Archive for the ‘Financial services’ Category

Insurance and Divorce

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i-love-you-1310934-640x480Statistics tell us that over half of married couples end up in divorce.  This is sad, sobering news and even with the use of a pre-nup, the process of divorce is both emotional and difficult.  There are large issues to decide when your relationship ends up in separation or divorce, and insurance may not be on the top of the list.  Nonetheless, break ups have insurance issues to be resolved and so it should be on the list of items to be discusses and decided.  While not all divorces are contentious, it is human nature to have anger, selfishness, revenge and pettiness sometimes show their faces when unraveling the marital assets.  The courts and lawyers may hammer out the final decrees, but here are the insurance areas that need to be considered.

Health Insurance

If you had your health insurance through your spouse’s employer, then once your divorce is final, you have to get your own coverages.  It is important that there are no gaps in the date of coverage from the time you leave the company plan to the time you start your own plan.  The kids can stay on the company plan or go with your new plan depending on the custody agreement.  The court may decide this for you as well as who will pay premiums if that becomes a new expense for you.

Providing COBRA for the party no longer covered by the company plan is required of the employer for up to 36 months.  The company must be notified within 60 days of the divorce.  If you choose to go with the COBRA coverage offered by your ex’s company, you are 100% responsible to pay for those premiums unless the court assigns payment to your ex as part of the support agreement.  It would be wise to shop around for a new plan before you just accept COBRA as prices for Health Insurance do vary.

For a legal separation, it is the same as divorce but make sure you check to see what the company policy is when it comes to separation.  Some companies only recognize a legal divorce, others treat separation and divorce as if they were the same.  You or your lawyer should have the conversation with Human Resources before you start making any changes.  If you find yourself in legal separation mode and the divorce is dragging, you are not obligated to keep the insurance on your ex unless the court orders it.  If the court orders your spouse to keep the insurance in place, you can keep your current plan with the employer, unless the employer says no and then the spouse must get and pay for COBRA or another plan to not be in violation of the court order.

Finally, for both separations and divorce – make sure you update the name and address on all documents and policies.  If there are health proxies in place, next of kin notices, and contact names involved, these must be changed too.

Life Insurance

The purpose of Life Insurance is to protect the income of the providing spouse, with the beneficiary of benefits usually being the receiving spouse.  Life Insurance replaces income to the surviving spouse if the providing spouse dies.  Ownership is key on a life policy as only the owner of the policy can change the beneficiary and they have control of the policy’s cash value.  This can become an issue with remarriage as there is no way to know what the ex-spouse/owner has done – even if actions were courted ordered because there is no method to monitor their actions.  It may be best to take control of the life policy AND pay the premiums – which could be part of the divorce settlement.

Again, names, addresses and beneficiaries should all be changed when the divorce is final.

House / Homeowners / Tenants Insurance

The house is always a big item to deal with in divorce.  At the very least, one of you will have a new location in which to live soon.  Home/tenant insurance must change from the one policy location you share, to now two policies covering where you both will live, contents you have with you and your personal liability exposures.  Floaters or schedules should reflect the actual items each party ends up with when the divorce is final. An ownership change in the property requires a name change on the main policy.  If the woman keeps the house but changes her name, that must be reflected on the policy too.  If the change involves removing a name from the current policy, BOTH people should sign the request and it should be made in writing to avoid issues and one spouse removing another without their knowledge or consent.  You lawyer should be able to help you with this if it becomes nasty.

Car Insurance

If each of you owns a car, titled in your own name, then it is an easy change.  Each person will get their own policy in their name with the car they own.  Update the name on the policy, the mailing address, garaging location and billing method.

If both own a car, the title must be changed to show only the new owner.  That person will have the insurance policy in their name for that car.  If you have both owned the car and been on the same policy, you can not remove the other without their consent or remove the vehicle with their consent.

Don’t make changes until the divorce is final.  Change requests should be in writing, signed by both parties and include name changes, address changes, ownership change, garaging and usage change, and billing method change.

