Could your loved ones survive comfortably without your income? Nobody wants to plan for death, but it matters. The people you care about could be left upset and financially stressed. Choosing the right insurance makes a difference in the quality of their lives. And it also offers peace of mind for you and your family today. Discover the benefits of investing in single premium life insurance.
Basics About Single Premium Life Insurance
People purchase single premium life insurance to create an estate. And this money can be used for survivors to pay bills or as a donation to a favorite charity. With single premium life, money is paid into the policy for a guaranteed death benefit until you pass away. There are various investment options and withdrawal rules, based on the type of policy you choose.
Building a Death Benefit
The size of the death benefit paid out when you die depends on specific factors, such as your age, your health, and how much was paid into the policy. Most of the time, these policies are paid in one lump sum, but in other cases they can be purchased with fixed premiums over a predetermined number of years. This can be done in two years or for much longer. The nice thing is that the premiums never increase and are set at policy issue.
The death benefit with most policies is guaranteed after the policy has been approved and the first premium has been made – whether it be a lump sum or made with payments over time. Most policies will guarantee the death benefit up to age 120 so there is little worry the policy will lapse. (Some policies do expire before age 120, so be sure to let you agent know what you’re looking for.)
And some policies offer different investment options that allow for future growth. Your death benefit is always guaranteed, but if interest rates increase or certain indexes perform well, then the death benefit and cash value can grow over time. You or your heirs can end up with more than what was promised.
Single Premium Life Insurance and Long-Term Care
While single premium life insurance is meant to take care of loved ones when you die, there are times the funds can be used when you are alive. If you require long-term care, funds can be drawn from the policy and accessed tax-free in some cases. And the remaining funds are usually income tax-free for your dependents after you die.
Having these funds available during your life can protect your assets if you require long-term care. Many policies offer Accelerated Death Benefit riders. Should the owner by chronically ill, then a certain percentage of the policy will pay out each year to cover health related expenses. This is a great feature for those who are on the fence about long term care, but also interested in leaving a legacy for their families.
Of course, another option is to invest in a separate long-term care policy. Having a tax-qualified long term care policy can ensure the full death benefit from your single premium life insurance will be paid to your beneficiaries after you die. If needed, the two separate policies can work in tandem with one another as well.
Consider Terminal Illness
Some single premium life insurance plans let you gain access to a portion of the money if you are diagnosed with a terminal illness. Ask your insurance agent about these plans. A terminal illness means your life expectancy is 12 months or less. Having the ability to cash out some of these funds can make the rest of your life, and the lives of loved ones caring for you, a lot easier. Most insurers will allow large portions of the policy to be withdrawn in such circumstances.
Three Basic Types of Investments
There are three basic types of accounts when you choose single premium life insurance. In order of least to most risky, they are whole life, indexed life and variable life. Whole life offers a fixed interest rate, indexed policies safely index into the markets while variable life invests in stocks, bonds and mutual funds. One size does not fit all. Your risk tolerance will help you decide which one is right for you.
Think about market changes, your other assets, and how the cash value of the policy will be used. A fixed interest rate provides a higher level of stability but a variable rate can result in greater gains, depending on the market. So long as the death benefit is guaranteed, it’s usually okay to take a little more risk if you don’t plan on accessing the cash value.
Other Facts to Know
Single premium life insurance is tax-deferred. Plus, beneficiaries can inherit the proceeds without paying taxes or dealing with probate. The funds are available immediately for their convenience. To purchase this insurance, you may have to pass underwriting and a health exam. And frequently, there is minimum investment involved, such as $5,000. These considerations have an impact on whether single premium life insurance is accessible for certain people.
Consider your options carefully before making a final decision. Talk to a dedicated insurance agent, accountant, and an attorney to help determine if single premium life insurance should be a part of your portfolio.
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Category: Life Insurance
Operating a small business is challenging and rewarding. People work hard to create an enterprise that pays their bills and employs others. Each member of the team is essential to support the daily company operations. If someone becomes seriously ill or dies, it impacts the business. Discover crucial reasons to invest in small business life insurance in this post.
Protect Your Family
One of the key reasons to get small business life insurance is to protect your business and your family when you die. Often family members are unable to take over a small business. You may have specific expertise as the owner that nobody else possesses. Plus, business loans may use your vehicles or home as collateral. This situation would put your family in a precarious financial position. Life insurance helps cover these expenses when you are gone. It also provides the business with needed colateral so that is can be fairly valued and, id desired, sold at a fair price.
Offset Loss of Value
Many business owners say nobody else can do what they can. And this is frequently true. When the owner dies, the business might have little or no value. Without the knowledge or talents of its proprietor, the company may close its doors. As a result, everyone experiences a loss. Business life insurance helps ease this financial blow.
But in many cases there is some intrinsic value in the business that can be unlocked. Life insurance planning can, if nothing else, buy time so that business partners or other who might be interested can negotiate a takeover. Too often, small businesses simply dissipate when the owner passes and with it the intellectual property, book of business, clientele and website that might have otherwise provided for those left behind.
Insurance for Key Players
Some small businesses focus on the time and talents of one individual. Others have a small team of professionals who get the work done. If one of them dies, the business will likely suffer. When this person is gone, nobody is instantly available to take over his or her areas of expertise. The right business life insurance policy gives your company time to find a suitable replacement or make other arrangements.
To account for this loss, many businesses purchase what’s called a key person or buy/sell life insurance agreement. These plans will instantly capitalize one or more key players so that the business and its practices can carry on without significant disruption. The proceeds from a buy/sell or key person agreement can be used in a number of ways in order to keep the business thriving. It will also help retain key client who might otherwise be tempted to move to a competitor.
Save the Business
It might take a combination of policies to save your business if you or another vital team member dies. A knowledgeable life insurance agent helps business owners find the ideal policies for their unique needs. For example, a personal life insurance policy will protect family members and help them pay off all types of debts. And a key person insurance policy protects proprietors and employees against business losses.
Each situation is different and requires strategic planning and careful valuations. Done right, your business will carry-on and the heirs of the deceased will be comfortable provided for. When a business must be sold in order to pay the heirs of an estate, the only person who usually wins is the buyer as they have significant leverage over the sellers.
Plan Ahead
While the need for small business life insurance might be evident, you may overlook it to handle other expenses. Nobody plans to die or get a debilitating illness. However, it happens, and you want to be prepared. Planning ensures the coverage is available when people need it. If something occurs, it would be too late to get coverage after the fact.
Whether it’s a life policy or one that provides income in case of a disability, insurance is one of the very best tax-advantaged tools to cover the unexpected.
Protect Wealth for the Future
Life insurance is a smart way to protect your wealth for the future. After a lifetime of building your business, you want to take care of your loved ones and employees. Investing in life insurance protects your current wealth for future generations and business owners. Instead of everything closing down, you can leave a thriving business behind to keep your loved ones comfortable for years to come.
