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.

Residents of Santa Clara and San Mateo, Beware of Health Insurance Issues!

It is not healthy to worry needlessly about your health. However, ignoring the signs of potential health issues is even worse. Hypochondria is not a good thing – but health is, in many ways; it is just a matter of common sense and taking essential precautions. The same wisdom applies to the matter of health insurance.

The right health insurance coverage for your family is critically important. It requires your time and attention as well as expert advice. If you have already gone through the mill, that should be okay. Unfortunately, the word ‘should’ has to be used here.


That is because recent changes in health insurance policies and procedures could catch you unawares and affect adversely the handling of a possible future medical situation. Here is a case in point that could have major implications for those living in Santa Clara and San Mateo.

An unexpected ineligibility of coverage

In Santa Clara and San Mateo counties, Stanford is a major provider of healthcare services. It runs one of the two trauma centers in Santa Clara too. Those who purchased an Obamacare health insurance plan after 03-01-2011 with Blue Shield do not have Stanford as a preferred provider.

This has serious financial implications for those living in these counties. If the health insurance company has a preferred provider contract with a hospital or other health facility, the full benefits of the insurance policy are available.  This typically involves a 20% patient copayment after a deductible, which is set to an annual out of pocket limit; it is usually $7,550. The preferred provider has a set fee for each service it provides.

Those with policies purchased after 03-01-2010 will have to pay much more if they go to a Stanford facility. The deductible is double and the copayment rises to 50% of the covered charge. On top of this, the patient will have to pay for uncovered charges.

As an example, take a surgical procedure that costs $100,000. With a preferred provider, the patient pays just the out of pocket of $7,550. Everything else is covered. For the same procedure with a nonpreferred provider, the out of pocket becomes $15,100 and the copayment is $50,000. In other words, the patient will have to pay $65,100 out of the total cost of $100,000.

Those who have policies purchased before 2010 or have Medicare supplements may not have to face this adverse situation caused by this new development.

Where do you stand?

If you live in Santa Clara or San Mateo counties, you should examine carefully your health insurance policy to see if you have the proper coverage you need. Those who live in other counties should also check, if there have been any recently introduced changes that might affect them.

You need to act fast in order to modify or change the policy, if required, and to provide for the best coverage your family deserves. It would be better for you to contact at the earliest an experienced insurance broker, who will be able to give you the guidance you need; ensure that you have made the right decisions.

Friday, October 26, 2018

Who says you’re too old to buy Life Insurance?

The older you are, the costlier life insurance becomes. There is a reason for this. Life insurance companies need to limit their risks: the chances of paying out for a life insurance policy bought by a 65-year-old is greater than one taken out by a 35-year-old. The cost is a major factor that seniors need to consider when deciding on buying a life insurance policy, but it is not the only one.

Do seniors need life insurance?

You have had life insurance for most of your adult life. You bought the coverage so that those who depended on you financially would not suffer if you should die. Now you’re into your retirement years, your children are settled and independent and you have paid off your mortgage. In effect, you have no financial liabilities to worry about.

In such circumstances, do you need life insurance? As in many aspects of life, there is no clear-cut answer for this. What is clear is that deciding to forego life insurance is a major decision, at any age, and you need to consider carefully the ramifications before making a decision.

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Reasons for not having life insurance

These are rather simple:
  • No one is financially dependent on you.
  • Age and possibly health issues have made the premiums too high.
  • You have no debts that your family will be burdened with in the eventuality of your death.
  • You have adequate savings to meet your foreseeable needs.
  • You have all the other insurance coverage you still need like auto, homeowner’s, long-term care and so on.
  • The estate you leave behind will give your family the financial support they may need.
  • The cost of the policy is totally beyond your means.
If all these conditions apply to you, then you may not need life insurance.

Reasons for having life insurance

These are not so simple:
  • Perhaps, not all the reasons given above (for not having life insurance) apply to you. You may need life insurance.
  • You want to leave a legacy that will continue after you are gone. Life insurance is a great way to ensure this. The legacy may not be for your family, it could be for a cause you care deeply about.
  • If you already have a permanent life insurance policy (as opposed to term insurance, which is for a fixed period), cash value will have built up and continuing with the policy makes sense.
  • Paying the premiums does not impose any stress on your finances.
  • Life insurance will give your family money, which they do not need, but will help improve the quality of their lives.

