Relocating to San Antonio

RSS

Insurance

PROTECTING YOUR FAMILY AND PROPERTY

In this chapter, you’ll find information on different types of insurance, including homeowners, auto, medical, dental and life insurance, as well as practical tips on reading policies and shopping for coverage. As you organize your relocation to the San Antonio region, it’s also a good idea to review your family’s insurance needs. For your home, you’re probably planning to purchase new home furnishings, appliances and other equipment that should be noted in your updated home inventory. If you’ll be commuting to and from the office each day, you’ll need to know how many miles you’ll be driving. Keep copies handy of previous auto, home and health policies for easy reference when completing new insurance applications – it will save you time and aggravation.

Insurance in Texas
In Texas, the state’s insurance regulator is the Texas Department of Insurance (TDI).At its website (www.tdi.state.tx.us), you’ll find a wealth of consumer information and names of insurance providers that are allowed to market their services in the state. There is also a Consumer Help Line for answers to general insurance questions or for information on filing an insurance-related complaint. Call 800-252-3439 from 8 a.m. to 5 p.m., central time, Monday to Friday.

Quick Tips to Help You Select Insurance Coverage
TDI recommends these tips to assist you with all of your insurance shopping needs.

Get price quotes from several companies and compare the rates and coverages. TDI publishes auto and homeowners price comparisons that can help you compare sample rates. The price comparisons include annual price estimates for sample policies and information about a company’s complaint record and financial strength.
Include independent agents in your search. Some agents only represent a single company or company group. Independent agents typically represent several companies and can give you multiple quotes at one time.
Determine what coverages you want and need. For instance, if you have valuable car stereo equipment or if you need more than basic residential coverage for jewelry, collections, or other valuables, you may need endorsements that change or add coverage. Endorsements that add coverage will raise your premium.
Answer questions truthfully when you apply for insurance or ask for a rate quote. Wrong information may result in an incorrect price quote, rejection of your insurance application, or cancellation of your policy.
Consider higher deductibles. Your policy probably will have deductibles. A deductible is the amount you have to pay out of pocket on your claim before the insurance company pays. The higher your deductibles, the lower your premium. Choose the highest deductibles you can afford.
Ask about discounts. Insurance companies may offer policy discounts that will lower your premium. Ask your agent what discounts the company offers.
Make sure you have uninterrupted coverage. Never cancel an existing policy until you get your new policy or a written “binder.” A binder proves you have coverage until the company issues your policy.
Don’t pay cash to an individual agent. Pay with a personal check or money order made out to the insurance company or agency. Get a receipt for your premium payment.
If a company turns you down, keep shopping. Different companies have different criteria for accepting customers.

Homeowners Insurance
Insurance companies may sell several types of homeowners policies in Texas, each with a different level of coverage:

HO-A policies provide extremely limited actual cash value coverage of your home and its contents. Only the types of damage specifically listed in the policy are covered.
HO-A amended policies provide more extensive coverage than the base HO-A policy but less coverage than an HO-B. Coverage provided by these policies may differ by company.
HO-B policies provide replacement cost coverage for most types of damage, except those specifically excluded in the policy.
HO-C policies provide the most extensive coverage, but they are more expensive than other types of policies.

Generally, HO-B policies provide the most coverage for the price, but some companies do not offer them. Read your policy carefully to know exactly what coverages are included. If a company offers you a policy with less coverage than you’d like, ask if other policy forms are available. You also may be able to buy additional coverage by adding endorsements to the base policy.

Consumers can compare rates among homeowner insurance companies by going to https://apps.tdi.state.tx.us/helpinspublic/Start.do?type=res and answering the homeowner profile questions listed and then clicking on “get sample rates.” You’ll get a list of all the companies in TDI’s database and their sample rate estimates. You can then select up to three companies to view a detailed comparison of rate and policy information.

— Make Sure Your Coverage Fits Your Needs
TDI advised that you enough coverage to avoid a major financial loss if your home is badly damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house. Also, it means that you should insure your home’s “replacement cost,” not its market value. The market value may be higher or lower than the cost to rebuild your home. If you have replacement cost coverage and your house is destroyed, you can rebuild your home on the same lot at current local construction costs.

HO-A policies do not provide replacement cost coverage, but you may be able to add it with an endorsement for additional premium. Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home’s square footage, number of bedrooms and number of bathrooms. Inform the agent of any custom features that are part of the house.

