Do You Need Life Insurance?

Life insurance: Do you need it?

The most frequently asked question about life insurance is: Do I need it? The answer depends greatly on your situation. So, let’s determine if you need it. Review these statements and check all that apply:

□ I am married.
□ I have children.
□ Our family recently welcomed a new baby.
□ I am single, but I have dependents (a child or an elderly relative) who I support.
□ I am the sole breadwinner in my household.
□ I recently changed jobs.
□ My income has changed.
□ I recently bought a house.
□ I will pay for my children’s college education.
□ I own a business.
□ I am in debt.
□ My family has a history of illness, such as diabetes or heart disease.
□ I have trouble saving/investing money.

If you checked any of these statements, you need life insurance to protect the loved ones who rely on you for their financial support.

Imagine if you died unexpectedly. What would happen to your spouse, your children and other dependents? Would their standard of living or care slip significantly? Who would pay your children’s college tuition? Who would pay your mortgage and other debts? Would your business survive?

With life insurance, these concerns go away. If for no other reason, get life insurance for those most important to you—your family.

Life insurance tips

Now that you’ve determined that you need life protection, here are 10 suggestions to help you look for the best life policy for your family’s needs:

Get the right amount. Remember that the amount of life insurance you need is directly related to the dependency of your family. An eight-year-old child is more dependent than a 20-year-old already is in college. Plus, knowing how much coverage you need prevents you from paying for unnecessary insurance.

Start young. Get your life insurance while you’re young. Generally, premiums are cheaper for younger people because they are healthier than the rest of the population. Also, buying young will enable a cash-value policy to grow in value.

Live healthy. Don’t smoke. Tobacco users pay more than twice the premium as non-smokers. Also, don’t cheat because benefits can be denied if someone who claims to be a non-smoker dies of a smoking-related illness. Also, you can improve your insurability and get a better rate by routinely visiting your doctor and improving medical conditions, like high blood pressure.

Know what life policy you need. Learn the difference between term life and whole life policies, as well as that of a cash-value policy versus an annuity. There are products that serve several purposes and those that serve a single purpose. Know what your needs are first. Then you’ll know which coverage you should purchase.

Dual incomes? If you and your spouse are breadwinners, get life insurance for both of you. That way, if either of you passes away, the family’s standard of living will not suffer.

Prepay the premium. Ask the insurance company if you can pay your premium in advance, instead of monthly. This approach will save money on administrative or handling fees. Not all companies do this, but it never hurts to check.

Want to save money, too? Some life insurance products—known as “cash-value policies”—are both a savings tool and a death benefit. These polices are ideal if you cannot save money. The cash value accumulates and can be borrowed or used for other purposes.

Buy ‘bulk.’ Some insurance companies charge less for buying more. For example, it may be cheaper to purchase a $250,000 policy rather than the $230,000 you need.

Don’t rely on employer-provided coverage. Many group plans limit the amount of coverage offered, which may not be enough for your needs. Additionally, you likely cannot take the life insurance with you if leave your job.

Keep your coverage current. Major life events will impact the amount of coverage you need. Many events—such as having a child, getting married or buying a big house—will increase the amount of coverage you need. Others—such as children leaving the roost—may decrease the coverage you need.

Losing you would be painful enough for your family. The right life insurance can at least alleviate concerns about the financial implications of your death.

Allen & Stults Co. is a local Trusted Choice® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Allen & Stults Co. online at allenstults.com or call it at 609-448-0110.

Consider Buying Earthquake Insurance

Images of desperation and despair continue to pour out of Haiti in the wake of its devastating earthquake last month, killing over 200,000 people and directly impacting over 3 million of its people. This earthquake also serves to remind Americans of their exposure to this peril as well. Records dating back to 1900 reveal that earthquakes have occurred in all 50 states and caused damage in 39 of these states. The Federal Emergency Management Agency (FEMA) released a major study in 2000 indicating that U.S. earthquake losses over time could average $4.4 billion a year.

So the following question naturally arises: what is your exposure to an earthquake? Research indicates that residents in California, Oregon, and Washington are most at-risk. However, parts of Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee are also quite exposed to earthquakes. The New Madrid Seismic Zone runs under these states and, though it occurred long ago, gave rise to one of the largest magnitude earthquakes to ever hit the United States.

If you live in any of these states, you should ascertain your proximity to an earthquake fault zone. California residents can determine their exposure by visiting the State of California's Department of Conservation Web site, which provides a list of affected cities and counties. For other state-specific information, visit the U.S. Geological Survey Web site.

