Life and Health

Although some insurance companies have a few company-specific guidelines for underwriting Disability insurance policies, all insurers will use the same key factors in determining your eligibility, rate, and amount and type of coverage. Understanding what an insurer looks at during the underwriting process can help you get the disability coverage you need.

1. Gender and Age. Male applicants usually pay less for their policy than females because males tend to file fewer claims than females. Older applicants typically pay more for their policy than their younger counterparts.

2. Occupation. Since certain occupations present a greater risk of injury or death than others, insurers will examine both your job duties and title as they decide the type and cost of the coverage they offer. Insurers group different occupations into rating classes that are represented by a number or letter. The rating is based on the level of risk the occupations typically hold, the amount and types of claims common to the occupations, and the income level of those employed in the occupations.

3. Lifestyle. Your lifestyle, in particular any activity that you participate in that could increase your probability of suffering a disabling accident, will be questioned. The insurer will directly ask you about your activities, but be careful to be honest since they may also collect information about your lifestyle from credit bureaus, internet databases, and even your family or friends.

4. Income. Your income will be instrumental in determining what type of coverage you’re eligible to receive, the rate, and the monthly benefit amount. The insurer will ask you to provide proof of income, such as a W2 or income tax form. The insurer will put your salary information into a table and decide the amount of monthly benefit you’ll be eligible to receive. The amount is usually between 50% and 70% of your pretax income, with higher percentages accompanying lower incomes and lower percentages accompanying higher incomes. Additionally, your income amount will affect what type of coverage the insurer offers you. Those with higher income levels are usually offered a policy with more comprehensive coverage and a much broader definition of disability.

5. Medical. Insurers not only look at your current state of health, but also at your past health history. The insurer may even look at your familial medical history to see if you have a predisposition for developing costly medical conditions like cancer, diabetes, or heart disease as they determine your eligibility. Again, it’s important to be honest on the questionnaire since you will be asked to undergo either a full physical examination or a paramedical examination by a medical professional.

Once the insurer has collected all the above information, a home office underwriter will review it and either issue you immediate coverage or ask you to submit some additional information to assess if you’re an acceptable risk for them. The insurer will assign you to one of the following risk categories:

• Substandard/special risk – if you’re assigned into this category, then the insurer has determined that there’s a high probability of you making a future claim. If the insurer extends you coverage, then you’ll be charged higher rates and your policy will have a shorter benefit period, a longer elimination period, and contain an amendment to either exclude certain medical conditions for a set period of time or fully exclude them indefinitely.
• Standard risk – most disability coverage applicants fall into the standard risk category, meaning they are no less or more likely to file a claim than any other insured individual.
• Preferred risk – the insurer has determined that you’re less likely to file a claim than other insured individuals. You will pay the least amount for preferred risk coverage.

According to A.M. Best, an insurance rating company, fewer than 50% of U.S. households have Life insurance outside of what’s provided by their employer. This statistic begs the question – why have so many individuals abandoned their Life insurance needs? There’s not a one-size-fits-all answer to such a question, but there are a couple of common contributing factors.

One factor is the alleged product misrepresentations cited in class-action lawsuits against several Life insurance companies. Another factor is that much of the media focus today is centered on individuals living much longer than previous generations and the resulting need to prepare for the retirement years adequately. This focus has caused many Americans to redirect their attention toward saving for their retirement years and to start placing their money into tax-favored accounts. Consumer trending hasn’t gone unnoticed by Life insurance companies. Despite the fact that most individuals don’t consider Life insurance a good investment option, many insurers have been heavily marketing the investment side of Life insurance policies instead of the death benefit aspect of it.

The protection Life insurance provides through its death benefit is and always has been the main reason individuals purchase Life insurance policies. The funds a Life insurance policy beneficiary receives can serve as a replacement for the income lost by the death of the policyholder. It can also help to secure the future needs of the policyholder’s spouse, children, or other dependents, such as college funding.

Investments can be an important aspect of funding a retirement. That said, investing in the stock market can never be a substitute for a Life insurance policy.

