EIJING—Chubb Corp. said Tuesday that it has received approval to establish its second insurance branch in China.

Chubb Insurance (China) Co. Ltd., a wholly owned subsidiary of Warren, N.J.-based Chubb, received approval from the China Insurance Regulatory Commission to establish a branch in Nanjing, China, that is to open in December.

Chubb opened its first China branch in Shanghai in September 2000. That branch was converted into a wholly owned subsidiary in February 2008.

businessinsurance

When you lose your job unemployment insurance provides temporary financial assistance that can help you pay the bills. Find out how to apply for unemployment insurance benefits in the United States.

1. Find out if you qualify for unemployment insurance. Individual states determine eligibility. Your State Unemployment Insurance Office can tell you if you qualify and how to apply if you do.
2. Gather the documents and information you need to file your claim. You will need your Social Security number. You will also need a list of past employers, their addresses, and your dates of employment.
3. Apply for unemployment benefits through your State Unemployment Insurance Office, which may allow you to apply online, by phone or in person. Apply as soon as possible since you will not receive your first check for a few weeks.
4. Register with your state’s Employment Services Office. You can receive free services that include help with your resume, job interview help, career counseling, access to local job listings and job training.
5. Claim your weekly or bi-weekly benefits. In many states you can do this online or by phone. It is important to follow your state’s directions for claiming your weekly benefits so you don’t miss payments.
6. Appear at your Unemployment Insurance Office when you are requested to do so. Be on time for all appointments.
7. Look for a job. To maintain your benefits you must actively look for a job and not turn down any suitable offers. Taking a part-time job may not mean your benefits will end, as long as you don’t earn over a certain salary, as determined by individual states. Check with your unemployment insurance office for details.
Tips:
Contact your State Unemployment Insurance Office for information specific to applying for unemployment insurance benefits in your state.
The amount recipients of unemployment insurance benefits receive is based on a percentage of the individual’s earnings over a 52-week period. The amount will not exceed a maximum benefit amount that varies by state.
Benefits can be paid for up to a maximum of 26 weeks in most states, although additional weeks of benefits may be available during periods of high unemployment.
What You Need:
Your Social Security number
A list of jobs you have held, including dates of employment and addresses.

By Dawn Rosenberg McKay

about.com

To understand title policy insurance in America, let’s look at chain-of-title and how title companies search the public records. Title insurance companies aren’t really concerned with where dinosaurs once roamed, whether our ancestors trekked across the Bering Straight or where American Indian tribes settled. Title searches begin with when the United States government stole the land, I mean claimed it — from the U. S. patent — and move forward from that point.

Because humans are involved in recording deed transfers and plotting land parcels, a lot can go wrong. You want title insurance because it will protect you against defects and human error.

Property Searches and Public Records

Property transfers were first recorded alphabetically in separate Grantor and Grantee books.
The books are heavy to lift and dusty.
County records are often maintained at local courthouses or the Clerk of Registrars.
Today, most records are stored on the computer.

Division of Land

Early deeds involved large chunks of land known as Townships.
Townships contain 36 sections and are six miles by six miles.
Sections measure one mile by one mile and contain 640 acres.
Half of a section is 320 acres.
1/4 of a section is 160 acres.
1/4 section of 1/4 section is 40 acres.
An acre is 43,560 square feet

Title Search Basics

Title searches start with the most recent deed, searching the grantee’s name (the person now holding title) backwards in time, until the deed when the grantee acquired the property is located.
That grantor’s name is then searched backwards in time in the grantee’s book to find when the grantor acquired title as a grantee.
This process continues, and over time, the property description involves larger and larger parcels of land.
Eventually, the searcher finds the U. S. Patent.

Other Factors Affecting Title

Deeds establish chain-of-title, but sometimes those chains are broken. In addition, title searchers also look for reconveyances (proof that the encumbrances are paid off), and they look for easements, rights-of-way, CC&Rs, other elements affecting title to the property. Here are more records that are searched to piece title together:

Marriage records
Death certificates
Tax sales

Title Insurance Coverage

Depending on the title company, consumers can choose among a variety of options, but the top three choices are Owners, Lender’s and Extended Coverage.
Basic Owner’s Title Policy Coverage:
Clear title to the property
Incorrect signatures on documents
Forgery, fraud
Defective recordation
Restrictive covenants
Encumbrances or judgments

Basic Lender’s Title Policy Coverage:
Mechanic’s liens and unrecorded liens
Unrecorded easements and access rights
Defects and other unrecorded documents

Extended Owner’s Coverage
Building permit violations from previous owners
Subdivision maps
Covenant violations from previous owners
Living trusts
Structure damage from mineral extractions
Variety of encroachments and forgeries after title insurance is issued

Who Pays For Title Policy Insurance?

This depends on your local custom.
It can differ from county to county, but it is also negotiable in the purchase offer.
Sometimes sellers and buyers split the fee for the owner’s policy.
Typically, the buyer pays for the lender’s coverage.

How Long Are Title Policies Good For?

Forever, theoretically. If you are planning to resell the property within a couple years, ask your title company about “binder” coverage. Most companies will sell you a binder policy for 10% more. A binder is good for two years, often can be extended beyond that time, and the fee charged for the new buyer’s policy will be the difference between what you bought the property for and the price at which it sold. In other words, you will get a credit for the amount of coverage you purchased under your own Owner’s Title policy.

How Often Are Title Policy Insurance Premiums Paid?

Once. The fee is due when you buy. You will never pay it again. Title policy insurance is the best insurance policy you can ever buy.

By Elizabeth Weintraub

about.com

WASHINGTON – The new health care law already is helping millions of people through tax breaks for small businesses and assistance for families with young adults, President Barack Obama said Saturday.

In his weekly radio and Internet address, Obama promoted his top domestic priority, which passed Congress with no Republican votes and continues to stir strong emotions nationwide. He acknowledged that many provisions will not take effect for years. But he said others are doing some families good now.

Some 4 million small-business owners and organizations have been told of a possible health care tax cut this year, Obama said. On June 15, some older people with high prescription drug costs will receive $250 to help fill a gap in Medicare’s pharmaceutical benefits.

“Already we are seeing a health care system that holds insurance companies more accountable and gives consumers more control,” the president said.

Obama said Anthem Blue Cross dropped a proposed 39 percent premium increase on Californians after his administration demanded an explanation. He said Health and Human Services Secretary Kathleen Sebelius wrote to all states “urging them to investigate other rate hikes and stop insurance companies from gaming the system.”

A new federal agency will provide grants to states with the best oversight programs, Obama said.

His administration also is drafting a “patients’ bill of rights” to give consumers information about their health care choices and rights, he said.

As of September, Obama said, “the new health care law prohibits insurance companies from dropping people’s coverage when they get sick and need it most.”

He said his administration will urge large employers to follow several insurance companies’ example of allowing people under 26 to stay on their parents’ employer-provided health insurance plans starting this summer, rather than having to wait until September or later.

“Ultimately, we’ll have a system that provides more control for consumers, more accountability for insurance companies and more affordable choices for uninsured Americans,” Obama said.

Republicans continue to attack the new law as too costly and ineffective. They vow to make it a major issue in the November congressional elections.

A new Gallup poll found that the law’s enactment has not lessened Americans’ concerns about health care costs. The poll found that 61 percent worry about the costs of a serious illness or accident and 48 percent worry about normal health care costs.

Whitehouse.

1) Small Business Tax Credits

Offers tax credits to small businesses to make employee coverage more affordable.  Tax credits of up to 35 percent of premiums will be available to firms that choose to offer coverage.  Effective beginning calendar year 2010. (Beginning in 2014, the small business tax credits will cover 50 percent of premiums.)

2) No Discrimination Against Children with Pre-Existing Conditions

Prohibits new health plans in all markets plus grandfathered group health plans from denying coverage to children with pre‐existing conditions.  Effective 6 months after enactment. (Beginning in 2014, this prohibition would apply to all persons.)

3) Help for Uninsured American with Pre-Existing Conditions until Exchange is Available (Interim High-Risk Pool)

Provides access to affordable insurance for Americans who are uninsured because of a pre‐existing condition through a temporary subsidized high‐risk pool.  Effective in 2010.