When calculating your home’s replacement cost, deduct the value of the land, foundations that are below the surface of the ground and other items such as landscaping and lawn sprinkler systems. Construction costs change, so it’s wise to update your coverage amounts annually.

Household contents are automatically covered only for their “actual cash value.” Actual cash value is the replacement cost minus depreciation. You can buy replacement cost coverage for your possessions as an endorsement. Homeowners policies offer very limited coverage for valuables like jewelry, furs, cash, and stamp and coin collections. You can buy separate endorsements to increase your coverage.

A homeowner’s insurance policy in Texas usually combines five different types of coverage. According to the Texas Department of Insurance (TDI), these include:

Dwelling pays for damage or destruction to your house and any unattached structures and buildings, such as fences, detached garages and storage sheds.
Personal property pays for theft, damage or destruction of the contents of your house, including furniture, clothing, and appliances.
Liability protects you against financial loss if you are sued and found legally responsible for someone else’s injury or property damage. A homeowners policy automatically provides $25,000 in coverage. You can buy up to $1 million in coverage for an extra premium.
Medical payments pays medical bills for people hurt on your property. It also pays for some injuries that happen away from your home, such as your dog biting someone. A basic homeowners policy pays $500 in medical bills. You can pay extra and get up to $5,000 in medical payments coverage.
Loss of use pays your additional living expenses (temporary housing, food, and other essential expenses) if your home is too damaged to live in during repairs. Most policies pay 10 to 20 percent of the amount of your dwelling coverage.

— Factors that Affect Your Premium
Your premium will be based on several factors. According to TDI, these include:

Where you live.
Level of fire protection available in the area.
Construction type of your home (brick or frame).
Type of policy you purchase.
Amount of coverage you buy.

— Lowering Your Premium by Increasing Your Deductible
Texas homeowners’ policies generally carry a basic deductible of 1 percent ($1,000 on $100,000 of coverage) of the insured value of the dwelling. Deductibles are available as high as five percent and as low as $100, although not all companies offer deductibles that low. If you raise your deductible, you’ll have to pay more out of pocket for repairs and replacement before your insurance company will begin to pay.

— Ask about Discounts
Companies may offer premium discounts if you take steps to reduce the chances of a loss. Each company sets the amount of the discounts it offers. Following are some of the more common homeowners discounts available:

Impact-resistant roof.
Noncombustible roof.
Burglar, fire, and smoke alarm systems.
Automatic sprinkler systems.
Fire extinguishers.
Premises in good condition (companies set their own standards).
Age of house (companies set own standards).
Marking personal property with an identifying number (inspection required).
Good claims experience for three consecutive years.
Other policies with same company or group.
House insured to full replacement cost.
Senior citizens discount.

— Other Types of Insurance
The San Antonio region is relatively free from natural disasters, however, heavy rains can cause flooding and high winds can cause major damage to a home and occupants. These threats are of special concern to residents living along rivers and lakefront property. Depending on your home’s location, you may select additional coverage to protect your property and belongings. Even if a home is not located near a lake, flooding can occur from heavy storms and cause major damage to a home and occupants.

Flood Insurance
With its location off the Gulf of Mexico, Texas ranks high in the U.S. in weather-related property damage each year, including flooding. Home insurance policies don’t cover floods, but coverage is available and underwritten by the U.S. Government (FEMA), which covers damage caused by rising water. The cost of insurance varies substantially based on the elevation of the property relative to the historical flood evaluations.
When purchasing a home, buyers should check with the real estate and insurance agents to research the home. The state of Texas mandates that the seller provide a disclosure statement revealing any past flooding problems and all corrections made to the home.

If a lender determines that a property is in a special flood hazard area, the borrower is required to purchase flood insurance. A special flood hazard area has a 1 percent chance of being inundated by flood.

Earthquake Insurance
Coverage is available and inexpensive as earthquakes are rare in Texas.

Extra Coverage (Endorsements)
You may have special coverage needs that expand or increase the coverage on certain items. These can include camera equipment, coin collection, computer equipment, antiques, fine arts, rugs special collections.

Personal Umbrella Liability Insurance
This additional coverage provides you with more liability coverage than a homeowner’s policy. Ask your agent for more information about what additional coverage includes.

