactured in the 1940s. Patients are not lining up to see a doctor who hasn’t cracked a book since before the polio vaccine was discovered. Why, then, do millions of Americans get their health care through an employer-based system from the 1940s?

Employers didn’t start offering health benefits roughly 60 years ago because they were experts in medical decisions. It was a way of circumventing the World War II wage and price controls. Barred from offering higher salaries to attract workers, employers offered health insurance instead. Aided by an IRS ruling that said workers who received health benefits did not have to pay income taxes on them, and by the fact that employers could write off the cost of the health benefits as a business related expense, this accidental arrangement became the primary way most Americans access health care.

The system worked at first, but a lot has changed in 60 years. Back then, the average soldier returning from World War II took a job with a local company where he would work for decades until he got a gold watch at a big retirement party. Today, lifetime employment is dead. By 42, the average American will change jobs 11 times.

Sixty years ago, most American companies competed only against neighboring companies for lucrative contracts. Today, most businesses are up against foreign companies that don’t foot the bill for their employees’ health-care costs.

Today, health-care costs are increasing at twice the rate of inflation. To stay in the black, companies are forced to raise their employees’ premiums and deductibles, opt for cheaper insurance plans, or worse yet, drop health benefits altogether. Since 2000, the percentage of employers providing health insurance has declined by nearly 10%.

For too many, the employer-based system is inefficient. Each employer purchases health insurance separately. According to a recent estimate by the McKinsey Global Institute, this adds more than $75 billion in underwriting, marketing, sales, billing and other administrative costs that offer no health benefits. More than half of all American employers who offer health-care benefits don’t offer their employees a choice. Consequently, most Americans don’t have the option of giving their business to insurance companies that treat them well and only cover what they need. This prevents the usual market forces from holding down costs.

Workers are the ones paying for this waste. The money that employers are spending to buy health care for their employees could otherwise go to workers in the form of higher wages, empowering individuals to make their own health-care choices.

The currently available alternative to this employer-based system is even more horrifying. Individuals buying insurance don’t have the same purchasing power as large businesses and end up paying much higher prices to cover administrative costs and risks. They also don’t get the tax breaks that employers get for buying health insurance. In most states, insurance companies have the right to discriminate against individuals by denying coverage or charging astronomical prices to anyone with a pre-existing condition. It is no surprise that, when given the choice between the employer-based system and buying health insurance on their own, the vast majority of Americans reject the latter. (A Kaiser Health Tracking Poll this summer, for example, found that only 17% of Americans said they would prefer to buy insurance on their own.)

But this is a false choice. It assumes that the current system is the only option. Why can’t Americans have the best of both worlds?

Americans need some of the benefits of the employer-based system: the security of being part of a large group, of not being denied coverage because of age and pre-existing conditions, and the convenience of having experts screen qualified plans and manage enrollment. But Americans also need portable insurance — coverage that follows them when they change jobs, lose jobs, start a business or whatever else may come. Americans need more choices and the market power to buy the health coverage that works best for them and their families and, in turn, to make insurance companies compete for their business.

Such a system could be implemented today by creating state or regional insurance exchanges that pool individuals and small groups to pay the same lower prices charged to larger employers; that certify that all insurance benefit packages meet minimum consumer protection standards; that manage the enrollment process; that collect premiums; and that require insurance companies to issue and renew coverage for anyone who applies, protecting the insurers by paying them a risk-adjusted premium that pays them more when they enroll sicker, more costly, patients.

Fundamentally, this means that insurance companies would have to change their business model to compete on the basis of quality, price and benefits, rather than by “cherry picking” the healthiest people to cover. It means spending less money on administrative costs and more money on keeping patients healthy. And it means letting everyone keep the health insurance they have if that’s what they want, but giving all employers and employees more choices for their health care.

In the coming year, there will be no shortage of suggestions for fixing the nation’s health-care system. But what Americans and the president-elect need to ask is whether the health-care system that was founded in the 1940s is the best health-care system for the 21st century. We believe that Americans deserve better.

Dr. Emanuel, an oncologist and chairman of the department of bioethics at the National Institutes of Health, is author of “Healthcare, Guaranteed” (Public Affairs, 2008). Mr. Wyden, a Democrat, is a U.S. senator from Oregon and sponsor of The Healthy Americans Act.

People are worried about all kinds of things in this economy. One topic I’ve seen written about lately is retirement plans.   Candice Choi of the Associate Press wrote a good article recently about what happens to your company-sponsored retirement plan if you’re laid off.

She says, the answer depends on how long you worked for the company, the amount you saved up and whether the money’s in a 401(k) or a pension plan.

For the most part, federal regulations protect retirement savings, even if a company goes belly up – which may come as a relief to many given today’s shaky economic landscape. Since the start of the recession last December, the number of unemployed people in the country has increased by 2.7 million, to 10.3 million.

In case you’re worried about your job security, here are some questions and answers about your company-sponsored retirement account.

Following is some additional Q&A that Candice answers.

Q: Do I get retirement benefits if I’ve only been with the company a short time?

A: Companies typically have a “vesting period,” meaning you need to be employed a minimum amount of time to be entitled to certain benefits. With 401(k) plans, the requirement is often three years.

If you’re laid off before then, any matching contributions by your employer may be taken back, said Chris Mahoney, a retirement leader at Mercer, a human resources consulting firm.

If you’re not vested yet and want to know how much money could be reclaimed by your employer, check your monthly 401(k) statement. Employer contributions to date should be listed separately.

Any money you put into the account is yours, even if you haven’t reached the vesting period.

With pension plans, the vesting period can be no longer than five years, and may be less. If you aren’t vested at the time of your layoff, you’re out of luck – you don’t get anything. Though some plans vest workers in stages: For instance, workers may be 25 percent vested after two years and 50 percent vested after three years and fully vested after five years.

