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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Are you properly insured in the event you become disabled? (image via goingslo on Flickr)

Many working Americans don’t have the right insurance in place to provide their family with the protection they need.  If you asked most people in their 30’s and 40’s what kind of insurance they need in order to protect their family, they would likely answer auto, home, and/or life insurance.  While these types of coverage do provide protection and are a necessary, they don’t cover all the bases by themselves.  In fact, people in this age group actually need another type of insurance even more than they need life insurance.  What coverage are they missing?  Disability insurance.

Most people have some kind of disability insurance through their employer but for many of us, that coverage isn’t enough to protect our family’s financial security.  The root of the problem is that people are worried about things in the wrong order.  People in this age group are aware of their own mortality and concerned about how their death would impact their families.  What they don’t realize however, is that they have a 30% chance of becoming disabled before retirement age and only a 17% chance of dying before retirement age according to the Social Security Administration.

But My Employer Provides Disability Coverage

Many people receive short term disability coverage through their employer, but if you become disabled, this coverage may not be enough. Consider this; you are the primary breadwinner for your family and become temporarily disabled, your employer offered coverage will likely only pay you 60% of your regular salary.  If your family had to get by for several months on little more than half your salary, could you do it?  This is one of the most important questions you need to answer in order to determine if you need additional disability insurance.

But I Work for Myself

If you are self-employed, that picture may be bleaker.  Would your business be able to survive without you for several months?  Would it continue to pay you the money you need to take care of your family?  Those who own their own business and who work for themselves must have some kind of safety net in place to protect themselves in the event of a disabling event.  Even if you have money in reserves to help cover your personal income, you may not have thought about how the business will continue if you cannot function in the same role you are in right now.  Understanding how this kind of event will impact you personally and your business is the key to determining how much disability coverage you need in order to have the protection you need in place.

Short vs. Long Term Coverage

Additionally, even if your short term coverage is in place and seems adequate, you may not be protected if you become disabled for a longer term or even for life.  There are two different kinds of disability coverage, short term and long term.  Short term coverage generally covers qualifying disabilities for a period that is generally less than one year and may be tied to the amount of time you have been with the company.  If you remain disabled after the timeframe covered by the short term policy, you will need a long term disability policy in order to continue receiving benefits.

Because disability insurance policies can be complex with many restrictions and a wide range of options, you should work with an insurance professional to find the right policy to provide the coverage you need to protect your financial future.

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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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Insurance Mistakes

What mistakes might you be making with your insurance policies? Image via cybrarian77 on Flickr

When you are just starting out, there are so many new things you have to handle, things that your parents have always taken care of for you.  You may be moving into your first apartment, starting your first job, buying your first house, or leasing a new car.  It’s normal to experience a few growing pains as you make missteps and mistakes but some mistakes, the ones with a dollar sign attached, can be more painful than others.  One of the most common mistakes young adults make is not having insurance to protect the life they are building.  Insurance may seem like a luxury or like something you will worry about when you are older, but it is one of the most important things you can do now to protect yourself now and in the future.  

Here are 4 of the most common insurance mistakes young adults make.

1.    Not Having Insurance

The biggest mistake people in their 20’s can make is not having insurance.  If you live in an apartment and own anything you didn’t buy at a yard sale, you need a renter’s insurance policy.  If you drive a car, you need an auto insurance policy that covers liability and uninsured/underinsured motorists at a minimum.  If you don’t have a trust fund, you need personal disability coverage that provides income if you lose your ability to work.

2.  Not Having the Right Insurance

Another big mistake young people make is not having the right insurance.  You may have auto coverage that doesn’t protect you from an uninsured/underinsured motorist.  You might have life insurance but not disability insurance, even though you are more likely at this age to experience a temporary disability than you are to die.  Having the right insurance to protect yourself is one of the most important things you can do to protect your financial future.

3.    Not Having the Right Amount of Insurance

It is great if you have insurance, but if you don’t have the right amount, you may still find yourself in financial freefall.  For example, look at the limits on the liability coverage provided with your auto policy.  Now imagine that you are in an accident deemed to be your fault and the person in the other car dies.  Will the upper limit on your liability policy be enough to pay for a wrongful death lawsuit?  If not, your wages for the rest of your life can be garnished to pay for that one accident.  This is why having the right amount of insurance matters as much when you are 20 as it does when you are 40 with a family and a house.

4.    Not Shopping for Their Own Policies

Another common mistake people make when they are just starting out is to buy the same policies that their parents have from the same companies that their parents use.  Regardless of how great the company is or how good they have been to your family over the years, it is always a good idea to shop around for your own policies.  Some companies offer better rates for newer drivers or provide more comprehensive rental policies at more reasonable prices.  Make sure the insurance you pay for is meeting your needs and that you are getting the best possible price in the process.

One of the most challenging things about moving out and moving up in the world is avoiding the most common mistakes.  Understanding your individual insurance needs and purchasing the right policies with the write amount of coverage allows you to protect your future while you work to build it.

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Business Insurance

Is your business properly insured?

Whether you are a new business owner just starting out or an established entrepreneur looking to hire your first employee, it is important to understand what insurance coverage you need to protect your business.  However, wading through the all the available information to decide what policies and coverages are right for you can easily end with you being over or under insured.

Insurance for businesses comes in many different forms. What you need often depends on several factors including what type of business you are in, whether or not you have employees, and what state you live in.  Many business owners believe that the way the structured their business, as a corporation or LLC, provides them with the protection they need and eliminates the need for business insurance.  This simply isn’t true.  Company structure can protect your personal assets but they do not provide protection for the business itself.

The first step in deciding what kind of insurance you need for your business is to understand the different types of business insurance and the protection each kind offers.  According to the Small Business Association, these are the different kinds of insurance small business owners may need to fully protect their business.

1.    General Liability Insurance

This type of coverage offers broad protection against most legal actions resulting from negligence claims, accidents, or injuries.

2.     Product Liability Insurance

This type of coverage is important for businesses that manufacture, distribute, or sell products including both wholesale and retail sales.  It protects against legal actions resulting from injuries caused by product defect.

3.     Professional Liability Insurance

Similar to product liability insurance, this type of coverage protects businesses that provide services to customers.  It covers things like malpractice, errors and omissions, and negligence that results in harm to your client.  Depending on your profession, the state you live in may require that you carry this kind of insurance.

4.     Commercial Property Insurance

This kind of coverage protects the property and assets that belong to the company against loss or theft.  While it covers real property like buildings and office equipment, it may also cover things like loss of income and business interruption.

5.     Home Based Business Insurance

This type of coverage is specific to businesses run out of your home which are not covered by most homeowner’s policies.  You may be able to cover your home-based business with a few riders on your homeowner’s policy but you may have to purchase other business specific policies as well.

6.     Workers Compensation Insurance

This kind of coverage provides protection for your employees in the event they are injured on the job.  If you have employees, all states require that you carry this kind of coverage.

7.     Unemployment Insurance

This type of coverage is assessed in the form of a tax and is required by all states if you have employees.  It provides funds for the payment of unemployment benefits in the event one of your employees is let go and qualifies for benefits.

8.    Disability Insurance

This type of coverage provides employees with a portion of their pay if they suffer a qualified disability.  It is required for companies with employees in some states.

Now that you understand what each kind of coverage protects, you need to assess the businesses’ potential exposure for loss.  This exposure will help guide the types and amounts of coverage you need to safeguard your business.

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