What Does Homeowners Insurance Cover?

Homeowners insurance policies, better known as HO policies, have been designed to help home owners safeguard their home and personal belongings. Considering that they have the responsibility of protecting their home and personal property, they should definitely opt for insurance. In fact, they can be sued by people who accidentally fall and injure themselves on their turf. Moreover, a homeowner may also be forced to vacate the home and arrange for alternate accommodation in case the home gets damaged. Thankfully, a wide range of insurance policies are available in the market.

Basic Homeowners Insurance
The most basic policy insures the property against damage due to 11 factors or perils of nature. Some of these factors are: fire, lightning, smoke, vandalism, theft, ice, snow, windstorm hail, riot, and volcano eruption. The popularity of this policy, better known as HO-1, has diminished over the years, since the policy does not protect against loss or damage to property on account of plumbing issues as a result of freezing. Loss on account of heating system malfunction is, again, not covered by this policy. HO-2 is also a basic policy, but with a wider scope of coverage. HO-2 protects the property from damage on account of 17 factors, and hence, it is a marginal improvement over HO-1.

Popular Homeowners Insurance
It’s evident that both HO-1 and HO-2 provide only minimal coverage. For people who live in areas that are not prone to floods or earthquakes, HO-3 is a good policy, since it provides peace of mind to the homeowner on many fronts. For instance, this policy provides protection to the homeowner who may get sued by people who meet with an accident on his/her turf. Damage to the residence and personal property are also covered by this policy. As far as damage to the home is concerned, the insurance company agrees to pay the price that is equal to the cost of replacing the property (replacement cost). In case of personal property, the homeowner is entitled to receive the actual cash value of the property. For people living in flood prone areas, flood insurance should be purchased in addition to HO-3.

Actual Cash Value = Cost of Replacing the Property – Depreciation of the Property

Most Comprehensive Policy
The HO-5 policy or Comprehensive Form Policy, is equivalent to purchasing an HO-3 policy with a ‘Special Personal Property’ endorsement. This would help protect unscheduled personal property from all possible risks, except those that are specifically excluded. It’s no wonder that the cost of this policy is 15% more than the cost of the most popular coverage provided by HO-3.

Insurance Policy for Older Homes: In case of older homes, the cost of replacing the property is usually more than the market value of the property. This is on account of depreciation. Hence, for older homes, insurance will not cover more than the actual cash value of the property. This is where the HO-8 policy, which is a modified version of the HO-1, assumes importance.

Since homeowners insurance is indispensable, the owner should shop around for the best homeowners insurance quotes after settling on the appropriate insurance policy. Tenants can also ensure that their personal property is protected by opting for HO-4, better known as Contents Broad Form or Tenants Policy.

Home Improvement Addition

Renovating your home is certainly the best opportunity, not only to step-up your living space, but also to add to the value of your house. There are many ways in which you can increase the value of your house. You can get attractive interiors done, expensive furniture installed, and even build a fireplace. However, all these things would not add as much value as a complete well-planned home re-modeling would. When you think of financing the plan, you need to be well-prepared by considering many factors. Getting to know all the important aspects such as home market values in your locality, minor home upgrade expenses, architectural plans and patterns, home improvement loans, timetable, and schedule for completion, can save you valuable time and preclude unnecessary stress.

Considerations

Zoning Policies and Regulations
The first thing you need to do is receive permission from the local government authorities to commence with the construction. In a majority of regions, you are required to abide by your city or town zoning policies and ordinances, and also obtain a construction license before building an extension to your home. The expenses for such licenses may differ from state to state. However, you need to be ready for spending around 2 – 5% of the entire cost of the renovation on this license.

Structural Specifications
You are required to carry out soil testing which would evaluate the stability of the soil on which you intend to build the addition. If you reside in a coastal area which has a substantial amount of loose soil or clay in the soil, such tests can help find if you would need pilings to hold the structure firm. Most of the contractors provide such services as this is a decisive step in the renovation.

Choosing a Contractor
You need to be very careful when choosing the appropriate contractor for the work. Get referrals from your friends, family, and colleagues for a good contractor, or look out for builders who provide special services in the type of architecture you desire. When choosing a suitable contractor, ensure that he is licensed, bonded, and covered with insurance. This not only ensures that you employ one of the best contractors around, but also protects you in the situation of a mishap. Finally, choose a contractor who will suit your needs, and most importantly your budget.

