Overview of Insurance Products
An explanation of coverage as offered by US insurance companies.
A homeowners’ insurance policy provides coverage for the following:
Structure (the dwelling itself)
Other structures (like sheds and fences)
Personal property (the contents of the structures)
Loss of use (also called Additional Living Expense or ALE)
Medical Payments to Others
The first four are considered as “property” coverages located under Section I of your policy. Personal Liability and Medical Payments to Others are considered “liability” coverages located under Section II of your policy.
Source: Homeowners' Insurance Toolkit, by FL Dept. of Financial Services.
In Florida, business owners have the option of purchasing insurance through a variety of insurance organizations, depending on the type and size of the business. Many authorized insurers are licensed to sell commercial insurance in Florida. Also, surplus lines insurers can provide coverage for businesses and professionals in high-risk situations.
An authorized insurer is a company authorized by the State and required to regularly submit their rates, financial standing, premiums, claims and policy forms for review. These measures ensure that the insurance company has enough reserve cash to pay claims. Authorized insurers also must contribute to the Florida Insurance Guaranty Association (FIGA), which pays most claims for policyholders if an insurer becomes insolvent. Specialty Lines may be available, as well.
Source: Small-Business Owners' Insurance, by FL Dept. of Financial Services.
When you buy, or enroll in, a health plan, the insurance company agrees to pay for preventive services to help you stay well, plus part of your medical bills when you need a checkup, get sick or have an accident. These include things like doctor or hospital visits, prescription drugs, tests, maternity care and other medical services you may need. That’s called “coverage.”
Premiums are payments you make each month to your insurance company for your health insurance coverage. Health insurance is a plan, or policy, that covers a percentage of doctors’ visits and hospital bills. It exists to help offset the costs of medical events, planned or unplanned. Wellness and preventive care are usually covered.
Source: How Health Insurance Works, by Florida Blue BCBS.
Affordable Care Act Plans (Obamacare)
Employee Benefit Plan
A cafeteria plan (IRS Section 125) is a written benefit plan offered by an employer in which all participants are employees; and participants can choose cafeteria-style, from a menu of two or more cash or qualified benefits, using pre-tax contributions to pay for the premiums.
.A qualified benefit is a benefit that the IRS does not consider part of an employee's gross income. Qualified benefits include, but are not limited to:
accident and health plans (including medical plans, vision plans, dental plans, accident and disability insurance)
group term life insurance plans (up to $50,000)
dependent care assistance plans
certain stock bonus plans under section 401(k)(2) of the Internal Revenue Code
Source: Cafeteria Benefit Plans, by Social Security Administration.
The Affordable Care Act (ACA) requires all healthcare plans offered in the individual and small group markets to cover ten categories of essential health benefits: ambulatory care, emergency care, hospitalization, maternity and newborn care, mental health and substance use care, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive care, chronic disease management, and pediatric dental and vision care. The Act prohibits pre-existing condition exclusions.
Premium tax credits may be available for individual/families with income falling below certain levels. Individuals who are eligible for public programs, including Medicare, Medicaid, CHIP, or for employer sponsored coverage that meets affordability and minimum value standards are not eligible for tax credit.
Source: Summary of the Affordable Care Act, by The Kaiser Family Foundation.
Medicare is health insurance for people 65 or older, certain people under 65 with disabilities, and people of any age with End-Stage Renal Disease (ESRD).
There are four main “parts” of Medicare insurance: Part A, Part B, Part C, and Part D. Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) together make up Original Medicare. Medicare Part C, also known as Medicare Advantage, and Medicare Part D (prescription drug coverage) programs that let you get Medicare plans through private insurance companies that contract with Medicare. There is also Medicare Supplement insurance (also called Medigap), which is sold by private companies.
For more information: Medicare Guide, by Centers for Medicare & Medicaid Services.
For more information: Medigap Guide, by Centers for Medicare & Medicaid Services.
The National Flood Insurance Program (NFIP) was established with the passage of the National Flood Insurance Act of 1968.
Floods are the most common and costly natural disaster in the United States. Consequently, property owners who live in communities participating in the NFIP can purchase a policy for their property to insure it against flood losses.
The NFIP is a federal program enabling property owners in participating communities to purchase flood insurance as protection against flood losses, while requiring state and local governments to enforce floodplain management ordinances that reduce future flood damage.
Direct physical damage to buildings or personal property by flood is generally covered under a flood insurance policy.
Source: NFIP Fact Sheet, by Federal Emergency Management Agency (FEMA).
Term Life Insurance provides life insurance protection for a specified period of time. Term life is sometimes convertible. Term insurance provides protection for a defined period of time and pays benefits only if death occurs during that period.
Whole Life Insurance is a form of permanent life insurance that can remain in force for your entire lifetime. Whole life (ordinary life) is the most traditional type of cash value insurance. Generally premiums and death benefits stay the same over the life of the policy. The policy’s cash value grows at a fixed rate.
Universal Life Insurance is a form of permanent life insurance characterized by its flexible premiums and face amounts. Universal life gives you flexibility in setting premium payments, underlying investment options (variable life insurance), and the death benefit.
For More Information: Life Insurance and Annuities, by FL Dept. of Financial Services.
Personal Umbrella Policy
An umbrella policy provides additional coverage or “excess liability” above the limits of your basic policies. Your umbrella insurance can come into play if you are found liable and need to pay damages, or if you are sued and need to pay for your legal defense – even if the result is that you are not found to be responsible.
An umbrella policy only pays once your basic liability limits have been exhausted or the claim is excluded from the basic liability coverage. The claim will be made against you, the policyholder, on behalf of the wronged party. Then your insurance company may pay the settlement amount up to the limits of your coverage. If the settlement amount exceeds your coverage limits, you are responsible for paying the remaining amount out of pocket.
For More Information: Learn Umbrella Insurance 101, by Trusted Choice.