Insurance 101: What is Life Insurance?

Life insurance has technically been around for thousands of years. In Roman times the military put together a fund to help pay for the burial of soldiers and even helping the loved ones of soldiers killed. It wasn’t until the late 1700’s that actual companies were formed to provide coverage for individuals. In the early 1900’s many Americans starting seeing the value in life insurance and it got to the point where there were more insurance policies sold than population in the US.

Life insurance has basically two types of insurance: Permanent and Term.

Many people call permanent insurance “Whole Life” but whole life is an actual type of plan that has been around for over a 100 years. Another type of permanent policy is called Universal Life. This is a newer model that uses different ways to help a policies cash value and death benefit grow. Whole life is based on the dividends the insurance company is paying at a specified interest rate. Universal Life can be based on the carrier’s specified interest rate, off the stock market which is Variable Universal Life (VUL) or the S & P 500 called Indexed Universal Life (IUL).

Both of these ideas are great ways to put money into a plan that will give your family protection if something were to happen to the insured or as a way to have cash down the road. There are many great permanent policies and it all depends on what you feel is best for you after sitting down with a licensed agent.

Term insurance is a contract with a carrier for a specific time period “Term” for a specific coverage “death benefit.” Once you hit the end of your term you can continue paying for the coverage you had but usually at a much higher rate. You can decide to not pay and the policy is no long “in-force.” Term is a great way to get a higher death benefit at a much lower rate. Many people don’t realize how affordable term life insurance can be and never ask the question. Term life is a great way for a family to help protect them in the event one parent was to pass away so they can stay in their home, the kids can still go to college and the other parent can continue to stay home or working the same job. We have a very simple equation at our agency we like to use to come up with a minimum coverage for our customers. 10x your gross income + your debt = the minimum coverage suggested. This doesn’t take into account how many kids and their future. This does not involve if you want to give some to charity. There are a number of other things going into how much coverage an individual should have and these are all great questions you can ask one of our agents.

At Corwin Insurance we have teamed up with some of the most experienced brokers in the country with multiple A+ rated companies and have years of experience with life insurance plans. We are not just an insurance office selling auto insurance. We want to protect everything that is important to you!

*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.

Insurance 101: What is Business Insurance?

Business/Commercial insurance is coverage for your business and to help protect you if you and your business in the event of a loss or were found at fault or liable for a loss while a customer is on your property or using your product. Business/Commercial insurance can be very complicated and we suggest you sit down with an agent to discuss.

Many small businesses fall into categories that can allow them to get a “Business Owners Policy” or BOP. This is a policy that will cover your specific business for all the different type of risks you may face. Many insurance companies have created BOP’s to help simplify insurance for the consumer and agent. BOP’s usually give very good coverage at an affordable price. The companies try to package together all the different coverage the businesses in the particular categories face. If your business can qualify for a BOP it is most likely the best coverage at the most affordable price. Many times a BOP will include a coverage for the business that on its own can be 3-5x more expensive if you went to buy it separately.

An example of a BOP would be a restaurant business owner’s policy. This can cover the building and business property in the event of a loss such as fire. BOP’s can cover inventory if a refrigerator broke due to a covered loss. The coverage in a BOP can be great and affordable for most small businesses. Anything from a fast food chain to a small diner should have a BOP. This will cover them if a customer bites into something in their food and cracks a tooth or if a customer slips and falls. A customer getting injured in some way on your business property can have a devastating impact on the future of your business.

*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.

 

Insurance 101: What is Umbrella Insurance

An umbrella can also be called excess liability coverage. An umbrella is additional liability coverage over and above the current liability coverage you hold on your car and home. This is something used very rarely which makes it affordable for everyone. The typical umbrella is for $1,000,000 in liability coverage. We have seen this coverage for as low as $150 a year. So if you have a $500,000 liability coverage on your home you would have a total of $1,500,000 in liability coverage to help cover you if you were found liable for a loss. The cost for an umbrella is extremely low considering the coverage it provides.

You never know what can happen and if you were to be found liable for a loss of over your liability limits you could lose your assets or have to pay damages out of your own paycheck. You can never possibly be covered for every potential loss but having an Umbrella would greatly increase your chances of being able to protect your assets in the event of a lawsuit.

With all the new technology in cars these days it can be overwhelming and individuals may not be as focused as they need to be while driving. Things happen….. Doesn’t the low cost of an umbrella seem worth it?

*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.

