General FAQs about Health Insurance
Q: What kinds of questions should I be expected to answer when I apply for an insurance policy? Why do insurers need so much information?
A: When you apply for an insurance policy, you’ll be asked a number of questions. Among other things, the agent might ask you your name, age, gender, and address. You’ll also be asked a number of other questions which will be used to determine how likely you are to make a claim.
When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, they want to know about the person’s previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured. Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you.
In addition to your age, gender, and driving experience, they will also need information about the vehicle you drive and how you drive it to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.
Q: What are the advantages to using an agent to purchase insurance?
A: By using an agent to purchase insurance, the policy holder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local independent agent is able to deliver quality insurance with competitive pricing and local, personalized service.
Health Insurance FAQs
Q: How much Health insurance should an individual own?
A: Health insurance protects against unforeseen illnesses and accidents by providing monetary support to help pay for medical expenses. Paying monthly premiums to an insurance company ensures that funds will be available to help cover medical costs.
Q: Why would I need an individual health insurance policy?
A: The most common reason a person will need and individual health insurance plan is because he / she is no longer covered under a group plan at their job. In this instance, the person will normally seek out individual coverage to continue receiving health insurance.
Q: Is there a way to reduce my premiums and overall health insurance costs?
A: Premium costs can be reduced by choosing higher deductibles and higher co-pays and coinsurance levels. This will mean you pay less monthly, but will pay more per medical event. Other ways to reduce overall health care costs is by just taking care of yourself. By exercising and eating right and not engaging in bad habits like smoking you can show you are a lower risk person to ensure and receive lower premiums. Additionally, living a healthy lifestyle will also reduce the incidence of common colds and other minor illnesses that result in doctors’ visits and prescription medicines.
Q: Can I get coverage for myself and my family?
A: Yes you can. We provide quotes on both individual health insurance plans and health insurance plans for families.
Q: What is coinsurance?
A: Coinsurance is the portion of the medical bill that is shared by both the insured and the insurer. For example, if you had an 85% to $5,000 coinsurance, you would be responsible for 15% of the medical expense while the insurer would be responsible for the other 85%.
Life Insurance FAQs
Q: How much life insurance should an individual own?
A: Rule of thumb suggests an amount of life insurance equal to 6-8 times annual earnings. However, many factors should be taken into account when determining the right amount of life insurance for you and your family.
- Income sources (and amounts) other than salary/earnings
- Whether or not you are married and, if so, what your spouse’s earning capacity is
- The number of individuals who are financially dependent upon you
- The amount of death benefits payable from Social Security and from an employer-sponsored life insurance plan
- Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need, etc.)
Calculating the correct amount of life insurance to buy is not as simple as it appears. We recommend contacting us for help determining the right amount of coverage. As independent agents, we are unbiased advisers that will help you avoid buying too much, show you appropriate optional coverage for your need, and recommend a company that will best serve your interests.
Q: What about purchasing life insurance on a spouse and on children?
A: In certain circumstances, it may be advisable to purchase life insurance on children; generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s).
It is of utmost importance that the income-earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance. This should be done before contemplating the purchase of life insurance on children or on a non-wage-earning spouse. Life insurance on a non-wage-earning spouse is often recommended for the purpose of paying for household services lost due to this individual’s death. In a dual-earning household, it is important to protect the income earning capacity of both spouses.
Q: Should term insurance or cash value life insurance be purchased?
A: This is a difficult question that can only be answered depending on your personal circumstances.
First, recognize that in any life insurance purchasing decision, two questions must be answered:
- How much life insurance should I buy?
- What type of life insurance policy should I buy?
If you are on a tight budget, you may opt for term life insurance- which tends to be the least expensive life insurance option you can choose.
If your ability to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the second question: what type of policy to buy. Important factors affecting this decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer), and the rate of return on alternative investments possessing similar risk.
Q: How does mortgage protection term insurance differ from other types of term life insurance?
A: The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, e.g., 15, 20, 25, or 30 years. Although the face amount decreases over time, the premium usually remains the same. Further, the premium payment period often is shorter than the maximum period of insurance coverage. For example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.
Q: Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?
A: Yes. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured’s death. Although a lender may offer a mortgage protection term policy to you, the lender rarely requires it.
Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?
Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost.