WOMEN'S INDEPENDENT GUIDE TO INSURANCE
Independent Insurance Agents of America
Financial Decision Makers
The environment in which women now live, work, and care for their families is much different from previous eras. We may juggle many roles: career, marriage, motherhood, caregiver to aging parents. And, even in dual-income families, women still handle major responsibility for household management. Regardless of our stage in life, educational background, economic situation, marital status, or number of dependent children, we make-or strongly influence-decisions affecting our financial well-being and that of our families. We must be prepared to act as advocates and financial decision makers for ourselves and on behalf of our spouses and families. We also must be able to plan effectively for our futures to ensure financial security.
As a business owner and married mother of three children, I too, juggle more roles and wrestle with time constraints. I continually monitor the financially concerns of my independent insurance agency and my family. Developing budgets, tracking financial results, and setting goals for business expansion, college, and retirement help me gauge my financial success. As an insurance advisor for more than 20 years, I have seen the importance of adequately protecting assets and future earnings through the purchase of insurance products.
The Women's Independent Guide to Insurance was created by the Independent Insurance Agents of America (IIAA) to help you plan for and achieve your financial security goals. We have provided information regarding the different types of insurance available and suggested when various forms of insurance are most appropriate. Our goal is to assist you in making sound, informed decisions to meet your specific needs.
The Independent Insurance Agents of America is an association of 280,000 agents and agency employees nationwide who bring value to clients by offering the best combination of coverage, service and price. IIAA members represent many insurance companies and, as a result, can shop for policies that best meet their client needs. Because we are not tied to a specific insurer, we also serve as advocates of our client's interest.
Your life will most likely differ greatly from your mother's, just as her life differed from your grandmother's. Happily, the role of today's women in family and business finances is broader than previous generations ever could have imagined. IIAA wants to help you meet each new financial challenge, helping to ensure your success and your financial security.
Jeanne M. Heisler, CPCU, CIC, CLU, CPIW
Independent Insurance Agent
Women continue to emerge as an increasingly powerful economic force in today's society:
- 55% of employed women account for half or more of household income.
- 60% of women now work; by 2000, women will account for two-thirds of new entries into the workforce.
- The 7.7 million women-owned businesses in the are the fastest-growing segment of the economy, and employ 35% more people in the than Fortune 500 companies do worldwide.
In whatever form, insurance addresses risks and how to control your exposure to loss effectively. Insurance is a means to an end-a way to help ensure that you have sufficient resources to survive the financial crisis that could be caused by fire, auto accident, lawsuit, health problem, or drop in income. By covering your exposure to risk, you minimize the financial damage you might suffer.
Insurance works by spreading the risks of an individual-you-among many individuals. The chances that everyone in the group would experience a crisis at the same time are statistically very small. Insurance premiums are collected from everyone in the insurance pool and paid only to those who suffer a loss. The cost of your insurance policy is determined by the likelihood that you will file a claim. That's why, for example, an individual or family with several speeding tickets or car accidents will pay for insurance than those with clean driving records.
To protect your financial security, independent insurance agents recommend that you carry auto, homeowners/renters, life, disability, and health insurance in amounts appropriate to your situation and needs. Agents also suggest that you revisit your insurance coverage as changes in your life alter your financial security needs.
Your stage in life often determines the type of insurance and amount of coverage you need. Life stage is defined by
- Age
- Marital status (single, married, widowed, divorced)
- Parent or childless
- Own or rent a home or other major property
- Employed or unemployed
- Work in traditional setting or at home
- Own business or employed by others
Life Stage Defines Need
Various factors significantly impact the types and comprehensives of insurance you and your family or business require.
For example, a single woman just beginning a career might not be interested in or able to afford the broad coverage required by a more mature worker with dependents. Similarly, a woman approaching retirement age will have different financial security requirements.
Your marital status influences your needs. A married woman who is a full-time homemaker may rely on the insurance benefits provided by her spouse's employer. Divorce or the death of your spouse may change the scope and nature of the health, disability and life insurance coverage you carry. Becoming a parent also impacts your insurance needs.
Employment status is another factor. If you receive adequate health and life insurance from your employer, you might not need supplemental coverage. However, if you are a full-time homemaker, self-employed, or receiver of inadequate employee-related benefits, you may have insurance gaps. And, if you are self-employed-with a business in your home or other location- you need to secure business insurance to protect your business and yourself.
