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15 Common Questions About Life Insurance

15 Common Questions About Life Insurance

Life isn’t one-size-fits-all – and neither is life insurance.

Planning for the future can feel exciting and scary at the same time. Whether you’re buying your very first policy or planning for the next chapter of your legacy, it’s common to have questions.

Here are some common questions you might be wondering. (Want a more personalized answer – or a quote? Talk to your local ERIE agent.)

  1. How much life insurance do I need, anyway? A number of factors – including your age, debts, monthly expenses and number of children – can influence how much life insurance you may need to comfortably plan for your future. A local insurance professional like an ERIE agent can give you a free quote based on your unique needs. As a general rule of thumb, the experts at LifeHappens.org recommend purchasing a policy worth 10 to 15 times your gross income. Try out our free life insurance calculator for a private, no-obligation estimate you can do right at home.
  2. Isn’t life insurance really expensive? Purchasing an insurance policy worth hundreds of thousands of dollars may sound like an expensive proposition. But the truth is, life insurance is more affordable than you may think. With Erie Family Life, a $250,000 life insurance policy could cost less than $15 a month1.
  3. Do I need a medical exam to purchase life insurance? Not always, but do expect to answer certain questions. Generally speaking, it’s more likely you’ll need an exam as your age and/or the amount of coverage requested increases. For some life insurance policies, your insurer will require a brief medical exam, more commonly referred to as a paramedical exam. It’s similar to a basic physical. A paramedical exam professional will measure vitals like your height, weight, temperature and blood pressure. You’ll also have to have blood drawn and a urinalysis test completed.
  4. Can I purchase life insurance without a health exam? Not all life policies require you to get a paramedical exam. Life policies below $100,000 typically require you to only complete an application (with the help of your agent) before it is reviewed by an underwriter2. Looking for more coverage? Ask your local agent about ERIExpress Life. If you’re between the ages of 18-55, you may be able to get an instant-issue term or whole life policy with up to $500,000 in coverage by answering several application questions without having to complete a life insurance paramedical medical exam 2.
  5. Why should I think about life insurance if I’m young and healthy? Life insurance is a smart purchase at any age. Even if no one depends on your monthly income, a life insurance policy will cover your funeral expenses and debts — including student loans. And there’s another advantage of purchasing a policy at a young age: lower rates. Because insurers price policies based on risk (and young people have a far lower mortality rate than older groups), your rates are generally less expensive if you’re young and healthy. Buying a policy when you’re young and healthy makes it easier for you to buy more coverage in the future. Plus, you’ll have a policy (locked in at a great rate) now, should you ever need it.
  6. I have a policy through work. Isn’t that enough? As part of an overall benefits package, many employers offer some form of life insurance coverage to their employees. Since this coverage is typically paid for by the employer, it’s a great benefit to have. But it’s still wise to hold your own personal life insurance policy. There are a few reasons for this. First, the coverage provided by your employer might not be enough to support your family in the event of your death. Employer-provided life insurance often covers you for a low set amount — like $50,000. Additionally, your coverage will be lost if you take another job or find yourself unemployed. Read more in our related story on why it matters to have life insurance outside of work.
  7. I don’t work outside the home. Why should I think about life insurance? Being a stay-at-home parent is a full-time job. And while your work may not generate an income, it does significantly reduce your household expenses. Think of all the extra costs associated with child care, transportation and meal preparation that would be incurred if you were no longer around. Just because you don’t bring home a paycheck doesn’t mean you aren’t making a significant contribution to your family’s bottom line. Read more about life insurance for stay-at-home parents.
  8. What’s the difference between term and permanent life insurance? Term life insuranceprovides coverage over a fixed period of time. Term life insurance is a cost-effective option to provide protection for the loved ones you leave behind. With this type of policy, you can select a term that will cover you when you need it most — such as the time it will take your children to reach adulthood. Permanent policies, such as whole life policies, provide coverage over your entire lifetime.2 That means your family and beneficiaries are covered for the duration of your life. Whole life insurance accumulates cash value, too, providing you the option of borrowing against it in the future.3
  9. I’m a rock climber. Can you still cover me? Assessing risk is a key component of underwriting a life insurance policy.  Dangerous hobbies — like skydiving, rock climbing or vehicle racing — make you inherently riskier to insure. However, just because you’re an adrenaline junkie doesn’t automatically mean you can’t get life insurance. Before giving you a quote, your insurance agent may ask you to fill out a written questionnaire to understand more about your hobby. In many cases, you’ll still be able to get insurance. Just expect to pay a little extra to account for the additional risk.
  10. Can I “stretch the truth” a little in my life insurance application to get a better rate? When applying for a life insurance policy, you’ll get asked questions about your occupation, health, family medical history and potentially risky hobbies. While your answers to these questions may impact your insurance rates, you should always answer them truthfully.  Misrepresenting your health status or other important information in your application could result in negative consequences that might affect your coverage.
  11. Couldn’t my family just crowdfund my final expenses if I pass away unexpectedly? Websites like GoFundMe provide a platform for users to ask for online donations to cover funeral and burial costs, or to fund other memorial wishes in honor of a loved one who passed. But crowdfunding is no substitution for life insurance. Unlike a life insurance policy, the amount of money you’ll raise is totally unpredictable — and may be further reduced by fees and taxes.
  12. What is a life insurance beneficiary? A beneficiary is a person or entity designated to receive the funds from your life insurance policy in the event of your death. Your beneficiary can be a person, business, trust, charity, church or even a school. An insurance policy can have more than one beneficiary.
  13. How do I choose a beneficiary? Choosing a life insurance beneficiary depends largely on how you’d like your life insurance benefit to be used upon your death. If you have young children, naming a spouse or close family member you trust as your beneficiary and memorializing your wishes may be one way to provide for your children’s care in your absence. Grown children could use the insurance benefit to help pay for college. Ask your ERIE agent about how to leave your benefit to a charity, school or church. In those cases, it’s recommended to have your gift be consistent with an established pattern of giving or support. Read our related article on how to choose a life insurance beneficiary.
  14. Could I be the beneficiary of a long-lost life insurance policy? It’s estimated that $1 billion in benefits from forgotten and lost life insurance policies are sitting unclaimed in America. In light of that statistic, it’s possible you could be a beneficiary to a life insurance policy that you’re unaware of. Organizations like the National Association of Unclaimed Property Administrators, which operates missingmoney.com, allow you to conduct a quick search online. Learn more in our related blog story on how to locate a lost life insurance policy.
  15. I don’t have kids. Why should I think about life insurance? The need for life insurance isn’t limited to parents. Whether you’re entering adulthood or nearing retirement, everyone can benefit from owning a life insurance policy. Beyond providing for children, a life insurance benefit can be used to cover expenses like funeral costs or pay off any outstanding debts.
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Insurance-Adjuster