Auto Insurance
It’s the law in Texas for people who drive to be able to pay for vehicle accidents they cause. This section explains the importance of having auto insurance, how to shop for insurance as well as the current liability limits required in Texas.

— Texas Sure Vehicle Insurance Verification
Texas Sure is a new program whose goal is putting an end to motorists driving without insurance, stopping drivers from dropping coverage after receiving a valid insurance card and eliminating the use of fraudulent insurance cards.

It’s a serious issue in Texas, where 20 percent of the vehicles on Texas roads have no insurance coverage. That’s one in every five cars and trucks, which equates to an estimated $1 billion extra in insurance premiums that law-abiding Texans are paying annually to protect themselves against uninsured and underinsured motorists.

Working together, the Texas Departments of Insurance, Public Safety, Transportation and Information Resources developed a system to reduce the number of uninsured motorists by compiling a database that connects every registered vehicle in the state by its license plate, vehicle identification number (VIN) and liability insurance policy. Now, law enforcement officers and tax assessor-collectors can immediately access the database and verify if you are driving without insurance.

Driving without insurance carries severe penalties. First-time offenders are subject to a fine of up to $350, plus court costs, and may be assessed additional fees as authorized by Transportation Code Chapter 708: http://tlo2.tlc.state.tx.us/statutes/tn.toc.htm. Repeat offenders face fines of up to $1,000 and a two-year driver license suspension.

— Shopping for Auto Insurance
Texas supports a competitive insurance market, which means you have a wide range of pricing options. Be sure to get price quotes from different companies and compare the rates and coverages. When asking for price quotations, it’s important that you provide the same information to each agent or company.

Determine in advance the coverages you need.
If you select a higher deductible, it will lower your premium. Keep in mind, though, you’ll have to pay more out of pocket if there is a claim.
Never provide incorrect information on an application and always answer questions honestly. If you do provide incorrect information, it could lead to a claim denial or cancellation of coverage.
Spend time online finding out about each insurer’s financial rating, complaint index and license status – it’s all possible today via the Web. You can learn more about a company, including its license status, complaint history, and financial rating from an independent rating organization, by calling TDI’s Consumer Help Line 1-800-252-3439 or by visiting the website at www.tdi.state.tx.us.

— Liability Requirements
The basic coverage in Texas is called 25/50/25, which means you must have $25,000 worth of coverage for each injured person, up to a total of $50,000 per accident and $25,000 for property damage per accident. These are just the basic limits. It’s important to keep in mind that if your liability amounts are not adequate to pay for the other driver’s costs, the driver may sue you to collect the difference. To prevent this from happening, you can buy additional liability coverage.

— Reviewing the Policy
When you receive your policy, read it to review what it covers. Look carefully at the exclusions section that lists what your policy doesn’t cover. The declaration or “deck” page of your policy indicates the legal name of your insurance provider, your policy number and the amount of each of your coverages and deductibles.

— Proof-of-Insurance Card
You should expect to receive a proof-of-insurance card as soon as you pay your premium. This is important to keep in your vehicle at all times as you may have to show proof of insurance in these cases:

If asked by a law enforcement officer.
In an accident.
Car registration or registration renewal.
Applying for or renewing a driver’s license.
Car inspection.

— Auto Insurance Coverages
Many insurance companies use the Texas Personal Automobile Policy, a standardized policy form that offers eight types of coverages. There are alternative policies available, as long as they’re approved in advance by the Texas Department of Insurance (TDI).
Summarized below are descriptions of the eight coverages you’ll find in the standard auto insurance policy, as outlined by TDI.

Liability Coverage
(Basic liability coverage meets the state’s financial responsibility requirement.)

Pays: Other people’s expenses for accidents caused by drivers covered by your policy, up to your policy’s dollar limits. These may include other people’s medical and funeral costs, lost wages, and compensation for pain and suffering car repair or replacement costs auto rental while the other driver’s car is being repaired punitive damages awarded by a court. Liability insurance also pays your attorney fees if someone sues you because of the accident and bail up to $250 if you are arrested.

Covers: You and your family members, “Family members” include anyone living in your home related to you by blood, marriage, or adoption, including your spouse, children, in-laws, adopted children, wards and foster children. Other people driving your car with your permission, family members attending school away from home and spouses living elsewhere during a martial separation also might be covered.

