Finding your Prospects is only the Beginning: Advice for Insurance Agents

Coveting leads for prospective clients
Phillip joined our captive company for two reasons–and was soon asked to leave. One, we have products that are better than anything he could offer through his privately owned agency. Two, we have a lead system (for which we pay 7% of our commissions) that eliminates some of the work of finding prospects. Unfortunately, he continued to operate his own agency as well which was a violation of his contract.

Whether Phillip was right or wrong, his action illustrates a truth known to all insurance agents. Finding people to talk to is the most difficult part of the insurance business. Referrals and call-backs are the secret to success. But getting the clients who will do the marketing for you involves a lot more than just selling them a policy.

Keeping clients once you get them
Developing a lead into a long term client can be summed up with one question. How much time are you willing to spend, and how much service are you willing to provide for which you will not get a commission in terms of dollars?

Getting the appointment with your prospect is the first step in getting the business. Without that appointment, you have no business. However, it is only the first of many steps toward getting and keeping the business.

Being seen as a “real” person
We are living in a day when trust is dangerous. Numerous scam artists lurk in the streets, watching for an opportunity to take advantage of the unwary. With that in mind, it is important to let your prospect see you as a real person–someone with a phone number, an address, a family, perhaps some interests in common. I tell my prospects why I am in insurance, what I did before that, and where I live. I also give them a small written bio in the form of a bookmark that has pictures of me, my kids, and my grand kids. We engage in a five or ten minute exchange where they tell me a bit about themselves as well. It breaks the ice, as I’m not likely to scam a person who has enough information to put me in jail.

Getting to the need
Within a few minutes, we transition to business. I usually ask if they know anything about my company. Even if they do, I have a bit more information ready to give them such as the kinds of service we provide, the speedy claim payment for which the company is known, and the assets that support the company as a whole.

Even when I know what product the client is probably interested in, I begin with a simple questionnaire that we call a “needs assessment.” I have a couple of variations, depending on the situation. For example, I find out very quickly what health insurance a person has; if she has Medicare and Medicaid, I know that I don’t need to waste time on Long Term Care, or any kind of health product other than a prescription drug plan. The only thing I can help such a person with is their life insurance.

Understanding the prospect
Once I have determined what my approach should be, I simply explain that my purpose is to give them information followed by some options tailored their unique situation. To do that, I must ask a few questions. The next step will be a decision which will be up to them to make. That decision will be to either take action on one or more of the options, or to do nothing.

Then I simply ask questions about the areas that have the most impact on a person’s future regarding life and health. If they have life insurance, what kind is it, and when was it last reviewed. If possible, I will ask them to get their policy and let me take a look at it. Doing so has turned up policies that were Term Life about to expire–or universals with premiums about to increase. Nearly everyone thinks he has “whole life.” In my experience, at least 60% are sadly incorrect.

If a client has health insurance which is currently serving his needs adequately, I inquire first about his health, and then about Long Term Care. If a person is already using a walker or wheelchair, or has serious illnesses like diabetes requiring insulin, for example, there is little point in discussing Long Term Care as he won’t qualify for it. If his health is good, however, I will simply engage him in a discussion about family members or friends who have needed extended care. The point is, we have to establish the possibility that at some point in the future, extended care is likely to be necessary, and that putting the burden on family members strains the emotional, physical and financial health of the family along with putting the life long savings and family home at risk.

Educating the prospect
The underlying purpose in all this discussion–which can take from 20 minutes to an hour–is not sales. It is education. Many people –not versed in insurance language–are confused about what they already have. Insurance is something people buy because they have to; then they put it in a closet and forget about it, believing they have everything they need, and locking the mental door against anything new. An agent who can open that door and either verify or clarify their understanding about their insurance possessions stands a much better chance of making a new sale.

Sometimes opening that closet is like opening a can of worms. Recently a client shared two 15 year old life insurance policies–$50,000 each–on himself and his wife. The policies were both labeled “whole life” both on the cover sheet and on the deck page. His also said “payable for life” beside the premium. This year he received a notice saying that if he wants to keep the $50,000 his premium goes from $60 per month to $308! His wife’s premium would go to about $290. He had already called the company and had been told that regardless of what the deck page says, the policy is actually a Term policy and that the premiums will continue to increase. Nothing on that policy says Term. However, there is a paragraph which he had never noticed and did not understand, which said that the premium was subject to “periodic recalculation.”

Does the client have grounds for a complaint and return of premium? I would think so. But whether he does or not, he knows, that even though it will cost him more now than it would have 15 years ago, he wants a policy that will have no increase in premium and will not decrease in benefit–guaranteed whole life. If I hadn’t discussed his complete life/health insurance package with him, he would never have known.

Delivering the policy
Once a policy has been issued, our company requires personal delivery and obtainment of a delivery receipt. It has been said that every minute spent with a client upon delivery of a policy is equal to a year that the client will stay with the company. Furthermore, many more policies are sold at the time of delivery than are sold on a first visit. The client has trusted you enough to take the first one. Take the needs assessment with you and review it before getting to the house. A completed needs assessment will have possibilities between the lines. Are children getting married, grandchildren being born? Who is the beneficiary on the life policy you are delivering. Offer to visit that person, give them a business card with the policy number written on the back, and let them know that in the event a claim needs to be made, you will be available to help or answer questions.

Generating repeat business possibilities
Once the business is complete, generate more business by doing the unexpected. You can drop in when you are in the area, deliver a small box of Russell Stover chocolates (at less than $2.00 out of your pocket), or some other small gift that simply says “thank you for your business.” A small gift or card–for no reason whatsoever except to say thank you–will go a long way in keeping your clients and finding new ones.