Comparison Shop Now
Before a crisis occurs, start comparing life insurance policies today. Do you want to make sure your family can live in comfort after you die? Are you concerned about your business partners and employees carrying on with business operations as usual? Make a list of what you want to cover and share it with your dedicated insurance agent. No matter what the coverage, there are policies to help you achieve your goals. And your broker will comparison shop to help you get the most competitive rates.
There is no time like the present to invest in small business life insurance. Take care of business now and in the future with the right insurance coverage.
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Category: Life Insurance
After years of hard work, people want to retire and relax. To make this happen, people need to plan for their retirement years. There are many ways to save for your golden years. Often it becomes confusing and people wonder what choices to make. Find out the basics about a fixed annuity and reasons to invest in annuities for retirement.
What Is a Fixed Annuity?
People looking to save money and earn interest often opt for a bank CD rather than a savings account. A fixed annuity is much like a CD because it pays a guaranteed rate of interest. Often this interest is higher than banks CDs. There are two types of fixed annuities – immediate and deferred. An immediate policy makes fixed payments during retirement. A deferred annuity accumulates based on the rate of return. Because a fixed annuity makes a determined payout, it is a popular choice for retirees who want guaranteed retirement income.
The Benefit of Choosing Fixed Annuities
People on a budget are reluctant to risk their money on a unpredictable investments. While stocks can be part of a retirement portfolio, they are risky. There are winners and there are losers, depending on the amount of risk one takes on. However, a fixed annuity pays a guaranteed rate of interest. It also offers steady, guaranteed income.
Retirees who want to avoid the roller coaster of the stock market with their entire portfolio often choose fixed annuities. An added advantage is the low investment minimum for those on a fixed budget. Some are as minimal as $1,000. And this puts investment within reach for those who are younger and planning for retirement income in the future.
Tax Advantages
The interest accumulated on a fixed annuity is tax-deferred. This means owners (annuitants) do not have to pay taxes until they cash out. There are no 1099s to consider. If someone reinvests, no taxes are due, and compound growth is enjoyed. All of this is appealing to someone who prefers a streamlined portfolio for tax reasons.
However, a high-income earner might be concerned a fixed annuity is ultimately taxed at ordinary income rates as opposed to a long-term capital gains rate. Ultimately, your gains are taxed as income only when you decide to withdraw them. Otherwise they are deferred. Gains in a non-qualified annuity (post-tax accounts) can be deferred for life. In a qualified plan (like and IRA or 403b) they can only be deferred so long. Most qualified account owners have to begin Required Minimum distributions at age 70 1/2.
Most people maintain a diversified retirement portfolio in order to account for their taxable situation. And it makes sense to consult with an accountant who knows the facts about fixed annuities and tax rates based on the individual’s income and goals.
Concerns About Fixed Annuities
People investing in fixed annuities should inquire about the rates, what happens at maturity, and the cost of surrender charges for early withdrawal. However, another advantage is that many annuities permit you to access a percentage of the money each year with no penalty.
Annuity investors must also be aware of inflation. Some annuities offer fixed payouts while others offer increasing payouts based on inflation or other growth metrics. Owners need to consider future purchasing power and the value of the dollar in years to come. And this is much like any other retirement investment. Wise investors consult with an attorney, accountant, and reputable insurance agent to get more answers.
The Bottom Line About Fixed Annuities
Conservative investors like fixed annuities because they provide stability and peace of mind. While there are minor concerns, the bottom line is people will have reliable, safe money for retirement. The sum might be modest but it can still be used to cover expenses and provide money people need during their older years.
If you want to invest in annuities for retirement, consult with an experienced insurance agent. An educated agent can guide you through the process and explain how fixed annuities can help you in retirement.
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Category: Annuities, Retirement Planning
Many people rely on prescription drugs for their well-being, such as heart medications and psychiatric prescriptions. Being forced to go off these medications could lead to life-altering situations. And patients have valid concerns about the extent of their prescription coverage. But once you’re age 65 and eligible for Parts A and B, you need to find out more about drug coverage under Medicare Part D.
Legitimate Medications Matter
Failure to find the right coverage puts patients in a desperate situation. Some order online from fly-by-night companies. And others use medication from friends or family with similar health conditions. Plus, some patients leave the state or country to buy meditations.
However, none of these drugs is reliable and safe. As a result, patients can get injured or die from using them. Never take risks with your prescription drugs. Policy choices exist once you’re Medicare eligible that will help you cover the cost of your medications.
Medications Become Costly
Another issue for people who depend on medication is the rising cost of certain prescription drugs. And for older people on a fixed income, these costs can be difficult to cover. The price could mean choosing between buying monthly prescriptions or putting food on the table. An insurance agent helps people facing this type of crisis. And it takes searching to find the right Medicare Part D coverage. But supplemental plans are available to get the highest level of coverage.
Medicare Drug Plans Are Different
Some people believe all Medicare drug plans provide the same coverage. But there are different options, and each has its unique benefits. Working with a licensed insurance agent can reduce the confusion. An experienced pro knows to help people find the right plan for their individualized needs.
Plans vary in what they cover year in and year out. You should almost always check your options every year during the Annual Election Period (AEP) which runs from October 15th through December 7th. For most consumers, this is the only time they can change drug plans. Changing plans can reduce premiums, lower or eliminate copays, and avoid annual deductibles. Those who haven’t shopped their Part D drug plan for several years could be overpaying by several hundred dollars.
It’s also very important to make sure you’re using a in-network pharmacy. Almost all Part D drug plans offer better prices at their preferred pharmacy where they have negotiated lower rates. One of the biggest (and most easily correctable) mistake Medicare beneficiaries make is buying their drugs from an out-of-network or non-preferred pharmacy. Consumers should always make sure they are using the best pharmacy – either by mail order or in-person.
Find Out About a Formulary
Each Medicare plan provides a specific list of covered drugs. And this list is called a formulary. In most of these lists, drugs appear in different tiers. And the drugs in each one have various costs. For example, a drug on a lower tier is likely to cost less than one put in a higher one.
Some drugs can be in one tier one year and then a higher tier the next. This results in higher copays and/or needless exposure to deductibles. A good agent can tell you where you are leaving money on the table. This savings can help many to stay with the prescriptions that give them the best results.
Working With Prescribers
When a patient discovers they must take a drug on a higher tier, the cost can be more than expected. But there are ways to reduce this cost potentially. Discuss your needs with a doctor or prescriber. While they might believe you need a drug on a higher tier, there could be a reasonable substitute.
For many, generic drugs are also a viable option. Find out if a different medication is a possible solution. Many consumers come on to Medicare only to realize that name brand drugs are very costly where a generic substitute can offer the same efficacy at a fraction of the cost.
