10 Things to Consider About Insurance When You Pay Off Your Car Loan

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.  Coverage and descriptions are summaries, subject to the terms and conditions and definitions in your own policy .  Talk to your agent!

PT at Prime Time Money just paid off his car, and he wrote a post about the decision he must make about what to do with the extra money.  He mentioned the possibility of changing his insurance coverage now that he no longer has a loan.  I, being me, always have something to say, and that’s especially true when insurance is a topic.

So, should you change your insurance when you pay off your car loan?

That depends.  Here are some things to consider:

Only two coverages have anything to do with the type of car you have: Comprehensive and Collision.  Those are the only two coverages that cover the car itself.    That’s why the lienholder requires it – they don’t care if you’re hurt or if you hurt someone else; they just care that their collateral is covered.

Collision covers damage to your car when your car hits or is hit by another vehicle,  or other objects.  It pays whether the incident is your fault, no one’s fault or a hit and run.  Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

Comprehensive (also called Other Than Collision) covers most other things that physically happen to the car – if it’s stolen, damaged by a hurricane, flood, falling object, or animals. Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

So, what should you think about doing?

  1. Find out how much you pay for each of those coverages, and determine your deductible.
  2. Get quotes for raising the deductible(s) and for eliminating the coverages altogether. Get the quotes for each individual coverage so you can see what they cost separately, for all your cars.
  3. Consider what you’d be giving up. I suspect you’ll find that you won’t save as much as you think, especially with Comprehensive coverage.  Also, keep in mind that if you remove them you will be completely out of luck if you get into an accident that is your fault, if it’s a hit and run or if the at-fault party doesn’t carry enough coverage to fix your car (Florida only requires $10000 property damage coverage.  Have you thought  about what happens if they hit more than one car, or if you drive something that $10000 wouldn’t fix?).  Also, you’d have no coverage if it’s stolen, damaged in a hurricane, etc.
  4. Figure out how much of a loss you could absorb without too much financial difficulty. Compare it to the cost of the coverage. Could you come up with the money to replace your car to fix it if the damage is $1000?  $5000?  If it is a total loss could you replace it?  Is it worth it to you to spend X dollars for that peace of mind?
  5. Figure out how much of a loss you could absorb without too much mental/emotional difficulty. Will you be able to sleep at night knowing that you’re not covered?  Is it worth it to you to spend X dollars for that peace of mind?
  6. Consider starting a Deductible Fund.  Think about increasing the deductibles on all of your insurance (including health insurance) and putting that into a fund to pay those deductibles if you incur a loss.  You might be amazed at the money you can save, and over time you’ll almost always come out ahead (well, unless you’re really unlucky). I used to write an individual health policy where the difference in premium between the $500 deductible and the $1000 deductible was  (depending on the insured approximately) $600 per year – more than the deductible difference!  If you chose the $500 deductible you started off $100 in the hole.  Ridiculous. If the patient chose the $1000 deductible they paid less, and if they didn’t get sick they could save as much as $600!  That’s what they call a no-brainer.
  7. If you decide to drop these coverages, consider keeping just Comprehensive. It doesn’t cost much at all, and in many states you can get your windshield replaced if broken without having to pay your deductible.  Many of my clients kept Comprehensive with the largest deductible just for the glass coverage.  My company actually would replace any of the glass on the car (side glass, mirrors) without requiring the insured pay their deductible, and the coverage often cost about $10 every six months.
  8. You don’t want to reduce your liability or uninsured motorist coverage. They have nothing to do with the type of car you drive – you can do just as much damage with a brand new car as an old clunker!  In fact, you may want to get quotes to increase these coverages…
  9. Consider getting quotes from other companies. Hey, as long as you’re doing the work.  And if you do, read my series on  Auto Insurance 101 to get some good tips!
  10. Don’t forget to remove the lienholder! Make sure your insurance agent removes them as the loss payee – sometimes they forget.  It’s not that the bank could actually collect the insurance money if you had a loss, but it would delay your payment at claim time while they straighten it out.

