Sunday, December 29, 2013
Missouri Insurance Law
Missouri law requires that all motor vehicle drivers and owners maintain some type of motor vehicle liability insurance coverage. Unfortunately, each year thousands of Missouri citizens are involved in automobile accidents with drivers who have not maintained the required automobile insurance. This results in unpaid damage claims and higher insurance premium rates for all Missourians.
Missouri motor vehicle owners are required to show proof of insurance when registering a vehicle and renewing their license plates. Liability insurance covers your legal liability when injuries or property damage happen as a result of your actions. The minimum level of coverage required by state law is:
$25,000 per person for bodily injury
$50,000 per accident for bodily injury
$10,000 per accident for property
The law also requires you to have uninsured motorist coverage of $25,000 for bodily injury per person and $50,000 for bodily injury per accident.
Nonresidents must maintain insurance that conforms to the requirements of the laws of their state.
You must keep some proof of insurance in your vehicle at all times. If a law enforcement officer asks for proof of insurance and you cannot show it, the officer may issue you a ticket.
The Department of Revenue will be notified that you do NOT have insurance on your vehicle or the vehicle you drive if you are in an accident or a police officer asks you to show proof of insurance. At any time, the Department of Revenue may also ask you to prove you have insurance.
Friday, June 22, 2012
Are life insurance loans a bad idea?
Are life insurance loans a bad idea?
Highlights
- Any money that isn't repaid will be deducted from your death benefit.
- Like a conventional loan, you'll be charged interest on the loan amount.
- Unpaid interest will accrue as income and add to the loan balance.
Sometimes the unexpected happens and you need cash. Borrowing from your life insurance policy is one option.
Your cash-value whole, universal or variable universal life policy can appear a tempting source for a bailout, especially if you've been paying into it for years. After all, the quick-cash loan option was one of the features that sold you on permanent life insurance in the first place.
But before you borrow from your policy, consider the dangers ahead should you neglect to pay the interest on your loan -- or worse, trust that the dividends from your variable universal life insurance policy will automatically cover it.
"The biggest thing that people don't understand, including the agents selling it, is the intricate taxation that takes place inside a life insurance policy," says Al Barnes, a life insurance specialist in Alabama. "Borrowing from a cash value like that is sort of like building your house right on top of the San Andreas Fault -- only you don't know the San Andreas Fault exists."
Not your standard loan
On the surface, a policy loan appears simple: You can typically borrow up to the cash value you've accumulated in the account. If you have a variable universal life policy, the insurer will move the loan collateral (a cash sum equal to your loan amount) out of your investment fund and into a guaranteed or fixed fund.
"We don't want to expose that collateral to market downturn that could result in negative equity in the policy to where you basically lose your policy," says Paul Wetmore, assistant vice president for individual life products at MetLife.
Unlike a conventional loan, you don't have to pay a policy loan back; any money you take out will simply be deducted from your death benefit, which goes to your beneficiaries.
But that's where the good news ends.
Costs to consider
Exactly like a conventional loan, you'll be charged interest ranging anywhere from 5 percent to 9 percent on the loan, says Barnes. Unpaid interest will be added to your loan amount and will be subject to compounding. That's right -- you'll be paying interest on your interest.
If you have a variable universal life policy, you may also be charged an "opportunity cost," which is the difference between what your collateral was making in the investment account and what it will make in the guaranteed account. For example, if the invested portion of your account was earning 6 percent and the guaranteed fund earns a fixed 4.5 percent, you can add the difference, or 1.5 percent, to your interest rate to cover the earnings your insurer will forfeit by pulling that loan money out of the market."What people don't realize is that interest has to be paid. You're going to pay it either out of your pocket or you're going to borrow it (from your policy)," says Barnes. "It's exactly like borrowing on your home equity line. Just run an illustration of that and see what happens to your home equity."
Are life insurance loans a bad idea?
Highlights
- Any money that isn't repaid will be deducted from your death benefit.
- Like a conventional loan, you'll be charged interest on the loan amount.
- Unpaid interest will accrue as income and add to the loan balance.
Sometimes the unexpected happens and you need cash. Borrowing from your life insurance policy is one option.
Your cash-value whole, universal or variable universal life policy can appear a tempting source for a bailout, especially if you've been paying into it for years. After all, the quick-cash loan option was one of the features that sold you on permanent life insurance in the first place.
But before you borrow from your policy, consider the dangers ahead should you neglect to pay the interest on your loan -- or worse, trust that the dividends from your variable universal life insurance policy will automatically cover it.