And you should also know that some drugs fall under Medicare Part B. These are drugs that are administered at a doctor’s office – usually they are injections or administered intravenously. This means that Medicare and your supplemental insurance will cover the cost. This is why it’s a good idea to have a comprehensive Medicare supplement along with your chosen drug plan.
Necessary Drugs
In certain situations, there might not be a substitute for a high-cost prescription. However, you or your prescriber can ask your Medicare Part D provider for a tier exception. The result would be a lower copayment for the patient. Often this is the best way for people to cover the costs of medications they need to maintain good health.
There are several ways to reduce the costs of expensive medications by working with your doctor, your Medicare plan provider, the drug manufacturer and the State where you live. There are several programs designed for those who fall in certain income levels.
Changes To the Medicare Formulary
Sometimes a Medicare drug plan makes changes to its formulary throughout the year. Changes occur within the guidelines established by Medicare. However, if the change involves a drug you are taking, the plan must follow specific steps.
First, they must send written notice of the change to you within 60 days before the change become effective. Next, when you request a refill, a notice of the change must be issued with a 60-day supply of the drug under the same plan rules that existed before the change. If you encounter this issue, then it’s a good idea to work with your doctor to see what other options might be available.
How To Get the Coverage You Need
Consult with your insurance agent about changes. Work each year to review the formularies of Medicare Part D plans to find one that offers the best prices. Contact your doctors and prescribers to find out more about alternatives. With some work, patients can get the coverage they need to get the right prescription drugs.
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Category: Uncategorized
Short-term health insurance policies are becoming very popular. More people are buying these policies to get immediate coverage. But is short-term health insurance or regular coverage the right choice for you? Does it make sense to go without coverage?
Find out more about the differences between these two health insurance policies by reading below. Learn who chooses short-term coverage and why. Every situation is a little different, but we can help you make the best decision.
Short-Term Health Insurance is a Bridge
Short-term health insurance is not a regular traditional policy. Usually, short-term policies offer maximum payouts and require medical underwriting. The term of most policies is three months, although they can be shorter or longer.
Some companies offer extended short-term coverage. Newer plans allow the insured to buy up to four 3 month term at once. This eliminates needing to prove insurability after one or more terms has expired. But this type of policy is not regular health coverage; plans will have annual maximums and they may not cover preexisting conditions. You should not expect these plans to cover a pregnancy or high cost prescriptions that you are already taking.
In most cases, short-term health insurance is a bridge that provides essential coverage until a person qualifies for regular health insurance. Many consumers, however, are opting for short term plans over ACA coverage simply due to cost. These plans can be tailored to meet most budgets and they’ll provide coverage for unexpected accident, injuries and illnesses.
Immediate Coverage
When a person needs immediate coverage, a short-term policy is a viable choice. Policies can be purchased today and in effect tomorrow. You can select the exact amount of days you would like to have coverage. And if your traditional coverage begins sooner than thought, you can cancel your short term plan an receive a refund for any unused days
Most short-term policies cover emergency hospital visits and basic medical costs. Others will offer office copays and prescription drug coverage. You can also add dental & vision coverage as well as cash reimbursement riders that will cover the deductible you select. Always review the terms of the policy with your insurance agent and ask questions about the extent of coverage.
Reduced Costs
One of the reasons people select short-term health insurance is reduced premiums. With less coverage and a choice of deductibles, the monthly premiums are very affordable. People who lost their job – or students waiting for other coverage to kick in – benefit from short-term health insurance coverage.
COBRA coverage is costly if you find yourself unemployed. But you may feel better with some amount of health insurance. The budget-conscious cost of short-term coverage offers an affordable cushion while looking for employment. And if you find a job, short-term coverage is in effect until your employer offers regular health insurance. Sometimes employers have a waiting period of one to three months.
When Short-Term Insurance Is Not an Option
Unlike regular health insurance coverage, short-term insurance does not have to observe the Affordable Care Act (ACA) requirements. These policies do not have to cover the ten health benefits ACA health plans must cover. Basically, short-term plans are meant to cover unexpected injuries and sudden illnesses. Pre-existing conditions may not be covered. For this reason, the premiums are less expensive than regular health insurance. But if a patient has a pre-existing coverage, this plan may not be practical.
Fill in the Gap
A person who has a job and needs to wait for coverage would benefit from a short-term health insurance plan. Or a student no longer covered under his or her parents’ policy fills in the gap with short-term coverage. Those who are in good health and just a few months away from Medicare eligibility enjoy the peace of mind these plans provide.
But it is not meant to be a permanent solution. In other words, there are few substitutes for regular health insurance. However, short-term plans prevent people from the financial stress of medical bills if they have an emergency before regular insurance starts.
What If I Need Regular Health Insurance?
People with specific health conditions might need regular health insurance coverage. Always consult with a reputable insurance agent to find out your options. For example, a pregnant woman cannot get coverage through a short-term policy. But the state may offer options under the ACA.
And there are a wide variety of regular health insurance coverage options to suit your needs and budget. Let a knowledgeable agent do the shopping for you to get the best possible coverage under the circumstances.
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Category: Health Insurance
As people age, they may develop health conditions that require daily care for an extended time. Often health insurance does not cover all these costs, such as assistance with daily activities like bathing, at-home care, nursing home or adult day care, and home modifications for the disabled. Consider the benefits of investing in a long-term care insurance policy.
Know About Your Current Health Insurance Coverage
Most health insurance policies provided by an employer will not cover every aspect of long-term care. Medicare covers a nursing home or at-home care for a limited period, depending on the conditions. A long-term care insurance policy is meant to cover necessary expenses when other insurance does not. Older people looking for essential coverage should consult with a knowledgeable insurance agent about Medicare Supplement Insurance policies to fill in the gaps.
What to Consider When Choosing Long-Term Care Insurance
Purchasing long-term care insurance is less costly when you are younger, and older people might not be able to get this coverage – due to age requirements or health condition. Over time, the premiums increase. Choose an affordable policy that fits into the budget.
A person with a lower income may qualify for Medicaid, which covers nursing home and at-home care. But there are stringent eligibility requirements, including having little or no resources. Talk about long-term care needs with family and friends who might be able to help and be realistic about what they can do. Work with an accountant about possible tax and financial benefits of getting long-term care coverage, as well as ways to protect your wealth and family.
Basics About Long-Term Care Insurance
Most people buy individual long-term care insurance plans from an experienced insurance agent. Others get coverage from employers, organizations, and joint or state programs.
An agent can guide you through this process to select the best option. Consult with an insurance agent about long-term care insurance now rather than later as policies may not cover preexisting conditions. Waiting until you are in declining health could mean the condition is not covered by the policy.
