As another year comes to a close, it's time to ponder your 2012 New Year's Resolution. If you are like most people, you want 2012 to be a better year from a personal financial perspective than 2011. Review this checklist and your insurance policies as you pledge to make 2012 better than 2011.
- Review your beneficiary designations: Get in touch with your agent or the insurance company to verify beneficiary designations on your life insurance. Life changes and sometimes people forget to update their beneficiary designations. Be sure your life insurance is payable to the person who should receive the benefit.
- Know your term insurance conversion rights: Term insurance is often purchased for short-term needs, but in some cases it becomes necessary to have coverage for a longer duration than expected. Many term policies let the owner convert the term insurance to permanent insurance without medical underwriting. This can be particularly useful for someone who is uninsurable but needs to extend coverage. Be aware of the conversion rights within your policy.
- Use dividends to pay whole life insurance premiums: Whole life insurance policies purchased from mutual insurance companies generate dividends. At some point these dividends may be sufficient to pay the policy premium. Review the status of your whole life policy with your agent to see if you can and/or should allow dividends to pay your insurance premiums. Doing so can improve your cash-flow.
- Review uninsured motorist provisions: The number of uninsured motorists tends to increase in tough economic times. It is important to know how your insurance works in the event an uninsured motorist hits your car. The laws vary by state so keeps this tip in mind when moving from one state to another.
- Pay annually: You do not have to pay insurance premiums on a monthly basis even if you make monthly loan or lease payments for your automobile. Your auto insurance company may offer you different premium payment options: monthly, quarterly, semiannually or annual. Paying auto insurance premiums on an annual basis may reduce your auto insurance expense by five percent or more depending on the carrier. As a general rule, fewer payments lead to less expensive insurance.
- Bundle and shop: Many insurance companies can offer more competitive pricing if they issue most of your property and casualty insurance. If your auto insurance and home or renters insurance is with different carriers, contact those carriers and let them know you want to consolidate your insurance. You may get a pricing discount for bundling your insurance with one carrier.
- Use it or lose it: Most dental insurance policies cover semi-annual checkups or offer such checkups at a reduced rate. Use your dental insurance to pay for your semi-annual cleanings otherwise you get the bad end of the deal.
- Find a dentist before you need one: Many dentists find it is more profitable to offer cosmetic dentistry services and routine care to uninsured patients than to offer routine care covered by insurance. As a result fewer dentists are accepting new patients with insurance. Establishing a relationship with a dental practice for routine care makes it more likely they will see you in an emergency situation. Searching for a dentist in an emergency can be time consuming and painful. Do it now.
- Know your annual and lifetime maximums: Most dental insurance provides benefits up to a specified dollar amount. In many cases the maximum annual benefit is $1,000 to $2,000. Some dental procedures are in excess of the annual maximums provided by these policies. Know the maximum benefits under your dental policy and plan for a rainy day.
- Consider options outside of your employer's plan: Do not enroll in your employer's health insurance plan simply because it is convenient. You may be surprised to find out you can get a better deal outside of the employer/employee health insurance relationship. If you are young and/or healthy, shop around for a policy that meets your needs and consider the financial implications of having your own health insurance coverage.
- Become aware of ancillary services: Many health insurance providers negotiate discounts for health related products and services that may benefit you. Examples include discounts on massages, gym memberships, and weight loss programs. See if your health insurer offers any these or similar discounts.
- Consider purchasing prescriptions outside of your health insurance: Many national chains offer certain prescriptions at a very low cost. This is done for a number of reasons including increasing the number of customer visits to the store. In some instances it will be less expensive for you to purchase prescriptions without using your health insurance. Your local pharmacist can price your medications with and without submissions to the health insurance company.
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