Personal Insurance Do's and Don'ts

Many of us don't want to think about what would happen if we suddenly lost our job, became medically disabled, or tragically left loved ones to behind suddenly to fend for themselves. Personal insurance provides a safety net for you and your family in the event of such misfortunes. Knowing what to do and what not to do when deciding on the right policy can save time and money now, and assure a hassle-free experience if the worst should happen.

Let's take a look at what personal insurance is. This type of policy comes in 4 basic categories:

Income Protection
This type of insurance provides payments to you in the event that you become disabled or are otherwise unable to work.

• Do: Be sure the policy you are purchasing will provide enough income to cover any mortgage payments and monthly obligations that are imperative for you and your family's monthly needs. 
• Do Not: Choose your plan just because it is the cheapest. Be sure the benefits are what is needed to live and cover important bills if you become unable to work.

Permanent Disability Insurance
This coverage will pay a lump sum in the event that you suffer an accident or injury that prevents you from being able to work in the future. Don't count on Social Security Disability Insurance to cover your expenses as 65% of initial SSDI claim applications were denied in 2009.

• Do: Be sure to get enough coverage to not only replace your current income, but also enough to cover future medical costs and pay any outstanding bills. Your insurance agent can recommend the plan that fits your situation the best.
• Do Not: Forget any possible expenses that are necessary for you to live, if you become permanently disabled.

Illness/Injury Insurance
This type of personal insurance provides a lump payment if you suffer a sudden major health issue such as a stroke or heart attack. This would be an option if you are ineligible for income protection insurance due to being presently unemployed.

• Do: Remember that this type of policy is not just for older or at-risk people. According to The Center for Disease Control, nearly 600,000 people die of heart disease in the United States every year. Many die because they lack the money to get adequate treatment due to unemployment.

Life Insurance
Life insurance is essential for those of us who are married, raising children, or have people depending on us financially. The coverage amounts vary from policy to policy but a lump sum payment is made to the beneficiaries you choose if you pass away.

• Do: Be sure to have a policy that pays enough to pay off all existing debts, funeral expenses, and enough left to take care of your family's needs. According to J.D. Powers and Associates, studies of widows and widowers whose husband/wife died young (between the ages of 30 and 55) shows that less than 25 percent thought their spouse had enough life insurance coverage.
• Do: Shop around and compare plans. Ask questions and understand the policy before you finalize any type of insurance coverage.

For more information on which Oklahoma City Personal Insurance policy would best benefit you, give Alexander & Strunk Insurance Professionals a call at 405-751-8356.

Can Having Bad Credit Affect Your Insurance Quote?

Having bad credit not only penalizes you from getting mobile phone contracts, obtaining a mortgage or getting a great interest rate on a car loan, but it also increases your insurance premium.  Bad credit shows lenders and suppliers that you have a habit of defaulting on payments or bad spending habits, which puts them at risk.  Because of this risk you are often penalized by having to pay higher than normal interest rates or you may be denied financing and funding altogether.  This is no different when obtaining insurance quotes.  Home Insurance, health Insurance and car insurance quotes are all affected by credit risky behavior.

How Insurance Companies Calculate Your Premium
According to CNN Money, how insurance companies calculate your premium has been a long kept secret; however,  90% of home and auto insurance carriers use a score based on your credit report as part of that secret.  It is important to note that the credit score used to determine your premium is not just your traditional score given by the three credit bureaus.  Your credit score along with other information is used to calculate what’s called an insurance credit score.  This insurance credit score determines how much you'll pay per month for your car insurance.  Good driving habits, no accidents and a low amount of claims on your policy can help improve your insurance credit score, which will lower your premium for the next term, should you decide to go with the same insurance company again.

Why Your Credit Score is Taken into Consideration
Businesses use your credit score to determine how likely you are to simply pay your bills on time.  Other companies use your credit score to determine your credit risk and how likely you are to repay monies loaned.  If you have small marks on your credit report such as defaulting on a hospital bill or having libraries fines, this may not give you " bad credit," with an insurance company; however, a credit report that contains bankruptcies, loan defaults or unpaid utility bills will negatively impact your insurance credit score.

Another form of credit which is often overlooked by consumers, but not by lenders or insurers is Chexsystems. Chexsystems is a credit bureau used by banks and other financial institutions to report bounced checks, accounts closed with negative balances, and other charges related to FDIC insured institutes. Chexsystems is referred to as a “bank's blacklist”.  If your name is on this list, you may be denied bank accounts, loans and in some cases insurance.  However, insurance companies understand the need to be insures, so they will often extend insurance albeit with the penalty of having to pay a higher than usual premium.

For more information about an Oklahoma City insurance policy, call an Alexander & Strunk agent today at 800-375-8356.

