Is Guaranteed Issue Life Insurance a Good Option?

We often get asked questions along the lines of “My aging parent is very ill and medical bills have drained his/her savings account, but I cannot afford to pay for the funeral if he/she should pass away.  Can I buy life insurance on my parent?”  In this scenario, we do not advise purchasing “regular” fully underwritten life insurance.  More often than not, term life insurance is going to be ideal for most people, but not in this scenario.

Why we wouldn’t recommend term insurance in this case…

Term life insurance would typically not work in this case because the coverage amount would be too small, the client would likely be uninsurable because of health issues, and the client’s age would be outside the range a life insurance company would approve coverage for.

What we would recommend…

When we get this question, we usually tell inquirers that they have two options:

  1. Take the money you would have spent each month on term insurance and instead put it into a savings account so it can start accruing interest. You can then access these funds later when in need of money for your loved one’s final expenses.
  2. Purchase a guaranteed issue life insurance policy.

What is a guaranteed issue life insurance policy?

Guaranteed issue life insurance is a type of life insurance that you cannot be denied coverage on, hence “guaranteed”.  There are a few things you should know about this type of insurance.

  1. Guaranteed issue life insurance is typically known as “last resort” life insurance. It’s meant for those who may have been denied previously and/or are not in good health.
  2. Guaranteed issue life insurance policies are designed so that surviving loved ones can pay for your final expenses, such as a funeral, burial, and medical bills.
  3. Guaranteed issue life insurance premiums will never increase.
  4. A guaranteed issue life insurance policy accumulates cash value.
  5. Guaranteed issue life insurance policies have significantly lower death benefit amounts compared to term or permanent policies.
  6. There is no medical exam or questionnaire required for guaranteed issue life insurance. The only factor that is really taken into consideration is the age of the insured.  Because of this, guaranteed issue life insurance premiums are higher per thousand than most other types of life insurance.
  7. Benefits are limited to the first two years. This is called a Graded Death Benefit period.  What this means is that if you die within two years of buying the policy for any reason other than an accident, your beneficiaries typically only receive the total amount of what you paid in premiums.  (This can vary depending on the carrier.)

So, if you’re in relatively good health, fully underwritten life insurance may be a better option for you.  However, guaranteed issue life insurance is a great option for those with a desperate need.

How much does guaranteed issue life insurance cost?

While you can get millions of dollars’ worth of term life insurance coverage, guaranteed issue life insurance coverage often caps at $50,000.  Again, its design is based around simply helping your surviving loved ones pay for your final expenses.

Quotacy works with Gerber Life to provide guaranteed issue coverage options.  Gerber’s guaranteed issue policy is available in all U.S. states except for Montana.  Take a look at the examples and table below to get an idea on what a guaranteed issue policy can cost.

Example #1

 John Smith is 55 years old and has been denied for traditional life insurance because of his Stage IV prostate cancer.  He does not want to burden his children with his final expenses so he plans on purchasing guaranteed issue life insurance.

He’s automatically approved without having to undergo a medical exam or fill out any health forms.  John obtains $20,000 in coverage and his premiums are $91.30 per month.

If John passes away within two years, Gerber Life will refund to his beneficiaries all premiums that had been paid plus 10% interest.  However, if John happens to die because of an accident unrelated to his health within those two years, his beneficiaries will receive the full $20,000 death benefit.  After two years, his beneficiaries will receive the full death benefit regardless of how he dies.

Example #2

 Jane Doe takes care of her 79-year-old mother Sally.  Sally does not have any life insurance and Jane is worried that she won’t have the funds to give her mother the funeral she deserves.  Jane decides to buy a guaranteed issue life insurance policy on Sally.

A $12,000 policy is enough for Jane to ensure she can pay for a proper funeral and burial.  Sally is approved for coverage and the policy will cost $165.70 per month.

Although this type of policy is easy to acquire, it offers less coverage and higher premiums than traditional life insurance, so explore all your options.  If you aren’t sure if guaranteed issue life insurance is the best choice for you or want more information, contact us here at Quotacy and we can help you.

Recap of Guaranteed Issue Life Insurance:

  • If you’re between 50 and 80 years old, you can be accepted for guaranteed issue coverage regardless of your health.
  • There are no medical exams to complete or health questionnaires to fill out.
  • Cash value accumulates within the policy.