Considerations for Unexpected Errors
Plan your budget according to some costs that may not be anticipated. Probably, after deciding on a firm budget, you might think of adding more to the existing plan. You also need to consider the expenses which may incur due to some unfortunate occurrences such as damages to the house’s power supply. Irrespective of the possibilities, you need to include a margin for errors in both the estimated budget and also the approximate completion date for the project.

Home Insurance Updates
In a majority of cases, making an preferment increases the value of the house. It is crucial that your home insurance policy covers the changes and modifications that you are anticipating. To avoid any issues later, it is recommended that you consult with your insurance agent before you start with the construction.

While planning your house renovation, make sure you consider these important points for a hassle-free execution of the plan.

Get The Best Homeowners Insurance

A homeowner has the responsibility of protecting his home from unforeseen events that can cause irreparable damage to his property. Homeowners insurance policies, also known as ‘HO Policies’, protect the home against damage, and provide insurance against loss of personal belongings.

Choosing the Appropriate Policy

HO-1: This is the most basic policy that covers damage due to the following factors: fire, lightning, smoke, vandalism, theft, ice, snow, windstorm hail, riot, and volcano eruption. Since this policy provides very basic coverage, its popularity has faded over the years.

HO-2: In addition to insuring against the above mentioned events, this policy protects against loss due to the following: freezing of plumbing, flooding due to plumbing overflow and heating system malfunction. Generally, mortgage lenders insist on a homeowners insurance. This is because the house functions as their collateral. While HO-1 covers damage due to 11 factors, HO-2 protects against 17 factors that may result in loss of property and belongings.

HO-3: This policy provides protection against the perils of nature. The premium may be higher in case of homes located in areas prone to hurricanes and windstorms. The policy also covers up to $2,000 worth of jewelry against loss due to theft. It covers the cost of rebuilding the house in case it gets destroyed. Just like the HO-2 policy, HO-3 covers the cost of damage to the house on account of flooding due to plumbing overflow and heating system malfunction. Liability suits that may be filed against the homeowner by people who may get injured on the property are also covered by this policy. However, it provides no protection against floods and earthquakes, for which, a homeowner is expected to buy additional insurance.

HO-4 and HO-6: These policies do not cover any damage to the building. They only provide protection against loss of personal property. Hence, it is ideal for condominium owners and tenants.

HO-5: This is the most comprehensive policy. The cost of the policy is 15% more than the cost of HO-3. In addition to including the coverage provided by HO-3, this policy insures against loss of building and property due to a number of factors. Buying a package that provides protection against a number of factors gives peace of mind to the owner. Also, it is cheaper to buy a single policy that protects against a number of factors, rather than buying individual coverage.

Shopping for the Best Quote

A homeowner should shop around for the best quote after deciding on the appropriate policy. He/she may get a good quote by installing motion sensors and surveillance cameras. In general, arming the house will help get a good deal on the policy. The insurance company should have strong fundamentals and should not be involved in any insurance fraud. The homeowner should also be aware of any consumer complaints against the company.

The amount of HO policy coverage for personal belongings is generally half of the amount of coverage provided for the home. Although a HO policy remains in effect, a landlords insurance policy is a must for houses that have been rented out or leased. This is because, ‘HO policies’ are only designed to provide adequate coverage for owner-occupied houses.

Life Insurance Benefits

The death of a family member is traumatic, especially if he or she was the breadwinner of the family. At such times, the bereaved family members have to cope with not only a personal loss, but a financial crisis as well. This is where life insurance comes into picture. It guarantees that in your absence, your loved ones are taken care of, and are financially secure.

What is Life Insurance?

Life insurance is a legal contract between two parties, namely the insurance company, and the policyholder. It ensures that the beneficiary receives financial support in the event of the insured’s death or accident. The terms of the insurance policy state that the policyholder agrees to pay the specified premium at regular intervals. Life insurance depends on a host of factors, including the age, income, expenses, outstanding loans, number of dependents, health, etc. It is mainly of four different types, universal life insurance, term life insurance, whole life insurance, and endowment life insurance. Described in detail below are the advantages life insurance offers.