Auto Insurance For Teenage Drivers: How to Minimize It

Teenagers are excited about getting their independence when they pass their road tests. As a parent, however you may be stressed about including your kids on your auto insurance policy. Oklahoma City Insurance companies usually view teenagers as high risk drivers due to their lack of experience and perceived incompetence behind the wheel. Teenagers are often adventurous on the road; they may want to try stunts they have seen in movies or on television. Insurance companies know this, that is why your premiums will increase when your teenager starts driving. Fortunately, there are several factors you can control to minimize the raise in premiums when you add teens to your insurance policy.

Type of Vehicle

Teenagers often like customized, fast and sporty vehicles. These teens enjoy speeding which is exactly what makes them high risk drivers. Insurance companies on the other hand, hate seeing teenagers in fast vehicles. The faster the vehicle, the higher the chances of an accident. Think twice before buying a sports car or other turbo-charged vehicle since your insurance premiums will shoot up. In addition to worrying about premiums, you should ensure that your child drives a car which is even safer than yours because teens are more likely to get into accidents due to their lack of experience and willingness to take risks.

Driving History

Insurance companies favor drivers with clean driving records. If your teenager causes any type of accident, your insurance premiums will rise. Your premiums will also go up if your child gets speeding tickets because breaking driving laws can increase the risk of accident. Teens who have few to no driving related incidents on their records will be seen as a lower risk, so you'll pay less if your kids keep their driving records clean.

Enrollment in a Teen Driving School

All teenagers should take driver's education in order to lower their risk level. Insurance companies will offer lower premiums to kids who are in these types of programs. The grades your kids get in these classes can also significantly impact the premiums. Insurance companies often award a 25% premium discount to teenagers who score a mean grade of ‘B’ or more in driver's education courses.

Driving Frequency

Your premiums will be higher if your teen drives more frequently because every time an adolescent gets behind the wheel, it's considered a higher risk than if an adult was driving. Thus,  if your child is listed as an occasional driver, your premiums will be low compared to if he or she is listed as a permanent driver. If possible, limit your child's use of the car to occasional drives in order to keep premiums low. If you want your child to be able to drive frequently, take extra safety precautions to minimize the risk to your teen and to your vehicle. You might also want to consider getting separate insurance for your teen driver to save money on your premiums.

There are lots of factors to consider when adding teenagers to auto policies. If you are thinking about getting a vehicle for your teenage driver or adding your child to your policy, call an agent at Strunk Insurance today at 800-375-8356 for a free quote.

Insurance A Brief History

The insurance industry is one that affects nearly every aspect of people’s day-to-day lives. People can have insurance on their vehicles, homes, businesses, properties and even lives. The companies that provide these policies even eliminate risks in some cases, such as is the case when they demand additional safety measures on construction sites or offer incentives for safe drivers. The insurance industry, however, did not just appear overnight. It has had a long and storied past.

Insurance is about distributing risk. Merchants would distribute their supplies, wares and other property across multiple ships when traveling across treacherous rivers. This would reduce the risk of loss if any single vessel happened to capsize.  

Insurance became far more sophisticated in Europe’s post-Renaissance period than it was during its ancient roots.  The current model used by insurance companies throughout the world can be traced to 1680, but it continued to develop in the United States over the years, and at one point before the Civil War, the morally deficient practice of allowing slave owners to insure their slaves became somewhat popular. The 19th century also saw some insurance companies, like New York Life Insurance and Trust Company, expand from insuring just local citizens to the people in the entire region around them. This laid the groundwork for modern national insurance companies.

The Social Security Act of 1935 was the first nationally mandated form of insurance in the United States. The passage of this legislation gave rise to the concept in America that insurance was a valid and even ideal way for people to achieve personal economic security. This paved the way to getting insurance for the millions of people in America who have it. Once the federal government accepted insurance as a positive thing, the rest of the country soon followed.

No one can argue that insurance is a benefit for individuals throughout the world, but people didn’t always have this safety net. We live in a world where it’s just accepted that anyone with financial resources can secure insurance if they wish to, so it’s hard to imagine times when this choice didn’t exist. Thanks to ancient civilizations, however, the constant evolution of insurance continued throughout many millennia to lead to the system that we have in place today.  

People have known for thousands of years that insurance policies are a knowledgeable investment. Take their advice and contact an agent at Strunk Insurance for a free Oklahoma City insurance quote today.

Determining the Importance of Income Protection Insurance

Almost everyone recognizes the importance of protecting homes and cars with quality insurance coverage, but what about protecting the most important asset? Homes are certainly valuable assets, and cars are too, but what income? The ability to earn an income is a valuable asset.

For instance, a 35 year old currently earning around $50,000 a year would easily lose over $2 million in potential earnings if the ability to work suddenly ended. Of course, this figure doesn’t account for regular pay increases or promotions that could easily increase this figure exponentially. For most people, income is the most valuable asset they have.

Every day, workers become disabled or ill and lose their ability earn a living. Major illnesses and accidents can occur without warning, leaving workers without the means to make any money. Of course, major incidents aren’t the only issue workers must worry about; workers can lose out on income for just a few months or a year, which can lead to significant turmoil.

