Bankruptcy, Poor Credit and Insurance

Bankruptcy, Poor Credit, and Insurance
I posted about credit and insurance yesterday, but am not sure I covered everything. I discussed why insurance can be more expensive and harder to obtain if your credit is poor. But after surfing around Bad Credit Blues, I noted some articles on helping people raise their credit, and I'd like to direct you to those a little more closely. You can take steps to repair your credit, and many of these steps will not cost money.

If you have had a bankruptcy, or if your credit has taken the plunge for some other reason, the Credit After Bankruptcy Article can help you begin to raise your credit score rather quickly...say in the timespan of months, and not years.

If you have debt problems, but have not actually filed bankruptcy yet, the bankruptcy alternatives article and free online analysis tool may help you avoid the more drastic steps.

Insurance and Credit Score

Why does the insurance company need my credit report?



Insurance companies need to price right. If they price too low, then they will lose money. If they price to high, their competitors will sell more insurance. One factor that is taking on more importance in how an insurance company views you as a risk is your credit score.

Note: If you want legal ways to help build your credit score, visit Bad Credit Blues News.



Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically, people who have a poor insurance score are more likely to file a claim.

Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.

Health Insurance - Am I dreaming - Bush wants us to have it!

I must be dreaming, or maybe the President reads my blogs!

Bush addressed the huge problem of uninsured Americans and wants to change the tax code so that people are more aware of the cost insurance, and so that people can get liberal tax deductions for getting their families covered.

USA TODAY ARTICLE ON BUSH'S PLAN

Forty Seven Million Americans do not have health insurance! That is one out of 6 of us, and to me - living in an advanced society - this is unacceptable.

More HSA Health Savings Account Basics For Health Insurance

WHAT IS AN HSA or Health Savings Account?

I have divided this post up into three blogs. The first one is a basic outline so you understand the two parts of an HSA. The second part outlines some advantages to using a Health Savings Account Plan for your medical insurance. The last part tells you where to get more information!

Part 1: Is an HSA Health Insurance?

If you are shopping for health insurance, you have probably noticed a major medical insurance product called an HSA or Health Savings Account. An HSA is not actually insurance, but is an account that would be obtained with an HSA compatible Major Medical Insurance Plan. So we are talking about two parts of an HSA program here. One part is the Major Medical Health Insurance for your larger expenses, and the other is an investment, retirement, or savings account you can use on health purchases.

Part 2: Why would I want an HSA Account?

HSA plans make sense for many people. You can contribute, according to IRS guidelines to your HSA account. You will be able to deduct the allowable amount from your taxes. You can use this money to spend on any qualified purchases - some that might not even be covered by your major medical. However if you remain healthy, and do not need to take the money out - you keep it!

I have had clients who spent a considerable some on a lower deductible health insurance plan and then felt cheated because they had not used their plan very much. Well, I think that they were lucky to stay healthy! However, I can see their point. So I would be happy to give them the option to spend less on a much higher deductible health plan. That would also give them the security of knowing they will have health insurance in case of any major illness or injury! They can also choose to make contributions to their HSA, have a tax break, and know that if they don't have to spend the money, it will keep rolling over.

Part 3: Learn More About HSA's From Uncle Sam

I always like to go right to the Horse's...er Mouth ... when people ask me questions about taxes and/or the law. To learn more about HSA's you should go right to the Government.

Here is a link to the Dept. of the Treasury publication.

Homeowners - Can you live without homeowners Insurance?

Can you own a home without homeowners insurance?

Well, it's interesting. Most states make it illegal to drive a car without car insurance, but do not have laws on the books forcing homeowners to insure their homes. If you have a loan on your home, most mortgage companies will require you to carry homeowners insurance. Since the mortgage company may actually carry the bulk of your investment on their books, they need to make sure it is protected.

However, if you own your home free of a mortgage, then you are not required to carry homeowner's insurance. However, things happen. Your pipes could burst, a small fire could get set in your kitchen, or your home could flood. I would always advise a homeowner to carry homeowners insurance on the bulk of their ivestment. Set the deductible at an amount you can afford to lose to keep your premiums affordable.

If you think your current homeowners insurance is too expensive, or if you have done without homeowners insurance, why not take five minutes to get an online quote or find a qualified local insurance agent?

Click Here To Start a Quick Free Online Quote.

Handling an Insurance Company Complaint or Question

I see this question posed all of the time. If you have a question or complaint about the way your insurance company handled your claim, what should you do? Even if you don't have a complaint, but are unsure about an insurance company or insurance agency, do you have anywhere to go to check up on them?

Well, every state in the US has an insurance regulatory body. This is usually an insurance commission or department of insurance.

HERE IS A PAGE WITH A LIST OF THE U.S. STATE INSURANCE REGULATORS.

If you do have a complaint with the way an insurance claim was handled, I think you should start with your insurance agent or the insurance company. Mistakes do get made, and sometimes a mistake can be traced back to miscoding a form in a clerical department. I have helped clients get claims approved and paid by just making a call to an insurance company and trying to find out if it was an error.