Benefits of Life Insurance

-Life insurance provides monetary coverage to the family members in the event of the policyholder’s demise.
-It acts as an excellent investment, protecting your assets. Life insurance provides custom-made investment options that are suited to one’s changing financial needs at different ages. Planning for your children’s higher education, marriage, a home, and even retirement options can all be taken care of by investing in life insurance. For a young couple with kids, life insurance can provide education as well as wealth insurance. Whereas for an elderly couple, the same can offer retirement and mortgage plans. Whatever money you saved when you earned, now serves as a source of income when you retire.
-After the demise of the insured, life insurance can be a constant source of income for the bereaved family members, making it easier to fund children’s education and pay bills on time. If the policyholder has incurred any debt during his lifetime, a policy cover will help his spouse/family to repay the debt.
-Funeral expenditure nowadays is costly. Paying for the services, at a time when you are still numb and reeling from the sudden loss of a loved one can be hard, to say the least. In such cases, a life insurance policy can come to your aid, by taking care of the funeral expenses.
-You can add riders or health insurance plan to your life insurance policy, and have guaranteed protection against the increasing hospitalization costs and critical ailments.
-When you apply for a policy, you need to pay the stipulated premium at regular intervals. This practice gets you into the habit of saving a certain amount of money for long-term use, which is essential to satisfy your financial needs.
-Life insurance is non-taxable, and hence makes for a great source of savings.
-In case of a cash crunch, when the policyholder needs a loan, he can avail of one through the insurance policy, without having to worry about the hassles of repayment. The insurance carrier deducts the loan amount from the life insurance policy upon maturity.
-If the policyholder owns a piece of land, he has to pay estate taxes. If he intends to transfer the possession to his heir, a life insurance policy can help by offering the required funds.

Thus, you have seen how essential it is nowadays to opt for a life insurance policy. If you haven’t yet applied for one, do it without delay. Do it at a time when you are young and healthy, with no major ailments. The sooner you apply, the lesser the premium amount you have to shell out. Compare insurance quotes from several companies. This way you can make a wise and informed decision based on what’s best for you and your family’s requirements. In case anything happens to the breadwinner of the family, life insurance can come instantly to rescue. It can be your ally in the worst of times, working like a protective blanket, offering monetary assistance and peace of mind.

Whole Life Insurance Advantages

Whole life insurance is also called cash value insurance or permanent life insurance or straight life insurance. It provides coverage for the entire life as long as premiums are being paid. These premiums are decided at a fixed rate. Further, the insurance company invests some part of the premiums and creates a savings account or cash value that gradually accrues, and is tax deferred. This cash value can be withdrawn or borrowed. However, such a transaction can cause a decrease or cancellation in the death benefit. In case of the following four conditions, a whole life insurance may be purchased.

-It is possible to pay the premiums and obtain the required coverage
-The savings in the life insurance policy won’t be required for minimum ten years
-The policy is affordable and has good rates
-There is a need of more tax deferred savings

Advantages

Some of the major advantages are described below:

1 – Constant or Fixed Premium
In term life insurance, the premium increases on renewal. In case of whole life insurance, the premium remains constant. It does not increase with time. Also, if dividends are used, the premiums that have to be paid are minimized.

2 – Death Benefit
The death benefit does not decrease in case of whole life insurance. When demise occurs, this death benefit is not subjected to federal income taxes. As per the requirement, the death benefit can be accepted as a lump sum amount or a monthly income.

3 – Cash Value
In contrast with other life insurance policies, the whole life insurance policy accrues usable cash. As the policy holder pays premiums, this cash goes on increasing. In case the policy is surrendered, the policy holder gets the cash values. This cash value is tax deferred.

4 – Dividends
A participating whole life insurance policy has a feature of dividends. These are received as cash. They can be used to minimize premiums, to generate interest or purchase paid up additions.

Other Advantages

-The policy guarantees a high degree of safety.
-This insurance provides coverage for a lifetime.
-It generates tax deferred cash.
-Some withdrawals and loans are tax favored.
-A non-participating insurance has relatively less out-of-pocket premium payments.
-In participating insurance, the dividend can be used to purchase paid-up additional insurance, and this results in increasing the face value of the coverage.
-In limited payment insurance, the premiums are paid for a limited number of years, while the coverage is for the entire lifetime.
-In single premium insurance, there is only one large premium, and hence, the policy has an immediate cash value.
-In indeterminate premium insurance, the premium is adjustable, but never more than the maximum value stated in the policy.
-The policy holder can borrow a loan using the cash value as collateral.

