Relocating to Las Vegas

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Insurance

In this chapter, you’ll find information on different types of insurance, including homeowners, auto, medical, dental and life insurance, as well as practical tips on reading policies and shopping for coverage. As you organize your relocation to the Las Vegas area, it’s also a good idea to review your family’s insurance needs. For your home, you’re probably planning to purchase new home furnishings, appliances and other equipment that should be noted in your updated home inventory. If you’ll be commuting to and from the office each day, you’ll need to know how many miles you’ll be driving. Keep copies handy of previous auto, home and health policies for easy reference when completing new insurance applications – it will save you time and aggravation.

Insurance in Nevada
The Nevada Division of Insurance (NDI) protects the rights of Nevada consumers in dealing with the insurance industry and ensures the financial solvency of insurers. In order to fulfill its mission, the Division advances a sound regulatory environment that is responsive to the insurance needs in Nevada. More information is available at http://doi.state.nv. The Nevada-specific insurance information presented below is from NDI.

Insurance Types
— Homeowner’s insurance
There are different packages of home insurance offered to protect your home and belongings. Each package protects against a specified number of perils. Perils are events that cause damage to property. Three examples are fire, windstorm and theft. In addition to coverage for named perils, each package policy usually contains four additional types of coverage: property damage, additional living expenses, personal liability and medical payments. Home insurance policies apply to most owner occupied single-family homes and are modified slightly for apartments and condominiums.

The five homeowners package forms for single family owner occupied homes are HO-1, HO-2, HO-3 with HO-15 and HO-8. These policy forms insure your home and belongings against at least 11 named perils. The more perils your policy covers, the more you will pay for the policy.

Basic Form HO-1 insures your property against 11 basic perils.
Broad Form HO-2 covers 18 perils.
Special Form HO-3, the most popular of all homeowner’s forms, offers a broad range of coverage. This form provides comprehensive coverage on your home and broad named peril coverage on your contents.
Comprehensive Form HO-3 with HO-15 covers your home and personal property for everything that is not specifically excluded. This policy generally provides the broadest coverage available, but is not offered by all companies. It usually costs more.
Modified Coverage Form HO-8 is designed to provide package coverage to the owner-occupants of homes that do not meet all the requirements applicable to other homeowners forms. The HO-8 provides building and personal property coverage slightly more restrictive than that of other homeowners forms for owner occupants that include a replacement cost clause. The HO-8 is particularly well suited for residences that have suffered extensive depreciation.

Your home may not qualify for one of the five homeowners package policies, therefore, a company may offer you limited coverage on your house. This coverage may be fire and extended coverage. Your home and only your home would be covered for damage due to very specific perils or losses.

Keep in mind

For more complete coverage, you will pay less out of your own pocket if disaster strikes. You will also need enough liability coverage to protect yourself from lawsuits resulting from your negligence.
Your mortgage lender may require you to cover the house for at least the amount of the mortgage. This may be either too little or too much coverage for your individual circumstances. You are not required to purchase insurance from the insurer recommended by your lender.
Insurers may impose some coverage requirements for replacement cost protection.

Factors that affect your premium

Type of Construction: Frame houses usually cost more to insure than brick.
Age of House: New homes may qualify for discounts in some states. Some insurance companies either may not insure very old homes or offer a limited form of coverage.
Local Fire Protection: Your home’s distance from a fire hydrant and the quality of your local fire division determine your fire protection class.
Amount of Coverage: The amount of coverage you buy for your house, contents and personal liability will affect the price you pay.
Deductible Amount: Your choice of a higher deductible will reduce the price for home insurance.
Discounts: In some states, insurers offer lower prices for such things as insuring your home and car with the same company and installing deadbolt locks or alarm systems.

Basic coverage available:
Property Damage coverage helps pay for damage to your home and personal property. Other structures such as tool sheds, detached garages, houses and their contents are also covered. You should check with your agent or your insurance company to determine if the amount of coverage on other structures is sufficient.

