Life and Health

It’s important to have Disability coverage whether you get it from your employer, or purchase it privately. Disability insurance is your paycheck if you’re sick or disabled and can’t work for an extended period of time. That being said, the question then becomes where do you get the better deal; from your job, or on your own

The most significant difference between group and individual plans is eligibility. Because you’re an employee, you qualify for coverage at work usually on a guaranteed issue basis. However, it isn’t that easy when you apply for an individual policy. A private insurer will require you to meet stringent medical and financial criteria.

Coverage provided through a group plan offers no flexibility. If you become disabled, you are either paid a percentage of your salary, or a fixed amount each week or month. Benefits continue until you recover, or until you reach Social Security retirement age. Typically there are no cost-of-living adjustments to increase your benefits in step with inflation.

An individual policy lets you choose the monthly benefit amount (up to carrier issue limits), waiting period and maximum period of payments. You can also customize a policy to cover a specific occupation, and add cost-of-living increases.

There are some other policy features you should take into consideration when you are looking for the better deal:

• What is the insurer’s definition of disability? Does the policy define disability as “own-occupation,” which means you are disabled if you cannot perform your current job, but might be able to work in another? If it does, will it eventually change to “any occupation,” or does remain “own occupation” to age 65?
• Is it portable when you change jobs? You lose coverage provided by an employer when you change jobs, but private insurance is yours to keep no matter where you work.
• Are the benefits taxable? Premiums paid with pre-tax dollars by your employer result in a benefit that is taxable as ordinary income when you file a claim. When you pay your own premiums with after-tax dollars, any benefits received are tax-free.
• Does the policy include residual and recovery benefits? Can you receive benefits if you are partially disabled and are earning less because of it, or do you have to be fully disabled and then return to work to receive residual/recovery benefits?

A group plan limits coverage and definitions of disability, but it’s subsidized by the employer, so it will probably be less expensive. However, if your situation warrants quality and quantity of coverage, then buying your own Disability insurance is the better option.

We live in a time when our knowledge, recognition, and treatment of the diseases and disorders that abound are advanced and life expectancies are long. Unfortunately, there are still some diseases, injuries, and disorders that are so difficult to diagnose properly that a second opinion is not only suggested, but is often vital to ensuring the right treatment is given and the wrong treatment, together with its associated expenses, is avoided.

Disease Misdiagnoses

ALS (amyotrophic lateral sclerosis or Lou Gehrig’s disease) is one example of a difficult to diagnose disease. According to the ALS Association, 15% of those diagnosed with ALS do not actually have the disease. This means they are paying for treatment of ALS when that is not the underlying cause of their symptoms. With a second opinion, possibly from a neurological specialist who treats ALS patients, these wrongly diagnosed individuals could be re-diagnosed with the proper illness — one that might even have a cure and then be given the proper treatment. Whenever you are given a diagnosis as serious as ALS, Muscular Dystrophy, cancer and the like, a second opinion should be a definite part of your treatment plan.

Of course, organic neurological disorders aren’t the only diseases that get misdiagnosed and require a second opinion. Lyme disease, mentioned in the 2004 Reader’s Digest article, “10 Diseases Doctors Miss,” is often misdiagnosed because of its generic, flu-like symptoms. When diagnosed and treated properly, Lyme disease can be cured easily with no long-term damage. A misdiagnosis that results in Lyme disease going untreated can result instead in permanent joint damage. Although every bout of the flu should not result in a second opinion, in the case of long, lingering illnesses that don’t seem to respond to treatment, a second opinion is a good idea.

Unnecessary Surgery

When it comes to unnecessary surgery, second opinions can save you money as well as recovery time. One example of this is knee surgery. The knee is a very complex joint and it takes years of experience for a surgeon to be completely comfortable doing anything less than a total knee replacement. This sometimes leads to surgeons suggesting a total knee replacement when the damage actually done to the knee requires only a partial replacement. Partial knee replacement is less invasive and expensive than a full knee replacement, and the recovery time is much shorter.

