Need some help with your insurance coverage? Not sure of the terminology used in your policy?
Find answers to all of your insurance questions. Browse by insurance type to find specific details to your general questions:
What is auto insurance?
Car insurance guards you against personal financial loss in case of an accident. It is a legally binding contract between you and the insurance company. You pay an auto premium and in return, the insurance company pays for some losses as outlined in the policy.
Why is automobile insurance important?
Your auto may be a valuable asset, if damaged can be expensive to repair or replace. Also, the insurance company pays for damages to another vehicle or property as a result of your driving.
Auto insurance covers your legal liability arising out of driving. The extent of the damage or injury caused may open you up for excessive liability in which case the auto insurance company would pay for any liable damage, up to the dollar amount of liability coverage specified in your contract. If sued, the insurance company would pay for your legal defense fees. Without the protection of auto liability insurance coverage, your personal assets could be at risk.
What are the premium limits on what a car insurance company can charge for insurance?
Auto insurance companies have a certain range for premium levels that are based on several factors that are measured at the time of an application submission. Some of the factors insurance companies take into consideration are your driving habits such as, regular miles driven and if your car is used for business, vehicle model and year, and driving history. Also, the premium varies depending on your age and health condition.
Can an auto insurance policy be canceled for any reason?
Unless for specific issues outlined in your insurance contract, the car insurance company cannot cancel your policy arbitrarily. Certain state laws prohibit or limit exceptions for reasons of cancellations not outlined in your contract. Generally, auto insurance policies are subject to cancellation only for failure to make timely premium payments, fraud, or serious misrepresentation by the policyholder.
Is a policy cancelable at any time and without penalty?
As a rule of thumb, you can choose to cancel a car insurance policy with proper notice to the insurance company. Occasionally, there are financial penalties for early cancellation of policy.
Is insurance mandatory, if you own a car?
Majority of states require car insurance. Basically, when you register a vehicle or renew your license plates you demonstrate your monetary capacity to pay certain level of damages. You can meet this state government requirement by having a minimum amount of auto insurance coverage.
Which government agencies regulate insurance companies?
Car insurance companies in the nation are regulated mainly by individual states. Surprisingly there is no federal agency that regulates and oversees insurance companies. The state insurance regulatory agencies are known as “Division of Insurance,” “Insurance Bureau,” Department of Insurance,” or “Department of Financial Services.”
Can you retain your car insurance policy, if you receive a cancellation notice for missing premium payments?
For car insurance policies, state law may require a minimum of 10 days advance written notice before canceling. If the insurance company accepts your missing payments, your policy will remain in force. However, if your coverage is terminated, your insurance company may choose to reinstate the policy, it is not guaranteed.
What should occur during a claim?
The mitigation and transference of risk is the reason why consumers get insurance. Under contractual terms, the insurance company must make payment of any claims if the claim is proper. The policyholder and the insurance company should work together to help make the claims process as easy as possible.
What are some popular types of life insurance?
Life insurance is an important component of financial planning. There are two types of life insurance policies: term and permanent. Term insurance is temporary life insurance such as term life insurance. While, permanent insurance can last till the expiration of the policyholder, if premium payments are kept up-to-date.
What is term life insurance?
Term Life Insurance is the most basic form of life insurance, the foundation of any life insurance policy. The policy is for a specified term such as a 10, 15, or 20 year term, during which the insured is covered. Once the term ends, so does the term life insurance coverage. There is no cash value in this type of policy.
What is whole life insurance?
It is a policy in which cash value can be built up over time, in addition to providing life insurance coverage. The cash value is invested in fixed dollar investments.
What is universal life insurance?
Universal life insurance is an evolution of whole life insurance. It varies from whole life in that it gives the policyholder the flexibility to change, within limitations, the timing and amount of premium payments and the death benefit during the life of the policy. It also has a cash value feature that invests in fixed dollar investments.
What is variable life insurance?
Variable life and variable universal life are an evolution of the universal life insurance policy. It has a cash value feature that gives the policyholder opportunity to invest in types of mutual find securities. Variable life insurance policies are regulated as securities under federal securities laws.
What is the basic individual life insurance?
Individual life insurance is underwritten for one individual, one person-one policy coverage. However, Second-to-die policies or survivorship policies which payout the death benefit upon the death of the second of two insured persons, are considered individual life insurance policies.
