Life Insurance


These days you can buy nearly anything online, even your insurance.  Although it may seem like you are saving time and money by obtaining a policy online, it may not be so convenient later.

One of the biggest advantages of working with an agent is that they have time to sit down and talk with you, in turn allowing you to establish a one on one relationship.  Just one visit with an agent can prove to be beneficial in respect to knowing what your options are and choosing the best possible coverage that fits your needs.  In addition to this, based on your answers to a few simple questions, an agent is able to find possible discounts that you may be qualified to receive.  Purchasing insurance can sometimes be stressful and an agent can alleviate some of that stress, if not most of it just by understanding and being able to relate to you.  After all, we are human and it’s comforting to know that someone has your best interest at heart.

Ben Franklin said it best, “Time is money”. Although an online agency provides you with a phone number where they can be reached, you may not be able to speak with a live person. I’m sure that we have all experienced the downfalls of 800 numbers and the “customer service” they provide.  One could spend 30 minutes or more being looped from one automated message to the next only to reach a live person who ends up transferring you somewhere else. Being able to reach your agent by phone without having to guess which automated option to choose can save you both time and aggravation.

One final advantage to working with an agent who is local is that they can work with you in regards to your coverage.  They can adjust your limits and/or deductibles without sacrificing the important coverage that you need resulting in a policy that is tailored just for you and your pocketbook.   Online agencies give you the freedom to choose the coverage you want according to what you can afford, but an agent can recommend coverage that will protect you and your family all while keeping you within your budget.

For example, the required liability coverage amounts in the state of Arizona are 15/30/10.  Sure, you may get a huge savings up front, but will you pay for it in the end?  If you cause an accident which results in bodily injury more than $15,000 or property damage more than $10,000, you are financially responsible.  Just to give you an idea, according to the National Safety Council, the average cost of injury in a car accident is $61,600 and the average price of a new vehicle is a tad over $30,000 according to Forbes.  Saving a couple of dollars by reducing coverage could cost you thousands in the long run.

With all of the decisions that you make in life, don’t let choosing the right policy overwhelm you when you have an agent right who is right around the corner.  Make an appointment today by calling us @ 480-288-5900.  We can help you protect what matters most!

Do you know how divorce may impact your insurance policies? (image via flickr)

No one likes to think that it will happen to them but with a 50% divorce rate, it is happening to a lot of us.  The last thing you want to think about while you are divvying up your life is insurance, but it should be at the top of your to do list.  In order to ensure you are protected during and after the divorce, you will need to review and make changes to the insurance policies you have individually and together.  Here are 5 of the most common ways getting divorced impacts your insurance.

Policies that Protect Home and Property

These are your homeowner’s policy or your renter’s policy and provide coverage for damage to your home and/or loss or damage to personal property.  Odds are that at least one person is changing residences as a result of the divorce and when they leave, they will be taking property with them.  It is a good idea to reassess your homeowner’s or renter’s policy to ensure you still need all the coverage you have.  For example, if you have a rider that covers an expensive piece of art you may no longer need that rider or to pay for the additional coverage if your former spouse is taking the art.  If you are moving from a home you own to a rented space, you will want to switch your homeowner’s policy for a rental policy.

Policies that Protect Your Cars

There will definitely be changes to your auto policy unless one of you doesn’t drive.  At a minimum, the policy will need to be changed so that it only includes you as an authorized driver.  If you have more than one car, the coverage for any vehicles you no longer own can be removed as well which will save you money.  Don’t wait to make these changes.  As long as you are both listed on the policy, you are both liable for any claims against that policy.

Policies that Cover Your Life

Most people think that one of your first insurance changes you would want to make would be to your life insurance.  You don’t want to take the chance that something happens to you and your former spouse gets your life insurance payout.  However, there are several reasons why you may not want to make any changes to your life insurance as part of the divorce.  First, if you have children, you may want your life insurance proceeds to go to your spouse because they will be the primary caretakers for your children.  Second, if your spouse is paying alimony and child support and something happens to them, life insurance proceeds can help replace that lost resource.  One change you may consider is changing these policies, the ones meant to provide for the care and raising of children, from whole life policies to term policies.  This would enable you to provide means for their care until they are old enough to care for themselves without having to pay premiums for life.

