One of my favorite topics to
discuss with clients are their travel plans. The answers I get range from China
to Europe and all across the U.S. One couple I know is visiting Norway right
now and another will be traveling to Africa later this month.
Apparently, they are not alone. According
to AARP, 47% of baby boomers expected to travel internationally in 2018.
Overseas travel may be one of the
more popular aspirations in retirement, but it does raise an important
question: “Will my health insurance coverage travel with me?”
Not long ago my car insurance agent called to let me know that I may be eligible for a discount on my insurance rates due to my “excellent credit”. This was a little surprising to me since it had never occurred to me that my auto and homeowners insurance premiums were based, at least in part, on my credit rating.
Apparently, however, this is a thing.
One landmark study found that credit-based insurance scores
are used by about 95 percent of all auto and home insurers in calculating the
cost of insurance to individuals.¹
While the vast majority of insurance companies use
credit-based insurance scores to help determine the price of insurance, it is
banned in the states of Massachusetts, Hawaii, and California. Some states only
allow it as a factor for property insurance like auto and homeowners insurance.
Other states allow it to be used with any type of insurance.
Generally, an insurance company will use a credit-based
insurance score as just one factor in its underwriting process. Other factors
may be considered, depending upon the type of insurance. For example, with auto
insurance, other factors could include your zip code, the age of the drivers,
the make, model and age of the car, and the number of miles you drive annually.
The use of credit scores to determine insurance rates is
rooted in research that has shown individuals with lower credit scores had
higher car insurance losses and higher claims payouts.
You can ask your insurance company if a credit-based
insurance score was used to underwrite and rate your policy, and in which risk
category you were placed.
If you want to improve your credit-based insurance score,
you should consider taking the same steps you would to improve your credit
rating: make timely debt payments, clear up past disputes and keep credit card
Predictive Analytics: Achieving Greater Decision Accuracy, Better Risk Segmentation, and Greater Profitability, Fair Isaac Corporation, 2012 (most recent statistics available).
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information on a topic that may be of interest. FMG, LLC, is not affiliated
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If you are a Minnesotan age 65 or older and have what is known as a Medicare Cost Plan, you may experience changes to your insurance that will go into effect in 2019.
The State of MN estimates that up to 200,000 Minnesotans will be required to take action during the current enrollment period to obtain replacement coverage for 2019. Another 125,000 or so may be “auto-enrolled” into new Medicare Advantage Plans with their current insurer.