Understanding Long Term Care Insurance Ratings

Long term care insurance doesnt come cheap, and it also tends to be more complex than other types of insurance. When purchasing long term care insurance, one of the several things you should consider is the rating of the insurance company although most of us dont pay much attention to it.

The ratings system was basically designed to ensure that the insurance company issuing a policy is financially sound. There are several different independent companies that offer ratings systems including such familiar names as Standard and Poors and Moodys.

Perhaps the most well known of the ratings companies is A.M. Best which publishes over 50 different reports about insurance companies and the industry in general. The company has been in business over 100 years, and is the largest such company in the world.

Technically the credit ratings evaluate the risk potential and the creditworthiness of a particular company they arent really meant to be an endorsement, although inevitably people use them as such.

The ratings companies all have slightly different designations, but the grades are easy enough to understand. The ratings scores all work in much the same way as your childs school grades using a scale from A to F - A and B are good, whereas a C, D or E rating is not so good.

Bests highest rating is A+, whereas Standard and Poors best rating is AAA and Moodys is Aaa. These ratings all mean more or less the same thing an excellent track record, financial stability and the ability to meet the demands and expectations of policyholders.

In the somewhat unpredictable world of insurance, nothing can ever be guaranteed, but if you take out long term insurance with a company that has the highest ratings with any of the ratings companies, you have basically nothing to worry about.

As far as low ratings are concerned, you should probably avoid taking out long term care insurance with a company rated C or D. And Bests lowest rating is an F which means the insurance company is basically bankrupt definitely one to avoid!

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Payment Protection Insurance For Beginners

Unless you don't read the finance sections of the newspaper, you will no doubt be familiar with payment protection insurance - or PPI for short. Unfortunately, payment protection insurance - which is an umbrella term for income, loan and mortgage payment protection policies - has featured very prominently in the media recently. And all for the wrong reasons.

What does payment protection insurance do?

But first of all, what is payment protection insurance? PPI policies pay out a monthly tax-free sum should you become unable to work due to long term illness, accident or involuntary redundancy. This means that your credit commitments such as mortgage, loan or credit card repayments and in some cases depending on which policy you buy, other living expenses, are covered in part or full by the insurance.

This means that you wont have to worry about paying your debts while you find another job or get back to 100% health certainly State benefits will not cover the average persons cost of living - nor will you upset your lender by missing payments (which can also affect your credit report and potentially any future lending). And in the case of mortgage payment protection insurance (MPPI), it can keep a roof over your head, quite literally.

Negative coverage

So you can see just why payment protection insurance is such an invaluable product. If sold properly that is. Unfortunately, there has been lots of negative coverage in the press and on the TV recently regarding PPI. Plus, with the referral of the sector to the Competition Commission for an in depth review which is expected to last two years understandably confidence in the product has taken a nose dive.

There have been reports of consumers being forced into buying expensive and often unsuitable PPI alongside their loan, credit card or mortgage. Many of these consumers have bought it without realizing that it is not compulsory, nor that they can shop around for a standalone policy and some without actually realizing what the cover is for.

Several large companies have already faced fines for their failings in selling payment protection insurance and some consumers have proven that they were mis-sold a payment protection insurance policy and have successfully been awarded compensation for being sold unsuitable policies.

For failings this could mean that the product was not properly explained and the correct advice given when the policy was sold. Or, where the seller did not even ask the right questions in order to assess a customers suitability for the product.

Some customers even took out loans not realizing that PPI cover had been included in the total cost of the loan -and they were paying interest on it!

The term unsuitable can cover lots of issues, but probably one of the main ones is exclusions. Many people who were sold PPI already had a pre-existing health complaint that the policy simply would not cover.

Or, they were self-employed. Very few PPI policies are actually suitable for self-employed people due to how they would actually prove they were not receiving an income when it came to claiming. In some cases, the insurers only pay out if you shut the company down!

But dont let this put you off. If there is a gap in your protection insurance and PPI is the product to fill it, then there are ways to ensure that you dont get caught out with an unsuitable policy.

Tips on buying PPI

First of all, remember that payment protection insurance is not compulsory and you do not have to buy it alongside your loan, credit card or mortgage. The lender or bank may intimate this as this is where they make their biggest profits but you dont have to go with their product.

Some companies offer cheaper loans if you take out their PPI policy along with it, but while the loan may be cheap, the payment protection insurance certainly wont, so dont be fooled!

As with everything, shop around for the right deal for you. Go to an independent, standalone provider who is not tied to a particular PPI provider and that way youll have more choice.

Check out the policy terms and conditions and see what the policy does and doesnt cover. As an example, many do not cover time off work for stress or backache the two most common reasons for absence from work.

See whether your occupation will be covered by the insurance.

Find out what is the highest income amount you are insured for and how long the benefit will be paid for (typically it is 12 months but some policies pay out for up to two years)

Ask whether the payments are likely to increase and if so by how much?

Finally, check out the premium. Premiums from independent providers are normally cheaper than those offered by the high street banks ad lenders. In fact, you can save up to 40% on MPPI and 80% on loan protection insurance if you shop around carefully.

Mis-sold a policy?

If you already have a payment protection insurance policy and feel that you were mis-sold the cover, ask yourself the following questions to see if you have a case:

Were you:

told the policy was optional or was it implied that PPI cover was compulsory or that it was compulsory in order to obtain the loan?

given a statement of Demands & Needs as well as appropriate Financial Services Authority (FSA) documentation at the appropriate time?

asked about your employment status and whether you had any pre-existing medical conditions?

allowed to check the policy terms and conditions prior to the sale (either face to face or via online sales)?

asked whether you had any other insurances in place that already covered the risk?

