Posts Tagged ‘insurance company’

Term Life Insurance Glossary

Friday, May 21st, 2010

Accidental Death Benefit:

An extra death benefit amount that is paid out in addition to the face amount of the policy if the insured dies by accidental means. It cost extra to get this benefit, and usually cannot exceed $250,000 to $300,000, and cannot exceed more than the face amount of the policy.
Accelerated Death Benefit Option:

Also known as “living benefits.” This rider allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care or confinement to a nursing home. Availability and specifics of these riders vary by carrier and state.


Most insurance companies calculate age by using the age you are nearest to. Example: Insured is 45 and it is January, and the insured’s birthday is in March. If the insurance company was calculating age nearest, the insured would be considered age 46 for the purpose of calculating rates.


The transfer of the ownership rights of a Life Insurance policy from one person to another.

Aviation Hazard:

The extra hazard of death or injury resulting from participation in aeronautics. It usually does not include fare-paying passengers in licensed commercial aircraft. This generally will require paying extra premium or the waiving of certain benefits of coverage.


A procedure for making the effective date of a policy earlier than the application or issue date. Backdating is often used to make the age at issue lower than it actually was in order to get lower premium. State laws often limit to six months the time to which policies can be backdated.


The person designated to receive the death benefit when the insured dies.

Business Insurance:

Policies written for business purposes, such as key employee, buy-sell, business loan protection, etc.

Buy-Sell Agreement:

An agreement among owners in a business which states the under certain conditions, i.e., disability or death, the person leaving the business or in case of death, his heirs are legally obligated to sell their interest to the remaining owners, and the remaining owners are legally obligated to buy at a price fixed in the Buy-Sell agreement. The funding vehicles are either disability or life insurance or both.

Children’s Term Insurance Rider:

Provides term insurance to the insured’s children. It is a flat premium for all his children and the benefit usually is not less than $1,000 or more than $10,000.

Collateral Assignment:Focus

Assign all or part of a life insurance policy as security for a loan. If the insured dies the creditor would receive only the amount due on the loan.

Conditional Receipt:

This is the more exact terminology for what is often called a receipt. It provides that if premium accompanies an application, the coverage will be in force from the date of application, or medical examination, if any, whichever is later, provided the insurer would have issued the coverage at the rate applied on the basis of the facts revealed on the application, medical examination and other usual sources of underwriting information. This coverage usually has a limit until the policy is delivered and all delivery requirements are met. A life and health insurance policy without a conditional receipt is not effective or available until it is delivered to the insured and the premium is paid and all other conditions are met.

Contestable Clause:

A provision in an insurance policy setting forth the conditions under which or the period of time (usually 2-4 years) during which the insurer may contest or void the policy. After that time has lapsed, normally two years, the policy cannot be contested. Example: Material misrepresentation in the application. The suicide exclusion on life policies also may apply during the same period.

Contingent Beneficiary:

A person or persons named to receive policy benefits if the primary beneficiary is deceased at the time the benefits become payable.

Convertible (conversion):

A policy that may be changed to another form by contractual provision and without evidence of insurability. Most term policies are convertible into permanent insurance.

Credit Insurance:

Insurance on a debtor in favor of a creditor to pay off the balance due on a loan in the event of the death of the debtor.

Cross Purchase:

A form of business life insurance in which each party purchases life insurance on each other.

Decreasing Term:

A form of life insurance that provides a death benefit which declines throughout the term of the contract, reaching zero at the end of the term. Almost never sold any more because level term insurance is so much less expensive.


The actual placing of a life insurance policy in the hands of an insured.

Double Indemnity:

Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances.

Entity Agreement:

A buy-sell agreement in which the company agrees to purchase the interest of a deceased or disabled partner.

Evidence of Insurability:

The medical and other information needed for the underwriting of an insurance policy.


The medical examination of an applicant for Life Insurance.


A physician, nurse, or para-med appointed by the medical director of a life insurance company to examine applicants.


The termination of a term life insurance policy at the end of its period of coverage.


The first page of a life insurance policy.

Face Amount:

The amount of insurance provided by the terms of an insurance contract, usually found on the face of the policy. In a life insurance policy, the death benefit.