You and your family members might be covered when driving someone else’s automobile – including a rental car – but not a car that you don’t own but have regular access to, such as a company car.
Note: Some policies won’t cover other people, including family members, unless they’re specifically named in the policy. Your policy’s declaration page should list the names of all of the people covered by the policy.

Medical Payments Coverage
Pays: Medical and funeral bills resulting from accidents, including those in which the other person is a pedestrian or bicyclist.

Covers: You, your family members and passengers in your car, regardless of who caused the accident.

Personal Injury Protection (PIP) Coverage
Pays: Same as medical payments coverage, plus 80 percent of lost income and the cost of hiring a caregiver for an injured person.

Covers: You, your family members and passengers in your car, regardless of who caused the accident. An insurance company must offer you $2,500 in PIP, but you can buy more. If you don’t want PIP, you must reject it in writing.

Uninsured/Underinsured Motorist (UM/UIM) Coverage
Pays: Your expenses from an accident caused by an uninsured motorist or a motorist who did not have enough insurance to cover your bills, up to your policy’s dollar limits. Also pays for accidents caused by a hit-and-run driver if you reported the accident promptly to police.
Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and damage to items in your car. There is an automatic $250 deductible, which means you must pay the first $250 of the repairs yourself.

Covers: You, your family members, passengers in your car, and others driving your car with your permission.
Insurers must offer UM/UIM coverage. If you decline coverage, you must do so in writing.

Collision Coverage (Damage to your car)
Pays: The cost of repairing or replacing your car after an accident. Payment is limited to your car’s actual cash value, minus your deductible. Actual cash value is the market value of a car like yours without damages.

Covers: You, your family members, passengers in your car and others driving your car with your permission.

Comprehensive Coverage
(Physical Damage other than Collision)
Pays: The cost of replacing or repairing your car if it is stolen or damaged by fire, vandalism, hail or a cause other than a collision. Comprehensive coverage also pays for a rental car or other temporary transportation if your car is stolen. Your policy won’t pay for an auto theft unless you report it to police. Payment is limited to your car’s actual cash value, minus your deductible.
If you still owe money on your car, your lender will require you to have collision and comprehensive coverage.

Towing and Labor Coverage
Pays: Towing charges when your car can’t be driven. Also pays labor charges, such as changing a tire at the location where your car became immobile.

Rental Reimbursement Coverage
Pays: A set daily amount for a rental car if your car is stolen or is being repaired because of damage covered by your policy
Source: Texas Department of Insurance

Health Insurance
The health care and biosciences industry in San Antonio is a major economic force in the community, responsible for employing one of every seven San Antonio employees, representing an annual payroll of $4.75 billion in 2007. It’s also the center of health care for South Texas, where residents will find an abundance of choices.

So, how do you learn about your health care options and find a family doctor? Of course, your employer should be your first stop. Your company’s human resources office can usually provide you with literature about hospitals and doctors that will accept the company’s insurance. Here are a few resources in the San Antonio/Bexar County area:

The Bexar County Medical Society (BCMS) was the first county medical society formed in the state of Texas in 1853. The Society represents 4,000 + physicians in Bexar and contiguous counties and is the eighth-largest county medical association in the U.S BCMS works with hospitals, the Metropolitan Health Department, practice administrators, emergency response personnel and vendors of all kinds to the medical community. You can also find a doctor in Bexar County by visiting www.bcms.org/find_doctor.htm.

Other sources:

DoctorFinder provides basic professional information on virtually every licensed physician in the United States, which includes more than 814,000 doctors. AMA member physicians are offered an expanded listing that contains additional information such as office hours, accepted insurance providers, educational history and other helpful information. http://webapps.ama-assn.org
Texas Medical Association provides information on Texas Medical Association members only. 800-880-1300 www. texmed.org
State of Texas Medical Board can help you find public information about a medical doctor, physician assistant, acupuncturist or surgical assistant licensed by the state of Texas. Information available for consumers includes person’s name, license number, licensure status, disciplinary status, honors and awards and malpractice history. The Enforcement Division receives and evaluates complaints on physicians, physician assistants and acupuncturists. 800-248-4062 www.tmb.state.tx.us

Be sure the doctor you select is board certified by visiting the American Board of Medical Specialties at www.abms.org or call 866-272-2267.