Making the right decision

Life insurance is an area you need to be sure about before you take any decision. You should be able to weigh the pros and cons in a balanced and unbiased manner. This is not easy, because of the financial, practical and emotional issues involved. An expert insurance professional is the right person to help you make the right life insurance decision.

5 Insurance Pitfalls you must avoid


The concept of insurance is simple: you pay a small regular premium; should the situations you are insured against arise, the payout from the policy will give you the finances you need to recover. However, there is a big difference between understanding a concept and putting it into practice the right way.

The terms and conditions of an insurance policy are indeed complex. There is every possibility of making mistakes in arriving at the amount of coverage you require. Consequently, you might get the wrong policy and you are left without the financial resources you need, when you require them the most. Here are listed for your benefit some of the most common mistakes that people make in matters of insurance.

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Having no coverage

This is by no means confined to a small section of the population. If you don’t have coverage, you don’t have protection. The problem is there are so many things you need to protect yourself against. If you own a car, you need auto insurance; but you do not know the type of policy that is right for you.

If you don’t own property, you may not need homeowner’s coverage; but you do need renter’s insurance for where you live. Health insurance is yet another highly complicated field. No matter how healthy you are, you could need it tomorrow, anytime. Should you have disability coverage too in cases where you are seriously injured?

Having too little coverage

Insurance costs money and the larger the policy, the more it costs. The cost of multiple policies together could be disconcerting. A seemingly simple solution would be to reduce the value of the policies; or you may cut back on the types of coverage so that what you pay for insurance fits comfortably into your budget.
That’s fine as long as your life is smooth, and you have no problems. However, what if you need to file a claim and the amount you get is not enough to provide you the money you need to recover? The few dollars saved every month by cutting back on insurance will not save you from the eventuality that has become real.

Having too much coverage

Fear of the worst-case scenarios often drives people to overinsure themselves. This may appear to be a good thing: who will complain about an excessively large payout? However, the effect of paying large premiums for coverage that you don’t really need can have a negative impact on your everyday happiness and comfort.

Having the wrong coverage

It’s easy to get caught up in the idea of protecting yourself and your family from everything you possibly can. Nevertheless, do you really need life insurance, if you have no dependents? Do you need flood insurance, if you live in an arid region with very little rain? The answers to such questions are not always clear-cut. You need to think carefully about various possibilities and options.

Failing to update coverage

Life and circumstances keep constantly changing. A policy that was right a few years ago, may not match your needs today. Not reviewing your coverage regularly to ensure the kind of protection you require could leave you in serious trouble, should things go wrong.

Get professional advice

The right way to avoid insurance pitfalls is to consult an experienced insurance broker, who has the right expertise to help you get the coverage you need at an affordable cost.

Monday, September 24, 2018

Buying Insurance: 5 Common Mistakes

Buying insurance can be confusing. Do you need it? How much do you need? Can you afford it? These are just a few of the questions that arise when you think of buying a policy. This confusion can often lead to mistakes that could leave you without the right coverage of your needs. Five common mistakes given below can help you avoid them when buying an insurance policy.


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Do not assume it is expensive

According to the U.S. Census Bureau, about 30 percent of households do not have life insurance coverage and over 40 million Americans are without health insurance. The figures for other types of coverage too are high. The main reason for these alarming figures is that many consumers mistakenly think that the cost is unaffordable.

That is not really the case: doing some research will often reveal that the actual cost is lower than the cost presumed. While the premium itself may appear to be high, there are usually discounts available that will significantly reduce the cost. For example, insurance companies offer discounts on auto insurance for those who have good driving records, who are members of AARP and so on.

Do not remain insensitive to eventualities

Your family needs keep increasing forever; if you are insensitive to this fact, you may end up with inadequate life insurance. In the case of disability or long-term care, for how long should you seek coverage – a few months or a few years?

Insuring your home for the value you bought it years ago could leave you very underinsured, if property values in your area have risen.  An insurance expert will be able to help you work out the right coverage that will take care of all possible eventualities.

