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What Is Supplemental Insurance?

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What Is Supplemental Insurance?

If you have an insurance policy that has coverage gaps, you may need to purchase something called “supplemental insurance.” This means simply that it is in addition to the insurance coverage that you already have. It is usually a secondary payer and only pays after the first insurance has paid. 
The most common types of supplemental insurance are health-related insurance that pays directly to you if you’re injured (disability) to help cover your expenses due to lost wages, or that pays uncovered health care costs from your other insurance. Combined with regular insurance it can help mitigate financial crises.

A few types of supplemental insurance are:

* Disability – Coverage you can purchase that will pay cash benefits to you for lost wages, household help, and even for home delivery if you are disabled.

* Accident – Sometimes the coverage you have through your health insurance is lacking so you can purchase additional accident coverage to help cover issues that might come up.

* Health – If your business offers some coverage but it’s lacking, you can go to an insurance agent and buy supplemental insurance to cover what your place of work doesn’t, such as eye care, dental care and maternity coverage.

* Life – In addition to a regular life insurance policy, you may find that you need more insurance as you age. Instead of redoing the first policy it can often be beneficial to pay for a small additional policy.

* Medicare – There are many gaps in Medicare coverage, so getting a supplement is a good idea to help cover things that are missing.

* Gap – Owe more for your property than it’s worth? You can get gap coverage that helps make up this difference if a loss occurs.

Most supplemental insurance really works just like regular insurance, but a lot of times it pays directly to you instead of to others. This which means you’ll be required to file the paperwork yourself. But, if you are short on savings and do not have a high tolerance to risk, you may want to look into getting supplemental insurance.

Look for Gaps in Coverage

To figure out where you need insurance, go over your coverage with a fine tooth comb. It can help if a qualified agent, with a company you want to work with, is helping you. They can help you figure out where you may be short on coverage. Look at each type of insurance that you have to figure out where you have to come out of pocket too much, or where you have no coverage when you thought you did (such as drug coverage).



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Talking to an insurance agent, or several agents that work with more than one company, can help you figure out if you need supplemental insurance or not. Don’t overlook the value of having supplemental insurance if you need it.

Tips for Lowering Your Homeowner’s Insurance Premiums

Tips for Lowering Your Homeowner’s Insurance Premiums


One of the largest investments you’ll likely ever make is your home. Protecting it has to be a top priority, and due to that you should do everything you can to ensure that you have the best insurance you can afford that covers what you need it to cover.
1. Compare Several Companies – High pressure sales tactics are common in the insurance industry, but you have to resist it so that you can check out more than one company for your insurance needs. Prices, customer service, and coverage vary greatly among companies.

2. Choose a Higher Deductible – Higher deductibles enable you to pay less on your premium payments each month. It’s a quick way to lower costs. Ask your insurance provider to compare premiums and deductibles so that you can make the right decision for your family.

3. Consider Actual Rebuilding Costs – Even if your entire home and all its contents was wiped off the face of the earth, you still own the land. Get an assessment to find out how much the land is worth and deduct that from the cost of a rebuild to get a more accurate picture of what it will cost to rebuild. 

4. Bundle Insurance – When you buy more than one kind of insurance from a company, you can usually get a substantial savings. Many companies that are also banks provide other financial offerings, too. Check out everything to find out if it’s good enough for a one-stop shop.

5. Update Your Home – If your home is older, it’s important to ask your insurance agent if you can do things to your home to lower the cost of insuring it like storm shutters, shelters and other features.

6. Improve Home Security – Fire systems, carbon monoxide systems, and even burglary systems might help lower the cost of your insurance premiums. Your insurance agent can make recommendations for you.

7. Ask for Other Discounts – There are often discounts you can ask about such as senior, job related, bundling, and other types of discounts that they might not mention to you without asking.

8. Keep Your Credit Spotless – If you have poor credit, you’re going to pay more for insurance as well as other types of products. Do what you can to keep your credit rating high to avoid paying more for necessities like insurance.

9. Become a Long-Term Customer – The longer you stick with a company, the more discounts you will get. Some companies even provide refunds for long-term customers. Ask about programs like this to help you make a choice.

10. Review Your Policies Yearly – People find it helpful to review their insurance policies at least yearly to ensure that they’re neither overly covered nor under covered. Many people find it helpful to do a review each year during their birth month so that it becomes a routine.

Homeowner’s insurance is a necessity. You never know when something will happen - be it “an act of God” or an accident such as a house fire. Even someone falling down inside your house can result in huge bills for you to pay. Being covered for these contingencies can give you peace of mind now and in the future.

How to Know If Your Homeowner’s Insurance Is Up to Date

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How to Know If Your Homeowner’s Insurance Is Up to Date

It’s not unusual to buy a house, get homeowner’s insurance and then never check up on the policy again. Then something terrible happens and you find out you’re not covered for that new deck you added. To avoid this happening to you, check up on your policy coverage at least once a year. Some people choose to update anything to do with insurance of all kinds during their birth month to make it easy to remember to do.
Has Your House Increased in Value?