Fixed Benefit:

A benefit, the dollar amount of which does not vary.

Free Look:

A period of time(usually 10, 20, or 30 days, depending on the state) during which a policyholder may examine a newly issued individual life insurance policy, and return it in exchange for a full refund of premium if not satisfied for any reason.


Acceptability to the insurer of an application for insurance.

Insurable Interest:

You have an insurable interest in the life of the insured if upon the death of the insured you would suffer financial loss.

Insurance Policy:

The printed form which serves as the contract between an insurer and an insured.


The party, who is being insured. In life insurance, it is the person because of his or her death the insurance company would pay out a death benefit to a designated beneficiary.


The company that pays out the death benefits if the insured dies.

Irrevocable Beneficiary:

A beneficiary that cannot be changed without his or her consent.

Key Person (Key Man) Insurance:

Insurance on the life of a key employee whose death would cause the employer financial loss. The policy is owned and payable to the employer.

Lapsed Policy:

An Insurance policy which has been allowed to expire because of nonpayment of premiums. In a cash value life insurance policy such as Whole Life or Universal Life the policy could expire because the cash surrender value reached were insufficient to cover cost of insurance payments are being made to replenish it.

Level Term Insurance:

A type of term policy where the face value remains the same from the effective date until the expiration date, it would also mean a period of time the premiums would remain level. For example, the 5, 10, 15, 20, 25 & 30. However, after the level premium period most policies turn into Annual Renewable Term where the premiums increase annually.

Life Expectancy:

The average number of years remaining for a person of a given age to live as shown on the mortality or annuity table used as a reference.

Life Insurance:

An agreement that promises the payment of a stated amount of monetary benefits upon the death of the insured.

Medical Information Bureau (MIB):

A data service that stores coded information on the health histories of persons who have applied for insurance from subscribing companies in the past. Most Life insurers subscribe to this bureau to get more complete underwriting information.

Mortality Charge:

The charge for the element of pure insurance protection in a life insurance policy.

Mortality Cost:

The first factor considered in life insurance premium rates. Insurers have an idea of the probability that any person will die at any particular age; this is the information shown on a mortality table.

Mortality Rate:

The number of deaths in a group of people, usually expressed as deaths per thousand.

Mortality Table:

A table showing the incidence of death at specified ages.

Mortgage Insurance:

A life policy covering a mortgagor from which the benefits are intended to pay off the balance due on a mortgage upon the death of the insured.

Nonmedical (Non-Med):

A contract of life insurance underwritten on the basis of an insured’s statement of his health with no medical examination required.

Not Taken:

Policies applied for and issued but rejected by the proposed owner and not paid for.

Occupational Hazard:

A condition in an occupation that increases the peril of accident, sickness, or death. It usually will mean higher premiums.


All rights, benefits and privileges under life insurance policies are controlled by their owners. Policy owners may or may not be the insured but need to have an insurable interest in the life of the insured at the time of application. Ownership may be assigned or transferred by written request of current owner.

Permanent Life Insurance:

A term loosely applied to Life Insurance policy forms other than Group and Term, usually Cash Value Life Insurance, such as Whole Life Insurance or Universal Life.

Policy Fee:

There are two calculations to determine the premium for term insurance. The Policy Fee which is a flat fee added to each policy and the rate per thousand times the number of thousands of death benefit.

Preauthorized Check Plan:

A premium-paying arrangement by which the policy owner authorizes the insurer to draft money from his or her bank account for the payments. This is usually done on a monthly basis.

Preferred Risk:

Any risk considered to be better than the standard risk on which the premium rate was calculated. Some companies are now offering degrees of preferred to reduce the premium rates even more. An extremely healthy person can now get extraordinary low rates.


The price of insurance for a specified risk for a specified period of time.

Primary Beneficiary:

The beneficiary named as first in line to receive proceeds or benefits from a policy when they become due.


Statements contained in an insurance policy which explain the benefits, conditions and other features of the insurance contract.


Coverage’s issued at a higher rate than standard because of some health condition, or impairment of the insured.