4) Ends Rescissions

Bans insurance companies from dropping people from coverage when they get sick.  Effective 6 months after enactment.

5) Begins to Close the Medicare Part D Donut Hole

Provides a $250 rebate to Medicare beneficiaries who hit the donut hole in 2010.  Effective for calendar year 2010. (Beginning in 2011, institutes a 50 percent discount on prescription drugs in the donut hole; also completely closes the donut hole by 2020.)

6) Free Preventive Care under Medicare

Eliminates co‐payments for preventive services and exempts preventive services from deductibles under the Medicare program.  Effective beginning January 1, 2011.

7) Extends Coverage for Young People up to 26th Birthday through Parents’ Insurance

Requires new health plans and certain grandfathered plans to allow young people up to their 26th birthday to remain on their parents’ insurance policy, at the parents’ choice.  Effective 6 months after enactment.

Help for Early Retirees

Creates a temporary re‐insurance program (until the Exchanges are available) to help offset the costs of expensive premiums for employers and retirees for health benefits for retirees age 55‐64.  Effective in 2010.

9) Bans Lifetime Limits on Coverage

Prohibits health insurance companies from placing lifetime caps on coverage.  Effective 6 months after enactment.

10) Bans Restrictive Annual Limits on Coverage

Tightly restricts the use of annual limits to ensure access to needed care in all new plans and grandfathered group health plans.  These tight restrictions will be defined by HHS.  Effective 6 months after enactment. (Beginning in 2014, the use of any annual limits would be prohibited for all new plans and grandfathered group health plans.)

11) Free Preventive Care under New Private Plans

Requires new private plans to cover preventive services with no co‐payments and with preventive services being exempt from deductibles.  Effective 6 months after enactment.

12) New, Independent Appeals Process

Ensures consumers in new plans have access to an effective internal and external appeals process to appeal decisions by their health insurance plan.  Effective 6 months after enactment.

13) Ensures Value for Premium Payments

Requires plans in the individual and small group market to spend 80 percent of premium dollars on medical services, and plans in the large group market to spend 85 percent.  Insurers that do not meet these thresholds must provide rebates to policyholders.  Effective on January 1, 2011.

14) Community Health Centers

Increases funding for Community Health Centers to allow for nearly a doubling of the number of patients seen by the centers over the next 5 years.  Effective beginning in fiscal year 2011.

15) Increases the Number of Primary Care Practitioners

Provides new investments to increase the number of primary care practitioners, including doctors, nurses, nurse practitioners, and physician assistants.  Effective beginning in fiscal year 2011.

16) Prohibits Discrimination Based on Salary

Prohibits new group health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees.  Effective 6 months after enactment.

17) Health Insurance Consumer Information

Provides aid to states in establishing offices of health insurance consumer assistance in order to help individuals with the filing of complaints and appeals.  Effective beginning in fiscal year 2010.

18) Holds Insurance Companies Accountable for Unreasonable Rate Hikes

Creates a grant program to support States in requiring health insurance companies to submit justification for all requested premium increases, and insurance companies with excessive or unjustified premium exchanges may not be able to participate in the new Health Insurance Exchanges.  Starting in plan year 2011.

Whitehouse.

Insurance companies have their own rules and guidelines that they follow when they write an insurance policy. However, states have laws and regulations about what is acceptable and what is not acceptable in the insurance underwriting industry. Insurance companies are regulated by the states. We will examine how to underwrite insurance for medical insurance, life insurance, and home insurance policies.

First, medical insurance is probably the most expensive. How does one underwrite medical insurance? Medical insurance is underwritten by examining what information is on the application for health insurance. After the application process is completed, the underwriter will make the decision to insure you or not to insure you. The underwriter will consider the person’s age, health, and lifestyle. There are other factors that are considered when you are applying for coverage. Do not be surprised if you are asked for your medical records. There are factors that may cause a denial of coverage: diabetes, chemical dependency, and heart disease. You may also be asked to take a physical examination before coverage is granted to you.

Next, life insurance is written and paid out upon your death. How is life insurance underwritten? Life insurance is underwritten to provide your family with money upon your death. The underwriter will measure the risk of death based on the application you submitted. The underwriter will take into account your age, sex, weight, height, occupation, and possibly your hobbies. Your marital status and the number of kids you have are also deciding factors when applying for life insurance. For example, if you are a stock car race driver, you may not be able to get life insurance due to the possibility of an accident. If you are a frequent traveler to foreign countries, this can also cause you to be denied coverage. This information is placed in the computer to help the underwriter(s) with their decision.

Then, home insurance is available to compensate you just in case there is damage to your home. The home insurance policy covers property damage and fire damage to your home. Home insurance is also underwritten to cover personal possessions in the home. The underwriter will get as much information as possible about the property and you. This information will help him make a decision about insuring the property. The insurance company may hire an inspector to visit the property and take pictures. The information is then entered in to a computer and a decision is made to insure the applicant or not to insure the applicant.
Finally, it is very important that we all make sure that we have insurance. So, medical, life, and home insurance can help us avoid large expenses in the future.

http://www.howtodothings.com

If you’re thinking of replacing your life insurance policy with a new one, here are some things you should consider, according to the Life Insurance Buyer’s Guide published by the National Association of Insurance Commissioners:

1.  If you decide to replace your policy, don’t cancel your old policy until you have received the new one.  You then have a minimum period to review your new policy and decide if it is what you wanted.

2.  It may be costly to replace a policy.  Much of what you paid in the early years of the policy you have now paid for the company’s cost of selling and issuing the policy.  You may pay this type of cost again if you buy a new policy.

3.  Ask your tax advisor if dropping your policy could affect your income taxes.

4. If you are older or your health has changed, premiums for the new policy will often be higher.  You will not be able to buy a new policy if you are not insurable.

5.  You may have valuable rights and benefits in the policy you now have that are not in the new one.

6.  If the policy you have now no longer meets your needs, you may not have to replace it.  You might be able to change your policy or add to it to get the coverage or benefits you now want.

7.  At least in the beginning, a policy may pay no benefits for some causes of death covered in the policy you have now.

In all cases, according to the Buyer’s Guide, if you are thinking of buying a new policy, check with the agent or company that issued you the one you have now.  When you bought your old policy, you may have seen an illustration of the benefits of your (permanent) policy.  Before replacing it, ask your agent or company for an updated illustration.  Check to see how the policy has performed and what you might expect in the future, based on the amounts the company is paying now.

http://www.lifeinsure.com

People today need more insurance policies. As a result, insurance has become an important part of stability in case of a certain loss. You can consider insurance as a safeguard for you and your family. You can feel secure knowing that if something may happen to your house or your properties, your family will not suffer.

Insurance is a contract between the policy owner (benefactor/client) and the insuring company (insurer/insurance group). The contract states that the insurance company, upon the unfortunate incidence of the policy
owner’s death, incapacitation, or serious illness, agrees to pay an identified sum of money to the policy owner’s beneficiaries. In exchange for this, the policy owner is obligated to pay an identified amount called “premium” on a regular basis, or according to the policy contract. There are many kinds and categories of insurance policies, ranging from life insurance, car insurance, house insurance, business insurance and many others. Mushrooming insurance companies, together with their brokers and individual agents, do their best to offer insurance plans on as many people as possible.

Each of the available insurance plan offerings in the market entails different premiums and pay-outs which cater to the various budgets and lifestyles that people have. There are also a number of requirements which the policy holder should be familiar with, in order to choose the best insurance plan. If you are scouting for an insurance policy that fits you, read on to find out how an insurer receives an application for insurance. This will help you in fulfilling all of the requirements for you to be entitled to an insurance plan.

1. Know your situation. Understanding your situation will help you identify what kinds of policy will work best for you. Insuring companies have different packages and rates that cater to different individuals. You will be rated either as a High-Risk client or Low-Risk client depending on your lifestyle, number of beneficiaries, type of work, hobbies, age, and other variables. This  is one of the first factors that the insurer will look into, before approving your insurance plan application.