Remember, term life insurance quotes are free to run on E-Exchanger.com and there is no penalty for applying.  It doesn’t hurt to apply for term life insurance, then opt for the guaranteed issue if you end up being denied.  The more options you have, the better decision you can make.

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5 Types Of Life Insurance For Seniors

Here is the ultimate truth about life insurance: the only policy that matters is the one that is in force on the day you die. – Tom Hegna, economist, author, retirement expert

Tom Hegna’s quote is powerful. If you have loved ones who would suffer financially should you pass away, you need a life insurance policy that is in force.

Seniors generally have five options for life insurance. We’ll review each type to help you make an informed decision.

When you’re ready to apply, you can be confident that you’re purchasing the best policy you qualify for at the most competitive price.

Five Types Of Life Insurance For Seniors:

1. Term

2. Whole

3. Guaranteed Universal

4. Universal

5. Final Expense

Next Steps:

How To Apply

1. Term

As the name implies, term life insurance provides a benefit for a specific amount of time. Contrary to popular belief, term life insurance is purchased by seniors regularly.

Primary components to understand about term when deciding if it’s a good fit for you:

  • How old are you? At some point, your age can disqualify you from purchasing term. Each life insurance carrier is different, but generally age limits look like this:
    • 80 years old – 10 year term
    • 75 years old – 15 year term
    • 70 years old – 20 year term
    • 65 years old – 25 year term
    • 58 years old – 30 year term
    • Unsurprisingly, term life insurance premiums increase with age.
  • How is your health? Less than perfect health means higher premiums or a possible decline. As we age, it's common to develop chronic health conditions including:
    • hypertension
    • diabetes
    • cardiovascular disease
    • anxiety

Bottom line – your age and health are two main components to securing life insurance. It’s possible you will need to complete a para medical exam that often includes an EKG.  Typically after age 70, many carriers will include a cognitive and physical function test.

One more thing – there is no exam (simplified issue) term life insurance options for seniors, too. At up to age 65, healthy seniors may be able to purchase a moderate amount of term life insurance (up to $500,000). From ages 66 – 75, healthy seniors may have the options to purchase a modest policy of up to $99,000.

2. Whole

Whole (permanent) life insurance provides a death benefit for the rest of your life and also accumulates a cash value. Unlike term life insurance, whole life insurance remains in force as long as you pay your premiums. Additionally, your premiums remain the same amount for the life of the policy.

What is a cash value?

Cash values, which accumulate on a tax-deferred basis just like assets in most retirement and tuition savings plans, can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children’s education or to provide income for your retirement. When you borrow money from a permanent insurance policy, you’re using the policy’s cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash-surrender value. – Permanent Insurance, Life Happens, a nonprofit life insurance awareness organization

Whole life insurance has some main characteristics:

  • Not common for seniors to purchase, however can make sense in some instances:
    • Desire to leave a specific amount to a beneficiary (i.e. family member, university or charity).
    • Utilize the policy loan option.
    • As a strategy to minimize estate taxes.
  • Policy lasts a lifetime.
  • Premiums are more expensive than term life insurance.
  • Accumulates cash value.
    • Ability to take policy loans from the cash value.
  • Underwriting guidelines are similar to term life insurance for seniors.
    • Usually the cutoff age for purchasing whole life is 75-80 years old.
    • Your age and health factor into whether or not you qualify for whole life insurance.

Bottom line – whole life insurance isn’t purchased by seniors all the time, but it can make sense in certain circumstances. Underwriting is similar to term life insurance.

3. Guaranteed Universal

Think of Guaranteed Universal life insurance (GUL) as a branch between term and whole life insurance. GUL is regularly recommended to seniors because it has some of the appealing aspects found in both term and whole life insurance.

Key features of Guaranteed Universal life insurance:

  • More affordable than whole life insurance.
  • Tends to be more expensive than traditional term life insurance.
  • GUL is technically not considered permanent life insurance because you select the length of the policy.
    • However, the policy length is routinely expected to outlast your life.
  • Does not accumulate a cash value.
  • Premiums can be level for a lifetime.
    • Premiums are not tied to investment volatility or interest rates.
  • GUL is often often used for:
    • Minimizing estate taxes.
    • Providing a legacy to a beneficiary.
    • Financing end of life expenses.
  • The underwriting process is often the same as a term life insurance application.