Personal Property is the contents of your home and other personal belongings owned by you or family members who live with you. Home insurance policies may provide limited coverage for small boats; however, most home insurance policies do not cover motorized vehicles unless they are unlicensed and used only at your home. Your insurance agent or your insurance company can help you find appropriate coverage for your car, boat, snowmobile or other recreational equipment. Some forms of personal property, such as silverware, computers, guns, money, expensive antiques and jewelry, have limited coverage under your homeowner’s policy and may need additional insurance. This coverage can be added to your policy as an endorsement.

You can choose to insure your home and belongings for either replacement cost or actual cash value.

Replacement Cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality, without deducting for depreciation. Depreciation is the decrease in home or property value since the time it was built or purchased because of age or wear and tear. Many insurers require homeowners to insure their homes for at least 80 percent of the replacement cost. If the homeowner fails to insure for at least 80 percent of the replacement cost, a penalty is applied to partial losses.

Actual Cash Value is the amount it would take to repair or replace damage to your home after depreciation. For example, if your roof has a 20-year warranty and is 17 years old, there would be a depreciation for the age and condition of the roof. Most standard home insurance policies cover the contents of your home (i.e., personal belongings) on an actual cash value basis. Many insurers offer an option for you to insure your belongings at replacement cost. The premium will be slightly higher for this coverage; however, you may want to consider this option.

Whether your home is insured for replacement value or actual cash value, it is important to keep track of its value. For instance, the addition of a room, new insulation and yearly inflation all increase the replacement cost of your home, while the actual cash value of the home may decrease over time. Check with your agent or insurance company at least once a year to make sure your policy provides adequate coverage.

Additional Living Expenses:
Most home insurance policies provide additional living expenses that will pay some expenses if your home is damaged by an insured event to the extent that you cannot live there while repairs are being made, or if you are denied access to your home by government order. These expenses could include limited motel, restaurant and warehouse storage.

Personal Liability:
This coverage protects you against a claim or lawsuit resulting from bodily injury or property damage (non-auto and non-business) to others caused by your negligence. This coverage applies to you and all family members who live with you. You should check with your agent or insurance company to determine if the amount of personal liability coverage is sufficient.

Medical Payments:
Regardless of who is at fault, this coverage pays medical expenses for persons accidentally injured on your property by a member of your family or by your pets. Medical payments do not apply to your injuries or those of family members living with you or to activities involving your at-home business. You should check with your agent or insurance company to determine if the amount of medical payments coverage is sufficient.

Discuss with your agent the optional insurance coverage that you may wish to consider. These can include the following:

Guaranteed Replacement Cost Coverage.
Inflation Guard Endorsement.
Scheduled Personal Property Endorsement.
Increased Limits on Money and Securities.
Secondary Residence Premises Endorsement.
Watercraft Endorsement.
Theft Coverage Protection Endorsement.
Credit Card Forgery and Depositors Forgery Coverage Endorsement.
Flood Insurance.
Earthquake Insurance.
Windstorm Coverage.

Price Quotes:
When shopping for home insurance, get price quotes from different companies and compare the rates and coverages. When asking for price quotations, it’s important that you provide the same information to each agent or company.

To give you an accurate quote, the agent or company will usually request the following information:

Description of your house.
Distance from the nearest fire division and fire hydrant.
Square footage.
Security devices.
A picture of your home.
The coverages.
Limits you want.

— Auto Insurance
Now that you’ve relocated to the Las Vegas area, it’s a good opportunity to familiarize yourself with auto insurance requirements in Nevada, which include:

Nevada law requires you to have at least $15,000/$30,000/$10,000 in liability insurance. This means coverage must be at least $15,000 because of bodily injury to or death of one person in any one accident to a limit of not less than $30,000 because of bodily injury to or destruction of property, and to a limit of not less than $10,000 because of injury to or destruction of property of others in any one accident.
Nevada has mandatory liability responsibility laws that are met through Nevada licensed insurance carriers. All registered vehicles are required to have the minimum liability coverage. Should the coverage lapse while registration is still current, the Department of Motor Vehicles (DMV) may suspend the vehicle registration and charge a $250 reinstatement fee. Roadside spot-checks, direct mail verification and insurance company data comparisons provide verification methods to ensure compliance.
Insurance companies are licensed and regulated by the Nevada Division of Insurance. You may verify whether an insurance company is properly licensed in Nevada online at Nevada Insurance Alert or by calling (888) 467-4195. You must obtain insurance from a Nevada-licensed carrier. If you are coming from out-of-state, you must notify your agent or carrier that you have moved to Nevada.
At the time of vehicle registration, you may present a Nevada Evidence of Insurance Card or sign a declaration that you will maintain Nevada insurance coverage for the entire time the vehicle is registered in Nevada. An Evidence of Insurance Card or Power of Attorney must be presented if any person other than the vehicle owner is registering the vehicle.
A Nevada Evidence of Insurance card must be carried in your vehicle at all times and presented to any law enforcement officer upon request.

Comprehensive and collision coverages are not required by Nevada law and, in certain cases, because of the age or condition of the automobile, may not be available. However, if you borrowed money to purchase your automobile, your lender may require you to carry this coverage until the loan is paid.

You are not required to carry medical payments or uninsured/underinsured motorist coverage, but all insurance companies are required by law to offer you medical payments coverage of at least $1,000 and uninsured/underinsured motorist coverage in an amount equal to your bodily injury coverage.

If you plan to lease an automobile, you should check your lease agreement. Generally, these agreements require that you carry liability coverage in the amount of $100,000 per person, $300,000 per accident and may require you to carry property damage coverage in excess of the $10,000 limit required by Nevada law.

Liability Insurance:
Most auto liability insurance policies contain the following major parts: liability insurance for bodily injury, liability insurance for property damage and uninsured/underinsured motorist coverage.

Bodily injury liability insurance does not protect you or your car directly. Third-party bodily injury liability insurance protects you if you are the cause of an accident in which other people are injured. This insurance protects you against their claims for damages such as medical expenses, lost wages and pain and suffering. This insurance coverage will also pay if a member of your family living with you caused the accident, or if it was caused by a person using your car with your consent.

Bodily injury liability insurance carries specific benefit limits. These limits address how much money your insurance company is committed to pay for any one victim injured in an accident and limits the amount the company must pay for multiple victims.

To make a smart consumer purchase, you must understand these limits for bodily injury liability insurance. As noted above, Nevada law requires that you carry limits of $15,000 for bodily injury or death of each person injured in an accident and $30,000 for bodily injury or death of all persons injured in an accident.

You may decide to purchase additional coverage. This decision may be based on your desire to protect your assets from claims above the minimum amounts. The extra cost of higher coverage tends to be relatively low.

Property damage liability insurance pays for damage you cause to the property of others, such as a crushed fender, broken glass, a damaged wall or fence. Your insurance will pay for this damage whether you are driving your automobile or whether it is being driven by another person with your consent. Nevada law requires you to carry $10,000 for damage to the property of others. You may decide to purchase additional coverage.

The policy liability limits may also extend to include a trailer that is designed to be pulled behind a private passenger auto, pickup or van.

Uninsured/underinsured motorist coverage protects you directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto insurance (uninsured), or whose policy limits are not high enough to cover your injuries (underinsured). This coverage does not protect the other driver, and it does not cover damage to your vehicle.

Nevada law requires your insurance company to offer you uninsured/underinsured motorist coverage in an amount not less than your minimum limits of liability insurance for bodily injury described above. You do not have to purchase this coverage, or you may elect to purchase limits lower than your bodily injury limits of liability, but you will be required to sign a waiver indicating your decision. Nevada law does not require that you carry uninsured/underinsured motorist coverage.

You may purchase higher limits of liability inexpensively under a personal umbrella policy. An umbrella policy provides broad liability protection over and above your auto policy’s liability limits. It can be written to include other insurance policies, such as your homeowners, recreational vehicles or other personal lines insurance products. It will also cover some exposures to loss that are not covered by your auto or homeowner policies.