Everyone’s risk tolerance is different.  There’s a reason why “insurance” is synonymous with “risk management”.  Whatever you decide, make sure you can sleep soundly.

And to anyone who pays off their car loan, congratulations!!!!

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If you liked this post, check out these related posts:

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

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It’s Benefit Enrollment Time – Legal, Pet Insurance and Lots of Little Perks

This is the final post of a series of posts on choosing benefits.  Today I will look at the ins and outs of the offered Legal Plan, Pet Insurance, Discount Programs and the rest for tomorrow.

In addition to all of the other great benefits, Large Conglomerate offers an array of add-on benefits.

Hyatt Legal Plan – offers unlimited telephone advice and consultation with a participating Plan attorney for covered services including:

  • Family law including premarital agreements
  • Wills and estate planning
  • Traffic and criminal matters
  • Real estate including sale, purchase or refinance of primary residence, and eviction and  tenant problems
  • Identity theft defense
  • Tax audits
  • Immigration assistance
  • Security deposit assistance for tenants
  • Boundary or title disputes
  • Property tax assessment
  • Zoning applications
  • Protection from domestic violence

You get all of that for $15.75 per month, or $189 per year, and it covers the employee and eligible dependents.

We have two lawyers in the family, so I’ll be skipping this.  That said, if you think you’ll need an attorney in 2009 for any of the above items then it would be worth finding out about.  Me?  I’d rather use that money towards a Personal Liability Umbrella.

So, this is a no.

Pet Insurance – through Veterinary Pet Insurance (VPI), they direct bill you for coverage.  We’re offered a 5% discount, and you have to click on the details button to find out that the discount applies to the premium of the base policy only, it does not apply to the Lost/Found Registration or optional coverage such as the Vaccination & Routine Care Coverage or the VPI Cancer Rider. Can not be combined with other discounts.

Woo. Hoo.

Birds, dogs, cats and other animals are covered.  Features include:

  • Choice of three different plans
  • Discounts for 2 or more pets enrolled
  • Routine care is an optional coverage
  • Helps with lab fees, treatments, prescription, surgery or more
  • Use any licensed veterinarian

I did an online quote and for my six-year-old mixed breed it ranged from $16.77 per month for their basic plan with no increased wellness coverage to a whopping $52.40 per month for their premier plan with increased wellness coverage.

Doing the math, that’s between $201.24 and $628.80 per year.  This dog, luckily, has not cost us a cent in veterinary bills for the past four years (We have two friends that are veterinarians, so get advice on the phone on the few occasions needed).  So even if we got a hige bill this year unless they cover $800 of it we’re ahead.

All that said, my beloved Jonah cost me over $200 per month with his Cushing’s Disease, thyroid problems and epilepsy.  Most plans won’t cover those things anyway.

Also a no.


Employee Assistance Program – supplies confidential, professional assistance with a wide range of work/life issues.  Information, counseling and referrals are provided for a wide range of needs.  I’m sure someone uses this service, and I’m glad it’s there for them.

Free, but no thank you.

Back-Up Care Advantage Program – Provides safe, affordable and reliable back-up child and adult/elder care services to employees and their families.     It’s a great benefit because it offers people an alternative when schools are closed, regular providers are on vacation or illness.  You can use home or center-based care at a very discounted rate.

  • Center-based care is $15 per child per day, $25 maximum for two or more children
  • In-home care is $4 per hour during weekdays  and $6 per hour evenings and weekends.
  • Medical care is $50 per hour
  • You must register.  Reservations are required, but they probnably have some last-minute availability for illnesses.  You can call 24/7.

I had to scramble earlier this year when I had to take my Dad for surgery.  I’m not sure how comfortable I am with strangers taking care of Son (he’s never had a babysitter), but I may check out the nearest center just in case something like this pops up again.

Health Advocate –  Helps employees and their faamilies navigate the health care system – an invaluable help when a serious illness strikes.  And it’s available to all active employees, spouses, parents and parents-in-law regardless of whether they are enrolled in one of Large Conglomerate’s health plans!

