Overlooking Insurance Premium Payments Can Be Costly!
August 12, 2011
When their annual family life insurance premium came due recently the Johnsons did not have the funds available. Their credit cards were topped out from some unexpected house maintenance issues, a trip and, along with all of the other day to day expenses of running a household; there was just not enough money in the bank. Their budget was on overload. The life insurance premium statement and reminder notice was filed in their “to be paid” folder, untouched and unpaid for several weeks until they received the final “lapsed” notice.
Fortunately for the Johnsons there was no claim required under their now lapsed life insurance policy or this story would have had a much sadder ending. There would have been no life insurance to look after their family responsibilities.
Unfortunately, however, the Johnsons needed insurance and soon found out getting their life insurance back on track when it has lapsed is no easy matter. New applications, new medicals (and a hope that their good health continued to even qualify) were required and now at much higher premiums reflecting their current ages. Years of previous insurance payments now gone and a new policy required. A costly and potentially financially catastrophic circumstance indeed.
Imagine similar circumstances if they had left the country on an extended vacation and their home, automobile, or any insurance policy expired while gone and they suffered a major loss such as a fire? For the sake of a few extra precautions, the risk of financial loss could be catastrophic.
With most of our household budgets strained and on overload these days it can become difficult trying to prioritize which expenses come first. Late with a credit card bill? You’re charged more on the next one. Late with your cable TV, cell phone or most other monthly expenses? You might have an interruption of service or incur additional service charges. Late with your home, automobile, life, business or any insurance premium? You may find your policy lapsing and the financial consequences severe.
To avoid the chance of an accidental cancellation or expired policy always make sure your premiums are paid by their due date. If you are unable to do so, it is always important that this be communicated to your broker or insurer to review any options available.
Sincerely,
The Insurance Advisors @ Guthrie Insurance Brokers Ltd
Toronto- (416) 487-5200 – 1-888-310-SAVE (7283)
www.GuthrieInsurance.com - info@GuthrieInsurance.com
E & O E
This just in from Europe. Is this coming to a Country, Province, or State near you? Statistics have consistently shown that women live longer and have fewer automobile accidents. Certainly, this means that men generally pay more for this type of insurance. Where is the line drawn for fairness? With this, women will certainly see increases in the cost of life insurance and automobile insurance, while men will pay less. Is the next step age ”discrimination”. Should a 20 year old female pay the same for life insurance as a 75 year old male? Who is subsidizing who?
Lets try and use the same “discrimination” for tax purposes. If services are the same for all homeowners in a given jurisdiction, is it fair that the owner of a more expensive home have to pay more? How about income tax? Is it fair that someone who earns more than another have to pay more? Where is the line drawn?
Here is the article -
The European Union’s highest court has outlawed any discrimination between men and women as actuarial factors when calculating premiums for life and property and casualty insurance policies.
“The use of actuarial factors related to sex is widespread in the provision of insurance and other related financial services,” the EU Grand Chamber wrote in its judgment in Yann van Vugt and Charles Basselier v. Conseil des ministres, posted on Mar. 1, 2011. “In order to ensure equal treatment between men and women, the use of sex as an actuarial factor should not result in differences in individuals’ premiums and benefits.
“To avoid a sudden readjustment of the market, the implementation of this rule should apply only to new contracts concluded after the date of transposition of this directive.”
That would basically give European insurers up until December 2012 to make the transition.
Articles 21 and 23 [of the EU] Charter state, respectively, that any discrimination based on sex is prohibited and that equality between men and women must be ensured in all areas,” the court found, noting that Article 5(2) of EU Directive 2004/113 provides for equal treatment between men and women in the access to and supply of goods and services. “Consequently, it was permissible for the EU legislature to implement the principle of equality for men and women – more specifically, the application of the rule of unisex premiums and benefits – gradually, with appropriate transitional periods.”
