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Home Insurance for Protection of Your Most Valuable Asset

17. August 2017 16:18 / Jason Kelley / / Comments (0)

Is Home, your most valuable asset? In fact, for most of us, it is. We spend a substantial part of our lifetime’s earnings on a Home. We spend some of the best moments of our lives in our homes. We take all care to ensure that our homes and possessions are protected from any damage or loss. However, mishaps still happen. We can do little about the natural disasters that can potentially cause major damage. Housebreakings are not rare despite us installing best protection equipment with burglars finding ways to outsmart the technology.

Any damage to the exterior or the interiors of our homes or its content can cause emotional and financial distress. There could be many things to fix and replace. As our homes protect us from the heat, dust, rains and many other troubles, it is only fair that we protect our homes from any damage / untoward incidence. In order to protect your home and protecting yourself against any potential losses due to any damage to your home, you need a Home Insurance.

Traditionally, Indian homeowners’ attitude towards Home Insurance has been somewhat indifferent. A Home Insurance has been considered as an avoidable expense in India till recently. However, Home Insurance in India is getting recognized as a crucial protection product after instances of natural disasters in Nepal and India, when many houses were seriously damaged. Thefts have been common for years; however stakes have gone up of late with homeowners’ preferences for high-value gadgets like LED Television Sets, Home Theatre Systems, Air Conditioners and even rare Antiques. Home Insurance plans are designed to protect the insured against a wide range of perils that put them at risk.

A standard Home Insurance not only safeguards the structure of your home but also covers all the belongings and prized possessions collected over the years. A standard Home Insurance cover gives you a chance to choose either the house structure or the household contents in a single policy.

Let’s understand in detail what a standard Home Insurance plan offers:

Fire: A house can catch fire due to many possible reasons. One may forget to switch off the stove or a spark emanating from an electrical appliance may result in something big and devastating. Short-circuits are common in rainy seasons. A Home Insurance plan offers protection against losses due to fire. It can leave a devastating effect. The property structure can become severely damaged, such that you have to rebuild it. In such a situation, a Home Insurance policy pays for the expenses incurred on repair and reconstruction work. With financial support from the Home Insurance policy, you can focus on getting the house back to its original condition.

Theft: Another problem that worries most homeowners is a possibility of theft. A burglary can result in loss of precious contents such as jewelry, documents, and electronic appliances. One can protect against such possibilities by taking optional burglary coverage. This coverage pays out in the event that the home's contents are stolen.

Storm, Flood, Inundation: With rising instances of Flood, inundation in the last few years, Home Insurance is gaining the attention of the homeowners as an important protection product. There have been a number of instances of people have become the victims of natural disasters in which their houses have been damaged to great extent.

Earthquake: One can also opt for an Earthquake coverage which offers compensation if the structure or the contents of the home are damaged due to Earthquake.

Others: One can also opt for a terrorism coverage which offers compensation if the structure or the contents of the home are damaged by acts of terrorism. Home Insurance in India is becoming important with changing dynamics of Home ownership. A house can get damaged due to so a number of external factors beyond the control of the owner. In the case of a serious damage, it may not be possible to restore everything to its original state because of the enormous expenses that it may involve. With Home Insurance, you can make a claim on the policy and recover the expenses arising from the loss.

In the event of a mishap, making a home insurance claim is not complicated. The homeowner needs to fill in the claims form and submit it with relevant documents to the insurance company. All documents supporting your claim must be provided for it to be approved. The insurance company surveyor will scrutinize the loss and the claim and arrive at a compensation based on the replacement cost.

Home insurance quote depends on various factors like if the premise to be insured is rented or owned accommodation, the Type of property (flat or individual house), the age of the property and the coverage type (the structure or the content or both). Coverage amount is the maximum limit that would be paid if some damage occurs to the house. The major factor that determines the coverage amount is reconstruction cost of the house. Reconstruction cost is ascertained by the following formula:

Total constructed area X Construction cost per square feet With a good home insurance in place, you can have complete peace of mind regarding your property investment. In events like damage to your house due to an earthquake and flood/, inundation, you can avail emergency repairs,. Interestingly, the Home Insurance premium is reasonably low in most cases so as not to put extra financial burden on you. Whether you live in a city or a small town, a Home Insurance is becoming essential. If you have invested a substantial amount of your lifetime’s earnings on your home and its contents, then not having a Home Insurance can be risky.

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Is Guaranteed Issue Life Insurance a Good Option?

9. August 2017 00:14 / Megan Kunis / / Comments (0)

Is Guaranteed Issue Life Insurance a Good Option?