— Health Plan Basics
Health care plans pay for most, and sometimes all, of the treatment costs for illnesses and injuries. They can generally be classified as either “fee for service” or “managed care.” Many people obtain health coverage as part of a group – such as an employer, professional association, or other organization – that offers health coverage to its employees or members. Others may buy individual health coverage directly from an agent or insurer. The type of plan you have and how you obtained it usually determines the benefits included, how you access and receive medical care, and what you’ll have to pay out of pocket.

— Fee-for-Service Health Plans
Fee-for-service plans, often called “indemnity plans,” are sold by traditional insurance companies. With a fee-for-service plan, you can go to any doctor or provider you want, and you don’t need a referral to see specialists. A fee-for-service plan will generally pay for most, but not all, of the costs to treat medical conditions covered by the policy.

Often your provider will bill your insurance company directly for its share of your health care costs. In some cases, however, you may have to pay the bill up front and then file a claim with your insurance company for reimbursement. Texas law requires companies to pay claims promptly, but it could take several weeks for you to receive your reimbursement.

With a Fee-For-Service Plan, you will pay:
Premiums. A premium is a fee you’ll have to pay to participate in the plan as long as you have coverage. If you have a plan through your work, your premium will likely be deducted from your paycheck. Employers who offer health plans usually contribute toward some or all of your premium costs, but they aren’t required to do so.

Deductibles. A deductible is an amount that you must pay out of your own pocket before your plan will begin to pay. If you have a family plan, the deductible may apply to your entire family, or each individual may have a separate deductible. You’ll usually have to meet your deductible each year. Many insurance companies offer high-deductible options for plans. In general, the higher your deductible, the lower your premium will be.

Coinsurance. Once you’ve met your deductible, most fee-for-service plans will pay a percentage of the remaining cost for covered health services and require you to pay the rest. This cost-sharing is called coinsurance. The coinsurance will vary by plan. For instance, some plans may pay 80 percent of the cost, leaving you to pay 20 percent, while others may pay 70 percent, leaving you to pay 30 percent. In Texas, health plans must pay at least 50 percent of the cost of covered services after the deductible has been met. As with deductibles, the higher the amount you pay in coinsurance, the lower your premium will be.

Most fee-for-service plans will pay only up to a maximum amount, such as $1 million, during your lifetime toward your total medical expenses or for certain medical conditions. This is called a “lifetime maximum.”

— Managed Care Health Plans
Managed care plans use “networks” of doctors, hospitals, clinics, and other health care providers that have contracted with the plan to provide health services to the plan’s members. Some managed care plans require you to use providers within the plan’s network for all routine care. Others pay for care from any provider, but offer financial incentives for you to use providers within the network.

In general, the trade-off for managed care is reduced choice for increased affordability. Managed care plans are typically more affordable than fee-for-service plans that offer comparable levels of coverage. Managed care networks provide a built-in clientele for network providers, allowing them to charge lower rates. In addition, managed care plans control costs by emphasizing preventive care in an attempt to avoid serious medical conditions that would later require more expensive treatment.

Managed care plans will only pay for services deemed to be “medically necessary.” If the plan covers prescription drugs, it may have a list, called a “formulary,” that specifies the drugs it will cover.

There are three types of managed care plans, each with a different level of provider choice:

Health maintenance organizations (HMOs) generally require you to receive health care only from providers within the HMO’s network. There are exceptions for medical emergencies and when medically necessary services are not available within the network. With an HMO, you’ll choose a “primary care physician” from a list of doctors in the network. Your primary care physician oversees all of your medical care and provides referrals to specialists and other providers. HMOs may pay primary care physicians a set monthly fee for each member, regardless of the amount of covered services performed.
HMO members with a point-of-service (POS) option are allowed to use providers outside the HMO’s network without first having to receive a referral. However, if you use providers outside the network, you’ll have to pay more for your health care. A POS plan may exclude the option for out-of-network care for certain medical conditions. POS coverage is usually offered as a “rider,” or an add-on to the contract, for an additional fee.
Preferred provider organization (PPO) plans allow you to go to any provider you choose. However, you’ll pay less if you use providers in the PPO’s network. You don’t have to select a primary care physician to oversee your care in a PPO plan.

With a Managed Care Plan You will pay:
Premiums – the fee you’ll pay to participate in the plan.