These changes may cause you to lose policy bundled discounts like: Multi-car; Auto and Home credits with the same company; Occupational / Affinity Group discounts

Disability & Long Term Care 

This can be a big issue for the now single party because they will not have that automatic next in line person to care for them if something occurs.  Changes here will depend on how the disability components are set up.  Was it set up to compensate for lost earnings due to a disability or is it used in place of retirement benefits from work during the marriage.  Review these issues with your lawyer to best decide on how or if the disability benefits will continue now.

Long Term Care plans are individual policies and usually not impacted by divorce except for a name and address change and a married discount will be lost.

Divorce is by no means an easy season, but there are plenty of people who have passed this way and they can give you great emotional support.  When it comes to the legal issues, don’t hesitate to depend on your lawyer for help.  And when it comes to insurance issues, don’t hesitate to call us to help you through it all.

 

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Fitts Insurance Agency, Inc.

2 Willow Street, Suite 102

Southborough, MA 01745

 

888-697-6542

508-620-6200

(f)508-481-0227

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Why is Life Insurance So Important?

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You probably don’t sit around with your friends and discuss life insurance, but it’s an important part of your financial portfolio. Learn why as you decide whether life insurance is right for you.

What is Life Insurance?

A life insurance policy provides a financial payout to your survivors if you die. It’s a valuable tool in your estate planning portfolio since it protects your loved ones from financial stress or devastation after your death.

What Does Life Insurance Cover?

Purchase a life insurance policy, and your surviving beneficiary can use the money for a variety of purposes.

1. Cover funeral expenses. The average funeral cost $7,045 in 2012, according to the National Funeral Directors Association. Reduce your survivors’ financial strain with life insurance funds that cover this necessary expense.

2. Replace income. Because your survivors depend on your income for basic living expenses, they’re at risk of losing their home, vehicle and other assets after your death. Your life insurance policy can provide your survivors with financial stability.

3. Repay debt. Student loans, credit cards, vehicles, mortgages and other debts can burden  your survivors. Purchase life insurance, and the policy can repay debt and reduce the financial strain your survivors feel.

4. Pay estate taxes. After your death, your survivors will owe estate taxes on any assets you own. Instead of affecting their budget, they can use your life insurance funds to pay this expense.

5. Save for the future. Fund your children’s college education, help your partner start a business or support your parents’ retirement. Your life insurance policy can fund these and other future plans.

Who Needs Life Insurance?

Many people think life insurance is necessary only for parents of young children. After all, those survivors could face severe financial strain without adequate resources to provide for their basic needs. In reality, anyone who’s single, married, young or old benefits from the financial peace of mind a life insurance policy provides.

How Much Life Insurance do you Need?

Everyone’s life insurance needs differ, so you’ll want to evaluate your finances and situation as you decide how much life insurance to purchase. Consider what your life insurance funds will cover, how much money your survivors need to live comfortably and the premium amount you can afford. Your insurance agent can work through these details with you to ensure you have adequate protection that secures your loved ones’ futures and gives you peace of mind.

Employment Practices Liability: The Coming Plague

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EPL articleEmployment Practices Liability (EPL) differs from other professional and management coverage since it protects the company from acts which violate the employees’ legal rights of employment.

What are these rights?

1. Sexual Harassment

2. Discrimination (sex, race, national origin, age religion or color)

3. Wrongful Termination

4. Constructive Discharge

5. Infliction of Emotional Distress

6. Violation of the Family Leave Act

The meaning of the laws regarding these rights and insurance coverage for these acts is fairly well established.  Policy language and court cases have hammered out some of the conflict.

From a risk management perspective, sensitivity training and the development and implementation of strict behavioral guidelines greatly reduces the risk of claims.

Three factors in this risk change almost daily and must be addressed.  State laws may expand the protected classes (sexual orientation) covered by employment law.  These suits are massively expensive to litigate.  Thirdly, outsiders like contractors, customers, and suppliers are now claiming under this tort.

