Welcome to the 126th Cavalcade of Risk, where we’re showcasing the best in risk-related writing from around the web. As a primary risk-management tool, insurance in all of its various forms tends to show up a lot of the posts, but there’s something for everyone here, so dig in…
To start things off, we have a compelling article from Scott Bartlett about the dangers of progress. Scott’s post is inspired by the book A Short History Of Progress by Ronald Wright. It’s a reminder of the ultimate risk to all of us if we don’t take care of this little planet we all call home. But more then the usual articles about climate change and environmental degredation, Scott also looks back over centuries of history to see how the rise and fall of civilizations is often linked to resources and their depletion. Sobering, yet an excellent read.
To put a visual spin on the idea of risk, Julie Ferguson of Workers’ Comp Insider brings us a photographic depiction of workers performing all sorts of tasks far from terra firma. If you’re leery of heights, these are probably not the jobs for you. There are pictures of modern workers, as well as plenty from days gone by, and it’s interesting to note the complete lack of safety equipment in some of the older shots.
Life Insurance And Estate Planning
Jim Yih of Retire Happy Blog brings us Cathy’s story of life insurance. It’s an excellent example of a scenario where term life insurance makes much more sense than permanent life insurance. Term life insurance is a perfect product for someone who is insuring her life in order to protect her children, since we can assume our children will only be financially dependent on us for a finite length of time. And since it’s a lot less expensive than universal or whole life insurance, a term policy allows a person to have a policy with a higher face value and lower premiums.
Free Money Finance also writes about term life insurance, taking to task a recent WalletPop article that included term life insurance as a type of coverage that is “not worth the money”. I think FMF’s take on this is absolutely correct. For some people, permanent life insurance might be just the right product. But anytime a planner or advisor is recommending permanent life insurance as being generally a better option, it’s a good idea to question how much more commission they will get if the client goes with permanent life insurance.
Continuing on the importance of estate planning, Jeff Rose of Good Financial Sense tells us what happens if you die without a will. Basically, all assets will pass through probate, and state laws will determine how your money and possessions are doled out – and who will care for your minor children. The way the state does it may be far different from how you would want it done, which is why having a will is such an important part of financial planning.
Russell Hutchinson of Chatswood Consulting Limited takes a look at whether the Christchurch, New Zealand earthquake will impact life insurance premiums. He notes that although the loss of life was tragic, the payouts in terms of life insurance settlements will be quite small when compared with the payouts for property damages from the quake. He concludes that events like the recent earthquake will usually not impact life insurance premiums rates at all.
Health Insurance And Healthcare Reform
Jaan Sidorov of the Disease Management Care Blog delves into some of the financial nitty gritty behind the idea of patient centered medical homes. The PCMH concept has become quite popular during the course of the healthcare reform debates, but Dr. Sidorov’s article brings into question the financial sustainability of such models, as it appears that they won’t be making much money. The idea is for the clinics to be paid on a per member per month basis, but the actual amounts that would likely be paid are startlingly small.
InsureBlog’s Bob Vineyard tells us about a European ruling which prohibits companies from using gender in setting prices for products like insurance and annuities. Turns out that there could be some unintended (and not-so-great) consequences, such a young men buying higher performance cars because their auto insurance premiums are artificially reduced. Here in Colorado, health insurance premiums are no longer allowed to be based on gender. It will be interesting to see if similar laws catch on across the country, or with regards to other products, like auto insurance.
Jason Shafrin of the Healthcare Economist looks at a proposal from the Healthy Trucking Association of America and the Convenient Care Association, for a plan to provide health insurance to truck drivers that would allow them to access care wherever their job may take them. The integrated medical home concept works well for people who are generally in the same geographic location from one day to the next – but truck drivers need access to care all over the country.
Eric Turkewitz of the Terkewitz Law Firm writes and open letter to NY lawmakers, encouraging them to reject a proposed measure that would cap pain and suffering damages at $250,000 in medical malpractice lawsuits. While we tend to hear a lot from people who are in favor of tort reform measures like the cap on non-economic damages, Eric’s letter provides quite a bit of detail from the other side, and explains why it would do more harm than good to place such a cap.
The Consumer Boomer gives us an overview of how Medicare Advantage programs work, the details about what the various Medicare plans cover, and information needed for enrollment. Good info for anyone approaching retirement age and starting to look at how health insurance works once we turn 65.
Nancy Germond of All Business explains why your home may be underinsured. The problem seems to stem from the fact that many insurance carriers give the homeowner the responsibility of determining the replacement value of a home, and that may not be the same as the market value of the house. Nancy notes that a better option is an insurance carrier that will do an independent appraisal, or one that will add a percentage cushion to the determined replacement value in order to more adequately account for increases in replacement cost.
Neal from Wealth Pilgrim explains that if you need to file a claim with your homeowner’s insurance, hiring a private insurance adjuster can be a good way to make sure that you get as much money as you’ll actually need to repair or rebuild your home.
Canadian Finance Blog explains the basics in terms of how auto insurance premiums are calculated: type of coverage, how much you drive, what kind of car you drive – they all play a factor. I’ve read that some auto insurance carriers even look at credit scores in order to set prices.
Other Risky Business
Health Blog’s David Williams discusses whether parents should be allowed to give teachers gifts. While regulating such things might at first seem trivial and intrusive, David points out how gifts from pharmaceutical companies to doctors have been shown to influence the doctors’ prescribing habits. Observation of the relationships between doctors and pharmaceutical companies when gifts are involved should give us pause to consider the fact that there is always a risk of compromising integrity when gifts are allowed. Good food for thought.
The Dough Roller tells us about identity scores. I wasn’t aware such a thing existed, but an identity score – compiled using data from a much wider source of data than credit scores - is used by lenders as an indicator of how likely it is that a credit applicant is using a fake identity. The higher the number, the more likely it is that an applicant is committing identity theft. The article includes details about how you can check your ID score and make sure that it doesn’t contain errors.
Credit Card Guru takes us for a closer look at payment protection insurance, and concludes that it’s usually not worth the money. Sure, programs like that help to alleviate some risk (for people who carry a balance on their credit cards and would have a hard time making payments if they were faced with an unexpected job loss, illness, etc.) but it appears that the insurance is pricey and has a lot of fine print.
Heather Hollingsworth takes a look at how unrest in Egypt and the rest of the Middle East could impact global financial recovery from the recession. Since so much of the world’s oil comes from the Middle East, protests and regime changes there can have an effect all over the world.
That wraps up this edition of the Cavalcade of Risk. Thanks for all the great submissions!