People get sick, have terrible accidents and die without ever informing anyone. Some people are able to overcomes the struggles while others don’t. The issue is not because they are heartbroken. However, they are financially powerless at that particular moment. This is why people seek health insurance schemes from every angle. Sometimes, people around you talk about other types insurances like home, car and life. But do you know why all these insurances are important? Anyways, in this article we focus on health insurance in depth.

Let’s start by defining what is health insurance. Health insurance covers partial or full risks of a person’s medical expenses. A finance structure provides enough money to pay for health care benefits. This is done after estimating the risks and expenses of the healthcare system. Furthermore, government agencies and other private businesses offer these benefits (non-governmental entities). Health insurance secures the cost of the supplies used for illnesses, ailments, or injuries. These include losses from accidents, deaths, limbs removal, disabilities and other medical expenses. It can be either renewable or permanent.

Is it important to have a health insurance? Yes, it is.

  1. People with no insurance receive lesser medical and care time.
  2. These individuals often have worse health results. In addition, having no insurance to back them up can be a great burden to their families.
  3. Though the word “insurance” is not expensive to pronounce. However, the thought of not having it can be very costly.
  4. Having no insurance is a headache for some people. They tend to relax until something bad happens to them and then go to the emergency room for care. Usually, they end up not being able to pay all the bills, which the doctor provide.
  5. With insurance, you receive annual check-ups and other tests to prevent diseases that are treatable at an early stage.

The demand for short-term health insurance is relatively high. Why do you think it’s referred to as short-term? This is because it only covers between a month to a year. This type of insurance is for those who need temporary health cover since they have little time to spend in another country.

Short-term insurance covers just the basic health care costs for small periods, between one to twelve months. They do not include annual check-ups but majorly medical costs. This form of health insurance is that shields an individual from emergencies. They provide low cost and short-term options to cover your medical gap. With this, you can avoid paying bills (medical) without insurance.

When Should I Use Short-term Health Insurance?

Most short-term health insurance policies do not often cover pregnancy. Therefore, the scheme will not cover the pregnancy gap as well. This policy is only for women who are not pregnant. It is also important that you are knowledgeable to prevent your hopes from becoming too high or lost.

Health insurance mostly covers deaths, dismemberment, sicknesses, surgeries and other medical expenses. Unlike long-term health insurance schemes, your health history may cause disapproval in your insurance. However, some policies only tend to cover major health issues. This shows that they are limited in coverage area and duration. Sometimes, the short-term plans cover drug prescription and other benefits. More expenses are made for these additional benefits, depending on your choice of plan or Insurance Company. Therefore, before going into any insurance scheme read the terms and conditions to avoid being put at risk, which only you will bear. In addition, applicants must answer medical questionnaires to know if they meet the criteria for your insurance. Insurance companies support this.

You can use short term insurance plan when you are searching for a job until your insurance policy starts. This insurance policy allows you to void pre-existing conditions on your next insurance.

Why Consider Short-term Insurance?

  1. It is flexible: applicants are able to specify how long they want their coverage to last. It also allows you to customize the entire period to suit your personal needs. Moreover, you have the ability to re-apply at the end of each period, sometimes you are not; but bear it in mind that it is possible your plan may not pass all the way.
  2. It is easy: In contrast, to short-term plans, major medical coverage tales a long period depending on what you are applying for. For short-term plans, applying is easy and decision can be made almost immediately. Short-term plans are not made to replace standard medical insurance plans.
  3. It reduces the financial blow of medical bills. Sometimes, one might decide to go without health insurance but what if unforeseen circumstances arise? Open a short-term health insurance plan for you and your family today. Life insurance helps protect the people you care about if you are no longer here to provide for them. That is a life insurance quote to remember. These situations happen at inconvenient times. They come as shockers but having a health insurance scheme would help pay the bill. Recall that benefits differ according to the plan you select. The amount of money coming from your pocket would reduce when the health insurance’s deductibles do not show anymore. This helps you cover every charge.
  4. Good news! You get to have a doctor to yourself:This allows you see the doctor or visit the hospital at your own convenience. In addition, most short-term health insurance plan are in partnership with organizations providing the help, allowing you gain access to a lower care.

