FAQs

Q:

What is Insurance?

Q:

What is P & C (Property and Casualty) Insurance?

Q:

What is Umbrella Insurance and why do I need it?

Q:

Why choose an Independent Agency?

Independent agents offer you several key advantages:

• More Options: You benefit from the wider range of options available to an independent agent who can choose among various companies to find you the best combination of price, coverage and service.
• Better Service: You can develop a personal relationship with your independent insurance agent, especially one right in your own community.
• Advice and Advocacy: Your independent agent will always take the time to discuss your particular situation at length, offer advice, and respond to concerns. And, if you ever have to make a claim, your independent agent can be your advocate in the process if needed, helping you along the way and making sure your claim is processed swiftly and fairly. (back to top)

Q:

What is Trusted Choice?

Q:

What types of life insurance are there? And which one is best for me?

Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household’s death. Today it is used for many reasons, including wealth preservation and estate tax planning. Of course, it still provides you with the opportunity to protect yourself and your family from personal risk exposures like repayment of debts after death, providing for a surviving spouse and children and fulfilling other financial goals such as college funding, leaving a charitable legacy or paying for funeral expenses.

Life insurance protection is also important if you are a business owner or a key person in someone else’s business, where your death (or your partner’s death) could prevent the business from continuing its operation. One of the key benefits from any type of life insurance is that the death benefit that is paid out is most always tax-free. All life insurance policies involve four separate parties: the insurance carrier, the policy owner who pays the premiums, the insured upon whose death the policy will pay out and the beneficiary who receives the death benefit proceeds.

Who Needs It?

Not everyone needs life insurance. If you are single and have no dependents, it may not be worth the expense. If, however, you have anyone who financially depends on you (even partially), life insurance may be appropriate for you. When considering life insurance, ask yourself the following questions:

• Do I need life insurance?
• How much do I need?
• How long will I need it?
• What type of policy makes sense for me?

Your need for life insurance will depend on your personal circumstances, including your current income, your current expenses, your current savings and debt and your family’s goals. Many planners recommend coverage equal to at least six to ten times your gross annual income, but your needs may differ from that.

Types of Life Insurance

Life insurance protection comes in many forms, and not all policies are created equal. While the death benefit amounts may be the same, the costs, structure, durations, etc. vary tremendously across the types of policies.

-Whole Life

Whole life insurance provides guaranteed insurance protection for the entire life of the insured, otherwise known as permanent coverage. These policies carry a “cash value” component that grows tax deferred at a contractually guaranteed amount (usually a low interest rate) until the contract is surrendered. The premiums are usually level for the life of the insured and the death benefit is guaranteed for the insured’s lifetime. Any withdrawal you make will typically be tax free up to the amount of premiums you have paid into the policy minus any prior dividends paid or previous withdrawals. Because of their permanent protection, these policies tend to have a much higher initial premium than other types of life insurance.

-Universal Life

Universal life insurance resembles whole life in that it is also a permanent policy providing cash value benefits based on current interest rates. However, the premiums, cash values and level amount of protection can each be adjusted up or down during the contract term as the insured’s needs change. Cash values earn an interest rate that is set periodically by the insurance company and is generally guaranteed not to drop below a certain level.

-Term Life

One of the most commonly used policies is term life insurance; it pays the face amount of the policy, but only provides protection for a definite, but limited, amount of time. Term policies do not build cash values and the maximum term period is usually 30 years. They are useful when there is a limited-time need for protection and when the dollars available for coverage are limited. The premiums for these types of policies are significantly lower than for any type of cash value policy. They also (initially) provide more insurance protection per dollar spent than any type of permanent policy. However, the cost of premiums increases as the policy owner gets older and as the end of the specified term nears. Term polices can have some variations, including, but not limited to:

• Return of Premium Term: Affordable premiums are guaranteed in all policy years and remain level for the amount of years you choose – 20 or 30. If the insured is still living at the end of the level period, 100 percent of eligible premiums are guaranteed to be returned upon surrender, or can be used to purchase a paid up whole life policy.
• Level Term: This policy has an initial guaranteed premium level for specified periods; the longer the guarantee, the greater the cost to the buyer (but usually still far more affordable than permanent policies). These policies may be renewed after the guarantee period, but the premiums do increase as the insured gets older.

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Q:

How do I report insurance fraud?

Fraudulent insurance claims cost us all money. Toll-free phone numbers are available for reporting information concerning fraudulent insurance claims. The caller’s identity is kept confidential and an individual may talk with a trained investigator or leave information anonymously on a telephone answering machine.

According to the National Insurance Crime Bureau, criminals who defraud property/casualty insurance companies not only steal from insurers, but they rip all of us off as well. We all pay the price for their crimes. You…your coworkers…your neighbors…we’re all victims.

Insurance industry studies indicate 10 percent or more of property/casualty insurance claims are fraudulent. And fraud is the second most costly white-collar crime in America behind tax evasion. Add it all up and insurance fraud costs Americans billions of dollars each year. Not only does fraud cause higher insurance rates, but it also raises our taxes and inflates prices for consumer goods… Read the full article here. (back to top)

Insurance Fraud Hotlines

• Westfield: 1-800-654-6482
• Grange: 1-800-847-6332
• State Auto: 1-888-999-8037