Tuesday, January 22, 2019

10 Key Insurance Policies - Part 1

The aim of insurance is to protect you against the unexpected. We know that we will all die eventually, but we do not know when, so we have life insurance to provide for our dependents after we are gone. We are not aware of when we will fall sick, be injured in an accident, have our homes damaged by natural disasters and so on. Life is full of uncertainties and it is natural to try to have as much protection as possible against what could happen. The problem is that resources are limited and trying to have insurance against every possibility may not be financially viable.Every individual and family’s insurance needs are different. That being said, there are some types of coverage that are essential for just about everyone. These are the key policies that should always be in place. The specifics may differ from person to person, but an insurance broker will be able to give you focused guidance that will ensure you get the coverages you really need.

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     ·  Disability insurance: Studies show that about one-third of Americans will suffer, from some form of disability during their lifetime that will prevent them from working and earning an income. The effect this can have on a family is often not fully appreciated. The fact is that, almost half of all home foreclosures are caused by people being disabled and unable to work and pay off their mortgages. Disability insurance is the only protection you have if your earning ability is affected by sickness or injury.

     ·  Long term care insurance: Americans may be healthier than ever before and may live longer, but it is important to keep in mind that over half of the population will require some type of long-term care, such as an extended stay in a nursing home or having an in-house nurse after the age of 65. At the minimum, a 12 month stay in a nursing home will cost $60,000. It will probably be much more, depending on the amount of care required. Not having this coverage could wipe out your savings and retirement portfolio. What happens to you, and your spouse, then?

     ·  Health insurance: A major illness or a serious accident could leave you, or a family member, with medical bills running into hundreds of thousands of dollars. This could not only wipe out your savings, but also bankrupt you. Health insurance is the only protection you have against the ever-rising cost of medical care.

     ·  Umbrella insurance: It is not only the rich who are sued for damages. The world we live in is becoming increasingly litigious and even the smallest of issues can result in claims for damages. Many people make the grave mistake of presuming that because their assets are limited, it is not worthwhile for anyone to sue them. They forget that their future income may be included in any damages awarded. Umbrella Insurance is the best form of protection at a lower cost.

     ·  Term life insurance: Death could strike anyone at any time. Term life insurance is a cost effective way to ensure that your dependents do not suffer financially after your death and that their futures will remain secure.

The next part of this blog will look at the other essential insurance coverages.

Wednesday, January 16, 2019

Health Insurance Options for Small Businesses - Part 2

Two options were covered in the first part of this blog. Here are three more popular and viable health insurance options designed for small businesses.

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Group integrated health reimbursement arrangements

High Deductible Health Plans (HDHPs) are among the most widely used group health coverage options. One reason for this popularity is the low cost of coverage. The problem with them is that the low cost is due to the high deductibles and the limited coverage they provide. HDHPs may meet the requirement of providing employees with healthcare, but they typically do not meet all healthcare needs or cover all the costs. One cost-effective way of making up for the shortfall is to offer a Group Integrated Health Reimbursement Arrangement (GIHRA). With a GIHRA the employer allocates a monthly tax-free allowance to the employee that is in addition to the group policy. The employees can use this to pay health care costs and the employer will then reimburse them to the extent of the amount allowed to them. Businesses can set up their own employment eligibility requirements and allowance limits.

Association health plans

Associated Health Plans (AHPs) allow small businesses within the same industry segment or in the same geographical location to jointly purchase large group coverage. Because of the larger size of the employee pool, the cost per employee, can be substantially lower than other coverage options. However, in some cases, standard coverage items and essential health benefits may not be covered. Businesses joining together for an AHP must ensure that they all have the same employee health care objectives. Without this, the conflicts that will arise on the amount and types of coverage, can render the plan inoperable.


Self-funded health insurance is an option that some companies go in for. In this case, there is no health coverage from an insurance company and so there are no premiums to pay. Instead, the employer takes up the financial burden of providing health care to the employees. The eligibility, types, amount of coverage and deductibles etc. are all provided in a formal coverage plan that is made known to all employees. The positive here is that since there are no fixed payments to an insurance provider, the financial outflow will be limited to only actual costs covered by the plan. The risk, of course, is that the payments towards healthcare costs will exceed what the insurance costs would have been. In the worst case scenario, the financial outlay could cause irreparable financial damage to the business.