Since 1985, Gary Stuart has worked to build and cultivate an agency that puts the customer’s needs first. In 2000, he translated 15 plus years of insurance experience to the development of sites like accuterm.net accuterm.net where life insurance agents can learn about the advantages of exclusive, internet generated sales leads. Gary believes that a good lead is only the beginning of an agent/client business relationship.

Self-Motivation or Regulation

There’s a movement in the Reinsurance Industry to have contracts signed at inception. Can we do it?

Introduction

Historically, the Sellers and Buyers of reinsurance have been notoriously lax in getting “actual contracts” negotiated, drafted and signed. We all know the heralded stories of “handshake deals” and “cover notes written on napkins”; everyone knew each other and deals were done as a gentlemen’s agreement. The deal was priority, the contract was not. With the growth of the reinsurance community and the involvement of larger sums of money, this remiss practice led to “regulatory involvement’ in 1994 when the Plenary Committee of the National Association of Insurance Commissioners (NAIC) adopted amendments to Chapter 22 of the NAIC Accounting Practices and Procedures Manual establishing what has become known as the “Ninth Month Rule”.

Ninth Month Rule

In the early 1990’s there was regulatory concern that parties to a reinsurance agreement may reconstruct essential coverage terms of a previously negotiated reinsurance deal after the losses have occurred in order to take reinsurance credit for a transaction that involves no transfer of insurance risk.

Thus, on September 18, 1994 amendments were adopted which revised Chapter 22 of the NAIC Accounting Practices and Procedures Manual. The Manual is used by most states to establish statutory accounting practices for insurers. Specifically, Chapter 22 governs how reinsurance transactions will be accounted for in the financial statements of insurance and reinsurance companies.

One of the amendments prescribed a special accounting treatment for reinsurance transactions where the contract associated with said transaction has not been signed within nine months of the inception date of the transaction (i.e. the “Nine Month Rule”). Thus, if a contract is not signed within the specified nine months the underlying transaction will receive retrospective accounting treatment which would significantly impact the financial statement of the insurer.

Silverstein and Spitzer

Following the events of September 11, 2001 (in particular, the Silverstein case) and the investigations of the industry by the Attorney General of New York, it is not hard to imagine that regulators may once again take a look at how the industry executes its contracts. Is this what we want as an industry?

Ronald Reagan once said “the nine most terrifying words in the English Language are: ‘I’m from the government and I’m here to help.’” Well… I won’t go so far as to say regulators are terrifying, but if we are not proactive enough to help ourselves, we can be sure that we’ll be faced with further regulations.

The issue in the Silverstein case had to do with the definition of “occurrence” or rather the lack thereof. This issue arose because the parties failed to reach agreed upon contract wording before the loss occurred. While this example is in the context of an insurance binder, the same problems emerge in regard to reinsurance placement slips. In any case, this exposed to the public and highlighted to regulators a less than sophisticated business practice that occurs in both the insurance and reinsurance industries. (i.e. incomplete terms at inception). It should not have been surprising; many examples of this type of issue have been happening for years.

New York Attorney General Eliot Spitzer’s investigation threw the spotlight on a heretofore little known industry and the lack of disclosure that was exposed has no doubt cast a shadow on the image of our industry with consumers and regulators. The fact that, as an industry practice, contracts are not signed until almost nine months after the inception date only darkens that shadow of suspicion.

These events have rightfully awakened some in the industry to push for contracts to be signed by inception with full disclosure of all contract terms and conditions.

London Market and Contract Certainty

In London, the Financial Services Authority (FSA) (“an independent non-governmental body, given statutory powers by the Financial Services Ad Markets Act 2000”; according to its website) has set a challenge for the UK insurance industry to achieve “contract certainty” by the end of 2006. Should the industry fail to meet this deadline the FSA has indicated that regulatory intervention will result with possible “operational risk charges, other capital charges and specific rules.”

Nick Prettejohn, CEO of Lloyds, in a speech to the Insurance Insider Breakfast Briefing stated that there are commercial and regulatory reasons for a move towards contract certainty which he defined as “not only contract delivery” (i.e. having a contract produced or drafted prior to inception) but as a “complete and final agreement of all terms between the insured and insurers before inception”. Prettejohn explained that contract certainty is essential in order to minimize risk because without it underwriters have uncertainty about their exposure: “uncertainty over exposure for underwriters leads not only to reserving risk but also to an inability to properly understand business performance and therefore pricing. Inability to calculate exposure properly leads to capital misallocation.” Thus, he states, there is a “commercial case” for contract certainty.

Prettejohn further explained that if insurance/reinsurance companies fail to achieve contract certainty and thus cannot fully assess their exposure then the rationale for regulatory interest (FSA) is obvious.

Prettejohn concludes that, “We have no choice in the drive to contract certainty; we simply have to make it happen. The commercial and regulatory rationale cannot be denied. As such, I would prefer that as far as Lloyd’s is concerned, we do not have to exercise any mandate or sanction to enforce compliance. A voluntary market solution is distinctly preferable and it is certainly to be preferred to FSA enforcement.”

The London Market is on its way to meeting their goal. Where are we and can we strive toward the same goal without regulatory intervention?

Slip vs. Contract

Much of what Nick Prettejohn says also applies to the US Reinsurance Market. In order to have “contract certainty” (to borrow that phrase from our UK colleagues) there must be a complete and final agreement of all terms and conditions between the ceding company and the reinsurers before, or immediately following, inception.