Bottom line – Guaranteed Universal life insurance is commonly purchased by seniors. Level premiums, a policy term that outlasts your life, and the ability to leave a legacy to your beneficiary(s) are primary reasons many seniors select a GUL.

4. Universal

Universal life insurance (UL) lasts a lifetime. The name implies that it’s similar to a GUL. However, there are some key differences and Universal life insurance is usually not purchased by seniors.

Let’s examine the specifics:

  • Universal life insurance is considered a form of permanent life insurance as it lasts a lifetime.
  • UL does have a cash value component.
    • Cash value is directly linked to policy’s investment performance.
    • Ability to take policy loans against the cash value of the policy.
  • Designed to provide flexibility in your policy:
    • Premium payments must be made to cover the cost of the policy.
    • Additional premium payments can be made to the savings component of the policy.
  • Policy is directly affected by the volatility of its investments.
    • In other words, the investment earnings are not guaranteed.
    • Depending on the policy’s performance, premium payments may need to be increased to maintain the policy.
  • Death benefit is adjustable.
  • Underwriting guidelines for UL are usually the same as a term life insurance application.

Bottom line – Universal life is not usually purchased by seniors. The policy does last a lifetime and provides flexibility, however, there are risks associated with the structure of the policy.

5. Final Expense

Final Expense (FE) life insurance makes all the sense in the world for seniors under certain circumstances. Aptly named, Final Expense works well for those seeking funds to cover end-of-life financial needs.

What you need to know:

  • Final expense is permanent life insurance and lasts a lifetime.
  • FE secures funds for end of life costs:
    • Funeral and burial expenses.
    • Medical bills.
  • Policies amounts typically range between $50,000 – $100,000.
  • Often FE policies can grow a cash value, meaning that you can access funds during the life of the policy (policy loans).
  • Underwriting for Final Expense is different than standard term life insurance:
    • Approval can be instant after you pass the health questionnaire.

Bottom line – Final Expense is a popular life insurance option for seniors. While the policy amounts are modest compared to other life insurance options, it may be the right amount of life insurance needed for your family. Further, the underwriting process is more lenient and instant approval is possible.

How To Apply

Your life insurance needs determine which policy is the best fit for you. Seniors have specific life insurance considerations and as an independent life insurance agency, we’ll collaborate with you to find the best policy at the most competitive price. Independent agents are not held captive to a particular life insurance carrier and you will receive multiple quotes from multiple carriers.

This is important – Some life insurance is better than none. And, the best time to become insured is today.

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6 Holiday Headaches You Can Control with Home Warranty

The holidays can be both joyous and stressful. With a home warranty, unexpected repairs can be fixed by reliable technicians. Save yourself a headache!

While many of us look forward to the holiday season all year, it can also be a time of great stress. In between all that cookie-baking and gift-buying, it can be challenging to get someone to fix your broken dishwasher or HVAC system. Fortunately, there’s a solution for any unexpected breakdowns that might put a damper on your holiday spirit: a home warranty plan.

home warranty is an excellent way to protect your home from unforeseen and unexpected expenses. The Home Warranty Plan is a one-year service contract for the repair or replacement of covered home system components and appliances that typically break down over time.

Take a look at these five common holiday season headaches that can be easily managed with an Home Warranty Plan.

1. Finding reliable help around the holidays

It can be just as challenging to find reliable home-repair help during the busy holiday season as it is to get that Thanksgiving turkey just right. With a home warranty plan, you’ll have access to industry-leading expertise 24 hours a day, 7 days a week, 365 days a year. E-exchanger will find the right licensed personnel and eliminate the need for you to locate qualified help during the busy days leading up to and during the holidays.

2.Unforeseen expenses 

Repairing something as major as your home heating system could cost you thousands of dollars. Such a huge expense can be stressful at a time when you’re already spending money on gifts, food, decorations and other miscellaneous holiday expenses. But with a home warranty, you’ll only need to pay the monthly fee along with a trade service call fee, which is a fixed amount that's easy to plan for.

3. Dealing with insurance companies

With a warranty plan, you can skip the whole process of filing claims and deal with insurance, and spend that precious time shopping, wrapping gifts, cooking delicious meals, or decorating your home with family and friends.

