Personal FAQs

Annuities

No probate in case of death, as long as you specify beneficiaries. Which means your family will find it easier and less costly to obtain the value of the annuity.

Shelter Investment Earnings
Retired people can use annuities to shelter investment earnings that would otherwise lead to taxation of Social Security benefits.

Fixed (Tax Deferred Annuity)
A fixed tax deferred annuity, also referred to as a tax deferred annuity, is a contract between you and an insurance company for a guaranteed interest bearing policy with guaranteed income options. The insurance company credits interest, and you don't pay taxes on the earnings until you make a withdrawal or begin receiving an annuity income. Because fixed annuities invest your premiums in interest bearing obligations, you receive a lower return in comparison to equity indexed annuities, since interest rates historically trail stock market returns.

Tax Deferred Annuity Advantages - Savings
Many people today are using a tax deferred annuity as the foundation of their overall financial plan. The most important difference between an annuity and CD's is that annuities allow for the deferral of the taxes due on the interest earned until the interest is withdrawn. By postponing the taxes your money compounds faster because you can earn interest on dollars that would have otherwise been paid to the IRS. Later, you can decide to take a monthly income and your taxes will be less because they were spread out over a period of years. An annuity has a penalty for early surrender but most annuity contracts have a limited withdrawal provision that permits the contract owner to withdraw a certain percentage each year without a surrender charge.

Tax Deferred Annuity Advantages - Taxes
You pay no taxes while your money is compounding. You can also pay a lower tax on random withdrawals because you control the tax year in which the withdrawals are made and only pay taxes on the interest withdrawn.

Fixed (Immediate Annuity)
A fixed immediate annuity, also referred to as a fixed payment annuity, provides you with a stream of income payments from your original purchase payment. The amount of your income payouts is determined by the guaranteed interest rate and the payout option you select. A fixed immediate annuity can begin benefit payments as early as one month and no later than 13 months from the date of purchase and is intended for investors who need a guaranteed income stream to begin soon.

Back to the Annuities page

Auto

Collision Coverage
Covers damage caused to the owners auto from a collision caused by another auto or other object. The deductible is the amount you choose to pay upfront (if any) before the auto insurance policy pays. The higher the deductible chosen the lower the collision coverage cost within the auto insurance policy.

Comprehensive Coverage
Covers damage caused to the insured's auto (your automobile) from risks such as theft, fire, falling objects, earthquake, flood, missiles, explosion, riot and civil unrest. The deductible is the amount you choose to pay upfront (if any) before the auto insurance policy pays. The higher the deductible chosen the lower the comprehensive coverage cost within the auto insurance policy.

Liability Coverage (Bodily Injury & Property Damage)
Injuries that you (insured) cause to someone else is covered under this part of an auto insurance policy. The minimum liability insurance coverage available for purchase in New Jersey is 15/30 and is explained in detail below. However, we recommend that you choose liability insurance coverage amounts that are much higher than the minimums listed below.

New Jersey Liability Coverage limits explanation:
15/30/5 15=$15,000 - 30=$30,000 - 5=$5,000

First number is the bodily injury liability maximum for one person injured in one accident.
Second number is the bodily injury liability maximum for all injuries in one accident.
Third number is the property damage liability maximum for one accident.

Property Damage Liability
Damage caused by the insured (you) to someone else's property, such as a motorcycle, car, truck, fence, or house, is covered through property damage auto insurance coverage. This coverage also assists in protecting you if a lawsuit arises from an accident. The minimum coverage amount in New Jersey is $5,000.

Medical Payments Coverage
Medical payments coverage pays for the medical and funeral expenses for you or others hurt or killed in an accident while riding in or driving your car or truck. Claims against this coverage include all reasonable hospital, surgical, chiropractor, X-ray, dental, professional nursing, prosthetic, and funeral expenses. It will also cover you or members of your family if you are hit by a car when you are walking or if you are riding in another car or truck. This coverage will pay for your medical and funeral expenses even if you cause the accident. The coverage is often limited to medical care you get in the first one, two, or three years after the accident and is limited to a specific dollar amount. This is a required Auto Insurance coverage in New Jersey.