Just out of law school I started my first “reinsurance job” barely having any idea of what “reinsurance” was. On my first day my new boss pointed out a pile of contracts that I could work on that “just came in”. Upon my review I noticed that these contracts that had “just come in” in September of 1988 had inception dates of January 1, 1977. Granted they were property cat covers, but just the same, it offended the sensibilities of a recent law school grad. What type of industry does business without a complete and signed contract? I wondered what I had gotten myself into.

Needless to say those “sensibilities” relaxed as I continued my reinsurance career and realized the reality that contracts were, in fact, signed at or before inception. They were called “placement slips” or “cover notes”, and though bare-boned they were still legally binding contracts. A more “complete” contract would be negotiated, drafted and signed at a later date, sometimes much later, as my anecdote indicates.

Any writing is enough to form a contract if it shows the intention of the parties to make an offer and acceptance. Thus, when a slip shows a promise by the insurance company to offer or cede premium and risk in exchange for a promise by the reinsurer to accept the premium and risk, you have a valid contract. Whether a slip contains enough information to answer all issues arising about the interpretation of the formed contract may be questionable. Any issues not fully vetted would be left for the parties to come to terms with in their business dealings or if they are unable to do so then to be decided by an arbitrator or judge.

With the advent of the Nine Month Rule, many reinsurers and brokers complained that it would be impossible to get contracts completed within such a time frame, (history shows this to be wrong, but it was the prevailing thought at the time). This new compressed time period pushed the brokers (and the direct markets) to include not just the usual laundry list of clauses in the slip, but to actually attach examples of clauses that were expected to be in the contract. This of course, has taken us a long way from the bare-boned cover note to something which had some substance to it. However, in light of the current market place we need to go farther.

I would argue that for purposes of “contract certainty” we need to push forward with a completed actual “contract” and not just a “complete slip” at inception. Since the use of a slip seems to imply that the terms and conditions are not yet completely set. Further to those persons not “in the business”, consumers and shareholders for example, it may seem like an actual contract has not been agreed to and it is just business as usual.

Contract Certainty

The problems with obtaining contract certainty are many. Having to negotiate contract provisions other than the strictly financial terms of a placement can lengthen and intensify the negotiation/placement process and put further pressure on an already hectic and harried renewal period. If it takes more time to negotiate the placement slip, it could possibly lead some brokers to fail to fully place coverage by the inception date, thus doing a disservice to their clients. Note that particularly in the “broker market”, because coverage is placed by “subscription”, you may not obtain agreements by all reinsurers at an early enough date to have the contract in place by inception. Very often the dynamics of negotiation take discussions right up to the inception date. In this case, considering that an underwriter’s authorization is at least partially based on the contract provisions, the underwriter would not be able to have a contract “in hand” at inception that reflects what has been currently negotiated.

Some have suggested “standardized wordings”. In that regard, maybe it would facilitate a quicker review of the wording because of familiarity. However, as a practical matter each cover is different; from the rate charged to the business covered, and thus “standardized wording” will not work in all situations. There is also the question as to whose “standardized wordings”. What the ceding company would tend to want as “standard” may tend to be what the reinsurance market would like least and vice versa. Any “industry standard” may run afoul of anti-trust considerations. In any case it is important to note that the placement of reinsurance is a negotiated process and the type of wording that the underwriter may be willing to accept on one piece of business, he or she may not be willing to accept on another. Thus if the contract is to truly reflect this and be a negotiated product then underwriting submissions must in turn be submitted earlier for a complete review even if “standard wording”. If it is not a truly negotiated process, then ultimately these “standard” contracts will be looked at as contracts of adhesion. Thus, while standardization may help it is not a panacea to the issue of contract certainty.

How then can the Reinsurance Industry accommodate this change? Greater regulations are certainly one answer. However, the insurance industry is already heavily regulated and I would guess that most would agree that more regulations and the bureaucracy that accompanies them would not be welcome. What is needed is a change in the way we do our business, a paradigm shift. If we are going to make it work, this shift needs to be supported by everyone – brokers, underwriters and ceding companies. But such a shift in behavior can only come about through leadership at the senior management and board level, given the resistance of human nature to change. But the change is coming one way or another and it behooves us as an industry to move forward on our own volition.

It is important to note the resistance to the Nine Month Rule in the early 1990’s. Underwriters and contract writers said it couldn’t be done; the industry would be hard pressed to produce and sign a contract within nine months. Well, it was done, and currently virtually all contract documentation is negotiated, drafted and signed within nine months of the inception date. This was, of course, accomplished because it had to be, despite the perceived difficulty, because the accounting penalties for not doing so were too significant. However, it was accomplished with a great deal of anguish (at least on the part of reinsurers and brokers) and fear of costing accounting penalties to client ceding companies.

At a time when our industry is faced with the possibility of further regulations and probably further angst in complying with whatever regulations may be imposed, it would seem preferable, as an industry, to voluntarily adopt changes rather than to have regulations with penal provisions thrust upon us.

Random Thoughts

• Contracts can be negotiated, agreed to and signed before inception if the wordings are received by the reinsurers much earlier in the placement process (September-October) and possibly assigning a deadline for subscription prior to the actual inception date. However, this would entail that the brokers obtain all placement/renewal information and agreement to contract terms from their clients at a very early date.