Lots of options – lots of ways to make mistakes

The aim of all these health coverage options is to reduce the financial burden on small and medium enterprises. Each one has its own pros and cons and navigating through the complexities of the coverage options can not only be time consuming, but also very confusing. Making the right decisions will result in a happier and more motivated workforce that will have a positive impact on business performance, while the wrong choice could result in a demoralized workforce and lower productivity. Contacting an insurance broker is the best way to be sure of making the right choices. He will evaluate the coverage needs of the employees and suggest the health plan that will be best for them and the company itself.

Wednesday, January 9, 2019

Health Insurance Options for Small Businesses(Part-1)

California has always been the home of innovation, new business ideas and ventures. Besides the well-established large and medium corporations that have made a firm home in the state, there are an ever-increasing number of smaller enterprises based here. All these businesses, large and small, face challenges every day and their ability to overcome them is what leads to success.

There is one area, however, where small businesses are badly hit – the healthcare costs of their employees. Healthcare is a critical component of employee motivation and loyalty, but the cost can be too much to bear. In the last 15 years, the average cost of covering an employee under a group health insurance plan increased from $2,196 to $6,435 – a rise of almost 300%.

For many enterprises, this cost has become unsustainable and healthcare benefits are being dropped. This has an immediate impact on overall productivity and employee motivation. Furthermore, the fight to retain talent in the near the future will become increasingly bitter, and businesses without health benefits will be on weak ground.

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The solution

Fortunately, many small business health benefits are available. Each has its own pros and cons, but they do help small and medium businesses to consider five options on their employees’ health benefits at costs that are viable. It is best for small businesses to know what they are and what each one can offer. The present post covers two of these options and the next will cover the remaining three.

Although the options mentioned here are among the most suited for small enterprises, the fact remains that health insurance is a complex subject; it is essential to seek expert advice to personalize the best option on a case-by-case basis. An expert insurance broker with considerable experience in corporate health insurance policies will be best placed to provide all the details about the right coverage at an affordable cost.


The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) enables businesses having employees under 50 to offer health coverage with a monthly tax-free allowance; they can use it to pay for personal health insurance. The employees get the benefit and the business is able to control its healthcare costs.

Traditional group health insurance

This is a traditional health coverage option, which most people are familiar with; the employer has to pay a fixed premium for a policy that covers its employees. Part of the cost may be passed on to the employees. The employees are responsible for the deductibles and co pays for any health service they avail of.

It is a simple system, which most employees are comfortable with. However, the cost can be quite high. According to recent studies, the average cost of coverage for an employee’s family, if the business has employees under 500, is expected to increase to over $13,000 in 2019. Despite the convenience, this cost could be unsustainable for many small enterprises.

Wednesday, January 2, 2019

Reevaluate your Home Insurance for 2019

The year 2018 was one of the worst on record for California, in terms of wildfires, floods and other such natural disasters. Although residents of the state were unprepared for what had happened, it was not unexpected for the experts.

Over a decade ago, climate scientists had predicted weather extremes, and had warned that their consequences would gradually become a way of life in the state. Unfortunately, the speed at which the changes have occurred has taken them by surprise. Not to speak of the speed it happened, the fact is that California is now a state with a volatile climate.

According to the experts, the incidence of wildfires and floods will keep increasing in the future. What residents have seen over the last 10 years is what they can expect in a short spell from now on.

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Floods and fires work together

Climate experts say that the floods and wildfires have formed a partnership where one contributes to the growth of the other. This may sound strange to most people who have seen that fire and water do not go together. However, it is a fact that heavy rains and flood lead to rapid proliferation of plant life – from weeds and wildflowers to shrubs and trees.