No Fault Coverage (PIP)
New Jersey does require "No Fault" insurance coverage. This coverage pays medical bills for injuries suffered in an auto accident regardless of who caused the accident.

Benefits Provided Include:
Pays 80% of all reasonable expenses for necessary medical, surgical, x-ray, dental and rehabilitative services, including prosthetic devices, wheelchairs, crutches, slings, neck braces and splints (including necessary travel related to medical care.) Necessary remedial treatment (nursing home care or home nursing care).

Pays 60% of gross income loss caused by inability to work because of an injury suffered in an accident.
$5,000 death benefit

Uninsured Motorist Coverage - New Jersey Auto Insurance Policy
Covers the insured (you) for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance. This coverage is required for Auto Insurance in New Jersey. Contact us at 609-466-5300 to discuss what uninsured coverage amounts you require to meet your family and personal needs.

Example of uninsured motorist limits:
20/40 20=$20,000 - 40=$40,000

First number is the uninsured motorist maximum for one person injured in an accident.
Second number is the uninsured motorist maximum for all injuries in one accident.

Underinsured Motorist Coverage
This coverage comes into play when an at-fault driver has auto or motorcycle liability insurance, but the limit of insurance is inadequate to pay for your damages.

Underinsured Motorist Bodily Injury Coverage
This type of auto insurance coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver who has insufficient auto or motorcycle insurance coverage. The auto insurance coverage typically pays the difference between the coverage limit you select and the other driver's bodily injury coverage limit. This is not a required auto insurance coverage in New Jersey.

Underinsured Motorist Property Damage Coverage
Protects you if your auto is damaged in an accident caused by a driver who has insufficient auto insurance coverage. This coverage pays the difference between the coverage limit you select and the other driver's property damage coverage limit. This is not a required coverage in New Jersey.

Back to the Personal Auto page

Disability

Short Term Disability Income Insurance Policy Features
Short term disability insurance is sometimes referred to as Accident and Sickness insurance. It provides benefits for a limited period of time, typically 26 weeks or less. Short term disability usually provides coverage for accidents or illnesses outside of work when Workers Compensation insurance does not apply.

You would begin receiving money from your short term disability insurance policy within 1 to14 days after becoming sick or disabled. The actual time for coverage to begin depends on whether you suffer an illness or injury. If you suffer an injury, your benefits will be paid immediately. If you suffer an illness, it will take longer because there needs to be sufficient time to show that the illness is grave enough to be disabling.

You choose the amount of income (up to 66% of your gross income) from $400 to $2000 a month when you can't work due to an accident or illness.

Benefit periods of up to 2 years!
Short waiting periods 1 to 14 days!

Long Term Disability Income Insurance Policy Features
Long term disability insurance provides benefits for a limited period of time, typically 2 or 5 years and is also usually guaranteed renewable until the age of 65. Long term disability insurance usually provides coverage for accidents or illnesses outside of work when Workers Compensation insurance does not apply.

You can begin receiving money from your long term disability insurance policy when the "waiting period" time chosen for the policy is reached. Typically, 6 months to a year is chosen for a waiting period in order to reduce your premium, but shorter times are available.

You choose the amount of income (up to 66% of your gross income) from $400 to $3000 a month when you can't work due to an accident or illness.

Benefit periods of 2 & 5 years!
Short waiting periods 7, 14, 30, and 90 days!
Guaranteed renewable to age 65
24 hour coverage - on or off the job!
$2,500 Accidental Death Benefit included!
No restrictions on how the money is used!
No benefit reduction at age 65!
Hospitalization Rider pays up to double your benefit per month (for two months) if an injury or sickness puts you in the hospital!