• A cultural shift may cause change in our business structure, how we do business and the workload cycle (i.e. amount of personnel needed). Brokers may consider convincing their clients to stagger inception dates throughout the year rather than just 1/1 and 7/1.

• Consideration needs to be given to version identification when changes are made due to negotiations. (Are we looking at the latest document?)

• Any movement towards contracts being signed by/at inception would be remiss if it didn’t address contract ambiguity

Acknowledgments

This article would not have been written but for my participation in a conference involving some of the best contract experts in our industry: Pam Parkos of BRMA, Kevin McCune of Willis Re and Rich Lagani of AIG. I was humbled to be asked to join them on the panel discussing this very topic. Further, I wish to extend my gratitude to Jon Colello and Eileen Villeroel of AXIS Re whose comments and assistance on this article were invaluable. Lastly, but not least, I thank Ron Moore of AXIS for giving me the opportunity to write this article for “Declarations”.

Disclaimer

The information contained in this commentary is without any form of warranty expressed or implied. Any use of the information contained within this article is solely at your own risk. All opinions in this commentary are personally those of the author and do not represent the views of AXIS Reinsurance Company or any other company or person.

Mark Reynolds is Vice President and Senior US Reinsurance Counsel of AXIS Reinsurance Company. Mark joined AXIS Re in 2004 and serves as manager of the Contract Department and legal counsel to the underwriting staff. Mark also provides reinsurance contract support to AXIS’ sister companies globally. AXIS Re is located in New York, New York and is a member of the AXIS Holding Group which is headquartered in Hamilton, Bermuda.

How To Seek Private Unemployment Insurance

There are some people who extend their unemployment benefits by using private unemployment plans. There are several private companies that offer unemployment insurance. You can receive a pay out for a small monthly fee should you become unemployed through no fault of your own. In this article we will discuss the pitfalls and things you need to look out for when you purchase private unemployment insurance.

Before taking out a private unemployment insurance policy check to see what their claim recovery rate is. If they only ever pay out on 30 percent of their claims then you should look elsewhere. They are legally obligated to give you this information so do not be afraid to ask for it.

Think twice before signing a policy that has a lot of pages. You may want to have someone you trust go through it with you. A lot of pages in a policy could be an indication that there are hidden things in the Unemployment Insurance Agreement. There is no reason why you cannot be given a short document with everything outlined in layman’s terms.

Many times companies will only pay out if you were laid off, not fired. Make sure you understand the conditions in which your company will pay out. Some companies will try to hide this with clever language. If full comprehensive unemployment insurance is what you want then make sure this is what you are getting. There are several companies that offer this and will pay out provided you did not quite your job or were not fired for gross misconduct.

If you want accident or sickness coverage with your policy again make sure you understand the terms and conditions. Some companies will only pay out with a very expensive specialist diagnosis. Try to find a company that will pay simply by seeing your doctor.

About The Author:
Leonard Garrett provides information on work at home
opportunities.

Visit his site at:
workathomeopportunities.biz workathomeopportunities.biz

Find a Cheap Home Owner’s Insurance Quote in Louisiana

Louisiana homes are prone to wind and water damage as the state is at high risk for hurricanes and rain storms. Therefore, Louisiana home owners must make sure their homes are as wind- and water-resistant as possible. Home owner insurance companies are going to look at several factors regarding these kinds of resistance as they determine a Louisiana home owner insurance quote.

After you are moved in and settled, you have no control over the age of your home; however, you do have control over the condition of your home. Many old homes are prone to more damage than newer homes, so you have to make sure your old home is well-maintained. Make all necessary repairs and replacements before you search for your Louisiana home owner insurance quote. By doing this, you are more likely to get a cheap home owner insurance quote. Take into consideration your roof and your plumbing and electrical systems, as these factors can cause additional water damage as well as fire damage. Make sure your windows and doors are sturdy, as well.

Once your home is as hurricane- and storm-resistant as it can be, start thinking about other safety factors. Fire damage isn’t always caused by a faulty electrical system. Install smoke alarms in each room throughout your home, and keep the appropriate number of fire extinguishers depending on the size of your home. Do you feel that your home is as burglar-proof as it can be? Install an anti-theft system in your home. Replace weak doors and locks with thicker, sturdier doors and dead bolt locks. Make sure the locks on all of your windows work, and that there are no cracks or openings in your windows.

Your Louisiana home owner insurance quote will depend on each of these factors. Take care of them. Make repairs and replacements, and take extra safety precautions, before you start shopping for a Louisiana home owner insurance quote.

For free quotes and a lot of information about insurance please visit the following
recommended sites.

ezquoteguide.com/home/ Find a Cheap Home Owner’s Insurance Quote in Louisiana
myquoteguide.com/Mobile-Home.shtml The Cheapest Mobile Home Insurance Quotes That Provide Great Coverage
myquoteguide.com/home-policy.shtml Homeowner’s Insurance Policies and Coverage That Can Save Anybody Money

How Short Term Health Insurance Coverage Can Help You And Your Family

Being without insurance can be risky. You never can tell when you might be in an auto accident, or when a wrong step might land you in the emergency room. Unfortunately with the high costs of medical procedures and treatment, most people can’t afford to be without some kind of health insurance. Many people feel that health insurance, unless provided by their employer, is simply too expensive. However, if you have problems affording a premium, an emergency room visit, which could easily be a $1000 visit would be even worse. Some people may become needless trapped in this situation because they lost coverage through an employer, or for other reasons, and be faced with going for a period of time without any coverage. Although Cobra is one option, Cobra is fairly pricy and may not be well-suited to every situation, especially gaps in coverage. However, with Blue Cross Blue Shield Short Term coverage, you can ensure that you don’t have any gaps in coverage at a reasonable rate.