Renewable Term:

Term insurance that may be renewed for another term without evidence of insurability. Level term usually turns into renewable term with increasing premiums after the level premium period.


A new policy written to take the place of one currently in force.

Revocable Beneficiary:

The beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary. Most policies are written with a revocable beneficiary.


An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.

Standard Risk:

A risk that is on a par with those on which the rate has been based in the areas of health, physical condition, and lifestyle. An average risk, not subject to additional charge / rate or restrictions because of health. At one time the best class of risk was the standard class. As the insurers improved their underwriting skills, they were able to define those in very good health and offer them better rates with the new preferred class. Now some insurers have even developed different levels of preferred.

Stock Purchase Agreement:

A formal buy-sell agreement whereby each stockholder is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obligated to sell. This agreement is usually funded with life insurance.

Stock Redemption Agreement:

A formal buy-sell agreement whereby the corporation is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obliged to sell. This agreement is usually funded with life insurance.

Term Insurance:

It is the type of life insurance that provides protection for a specified period of time. It usually has no real cash value build up.


A technician trained in evaluating risks and determining rates and coverage. When an application is submitted to the insurer, it is the underwriter who gathers all the necessary information to determine whether a person is a preferred risk, a standard risk, or rated.


It is what the underwriter does to determine the class of risk an applicant will be placed in.

Universal Life:

An interest sensitive life insurance policy that builds cash values. The premium payer has some flexibility as to amount and frequency of premium payments. It is a matter of considering 3 variables. The assumed interest rate, the cash surrender value and the premium payment plan. The policy is interest sensitive, and if interest rates change from the assumed interest, it will effect the other two variables. If you have a Universal Life Policy, you should have it evaluated to see if you need to increase premiums based on current interest rates. A fourth variable that has not been a factor but could be in the future, and the owner should be aware of, is the cost of insurance variable. Universal Life policies are usually structured assuming current cost of insurance rates. The insurance companies reserve the right to change those rates.

Waiver of Premium:

A provision of a life insurance policy which continues the coverage without further premium payments if the insured becomes totally disabled.

Whole Life Insurance:

Life insurance that is kept in force for a person’s whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed as long as the scheduled premiums are maintained. The variable in a whole life policy is the dividend which could vary depending on how well the insurance company is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policyholder in the form of dividends. Policyholders can use the cash from dividends in many ways. The three main uses are: It may be used to lower premiums, it may be used to purchase more insurance or it may be used to pay for term insurance.

Term Life

Friday, May 21st, 2010

Term Life Insurance

Term Insurance provides protection for a specific period of time. The benefit is paid if your death occurs during the term. Level term insurance products are the most popular plans due to the low premium. The level term can be 5 years to 30 years. The premium and the death benefit will stay level during the term of the policy.

The main advantage of term insurance is the lower premiums at a younger age. The disadvantages are the premium increases as you get older and the original term expires, and the policy does not offer any cash value or paid-up insurance.

Permanent Life

Friday, May 21st, 2010

Permanent Life

Permanent Life insurance provides lifelong protection. These policies are designed and priced for you to keep for “the long haul”. Most permanent policies have a feature known as “cash value” or “cash surrender value”. This cash value can be borrowed or used to make premium payments. Keep in mind that the cash value is not the same as the policy face amount. There are many different types of permanent life insurance. The major ones are described below:

 Whole Life or Ordinary Life

This is the most common type of permanent life insurance. It is life insurance that is kept in force for your lifetime as long as the premiums are paid. All whole life policies build up cash value. Whole life policies also generate dividends that can be used to lower premiums, purchase more insurance or buy term insurance. Universal or Adjustable Life This product provides more flexibility. After the initial payment, premiums can be paid at any time in virtually any amount. The death benefit can be easily increased or decreased.

Variable Life

This type of permanent policy provides death benefits and cash values that vary based on the performance of a portfolio of investments selected by the insured. The cash value is not guaranteed. The insured assumes the risk of the value of the benefits based on the performance of the designated investments. The advantages of permanent life insurance are the guaranteed protection for your lifetime or a specific age, premium costs are fixed, and cash values are accumulated. The disadvantage is the cost of the premium in order to buy enough protection.