Back to the Disabilities page

Health

HMO Health Insurance Policy Features

Preventive care emphasis
Primary care physician (PCP) coordinates your total care
Must get a referral from your PCP to visit a specialist
Fixed monthly fee

HMO Health Insurance Policy Overview
Subscribers to an HMO receive medical services from participating physicians, clinics and hospitals. You choose a primary care physician (PCP) from a list of participating doctors from where you live. That doctor is used for typical circumstances such as annual exams and usual health issues. If you need to see a specialist, be hospitalized, or have lab or X-ray work, your doctor will refer you to a provider or facility within the HMO system. Your doctor must give authorization for those services to be covered by your HMO. In other words, you must see HMO approved physicians and use HMO approved facilities or pay the entire cost of the visit yourself.

Similar to Point-of Service (POS) and PPO's, HMO's have made arrangements for lower fees with a network of health care providers and give their policyholders a financial incentive to stay within that network.

You may have to pay some portion of the cost (co-payment) for each office or hospital visit, such as $20 - $30 per doctor visit, regardless of what the services cost. Also, some services such as emergency room, mental health and chemical dependency services, may carry additional costs in a HMO health maintenance plan.

PPO Health Insurance Policy Features

Convenient access to quality health care
Large and diverse network available of primary care physicians, specialists, hospitals & clinics.
Pay for services as they are provided

PPO Health Insurance Policy Overview
You can see any health care professional in the network any time you choose to make an appointment. You don't need referrals for specialists or other services as you do in an HMO. You can see doctors or specialists outside your PPO network, however, your portion of the costs will be higher.

You may have to pay some portion of the cost (co-payment) for each office or hospital visit, such as $20 - $30 per doctor visit, regardless of what the services cost. Also, some services such as emergency room, mental health and chemical dependency services, may carry additional costs in a PPO health insurance plan.

POS Health Insurance Policy Features

Preventive care emphasis
Pays benefits for out-of-network care, but at a lower level

POS Health Insurance Policy Overview
Less restrictive than an HMO or PPO, a (POS) or Point of Service plan lets you see any licensed health care professional for anything covered by the insurance. Care you receive from out-of-plan health care professionals is reimbursed, but you must pay an often times much higher co-payment or deductible amount. While you may choose to see a physician outside the network, if you don't receive permission from your (PCP) primary care physician, you're likely to end up submitting the bills yourself and receiving only a small reimbursement...if any.

Costs that exceed your deductible are covered by a co-insurance plan in which you and the insurance company share the cost for services covered by the policy.

Also, some services such as emergency room, mental health and chemical dependency services, may carry additional costs in a POS health insurance plan.

Major Medical Health Insurance Policy or Fee-for-Service

Major medical health insurance provides benefits up to a high limit for most types of medical expenses incurred, subject to a deductible. Once you meet the deductible, our Major Medical Insurance plans pay a percentage of what is considered the "Usual and Customary" charge for covered services. The insurance company generally pays 80% of the Usual and Customary costs and you pay the other 20%, which is known as co-insurance. If the insurance company charges more than the Usual and Customary rates, you will need to pay both the co-insurance and the difference.

With Major Medical Insurance plans you can choose your doctor and any hospital for your medical services. You or your doctor send the bill to the insurance company, which pays part of it. Usually, you have a deductible such as $250 or more to pay each year before the insurer starts paying. The plan will pay for charges such as medical tests and prescriptions as well as from doctors and hospitals.

Major medical insurance coverages offer more choice of doctors (including specialists, such as cardiologists and surgeons), hospitals, and other health care providers than managed care plans, such as HMO, PPO, and POS. Major Medical Insurance may not pay for some preventive care, such as check-ups, and is usually a more expensive health insurance coverage than utilizing a HMO, PPO, or POS plan.

Back to the Health page

Homeowners

Replacement Cost or Actual Cash Value Option
Covered losses under a homeowners insurance policy can be paid on either a replacement cost basis or on an actual cash value basis. When "actual cash value" is used, the policy owner is entitled to the depreciated value of the damaged property. Therefore, the older the item is, the less money you may receive for it. If you choose the "replacement cost" coverage, the homeowners insurance policy will reimburse the amount it costs to replace the property with something of a similar type and quality at current prices.

