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How To Read Your Homeowner’s Insurance Declaration Page

Reading a homeowner’s insurance policy can be overwhelming, especially for a first-time homeowner. It is important that homeowners understand the declaration page in their insurance policy so they know what is and is not covered. After all, a home is usually a person’s most valuable asset.

The declaration page in your homeowner’s insurance policy, typically the first page or pages of a policy, is a concise summary of the coverage provided. Understanding the declarations page will help ensure you get the most out of your policy.

You can quickly see how you and your home are protected from covered losses by reviewing the declarations page. The information provided typically includes the insurance company information, the address of the policyholder and the location of the insured property and the unique number identifying the property and coverages included and your lender if you have a mortgage. Make sure all of the information is accurate.

Here is some other important information included on the declarations page:

Coverage included section that explains what the insurance includes, such as coverage for your dwelling and anything physically attached to your home, such as a deck, garage or patio. It also includes other structures on the insured location, such as pools, gazebo or fence.
Personal property, such as furniture and TVs. Certain items, such as jewelry and fine arts, have restricted coverage limits. If you have high-value jewelry, fine arts or other such belongings, you likely will need riders.
Coverage limits that provide the maximum amount your insurance provider will pay for each type of coverage. Typically, natural disasters such as earthquakes and flooding, are not covered.
Loss of use is coverage for if you need to stay in a hotel or elsewhere while repairs are being made to your home for a covered claim.
Personal liability coverage provides protection with listed caps in case you are sued for an accident that occurs on your property.
Medical payments for others that covers you up to a certain amount if someone is hurt on your property.
Endorsements, or changes to your policy, are coverages you can add to protect parts of your home not covered by standard insurance.

A declaration page also can be used as proof of insurance.

You should carefully review your declarations page when you buy an insurance policy to make sure the information is correct. You do not want to discover when filing a claim there is an error.

If you’re having trouble reading your policy, an insurance agent can go through it step by step. Agents at The Leliaert Insurance Agency can help you review your insurance to make sure it is up to date and based on your specific needs.

What is a Commercial Insurance Package vs a Business Owners Policy?

If you are opening a small business, you might be wondering, what is commercial insurance, and do you need it? And, what is the difference between a commercial insurance package and a standard Business Owners Policy? The biggest difference between the two is the extent to which a policy covers your business’s unique activities and risks.

Learn everything you need to know about the differences between a business owner’s policies and commercial package policies. Find out what commercial packages offer that business owners’ policies do not – and if your business needs the coverage. And, discover how commercial packages customize coverages based on your business’s needs and risks.

What is a Commercial Insurance Package vs Business Owners Policy (BOP)?

What is a commercial insurance package policy (CPP) and does your business need this type of coverage? Whether or not your business presents a high enough risk to warrant CPP coverage is dependent on the size of your business and the specific risks associated with your business activity. Every small business needs to carry basic coverage, as included with a Business Owners Policy (BOP), but the same is not true for CPP coverage.

BOP coverage provides three essential forms of protection: property damage, liability, and business interruption insurance. CPP coverage extends to the aspects of your business that are non-standard from other businesses, and present a higher risk. And, a commercial insurance package policy is more affordable for small and medium-sized businesses than purchasing separate policies for each specific need.

Business Owners Policy (BOP) Explained

Business Owners Policies include the core essentials for just about every small business in any industry. In general, a BOP includes coverage for general liability claims, damage to your business’s property and building, and wages lost as a result of business interruption. Many small businesses in the United States find their BOP perfectly sufficient for their business-coverage, whereas growing businesses and those with specialized risks might need the extended coverage offered by a commercial coverage package policy.

General liability insurance is fundamental for every business and covers the legal costs and court fees associated with third-party claims of damage or injury for which your business is responsible. If your business property gets damaged as a result of vandals, fire, flooding, or other natural disasters, property insurance coverage takes care of the costs. And, in any case, a BOP provides coverage for wages lost due to business interruption, such as property damage.

