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In 2008, some 68 million Americans did not have Life insurance, according to the Life and Health Insurance Foundation for Education. However, if you have loved ones who depend on your income, a Life insurance policy is a must-have. If you were to die today, an effective Life insurance plan will ensure that all your family’s financial needs will be covered — from the monthly mortgage and utility bills to your child’s college education.

If you already have a Life insurance policy, good for you. You’ve taken an important step toward protecting your family. However, you might want to take a closer look at the type of Life insurance coverage you own. Most Americans who have Life insurance only carry the group coverage offered by their employers, according to a 2008 LIMRA International study. Unfortunately, this type of coverage typically ends as soon as you leave that job or retire.

If you want to make sure your family is covered well beyond your working years, you might want to consider Permanent or Whole Life insurance.

Whole Life 101

Although Term insurance typically only covers you for 15 to 20 years, Permanent or Whole Life insurance remains in effect for your entire life as long as you keep paying premiums. For the first few years after you purchase a Permanent Life insurance policy, your premiums will probably be higher than the actual cost of insurance protection.

Because you are contributing these excess premiums, the policy can accrue cash value (that’s why Permanent Life insurance is also known as Cash-Value insurance.) You can borrow against this cash value for a number of reasons, such as to pay off a mortgage, cover your child’s college tuition, or supplement your retirement income. Of course, these policy withdrawals or loans will reduce the cash value of your policy by the amount of your outstanding loan balance plus interest. You could even use your cash value as collateral for a business loan.

Generally, once a permanent policy is in force, your premiums will remain level. This ensures continual protection for your family as you age, even if your health becomes poor. Although Whole Life insurance commands an initial higher premium than Term Life, you won’t have to worry about re-applying every 10 or 20 years at a considerably higher rate as with Term Life.

A Personal Decision

Although almost everyone needs some kind of Life insurance, it’s up to you to decide whether a Permanent or Term Life policy is the best choice. It all depends on your specific needs and situation. If you are uncertain about what kind of Life insurance policy you should purchase, talk to one of our financial advisors.

Just about everyone in the country is wondering how the passage of the health reform bill by Congress will affect them. According to Kaiser Health News, this historic legislation could have an effect on almost every citizen. People, even those who are unemployed, will be able to get medical care. But professionals who have been enjoying the best health coverage available might possibly see their benefits dwindle. What Are the Immediate Changes? There are certain things that will happen in the first six months after the bill is actually signed into law:

• Insurance companies will not be allowed to put lifetime limits on coverage. This means that people with chronic health conditions will never “use up”� all of their insurance coverage.
• People with children on their company insurance plan can keep unmarried dependents enrolled until they turn 26. This is very important because of the number of college graduates who are unemployed.
• Insurance plans will be required to cover preventative health services such as colonoscopies, and screenings for things like osteoporosis, high blood pressure, diabetes, sexually transmitted diseases, and for smoking cessation counseling.
• Pre-existing serious health conditions can no longer prevent people from getting Health insurance. They will be able to purchase coverage from a government-subsidized exchange. However, this coverage will not be available until 2014.

Health Insurance Will Be Required. Uninsured people will be required to purchase Health insurance by 2014. Subsidies will be available that reduce the premiums subject to income limits. Penalties will be imposed on people who do not purchase insurance that could be as much as 1% of their income.

Changes to Medicare. Tighter controls might be put on decisions for care that are considered too costly. The care provided to older people might even be restricted. Cancer screening could be denied for older citizens. The Medicare system will see a huge hit because approximately one-half of the health reform costs for the next 10 years will come from the Medicare budget.

Pre-Existing Illnesses and Loss of Coverage. Starting this year, the health reform bill will ensure that insurers can’t deny coverage to any child based on existing health problems. In 2014, this will be expanded to include all applicants. Within the first six months of the bill being signed into law, an insurer cannot drop policyholders except in cases of fraud.

Longer Wait Time to See Your Doctor. Millions more people will have access to health care but the number of healthcare workers will not grow quickly enough to keep up. You can expect to wait about twice as long to get in to see a doctor as you did in the past.

Changes to the Coverage You Get from Your Employer. Employers who offer high-value, “Cadillac’ health plans will probably begin to cut back on those benefits. If they don’t do so by 2019, they could face fines from the government. This could possibly mean no more vision or dental coverage or going to a specialist without a referral from your family doctor.

Benefits for Women. With this new health bill, insurers will have to cover maternity care the same way they cover any other medical procedure, but not until 2014. Employers will also be required to allow break time for mothers who are nursing and a private place where they can use their breast pump.

Losing or Leaving Your Job. If someone quits or loses their job, the same exchanges that help lower income people purchase insurance will be available. This means when you leave your job, you don’t necessarily have to pay the high COBRA costs. This is very important for people with a pre-existing condition. You might even be able to get free health coverage under some circumstances.

Higher Taxes. In 2013, Medicare payroll tax will go up for incomes over $200,000 a year.

An old adage in the insurance business regarding the subject of Disability insurance goes like this:

“The odds are good that you will be laid up long before you are laid out!”

Although this statement might seem somewhat amusing, it is also very true. Individuals (especially males) between the ages of 30 and 50 will likely suffer an incapacitating injury or illness before they die. However, for many people, it is easier to imagine dying than becoming disabled.

Disability has sometimes been called “living death,”� and the implications of being totally disabled are frightening. Disability has far greater economic, relational, and social consequences than dying. Why? Because the disabled person continues to require assets (food, medication, support services) while no longer contributing to the family’s income. Not only is he/she not contributing, the individual is usually consuming a disproportionate amount of the assets the family needs to live on!

For still unexplained reasons, Disability Income Protection Plans have always seemed to lag behind other forms of protection, despite the fact that a long-term disability, which can be catastrophic, happens more frequently than most people think. Disability income provides essential protection against the loss of income due to an accident or illness.

There are two types of coverage: Short-term and long-term protection. Short-term coverage generally provides income replacement for a period of three to six months. Long-term coverage starts after a short waiting period and, depending on the specific policy, usually lasts two years, five years, or up to age 65.

The definition of disability is critical. The more liberal definition, which of course costs more, defines disability as being unable to do a specific job. This is called an “Own Occupation” definition. For instance, if a surgeon has an accident and loses the use of one of his hands and can no longer perform operations, he can still receive benefits even if he is working and getting paid to teach surgical techniques.

Under the more restrictive “Any Occupation”� definition, if that same surgeon accepts a position as a teacher, he would forfeit the benefits. Note, however, that an “Any Occupation” definition might be just fine for most occupations. Our financial professionals can help you decide which one is right for you.

A Cost of Living Adjustment (COLA) rider is very important since it adjusts the benefit annually according to the changes in the cost of living index. Although not critical for a short duration disability, over a 10 or 20 year time frame it is essential.

The waiting or elimination period mentioned earlier is also flexible: 30-60-90-120-180 days. Obviously, the longer the waiting period, the lower the cost. A good policy must be “Non-Cancelable” and “Guaranteed Renewable,”� which protects the insured from a company not renewing the policy and raising the premiums. You can obtain a Disability insurance policy through an employer group plan or as an individual. The group plans are less expensive but have far more restrictions and caps than an individual plan. What many people do not realize is that most benefits received under a group plan are taxable!

Highly compensated employees can seldom obtain the level of protection they need under a group plan because of coverage limits. The best way to make up the difference is to purchase a wrap-around individual plan.

Without Disability insurance protection, you can lose everything you own very quickly as the result of an accident or illness. Don’t gamble with your future.