And discuss your all of your options with your preferred agent. Traditional (pay as you go policies) were most popular just a few years ago, but hybrid, asset based LTC policies are gaining traction. You can purchase a hybrid plan in one lump sum – or with fixed annual premiums – and eliminate future premium increases. Best of all, your heirs will inherit your hybrid annuity or life insurance policy if it’s never used.
Extent of Coverage
Each long-term care insurance policy differs in its coverage and requirements, such as using services from a certain professional or agency or allowing independent care providers, including family members. Verify the type of coverage meets your unique needs.
Care coverage may include a nursing home, adult day care, assisted living facilities, nursing and other care, home health care, and home modification such as ramps. Carefully review the policy to ensure you get the coverage you need.
Be aware of policy limits and how much they will pay for these services. And there might be some exclusions, such as treatment for mental illness and alcohol and drug abuse. Verify your plan is “tax qualified” so that it has to follow all guidelines set by the government.
When Benefits Are Triggered
With most long-term care insurance, certain conditions must happen before the policyholder receives benefits. For example, the policyholder must be unable to perform designated activities of daily living (ADL). Typically, when a policyholder requires assistance with two or three ADLs, the benefits are “triggered.”
Inquire if the policy has a waiting or elimination period before the benefits start to be paid. And consider the increasing cost of medical care in the future. The cost of care today is sure to increase in ten years. Inquire if there is an option to purchase increased coverage in the future.
Few people want to think about becoming chronically ill or disabled as they age. However, having the right care makes this situation easier. Choosing long-term care insurance today can protect your personal and financial well-being in the future.
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Category: Long Term Care Insurance
With the rise of medical costs, getting sick can be a huge expense. And the problem is if you are unemployed and are currently in school, you have no employer who will shoulder the cost of a medical insurance policy.
As a student, you are not immune to the same accidents, illnesses and injuries that professionals are exposed to everyday. And this creates a huge need for health insurance coverage. Most likely, you already have student loans. Getting sick only means you have to pay for medical bills. And these bills will take away the money that you should have spent on your education. Think about the benefits of short term health insurance plans for students.
Short-Term Health Insurance is Affordable
Short term health insurance is a straightforward deal. You are covered for a short period of time and you pay a premium. The first thing you do is to pick the amount of benefit you want to receive should you get sick. Most policies have a calendar year maximum – or maximum per cause. You choose which type you prefer. If you are needing coverage for several months, then a lifetime maximum of 1-2 million might be a good idea.
Many short term health insurance policies can cost less than you might think for the entire policy’s tenure. Polices with higher deductibles can be under $100 a month! These same plans can also provide prescription drug coverage and doctor’s office copays without the insured reaching the deductible. It’s nice to have these first dollar benefits available right away.
It Is Immediately Effective
A lot of companies offer short term health insurance policies that take effect as soon as the payment is made. Apply today and your coverage is effective tomorrow.
Unlike Obamacare coverage, short term health plans do require medical underwriting. There are usually only a few questions to answer, but not everyone is approved. Other policies might offer coverage while excluding preexisting conditions. If you only need coverage for a few months, these Guaranteed Issue plans can provide peace of mind.
Additionally, many plans offer riders like dental and vision coverage. Still others will provide cash reimbursements for an accident, illness or injury. It’s nice to know your plan will can pay you several thousand dollars up-front with an critical illness rider. These riders do cost extra, but can be worth it if run into something unexpected.
It Has Wide Coverage
Many hospitals and doctors accept short term plan insurance. This is even covered in cancer centers. As millennials continue to buy short term health insurance policies over long term ones, more and more facilities will cover those who purchased this type of insurance. Although maternity is not part of the deal, below are some important medical service that you can get if you purchase a policy.
Lab tests – this is costly. Most doctors require a lab test to be able to pinpoint and diagnose the disease properly. With short term insurance, you do not have to pay the costs of these tests.
Doctor visits and specialist visits – if you are indisposed and cannot get out of bed, doctors can come and visit you and the health insurance company will pay for that specialist’s service.
X-Rays – like lab tests, x-rays are costly. This should be covered in your health insurance plan.
These plan can cover you all over the United States using networks from Aetna, United Healthcare, Medical Mutual of Ohio, Cigna and others. If you travel a lot, then we can help you find the broadest network to meet your needs.
It Bridges the Gaps
Short term health insurance for students bridges temporary gaps in long-term insurance. Once you turn into an adult (age 26 in most states), your parents’ insurance provider will no longer recognize you as a dependent. You need to buy your own. But as a student without work, long term health insurance is costly. Besides, long term health insurance is typically shouldered by an employer.
A short term health insurance will bridge this gap. And this is most especially important if you are close to graduating. While finishing your degree, you can expect to get full coverage until such time that you find an employer, provided that you pay your premium on a regular basis. This is also a great alternative if you missed out enrolling for long term health insurance. You wait out for the next enrollment of the Affordable Care Act, knowing that you have temporary health insurance coverage.
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Category: Health Insurance
Medicare provides us an optional program called Part D. This is a type of insurance that will help the insured pay for prescription drugs. A person who chooses to enroll must pay a monthly premium on top of the regular Part B premium. Read on to learn six facts about Medicare Part D drug plans and why this coverage is necessary.
Two Ways to Get Coverage
The first way to get coverage is to add a Part D policy to the original Medicare. This is called a Stand Alone Medicare Prescription Drug Plan. This works like an extension of your original coverage. If anything happens to you and you need prescription drugs, the government insurance will shoulder part of the prescription medicine cost. Most times stand alone Rx coverage is paired with a separate Medicare Supplement policy.
The second way is to join a Medicare Advantage Plan that is offered by private insurance companies like Aetna, Anthem, Humana, United Healthcare and the like. If you do this, make sure you ask enough questions to the carrier and review (or renew) your policy during Open Enrollment between October and December. Different companies offer different coverage so investigate carefully and make sure your needs are met by the plan you buy.
And it’s important to note that not all Medicare Advantage policies include drug coverage. Be sure to look for MAPD plans, not MA only plans. The PD stand for Prescription Drug coverage. Some consumers with creditable drug coverage elsewhere (like the Veterans Administration for instance) are okay with MA only plans.
It Has a Cost
Medical coverage for prescription drugs is not free. This means that despite you paying a monthly premium, you will still pay part of the medicine cost should the time come that you need them. The government or a private insurance company will only share the cost with you but not shoulder the full amount. Some Rx copays will be less than others, so it’s wise to shop around based on the pharmacies you prefer.
There is a Coverage Gap
Also called a donut hole, there is a gap in the coverage of drug insurance. What this means is that there is a temporary limit on the kinds of drugs covered by the insurance plan. This gap begins once you have used up an amount specified by the provider – $3,750. On average, you will pay 35% to 45% of the drug’s cost once you hit this limit.
The coverage gap ends once you and the plan have paid $5,000. Then you’re in the Catastrophic Coverage phase. You will pay a very small amount for almost all of your prescriptions it this time. (At present, the Donut Hole should be closing for all Rx plans in 2019.)