Q: What happens to the money in my 401(k) or pension after I’m laid off?

A: If you have less than $1,000 in your account, the company can hand the money over to you. Unless you notify them of your preference within 60 days, it can write you a check or roll the money over into an IRA under your name.

For amounts between $1,000 and $5,000, the company can roll the money over into an IRA, but cannot make a cash distribution without your consent.

For 401(k) accounts valued at $5,000 or more, the company can’t touch the money without your consent. The money stays in place unless you request otherwise.

For pensions worth more than $5,000, some companies may pay lump sums. Otherwise, you’ll start getting payments when you reach the plan’s retirement age, usually around 65, said Dallas Salisbury, president of the Employee Benefit Research Institute.

If you’re not getting payments until retirement age, it’s important to keep former employers up-to-date on address changes. Companies are required to file pension records with the Social Security administration, but it’s still possible your contact information may be lost, Salisbury said.

Q: Should I take a lump sum or keep it in a retirement account?

A: If you cash out a 401(k) or pension, it’s subject to income taxes and a 10 percent penalty if you’re not yet 59 1/2. So it’s to your advantage to roll the money over into another retirement account, such as an IRA. If you find a new job, some companies let workers roll over money from past retirement accounts into current 401(k) accounts.

Q: What happens to my pension if my company goes under?

A: Pensions offered by private employers are typically secured by a federal agency called the Pension Benefit Guaranty Corp.

The PBGC ensures pension payments, but you may not get the full amount your employer promised. Each year, the agency issues a cap on benefits it pays out to retirees – next year’s annual cap is $54,000.

Gary Pastorius, an agency spokesman, said about 35 percent of retirees get reduced benefits because of the cap. Payments may also be scaled back if an employer’s plan sets retirement age earlier than 65.

The PBGC only distributes lump sums for $5,000 or less, Pastorius said. For greater amounts, you’ll get annual payments once you’ve reached retirement age.

“Professional service” companies such as law firms or medical practices with 25 or fewer workers usually aren’t covered by the PBGC.

Under federal regulations, these businesses are still required to maintain certain funding levels for pensions. But if the company goes under, retirees may not get their full benefits or as much as they would if the pensions were covered by the PBGC, said Craig Copeland, a researcher at EBRI.

Q: What happens to my 401(k) if my company goes under?

A: Your 401(k) is protected even if your company goes out of business.

Government regulations require 401(k) funds to be held in a trust separate from employer accounts and from the companies that manage 401(k) plans. The trust funds are overseen by investment managers, and they carry insurance designed to help protect a company from a fraudulent loss due to embezzlement or other misconduct.

As with a layoff, the money may be distributed either as a check or rolled over into an IRA. If you’re not yet vested, promised employer contributions may also be forfeited under a bankruptcy.

Some of your 401(k) might be at risk, though, if your company’s matching contributions are in the company’s own stock – those shares become worthless if the company goes bankrupt.

December 18, 2008

Frequently Asked Question’s about buying life insurance

Description:

Byron Udell, founder and CEO of AccuQuote, is a life insurance and annuity industry expert that is often called upon as a resource for authors for publications such as the Wall Street Journal.  In this podcast he will provide the answers to some of the most frequently asked questions that come up when buying term life insurance.

Size: 11.2 MB

Length: 12:15

Click here to download

According to a recent study by New York Life Insurance company, American families, already confronting a difficult economic environment, face the danger of missing widely-held goals such as paying off a mortgage, funding a four-year college education or financing a secure retirement because their life insurance policies don’t provide adequate protection.

A detailed analysis of self-reported financial objectives revealed that Americans typically have just 49 percent of the financial protection they need to achieve their own stated financial goals for their families. This Life Insurance Gap exists despite the fact that over 80 percent of American breadwinners surveyed feel they have enough life insurance coverage. The Life Insurance Gap translates into a median shortfall of almost $300,000 in coverage for the typical American family.

According to the survey, breadwinners reported a median of approximately $300,000 in life insurance coverage. Respondents were then asked about the ways they planned to use their families’ life insurance coverage if needed. Options ranged from simply replacing the breadwinner’s income to covering retirement and college expenses. Based on the responses to these questions, the median amount respondents reported they would need from the breadwinner’s life insurance proceeds was $589,378. When contrasted with the $300,000 median amount of actual life insurance coverage, the typical American family faces a 49 percent gap between their financial goals and the money they would have available from their life insurance policies, in the event of the breadwinner’s death.

The Life Insurance Gap survey examined the financial planning attitudes and behaviors of 1,003 Americans age 25 and over with dependents, with a particular focus on what they want their life insurance policies to cover in the event of the death of the breadwinner.

A Disconnect Between Perception and Reality

Despite the existence of the Life Insurance Gap, Americans believe they have enough life insurance to protect their families. About 80 percent of respondents stated that they are at least somewhat confident that they have enough coverage. Even more revealing was the fact that 64 percent believe that their standard of living would not decline if the breadwinner in the household passed away.

However, according to the study, household breadwinners have enough life insurance, on average, to cover expenses for only four years after the loss of the breadwinner.

The study found that Americans are clearly concerned for their families’ well-being and safety. Over half of the respondents believe that it is very important to have life insurance to protect their family. However, even though most people understand the basic need for life insurance, buying it isn’t necessarily a direct result, because only 20% of respondents have enough life insurance to meet their self-reported needs. In fact, life insurance is seen as less important than many other ways people protect their families. Even though inadequate life insurance coverage can have a dramatic impact on a family’s standard of living, only about half of the survey respondents said they felt that purchasing life insurance is very important, in contrast with other critical areas for family protection such as driving safely (95%), wearing seatbelts (95%), and regularly testing smoke detectors (70%).