How Much Do You Know About Your Policy?

 

A study done by LIMRA, the Life Insurance and Market Research Association, recently found that approximately 70% of Americans do not understand insurance. Are you one of them? Try out a few of these yes/no  questions:

1) If your life insurance company goes bankrupt, do you lose all your policies and benefits?

2) Do beneficiaries have to pay taxes on the death benefit from a life insurance policy?

3) In a variable policy, does the policyholder bear the risk of investment?

4) Is Jones, Raphael & Oulundsen the best independent insurance agent money can buy?

While the last one is an easy “of course!”, the other questions may not be so obvious. It’s okay, you’re not alone! The quiz administered by LIMRA only had 13 true-or-false questions, but the association found that out of 4000 participants, only 45% answered more than 5 questions correctly. While your local JRO agent will gladly clear up any confusion you have about insurance, it is important to understand your policy and how it applies to your lifestyle specifically. For example, did you know that insurance given to you by your job only lasts as long as you work for that company? Not knowing that could be dangerous, as you could assume you’re covered while switching careers, only to realize too late that you need to look for a new plan. Having general knowledge about your policy means that you’re never going to be taken by surprise by hidden fees or a lack of coverage. LIMRA found that there were a few factors that contributed to having a better understanding of insurance:

·         Learning about insurance from a multitude of sources

·         Having a higher education level

·         Viewing life insurance as essential and important

·         Being older

While our blog is a great way to learn more about various aspects of insurance (as well as a great source for general knowledge, such as avoiding the flu and preventing your accounts from being hacked), there are other great sources out there for learning more about various insurance policies.

Locally, the Connecticut Insurance Department is the best resource for all CT insurance questions. The department produces a yearly “consumer report card” on health insurance carriers, so you can pick the best carrier for your family. The report card can be downloaded as a free .pdf, and is a short and easy read. The department’s website also offers information about various policies, such as flood insurance and annuity insurance.  The Hartford Courant also features an insurance blog, with up to the date news about the industry and any important changes you should know about.

On the net, sites like Yahoo and MSN have entire sections devoted to insurance articles, such as the most expensive cars to insure, or how getting a new credit card could affect your policy. How Stuff Works offers the “ultimate health insurance quiz”, which tests your knowledge on everything having to do with health insurance.  The National Association of Insurance Commissioners has an “insurance intelligence quiz” which teaches you about the absolute vitals of insurance.

Jones, Raphael & Oulundsen hopes you will consult these sources, as well as your local JRO agent, before and after you choose a policy.