There is a Thing Called Formulary
A Medicare Part D Plan does not entail that you get insured and covered for all kinds of prescription drugs. There is a list called a formulary that stipulates the names of the drugs covered in your plan. This list also includes how much you will pay for the cost and how much the insurance company is going to shoulder.
The formulary includes expensive branded drugs and generic drugs. Knowing this, you need to check this list before enrolling. It does not make sense enrolling if the formulary does not contain the specific drug you need for your medication.
Some Plans Need Prior Authorization
What this means is that before you even qualify, some companies or drug plans require that you meet specific criteria so that the drug can be released to you. For example, your physician may be required to provide a medical synopsis indicating why you need that drug.
The doctor must prove that the drug you are seeking is a medical necessity. The insurance company will ask your doctor if another drug can be used as an alternative. This is the only way the insurance company will let you fill your prescription.
It Costs Less for Some & More for Others
If you qualify for a Low Income Subsidy (LIS for short), then your premiums and copays will be less. The amount of extra help you receive will be based on your household income and tangible assets, like bank deposits, stock, bonds, etc. The government will calculate how much help you get each year toward your premiums and copays.
Conversely, if you are a high income earner, your Part D premiums will increase. The increase will be based on your reported household income from 2 years ago. The government uses a sliding scale to calculate the amount added onto any plan you select. The extra premium ranges from approximately $13-$75 a month. This program is called IRMAA – Income Related Monthly Adjustment Amounts.
It Has a Late Penalty
An amount is added to your premium if you enroll late. You have 6 months surrounding your Part B effective date to enroll. You may be able to defer if you have creditable coverage elsewhere (VA or employer coverage), but most will need to find coverage when first Medicare eligible at age 65. At the moment, the late penalty is calculated by multiplying 1% to the national base beneficiary premium.
As of 2018, the base premium is roughly $35. Then you multiply this by the total number of months that you are not covered, were eligible to enroll, but chose not to enroll. After several months of an accruing penalty, its like paying for two different plans – so it’s usually wise to get a policy when first eligible.
Medicare Part D coverage is essential for people with ongoing prescriptions – and those who want to later avoid a lifetime late enrollment penalty. Work with a licensed insurance agency to make an educated choice about this important coverage.
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Category: Medicare Part D
Every year, 4 million Americans turn 65, and many of them are looking forward to retirement. But not many of these retirees planned for their Medicare costs. Planning for Medicare costs in retirement starts early, so you feel confident about health care expenses after retiring.
The cost of health care becomes increasingly costly as we age. We become more prone to diseases, and our bodies get weaker, failing to fight off what used to be common illnesses that our bodies once warded off. Often, we are ill-prepared when the time for retirement comes. To plan for it carefully, you need to understand the costs of Medicare.
Medicare Part A
Medicare Part A is usually called hospital insurance. It covers items such as inpatient hospital care, skilled nursing facility stays, and some home care. You qualify for Part A if you have paid ten years’ worth of premiums through payroll deductions. In other words, you have likely already paid for this component through years of work. It’s not free, but there is no cost.
If you do not meet the ten year threshold, you can also qualify if you are the dependent of your spouse who has paid the premiums through his or her contributions. If you do not qualify through a spouse, your insurance premium will be $422 per month beginning 2018. This might apply to someone who is of Medicare age, but lived abroad most of their lives.
Part A hospitalization has a deductible of $1,340 for 2018. On top of this, you also pay for coinsurance costs. The price of this will vary, and this variation depends on the type of illness and the length of stay in the hospital. Part A has some gaps in it that can be filled with a Medigap policy, but you need to be enrolled in Part B in order to purchase said supplement.
Medicare Part B
Part B refers to care received at by a doctor. This might include services like a doctor’s office visit, outpatient care and preventive care, durable medical equipment, ambulance transportation and supplies necessary to treat your overall health.
Unlike Part A, Medicare Part B does have a monthly premium. You can pay the government directly or have your amount deducted from your Social Security benefits. In 2018, you will pay $134 per month if it’s your first time enrolling in Part B, or if you are not eligible to receive retirement benefits from Social Security or Railroad Retirement. In some cases, Medicaid will pay your premiums if you meet their financial criteria.
Medicare Part B is means tested using what they call a Income Related Monthly Adjustment Amount (IRMAA). This means high-income earners will pay more for this coverage. Medicare will use a sliding scale to determine your monthly premiums and it’s based on your modified adjusted gross income from 2 years ago. There are five levels altogether and you will receive a letter should this upcharge apply to you. Premiums will range from $134 to $428 per month.
Part B also has a deductible associated with it – that amount is $183 in 2018. Some Medicare supplements sold today can fill in this gap as well. It’s wise to speak with an agent to see if it’s a good value to buy a supplement that covers this deductible.
Medicare Part C
This plan is commonly known as the Medicare Advantage Plan. With this option, you are buying your insurance from a private institution, like Aetna, Anthem BCBS, Humana, United Healthcare or others. These institutions are accredited by the government, specifically Medicare.
You will receive your benefits and claims from a private company and not from the government. These institutions offer similar benefits as original Medicare, but they can also include prescription drug coverage as well – otherwise known as Part D. Advantage plans can also offer varying amounts of dental, vision and hearing insurance.
The catch here is that each Advantage plan varies in coverage, benefits and network availability. So you need to look at your options very carefully. It’s important to make certain your preferred doctors, hospitals and healthcare providers participate in the network.
Each company also has its list of prescription drugs that they can cover, both branded and generic. The cost of the plans varies from one company to another. As these plan receive reimbursement from the government, some can be as low as $0 a month.
Medicare Part D
Medicare Part D is focused solely on prescription drugs. If you buy this policy, you and the private insurance company will share the cost of the drugs. As mentioned earlier, each company has its list of the prescription drugs that they offer and at what cost. This is referred to as their formulary.
Part D drug plans will vary in cost and benefits depending on where you live, what you take, and where you fill your rx’s. One size does not fit all with these, so it’s important to be diligent when shopping for one. Make sure your agent knows all of your information.
If you choose to enroll in a Medicare Advantage plan, you may not need a Part D drug plan as this component is usually included. If you stay with Medicare Parts A & B (referred to as Original Medicare) then you likely want to purchase a Medicare supplement and stand alone Part D drug plan. We can walk you through it.
Talk to a knowledgeable insurance professional to learn more about your Medicare options in retirement. Gathering information ahead of time makes it easier to slip into the comfortable retirement you always dreamed of.
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Category: Medicare Advantage, Medicare Part D, Medicare Supplements
Many people do not want to talk about death because they think it is morbid. And many believe that they should not even worry about the expenses because they are already gone. The truth is, if you care about loved ones, you need to plan for them financially no matter what happens to you.
