Choosing a deductible for your auto insurance quote might seem like an easy task, but it is actually a very big decision that should not be taken lightly-especially since your deductible has a big effect on the premium you are charged and because you must have enough money in the bank to cover it, should you have an insurable incident.
A deductible is the amount of money that you need to pay out of pocket toward damages on your vehicle if you suffer an insurable event like an accident or car theft. Deductibles are only paid when you have damage that is covered by your insurance policy-otherwise, all damages will come out of your pocket or that of the person responsible for causing the accident.
Because a deductible must be paid out of your own, personal funds, it is important that you choose a deductible that you can actually afford to pay. Otherwise, you might end up with a deductible that hurts your savings, results in additional debt and prevents you from being able to get your car in working order. Without a car in working order you could suffer other financial difficulties such as the loss of a job.
It is tempting to choose a high deductible when shopping for auto insurance quotes because the higher your deductible is, the lower your auto insurance premium will be. Since accidents don’t happen to most people very often, it can seem like a real waste to pay for a high premium each and every month. But as tempting as that might be, ask yourself this-does it really matter? If you have a cheap auto insurance premium every month but you can’t afford the deductible, then you are switching one difficulty for another.
Instead, choose a deductible you can afford-one as high as you can afford-and then enjoy the resulting premium. That way, you will take advantage of as cheap a premium as you can get, you will have the comfort of knowing that you can afford your deductible if something should happen, and you won’t feel as though you are throwing away money on a policy that is not providing as much benefit as you need.
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When you shop for health insurance online, you often hear about HMO and PPO plans, but there is another type of health insurance policy organization out there, and it is called an indemnity plan. With an indemnity plan, there is no need for you to visit a certain network of doctors. Since this is a strict requirement of HMO plans and an activity that affords major discounts in a PPO plan, the ability to have absolutely no network of doctors in an indemnity plan is a great benefit.
The Benefits of Indemnity Plans
In addition to being given the freedom to visit any physician or specialist you want under an indemnity plan, you will also not generally be required to choose a primary care physician. This means you also won’t be forced to get referrals before you visit a specialist.
The Potential Drawbacks of Indemnity Plans
One of the drawbacks to an indemnity plan is that you must generally pay all your medical expenses out of pocketed then get reimbursed by the insurance company. Many consumers do not have the money at hand necessary to pay all expenses out of pocket initially, so this type of plan is not appropriate for every individual.
Another drawback to indemnity plans is that the insurance company will generally only reimburse you the “usual and customary” rate for your medical expenses, regardless of what they actually cost. The usual and customary rate is the average of what healthcare providers in your area charge for services. But because you are not dealing with a network of providers (like in a PPO and HMO) who have already agreed to charge that rate for services, you may have higher out of pocket expenses with an indemnity plan.
Like other insurance plans, you may need to choose deductibles and limits when you shop for indemnity health insurance online. While the monthly premiums may look attractive when you choose extremely high deductibles and low limits, make sure you choose deductibles you can actually afford to pay out of pocket for and that you choose reasonable limits.
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There are many aspects of your health and habits that must be taken into consideration when you have a health insurance policy underwritten. These things work together to create the general risk that you life presents to the insurance company. It is not until all these factors are considered that your insurance agency can determine whether or not to issue your policy and what premiums to charge. Here are some of the main factors that health insurance underwriters consider when reviewing your health insurance application for approval.
Your medications: The meds you take give a good insight not only on the prior events of your health history, but also on what your doctor thinks might be in the future. For instance, you might not have had a heart attack yet but if your doctor has you on a cholesterol medication, then it is likely that he or she thinks you may be at risk for one in the future. That indicates to a health insurance underwriter that you could be a risky bet.
Your actual health history: The events that comprise your health history give an insight not only into what your health future might hold but also in how you treat and respect yourself. For instance, Type 2 diabetes is often caused by obesity and poor eating choices. If you have Type 2 diabetes then it is unlikely that you eat well or exercise, which puts you at risk for a whole host of additional health problems.