If you feel that you have been mis-sold your payment protection insurance policy, then contact the lender who originally provided you with the cover and voice your concerns. If you find that then matter is not then satisfactorily resolved, take it up with the consumer body the Financial Ombudsman Service.

Finally, remember that payment protection insurance is literally priceless and can mean the difference between financial recompense and financial ruin should you become unable to work.

Choose your provider wisely and you wont go far wrong.

Jason Hulott is Business Development Director of Protection Insurance. Protection Insurance is an internet based insurance business dedicated to getting consumers the very best insurance rates and the best products.

Home Insurance, Flood Alert

The Royal Institution of Chartered Surveyors warns that if you can't get insurance for your house, you're in big trouble. Mortgage lenders won't lend on houses that are uninsurable and as a result its value could fall by up to 80%.

It's a high flood risk that's most likely to make your house uninsurable. According to a recent survey, 6.5 million homes are already at risk from flooding of which 1.5 million are in high risk areas. The government has completed flood defences in many such areas and protection for a further 80,000 homes is due this year. But concerns have also been expressed about a further 120,000 new homes planned for the Thames Gateway which are potentially in a high at risk zone. Yet many areas remain vulnerable. And if global warming continues, by 2030, the 1.5 million at risk could mushroom 3.5 million. Back in 2003 the Association of British Insurers (ABI) agreed the principles which committed UK insurers to offering home and contents insurance for properties in areas which are assessed to be at a flooding risk once in seventy five years or more. The rider was that the flood defences had to be already in place or would be completed by the end of 2007.

The Department for Environment, Food and Rural Affairs (DEFRA) has the responsibility of developing and maintaining these flood defences but within the insurance industry there's widespread concern that insufficient progress is being made. As a result the insurers have has warned the government that there could be widespread withdrawal of insurance cover if progress is stepped up.

In the mean time, those in areas threatened by flood water could find their insurance premiums soaring. Whilst the insurance industry agreed to provide insurance cover, their commitment was simply to maintain premiums at reasonable levels. But there was no definition of what reasonable means. As a result premium increases of 60% have been common with up 400% increases in bad areas. In a tiny number of cases, cover has been withdrawn altogether, mostly in country areas where DEFRA considers the cost of defending a cluster of a few homes to be uneconomic.

Environmentalists warn that unless DEFRA gets it's skates on, the UK 's current bill for flood damage could rise from 950 million a year, to 3.2 billion. After all, the average insurance claim for household flood damage is 30,000 that's even higher than fire damage. And localised events like the 2004 flood at Boscastle, Cornwall , can cost the insurers over 15 million.

If you are in any doubt whether your home or proposed home, is in a flood risk area, you should visit www.environment-agency.gov.uk. This is DEFRA's web site where you can check whether they think your home is at risk of flooding. Their maps were originally designed for planning purposes and provide information on a post-code basis.

Whilst many insurers use the DEFRA information, others like More Than, have their own flood maps. These assess homes individually rather than post code areas. This means that if your existing insurer increases your premium for flood risk and uses the DEFRA information, you may still be able to get a cheaper rate from an insurer using it's own flood data if its data identifies that your property is beyond the at risk zone.

The ABI has recently added to the pressure on DEFRA to accelerate the building and upgrading of flood defences. It has warned that unless the government increases its spending on flood defences, the insurance industry may not continue their commitment to the 2003 principles.

That would be bad news for many homeowners.

Michael Writes for Brokers Online who offer Life Insurance, Life Assurance and Home Insurance all online

Make Sure You Know Everything There Is To Know About Cheaper Car Insurance

Of course we all want to save money on our bills, but sometimes it seems that everything is still expensive, especially when it comes to cars and insuring them. They can sometimes be a millstone around your neck. However it is possible to make savings when it comes to buying car insurance and one of the best ways to make savings on your premiums is to shop around.

You can get someone else (ie your insurance broker) to shop around on your behalf or you can have a look online. Buying online can not only save you a huge amount of money but it will also save you a whole lot of time and leg work.

Almost all online insurers can give you an almost instant quote which you are then able to consider and compare with other online companies. Some sites will also give you a comparison table on their site which even saves you the trouble of searching yourself. Of course you should always double check this information to make sure it is right and currently up to date as you can often find that once you fill in a full application, the premium can vary quite dramatically.

One of the most common reasons why people don't make savings on their car insurance is because they simply don't shop around. Along with this they fail to gain as much knowledge on the subject as they possibly can.

Understanding which policy you would be better taking also goes a long way to helping you save on your car insurance. For example there are two main types of insurance, third party, fire and theft, and fully comprehensive. The type of policy most suited for your needs should be taken into account but also bear in mind that fully comp, while covering you for more, will be the most costly.

There are many ways in which you can lower the cost further. If you have had advanced driving lessons then this should be stated - the safer you are regarded by the company then the lower the cost of your premium.

Your age and sex also plays an important factor in how much you pay for your car insurance. There are specialist websites that cater just for the young driver or say for the female driver and by going with one of these you can save yourself money on the cost of insurance.

Fitting better anti theft devices on your car can also save you money as can offering to pay a higher excess fee.

David Thomson is Chief Executive of BestDealInsurance a completely independent specialist broker dedicated to providing their clients with the best insurance deal. They offer great value car insurance, home and life insurance, ensuring that their clients have the protection they need, without leaving a hole in their pocket.