Personal Insurance - Auto

Farm Insurance

1. I am only renting a farm and do not have significant assets. Do I need a farmowner's policy?
   Yes, you do need a farmowner's policy, regardless of the value of your farm assets. You should insure your farm assets against loss. However, in today's society, the important coverage in any insurance policy is the liability protection. How would you pay for damages done by the steer that got loose through the opening in the pasture fence? Or how about the milk contamination in the bulk tank driver's last load? Or even damage to another vehicle caused by your tractor and equipment out on the road?
2. I understand I need to insure my buildings, but why my equipment and live stock?
   Equipment can be protected from losses due to fire, theft, collision, and upset. If machinery is not specifically listed on the policy, you have no coverage for those pieces. Livestock is the same way. Livestock can be insured up to its replacement value on a farmowner's policy using a brief description and value of each head. Again, if it is not listed on the policy with a description and value, you generally have no coverage.
3. Do I need more than the liability protection provided on the basic policy?
   Again, in today's society, liability protection is a major concern. Does your farm policy provide enough coverage at $300,000 limits? If you own a farm or other assets, probably not. You might be better suited to consider a farm umbrella liability policy of $1M, $2M, $5M or more. The umbrella policy offers additional protection beyond the basic liability coverage afforded under the general liability limits of the farmowner's policy.
4. I hire the neighbor boy to help during the summer months around the farm. Do I need Workers Compensation (WC) coverage for him?
   Yes, you need WC for any and all employees, regardless of the wages paid. Pennsylvania law requires you to protect your employees against job-related injuries. As a result, WC coverage is mandatory in Pennsylvania. Call us for WC rates under the Ag Safety Group.
5. I use my old pickup truck for farm errands only. Do I need to have it licensed and insured?
   If you are using a pickup truck to service your farm property only, you may want to consider a farm sticker in Pennsylvania, instead of licensing. Also, if you go no further than a small radius of your farm, you may want to consider farm license plates for the truck. We can insure both of these types of vehicles. Call us!
   

Fire Company Insurance

1. Do fire companies really need insurance coverage?
   Fire companies are no different than churches and other volunteer organizations…they are made up of excellent people giving of themselves to help and protect others. Firehouses need the same comprehensive protection as other buildings in the community. More importantly, its volunteer members need coverage for themselves personally if they are hurt, injured, or even killed in the line of duty. Turn to a specialty carrier for your comprehensive package of protection.
2. Aren't all policies created equal?
   Again, no policy can protect against all possible loss situations and no two policies are identical. However, a carrier who specializes in benefits for fire companies and their volunteers will have unique coverages available for you and your fellow volunteers. What seems like insignificant benefits on paper can provide significant benefits if you are the one in need of financial help due to an accident while volunteering on behalf of the local Fire Company. Call us today for your company quote.

Life Insurance

1. How much life insurance should I use to protect my family?
   General "rules of thumb" suggest life insurance equal to 6-10 times your annual salary. However, many factors should be reviewed in determining a more exact amount of life insurance. Those factors include: 1) other income sources than salary, including Social Security benefits; 2) if married, what would be the spouse's earning capacity; 3) number of dependents; 4) other death benefits available (e.g.-employer coverage); and, 5) special life insurance needs (mortgage repayment, education needs, estate planning, etc.). Call us to help you determine your need for life insurance coverage.
2. Once I determine the amount of life insurance, then what kind should I purchase?
   That is a good question! The answer will vary depending upon your circumstances. If the amount is so large, the only way to afford it might be through the purchase of term insurance with its lower premiums. However, if your ability to pay life insurance premiums is such that you can afford a fixed or permanent premium, then you need to consider other financial factors in the decision (e.g.-tax bracket, short or long-term needs, rate of return on alternative investments of similar risk, etc.).
3. Is mortgage insurance a good buy?
   The face amount of mortgage insurance typically decreases over time, consistent with projected decreases in the outstanding balance of the mortgage loan. Fixed term insurance, on the other hand, usually remains level in premium and death benefit for a fixed number of years. Term insurance is generally less expensive and maintains a higher death benefit than mortgage insurance.
4. What about purchasing life insurance on my spouse or children?
   In certain circumstances, it may be wise to purchase life insurance on children. However, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s). It is of utmost importance that the earning capacity of the primary breadwinner be fully protected through the purchase of the required amount of life insurance before contemplating the purchase of life insurance coverage on children or on a non-wage earning spouse. Life insurance on a non-wage earning spouse is often recommended for paying for household services lost at this individual's death. In a dual-earning household, it is important to protect the income-earning capacity of both spouses.
   