Also called final expense life insurance, a funeral expense life insurance policy is meant to cover your funeral and burial expenses. This, however, should not be confused with typical life insurance because this may not leave money to the people you leave behind.
Instead, it will pay for your family’s expenses to give you a decent funeral and burial. And this is your choice. You can name a beneficiary who will receive cash at the time of your death. Or you can name a funeral home as a beneficiary and manage the money at your demise to put together a pre-planned funeral service. But do you need a funeral life insurance policy? Below are some reasons why you need this important coverage.
All Expenses Paid
When we die, our family shoulders the burden of spending for our casket, funeral services, dinner and snacks served, burial lot, and burial services. With the rising cost of these services, the family we leave behind may need to borrow money to coordinate a proper funeral. The need to lean on others for cash puts them in debt at the time of your death.
With an insurance policy, your family can expect to have resources to pay as much as $50,000 for your final expenses. This insurance will protect your family, most especially so if you are the breadwinner, and your children are too young to be working and financing your burial.
Peace of Mind for Everybody
It is painful enough that a family member passed away. But a family left behind with no money to pay for funeral expenses is like rubbing salt to a wound. Can you just imagine the emotional and mental pain your family has to go through once you leave this earth? Your passing can cause severe pain, and yet here is another problem—money.
If you plan your death as early as now, your family will, at the very least, have peace of mind that your funeral costs should never be an added burden. The only thing they have to deal with now is the anguish of losing a loved one.
You Can Choose from Several Options
Funeral insurance policies come in two payment forms. This allows flexibility for consumers who cannot afford to pay the lump sum. For starters, you can pay the single-premium policy in which you pay the entire policy cost. Once paid, you have immediate coverage for the full death benefit. This applies especially to those who are 70 years old and above. In fact, this is the only option to pay if you are already 70.
The second choice is called the Graded Death Benefit. This is a payment structure in which the coverage of your death benefit increases as time goes by. A five-year payment policy will give you a different benefit than a 10-year policy. For example, you may only get 30% of the face amount at the time of your death if it happens within the first year purchasing the policy, and then you can get 70% of the face value on the next year. This gets higher as you pay longer.
Your Final Wishes Acknowledged
Funeral life insurance gives you the freedom and power to plan your own services. When you die, your family will be able to just grieve without the distraction and stress of planning a funeral. Plus, pre-planning ensures your final wishes are acknowledged. You have peace of mind that you will get the type of funeral you prefer for religious or personal reasons.
Plus, your family will not be forced into a decision based solely on finances. Some grieving people are forced to plan a cremation or quick funeral because they cannot afford to fulfill their deceased loved one’s final wishes. Funeral expense life insurance makes it easier for everyone.
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Category: Life Insurance
If you’re on Medicare or nearing eligibility, you know this insurance does not cover all of your out of pocket expenses. You can shore-up some gaps with a Medicare Supplement or Advantage plan, but they may not be enough either.
This is especially true if you’re on a Medicare Advantage policy. These policies have much more out of pocket exposure. Should you have a illness or injury resulting in a hospital stay, you can rack up big bills. That’s where hospital indemnity plans can help significantly.
Hospital Indemnity Plans Go Beyond Medicare
Medicare eligibility can be a great thing, but it’s important to know its limitations. This is especially true if you choose a Medicare Advantage plan over a traditional supplement. If you closely inspect your chosen Advantage plan, you will see there can be significant out-of-pocket costs if you have a hospital stay, accident or prolonged illness.
All Medicare Advantage plans have large daily copays if you’re admitted to the hospital. And these amounts can be even higher if you’re receiving care out of your insurance plan’s network. A hospital stay of just a few days can result in thousands of dollars you might owe before your plan pays the full amount. And your cost sharing will grow larger if you have a deductible that must be met first. You will also have doctor’s copays and coinsurance to pay as well.
Covering Medicare Under Observation Hospital Stays
Under Observation are the two worst words you can hear when you’re on Medicare. In a nutshell, it means Medicare is not paying for your stay. It’s a loophole in the system that allows doctors to place a patient “Under Observation” while confined in a hospital – and it happens more than you might think. When it does happen, Medicare will not pay the bill at all. This means your Medicare supplement or Advantage plan will not pay either.
An Under Observation stay of just a couple of days can cost thousands. If you’ve ever encountered this – or know anyone who has – you know owning a hospital indemnity insurance plan can be a financial lifesaver. Having an insurance policy covering the hundreds of dollars per day (you choose how much) can eliminate the high costs associate with an Under Observation hospital stay.
Hospitals have several reasons why they label a stay as Under Observation, but as you might imagine it’s to protect themselves while staying in the good graces of the Medicare system. As these stays have become more commonplace, it’s a good idea to have a backup to your Medicare insurance. And to avoid the shock of a very large, unforeseen expense after your release home.
How Do Indemnity Health Insurance Plans Work?
Hospital Indemnity plans can do a lot – and they are especially useful if you chose a Medicare Advantage plan over Medicare supplement insurance like, Plan F, G or N. Advantage plans usually have significant of out-of-pocket exposure. If you look closely at your insurance coverage, you’ll see there are large copays for you first few days in a hospital. There are also deductibles, coinsurance and copays for procedures. When you add this all up, you get your maximum out of pocket exposure.
Your out of pocket exposure will differ whether you’re in network or out of network. (It’s less for in-network claims.) However, when examining your Scope of Benefits, you’ll see your maximum out of pocket exposure is usually somewhere between about $3,500-$10,000 in any given year. A good Indemnity plan will significantly reduce or eliminate those amounts.
Do They Offer Any Additional Benefits?
Hospital indemnity plans aren’t just for those on Medicare. The Affordable Care Act has created significant changes in the health insurance marketplace. It’s not uncommon to see plans with high deductibles, large coinsurance amounts and significant out of the pocket exposure to the insured. Simply put, many ACA plans don’t offer benefits right away.
Whether you’re Medicare eligible or on a high deductible health insurance plan, it’s nice to know there are policies for sale that will provide benefits right away. So what do indemnity health plans cover? Quite a bit, actually – things like:
- Deductibles, coinsurance and office copays
- Lump sum hospital payments
- Under Observation Stays for those on Medicare
- Emergency room visits and ambulance rides
- Outpatient rehab and surgeries
- Skilled nursing care
- Mental health benefits
- Accidents, illness and injury
- Cancer, heart attack and stroke benefits
These are just a few of the benefits hospital indemnity plans provide. You can tailor these plans in several ways to fit your needs and budget. Many also offer separate riders like dental and vision coverage.
Furthermore, some indemnity plans are available on a Guaranteed Issue basis. This applies more to those on Medicare nearing their 65th birthday, but our clients are pleased when policies offering great benefits can be purchased without medical underwriting.