Do not buy insurance considering just the price

The number of clauses, the nuances of their presentation, and the actual wordings can make very confusing the comparison of insurance policies. Many consumers find that the basics of the policies of different companies are all the same. Therefore, they simply presume that it would be fine if they purchase a policy guided just by the cost factor.

More importantly, you need to consider the reputation of the company, the quality of service offered, the exclusions that could lower the policy cost and a few other factors, which appear to be rather insignificant.  For example, the higher the health insurance premium in general, the less you pay when you go to the doctor. What would work for you? Does your property coverage include food spoilage in the event of a power outage? Such considerations prove to be quite beneficial.

Do not ignore the details

Insurance policies are rather long and complex documents. This is not because they are designed to confuse consumers; it is so because of the volume of issues and contingencies to be covered. It's easy to gloss over these terms and conditions, and just look at the cost and the claim payout.

The problem is that the details may, and probably will, contain factors that could affect or reduce the payout. This is another area, where an insurance professional will be able to tell you how, when and where the details of the policy will affect the benefits.

Do not set deductibles too high

The thumb rule is the higher the deductibles, the lower the premium. High deductibles may help your monthly budget. However, in case of a claim due to an eventuality, your high deductibles are not helpful: you need to pay a substantial amount (more than you can afford) out of your own pocket. The effectiveness of the policy and the protection it ought to provide stand substantially reduced.

When buying insurance, you will do well to contact an expert insurance broker, who will be able to evaluate your coverage need and suggest the right policy, at the right price.

Seemingly Rich, Probably Poor!

According to a recent report from the Department of Housing and Urban Development (HUD), a family living in the Bay Area with an annual income of $117,400 can be considered to be in the ’low income’ category. Those with an income of $73,300 are in the ‘very low income’ bracket. A study by the Brookings Institution says that those earning six figure salaries can be considered to be ’poor’. This is not surprising, given the wide variation in earning levels across the U.S.


A lot to feel blessed

Across the U.S., the median household income is $91,000 for a family of four. It is estimated that more than 40 million people in the country live on less than $25,100 a year, which places them below the poverty line. Between 2008 and 2016, salaries for full-time workers in metropolitan San Francisco rose by 26%, faster than any other part of the country. Dallas is in the second place with an increase of 14.4%. Those living in the Bay Area, therefore, have a lot to feel blessed.

 A lot to protect

The people of the Bay Area in general, and San Franciscans in particular, have deservedly earned their high incomes. The area is a hub of high-tech industry, which has triggered the economic boom. What many of those people do not realize, however, is that the other side of ‘increased prosperity’ may be the probability of ‘increased losses’. This situation issues from the failure to act when you have a lot to protect. A million dollar home is nice to live in; but rebuilding in case of its unexpected destruction will cost a lot more than a million.

The same holds true of expensive cars and similar possessions. In the event of the death of an earning member of the family, the effect of the loss of income is correspondingly huge. It was on that income that the future of the family depended entirely, and to shatter those hopes is to rob the family of its future.

Insurance: the best protection

Insurance is the best way to protect a family from loss, no doubt. However, it must be of the right type and for the right amount. According to recent research, about 60% of homes in America are underinsured, approximately by 20%. In other words, if a home worth $500,000 is destroyed, the family will have to raise $100,000 on their own to cover the rebuilding cost.

The three main reasons for this debacle are: (1) people have not recalculated the value of their homes over the years; (2) they have not updated their policies after making improvements or additions to their homes; (3) they have fallen victim to the ‘it-happens-to-the-other-guy-not-me’ syndrome. The same problem afflicts life insurance: higher costs associated with rising standards of living are overlooked, and policies not updated. Health insurance is yet another similar problem area.

Importance of professional guidance

Most people know what they need to insure but not how much to cover. Finding the right balance between the cost of the policy and adequate coverage is never easy. That’s where the insurance professional plays a critical role. They have the expertise and experience to assess your insurance needs, and to customize the right policies for you and your family and ensure the kind of security you want.

