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Finding Insurance: Shop Online or Use an Agent?

October 31st, 2006 by Megan Mahan

It’s one of those questions that causes millions of Americans to lose sleep every night: Should I shop my insurance online or get out the phone book and call around? smq.JPG

Alright. So maybe it’s not the source of insomnia across the country. But with new technologies like the Web–which invariably make our day-to-day life easier–also bring with them concerns for safety and identity protection.

This is almost always the case when it comes to shopping for financial products like insurance. Folks want the convenience of the Web but the safety, security and personal touch that comes with talking to a human.

So what if I told you that you could have it both ways?

…Read the rest of this entry »

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Election Politics 101: Don’t Talk About Health Care

October 30th, 2006 by Jeb Foster

As an election issue, health care always sits high up on the list of voter concerns. This election cycle is no different. Makes sense. Health care is expensive and getting more so each year.

What is striking, however, is that during elections, politicians do every thing they can to avoid talking about our country’s health care woes.
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According to recent Kaiser Family Foundation release, many pols steer away from the issue because of its complexity. “The issue is difficult to discuss through sound bites, 30-second commercials and lawn signs,” says the foundation. A recent op-ed from the Baltimore Sun offered a similar explanation: “[Health care] and paying for it is a large and growing concern for most Americans … but neither politicians nor voters have many fresh ideas on what to do about it.”

Given an opportunity, however, candidates will jump to criticize a rival’s position on health care. For that reason, most keep mum on the subject. You don’t have to be a seasoned political strategist to know that nuanced and open debate on tough subjects is to be avoided at all costs during an election. The risks are too great.

If a candidate is forced to talk about health care, we can expect platitudes, such as “I’m for developing a cure for the common cold.” Or, platitudes with a barb: “I support a cure for cancer, but my opponent does not … and she eats small children.”

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Weekly Insurance Blog Wrap-Up

October 27th, 2006 by Jeb Foster

Links from this week’s video:

The Price of Health Care, a Honda

Living on the Edge: Not Just an Aerosmith Song

Home Inventory Made Simple

Insurers Recoil from the High Cost of Mental Illness

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Insurers Recoil from the High Cost of Mental Illness

October 26th, 2006 by Jeb Foster

Consider this startling stat from the National Institute of Mental Health (NIMH):

An estimated 26.2 percent of Americans ages 18 and older — about one in four adults — suffer from a diagnosable mental disorder in a given year.

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According to this story from Post, a quarter of that quarter has it so bad their daily functioning is compromised.

The NIMH adds that mental disorders are “the leading cause of disability in the U.S. and Canada for ages 15-44.”

Mental health treatment is one of the big drivers of health care cost inflation, and as you might guess, health insurers are trying to find ways to reduce outlay. One tactic that’s proven effective (if unpopular) is to deny individual coverage to anyone who has taken a red-flag raising medication–such as an anti-depressant.

MSN Money’s Debora Vrana has a comprehensive article on this practice. Her story is entitled “Prozac: Hazard to your health insurance.” It’s worth a read.

Vrana says people who have sought mental health treatment regret letting their insurer pick up the tab, as they’ve been branded “insurance untouchables.”

Because insurers are so skittish, many therapists and counselors warn their patients to keep their mental health history under the radar and pay for treatment out of pocket.

“The moment I give them a label, it can follow them for their entire life. I really worry about that,” says Dr. Peter Gumpert, a therapist quoted in the article. “This whole thing has a chilling effect on people getting the help they need.”

Read the entire article.

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Home Inventory Made Simple

October 25th, 2006 by Maribeth Neelis

scissors.jpg I’ve always been a sucker for the products touted on those late-night infomercials–scissors that cut through metal, a plastic tube that stores and cooks your pasta, miracle powder that removes any stain from grape juice to motor oil. Basically, if it makes my life easier, I’ll buy it, or at least put it on my ever-expanding wish list.