BOP coverages are specifically designed to serve the most common needs of businesses, but many areas of the country experience natural events that are not covered by your BOP. For example, businesses operating within hurricane zones of the United States, and areas prone to frequent flooding likely must purchase extended coverage at an additional premium.

A BOP is great for small businesses that engage in low-risk business operations. Insurers often instill a cut-off limit on the size of a business’s property that they will cover under a BOP. For example, many insurers will not offer BOP property insurance to cover facilities that exceed 25,000 square feet.

Commercial Insurance Package Policy (CPP) Explained

The most common reason that businesses move from a BOP to a CPP is growth and risk exposure. Whereas a BOP only includes the three fundamental business coverages (property insurance, general liability, and business interruption), a CPP accommodates much more customization to create a policy designed for your unique risks. For example, unlike a BOP, you can create a CPP that bundles professional liability coverage, commercial auto insurance, and many others. A CPP, however, cannot include such coverages as workers compensation, directors and officers insurance, or key person insurance.

Do You Need a Business Owners Policy or Commercial Package Policy?

Both types of insurance policies provide a way of combining essential coverages into a bundled package to save your business money. And, at the end of the day, you need a policy that provides the coverage you need at a price you can afford. But, being underinsured, you run the risk of further financial losses and burdens than if you take out a CPP.

So, it all depends on your business’s activity, assets, and risks associated with daily operations. If your business is growing or engages in specialized risks, it is important to purchase a policy that includes the necessary coverage. Talk to an insurance associate for a free consultation on a BOP vs CPP, and to learn more about what a commercial insurance package policy is.

BOP Meaning: What is a Business Owners Policy? – 2021

What is the Business Owners Policy (BOP) meaning? A BOP is an essential piece of coverage for anyone who owns their own business. This coverage protects small and medium-sized business owners from property damage, general liability, loss of wages, and more.

Learn everything you need to know about business owners’ insurance policies, and why they are important. Find out which losses and expenses for which this type of policy covers, and where that coverage ends. And, see how BOP coverage is specialized for the risks that small businesses are likely to face in 2021.

What is a Business Owners Policy? BOP Meaning Explained – 2021

Every small or medium-size business is likely to need a BOP, meaning a Business Owners Policy to provide coverage for general liability, property damage, and more. This type of policy is designed for businesses in every industry that are small enough to qualify. In general, a BOP provides much of the same type of coverage as is included in a homeowners insurance policy.

Large businesses often procure separate policies to meet their needs, whereas smaller business owners are inclined to purchase a bundled policy. Business owner policies let you bundle coverages into a single policy, whereas larger businesses pose too high of a risk for a bundled policy.

A Business Owners Policy (BOP) combines coverage for your business property, business interruption, and liability insurance into a single policy. This coverage comes into play when such events as a fire, natural disaster, or theft take place that results in bodily injury or property damage. Common businesses to purchase BOP insurance includes offices, contractors, restaurants, retail storefronts, and other small service industry businesses.

What Does a Business Owners Policy Cover?

Business Owners Insurance Policies offer coverage for the buildings in which your business operates, as well as the property within those buildings and owned by your business. Many insurance providers offer standard and special business owners’ policies from which to choose. Standard policies often are limited to property insurance, business interruption insurance, and liability coverage.

Many insurers offer additional coverage options for businesses that need special protections. For instance, you can customize a policy to include coverage for off-site utility service income, data breach coverage, and more. Insurance companies work to customize the coverages in your BOP to best serve the needs of your business.

What is Not Covered in a BOP?

Though a BOP is tailored to your unique business needs, there are several types of coverage that are not included in the policy. For example, a BOP does not include professional liability insurance, which is required for some professional service providers like attorneys and physicians. If your business operates a fleet of vehicles, you need a separate commercial auto insurance policy, and most states require businesses to carry workers’ compensation insurance – which is also separate from a BOP.

Do You Need a BOP?

So, how do you know if you need to purchase a Business Owners Policy? If your business operates from physical property, building, or location you need a BOP. These policies include property insurance for home-based businesses, as well as commercial business buildings. And, it doesn’t matter if you own or rent the space – a BOP provides property coverage.