Types of Whole Life Insurance

As is obvious from the above information that these benefits can be gained through different types of whole life insurance. Now, let us take a look at the major types, and understand their features in brief.

In non-participating whole life insurance, the premium and face value remains constant for the insured’s entire life. The costs of this policy are fixed, but it does not pay any dividends.

A participating whole life insurance has a feature of paying dividends. These dividends are a consequence of favorable mortality, excess investment earnings and expense savings. However, it is not warranted that these dividends would be paid to the policy holder. They may be used for a variety of purposes.

The above-mentioned categories have a variety of options which are mentioned below:

-Level premium whole life insurance
-Limited payment whole life insurance
-Single premium whole life insurance
-Indeterminate premium whole life insurance

The final decision to opt for insurance should depend on what sort of coverage you want and your current physical and fiscal health.

About Life Insurance Premium

The purpose of a life insurance policy is to provide financial security to the family of the policy holder, in the event of his/her death. Insurance premium is the amount paid to the insurance company at regular intervals for providing insurance cover to the person availing this facility. Before you go ahead and purchase an insurance policy, you should take time to shop around to find out which insurance company asks for the lowest premium.

Many of us believe that people who are healthy and fit, pay the least premium. However, this is not always true, because our current state of health or fitness is not the sole deciding factor. So, which factors decide the premium?

10 Factors that Influence your Life Insurance Premium

In this article, we shall focus on the many factors that determine your premium amount, so that you don’t end up paying a higher premium than what you should be paying. The bottom line is that the higher the risk of the applicant’s death, as assessed by the insurance company, the higher the premium he/she is asked to pay.

1. Your Age
The biggest deciding factor when it comes to determining your premium amount is your age at the time of applying for the policy. The younger you are when you apply for insurance cover, the lower your premium will be. This is because someone who is young is less likely to die a natural death during the time of coverage, as compared to someone who is in their 60s or 70s. A young person has many years to go before the company has to make payouts, and till then, he will have paid a lot of money as premium. This reduces the risk incurred by the insurance company, which automatically translates to lower premium amount.

However, old people are asked to pay a higher sum as premium to compensate for the risk incurred by the insurance company, as the probability of claim being filed after a few premiums, is higher. To avoid paying high premiums, it is recommended that you apply for a policy when you’re young.

2. Your Current Health
Along with your current age, your current physical health also plays a key part in determining your premium. Your insurance provider either asks you to fill in a questionnaire, or conducts a medical examination. If you are found to be in good health, with no major health issues in the recent past, you’ll be eligible for a lower premium. However, if you’re diagnosed with any form of severe health problem, such as diabetes or high blood pressure, you’ll be asked to pay more.

3. Your Health History
Along with your current health, insurance companies also take your medical history into account. If your medical records indicate chronic illness or other severe health problems, you are required to pay a higher premium. This is because a chronic illness increases the chances of an early payout.

4. Your Family’s Health
The fact that insurance companies take account of your family’s health in order to determine your premium, can be disappointing, because it’s something that’s totally beyond our control. However, the sad truth is that if you have a parent or sibling who has died of cancer or heart disease before the age of 60, it is highly unlikely that you will be charged a lower premium. In fact, some insurance companies charge you with higher premiums even if a member of your family has been diagnosed with one of these conditions before 60, but has survived.

5. Your Occupation
If you didn’t know, your life insurance premium can be affected largely by your job because some professions are riskier than others, which increases the chance of a payout by the insurance company. Just compare the job of a software engineer and a firefighter. Which one do you think is more hazardous? Surely, that of the firefighter, and this means he has to pay a higher premium. Other high-risk professions include those of a stuntman, construction worker, airline pilot, police officer, soldier, mine worker, etc.

6. Your Lifestyle
Do you smoke or enjoy your drink often? People who are chain smokers and/or drink frequently, are required to pay more because smoking and drinking take a heavy toll on your health. A smoker or a drinker is considered a high-risk individual by the insurance companies. However, if you quit these habits, you can be eligible for lower insurance premium after one year. However, the insurance company will ask for blood test results as evidence. Now, isn’t that reason enough to quit?