In the home-inventory software from the Insurance Information Institute, I’ve finally found a product that helps keep track of all those possessions. Knowing what you own and its worth allows you to get insurance that provides adequate coverage.

You no longer need to walk through each room with a notepad; the software prompts you with questions about each room and allows you to upload photographs and receipts when necessary. It organizes all the information in a report, which you can burn onto a CD or print out and store at a friend or relative’s house. Best of all, when you buy that new juicer/food processor, it’s easy to add it to the inventory.

Download the Software for Free

Download Lists that give you an idea what to include in your home inventory.

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And You Thought Sam Waterson Was Kidding…

October 25th, 2006 by Megan Mahan

Maybe robot insurance isn’t just silly joke fodder.

According to this recent MSN tech article, an estimated 39 million households could include robots by the end of the decade.

CNET also has a great FAQ article about robots. Check it out to learn what robots are doing now, and what they could be doing in the future. It also wouldn’t hurt to learn the difference between a robot and an android. Just for future reference.

With all the new robot technology, I figure there’s got to be some insurer out there calculating the risk of a robot gone haywire. I’ve seen all three Terminator movies. I’m aware of the possibilities. :)

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Living on the Edge: Not Just an Aerosmith Song

October 24th, 2006 by Megan Mahan

Do you have the cash reserves on hand to deal with a medical emergency?

…the number of
uninsured Americans
rose by 1.3
million last year

A recent study by the Kaiser Family Foundation (KFF) found that only 22.3 percent of middle-class families could financially cope with a small medical emergency–an equivalent of just over $3,000–which would treat injuries like broken bones.

The middle-class seems to be living on the edge, points out a recent MSN Money story, which explores the findings produced by the Democratic-funded Center for American Progress.

Financial declines over the last five years are to blame for the monetary squeeze in the middle class, says the CAP. As a result, the income for middle-class families has remained “stagnant or flat” since 2001, while prices for life’s essentials–housing, education, transportation and health care–have dramatically increased.

…Read the rest of this entry »

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The Price of Health Care, a Honda

October 23rd, 2006 by Jeb Foster

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We Americans are thrifty. We know how to comparison shop and sniff out a good deal–particularly when it comes to our cars and household appliances.

We’re not penny pinchers when it comes to health care, however.

Washington Post columnist Michelle Singletary has an interesting article this week on our yen for saving money on everything but medical care.

“More people probably know the whereabouts of Osama bin Laden than the average cost of their health services,” says Singletary, who pens the “Color of Money” column for the Post.

According to a recent study, people estimate the cost of a routine doctor’s office to be about $95. The actual average cost is much higher–twice as high, actually. When asked to guess the cost of a four-day hospital stay, respondents underestimated the cost by nearly two thirds. Their guess average: $7,762. Reality: $20,000. People were more likely to come closer to the price of a Honda Accord. (On average their guesses were within $300.)

…Read the rest of this entry »

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Weekly Insurance Blog Wrap-Up

October 20th, 2006 by Megan Mahan

Links to this week’s video:

Insurance, Climate Change, and Other Light Topics
Earthquake Insurance: Few Have It, Many Need It
Long-Term Care Insurance: Down to the Nitty Gritty
Fast Food and the Rising Cost of Healthcare

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Fast Food: Threat or Menace?

October 19th, 2006 by Jeb Foster

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A couple of weeks ago we talked about why the cost of health care is so high. The big reason, according to New York Times business writer David Leonhardt, is that we’re getting more health care than ever before. And that health care is of exceptional quality–and quality ain’t free, folks.

Makes sense. But that can’t be the whole story. Because people in other industrialized countries have longer life expectancies and pay less for health care. According to the CIA World Fact Book, 47 countries rank higher than the U.S. in terms of life expectancy. What gives? Shouldn’t the longest life spans belong to the people who spend the most on health care? Why should folks in Andorra live longer than we do when we’re the ones spending the big bucks?