If your business or employees deal with customers regularly you need a BOP. If a customer sues your business, your BOP covers the costs associated with litigation and damages. Without a BOP, you face shouldering the financial burden of any customers who sue your business.

Most importantly – a BOP provides coverage for theft, including digital theft and data breaches. With cyber theft and ransomware attacks on the rise, digital assets are more at risk than ever. Business owners have little recourse to take unless you are covered by a BOP.

If you own a small business, odds are that a Business Owners Policy is an essential piece of your coverage. Are you ready to find an insurance provider? Talk to an insurance associate today to learn more about the BOP meaning and small business coverage that is right for you.

What is Indemnity Insurance? A Total Guide for Professionals – 2021

Indemnity insurance provides coverage to losses and damages incurred by professionals and businesses. Some professions are legally required to have this type of coverage, such as attorneys, medical practitioners, and more. It is most prevalent in cases claiming your practice or business at fault.

Learn about how indemnity insurance works and whether you need this type of coverage. Find out what it generally covers and when it is legally required to carry this coverage. And, see how it provides flexibility for professionals, certain businesses, and service providers.

Your Total Guide to Indemnity Insurance and What it is For – 2021

If your business or professional entity incurs damages or losses, indemnity insurance can provide compensation. This type of insurance serves in some cases to exempt an entity from liability regarding a claim of fault or misjudgment that results in a claim of loss or damages. Some of the most common entities that acquire or are required to carry indemnity insurance include legal service providers, financial services, financial advisors, and medical service providers.

In the event of a medical malpractice claim, indemnity insurance provides compensation to cover the costs of loss and damages. In this policy, the insurance company agrees to make the policyholder fiscally whole as far as they incur losses as a result of their practice. On the other end, the insured party agrees to pay a monthly or annual premium.

It is Liability Coverage: How Does it Work?

This type of coverage is available as an addition to your existing commercial or business liability insurance. And, many professionals and service providers must have supplemental indemnity coverage. It is an extra form of insurance that is specific to professional practitioners and is often called professional liability insurance.

It is most relevant if someone to whom a service is provided, claims negligence or loss as a result of a failure for the service provider to perform the agreed-upon service. Unlike general liability insurance, it does not cover losses as a result of damage to property, bodily harm, or compensation for lost wages.

This type of insurance can cover court fees, attorney fees, and other legal costs associated with a civil claim against a professional business entity. Indemnity insurance kicks in to offer compensation for the costs of litigation and any damages that the entity is required to pay.

Unlike other forms of coverage, this coverage is catered to each policyholder. Each insurance provider has different areas of focus when it comes to indemnity. Talk to a Leliaert insurance associate today to customize the right indemnity insurance policy for your business or professional entity.

What is Commercial Insurance? Total Guide to Business Coverage – 2021

Commercial insurance comes in several forms and serves to cover losses associated with your business activity. It protects the leadership of a business, as well as a business’s employees from incurring losses as a result of a workplace accident. And, it can make the difference between staying in business through unforeseen hardships, or shutting the doors for good.

Learn everything you need to know about commercial policies for businesses of every size and industry. Find out about the different options available for protecting your commercial enterprise from the full brunt of liability costs. And, discover how this type of business insurance can be a vital resource in the face of legal liability associated with an incident involving your business and employees.

The Total Guide to Commercial Insurance and What it Covers in 2021

Different types of commercial insurance protect your business from different kinds of risks. Also called business insurance, it covers many of the brutal expenses that your business incurs when being held liable for losses. Instead of shouldering the full burden of the risk, business insurance provides a buffer between your business’s liable expenses and its profits.

Business insurance typically carries a higher coverage limit than that of a personal insurance policy, since it has to provide coverage for numerous employees and business assets. Depending on the type of business, you can get coverage for your business’s financial wellbeing, reputation protection, and employees. Since every business is unique in the risks associated with its operation, every business must choose from a menu of coverage options available to create a policy that serves the unique needs of your business.