  • Clinical Support Services – care coordination among physicians and medical institutions and many other sevices
  • Administrative Supprt Services – including claims and billing assistance, fee negotiation with providers for treatment, and, when necessary, appeals assistance and information about alternative resources or coverage options.
  • Healthcare Coaching – helps particpiants manage their healthcare and treatment
  • Information and Service Support – helps members locate and arrange a wide array of services, access to experts for consltations and second  opinions, locate and arrange for special needs including transportation, and more.
  • Privacy – When a member takes advantafge of this service their provacy and health information is protected “to the fullest extent provided by applicable law”.

This is a terrific program I hope never to have to take advantage of.

Not now, but maybe someday.


Wellnessworx – a confidential and voluntary collection of tools, resources and personalized support to try to help you get/stay healthy.  It offers:

Health Risk Assessment (HRA) – a report card for your health.  You work on your own or with a Health Coach to formulate an action plan to target specific areas for improvement.

Healthways Health Coaching Program – using your HRA and looking at your filed health claims (Big Brother!), they may  contact us to work with highly trained coaches to support you in improving your health.

Healthways Condition Management Program – Helps those with common medical issues manage their conditions and improve their  health.

These guys send stuff to Husband all the time, which he valiantly ignores.  It’s all a little too Orwellian for me.

No thank you.

Nationwide Discounts – Large Conglomerate offers discounts to employees and their  families for a wide range of products and services.  We’re currently saving 10% on our cell phones, and I used their service to get a great deal on Husband’s MAC last year.  I check the website frequently for any new additions that we can take advantage of.  Also, through Aetna Wellness Products and Cigna Healthy Awards Discount Programs we can get discounts through our medical and dental providers for weight loss programs, gyms,  smoking cessation, alternative health care, vision, and hearing services.

Yes, thanks!

So, ladies and gentlemen, we’re done.  Now all that’s left is for me to go to the website and tell them my choices.  Since ther website is down I’ll have to wait, so it’s  a good  thing they extended the deadline.

I know this was boring as heck, but doing this forced me to actually read everything, something I haven’t done.  Ever.  I hope I’ve inspired you to do the same.

Read the rest of the series!

It’s Benefits Enrollment Time, Series Overview

It’s Benefit Enrollment Time – Medical Insurance Part 1 – Evaluating What You’ve Got

It’s Benefit Enrollment Time – Medical Insurance Part 2 – The Plans and What They Really Cost

It’s Benefit Enrollment Time – Dental Insurance and Why The Math is So Important

It’s Benefit Enrollment Time – Life Insurance a Bargain For Us

It’s Benefit Enrollment Time – Seeing the Vision Plan Clearly. Finally.

It’s Benefit Enrollment Time – Disability and Long Term Care Insurance are Good to Have

It’s Benefit Enrollment Time – Disability and Long Term Care Insurance are Good to Have

This is part of a series of posts on choosing benefits.  Today I will look at the ins and outs of our choices for Disability, and Long Term Care insurance.  I’d forgotten about Disability, so I’ll save  Legal, Pet Insurance, Discount Programs and the rest for tomorrow.


We are really so lucky that Large Conglomerate gives us access to so many benefit programs.  In addition to health insurance, dental insurance, vision coverage,and life insurance, we have other choices to make.

Disability Insurance – Besides medical insurance Disability is the most important coverage to have.  At least according to me.  My mother is disabled, and her life (and ours) would be much easier if she had purchased it.  My dear cousin was blessed with a policy that paid her 60 percent of her salary from the day she had to leave her job due to her Multiple Sclerosis more than fifteen years ago, and paid until she passed away from cancer a few months ago.  When I put in an offer on my house the first thing I did was to get a quote for Mortgage Disability Insurance.  Very, very important stuff.