7. Your Recreational Activities
Not only does a high-risk job cause your insurance premium to go up, but also a recreational activity with substantial amount of risk involved. In other words, your love for extreme sports can translate into a higher premium, because getting involved in such dangerous activities can increase the risk of untimely death. Here’s a list of such activities.

-Skydiving
-Private aviation
-Scuba diving
-Motorsports
-Rock climbing
-Bungee jumping
-Paragliding

Note that different insurance providers have different opinions regarding which activities are riskier, as compared to the others. Also, your experience, level of skill, and how often you indulge in these activities, are taken into account.

8. Your Credit History
This factor has to do with your ability or willingness to pay the premium on time, and not any risk that could cause an untimely death. Before they decide on how much premium you would pay, insurance companies check your credit score and credit history, to determine if you’re financially responsible. People with a bad credit score are required to pay higher premiums, just to compensate for the risk involved.

9. Your Driving Record
Road accidents are one of the leading causes of death and severe injuries, and being a reckless driver only adds to the risk of an untimely death. Insurance companies ask for your driving record when you apply for an insurance cover, to verify if you are an irresponsible driver. If you are, you are required to pay a higher premium. However, most companies are only interested in your recent driving record, and do not raise the premium if you haven’t committed any major violations in the past five years.

10. The Type of Policy
Are you planning to apply for a policy for whole life or a fixed term? How much is the amount you want as death benefit? All these factors can influence the premium you pay for your life insurance cover. The premium is higher for whole life insurance because in that case, the insurance company has to pay you the money, sooner or later. In case of a term insurance, the premium you pay is less, because there is little or no chance of a payout by the insurance company. Also, opting for a group insurance is a good idea, because the premium amount is inversely proportional to the number of members in the group.

Some insurance companies also consider your gender when calculating your insurance premium. This is because statistics show that women have a higher life expectancy as compared to men, and hence, are required to pay less.

Finding an Affordable Life Insurance

A term policy is the simplest form of life insurance wherein the policyholder is covered for a predefined period. These type of policies provide a death benefit to the nominees or beneficiaries, if the insured were to die within the term. The policy does not provide any other returns other than the stated benefit. In other words, if the insured survives the coverage period, he or she will not get any benefit on maturity. However, he or she may choose to renew the policy.

There are several such insurance providers operating in the market, and selecting from among them can be quite perplexing. To add to the misery, the plans of all these providers have several differences between them.

Here are some things to keep in mind when looking for the best deal:

Tip 1 – Search in the right places

It is recommended to begin by checking with your own bank, and see if they are affiliated with any such providers. If you are connected with a financial institution in any way, then you can check there too. But the problem is, because of their affiliations, banks and financial institutions will generally try to push those products onto you. Also, their variety will be quite limited. The best option is to search on the Internet. You will find several options, and there will be no excess baggage of someone hard-selling these products to you.

Tip 2 – Ask for quotes

Once you have begun your online hunt, you will need to ask these providers for quotes. Many of the companies provide their quotes for free. Try to benefit from these. Since there are vast differences in the structure of the cover provided by various companies, their costs will vary too. In fact, some of the top providers can have a difference of as much as USD 300 in the amount of premium. The idea is to take at least ten to twelve quotes before you can compare them.

Tip 3 – Compare the quotes

It is absolutely vital that you compare the quotes in the right way. It is not enough to compare them just by the premium, but also check what they have to offer. Some of these policies will take lesser premiums, but will pay less too. Then there are other services, too, that need to be taken into account. The best thing to do is a like-to-like comparison, comparing every feature and not just the cost. If you are not sure about making the right kind of decision at this point, ask someone who knows about finance, to help you out.

Tip 4 – Be truthful

Your application will have several things to be filled in, and you must be absolutely truthful about these points. Common facts like age and gender cannot be fabricated, but there are things like smoking, alcohol intake, and medical conditions that people tend to lie about. However, this is a very foolish thing to do. When the claim is made, all these points are easily verifiable. If factually incorrect information is found, the policy payouts would be forfeited and the cover declared null and void. For example, the premium amount for a smoker would be a little higher than one who is not, but the benefits will be paid out on death. However, if you lie about it, your beneficiaries will not get that amount too, and the premiums paid will be forfeited leading to financial loss. Honesty is really the best policy here.