The Most Common Type of Commercial Business Policy

When it comes to a basic business insurance policy, many businesses begin with a standard Business Owners Policy or BOP. This basic policy provides three essential forms of business-coverage, including commercial property, general liability, and business income insurance. Every business needs these three types of coverage, and many businesses need additional coverage beyond that which is in a BOP.

BOP: Commercial Property, Business Liability, and Income Insurance

Commercial property insurance provides coverage for the infrastructure and physical property of your business. This type of coverage applies to equipment, like computers, electronics, tools, machinery, furniture, and accounts receivable. In the event of damage to your physical property, a BOP policy kicks in to help your business pay for the expenses.

General liability insurance kicks in to protect your business to cover damage claims. It covers claims of slander, advertising mistakes, bodily injury, and property damage. For example, if one of your employees accidentally drops hot soup on a customer, general liability insurance covers the expenses associated with damages awarded to the claimant.

The third type of coverage provided in a BOP is business income insurance. This type of insurance provides financial assistance to your business in the event of property damage. For example, if a car crashes through your office wall, it covers the rental cost for a temporary office.

Other Commercial Insurance: Auto, Workers Comp, and Cyber Liability

Apart from a BOP, your business may need coverage specifically catered to your commercial activity. Many insurance providers offer niche coverage options for businesses with specific needs. But, most providers offer businesses the option to extend their commercial policy with auto, workers compensation, or cyber liability insurance.

Commercial auto coverage is an essential addition to your policy if your business involves working with automobiles. Commercial auto coverage is similar to personal automotive insurance. The difference is it covers multiple vehicles in the event of a breakdown of equipment. It provides liability coverage for business-related auto accidents where injury or damage occurs.

Workers’ compensation insurance covers business expenses associated with lawsuits involving worker-related injuries. Many states legally require businesses to have workers’ compensation insurance if the operation involves construction, manufacturing, or engineering. In the event of a lawsuit, it covers medical expenses and wage loss, damages, and litigation fees for the defense.

More businesses operate digitally, meaning cyber liability insurance is more necessary than ever before. If your business operation involves managing digital assets, such as personal or financial information, cyber liability is essential. If your business’s cybersecurity is breached, compromising digital assets, and damaging digital infrastructure, cyber liability insurance kicks in to cover the expenses associated with the fallout. It can cover the costs associated with lawsuits regarding the compromising of personal information, as well as many other expenses.

Get Help Creating a Policy to Fit Your Business

Every business is different in the coverage it needs – but every business needs to be covered. There are many other forms of business coverage that are not mentioned here, and an associate can help you create a policy to fit your business needs. Talk to a Leliaert Insurance associate today for expert help in creating the right commercial insurance plan for your business.

What is Variable Life Insurance? Total Guide to Cash Value Policies – 2021

Variable life insurance is a type of permanent life insurance that offers policyholders a cash value portion of the account. Unlike other permanent life policies, a variable life policy comes with significantly more risk, while presenting the opportunity for more reward. These policies give you the most control over how aggressively you invest the cash value portion of your account, and where you decide to invest.

Learn about the risks and rewards that come with a variable life policy as opposed to other permanent life policies with a cash value feature. Find out how variable life compares in terms of premiums and ongoing costs associated with keeping the policy current. See the pros and cons of a variable life policy, and get help determining the best life insurance solution for your situation.

Everything You Need to Know About Variable Life insurance in 2021

Variable life insurance is the riskiest of the 4 different types of permanent life insurance that offer a cash value account included in the policy. Variable life insurance, like all permanent life insurance policies, is designed to remain in place for the life of the individual being insured. And, also like other permanent life insurance policies, variable life policies feature a death benefit, a cash value, and the premium.

What is the Death Benefit for Variable Life Policies?

The death benefit is the most standard element of any life insurance and is the main purpose of the policy. Every month, you pay a premium to keep your life insurance active, part of which goes to the death benefit. When the policyholder dies, the death benefit is bequeathed to a beneficiary. Apart from the administrative fees and that which goes towards the death benefit, the rest of the premium payment goes towards the cash value component of the policy.

What is the Cash Value Portion of a Variable Life Policy?