Blue Cross Blue Shield Short Term Coverage is a smart alternative to gaps in coverage. Depending on where you live, this insurance can cover you for up to a year or for as few as thirty days. However, in the interest of being affordable, short term coverage typically is not a comprehensive plan and is designed to protect against major losses from events that require hospitalization, surgery, or trips to the emergency room. Normally vision and dental are not a part of short term coverage because it would significantly increase the cost of the policy and make it unaffordable.

The likelihood of being in an auto accident or becoming very sick is very remote, but it happens to hundreds of people each day. Life is unpredictable and hospitals and physicians can be unreasonable if you don’t have insurance coverage. In some states, if a person without insurance comes to a hospital the hospital is only legally obligated to stabilize you. This means that people without insurance are not fully examined to find the cause of their problem and only the symptoms are treated. While this may sound barbaric, this is how hospitals operate when you don’t have insurance.

Lack of insurance can also be a major inconvenience in the event of an auto accident. Even if the accident is someone else’s fault, their insurance company does not necessarily have to take care of the hospital bill in a timely manner. Many insurance companies, although they admit fault and are required to reimburse you somehow, have a policy of only writing one check whenever you finally settle your claim. However, the hospital will want their money soon after you leave the hospital, and if you don’t have insurance coverage, you will be expected to pay this money back on your own. This often is a way that insurance companies force patients to settle without treating the long term problems that come from an accident. However, even a short term insurance policy will shield you from many of the difficulties that come from a dramatic event like an auto accident.

It is also possible to insure just your children with Blue Cross Blue Shield Short Term Coverage. This is a very attractive option for parents with one or more child involved in sports or who are very active. A short term policy would offer reasonable coverage in the event of a broken bone, sprain, or if stitches were needed. Short term care for doctor visits would be somewhat limited, but smaller medical needs can be paid out of pocket or put on a credit card, while more serious events can become expensive very quickly.

Even if you have just started a new job and are waiting for your insurance to come into effect, short term insurance can help protect you from any major losses. Going for 90 days without insurance might not seem like a big deal, but you never know what tomorrow may bring. In some cases, being treating for a condition or accident without coverage can make it difficult to obtain insurance later. Stipulations vary from state to state, but insurance companies can refuse to cover pre-existing conditions, especially if there are gaps in coverage or if you were treated without using insurance.

Although being in between jobs can be scary at times, short term insurance from Blue Cross Blue Shield will give you some peace of mind. In today’s world, it is easy to get behind on bills, especially if you have unexpected expenses like hospital bills. Getting short term insurance will ensure that your financial status isn’t jeopardized by unexpected accidents or sickness.

Learn as much as you can about popular-insurance-plans.com/tag/short-term-medical-health-insurance/ short term health insurance and other health coverage issues at popular-insurance-plans.com/ popular-insurance-plans.com. Educate yourself to make the best choice you can

How To Beat Insurance Companies At Their Own Game

I was an Insurance Agent for over 20 years before retiring, and I am going to teach you how to win at the game of insurance. You CAN beat the insurance company at their game!

First let me tell you the biggest mistake most insurance consumers make. They look for the best deal they can find (and this is good), but when their policy arrives they throw it in a draw and forget about it until they need to file a claim. And I have to tell you insurance companies love it. Why? Because as along as you forget about it they will be making more money than they need to, even if you are happy that you found a cheaper price.

There is a better way. A way to have better coverage for even less cost. Interested? Keep reading. You can win!

The name of the game is not only having an insurance policy; it is managing your risks with the policy you have. If you will take the time to learn how to manage your risks, you can have better coverage at claim time without paying more in premiums and without seeing your money flying out of your pockets to cover the cost of your high deductibles.

Managing Homeowners Risk

Let me show you how to do this with an example. Let’s assume the replacement cost of a home is $396,000, and that we have it insured for that amount. Using the rates for the state of Texas where I live, the premium for this policy is $1,825 per year. The deductibles chosen were 1%, or in this case $3,960 (most chose 1% now because it keeps the premium down, but this is painful at claim time). Further, let’s assume that we live in a hurricane prone area and hurricane season is just around the corner.

How can we get better coverage for less cost, or better, for no additional cost? Is it possible? Yes!

Here’s the game plan. On June 1st we call our insurance agent and instruct him/her to lower our windstorm deductible from 1% down to $500 or even $100 if it is available. He/she informs us that the cost will be a $600 increase in annual premium. Don’t worry about it because we know something the agent doesn’t. We don’t want it for one whole year. We just need it for the next four months. Why? Because the hurricane season will be over then and on September 30th we will be calling back to adjust the deductible up again. And when we do the premium will go down $400 if we go back to our 1% deductible (but we will not and I’ll show you why in a minute), but if we do our pro-rated bill will be only $200. In just a minute we will eliminate this $200 also. Stay with me, and I’ll explain later.

For now let’s ask ourselves what are the two things that can happen during the upcoming hurricane season? We will either have damage or no damage. Of course we would prefer the latter; but if the former is the case, guess what? We are better covered with our $500 or $100 deductible. Let’s see how much better.

Let’s assume we had roof damage to the tune of $15,000. Without risk management our settlement would have been $15,000 minus our 1% deductible of $3,960 or $11,040. However, by managing our risks our settlement is $15,000 minus either $500 or $100 whichever deductible we could get so that we will get either $14,500, or $14,900. And this means that we will have an extra $3,860 dollars for our vacation! (See? - $14,900 minus $11,040 is $3,860 dollars)—but what about our poor roofer? Well he’ll just have to get his vacation money elsewhere.