What is an Insurance Adjuster?

Most of us know what an insurance company is. But just what is an insurance adjuster?

Sometimes it’s not clear who adjusters are and how they’re trained for the job. (After all, how many colleges offer “insurance adjusting” as a major?)

To get some answers, we went behind the scenes with Chad Smith, a property claims specialist at Erie Insurance who handles large losses. Read on to learn more about him and all the important ways he helps Customers in their time of need.

In your own words, what is an insurance adjuster?
To me, an insurance adjuster is someone who has a great deal of responsibility and accountability. An adjuster owes that not just to the company he or she represents, but to the customers who’ve experienced a loss.

At Erie Insurance, adjusters are the ambassadors of the company. People don’t really see how an insurance company works until they have a loss, and we represent that.

What kind of background do you need to become an adjuster?
More often than not, you need to have a college degree. I have a business degree, but insurance adjusters can pursue other fields as well. I would also recommend adding computer and math classes to your coursework.

How did you become an adjuster?
ERIE hired me as an adjuster shortly after graduating from college. I went through a few months of training that included both classroom and field training. I was tested on information and then spent some time out in the field with seasoned adjusters and appraisers to learn about what they did first hand. Because I work directly for an insurance company, I don’t need a license to be an adjuster. However, the rules vary by state.

What kind of skills do you need as an adjuster?
Being people-oriented is a must. You need to be able to empathize with the Customer by putting yourself in their shoes. Honesty and integrity are essential in establishing trust.

Because of the way the field is evolving, you need to be really comfortable with technology or be willing to learn it. To grow as a professional adjuster, you have to move beyond in-house training and pursue professional insurance designations like the Chartered Property Casualty Underwriter (CPCU) and Associate in Claims (AIC).

What is a normal day like?
There really is no normal day. And that’s one reason why I love my job!

In order to handle it, you have to structure your days to a certain degree, but also maintain flexibility. I might plan to make calls all morning—but if I get an urgent claim, I need to reorder my day. I’m always busy.