When the weather turns hot and the air becomes drier, the plants also dry up and become tinder, waiting for a spark to ignite. When the fire does start, the huge amount of fuel that is available ensures they are big ones. After the fire is finally over, the deforested land loses its ability to retain water. Consequently, the next rains will have a greater potential for causing floods. So the cycle goes on and on.

There’s more

Expanding communities mean that the extent of land used for human occupation is increasing. In other words, more and more people put themselves in harm’s way. If an established town like Paradise can be destroyed, think of what could happen to new property developments, which change radically the landscape of the state.

Protection is paramount

For the California homeowner, the questions of climate change and its causes are indeed serious issues. However, their immediate priority is protection of their homes and families from the unquestionable trends of big risks from wildfires, floods and other disasters.

Recent studies have shown that a frighteningly large number of homeowners are uninsured; even among those who do have insurance, the coverage is not adequate to meet the possible repair and rebuilding costs. It is not just the loss of a home and belongings, there is also the matter of the huge cost of having a place to live until the home is available again.

The need for proper home insurance has never been as critical as it is now, and the necessity increases with each passing year. If you are unsure about the amount of home insurance you have and whether it will cover the potential loss from floods and wildfires, and other disasters, contact an expert insurance broker for a fresh coverage evaluation and advice on additional protection needed.

Monday, December 24, 2018

How much Auto Insurance do you need?

It is universally true that people never ever consider themselves bad drivers, even if they are so at times. If a car accident occurs, it is always the other person’s fault! California is an at-fault state, which means that the insurance company of the person who has caused the accident is responsible for paying not only the repair costs, but also the medical costs incurred.

Car-owning Californians presume mistakenly that they need only the minimum auto insurance coverage. Even the best of drivers can and do make mistakes that cause accidents. In addition, there can be circumstances beyond anyone’s control, where no person is responsible for an accident.

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Partial protection is never enough

In California, it is illegal to take a car on public roads without insurance coverage. There are very severe penalties for not having one. The minimum coverage limits are $15,000 per person and $30,000 per accident, which satisfies the legal requirements.

However, it is never going to be enough to provide for the kind of protection you need actually, if you are liable for causing the accident, in part or in whole. In California, the payment of medical expenses for accident-related injuries is usually through liability coverage. With medical costs skyrocketing, paying for medical expenses out of your own pocket could bankrupt you.

How much is enough?

Ideally speaking, the more coverage you have, the better it is for you. Of course, there are practical considerations that place a limit on this suggestion. It is not a good idea to pay huge premiums, far more than you can possibly afford.

Coverage of $100,000 per person and $300,000 per accident is very likely to be adequate for most accident claims and costs. With this kind of coverage, you will find yourself well protected from medical and repair costs, if you are liable for causing an accident.

There is yet another factor to take into account: what happens if you sustain serious injuries in the accident? Alternatively, if the injury is caused by a driver who has no insurance or has inadequate coverage? This is where other forms of coverage are important.

Uninsured Motorist Insurance: This insurance will pay for injuries and property damage if the at-fault driver does not have insurance, or if the coverage is not enough to pay for all the costs.

Collision Coverage: This will pay for damage to your vehicle regardless of who is at fault.

Medical Payments Coverage: This will pay for any injuries you may suffer in an accident as well as for that of any passengers in your car. The payment is certain, regardless of who is at fault.

Calculating the types of adequate auto insurance coverage, and how much is required involves a number of factors: road and vehicle related risk factors, the amount a person can afford to pay for insurance, and so on.

Finding the right balance requires the knowledge and experience of a reputed insurance expert. Consult one to ensure that you have full protection, under all circumstances, should you cause an accident.

What is Loss of Use Coverage?

Camp Fire in Northern California and the Woolsey Fire in the southern part have been the most devastating the state has ever seen. While the loss of life is tragic, the plight of those who survived, but lost their homes to the flames should not be forgotten. Most of them will be looking towards their homeowner’s insurance policies to help them rebuild their homes and their lives.  Many of them may be in for a rude shock: they may find disturbing things.