Thursday, August 23, 2018

Insuring your Second Car

Say, you have bought for your own use a second car, or one for a teenager who is now driving, or a son who got married or moved in with a friend. It would make a lot of sense to add this second car to your existing auto insurance coverage, instead of having two separate policies. It’s easy and simple as well.

Most insurance companies limit the number of cars that can be included in one policy. This number varies from company to company, but it is typically 3 or 4. As long as you do not exceed the limit, you face no problems. Here is how to go about adding a car to your policy.

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Collecting vital information

Collect all the essential information about the new car. This includes name, model, year, license plate number and the Vehicle Identification Number (VIN). Ensure that all the information you have collected is completely accurate, because any errors in the data submitted could be cause enough for turning down a future claim.

Contacting the insurance company

Get in touch with your insurance company. Some companies allow you to modify a policy online. If that is possible, find the relevant webpage for policy modification and provide the information. If that is not possible, call the company helpline, and they will walk you through the process.

Working out the right coverage

Decide on the coverage you want for the second car. It does not have to be the same as that for the first vehicle. You can reduce or increase the coverage, adjust the deductibles and so on. This is one area where it is easy to make a mistake and this is where the advice of an insurance professional could be of great help.

Checking the rates

Check how the addition of the second car to the existing auto insurance policy will affect the rates. Normally there is an increase in the cost of the policy due to a number of factors. For example, if the second car is expensive or is known to be accident prone, the increase may be high.

On the other hand, if the second vehicle is an inexpensive one and is known to be safe, it is possible that the rates are lower. The insurance company may think that your accident risk is low due to the availability of a safer vehicle.

Moreover, adding a second car to a policy may qualify you for a multi-car discount in some cases. Here again the guidance of an insurance broker can be of great help in arriving at the right coverage at the right cost.

Doing it the right way

Therefore, the addition of a second car to an auto insurance policy may not involve any significant additional cost. It may even bring the rates down. These are important factors no doubt for you to consider; but the first thing is to ensure that you have the right coverage and that both the vehicles are fully protected. Contact your insurance broker at the earliest for expert professional advice on all these issues.

A Home Insurance Renewal Checklist

What do you do when you get your homeowner's insurance renewal notice? Do you switch over to autopilot and send off the payment asked for without even looking at your coverage? If you say ‘yes’, yours is not an isolated case: it’s exactly what most people do! This is because what was good enough last year, the year before and for many preceding years, must be good enough for now, they think!

Unfortunately, that is often a very wrong assumption. The value of your home along with all your possessions must have grown over the years. The coverage you had opted for a couple or more of years ago may not be enough today to give you the protection you need.

The renewal notice should be treated as an opportunity to take stock, and fine-tune your coverage to meet your current needs. This does not always mean ‘pay more’. Here are four questions you have to ask when a renewal is due.

Are you eligible for discounts?

You could be eligible for a discount on your policy if you had recently paid off your mortgage, or done some home improvements like putting up a new roof, installing a security system and/or smoke detectors, fitting a sump pump and so on. The amount and type of discount will vary depending on the type of policy and the insurance company.

You could also consider increasing your deductibles. Check with your neighborhood association whether bundling your home and car policies will qualify you for discounts and save you money. Your insurance broker is the best person to help you understand both the coverage you need and the savings you qualify for.

Have you done any remodeling or renovation?

It’s easy to underestimate the value of your home after small renovations. If you have had any work done recently, your home may be worth more than what you think; your insurance coverage must correspond to its real value as of today.

Has your liability increased?

If there are changes in your home that could increase your liability, they ought to be taken into account when you renew your policy. It is surprising how even common things like getting a dog (even the most good-tempered can bite if provoked), or putting up a swimming pool can increase your risk. Renewal is a good time to revisit your liability and ensure that you have the protection you need.

Is your inventory up to date?

The increase in your possessions and their value is something that may go unnoticed. Take a walk around your home and look for items that you have acquired over the last few years, but not covered under your policy. If some or all have significant value, this is the time to modify the coverage to include them. If you have bought things expensive, check if the coverage for them is subject to limits and if special coverage is necessary.

You need to go into all these issues rather closely to ensure that your home insurance coverage is what it should be. Your insurance broker is the right person to walk you through the complexities, and make certain that you have the right coverage at the right cost, with the best discounts.