Now let’s deal with scenario number two. We did not experience any hurricane problems this year yet we have paid $600 to lower our deductible. Are we stuck with this increased cost? Absolutely not! It’s September 30th, hurricane season is over and we’ve called our agent to raise our wind-related deductibles. Now let’s NOT raise them back to 1% because this would generate only a $400 credit leaving us with that $200 pro-rated bill I mentioned earlier. Let’s raise them as high as we can go (as much as five percent if possible). Why? Because the risk of wind-related damages are over for at least the next nine months so why pay for even the 1% deductible? The agent re-calculates our premium and informs us that we NOW have a $600 credit. This eliminates the $600 charge we incurred by lowering our deductibles before the storm season began back on June 1st. And, thus we have managed our risks and obtained better coverage at no additional cost ultimately. Now you are a winner in the home insurance game.

Two words of caution are needed. Number one: don’t forget to call your agent back every June 1st to lower your deductibles back to $500 or $100 in anticipation of the upcoming storm season or you will be stuck with a 5% deductible ($19,800) next hurricane season. Number two: do not wait until a hurricane is too close to striking your area because agents lose their binding authority when a storm crosses certain latitudes and longitudes and this means they cannot change or sell any policies. So do it on June 1st as a matter of priority.

Managing Auto Risks

To manage our auto risks, one simply has to be aware of the fact that driving away from home in unfamiliar territory is more dangerous. And therefore when we are going on a trip it is time to think: RISK MANAGEMENT! How can we manage our risks to have better coverage for less cost, or even no cost?

Again, we will use Texas rates on our assumption. Let’s assume that we have two autos insured at state minimum limits of 20/40/15 for our liability and uninsured motorist coverage, $2,500 personal injury protection coverage, and $500 deductible on collision and theft. The cost for our six-month policy is $516. Next week we are going to go on a fourteen-day vacation. As good risk managers, we call our agent and tell him/her to increase our coverage’s as follows: liability and uninsured motorists to 100/300/50, personal injury protection to $10,000, and to lower our deductibles to $100. Again, there is no need to discuss why we are doing this, just ask them to do it). They will tell us that our premium increase will be an additional $220 per six months. Don’t be alarmed by this amount, remember we know that we will only need this higher coverage for fourteen days, because when we return from vacation we will be calling back to re-adjust our coverage’s back to where they were before or trip.
Therefore, dividing the $220 by six months (180 days) we find that the cost will be about $1.23 per day, time’s fourteen days, for a total of about $17.

Now, let’s consider the following possible scenario on your vacation: you are involved in a major accident, there is $3,500 damage to your car. You and your wife sustained bodily injury that cost $8,000. The car you hit, valued at $50,000 was totaled out and the family in that car sustained injuries costing $260,000.

If we had not managed our risks and raised our coverages for the $17 that it cost us, here is where we would be: we would owe $6,500 on our personal medical bills and $500 on our car. We would owe the family we hit $220,000 for their bodily injuries and $35,000 on their car (the difference between our original 20/40/15 policy and our 100/300/50 policy we acquired for our trip)- a total of $262,000. However, we managed our risks, raised our coverages, and now our out of pocket costs is only $117. And then of course we could recover this $117 also by increasing our deductibles even higher when we get back, say to $1000 or $1250 for about 30 to 45 days before re-adjusting to our original $500 deductibles.

And so you see it is easy to beat Insurance Companies at their game if we know and apply the principles of risk management.

Good luck and enjoy your savings and peace of mind!

About the Author

John R. Miller

John owned and operated a successful insurance agency consulting with customers on Auto, Life, Homeowners and Health Insurance for over 20 years. He is now retired and consults with consumers on insurance polices and insurance questions. He is also a consulting writer for

Health Insurance: Avoid Painful Dental Bills With Insurance

Going to the dentist is bad enough without having to pay a huge bill. Forty-six percent of Americans don’t have dental insurance reports the National Association of Dental Plans. Many Americans have no idea that dental insurance even exists.

Individual dental insurance coverage is available, but you might have to do a little research to find the right policy for you. Dental work can run thousands of dollars in just a few visits. You want to have the policy that will best fit you and your family.

Like other health insurance policies, dental insurance ranges widely in the type of coverage you receive in relation to the benefits paid. Some things are simply not covered. Monthly premiums average anywhere from $12 to $50 per person.

That doesn’t sound too bad, but be sure that you check to see if this is simply an introductory rate. Many companies raise the rates significantly after the first year.

Make sure that you are dealing with a reputable insurance company. Dental insurance is an area that is highly reported to have fraudulent companies taking advantage of consumers. If your work offers dental insurance, it is probably your best option. If it isn’t available through work, be prepared to shop around to find a good company that offers a good deal. You can start by asking for recommendations at your dentist’s office.

There are three types of dental insurance coverage: Dental HMOs, Dental PPOs and Dental indemnity plans.

Dental HMOs are similar to a traditional HMO. You are given a limited selection of dentists that you can see. This type of dental insurance offers you the least amount of out-of-pocket costs. You premium costs are likely to be very affordable, often around $13 each month.

With a Dental HMO, you are usually guaranteed one or two dentists within 15 miles of your home or work. The focus tends to be on preventative care, with many plans paying 100% of these visits. They will usually pay for sealants or topical fluoride treatments that other plans do not cover. As your treatments become more complicated and expensive, your reimbursement rates could be at 50% or less.

