January 26, 2009
and prices. Whooo, the prices!
I don’t know how frequently I’ve talked about getting life insurance, separate from my employer-sponsored plan, but I’m pretty sure I called last March the month of insurance. What a liar.
Well, it took me two days to get my butt in gear THIS time, but I’ve finally requested quotes from a variety of companies, and they really run the gamut.
I started with looking for companies with higher ratings on A.M. Best, but that kinda just confused me, and wasn’t terribly fruitful. I came up with the following: AAA (wouldn’t give me an online quote), Mercury (doesn’t do life insurance), Wawanesa (also doesn’t do life insurance), Commerce West (again, same story).
Finally, I just gave up on the A.M. Best angle, clearly that was going about things backwards. It was time for known quantities and Googling. Mostly Googling because not many of my friends have life insurance. I also wasted about 30 minutes lecturing a friend about how important life insurance was; it’s not hypocrisy, she’s pregnant! With a child. Life insurance is critical! Of course, I’ve got dependents already, so why was I still on the phone and not getting quotes? Right right.
So, friends: one gal has her policy through Farmers, but “it was through hubby’s friend, and I don’t know if I got a good deal.” And work: provides life insurance through Prudential. Good enough, I started with those two companies and worked up quotes for both.
The baseline information was: 26 yr old Female, short, thin, non-smoker with no family history of cardiovascular disease, cancer, etc., for a 30-year Term policy for $2 million.
Honestly, that number was initially just a randomly chosen number, but after I used a few calculators to estimate my family’s insurance needs given existing debt (I don’t have any but the padres do), living expenses for 20 years (my people can be long-lived), and existing savings, it came extremely close to that $2 million. Crazy, huh?
And I chose term life after reading so very many articles arguing the merits of term versus whole life insurance. Jim at Blueprint for Financial Prosperity explains the differences here. Most term policies have the option of converting to a whole life policy, but I’m not certain that’s really necessary. Then again, I might be looking at this wrong: with auto insurance, I’m accustomed to shopping around and being able to replace my existing policy at any given time. That’s probably not the case with life insurance, you probably don’t want to have to be re-insured at a later time in life because, theoretically, you’re going to be facing higher rates. Then again, the rates can be pretty high just for term, I’m not sure I could afford whole life.
Anyway, the quotes ranged pretty wildly.
The lowest bid came from Prudential: $965 per year.
The others came in at $1000/yr (Midwestern), $2400/yr (Farmers), $1500/yr (Liberty Life), $1300-2700/yr (State Farm).
All the above companies were fairly highly rated, they’re all at least A ratings, with a Stable indicator. Of course, most of the ratings were from last spring so there’s certainly a chance that they aren’t doing as well now.
Now that I’ve taken that first step, and requested a few applications, I’m not really sure how to choose. I feel the need to do more research on the actual policies: coverage, restrictions, etc. Also, it’d be great if I could select a company that provides both auto and life coverage for a discount.
In any case, if I plan to pay the annual fee in full, though, the insurance fund is going to need a boost. Just at the wrong time, too!
Has anyone else gone through this selection process or care to share what sort of life insurance you have?
October 25, 2008
After procrastinating for hours, I finally tackled another load of organizing today. While sorting through piles of folders, manila and accordian, I found some leftovers from a three year old benefits enrollment packet. Among the papers was an envelope containing information on long term care insurance. It was clearly set aside for perusal at a later time because I’ve been very concerned about long term plans for my parents since starting this blog, but had never been satisfied enough with my research on this topic to satisfy my need for information before purchasing it.
Alas, how clear is hindsight. I should have signed up for this years ago! Had I done so, at least one part of our dilemma would be less frustrating. Unless my mom is declared functionally disabled, she cannot draw any governmental benefits, and my dad cannot afford to leave her alone to go work a job with regular hours because we don’t have anyone to stay with her. Catch 22: they have very little income of their own, and now that we’re in this fix, my dad can’t go out, leaving mom alone, to earn a decent wage.
From my review of the materials, assuming the new insurance company that my employer contracted with last year honored the same basic requirements, mom would be eligible to claim benefits now, thus freeing my dad to work a more regular job and support at least the two of them.
For future reference, a typical set of triggers for benefits eligibility, according to the California Department of Aging, would be based on the inability to perform at least 2 of the 7 activities of daily living (ADL) listed below, or on impairment of cognitive ability:
- Bathing
- Dressing
- Continence
- Toileting
- Tranferring
- Eating
- Ambulating
She’s definitely suffering from impairment of cognitive ability, and at least 2 of the above 7 ADLs. I did have some sense of urgency when I was in my first year of employment, but it fell by the wayside because money was still too tight. Now that it’s too late to help mom, I need to take a long hard look at the application for my dad because if anything happens to him, too …….