Health Insurance

1. What types of health insurance policies are available?
   In recent years, managed care plans have replaced the typical indemnity, or fee-for-service plans. Managed care plans include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPO's), and Point-of-Service (POS) plans.
   Managed care plans require insureds to access health care through a network of providers. The primary care physician refers patients to specialists and other providers in the network. In turn, premiums are somewhat reduced and/or benefits increased.
   Traditional indemnity plans allow insureds the freedom to select and use providers of their choice. Services are not restricted to the network's territory or list of participating providers.
2. Is my employer required to offer me health insurance?
   Employers typically offer benefits like health insurance on a voluntary basis to attract and retain quality employees. Cost of the insurance for the employee is usually paid in full by the employer, while employees contribute to the cost of spouse and dependent care.
3. If I change jobs, does my health insurance continue?
   Generally, your new employer will offer you their group health insurance benefits after a probationary employment period. You may continue your previous employer's coverage under Federal COBRA regulations for up to 18 months after terminating employment, but at your own cost. Generally, employees opt for their new employer's health insurance plan.
4. What health insurance options do I have if I want to start my own business?
   As mentioned, Federal COBRA regulations allow you to continue your current employer's health insurance plan for up to 18 months after terminating employment, but at your own cost. If your spouse is employed, check into adding the family to his/her plan. Otherwise, you will need to secure your own individual health insurance plan. Options for coverage include Short-Term Medical, Traditional (indemnity or fee-for-service) plans, PPO's, and MSA's.
5. What are HSA plans?
   Health Savings Accounts (HSA's) are offered to individuals and small groups as an alternative to low deductible health insurance plans. An HSA is a two-part plan. Qualified HSA medical plans offer a high deductible, or "catastrophic," health insurance coverage plus a separate account for tax-deductible, tax-deferred savings. Accumulated money in the HSA may be withdrawn for I.R.S.-qualified medical expenses that either are below the insurance plan’s deductible or not covered by the health insurance plan. Individuals and families with HSA plans may deposit maximum limits (as determined annually by the I.R.S.) to a custodial HSA account each tax year the plan is in effect.
   

Disability Insurance

1. What is disability insurance?
   Disability insurance (DI) provides income protection for you and your family if you become physically unable to work. Where would the cash come from to pay your monthly mortgage payments, car payment, or credit card balance? DI can put money back into your pocket to pay those fixed expenses.
2. Do I need DI protection?
   The need for DI depends on several factors: 1) your continued monthly debt obligations; 2) your spouse's earning ability to replace your lost wages; 3) your cash reserve to cover unexpected periods of unemployment due to physical limitations; and, 4) other sources of income.
3. How much DI do I need?
   Coverage amount depends on some of the above factors. You can usually purchase monthly benefits in an amount of up to 70% of your current income. Depending upon your occupation, you can secure benefits for 1 year, 2 years, 5 years, or "to age 65." Other options worth considering include own occupation rider, guaranteed renewable rider, and a benefit increase option.
   