Dental PPOs allow you to go to a network dentist and pay one set of prices. You can chose to see a dentist outside of your network for lessened benefits. The average monthly premium is usually around $30 per month.

Dental indemnity plans are considered traditional insurance plans and are rare when it comes to individual coverage. If you can find this type of coverage, expect to pay at least $40 per month.

There are credit unions, professional associations and affinity groups, such as AARP, that offer members access to group dental plans. You pay the entire premium, but get the benefits of being included in a group plan.

For example, AARP offers a group PPO plan to its members through Delta Dental. The monthly premiums range from $30 to $45 per person. Many areas such as preventative care, diagnostic and restorative treatments and oral surgery are covered by the plan. The premium is guaranteed for two years.

You could also check into group plans offered through your employer. You may have to pay 100 % of the premiums, but the terms are better than with an individual plan. Though it will usually cost you a little bit more, the benefits are well worth it. Many employers will let you pay your premiums with pre-tax dollars, adding more benefits to you.

Discount dental plans are becoming popular these days. Basically the plan negotiates your bill down, giving you a discount on certain procedures. These plans can cost you around $15 a month. You are responsible for paying the bill when services are given.

Some companies can negotiate you significant savings, especially in the case of major restorative work. But the plans are largely unlicensed by state authorities.

You should be careful when purchasing discount plans. Only buy through major insurance carriers – they are always licensed. You could also look to companies associated with national organizations, but don’t take the company’s word, check with the organization itself.

Reputable plans will tell you that you are not purchasing insurance and will tell you all the terms and conditions in advance. You will be able to locate their web site, contact information and their corporation registrations for your home state. Ask which dentists are included in the service and double check with each office. Never send money without receiving the materials that spell out the terms first.

Martin Lukac, represents RateEmpire.com RateEmpire.com and 1AmericanFinancial.com 1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

Long Term Care Insurance: Yea or Nay?

Long term care insurance coverage simply MUST be considered by everybody who can medically qualify for this important coverage.

Why? For starters here are 10 good reasons:

1. The odds: The odds of your needing long term care are overwhelming: The odds of requiring long term care in your lifetime have now risen to 70 percent. That means that seven out of 10 Americans will use their policies - This is a far greater risk than an auto accident or a house fire. Most people wouldn’t even consider being without homeowners and auto insurance, but there are far too many people who are not yet protected with long term care insurance.

2. Longevity: Folks are living longer. There are now more people over the age of 100 than any other time in history. Yet, we still have no cure for Alzheimer’s, Parkinson’s disease, Multiple Sclerosis or many other illnesses that can cause a need for long term care.

3. Independence: No parent wants to ever be a burden on their kids, especially if their kids are raising their own children. Baby boomers are called the sandwich generation because many are caring for an elderly parent with medical needs while putting a child or children through college. But most retirees want to remain independent as long as they can, even when it comes to such simple things such as driving themselves to doctor appointments and to the store.

4. Spend down: You run the risk of having to spend down your entire life savings for long term care needs before you die, leaving nothing to your heirs or worse yet, to your surviving spouse.

The most common governmental benefit is provided by Medicaid, and a married couple can have approximately $100,000 in savings while still qualifing for nursing home benefits through Medicaid. But a single person has to spend his savings down to $2,000 before he is eligible for those same benefits.

Even so, most parents would like to leave something to their family, even if it is just the value of their home for their survivors to sell and split the proceeds. Every generation feels that leaving a legacy is important, even if their children are already successful.

5. New statistics: Even though long term care is associated with seniors and retirees, Unum, a major LTC insurance carrier, reports that in 2006 almost 58 percent of LTCi claims were for people under the age of 65. The average claim for this age group lasted a year or longer. Unum’s analysis showed that 30 percent were cancer claims, and more than 10 percent were claims resulting from strokes. Other leading sources for claims included neurological disease, dementia and multiple sclerosis. These data underline the fact that the younger someone is when they apply for LTCi coverage, the better.

6. Underwriting changes: Over the last forty years, insurance companies have found that many policyholders who purchased LTC coverage have kept these policies in force longer than insurers anticipated. In the past, many insurers priced their plans anticipating that a certain amount of policies would lapse, which would lead to extra profit for the company. But when the number of lapsed policies was less than expected, claims increased, forcing them to re-evaluate their underwriting guidelines.

7. Government encouragement: Federal and state governments are now pushing hard for people to purchase their own long term care policies. Obviously, if more people purchase long term care insurance, fewer people will tap into the Medicaid and welfare programs that are jointly funded by the federal and state governments.

Their strategy is three-fold: First, they have made it tougher to qualify for Medicaid. Strategies that elder law attorneys and certified estate planners were able to recommend in the past are now against the law. Second, some states promote co-op programs to encourage citizens to purchase long term care policies. In most cases, whatever the value that the policy would pay would be matched by the state in free, future, LTC benefits. Most states have a cap on benefits, but needless to say, it is a good value for the resident. Last but not least, tax-qualified long term care policies are tax deductible.

8. Legal changes: Again, the federal government and some states have now changed the rules on what Medicaid applicants can legally do to qualify for benefits. One of the major changes on February 2, 2006 was the enactment of the DRA (Deficit Reduction Act) of 2005. This extended “look-back periods” for gifting to five years from three years. Also on gifting, whether money or property - the penalty calculation would be figured from the date of application for Medicaid instead of from the date of the gift. Another difference pertains to the usage of life estate survivorship deeds. The law now treats these as if the gift never took place for Medicaid eligibility.