Deductibles – amount that you must pay out of your own pocket before your plan will begin to pay.

Copayments – amounts you pay each time you go to the doctor, fill a prescription, or receive a covered health service. Most managed care plans usually have a maximum out-of-pocket amount that you’ll have to pay in copays and deductibles over a certain period, usually a year. When you reach this amount, your plan will pay 100 percent of all further costs.

Coinsurance – percentage of the cost for health care services that you must pay after you’ve met your deductible. Coinsurance applies to network and out-of-network care in PPO and POS plans.

The HMO must have a procedure to resolve complaints from members and a procedure for the member to appeal the decision if not satisfied with the resolution of the complaint. HMOs may not cancel or retaliate against a group contract holder (employer), a doctor, or a patient who files a complaint against an HMO or appeals an HMO’s decisions.

HMOs may not prohibit doctors from talking to you about your medical condition, treatment options, and terms and requirements of your health care plan, including how to appeal an HMO’s decision. An HMO also may not provide financial rewards to doctors for withholding necessary care.

Texas law provides additional protections by requiring that HMOs:

Have adequate personnel and facilities.
Make covered health care services available within a certain mileage from your home, residence or workplace.
Allow referrals to out-of-network providers when medically necessary covered services aren’t available within the network.
Allow members with chronic, disabling, or life-threatening illnesses to use specialists as their primary care physicians under certain circumstances.
Allow members to continue seeing providers no longer with the network for specified periods of time if there are special circumstances, such as a terminal illness, disability, life-threatening condition, or pregnancy, as long as the provider agrees to continue treatment at the HMO’s contracted rate.
Pay for emergency care to stabilize medical conditions that a prudent layperson with an “average knowledge of medicine and health” would consider serious enough for immediate medical care, including the care of a fetus if you’re pregnant. If emergency treatment is provided by a facility outside the HMO’s network, the member may be transferred to a network facility and physician once the patient’s condition is stabilized.

— Federally Mandated Benefits
In addition to benefits required by state law, health plans must abide by federal law and offer maternity and newborn coverage and mastectomy benefits.

— Maternity and Newborn Coverage
If maternity benefits are covered, a group health plan with more than 15 employees must provide for a minimum hospital stay of 48 hours after an uncomplicated vaginal delivery and a minimum stay of 96 hours after an uncomplicated cesarean birth. A carrier may not deny benefits on the grounds that a pregnancy is a “pre-existing condition.”

Plans that have maternity benefits must automatically extend coverage to the newborn for 31 days. To continue coverage beyond 31 days, you must notify your plan administrator during this period and pay any additional required premiums.

A carrier may not exclude or limit initial coverage of a newborn child because of premature birth, accident, illness or congenital medical conditions. This includes providing reconstructive surgery for craniofacial abnormalities for a child younger than 18 who has been continually covered by a health plan.

A benefit covering “complications of pregnancy” may help if your plan does not include a maternity benefit. Miscarriages or non-elective cesarean births are considered complications. In most cases, management of a difficult birth is not considered a complication and is only covered by plans with maternity benefits.

— Mastectomy Coverage
Plans that offer mastectomy coverage must also provide for reconstructive surgery of the breast on which the operation was performed, as well as the other breast if needed for a symmetrical appearance. This coverage may be subject to deductibles, copayments and coinsurance that are consistent with other benefits under the plan. The benefit must also cover prosthesis and treatment of complications at all stages of mastectomy, including lymphedemas.

— Questions to Ask in Selecting a Health Plan
Before you start shopping for a plan, be sure to visit www.texashealthoptions.com, where you’ll find many resources, including locating an agent, insurance company profiles and general help for consumers.

If you have a doctor, is he or she within your network of providers?
How about hospitals – are there choices?
Determine if there are limits on treatments, surgeries, medications or referrals to specialists.
What (if any) are the benefit limits per person, family, illness, treatment and/or hospital stay?
Ask about out-of-network care and what is involved should it be used.
Are there annual or lifetime maximums on the plan you’re considering?

— Application Process
When you apply for coverage, fill out the application accurately and completely. If you knowingly provide incorrect, incomplete, or misleading information, especially about a pre-existing condition, your coverage could be canceled or your benefits denied.