…Read the rest of this entry »

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Long-Term Care Insurance

October 19th, 2006 by Maribeth Neelis

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If you ask me, long-term care insurance is about as cringeworthy a topic as life insurance. Who wants to think about aging and regressing to a state where you need to be cared for 24/7? However, it’s worth a moment of discomfort as you muse what life might look like for you and your family if you don’t consider LTC insurance.

On average, a year of full-time care costs almost $60,000. After discovering you have no LTC insurance, your son or daughter decides to move you into his or her basement. You haven’t lost all your faculties, so you are acutely aware of the musky odor and odd noises. Because your family doesn’t want to leave you home alone and can’t afford to hire someone, they enlist the help of the garish, outspoken neighbor, Babs, who loves having someone to talk to while she watches her soaps. Your body may be failing you a bit, but your mind is not and you can’t bare her incessant chatter and patronizing nature. Each night as you fall asleep on your damp, basement cot, you dream about how your life might be different if you had purchased LTC insurance instead of that mid-life crisis Corvette.

A sort of hybrid between life and health insurance, LTC insurance enables your family to pay for any care you need. Your LTC insurance might cover your rent at an assisted living facility, the fee for adult day care or the expenses if a family member becomes your full-time caregiver. It will guarantee you a comfortable environment free of obnoxious neighbors and clammy basements.

Consider a few statistics courtesy of the Insurance Information Institute.

–11 percent of the individuals who applied for LTC insurance in their 50s, 19 percent in their 60s and 43 percent in their 70s were rejected.

–In 1999, about 160,000 of the people living in nursing homes were under age 65 (almost 10 percent of the total). Of those receiving home health care services, roughly 400,000 were under 65 (about 30 percent of the total).

–According to a report from the Kaiser Foundation, over five million people ages 18-64 need some type of long-term care in their lifetime.

If you expect to qualify for Medicaid by the time you’re 65, you should not purchase LTC insurance. The government program will subsidize the cost of care. Conversely, if your net worth is above 1.5 million, excluding your home, you can safely forego the LTC insurance as well.

But since the middle class makes up nearly 50 percent of the population, chances are you fall in between those two extremes, and might want to consider LTC insurance so your children or siblings aren’t saddled with the financial burden.

Links:

http://www.longtermcarelink.net/

http://www.medicare.gov/LongTermCare/Static/Home.asp

http://www.opm.gov/insure/ltc/

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Earthquake Insurance: Few Have It, Many Need It

October 17th, 2006 by Megan Mahan

It seems as if everyone’s been so caught up in hurricane madness over the last year, that we’ve sort of forgotten about another serious catastrophe: earthquakes.

That is, until last week when a 6.6 magnitude earthquake rattled Hawaii.

Robert Hartwig, the executive vice president and chief economist for the Insurance Information Institute (I.I.I.) said last week’s quake was “a reminder that disaster can strike anywhere at any time.”

Not to scare the bajeezus out of you, but it’s true. And fortunately there’s something you can do to protect yourself from earthquake damages.

Like flood insurance, earthquake insurance can be purchased in addition to your home insurance policy. As the name suggests, it covers damages to the structure of your home–and in most cases your belongings–resulting from an earthquake. And, like flood insurance, many homeowners don’t realize that earthquake-related damage is not covered by a standard home insurance policy.

And if you’re anything like me (a properly landlocked native of Iowa, living far, far away from seismic activity), you want to learn everything you can about earthquake coverage so that you can adequately protect yourself.

Let’s embark on this adventure of earthquake insurance edumacation together, shall we? :)

…Read the rest of this entry »

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Insurance, Climate Change and Other Light Topics

October 16th, 2006 by Jeb Foster

[Disclaimer: this post could be a little depressing.]

I think climate change is a fascinating subject. I know, I know–it may seem morbid to be fascinated by something that promises to be (and perhaps already is) such a destructive force. But what intrigues me is not the potential devastation, but humankind’s response to this challenge–and on a more specific level, the insurance industry’s response.