The cash value portion of permanent life insurance functions in the same manner as a standard investment brokerage account. The difference with a variable life insurance policy is the amount of investment control and mobility of funds afforded to the policyholder. As the investments appreciate, the policies cash value increases.

If you decide to close your variable life policy at any time, the cash value is the amount you expect to receive back. While the policy is active, the cash value principle is invested in securities that are similar to mutual funds or index ETFs. Most variable life insurance policies include a fixed-interest option that guarantees a steady rate of return to your cash value.

Why Choose a Variable Life Policy?

The benefits of choosing a variable life insurance policy include the potential for a higher rate of return on your investment. Variable life policies offer more investment options and flexibility than that afforded by a whole life policy. But, with greater reward potential comes greater risks, and variable policies are so named for that exact reason.

The cash value portion of a variable life policy most resembles a standard investment account. When the market is good the cash value swells, and when the market ebbs the cash value drains. But, unlike other policies, a variable life policy is built to afford easy access to the cash value.

Variable policies often include the highest amount of ongoing and additional fees to keep the account open. And, if you are worried about the ability to maintain premium payments, there are more frugal options for getting life insurance. If you want to learn more about variable life insurance, talk to an insurance associate for a free consultation.

What is Cash Value Life Insurance? The 4 Types of Policies – 2021

Cash value life insurance provides investment opportunities to earn interest over the policy’s lifetime. This type of life insurance policy features a separate partition that acts as a savings account, called the cash value. And, these life insurance policies let the holder access the interest on the cash value.

Learn everything you need to know about the 4 types of cash value life policies available and how they differ. Find out how a cash value policy works, what benefits they offer in the short vs long-term, and the responsibilities associated with them. And, see how these 4 types of cash value policies rank next to each other on the risk/reward scale.

What are the 4 Types of Cash Value Life Insurance and How Do They Work?

A cash value life insurance policy is one of 4 different types of permanent life insurance that earns interest over time. In general, the types of permanent life insurance with a cash value feature include whole life insurance, universal life insurance, variable universal life insurance, and indexed universal life insurance. And, the investment activity widely varies on a risk and reward scale, depending on which type of permanent life insurance policy you choose.

The biggest difference between this type of life insurance policy and a term policy is the assurance of interest in a separate cash-value account. The cash value portion of your account is accessible to borrow money against, or as liquid funds. So, like a savings account, a cash value account takes a portion of your monthly premium to use in an investment account that grows over time.

How Does the Cash Value Portion of Permanent Life Policies Work?

Every life insurance company is slightly different when it comes to the details of creating a policy. But, in general, there are two main elements at play in how permanent life insurance works. A permanent life insurance policy usually features a death benefit and a cash value.

The death benefit works similarly to that of any other type of life insurance. The value of the death benefit is bequeathed to a beneficiary at the time of the insured’s death. The amount of death benefit a policy pays depends on the face value of the policy – just like term life insurance.

The other element of permanent life insurance is the cash value. The cash value is in addition to the death benefit and acts as an investment account. The principle for the cash value portion comes directly out of the monthly premium, which makes these types of policies more expensive than those without a cash value feature.

Unlike the death benefit, you can access the cash value portion of your account at any time during your life. Over the life of the policy, the interest accrued in cash value is tax-deferred. Some policies offer a more stable return, whereas others offer an aggressive approach, and how much return the cash value portion yields is contingent on the type of policy you choose.

How Does Accessing the Cash Value Work?

The cash value portion of your permanent life insurance policy is accessible by several means, contingent on the stipulations of your policy. In general, the cash value is accessible by withdrawal, loan, surrendering the policy, or payment of policy premiums. Depending on the type of policy, there may be consequences or penalties for accessing the cash value.

Make a Cash Value Withdrawal

Withdrawing the cash value from your account is the most convenient and common way of accessing the cash value. As long as the amount being withdrawn is less than the premium paid thus far into your cash value account, withdrawals are tax-free. If, however, the amount you withdraw exceeds that which you have paid into the cash value, it is taxed by the IRS as standard earned income.