When purchasing an individual plan, never sign a blank policy application, and verify any information filled in by an agent. Make payments by check or money order payable directly to the insurance company or HMO, not the agent, and insist on a signed receipt on the carrier’s letterhead. Make sure you have the full name, address and phone number for both your agent and your carrier.

Never pay more than two month’s premiums until you have received a copy of your policy, HMO certificate or group membership certificate.

State law requires that you have a 10-day “free-look” to evaluate any individual coverage policy, during which you can change your mind and receive a refund. If you return a policy, send it by certified mail and request a return receipt.

DENTAL Insurance
Dental insurance differs from other types of insurance. Oral health care is fairly routine and predictable which does not characteristically describe what insurance is intended for. The term “dental plan” more accurately describes what most would call dental insurance. With the help of dental predictability, consumers are able to make calculated decisions about dental plans that suit them best.

The most commonly utilized types of managed dental plans are: Direct Reimbursement (DM); Preferred Provider Organization (PPO); Dental Health Maintenance Organization (DHMO); and Discount/Referral.

Direct Reimbursement (DR) plans are designed for its members to have the freedom to choose any dentist and for employers to offer a plan customized for their budget by deciding what percentage to reimburse at each level of cost. Employees choose a dentist, pay for the treatment and are then reimbursed a certain percentage of the dollar amount. Some plans also establish “Flex” accounts in which employees pay their share on a before-tax basis.

Preferred Provider Organization (PPO) plans require a monthly payment which entitles the member to a network of dentists who have agreed to discount their fees. Non-participating dentist can still usually be visited for a higher deductible and co-payment.

Dental Health Maintenance Organization (DHMO) plans pay contracted dentists a fixed amount (usually on a monthly basis) per enrolled family or individual, regardless of utilization. In return, the dentists agree to provide specific types of treatment to the patient. The patient may be required to pay a co-payment. Theoretically, the DHMO rewards dentists who keep patients in good health, thereby keeping costs low.

Discount/Referral options are arrangements in which a limited number of providers who have agreed to discount their normal fees in exchange for the expectation of a larger patient pool. There is no reimbursement to the patient or to the provider. Many individuals and families that do not receive dental insurance from their employers turn to discount dental plans to reduce their out-of-pocket expenses.

The San Antonio District Dental Society provides a referral resource on its website to locate a dentist by specialty, visit www.sadds.org/specialists/rosterlists.asp. The Texas Dental Association and its 8,100 plus member dentists can provide information that will be most useful as you make decisions about which dentist to see, what preventive care you should take, and other matters that affect your dental health and that of your family, visit www.tda.org.

Life Insurance
In the event of your death, life insurance coverage provides financial compensation to your family. Life insurance policy payouts are not subject to federal income tax, which provides the assurance that a surviving family will receive full benefit of the proceeds.

There are two major types of life insurance – term and whole life. Whole life is sometimes called permanent life insurance, and it encompasses several subcategories, including traditional whole life, universal life, variable life and variable universal life. In 2003, about 6.4 million individual life insurance policies bought were term and about 7.1 million were whole life.

Life insurance products for groups are different from life insurance sold to individuals. The information below focuses on life insurance sold to individuals.

Term insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.

There are two basic types of term life insurance policies – level term and decreasing term.

Level term means that the death benefit stays the same throughout the duration of the policy.
Decreasing term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.

In 2003, virtually all (97 percent) of the term life insurance bought was level term.

Whole Life/Permanent insurance pays a death benefit whenever you die – even if you live to 100. There are three major types of whole life or permanent life insurance – traditional whole life, universal life and variable universal life, and there are variations within each type.

In the case of traditional whole life, both the death benefit and the premium are designed to stay the same (level) throughout the life of the policy. The cost per $1,000 of benefit increases as the insured person ages, and it obviously gets very high when the insured lives to 80 and beyond. The insurance company could charge a premium that increases each year, but that would make it very hard for most people to afford life insurance at advanced ages. So the company keeps the premium level by charging a premium that, in the early years, is higher than what’s needed to pay claims, investing that money, and then using it to supplement the level premium to help pay the cost of life insurance for older people.

By law, when these “overpayments” reach a certain amount, they must be available to the policyowner as a cash value if he or she decides not to continue with the original plan. The cash value is an alternative, not an additional, benefit under the policy.

In the 1970s and 1980s, life insurance companies introduced two variations on the traditional whole life product – universal life insurance and variable universal life insurance.