Life and Health

If your employer provides Group Health insurance, bear in mind that these plans vary widely in cost and in what they cover.

Chances are that you’re not aware of these facts about Group Health plans:

• Your plan doesn’t necessarily cover you. Employers are not required to provide Health coverage to all workers. What’s more, they can tailor benefits to specific groups of employees as long as they make clear distinctions between the groups — for example, covering full-time employees, but not part-timers.
• Your health habits could affect your premiums. Employers are well aware that the better care that their workers take of themselves, the less they’ll have to pay in health care costs – and the lower their premiums. According to one recent nationwide survey on the cost of Group Health plans, more than two in three businesses offer employees financial incentives for healthy lifestyles – for example by discounting their portion of the plan premiums. On the other hand, a growing number of businesses are setting penalties (premium surcharges) for employees who smoke, are overweight, have high cholesterol levels, etc.
• Your family might not have coverage. Although most companies provide benefits for their employees’ dependents, they have no legal obligation to do this. More and more businesses that do cover dependents are reducing their premium subsidies for this coverage. If an employee’s spouse has Health coverage available through their own job, some companies are adding a premium surcharge or removing the spouse from the plan.
• Pregnancy might not be covered. Although the federal Pregnancy Discrimination Act requires companies with 15 or more employees that have Group Health plans to pay for pregnancy-related expenses on the same basis as other medical conditions, the law does not apply to smaller businesses. Some states may require these firms to cover the costs of pregnancy. For the record, Group Health plans provide the main source for maternity coverage – a nationwide survey in 2009 found that only 13% of individual Health plans available to 30-year-old women provided maternity coverage.
• You’re paying a growing percentage of the premium. According to a nationwide survey, average total health care cost per employee should reach $11,664 this year, a 5.9 % hike from 2011. The average employees will pay $2,764 of these costs (including premiums), up 9.3 % from 2011 – and a hefty 40% higher than the 2007 figure. However, most workers don’t realize the total cost of Health insurance – until they lose their job and have to pick up the tab themselves.

If you have any questions about Health insurance for you and your family, just get in touch with us.

With the wide array of Life insurance products on the market, how can you be sure that you’re getting the best deal for your premium dollar? Although buying Life coverage is a critical financial decision, all too many people choose coverage without taking advantage of the variety of features that can add significant value to their purchase.

According to industry experts, frequently overlooked policy add-ons include:

• Guaranteed purchase option. This feature permits you to buy coverage starting at a specific life event (such as retirement) or on a set date without showing proof of good health.
• Term rider for a spouse or child. You can add coverage for a spouse or dependent child, under the age of 26. In many cases, this option offers significant discounts, compared with the cost of purchasing separate policies.
• Premium waiver. If disability or serious injury leaves you unable to work, the insurance company will pick up your premium.
• Accelerated death benefit. Should you face a terminal illness, you can borrow cash advances against the policy’s death benefit. Policyholders often use these advances to pick up the tab for palliative services or hospice care during their final days, relieving the financial pressures on their family or caregivers.
• Long-Term Care rider. Some policies allow you to use policy benefits for long-term medical care in return for reducing the death benefit.

You might also be eligible to benefit from other Life policy options.

Our insurance professionals would be happy to provide a review of your needs and tailor coverage that offers the best value at an affordable price. Just give us a call.

There are innumerable incentives to having Life insurance. For example, a Life insurance policy offers financial protection for remaining family members when a primary breadwinner passes away. This will help ensure that beneficiaries have enough income to maintain their standard of living and not struggle to make ends meet. Life insurance funds can also be used for expenses like a child’s or widow’s college tuition, attorney and probate fees associated with the estate, mortgage payments, burying the deceased loved one, childcare and housework expenses left unattended by the deceased loved one dying, and so forth. It’s obvious that Life insurance offers invaluable protections for the entire family. So, why is it that more Life insurance policies are purchased by men? Contrary to the assumptions made by some, women in all types of family structures need to have a Life insurance policy.

