State Farm Continues To Provide Lowest Insurance Rates

State Farm Insurance Co., California's biggest auto insurer, intends to cut drivers' rates by 5.4%, an action that will pressure competitors to continue a downward price trend. The news Thursday means $133.8 million in premium savings for State Farm customers in California.

It provoked an angry dispute, though, between Consumers Union, the publisher of Consumer Reports, and state Insurance Commissioner Chuck Quackenbush over whether regulators should be investigating excess profits at insurers and ordering even greater premium reductions.

Huge sums are at stake in a state where driving is a necessity for most people. Of California's 20 million drivers, 15 million are insured. In 1995, the average premium for a 30-year-old motorist with a clean record was $566, while a 30-year-old with one ticket and one accident paid $1,129.

State Farm's proposed reduction requires Insurance Department approval. It follows a cut of 1.7% in September, and is the latest in a series of premium reductions.

Consumers Union policy analyst William Ahern replied with accusations that Quackenbush "has decided to protect excessive auto insurance rates and profits in California."

Source: http://articles.latimes.com/1996-08-16/business/fi-34920_1_state-farm
From Associated Press

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Medicare Updates

There's some bad news for those looking for easy ways to trim Medicare spending.

The Congressional Budget Office says two major approaches tested in recent years mostly failed to reduce spending.

Nonpartisan analysts looked at experiments that promoted better care coordination for the chronically ill, trying to keep them out of the hospital. They also studied experiments that changed the way doctors and hospitals get paid, rewarding quality instead of volume.

A report issued Thursday concluded neither approach reduced spending.

Care coordination increased spending in some cases, when added fees for monitoring patients were taken into account.

Payment for value only seemed to save money when providers were given a fixed amount and encouraged to use it efficiently.

Both approaches are part of President Barack Obama's health care overhaul.

Source: http://finance.yahoo.com/news/medicare-savings-ideas-missed-mark-220504316.html

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Get the Best Home Insurance!

Hunkered down at home in Great Falls, Va., during the blizzard of 2010, Doug Colley and his wife, Christina, discovered a sparking surge protector that quickly set their bedroom on fire. Engulfing smoke drove the couple out into the cold with only their coats and Christina's purse. Fire trucks from several area firehouses responded, but they couldn't reach the house because 3 feet of snow covered the couple's half-mile-long driveway. The Colleys watched as the fire consumed their home of 32 years and, along with it, a lifetime of belongings.

Build a Good Policy

Keep in mind that you're not insuring the market value of your land, just the cost to rebuild your home, garage and any other buildings. Your policy should include an inflation guard that is keyed to regional costs and, ideally, adjusts your coverage every year. Building costs can change not only with the economy but also after a disaster, when contractors and materials may be in short supply, says Don Soss, a vice-president of Fireman's Fund. That's one reason it's also smart to purchase extended-replacement coverage, which covers the difference if the price to rebuild exceeds your dwelling limit. Your policy probably already has 25% extra coverage built in, but you can buy more in 25% increments -- usually for $30 a year -- up to another 100%, says Michelle Rupp, an independent agent in Seattle.

New building codes often create a discrepancy between the limits of coverage and the actual cost to rebuild, says Kathleen Stalter, risk-services manager at Fireman's Fund. After a disaster, municipalities may quickly tighten their codes. Some insurers include full building-code coverage, but most include either an extra 10% of the dwelling limit or a flat $25,000, which may also have to go toward removal of debris. You can beef up your coverage by buying an endorsement -- often called a building-code upgrade. It will cost about $50 to $75 a year to double your protection to 20% of the dwelling limit.

Take Stock of Your Stuff

In the event of a total loss, you usually have 180 days to provide your insurer with a list of everything you owned, from sofas to soup spoons. Before the fire at their home, the Colleys had begun an inventory but hadn't finished it -- and it went up in smoke, too. "Think about having to imagine yourself in every room of your home, trying to remember everything in it," says Doug.

You can create a detailed listing or just take photos or make a video. Open cupboards, closets, drawers and storage boxes and shoot those, too. Not only will the images jog your memory, they will also assure insurance adjusters that your furniture really was high-end or antique, and not just starter stuff from Ikea. The Colleys have asked family members for holiday photographs taken in their home that show heirloom antiques in the background.

Get appraisals of valuables and, if necessary, purchase a personal-articles floater to cover them beyond the normal limits of your policy. Such coverage typically costs $17 per $1,000 of property value annually. Fireman's Fund even offers a "collections" endorsement that would cover the contents of a wine cellar.

Focus on the Fine Points

Rebuilding almost always takes longer than you anticipate, so look for a policy that provides 24 months of coverage for comparable housing and related expenses (called loss of use coverage). If your insurance company offers a fixed dollar amount with no time limit, divide that amount by 24 months to compare the coverage with that of other policies.

You'll need liability coverage in case you (or a family member) are legally responsible for causing injury to someone else at home or elsewhere. Given that medical (and legal) expenses can quickly mount, Rupp urges clients to buy as much liability coverage as they can afford. To increase the standard limit of $300,000 to $500,000 would cost about $20 annually, says Rupp.

