Daily Financial Tips

Archive for January 15th, 2012

Non-Cancellable & Guaranteed Renewable

This is the most comprehensive level of renewability possible for a consumer. Most of the major individual DI carriers do offer a policy that is “Non-Can”. There is a big difference between a Non-Can policy and a policy that is just Guaranteed Renewable, so make sure you understand which renewability feature your policy has before you make a decision.

A Non-Cancellable disability insurance policy means the premium schedule will never change. If you have a policy with a level premium payment schedule, the price you pay for your policy today will be the same 30 years from now. The first major benefit of a Non-Can policy is the premiums will never change unless you buy more coverage in the future. The benefit amount and benefit provisions will also never change under a non-cancellable and guaranteed renewable disability insurance policy.

Guaranteed Renewable

A “GR” policy does not offer your premiums the security level you think. The insurance company can raise rates on a GA policy by state, occupational class, or policy year. Carriers have increased rates in the past with GR disability insurance policies, and odds are it will happen again. A GR policy is going to be about 20% less expensive than a DI policy that is Non-Can, however to know that there is no way an insurance carrier can raise me out of my policy is well worth the guarantees. Think about the possibility of being 57 years old and getting a 100% rate increase because the company you bought a policy from has really bad experience in your home state, or occupation. Most people purchase individual disability insurance to protect their family and their income, a guaranteed renewable only policy may be a bit cheaper, but you run a risk of seeing a big rate increase at the worst time with one.

Conditionally Renewable

You will usually only see this with association disability insurance policies. There is no guarantee the rates will remain the same, and they can be raised as much as the insurance company wants anytime. Many of the major medical and dental association plans are conditionally renewable, and have all had several rate increases during the past twenty years.

Like all medical related costs, vision costs have soared in the last decade, particularly in the last 5-years. Today, as the economy tightens many health care plans do not include optometry or vision care. Even prescription glasses or contacts can cost a bundle and on top of that you will be hit for the eye examinations that go along with them, these can cost a pretty penny these days. If you have a large family or you need your eyes to earn a living, you really cannot be without eye care or vision insurance.

Some company health care plans allow you to add vision insurance onto your policy even if your policy excludes it. If you are self-employed or your company or employment has no plan or plans available, then you may wish to consider a PPO or preferred provider policy. You might also think about joining an HMO or health maintenance organization. If you need to get laser eye surgery for any family member then having a PPO plan might save you a bundle as those surgeries are not cheap.

Of course, you will have to shop around as there are countless types of coverages and the prices vary quite a bit too. Some plans have monthly premiums and a membership fee, while some waive the sign-p fee. They generally come with deductibles, but not all. Having vision insurance could save you from catastrophe, as many eye conditions end up cost huge sums of money and can easily put the average family in debt or ruin their financial situation for years to come. So, please shop around and consider your options very carefully.