2. Consult with agents. Insurance agents will give you all the necessary information on whatever you need to know about their company’s insurance plan offerings. Keep in mind, however, that marketing agents are trained to make a sell. Be sure to understand the jargon they use. Some insurance terms are difficult to identify, and can confuse you. Use dictionaries or online insurance term glossaries in order to find out exactly what your insurance plan can give you. Get insurance quotes from various agents and various insurance firms, to help you in choosing the best company.

3. Fill up an application form. Once you have identified the best insurance plan for you, fill up an application form. Answer everything in complete honesty. Most application forms have legal notices written on the back part of the application sheet, which you should check out. If you feel that you need to know more about the fine print, consult with your lawyer and show him all legal documents. Some insurance companies will also require you to go through physical examinations. Be prepared for these.

4. Sign and submit. Once all requisites and requirements have been fulfilled and you have finally signed the application forms and their respective legal documents, you can now submit all these to the insurer’s agent who will process your documents. The insurer company will then receive the application form, and use it to decide whether you are eligible for an insurance plan or not.

Now that you know how an insurer receives the application form, applying for your own insurance is easier.

http://www.howtodothings.com

worked in the insurance industry for 16 years and saw first hand how profitable an insurance company can be. I will not attempt to go into the nitty gritty details but I will give you a pretty good idea in the form of an overview, how profitable a venture an insurance company can be.

Insurance is a form of risk management. It is purchased to avoid the possibility of a large, potential future loss. To compensate the insurance company for taking on this potential future payout, the insured pays the insurance company a certain sum of money known as the premium. In return for the payment of the premium the insured receives a written document, known as the insurance policy, that lays out what events are being insured and what the payment to the policyholder would be if that event actually occurred.

The insurance company collects the premiums of a large group of insureds to cover the few losses they would have to pay out for. They use historical data to figure the probability of losses and then charge premiums to cover them while building in a profit for themselves.

For example, let’s say there were 100 houses each worth $100,000 in a particular area. They would have a total value of $10,000,000. According to the history of that neighborhood, two houses are expected to burn down during any one year. Without insurance all 100 homeowners would have to keep $100,000 in the bank to cover the possibility of the house burning and needing to rebuild it. With insurance, each homeowner would only need to pay $2,000 into an insurance pool to pay for rebuilding the two houses that are expected to burn down.

2 houses burn x $100,000 = $200,000 for rebuilding the houses $200,000 divided by the 100 homeowners = $2,000 premium

That $2,000 premium will then have to be increased somewhat to add a profit margin for the insurance company.

In addition to the built in profit that the insurance company adds in to each premium it takes in, the company would also be subject to the actual experience of the insured group. If it takes in more money in premiums than it paid out in claims then it receives what is known as an underwriting profit. And, on the other hand if it pays out more than it has taken in then it has an underwriting loss.

One way of looking at how well an insurance company is doing is to look at their loss ratio. The loss ratio is calculated by taking the losses they had to pay out and add to that the expenses they incurred to actual pay out the claims and divide that sum by the premiums taken in. A ratio of less than 100% shows a profit and a ratio greater than 100% indicates a loss.

In many cases if an insurance company’s ratio is greater than 100% they can still be profitable. That is because there is usually a period of time between taking in premiums and paying out claims. During that period of time the company can invest the money taken in and they can earn a profit from that investment to offset any underwriting loss and could actually end up with a net profit. For example, if the insurance company pays out 15% more in claims and expenses than premiums it took in, but made a 25% profit from its investments, then it would have received a 10% profit.

So, as can be seen there is more than one way to skin the profitability cat for an insurance company to make money. Two key factors in that regard are how well they can
predict their payouts and how well they can invest the money they take in.

http://www.buzzle.com

If one were to select a competent employee, a suitable day care center for your kids, or any other service the first would be to spread the word among people in the know. The ‘modus operandi’ would be no different in selecting a good insurance provider for your business. Being your own business you are certain of your requirements, e.g. you would be well versed with: (a) various risks your business is exposed to – market fluctuations, natural calamity, the political environment, etc; (b) your budget for premium payments for adequate coverage, and so on. Essentially, you should be looking to optimize the coverage the insurer is providing you, at the cost you are willing to part with.

Some of the suggested steps towards identifying an ideal business insurance provider are as follows:
Shortlist some insurance providers.
Apprise them on the nature of your business.
Procure quotes from insurers with details of the risks to be covered.
Compare the quotes and the draft proposal.

Short listing Insurance Providers

The ideal way to get a list of potential insurers is to speak to people who have already found these services. Business associates and friends (more often the former), are the best channels to get this information as they would have already employed the services of an insurer and by actual experience, will not only be able to recommend a good insurance provider, but also be able to give valuable insights on how to get adequate coverage within your budget.

The other option that requires a bit more prudence and thought is to conduct a market survey by checking on the available business insurance providers by ‘cold calling’ them or checking on their services and credentials on the Internet and other channels such as the Yellow Pages or business directories.

Apprise the insurer on the nature of your business

The next crucial step after procuring a list of business insurance service providers is to invite them for a discussion:
Give them a brief about the nature of your business, to allow them to understand and provide suitable coverage.
Give them an estimate of your budget. This is extremely important for them to formalize their quote.

Procure quotes from the insurers

Once the insurer has gained an understanding of your business he should be in a position to customize the insurance solution to provide you with the best fit, within your estimated budget.

The insurer needs to understand certain key aspects about your business:
Nature of your business – This is of prime importance, since the insurer then draws up the various risks your business is exposed to. The coverage has to be customized accordingly, and given the intensity of the risk, the premium amount will be calculated.
Risks associated with your business – There are some standard risks that any business or even human beings are exposed to: (a) natural calamities (popularly known in insurance parlance as “Acts of God”), such as floods, famine, earthquakes, etc; (b) losses as a consequence of non-natural events, such as burglary, violence leading to destruction of life and property, acts of terror, etc; (c) occupation-related consequences/hazards, these are applicable to professionals who render services to the public at large and are prone to errors/negligence leading to loss, such as doctors, lawyers etc.

Comparison of the proposals provided by the shortlisted insurers

The final step before actually selecting the most suitable business insurance provider is to compare the proposals given by the shortlisted insurers.

The proposal should give you a fair indication of the reliability of the insurer. A good insurer would have done a detailed study of your business, and apart from providing you with the details of the risk you are exposed to, would have also suggested ways and means of reducing some of your risks. This will give a fair insight on the level of expertise of the insurer.

The proposal should typically contain:
Various risks your business is exposed to.
Quotes on how these risks would be covered along with the premium amounts and frequency.
Reference to unexpected events of change in circumstances, if any, which would result in a change in the premium amount, e.g. in the case of motor vehicle insurance, if during the life span of the insurance coverage, the owner of the vehicle meets with an accident and claims the repair expenses from the insurer, the subsequent premium amount could be increased.
Suggestions on how some of the risks your business is exposed to can be minimized to lower the cost of insurance coverage.

Once the proposals are compared and the ideal insurer emerges, you can proceed to sign the dotted line and protect your business adequately against the various identifiable risks your business is exposed to!

The basic goal behind buying insurance is to make you financially whole following a loss. You agree to pay a (relatively) small fee to an insurance company today, causing a small but certain loss to you now, in exchange for a guarantee from the insurance company that it will bear the burden of a large but uncertain loss in the future.

Let’s say that you have a house that you own, free and clear – with no insurance. As long as you continue to pay your property taxes, you have every right to enjoy the use of that house for as long as you like, as guaranteed by law. You may live there, rent it out, leave it vacant or even sell it if you like. However, if that giant tree in the back yard falls on your house causing severe damage, it is still up to you to cover the cost to repair the house. This is the basic reason to carry property insurance, which would have paid for your property to be fixed or replaced.

Who Needs Insurance?
Thankfully for those of us who might be negligent in our responsibility to have insurance on our property, we are forced in many cases by either law or contract (the mortgage contract) to carry insurance. While not many, if any, U.S. state laws require you to carry property insurance, they do often require some form of liability insurance, especially for cars. This covers repair or financial restitution to someone else besides the individual at fault. For example, the person at fault’s liability insurance pays to have their car fixed, or pays their medical bills. Fortunately, when most of us purchase the required liability coverage, we are given the opportunity to purchase the property insurance (i.e. comprehensive or collision insurance) rather easily, thus saving us from financial hardship if our own car is damaged in the accident.