First of all, a Life insurance policyholder has a guaranteed monetary return for the dollars paid in premiums. Since a return on money invested in mutual funds and stocks are never guaranteed, even under the most ideal market conditions, the same can’t be said of these types of investments. This is exactly why most brokers warn their clients not to invest more money than they can afford to lose. Even individuals that have a stock portfolio with a good rate of return must wait while it amasses over time and becomes substantial enough to meet their family’s long-term financial needs. Obviously, a person can die before their stock portfolio makes enough money to cover their family’s long-term needs.

Secondly, stock portfolio values fluctuate; as the market conditions change, as will the value of a stock portfolio. The inconsistency of stocks can create major problems when an individual is trying to ensure that their family’s long-term financial needs will be met if they were to die unexpectedly. For example, if the death occurs while the stock market is in a down cycle and the survivors must sell the assets, then they won’t net as much money as might have been planned and will also pay capital gains taxes. On the other hand, the beneficiary of a properly planned life insurance policy will receive the death benefit tax-free.

In closing, don’t mistakenly underestimate or overlook the value of a Life insurance policy. An insurance agent can help you determine the type and amount of coverage that will best suit your needs.

Almost everyone is aware that eating lots of leafy, dark green vegetables is a healthy choice. Even if we don’t put heaping piles of fresh spinach or kale on our dinner plates, we know that we probably should. New research is unlocking the secrets of why certain veggies are helping us to stay healthy and to minimize the effects of aging.

It turns out that simple broccoli is a very impressive anti-aging food that comes with the added benefit of contributing to heart health. A recent study conducted at UCLA demonstrates that, among vegetables, broccoli is the best source of a chemical called sulforaphane. This chemical helps to activate the body’s own antioxidants, which helps to control cell decline.

And that’s not all. Broccoli is one versatile vegetable. One study that tested broccoli extracts revealed that broccoli can have a direct impact on preventing bladder cancer. The same study found that broccoli helps prevent muscle damage during oxygen deprivation (which is one key to surviving a heart attack).

Dieticians remind us that the way you prepare broccoli and other vegetables has a large impact on the benefits you receive. For instance, consider steaming broccoli rather than boiling it to preserve the nutrients. And never fear that you must eat broccoli every day. Other vegetables that are rich in sulforaphane include kale, cabbage, cauliflower, radishes, collards, and turnips. As a rule, if it has green leaves, it’s good for you, and you are most likely not eating enough of it!

Most employees that leave a job also leave their employer-sponsored medical coverage behind. This can be a chancy move, especially if you don’t have other insurance options readily available to you.

If you’ve already left your job, then you’ve most likely already found out that obtaining affordable Health insurance isn’t the easiest task when you’re between jobs. COBRA is an option that gives you the right to keep your insurance from your previous employment, but the monthly premiums are usually extremely expensive and something that many simply can’t afford while unemployed.

Temporary insurance, which is a short-term form of Health insurance, can be an affordable alternative to the high premiums associated with COBRA. It’s designed to provide a bridge between the gap of finding your next job and leaving your former employer-sponsored plan. Having such a policy can remove the chance of not being protected against unforeseen injury or sickness while you’re between jobs, but pre-existing conditions are usually excluded.

The premiums for short-term coverage policies are usually much cheaper than those for COBRA, but the cost can still seem expensive for someone without a job. Although finances might tempt you to put off insurance until you find another job, you should remember that financial security is the primary reason that individuals purchase short-term health insurance in the first place.

It only takes one unexpected hospital trip or admission to put someone without medical coverage hundreds to thousands of dollars in debt. For example, consider the financial repercussions if you suddenly develop appendicitis and need an emergency appendectomy when you don’t have Medical insurance. The average cost of an appendectomy is between $11,000 and $18,000 dollars. Countless financial studies have cited medical bills as one of the leading causes of bankruptcy in America. Having short-term health coverage to carry you until your next job can help avoid the catastrophe of being responsible for the total cost of medical bills from being uninsured.