In the state of California, consumers are protected by the following regulations (also from the California Department of Aging):
1. Guaranteed Renewable or Noncancelable Protection: Every long term care policy sold to an individual must be either guaranteed renewable or non-cancelable. Guaranteed Renewable means that the company cannot cancel your policy or change any of the benefits, unless you fail to pay the premiums. Insurance companies are allowed to increase premiums for a “class” of policies, but not for you individually. Non-cancelable means that your coverage cannot be canceled or the benefits changed, and the premium cannot increase as long as you continue to pay on time.
2. Continuation or Conversion Coverage: If you purchase a long-term care certificate through a group, you can continue or convert your coverage if the group cancels the master policy or terminates coverage. Continuation means you keep the same coverage if you pay the premium on time. Conversion means you get an individual policy of insurance with identical or equivalent coverage without health screening. In each case, your premium can change when you are no longer in the group.
In other words, if your group leaves the company, you’re still ok. If you leave the group, the company is not bound to continue offering you the same policy.
3. 30-day Free Look: Every applicant (except purchasers in employer or trade groups) has the right to return any policy or certificate within 30 days of receipt, for any reason, and have all premiums or fees refunded. The 30 days begins on the day you get the policy or certificate.
4. Forbidden Requirements: Policies sold after 1990 cannot require you to be in a hospital before benefits will be paid in a nursing home, or to get skilled nursing care before personal care services are covered. Companies can’t refuse to pay you benefits because you weren’t in a hospital or nursing home before you needed covered home or community services. Companies also cannot refuse to pay covered benefits to people who are diagnosed with a mental illness or cognitive impairment, including Alzheimer’s disease, if they meet the eligibility trigger in the policy.
Duties of Agents and Companies: California law requires agents to comply with certain standards when selling insurance and to give consumers certain information at the time they make a sales presentation. If you are replacing a policy, agents are required to give you a fair and accurate comparison of any policies you may already have with one you are considering for purchase.
If you are buying any long-term care insurance, you must be given a “Long-term Care Insurance Personal Worksheet.” This form gives you important information about any rate increases the company has had, and asks you to consider certain other issues related to buying long-term care insurance and your ability to pay premiums over time. If you do not complete this form, the company is required to contact you before issuing coverage to make sure the agent showed it to you, and that you meet their standards for income and assets to purchase this product. The Personal Worksheet is intended to help you purchase the right type of policy and an appropriate amount of coverage for your particular circumstances. Insurance agents have a duty of honesty, good faith, and fair dealing to all consumers. They are prohibited from using high pressure tactics to sell you insurance and are not allowed to sell inappropriate coverage or excessive amounts of insurance. Advertisements and other marketing materials used by agents and by companies cannot be misleading. Violations of these standards should be reported to the California Department of Insurance at 1-800-927-HELP (4357).
I do wonder, though, how these protections change if the person paying the premiums move, or even if the beneficiary of the insurance moves out of state. Do you retain the protections of the state in which you purchased/initiated the coverage?
August 20, 2008
I’ve gotta say, my insurance company has been crap at following up with the arbitration decision on my car accident back in April of last year.
After today’s call, the twentieth follow-up call since arbitration dates were set, I’m walking on a little cushion of forgiveness-air: the guy who hit my car was deemed 100% at fault and I get all my money back!!
(That’s right, jerk, that’s what you get for driving recklessly, speeding, cutting off at least 4 cars and then lying about it.)
I can’t even remember if I had to take that $1000 for the deductible out of my car fund or from my expenses fund anymore, but I need to decide where it goes. I’m told that I can expect the check by the end of this week. Squeeeee!
July 1, 2008
(ie: Supplemental income)
Ahhh, yes. My second income “make-up” check has come in, and I’ve divvied it up.
Originally this was going to be the All Responsibility Check: 20% to savings and 30% for taxes. Since I’m struggling with cash flow, I took 5% of it from the savings allotment and put it that in the expense account. I might as well. If I run short and have to dip into the emergency fund, I’ll just be really annoyed and I have a policy against dipping anyway. As Sistah Ant and I discussed once, it seems like a slippery slope to tread, dipping into the e-fund for non-emergencies.
I’ve an abundance of Citi and ED savings accounts but they’re all being used for specific purposes (Travel, Car/House Maintenance, easier access E-fund, expenses, Car Insurance), so I’ve finally returned to my old ING Direct account to hold my tax savings. That money is just going to be sitting there until next April, so I want it out of sight. Even better, ING is offering a 3% APY rate, so it’s actually doing better than ED.
I’m considering moving my entire emergency fund over to ING, actually, since it’s a fairly substantial amount. I think the Car/House Maintenance and Car Insurance funds can also be moved because those expenses won’t crop up so suddenly that I can’t wait a few days to transfer the money from ING.