Your family history: DNA ruins a lot of things health wise. If heart disease runs in your family then you are much more likely to suffer from it eventually. The same can be said for cancer, obesity, diabetes and certain mental illnesses. Knowing that someone in your family has suffered with these issues could change how a health insurance underwriter views your application for coverage-even if you are in perfect health.
Your weight and height: Your weight and height indicate how well-proportioned you are. Someone who weighs 300 pounds and is 5′3″ is much more likely to be considered obese than someone who is 6′5″ and weights the same.
Smoking status: If you are a smoker-even an occasional lighter upper-then you are putting your body at risk for cancer, lung disease, emphysema and more. This will not be looked upon favorably by the underwriters reviewing your health insurance application.
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When your auto insurance policy is underwritten, your insurance underwriter attempts to figure out whether or not you should be approved for the policy, what you should be charged and if there should be any special amendments to your policy. Many different factors and traits are considered during this process including:
Your motor vehicle report: Your motor vehicle report (MVR) is a report that shows your driving record. It shows all the tickets you’ve gotten for reckless driving, speeding, and not obeying general traffic laws. This report is extremely important in determining how risky you are to insure. If you have many tickets and incidents on the report that show you are not a responsible driver, then you are going to be expensive to insure because the auto insurance company is going to assume that your recklessness translates into expensive claims for anyone who insures you. The underwriters will then decide to charge you a higher premium than you might expect in order to offset the likelihood of claims.
Your age: The older you are, the more likely you are to be an experienced and responsible driver and the less expensive your premiums are likely to be-until you hit a certain age. Because as you start to get older, you again become more risky as a driver because you are less sharp witted, have worse eyesight and less hand-eye coordination. So whether you are too young, too old, or right in the middle, it will have an effect on your auto insurance underwriting and premiums.
Your gender: Unfortunately for the masculine set, male drivers (especially those who are young) are seen as riskier bets by insurers. Males are often considered to be risk takers and less responsible than their female counterparts.
Your relationship status: Married individuals are often seen as more stable and responsible by auto insurance underwriters. Singles get a bad rap and are often charged more for car insurance.
Your car: If you drive a flashy, speedy, light and rocket ready sports car, then you are likely to be charged a higher premium than someone who drives a four door sedan. Sports cars are often purchased by people who want to test out the speed and handling of the car and usually want to push the car to its limits. That doesn’t always reflect well when an underwriter is looking to set the premium for your car insurance policy.
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Whole (or permanent) life insurance policies are more than meet the eye. Sure they offer a death benefit that caries through the rest of your life as long as you pay your premium and keep the policy in force, but more than that they offer an additional benefit of premiums accruing into something called cash values. These cash values can grow in a few different ways:
- They can grow at a fixed rate like in a traditional whole life policy.
- They can grow at a variable rate by choosing a sub account to invest them in. Sub accounts in a variable policy may have fixed investments like money markets, they may have stocks, bonds or mutual funds.
- They can grow at a variable rate tracking the returns of a specific index-like the S&P 500 or the Dow Jones Industrial Average.
The third kind of growth is seen in an equity indexed life insurance policy. When you have an equity indexed life insurance policy, your cash values grow as they would in a variable policy but the sub account you choose is created to mimic the performance of a particular index. If that index goes up, then your cash value will likely go up. But if the index goes down, then so will your cash value.
One of the most important things to remember about an equity indexed life insurance policy is that there is no guarantee that you will earn money. Many illustrations for life insurance will show the great amounts of cash that can be accumulated in an equity indexed life insurance policy, but there is always the chance that the index you choose for your sub account will go down in value and will reduce the cash values you accumulate. The great things about equity indexed life insurance policies, however, is that they often have a floor, or minimum amount that you are guaranteed to gain. While this threshold is often significantly less than the fixed rate of return in a traditional life insurance policy, it at least offers some sort of gain while markets are down. On the other hand, there is also often a ceiling or maximum gain you can experience which may be less than the actual increases experienced by the index that you choose.
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