Contact Us For Enrollment Advice & Insurance Rates
When you’re planning your Medicare enrollment, you’re just marching down the cafeteria line. You get your government run Medicare Parts A & B, then you have to work on the best and most affordable ways to supplement this coverage. We’re here to guide you through this process and to fill any and all gaps in the way the best suits your needs and budget. Certainly, a hospital indemnity plan is worth consideration.
Ready to get started? Contact us today!
Category: Medicare Advantage, Medicare Supplements
For many Americans, Medicare is their primary insurance coverage provider. Most of these people are retired, and some are disabled. And when they need health care services, they just pull out their familiar Medicare card.
Now the face of Medicare is changing. And soon a new Medicare card will be issued to those who are covered by this plan. In case you haven’t heard, new ID cards will be issued for all eligible members beginning in April 2018. This will be a slow rollout over twelve months.
Basic Facts About the New Medicare Cards
Most people carry a driver’s license or state identification card. Besides valid ID, a Medicare card is one of the most frequently used cards in your wallet. New Medicare cards will be sent out between April 2018 and April 2019 depending on where you live.
The new Medicare card will have a randomly generated number that is unique to each cardholder. Once this card is in your hands, you will no longer use your Social Security number as your plan identification number. Many cardholders will be pleased this sensitive number will no longer be the basis for proving eligibility. Using a specific, random number for each policyholder is a format that resembles other insurance providers. And this model offers a higher level of security to Medicare cardholders.
New cards will also be made of paper. The idea is they’ll be easier to use and copy while saving taxpayers money. Additionally, you will be able print off a new one by logging in to your account at Medicare.gov. You might print off more than one and keep one laminated for longevity purposes.
New ID Cards Protect Your Identity
Identity theft is a worrisome problem. And nobody wants to try to prove they were a victim of this type of fraud. The new Medicare card number will help protect your identity. And Medicare will never ask cardholders for personal or private information. Be aware that Medicare will never call or ask about your new ID. If you are contacted, its likely a fraudulent scam.
There will be no fees for new ID cards. They will look just like they have in the past with the familiar red, white and blue template. No longer will there be the insured’s Social Security number, however. The Medicare Chip Reauthorization Act of 2015 (MACRA) requires SSNs to be replaced with new beneficiary identifiers or MBIs. This should help to cut down on Medicare fraud and identity theft.
New Cards Will Arrive – Nothing To Do
No action needs to be taken to get your new Medicare card. One important step you can take now it to verify your mailing address is updated and accurate. And if your address needs to be corrected, contact Social Security at socialsecurity.gov/myaccount or call 1-800-772-1213. If you’re unsure, reach out to Social Security to verify the address on file. The right address ensures your new Medicare card arrive safely at the right place. And then you just watch your mailbox to get your new card.
Don’t expect new cards right away. Some won’t arrive until 2019. In fact, Medicare beneficiaries in Ohio and Kentucky will be some of the last people to receive new cards . For some, the new IDs may not arrive until April 2019. In other words, don’t be alarmed if your friends in other states have theirs, but your Medicare card has not arrived yet.
Out With the Old and In With the New
Immediately destroy the old card when your new Medicare card arrives in the mail. You do not want it to be misplaced or improperly used. In addition, if you are concerned about security issues, use scissors to cut the card up into tiny pieces.
Start using your new card right away to get the same benefits you are accustomed to receiving with your old one. And your new card with its new number provides better protection than the old system. Doctors and hospitals know that these new IDs are on the way. It should in no way surprise them when you present them with this new information. And the same applies to your supplemental information as well.
What About Medicare Supplemental Insurance?
Different carriers provide Medicare Supplemental Insurance. Those cards will remain the same unless you receive separate notification directly from your provider. Continue to use your old Medicare Supplemental insurance card as well as your Medicare Advantage cards. The same is true of Part D dug plans. There should be no changes to any of your IDs with these three programs.
If you have questions about your supplemental insurance coverage, contact us or your local insurance agency to find out more. Any reputable agent can help you get the Medigap coverage you need. Also, this added coverage pays for a full range of healthcare services.
If you want more information about this important change, contact us, your trusted insurance agent, or go to Medicare.gov to get additional details. Otherwise, you just need to wait for your new card to land in your mailbox!
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Category: Medicare Supplements
This year marks an increase in the cost of medical care. As such, it is wise to understand what you are paying for when you have Medicare.
More importantly, there is a need to know why getting supplemental coverage is a necessity when you consider the costs of Medicare and what will be covered.
Government provided Parts A and B (commonly referred to as Original Medicare) have several gaps. Filling those gaps with a Medigap or Advantage plan can save you thousands.
Understanding the Medicare Premiums
First, let us discuss what the costs are regarding premiums. There are four basic types of premiums stipulated in Medicare, albeit the last two are like extensions of the first two major premiums.
Part A Premium – this is also called premium-free Part A. Many people do not pay this because of the cost. This has the best coverage, but it is also not pragmatic to a lot of people. If you get this type of Medicare, you will pay $422 each month. But this only applies if you paid less than seven years’ worth of Medicare taxes. But if you paid the taxes, the standard cost is $232.
Part A – for this premium, you will get the following for each period:
- $1,340 deductible
- the coinsurance for the first 60 days that is worth $0
- coinsurance per day per period on the 61st to the 90th day worth $335
- and coinsurance for the 91st day onwards worth $670
Part B Premium – the standard cost of this is $134. Those who have Social Security benefits can pay less, and they pay, on average, $130. You can increase your premium if you can afford it but you will not anything closer to Premium A.
Part B – this covers deductibles and the costs of coinsurance. You will be paying $183 per year, and you will typically pay 20% of the amount for doctor services. This applies to most in-patient services and outpatient therapy plus medical equipment.
Part C Premium – this is a little tricky because it varies from one plan to another. However, Part C is not a separate benefit. It is still part of the policy, but it allows private firms to provide Medicare benefits. Examples of these are HMOs and PPOs. They are also known as Medicare Advantage Plans
Part D Premium – this refers to outpatient prescription drug insurance. This is a part of the Medicare policy that allows a patient to be covered on the costs of prescription drugs. However, this insurance is only covered by private companies and not directly by the government.
The Importance of Supplemental Coverage
Also called Medigap, Medicare Supplement Insurance is sold by private companies that allow you to cover expenses that the government does not insure. Examples of these are deductibles, copay, and coinsurance.
With Medicare, you have to be on US soil to get your benefits. But with Medigap, many providers offer health insurance for you even if you are outside the United States, something that the typical Medicare insurance will not cover.
Another benefit of Medigap is that it may allow you to get 50% to 100% coverage for blood transfusions for the first three pints. With Medicare, the government will only pay on the third pint. Medigap also covers some skilled nursing facilities should you need one. Most Medigap plans can shoulder up to 100% of the coinsurance for this need.