9. Estate recovery: If one needs Medicaid for their long term care needs, 49 out of 50 states now have laws to place a lien against the equity in one’s home, so that when the Medicaid patient and their spouse, if applicable, pass away, the state will require repayment for the money they contributed toward their health care. And there goes any anticipated inheritance.

10. Health care flexibility: Home health care is by far one of the most popular settings for care. If at all possible, folks want to stay within the confines of their own home where they are comfortable versus living in an an institutional setting. With good home health care benefits available in most long term care policies, this choice can become a reality. We have seen folks use the home health care benefit of their policy to get a sitter or a home health aid to help them with their activities of daily living. Some of the more common illnesses were Alzheimer’s disease, cancer, strokes, and stability and mobility issues.

With these reasons alone, you can easily justify long term care insurance for your future financial freedom and independence. It’s prudent to gather as much information on statistics, laws and insurance in order to truly be prepared.

Long term care insurance activist, Clay Cotton, writes for

How To Get A Cheap Online Life Insurance Quote

You can buy anything online now, and get a good price - from cars to shoes to life insurance. In fact, it’s easy to find cheap life insurance quotes online if you know where to look. And the best place to look is on an insurance comparison website.

Why an Insurance Comparison Website?

Insurance comparison websites give you a fast and easy way to get quotes from several A rated life insurance companies – and you only have to complete one form. On the best insurance websites, you can even get quick answers to your life insurance questions by talking with insurance professionals online or by phone. (See link below.)

Once you get your quotes, it’s easy to compare them and find the company with the cheapest rate.

Your Choices for the Perfect Life Insurance

Of course, it’s not enough to get a fast quote for your life insurance if the insurance you end up with does not suit your needs. An insurance comparison website lets you get the type of life insurance you want:

* Term life insurance, which is cheaper because all you’re buying is insurance.

* Whole life insurance, which includes an investment feature.

* Universal life insurance, which also includes an investment feature but offers more flexible payments.

* No load life insurance, which is a whole life policy with limited fees.

You can also choose how much life insurance you want to buy.

Check Out the Insurance Companies

All the quotes you get from an insurance comparison website will be from A rated companies, which means they’re financially stable. However, you may want to check the companies further.

To check the ratings of a life insurance company, your best source is a credit agency like Standard & Poor’s (standardandpoors.com), and a consumer rating site like J.D. Power and Associates (jdpower.com).

Bottom Line

By going online to an insurance comparison website, you’ll have the assurance of knowing you’re protecting your family and getting the cheapest insurance rate possible with a reliable company.

Visit LowerRateQuotes.com/life-insurance.html LowerRateQuotes.com/life-insurance.html or click on the following link to

Differences in Wedding Customs

There are other differences in wedding customs. In Russia, the bride and groom stay attached to each other the entire time they are at the reception. They literally hold hands the entire time.

My wife got extremely upset with me each time I would get up and leave her alone for a moment at our wedding. One time, I was trying to help some elderly relatives of mine get some food. After once or twice, I gave up and sat next to her.

We did not circulate around and talk with people who came to the wedding, as is the custom in America.

In Russia, each person approaches the wedding table and offers a toast. You must drink a toast with each person who comes to the table. By the end of the reception, you are dead drunk on your feet.

No one came to the table and offered a toast. My wife thought that this was rude of my guests. My guests thought we were rude for not going around to greet everyone personally.

Russians wear the wedding rings on the right hand, as opposed to Americans that wear their weddings rings on the left hand.
When my wife travels to her homeland, she switches her wedding ring from her left hand to her right hand; otherwise ‘everyone will think that I am a widow rather than married.’

In Russia, it is the custom that other male guests may ‘capture’ your wife and hold her for ‘ransom.’ The bridegroom must entreat the other guests to help him gather enough money to ransom his bride. The capture and ransom are somewhat tongue in cheek, but are real enough that you won’t get your wife back without paying the ransom.

We tried to have a similar type of event at our wedding, but none of the American guests understood what was going on. After her ‘capture,’ we passed the hat to raise the ransom money, which substituted as a kind of ‘money dance.’

After we passed the hat three times to raise the ransom money, I had to sing for my bride.

My wife’s name is Aksana, and I adapted the Richie Valens’ song, “Oh, Donna” as a song I could sing about my missing girl, Aksana. Okay, it’s a reach, but it worked somewhat. However, the whole thing came off like a skit in ‘Our Gang.’

So much for trying to inject a Russian custom in an American wedding.

Russians usually drink until late in the evening – sometimes until dawn.
The family of the married couple is not supposed to leave until the last guest leaves.

For Russians, a successful wedding is one where everybody must be drunk. Having plenty of food is typical for any Russian function, and a wedding is no exception. If you have enough liquor and food, the reception will be a success.

Drinking was minimal at our wedding. No one needed a liver transplant after the reception, so by Russian standards, it was a failure.

My parents are elderly and wanted to leave before dark so they could drive home.

They can’t see to drive at night anymore. My wife begged them not to leave the reception ‘so early before the other guests left.’

My parents felt they had to leave so they weren’t a danger on the road. My wife felt as though my family ‘abandoned us.’

John has been successfully married to a Belarussian wife for over five years. He has traveled extensively through Russia and other CIS countries. He will tell you why you should consider Russian women, how to meet them, how to bring your special woman home, and how to survive married life.
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