If you’re not sure, ask for an assessment. Usually you’ll get a tax assessment sent to you once a year in order to pay your property taxes. If you notice a big increase in the assessment, first double check to make sure that it is accurate and not overpriced; second, call your insurance company so that you can update your policy.

How Much Have You Paid Down the Mortgage?

If you’ve paid down the mortgage and you have a healthy savings account, you should determine how much you’re willing to come out of pocket for your house if something should happen. Some people, for example, do not report a power outage caused by a storm that ruined their food. They really don’t need the 300 dollars to refill the fridge from the lost food, or 1000 dollars to fix the damage caused by the tree falling on the roof. 

Have You Added onto the House?

If you’ve added a room, improved the windows, improved security and so forth, you should talk to your insurance company to determine if this affects the price of your insurance. Having safety devices like some alarms, carbon monoxide detectors, and security features such as automatic calls to the fire station when you’re out can lower the cost of your insurance. Likewise, some other additions like a new room will add to the cost.

What New Things Have You Brought into the House?

Most of the time, a couple of years after buying a new house people tend to buy new furniture, more electronics and other things that cost more money than their old appliances and entertainment systems. It’s important to assess at least once a year the cost of the items in your house such as new tools, furniture and fixtures.

Have You Installed a Security System?

Security systems can cut down on the cost of your insurance when it comes to theft risk. If you’ve installed an expensive system, though, it might add to the cost of your insurance to replace the system should it be damaged from something like a storm.

Do You Have a Pool You Did Not Have Before?

Have you built a pool, added a hot tub or even have a trampoline? If so, your insurance needs are going to be higher due to potential liability. Getting children’s parents to sign waivers doesn’t work, so make sure you are covered.

Has a Fire Station Moved Nearby? 

Believe it or not, having a fire station nearby can lower your insurance costs, but having a fire extinguisher put into your yard can make them higher. If either of these things happens, you need to call your insurance company and let them know to see how it affects your insurance.

Did You Add a Storm Shelter?

Adding a storm shelter is one more thing that will need to be repaired should something terrible occur. While it will help save on loss of life and some companies give a discount for having one, in some cases it might actually increase your insurance costs. 

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As you take an assessment of your homeowner’s insurance needs, remember to also update other policies as needed. Please do not avoid updating your policy for fear of paying more. There is no point in paying anything if you’re not covered according to your true needs. Getting paid 1000 dollars when you need $10,000 is just like getting nothing at all.

How Much Insurance Do You Really Need?

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How Much Insurance Do You Really Need?

Before buying insurance, try to figure out how much you need. How much insurance you need depends on a variety of factors, including the type of insurance you’re looking at getting, the laws, and your family financial situation. In general, the idea behind insurance is to avoid added financial stress when a difficult situation occurs, not shower someone in riches.
By Law

Each state has various requirements on auto insurance, so you need to ensure that whatever insurance you get for your automobile covers what is required by law. Most states have quite low requirements so you may then want to also decide to get a little extra based on your needs and your own level of risk aversion.

Income Needs

If your family needs income after your death, you may want to consider various types of insurance that can offer an income to your beneficiaries. Your insurance agent can help you determine what type of insurance is best for your needs, but the first thing you should do is make a list of your assets, debts, and how much income your family will need if you’re not there. Age plays a big factor here, too. If you spouse is closer to the age they can collect social security, the income you need to provide them after your death will be substantially lower.

How Much Debt You Have

Some debt will disappear with your death automatically. Other debt, such as joint debt, medical bills or your house payment will not go away. When you factor in that, and the loss of your income, plus paying off the debt that you’ve accumulated, you’ll have a much better idea of how much life insurance you need. The same thing can be done for other types of insurance, such as homeowner's or renter’s insurance. It’s based on how much you need to pay off or replace.

Your Level of Risk Aversion

Some people have a higher tolerance for risk than others. If you have a large cash savings account, it’s important to consider how much of that you want to risk, compared to the cost of buying enough insurance to pay down debt, pay final expenses, or pay to fix your car in an accident. With auto insurance, the higher your deductible the lower your monthly premium payment, so if you have good cash reserves you might be willing to risk some of your savings to pay less each month.

How Much Pension You Have

If you have a pension account, consider that in your insurance dealings because it’s money that your family may have available in addition to your savings and insurance. Generally the more cash your family will have at your death, the less insurance you need to purchase. However, what if you were incapacitated instead of dead? Do you have insurance to cover that contingency? 

Your Legacy

While insurance should not be something you buy to create wealth in your family due to the expensive nature of insurance as you age, sometimes you just want to provide a legacy to someone such as a charity or a grandchild. You can get a special policy that goes directly to them after your death just to pass on something from you, even if you have nothing in the way of personal assets now. 