What basic information does individual life insurance underwriting require? Life insurance companies require at minimum this information on the life insurance application:
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1. Age
2. Sex (exception uni-sex)
3. Weight
4. Height
5. History of health (includes family health history)
6. Marital status and number of children
7. Occupation (hazardous and associated risk of death)
8. Income (establish suitability)
9. Tobacco, drug, and alcohol use (past and present use
10. Particular hobbies (race car driving, motorcycle, skydiving, hang-gliding, piloting non-commercial aircraft)
11. Foreign travel (last time and future travel plans within a calendar year and during underwriting)
12. What is the purpose of the insurance (such as for family protection, business, estate planning, etc.)
13. Total death benefit amounts of existing life insurance policies and amount of new policy |
Are there any physical exams?
Depending on the amount of life insurance applied for, determines the intensive level of physical examinations. The higher the death benefit, the more extensive and intensive the medical exams, includes background medical investigations.
What is an Insurable interest?
An individual has insurable interest in someone or something when the loss or damage to it would lead the individual incur financial loss or other types of losses. In life insurance, persons have insurable interests in their own lives in addition to the lives of their spouses and dependents.
Can anyone be listed as beneficiary?
Yes, it is not essential for the beneficiary to have an insurable interest in the life of the insured.
What is health insurance?
Health insurance is a promise by the health insurance company to provide access to and pay for health care services in return for payment of premiums.
What is fee for service or private indemnity insurance?
Fee for service or private indemnity insurance can be acquired by individuals independently, or through group insurance, such as employers or associations. The indemnity insurance permits some level of choice of health care provider to the insured. In its limited form, private indemnity insurance is typically known as a Preferred Provider Plan, choice is restricted to member health care providers of the sponsoring insurer's Preferred Provider Organization or PPO.
What are HMOs or health care maintenance organizations?
A health care maintenance organization provides wide-ranging medical services to a voluntary enrolled population in return for a fixed, prepaid fee.
What are employers sponsored plans?
Private employers that offer health coverage through their own self-funded sponsored and administered employee benefit plans. These plans are covered under the federal Employees Retirement Income Security Act ("ERISA").
Are there any government sponsored programs?
Private insurance companies dominate the healthcare arena in the nation. However, health coverage is provided through workman’s compensation systems in individual states, if healthcare relates to job-related injuries. Government provided care or government subsidized, includes Medicaid for the disadvantaged, Medicare for the disabled or elderly, Medically Indigent Adult (MIA) programs for the indigent at the county level, and CHAMPUS for military dependents.
What is a health insurance policy?
A health insurance policy is a binding contract between an individual or group and an insurance company, promises to pay for reasonably required healthcare by the policy holder.
How to determine your health care benefits?
If the health insurance is derived individually then the individual gets a copy of the plan agreement or policy which contains the coverage or benefit details. If insurance is received through a group or employer plan, the individual receives a coverage handbook or summary instead of the plan agreement.
What services are covered under average health insurance?
Medical insurance generally covers medical expenses as a consequence of illness, injury, accident, and disease. Also doctor visits, costs of hospitalization, surgery expenses, and follow-up visits are covered by the health insurance plan. Several plans offer coverage for prescription drugs, psychiatric care, and alcohol and drug rehabilitation programs.
What are some exclusions of health insurance plan?
There are several exclusions in terms of health insurance coverage. General exclusions include pre-existing conditions, past history of suicide attempts, substance abuse, mental illness, Workman’s Compensation insurance reimbursement, prescription drugs, elective surgery or cosmetic procedures, dental and optical coverage, and certain preventive care procedures.
What is the difference between coinsurance and copayment?
Copayment and coinsurance are thought of as synonyms but actually are two different things. A copayment requires the policyholder to pay a fixed dollar amount each time a medical service is performed. Meanwhile, with coinsurance the insured shares the risk with the insurer. Coinsurance is not a fixed cost to the policyholder but a percentage of the cost of medical services which usually has a maximum ceiling after which the insurance company covers the medical costs.
Do you need to purchase home insurance?
There are two important reasons to get
home insurance:
1. Mortgage lenders require you to have it for part or the entire term of your home loan mortgage
2. You want it to protect your most expensive and important financial investment, in case of damage or loss
Do you need to purchase renter’s insurance?
