6 Common Problems Caused by Clogged Gutters
Raising a ladder to dig mud and leaves from your gutters never sounds like a fun job. But if you’re a homeowner, it’s worth the hassle. That’s because cleaning your gutters can help prevent anything from bees’ nests to a bad foundation. This year, resist the urge to put off the chore. Need some motivation? […]
4 Fire Prevention Tips for Your Business
Reducing the risk of a fire at your business is one of the most important things you can do to help protect your customers, employees and property. The U.S. Fire Administration reports that more than 116,500 nonresidential building fires occurred in 2021. Those fires caused 1,025 injuries and almost $3.7 billion in damages. The Unseen […]
7 Tips for Developing Your Family’s Fire Escape Plan
During a house fire, every second counts. That’s why it’s important for you and your family to be prepared. A recent study by the American Red Cross found that many homeowners are both overconfident and underprepared when it comes to fire safety. Practicing your escape plan twice a year helps increase the odds of survival, […]
Is Universal Life Insurance Right for Me?
Universal life insurance is a type of permanent life insurance that provides lifetime coverage as long as you pay your premiums. Like other permanent life insurance, it has a cash value element that can be used for different purposes. Universal life differs from whole life in that it allows you to lower or raise your premiums within certain limits and offers more flexibility.
How Does Universal Life Insurance Work?
Premiums for universal life insurance have two components – the cost of insurance (COI) amount and the cash value or savings component. The COI is the minimum premium payment required to keep the policy in effect. This amount can vary depending on the age and insurability of the policyholder and the insured risk amount. Premiums collected in excess of the COI amount accumulate within the cash value portion of the policy. As the insured ages, the cost of the insurance will increase. The accumulated cash value can cover the increases if the amount is sufficient.
What Are the Benefits of Universal Life Insurance?
Pros of a universal life insurance policy include:
- Flexibility: These policies typically have flexible premiums within limits. Policyholders can pay more than the COI; in which case the excess premium amount is added to the cash value and accumulates interest. If enough cash value accumulates, policyholders may lower or skip premium payments without the policy lapsing. In some cases, policyholders may be able to increase the amount of their death benefits (although a medical exam may be required) or lower their death benefits to lower their premiums.
- Cash value growth potential: Like all permanent life insurance, universal life policies can accumulate cash value. These funds earn interest based on whichever is greater – the policy’s minimum interest rate or the current market. As cash value accumulates, policyholders may use part of it in the form of withdrawals or loans.
- Low-interest loans: Policyholders may borrow against the cash value of a universal life insurance policy without tax implications. These loans are made at interest rates often lower than rates available for personal loans, with no credit check. However, outstanding loans at the time of death will reduce the death benefit by the amount that is outstanding.
What Are the Disadvantages of a Universal Life Policy?
Although it offers several important benefits, universal life insurance has certain disadvantages. One is that the cash value of the policy is lost when the policyholder dies. The beneficiaries only receive the death benefit, and the insurance company keeps the cash value. Some withdrawals are taxable. Returns on cash value are not guaranteed, as they are with whole-life policies. In addition, with the flexibility to lower premiums and make withdrawals in times of need, you run the risk of your cash value falling to zero and your premiums not covering the cost of insurance, in which case your policy could lapse.
If you are shopping for life insurance, you may want to compare term life, whole life, and universal life policies. Our friendly agent is happy to review the different options with you and help you obtain a life insurance policy that meets your needs.
Batten Down the Hatches: What To Know About Winterizing Your Boat
As the days become shorter and the temperature dips, the inevitable appears on the horizon for every boater: winter. But don’t let the impending off-season blow you off course. By planning to properly winterize your boat, you’ll confidently end the season knowing you and your beloved ship will be ready to take on the waves […]
Errors and Omissions Insurance: What Is Covered?
Errors and omissions (E&O) insurance is a type of professional liability insurance. It is designed to protect professionals, including companies and workers, against claims of negligent actions or inadequate work brought by clients. Companies that provide services to customers for fees often purchase E&O insurance.
What Does Errors and Omissions Insurance Cover?
E&O insurance generally addresses the aftermath of professional service mistakes, such as specific errors.
- Errors, mistakes, or oversights
- Failure to meet a deadline or deliver a service promised to a customer
- Failure to meet a specific standard of care as outlined for a given profession
- Professional negligence
- Breach of contract
If a company is sued, errors and omissions insurance may cover legal fees and court costs, whether or not the company is found to be at fault. E&O insurance may also cover settlements, judgments, damages, and expenses incurred by others for professional wrongdoing.
What Will E&O Insurance Not Cover?
E&O insurance will not cover criminal prosecution or liability that arises from illegal acts, intentional wrongdoing, or criminal activity. It does not cover bodily injury, employee injuries, discrimination claims, or information leaks due to cybercrime. Errors and omissions insurance may not cover temporary employees of a company.
What Is the Difference Between E&O Insurance and Liability Insurance?
