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.