The court’s decision will create some uncertainty in the market during the transitional period, says Noleen John, a legal consultant for international legal practice Norton Rose LLP.
“It also seems likely, in view of the length of the transitional period, that insurers may need to use uncertainty premiums until they have sufficient data in relation to the carrying on of business on this new basis. This could result in higher premiums or lower benefits for certain policyholders (female motorists and male annuitants).”
The decision also may create some uncertainty about the future of other established actuarial factors used to establish insurance premiums.
“There is going to be uncertainty in the insurance market for some time as a result of this decision,” says Ashley Prebble, insurance partner at Norton Rose LLP. “It is likely that the decision will require the European Commission to clarify the position with regards to other potential areas of discrimination, particularly age and disability.
“This might be done through a protocol setting out exactly what insurers will be able to do in terms of differentiating the risks posed by different categories of policyholders”
Courtesy of CIP Society Advantage Daily
PS. For past articles relating to insurance, safety, and loss prevention, please scroll through the “read our blog – Guthrie News & Views” section in our website noted below.
Sincerely,
The Insurance Advisors @ Guthrie Insurance Brokers Ltd
Toronto – (416) 487-5200 – 1-888-310-SAVE (7283)
www.GuthrieInsurance.com - info@GuthrieInsurance.com
E & O E
Why do YOU need Travel Insurance?
October 5, 2010
Whether you are heading to Buffalo for a few hours of shopping, or taking off for the 6 month trip of a lifetime, you need to travel protected from unforeseen medical situations!
Why do people need travel insurance?
Who would have thought a volcano in Iceland would snarl air traffic around the world?
Flight cancellations, especially those attributed to “acts of God” can leave travellers at the mercy of airlines that are in a perpetual state of cutting back. Travel insurance takes the guess work out of “what happens next?” when flights are cancelled or luggage is lost. Travellers with travel insurance know before they leave that they have a “Plan B”.
Cancelled flights or lost baggage aren’t the only pitfalls travellers may face. Requiring medical attention while away from home is always stressful, and can be extraordinarily costly.
Heading to Arizona for a week of golf, John from Calgary was thinking about nothing other than sand traps and his short game. Midway through his vacation, a heart attack brought everything to a screeching halt. Emergency medical care and three weeks in the hospital saved his life … and left him with a hospital bill totalling $1.2 million!
The cost of medical treatment in the United States has been international news for months, as President Obama tried to hammer out a health care reform bill with Congress and the Senate. Although the bill passed, with numerous compromises, medical costs in the U.S. remain stratospheric.
Gerald from Windsor learned that when he went to Ann Arbor, Michigan for a weekend of fun. He and some friends were tubing on a river when Gerald scratched his foot on a rock. Being 25 years old, the slight pain didn’t cause him a moment’s pause.
Until that night when he could hardly walk on his injured foot. The cut had become infected. Grudgingly, Gerald allowed his fiancé to talk him into visiting a nearby emergency room. He stayed the night, received some anti-biotics and was released the following day with his foot on the mend … and with a $6,000 hospital bill in hand.
“I was shocked,” Gerald said when asked about his reaction to the cost of his treatment, “but I was covered for medical treatment because I’d booked my trip on my credit card.” Or, so he thought.
That’s when Gerald learned the difference between travel accident insurance and travel medical insurance.
Credit card companies – for the most part – offer something called travel accident insurance. This means they provide a predetermined lump sum in the event of a specific injury, or death, as a result of an accident while travelling.
Which meant, in Gerald’s case: “I was on the hook for $5,000 of the $6,000 hospital bill!”
Nobody expects to become ill or injured while on vacation, but the sobering costs of care has made travel medical insurance a necessity.
Can Am Insurance – 2010
Sincerely - The Insurance Advisors @ Guthrie Insurance Brokers Ltd
Toronto – (416) -487-5200 – Richmond Hill – (905) 313-8481
www.guthrieinsurance.com - info@guthrieinsurance.com
E & O E