Married Women Working Outside or Inside the Home. Modern women are often making as much, if not more, of a financial contribution to the family as their male counterparts. It needs to be determined if the wife’s financial responsibilities will still need to be met or be moot with her death. It also needs to be determined whether or not the deceased wife’s absent income will affect the family’s ability to maintain their lifestyle.

Aside from direct financial contributions that many women make to a household, there are also all the various childcare and household chores and responsibilities that the female, whether holding down a job or not, attends to inside the home. The value of such contributions are often significantly undervalued until the wife is actually gone and the husband discovers how costly it is to pay someone for the services.

Historically speaking, men have typically purchased a Life insurance policy on themselves to protect the family, possibly adding a much smaller policy for the wife. Everyday life has given women a firsthand view of just how difficult it can be for a widowed husband to maintain the same standard of living for his family after his wife passes away without Life insurance. As women have a growing need for assurance that their children will still be able to live in the same home, go to the same school, eventually attend college, and so forth if they were to pass away, they’re starting to realize what a misguided and dangerous approach it is to only insure the male. Many women are taking the initiative to research and purchase their own Life insurance policies and/or have an equal say in the family’s overall Life insurance portfolio.

Single Mothers. In some cases, the woman is the sole head of household. Often the full brunt of responsibility is on the single mother’s shoulders. Life insurance can provide monetary assurance that the child will not be left financially destitute. Remember, even if a family relative or friend has agreed to assume responsibility for the child, it will still cost money to raise and educate the child.

Single Women without Children. One of the biggest insurance misconceptions is that single, childless women don’t need any Life insurance. This simply isn’t true. First of all, someone would be responsible for the inevitable costs of death, such as probate fees, attorney fees, and the cost of the burial. Additionally, many single women are purchasing their own homes. Some might share their homes with their aging parents eventually. Another concern would be from parents expecting to entirely or partially depend on their child for financial help. Should the child die, the funds from a Life insurance would provide the aging parents with any financial support they’d lose and the ability to finish paying for the child’s home.

In closing, a woman’s value, both inside and outside of the home, should never be forgotten or diminished. The need and importance of insurance is just as, if not more, substantial for women as men. Don’t procrastinate on Life insurance needs; Life insurance policies are easiest to qualify for and are most affordable the younger and healthier the woman is when she applies.

Unpredictable job and investment markets make it difficult to determine how much Life insurance to buy. The standard formulas for buying coverage to match a specific percentage of income are inadequate solutions. Online calculation tools usually tell everyone to raise their coverage by $1 million. However, Life insurance is a personal issue. For example, a married couple with three children and a mortgage will need more coverage than a childless couple without a mortgage. When the markets are down, many people are tempted to shirk their Life insurance needs. Major life changes also affect how people deal with their individual needs. It is best to take a systematic approach to buying coverage instead of relying on standard rules and formulas.

One Simple Strategy. The main purpose of Life insurance is to provide survivors with enough funds to pay the final expenses and continue life comfortably. This is why most calculators are programmed to suggest a chunk of money equal to at least 20 years of regular income. With overall longer life expectancy and a lower savings yield, this might be too high of a goal for most people. There is a much simpler strategy for figuring out exactly how much insurance is needed. It is also better to buy from a plan that is easy to update. After projecting personal needs from the following four categories, assess the situation to see if extra coverage or different policies are needed.

1. Debts & Mortgages. Write down the total of all auto loans, mortgages, student loans and any other debts. All of these debts might be a serious burden for survivors to handle. However, survivors might choose to keep up mortgage payments. Be sure to allow enough money to make this possible.
2. Final Expenses. Traditional funerals can cost between $10,000 and $20,000. Although pre-planning a funeral is beneficial, it is even more important to ensure enough Life insurance funds are available to pay the final bill. For a reasonable funeral figure, aim for $15,000.
3. Income Replacement. Families will not need 100% of the policyholder’s current income. Be sure to deduct final expenses, education costs and debts. As a rule, it is best to plan on replacing 50% of pretax income until retirement. This amount can be placed in a lump sum by dividing 50% of annual income by 0.05.
4. Education Expenses. This might be one of the most difficult calculations. Each school varies in tuition costs, and the tuition rates may be much different by the time children are ready to enroll in college. The average cost of college tuition has been rising by about 5% each year. This is the same rate Life insurance is expected to grow over time. Calculate the future cost of tuition at the desired colleges, and add the amount to a Life insurance policy.