How do I use my Short-term Insurance?

If your short-term plan has a provider network, then any doctor should accept your card. Get in touch with the insurer or your Health agent if you have a problem. You should still be able to see almost any doctor you desire even if your plan does not have a provider network. However, you will need to submit your medical bills to the health insurance company for reimbursement. In this case, you may have to set up a payment plan or defer payment with the doctor until you pay off your claim. Providers usually discount their fees in order to participate in a network. As a result, using network providers when available saves money. With some plans, benefit levels may also vary between network and non-network providers.

Choose wisely. Keep in mind that both health and life are extremely crucial.

“A man’s home is his castle.” This saying refers to the importance of a man’s home. Our lives revolve around our homes. They’re not only where we live, they’re where we keep our memories. Over time, a house absorbs the character of those living within. Therefore, being hurt when one’s home is damaged is natural.  Victims of such tragedies shouldn’t also have to worry about money. That’s where homeowner’s insurance comes in.

Homeowner’s insurance shields families all over America from financial catastrophes. Insurance companies accomplish this by promising to pay for certain damages. They do this in exchange for monthly fees. The idea is that most insured people will not need the insurance. This allows insurance companies to assist those that do and make a profit. However, recently homeowner’s insurance rates have risen a lot. This is due to weather patterns.

Basic Policy Overview

Some might wonder how the weather can affect insurance. To learn this, we must first discuss homeowner’s insurance plans. There are four main types of individual coverage: HO-1, HO-2, HO-3, and HO-5. HO-1 is the most basic policy and safeguards individuals many things. These include fire, lightning, hail, volcanic eruption, and most forms of vandalism. HO-2 covers all the items listed above. It also covers snow, sleet, falling objects, accidental electrical damage, and accidental water damage. HO-3 is where policies start changing. HO-3 covers any damage not excluded in the policy. Finally, the HO-5 policy covers all but a few sources of damage.

Now, an observant individual will spot some similarities in said policies. Specifically, one might notice that every single one covers weather problems. Each of these policies are meant to cover both damage to the home and damage to the property inside. Furthermore, certain policies will pay out 30-day living expenses in the case of serious losses. Knowing this, we can conclude that the payout for weather-related damages can be massive. Also, weather disasters usually result in lots of people making claims. You can see how expensive these events are for insurers.

The Worsening Weather

In the last several years, there has been a growth in the rate of weather disasters. This growth has increased the financial burden on insurance companies. In response, insurance companies increased their rates. This passes the burden down to the homeowner. Unfortunately, most experts believe these rates will only continue to rise.

The culprit behind the worsening of our weather patterns is quite clear to insurers: Global Warming. According to insurance reports, most insurance companies have spent years trying to mitigate the effects of global warming. It can be said that they have succeeded. The current rise in homeowner’s insurance rates is not equal to the rising costs. However, as the average insurance company’s cost grows, so too will the average insurance rate.

In addition, it’s quite likely that the things insurance companies are using to shield consumers from the full financial burden have their limits. Many people have speculated that the future will see a sudden spike in insurance rates. The longer global warming goes on, the more likely this becomes.

What Can We Do?

Right now, there’s not much we as individuals can do to stop the rise in homeowner’s insurance rates. So long as people have houses they will need insurance. This means homeowner’s insurance is very close to a needed service. However, most insurance companies are for-profit companies, which means it’s their duty to be profitable. Therefore, the rise in rates is not something that can the insurance companies can stop.

There are some thing one can do to lessen the financial burden. For instance, one can move to an area where natural catastrophes are less common. Insuring such areas is less risky, allowing insurance companies to offer lower rates. Of course, the inverse is also true. People living near the coast or upon fault lines face higher insurance rates. This also affects people living in tornado-prone states and those living near a volcano.