Borrow Money Against the Cash Value

Another option is to take out a loan on the cash value of your policy. You can borrow against the premium payments already made and the interest accrued by the cash value principle. And, loans taken against the cash value of your permanent life insurance policy are tax-free, as well.

But, if you die with outstanding debt from a loan against the cash value, the remainder is taken out of the insured’s death benefit value.

Close the Policy and Get the Cash Value

If you decide to surrender your permanent policy you can access the cash value, but not before paying a few fees. Most insurance companies require the policyholder to pay a surrendering fee when closing the policy. And, you also run the risk of being charged income tax on the value of your policy after it is dispersed back to you.

Use the Cash Value to Pay Monthly Policy Premiums

The other common way of utilizing the cash value is to help with premium payments for your permanent policy. Most insurance providers allow the policyholder to use their cash value to pay monthly premiums, as long as it doesn’t reduce the principle and cause the policy to lapse. And, if you are having trouble paying your monthly premiums, this type of life insurance might not be the right fit for your finances.

If you’re interested in a life insurance policy that features an investment aspect, a cash value policy might be the right choice. But, how do you know if it is the best option for your future? Talk to an insurance associate for a free consultation on whether a cash value life insurance policy serves your current and long-term needs.

Your Total Cyber Security Insurance Guide for Small Businesses – 2021

Most businesses have cyber security insurance of some sort, but what does that mean? Cyber policies span a wide range, and the coverage you receive can vary just as widely. So – does your business need this type of insurance and what does it cover?

Learn everything you need to know about cybersecurity liability coverage and what it is for. Find out whether your business liability insurance includes a cyber provision and the extent to which it might provide coverage for a variety of events. And, see if your business is getting the amount of coverage it needs for cyber-related incidents.

Cyber Security Insurance Guide – 2021: What is It and Who Needs It?

Of all the types of insurance for small businesses, the vast majority of businesses lack cyber security insurance. Cyber coverage is known as cyber liability insurance, and it is a purchasable add-on to most insurance companies’ standard business liability insurance policies. But the extent of coverage can widely vary between insurers.

If you are unfamiliar with why your business might need cyber protection, just consider the recent Solar Winds hack, Microsoft Exchange cyber attack, or the 36 billion digital records exposed through data breaches in the first half of 2020. Cyber threats are reaching small businesses on an entirely new scale, and the average data breach for a small business costs nearly $4 million in damages and repairs.

In 2021, most small businesses know that they need cybersecurity liability protection. So the real question is what you need your policy to protect. And, the answer is different for every business.

What is Cyber Liability Insurance?

Cyber liability is specialty business coverage for risks associated with digital threats to a business’s information, internet technology infrastructure, regulatory liabilities – and more. The majority of business liability policies refrain from expressly mentioning cyber coverage – unless to rule it out. You can add it to your general liability policy to cover events like data theft, ransomware extortion, malware attacks, denial of service – and others.

If you have cyber insurance, your business is covered for losses and other costs related to qualifying events. These costs can include legal fees and the associated expenses to investigate the cyber event.

But, a claim can be denied by the insurer for several reasons, like failing to safeguard the stolen data in the first place. And, according to IBM, nearly 85% of corporations fail to correctly safeguard their data files. So, along with coverage comes the responsibility to manage and monitor the security of your network.

Do You Need Coverage for a Cyber Event?

About 63% of small businesses reported experiencing a data breach in 2019, and the percent is only likely to increase in the coming years. And, of the businesses that experience a cyber attack, around 60% are out of business within a timespan of months. At the end of the day, if your business has valuable digital assets, it makes sense to have coverage.

Since the beginning of the COVID-19 pandemic, digital adoption by small businesses has accelerated six-fold. Between March and October 2020, like many businesses newly adopted a digital presence as was true of the past three years – combined. So, it is no wonder that cybersecurity threats have increased as well.