4. Playing host with a broken appliance

A broken dishwasher or refrigerator can really put a damper on your holiday festivities. A home warranty plan offers an expedited repair process on covered items. You no longer have to worry about a crisis caused by appliance or system breakdowns at a time when your house is swarming with guests.

5. Paying the full cost of repair or replacement

In the event of a breakdown, insurance usually reimburses the value of the item minus depreciation. This means you will not be reimbursed the full amount paid at the time of purchase. With a warranty plan, you won’t have to pay for the actual repair or replacement of covered items, and your contract will cover repair or replacement of covered items regardless of age, make or model.

6. Not enough time to coordinate home repairs

Finding reliable help that suits your budget, following up and replacing parts all involve a considerable time investment. Since the costs associated with repair and replacement are so high, it is not possible to skimp on the research and effort needed to get a satisfactory solution. A warranty plan will save you time when you need it the most this busy holiday season.

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Why You Might Want Wedding Insurance

If you’re busy planning a wedding, you might want to consider insuring it.

Wedding insurance policies are relatively easy to understand, and the two main types are both inexpensive compared with the cost of a ceremony and reception:

  • Liability insurance covers you in case of an injury or property damage at the wedding. Liquor liability, sometimes a separate coverage, pays out if someone drinks too much and causes an injury or damage.
  • Cancellation coverage reimburses you for costs such as deposits and guests’ airfare if you need to cancel or reschedule the wedding for an unforeseen reason. Unfortunately, that doesn’t include a change of heart.

The most common wedding cancellation claims involve:

  • A vendor, such as a venue or a caterer, going out of business or being otherwise unable to fulfill its agreement.
  • Extreme weather, such as a hurricane or tornado.
  • A member of the bridal party or family being too injured or ill to participate.

Costs

Cancellation and liability coverage are sold separately. Prices are based on the number of guests or the wedding’s price tag, depending on the insurer, but each can cost under $200 for a wedding with fewer than 50 guests.

How to buy it

You can buy wedding insurance through an event insurer, such as Wedsafe or WedSure, or large insurers such as Travelers Insurance. Some insurers sell “event insurance,” which can also cover a wedding. Ask your agent if your current insurer has any options.

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Life Insurance for Business Owners

Are you a small business owner or a co-owner of a company? Among the many days to day responsibilities you encounter, you also are responsible for your family. You need to protect your family at home as well as your business family.

Life Insurance for Business Owners

Life insurance for business owners can help lay a proper financial foundation by protecting your current and future business. Let’s look into the different situations that life insurance can benefit your company or business.

Collateral Assignment Life Insurance

A life insurance policy can be used for business owners that require cash to begin a business or buy a company. Typically, when you buy a life insurance policy you will name a beneficiary. This beneficiary has an insurable interest to the insured. This beneficiary can be a family member, spouse or a business partner or company. When you’re getting a life insurance policy for an SBA loan or bank loan – it is the same overall concept. You have to assign a primary beneficiary, however- the lender will be named the collateral assignee. If you were to die the lender will get the balance of the loan from the life insurance death benefit. Your primary beneficiary will then get the balance once the loan is paid off.

What would happen in the event that you didn’t use a collateral assignment? If you had the lender the sole beneficiary, the lender would then collect one hundred percent of the life insurance policy’s death benefit. E-exchanger life insurance can help you avoid that.

Executive Bonus Plan Life Insurance

With an executive bonus plan, you’re using a compensating method for specific employees by paying the life insurance policy premiums on the key employee’s life. The employer or business owner will pay for a benefit that is owned by the executive or employee. There are benefits to both the employer and employee when it comes to Executive bonus plans.

For the employer, there is no administration needed, the plan is simple, and costs are tax deductible. For the employee, the executive is the owner of the life insurance policy and of the cash values. The policy is not lost if they were to change employers. The death benefit can be income tax free.

Key Person Life Insurance

The purpose of key person life insurance is pretty basic:

A company buys a life insurance policy on a key employee, business owner or executive who is very important to the business. The company will apply for a life insurance policy, pay for all of the premiums and own the policy. The business is also the beneficiary of the life insurance policy. If the key person were to die, the company will receive the death benefit of the key person. The tax-free benefit can be used in a variety of ways. It can help make up for company sales as well as lost earnings. The benefit can also help cover some or all of the costs of finding a good replacement and provide proper training.