To determine how much Life insurance is needed, add all four of these categories’ totals. If there is no pension, it is beneficial to increase the amount. However, if a spouse earns a considerable salary, it might be feasible to decrease the total. For family members with unique or troublesome medical conditions, add between $100,000 and $250,000. The overall total usually adds up to a six-figure amount or slightly more than $1 million. Increasing a death benefit on a Term Life insurance policy usually costs several hundred dollars each year, so the premium amount should not be impossible to pay. To get a better idea of what to expect for a premium, discuss the figures with our agents.

Getting married, having children, buying property and retiring are all life steps that require more Life insurance. There are many different options for this coverage. Young and healthy individuals can usually lock in a low price for many years. Some policies also come with the option to convert to permanent coverage, which can be kept regardless of future health conditions. Term Life becomes expensive after age 65, so it is a smart idea to consider Whole or Universal policies. To determine the best option, discuss personal details with one of our agents.

The revenue-enhancing reforms and regulatory aspects of the Patient Protection and Affordable Care Act (better known as “Obamacare”) are just now making themselves felt. Some provisions – such as restrictions on the ability of insurers to decline covering children because of pre-existing conditions and the elimination of lifetime benefit caps have already become law. The constitutionality of the law, however, is in question. A majority of states have joined in a lawsuit challenging the authority of the federal government to impose a mandate for citizens to purchase a given product or service – an unprecedented expansion of government power, if allowed to stand. The U.S. Supreme Court is scheduled to hear arguments this spring and will rule on the issue this year.

There is a chance that the entire law will be struck down, in which case we return largely to the status quo. Another scenario is that the Supreme Court will strike down only the portion of the law that requires citizens to buy government-approved insurance or face a fine. However, since the system depends on the healthy buying into the system together with the sick, in order to contain costs versus revenues, it would be nearly impossible for the law to go into effect without the mandate. We cannot predict how the Supreme Court will rule. As things stand right now, however, here is how you might be affected by the law:

Overall Effects. The law will likely benefit the currently dispossessed, unemployed, underemployed, and those with pre-existing conditions who have trouble getting Health insurance on the individual market. The law will also potentially benefit U.S. companies that do business abroad, on the theory that exporters can offload a significant part of their current health care expenses to the government – thus making them more competitive against competitors from countries with socialized health care systems. Those who currently have good Health insurance, including executives, managers, professionals, certain government employees, and those in established unions with generous health benefits, might see the quality of coverage and available care deteriorate substantially.

What has happened already? As mentioned, lifetime limits have been revoked. You can never exhaust your benefits. Plan members can keep their unmarried dependents on their plan until they turn 26. This will benefit college-age people without access to a student health plan, and unemployed or underemployed young people in transition. Coverage for certain preventative screenings and tests such as colonoscopies, high blood pressure, diabetes, STDs and osteoporosis has been expanded. Plans are now required to cover smoking cessation counseling.

Future Changes. As of 2014, all uninsured individuals must purchase a Health insurance plan. The government will subsidize the purchase for low-income individuals. Those who have pre-existing health conditions will be able to purchase coverage from a government-subsidized exchange, also available in 2014.

Those who remain uninsured will have to pay a penalty of as much as 1% of their income. Some might choose to pay the penalty rather than buy coverage, especially since pre-existing conditions are no longer an obstacle to obtaining coverage. Wait times to see a doctor could increase. Many more people will increase their demand for care once they have coverage – but the supply of available health professionals will not increase. The result could cause wait times to more than double in some markets.

Administrative and regulatory requirements could force many smaller practices out of business, moving patient loads to larger clinics and institutions. Medicare. In order to fund the more general benefits under the PPACA, Congress stripped roughly half trillion dollars from Medicare over the next eight years. Consequently, we are likely to see more stringent cost controls on Medicare patients. We could see a sharp reduction of costly procedures and screenings for the elderly.