Introduction to Health Insurance

Friday, May 21st, 2010

Why Do You Need Health Insurance?

Today, health care costs are high, and getting higher. Who will pay your bills if you have a serious accident or a major illness? You buy health insurance for the same reason you buy other kinds of insurance, to protect yourself financially. With health insurance, you protect yourself and your family in case you need medical care that could be very expensive. You can’t predict what your medical bills will be. In a good year, your costs may be low. But if you become ill, your bills could be very high. If you have insurance, many of your costs are covered by a third-party payer, not by you. A third-party payer can be an insurance company or, in some cases, it can be your employer.


Health care in America is changing rapidly. Twenty-five years ago, most people in the United States had indemnity insurance coverage. A person with indemnity insurance could go to any doctor, hospital, or other provider (which would bill for each service given), and the insurance and the patient would each pay part of the bill.

But today, more than half of all Americans who have health insurance are enrolled in some kind of managed care plan, an organized way of both providing services and paying for them. Different types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), and point-of-service (POS) plans.

You’ve probably heard these terms before. But what do they mean, and what are the differences between them? And what do these differences mean to you?

Types of Insurance

Fee-for-Service (Indemnity Plan)

This is the traditional kind of health care policy. Insurance companies pay fees for the services provided to the insured people covered by the policy. This type of health insurance offers the most choices of doctors and hospitals. You can choose any doctor you wish and change doctors any time. You can go to any hospital in any part of the country.

With fee-for-service, the insurer only pays for part of your doctor and hospital bills. This is what you pay:

  • A monthly fee, called a premium.
  • A certain amount of money each year, known as the deductible, before the insurance payments begin. In a typical plan, the deductible might be $250 for each person in your family, with a family deductible of $500 when at least two people in the family have reached the individual deductible. The deductible requirement applies each year of the policy. Also, not all health expenses you have count toward your deductible. Only those covered by the policy do. You need to check the insurance policy to find out which ones are covered.
  • After you have paid your deductible amount for the year, you share the bill with the insurance company. For example, you might pay 20 percent while the insurer pays 80 percent. Your portion is called coinsurance.

To receive payment for fee-for-service claims, you may have to fill out forms and send them to your insurer. Sometimes your doctor’s office will do this for you. You also need to keep receipts for drugs and other medical costs. You are responsible for keeping track of your medical expenses.

There are limits as to how much an insurance company will pay for your claim if both you and your spouse file for it under two different group insurance plans. A coordination of benefit clause usually limits benefits under two plans to no more than 100 percent of the claim.

Most fee-for-service plans have a “cap,” the most you will have to pay for medical bills in any one year. You reach the cap when your out-of-pocket expenses (for your deductible and your coinsurance) total a certain amount. It may be as low as $1,000 or as high as $5,000. Then the insurance company pays the full amount in excess of the cap for the items your policy says it will cover. The cap does not include what you pay for your monthly premium.

Some services are limited or not covered at all. You need to check on preventive health care coverage such as immunizations and well-child care.

There are two kinds of fee-for-service coverage: basic and major medical. Basic protection pays toward the costs of a hospital room and care while you are in the hospital. It covers some hospital services and supplies, such as x-rays and prescribed medicine. Basic coverage also pays toward the cost of surgery, whether it is performed in or out of the hospital, and for some doctor visits. Major medical insurance takes over where your basic coverage leaves off. It covers the cost of long, high-cost illnesses or injuries.

Some policies combine basic and major medical coverage into one plan. This is sometimes called a “comprehensive plan.” Check your policy to make sure you have both kinds of protection.

What Is a “Customary” Fee?

Most insurance plans will pay only what they call a reasonable and customary fee for a particular service. If your doctor charges $1,000 for a hernia repair while most doctors in your area charge only $600, you will be billed for the $400 difference. This is in addition to the deductible and coinsurance you would be expected to pay. To avoid this additional cost, ask your doctor to accept your insurance company’s payment as full payment. Or shop around to find a doctor who will. Otherwise you will have to pay the rest yourself.