Although States regulate insurance, insurance companies tend to be regional and national; therefore, policy language does not always represent state law or the conditions under which the laws apply.

Have your state-licensed insurance agent read policy language to assure proper coverage in each state your company operates.

The policy limit includes litigation costs and claim payouts.  Legal fees are not add-ons as in other liability policies.  So, as the insurance company lawyer negotiates at length, your available funds to settle dwindle.  This process can become a very dangerous game of chicken for your assets.  Increase limits accordingly and keep informed as to the progress of any negotiations.

Customers, suppliers and contract labor are beginning to avail themselves of this course of action.  Train all employees and implement strict behavioral protocols at all levels and duties.

Most important, assure your managers spot poor or reckless behavior early, and correct it.  Zero tolerance policies work in this area.  You wouldn’t want to work in a truly hostile environment.  Don’t turn your back on these behaviors.

Tax Season Riddled With ID Theft Scams

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LAdyThe IRS says more than 3,000 taxpayers have been victimized by phone scammers claiming to be IRS agents and demanding payments by either by pre-paid debit cards, or by deposit into online payment accounts.

The IRS says it doesn’t call taxpayers to discuss their accounts, so anyone receiving such a call should hang up quickly.

Another potential danger for taxpayers is identity thieves using personal information to file fraudulent tax returns, and stealing their refunds. A number of states have enacted stricter identity verification methods to try to reduce this threat.

Tax season also brings with it an increase in email phishing scams in which criminals send emails claiming to be from the IRS, in the hopes victims will enter personal information into a false IRS or banking website.

Scammers are also trying to exploit confusion about the Affordable Care Act by demanding people pay ACA-related tax penalties to them.

All these scams highlight the importance of taking active steps to protect your identity, and the need for heightened vigilance during tax season.

Maria Cordeiro is client services manager for Chubb Personal Insurance.  Posted: 17 Mar 2015 08:34 AM PDT

Protect yourself from on-line crime

At the rate cyber crime is spreading, it’s now just a matter of time before you are impacted by some form of cyber attack. Identity Theft Protection and assistance services are highly recommended. In the meantime, do what you can to limit your exposure to on-line crime. Here are some helpful tips:

Any time you get online, including while you take online classes, you run the risk of having your identity stolen. Be vigilant and protect yourself with seven tips.

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Back to school shopping: Insurance

The children are back at school. Together with the many lifestyle changes that they (and you) will be making this time of year, remember that it’s also important to give your insurance a tune-up.

A recent industry report recommends considering these items when Johnny or Sally leaves the nest:Moving back to school More

What’s the difference between an on-line insurance provider and an insurance agency?

Just as one might use a CPA to prepare their income taxes or an attorney to help them with their estate planning, many choose to use an insurance agency to write their insurance policies. This choice is mainly made because a person feels they need professional advice during the process. Of course, everyone will have different needs and circumstances surrounding their purchase, and this is why an insurance professional’s advice can be an invaluable asset. If you’re debating buying insurance online versus through insurance agency, then you should ask yourself a couple of questions: More

CYBER LIABILITY INSURANCE: A smart investment that can save your business

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On April 20, 2011, someone hacked the Sony Playstation Network. They found an opening in the online video gaming network’s password-reset system and penetrated the security protecting its customer database. Days later, the company admitted that the hackers had obtained personal information on 70 million or more subscribers. The hackers got names, physical and e-mail addresses, birth-dates, and other identifying information, and it’s possible that they got credit card numbers. Sony took the network offline to reinforce it, but within days of it coming back online, hackers broke in again.

Playstation Network is a high-profile target with tens of millions of subscribers, making it attractive to criminals. However, even small businesses that do business over the Internet are vulnerable to the same kinds of intrusions. The federal Internet Crime Complaint Center referred more than 146,000 complaints to local, state and federal law enforcement agencies in 2009, 22 percent more than the year before. One out of every three of those complaints was for identity theft, credit card fraud and computer fraud. The Ponemon Institute has reported that the average data breach costs businesses $7.2 million.

What could happen to a business’s data? More