Insurance is all about managing risk. You are managing risk when you buy a policy, and insurers are doing the same when they issue one. If the latter party thinks something (or someone) is risky, they charge more–partly because they need to have enough cash on hand when when 16-year-old Johnny totals the family station wagon or when a hurricane comes trundling down Hurricane Alley.

If you believe the science of climate change, it looks like we’re in for a bumpy ride - one that’s fraught with risks, both known and unknown.

…Read the rest of this entry »

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Weekly Insurance Blog Wrap-Up

October 13th, 2006 by Megan Mahan


Links from this week’s video:

Robot Insurance: Got Yours?

Live Longer with Electronic Stability Control (and Fish Oil)

New Car? Don’t Forget the Insurance!

Planning for the Golden Years

National Book Month: [Finance] Book Favorites from InsureMe Top Dogs

Cost of Employer-Sponsored Health Plans to Increase in 2007

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Cost of Employer-Sponsored Health Coverage Set to Rise Slightly in 2007

October 13th, 2006 by Penny Hagerman

Those of us insured through our employers can expect to pay slightly more for health coverage next year than we’re paying in 2006, according to a recent article in Reuters News.

Total employer/employee health insurance costs are expected to rise in 2007 by 6 percent, a slight climb which marks the fourth straight year of a lowered increase.

The human resources firm which conducted the survey on which this article is based predicts that employees will be picking up about 22 percent of the overall cost of health insurance next year, as compared with 20 percent this year. That amounts to an average increase of about $518 per employee over the span of the year, according to a press release on the firm’s study.

But our employers will also be paying more to help keep us insured: from an average of $7,000 to $10,000 per employee, depending on the percent contributed. That reflects an increase of at least 11 percent in employer-covered costs for nearly one in five companies.

If you’re searching for ways to counter this extra expense, you might want to consider an HSA, or Health Savings Account. This is a tax-free account you set up specifically to cover health-related expenses.

For more information:

All About HSAs
Health Savings Accounts
High Deductible Health Plans with Health Savings Accounts

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Hooray! It’s National Book Month!

October 12th, 2006 by Jeb Foster

O
n learning that October is the time to celebrate all things literary,

I figured I’d suggest an insurance-related book for readers of this blog. tall stack of books.jpg

But then I reconsidered that idea.

How many people want to read an entire book devoted to insurance? Sure, people want to know what’s what about finding the right coverage, but reading a whole book about insurance seems rather sadistic, doesn’t it? (Most of us would probably prefer to give ourselves paper cuts with our declaration pages.)

Then again, people do love to save money, even if it means putting down the latest from Danielle Steele and picking up a weighty tome on personal finance. The stacks at Barnes and Noble testify to our predilection for pinching pennies.

So I’m skipping the insurance book idea and expanding the scope to personal finance in general. Insurance is an important component to everyone’s economic well being, but what good is getting a deal on your insurance when you’re just pouring the savings into bad investments and extravagant purchases you can’t afford?

The folks here at InsureMe know a thing or two about proper money management, so I decided to ask a few of them for a list of recommended reading. Here are their suggestions:

Teach Your Children Well, Shred Your Debt, Skip the McMansion

Name: Lori Reed
InsureMe profile: Director of Marketing
Book selection: “Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not” by Robert T. Kiyosaki and Sharon L. Lechter
Bottom line: “It made so much sense to me,” says Reed. “It made me think about making money work for itself (and me) rather than just thinking I am supposed to work harder and longer.”

Name: Mike Sajdak
InsureMe profile: Chief Financial Officer
Book selection: “The Total Money Makeover” by Dave Ramsey
Bottom line: Sajdak: “It takes complex financial topics and makes them easy and enjoyable for everyone. I especially like Dave’s focus on shedding all debt.”