Monday, July 23, 2018

How much Long-term Care Insurance do you need?

Although major sickness can strike at any age, the chances of suffering from a long-term medical condition increase as you get older. Requiring long-term care in your senior years is bad enough. It is even worse if you feel that you are a financial burden on your family because of your medical bills then. A well-planned long-term care insurance will give you the financial resources to manage expenses arising from chronic or long-term debilitating sickness.

While an increasing number of people realize of late the importance of having long-term care insurance, they may not have the coverage they need. Long-term care insurance is not a one-size-fits-all type of policy. If you have questions on long-term care insurance or the right quantum of coverage, here are a few important facts to keep in mind.

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  • Resources cushion: Long-term care insurance should be part of your retirement planning. What assets and income sources will be available to you in your senior years? Can some of these be devoted to possible long-term care needs? What kind of insurance is needed to cover the gap between resources and care costs?
  • Place to retire: The place where you plan to live after retirement is a variable factor in arriving at the cost of care; it varies not only from state to state but also from city to city.
  • Duration of care: The duration of the long-term care will have a major impact on the cost and the policy you need. While it is not possible to predict an ideal duration, the typical care period is around 3 years. Genetic and hereditary diseases like Parkinson’s or Alzheimer’s can significantly increase the duration.
  • Health history: Your current and past health history and any recurring medical issues in the family over the last few generations would be important inputs. Those details would have a direct bearing upon the probability of long-term care need and the required duration of care, which in turn would help arrive at the type and quantum of insurance.  
  •  Inflation factor: Buying a long-term care coverage policy at an early age has the advantage of a low cost; but it may be many years before you may need the care and make the claim. Therefore, inflation should be factored into the amount of coverage that you opt for.

Planning: essential though unpleasant

Sentimentally, no one wants to think about prolonged medical care, especially in old age. Everybody would prefer instead to keep perfectly fit until the last breath. Nevertheless, it is too important a subject to ignore. Do not mistake long-term care for end of life care: they are two different things.

Long-term care is medical treatment and nursing for an extended period until you recover. End of life care refers to the care you need when you are in a terminal condition. Long-term care coverage affects how well and how fast you can be expected to recover.

Guidance of an expert

The financial situation of every person/family is different from every other. The factors outlined above will give you an idea of the kind of coverage you need. However, insurance is a complex matter: making mistakes and miscalculations is easy.

Discuss your insurance needs with an expert insurance agent who will be able to guide you to the right long-term care insurance policy at the right cost. It does not take long and the peace of mind you get will be lasting.

California State: Second Most Vulnerable to Natural Disasters

Natural disasters cover a wide range of natural phenomena including hurricanes/tornados, earthquakes, floods, fires and so on. California, called the ‘Golden State’, is truly a great place to live. Ask Californians if they would like to live in another part of the country; surely a majority of them will say ’No’.

However, California has its fair share of calamitous occurrences and the Californians take them in their stride. According to Federal Emergency Management Agency (FEMA), California is the number two state most prone to natural disasters. A few of the worst disasters of the last 100 odd years that devastated California are listed below. 

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  • 1906 The San Francisco Earthquake: More than three-fourths of the city were severely damaged or destroyed, and over half the population was left homeless.
  • 1923 The Berkeley Fires: The fires gutted multiple city blocks and almost 700 buildings.
  • 1964 The Christmas Flood: 19 people died, and damage of a scale of over a $100 million occurred in Humboldt County.
  • 1982 The Alpine Meadows, Tahoe North shore Avalanche: This is the deadliest avalanche ever recorded in North America.
  • 1989 The Loma Prieta Earthquake: The images of the havoc caused remain seared in the minds of San Franciscans even today. 63 people were killed and 3757 injured.
  • 1991 The Oakland Hills Fire: Over 800 buildings were destroyed and 25 people died.
  • 2015 The Valley of Fire: Over 1,300 homes and almost 80,000 acres of land were burnt in Napa, Sonoma and Lake County.
  • 2015 onwards Savage wildfires: They are now a regular part of summer.
  • Many more have made headlines.