Legal and Contractual Cyber Insurance Responsibilities for Businesses

When it comes to your business’s requirement to have cyber coverage, you might be under legal or contractual obligations if your company handles any personal information. Especially when it comes to customers’ and clients’ sensitive information, your state’s requirement for cyber insurance might be obligatory. Even if the data files are kept in “off-line” storage, you likely need cyber coverage if your business stores credit card information, bank account numbers, social security numbers, and even names and addresses.

Another reason you might be required to have cyber coverage on your general business liability policy is if your business’s revenue crosses paths with European markets. If you deal with businesses or sell to consumers in Europe, the European Union mandates the application of standards implemented under the General Data Protection Regulation (GDPR).

What Types of Events and Incidents Does Cyber Liability Cover?

The events and incidents covered under a cybersecurity insurance policy regarding your business’s digital exposure. In general, the costs associated with an event are covered for first-parties, third-parties, or both. Expenses that are covered for first-parties often include the costs of IT forensics, credit protection, crisis management, notifications, and crime engineering.

Third-party expenses often cover the costs of breaches of contract, breach of network security, Denial of Service (DoS), malware and computer virus software transmission, negligence of the protection of data therewithin, legal defense and fees, and financial penalties as a result. Also, cyber policies generally cover some or all of the costs associated with a ransomware event, in which digital assets are leveraged by hackers for financial extortion.

Even when all the best safeguards are in place and the best standards of cybersecurity are being followed, cyber threats still pose a threat. In the event of a cyber attack, is your business covered? Talk to an insurance associate today for a free consultation on choosing a cyber security insurance plan that protects your business’s digital liability.

Is Life Insurance for Children Available and Why Do You Need It? 2021

In the face of recent world events surrounding the COVID-19 pandemic, there is a new interest in life insurance for children. Generally, children have little need for a life insurance policy, except for in special circumstances. So when does it make sense to get life insurance coverage for your child, and are there alternatives?

Learn everything you need to know about child life coverage and shopping policies in 2021. Find out how it works, what you need to know when buying, and the rough-average monthly-premium. And, discover alternative solutions to children’s life insurance that make sense for your family.

Life Insurance for Children in 2021: How it Works and What Its For

Just like standard life insurance – life insurance for children is primarily a form of income protection. So, since a child doesn’t make income, you don’t need life insurance to cover the loss. This logic, however, ignores the financial obligations that accompany anyone’s untimely death, like funeral costs, as well as the potential benefits of investing in a permanent life insurance policy for your child.

In general, there are two umbrella reasons you might want to take out a life insurance policy on your child. The first is if your child has a chronic illness or other medical condition that poses a risk to their lives. The other reason you might take out a life policy on your child is as a form of long-term investment and savings for their future.

These two routes are quite different in the needs that they serve, as well as the general cost of monthly premiums. Breaking down children’s life insurance into these two categories helps you see the benefits, drawbacks, and practicality of both. The biggest difference between life insurance policies for kids is that one is term life and the other is permanent life.

How Does Life Insurance for Kids Work?

The biggest benefit of buying a life insurance policy for your child is if a critical illness of some sort will make it difficult for them to get insurance in their adulthood. When thinking about these policies, they are often whole life insurance and carry significantly higher premiums than that of a term life policy. Whole life insurance policies usually have monthly premiums that cost about 15-times more than the cost of term life insurance premiums.

But, the extra money you spend on a child’s whole life insurance policy is not wasted. They usually carry a cash value in the form of a policy rider, which is accessible by your child in their lifetime. So, in a way, the policy includes a savings account with dividends.

What You Need to Know When Shopping Insurance Companies

That being said – this type of investment is criticized by some economists for having a low rate-of-return, high-rates, and fees that can make these policies untenable. For those able to afford the high-premiums for their lifetime, the benefits remain intact for the life of your child, without any changes based on the state of your health. But, if you are unable to sustain the policy premiums for the duration of the policy – or you transfer the policy to your adult child and they are unable to continue payments – the cash benefit can be significantly impacted.

Most children’s whole life insurance policies max-out at age-18. So, with most insurers, you can still create a policy for a child who is 17 years old. Gerber Life, however, will not create a policy for children over the age of 14, and the policy automatically transfers to the underwritten child when they turn 21.