Coinsurance Penalty in a Homeowners Insurance Policy
If your policy limit is less than 80% of the replacement cost of your home, you will face a "coinsurance penalty," which means you'll have out-of-pocket expenses to cover costs beyond the policy deductible you chose. For example purposes we will assume your home's estimated replacement value (RCV) is $100,000. The co-insurance clause requires you carry at least $80,000 (80% of your RCV). If you chose to purchase only a $40,000 Homeowners Insurance policy you would be underinsured by half. Therefore, in the example the insurance company would pay one-half of a loss less the policy deductible, so if you suffered a $10,000 covered loss to your house, condominium or townhouse and had a $500 deductible, your policy would only pay $4,500.

All Risks or Named Perils in a Homeowners Insurance Policy
An "All Risks" policy provides the broadest homeowners insurance protection because it will cover losses that are due to any peril except those specifically excluded in the policy. A "Named Perils" policy covers losses that are due to only those perils listed in the standard Homeowners Insurance policy and typically include fire, hail, windstorm, and other physical losses.

Personal Liability in a Homeowners Insurance Policy
Personal liability in a homeowners insurance policy is also an important part of having security from accidents that may occur on your property. We suggest you choose coverage limits that are not less than those on other liability insurance you own, such as car insurance.

Back to the Homeowners page

Life

Term Life Insurance Policy Information
Life insurance coverage for a specified length of time. A term life insurance policy is usually purchased with a particular need in mind. Beneficiaries will collect, usually tax free, the face value of the policy upon the insured (your) death. Term life is attractive for those with a limited income, high short term insurance needs, or for personal family protection.

If the insured survives the time period, the policy expires. There is no cash value at the expiration of a term life insurance policy. Some policies have a convertible feature permitting a policy owner to exchange a term policy for a cash value policy without evidence of insurability.

Level Term Life Insurance Policy Features
A constant death benefit and a level premium for a specified number of years. We offer 10, 15, 20, and 30 year terms.

Decreasing Term Life Insurance Policy Features has a decreasing death benefit and a level premium.

Whole Life Insurance Policy Information
The most popular choice for those seeking to cover permanent needs, such as contributing to a survivor's nest egg, paying off final expenses, etc. Whole life insurance provides permanent, lifelong insurance coverage. The benefit amount remains the same and is payable to the beneficiary(s) at the time of the insured's (your) death. It also offers an opportunity to build cash value, so you can take a loan on your policy to fund major purchases or to provide for unexpected costs.

Whole life insurance has a fixed premium and a level death benefit to age 100. The premiums don't increase with age, which averages the cost of the policy over your life. The cash value increases with time until it equals the death benefit at age 100. This type of policy never has to be renewed or converted. The cash value is an amount of money that you are guaranteed to receive in the event of policy cancellation.

Variations of Whole Life Insurance include:
Modified Premium - lower fixed premium for the first 3 or 5 years, and then premiums increase. These policies work well for individuals that expect to improve their financial condition in the near future.

Graded Premium - premium increases each year for the first 5 years, and then is fixed.

Advantages of Whole Life Insurance

guaranteed protection for life
level death benefit that is generally tax-free
premiums do not increase in correlation with your age
cash may accumulate tax-deferred

Disadvantages of Whole Life Insurance

premium costs may make it difficult to buy enough
need to carry a whole life policy for a considerable length of time to be very beneficial
cash value may be less than your face value
cannot vary your monthly premium payment and the premium-paying period may be lengthy
amount of coverage cannot be increased at a later date

Universal Life Insurance Policy Information
A flexible premium policy that combines protection against premature death with a savings account that typically earns a money market rate of interest. A universal life insurance policy is a combination of term life insurance protection with the cash savings value of whole life insurance. Interest rates paid on the cash value are typically higher than with whole life insurance because they tend to follow the markets.

Premiums for universal life insurance policies can be paid in a lump sum, annually, or anywhere in between. Interest on the cash value is usually guaranteed, but will vary according to the investment performance. Each month deductions are made from the cash value fund to support the costs of the insurance protection. As long as the cash value is substantial enough to maintain the monthly costs, the policy will remain in force. Typically the death benefit reduces in proportion to the increase in cash value, thus causing a level death benefit.