Survival and recovery

Surviving a natural disaster is a matter of preparedness and luck. There will of course be state and federal aid forthcoming to help survivors face the immediate aftermath. However, these are not meant or sufficient for recovery and rebuilding lives. The victims often find that their homes and sources of livelihood are demolished. The only protection, if they have one, is the insurance coverage.

It is insurance that is likely to help rebuild homes, restart businesses and keep families protected and fed. Unfortunately, many Californians are either uninsured or underinsured. This is due to a feeling that disasters always happen to ’other people’, not ‘us’. Many of those who were unable to recover from the disasters listed above too thought so.

Insurance: The Best Protection

Do not remain unprepared for calamities, taking your insurance for granted. You may feel you are well protected, but in reality, you could be underinsured or there may be gaps or catches in the coverage that you are not aware of.

It is best to contact an experienced and reputed insurance broker  at the earliest. They will  examine carefully whether you are sufficiently protected from natural disasters, and whether you need any additional coverage.

Hopefully, you will never ever need to file a claim. Nonetheless, a carefully planned insurance that covers all possible eventualities would surely give you immense peace of mind that you CAN rebuild your life come what may!

Friday, June 22, 2018

Stay Protected this summer with an Umbrella Policy

Summer is here and millions of Americans will be hitting the road to travel and make the most of the sunny days with occasional rains. You and your family will probably be among them. You may have the safest of vehicles and be an excellent driver, but there are factors beyond your control that could affect your safety on the road.

An accident could occur at any time for no fault of your own. Fender benders are no big deal, but if it is a major accident resulting in major vehicle damage, serious injury or in the worst case, the death of someone in the car, you depend on insurance to get you through the terrible time.

Nevertheless, what happens if the driver at fault does not have auto insurance or has inadequate coverage? How will the medical and other expenses be covered? This is where an umbrella insurance policy can save you.

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This could happen to you

Peter and Martha along with their children are driving to the neighboring town for a party. The car is in good condition and Peter is a safe driver. However, the kids in the back seat soon start fighting, and this distracts Peter. He pulls over to stop the quarrel and pacify them; still distracted a bit, pulls out into the traffic without checking for other vehicles.

You are out for a Sunday drive with your family, when Peter suddenly pulls out in front of you. There is no time to avoid the imminent accident; your car is badly damaged and all of you in the car suffer major injuries.

You all need hospitalization, surgeries and long rehabilitation. If Peter is underinsured and his policy is not enough to cover your expenses, what happens? You could sue him for the money, but that will be a long battle, and he could declare himself bankrupt, in which case you are back where you started. If you have an umbrella insurance policy, that will kick in, after Peter’s policy is exhausted, to cover your medical expenses. It's as simple as that.

Obviously, this is a worst-case scenario. You hear reports of things like this always happening to others, and thank God for that. However, there is no absolute certainty that it will not happen in your case. Maybe in other contexts, what you thought the remotest possibility would have taken you by surprise by becoming a reality. Umbrella insurance is a very inexpensive way to get the extra protection you need even in a worst-case scenario.

Why an umbrella policy?

Umbrella insurance is a simple and safe way to protect yourself from situations where other insurance coverage is not enough for your medical and other expenses. An umbrella policy can also cover pain and suffering as well as emotional distress and lost wages. It is the most cost-effective way to get the extra coverage you need to remain protected.

Consult a reputed insurance broker to know more about the advantages of an umbrella policy; they will tell you what kind of coverage is right for you.

Life Insurance Questions you need to consider

Buying life insurance is a major decision that impacts not just the lives of all those who depend on you, but also your own life and the way you live your life. Life insurance is today an extremely complex subject with a vast number of companies offering a huge number of coverage options. Trying to find your way through this maze can leave you dazed to the extent that you could easily make the wrong decisions on your coverage.

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Often the flaws or nasty catches in a policy will not be realized until the holder passes away, and the dependents do not receive the benefits as the policyholder had planned. Having a life insurance policy is not enough – you must have the right and foolproof coverage.

Seeking a reputed professional insurance agent would be the best way to ensure that the policy you buy is what you actually need, and the terms and conditions of the policy have no traps. Here are a few basic questions you should consider yourself first, and later in consultation with the insurance agent.

