Decoding Life Insurance Quotes: 4 Tips

Life insurance is (or should be) an important part of nearly every household's financial plan. If it's not part of your family's financial base, it may be that you find life insurance too confusing or complex or maybe you're just adverse to the idea of considering the topic of your own or your spouse's demise. These are not uncommon reasons for avoiding the subject of life insurance.

Who Needs Life Insurance?

Simply stated, life insurance is an obligation for anyone on whom someone else is dependent for financial support. Whether this dependent is a spouse, a child, a parent, a sibling or a partner, if your death would mean a significant financial loss for another person, you need to have life insurance. If you're retired with a secure income or independent financially and no one would suffer financially at your sudden death, then you probably don't really need life insurance.

Two Types From Which To Choose

Life insurance is divided into two types – whole-life (permanent) and term-life. Term life is the least expensive and simplest form. With term life, the insurer sets the cost of the policy according their perceived risk of your dying within the term, which is typically 10, 20 or 30 years. If you die within the term of the policy the stated death benefit is paid to your named beneficiary.

Permanent insurance uses the same “risk of death” assessment for helping determine premium cost but also features a savings component, referred to as the cash value. You'll find three types of permanent life insurance – whole life, universal life and variable life. What differentiates these from one another is the way the cash value funds are handled.

Decoding Life Insurance Quotes

Here are four tips for decoding life insurance quotes:

1.     Use an independent broker with access to multiple life insurance companies to get multiple quotes side-by-side.

2.     Life insurance costs are determined by your age and health. This is a competitive business and most life insurance companies offer about the same policy costs.

3.     Insurance costs are the same whether you buy online, from an independent agent or straight from an insurer. There may be differences, however, in service quality. An independent broker can help you find the best companies.

4.     If you have a particular health issue, your broker can steer you toward an insurer that may be more lenient to individuals with your condition.

Are Pets Covered by Renter's Insurance?

A question we often hear when talking about renter's insurance is, “What type of provisions does a renter's insurance policy include regarding pets?” This is a good question, and the answer applies equally to both renter's and homeowner's insurance.

Renter's Insurance Coverage

Renter's insurance typically provides three types of financial protection. These include:

• Personal Property Protection – covers your rental home's contents and your personal belongings against loss/damage resulting from specific named perils.
• Liability Protection – covers you and your family members living in your rental home from financial loss resulting from liability lawsuits or medical expenses stemming from a visitor to your home becoming injured.
• Additional Living Expenses Protection – if your rental home becomes unlivable as the result of a peril covered in your policy, this benefit will reimburse you for expenses incurred while temporarily being forced to live outside of your residence, within stated policy limits.

Pets Are Not Considered Personal Property

Of the three protections listed above, the only one that applies as a form of pet insurance is the second, liability protection. Personal property protection doesn't apply because insurance companies don't consider pets as personal property. Dedicated pet insurance is available from various insurance companies for financial protection should your pet become ill or injured, just as your medical insurance covers you in the event that you become ill or injured. Renter's insurance, however, is not applicable regarding your pet's illness or injury.

How Liability Factors In

The liability coverage contained in your renter's insurance policy could be looked at as a type of pet insurance in that it provides you with financial protection should your pet either cause damage to your rental home or inflict an injury to a third person, whether inside or outside of your actual residence.

The liability coverage in your renter's insurance won't cover all pet-related damage nor will it apply to all pets. Some breeds of dog, for example, may be excluded by your insurer. Typically, this includes breeds known to be aggressive. The most common pet-related liability claims made against renter's insurance policies are dog bites. Certain exotic pets such as monkeys or reptiles may also be excluded.

Damage caused by your pet to your rental home will likely be covered, however, this doesn't extend to damage to your own personal property. If your dog gets loose and tears up your neighbor's garden, this would likely be covered.

Homeowner's Insurance Costs: Newer Versus Older Homes

Buying an older home can bring with it some up-front costs you might not experience when buying a newer home, depending on how much damage or deterioration the older home has seen in its life. As a general rule, older homes also present a higher risk factor to insurance companies, so another up-front cost you likely will have to deal with is a higher premium rate on your homeowner's insurance coverage.

Though this higher premium rate for your particular older home may not necessarily be the case, since all homes and homeowner's insurance policies are different, it's true more often than not. Here's why:

-  Certain systems within an older home may be outdated and require replacement in order to bring it up to codes and current safety standards. This may include the plumbing and electrical systems, which would both be expensive to update to today's standards.

-  Older homes may have certain physical hazards due to their old age such as foundation problems or the need for roof replacement. They may also be plagued with health hazards such as lead paint, asbestos and mold.

-  Certain older features like hardwood floors and plaster walls may be difficult and expensive to replace. If your older home is included within the National Historic Register, this will almost certainly increase the cost of your homeowner's insurance.

Two Important Tips for Buying Homeowner's Insurance

The number one rule for those shopping for insurance, any kind of insurance, is to get multiple quotes that will allow you to comparison shop. Using an independent broker with access to numerous insurance providers is an easy way to do this, allowing the broker to do the groundwork and present you with multiple options from which to choose.

Always look for discounts. Sometimes, you'll have to ask about available discounts to find out about them. Often, insurers have lots of discounts they can provide to qualified prospective customers.

Special Tips When Insuring an Older Home

Some things that may be standard in most modern homes could be missing in older homes and should be considered in order to upgrade the home and lower your home insurance rates. Consider the following:

Installing smoke alarms and carbon monoxide detectors can sometimes lower insurance costs by as much as 10%.

Dead-bolt locks, sprinkler systems and monitored burglar alarms may all help lower insurance rates on older homes.