Employers will cut back offered benefits. So-called “Cadillac” plans will nearly disappear, under threat of government fines, as of 2019. This could affect your access to retirement health benefits (such as those provided under some union contracts) and even private vision and dental plans. It could also make it difficult or impossible for you to see a specialist without first obtaining a referral, since the vast majority of health care will convert to “managed care” models such as HMOs and PPOs.

Benefits for Women. As of 2014, all insurers must cover maternity benefits on an equal basis with other medical procedures. Employers are also required to allow break times for nursing mothers and a suitable place in the workplace for lactating mothers to pump breast milk. Recently, regulations passed by the Department of Health and Human Services are also requiring employer health plans to provide coverage for birth control, including the RU-486 abortion-inducing pill. This provision has been hotly contested this year by some employers, including the Catholic Church and affiliated charities and hospitals. As of March 2012, the Obama Administration is still requiring this coverage. However, if Obama loses the presidential election, we expect that these requirements will be loosened for religious employers, or repealed altogether.

Higher Taxes. Beginning in 2013, a 3.8% Medicare payroll tax will take effect on certain “unearned income” for those with incomes over $200,000 a year – or $250,000 for married couples. An additional 0.9% Medicare contribution tax will also kick in for higher income individuals, unless Congress acts to repeal this provision.

The tax will also apply to gains on real estate transactions – which will become a significant planning consideration for those involved in the real estate market. The $250,000 exemption for single taxpayers and $500,000 exemption for married couples on the sale of a qualified personal residence will still apply, however, for the purposes of calculating the unearned income Medicare contribution tax. If your home qualifies, you will only be subject to the 3.8% tax on gains exceeding the exemption.

While shopping for Health insurance, consumers everywhere should beware of disguised benefit plans. They are often called limited medical benefits or mini-med plans. Although they appear to offer comprehensive coverage, these plans actually might provide very inadequate compensation in the event of illness or injury.

The benefits provided by these plans are not nearly the same as major medical insurance or comprehensive health coverage. Mini-med plans and limited medical benefit insurance policies are usually advertised as inexpensive alternatives to major medical plans. The level of coverage offered by both options can be very low. With major medical plans, there are limits placed on how much a consumer must pay for specific treatments or incidents. However, there are no limits with mini-med plans. In addition to this, there is a cap amount allowed each year. Plan members are responsible for any expenses incurred beyond that amount.

Since health plans with limited benefits come in many forms, consumers must be careful while comparing options. If an individual signs for one of these plans experiences a major illness or injury, inadequate benefits can put that consumer in a difficult financial situation. While the benefits of these plans are not comparable to comprehensive coverage, they are often advertised as such. The following are signs of a limited plan or mini-med plan:

• There are annual limits for what the policy covers.
• The plans require association memberships.
• They are often described as innovative or cost effective.
• The premium offers are only available during the period of open enrollment.
• There are no pre-existing condition exclusions.
• Pharmacy and medical discount cards are often sold as insurance.
• The companies usually make unsolicited calls or send frequent emails.

When shopping for Medical insurance, consumers should always ask questions. It is important to know exactly what a plan offers before agreeing to the terms. To avoid the costly effects of signing up for an inadequate plan, be sure to ask an agent for the following information:

• A detailed explanation of all benefits, exclusions and limits.
• The full address and name of the insurance company’s underwriter.
• A detailed outline of coverage provisions.
• The agent’s full name, address and National Producer Number. Agents should be licensed in the states they operate in.
• An explanation of what percentage of the monthly payment goes toward the premium and how much goes toward other fees.

Nearly 80% of employees believe that their Life insurance coverage is adequate. However, many working men and women who have Life insurance coverage haven’t taken the time to evaluate their needs since the start of their first policy. This leaves them and their families at risk of facing trouble in the event of premature death. Working women who have Life insurance are more likely to admit that they don’t know how much coverage they possess. They’re also more likely to purchase inadequate coverage. A good estimate for adequate Life insurance is five years of salary combined with the amount of all current debts. However, about half of all men and women purchase coverage that is equal to the amount of debt they have combined with three years of salary.