What would happen if the key person were to die unexpectedly? Could your business move forward without a hiccup? The life insurance death benefit can provide liquidity quickly so you can provide ongoing financial demands.

How about securing loans for your company’s growth? Sometimes loans are needed to help with the financing opportunities of expanding a business. Your lender will often seek collateral as security and the death of a key employee may pose too much of a risk to your lender. It is very common for a lender or bank to require key person life insurance on anyone that is vital to the life of your company.

One of the most important uses of key person life insurance is when there’s a need to buy out a deceased co-owner's interest in a company. There are some unfortunate situations that can arise if a key person policy isn’t in place. How would the deceased co-owner's family receive their share of the interest in the business without selling it off? How would the surviving owners pay off the dead owner’s family in order to avoid becoming partners with them?

Buy Sell Agreement with Life Insurance

When you’re an owner of a company or a partner in a business, a buy sell agreement can be an excellent way to avoid uncertainty. When a partner or company owner dies, the life of the business and it’s future are uncertain. With a buy-sell agreement, you can make sure you’re helping to protect you and your company from the unexpected or unintended transfer of ownership. By considering a buy sell agreement and funding it with life insurance, you can provide protection and extend the life of your company.

The buy sell agreement will aid the sale and purchase of a company based on a specified event. The most common events are retirement, disability or death of the owner of the company. The buy-sell will lay out specifically who will get what with regards to shares of the business. It will define how much and it will guarantee the buyer at a predetermined price. The buy-sell agreement also allows for the purchasing of company shares from the estate of the surviving family. Lastly, a buy-sell can be beneficial with creditors. Creditors will most likely be much easier to deal with when they can see that a company has protection established to make the loan decisions easier.

Business Succession Planning

Life insurance plays an important role as the driving force in succession planning. It is key that you have adequate coverage for you and your business partners. You need to get a formal valuation of your company and make sure that your coverage is updated with the growth of your company. Succession planning is a very important topic and can be vital to your business. If you let the estate plan dictate how your company transitions, it may cause significant issues. There are many companies that have had disastrous results due to poorly designed succession plans. Just ask the Robbie family and the Miami Dolphins.

Get Started

If you’re ready to get started, make sure you work with the following 3 resources:

  • Attorney
  • CPA
  • Life Insurance Broker

You’ll need experts in each of these areas in order to secure the best strategy and policy for your business succession plan.

How to Get Quotes and Apply

Once your plan is in place you can begin shopping for your life insurance policy. Simply use the free quoter on this page to get an idea of rates.

However, the best way to secure coverage is to have our research customized quotes. You can simply contact us at E-exchanger.com.  We’re independent and licensed life insurance agents. We’ll find you the best policy at the most competitive price from dozens of top rated life insurance companies. Once we find you the lowest rate, we’ll help you apply conveniently online or over the phone. We’ll help you from start to finish.

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10 ways to save money around the house



Have you ever considered how many ways you can save money around the house? Here are 10 of them:

1. Unplug your electronics at night
According to the U.S. Department of Energy, the average U.S. household spends about $100 per year to fuel appliances left on standby mode. Save some money by plugging your devices into power strips and switching them off before bed.

2. Collect spare change
That loose change you find around the house can really add up. Start collecting coins, and then take them to the grocery store to exchange for dollars at the end of every month.

3. Use what you already have
Instead of going on a shopping spree every time the refrigerator seems bare, browse through the pantry and eat the items you already have.

Browse your pantry before making that emergency trip to the grocery store.

4. Start clipping coupons
If you collect the newspaper and have time to set aside on a Sunday morning, start clipping coupons. But don’t just use them to buy something because it’s on sale and seems like a great deal – only make the purchase if it’s an item that won’t go to waste.

5. Grow your own herbs and vegetables
Why buy herbs and vegetables when you can grow your own? Even if you don’t have room for a full garden of veggies, U.S. News & World Report said you can likely find enough space inside or outside to plant herbs. Try growing your own dill, basil and mint to save money and spruce up your dishes.

“Baking soda and vinegar can sanitize most of your appliances.”

6. Clean with baking soda
Who needs expensive cleaners when you have baking soda? You can replace most chemicals when you mix a natural solution of baking soda and vinegar. The combination can clear out a clogged drain, remove dirt and grime from your kitchen sink and sanitize most of your other home appliances.