Most homeowners policies specifically exclude earthquake losses, just as they do flood losses. Therefore, if you live near an earthquake seismic zone, consider purchasing a separate earthquake policy or an earthquake endorsement attached to your homeowners policy. In addition, the following are some steps to take that will reduce your chances of injury or property damage resulting from an earthquake:

• Verify that operational fire extinguishers are strategically located on each floor of your home.
• Anchor tall furniture, refrigerators, water heaters, and bookcases securely to the walls.
• Utilize flexible connectors for gas supply to gas-fueled appliances.
• Keep beds away from glass or any hanging object that might fall.
• Verify that your home's roof and chimney are well-maintained, with proper support.
• Apply safety film to windows and glass doors.
• Add anchor bolts or steel plates between the home and its foundation.
• For older homes, work with a civil engineer or city building department to verify that your home is up to code for the earthquake peril.
• Communicate to family members an emergency meeting place should your family get separated during an earthquake.

If you are in your home when an earthquake occurs, stay inside and move away from windows, skylights, doors, and objects that might fall. Crawl under a sturdy item such as a large table or desk. Stay where you are until the shaking stops.

Get more personal lines insurance and risk management tips and ideas from IRMI.
Copyright 2010
International Risk Management Institute, Inc.

Property insured by the Association

For decades, most Condominiums carried insurance protection for the Association Limited Common Elements as well as the Common Elements. Generally the insurance coverage (and the documents) stated that the Association would insure “everything as it existed at initial conveyance by the developer.” This was fairly simple for all to understand as most agree on what items were there initially (oven, refrigerator, electric, wiring, plumbing, floor covering, etc.).

BUT, over the past few years many Associations have changed their insurance to only cover the exterior shell and those items used by multiple owners. This means they are only insuring the roof, exterior walls, electric used by the entire building, plumbing used by the entire building and the like. Everything else is your responsible to replace, WHETHER OR NOT YOU HAVE ADEQUATE AND PROPER INSURANCE.

We recently saw a “matrix” from one Association which basically stated that the unit owner is responsible for, and needs to insure, all interior insulation, all sheetrock, all electric wiring within the building, all plumbing within the building and even more. This simply means the Association is insuring an enclosed box shell, no more. Depending on your unit size, you may need to carry $50,000 or $100,000 or more of “building” limit. We have a couple of clients who have $300,000 plus of building coverage.

Unfortunately changes to the Master Association insurance policy have not been broadcast enough to unit owners. We expect that a letter went to all unit owners in your community or at the least an announcement was made at an annual meeting but the significance of any change may not have been adequately stressed to the unit owners.

You need to find out TODAY how your Association’s policy covers building elements and what building items they do not cover. Send it to your representative in our agency and we will immediately advise you how your policy covers these items and what changes need to be made to your policy, if any. Our fax is 609-448-8063 and email is cmazzoli@allenstults.com. Make sure your name is on the fax or email.

In-Home Businesses

Homeowner (HO) policies are not meant to insure in-home businesses. HO premiums assume that coverage is for a residence and related structures. Therefore no liability coverage is available for business activities such as customers who slip and fall on your premises, damage to business property (owned or in your control), injury caused by things you make (products liability), or damage due to services that you promote or provide. It is also unlikely that an insurer would provide a legal defense against business related claims.

Generally, an HO policy does not provide workers compensation coverage for any employee. Medical expense and liability coverage may be available for workers who are ineligible for workers compensation, such as maids, butlers, or nannies, but such coverage only applies if an injury occurs while performing residential tasks.

There is no coverage for detached garages, barns, or similar structures on your residence premises if they are used in whole or part for business.

Example: You store $3,000 worth of equipment and supplies that you use in your job in your garage and the garage burns down. The fire loss to the garage becomes ineligible because of its partial business use.

A basic HO policy may protect certain property. However, the coverage may be limited to as little as a few hundred dollars. Items qualifying for limited coverage include business personal property kept in or around your home, business personal property kept at a location other than in or around your home or landlord's furnishings. One way to improve your coverage is to add policy options that do the following:

• increase the coverage limits for business personal property
• cover garages and other buildings that are rented to others
• protect electronic business equipment which is usually used in a vehicle while such equipment is located outside of a vehicle
• provide theft coverage for landlord's property
• acquire limited business personal property and liability coverage for a in-home daycare
• cover a condo unit owners' liability for damage caused by renters
• provide premises liability coverage (i.e. a customer slips and falls)

If you have any questions about business or homeowners coverage, feel free to give Allen & Stults Co. a call.

Overpaying for insurance?

Insurance: The One Question Everyone Asks

“Am I overpaying?”

That’s a question that every consumer asks from time to time. Everyone is curious and concerned as to whether he or she is getting a good value for the money, whether it’s for technology, a car or an airline ticket.

It’s a good question to ask about insurance, too. After all, Americans spend a lot of money on insurance for homes, autos and businesses. In 2008, American drivers spent $161 billion for personal automobile insurance, reported the A.M. Best Co., an insurance research and ratings firm.

This large market for auto insurance is highly competitive. Consumers play a large part in keeping insurance rates competitive by virtue of shopping—whether online, by telephone or in person. More than one of four (about 28 percent) of auto insurance buyers shopped around for car insurance in 2009, reported J.D. Power & Associates in its 2009 national auto insurance study.