Sometimes, surgical procedures are diagnosed that have nothing to do with the actual health issue suffered by the patient. In 2008, the University of West Georgia published an essay on their Aneurysm and Arteriovenous Malformation Support page by a man who had suffered an asthma attack and went to the hospital. Instead of routinely treating the asthma, the physicians thought he was suffering from an aortic dissection, which is a tear in the wall of the aorta, and they performed emergency surgery only to find that there was no tear. Had he gone for a second opinion, the unnecessary heart surgery and opening of his chest cavity could have been avoided.

Conclusion

Although no one wants to prolong treatment of their diagnosis for fear of permanent damage to their health, a second opinion can be beneficial in this time of advanced medical treatment options. Taking the few days or weeks necessary to get a second opinion could result in a more accurate diagnosis and more effective treatment plan. At the very least, it can give you options to help you control your health care options.

How long has it been since you last reviewed your Life insurance coverage? If you are like most, chances are you long ago filed your policy away and haven’t thought about it since.

But life is not static, and circumstances do change. Major life changes such as marriage, the birth of a child, the purchase of a new home, or even an increase in salary can shape how much financial protection you and your family needs.

Even if a year goes by without any major life events, it’s still a good idea to review your coverage. The amount of your Life insurance coverage should be sufficient to meet the current obligations and future needs of your loved ones. If you have taken advantage of historically low interest rates and recently refinanced, make sure you have enough coverage to satisfy your new loan obligations. If you’re single, consider the cost of a funeral, outstanding medical bills, credit card balances and ongoing financial assistance for elderly parents who might be dependent on you.

And while you’re reviewing your coverage, it’s also a good idea to confirm that your current beneficiary elections are still accurate.

If you’re uncertain whether your current coverage is meeting your family’s needs, contact us for a needs analysis to provide you the peace of mind that your family will be taken care of should the worst happen.

You wake up in the middle of the night overcome with excruciating chest pain. You call 911, and an ambulance rushes you to the emergency room. Now what? Although your physical well-being is now in the hands of capable medical professionals, who is going to take care of your household, your bills, and your pets? This is exactly why you need a medical emergency plan.

By creating a medical emergency plan, you can make decisions in advance about how you want your personal matters to be handled if you are hospitalized. Not only can you specify what needs to be done, but you can also choose which people you want to carry out these duties.

Here are a few things you should keep in mind as you create your medical emergency plan:

Choose trustworthy money managers.

This is the first step to building an effective medical emergency plan. If you were too sick to pay your bills and oversee your other financial affairs, who would take care of it for you? Make that decision right now, while you are healthy and alert. Make a list of family members, friends, or professionals that you would trust to manage your financial matters if you couldn’t do it yourself. Be sure to provide a copy of this list to your attorney. Unfortunately, there are plenty of malicious “caregivers” out there who take advantage of sick people by offering to handle their finances — and then drain their bank accounts. If you make a list of reliable money managers in advance, you’ll be less likely to fall victim to this type of fraud.

Put it in writing.

As with any other type of protection plan, it’s important to put your medical emergency plan in writing. Be sure to give detailed instructions about who you want to handle your personal matters and how they should go about doing it. Be specific: Make it clear that your sister Jane should handle your household chores, your brother Bob should pay your bills, and your best friend Sherry should feed your pets. Give step by step instructions to each of these friends or family members on how to complete these tasks. Once you’ve typed up these instructions, be sure to tell your family members and friends where they can find the document. You might want to provide a copy to a trusted family member or your attorney.

Update your emergency contact info.

When you go to a new doctor for the first time, they generally ask you for a list of emergency contacts. How long has it been since you last updated this information? Phone numbers could have changed, family members might have moved, or you might no longer be on speaking terms with some of the contacts. Make sure that your doctors have the most up-to-date emergency contact information on file. This will ensure that they can get in touch with the right person quickly should there be a sudden emergency. You should also include an emergency phone number in your cell phone address book. For example, if your husband is your preferred emergency contact, program his cell phone number as “ICE” in your cell phone. “ICE” stands for “In Case of Emergency.” If you are in an accident, paramedics are trained to call the ICE number on your phone.