Coverage
According to a survey published in the Journal of Financial Planning, many homeowners have vastly misguided views of what their homeowners insurance actually covers. According to this survey conducted by the National Association of Insurance Commissioners, “One third of homeowners believe flood damage will be covered by their standard policy. Over half think their policy covers them in the event of a water line break. Thirty-five percent say they will be compensated for an earthquake, and a slightly lesser proportion thinks mold is covered.”
In actuality, the typical perils (causes of property destruction) that are typically not covered are:

• Flood damage (this is a separate policy)
• Earthquake (this is also a separate policy)
• Mold
• Acts of war
• Parts of the property in disrepair (Including worn-out plumbing, electrical wiring, air conditioners, heating units and roofing).

Policies are often written so that for something to be covered, it must be “sudden and accidental”, meaning that it wasn’t a slow leak that caused damage over many months. Often this is not covered by insurance. If your roof caves in from old age, and not from storm damage, it will likely not be covered.

The typical perils which typically are covered include:

• Fire
• Wind (tornado or hurricane)
• Hail
• Theft

Liability Coverage
In addition to covering the value of your home or other property, many insurance policies also include an important provision for liability coverage. You may not think this is very important, being the careful person that you are, however, there are scores of eager lawyers in every city searching high and low for lawsuits against people such as yourself. Liability coverage is well known to owners of automobiles, but may be lesser-known to homeowners.

If your neighbor’s house catches fire because you left your charcoal grill unattended, who do you think will pay for the damage caused by the fire? You will. You have paid the insurance company your premiums so that they will pay for larger claims when they do occur. The same goes for someone who is hurt and requires medical attention while on your property.

If you are on vacation and your property is stolen, such as a diamond ring, you may be entitled to reimbursement. Be sure to document the theft with evidence that you owned it and you should be able to provide a police report to the insurance company.

Don’t Guess – Know
You should know what your policy does and – more importantly – does not cover. Insurance companies don’t stay in business by charging a minimal amount to cover any and all things which could possibly happen to your property.

Additional (Non) Coverage
Home-based businesses are not typically covered. This doesn’t include a home study, but rather a place where people come into your home as customers, such as a workshop where you repair furniture. You will need a separate business (commercial) policy to properly insure this area and its related liability. Again, these rules vary from state to state and country to country.

Also, if your property, especially your house, is left vacant for more than a certain time period, such as 60 days, then the homeowners policy may be canceled immediately by the insurance company. It is assumed that a vacant house is at a much higher danger of perils such as fire or theft, and therefore changes the risk profile enough to require a separate policy. If you have a second home or a vacation property, you may get another policy to cover this home as well.

Pitfalls to Avoid
Check to see if your policy covers repairs at actual cash value (ACV) or at replacement cost. Replacement cost is usually much better. Case in point:  If your roof was damaged and needs to be completely replaced, replacement cost will pay for it to be fully repaired less your deductible, while ACV will pay you what your roof was estimated to actually be worth at the time of the damage. The tradeoff is that ACV costs less than replacement cost coverage.

Art and Jewelry
Additionally, if you have expensive jewelry or art that you want covered, you may need to add a floater. This is an add-on to your main policy. Many policies have standard amounts that they will pay out for losses to particular items, and they will pay no more.

Co-Insurance Clauses
Finally, some property owners only want to insure a property for what they paid for it, which may bring into play a co-insurance clause. This is (depending on local laws) where the property is insured for less than say 80% of its current replacement cost. A lesser amount of coverage and the insurance company will require you to share in a percentage of the repairs above and beyond the deductible amount.

Premium Factors
Do you live in an area prone to tornadoes, hurricanes or floods? Do you own a large dog or a swimming pool? Are you a smoker? How’s your credit score?

You may be a higher-than-normal risk based on your answers to these questions, and they will charge you accordingly. These are factors that the insurance company takes into account when setting your insurance rates. The more that these and other risks are applicable to you, the higher your rates will be.

Final Thoughts
One last warning: some insurance companies provide seemingly unbelievable rates for their policies. If the company is unknown and its rates are exceptionally good, this should be a red flag for you. Check around for the company’s reputation, and don’t just take the salesman’s word for it. Have a look at the policy and see what they cover, and what they don’t. You may find only too late that what you thought was adequate coverage, was barely the legal minimum in your area. Seek quality coverage – remember, “cheap insurance can be very expensive.”

by Daniel Myers

http://www.investopedia.com

It’s impossible to predict whether you might lose a lawsuit resulting from a car accident or an accident on your property. Nor is it possible to predict the amount that might be awarded to the winning party, an amount that you would be responsible for paying. To protect yourself against the possibility of devastating financial loss from these unforeseen events, you may want to purchase an umbrella policy.

What Is an Umbrella Policy?
An umbrella policy protects your existing personal assets and future personal assets (like wages, your inheritance or that lottery you’re planning to win) against the cost of losing a lawsuit over a car accident or an accident on your property. If you were to lose such a lawsuit, you would likely have to pay the winning party for costs such as medical expenses and lost wages, which can quickly become very expensive.

You don’t have to be wealthy to need an umbrella policy – even if you don’t have any assets, your wages can be garnished.

An umbrella policy picks up where your auto and homeowners insurance policies leave off. It has a high deductible because the deductible is designed to be met by your other policies. Expect to pay a few hundred dollars a year for this coverage.

What It Covers
An umbrella policy provides excess coverage above and beyond what is provided by your homeowners and auto insurance policies. As an example, let’s say your auto insurance pays $300,000 of medical expenses per accident and your umbrella policy is for $1 million. If you are sued for $900,000, your auto insurance would pay $300,000 of the damages and your umbrella policy would pay the remaining $600,000. Umbrella policies usually provide at least $1 million to $5 million of additional coverage, and it is possible to get more if you have lots of assets to protect.

What about the legal expenses you’ll incur if you’re sued? With umbrella policies, legal expenses are covered on top of the policy amount. The policy may also pay you if your appearance at legal proceedings causes you to lose pay from work (for example, if you are an hourly employee or if you don’t have any personal or vacation days available). Since the insurance company’s money is at risk when you’re sued, it’ll want to protect that money with its own legal team, possibly a better legal team than you could afford on your own.

In addition to covering you for accidents on your property or car accidents you are found to be at fault for, an umbrella policy can also protect your dependent children (for example, if your daughter causes a car accident), any accidents caused by you or your dependent children while operating a watercraft, accidents that occur on rental property you own and personal injury lawsuits arising from slander, libel, defamation of character, false arrest, detention or imprisonment, abuse of process, malicious prosecution, shock/mental anguish and possibly more. Be sure to consult your specific policy for details.

What It Doesn’t Cover
An umbrella policy is a form of personal insurance, so it won’t protect you from lawsuits related to a business you own. This includes babysitting, or “compensated child care” in insurance lingo, by the insured (because that would be considered a business). However, your policy may still cover your children if they babysit part-time on someone else’s property.

Umbrella insurance also does not cover activities like drag racing or any other high-risk, unnecessary use of your vehicle. Also, it may not cover all types of vehicles, such as recreational motor vehicles, truck tractor trailers, farm tractors or trailers, or more generally, vehicles exceeding a certain weight limit, such as 12,000 pounds. The policy won’t cover damage to your own car (your auto insurance should provide for that) or damage to your own property (your homeowners insurance should cover it).

If you commit a crime (such as driving under the influence) and are forced to pay restitution, an umbrella policy won’t cover it. Likewise, intentional acts, such as sexual harassment, discrimination, intentional bodily injury, intentional property injury and other willful and malicious acts by the insured are not covered. (As the old saying goes, “crime doesn’t pay”.)

Furthermore, an umbrella policy does not provide you with excess health insurance coverage. Most health insurance policies have annual and lifetime limits on what they will pay. If you’re concerned that those amounts are too low, you will need to purchase more comprehensive health insurance, because an umbrella policy won’t help you.