Name: Tim McTavish, a.k.a. “The Frugal Scotsman”
InsureMe profile: President and Chief Executive Officer
Book selection: “The Millionaire Next Door” by Thomas Stanley
Bottom line: “The book analyzes how [millionaires] live and think differently about money than the non-millionaires,” says McTavish. “Most surprising is that most millionaires don’t look like the person who’s loaded with cash. Instead, they’re probably the person next door. That guy driving the fancy car, living in the mansion, well, he’s likely as broke as you are. Millionaires live well within their means, don’t flaunt their cash, are thrifty (flying coach and using coupons), pay for higher education for their kids, and rarely if ever borrow money.”

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Planning for the Golden Years

October 11th, 2006 by Maribeth Neelis

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Gone are the days of Betty Freidan’s Feminine Mystique. Today, 61 percent of married women bring home a paycheck compared to only 23 percent in 1959. But on average, women still earn less than men, spend less time in the workforce and receive fewer retirement benefits.

Lower Total Earnings. Women earn an average of 73 cents on every dollar a man makes.

Less Time in the Workforce. It’s usually women who leave their jobs for extended periods to care for children or ailing parents.

Fewer Benefits. A Women’s Institute for a Secure Retirement (WISER) study reported women receive only 50 percent as much pension as their male counterparts.

Considering those disadvantages and that the average woman spends more of her life single than married, it reasons you should spend a little more time thinking about retirement regardless of your age.

…Read the rest of this entry »

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Buying A New Car? Don’t Forget The Insurance

October 10th, 2006 by Megan Mahan

Shopping for a new car brings many considerations. Aside from a car’s fun features, you’re probably evaluating things like size, gas mileage and horsepower. What many people forget to check on, however, is how a new car will affect insurance rates.

Yes, in addition to your own personal stats (including things like your driving record, age, sex, credit history and geographic location), your car can play a big role in how much you pay for auto insurance.

What gives?

Comprehensive and collisions costs are mostly to blame, according to this article, featured by MSN Money. Because, unfortunately, when repairs need to be made, insurance rates increase. This is especially true for higher-end cars. Generally speaking, the more your car is worth, the more it’s going to cost to repair. Insurers realize this and will take it into account when determining your premium.

In addition to repair costs, insurers look at a variety of other factors when it comes to putting a premium price tag on your vehicle.

Here are a few other rules of thumb:

…Read the rest of this entry »

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Live Longer With ESC (and Fish Oil)!

October 9th, 2006 by Jeb Foster

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The scenario: You’re buying a car and thinking about which features and add-ons you want. Forty-eight-inch rims? Chest-caving subwoofer? Mammoth spoiler? Or, that ESC thingy the sales associate is hawking but only adds a little button on the dash and won’t impress the ladies?

If the choice is between optional electronic stability control (ESC) and a fancy stereo, always choose ESC. Unless that stereo has a sensor that detects when your car is about to roll over and brakes the necessary wheel in order to help you regain control.

I don’t know about you, but any technology that could potentially save 10,000 lives annually is music to my ears.* Forget the stereo.

We’ve covered the benefits of ESC here at the Insurance Blog before. (See Penny’s original post here.) This wonder technology is not news, really. But even if it’s not a fresh story, I just wanted to wave my own pompoms in support of this life-saving gizmo. (To see how it works, click here.)

Perhaps swayed by Insurance Blog reportage (or by an Insurance Institute for Highway Safety study that said ESC could prevent nearly one-third of all fatal crashes), the National Highway Traffic Safety Administration last month established a deadline for car manufacturers to make the technology standard. By 2012, all cars will have ESC, although many of the big car manufacturers are trying to beat this deadline. Ford says it will equip its entire fleet with stability control by 2009. GM plans to do so by 2010.

This is great news for drivers and insurers. And it’s a great PR opportunity for the car maker that gets to 100 percent ESC first.

Now, if we can reduce driver distraction, get more people on the fish oil train and alert more of our seniors to the dangers of robots, we’ll have a good shot at making living a less deadly activity.

*Insurance Institute for Highway Safety

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Robot Insurance: Do You Have Yours?

October 9th, 2006 by Megan Mahan

Because you never know when robots will strike…and eat your medicine for fuel.

Thanks to our affiliate Brian M. for passing this along!

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