List doctors and medications.

You should also include a list of your current doctors and medications as part of your medical emergency plan. This information might be crucial if you were to suffer from a medical emergency. Make sure that your spouse, sibling, or another designated person can provide this list quickly to emergency workers if and when necessary. That way, ER doctors could obtain your medical history from your doctor’s office and they’ll also know which medications you are currently taking.

Take care of the legal documents.

If you want to develop a truly effective medical emergency plan, you’ll also need to put together these basic legal documents:

• A Living Will or Advanced Health Care Directives
• Health Care Power of Attorney
• A Financial Power of Attorney

Talk to an attorney about putting together these important documents.

Talk to your family and friends.

So, you’ve already taken the time to put an emergency medical plan in place. Good for you. However, your plan is worth nothing if your family and friends don’t know about it.

Take the time to sit down with your loved ones and discuss your plan. Although this is never an easy topic to broach, it’s important that your family and friends understand what you would want to happen in the case of a medical emergency.

You likely already have Life insurance to protect your family against the financial adversity they could face after your unexpected death. And you’ve probably insured your home, cars, and other personal possessions against the financial loss that can result from fire, theft, or damage. But what have you done to protect yourself and your family against an injury or sickness that affects your ability to work? Do you have Disability insurance?

The reality of how long you and your spouse could stay afloat if one of you were to lose your income due to a disability is sobering. On one income you might no longer have the ability to pay your mortgage, car payments, and other bills. If you are without Disability insurance, tapping into home equity, retirement savings, or credit cards can offer a temporary solution with damaging long-term consequences. Disability insurance offers an affordable method to maintaining your lifestyle without creating additional debt for your family.

There are many different ways to obtain Disability insurance. You might have group coverage at work, through unions or membership groups, and depending on the nature and cause of your disability, you might also qualify for Workers Compensation, Social Security, and veterans’ benefits. Without the benefit of Group insurance, individual coverage is a must.

There are many different types of Disability insurance contracts and several definitions of disability. Consider whether you contract includes:

• A favorable definition of total disability that is consistent with the risk of your occupation and, at a minimum, ensures the payment of benefits in the event you suffer a “loss of income.”
• A non-cancelable, guaranteed renewable clause that states the insurance company cannot cancel the policy or increase the premium until a certain age (as specified in the policy).
• Benefits that are payable until age 65 or later.
• A waiting period consistent with your overall financial plan. The longer you wait to receive benefits after your disability, the lower your premium. You can purchase coverage that provides benefits on the 31st day of disability or up to two years later. Whichever option you choose, make sure you can handle the financial exposure.

Everybody knows it’s a man’s world, right? That might be true in a lot of areas, but not if you’re talking about Life insurance premiums. Women are the rulers in this arena because insurance companies charge them lower rates than men of the same age.

So why do insurers consider men a bigger risk? The answer to that question lies in a key element of their genetic makeup: Testosterone. A surge of this hormone during the adolescent years is linked with a rise in violent and risky behaviors. Testosterone has also been linked with higher blood pressure, which increases the risk of heart disease, and a weakening of the immune system’s ability to fight off infection.

The other adverse effect of this adolescent testosterone boost is a lowering of the male’s levels of the female hormone oxytocin. A UCLA study titled On Friendship Among Women: An alternative to fight or flight, published in 2002, found that women are generally better at handling stress because high levels of oxytocin give them a natural advantage.

Scientists always thought that fear and anxiety triggered the adrenaline hormone as part of the fight-or-flight response. It was believed to be an ancient survival mechanism left over from the caveman days when survival meant knowing which of the two actions was the more appropriate response.

However, the researchers at UCLA discovered that women have a larger behavioral repertoire than just fight-or-flight. In fact, when the hormone oxytocin is released as part of the stress responses in a woman, it decreases the urge to choose between fight-or-flight and encourages the female to choose a third alternative, finding other women with whom she can share her anxiety. This action counters the stress and produces a calming effect.