These are just a few examples of things that an umbrella policy generally will not cover. Because there are quite a few exclusions, if you’re concerned about being covered for a specific event, ask your insurance agent if an umbrella policy will cover it and, if not, what additional policy you can purchase to protect yourself.

Underlying Insurance Requirements
Because an umbrella policy is designed to be a form of secondary insurance, it will have underlying insurance requirements. This means that you’ll have to have a certain amount of auto insurance and homeowners insurance coverage as a condition of being approved for an umbrella policy. The underlying insurance requirements will vary depending on the company you get your umbrella through, but typical coverage includes:

• Auto insurance bodily injury coverage of $250,000 per person/$500,000 per accident
• Auto insurance property damage coverage of $100,000 per accident
• Homeowners insurance personal liability coverage of $500,000

Additionally, some umbrella insurance providers will require you to have your auto and homeowners insurance with them before they will issue you an umbrella policy. Sometimes having all of your policies with one insurer saves you money, but sometimes it doesn’t – switching your homeowners and auto insurance policies to the umbrella provider can potentially make umbrella insurance more expensive than just the umbrella insurance premium itself. If you don’t already have the underlying insurance required by an umbrella policy, this will also effectively make your umbrella policy more expensive.

Things That Increase Your Risk of Being Sued
If you always take public transportation and don’t own any property, you are much less likely to need an umbrella policy. On the flip side, there are a few things that increase the likelihood of requiring an umbrella insurance policy:

• A long commute
• Driving during rush hour, when drivers are more likely to get into an accident
• Your home has a swimming pool
• You own a dog
• You frequently have guests over

The Bottom Line
Just because you aren’t at high risk of being sued doesn’t mean you are at no risk. Even if you are very careful, umbrella insurance can be thought of as bad luck insurance. The safest course of action is to be insured. And remember that as your financial situation changes, you may need to add more coverage in the future.

by Amy Fontinelle,

http://www.investopedia.com

In any economy, good or bad, businesses of all sizes have the potential to fail. But what happens to insurance benefits you have through your employer when your workplace files for bankruptcy? If you’re worried that your company might go belly-up, read on to find out how this will affect your benefits and what you can do to protect yourself.

Employer-Based Insurance
An employer-based insurance plan is an agreement between your employer and an insurance company. Workers can purchase coverage through the group plan by completing the necessary paperwork and having fees automatically deducted from their paychecks. There are several types of insurance provided by employers – some of the most common are health, life and disability. Some employers will offer forms of insurance coverage free of charge as a way of recruiting and retaining employees.

Bankruptcy and Your Insurance Coverage
If your employer files for bankruptcy but you keep your job, you may be able to keep your group insurance coverage. However, a company may drop its employee insurance benefits, cut employees’ hours or lay people off. Let’s look at how your insurance coverage could be affected in those situations:

Health Insurance: If your place of employment employs at least 20 people and you’re laid off or your job status changes causing a loss of insurance coverage, you and your dependents will still be able to maintain your current policy, thanks to COBRA (the Consolidated Omnibus Budget Reconciliation Act). Confirm that your employer offers a conversion option that would allow you to get individual health coverage from the company if you lose your group plan benefits.

Under COBRA, group health insurance coverage can be maintained for up to 18 months. However, you will need to pay both your portion of the premium payment – which you may have been paying through paycheck withholdings – in addition to your employer’s portion of the monthly premium amount and a 2% fee. After 18 months, you will need to obtain new health insurance coverage – either through a new employer, by purchasing a new individual plan or by joining your spouse’s plan.

If your employer chooses to drop its health insurance benefits as a result of a bankruptcy filing, you will lose your health coverage. You cannot continue your coverage through COBRA because the group plan will no longer exist. Your employer is required to give you 60 days notification before your coverage ends. During that time, you should receive a “certificate of creditable coverage,” which you will need in order to apply for a new policy.

Life and Disability Insurance: If you have life or disability coverage through work and you lose coverage, either because your job has changed or been eliminated, or the company cancels its group plans, talk with your insurance administrator to find out if you can transfer from your group policy to an individual policy.

Bankruptcy and Your Insurance Options
In the event that your company or employer files for bankruptcy, you will lose all forms of employer-based group insurance coverage, as those plans no longer exist.

As soon as you learn that your company is filing for bankruptcy, check on any outstanding insurance claims that you have submitted for payment and reimbursement. If those claims are not paid out before the company closes, you may need to file a “proof of claims” with the bankruptcy court.

If you elected to have money withheld from your paychecks to be deposited into a flexible spending account (FSA) for healthcare expenses, you should check with your company’s benefits administrator to ensure that you will receive compensation.

Converting from Group to Individual Coverage
Some insurance companies will allow you to convert from a canceled group plan to an individual plan. Typically, you will not have to provide any additional information when applying for an individual policy. However, you will need to complete some paperwork and cover the total premium payments.

The rules for converting to a personal policy vary by state, so you will need to check with your state insurance association. There is a small window of time in which you are allowed to convert from a group to an individual plan, so be sure to file papers in time. Also keep in mind that some levels of coverage may change with an individual plan, so plan ahead to avoid any surprises.

The Bottom Line
A company’s bankruptcy can mean significant changes for your insurance coverage, whether you keep your job or your workplace shuts down. If you’re concerned about your company’s financial health and want to know how a bankruptcy could affect you, take time to review your current insurance coverage. Learn what options you would have so that you can continue enjoying the financial protection you currently have through your group coverage plans at work.

Learn more information about Banking and Bankrupt

by Katie Adams

http://www.investopedia.com

Come rain, sleet, snow or bankruptcy, your insurance company needs to be able to cough up the cash to pay out your insurance claims when you need the money the most. If this doesn’t happen, you won’t have the money to pay your medical bills, to replace your car in case of an automobile accident, or to rebuild your home in the event of a natural disaster.

Your insurance company’s financial position needs to be on solid footing. To ensure that you’ll get the money you need in an emergency - even if the company’s financial position worsens – you need to do some research into your company’s finances. Read on to find out where to look and what to look for.

How to Choose an Insurer That’s Likely to Last
It’s hard to know for sure whether any insurance company – or any company for that matter - will still be around in five to 10 years, so how can you tell if an insurance company will exist to service your contract in the years to come? Let’s take a look at a few simple actions you can do to figure this out.

First, make decisions about your choice of insurance provider one year at a time. Before you think about renewing your policy each year, check financial ratings, read current news about the insurance industry, and watch trends in the stocks of insurance companies you are thinking about choosing.

• Checking Financial Ratings: You can check financial ratings on your state’s department of insurance website. Ratings generally range from ‘A++’ down to ‘F’. Similar to report cards, ‘A’ and ‘B’ are good, but as you go down the scale you can bet that a particular insurance company isn’t currently the valedictorian of financial stability in the insurance world. There is also one rating for companies that are no longer financially rated, which is ‘S’.
• Before choosing a company based on financial rating for homeowners insurance, check with your mortgage company to make sure your lender will accept your insurance company as your homeowners insurance carrier. Your mortgage company technically owns your house until you pay off your home loan, so it’s in the lender’s best interest to protect its investment by ensuring that you are insured by a financially secure insurance provider.
• Current News About the Insurance Industry: Even if the news you read is about general insurance industry problems, this is a sign that you need to be researching your insurance company or any company you are considering. Conduct internet searches with insurance company names in conjunction with key phrases like “financial problems” and “failure to pay claims”.
• Watching Stock Trends: Look up the stock prices for your current or potential insurance company. This can easily be done through many investing websites including Investopedia’s Stock Search. This is also available through an online brokerage website or your financial advisor’s website. You will want to check for trends in stock price over the last six months to five years. If the trend is consistently going downward, it’s time to take a harder look at the financial rating - an ‘A’ rating can quickly became a ‘B+’ or a ‘C-’ if the company’s financial position worsens.

Red Flags About Payouts
Even if your insurance company is financially stable, it doesn’t mean payment on a claim will come easily. Use state agency websites to view all metrics, not just financial metrics, to determine the likelihood of a proper payout in the event of a claim. Pay special attention to the number of complaints listed for any insurance company you currently use or may use in the future. This will give you an idea of the difficulty others have had in receiving payment on their claims.