All in all, there is no single insurance plan that will cover everything. The best thing to do is to understand your financial capacity and determine which medical expenses are beyond your financial means. Once determined, you can then select the best insurance policy for you. Keep in mind, however, that the original Medicare does not cover many medical services that you might need in the future. In this case, it is always best to opt in for a Medigap coverage.
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Category: Medicare Supplements
None of us want to think about it, but we have to: we are mortal, and someday, we’re going to pass on. It is prudent to start planning now for that inevitable time in the future. If you have a family, then you have people who have to take care of your financial obligations after you’re gone. Why saddle them with this responsibility? By taking the time now to buy the right life insurance, you can make sure that your loved ones are taken care of in the event of your passing.
But how do you know what the “right” life insurance is? By asking the right questions, you can be sure to get the information you need to make an informed decision. Here are five key questions to ask before buying life insurance.
1) What Is Your Overall Goal?
Without a doubt, this should be the first question you tackle. The answer to this question will go a long way in determining what type of insurance you’re going to buy and how much. If you’re looking for a policy that’s only going to cover you while you have dependents living at home, then you might be looking for a different type of policy than one that will last the rest of your life.
If you don’t have much in the way of financial obligations, then it’s not as necessary to get a large policy as it is for someone who owns a lot of assets or carries a lot of debt. In other words, knowing what you’re potentially asking for from your life insurance policy will determine what sort of policy you should be looking for in the first place.
2) What Are the Options Available To You?
Once you’ve determined what you need the policy for, you can start looking at your various options. While there are many, many different policies out there, they boil down into a handful of options. The first option is determined by what policies are accessible to you.
Most employers today offer some type of group insurance policy. This is a policy that you purchase as part of a larger group. Because of this, you get a group discount — a decent amount of coverage compared to what you would get if you were buying the policy on your own. As a tradeoff, however, you give up certain privileges, such as flexibility (most group policies can only be changed at certain times) or portability (you can’t take it with you if you leave the company). Still, it’s fast and convenient, and in most cases, a physical exam isn’t necessary.
On the other hand, you might want to consider an individual policy. While this can often be more expensive, and often a medical exam is required, you do get more in the way of control over your policy and what you want it to cover.
Another choice is whether you want a term or permanent policy. A term policy is an insurance that you pay on for a period — 10, 20, 30 years, etc. At the end of that time, the policy ends, and you either have to purchase a new one or make your way without life insurance for a while. On the other hand, a permanent policy is just that — permanent, and meant to last until you pass away.
3) What If You’re Still Alive?
As odd as it may sound, this is an important question. If you have a term policy, there’s a good chance you will still be alive when that term expires. Many people don’t know this, but your typical term policy doesn’t give you anything in the way of benefits after it expires.
As term policies approach the end of their span, however, you will most likely be given several options, including renewing the policy, lessening coverage to reflect your changing financial needs or upgrading to a permanent one.
4) What Happens If Your Financial Situation Changes?
Down the road, your needs may change. You need to know how those changing needs might be reflected in your policy. Can you change it as you go, and how easy or hard would that be? And what happens if you, unfortunately, find yourself in a situation where making a payment or two is hard? Will the insurance company be understanding? Or will that result in an immediate termination of your policy?
Many permanent policies allow you to build up cash value based on what you put into it. This cash value can be used later on if you find yourself financially strapped.
5) What Happens If Your Health Changes?
Another key question concerns your health. As you age, and your lifestyle changes, your health will change as well. Will this change affect your premiums? With a group policy, probably not. With an individual policy, regular medical exams might be required that can result in a change to your premiums. This is not the case for all policies, however, which is why it’s important to know what you’re dealing with before you buy.
Work with a dedicated insurance professional to help you find the right policy based on your needs, age, and financial situation.
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Category: Life Insurance
Short-term health insurance is a kind of medical insurance with coverage that is applicable for a specified period only. Also, it covers fewer illnesses compared to what long-term insurance policies do. However, it has a much lesser monthly premium cost compared to ACA (Obamacare) or any employer-based insurance plans. Short-term health insurance is a kind of coverage that many millennials prefer over long-term insurance plans. But what exactly are the things that you should know before buying short-term insurance coverage?
It is Not for Everybody
Short-term health insurance plans are ideal for specific people, but not everyone. The reason it is less costly is that you are covered for a brief period only, and the illnesses and conditions covered in your plan are also limited. Is this good or bad? Well, it depends on your condition. Short-term insurance is ideal for individuals who are getting off their long-term plans temporarily. Examples are:
- Children turning into adults and thus will be taken off as their parents’ dependents
- Individuals switching jobs
- Those who missed the open enrollment season for their long-term insurance
- Individuals who are in college or those in the process of looking for a permanent position
- Dependents who lost long-term insurance overage after a divorce
It Significantly Varies from Affordable Care Act (ACA)
Short term insurance has significant differences from Obamacare insurance policies in that it has lesser coverage than ACA. However, this can work to your advantage because short-term insurance is flexible. For example, short-term insurance does not cover pregnancy. ACA, however, charges you money for pregnancy coverage, even if you are a male.
Preventive care is also limited to short-term insurance, and not all companies offer it, as opposed to ACA, where preventive care is one of the ten requirements. Also, not all short-term insurance companies cover the cost of RX drugs (prescription) while these are mandatory in ACA plans.
You Only Pay It for When You Need It
This is why short-term insurance is also called travel insurance. You typically pay for insurance that covers a specific period. After this, the coverage is gone. Short term insurance plans are very affordable and are usually paid on a monthly basis. The average cost is about $30 per month. If you want to save more, you can choose from a wide array of offerings such as reducing the plan’s benefits, choosing a higher deductible, or paying your total premium up front to get a significant discount.
It Has Copay and Coinsurance Options
Both of these apply to short term and long term insurance plans. A copay, simply put, means that you and the insurance company share the amount of the services you availed. The split between you and your short-term insurance company will vary per plan. Let us say that you paid your doctor a visit, and the cost is $100, you may need to shell out $35, and the insurance company will pay for the rest.
In coinsurance, you pay a certain percentage of the medical expenses after you have met your deductibles. If your coinsurance is 30%, this means that you will pay $30 for every $100 of the total medical bill (after the deductible is met) and the rest will be shouldered by the insurance company.
You Cannot Always be Approved to Enroll
Many short-term health insurance companies will deny the application of individuals who have pre-existing conditions. This is not so bad considering that these companies are taking a considerable risk in insuring somebody who has an existing health condition. Remember, insurance is a business. Companies take the risk of paying a significant chunk of your medical expenses in exchange for a fraction of that amount, which is pretty much your premium.
If you need interim insurance coverage, we can help you find the right policy for your unique needs. Contact us to learn more about short-term insurance and other possible alternatives.
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Category: Health Insurance
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