There are two components to the coverage that Large Conglomerate offers:

  • Short-Term Disability – Pays for up to twenty-six weeks if Husband is sick or injured and unable to work for  more  than five consecutive business days.  Large Conflomerate picks up the cost of this completely.  Thank YOU!
  • Long Term Disability – Picks up at twenty-six weeks and covers 60% of Husband’s salary if  he becomes totally disabled.  There are lots of caveats and restrictions that will vary from policy to policy, but the bottom line is this is GOOD.  We have to pay for the Long Term Disability, and at $120 and change per month it’s hard to swallow but not as hard as it would be if we cold even find anyone to give Husband a policy.

A definite YES.


Long Term Care Insurance – Long term care insurance provides assistance with daily living activities such as bathing, dressing, eating, using the restroom and moving about.  Coverage applies either at home or in a facility, and it doesn’t matter whether you’ve been in an accident, sick or just dealing with the  effects of aging.

This is hugely important insurance to us, especially because we are older parents.  We don’t want Son to have to pay to take care of us, or take care of us himself.  If you want to know more of the reasons why we are very much sold on Long Term Care Insurance you can read the post I’ve already written about it.

That said, with only one income, and with both of is being 43 years old, we’re not ready to buy it yet.  And because we didn’t buy it at our first opportunity we’d have to provide the dreaded Evidence of Insurability.  Remember our old friend Diabetes?    Which means  they won’t issue the policy.  Pity, because we could have gotten a $200 per day benefit for $37.60 per month each.  That’s an excellent premium.

Rest assured we will take advantage of this option if we are ever given the opportunity (hopefully the job Husband gets when we finially move will offer it).

TIP: Something I’ve learned is to really read through all of your options when you get a new job and are eligible for benefits.   Know those items that give you a perk for signing up the first time – like not having to provide Evidence of Insurability.  That’s something that could really bite you in the  tush later.

Read the rest of the series!

It’s Benefits Enrollment Time, Series Overview

It’s Benefit Enrollment Time – Medical Insurance Part 1 – Evaluating What You’ve Got

It’s Benefit Enrollment Time – Medical Insurance Part 2 – The Plans and What They Really Cost

It’s Benefit Enrollment Time – Dental Insurance and Why The Math is So Important

It’s Benefit Enrollment Time – Life Insurance a Bargain For Us

It’s Benefit Enrollment Time – Legal, Pet Insurance and Lots of Little Perks

It’s Benefit Enrollment Time – Life Insurance a Bargain For Us

This post is part of a series on choosing benefits.  Today I will look at the ins and outs of our choices for Life Insurance.

The next item on the benefits agenda is life insurance.  Again, Large Conglomerate has several offerings.  Some are free, and some we must pay for.

We are offered:

  • Basic Life/Accidental Death and Dismemberment, with CIGNA Secure Travel
  • Business Travel Accident Insurance
  • Supplemental Life Insurance
  • Personal Accident Insurance
  • Dependent Life Insurance

All of these are provided at NO COST TO US:

Basic Life/Accidental Death and Dismemberment

  • Basic Life Insurance -standard life insurance with a death benefit of 1.5 times Husband’s base salary.
  • Accidental Death and Dismemberment (ADD) Insurance – pays an additional amount up to 1.5 times Husband’s base salary if the death is accidental, or if he suffers a dismemberment.  I haven’t seen the coverage for dismemberment, but these benefits are usually paid out as a percentage of the death benefit, and that percentage depends on what has been, er, lost.  I can’t find ours, but here’s a link to another policy and the coverage is likely similar.  It’s a bit macabre to read.  And no, it doesn’t cover if you lose your pinky toe.  Ouch.

CIGNA Secure Travel – This isn’t a death benefit.  As part of the ADD coverage, CIGNA Secure Travel provides emergency medical and travel services whentraveling more than 100 miles from home on company business or vacation.  I never really read this carefully before as Husband doesn’t travel for business, so I didn’t realize it covers vacations, too.  We can get help with pre-trip foreign travel assistance, interpreters, medical referrals, prescription refills, emergency travel services, and transportation of remains.    I will make sure I travel with their 800 number in the future.