Variable Universal Life Insurance Policy Information
Combines the growth potential of stocks with a guaranteed death benefit. It allows premiums to be paid, reduced, or even skipped at any time, and the contract will not lapse as long as sufficient cash value is available. The cash value fund can be split between different investment mediums, such as bond funds, stocks, and money markets. It's interest-sensitive and allows for an adjustable death benefit.

Back to the Life Insurance page

Long Term Care

Long Term Care Insurance Facts and Costs
No matter what age you are now, it's doubtful that you will pay more over your entire life in total premiums for long term care insurance than you would pay for only a one year stay in a nursing home.

The cost of nursing home care has risen at an average rate of 7% per year for the last 15 years. Today's average cost of care in New Jersey is about $141,000, but inflation rates will propel this cost much higher. An average inflation rate of 6% over the next twenty years would more than triple the cost of nursing home care. Medicare pays for less than 10% of all nursing home costs.

Facts

Over 50% of the U.S. population will require long term care at some point.

38% of the 13.5 million Americans currently receiving long term care are between the ages of 18 and 64.

More than 76% of people receiving long term care, receive it in their home or in other community environments.

Long Term Care Insurance Features
In choosing a long term care insurance policy you should look for the features listed below.

Stable Premiums: Premiums that will not be influenced by any change in your age or health, and will not change during the life of the policy. Insurance companies do reserve the right to change rates on a statewide basis.

Guaranteed Renewable: The insurance company can't cancel the long term care insurance policy unless you fail to pay the premium.

Covers Mental Conditions: Covers mental and nervous conditions due to any organic brain disease, including Alzheimer's Disease.

Exclusions: Exclusions should be minimal and should not adversely affect your stated insurance protection goals.

No Pre-Existing Conditions: All previous medical history admitted on the long term care insurance application and is approved for a policy, is of no consequence in the future.

Waiver of Premium: The insurance company allows you to stop paying premiums once you've begun receiving benefits. There can be waiting periods of up to 90 days before this waiver takes effect, and it may not be available when home health care is purchased.

Long Term Care Insurance Policy Premiums (Nursing Home Insurance)
There are six primary factors influencing the premium for long term care insurance policies:

Type of Policy: Facility, Home Health Care, or Comprehensive

Age: The most important element in determining the premium. Naturally the earlier you start paying for long term care insurance the better.

Daily Benefit: The maximum amount a policy will pay for one day of care. This can vary from $50 per day to over $400 per day. You will decide whether to purchase sufficient insurance to cover all of these costs or only most of them.

Benefit Limit: The number of years that a plan will pay a benefit from the time you get sick. Benefit limits generally vary from one year to lifetime coverage. The longer the benefit limit, the greater the protection but the higher the cost.

Inflation Protection: Sometimes called an "inflation rider", this provides you with a way for your daily benefits to increase over time. Otherwise, the policy may not be sufficient to protect you many years from now. Long term care insurance policies normally contain riders offering automatic daily benefit increases of 5 percent each year, either at "simple" or "compounded" rates.

Elimination Period: Amount of time that you agree to pay out of your own pocket before the plan (policy) begins to pay. This period normally varies from 0 to 100 days. The 100-day elimination period will produce the smallest premium cost to you.

Long Term Care Insurance (Nursing Care)
There are three levels of nursing care that are covered by a long term care insurance policy:

Custodial care: Care necessary due to a permanent or chronic illness or injury, which is less intensive, but which may continue indefinitely. This nursing care helps a person perform activities of daily living or supervises a person if cognitive impairment exists. Many custodial care situations start with a mild degree of illness which is followed by slow deterioration. Alzheimer's disease is one example where custodial care is usually needed. Other types of insurance policies do not offer custodial care benefits. The value of long term care insurance for you or a family member and protecting a lifetime of created assets is never more evident than in custodial care nursing services.

Skilled care: Short term nursing care needed after an illness or serious injury. Consists of rehabilitative and intensive 24 hours per day care.

Intermediate care: Rehabilitative care by a nurse for up to six months and when less than 24-hours per day supervision is needed.

Back to the Long Term Care page