"The biggest thing that people don't understand, including the agents selling it, is the intricate taxation that takes place inside a life insurance policy," says Al Barnes, a life insurance specialist in Alabama. "Borrowing from a cash value like that is sort of like building your house right on top of the San Andreas Fault -- only you don't know the San Andreas Fault exists."
Not your standard loan
On the surface, a policy loan appears simple: You can typically borrow up to the cash value you've accumulated in the account. If you have a variable universal life policy, the insurer will move the loan collateral (a cash sum equal to your loan amount) out of your investment fund and into a guaranteed or fixed fund.
"We don't want to expose that collateral to market downturn that could result in negative equity in the policy to where you basically lose your policy," says Paul Wetmore, assistant vice president for individual life products at MetLife.
Unlike a conventional loan, you don't have to pay a policy loan back; any money you take out will simply be deducted from your death benefit, which goes to your beneficiaries.
But that's where the good news ends.
Costs to consider
Exactly like a conventional loan, you'll be charged interest ranging anywhere from 5 percent to 9 percent on the loan, says Barnes. Unpaid interest will be added to your loan amount and will be subject to compounding. That's right -- you'll be paying interest on your interest.
If you have a variable universal life policy, you may also be charged an "opportunity cost," which is the difference between what your collateral was making in the investment account and what it will make in the guaranteed account. For example, if the invested portion of your account was earning 6 percent and the guaranteed fund earns a fixed 4.5 percent, you can add the difference, or 1.5 percent, to your interest rate to cover the earnings your insurer will forfeit by pulling that loan money out of the market."What people don't realize is that interest has to be paid. You're going to pay it either out of your pocket or you're going to borrow it (from your policy)," says Barnes. "It's exactly like borrowing on your home equity line. Just run an illustration of that and see what happens to your home equity."
Thursday, May 17, 2012
What's Covered In An Auto Policy.
What's Covered In An Auto Policy
The auto policy can (but does not have to) include coverage for up to six distinct risks, each of which is priced separately. They are:- Bodily injury liability, for injuries the policyholder causes to someone else.
- Medical, or in some states, Personal Injury Protection (PIP) for treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident.
- Property damage liability, for damage the policyholder caused to someone else’s property.
- Collision, for damage to the policyholder’s car from a collision.
- Comprehensive, for damage to the policyholder’s car that doesn’t involve a collision with another car. Covered risks include fire, theft, falling objects, missiles, explosion, earthquake, flood, riot and civil commotion.
- Uninsured motorists coverage, for treatment of the policyholder’s injuries as a result of collision with an uninsured driver. No state requires car owners to carry insurance for all these risks. But many states require drivers to carry minimum amount of liability insurance for bodily injury and property damage, as well as personal injury protection coverage.
Tuesday, May 15, 2012
Roughly 9 million Americans lost their health insurance as a result of the economic downturn, according to a new report*. In all, 52 million Americans are currently without health insurance.
The number of uninsured Americans rose by 4.3 million in 2009, mainly due to job losses. Most Americans receive health insurance benefits through their employer, and rising unemployment left many without coverage.
It's no surprise that those with the lowest incomes are most likely to be uninsured. Over 75 percent of the uninsured are members of the working-class.
Contrary to popular belief, losing a job doesn't necessarily mean losing health insurance, too.
A more affordable alternative is individual health insurance. Applicants who are relatively healthy can find quality health care coverage for a lot less than the cost of COBRA.
Free Information About Home And Auto Insurance!
One of the nice things that I like about my job is the fact that I was able to start with the company at a young age. The other thing that I enjoy is being in on the ground floor when auto insurance rates change. People use many methods of trying to get auto insurance rates, they either call into the office or email or wait for a response or some like to chat on the internet with an agent. This is where I come in. I get to answer the emails and conduct the live chats which are fun to do.
Some of the questions that people ask are interesting about coverage. Are animals covered if they are in the vehicle when hit by another vehicle? Do your rates increase after your first, second, or third car accident? How old do you have to be to apply for auto insurance on your own? Do you give free auto insurance rate quotes or is there a charge.
These questions show me that there are many new drivers that need this information and I suggested that we could put some of the answers under the frequently asked questions (FAQ) section of the webpage for our insurance company. So now if a question is asked more than five times it will go under that category. This is a quality improvement process. This makes me feel good and helps the customer.
A customer should never feel embarrassed about asking a question about auto insurance. They should know and understand what type of benefits and coverage they will be getting if they purchase a policy for their vehicle. In the same fashion they should know if they have a deductible and what is expected from them if they have an accident.
The first thing that should be discussed with the customer after they select their policy and deci9de to purchase it is when the premiums are due in case they do not get their first bill in time or it gets sent to the wrong address. We should not assume everyone knows these things. Besides it provides complete customer service for your auto insurance company.
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