Physical Damage Coverage:
In addition to the basic liability coverage outlined above, the most commonly recognized coverages are collision and comprehensive. Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is relatively expensive. This coverage is optional and not required by law. However, if your vehicle is financed or leased, your lending institution or lessor may require collision insurance.

If you have an older vehicle worth less than $2,000, there is little reason for you to purchase collision coverage, because you are likely to pay more money in premium than you would ever receive as a result of a claim. The loss settlement agreement for collision coverage allows the insurance company the option to pay for repair or replace your vehicle with like kind or quality.

Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. Comprehensive coverage also covers broken glass, such as windshield damage. Comprehensive coverage is less expensive than collision coverage and many consumers choose to carry it. However, remember it is your choice; you are not required by law to carry comprehensive coverage.

Deductibles reduce your premiums because you agree to deduct an amount from the claim your insurer otherwise would have to pay. Insurers offer deductibles because they reduce the number of small claims that are costly for them to handle.

If you purchase a new car with a loan, the financial institution that lent you the money may require you to purchase collision and comprehensive coverage. This is because the lender considers your car as collateral for the loan, and they want to make certain it is worth something if they need to repossess the vehicle.

In the event you have to buy or decide to buy collision or comprehensive coverage, you can save money by agreeing to the highest deductible you can afford to pay. Since comprehensive coverage is usually cheaper than collision coverage, many people save money by dropping the collision coverage and keeping the comprehensive coverage in force to protect against natural perils, theft and glass breakage.

Questions commonly asked by insurers for rating
When shopping for coverage, you should be prepared to answer the following questions from insurance companies to receive a rate quote.

Driving Record – On the application, you will be asked about your previous driving record. Insurers will ask about accidents and traffic violations for any driver covered by the policy for the preceding three to five years. Drivers with previous violations or “at-fault” accidents are considered to be a higher risk and are charged a higher rate. The insurer will also request a motor vehicle report from the Department of Motor Vehicles (DMV) to compare against the application.

Territory – The claims experience in your geographical area will also affect your rates. Applications include a question that asks for the address where the vehicle will be garaged. From this information, insurers assign you to a territory whose rate is based on historical experience for that territory. Generally, more claims are made from urban areas with tendencies of busy traffic, thefts and vandalism, than from rural areas.

Gender and Age – Statistically, males have more accidents than females. For this reason, men may tend to pay more for insurance than women. A small number of states have prohibited insurers from using gender as a factor in underwriting. Nevada, however, allows this type of rating. Insurers also have statistics that show a higher number of claims for some age groups than for others. For these reasons, young men tend to pay more for insurance than young women, and a person under 25 will pay more for insurance than a person of age 35.

Marital Status – Statistics show fewer auto insurance claims among married policyholders than unmarried policyholders.

Prior Insurance Coverage – Insurers may ask if you have previously had insurance coverage, because they want to know if you have ever been canceled for non-payment of premiums or other reasons, or if you have ever had any lapse in coverage.

Vehicle Use – You will be asked on the application how often and how far you drive the vehicle that you want to insure. The fewer miles you drive, the less chance you have of getting into an accident. Greater use will generally result in higher premiums because of the increased exposure to risk. Some insurers also offer discounts for drivers who participate in car pools.

Make and Model of Vehicle – The type of car you drive directly affects the cost of comprehensive and collision coverage. A make or model of car that has a high number of claims or higher claim costs will be charged a higher premium. High claims costs are generally attributable to two type of vehicles – higher-valued vehicles, which are more expensive to repair, and vehicles that have a performance history resulting in a higher severity of bodily injury losses in an accident.

Claim Frequency – The single greatest influence on the rating process is claim frequency. Claim frequency measures how often an insured event occurs within a group relative to the number of policies contained in that group. It does not mean how many times you specifically have made an insurance claim, although that will have an additional effect.

