Frequently Asked Questions

Q. What are the advantages of using an Independent Insurance Agency?
A. Some insurance companies employ salaried agents to sell their insurance. Most, however, use independent agencies such as BPS. Since the independent agent is not tied to any specific company, he or she is free to compare one insurance company to another and one insurance program to another in order to find the very best product to meet the client’s needs. BPS has chosen to be an independent insurance agency so that we can offer this type of objective, unbiased advice and service.
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Q. How can I find out about the ratings of an insurance company?
A. Insurance is a contract which says that the insurance company will pay a promised benefit when certain conditions occur. The promise is backed by the financial health and strength of the company, so it is important to select an insurance company that is solid. To assist consumers and Insurance Professionals, rating companies analyze the financial performance of insurance companies and publish the results regularly. Ratings may vary from one rating service to another, so it is important to get an overview from several different rating services, including A.M. Best Company, Standard & Poor's, Weiss Research, Duff and Phelps, and Moody's. Talk to your BPS professional for more information on ratings.
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Q. What kinds of questions do I have to answer to get insurance?
A. That depends on the type of insurance you are applying for. Different types of policies insure against different risks. For example, Disability Insurance guarantees a certain portion of your income should you ever become sick or injured and be unable to work. Therefore, the insurance company will ask questions about your general health, as well as questions about any dangerous activities you may engage in as part of your job, such as traveling to countries that are not as safe as the United States, or hazardous activities you engage in for enjoyment, such as parachuting or contact sports. An individual’s risk profile may disqualify him or her for certain types of insurance or may cause them to be “rated,” meaning that their rates would be higher than those applicants with a lower risk profile. BPS can help you determine your eligibility for insurance, even before placing an application. Of course, the insurance underwriters will make the final decision, but your BPS agent can help steer you toward the insurance company where you have the best chance of being offered insurance at low rates.
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Q. Are there different types of insurance companies?
A. Yes. “Stock” insurance companies are owned by stockholders and are operated for the financial benefit of those stockholders. “Mutual” insurance companies are owned by the policyholders and operated for the benefit of those policyholders. “Reciprocal” insurance companies operate in order to insure each other, thereby transferring a portion of risk from one company to another. “Lloyd’s” associations insure risks by backing their guarantees with private wealth. “Blue Cross/Blue Shield” health insurance companies are operated as non-profit organizations. HMO's or Health Maintenance Organizations provide prepaid health care coverage. After paying the premium, the insured person can get services at little or no additional cost.
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Q. Do I need to take a physical exam when I apply for Health Insurance?
A. Many group health insurance plans offer “guaranteed insurability,” meaning that applicants are not required to take an exam. Applicants for individual insurance may be required to take a physical exam.
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Q. Can I be rejected because of a pre-existing condition?
A. Applicants for insurance may be “rated” (charged higher rates) if approved for coverage or may be denied coverage due to pre-existing conditions.
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Q. How does Disability Insurance work?
A. Disability Insurance (DI) provides you with income if you become sick or injured and are unable to work. The amount and duration of benefits is stated in your policy. In general, the higher the amount and duration of benefits, the higher your premium will be. Benefit amounts are limited by law in all states. If you have DI through your employer, you still may be able to qualify for additional benefits through a private plan. Talk to your BPS representative to analyze your own particular situation. Benefits are taxable if your employer pays your premium without passing the income to you. If you pay your own premiums, benefits are not taxable. For full details, consult your tax professional and a BPS DI Specialist.
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Q. How do I determine how much life insurance I need?
A. Life Insurance provides the guarantee that, even if you die prematurely, you will be able to keep the financial promises made to the people in your life who are important to you. Some people just want to make sure the mortgage is paid off. Others may want to provide capital to buy out a business interest or partnership. Family breadwinners may want to provide income for living expenses and for big things like college education or weddings. The question is not how much life insurance you need, but how much you want. Your BPS Life Insurance Professional can help you determine the amount that is right for you and your family.
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Q. What is COBRA?
A. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires organizations with twenty or more employees to offer to continue group health benefits when a "Qualifying Event" occurs. These events include Termination of Employment, Reduction of Work Hours, Change in Dependent Status, Employee's Divorce or legal separation, Medicare Entitlement, and Employee's Death.

Employers must provide COBRA notification to covered employees and dependents explaining their rights. BPS can help employers with these notification responsibilities and assist them in staying in compliance.
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Q. What does a TPA do?
A. A Third-Party Administrator (TPA) can be hired to help companies administer complex Benefits Plans and company-sponsored Retirement Plans. Their services often include documentation required to be in compliance with state and federal laws and regulations. BPS partners with the top TPA firms to deliver the best service possible to our clients.
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Q. What is long Term Care Insurance?
A. Modern science has produced many amazing medical advancements in recent years, innovations that have resulted in longer average life spans. But as we age, we will reach a time when we need help with the Activities of Daily Living (ADL). Long Term Care (LTC) insurance is designed to pay for that help when the time comes. The problem is that, if you wait too long to get coverage, your health may change, and you may become uninsurable. Don’t leave this important piece of your financial plan to chance. Talk to an LTC professional at BPS today.
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