Do you need it?

Only a person with no dependents can do without life insurance. You do need life insurance, if: you have people who depend on you; your salary is what is supporting your family (either fully or in part); you have a mortgage to pay off; you have recurring expenses. The benefits that accrue on your life insurance will meet your financial obligations after you are gone.

How much coverage do you need?

No standard formula is available to help you calculate the ideal coverage you need. It is contingent upon the number of dependents, the stages they are in life, their and your lifestyles, and the financial obligations of every one of you. There is, however, a thumb rule that the policy value should be 10 times your annual income, and here again every family is different from every other. It is important, therefore, to have professional advice when calculating the value of a tailor-made policy you should buy.

What type of policy is right for you?

Term policies that pay the insured sum promptly on the death of the policyholder are the least expensive. Whole life policies that have a death benefit, as well as cash value, are more expensive. Within these two broad categories, there are options, and so you should get again expert advice on what is right for you.

What is the right premium?

Premiums vary depending on the insurance company and the plan you opt for. Each company has its own advantages and possibly some catches. An expert insurance broker that represents different companies will be able to guide you to the right company and the right policy.

Have you covered all the bases?

It is often difficult to consider objectively all the vital factors your insurance needs to cover.  Make a detailed list of all issues that will impact your policy choice. Discuss with the insurance agent who will be able to tell you if anything is left out.

Expert guidance is essential

These basic questions show how difficult it is to make the right life insurance decisions. The guidance of an experienced insurance broker will ensure peace of mind that comes from the right coverage you have made; in case of an unwelcome eventuality, those who depend on you will not suffer financially.

Wednesday, May 23, 2018

Preparing for a Life Insurance Medical Exam (Part-1)

One of the biggest questions people face when buying life insurance is how much coverage they can afford. Everyone wants the maximum indeed, because the policy beneficiaries can live in security and comfort after the policyholder passes away. The issue, however, is not that simple – of seeing how much a family can afford to spend on insurance premiums month after month.


How much you pay for life insurance is dependent on a number of factors. Besides your age, a major consideration is your health. The reason is simple: insurance is a business and the healthier you are, the longer you are likely to live and that means you will be able to pay more premiums. That is more income to the insurance company and so the amount of each premium can be reduced.

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Insurance is a very competitive industry: every company wants to attract as many customers as it can, and low premiums are the best way to do it. However, the business cannot run at a loss: a company, therefore, looks at the total amount it can expect you to pay. The calculation is the healthier you are, the longer you live, and the more income for the company.

On your part, you have your life cover with low premiums; you are content with the thought of security of and benefits to your family. Thus, the company and the policy holder are both winners. An experienced insurance broker can give you more information about this issue.

The difference that health makes

There is nothing you can do to exercise control over advancing age. The older you are, the more you will pay for insurance. Heath, however, is another matter. Every insurance company has its own policy on how it evaluates a customer’s health. There is no definitive rule in place. Having said that, customer health is crucial; it is typically divided into 4 categories:

1. The healthiest 20% are rated as “Preferred Plus” and pay the lowest premiums.

2.The next 30% are rated as “Preferred”. They will, on an average, pay about 20% for the same coverage.

3.The next 30% are rated as “Select” and pay about 20% more.

4.The last 20% are given a “Standard” rating and pay about 20% more in premiums.

This is only a general guide and the rating nomenclature will vary from company to company.

Better health saves money

The higher your heath rating is, the less will be your insurance premium. Consequently, you can reduce the cost of insurance or go in for a higher coverage. It is obvious that a lifestyle without adequate exercise, rest and sleep, or one that suffers from bad nutrition, smoking, excessive drinking, substance abuse and so on will affect your health. It will thereby increase the cost of insurance.

If you are planning to buy life insurance, changing your lifestyle just for a few days before the medical exam will not make any measurable difference to your health. However, you can do a few things before the medical exam. These simple efforts can surely help to improve your health rating; that way you can reduce the amount you pay towards insurance premiums.

The next part of this blog post will walk you through these useful things to score better in your medical exam results.