Everything You Need To Know About Insurance

5 Most Important Insurance Insights You Need to Know:

Insurance is key to protecting yourself against financial ruin -- Insurance is a strange investment in that people pay for it, but hope they'll never need to use it. Insurance may seem like a waste of money for young adults beginning their careers, but this investment may be the one thing that protects them against financial ruin for the rest of their lives. According to a Harvard University study, medical expenses account for approximately 62 percent of personal bankruptcies in the U.S. Additionally, an estimated half a million people in the U.S. will file for bankruptcy this year alone. Insurance is an important investment to protect your future, and you should look for insurance that protect yourself against the risk of financial ruin at the lowest cost possible.

All young adults need health insurance, even if they are healthy -- Some young adults think that health insurance is too expensive to purchase, but they can actually save money by purchasing it. Health insurance acts like a discount program for medical services, so those without insurance pay significantly more for medical services than those with it. Additionally, people who can afford health insurance but choose not to buy it have to pay a government-mandated fee called the individual shared responsibility payment. Most insurance companies kick dependents off their parents' policies when they turn 26, at which point they can opt in to their employer's insurance (group insurance), remain on their parents' insurance for an additional cost, or purchase a separate healthcare plan (individual health insurance) through insurance companies or their state's health insurance marketplace. (See How to Buy Individual Health Insurance) Regardless of which option you choose, all young adults need health insurance, even if they are healthy.

The second most important insurance for young adults is long-term disability insurance -- If a person becomes sick or injured and is unable to work for a period of time, long-term disability insurance protects them against loss of income. Young people just starting their careers may not have much money saved yet, but they rely on their current and future incomes, so long-term disability insurance helps them protect that income and their futures. For someone who is twenty-five years old, the probability of becoming disabled before retirement is more than three times the probability of dying. Since many employers don't offer long-term disability policies, one can be purchased through insurance companies.

Renters should purchase insurance - While young adults might have limited belongings, the belongings they do have are important and valuable, and should be insured. Renters insurance is a comprehensive way to protect all of your belongings in the event of theft or damage, and often protects these belongings both inside and outside the home. When purchasing renters insurance, it's important to have your property and belongings appraised every year to ensure proper coverage. Individuals can purchase renters insurance through insurance companies.

Make sure your car insurance protects you and not just the other person -- Paying the bare minimum price for car insurance might seem sweet, but this car insurance is usually designed to only protect the other person in an accident, and wouldn't cover a situation where you or your car is damaged. Make sure your car insurance is comprehensive and covers you, your car and the other car, should a collision occur.

And there you have it. For even more on this important subject, check out insurance expert Todd Erkis' user-friendly guide to insurance: What Insurance Companies Don't Want You to Know: An Insider Shows You How to Win at Insurance.

As I've discovered the hard way, what you don't know CAN hurt you. So in addition to insurance, I recommend that you start early and review the Three Most Important Decisions You Will Ever Make. I sure wish I knew then what I know now. (Don't we all?)

Source: www.inc.com

15 things you also need to know about insurance

Insurance is complicated and confusing. This guide answers some basic questions on where you need coverage and how much.

Winston Churchill once described the former Soviet Union as "a riddle wrapped in a mystery inside an enigma."

The same description might hold true about insurance in its varied forms. What you need, what you don't need and how much are confusing questions for many. Accordingly, here are 15 of the most commonly asked questions about insurance, along with some answers that should prove helpful to you in developing a comprehensive, cost-effective network of insurance coverage.

1. What sorts of insurance do most people need?

Basically, most people need to be concerned with insuring four areas: their possessions, their life, their health and their finances.

2. When you're talking about possessions, does that mean that homeowner's insurance is the most important?

Probably, since a house is likely to be the single biggest investment most of us make. The general rule of thumb with homeowner's insurance is not to skimp. If you can, pay a bit extra to obtain guaranteed replacement coverage, which mandates that the insurer will replace your home if it's destroyed regardless of how much it costs. If you only specify a certain amount of coverage, you could end up paying the difference if it doesn't meet all your replacement expenses.

3. Once I have guaranteed replacement coverage for my home, I'm all set, right?

Maybe, maybe not. It's important to know what your homeowner's insurance covers and what it doesn't. For example, particularly pricey items such as big-screen televisions and extra fancy stereo equipment are often excluded from policies or, at the least, inadequately covered. The same goes for antiques, collectibles, expensive jewelry and furs. To protect these and other items that your policy doesn't, obtain riders that specifically cover those things.