We often get asked questions along the lines of “My aging parent is very ill and medical bills have drained his/her savings account, but I cannot afford to pay for the funeral if he/she should pass away.  Can I buy life insurance on my parent?”  In this scenario, we do not advise purchasing “regular” fully underwritten life insurance.  More often than not, term life insurance is going to be ideal for most people, but not in this scenario.

Why we wouldn’t recommend term insurance in this case…

Term life insurance would typically not work in this case because the coverage amount would be too small, the client would likely be uninsurable because of health issues, and the client’s age would be outside the range a life insurance company would approve coverage for.

What we would recommend…

When we get this question, we usually tell inquirers that they have two options:

  1. Take the money you would have spent each month on term insurance and instead put it into a savings account so it can start accruing interest. You can then access these funds later when in need of money for your loved one’s final expenses.
  2. Purchase a guaranteed issue life insurance policy.

What is a guaranteed issue life insurance policy?

Guaranteed issue life insurance is a type of life insurance that you cannot be denied coverage on, hence “guaranteed”.  There are a few things you should know about this type of insurance.

  1. Guaranteed issue life insurance is typically known as “last resort” life insurance. It’s meant for those who may have been denied previously and/or are not in good health.
  2. Guaranteed issue life insurance policies are designed so that surviving loved ones can pay for your final expenses, such as a funeral, burial, and medical bills.
  3. Guaranteed issue life insurance premiums will never increase.
  4. A guaranteed issue life insurance policy accumulates cash value.
  5. Guaranteed issue life insurance policies have significantly lower death benefit amounts compared to term or permanent policies.
  6. There is no medical exam or questionnaire required for guaranteed issue life insurance. The only factor that is really taken into consideration is the age of the insured.  Because of this, guaranteed issue life insurance premiums are higher per thousand than most other types of life insurance.
  7. Benefits are limited within the first two years. This is called a Graded Death Benefit period.  What this means is that if you die within two years of buying the policy for any reason other than an accident, your beneficiaries typically only receive the total amount of what you paid in premiums.  (This can vary depending on the carrier.)

So, if you’re in relatively good health, fully underwritten life insurance may be a better option for you.  However, guaranteed issue life insurance is a great option for those with a desperate need.

How much does guaranteed issue life insurance cost?

While you can get millions of dollars’ worth of term life insurance coverage, guaranteed issue life insurance coverage often caps at $50,000.  Again, its design is based around simply helping your surviving loved ones pay for your final expenses.

Quotacy works with Gerber Life to provide guaranteed issue coverage options.  Gerber’s guaranteed issue policy is available in all U.S. states except for Montana.  Take a look at the examples and table below to get an idea on what a guaranteed issue policy can cost.

John Smith is 55 years old and has been denied for traditional life insurance because of his Stage IV prostate cancer.  He does not want to burden his children with his final expenses so he plans on purchasing guaranteed issue life insurance.

He’s automatically approved without having to undergo a medical exam or fill out any health forms.  John obtains $20,000 in coverage and his premiums are $91.30 per month.

If John passes away within two years, Gerber Life will refund to his beneficiaries all premiums that had been paid plus 10% interest.  However, if John happens to die because of an accident unrelated to his health within those two years, his beneficiaries will receive the full $20,000 death benefit.  After two years, his beneficiaries will receive the full death benefit regardless of how he dies.

Jane Doe takes care of her 79-year-old mother Sally.  Sally does not have any life insurance and Jane is worried that she won’t have the funds to give her mother the funeral she deserves.  Jane decides to buy a guaranteed issue life insurance policy on Sally.

A $12,000 policy is enough for Jane to ensure she can pay for a proper funeral and burial.  Sally is approved for coverage and the policy will cost $165.70 per month.

Although this type of policy is easy to acquire, it offers less coverage and higher premiums than traditional life insurance, so explore all your options.  If you aren’t sure if guaranteed issue life insurance is the best choice for you or want more information, contact us here at Quotacy and we can help you.

Recap of Guaranteed Issue Life Insurance:

  • If you’re between 50 and 80 years old, you can be accepted for guaranteed issue coverage regardless of your health.
  • There are no medical exams to complete or health questionnaires to fill out.
  • Cash value accumulates within the policy.

Remember, term life insurance quotes are free to run on Quotacy.com and there is no penalty for applying.  It doesn’t hurt to apply for term life insurance, then opt for guaranteed issue if you end up being denied.  The more options you have, the better decision you can make.

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