Overlay your homeowners coverage with an umbrella policy providing at least another $1 million of liability protection. To determine your premium, insurers will assess your exposure to risk, including the number of homes you own (and their location), as well as your vehicles and whether you have young drivers in your family. The deeper your pockets and the higher your profile -- are you likely to be quoted in the media or do you sit on a nonprofit board? -- the greater your need for coverage.

You can get a $1-million umbrella policy for about $150 to $300 annually. The next $1 million of coverage will cost about $75; each $1 million after that, about $50. Before insurers sell you an umbrella policy, most will want you to have a minimum of $250,000 of liability coverage on your auto policy and $300,000 on your homeowners insurance, and they may require you to buy both policies from them.

By Pat Mertz Esswein | Kiplinger – Tue, Nov 29, 2011 11:21 AM EST
Source: http://finance.yahoo.com/news/upgrade-home-insurance-070000189.html

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Read This: The best Life Insurance benefits!

Life insurance is one of those financial products that can give people the heebie-jeebies. It can sound confusing and complicated, and it involves thinking about a very scary proposition: death.

But life insurance really isn't as frightening or complex as it seems. It's actually a fantastically useful and flexible estate-planning tool that can provide income-tax-free security for your loved ones. It can also provide liquidity to pay estate taxes, especially if your estate largely consists of assets such as real estate or a closely held business that you may be reluctant to sell to raise cash. (If the policy is owned by an irrevocable trust, the insurance payout can avoid estate taxes too.)

Here's a rundown of some of the basics of life insurance:

1 'How do I buy insurance?'

You can go directly to an insurance company or use a broker, either in person or online, that compares products from multiple insurance companies and can help you find the best quote.

You also can check if your employer, union or trade association offers a group life-insurance policy. Group life-insurance policies may not offer as much flexibility as some individual policies, but they typically don't require a medical exam -- a boon for those in poorer health seeking to be insured.

When you're shopping for policies, stick to companies with high financial strength ratings from firms such as A. M. Best, since the last thing you want when spending money for peace of mind is to have to worry about your insurer going bust.

Most individual life-insurance policies require you to get a medical evaluation so that the insurer can assess your health and longevity risks. That's typically arranged by your insurance broker or the insurer, at no cost to you. In most cases, a medical technician will come to your home or office to get some vital stats and blood and urine samples.

2 'Do I need insurance?'

You generally can skip life insurance if you're single with no dependent kids and don't expect to have a taxable or debt-ridden estate. Also think twice about forking over for life insurance if your premature death wouldn't affect the ability of your surviving partner to pay for daily living expenses.

But do consider life insurance if you have dependent children, are a business owner or if your spouse doesn't work or you have a big income disparity. In these cases, if you die prematurely, a life-insurance policy can help the survivor pay for your family's day-to-day cost of living, including mortgage payments or help your business remain viable after your death.

There are many variables to factor in when considering how much life insurance to buy. It depends on your current and projected income and assets, your family's annual living expenses, the length of the policy you are considering and whether you have any specific future economic needs -- such as a child's college tuition, a special-needs child who needs lifelong support, or expected estate taxes to pay off. Your insurance broker or salesperson can help you come up with a coverage amount that's suitable for your situation.

3 'Term or permanent?'

Life insurance, in its most basic form, can be divided into two categories: term and permanent, also called cash-value. Term life, the simplest and cheapest form of life insurance, is when you buy an insurance policy that lasts for a set period, typically 10, 20 or 30 years.

A term policy, which usually costs just a few hundred dollars a year if you're in good health, is appropriate for people who only want life insurance for a limited number of years -- such as until your children are grown or until you reach retirement age.

Permanent or cash-value life insurance, by contrast, lasts for the remainder of your lifetime. These policies are often used for specific estate-planning purposes, such as funding future estate taxes or for ensuring the continuity of a family business.

4 'Why the cost difference?'

Permanent insurance is more costly than term life insurance because it lasts longer and because it provides more than just a death benefit: It also has an investment component in which money accumulates tax-free within the policy.

In other words, a portion of your premium is placed in a separate investment account; this money grows tax-free while the policy is in force. (How it's invested depends on the policy.) As more money builds up inside the policy, you might eventually use this stash of cash to help you pay the policy's premiums.

Many insurers tout the tax-free investment benefits of cash-value policies. Not only does the money grow inside the policy tax-free, but your beneficiaries don't have to pay income taxes when they receive the policy's payout. A cash-value policy might make sense if you have already contributed the maximum amount to other tax-deferred investment accounts, such as 401(k)s and individual retirement accounts.

On the other hand, the higher premiums, commissions, and sometimes limited investment choices might not make a cash-value account worth it.

Some people choose to buy a special kind of permanent policy called a "second-to-die" or "survivorship" policy.

These policies pay out when the second person in a couple -- you or your spouse -- dies, and the money generally goes to your children or other heirs. They typically cost less than traditional permanent insurance because they are based on the life expectancies of two people, rather than one.

Posted by: Rachel Emma Silverman | The Wall Street Journal – Tue, Nov 29, 2011 3:29 PM EST
Source: http://finance.yahoo.com/news/know-life-insurance-101-040100569.html

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