Throwing in Your Insurance Towel
It’s tough to know when the exact right time it is to bail on your insurance company. After all, even investing legend Warren Buffett doesn’t always know the right time to dump a stock. You must use your judgment and ask yourself the following questions about your level of satisfaction with your insurance company.

Some good questions include:

• Are you happy with the customer service you are getting? Do you wait on long holds when you call in to ask a question? Are the customer representatives friendly and knowledgeable?
• If you ever had a claim, did the insurance company pay out quickly?
• Does your insurance company offer the best rate? Have you compared your insurance rate with other carriers recently and noticed your current insurance is a little high?
• Do you know other people who have had better experiences with claims through a different insurance provider?

Stay Informed
Your state’s department of insurance is your best friend when it comes to finding out what rights you have when you buy insurance. Call this department to get information on your state’s guarantee fund for insurance policies. The guarantee fund is money set aside to pay out on insurance claims if your insurance company can no longer pay you due to a financial pitfall. Similar to the Federal Deposit Insurance Corporation (FDIC) insurance on bank accounts, there are maximum amounts this fund will pay out. Call your state’s insurance office to find out how much these amounts are before you pick an insurance policy.

Conclusion
Luckily, choosing an insurance company is not a lifelong commitment. You can switch insurance providers at any time. However, in order to reduce the number of hassles and increase the likelihood that your insurance company will pay your claims, pay attention and research financial and customer service information on your prospective provider. If you don’t, your insurance company’s problems could become your personal financial disaster.

by Reyna Gobel,MBA,

http://www.investopedia.com

When you feel like your job is teetering on a cliff due to impending layoffs, thoughts of every bill you have and how you are going to pay them are at the front of your mind. In this tidal wave of numbers, buying involuntary unemployment credit card (IUCC) insurance that offers to make payments on your credit card balances while you are unemployed seems likes a great idea. But does it work out for you in the long run?

What is IUCC Insurance?
This is an insurance policy normally offered by your credit card company to cover payments during a period of unemployment. Loss of self-employed work or quitting your job will not be covered. The amount that this service costs varies from company to company. However, it could be as much as 1% of your balance every month.

For some people the cost of IUCC insurance is worth, but for others it isn’t. You need to figure out how long you are going to be without a job, how close you are to paying off your credit cards, and if you could manage the payment without buying involuntary unemployment credit insurance.

When IUCC Insurance Makes Sense
Let’s say you have a $2,000 balance and your credit card insurance company charges you 1% each month for IUCC insurance. Your monthly insurance payment is $2,000 x .01 = $20. Your minimum payment is 3% of your balance, which equals $60. You expect a layoff in 2 months and you don’t expect to have another job lined up for at least 2 months. Your total payment with your credit card insurance per month is $80.

When IUCC Insurance May Not Make Sense
On the other hand, let’s say you have $5,000 in credit card debt and the cost for credit card insurance is 1% of your balance each month. Your monthly insurance payment is $5,000 x .01 = $50. You suspect a layoff may be happening in the next few months, but you aren’t sure. Your monthly minimum payment is 3% of your balance, which is $150. You can afford the payment now, and you are able to put aside the $50 a month you won’t be paying for involuntary unemployment insurance into your savings to save up for future payments.

If the layoff didn’t happen for 6 months, you’d pay a total of $300 ($50 x 6), which could have gone into a savings account to cover future payments or paid down your balance by $300. If you didn’t lose your job, you’d just be out the money for the length of time you kept the insurance.

How Does it Affect Your Credit?
You need to ask questions about how far in advance the payment is made so you don’t have late pays on your credit report. If payments aren’t reported on time, you will have a late pay and a huge drop in your credit score.

Cancellation Policies
Involuntary unemployment credit insurance can get pricey. Make sure you can cancel your policy quickly once you get another job. You want to ask questions such as:

When is the insurance billing date?
How far in advance of the billing date do you need to be notified in order for me not to get billed for the following month?

When you get this information, put it in a computer file or add it to your datebook. If you put it in your datebook, add both the billing date and the cancellation date to your monthly calendar for the next six months.

Alternatives

• Instead of buying IUCC insurance, try to pay down or pay off your credit cards, and/or reduce expenses so you have a manageable budget before you’re layoff.
• Before you buy IUCC insurance, look at other bills that can be put on hold for free. Call your student loan lender to find out your options for postponing payments before you get your layoff notice.
• Activate budget emergency mode. Cut back on all unnecessary expenses down to specialty food items and stash the money in a savings account in case you lose your job.
• Apply for a new job as soon as you get your layoff notice. Beforehand, revamp your resume and browse internet job sites for potential places to work next.

Conclusion
The bottom line is that you want to keep your credit intact through all circumstances. However, you have other options beyond involuntary unemployment credit insurance. Buy the insurance only if the layoff is imminent and the job market is slow. Otherwise, evaluate your other options and be prepared in advance with a layoff-ready budget, a healthy savings account and resumes ready to go. Your job may be at risk, but your secure finances can minimize the impact.

by Reyna Gobel,MBA

http://www.investopedia.com

The most commonly utilized and misunderstood aspects of the U.S. Medicaid program are its long-term care (LTC) benefits. Medicaid is not synonymous with long-term care insurance, but many who plan to rely on it are unaware of this. As a result, they find themselves without the care they really need or desire. Before you “plan” to have Medicaid cover your LTC needs, it is important to understand its coverage and how it differs from LTC insurance.

Background
Medicaid is a multi-part program designed to provide a wide variety of medical and custodial services to those who cannot afford it. It evolved during the so-called war on poverty in the 1960s as a program for the truly poor – the indigent population who were surviving on less than about 125% of the official poverty level.

Medicaid LTC is a great benefit for those people who didn’t necessarily have the chance to accumulate much, and now need LTC services beyond what their families can (or will) provide.

Some individuals, however, deliberately decide not to buy long-term care insurance, “planning” to use Medicaid instead. There is an entire legal specialty that focuses on helping older Americans bankrupt themselves in order to qualify for Medicaid benefits. Unfortunately, many of these people find out too late that Medicaid does not offer what they desire – the same choice, benefits or coverage options provided by LTC insurance.

Unlike Medicare, which is largely a federal program, Medicaid is primarily state-run, resulting in varying degrees and types of LTC coverage.

Medicaid LTC Benefits and Requirements
Generally speaking, for qualifying people, Medicaid covers custodial care in a nursing home in all states. Custodial care is for when you can’t perform some or all of the activities of daily living (ADL) without assistance:

• Dressing
• Bathing
• Transferring
• Walking
• Feeding
• Toileting/continence

Medicaid generally requires you to be unable to perform at least two of these six ADLs independently – much like LTC insurance policies. If you qualify for Medicaid by meeting the ADL requirement and your state’s income and asset requirements, you can probably use Medicaid to pay the entire cost of care in a nursing home.

Comparing Insurance and Medicaid
Aside from imposing no income and asset limits (because you purchase it), LTC insurance offers options and flexibility not found in Medicaid benefits. But Medicaid does have a few benefits not offered by most LTC insurance plans. The following chart summarizes the key general differences between these two ways of funding LTC needs.

Nursing-Home Stays
Both LTC insurance and Medicaid provide nursing-home coverage. Some LTC policies cover other types of care in addition to, or in lieu of, nursing-home care.

In many states, nursing-home stays (for non-skilled custodial care) are all that Medicaid covers. This means, if you are covered by Medicaid, staying at your own home is not always an option – even though care given at home is less expensive and often what you really need and want. Compared to this inflexibility of Medicaid, LTC insurance can be a great advantage.

Not all nursing homes accept Medicaid patients. If the facility doesn’t take certain types of state or federal funding, it might not have to take Medicaid patients either. So your facility of choice may not be available to you.

Medicaid doesn’t cover the fun things in life: trips to museums, shopping centers or other non-medical forms of care. It may not cover a private room, or allow you to have your spouse as a roommate. There may even be a special “Medicaid wing” or floor in the facility.

