Shumway Insurance Agency

10 Things To Know Before You Buy Life Insurance

1. Know what your needs are- Many people have a difficult time in determining how much life insurance they need. A common rule of thumb is to multiply your yearly income by 5 - 10 times, using the lower number for less dependents and the higher number for more dependents and debt. Another way to get a rough estimate is to add together your debt, estimated funeral costs and a year of replacement income. Either way you should go into the purchasing decision with a good idea of how much life insurance you need.

2. Buy Life insurance when you are healthy- As we start to get up there in age and our health starts to deteriorate; this is often the time that we start to get serious about purchasing life insurance. Unfortunately, this is also the time when life insurance becomes the most expensive. So buy life insurance as early as you can, but wait until you have dependents.

3. Ask questions- Understand the policy you are purchasing- You should know the policy inside and out before purchasing it. Is the policy renewable and non-cancel-able? How long are the premiums guaranteed for? Is there a disability rider? What are the exclusions?

4. Shop around for life insurance- Like any insurance policy; premiums can vary from carrier to carrier. They depend on your sex, age, health, activities, and in some cases profession.

5. Buy from a financially solid company- Insurance is only as good as the company standing behind the policy. This is especially true with life insurance as if things go well, we don't expect the company to pay out on the policy for many years to come. So, be sure to check out the carrier ratings from AM Best to make sure that the company is solid enough to stand the test of time.

6. Tell the Truth- There's no sense in being anything but truthful on your application just to save a few dollars. Be assured that if a claim is made, the insurance company will investigate before paying.

7. Take a Free Look- You have 30 days to look at the policy and understand it. If you are not satisfied with it during that time, cancel the policy and you will get your premium back.

8. Get Healthy- Simply put, health people pay less for life insurance than those who are overweight, smoke or have health problems. So put down the cheeseburger, throw away the cigarettes and save.

9. Make adjustments as needed- As you and your children age, or your income changes, you might want to adjust your benefits. Don't be shy about adjusting coverage to meet your needs.

10. Make sure you have it- Going without life insurance if you have dependents won't affect you - it WILL affect your family and loved ones. No matter how much or how little life insurance you can afford, make sure you have something in place for them.

Health Insurance Tips

(Some of this information may change depending on pending new laws, as of 2010)

1. Shop Carefully- Health insurance is expensive, so compare the policies and decide what you must have (ie. Asthma medicine) and what coverage can be reduced.

2. Ask About Pre-Existing Conditions and other Exclusions- One of the main reasons that claims are denied is a pre-existing condition exclusion in the policy contract. Even if health questions are not asked on the application the policy may not cover a condition you already have. Make sure you understand the definition of pre-existing conditions and how long they will not be covered.

3. Know if the policy can be non-renewed- Be sure to read the renewal section of the policy to know if the insurer has the ability to not renew your policy and under what conditions.

4. Check your application for errors- If you do not give correct and complete answers to medical questions your claims may be denied or your policy canceled. It is always best to tell the truth, the whole truth and nothing but the truth.

5. Review your employer Health insurance options each year- If you and your spouse/partner are both eligible for health benefits check out each companies options to see which may cost less. Sometimes it may make sense to have a family plan with one employer while other times it is more effective to have each spouse on their own employer sponsored plan. Because employers differ considerably in the amount they contribute, check out your options carefully.

6. Beware of COBRA- If you have been laid off and your former employer has 20 or more employees, the company is required by law to offer you the option to pay for an extension of your health insurance benefits for at least 18 months. But beware Cobra can be very expensive as you must pay the premium your former employer was paying plus an addition 2%.

7. Do you want to keep your Doctor? If you have a particular physician you like, that might dictate whether an HMO or PPO is right for you. In an HMO you must use the plans network of doctors. In a PPO you can use any doctor but may pay additional for going out of the PPO network.

8. Increase your out of pocket costs- Insurance was designed to protect against catastrophic loss. So the more you agree to pay for things out of pocket in the form of deductibles and co-payments, the less you will pay each month in premiums. One excellent way to reduce your overall health insurance costs is to consider a high deductible plan.

9. Choose a policy to protect your financial well being- Select a policy that fully protects you in the event of a catastrophic illness or injury. Avoid plans with unrealistic limits on hospital, surgery, prescription drug charges and other potentially large expenses. Even if that means accepting a policy with a higher deductible.

10. Find a reliable Agent- Using an agent can help make finding the right health insurance plan much easier. Understanding your needs will help him/her guide you through the myriad of coverage choices available.