Insurance 101: What is Auto Insurance

Being an insurance agency inside a car dealership we have some great conversations with customers about auto insurance. We try to make it as simple for our customers as possible when we verify they currently have insurance so they can take the car home that day. If a customer is leasing or getting a loan on their new car all of the banks we partner with require proof of comprehensive and collision deductible on the new car. Many banks require a deductible to be no higher than $1000 and to have much higher limits than the state requires.

What is “collision coverage?”

The collision coverage on your policy is coverage for your car if you were in an accident and you wanted to fix your own car. This is when you are in an accident with another car or stationary object. The majority of accidents fall under this coverage. This does not cover the other person’s car. You do not have to pay a deductible to fix another person’s car. This involves hitting another car or object while moving. The deductible you have on your policy is how much you need to pay to get your car fixed and your insurance company pays the rest.

What is “comprehensive coverage?”

The comprehensive coverage on your policy covers your car when something from nature strikes your car. This can take place while it is parked or while you are moving. Things such as tree branches, animals and hail can fall under comprehensive. Don’t let the name fool you it doesn’t give you complete coverage but many things fall under this coverage. If your car is stolen, acts of terrorism, fire and also if you have a broken windshield. Many carriers we represent will replace a broken or chipped windshield at no deductible but it is an added feature.

What is the difference between collision and comprehensive?

It can be difficult to explain the difference but the easiest way is if you are driving your car and hit another object most likely it will fall under collision. If your car is parked and there is damage to the vehicle you most likely will have a comprehensive claim. It gets tricky when it comes to nature. If you are driving and your car gets hail damage this would be considered comprehensive but if you are driving and run into a fallen branch most likely it would be a collision claim. If you were parked and a branch falls on your vehicle this would be a comprehensive claim. This can be very confusing but the best way to get answers on your coverage is by talking to a licensed agent.

If you are ever in an accident the claims representative will be there to assist you and let you know how the claim will be categorized and what deductible if any is required.

What is “Liability coverage?”

Liability coverage on your policy stands for the coverage you are given if you are in an accident and you are found “liable” for damages to the other party. Each state requires liability coverage on every vehicle but the amount can vary. This is an important conversation you need to have with an agent. The difference in price to increase your liability coverage is usually much less than expected we have seen with our customers. The different numbers on your policy stand for one individual is involved in the accident or multiple people. The number is in $1000’s as well. So if your policy states 250/500 that stands for $250,000 in liability coverage for one individual and $500,000 if there was more than one person in the accident. This could be for one car or multiple cars.

What is “Property Damage coverage?”

This covers you to pay for damages you did to another person’s property up to the limit stated on your policy. This is also stated in $1000’s and with the cost of cars these days its suggested in our agency to have $100,000 in coverage. If the damage to the property is higher than the coverage then your liability coverage kicks in.

What is “Rental Reimbursement?”

Rental reimbursement covers the cost you incur when you are in an accident and you need to rent a car while your car is being repaired. This is not coverage for when you are renting a car on vacation. This is sometimes misunderstood. Many insurance companies will extend the same coverage to a car you rent that you have on your own car. Again, this is a conversation to have with an agent. What many people do not know is some of the major credit cards will offer protection on the rental car if you are using their card to rent the car. This is a conversation you should have with the card company to find out what coverage is offered. These are important things to look into because the insurance offered at the rental counter can be beneficial but can be expensive.

More info:

The first misunderstood statement we get inside the car dealership is the statement of having “Full” coverage. This is usually said when someone has both comprehensive and collision coverage on their car. The issue with the statement of having “Full” coverage is the assumption you are covered for anything. It is highly unlikely to ever have “Full” coverage because you do not know what risk you may come across. If you were to hit a CEO of a fortune 500 company who you injured or even killed could you ever have enough coverage to cover that particular loss if you were found negligent? So now when you hear “Full Coverage” you will understand it doesn’t mean I am covered for everything but it usually means they have comprehensive and collision coverage on the vehicle.

If you have personal items in your car and it is broken into and your items are stolen many people think they should be covered under their car insurance. This is misunderstood too often and one of the many reasons we always suggest individuals have renters insurance. If you own a home it is most likely you have home owners insurance and if you refer back to our Homeowners tab it states your personal belongings are covered inside and outside your home. Same rings true with Renters insurance. Your personal items will be covered inside and outside your place of residence.

Many carriers offer added features such as roadside assistance, violation forgiveness, accident forgiveness and vanishing deductible. These are all great benefits that we hope you never use but if you ever do need one of these features you will be glad your agent offered them to you.

*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.

Insurance 101: What is Health Insurance?