Oh, and I still need a Moving fund; it’d be nice to have most of the sub-accounts in one place.
*thinking ….*
May 12, 2008
Sense was right. Even though I was relieved that PaDucky had taken the initiative to request quotes for taking MaDucky off the insurance policy, I couldn’t help myself: I had to look up other quotes because I’d wanted to compare rates anyway.
Geico’s rates were about $150 less, for the same coverage, and even better, the deductibles were only $500 for each car. I was really tempted to switch on over without further ado.
Luckily, I called my repair shop to ask about ease of service and transactions with Geico first. It turns out that while I have the legal right (it’s CA law) to go to any repair facility of my choosing, my preferred repair shop is “not longer a direct provider for Geico” because they had difficulty doing business with them. The guy that usually helps me said that they’d stopped working with Geico a couple years back because they charge premium prices for their work and Geico doesn’t like paying them. I understand the principle of that, obviously, that’s how they pass the savings along to the customer. It’s just ironic because they were the cheapest of three quotes for my car repairs from the accident last year!
I asked him what not being a direct provider meant to me as a customer. He explained that while other insurance companies allow them to take the photos, email them, and proceed with repairs, Geico requires the adjuster to come to the facility to take their own photos, and then to return again when the car is torn down if/when there is more extensive damage. Basically, not being a direct provider means that we’re looking at an extra 50% time premium. Nooo buddy! I don’t think so. If I’m going to have to use their services in the next six months, I want to use my own shop, and not have to wait three weeks instead of two. Aside from being impatient, I also never opt for the rental car benefit, so we’d be down to one car instead of two.
It looks like I’ll be sticking with Mercury for now, even though they’re a bit more expensive.
May 10, 2008
*shock*
I’ve been needing to call the insurance company to deal with the removal of my mom from the insurance. I knew it’d be a bit more complicated than taking my brother off because MaDucky’s actually the policyholder, so I’d been dragging my heels a bit. Also because I wanted to compare rates with other companies while I was at it.
Instead of the usual, “So, you know how we agreed to take your mom off the insurance? Have you done it yet?” conversation, PaDucky actually told me that he’d spoken to the insurance agent and had gotten a couple quotes for the new insurance, and made some inquiries about how much we’d save when the truck comes off the insurance.
Holy … cow …
He’s NEVER handled any of our paperwork. Never. He ferries the tax documents every year, but that’s because he’s had a working relationship with the accountant for more than ten years, and it’s best for him to go chat with the guy. But bills? Rent? Medical records? Banking? Nope. Nope. No and no. He won’t even go to the bank! I’m glad, but still mostly in shock.
Something’s finally pushed him to take the initiative to do something more around here, and I’m sorry it had to be MaDucky’s complete deterioration of health.
May 9, 2008
The $600 is in the BANK.
I’m super excited to chop that up into the categories I’ve finally settled on. In combination with my remaining $4800 once intended for tax payment, I have $5400 to “play” with.
$2000 will go to the emergency fund. I don’t have quite six months’ worth of expenses in there, so it’s going to be e-fund’s e-fund. I’d rather not kick up the bar to 20k yet, I’d like to enjoy having a full goal bar for a little longer.
$1250 goes to auto maintenance.
$1250 goes to auto insurance. This feels like a windfall. I usually use “put together” (ie: reimbursements, etc.) money for the insurance because I was having trouble squeezing any more money out of the paycheck. Now I have a nice cushion!
That leaves $900. $200 goes to my expense fund because work refused to reimburse me for something they’d promised to, and given the climate these days, I’m sure I won’t be able to force it out of them. Oh well.
$700 is now intended for ME!!! I struggled with this, but I’ve been trying to learn to how to live for me at least a little bit, and letting myself have 13% of a “windfall” isn’t the end of the world. The bulk of it is going towards being really responsible, after all.
$300 was earmarked for Con, of which $92 is already spent, so I’ll have up to $200 in gas and spending money for 5 days.
The other $400 will be my travel fund for the year. I could take a trip to Phoenix (tickets are approx. $140), I could go to Oregon (use an award ticket and have a wee bit of spending money), and then maybe even get in another trip to New York (again, use an award ticket, have a little transportation and spending money). That would definitely be the end of all that money, but it’d be fantastic! I have over 150 vacation hours accumulated, and will stop accruing soon, I might as well plan to have some fun and clear my head.
I’m thinking of other trips I wish I could squeeze in: BF’s family invited me on their two weeks to Cancun and backpacking in Belize. (Backpacking! In Belize!!) A coworker’s going to a timeshare in Hawaii for two weeks, I just pay for food and transportation. (Hawaii!!)
But, $400 doesn’t stretch THAT far.