In the short-term, homeowners (and those looking to be homeowners) have no choice but to bear this burden. In the long-term, however, we can try to be both more environmentally conscious. Should the weather return to normal, it’s certain that insurance rates would too.

Risk of being sued by Winter Weather: Liability Claims

We often ponder about casualties to our homes when it comes to bad weather. However, we fail to take others into consideration. There is a significant risk that people can get hurt if you don’t maintain your property. You are held responsible to damage that occurs on your territory. Nevertheless, your home insurance covers liability.

First of all, you should contact your insurance company even if you believe that the injury is not your fault. The insurance company is able to give you advice on what to do next. Additionally, insurance companies aid you with legal defense costs. This is included in the liability portion of your insurance. Take advantage of the services that insurance companies offer. They are there to help you!

Make sure you understand your contract with the insurance company. According to their policy, you have chosen to keep them aware of circumstances that might impact liability. Do not try to resolve any issue by yourself. Doing so may create a predicament for your own insurance coverage. Your insurance representative will explain how you are covered and do their best to help you in the situation.

Winter Liability Risks

  • Damaging another person’s property. For instance, a tree collapses on your neighbor’s fence or home.
  • Suppose the mailman comes to drop a package and slips on the ice on your walkway. Make sure you keep your walkway de-iced and clear of snow. This prevents others from getting injured.
  • Snow or ice on the roof of your home suddenly falls down on a parked vehicle. Moreover, a person walking along your property can also get hurt. You should pay attention to accumulation on your roof after a storm. Doing so will ensure a safe environment.

Contact your insurance company as soon as possible if you notice any casualties to your home. Many insurance companies have a 24-hour claim number that assists you in an emergency.

Insurance does not pay for gradual damage. As a result, delaying things could cost you a lot of money. Nonetheless, you can also inflict further damage that you would need to pay. This can prevent your claims from being valid.

The modern man relies on automobiles for everything. Supposedly, people spend more than 10% of their life in cars. Unfortunately, with so many people driving around at all hours of the day, accidents are unavoidable. These accidents can lead to both personal injury and financial difficulty. That’s why automobile insurance is necessary.

In the USA, all drivers need auto insurance. This requirement allows insurers to reward better drivers and penalize careless ones. It also means that major changes to car insurance are matters of national concern. This brings us to the matter of the recent rise of insurance rates. This jump in price has many citizens perplexed. Therefore, today we’ll discuss how this jump came about. However, to understand the rise in rates, some basic knowledge is necessary.

How Are Rates Determined?

As mentioned earlier, every driver in the United States must have automobile insurance. However, few people know how insurance prices are calculated. In most cases, your level of risk determines your insurance price. High risk means you’ll probably be more expensive to insure. Low risk means you’ll be cheaper to insure. There are three things insurers use to determine risk. These components are: Demographics, Car Usage, and Financial History.

Few people know that demographics play an important role in calculating risk. For instance, people who have been driving longer get into fewer accidents. Therefore, elderly drivers receive lower rates. Also, male drivers are bigger risks than women. They receive higher rates too. Furthermore, those who live and drive in urban areas with high traffic will receive higher rates than others.

Most people know that their driving history affects their insurance rates. What most people don’t realize, however, is that their current driving plans also affect these rates. For instance, drivers with low mileage are less likely to crash. Therefore, such drivers receive lower rates.  Drivers with high mileage are more likely to crash. They receive higher rates. In addition, those who own cars that are more likely to be stolen also face higher rates. There have been many reports of lottery winners buying sports cars and being ruined by the insurance rates that followed.

The most overlooked (by drivers) component of risk determination is Financial History. In truth, one’s credit history as important as one’s driving record. In addition, certain jobs are riskier than others. People in these jobs receive higher rates. Some high-risk jobs are: Doctor, lawyer, and business executive.

The Big Picture

Now we know how we get individual insurance rates. This means we can now look at the whole insurance industry. According to J.D. Power, the “annual rate increase of more than $200 per vehicle has more than doubled during the past four years”. This sudden rise in rates means that auto insurance is more expensive than ever.