Is Life Insurance a Cost-Effective Way to Save for My Child’s Future?

If you are looking at a way to save for your child’s future, a whole life insurance policy is certainly a valid route. It provides a death benefit, as well as a savings account that allows you to borrow money against the balance later in your life. So, opening a new policy for a young child can provide a means to pay for expenses in their adulthood, like college.

The main benefit of using a whole life insurance policy to help pay for college is that it is not recognized as a financial asset when calculating your financial aid. Some economists advise against the whole life policy, instead recommending you open a 529 plan to save for your children’s college. The 529 plan, however, does count as an asset in terms of calculating your child’s eligible financial aid.

Whether for future savings or because of an illness, a child life insurance policy is only one way to plan for expenses. And, navigating the options available can be overwhelming without help. Get a free consultation with an insurance associate to learn more about whether you should look into getting life insurance for children in your family.

Self Employed Health Insurance – 2021: Everything You Need to Know

For anyone who does not receive healthcare coverage through an employer, it’s up to you to find self employed health insurance. Health insurance for self employed individuals is available through the Federal government as well as private insurers. And, being your own boss comes with some tax perks when it comes to deductions.

Learn everything you need to know about getting health coverage under a self-employed insurance policy. Find out what health care options are available to you, and whether you qualify as a self employed individual. And, see how to determine which insurance plan is right for you.

How Does Self Employed Health Insurance Work in 2021?

Self employed health insurance can provide equivalent coverage as that from an employer, or you can find insurance on a budget. Health coverage is essential – whether your business has one employee or 1,000. But, as the self-employed owner of a business, you can take an extra income tax deduction for your health insurance costs.

The Health Insurance Marketplace provides a consolidated hub to get quotes from all the major healthcare insurers. And, you can specifically search for a policy designed for self-employed individuals.

Self-Employed vs Small Business: Which Are You?

When it comes to qualifying for self employed health coverage, it’s a matter of numbers. If you are the only employee in a business, which you run, then you qualify. But, do you have one or more employees?

If you even have a single employee you might qualify for a small business health insurance plan through the Health Insurance Marketplace. A small business policy might add the benefit of providing coverage for a spouse or family member, as well as yourself. Ask yourself, do you run an income-generating business that has zero employees?

If the answer is, yes, you are probably eligible for self employed health insurance through the Individual Marketplace. An employee is someone who receives a W-2 form at tax time from a small business. If your business occasionally hires contractors, they do not count as employees. In which case, you can still qualify as self employed.

What Coverage Options Exist for Self Employed Individuals?

If you find yourself in a situation where your self-employed income is scarce, see if you qualify for a premium health credit. You can find out if you qualify by filling out a Health Care Marketplace application. Low-income households are determined by the level of gross household income, compared to the size of the household.

If you are having a hard time affording the healthcare options available for self-employed individuals through the Marketplace, you might qualify for Medicaid or CHIP. Medicaid and CHIP are available through your state. And, they afford individuals in need and children healthcare coverage at little to no cost.

On the Healthcare Marketplace, you will find a range of types of coverage. Each option offers different levels of coverage at an affordable premium. In general, the less you pay on your health care monthly premium, the more the cost of medical care. And, the opposite is true when paying a high monthly premium – it affords you greater coverage on medical expenses.

If you do not qualify for Medicaid, and can’t afford a general individual policy, think about getting catastrophic health insurance, instead. Those who are under the age of 30 and have no medical pre-existing conditions might qualify for catastrophic insurance.

Insurance Tax Deduction for the Self-Employed

For the self-employed, the cost of your annual health insurance is all deductible. At tax time, you can deduct the premiums you paid over the previous year in the form of monthly health and dental premiums. That means that you subtract the total cost of your insurance from your taxable gross income over the year and receive the difference in your tax return.

But, if your single-person operation lost money over the previous year, you might not be able to claim the deduction in full. Are you ready to take the next step to get insured? Talk to an insurance associate today for a free consultation on finding the right self employed health insurance for you.