Questions to Ask About Fee-for-Service (Indemnity) Insurance

  • How much is the monthly premium? What will your total cost be each year? There are individual rates and family rates.
  • What does the policy cover? Does it cover prescription drugs, out-of-hospital care, or home care? Are there limits on the amount or the number of days the company will pay for these services? The best plans cover a broad range of services.
  • Are you currently being treated for a medical condition that may not be covered under your new plan? Are there limitations or a waiting period involved in the coverage?
  • What is the deductible? Often, you can lower your monthly health insurance premium by buying a policy with a higher yearly deductible amount.
  • What is the coinsurance rate? What percent of your bills for allowable services will you have to pay?
  • What is the maximum you would pay out of pocket per year? How much would it cost you directly before the insurance company would pay everything else?
  • Is there a lifetime maximum cap the insurer will pay? The cap is an amount after which the insurance company won’t pay anymore. This is important to know if you or someone in your family has an illness that requires expensive treatments.

Health Maintenance Organizations (HMOs)

Health maintenance organizations are prepaid health plans. As an HMO member, you pay a monthly premium. In exchange, the HMO provides comprehensive care for you and your family, including doctors’ visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy.

The HMO arranges for this care either directly in its own group practice and/or through doctors and other health care professionals under contract. Usually, your choices of doctors and hospitals are limited to those that have agreements with the HMO to provide care. However, exceptions are made in emergencies or when medically necessary.

There may be a small co-payment for each office visit, such as $5 for a doctor’s visit or $25 for hospital emergency room treatment. Your total medical costs will likely be lower and more predictable in an HMO than with fee-for-service insurance.

Because HMOs receive a fixed fee for your covered medical care, it is in their interest to make sure you get basic health care for problems before they become serious. HMOs typically provide preventive care, such as office visits, immunizations, well-baby checkups, mammograms, and physicals. The range of services covered vary in HMOs, so it is important to compare available plans. Some services, such as outpatient mental health care, often are provided only on a limited basis.

Many people like HMOs because they do not require claim forms for office visits or hospital stays. Instead, members present a card, like a credit card, at the doctor’s office or hospital. However, in an HMO you may have to wait longer for an appointment than you would with a fee-for-service plan.

In some HMOs, doctors are salaried and they all have offices in an HMO building at one or more locations in your community as part of a prepaid group practice. In others, independent groups of doctors contract with the HMO to take care of patients. These are called individual practice associations (IPAs) and they are made up of private physicians in private offices who agree to care for HMO members. You select a doctor from a list of participating physicians that make up the IPA network. If you are thinking of switching into an IPA-type of HMO, ask your doctor if he or she participates in the plan.

In almost all HMOs, you either are assigned or you choose one doctor to serve as your primary care doctor. This doctor monitors your health and provides most of your medical care, referring you to specialists and other health care professionals as needed. You usually cannot see a specialist without a referral from your primary care doctor who is expected to manage the care you receive. This is one way that HMOs can limit your choice.

Before choosing an HMO, it is a good idea to talk to people you know who are enrolled in it. Ask them how they like the services and care given.

Questions to Ask About an HMO

  • Are there many doctors to choose from? Do you select from a list of contract physicians or from the available staff of a group practice? Which doctors are accepting new patients? How hard is it to change doctors if you decide you want someone else? How are referrals to specialists handled?
  • Is it easy to get appointments? How far in advance must routine visits be scheduled? What arrangements does the HMO have for handling emergency care?
  • Does the HMO offer the services I want? What preventive services are provided? Are there limits on medical tests, surgery, mental health care, home care, or other support offered? What if you need a special service not provided by the HMO?
  • What is the service area of the HMO? Where are the facilities located in your community that serve HMO members? How convenient to your home and workplace are the doctors, hospitals, and emergency care centers that make up the HMO network? What happens if you or a family member are out of town and need medical treatment?
  • What will the HMO plan cost? What is the yearly total for monthly fees? In addition, are there copayments for office visits, emergency care, prescribed drugs, or other services? How much?