If you are unsure about the insurance implications of your divorce, work with your agent.  They can help you determine what insurance you need going forward and what changes you need to make in order to have the amount of protection that works for you.

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Does your insurance policy cover “acts of God?” (image via google)

If you own a car, own a house, or have a family, it’s a good bet you have some kind of insurance.  Odds are you have at least some kind of coverage for the car you drive and the place you live.  If you have personal insurance, you understand the importance of protecting yourself, your financial future, and your property.  But even savvy insurance consumers don’t always know all the ins and outs of their policies.  Here are 4 things customers commonly do not know about their personal insurance policies.

1.     Your Car Insurance Won’t Buy You a New Phone

If you have car insurance and your car is stolen, you know your policy will replace your car or reimburse you for its loss.  But, most car insurance policies will not replace or reimburse you for any personal property that was in the car at the time it was taken.  This also holds true for items stolen from your car.  Let’s say you leave your laptop under the backseat and your cell phone in the center console and someone breaks the window and steals both.  Your car insurance will cover the cost of repairing the window, but you are on your own for the loss of your laptop and phone.

2.     Losing Your Home Won’t Make You Homeless

One thing many people don’t realize about their homeowner’s policy is that it provides for the payment of expenses you incur if you have to live somewhere other than your home for a period of time while repairs are made.  For example, there is a fire in your house that causes significant enough damage that you will have to live somewhere else for 6 months; your policy will pay for the initial stay in a hotel as well as your rent and some other expenses.

3.     Life Insurance Benefits are Not Automatically Tax Free

If you die, the proceeds of any and all life insurance policies go to your beneficiaries’ tax free, right?  Not always.  Whether or not your life insurance payout will be subject to taxes completely depends on the details of your policy.  If you have a term policy where you are the policy owner and your spouse is the beneficiary, if you die during the policy term, the payout will likely be tax free.  However, if someone else, like your parent is the policy owner, there may be tax implications.  Talk to your insurance agent and an accountant to ensure you have a complete understanding of any tax implications.

4.     Natural Disasters are Not Generally Covered

An unfortunate truth in the world is that Mother Nature is unpredictable and sometimes leaves devastation in her wake.  Another unfortunate truth is that many of these disasters are excluded from standard personal insurance policies.  While most people know that flooding is not covered by their homeowners policy, they don’t realize that damage caused by tornados, earthquakes, and other “acts of god” is not covered without purchasing additional coverage.

The best protection you have is to read your policy all the way through and make sure you understand all its provisions and exclusions.  If you are unsure about whether or not something is covered, ask your insurance agent for clarification.

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Do you know losing a job will affect your insurance? (image via fairfaxcounty on flickr)

Times are tough and the economic turmoil of recent years continues to claim jobs almost every day.  The loss of a job presents problems on several fronts, first and foremost, the loss of income.  For many people who become unemployed, this problem overwhelms any others and makes it difficult to see how losing a job impacts other areas of your life.  Unfortunately, not dealing with these other areas can lead to more problems down the road.  One of these areas is your insurance coverage.

The last thing you need when you lose your job is to add to your family’s financial burden by purchasing insurance policies.  However, if you are like most people, you have been getting at least some of your insurance coverage through your employer.  Some of this coverage, like health and disability coverage was provided by your employer.  Other types of coverage like life, auto, and even homeowner’s coverage were purchased through your employer.  When your job goes away, in almost all cases, so does this coverage.   You may find yourself without life insurance, auto coverage, or a homeowner’s policy which further endangers the financial future of your family.

Here are things you must consider in terms of your insurance policies when you lose your job.

Health Insurance

Most people will have the option of continuing employer offered health insurance through the COBRA program once their employment ends.  This can be a lifesaver for families where the primary insurance provider suffers a job loss.  However, be prepared to pay significantly more for the same coverage.  Shop around to see if you can find an individual policy that is more cost effective.