Gender Issues. Women and men have different preferences regarding their Life insurance coverage. More men than women are concerned about contributing to their surviving spouse’s living expenses. The main concern most women have is covering their final expenses. However, men and women who have children are equally interested in providing for them. The difference between having enough money to cover final expenses and providing for loved ones is significant. Policyholders are urged to study their policies in order to understand the terms thoroughly. It’s also important to keep beneficiary information current.

Matching Needs and Policy Features. Many individuals are unfamiliar with their Life insurance policy’s basic features. Studies show that several employees who say they have Term Life coverage think that it affords them financial protection. They also believe this financial protection will last for an unlimited amount of time. However, this isn’t true. Term Life insurance only provides coverage for the specific term outlined in the policy. It’s important to recognize that the key word in this type of coverage identifies it as a temporary policy. If the term ends and the policyholder doesn’t renew it, coverage ends. Most Term Life insurance policies last for periods of 10, 15 or 20 years. However, some Term Life policies offered by employers may last for the entire duration of employment. If an employee quits or is terminated, the policy is also terminated. At the end of the term, the coverage may be continued. However, it’s important to remember that continued coverage comes with a much higher premium.

Many employees are not leveraging Life insurance as well as they could be. In order to meet their needs, employees need to realize how valuable this coverage is in supplementing estate planning and retirement benefits. People must familiarize themselves with the Life insurance benefits offered by their employers. Some employers may offer living benefits, which usually include will preparation, beneficiary assistance and power of attorney preparation. Employers should never assume that what is offered at work is sufficient Life insurance coverage for an individual. It’s best for employers to communicate this fact with employees. They should also encourage employees to analyze their needs to determine how much coverage they need. Although many people think that getting the right amount of coverage is difficult, it is a fairly simple process. The best way for employers and employees to analyze their insurance needs is to contact an agent who is capable of providing a professional analysis.

Key Person insurance is often called Key Man insurance or Keyman coverage. It is a policy taken out by a business to allow compensation for financial losses resulting from the incapacity or death of an important employee. Although there is no legal definition for it, Key Person insurance is an important type of business coverage. Another purpose of this coverage is to contribute to the continuity of the company. A policy’s term does not exceed the point of the key individual’s usefulness. Although this coverage does not indemnify actual losses, it does provide a fixed sum. The exact sum is specified in the policy’s verbiage.

Employers may obtain Key Person insurance for the health or life of a worker contributing special skills, knowledge or other contributions. To be considered for such coverage, a worker’s contribution to the company must be uniquely valuable or consume a considerable portion of the company’s worth. Employers obtain this coverage to offset the costs associated with losing the employee. Expenses such as hiring successors, decreases in business and training temporary workers are all important considerations for employers.

Who Qualifies as a Key Person. Anyone who is associated directly with the business may be considered a key person. In addition to this, individuals whose loss could result in serious financial strain usually qualify. For example, company directors, key salespersons, partners, key project managers or other valuable individuals with unique skills normally qualify.

Loss Categories for Key Person Insurance. For Key Person insurance compensation, there are four separate categories:

1. Insurance for protection of partnership interests and shareholders. As a rule, this type of coverage enables partnership interests or shareholdings that current partners or shareholders will buy.
2. Losses connected to the period when the key person cannot work, when temporary personnel must be provided and when it is necessary to pay for training and recruiting an adequate replacement.
3. Insurance for any parties involved in guaranteeing banking facilities or business loans. The value of the guarantee equals the value of the insurance coverage.
4. Insurance for profit protection. Some examples include offsetting lost income from cancellation of a business project the key person was involved in, lost sales or losses from delays. There are also several other types of losses.

The treatment of funds received and tax rules for premiums paid for key person coverage vary. In the United States, premiums are not tax deductible. To learn more about Key Person coverage, discuss the options with one of our agents.

Many people aren’t aware that Critical Illness insurance exists. The reason behind this is because Critical Illness coverage is fairly new to the United States market. Policy sales began in 1996. It’s also sold by brokers who are usually more focused on selling Life insurance. In addition to this, the coverage is aimed toward people who are between the ages of 30 and 55, which is a large group of people who aren’t as eager about purchasing Life insurance as they should be. Critical Illness insurance is affordable and simple. It is a supplement to a Health policy. If a person experiences a bout with cancer, a heart attack or a stroke, Critical Illness insurance contributes to financial stability during the experience.