Preferred Provider Organizations (PPOs)

The preferred provider organization is a combination of traditional fee-for-service and an HMO. Like an HMO, there are a limited number of doctors and hospitals to choose from. When you use those providers (sometimes called “preferred” providers, other times called “network” providers), most of your medical bills are covered.

When you go to doctors in the PPO, you present a card and do not have to fill out forms. Usually there is a small copayment for each visit. For some services, you may have to pay a deductible and coinsurance.

As with an HMO, a PPO requires that you choose a primary care doctor to monitor your health care. Most PPOs cover preventive care. This usually includes visits to the doctor, well-baby care, immunizations, and mammograms.

In a PPO, you can use doctors who are not part of the plan and still receive some coverage. At these times, you will pay a larger portion of the bill yourself (and also fill out the claims forms). Some people like this option because even if their doctor is not a part of the network, it means they don’t have to change doctors to join a PPO.

Questions to Ask About a PPO

  • Are there many doctors to choose from? Who are the doctors in the PPO network? Where are they located? Which ones are accepting new patients? How are referrals to specialists handled?
  • What hospitals are available through the PPO? Where is the nearest hospital in the PPO network? What arrangements does the PPO have for handling emergency care?
  • What services are covered? What preventive services are offered? Are there limits on medical tests, out-of-hospital care, mental health care, prescription drugs, or other services that are important to you?
  • What will the PPO plan cost? How much is the premium? Is there a per-visit cost for seeing PPO doctors or other types of co-payments for services? What is the difference in cost between using doctors in the PPO network and those outside it? What is the deductible and coinsurance rate for care outside of the PPO? Is there a limit to the maximum you would pay out of pocket?

Point-of-Service (POS) Plan

Many HMOs offer plan members the option to self direct care, as one would under an indemnity or PPO plan, rather than get referrals from primary care physicians. An HMO with this opt-out provision is known as a point-of-service (POS) plan. How the plan functions (i.e., like an HMO or like an indemnity plan) depends on whether individual plan members use their primary care physician or self direct their care at the “point of service.”

To illustrate this point, this is how these plans typically work. When medical care is needed, the individual plan member essentially has up to two or three choices, depending on the particular health plan. The plan member can choose to go through his or her primary care physician, in which case services will be covered under HMO guidelines (i.e., usually a co-payment will be required). Alternatively, the plan member can access care through a PPO provider and the services will be covered under in-network PPO rules (i.e., usually a co-payment and coinsurance will be required). Lastly, if the plan member chooses to obtain services from a provider outside of the HMO and PPO networks, the services will be reimbursed according to out-of-network rules (i.e., usually a co-payment and higher coinsurance charge will be required). Because people who belong to POS plans are responsible for deciding how to access care within the various options, it is important that they understand the financial implications of these choices.

Where Do People Get Health Insurance Coverage?

Group Insurance

Most Americans get health insurance through their jobs or are covered because a family member has insurance at work. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost.

Some employers offer only one health insurance plan. Some offer a choice of plans: a fee-for-service plan, a health maintenance organization (HMO), or a preferred provider organization (PPO), for example. Employers with 25 or more workers are required by Federal law to offer employees the chance to enroll in an HMO.

What happens if you or your family member leaves the job? You will lose your employer- supported group coverage. It may be possible to keep the same policy, but you will have to pay for it yourself. This will certainly cost you more than group coverage for the same, or less, protection.

A Federal law makes it possible for most people to continue their group health coverage for a period of time. Called COBRA (for the Consolidated Omnibus Budget Reconciliation Act of 1985), the law requires that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months. You will be charged a higher premium than when you were working.

You also will be able to get insurance under COBRA if your spouse was covered but now you are widowed or divorced. If you were covered under your parents’ group plan while you were in school, you also can continue in the plan for up to 18 months under COBRA until you find a job that offers you your own health insurance.

Not all employers offer health insurance. You might find this to be the case with your job, especially if you work for a small business or work part-time. If your employer does not offer health insurance, you might be able to get group insurance through membership in a labor union, professional association, club, or other organization. Many organizations offer health insurance plans to members.