Errors and omissions insurance is the same thing as professional liability insurance but different from general liability insurance. E&O insurance is designed specifically to cover mistakes made in the operation of a business. General liability insurance, on the other hand, is geared toward claims for bodily injury or product liability.
Who Needs Errors and Omissions Insurance?
Most businesses in which professional advice is given, or professional services are rendered need E&O insurance. Companies sued by clients can be held liable for millions of dollars in damages in addition to their legal fees. Examples of professionals who typically purchase E&O insurance include real estate brokers and agents, insurance brokers, financial planners, investment advisors, contractors, general maintenance companies, engineering firms, printers, and wedding planners. Doctors, dentists, and other medical professionals, as well as lawyers, carry E&O coverage, known as malpractice insurance.
Mistakes made on behalf of a client can be costly. Professionals working in financial industries, such as accounting, real estate, insurance, and investments, can certainly benefit from errors and omissions coverage. Clients may sue financial professionals if they incur losses due to errors made in a consultation, application process, or investment decision. In fact, many regulatory agencies require employees in these professions to obtain E&O coverage, either independently or through their employers.
How Much Does E&O Insurance Cost?
The cost of errors and omissions insurance can vary widely, depending on the type of business, where it is located, and whether any claims have been paid to that person or company previously. A professional or company that has been sued multiple times in the past is likely to pay higher premiums. On average, the cost of E&O insurance is approximately $500 to $1,000 per employee, per year. Our agent can help you find an E&O policy to suit your business needs at the best available rates.
Writing Your Will: Common Questions and Simple Tips
Have you thought about your final wishes in life? We know it’s not a particularly fun topic to discuss. But the truth is, writing a will is an important step to help your loved ones in the event of your passing. (So is choosing the right life insurance.) If you’re one of the 60% of […]
Should I Purchase Flood Insurance If I’m Not in a Flood Zone?
Flood insurance covers direct physical loss to your home structure and belongings caused by flooding. If the area where you live is not in a flood zone, you may think you are safe from flooding. The fact is that flooding is the most common natural disaster in the country. Many flood-related insurance claims come from areas with a low to moderate flood risk.
What Does Flood Insurance Cover?
Two types of flood insurance are available through the National Flood Insurance Program (NFIP):
- Building coverage: This protects you against damage from flooding to your foundation walls, staircases, anchorage systems, furnaces, water heaters, electrical systems, plumbing systems, refrigerators, stoves, built-in appliances such as dishwashers, permanently installed carpeting, cabinets, paneling, permanently installed bookcases, window blinds, solar energy equipment, well water tanks and pumps, fuel tanks, and detached garages.
- Contents coverage: This insurance covers personal belongings, such as furniture, clothing, electronic equipment, washers and dryers, curtains, microwave ovens, portable and window air conditioners, carpets not included in the building coverage, and valuable items, such as furs or artwork.
Flood insurance will not cover damage that is not the direct result of flooding. For example, damage from sewage backup is not covered unless flooding directly causes the backup.
When Can You Buy Flood Insurance?
You can purchase federal flood insurance if your community participates in the NFIP. For properties located within the areas with the most significant risk of flooding, known as Special Flood Hazard Areas (SFHAs), under the National Flood Insurance Act, lenders must require borrowers to buy flood insurance to receive federally-backed loans. You can purchase flood insurance at any time. After you have paid the premium, there is a 30-day waiting period before the policy goes into effect, except when:
- The initial purchase of flood insurance is in connection with making, extending, increasing, or renewing a loan; or
- The initial purchase of flood insurance is made during one year following adoption of a revised Flood Insurance Rate Map for a community, in which case the waiting period is one day.
If you purchase flood insurance when you buy your home, there is no waiting period before coverage goes into effect.
What Type of Flooding Does NFIP Cover?
When the surface of normally dry land is partially inundated, and two or more adjacent properties or two or more acres are affected, it is considered flooding covered by NFIP. This can be caused by:
- Unusual, rapid accumulation of runoff of surface water from any source, such as heavy rainfall
- Overflow of inland or tidal waters
- Collapse or destabilization of land along a lakeshore or other body of water caused by erosion or the effects of waves
- Mudslides or mudflows comparable to rivers of liquid, flowing mud caused by flooding
- Water currents exceeding normal cyclic levels
Flood insurance is not only for people who live in flood zones. Our friendly agent can help you obtain a policy to protect your home from flooding.
35 Screen-Free Activities Your Family Can Enjoy This Summer
Ah, Summer! As a kid, few times of the year bring more joy. But for parents, all that unstructured free time can bring its own share of struggles. When you were growing up, summer probably meant spending more time outdoors than inside. It meant swimming, bike rides and games of pickup basketball. Today, however, many […]
10 Easy Dorm Room Hacks
It’s college move-in time. For many, this is the first time students will be living away from home and moving into a smaller space. It might even be the first time sharing a room—and a bathroom—with someone. With a roommate and limited space, if you’re a soon-to-be college student, you might be in for a […]