Although the population is generally uninformed about this valuable type of coverage, it is similar to Long-Term Care coverage in the respect that it is becoming more necessary as our society changes. Since the population is living longer, the need for Long-Term Care insurance is increasing. In a similar fashion, the need for Critical Illness insurance is increasing because people are more likely to survive a heart attack, stroke or cancer today than they were several years ago. The chance of surviving cancer today is more than 60% for both men and women.

Since many bankruptcies result from extensive medical bills, it’s important to recognize how valuable Critical Illness coverage is. This type of insurance is designed to pay for the expenses that regular Health insurance won’t cover. Out-of-town care, copay fees, non-medical expenses, alternative treatments, deductibles and non-covered prescription drugs are a few examples of items that are covered under a Critical Illness policy. The coverage might also provide some compensation that Disability coverage offered by employers doesn’t cover. Benefits are paid in one lump sum. The sum is paid even if full recovery is expected. There are some policies that offer multiple payments.

Critical Illness coverage is a valuable investment for those who want to financially survive a critical illness. Treatment and recovery can become extremely expensive without insurance. Keep in mind that regular Health policies have limited coverage for the recovery period following the onset of a critical illness. The biggest issue is deciding how much coverage to buy. Since each person’s situation differs, there is no specific amount that every individual should buy. It’s best to contact our office to learn how this coverage works, how much will be enough to stay afloat financially and what steps must be taken to obtain proper coverage. Keep in mind that these policies are only for genuine critical illnesses. Skin cancer that can be removed or chest pain that doesn’t result in a heart attack are situations that would not be covered.

People who are considering Life insurance usually debate whether they need it or not. If anyone will suffer financially after a person’s death, that person should have Life insurance. This death benefit is meant to help surviving family members or dependents cope with the financial difficulties of losing the deceased’s income and paying for final expenses. Life insurance isn’t subject to federal income tax.

In order to determine how much Life insurance to buy, it’s important to consider what surviving loved ones would need if death occurred suddenly. Be sure to consider monthly living expenses, debts and final expenses when calculating costs. These are the essentials. There are also several more considerations. For example, college money for surviving children is a beneficial addition to a Life insurance funding plan. Long-term financial goals, a surviving spouse’s retirement and several other factors must also be considered. It’s best to speak with one of our qualified agents to discuss individual needs and determine what amount is sufficient. There are several aspects to consider with purchasing Life insurance.

Married Individuals. Many couples who get married don’t think they need to purchase Life insurance coverage until they have children. However, it’s important to know that the debts of one spouse must be paid by the surviving spouse in most situations. For example, if one of the individuals earns the sole income and has sufficient debt, the surviving spouse with the lesser income would face many serious struggles by inheriting such debt.

Parents with Young Children. Whether parents are single or married, it’s important to have enough Life insurance to cover the costs of child care and care. If one spouse stays at home and cares for the children, it’s important to be sure that they will all have enough money to live on. It’s also important to have Life insurance for the spouse who stays at home to care for the children. Without that spouse in the picture, the cost of transporting and caring for the children will be an issue. It might also be necessary to pay for housekeeping services. Single parents should always make sure that their children will have enough money to survive on. If possible, it’s best to leave extra money to contribute toward their college education.

Parents with Grown Children. It’s best for parents with grown children to make sure they leave enough money that their children will be able to pay their final expenses. Married parents with grown children must still consider the needs of their spouses.

Single Individuals. Although many singles think they don’t need Life insurance, this coverage is beneficial to have. Surviving parents, siblings or other acquaintances might benefit from the money. Aging parents might need extra money for health care. For example, parents who inherit this benefit might be able to afford a private room instead of a shared room in a nursing home.

There are several reasons for any person to purchase Life insurance. Even those who have no family members and few friends still have values that are important to them. In these cases, it’s helpful and satisfying to set up a Life insurance benefit amount to go to a preferred charity. To learn more about Life insurance and what options are best, speak with one of our agents.