Medicaid does pay for your stay in a facility for as long as you need the care. LTC insurance, on the other hand, does so only if you elect the lifetime option and chose a benefit level high enough to cover a lifetime of costs. Medicaid also covers your costs from day one, while LTC insurance does so only at a very high cost, imposing an elimination period. Also, LTC plans are not tax-qualified, so your benefits are likely to be taxable.

In-Home Care
Aside from nursing-home care, in-home care is one of the two preferred ways to receive LTC. (The other is an assisted-living or continuing-care facility.) Much of the care people need is custodial in nature and can be given in a home setting.

If you and your spouse, like most others, prefer to stay in your home as long as possible, then LTC insurance is the way to go as it allows you to choose this type of care.

Also, if you own a home, think twice before using Medicaid for receiving any form of LTC. If you receive care and your spouse remains in your home, some states may force your heirs to reimburse the costs of your care from the sale of your home when the community spouse – the one who stayed in the home – dies. This has come as a rude shock to many heirs!

Assisted-Living and Continuing-Care Facilities
Sometimes, before you quite need nursing-home care, you need more assistance than you can get at home, or maybe you just want to live in a retirement-oriented facility. Assisted-living centers provide you with an apartment and offers as much assistance as you need (for a price, of course). You can get housekeeping help, meal preparation and much more.

Continuing care takes assisted living a step farther by having an on-site nursing home, so the transition is an easy one.

Again, if assisted-living or continuing-care facilities appeal to you, LTC insurance is what you’ll need. (Your illnesses should not infect your savings.

Adult Day Care
Often, an elderly person’s family, instead of sending that person to a nursing home, chooses to provide much of the needed LTC but cannot be at home in the daytime due to work obligations and the elderly individual cannot stay home alone because of dementia or an inability to complete ADLs. Adult day care can solve this problem. This community-based care is often provided by churches and community centers. The premise is simple: drop the person off in the morning and pick him or her up in the late afternoon or early evening.

LTC policies offer the option to cover this care, while Medicaid does not pay in most states.

Becoming a Medicaid User
The process of deliberately adjusting your financial situation to get Medicaid appears simple: gift your assets or put them into certain trusts and poof! now you’re poor, so Medicaid will have to pay for your needs.

If you go this route, make sure you know what you are forgoing. Here are the things to keep in mind:

• Not all facilities accept Medicaid patients.
• You may not be able to get care at home.
• If you come out of the nursing home your assets are probably not available to you.
• Do you want a roommate (not your spouse)?
• Is getting out into the community important to you?
• Do you really want to give all your assets to a trust or your heirs while you’re still living?

Conclusion
Think long and hard before counting on Medicaid for LTC. Both have their benefits (and drawbacks), so ensure that all of your needs are covered before jumping in. As always, hasty decisions – especially when they relate to something as important as your health – can come back to bite you. You just might not get what you had expected.

by Janet Arrowood

http://www.investopedia.com

Do you know your insurance score? Most people don’t even realize that they have one until they receive an “adverse-action” notice in the mail notifying them that, based on their insurance score, they don’t qualify for the lowest pricing available from their insurance provider. To help you decipher what all this means, here we go over what the insurance score is, how it’s calculated and some things you can do to improve it.

The Shroud around the Mystery
If you ever get one of these adverse-action letters, any efforts to dig a little deeper into the circumstances behind your low score requires more perseverance than most people are willing to put forth.

The adventure begins by following the letter’s instructions to call the listed 1-800 number to receive a free copy of your credit report – which apparently has some affect on the score. You may wait several weeks for a reply, only to be sent a consent form that reads like an identity thief’s dream: the form will request detailed proof of identification, including photocopies of your driver’s license, in addition to your social security number and your insurance information.

If after gathering all of that information you are brave enough to send it off through the mail, the packet that you get back will simply summarize your credit rating, with absolutely no information about your insurance score. If you inquire further with the credit-reporting agency, you will likely be told that your credit report contains information that was used to calculate your insurance score, but that the credit-reporting agency has no access to your actual score.

If you persist and contact your insurance company, it will likely tell you that 99% of its clients do not qualify for the company’s lowest rate, and to qualify, your credit must be absolutely perfect. In other words, even if you carry no balances on your credit cards, own your home free and clear, are completely debt free and have a credit rating in the high 700s, you’re still unlikely to have an insurance score that qualifies you for the lowest available insurance rate. So what exactly is this mysterious insurance score, and what exactly is its reason and purpose?

What It Is and How It Is Calculated
An insurance score is a rating used to predict the likelihood that a customer will file an insurance claim. This score – as we noted above – is based on an analysis of a consumer’s credit rating, and the method for calculating it varies from insurer to insurer. While many companies use proprietary formulas to calculate the scores, the factors used in the calculation include the customer’s outstanding debt, length of credit history, payment history, amount of revolving credit versus amount of credit in the form of loans, available credit and monthly account balance.

Unlike a credit rating, which uses personal financial information to determine your ability to repay debts, insurance-score calculations do not factor in your income. This omission means that it is very possible for you to be penalized for taking out a large loan or charging a large amount on your credit cards each month even if your income is more than enough to cover the expenses.

The Logic
Insurance companies justify the use of insurance scores by citing studies that apparently show a positive correlation between credit scores and insurance claims. At some level, this may seem to make sense. At the level of minor traffic accidents, for example, it is reasonable to argue that individuals with poor credit are more likely to file claims, if for no other reason than the fact that they lack the funds to make repairs on their own.

Of course, if we look at the logic behind insurance scores we might want to look at it also from a business perspective: insurance scoring is quite profitable, especially since almost nobody qualifies for the lowest-tier pricing. Keep in mind that insurance premiums are a recurring revenue stream for insurance companies, and the scores help justify higher premiums.

How to Minimize the Impact on Your Wallet
A perfect insurance score, in the eyes of an insurance company, represents a client with the lowest possible risk of filing a claim, so – since the probability of filing a claim is based on credit – good credit is the key to a high score. A good credit report can have such a large impact on your insurance premium that you can, for example, have a flawed driving record but good credit and pay less for your car insurance than a driver who has a perfect driving record but bad credit. Do keep in mind, however, that your insurance score is not the only factor that determines your premium (you can ask your insurer for more details on what the other factors are).

While it is unlikely that your insurance score will ever be perfect, there are a few relatively painless steps that you can take to improve your score. To keep your insurance score high, be sure to pay all of your bills on time and limit the number of credit cards that you apply for and open.

But, paying your bills on time isn’t enough: as we mentioned above your insurance score is adversely impacted by large monthly credit card expenditures, even if you pay off your entire balance each month. To help your insurance score, you can minimize your credit card use. While it can prove unreasonably inconvenient to stop using your credit card entirely, most of us can find ways to cut down.

That said, if your goal is to have a perfect insurance score, be sure to evaluate whether the costs of changing your financial spending patterns is worth it. Cutting out your use of credit cards means time-consuming trips to the ATM and extra service charges from increased debit card use. You might also have to avoid the convenience of online transactions (still done primarily through the credit card), and, finally, if your credit card company offers you benefits – such as air-travel or other types of points – you might have to forgo these as well.

So, even after finding out about an imperfect insurance score, you may find the effort needed to perfect it is not worth what may amount to relatively small savings in premiums.

The Insurance Score Is Here to Stay
The use of credit history to determine insurance premiums is quite alarming to many consumers, particularly to those who have never filed an insurance claim but still don’t qualify for the lowest available pricing. Unfortunately, insurance scoring is a standard practice among the ranks of the nation’s largest insurers. Erie Insurance, in its explanation of insurance scoring on its website, reports that 90% of insurers use insurance scoring in some way. Other studies place that percentage even higher. With that in mind, the best way to help keep your insurance premium low is to keep your credit score high. Take the same amount of caution with your credit score as you would with your driving – being responsible with both can save you serious amounts of money in insurance premiums.

by Investopedia Staff, (Investopedia.com)

Even if you don’t think you’ve got anything of great value, you probably do – more than you could comfortably afford to replace in the event of a bad burglary or a fire. No matter how careful you may be with your own apartment, you can’t control your neighbors. They can leave your security gates open, buzz ill-intentioned strangers into your building, or fall asleep with a cigarette in hand and start a serious fire. While your landlord’s insurance may cover the building itself, the insurance will not cover the contents of your apartment. Additionally, if a visitor to your apartment were to have an accident, they may be able to sue you for damages.