Tip 5 – Do not procrastinate

With the advancements in medical treatments in recent times, the cost of life insurance is going down. Prices are already much lower than they were about a decade ago, and they are still going lower, as more inventions are being made. But that does not mean that you should wait any longer. Accidents can happen anytime, and this cover could be a big boon if anything untoward were to occur.

Health Insurance for Low Income Families

Health Insurance

Health insurance is very important to safeguard oneself and their family from the issues related to health. Low-income families have less access to employee sponsored insurance covers as compared to the higher-income groups. Health insurance is very important for every family and it would help get quality medical care. Health care costs are skyrocketing and these insurances would help one pay for the more serious and costly medical issues in future.

The government has tried to introduce affordable health insurances for the families with insufficient income for health care. Different states offer the programs according to their state laws. The various affordable programs are given below.

Medicare
This insurance program is jointly funded by the state and the federal governments. This policy is available to senior citizens, children, low-income parents, unemployed individuals, and people with disabilities. One has to be a U.S. Citizen to become eligible for these policies. The other eligibility criteria depends not only on the income, but also the assets of the applicant.

Mediaid
Mediaid is jointly funded by the federal and state government. Senior citizens, pregnant women, people with disabilities, and blind people are eligible for this program. The policy covers outpatient hospital services, doctor’s visits, and long-term in-patient services.

State Children’s Health Insurance Programs(SCHIP)
This program was an effort to try to insure the health of every child in the U.S. Children can be eligible for either Medicare, Medicaid, SCHIP programs of the state of residence, even if the parents are not eligible for Medicare or Medicaid.

Private Health Insurance Companies
There are many companies which offer health insurance coverage which are quite affordable. Many companies have family health insurance plans, which do not offer routine medical care, but protect the families financially in case of serious injury or illness.

Health Savings Accounts
These are savings accounts which can be used for expenses in case of medical care, prescription drugs, and over-the-counter medical supplies. They are used in conjunction with a high deductible health plan (HDHP).

Mini Medical Insurance
This policy may cover a pre-determined number of doctor visits, prescription medicines, daily hospital benefits, and limited accident coverage. The cost of this policy may be as low as $50 per month.

Health Maintenance Organization Plans (HMO)
This is a group health insurance plan. The medical care is provided through a network of doctors and medical facilities who work directly for the HMO. The person availing medical care under HMO has to make small co-payment at each visit. The annual premiums are slightly lower than the other insurances.

Low-income families can always visit the local social services and discuss the various options available. The government is trying hard to cover all the families in the low-income group. The standard of health care provided to low-income families has considerably improved over the years. The state and federal governments are trying their best to work together and introduce more policies so that health insurances are provided to all such families in America. It is always advisable to insure one’s family with a health plan that suits their budget. Thus, one would be able to ensure a better medical care for their loved ones.

Benefits of Health Insurance Coverage

In the US, health care is privatized. It has been estimated that people spend a third of what they earn on obtaining health care services. For instance, a drug that is used to treat lung cancer in patients costs about $80,000 while prolonging the life of a sick person by a month when used in combination with chemotherapy. It has been estimated that, on a monthly basis, the same drug would cost $10,000 less in Europe. The cost of a drug that is used to treat kidney cancer works out to $60,000, but may prolong life by just 6 months. On an average, if a person develops cancer, the cost of medical bills can add up to a whopping $140,000. It’s evident that most people cannot afford to pay for health care on their own. Hence they rely on employer-based insurance.

Health Insurance Benefits
The current system of employer-based health insurance benefits evolved on account of the employer receiving tax deductions equal to the amount of premium paid. At present, the total cost of deductible premiums paid by all employers in the US roughly works out to $200 billion. In other words, the government is providing a subsidy equivalent to $200 billion in order to ensure that employees receive the benefits of health insurance coverage. Health insurance plans generally work in the following manner: A person is expected to pay an annual amount, or deductible, before the health insurance plan starts covering the cost of medical expenses. The insurance company pays a chunk of the annual medical expenses, while a small portion known as coinsurance is borne by the policy owner. The ratio between the expenses borne by the insurance company and coinsurance is generally 80:20 or 70:30. If the coinsurance amount exceeds the maximum annual out of pocket limit for the insured, the insurance company is expected to cover the entire annual medical expense. In addition to coinsurance, some insurance companies may expect the insured to pay a flat fee known as co-payment for every visit to the doctor. The main types of health insurance plans available to a person are: Health Maintenance Organizations (HMOs) Plans, Preferred Provider Organizations (PPOs) Plans, and Point-of-Service (POS) Plans.