Life Insurance

If your life insurance was provided by or through your employer, you will need to find a new individual policy to meet your life insurance needs.  This should be a top priority in order to protect your family’s future.  Temporary loss of your income is challenging enough; don’t take the chance that the worst happens and your family must figure out how to move forward without you while also dealing with the permanent loss of your income.

Disability Insurance

Life insurance is important, but disability coverage is just as important, especially for those in their middle years with families.  People in this age group are actually more likely to become disabled than to die, according to the Social Security Administration. This means that protecting your family’s finances may mean you need to secure a disability insurance policy that is separate and distinct from your employment.

Auto and Home

Many employers offer group insurance coverage for auto and homeowner’s policies that enables their employees to purchase this coverage at a discount.  When your employment ends, these policies may remain in effect but the cost to keep them may increase because you are no longer part of the group.  There is also a chance that this coverage will no longer be available.  Make an appointment with your insurance agent to discuss these policies and make sure you have the coverage you need at the best possible price.

Losing a job is difficult enough; make sure you don’t compound the problem by failing to attend to your family’s insurance needs.

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http://www.iii.org/articles/life-stages/employment-change.html

What impact does your credit score have on what you pay for insurance? (image via Flickr)

In a nutshell, yes.  Insurance companies use a variety of factors to develop a risk profile for you when they are underwriting your insurance policy and determining your rate.  One of these factors may be your personal credit history and not because they are weighing the likelihood that you will pay for your policy.

Insurance rates are based in part on how much risk the insurance company believes they will be taking on by underwriting your policy.  In order to determine that risk level, they rely on real world statistics and actuarial tables built from those statistics.  By looking at large amounts of data, the insurance industry can make certain assumptions about you based on specific characteristics like your gender, age, marital status, etc.  This is how insurance companies determine that teenage boys are more likely to be in accidents than teenage girls and that married people are less likely to file an insurance claim than single people.

When it comes to your credit, the statistics can tell the insurance company some important things about how much of a risk you are.  The industry has demonstrated that there is a very strong relationship between credit history and risk level meaning that just looking at a person’s credit history can be used as an objective measurement of their insurance risk.  The bottom line is that people who pay their bills on time and are good stewards of their finances are more careful and conscientious with their cars and homes, which makes them a lower risk from an insurance perspective.

This means that the insurance company is using your credit history in a very different way than your bank might.  When your bank looks at your credit, they are assessing your income, assets, debts, and financial history to determine how likely it is that you actually meet the financial obligation of a loan or line of credit.  They are looking at your individual details to make a decision about your ability to pay.  The insurance company is looking at your credit as an objective way to assess how risky you are from an insurance standpoint.  They are looking at your individual details as compared to other people.  The bank cares about where you work, how long you have been there, how much you make, and how much you owe.  The insurance company only cares about how your credit history informs your risk profile based on the actuarial data.

Using information like your credit history to determine your insurance rates is one way that insurance companies guarantee that they are offering their products at fair prices.  The use of statistics and actuarial information in determining risk helps remove any subjective decision making from the process.  Insurance companies can offer better prices to a broader range of consumers by using factors like their credit history.

The score used by the insurance company however, is different than your standard credit score used by banks and other financial institutions.  In order to determine your insurance score, the credit bureaus use a formula that looks at things like the number of accounts you have, how good you have been at paying your bills, how stable your finances are, any negative factors like liens and bankruptcies, and how much you currently owe.  Unlike your regular credit score, occasional late payments have less of an impact on your insurance score than patterns of financial irresponsibility.

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Do you have an adequate amount of life insurance? (image via Tetra Pak on Flickr)

1.    Your life insurance needs are as unique as you are.

There is no such thing as a one size fits all life insurance policy which is one reason it can take longer to get a life insurance policy in place.  The key to achieving your life insurance goals is to know what you are trying to achieve and then buy a policy or policies that allow you to achieve them.

2.     The life insurance you get through your employer may not be sufficient.

Many people have a basic life insurance policy through their employer and assume that this is all they need to do from a life insurance perspective.  Unfortunately, if that policy doesn’t match your needs, you may not have the coverage you need.