Aside from the value of financial protection, short-term insurance also helps to avoid having future health insurance claims rejected under Health Insurance Portability and Accountability Act (HIPPAA) laws. In other words, individuals that don’t have a break from credible insurance coverage exceeding 63 days are considered to have maintained a continuous coverage, which means that they won’t be subject to exclusions for pre-existing conditions. And, many approved short-term policies are included in the realm of credible coverage, even if they have exclusions for pre-existing conditions.

Depending on specific state requirements, short-term policies may run for a term of anywhere from 30-days to one year. As far as payment goes, most short-term health insurance plans offer two different options – paying through a monthly installment plan or in a single up-front payment that will cover a specific number of days. Generally, single payment plans are slightly cheaper than monthly payment plans.

Of course, temporary insurance is designed to be just that: A temporary solution to ease your health and financial concerns. It’s not designed to last longer than a year and should never be considered a long-term insurance solution. Once you’ve found another job, you should look into your new employer’s insurance offerings and determine when your new coverage would start if it’s elected.

Life has various stages, each with unique insurance and financial planning needs. If you’re in the retirement stage of life and still have the same Life insurance coverage that you had 20 years ago, then your coverage is most likely not very suited to your current needs and age. There are also some retirees that feel they don’t need Life insurance at this stage of life or that it’s too expensive for them to maintain. Completely dropping all Life insurance isn’t a very prudent move either. While you might not need the degree of coverage you did during your child rearing and mortgage years, maintaining age and need appropriate Life insurance should still be a factor in your financial plan.

The following five points are prime examples of why you still need Life insurance through your retirement years:

1. Healthcare Debts. The last thing you want to do is to pass on your healthcare debts to your loved ones. A Life insurance benefit can ensure that your family has the funds necessary to pay your medical bills, without reaching into their own pockets.
2. Funeral Costs. Funerals are far from cheap. In fact, according to the National Funeral Directors Association, the cost of an average casket and vault is $6,500 dollars. Combine that cost with a tombstone, cemetery fee, flowers, and so forth and the cost of just an average funeral can be a heavy, maybe impossible, burden on your survivors. Many survivors use a portion of the Life insurance benefits to pay for the funeral costs.
3. Dependent Care. Life insurance is an important element in allowing your dependents, such as a spouse or special needs child, to continue to enjoy their current lifestyle. This is especially important if the spouse isn’t eligible to receive your Social Security or pension benefits.
4. Estate Taxes. Depending on how large your estate is, your survivors may be responsible for estate tax rates of 37% or more. Sometimes an estate consists of assets, such as a family business, that aren’t desired to be broken up or that aren’t as easily liquidated. Life insurance can be used to cover the estate taxes and allow your survivors to keep your estate intact.
5. Charitable Gifts. Some retirees have a non-profit organization that they wish to leave their Life insurance policy benefit. If so, do make sure that the organization will accept your policy and has a 501 (c) (3) not-for-profit status. Some organizations might need the Life insurance policy arranged a certain way or not be able to handle the donation at all. If you name the charity as the owner and beneficiary of the insurance policy, then you can deduct the premiums from your federal taxes.

In closing, these are just a few of the reasons that it’s necessary to maintain your Life insurance during your retirement years. Contact your insurance agent if you have any questions about the type or amount of Life insurance coverage that best serves your age, finances, and personal needs.

Although you might not be aware of it, there are far-reaching benefits to positive thinking that can improve your health and help you with stress management. According to the Mayo Clinic, studies show that the personality traits of optimism and pessimism can have a direct impact on your well-being. The good news is that, even if you are a pessimist by nature, you can take steps to improve positive thinking techniques in your life, and reap the resulting health and well-being benefits.

Health Benefits of Positive Thinking. Over time, researchers have explored the effects of optimistic thinking on health, and have found many correlations between well being and positive thought processes. These include:

• Longer life span
• Better resistance to the common cold
• Lower rates of depression
• Reduced rates of cardiovascular disease
• Improved coping skills during times of stress and hardship
• Better physical and psychological well-being

Get on the Road to Positive Thought Processes. There are some simple steps to take to move away from negative thinking, and create a new habit of positive self-talk.