However, this rise in rates isn’t because of greedy corporations. Instead, many different things cause the rise in rates. The most important of said things are: More costly accidents and global warming. These things increase the cost of insuring customers.

You heard that one right; global warming is to blame for rising insurance rates. Specifically, the weather caused by global warming is to blame. Unfortunately, global warming has nasty effects upon the weather. This has led to more insurance claims in the past few years than the industry has ever faced before.

At the same time insurance companies are dealing with this, they’re also facing a rise in fatal accidents. Fatal accidents are, of course, very expensive, as the insurer must pay the victim’s family for their loss. Such accidents may even make insurer pay for funeral costs.

What This Means For Us

The factors mentioned above (as well as a few others) make it far more difficult for insurers to turn a profit. Their response to these changes is raising the rates. Unfortunately, that means we as citizens must foot the bill for problems we have no say in.

However, there is still hope. We as Americans can solve any problem by making it public. To remove these problems, we must only inform others. An informed nation is a strong nation. We can work together to remove said problems. By doing so, our future will become brighter.

Who is secured by auto insurance and under what circumstances?

Your auto insurance policy covers you and other family members under your plan. Regardless of whether you’re driving your car or someone else’s. Additionally, your policy also provides coverage if someone who is not on your policy is driving your car. But this person needs your permission to operate the vehicle.

The auto policy you own only covers personal driving. Despite whether you are commuting to work or taking a trip. You insurance will not provide coverage if you use your car for commercial purposes. For example, delivering pizza. Moreover, coverage will also be neglected if you use your car to provide transportation to others through a ride-sharing service such as Uber or Lyft. However, some auto insurers are now offering supplemental insurance products. This extends coverage for vehicle owners providing ride-sharing services.

Is Auto Insurance Mandatory or not?

Auto insurance conditions are different for each state. Nonetheless, your lender may have his own requirements if you’re financing a car. Below is a list of what car owners want you to carry in every state:   

  • Bodily injury liability – This covers any costs that deals with injuries or death that you or another driver is responsible for while driving your car.
  • Property damage liability – Reimburses others for the damage caused by you or another driver operating your vehicle. Accidents include hitting other vehicles or property such as a fence, building or utility pole.

Furthermore, other states require that you to bear:

  • Medical payments or personal injury protection (PIP). This provides reimbursement for medical expenses that involves injuries to you or your passengers. In addition, lost wages and other expenses are also paid off.
  • Uninsured motorist coverage reimburses you when an accident involves a driver who does not have auto insurance. For instance, a hit-and-run scenario. You can buy uninsured motorist coverage as well. This will pay off the amount that another driver lacks to pay during a serious accident.

Therefore, consider adding PIP and uninsured motorist coverage to your policy for greater financial protection.

 

“Family isn’t the most important thing. It’s everything.” -Michael J. Fox. Family means a lot to people. They are the people that stay with you through the best and worst of times. Therefore, it’s normal to worry about what will happen to your family when you’re gone. It’s these worries that form the basis for life insurance.

We seldom talk about life insurance. However, it’s something that nearly every American deals with. Now, the hesitation people feel towards discussing anything related to death is natural. When comes to insurance, however, it’s necessary. Rather, it behooves people to learn as much as they can about life insurance and the regulations that affect it. Only informed and knowledgeable citizens can acquire the greatest benefits for their families.

For instance, many people are unaware that a major shift is soon to occur within the life insurance industry. This shift comes in the form of new regulation from the DOL (Department of Labor), which should change the entire industry for the better. Said regulation will impose new legal and ethical standards upon most insurance salesmen. Of course, in order to fully understand the impact of said regulation, we’ll first need to discuss how life insurance works. Only then will we be ready to discuss the changes and how they affect you.

Life Insurance Basics

Your choice in life insurance may decide the future of your family. It’s unpleasant, but true. Roughly 23% of all deaths in the USA occur between the ages of 25 and 64. No one ever expects it, but the future of your family might depend on how you planned for it. Therefore, it’s crucial that you understand the basics of life insurance.