Persons sharing characteristics with a high-claims group will be charged more for insurance coverage. At the same time, persons who share characteristics with low claims classes will be charged lower rates. Insurance companies offer discounts to individuals who exhibit certain characteristics. However, the greatest controllable factor is your driving record. A person with a clean driving record will pay less than a driver with similar characteristics but with traffic violations.

— Health Insurance
While moving to a new city is an exciting time for some, the journey can prove stressful as the little details of starting a new life take shape. Finding new doctors, updating or replacing existing insurance coverage or securing new health insurance may find itself on the list of details for many new residents and their families. Chief Executive Officer David Dahan of Orgill/Singer & Associates, one of the largest independent, multiline insurance brokerages in Nevada, offers advice on how new residents can find much-needed information on health insurance matters:

“As available insurance information and rates are constantly changing, it is highly beneficial for new residents to consult an insurance agent or broker at the start of their search,” says Dahan. “A conscientious insurance professional will be able to help you identify what are the appropriate insurance policies for you and your family, as well as answer any questions that may arise.”

While many newcomers may have health insurance from their new employers, there are times when a person may be between jobs, self-employed, or simply just cannot afford a comprehensive health insurance plan. Dahan suggests temporary health insurance as an option.

“A temporary health insurance plan is ideal for people in non-traditional careers, temporary employees, people in the middle of a career transition and self-employed individuals just to name a few,” says Dahan. “Ask your insurance broker if temporary health Insurance is right for you.”

After a new health insurance plan is in place, residents may want to find out more information on the healthcare professionals servicing this industry. For example, is your doctor board certified? Has he or she had action taken against them from the state or had complaints filed against them from former patients?

“Before selecting a new physician, you may want additional information on their credentials and practice history,” says Dahan. “To find out if a doctor is board certified and other general information, consult the Nevada State Board of Medical Examiners for medical doctors and the Nevada State Board of Osteopathic Medicine for doctors of Osteopathy.”

Shopping For Health Insurance:
Be sure you understand the full extent of the coverage that is included in any health plan you’re considering. If you have more than one option, choose the plan with the highest level of coverage you can afford. The higher a plan’s deductibles, co-pays, and coinsurance, the more you can usually save on premiums. However, you’ll also have to pay more out of pocket for claims.

Consider factors other than cost. A carrier’s financial rating and history of consumer complaints are important considerations. Ask your friends, family and physician for recommendations. Be sure you learn the answers to these questions about any health plan you’re considering:
Question 1: Does the plan cover your choice of physicians and hospitals?
Question 2: Are there limits on medicines, referrals to specialists, or the types of treatment or surgery available?
Question 3: Are there benefit limits per person, family, illness, treatment and/or hospital stay?
Question 4: What is the procedure for out-of-network emergency care?
Question 5: Does the plan have yearly or lifetime maximums?

Health Plan Basics
Health care plans pay for most, and sometimes all, of the treatment costs for illnesses and injuries. Many people obtain health coverage as part of a group – such as an employer, professional association or other organization – that offers health coverage to its employees or members. Others may buy individual health coverage directly from an agent or insurer. The type of plan you have and how you obtained it usually determines the benefits included, how you access and receive medical care and what you’ll have to pay out of pocket.

Preferred Provider Plans (PPO):
Health insurance companies contract a network of doctors and hospitals that are “preferred” by the company. These network doctors and hospitals charge a contracted fee for their services and when you choose to see one of these “preferred providers,” the amount you pay out of your pocket is usually quite low. There is typically a small co-payment (a fee per visit or service), which may be $15 or $20. It is important to keep in mind that since the insurance companies keep prices lower by contracting specific doctors and hospitals, there is higher charge for going out of the healthcare provider’s network. However, the PPO is a more flexible arrangement than many other plans because the plan will pay some of the costs if you choose to visit a doctor, specialist, or clinic outside the network.