Additionally, homeowner's insurance does not cover flood damage. So, go to your local town or municipal office and see if your house is in a flood plain. If so, contact the federal government's National Flood Insurance system to get flood policies offered by private insurers. (A link to the Federal Emergency Management Association's National Flood Insurance Program is on the left.) Likewise, seek out earthquake insurance if you live in an area that might be hit by a quake.

4. I have a home office. Do I have any special insurance needs?

Oh yes. A great deal of home office equipment, such as computers, fax machines, copy machines and the like, are generally excluded from most conventional homeowner's policies. As such, you have to obtain separate insurance to cover them. Insurance becomes particularly important if you see clients in your home office. That means you likely need liability insurance as well, so check with your insurance agent to make certain all your bases are covered.

5. Does homeowner's insurance cover me if, say, someone slips on my front steps, breaks a leg and sues me?

Not completely. Homeowner's insurance policies (and, for that matter, renter's insurance) have liability limits, so it's a good idea to investigate an umbrella policy. This adds additional liability coverage, upwards of $1 million and even more for a relatively cheap price (although the prices vary considerably from state to state). Not only does it add extra liability coverage for where you live, but you also get additional liability coverage for your car.

6. Is car insurance an absolute must?

Absolutely. Every state requires that drivers have some sort of automobile insurance in place. Even if they didn't, it would be sheer madness to drive even one inch without some form of protection. Slam into someone else and wreck another car or kill someone, and your financial life could very well be ruined without the protection of auto insurance.

7. Why is auto insurance so expensive and how can I hold down the cost?

The biggest bite of auto insurance comes from liability protection, which is effectively divided into bodily injury protection and property protection. This is one element of auto insurance you shouldn't shortchange. Look for minimum coverage of at least $100,000 per person, another $100,000 for property and $300,000 per accident. Additionally, if you can swing it, add on uninsured motorist coverage, which protects you in the event you have an accident with a driver who has no insurance.

To make this more affordable, consider raising your deductibles (that portion of the expense you have to pay before your coverage kicks in). Pushing up deductibles to $500 or even higher can significantly cut your premiums. Another way to trim costs is to eliminate collision coverage, which covers damage to your car. That's probably not wise if your car is new, but give it some thought if your car's got a few years on it and driving around with a ding or two is no big deal.

Other ways to cut costs: Drive safely (drivers with good records get better deals); insure every car you own with the same company (multi-car packages often mean lesser premiums); don't smoke (statistics show smokers have more accidents than non-smokers); and, if you're still in school and pulling down good grades, let your insurer know it (good marks can often cut premiums).

8. What about life insurance? Do I have to have that?

Does anyone depend on you financially? In its most basic form, life insurance covers a person's income. So, if no one, such as a spouse, child, or parent, is depending on your income, then life insurance is optional. However, if you're married, or there is someone whose well-being depends on what you make for a living, life insurance can prove an essential form of protection.

There is one interesting wrinkle that goes against the maxim of no income, no insurance. If you work and your spouse stays home with your kids, give some thought to taking out insurance on your spouse. The idea here is, should your spouse die, the death benefit could cover the expense of child care, which can prove rather hefty.

9. How can I figure out how much life insurance I need?

It's something of an inexact science, but try MSN Money's Life Insurance Needs Estimator.

10. What sort of life insurance should I consider?
For the most part, term life insurance works the best for most people. It's the cheapest and most simple insurance you can get. You pay the premium and you're insured. It's particularly effective if you follow the time-honored wisdom of buying term and investing the difference, which is what you would have to pay to get some sort of cash value insurance, or "whole life." If things work out, by sticking with cheap term and maintaining a systematic investment program, chances are that one day you'll have a nice large cache of cash.

11. So you should never buy anything but term life insurance?

It's not quite that cut and dried, because there are some instances where cash value insurance works quite well. For one thing, if you doubt you'll be able to, in effect, "invest the difference," cash value programs are a form of forced savings. In fact, there are some tied to mutual funds that can offer reasonable rates of return. And, since life insurance death benefits are exempt from taxes, they can prove an effective estate strategy to pass assets along to your heirs. The downside to most cash value plans is that they're more expensive than term and you have to plan on holding onto them for a while so you're not hit with heavy "early surrender" charges.