Firstly, there are many different types of life insurance. Today, however, we’ll just talk about the three most popular types: Term, Whole Life, and Universal. Each of these types appeals to different people in different situations. As such, they all have very different benefits and drawbacks.

Term life insurance is a temporary policy. Usually, term life insurance policies will exist for a total of 10-20 years. These policies are by far the least expensive life insurance option. However, it’s important to note that life insurance prices increase exponentially as one gets older. Therefore, once your term insurance expires, you’ll find life insurance of any kind to be far more expensive.

Whole life insurance is the simplest kind of life insurance, and likely the one people are most familiar with. Whole life policies remain in effect for as long as an individual continues paying for them. The initial fees are more expensive than those of term-life insurance. However, these fees don’t change in price after the initial purchase of a policy. In addition, whole life policies have cash values that grow as the policy ages.

Universal life insurance is similar to whole life in most ways. Much like whole life, it is also permanent, and it possesses a cash value. However, unlike whole life, the purchaser of universal life can shift a certain amount of dollars around. Essentially, one can “borrow” some money from the death benefit by shifting it to the cash value.

New Regulation

These life insurance policies are the most common, but make no mistake, there are many others. Furthermore, each of these policies can be customized (in minor ways) for specific individuals. You may now wonder; how can insurance agents find the best policy for you out of so many others? Well, that’s part of what this new regulation changes.

The upcoming law known as the DOL Fiduciary law stands to elevate most insurance agents to the level of fiduciaries. Fiduciaries hold the highest level of financial responsibility, and are required to act in the best interest of their clients at all times. Some might wonder, “Don’t insurance agents already possess these responsibilities?” Unfortunately, this is not the case.

As it stands now, insurance agents are only required to provide you with a plan that can meet your needs. They are under no obligation to work harder to find the best plan for you. This new plan will change that, subjecting those agents caught taking the easy way to heavy penalties.

The future of life insurance

This new ruling stands to change the face of life insurance forever. The feeling behind this change in policy is to return us to the earlier days of life insurance, when people trusted firms to take good care of them. Hopefully, this law will bring a new era, where people once again feel safe and comfortable dealing with life insurance.

The life insurance industry needs to change the way they do business. Some companies make a more appropriate effort to develop positively while others don’t. Moreover, this industry is on the edge of a lot opportunities. Doug French and James O’Neill call this evolution “the creative destruction” or “a paradigm shift”.

Although many experts might know where things are going, let us analyze one possible outcome. Nowadays, business circulates around customer experience. Your clients will go somewhere else if you do not have what they desire. This applies for the life insurance industry as well as for other companies. Making sure that your customers are satisfied is very crucial. This is because digital products are popular among the 35 and under age group. These people make up a huge portion of digital consumers. As a result, insurance companies and agents should capture this group of clients. Digital products create a dependence on the online environment to conduct a great deal of business.

Future clients will transform the entire life insurance system. They will most likely be an online shopper. More than ever, customers are going to Google before purchasing anything. Modern day customers do not want to be sold anything. Nor interact with agents. They would prefer not speaking to an agent at all costs if possible. However, agents are helpful when asking questions. These clients just want to find facts about the product and purchase it. Future clients are going utilize their own research skills to investigate companies and products. Call centers, mobile, and the internet will all play a huge role in the future of the life insurance industry.

Purchasing a home can be very troublesome. This process requires you to understand the relationship between down payments and private mortgage insurance. You may need to for pay an extra insurance on your loan if you make a down payment below 20%. Moreover, private mortgage insurance is an excess cost that increases the size of your monthly payments.

Mortgage insurance is different from other insurance plans. You pay a monthly premium to the insurer who protects the mortgage lender in your absence. In this article, you will learn more about PMI, how much it might cost, and what you can do to avoid it.

What is Private Mortgage Insurance?

You will have to pay for PMI if you a deposit of less than 20% when using a mortgage loan. Mortgage insurance secures the lender in the circumstance that default on your loan. This means that for some reason you are not making your mortgage payments. Furthermore, any home loan that considers for more than 80% of the purchase price should require a PMI. Lenders carry a risk when they make a large investment in a home. Therefore, they charge an extra insurance to offset this additional risk.