Individual Insurance

If your employer does not offer group insurance, or if the insurance offered is very limited, you can buy an individual policy. You can get fee-for-service, HMO, or PPO protection. But you should compare your options and shop carefully because coverage and costs vary from company to company. Individual plans may not offer benefits as broad as those in group plans.

If you get a non-cancelable policy (also called a guaranteed renewable policy), then you will receive individual insurance under that policy as long as you keep paying the monthly premium. The insurance company can raise the cost, but cannot cancel your coverage. Many companies now offer a conditionally renewable policy. This means that the insurance company can cancel all policies like yours, not just yours. This protects you from being singled out. But it doesn’t protect you from losing coverage.

Before you buy any health insurance policy, make sure you know what it will pay for…and what it won’t. To find out about individual health insurance plans, you can call insurance companies, HMOs, and PPOs in your community, or speak to your insurance agent.

Tips when shopping for individual insurance:

  • Shop carefully. Policies differ widely in coverage and cost. Contact different insurance companies, or ask your agent to show you policies from several insurers so you can compare them.
  • Make sure the policy protects you from large medical costs.
  • Read and understand the policy. Make sure it provides the kind of coverage that’s right for you. You don’t want unpleasant surprises when you’re sick or in the hospital.
  • Check to see that the policy states: the date that the policy will begin paying (some have a waiting period before coverage begins), and what is covered or excluded from coverage.
  • Make sure there is a “free look” clause. Most companies give you at least 10 days to look over your policy after you receive it. If you decide it is not for you, you can return it and have your premium refunded.
  • Beware of single disease insurance policies. There are some polices that offer protection for only one disease, such as cancer. If you already have health insurance, your regular plan probably already provides all the coverage you need. Check to see what protection you have before buying any more insurance.


Medicare is the Federal health insurance program for the following:

People age 65 or older

People under age 65 with certain disabilities

People of any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

The best source of information on the Medicare program is the Medicare Handbook – Medicare & You. This booklet explains how the Medicare program works and what your benefits are. To order a free copy, go to: You also can contact your local Social Security office for information.

You need to shop carefully before deciding on the best policy to fit your needs. You may get another booklet, Your Medicare Benefits, to help you in making the right choice. To order a free copy, go to:


Medicaid provides health care coverage for some low-income people who cannot afford it. This includes people who are eligible because they are aged, blind, or disabled or certain people in families with dependent children. Medicaid is a Federal program that is operated by the States, and each State decides who is eligible and the scope of health services offered.

General information on the Medicaid program is given in the Medicaid Fact Sheet. For a free copy, go to: For specifics on Medicaid eligibility and the health services offered, contact your State Medicaid Program Office.

Introduction to Homeowners Insurance

Thursday, May 20th, 2010

Intro to Homeowners

Most homeowners don’t have a choice in whether to purchase this kind of insurance – it is usually required by the mortgage lender.  Even if the mortgage is paid off, homeowner’s insurance is good buy.  A good homeowner’s policy provided by Hatcher Kimrey Insurance not only protects the house, but all the possessions inside.  Also, homeowner’s policies cover personal liability due to negligence and will provide legal defense up to the policy limits.


What Is Insured?


Coverage A protects the dwelling from all risks up to the policy limits.  The home should be insured for the replacement cost.  Replacement cost is the amount required to replace or rebuild your home or repair damages with similar materials and quality.

Coverage B protects unattached structures such as tool sheds, detached garages, detached houses and their contents.

Coverage C protects your personal belongings (clothing, furniture, standard electronics).  Some forms of personal property, such as silverware, guns, jewelry, antiques and computers, will require a separate endorsement.

Coverage D provides for living expenses in the event your house is uninhabitable while the repairs are being completed.

Coverage E protects you against a claim or lawsuit resulting from an injury or property damage caused by your negligence. 

Coverage F pays for medical expenses for accidental injuries on your property.

Types of Policies

Before purchasing homeowner’s insurance in Texas, it is best to familiarize yourself with the types of coverage insurance companies will generally offer.  Below is a brief summary of the types of homeowners insurance sold by Hatcher Kimrey Insurance.

HO-1 (HO-A) Basic Homeowner insures your property against 11 basic perils: lightning, fire, windstorm/hail, explosions, riot/civil unrest, aircraft, vehicles, smoke, vandalism, theft, and glass breakage.