What hours do you work?
I usually start early and end late. Sometimes I work weekends. I enjoy a lot of freedom with this position—and I’m available almost 24/7 because that’s how you provide great service. You can’t be stuck in the traditional nine-to-five, Monday through Friday mindset as an adjuster.

What’s the most memorable claim experience you’ve had?
Over the years, I’ve had many. One that stands out is working during the 2011 tornado catastrophes in North Carolina, Virginia and Tennessee. ERIE was the first insurance company on the scene. There was a lot of damage, but I was able to respond quickly and help Customers affected by the tornadoes. The fast response was made possible by the way ERIE set up its catastrophe team units. Some people I spoke to said neighbors with other carriers hadn’t even heard from their adjusters yet. It was extremely gratifying to help ERIE’s Customers when they really needed it.

What’s the most gratifying part of your job?
Knowing in my heart that I did the best I could for ERIE and for the Customer on every claim that I handle. I remember one claim we had to deny; even still, the Customer sent me a card thanking me for how polite and helpful I’d been during the process. Everyone should receive the same level of service, regardless of the outcome.

https://www.erieinsurance.com/blog/what-is-an-insurance-adjuster

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JD Power Insurance Survey

ERIE Ranked Highest in J.D. Power Insurance Study

Thousands of people recently shared their experiences about shopping for auto insurance in a new national study and Erie Insurance was awarded “Highest Satisfaction with the Auto Insurers Shopping Experience.”

The J.D. Power 2017 U.S. Insurance Shopping StudySM, now in its 11th year, provides an in-depth look at the entire auto insurance policy selection process. It explores why customers shop, their attitudes toward and perceptions of auto insurance brands and how they make their final purchase decision. Satisfaction is measured on three factors (in order of importance):

  • Price—How customers rate their new auto insurance provider on the price of the policy given the level of coverage.
  • Distribution channel—How customers rate their experience interacting with their new auto provider’s agent, call center rep and website.
  • Policy offerings—How customers rate the variety of coverage options, the degree to which their needs are met and the ease of obtaining a new policy.

For the fifth consecutive year, Erie Insurance ranked the highest in the study, with a score of 879 out of 1,000.

The study methodology and other findings

The study is based on responses from more than 16,400 shoppers who requested an auto insurance quote from at least one of the top 25 insurers that have the largest market share in the United States. Customers were surveyed from April 2016 to January 2017.

The study also revealed that shoppers are increasingly reliant on agent recommendations when considering and quoting insurers, compared to 2015 (with 9- and 10-percentage point increases, respectively). Another critical driver of satisfaction is communication. Companies like ERIE that ranked the highest in the study help:

  • Ensure the customer completely understands the coverage.
  • Provide guidance and/or tools for selecting the right coverage.
  • Make certain customers understand their premium calculations.

Are you shopping for insurance?

When you’re shopping for insurance, J.D. Power offers the following tips:

  • Look for an agent with a reputation for integrity and trustworthiness, who can give you thorough advice on the pluses and minuses of various insurers and their products.
  • Compare the terms of various policies and assess how those policies might be affected by factors such as current events, driver performance and acquisition of new vehicles.
  • Be sure you’re well covered in areas where you most need coveragesuch as personal liability (when you hurt other people or their property).

Who Is Erie Insurance?

ERIE has been protecting families and businesses for more than 90 years. The company’s employees and agents follow the Golden Rule—treat others as you would want to be treated.

“As you can see from this study, our prices, products and service often outshine the competition,” says Doug Smith, executive vice president, sales and products, at Erie Insurance. “When you work with an experienced ERIE agent from your neighborhood, you’ll get coverage that exactly fits your life and never pay more than you should. When something bad happens, we’ll make sure you’re back on your way, right away. We’ve built our reputation for being Above all in Service®.”

In the past year, ERIE has made improvements to the auto insurance quote tool on its website. Shortly after the J.D. Power survey closed in January, ERIE launched a refreshed website. For more information, get in touch with a local ERIE agent.

 

Erie Insurance received the highest numerical score in the J.D. Power 2013–2017 U.S. Insurance Shopping Studies (tied in 2016). The 2017 study is based on 16,424 total responses evaluating 21 providers and measures the experiences and perceptions of customers surveyed between April 2016 and January 2017. Your experiences may vary. Visit jdpower.com for more information.

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