Business Travel Accident Insurance

This is the death benefit coverage that pays if Husband dies or is dismembered while on company business.  Benefits vary based on the severity of the injury, but generally will pay up to four times his annual base salary up to 1.5 miillion.  We won’t have any problem staying under that  threshold.   It generally does not cover accidents to and from work.  It likely would provide coverage if he had to go see a client.  If Son and/or I accompanied Husband on a business trip we are also covered, with $50,000 for me and $25000 for Son.

All of that is free, so a very big YES, and  thank  you very much.

These benefits are offered at an additional cost to us:

Supplemental Life Insurance – Allows us to purchase an additional amount of life insurance from one to five times Husband’s salary.  Premiums are paid with after-tax dollars, so there is no tax benefit.  When Husband first started with the company we purchased this coverage, but only did three times his salary.   Then we found out he’s Diabetic. We’d love to increase it, but to increase coverage after you initually enroll you have to show Evidence of Insurability.  Yeah, not happening.  Rates are based on age and salary, and the policy is portable which means you can take it with you when you leave, as long as you are under  age 70.  That’s definitely what we’ll be doing, as buying new Life Insurance for Husband is just way too expensive.

Personal Accident Insurance – This is a new benefit this year.  Basically it’s just another accident policy, but it’s cheap ($.22 per $1000 of coverage), and they do not require Evidence of Insurability.  Pretty much any time I can buy coverage for him without evidence of insurability I do.  Thank you, Diabetes.

Dependent Life Insurance – Son and I are eligible for coverage, and we can choose several different amounts.  We did choose $50000 for me when we got married, which also gives us $10000 for Son.  Again the Evidence of Insurability monster rears it’s ugly head and we cannot increase this.  I have another $25000 in a paid up whole life policy I bought before I retired.  It’s not rated for age, so the $13 per month we pay isn’t bad.

So, yes, we are taking all of that, too.  The bottom line for us and life insurance is that we take as much as we can through work because we won’t be able to get anywhere near a decent rate with individual policies.  Yay aging.  Yay Diabetes.  Yay asthma.

Tomorrow I’ll wind up the series talking about Long Term Care, Legal, Pet Insurance, Discount Programs and the rest.

And then I’ll start writing posts that don’t put you all to sleep.  It will be a nice change.

Read the rest of the series!

It’s Benefits Enrollment Time, Series Overview

It’s Benefit Enrollment Time – Medical Insurance Part 1 – Evaluating What You’ve Got

It’s Benefit Enrollment Time – Medical Insurance Part 2 – The Plans and What They Really Cost

It’s Benefit Enrollment Time – Dental Insurance and Why The Math is So Important

It’s Benefit Enrollment Time – Seeing the Vision Plan Clearly. Finally.

It’s Benefit Enrollment Time – Disability and Long Term Care Insurance are Good to Have

It’s Benefit Enrollment Time – Legal, Pet Insurance and Lots of Little Perks

It’s Benefit Enrollment Time – Seeing the Vision Plan Clearly. Finally.

This post is part of a series on choosing benefits.  Today I will look at the ins and outs of our choices for Vision Care.

Husband has worked for Large Conglomerate for nearly seven years, and 2009 will be only the third year they’ve offered vision coverage.  I wear contact lenses, and I am a very serious, naughty overwearer.  I believe I’m supposed to wear each daily lens for two weeks before discarding them and using fresh lenses.  For me it’s often more like two months.  Or more.

I was thrilled when they started offering this coverage, as it had been twelve years since I’d gotten new glasses.  Granted, I only wear them at night, but the prescription was just not getting the job done, and my frames were past the point of repair.   Can you say tape?

The offerings this year are the same as that first year, and it is through VSP.   They offer the VSP Core Plan and the VSP Core Plan with Buy-Up.

VSP Core Plan

  • One eye exam every twelve months after $10 copayment.
  • $A 200 allowance applies to the cost of my contacts and the contact lens exam.

OR

  • One pair of lenses per year and one pair of frames every 24 months after $25 copayment.
  • A $200 allowance applies to the cost of the frames.
  • The cost of frames exceeding $200, additional prescription glasses and sunglasses all receive a 20% discount.