Health insurance is very complex and it changes over time. Many Americans have health insurance through their work but those who do not have other options available. Depending on your state they may have an option through a state Exchange. Since “ObamaCare” was created it has allowed every American to receive healthcare no matter what pre-existing conditions they may have currently or in the past. Health insurance is now required and if you do not carry some kind of health insurance as an individual or business you may get an additional tax. If you do not have a particular level of income you may also qualify for lower cost health insurance.

A number of other coverage falls in the “Health Insurance” bucket. An insurance agent must be licensed in Health to sell both Medicare and Long-Term Care Insurance.

What is Medicare?

Medicare is the federal health insurance program for individuals 65 or older, certain younger individuals with disabilities and individuals with ESRD (End Stage Renal Disease.)

Anyone who has paid into Social Security has been paying into Medicare and this will qualify them for Medicare once they turn 65. There are 4 different parts to Medicare.

Medicare Part A or “Hospital Insurance.” If an individual was needing to be hospitalized, needing Hospice or put into a skilled nursing home Part A will cover certain costs to a certain point.

Medicare Part B or “Medical Insurance.” This can help cover certain doctor services, medical supplies, outpatient care and preventative services.

Medicare Part C or Medicare Advantage. This is a type of Medicare health plan that is not associated with the federal government but offered by private insurance companies as an alternative to Original Medicare. Many Medicare Advantage plans offer prescription drug coverage as well.

Medicare Part D or Prescription Drug Coverage. This adds prescription drug coverage to Medicare. Private insurance companies and other private companies offer this coverage as long as they are approved by Medicare. Medicare.gov has a tab that will allow you to enter in all the prescription drugs you are currently taking and breaking down which “drug plan” is most affordable to you.

What is “Long-Term Care?”

Long-Term Care (LTC) or “Nursing Home” Insurance is an insurance contract with a private insurance company to help off-set the costs of needing a nurse in your home or covering the costs if you are needing to go into a nursing home. As the costs for nursing homes is increasing every year this has been a very popular insurance coverage people are looking into for themselves or their parents. The costs for a nursing home can be in the tens of thousands a month. This can cause someone to use up all of their savings and assets to pay for their stay. It does not appear as though the costs will be going down in the near future because of the age and amount of baby boomers in the US.

Long-Term Care Insurance works as a contract with an insurance company that you pay a premium every year and if you need full-time care due to failing activities of daily living or a brain ailment the insurance company would help pay for the care. If you are over the age of 65 part of Medicare will help cover the costs of a nursing home but only for a short period of time. Once you hit a certain time period the costs to stay in the nursing home will fall on the individual or the insurance company if they have Long-Term Care insurance. There are many different kinds of LTC you can purchase from a number of different carriers so having a discussion with a licensed agent is crucial. Many insurance companies have started to add “Critical Illness” or “LTC” riders to their permanent life insurance policies as well which could also cover some of the costs of a Nursing home or an in-home nurse.

No LTC insurance coverage is the same. Some have different wait periods while others have a max amount of coverage. The qualifications required to receive the benefits can be different with every carrier so you would need to look at the policy documents or talk to an agent to know how exactly your LTC insurance works.

*The statements above are for reference and are written by a licensed insurance agent as a quick reference guide to make understanding insurance easier. If you have questions please don’t hesitate to reach out to any one of our licensed agents here at Corwin or refer to your policy documents.

Insurance 101: What is Home Owners Insurance?

Home owners insurance is a coverage you can purchase from many carriers to help protect your home and personal property in the event of a covered loss.

Home owners insurance usually protects you if you were ever found liable for an action inside or outside your home. This is a very important coverage in this day and age with a number of people being sued for their actions or actions of one of the family members who live in the home. No carrier is the same and covers you the same way so the best way to find information about what you are covered for and what losses you are covered against you need to speak with your agent or look at your policy pages supplied to you by your insurance company.

Home owners insurance is not required unless you have a mortgage on your home, then your lender will require you to cover the home in the event of a loss so they know their investment is protected. Mortgage companies can force insurance on your home if you do not provide them with the documents stating you currently have coverage for the mortgage amount. Typically your home owners coverage will be over the amount of your loan because what you owe on the home and what it would cost to replace your home can be dramatically different. Having a discussion about how much coverage you need to replace your home is something an experienced agent can help with and explain.

Many times your insurance will be covering your home for more than you owe on it. This varies between carriers and this is where a yearly review of your insurance is important. In areas where home prices are increasing because building costs are increasing people may have their home owners for less than it would cost to rebuild the home. So in the event of a “total loss” the customer would not receive enough money to rebuild their home back to its original size or quality. Some carriers have protection against that happening to their clients but the client still needs to have a reasonable coverage amount.