Protecting a Worker’s Most Valuable Asset

It’s important to insure homes and cars, but it’s also important to insure income too. An income protection policy can replace as much as 75% of a worker’s income if disaster or illness strikes. There is usually a waiting period of approximately 30 days before becoming eligible to draw, but it also depends on the type of policy.

Income protection insurance provides the necessary funds for workers to continue paying for mortgage, rent, groceries, and more. Without insurance or another form of income, staying afloat can be almost impossible.

What About Disability Pensions & Sick Leave?

Sick leave is designed to cover short term absences. Most workers only have a few weeks of sick leave available. In extreme cases, it’s unlikely that a worker would have accrued enough sick leave to cover the rest of their working lives.

Some workers believe that disability pensions will meet their needs, but most pensions won’t cover the needs and expenses of most workers. If a worker has a mortgage to pay and a family to support, the income won’t go very far. Additionally, workers compensation comprises a safety net for people who are injured at work, but it doesn’t cover illnesses or injuries that occur off the job.

Why Income Protection is Vital

Workers who suffer an illness or injury leaving them unable to work for more than a few days can suffer greatly. In fact, misfortunes such as these can devastate a family. Financial problems can lead to other life issues and difficulties. Protecting family from needless suffering is one of the reasons why income protection insurance is necessary for most workers. Workers who have the right income protection insurance in place can ensure that income remains steady and that injury and illness don’t negatively impact families more than it already has. Contact an agent at Strunk Insurance today for all things related to Oklahoma City Insurance.

The Difference between Negligent and Intentional Acts

Liability insurance coverage is designed to protect policyholders from the effect of their negligence but generally offer no protection when a policyholder intentionally causes damage to another. This disparity makes it important that you understand the difference between negligence and intentional harm.

What Is Negligence

When an individual causes harm to another because she did not act with reasonable care, it’s considered negligence. When an individual is negligent, he can be directly responsible for causing harm or damage to another person but it is clear that the damage is not purposeful; it is due to either an oversight, ignorance of a situation, or poor decisions.

What Is an Intentional Act?

Intentional acts that cause harm or damage are those that the perpetrator purposefully creates with the goal of causing damage to another. An intentional act does not have to be a focused attack on a specific individual; in some situations, just knowing about a potential source of danger and deciding to do nothing about it can be perceived as intentional.

Negligence, Intentional Acts and Insurance

Insurance is not generally designed to protect individuals from their preplanned incidents. Instead, insurance is designed to protect against accidental and unexpected damages. Even life insurance, a policy that pays a benefit out after the death of an insured, has some unknowns. Because while every individual knows that eventually he will die, life insurance policies will generally not be issued if you know that your death is imminent due to terminal illness.

Insurance policies do not give policyholders permission to act recklessly with no consequences. It is there to protect the insured from the financial fallout of accidents, unexpected events, and potentially negligent actions. If you have questions about how negligence and intentional activities can affect your insurance policies and payment of benefits, give us a call at Strunk Insurance today. We can discuss the details of your Oklahoma City Insurance policies and help you better understand what may or may not be covered within them.

Is A High Deductible Plan Right For You?

When you have a high deductible health insurance policy, you’re essentially agreeing to take on a significant portion of the initial medical expenses that you’ll encounter each year. While this type of plan is not right for everyone, it can be a good choice for individuals who:

• Are young and healthy. The younger and healthier you are, the less likely it is that you’ll need regular medical care. And while being a healthy doesn't preclude your risk of having an accident that results in injury, the overall savings you'll experience on your monthly premiums can make facing this risk worth it. In fact, you can take the money you save on premiums and put at least part of it into a health savings account (assuming that you meet the qualifications) and then use those funds to pay your deductible should you have an accident. Since those funds rollover from year-to-year they will still be there should you need them to pay for medical expenses later on in life or for retirement.
• Need a tax deduction. When you have a high deductible health insurance policy with a deductible that meets IRS requirements, you can open a health savings account that allows for a large annual contribution which is tax-deductible. The limits for the contributions change from year to year but in 2012 they are $3,100 for a single-person account and $6,250 for a family account. There is an additional $1,000 catch-up contribution allowed for individuals over age 55.
• It's the only way you can afford health insurance. High deductible health insurance plans have an additional benefit that many consumers don't realize. When you have a high deductible plan, let's say with a deductible of $5,000, you’re expected to pay that first $5,000 worth of medical expenses but you are not doing so at the retail rate charged to consumers who don't have insurance. Instead, the insurance company works with your medical service providers to control the overall cost of treatments. In addition, by giving a defined deductible, they control the overall amount you’ll be on the hook for.

To learn more about the different types of Oklahoma City insurance policies and which might work better for you, give us a call at Alexander & Strunk Insurance today.