• Monitor yourself: During the day, stop and take note of your thoughts. If thoughts are mainly negative, make a conscious effort to put a positive spin on things.
• Be open to good humor: Give yourself permission to be happy, to smile, and to laugh, even when the chips are down. Seek humor in everyday events.
• Lead a healthy lifestyle: Follow a healthy diet and exercise at least three times per week. Eating right and exercising both have positive effects on mood and stress management.
• Surround yourself with people who focus on the positive: Choose to spend time with family and friends who are cheerful, supportive, and offer helpful feedback. Avoid spending time with negative people who have a “glass half empty” attitude.
• Practice positive self talk: Be gentle and encouraging with yourself, and never tell yourself something that you would not say to another person. If a negative thought enters your mind, try to think about it rationally, and follow up with positive affirmations about yourself and your circumstances.

Practice Every Day! If you have had a past tendency to have a negative outlook on life, don’t despair. While you may not become an optimist overnight, with everyday practice, you will begin to replace negativity with productive, positive thoughts. You may find that you become, not only less critical of yourself, but more accepting of the world around you. As your general attitude improves, you will begin to reap the physical and emotional benefits of a positive outlook on life!

Health insurance costs and medical debt statistics continue to shock the general public, and with statistics such as the following, it’s no wonder. The Commonwealth Fund, a healthcare action nonprofit group, reported in August of 2009 that health insurance premiums for family coverage through employer-sponsored plans had a 119% jump in cost from 1999 to 2008. They further predicted that if current trends continue, then family insurance premium costs would rise an additional 94% by 2020.

Despite clearly rising costs and the likelihood of future rises, most consumers realize that their current Health insurance isn’t sufficient protection to guard against accumulating mass uncovered medical debt. If not, then a quick look at a June sample study by The American Journal of Medicine may be a real eye opener, as it showed medical incidents drove 60% of all 2007 American bankruptcies. The sample study also showed that American families dealing with the repercussion of illness filed for bankruptcy every ninety seconds in 2007, despite three-quarters of those sampled having insurance.

Medical debt is damaging because of the speed with which it can accumulate. A sudden debilitating injury or illness can result in hundreds of thousands of dollars in just a few months. Just one overnight hospital stay can easily cost a couple thousand dollars.

What does this mean to the general public? It might just mean that your biggest money concern could be your health. So what can you do?

• An emergency treatment or planned medical expense – either way, it’s always financially prudent to have a plan of action to control cost and keep whomever is the health power of attorney apprised of the situation.
• To avoid needless or redundant cost for routine doctor appointments or hospital visits, discuss your concerns with your health insurance agent, your human resource department at work, or a financial planning advisor.
• If the medical need isn’t an emergency, you can check to make sure that your insurance will cover the procedure, visit, exam, and medication. There are also a few steps you may consider if you’re uninsured with medical debt -or- are insured, but still left to pay a large medical bill:
• Experts say that almost every medical bill has some sort of duplicate charge. So, review your bill, taking notes on any questionable charge, and then make an appointment with the billing department to address your concerns.
• Monitor every step of the process from time of service to billing. When you receive a summary of fees, you should call your insurer and check the payment status. This way you won’t get a surprising bill later on if the insurer refuses to cover payment.
• Despite the above, you might still be stuck with significant out-of-pocket expenses. If so, you can negotiate with the service provider’s billing department or financial counselor for a discount on the bill. This is often feasible if you can pay all of a discounted total at one time.
• The service provider may also be able to help you set up a payment plan.
• When you’ve done all you can do alone, a medical billing advocate may be able to help with major uninsured medical debt, usually for a fee of 15 to 50% of the bill amount. A substantial cost, but this person will use their expertise to negotiate with the service provider or insurance company.
• Some states may also have an indigent care fund to cover portions of substantial medical debt in certain situations.

In the end, your attitude plays a huge role in negotiations. Often the medical community is just as discouraged with how the system is run as you are. So, be calm, polite, and appreciative for any help that’s offered. You never know when someone that can’t help you today might be able to help you in the future.