7. Use a programmable thermostat
By using a programmable thermostat, you can set your heating and cooling systems to turn down when you’re gone for the day. The Environmental Protection Agency said this update can save you up to $180 every year in energy costs.

8. Consider streaming
With all of the options you have for online streaming nowadays, you might want to give it a try. Consider lowering costs by joining , two options that you can access on your laptop or other connected devices.

9.  Seal your windows and doorways
By sealing your windows and doors, the EPA estimated that you can save about 15 percent on heating and cooling costs every year. Consider adding insulation in the attics and crawl spaces, and use caulking to seal any cracks in your window and door frames.

10. Invest in a E-Exchanger Home Warranty
What happens when one of your heavily used appliances breaks down? You can’t just avoid getting it repaired or replaced. But that doesn’t mean you’ll have to put down an entire paycheck to get it up and running again. When you invest in a E-Exchanger Home Warranty, you’ll receive a plan that helps cover the cost of repairs or replacements in your major appliances and systems. With a home warranty, you can rest assured knowing you won’t have to hand over an arm and a leg when an issue occurs.

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Umbrella Insurance for a Very Rainy Day

Many consumers are not aware of the benefits provided by an umbrella policy and many may not even be aware of the existence of such a policy. Others might just view it as an “upsell” offered by insurance companies and agents hoping to make some extra income. However, the policy actually offers significant benefit to individuals and, according to the Insurance Journal, the state of Maryland’s Insurance Administration has issued a consumer advisory explaining the policy’s benefits. If you don’t currently have an umbrella policy, you’ll want to read on to understand better what it can do for you and your family.

In your standard home insurance policy, there’s a limit of liability for personal liability claims. The usual coverage that’s automatically provided is generally $100,000. However, given today’s litigious society and the cost of medical care, a claim can easily exceed that amount. If you are a homeowner, your assets, including your house, can be attached in the event of a judgment against you. This is where an umbrella policy can really help out.

The personal umbrella policy is given its name because it acts as an umbrella over more than just your personal liability policy. Most people who have umbrellas use the policy as extra protection for both their personal liability and automobile liability coverages. For example, if you have a $1 million umbrella policy, it will provide the $1 million in protection if either your personal liability or auto liability policy limits were exhausted.

Keep in mind that this is a liability policy and not a property policy. Therefore, even though your home insurance policy has two main types of coverage, the umbrella only applies to the personal liability portion of the coverage. As an example, if you have not insured your home for the proper amount and have a large claim, the umbrella policy will not provide you with any benefit. On the other hand, if someone is injured on your property and sues you, the umbrella policy will be prepared to step in if your home insurance policy’s personal liability limit is exhausted.

It’s common for people to consider the umbrella policy as an optional item and not necessary. Even if they are aware of the existence of umbrellas, many people choose not to purchase them, thinking that a very large loss will never happen to them. Unfortunately, when something unforeseen actually happens, it’ll be too late to purchase the coverage. Umbrellas are generally inexpensive when viewed in relation to how much coverage they provide. That low premium is a good sign of the relative infrequency of loss contemplated by the insurance companies in underwriting the policies. However, just because everyone thinks it’s rare for a loss to occur doesn’t mean they don’t believe it will never occur.

You should also keep in mind that there might be some ways to save on insurance premiums by purchasing an umbrella policy. Because many insurance companies offer a multi-policy discount, you might find that it’ll defray the cost quite a bit. When I first started purchasing an umbrella policy, the discount I received from adding it to my existing home and auto policies with the same insurer almost covered the entire cost of the umbrella! Given its low cost and potentially great benefit, you should really invest in an umbrella policy.

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Understanding the Key Terms on Your Warranty

Understanding the key terms on your warranty

If you're reading through your new car warranty for the first time, or you are considering purchasing a new car, there may be a few terms in there that you don't know. To help you understand your warranty, we've defined a few key terms:

  1. Bumper-to-Bumper: a type of warranty also commonly referred to as a basic or standard car warranty. All automakers offer a basic warranty for a set amount of time or miles. This warranty covers basic, non-engine parts of the car such as the power steering, fuel system, lights, sensors, audio system, brakes, and climate control. If any of these parts malfunction while you are covered with a bumper-to-bumper warranty, your dealer should pay to fix them.
  2. Deductible: the amount of money you pay the repair facility for repairs on your vehicle. Some warranties cover the cost of all repairs and labor, but others require you to pay a set amount out of pocket.
  3. Federal Emission Defect Warranty: a type of warranty that covers repairs your car needs to meet the Environmental Protection Agency (EPA) standards. This includes defective materials and repairs.
  4. Plan Term / Plan Expiration: the length of time or the amount of mileage your warranty covers. When you reach the end of your plan term, for example 3 years / 60,000 miles, your warranty plan will expire.
  5. Powertrain: a type of warranty that covers certain "powertrain" parts of your vehicle. These parts include the transmission, engine, and drivetrain (transfers power from the engine to the wheels and down). If your powertrain components are found defective or damaged before your powertrain warranty expires, the manufacturer will pay for replacements.
  6. Roadside Assistance: provides owners with assistance if the vehicle breaks down. This often includes a number you can call 24-hours a day, 365 days a year for emergency assistance, towing, help with a flat tire, or fuel problems.
  7. Surface Corrosion: rust on the outside of your car. Substances such as salt and iron oxide can make it easy for rust to form on your car. Some warranties do not protect against surface corrosion.
  8. Transferability: when you sell your car and transfer your warranty to the new owner. Car manufacturers may allow you to transfer the entire warranty, half, or none.
  9. Wear and Tear: when components of your car stop working due to external conditions. This means that your air system or radio stops working because of operational error, not because the parts can wear out. Some warranties cover wear and tear.
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The Real Benefits of Home Service Contracts

It's Saturday morning. With a cup of coffee in hand, you flip open the blinds and gaze out at your backyard. Despite the sunny morning, you notice standing water in the corner of your lawn.

Your heart sinks as you realize the water is your flooded leach field.

The home warranty contract you had when you first bought the house a year ago would have covered this, but you opted not to renew it last month.

What is a Home Warranty?

A home warranty is a service contract and covers wear and tear related repairs or the replacement of important home system components and appliances that break down over time.

A home warranty protects you and your family from bearing extreme expense and hardship from breakdowns not covered by your home insurance policy. Plans vary and can cover major home systems such as air conditioning, heating, electrical and plumbing as well as major home appliances such as kitchen ovens, stoves, refrigerators, and washers.

"I'm never going to have to pay for anything again!"

This isn't true.

Home warranty service contracts can cover a lot of major repairs or replace important systems and appliances, but only if you're signed up for the right one.

And there are a lot of companies out there advocating on behalf of these service contracts and the warranties they offer, and just like anything, they're not always truthful and the expectations they set with consumers can be misleading. They advertise that, under their umbrella policies, homeowners will never have to pay out of pocket again for repairs and services for their homes.

This isn't true.

Unfortunately, there are a lot of gross misrepresentations within home service contracts and the advertisements promoting them. Where, homeowners are led to believe if they spend more for what looks like an all-inclusive contract, they'll never have to pay for repairs or services to their home again, no matter what they are.

This isn't true.

The Honest Benefits of Owning a Home Service Contract

  • 1.The ability to call on a network of available pre-screened contractors for whatever their specialty is.
    • Instead of choosing a contractor blindly, a home service contract includes the right people to call on for the right jobs, mitigating the frustration of doing your own, unadvised research and dealing with the costly repercussions of illegitimate contractors who overcharge or are unfit to do the job. Not to mention, you'll never be covered for an all-out replacement.
    • In the earlier example of the flooded leach field, the service company the homeowners call on independently – because they no longer have the benefits of in-network contractors included in a home warranty – could falsely charge them. Instead of only replacing the sewage ejector pump causing the problems, the contractor might also cite septic tank malfunctions and replace the line from the house. How would the homeowner know?
    • Most homeowners don't have the time to manage what a contractor is doing or the knowledge to determine what repairs are needed and which are unnecessary. They just know they need it fixed. Home service contracts and their representatives are motivated to do the right thing on behalf of the homeowner because they are the ones who are paying for it.
  • If you pick wisely, you really will save money. Home service contracts really do pay claims.
    • The best part about the home warranty is when the consumer walks away without a penalty for wears and tears that naturally will happen to their home over time. Protect yourself, your family and your home by preparing for – not if, but – when your home systems and appliances malfunction or need repair or replacement.

 

 

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