But consumers aren’t the only ones shopping around for auto insurance. So too do independent insurance agents, including Trusted Choice® insurance professionals.

On average, Trusted Choice® agents provide consumers with property/casualty insurance options from eight different insurance carriers, reported the 2008 agency universe study conducted by Future One, a collaboration of the Independent Insurance Agents and Brokers of America (the Big “I”) and leading independent agency companies. For automobile insurance, those agents may compare rates and coverages at even more insurance companies, through their use of software that allows them to compare multiple policies and multiple carriers.

For auto insurance buyers, research showed that independent agents rank most highly on the most important element of customer satisfaction. The J.D. Power study measures customer satisfaction with auto insurance companies across five factors (in order of importance): interaction, policy offerings, billing and payment, price and claims. Insurers who sell their auto insurance products through agents performed “stronger in the interaction factor than do direct insurers,” reported J.D. Power.

Overall, customer satisfaction with auto insurance companies reached a five-year high in 2009, reported the J.D. Power study. The biggest improvement in satisfaction among the five factors has been in price. Interestingly, 42 percent of customers in 2009 reported that their auto insurance premiums declined without switching insurers.

Are you overpaying for auto insurance? Thanks to a competitive market that includes Trusted Choice® independent insurance agents, the answer probably is no. If you’re not sure, ask a Trusted Choice® agency to review your options.

source: TrustedChoice.com, October 2009

Need Flood Insurance?

Do you need flood insurance? Well, walk to the nearest mirror and ask the person you see if he or she owns much property that could be damaged or destroyed by water. If the answer is yes, then you should seriously consider buying flood insurance. Most persons who need the protection buy coverage offered by the National Flood Insurance Program (NFIP). If your community doesn't participate in the program, you'll have to look into coverage from private insurance companies.

I Live In A Flood Zone?!

If you have ever heard the term "flood zone," you may think that it refers to locations that are particularly vulnerable to flooding. Wherever you live in the USA, you live in a flood zone. While your area may have a lower chance of flooding than a coastal area or a location situated near a body of water, your area could still experience flooding. A very dry part of the country can be susceptible to flash floods; hilly locations may be harmed by drainage; snowy locations may suffer from heavy snow thaw; other areas may suffer deluges or flooding due to a heavy rain season which has soaked the surrounding soil. So, if you've insured yourself against fire, wind and other causes of loss, it certainly makes sense to also protect yourself from the potential of a flood loss.

What's The Likelihood Of Suffering A Flood Loss?

The chances of your business, home or personal property being damaged by a flood depends primarily upon where you live. They also depend on other factors such as:

· how much of a flood warning you receive

· the level of flood precautions you take (such as moving personal property from lower levels to higher levels), and

· the precautions taken by your community (such as the use of flood controls in construction standards or sandbagging threatened areas).

Since floods are related to weather conditions and tend to affect very wide areas, your chances of a flood loss may be higher than a loss from fires or windstorms. Many people have the obsolete belief that flood insurance is only needed if you live in a flood prone area.

Why Worry When Disaster Coverage Is Available?

You may believe that, even if you suffer from a flood, your loss may be taken care of when the government declares your location to be a disaster area. However, you're still taking a couple of large risks. First, your flooded locale may not be deemed a disaster area. Second, being designated as a disaster area is not a bargain. Disaster area status only gives citizens access to government disaster loans. IF you qualify for assistance, you have replaced insurance protection with an obligation to pay off a large, long-term loan. Is it worthwhile to gamble on an opportunity to pick up more debt? You'll find flood insurance to be a cheaper and much more valuable alternative.

Don't Be "All Wet"

You don't have to leave yourself unprotected. Allen & Stults Co. can help you with detailed information on the National Flood Insurance Program. You can also ask for help in getting the coverage you need to "keep dry" and secure in the face of a flood.

Reconstruction Cost vs. Market Value

The purpose of insuring homes to value is to make certain there is adequate coverage. This way, in the unfortunate event of a loss, there is sufficient coverage to rebuild the home to pre-loss condition. It also helps assist in quicker, easier claim settlement.

So how does Allen & Stults Co. calculate this reconstruction cost? The calculation method that we use to determine replacement of a home is based on reconstruction costs, not market value or the cost of new construction. Some of the information we use to calculate the reconstruction cost is; square footage, year of construction, number of bathrooms, among other variables to make sure the coverage is as accurate as possible.

The reconstruction cost of a home is the cost to rebuild today with similar materials and craftsmanship, used during its original construction. Building experts say that reconstruction can cost up to 30% more to rebuild a house than to build it new. Builders hired for reconstruction require a higher skill set since they are required to work around existing structures, landscaping and power lines. They also need to be able to match up new materials to existing materials. We use reconstruction cost because it most closely approximates the cost to rebuild the home to pre-loss condition.