A hodgepodge of details related to dealing with insurance sensibly

ˇ Sometimes it is better to pay for the 'risk' that you wouldn't die yesterday. Sounds crazy, eh? You know that you were fortunate enough to survive that yesterday. Why would you pay for protection against the chance of something that is surely out of question? Well, it might be that if you submit a predated application, then your considered age, on which the premium is based, will be different than if you submit it today. You may lose one month premium, but the gain of paying a lower premium on the long run may overbalance it.

ˇ If you are a smoker, then it may be a good idea to shop for insurance policies where there is no distinction between smokers and nonsmokers when the premium is established.

ˇ In the previous suit, if your health is poor and you have problems with the medical part of the application, it might be a good idea to join some professional organization where there is no medical check up.

ˇ If you are a smoker and have a policy, with appropriately higher premium, on yourself, you can usually switch to a cheaper premium a certain period (one year at least) after giving up smoking. You can find a policy where the company charges nonsmoker rates if you promise to quit the habit within 3 years; from year 4 they will charge the smoker premium if you have not had at least 12 months smoke-free prior to the end of year 3.

ˇ Never sign an application where the 'beneficiary' rubric is filled in with the agent's name. (I'm just joking, of course, but if you believe this was a silly joke, just read what happened somewhere in the US.)

ˇ Paying the premium monthly or annually may seem to be a technicality; it is not quite so. Monthly payment is more convenient perhaps, but it is somewhat more expensive.

ˇ Frequently, if you can arrange (based on the demonstration of an insurable interest) to buy a policy together with someone (who does not necessarily have to be even a relative), you can save on the premium, since the insurance company may charge the administration costs only once.

ˇ Canceling a policy is rarely a good idea, unless you want to switch to a better or cheaper one. However, if you still want to do this, you do not have to declare it. Since the insurance company gives you a 30 day grace period with premium payment, you are better off (gain free coverage for 30 days) if you just let the policy lapse because of non-payment of the premium.

ˇ When a couple wants to ensure that the survivor gets death benefit when any of them dies, it seems to be logical to buy a so-called joint-first-to-die life policy. For some strange reasons, it is rarely the best choice. If they buy two separate policies, they pay sometimes less altogether; even if they pay slightly more, the double coverage is usually a good reason to choose this option.

ˇ When insurance is bought with estate planning considerations in mind, usually a joint last to die policy is the rule; it is much cheaper than what would be the price for either the wife or the husband. However, if there is too large a gap between the premiums of their individual policies (because, e.g., there is a big age difference, or one of them is smoker and in poor health while the other is a very healthy nonsmoker), they might be better off with insurance on just the person whose life expectancy is the better. This way they may have to pay less, and probably will end up with the death benefit at the same time than with a joint policy; if it is still the person with better chances who dies first, the survivor other will probably be able to invest the money for the period it is not yet needed.

ˇ People applying for disability protection are often rejected by insurers because of a history of depression or other mental and nerve disorders. There is no reason to give up: they can buy basic protection from certain niche-players

ˇ Financial underwriting requirements also can make it difficult for people to buy the amount of coverage they want; there are certain limits and guidelines that link the possible coverage amount to declared earned income. Buying various kinds of insurance (e.g., disability, life, critical illness) can ease a bit this kind of tension. Also, if one does look for it, one can find special disability policies from certain companies for people who are in the final phase of their studies, or who are just starting a business. For business owners and self-employed people business overhead insurance (BOI) can be an important additional element. Premium for BOI is tax-deductible, and it can help to pay for fixed costs of the business (rents, mortgages, utilities, insurance premiums, loans, and the like) while the operation is suspended because of illness or injury.

ˇ For self-employed people who do not have WCB protection, most DI policies, even if available, offer benefit for injuries only after a lengthy waiting period. Again, it's worthwhile to shop around since there are options where first day injury coverage is offered.

ˇ Even when buying WCB protection is an option, it's not a bad idea to check out individually owned policies: while WCB protection is against injuries on the job only, individual policy provides protection around the clock, and frequently for lower premium.

ˇ With most disability policies, disabilities that trigger benefit can result from either injury or sickness. If someone's main concern is injury, and he or she is willing to take the chance of going without protection against sickness, 'injury only' protection is an option (of course, for lower premium). One can even buy insurance against specific injuries.

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