3.     Relying solely on employer offered life insurance may leave you with no coverage.

Even if your employer offered coverage meets your needs, if you leave your job or lose your job, you may find yourself without any coverage.  The older you get, the more your life insurance premiums will be if you purchase a new policy and if you get a serious illness, you may not be able to get coverage at all.

4.     The insurance you need will change over the course of your life.

The life insurance you need when you have small children and a mortgage is very different than what you will need when you are an empty nester on the verge of retirement.

5.     Match your policy to your needs.

The amount of insurance you need changes as you move through your life.  This is why it is important to match the amount of coverage you have to your needs.  A mixture of whole and term policies can enable you to vary the amount of coverage you need over your lifetime.

6.     Tell the truth on your application. 

You will be required to undergo some kind of medical evaluation in order to obtain most life insurance policies.  If you are not up front on your application, it may cost you your coverage right away or compromise your beneficiary’s ability to collect.

7.     Your premium will depend on your health at the time of purchase. 

The amount of your premium will depend on several factors, one of which is your health at the time of your application.  Medical conditions like high blood pressure or high cholesterol can increase your premium, even if they are controlled with medication.

8.     It saves to purchase your policies when you are young and in good health.

The amount you pay for a life insurance policy is generally set for the life of the policy when you purchase the policy, no matter how many years you have the policy.  This is one reason that it makes sense to purchase coverage when you are younger rather than waiting until you feel like you can afford it.

9.     Understand the policy terms.

In order to compare policies from different companies or even within the same company, you need to read through and understand the terms of the policy.  You also need to understand if there are any conditions so that you don’t inadvertently do anything that compromises your coverage.

10.  Shop around for the right policy at the right price.

Different companies have different offerings and use different pricing models.  You may be paying for this policy for 30 years or more and it makes sense to make sure you are getting the best price for the coverage you need.

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Employees

Good group benefits can help you land a great employee. (Image via Inkyhack on Flickr)

There are many factors that contribute to having a happy, productive workforce.  Human resources experts could give you a list a mile long of why things like company culture, employee appreciation, and providing meaningful work for a living wage would be near the top of that list of factors.  Group benefits, the ones that are optional, not the ones required by law, would also be up near the top of the list.  Group coverage often fulfills more than one need for your employees and can be a powerful way to express the company’s gratitude and appreciation for all the work employees do.  Providing these kinds of benefits can even be the thing that sets your company apart in the eyes of potential employees.

Here are 5 reasons small business owners should consider adding group benefits for their employees.

1.     Providing Peace of Mind

Two of the most common group benefits are life insurance and disability insurance, both of which protect the financial future of the employee and/or their family.  With these kinds of group benefits, employees can feel confident in their ability to support their family in trying times.

2.     Cost Control

The group nature of the benefits helps keep the costs down which means the company can offer things like health insurance or dental coverage because they are affordable.  It is also common practice to require that employees contribute toward the cost of many group benefits so that the costs are shared.  When you add in cost savings you may achieve by reducing turnover, benefits make good financial sense for most businesses.

3.     Tailored Solutions

Most insurance companies that provide this type of coverage will allow you to tailor the type of benefits you offer to meet the specific needs of your employees.  Additionally, there are other things, like subsidized gym memberships, which can be counted under the group benefits umbrella that are not related to or provided by an insurance company.

4.     Benefits Support

Many insurance programs offer support for their group benefits product lines that can provide real benefit to the business owner or manager.  When a group benefits package comes with this kind of support, it alleviates the need for HR staff or business owners to take time away from other things in order to answer questions.

5.     Recruiting and Employee Retention

One of the best reasons to offer group benefits is because benefits make employees happy and happy employees don’t leave for other opportunities.   The cost to the company of finding, hiring, and training a new person is likely much higher than the company’s contribution to the cost of benefits for that role.  If you are looking to attract the best and brightest people, you need to offer a work environment that doesn’t just compare with the completion, but surpasses it.  Group benefits can be the thing that turns your job offer into a candidate’s best offer.

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