Point of Service Plans (POS):
POS plans have similarities to both PPO and Health Maintenance Organization (HMO) plans. As with Preferred Provider (PPO) plans, you are directed toward a network of contracted doctors, hospitals and clinics for your healthcare, but you can pay a larger out-of-pocket fee to visit an out-of-network provider. In line with the managed care policies of an HMO, your healthcare is administered according to a healthcare professional. With a POS plan your primary doctor oversees your medical care and refers you to contracted specialists when the need arises. Similar to the philosophy of an HMO, POS plans promote health and wellness through prevention and education, in addition to treatment.

The upside to a POS plan is the freedom to go out on your own and chose your own providers, even specialists, outside the network. You are never limited to medical providers your primary care physician refers. However, be aware, the dollar amount the plan will pay decreases when you go outside the network.

You will pay approximately $600 a year for the privilege of being allowed to self-refer to out-of-plan practitioners, and your out-of-pocket contribution will be greater. It is wise to consider if it is worth it to you, as a consumer, to pay a higher monthly payment for the freedom to access specialists, physicians and clinics of your choice. If you are relatively healthy and do not have a special relationship to a specific physician, then you might consider a managed care program that will charge you less to exercise less freedom in choosing a healthcare provider. If the freedom to self-refer to any healthcare practitioner or hospital you want is important to you, a POS plan may be your ideal fit.

Health Maintenance Organization (HMO):
An HMO provides “managed care” in return for a monthly or quarterly premium. You pay a fee, the amount depending on the specifics of your coverage, and are offered a range of health benefits that cover the entire spectrum from preventive care and education to physician care, surgery and hospitalization. An HMO is a one-stop shop for all your healthcare needs. Your healthcare is “managed” by your primary care physician, usually a general practitioner.

Typically, you must receive a referral from your physician before visiting a specialist outside the provider network. With rare exceptions, such as when you are away traveling, you are limited to seeking care completely within the network of providers, doctors, hospitals and labs with whom your HMO has negotiated a fee schedule.

Since contracting discounts from a network of providers is one of the primary ways a HMO maintains cost effectiveness, the plan only works when you stay within the network. In addition to your premium, an HMO generally charges a co-payment (a way of sharing per visit costs between the consumer and the plan) of, for example, $10 or $20 for certain services or prescriptions. One of the unique features of an HMO is that they typically deliver care directly to patients. Patients visit an HMO’s medical facility to see the physicians. Most HMOs own their own hospitals and clinics and directly hire physicians who work only for them.

While an HMO is more restrictive than other plans, it can be a convenient and cost effective solution for an insurance consumer that does not have ties to a doctor or medical facility outside of the HMOs network. If the organization is well run, doctor visits and healthcare can be simple, hassle-free and reliable. If the need arises for you to see a specialist, your doctor will handle the research for you, all you will need to do is show up for your scheduled appointment.

Health Savings Account (HSA):
As of January 1, 2004, healthcare consumers have a new way to help manage their own healthcare. Health Savings Accounts (HSAs) provide consumers with added insurance coverage and control. Flexibility is the key component of an HSA. Anyone with a high-deductible health plan can set up a health savings account to save money on medical care now, as well as save for future medical expenses. You may use HSA funds to pay for expenses that must be met before your deductible, to pay for services not covered by your health plan (such as alternative therapies or out-of-network providers), or insurance coverage during periods of unemployment.

Even if you purchase your insurance plan or your health savings account through your employer, you still own your account. You make the decisions on how much to contribute to your account and which medical expenses you will use the funds to pay. When you change jobs or move, the account remains intact. Any unspent balances remain in your account earning interest until you spend them on medical care.

An HSA can be a comforting safety net if you have a high deductible plan (remember, your plan won’t begin paying out until your financial responsibility is met). In the event that you lose a job, must seek uncovered medical services or just want to exercise your right to seek a specialist not contracted with your insurance plan, the funds in an HSA may one day be your saving grace. If you are a consumer who desires security and values freedom, an HSA is an option you should research.

Self-Directed Health Plans: (SDHP)
These can also be called consumer directed health plans, and they are a way to organize, purchase and finance health care services. These plans succeed in providing consumers a method by which they can design and implement their own health plan that can be customized to their specific needs, healthcare philosophies and circumstances.