12. Health insurance is probably something I can't do without, right?

Correct. Recent estimates hold that more than 40 million Americans lack health insurance. Make sure you’re not one of them. The good news is that most employers offer health insurance to employees, usually at fairly reasonable group rates. Most plans boil down to a choice of two options, known as managed care and fee-for-service. Managed care, which carries such monikers as HMOs, PPOs and the like, has relatively inexpensive forms of coverage. Doctor visits and other services can be dirt cheap for employees, often costing only a couple of dollars per visit. The downside is that you usually don't get a doctor of your choice, as programs specify certain physicians from which you may select. Moreover, managed-care programs are often infamous for making you wait days and even weeks to get in to see someone.

Fee-for-service, on the other hand, carries more expensive premiums than managed care. The major advantage is that you can generally go to any doctor you want. Generally, fee-for-service policies will pay 80% of patient expenses after deductibles, with you as the employee responsible for the remaining 20%. Like other forms of insurance, you can trim fee-for-service premiums somewhat by increasing your deductible.

If you're self-employed or, by chance, your employer doesn’t offer health coverage, make certain you get something in place.

13. What exactly is COBRA?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. Under COBRA, if you resign from a job or are terminated for any reason other than "gross misconduct," you can continue under your former employer’s health-care coverage for up to 18 months. In many cases, spouses and dependent children are also COBRA-eligible. The downside is that the premiums are expensive since, in effect, you're paying both your and your former employer's share. The idea of COBRA is to continue a form of coverage until you arrange for some other sort of health insurance.

14. Does health insurance help if I'm sick or injured and laid up for awhile?

Partially. Health insurance only helps to pay your medical expenses. To keep income coming in if you can't work for a time, look into getting disability insurance. This is one of the more commonly overlooked types of insurance, and one that most working families really need. It pays you an income if you're incapable of generating your own income for any period of time. Some employers offer it, but in many cases, you'll have to look for it on your own. Look for policies whose waiting periods are no longer than 90 days. This is the time you have to wait until you start getting disability payments.

15. What about long-term care insurance? Is that something that should be considered?

Again, it depends. Long-term care insurance helps pay for nursing care and other like expenses when you get older. That's a good thing, no doubt about it. The drawback is that the premiums are expensive and become all the more so the older you get (By the time you're in your 70s, expect to pay several thousand dollars a year). One important consideration in long-term care insurance is whether you can genuinely afford the premiums without sacrificing your lifestyle; on top of that, think whether you can keep living the way you want if the premiums jump by 20% or 30%.00"/>

What do I Want to Know about My Insurance Benefits?

Coping with insurance plans may be tough, specially while you are already pressured and involved approximately intellectual fitness problems you or a loved one are experiencing. because of this, it is fine to recognize your blessings earlier than you need to apply them, if at all viable. the subsequent are steps you can take to ensure you understand your blessings so you can do something is within your manipulate to have your remedy included.

reviewing your coverage coverage

the first thing to find out is what intellectual fitness blessings your insurance policy offers. review your coverage coverage so that you are clean about whether or not your coverage consists of insurance for mental health services, styles of offerings which can be included and the quantity paid for these services, and any steps you ought to take to have treatment included. you have to have received a duplicate of your coverage coverage whilst you enrolled within the software, whether at work or independently. in case you did no longer get hold of a duplicate of the policy or have misplaced yours, you could call your coverage organization and ask for another one to be sent to you.

even if you have a copy of the plan, it's miles usually helpful to talk to someone else and clarify questions. this way you can identify any viable points of confusion earlier than you receive a bill. you must have various on your card or on the website to be able to tell you whom to contact.

the following are some questions you'll want to ask your coverage agency, if feasible, before beginning remedy:

1)  do i want a referral from my primary care medical doctor to a intellectual health expert?

many insurance organizations, especially fitness upkeep groups (hmos) require referrals from a number one care physician to visit any specialist, which include mental fitness experts. in case you do not get hold of a referral before touring a intellectual health expert, your insurance organisation may also deny your claims. in case you assume you require a referral, you have to usually get it in advance.

2)   do i want any pre-approval from the insurance business enterprise earlier than i see a mental fitness professional?

a referral is an authorization from a physician announcing that the remedy is medically essential;pre-approval or pre-authorization­ calls for that your insurance enterprise consents to make the fee. you should name your coverage employer to see if you need pre-approval, but you have to also preserve different questions in mind-how many visits are you authorised for? do you need a new popularity of every go to? if you are going to be hospitalized or in inpatient care, how many days are you allowed to live?

three)   do i want to see a mental fitness expert who's on a list furnished by my insurance corporation (in a "network") or am i loose to pick any certified professional?

if you want an "in community" issuer, you can generally discover a directory online or ask your primary care health practitioner to help pick out someone out.