HO-2 broadens the basic coverage to include 7 additional perils:  falling objects, collapse of roof due to snow or ice, damage from steam/hot water system, leaking of plumbing or heating system, pipes freezing, and electrical damage from appliances, wiring, or fixtures.

HO-3 (HO-B) provides for comprehensive coverage (Broad Form risks) on your home.  This insures your home against loss on a replacement cost basis.

HO-4 Renter’s Coverage insures your household contents and personal belongings, but not the structure.

HO-5 (HO-C) policies provide the most extensive coverage, often referred to as all-risk policies.  This policy offers replacement cost coverage for most types of risks.

HO-6 Condominium Unit Homeowner policy protects items not insured by the condominium association’s policy, such as damage to personal belongings, wall, floor and ceiling coverings, and any accessories not originally installed in the unit.

Hatcher Kimrey Insurance recommends that you purchase guaranteed replacement cost coverage and insure 100% of the value of the home and its contents.  You need to keep meticulous records of the value of your personal belongings, and purchase riders to insure any of your belongings excluded from your basic coverage.  Many insurance companies provide assistance with determining the replacement cost value of your home.

Please be aware that not all policies with insurance companies are the same.  Some have exclusions or endorsements that change the policy.  It is wise to have a professional explain the differences in coverage between companies.

Remember… we are always here for you!

Introduction to Auto Insurance

Thursday, May 20th, 2010


Hatcher Kimrey Insurance will help you make an informed decision about your auto insurance coverage.  We will help you to understand the types of coverage, the underwriting factors that affect the cost, Texas requirements, and which insurance company is best for you.

Liability Insurance

Bodily Injury Liability Insurance protects you from claims of injured parties when an accident is your fault.  It does not protect you personally or your car.  The protection includes medical expenses, lost wages, and pain and suffering.  Coverage also includes damages from an accident caused by a family member living with you or a person driving your car with your permission.

Bodily Injury Liability Insurance includes specific benefit limits.  These limits determine the amount of money paid to one victim and the amount paid to multiple victims of an accident.  Texas requires a minimum of $25,000 per individual and $50,000 per accident.

Property Damage Liability Insurance pays for any damage caused by you to the property of others.  It also includes specific benefit limits.  Texas requires a minimum of $25,000.

Uninsured Motorists coverage is protection against an injury from a hit-and-run driver or a driver with no insurance.  This coverage replaces the insurance that the other driver should have purchased or covers the amount not covered by the other driver’s insurance.  Again, uninsured motorist coverage is purchased with specific limits.  Texas does not require this coverage.

Personal Injury Protection (PIP) pays a minimum benefit for the losses incurred due to injuries to anyone riding in your car regardless of fault.  Texas does not require PIP.  Included in most PIP coverage are medical expenses, rehabilitation expenses, work loss benefits, funeral expense benefits, and survivor loss benefits.

Property Damage Coverage


Property damage is covered by either collision or comprehensive coverage.

Collision coverage pays for damage to your car as a result of a collision with another car or an object.  This coverage is optional but may be required by your lender.  Collision coverage only covers the expense to repair your damaged car.

Comprehensive coverage pays for damage to your car as a result of theft, fire, weather, flood and vandalism.  This coverage is also optional but may be required by your lender.

Other Optional Coverages


Medical Payments Coverage pays for the medical and/or funeral expenses for you or passengers injured or killed even if you are at fault.  It also covers you or family members if you are struck by an auto while walking or riding in another auto.

Rental Reimbursement Coverage pays for a rental car for a specific number of days at a specific daily amount while you car is being repaired.

Towing Coverage pays the expense of having your car towed to a repair shop.

Underwriting Factors


Insurance companies consider the following factors when assessing the risk of an applicant:

  • Driving Record
  • Marital Status
  • Residence
  • Age
  • Gender
  • Use of Vehicle
  • Type of Vehicle
  • History of Prior Coverage

Contact Hatcher Kimrey Insurance to help you select the best automobile coverage for you at the best price.  Remember…. We are always here for you!