Deciding how much insurance you really need depends on the type of insurance you’re getting, your current cash savings amount, and how close you are to retirement. In addition, consider your risk tolerance level, and the needs of the people you love and care about.

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How Insurance Companies Assess Risk

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How Insurance Companies Assess Risk

Risk is all about how likely it is that something might happen to damage person or property. Risk determination is based on many factors such as potential “acts of God”, human behavior, and the age of the people being covered. Most risk is, of course, based on uncertainty and it is a gamble on the part of the insurance company. However, it’s a gamble that is always in their favor due to the software they use to help evaluate risk based on a variety of information.
Examples 

* Smokers versus non-smokers – Life insurance and health insurance companies generally give a discount to non-smokers because it’s a known scientific fact that smokers are more likely to get ill or die sooner. 

* Teenagers cost more – Car insurance companies charge teenagers a lot more for insurance coverage due to the fact that they are scientifically proven to be more likely to get into an accident than experienced drivers.

* The more stuff the more cost – Regardless of the type of insurance you get, the more the dollar amount you need to cover, the higher the fee is going to be because that is more risk for the insurance company. 

* Geography – Where you live will make a huge difference in the cost of your insurance, no matter what type. This is because a lot of risk is assessed on a local basis. How many tornados does your area have? Do you live in a flood zone? Do you live in an area with high traffic and a high rate of accidents? What about theft? Does your zip code happen to be in a high crime area? All of these things will factor into your insurance costs.

* Your age – If you are older, life insurance is going to be more expensive. The reason is that everyone dies and you’re more likely to die the older you get. The cost of the insurance is based on a combination of average lifespan of your sex in your zip code, and other health factors.

* Your lifestyle – People in certain lifestyles pay more for insurance than others. For example, if you love skydiving, your life insurance will be a lot more expensive than if you don’t. If you like riding motorcycles, you’re going to pay more. 

Risk Assessment 

Insurance companies use data and statistics to compare things and assess risk. They do sometimes compare things that don’t always seem to go together, but using a lot of complicated data they extrapolate a risk factor for you when determining the price of your insurance and whether they’ll even cover you or not. 

The insurance company inputs all the data they gather from you into their complicated computerized systems and out comes your “risk assessment” which will determine whether or not they will cover you and at what price. These assessments are important for the insurance company to become and remain profitable. But they are also good to know so that you can manage your own risk in order to get better prices.

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How Having Not Enough or Too Much Insurance Hurts You

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How Having Not Enough or Too Much Insurance Hurts You

There are many variables that determine how much insurance you need to have. Insurance is meant to help defray costs and avoid financial disasters. It is not meant to help you or your relatives get rich. However, there are some questions you can ask as you choose insurance that you need to protect yourself and your family. The questions are based on the type of insurance you’re looking into, the laws of your state, and the state of your financial affairs.
Life Insurance 

As you choose how much and what type of life insurance to get, ask yourself what the point of the insurance is. Does your spouse need lifetime income if you should pass first? How much debt do you have that needs to be paid down? How much will your family spend on your final expenses? These questions can help you determine how much insurance you need.

* By law limits - In addition, life insurance companies generally limit the amount of insurance you can get based on your current income or your financial contributions to your household. You’ll need to take that into consideration as well when you’re determining how much to invest in insurance. 

* How much savings you have – Some people don’t even need insurance because they have enough savings to cover bills, final expenses, as well as to cover future income for their beneficiaries. It could be a waste of money to invest in life insurance under these circumstances.

When you take into consideration these issues, you can see how you can buy too much life insurance if you don’t need income for your dependents. Generally as you age your insurance needs form a bell curve with the most insurance needed during the time you’re raising a family and the least amount needed when you’re a young college student and a retired individual.

Auto Insurance

Choosing how much insurance to get for your automobile is covered by the laws in each state. Each state has a minimum amount of insurance coverage required. But, the minimum in most states is far too low. It’s important that you assess the truth of the situation in a worst case scenario to ensure that you get enough insurance to cover your needs.

Homeowner’s Insurance

Choosing how much homeowner’s insurance you need depends on the same factors as other insurance in terms of laws regarding minimum coverage. Then, you will go through with your insurance agent the potential factors that can come up, such as whether or not your policy covers floods or water damage. 

Rental Insurance

Your rental agreement usually covers how much insurance you need to buy, but so does the cost of your items. Do not assume that you’re covered in an apartment fire when you’re in a rental unless you are paying for rental insurance. The owner’s insurance likely only covers the building and not your personal belongings. Get enough to pay off what you owe and replace items at an increased cost. 


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Having too much insurance can hurt you by requiring you to spend too much of today’s money that could be used for savings and other purposes. Having too little insurance can cause problems by not protecting you and your family enough, contributing to potential financial disasters over situations such as a car accident, a busted pipe, or other issues that insurance is designed to help protect against.
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