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Rebuilding cost is not enough

Most homeowners plan on their coverage based on the cost of rebuilding their homes – or repairing them if they are lucky enough not to have lost them completely. What they do not take into account is the time it will take to have a home to live in again. It could be months, or even years.

Where will the family live until then? How much will it cost? Can they afford to pay rent for such a long period? There will be many other expenses not covered by insurance after wildfires end.

That it could be a year or more before a home is rebuilt or repaired may seem to be an exaggeration. However, history shows that it is not. After a large residential area is devastated by fire, the contractors who work in the area are overwhelmed with calls. It could be months before any of them is free to take on a project.

In addition, the demand for building supplies and materials will be huge, although shipments to the affected area will be fast. This could cause delays even for those who are lucky to start early the project.

Those who suffered through the 2017 Napa fires have firsthand knowledge to testify to such delays. It will cost a lot of money for a family not only to survive but also to pick up the pieces, while waiting for their home to be ready for occupation.

Loss of use coverage is essential

Loss of use coverage protects your family if you lose the use of your home. A homeowner’s insurance policy that includes loss of use coverage takes care of the living expenses of the occupants of the home until the home is ready for occupation again.

Depending on the coverage that the policy offers, loss of use can include payment of expenses that would not exist if the home had not been lost in the first place. For example, it could cover any extra commuting costs, food expenses etc.

If your homeowner’s insurance policy does not include loss of use coverage, you should act immediately, to modify the policy and provide for this additional and essential protection. If the coverage exists already, it is critical to ensure that it is enough to cover the living expenses when your home is not going to be ready for occupation for a long period.

Calculating how much coverage is required can be rather complex because of the various factors you need to consider. An experienced insurance broker is the best person to guide you through the process and ensure your family’s full protection.

In California, wildfires are no longer seasonal; they are now the new normal.

Friday, November 23, 2018

Insuring a Teenage Driver

It’s a big deal when your teenager gets their first-time driving license. A mid all the celebration (and worry for the elders) about the newfound freedom, there are the financial implications to consider.

Besides the cost of buying another car, (if you want to give the teen their own vehicle), there are the additional gas bills and more importantly insurance costs to bear. Insurance is one area where it is easy to make wrong decisions. Here is a guide to getting the right auto insurance for your teenager at the right cost.

Add the teen to your existing policy

Generally speaking, it costs less to add your teen to your own auto insurance policy than to purchase a separate one for them. The better your own driving record is, and the safer and more reliable the car you drive is, the lower will be the premiums.

Additionally, the type of car the teen drives impacts the cost. If it is going to be like your own safer model or another similar one, the cost of coverage will be lower than if you buy for your teen a high-powered sports car.

Assess your deductible

The higher the deductible, the lower is the premium. Increasing your deductibles can lower the premiums; however, should an accident occur, your out of pocket will be more. With a teenage driver at the wheel, the chances of fender benders and dings and dents are high, and so be careful about using this option.

Check for discounts

Ask your insurance company about the discounts that may be available. For example, the company may reduce the premiums if the teen has an image of a good student with a high GPA. If the teen is leaving for college and will not be taking the car along, a discount may be available as there will be less driving done. Explore all possible avenues of discounts.

Choose the right vehicle

If you are buying a car for your teen, consider getting a safe, reliable used vehicle. The cost of coverage will be lower than that for a shiny brand new car.

Avoid small claims

Scratches and minor dents are going to happen willy-nilly. If you file an insurance claim each time this happens, your rates will go up. Keep your deductible in mind too; since you will pay some part of the repair cost yourself, is filing a claim really worth it?

Think about a driving school

Teaching your teenager to drive is indeed a rite of passage. However, sending the teen to a driving school, preferably one approved by your insurance company, may entitle you to a discount.

Seek professional guidance

Auto insurance involves a large number of variables, some of which are easy to misunderstand or overlook. These mistakes can leave you with an avoidable high payment schedule. Even worse, they could leave you and your teenager underinsured; that could have serious financial implications, should an accident occur.

Obtaining the guidance of a reputed professional insurance agent will give you the right inputs to make the right decisions. That will ensure proper auto insurance for the new driver in the family.