Long-Term Care Insurance

1. What is Long-Term Care insurance?
   Most people refer to nursing home insurance as Long-Term Care (LTC) insurance. However, LTC insurance can cover the whole gamut of health care including home health care, adult day care, assisted living, personal or custodial care, intermediate care, skilled care, and Alzheimer's care.
2. Doesn't Medicare and my health insurance cover LTC?
   Generally, Medicare and other health insurance policies only cover limited benefits for LTC expenses. Medicare can cover skilled nursing home stays after a 3-day hospital stay for up to 20 days. Typical health insurance policies pay up to 30 days of skilled care only. Other stays in adult day care, assisted living, personal care, intermediate care, or Alzheimer's care are not covered by Medicare or major medical health insurance policies (Medicare Supplement and HMO's included).
3. How do people pay for nursing home stays?
   Most people rely on their own savings to pay the $3,000-5,000 plus monthly bills associated with nursing home confinements. Those who have depleted their assets rely on the State Medical Assistance program to help them pay their expenses. A small percentage of people needing LTC rely on their private LTC insurance policies to help pay and supplement their income to meet monthly expenses.
4. Aren't LTC insurance policies expensive?
   In comparison to monthly nursing home charges, LTC insurance can be very affordable. However, LTC insurance is not for everyone. Finances determine your need for the coverage. If coverage is appropriate, several factors affect the cost, including your age, health conditions, and policy options selected. It is best to work with an independent agent to determine your needs and investigate several options for coverage. Call us today for your free consultation!
   

Individual Retirement Accounts (IRA's)

1. What is an IRA?
   An IRA is an Individual Retirement Account. Established by the Federal government as a vehicle to encourage retirement savings, contributions are tax-deductible and earnings are tax-deferred. However, not everyone is eligible to contribute. Your income level and marital status determine your eligibility to contribute annually to an IRA.
2. How do I set up an IRA?
   You may use almost any investment vehicle to set up an IRA. Assuming you qualify for an annual contribution, you may use anything from bank certificates of deposit, to mutual fund accounts, to insurance company annuities. Each investment vehicle has unique paperwork to complete and sign to either establish a new IRA or transfer an existing balance into a new account. Most institutions require a minimum balance to open a new account.
3. Must I contribute annually to an IRA?
   No, most financial institutions do not require ongoing contributions to an established IRA. However, tax benefits encourage maximum allowable contributions to the account annually.
4. Is a Roth IRA better than a regular IRA?
   A Roth IRA follows identical eligibility and contribution guidelines as the regular IRA. However, the Roth IRA does not allow for deductibility of the contributions in the current tax year. Also, a Roth IRA does not mandate distribution requirements at the age of 70 ½.
5. Why should I consider a Roth IRA?
   A Roth IRA is an attractive option for those who might not need the tax deductibility of the contribution to the regular IRA, or would prefer the flexibility of withdrawing their contributions and earnings tax-free.
   

Annuities

1. What is an annuity?
   An annuity is issued by an insurance company to provide an income stream to a named beneficiary at some future date. It usually provides a death benefit and a guaranteed minimum interest rate on the money invested in it.
2. How are annuities used?
   Annuities are typically used for IRAs and other situations where the owner wants to defer income and taxes on the gain until later years. Annuities incorporate an insurance product (a death benefit) and an investment vehicle into one product.
   

Mutual Funds

1. What are the benefits of mutual funds?
   Mutual funds pool the resources of investors and allow a professional investment manager to oversee the daily monitoring of those funds. Mutual funds also allow for diversification, lower risk, and liquidity compared to other investment options.
2. How can I use Mutual Funds?
   Mutual funds can be used for several things, including a savings account, other retirement or emergency savings, or growth and income potential. Mutual funds are generally used for the intermediate to long-term investment perspective, depending upon the type of mutual fund selected.
3. Are there different types of Mutual Funds?
   Yes, mutual funds come in a variety of classes and families. Families are the sponsoring companies in charge of the various funds. Each family may have numerous funds they offer, depending upon the investment objectives. Three broad types of funds include cash (money funds), bonds (US Gov.'t, private industry sector), and equities (stocks of domestic and international companies). The right family and fund depends upon you comfort level of risk. Work with an investment professional to help you sort through the myriad of options in the marketplace today.