4)   does the amount paid via my coverage agency rely upon whether or not i see a professional who's "in their community or preferred company listing" or "outside the network"? in that case, what is the difference in the amount paid or percentage repayment for "in network" vs. "out of network" providers?

"in community" carriers are nearly continually cheaper than "out of community" carriers, even though whether or not you need to save cash or go to a doctor you opt for is a choice you'll should make. undergo in thoughts that your insurance employer may not constantly have a flat distinction. for some agencies, seeing an "in community" company may cost you a $20 co-pay, and an "out of community" provider will cost you $30; in others, "in community" might cost you $20 and an "out of network" may cost you 20% - which can be substantially better than $30.

5)   are there greenback limits, visit limits or other coverage limits for my intellectual health blessings? is there a distinction in what's paid for outpatient vs. inpatient treatment? if so, what are my advantages for each of those?

it is not unusual, based totally in your kingdom and your plan, to have limits on psychiatric visits or remedy control visits. your plan can also restrict you to something like 25 periods with a psychiatrist every yr, as much as 7 days of inpatient remedy a yr, and 12 medicinal drug management visits a 12 months. in case you exceed those services, you will ought to pay out of pocket.

6)   is there a particular list of diagnoses for which services are covered? in that case, is my analysis one of those included by my coverage?

insurance groups frequently have the option to no longer encompass sure diagnoses in all guidelines. in case you applied along with your circumstance as a pre-present situation, they may now not cowl anything associated with that. your coverage organisation will offer you with a list of blanketed and exposed diagnoses..

7)   what prescription gain does my policy offer? what are the co-will pay for medicines? are there one-of-a-kind levels of prescription insurance depending at the particular medicine? do co-payments vary depending on whether the drugs is established or name logo?

now not all medical health insurance plans provide a prescription benefit plan in addition to a treatment plan. even if you have a prescription plan, not all medications are blanketed. many prescription plans have "formularies" that determine how a lot you pay for different classes or brands of medicine.  included medicinal drugs fall into three categories:

customary: those pills are copies of emblem-name tablets which have been available on the market for some of years and are regularly provided at very reasonably-priced expenses.
preferred: these drugs are name brand but are to be had to you at a fee beneath the retail rate.
non-favored: these drugs are call brand but are not offered at a very huge bargain.
insurance businesses often replace their formularies to categorise drugs beneath sure fee classes. it's quality to invite your doctor to help you find out what payment category your drug is in before you go to the drugstore to keep away from an unsightly wonder whilst the invoice arrives.

but, many prescription medicines for mental health conditions are very highly-priced and even with medical insurance, you could discover yourself paying a lot for a prescription.

mail order pharmacy - a few coverage plans will let you order a three- month supply of renovation capsules through the mail for a reduced, wellknown fee.

are seeking outside help - pass right here to find out different ways to help pay on your prescription remedy.

Searching for Assist in Understanding Your Coverage

if you have problem know-how the policy, see if someone out of your doctor's office, your company, or a relied on pal, can help explain the statistics.

in case you receive medical insurance thru your organization, you'll be able to go to your human resources branch. if your company is massive, you could have a devoted blessings expert who might be in a position that will help you navigate health care. in case you paintings for a smaller commercial enterprise, you may need to talk to the person who organized the fitness care. they may now not be capable of assist and their know-how may be administrative, but they'll help placed you in contact with an propose who can positioned you at the proper song. you may be hesitant to confess in your employer that you want help with a intellectual fitness condition, but it is not legal to your company to fire you over a disability.

if you have private coverage, you may touch your kingdom insurance department (http://www.naic.org/state_web_map.htm) or state coverage commissioner's office (http://www.naic.org/documents/consumer_hipaareps.pdf  (their patron hotline may be the most beneficial) for assist in information your coverage policy. they can also assist you find out whether or not your corporation blessings follow the country intellectual health parity laws (legal guidelines that assure identical coverage for intellectual health conditions as for other fitness situations), and may help you in dealing with your insurance company if you are having a problem.

Other Resources

the center for patron fitness alternatives of purchasers union has prepared a helpful guidebook "a consumer guide to managing disputes together with your agency or personal health plan". phase 1 "know your coverage" and the"checklist for diagnosing your insurance" can be especially useful. you could entire the tick list as soon as you've got spoken with your coverage organisation. once finished, the checklist can function a handy reference need to you need offerings inside the future.

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