Each time your life stage changes, it is important to reassess personal, family and business insurance needs. This evaluation can be done with the assistance of a local independent insurance agent representing a wide range of insurance providers. Ultimately, your insurance choices will be determined by your individual situation and the needs of your family.
Insurance Types
You essentially have three avenues to purchase personal and business insurance: telemarketing companies ( who use sales people via 800 numbers), captive agent companies (who employ agents to represent only their insurance company), and independent agents. For you, independent agents mean access to numerous options that lead to the best combination of coverage, service, and price.
Connie
Connie is 26 years old and in the early stages of a career. She receives basic health insurance from her employer, and contributes to the cost of the plan through payroll deduction. Connie owns an automobile and rents an apartment. In addition to her job, she maintains a small free-lance graphic design business in her apartment, which is equipped with a sophisticated computer system.
The purchase of her computer prompted Connie to meet with her local independent insurance agent to review her overall insurance needs. Following a review of several insurance companies, represented by her independent agent, the agent tailored a plan that took into consideration Connie's financial security goals. The agent also updated Connie's automobile insurance to a plan that carried sufficient coverage, while offering a discount due to her age and safe driving record.
The agent encouraged Connie to inventory her clothing, furnishings, and other belongings in her apartment, and provided her with a renters insurance policy to ensure replacement should she experience a loss. She also purchased a special floater policy to protect her computer system investment.
Tailor the Right Coverage
Property/Liability Insurance. Provides for your home, automobile, and household or other possessions, and from claims against you for something you did or failed to do which resulted in physical or financial loss to the person filing the complaint.
Life Insurance. Pays money to the person(s) or organization(s) named as a beneficiary by the policyholder if the policyholder dies. Some life insurance policies also function as investment vehicles by accruing value as premiums are paid or by replacing estate assets depleted by inheritance taxes. Your employer may provide basic life insurance for employees during their tenure with the company. Often, employees are advised to maintain some level of separate coverage if their employer's coverage is not adequate. A personal policy also is good insurance in the event that you are laid off and, due to health problems, would not be able to get coverage for a new life insurance policy.
Health Insurance. Covers costs related to your health and your family's health, such as doctor visits, hospital expenses, and diagnostic tests. While many employers provide some level of health insurance, you may need to supplement the coverage or, when self-employed, secure health insurance for you and your family.
Disability Insurance. Pays the individual(s) covered for income lost due to a disabling injury or illness. It enables your earning power to continue even if your earnings do not. Again, some employers offer basic disability insurance that covers extended illnesses, but you need to determine if the coverage is long- or short-term to meet your needs adequately.
Long Term Care Insurance. Provides coverage for skilled and custodial care in a nursing home. Some policies also may cover home health care expenses. You can purchase coverage for yourself, your spouse and your parents to offset the costly expense of nursing home care, which most people pay out of their savings. Policy costs are determined by the age and health of the individual, type of care, and other factors.
Governmental Benefits. The government offers several types of supplemental insurance to the elderly, retirees, disabled, and disadvantaged individuals. Programs include health care, disability, and compensation to laid-off or injured workers. This insurance provides only minimal base coverage. Individuals receiving government benefits should consult their independent insurance agent to determine proper coverage required by you, your family, and business.
Driving Coverage for Your Automobile
Automobile insurance protects you, your family, and your vehicle in the event of injury or damage resulting from an array of occurrences. Your policy will cover the cost of repairs or replacement and furnishes protection against personal liabilities. Your independent agent can tailor a policy that meets your needs and provides several types of insurance coverage, including:
Liability. Covers injuries and damage you cause to other people or their property while operating an automobile.
Collision. Covers damage to your vehicle in an accident.
Comprehensive. Covers damage to your vehicle from fire, break-ins, vandalism, theft, and natural disasters.
Medical Payments. Covers emergency and related medical payments for you and your passengers, regardless of who is at fault.
Uninsured Motorists and Underinsured Motorists. Protects you and your passengers in an accident with drivers carrying insufficient or no liability coverage.
Additional Coverages. Pay for expenses such as towing, labor, rental vehicles, etc.