Similar to home insurance,
renters insurance can also face risks of loss. The risk for the renter is not associated with the loss or damage of the rented dwelling unit, but the risk of damage to or loss of personal property. Renters can be held liable by third parties injured while at the dwelling.
What risks does home insurance and renters insurance protect against?
The important risks covered by home insurance are:
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1. Damage or loss to the dwelling, in addition to other related structures on the land
2. Damage or loss to personal property items in the dwelling and related structures
3. Injury to third parties at dwelling |
The important risks covered by renters insurance are damage or loss to personal property items at the dwelling and liability protection from third parties injuries at the dwelling.
Who does the home policy cover?
It covers the insured and members of the insured’s home against loss of the home and the contents within. Liability portion of the policy protects the insured from third party injuries at the home.
Does renters insurance cover a roommate?
Renters insurance only covers the insured renter named in the policy. Even if the renter shares the dwelling with a roommate, the property of the roommate is not covered.
What is the difference between home insurance and title insurance?
Home insurance and title insurance protects against different types of risks.
Home insurance protects against damage or loss to the home, related structures, and the personal property items of the home, in addition to third party liability.
Title insurance guards homeownership interests in the real property. Title insurance guarantees marketable and good title to the real estate property, in that your interest in the real estate property is superior to all others.
Is title insurance necessary?
Title insurance protects the homeowner’s full legal ownership real estate property rights. If an issue regarding legal ownership of the property arises in the future which wasn’t discovered during the title search, the tile company will pay all associated costs with defending the title. By having a title insurance policy the homeowner can take much of the legal risk out of buying a home.
What is mortgage insurance?
Mortgage insurance safeguards the mortgage lender against the nonpayment risk by the buyer. This is not the same as mortgage life insurance, in which the insurance company pays off the remaining mortgage in the event of the insured homeowner’s death
Is mortgage insurance necessary?
The only reason to purchase mortgage insurance is if the mortgage lender requires it, it only benefits the mortgage lender.
Is a lower or higher home insurance deductible better?
It depends, if you have a higher deductible, it lowers your home insurance premium, and while a lower deductible will be accompanied by a higher premium. It is up to you which one you prefer.
What is long term care?
Long term care insurance is required when a person cannot perform some of the basic activities of daily living or ADLs. These everyday activities are eating, transferring, using the toilet, bathing, moving about (mobility), dressing (moving from a bed to a chair), and continence (bladder and bowel).
When does long-term care start?
The Federal government defines long-term care as a need for assistance that lasts at minimum 90 days. Depending on the type of policy held, care can begin right away or 30, 60, 90, or 120 waiting day period.
Who makes payments for long term care?
The state Medicaid programs pay for half of all long term care. Approximately, one-third is paid out of pocket by policyholders. However, Medicare has strict eligibility criterion and only offers for some skilled care in some narrow situations. Neither Medicare nor health insurance covers long term care.
Who should purchase long term care insurance?
Anyone who is 40 or older should consider getting long-term care. It is a critical component of good financial planning.
Where can I purchase long term care insurance?
Long term care can be obtained either through an insurance agent of an insurance company or an insurance broker that can offer long term care policies from several insurance companies. Some employers offer long-term care through the group insurance policy, but it is limited in scope and is not portable.
Is it important to know nursing facilities charges and care services?
The depth and level of care you will receive on a daily basis is a reflection of the reputation of the nursing facility, services vary widely from facility to another. Also, as medical costs rise at an accelerated pace every year, it is important to be aware of what the present and future costs of nursing homes will be.
Is long term insurance the same as nursing home insurance?
No. Many believe nursing home insurance is the same as long-term care insurance. However, nursing home insurance is not the same as LTC; it can be a component of a comprehensive LTC policy. LTC coverage is more in-depth than nursing home care.
Coverage for nursing home care is a significant part of an all-inclusive long-term care policy, but not the only component. Majority of long-term care is provided not in nursing homes but in the insured’s home by a professional skilled nurse or care. Home health care, adult day care, respite care, and assisted-living care are just a few of the types of comprehensive LTCI policy.
Does Medicare provide the same coverage as long term care?