For example, PMI will probably cover 15% if you put down 5% to purchase a home. A loan default triggers both the policy payout and foreclosure proceedings. This allows the lander to repossess the home and sell it in an attempt to regain the balance of the debt.

Cost of Private Mortgage Insurance

The cost of PMI depends on the size of the loan and the insurance company being used. You can expect to pay anywhere from 0.5% to 1% of the loan annually. This comes out to $50-$80 per month on a $160,000 home ($600-$960 per year). For a $200,000 home, the cost of the PMI may be $125 per month or more. The greater the loan, the higher the cost of private mortgage insurance.

Cost of Private Mortgage Insurance

The cost of PMI depends on the size of the loan and the insurance company being used. You can expect to pay anywhere from 0.5% to 1% of the loan annually. This comes out to $50-$80 per month on a $160,000 home ($600-$960 per year). For a $200,000 home, the cost of the PMI may be $125 per month or more. The greater the loan, the higher the cost of private mortgage insurance.

Avoiding Extra Cost of PMI

Avoiding extra PMI costs is possible when your down payment is less than 20%. Previously, I mentioned that you need PMI when a loan accounts for more than 80% of the home’s purchase price. However, you can avoid PMI if neither one of your two mortgages accounts for more than 80%. This is called the piggyback strategy. You have another mortgage loan that piggybacks on the first.

An example of this tactic is the 80-10-10 financing method. You receive the first mortgage loan for 80% of the purchase price and the second one for 10%. Additionally, you would have to deposit the remaining 10% in the form of a down payment. You can do the math and see that the total amount equals 100% of the purchase price. Nevertheless, neither of these two loans accounts for more than 80% of the purchase price. Therefore, you are likely avoid the extra cost of PMI when using this strategy.

Another example is the 80-15-5 mortgage. Same concept, however his time the borrower is making a down payment of 5%. The first and second mortgage loans consider for 80% and 15% of the purchase price. Again, there is no single loan covering greater than 80% of the purchase price.

Cancelling PMI

You are able to cancel your PMI once your mortgage principal balance is less than 80% of the current market value of your home. Usually, there are additional restrictions like a history of timely payments and the absence of a second mortgage. Mortgage lenders are responsible for telling you long it will take for you to reach that loan-to-value mark and update you of any cancellation options annually. They also cancel your PMI once the mortgage balance drops below 78% of the original value. Likewise, PMI can be terminated if you reach the midpoint of your payoff.

Factors to consider when selecting a loan that requires PMI

Similar to other types of mortgage insurance, PMI allows you to qualify for a loan that you may not be able to obtain. However, this also increases the cost of your loan. Thus, you are not protected if you run into problems with your mortgage. Only the lender is safe.   

Lenders often give conventional loans with smaller down payments that do not depend upon PMI. You will usually pay a greater interest rate for these loans. Furthermore, paying a greater interest rate can be either more or less expensive than PMI. This depends on a variety of factors such as the time period you plan to stay in the home. You have the option to ask a tax adviser about whether paying more in interest or PMI affects your taxes differently.

Borrowers who make a down payment may choose to consider other kinds of loans like the FHA loan. The cost of other kinds of loans can be more or less expensive than a conventional loan with PMI. This price depends on your credit score, down payment amount, the particular lender, and general market conditions.

Another alternative you have is saving up the money to make a down payment of 20 percent. PMI is not necessary with a conventional loan when you pay 20 percent down. Nonetheless, you receive a lower interest rate with this down payment.    

Therefore, ask lenders to show you the pricing for different options so you can see which one is the best deal.

 

 

 

 

 

 

 

 

 

 

 

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Purchasing a home can be very troublesome. This process requires you to understand the relationship between down payments and private mortgage insurance. You may need to for pay an extra insurance on your loan if you make a down payment below 20%. Moreover, private mortgage insurance is an excess cost... Read more »