Irma
At 35, Irma and her husband Joe have a young son, own a modest home and are about to become parents of twins. The welfare of their growing family is their primary concern. Irma elected to leave her job to care for the children full time. However, the couple was covered under her employer's health care plan, and Joe's employer does not provide coverage as comprehensive as Irma's former company.
The couple met with their independent insurance agent to determine how they could supplement Joe's health plan to provide sufficient coverage for Irma and the children. The agent reviewed their health care needs and identified an insurance provider that could economically supplement their coverage and meet their needs. With a growing family, the couple explored life insurance options with their agent. They purchased a policy that would protect the family's financial security should something happen to Joe. In addition, their agent encouraged them to see an attorney to draft wills.
The couple also re-evaluated their homeowners policy. The agent recommended a plan that would replace lost items at their actual cash value, instead of the current market value of the items, reducing the portion of the losses they must pay. They also decided to purchase a new automobile insurance policy after the agent informed them of discounts available because their home is insured by the same company. Joe and Irma's agent helped them reduce the overall cost of their insurance without compromising their coverage.
Protecting Your Personal Property
This insurance covers the repair or replacement of your property and furnishes protection against personal liabilities. Separate policies are purchased for homes and other major property or possessions. Because your home is probably your most valuable asset, it is critical to insure it properly. For example, if you live in a geographic area prone to certain weather problems-such as floods, earthquakes or hurricanes-you need special policies to protect your investment.
In addition, you should be aware of monetary limits on groups of items, including jewelry, computer or electronic equipment, artwork, some furnishings, etc. You can purchase additional insurance, called floaters, by listing items that fall outside the limits. Based on the value of your property, the cost of the floater is usually minimal and outweighs the risk of leaving family heirlooms, equipment, and prized possessions uninsured and unprotected.
You also have the option to insure your property for the actual cash value or the replacement cost, which determines the amount of compensation you receive. Replacement value enables you to replace property at the current market price, regardless of its age or condition-whereas, under actual cash value coverage, depreciation for age or condition is deducted from the replacement cost, reducing your compensation.
Renters insurance provides coverage for your personal property when you pay to live in a building owned by someone else. Personal property includes all of your household possessions. You are protected from disaster by a policy tailored to meet your needs and based on the value of your belongings. Similar to homeowners insurance, there are monetary limits on groups of items, coverage can be supplemented with riders, and you have compensation options.
Whether you own or rent your home, your policy should include liability coverage. This important coverage protects you against claims of bodily injury or property damage that result from your negligence and may prompt a lawsuit. These claims can be caused by an non-auto incident that occurs on or off your premises, such as a dog bite or slippery sidewalk. Coverage also includes medical payments for the injured person, such as first aid or emergency room treatment. You need to consider a limit of liability sufficient to protect you for the cost of a lawsuit and today's high medical bills.
Homeowners insurance provides comprehensive coverage for damage to structures and personal property, unless the coverage is specifically excluded. Coverage includes protection from damage caused by:
- Fire or lightning
- Windstorm or hail
- Explosions
- Riots or civil commotion
- Aircraft and other vehicles
- Smoke
- Weight of ice, snow, or sleet
- Freezing of plumbing, heating, air conditioning, or other household systems
- Theft or vandalism
- Falling objects
Your Business
Commercial or business insurance offers property and liability coverage whether you operate from your home or another location. While homeowners insurance may cover business property within specified limits, it typically is insufficient and does not protect against lawsuits related to your business activities. Selecting the right insurance is just as important as the choices you make for company stationery, equipment, or services. Your independent insurance agent can help you review your options and tailor coverage that best meets your needs.
Kay
Kay is the owner of an upscale antique shop in a trendy part of town. Her sales have grown steadily during the past several years with the public's renewed interest in antiques. Kay takes great pride in her ability to spot the best pieces and prominently displays them in her shop. A series of break-ins in the neighborhood prompted Kay to review her insurance to ensure that her business is adequately covered.
Kay and her independent agent reviewed her most recent financial statements, the lease on the shop, and her business ledger showing sales, purchases, profits, etc. To assess the state of her business and identify changes from the last review. Given the growth in her business, her agent recommended that Kay consolidate her existing multiple policies and purchase a package policy.
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