VSP Core Plan with Buy-Up is the same as the Core Plan except:

  • Two separate $200 allowances applies to the cost of my contacts and the contact lens exam.

OR

  • Two pair of lenses per year and two pairs of frames every 24 months after $25 copayment.
  • Two separate $200 frame allowances.

Or, you can do what I did that first year and get one pair of glasses and one set of contacts.

Husband has never worn glasses, so until this year I was the only one using it.  I chose the VSP Core Plan with Buy-Up that first year because I needed new glasses and contacts, and actually broke even (other than the premiums) because there was a rebate on the contacts which covered my copayments.


Pitfalls and PITAs and Good News

I know I could get glasses and contacts much cheaper than I can through the opticians covered under the plan, through Costco or Walmart or any number of online purveyors.  A lot cheaper.  But I’d still have to pay for an exam and a contact lens prescription, and it’s been my experience that doctors actually charged me for an eyeglass prescription of I wasn’t getting my glasses there.  Which really, really peeves me.

The biggest pitfall to this program is that they do not have any accounts with any of the discount retailers, which you would think would save them money.   Our optician gave me the reason for that when she told me that they do all of their own lensmaking, so it saves them a fortune.  And I’m sure they only reimburse a fraction of the retail price on the frames, too.   I have gone over the coverage limit and had to pay out of pocket.

On the other hand, last year the optician price-matched the lowest price I found online for the contact lenses.   With the rebate I wound up making money on the deal.

Last year and this year we skipped the Buy-Up and just did the VSP Core Plan. I actually have my appointment for this year’s lenses tomorrow morning (after 20 months I’m getting low on lenses).  I was contemplating letting the coverage go next year, figuring that I could do just as well through a discounter and that I probably would not need to buy lenses next year at all.  But then we found out that Husband needed glasses, for the first time ever.  Getting old has it’s challenges!

Because he’s diabetic we wanted to go to our Opthamologist, who is not on the plan (though other Opthamologists are).  We walked in to the optician (one of those people who are really, really good at their job and just accentuate the crappy customer service you get everywhere else) with a prescription and walked out with a pair of really killer titanium lenses with polycarbonate scratch-resistant lenses, glare protection (pretty important here in the land of the sun),  and clip-on sunglasses for $75 out of pocket.  That’s a pretty good deal that I don’t think I could have matched online.  Fantastic Optician also commented that VSP is the best Vision plan she’s ever seen, so that was an interesting tidbit, too.

So, let’s look at the costs for 2009.

VSP Core Plan 2009 Annual Premium: $85.32 (Note: I do not get the family plan for this, I select the Employee + 1 pricing.  Son does not need Vision Care, so why pay extra?)

Copayments:  $20

VSP Core Plan with Buy-Up 2009 Annual Premium:  $113.40

Copayments:  $20

So, bottom line is that now that Husband and I are both visually challenged this becomes an even better deal for us.   And something else occurred to me just this very second.

I’m thinking that perhaps we’ll do the VSP Core Plan with Buy-Up this year.  For an addtiional $28.08 ( that’s only $1.17 per paycheck – and paid with pre-tax dollars!)  I can get twice the amount of contacts and Husband can pick up a pair of prescription sunglasses, and  we can likely skip the coverage for 2010, and maybe even 2011 and save those premiums.

Oh, yes.  We will definitely be doing the VSP Core Plan with the Buy-Up this year.



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Read the rest of the series!

It’s Benefits Enrollment Time, Series Overview

It’s Benefit Enrollment Time – Medical Insurance Part 1 – Evaluating What You’ve Got

It’s Benefit Enrollment Time – Medical Insurance Part 2 – The Plans and What They Really Cost

It’s Benefit Enrollment Time – Dental Insurance and Why The Math is So Important

It’s Benefit Enrollment Time – Life Insurance a Bargain For Us

It’s Benefit Enrollment Time – Disability and Long Term Care Insurance are Good to Have

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