That said, bad stuff does happen too. If you have gone over the problem with your insurance company or insurance agent, and you still feel that they have violated the terms of your insurance policy, you should document what you've done, and communicate with your state insurance regulatory body. They are in charge of regulating the way that insurance companies do business in your state, and they will research the matter.

The last step that I would advise would be to actually contact a lawyer. They will cost you money, and while that may be money well spent, you need to gather information before you can make a decision on that. The state insurance commission will look at your case and determine if, in their judgement, the company has broken one of their rules.

If you'd like to look for a new insurance company or agent, I always suggest INSUREME because you can get an online quote and find a local agent. They also participate in the BBB Online Program, and have a clear privacy policy.

Are you chasing down group health insurance?

Can you make a group for group health insurance out of thin air?

I read a lot of forums aimed at small business people and professionals, and I see a common topic arise. One member wants to try to get other members to form a small group or association and negotiate a group plan for these people. On the surface, this sounds like a noble idea, but I do see some problems for trying to make a group out of a 'bunch' of people who need health insurance.

The first problem is that these people are not really employed by the same company, so it wouldn't be a true group. Some insurers go so far as to eliminate any 1099 employees from the true group, and some insurers will accept this. OK, so that's the first hurdle. You don't really have a group, and you probably won't get enough people to really negotiate on price. You would probably need thousands.

The problems with group health insurance for small groups

I've stated this before, but let me do it again. Group health insurance is not cheaper than individual health plans for most people. It might seem cheaper because your employer is picking up a large percentage of the price tag, but it really isn't when you add up the employer contribution plus the employee contribution. That's why people complain that their COBRA payments are so high! You aren't paying for COBRA. You are paying the total price tag for health insurance.

Group health is often very high because the insurer must take employees without underwriting. Of course, they don't do this as a service, but they do pass the costs along. With individual health insurance, and insurer gets to underwrite, choose who they will insure according to their guidelines, and take the people who they will insure, and exclusde pre existing conditions for a certain amount of time. Of course, these premiums are actually cheaper.

But group health insurance seems better!

If you really compare apples to apples, it works out. Most people want to spend far less out of their own pockets for the total bill than the amount employers fork over. I've spoken to small business owners who were paying 800 to 1000 for employee medical insurance. Many families would like to limit their total price tag to half of that or less. I cannot understand why I have to offer much higher deductibles or greater coinsurance amounts to fit a plan within their budgets.

If you are healthy, why not quote individual health plans? You may be pleasantly surprised. If you are not healthy, a group plan will certainly seem more attractive, but you do have other alternativies. All states have some fallback plan for high risk residents. In Texas, we have a risk pool. Other states have companies which offer guaranteed acceptance health plans. Of course, these plans are not free, and they are usually expensive. But group health will be expensive anyway.

If you cannot afford to pay for health insurance, many counties and states have health plans that they underwrite for lower income people. To work with country programs, and especially low cost insurance for children, you do not have to be destitute - and in fact, many middle income people qualify!

Find a Local Health Insurance Agent or Get an Online Quote

Medicare Beneficiaries - It's January and things are delayed on the Medicare Part D and Medicare Advantage Front - Again

Well, it's January now, so we have the usually backlog of enrollees who signed up for Part D or MA - Part D plans who have not received governement confirmation - and who have also not received their new ID cards. This shouldn't be old news, and should have been expected, but I think it's very frustrating the seniors shouldn't have the security of a speedy delivery of their information packets and ID cards.

I'm sure that agents are doing all they can to expidite the process, but as usual, the process is behind schedule. If you did sign up for a new prescriptin plan, or a Medicare Advantage Plan (MA PD) last month, and you don't have your packet, your copy of the application should serve as proof in case you need to get medication or medical care.

If you have a problem, contact your agent or your insurance company, and they should help you.

Why use an insurance agent?

You might think it doesn't matter where you buy insurance, but a quick decision can cost you lots of money. The money may be in premium, or it may be in having coverage that's not really good for you and your family.

Insurance can be complicated. You have coverage limits and deductibles with car insurance. You have out of pocket maximums and coinsurance with health insurance. You have different options to select underwriting severity for life insurance. Selecting a reasonable choice for your situation will be aided by an experienced local agent who understands your situation and the current policies available.

Agents can also come in different flavors:

Captive Agents: Can only write with one company, or may have the option to use other companies only if their primary company declines a customer.

Independant Agents or Brokers: Can write with any company they are legally appointed with in states they are licensed to.

Direct Agents: Can only do business over the phone under the umbrella of a large company. They usually write for one company, or from a pre-selected menu of companies.

Of course, I like indendant agents!

They are usually local and have community ties, and they know the options that are available to you. They should listen to you, qualify you for a particular situation, and come up with one or two best choices.

Find a Local Agent Through INSUREME - They are BBB Approved and have a clearly stated privacy policy. Thanks!