There are three particular actions that we can undertake to ward off serious illness or disease. They are: Quitting smoking, getting regular exercise, and watching what we eat. On smoking, Americans are getting a little better, but we tend to be poor at regular exercise and consuming a healthy diet. Too many years of burgers, fries and milkshakes loaded with fat and sugar have turned us into super-size versions of ourselves.

The sad truth is that Americans are fat and getting fatter. The CDC defines obesity as a body mass index (BMI) of 30 or greater. BMI is determined from a person’s height and weight and provides a reasonable indicator of body fat and weight categories that can cause serious health problems. The CDC further states that during the past 20 years there has been a dramatic increase in obesity in the United States. As of 2009, only the District of Columbia and Colorado had a prevalence of obesity less than 20%.

So what’s the big problem? According to the National Center for Chronic Disease Prevention and Health Promotion, obese and overweight Americans are at increased risk of a range of diseases from high blood pressure and hypertension, to Type 2 diabetes, gallstones to gout, several forms of cancer including breast, prostate, and colon cancer, and of course heart disease and stroke.

According to the American Heart Association (AHA), one in three adult Americans suffer some form of heart disease and 70 million Americans suffer from high blood pressure, the leading contributor to heart disease. Since 1900 cardiovascular disease (CVD) has been the number one killer in the world and almost half of the deaths every year in the United States are from some form of CVD.

But if you reduce your weight by controlling your diet and regular exercise, you actually decrease those risks and establish assets that will help prevent disease.

Healthy food habits can help you reduce three of the major risk factors for heart attack — high blood cholesterol, high blood pressure, and excess body weight. They’ll also help reduce your risk of stroke, because heart disease and high blood pressure are major risk factors for stroke. The AHA recommends eating a variety of fruits, vegetables, and grain products, including whole grains. They also suggest fat-free and low-fat milk products, fish, legumes (beans), skinless poultry and lean meats and to limit fats and oils to liquid and tub margarines, canola oil and olive oil.

Remember prevention is the key. Stop smoking, get some exercise and eat healthier foods. We really are what we eat. Our lives, literally, might depend on it.

How much life insurance you purchase depends on how much you actually need and what you need the life insurance to accomplish. Although it would take a dissertation rivaling the Patient Protection and Affordable Care Act to detail every individual situation, circumstance, and appropriate calculation, there are some general guidelines to help those purchasing life insurance get a good gauge on how much life insurance they should purchase.

Dependents can be used as a good rule of thumb for purchasing life insurance. Typically, the more dependents one has, the more life insurance is needed. Of course, life expectancy of the dependents should also be considered and even those without dependents should carry some life insurance. Here are four common situations:

1. Minor Dependents. The younger the child, the longer he/she will be dependent upon the parents’ income. Insurance should account for how long the child will need to be cared for should you die. There also should be enough insurance coverage to provide for new childcare or housekeeping services if a currently unemployed parent will need to find employment upon the death of their spouse. Ideally, when both parents currently work, they should each have insurance coverage that will sufficiently cover whatever amount they contribute to the household. At the very least, the higher-earning parent should be covered.

2. Dependents Other Than Minor Children. Examples of other dependents would include aging parents or a disabled family member that relies upon your income. The coverage amount should be based on how long the dependent is expected to live and how much income would be needed to maintain the same quality of life for that amount of time.

3. Couples without Dependents. If both spouses could live comfortably in the event one dies, then substantial amounts of life insurance is usually unnecessary. Life insurance should ideally cover medical expenses, owed debts, burial expenses, and any charitable donation desired. In the event that one spouse is a substantially higher earner than the other or the spouse would be left in financial hardship should a death occur, then the life insurance might need to be adjusted accordingly.