Problems Associated with Private Health Insurance
Although health insurance benefits that are provided by private insurance companies seem like a good option, there are a number of problems associated with this. For instance, most people are covered under their employer’s group health insurance plan, and hence, lose their health insurance on getting laid off. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives a person the option of continuing on the previous employer’s health insurance plan, for 18 months after getting laid off, by paying 35 percent of the amount of premium; the remaining amount of premium being covered by the Federal govt. Temporary health insurance plans provide coverage for 6 months, but do not allow preventive and routine medical checks. A person may try and purchase individual health insurance, but this policy is fraught with difficulties. Unlike group health insurance, where an individual cannot be singled out and denied coverage on account of pre-existing conditions, individual health insurance plans can deny coverage on account of pre-existing conditions. Since individual health insurance policies carry a higher premium, as compared to group health insurance policies, a person who is out of a job cannot possibly afford health care. Each plan has its own set of restrictions. For instance, HMO plans cover the cost of the treatment only if the patient seeks treatment from the doctor who is a part of the HMO network. In order to consult a specialist, one needs to be referred by one’s primary care physician, who again is a part of the HMO network.

Health Care Reform Plan
Health Care Reform plan, proposed by the Obama administration, intends to reform the health care system by subsidizing the cost of health care. A $1 trillion, 10-year plan, to provide subsidized health care to Americans would be financed by new taxes and savings in Medicare. The President has already managed to persuade hospitals to reduce their expenditure by $155 bn, by reducing Medicare payments. Pharmaceutical companies have also agreed to cut drug costs by $80 bn. The plan also proposes taxing the cost of health benefits provided by the employer. The health care reform plan also includes a government insurance option for people who are unable to afford private insurance.

Health Insurance Plans with Maternity Coverage

One of the most precious and cherished moments in a woman’s life is to find out that she is going to become a mother. With life thriving inside her, every would-be-mother develops an instinct to protect her child. Medication, health check-ups, and diet schedule go up on the refrigerator, but that is not all. Mothers also prefer to safeguard their children with something more than diets and medicines. They also prefer health insurance plans that provide maternity coverage.

What is Health Insurance?

Its prime purpose is to safeguard the health, as well as financial interests of the people who have been insured by the policy.

Insurance companies offer policies to people at specific prices. The policy holder is expected to make annual installments to this company, which is known as the premium. The total amount of money that is received by the company is invested into hundred percent risk-proof ventures, that have assured returns. Thus, the money that is paid to the company grows and in some cases also multiplies. In case of an accident, when any medical expenditure is incurred, the policy holder can make a claim for compensation of losses. The company compensates the policy holder with the loss that has been incurred. The factors for which the compensation is granted are termed as the coverage of the policy. For example, expenditures for dental health care is covered by dental insurance. In the same manner, the health of a mother and her child can be insured under maternity coverage. The premium for such policies can be pretty expensive.

Plans with Maternity Coverage

Insurance companies have tailored many different policies, according to the requirements of their customers. The maternity coverage is basically an extension of the normal health insurance policy. Under this coverage, many medical bills are taken care of by the company. The prenatal insurance plans have some specific terms and conditions, such as whether the company would bear the cost of medications like prenatal vitamins or not. Usually it covers all the expenses, such as antibiotics, medication, or hospitalization charges. Most of these plans do not cover the usual expenses, such as prenatal medications or expenditure of regular checks-ups. In order to avail coverage for even these expenditures, you might have to pay very high premiums. The broader the coverage of these plans, the more expensive is the premium.

You can avail these plans after you get pregnant or even after you get married. Among all the types, the one that has a coverage for husband, wife, and maternity is most popular, and it matures after the baby is born. The health insurance of the husband and wife can be extended and coverage for the newborn baby can be added to it, with an increase of premium. In some cases, you might have to avail new policies for the mother and also her child. The extension and coverage basically depends on the terms of the current policy that you are using. You might also use some of the maternity programs, that are sponsored by the United States government, such as Medicaid and WIC.

There are various insurance agents, providers, and companies that offer really good policies with maternity coverage. However, one must never hastily purchase a policy just because it sounds good. It is necessary to review your requirements and the amount of premium you will be able to pay.