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Archive for Tuesday, October 3, 2006

Author gives straight talk on insurance

October 3, 2006

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It's time for open enrollment. That means millions of workers will be evaluating their health, life and disability insurance options as part of their employee benefits package.

Trying to decide what coverage to get for yourself or your family can be a trying experience.

But it's not just picking the right health plan at work that confounds consumers when it comes to insurance choices. Many people aren't getting the best deal for their auto insurance. Or they don't have enough disability insurance, if they have it at all. Or there are gaps in their homeowners insurance coverage.

Kimberly Lankford, a columnist at Kiplinger's Personal Finance, says many people make big mistakes when they purchase insurance.

"Your entire financial plan is at risk if you do not have the right insurance," Lankford writes in her new book "The Insurance Maze: How You Can Save Money on Insurance - And Still Get the Coverage You Need."

Lankford says this is a particularly good time to re-evaluate your insurance. For example, life insurance rates have plummeted over the past decade, and many consumers can take advantage of these lower rates. Got a pre-existing medical condition? It may not be impossible to get coverage, Lankford writes.

As employees enter their employer's open enrollment period, the chapter on health insurance will be particularly helpful. For example, Lankford does a good job of explaining the new health savings accounts, or HSAs. The plans are supposed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.

If you're having trouble finding health insurance because of a pre-existing condition, don't get discouraged, Lankford says, just keep shopping. One source is the Web site for Communicating for Agriculture and the Self-Employed at www.selfemployedcountry.org. Click on the link for "Risk Pools."

And just because you're high-risk, don't be so desperate that you fall for a scam, Lankford warns. Specifically, she cautions against getting health insurance though an association group policy.

Got a home office? Did you know all that expensive equipment might not be adequately covered under your homeowners policy? That was news to me. If you have a home-based business, get a business-in-home rider, Lankford advises.

Most helpful is how Lankford concludes the book. She walks readers though the insurance that they need depending on where they are in life, such as when you get married, send your children off to college, or retire.

Typically, consumers get their information about their coverage from the people selling the policies. There's nothing wrong with that, but you need an objective source. The Insurance Maze can be that resource.

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