4. Singles without Dependents. Again, substantial amounts of coverage are generally unnecessary in this case. The life insurance should be enough to cover debts and burial expenses. Premiums are generally much cheaper for younger individuals. So, it’s actually fairly affordable if more insurance is desired to leave a charitable contribution or lock in a lower premium rate for the future. Experts once recommended for individuals to purchase life insurance five to six times their annual salary. However, a more reliable estimation is from using actual living expenses and the ensuing deficit that would occur from an absent salary. This can be accomplished as follows:

Figure the amount of income existing family members would need to maintain a comfortable lifestyle, which includes property taxes, mortgage or rent, property and vehicle insurance, property maintenance and repair, appliances, utilities, car payments, food and essentials, health insurance, child care, travel and recreation, and so forth.

Next, subtract the annual costs from above from other income sources, such as social security, spousal employment, or retirement that would remain in the event of your death. If unsure about Social Security survivor’s benefits, the Social Security Administration can provide an accurate estimate. Of course, the actual amount will depend on the age of the surviving children, your earnings, and the age at which you die. For children under sixteen-years-old, a good estimate is usually $4,000 annually for one child and $5,000 annually for two or more children.

Subtract the annual expenses from the other income sources to determine the deficit you’ll be working with.

The insurance coverage benefit should ideally be large enough that post-tax annual investment proceeds will cover the annual deficit, without your survivors dipping into the principle. The amount needed can be determined by dividing the deficit by 4% to 6%. Four or five percent leaves room to account for interest rate variations and inflation. You will also want to include any expenses that will be incurred upon death, such as funeral costs, medical bills, estate administration fees or taxes, children that will be going to college, and an uneducated or undereducated spouse that might need to return to school.

As mentioned above, it simply isn’t possible to cover each individual situation, circumstance, and calculation, but the above is a sturdy guideline that will be applicable in many cases. If any doubt remains about how much coverage you need, a professional life insurance agent can help you fine tune the above information to account for your circumstances.

Trying to figure out how to pay for a child’s college education is a mentally exhausting task for most parents. Few people probably think of their variable, whole, or universal cash value life insurance policy as a way to pay for a college education, but it can be a viable cash source.

Of course, the primary reason to buy any life insurance policy should always be to cover and protect the future requirements, needs, and lifestyle obligations of a family. However, once purchased for this need, there are many additional policy features that could allow you to use a permanent life insurance policy for current living needs.

Potential Features of Cash-Building Permanent Life Insurance. You can amass a significant amount of money without having to pay current taxes on the money. Just how substantial the amount of amassed money will be largely depends on what type of policy you opt to purchase. Additional premiums, for example, would only add to the amount of money that is accumulated.

If you ever need to take advantage of the “borrowing” feature on the policy, you can remove a sum of money and not face current taxation as long as the policy is not subsequently lapsed whether intentionally or unintentionally. After you utilize the borrowing feature, you will be repaying yourself instead of a lending agency. If the policy is sufficiently funded, then there might not be a need to repay the borrowed money.

Things to Keep in Mind about Borrowing from Life Insurance. Of course, since it is essentially your money, you can borrow funds from the cash value of your permanent life insurance policy for basically any reason. However, you should make sure that you pay a sufficient amount of premiums to keep the policy “in force.” Borrowing money could mean that you will need to pay greater premiums to keep the cash value of the policy at the suggested level. As long as you do this, a great portion of your child’s college education can be funded with your life insurance policy; yet, you will still have life insurance.

As mentioned above, you might never need to repay the borrowed money if you have a high cash value and pay the necessary premiums. However, you should always consult with an insurance or tax adviser before relying on this approach to pay for your child’s college education.

The Risk versus Benefit. Remember that nothing in life is without risk. Your policy could lapse because there is not enough cash value in the policy for the insurance company to provide the set life insurance benefit amount. The lapse is generally the result of not sustaining a sufficient cash value and/ or failing to make the necessary premium payments. The last thing you want to do is lose your life insurance. A lapsed policy usually means that you will be faced with paying taxes on any cash value above the amount you paid in premiums. If you feel that your policy is at risk of lapsing, you might try to reduce the face value of your policy (the amount paid upon death) to ensure there is enough money.

With all of the above in mind, a life insurance policy is a very feasible method of paying for college and other expenses. You can always consult with an insurance or tax adviser to ensure that it’s the right route for you and your family.