Medicare was designed to provide some skilled care in narrow situations. It was not designed as a governmental alternative to private long term insurance. Rather, it was meant to cover skilled care or acute care given during a short hospital stay.
Does Medicaid pay for long term care?
Yes, but in narrow situations. Generally, Medicaid applies to individuals who meet very low income thresholds and with few assets. Even then, only limited choice of benefits awaits them.
Does long-term insurance affect Medicaid benefits?
Medicaid rules are different from state to state. It is highly likely that once long-term care benefits begin that in your state it may disqualify you for Medicaid.
Does health insurance provide long term care?
Health insurance and long term care are not the same. Health insurance or medical insurance may only pay for the services of a nurse during recovery from injury or illness. Also, health insurance is not designed to cover activities of daily living, as is long term care.
What is an annuity?
An
annuity is an insurance company product, thus a contract between you and an insurance company. It is sold to consumers as an investment vehicle, with underlying mutual funds (variable annuity) or fixed dollar investments. There are several types of annuities which allow the annuitant to receive a lump sum, specified periodic payments, or payments for life from the insurance company.
Why have annuities become so popular in recent years?
The main reason of their popularity as investment vehicles is due the possibility of tax deferral. Annuities permit deferral of income taxes on the investment growth
What are some types of annuities?
There are many variations and types of annuity contracts. Some examples are:
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1. fixed or variable
2. immediate or deferred
3. single pay or multi-payment
4. straight-life or joint and survivor |
Does a beneficiary receive payments when annuitant dies?
There are various provisions for annuities that address payments to beneficiaries depending on the type of annuity as well. Some provisions allow for a lump sum payout, period certain, or payment for life of the beneficiary.
What is the accumulation phase of an annuity?
The accumulation phase of an annuity is the period when the annuitant makes payments to the insurance company to build up the investment value of the annuity.
What does annuitize mean?
This the liquidation phase of the annuity, when the insurance company starts making payments to the annuitant.
What is the immediate annuity?
It allows the annuitant to make a lump sum payment to the insurance company in return, the money is invested. The annuity is immediately annuitized and the annuitant starts receiving a regular stream of income, usually for life.
What is the deferred annuity?
It permits an annuitant to make payments until some point in the future, the annuity will be annuitized and payments made to the annuitant.
What is the variable annuity?
Unlike a fixed annuity, the rate of return on a variable annuity is not guaranteed. The underlying investments are a variation of mutual funds, for all purposes work just like mutual funds.
What is the SPIA?
It is a Single Payment Immediate Annuity, a popular type of annuity.
What is the SPDA?
It is the Single Payment Deferred Annuity, a popular annuity.
What is the purpose of business insurance?
Business insurance has several variations and comes in many hues. However, the purpose of business insurance is to mitigate risk associated with business enterprise or compensate for risk exposure for the business or its employees.
What type of business insurance does a business need?
The business risk assessment determines the type of insurance the business needs.
How much does business insurance cost?
The cost of business insurance depends on your specific business needs. The level of coverage and type of business insurance also determine varying costs.
What is the relation of insurance to business risks?
Insurance helps business mitigate risk and allow the business to continue to be in business in the face of associated risks. Without business insurance, businesses wouldn’t be able to sustain themselves because the financial liability associated with running the business would be too great.
Why do you need to purchase insurance for business risks?
Business faces perennial potentials of risk that can be of financial detriment to the business. The purpose of the business insurance is to transfer the risk to the insurance company.
What risks cannot be insured?
There some risks that are non-insurable, For instance, business can’t insure against all eventualities such as, rising supply prices or encroaching competitors.
What are some business risks that need to be insured against?
It is important that you assess your business arena and determine the associated risks with your particular business enterprise. Once you perform a risk analysis, consider the type and level of business insurance needed to mitigate that risk.
What are some risks that don’t require you to buy insurance?
These are some risks that don’t require business insurance:
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1. Install good quality locks or security devices
2. Install theft prevention security devices to mitigate loss of merchandise
3. Keep your place of business clean, dry, etc to avoid liability associated with potential slips and falls by customers. |
What is good insurance policy for small business?
A business owner’s policy is a popular choice of many small business owners. There are some qualifications and limitations to this type of policy.
What is liability insurance?
It protects your business against litigation.