Since January 1, 2002 insurers began offering plans that give patients and their physicians the autonomy to make decisions about what medical services they want and who they want to administer these services. Familiar elements of managed care, including gatekeepers (administrators who define what is “medically necessary” and thus covered by their plans), pre-authorization processes and network provider limitations, are replaced with self-directed health plans that make consumers the controllers of their own destinies. Patients and their doctors decide how insurance funds should be spent.

Self-directed plans represent a new direction in healthcare that utilizes the new technologies of today’s world. With self-directed plans you keep your medical records on special software and research medical services, medical providers and fees using the internet. Self-directed plans may be a new, exciting solution for those with the time and desire to manage their own healthcare, tailored to their own healthcare needs and philosophies.

— Health Insurance
Consumers can choose a plan in which their dental care is managed by a Dental Health Maintenance Organization (DHMO). DHMOs typically charge the lowest premiums and provide the most comprehensive coverage. Fee for service, or Direct Reimbursement, plans provide the most freedom of choice for consumers. With this type of plan a patients may pick any dental practitioner and clinic of their choosing. The plan pays a percentage for the service and the patient pays the remainder of the fee.

Whether you choose to use a plan or pay out of pocket, you will save more money over the long term if you routinely visit your dentist for check-ups and cleanings.

— Health Insurance
Life insurance provides financial compensation to your family in the event of your death. There is no federal income tax on the payout of life insurance policies, ensuring your family receives their benefits in full.

The first step in choosing the best plan for your needs is to make a list of all of your family’s financial responsibilities. From here you can estimate the amount of money your family would need to satisfy financial obligations and make a lifestyle transition after your death. Your insurance agent can help you choose the type of insurance policy that best fits your needs. Here are examples of standard coverage options:

Term insurance is coverage for a specific period of time.
Permanent insurance covers the insured for an entire lifetime.

While a term insurance policy can be renewed after expiration, its premium will rise accordingly. Permanent insurance is not a progressive type of policy, meaning you won’t have to pay more as you get older.

Common permanent life insurance plans have a “cash value” option that offers the insured a number of choices. For instance, if you cancel your insurance coverage, the cash value option will pay out the lump sum of the premium.

It’s also possible to “borrow” against a life insurance plan (based on the total amount of the cash value) and use it as collateral. The “loan” will still require interest, and if not paid back in full, can reduce the amount of death benefit your family would ultimately receive in the event of your death. A permanent life insurance policy allows you to add additional insurance or “riders,” to help specifically tailor your coverage to meet your needs.

Selecting an insurance company
Insurance companies generally use one of three methods to market their product: 1) direct marketing; 2) independent agents; or 3) exclusive agents. The type of marketing method may be good or bad for a consumer, depending on the type of services offered. Therefore, consumers should be aware of each of the three methods and may want to consider them in their purchase decision. When calling agents for quotations, ask them how many companies they represent and how they operate.

Direct Marketers sell insurance through the mail and by telephone. In some cases, consumers can save money with direct marketers because these companies do not have to pay insurance agents commissions to sell their policies. Companies can pass along some of these savings to the consumer. However, some consumers prefer to pay an additional premium for the opportunity to have a local agent available to them.

Independent Agents represent several companies. Therefore, you can get quotes for more than one company from one agent. This is considered an advantage to many consumers.

Exclusive Agents can only offer you coverage from the company they represent. Therefore, you can only get a quote from one company. Sometimes exclusive agents may work for a lower rate of commission than independent agents. This is because companies do not have to give the agent an incentive to write their product over another company’s product. The lower commission structure, especially commissions for renewal business, can represent significant cost savings to the insurance company and often a portion of that savings is passed along to the consumer in lower premiums.
Before signing any application for insurance coverage, you should verify that the company and the agent you are dealing with are licensed in Nevada. Visit www.nvinsurancealert.com and click on Verify an Insurance Company or call (888) 467-4195.