Fortunately, you can protect yourself against all of these potential problems with renter’s insurance. Renter’s insurance costs around $20 a month, which is affordable for most people and is a small price to pay for peace of mind and full protection of your belongings.

Understand What You’re Applying For
As you get older, you’ll find yourself needing to purchase more and more insurance. You may have already gone through the process of applying for car insurance, perhaps with significant help from your parents. However, applying for and purchasing renter’s insurance is a good opportunity to start learning about insurance policies on your own.

At its most basic, renter’s insurance covers the contents of your rented dwelling. It may also cover the contents of your car and your luggage while traveling. Another common policy component will cover loss of use, meaning that if your apartment burns down, you’ll be provided with some money to pay for temporary housing.

You should be aware that there are many things that most policies do not automatically cover. Examples include: bursting pipes, backup of sewage into your residence, earthquakes, floods, and other “acts of God”. These things can be covered for an additional premium if you feel you are at significant risk. Also, if you have any unusually expensive or valuable items like high-end electronic equipment, pricey jewelry, or an important collection, you may need to purchase additional insurance to cover these items. Most rental insurance policies have some liability coverage, so you will be protected up to a certain amount in the event that you get sued for an injury or other damages incurred at your home.

Assess Your Insurance Needs
When you apply for renter’s insurance, it’s a good idea to photograph or videotape everything you own. For expensive items, or if you have a collection, make sure to write down any serial numbers that could help verify your claim. You can even take it a step further and enter the items into a spreadsheet along with an estimate of each item’s value. Although these steps take some extra effort, you should do them for two strong reasons.

1. You probably think that the total value of the items you own is less than it actually is, which puts you at risk of under-insuring yourself. When you make yourself sit down and assess the true value of each item you own individually, you will get a more accurate picture of what your belongings are worth. Perhaps you have around 50 DVDs, which may not seem like much to you, but at $20 apiece, you have a DVD collection worth $1,000 that you won’t want to have to pay to replace in case of fire.
2. While your insurance company probably won’t want the inventory or the photographs when you take out the policy, your documentation will be indispensable if you ever need to file a claim because you will be better able to prove the value of your possessions. Make sure to keep copies of your inventory outside of your apartment, such as in a safe deposit box, with a trusted friend or relative, or emailed to yourself as an attachment, so that all your supporting documents won’t get destroyed along with your belongings.

Choose an Insurance Company and Apply
Once you’ve figured out how much insurance you need, you’ll be ready to locate insurance companies that offer renter’s policies in your area. To find a company, you can simply do an internet search for renter’s insurance and your state. Another approach would be to check with family and friends for recommendations and rates, then visit the websites of the different insurance companies recommended. Make sure to tell your insurance rep how you found them and if you have any other existing policies with them because you can often get family rates or package deals (for example, if you purchased both home and car insurance together). Once you’ve located potential insurers, research the companies’ insurance ratings through a company like A.M. Best, which rates insurance companies’ ability to pay you when you make a claim.

Starting the Application
After investigating your options, it’s time to start the application process. If several companies checked out financially, there’s no reason not to apply to all of them to see which one can offer the best combination of low rates and solid coverage. Some companies may allow you to complete the entire application process online. Others may want to speak to you on the phone or send you some paperwork to fill out. In most situations, it shouldn’t be necessary to meet with a representative in person. If a company wants you to meet with a rep in order to get renter’s insurance, it could be because they want to hook you into other insurance products as well, so be wary.

Fine Tuning Your Policy
The application will be relatively simple to complete. The only questions that might trip you up are in regard to the type of construction of your dwelling, year built, and type of roof material used. For some properties, you can actually find this information on Zillow.com; if not, you can get it from your landlord.

Also, it may be wise to opt for replacement cost coverage for your belongings rather than cash value coverage. Choosing the former option ensures that if your couch is destroyed in a fire, you’ll receive the full $1,000 you’d need to buy another couch from the store instead of the couple hundred dollars that your old couch was worth at the time of the loss due to depreciation. While replacement cost coverage tends to be slightly more expensive, the difference in premium tends to be negligible when weighed against the huge increase in coverage you get.

This is also when you’ll want to decide which deductible best fits your financial situation – there are positives and negatives for each price. As with all types of insurance, the lower your deductible, the higher the premiums, because with a low deductible, the insurance company will need to cough up more money in the event of a claim. Consider how much you can afford to spend replacing your belongings in the event of a major loss, and then insure yourself for the difference. Your deductible can be as low as $250 or $500 to start, and you can always increase it later as needed.

Pay for and Review Your Policy
Insurance tends to be cheaper when you pay an entire year’s premium at once instead of paying in installments, so if you can afford to pay annually, you should do so (insurance companies love to tack on administrative fees when you pay in installments). For the cash-strapped, keep in mind that the extra dollar or two you’ll pay for the dubious privilege of paying your premiums over the course of the year is better than having no insurance at all. If you decide to pay monthly, be aware that some companies will require you to pay by an automatic monthly withdrawal from your checking account. If your balance frequently hovers near zero, automatic withdrawals can put you at risk for incurring hefty insufficient funds charges, so you might be better off scraping together enough cash to pay the premium by check. Another way to save money on your insurance premium is to increase your deductible.

Once you get your new policy in the mail, you’ll want to read it to make sure that you understand exactly what is and isn’t covered and that your policy states any non-standard additional coverage that you may have purchased. Also, make sure that your deductible and premium amounts are correct.

Conclusion
When you’re first starting out, the total value of what you own may not be high enough to be worth insuring, but as you start bringing home paychecks, the value of your possessions can quickly grow to a surprising amount that you could not afford to replace. Renter’s insurance is probably the least expensive and easiest to obtain insurance you’ll ever own, so if you don’t already have it, get started on the process today.

You can read more of Amy’s personal finance articles at Two Pennies Earned, her own personal finance website, and at PF Advice, one of the web’s leading personal finance blogs. http://www.investopedia.com

The FDIC — Federal Deposit Insurance Corp. — is a U.S. government corporation created in 1933 that insures deposits in member banks. Members must meet certain liquidity and reserve requirements, and are assessed a premium based on these requirements and the balance of insured deposits. Insured institutions are required to post specific FDIC signage in their place of business. In the event a member bank becomes insolvent, the FDIC could utilize the payout method. The FDIC would determine the insured amount for each depositor and pay that amount to him or her. Since the inception of FDIC insurance on Jan. 1, 1934, no depositor has lost a single penny of insured funds as a result of an institution’s failure.

The FDIC insures deposit accounts, which are defined as:

• Demand deposit accounts, checking accounts, and NOW, negotiable order of withdrawal) accounts
• Savings deposit accounts and money market deposit accounts
• Time deposit accounts, including certificates of deposit
• Outstanding cashier’s checks, interest checks, and other negotiable instruments drawn on the accounts of the bank

The FDIC does not insure the following products, even if they were purchased through a covered bank:

• Stocks, bonds, mutual funds, and money funds
• Investments backed by the U.S. government, such as U.S. Treasury securities
• Contents of a safe deposit box
• Losses due to theft or fraud —may be covered by other insurance policies purchased by the institution
• Accounting errors — there may be other remedies for recovery
• Insurance products — life, auto and home insurance
• Annuity products

The basic FDIC coverage limits are:

• Single accounts: $250,000
• Joint accounts: $250,000 per co-owner
• IRAs and other certain retirement accounts: $250,000
• Revocable trust accounts: $250,000 per owner for the interests of each beneficiary, subject to specific limitations and restrictions

Remember, coverage is calculated per depositor, and not per account. If you own deposit accounts in different ownership categories, you may quality for more than $250,000 in coverage.

Until Dec. 31, 2013, the standard insurance amount per depositor is $250,000. On Jan. 1, 2014, it will return to $100,000, unless the government chooses to extend it, temporarily or permanently. However, insurance coverage for IRAs and other certain retirement accounts will remain at $250,000 per depositor.