This calming response does not occur in men, because testosterone, which men produce in high levels when they’re under stress, only presents them with the two alternatives of fight-or-flight. Their low level of oxytocin eliminates the third alternative of finding other men with whom to commiserate. In addition to biology, there’s also a sociological component in the explanation for men’s shorter life spans. Society has traditionally put pressure on young men to compete, causing them to take part in many risky behaviors to gain dominance.

Death in older men generally can be linked to diseases that resulted from the behaviors begun in youth, from smoking to heavy drinking to overeating. That’s why men usually have a higher rate of dying from cancer, diabetes mellitus, heart disease, strokes, and pulmonary disease.

In spite of both the biological and sociological factors, men aren’t necessarily destined to remain high insurance risks. Assessing risky behaviors early on, and taking action to correct them, will extend a man’s life expectancy. The healthier a man is, the easier it will be to find good Life insurance coverage at an affordable price.

With the price of just about everything from gas to milk heading into the stratosphere, here’s a piece of good news for consumers: According to the Insurance Information Institute, the average cost of Term Life insurance has dropped. A big reason for the decline in premium rates is that life expectancies have increased because of improvements in health care.

Why does how long you live affect how much you pay for insurance? The answer to that question lies in the way insurance companies fund the death benefit they ultimately pay.

Insurers charge premiums, which they invest to create the money they need to pay benefits. The longer you live, the more time the money has to earn interest. This means insurers don’t need to charge as much to pay the same benefit. However, insurers can’t predict life expectancy for each individual policy owner. Instead, they use what is known as “the law of large numbers,” which accurately predicts how many deaths will occur within a group of policy owners. This mathematical principle says that the larger the group, the more predictable the future losses in the group will be for a given period of time.

Insurance companies employ mathematicians, called actuaries, who study this statistical data. The data is the basis for mortality tables, which show, for a person at each age, the probability that they will die before their next birthday. Mortality tables also show:

• The probability of surviving at any age
• The number of years people at different ages can still be expected to live
• The percentage of people in a particular age group who are still alive
• An age group’s longevity characteristics

Separate mortality tables are used for men and women because of their substantially different life expectancies. Other characteristics also can influence life expectancy, such as a person’s smoker status, occupation and socio-economic class.

The mortality tables insurers had been using were last updated in 1980 when the maximum life expectancy was set at 100 years. However, in 2001, the Society of Actuaries and the American Academy of Actuaries updated the mortality tables and changed life expectancy to 120 years.

How much insurance rates will continue to drop as a result of these changes is anyone’s guess. As mentioned above, Term Life insurance, which provides coverage for a specific period of time but doesn’t build any cash value, has been the most significantly impacted by these new mortality tables. Although Term Life might not have an investment feature, the death benefit it provides can be used to secure the financial future of the policy owner’s loved ones.

On the other hand, there are some industry experts who think that Whole-Life insurance will experience a substantial drop in rates. Unlike Term insurance, Whole Life provides a death benefit while building up cash value through the life of the policy.

A periodic review of your insurance coverage with one of our representatives is always a good idea. With changes in Life insurance premiums, pay particular attention to this at your next coverage review.

For 2010, the contribution limit for an individual with self-only coverage under a qualifying high deductible health plan is $3,050, up $50 from 2009. For an individual with family coverage, the limit is $6,150, up $200 from 2009.

A qualifying high deductible health plan, for 2010, is defined as a health plan with an annual deductible greater than or equal to $1,200 for self-only coverage or $2,400 for family coverage. The limit on annual out-of-pocket expenses is $5,950 for self-only coverage or $11,900 for family coverage.

The current limits and corresponding 2010 limits for self-only and family coverages are compared in the chart below.

The IRS release can be viewed at http://www.irs.gov/pub/irs-drop/rp-09-29.pdf.

One of the most important tasks for any newly married couple is getting their financial house in order, and the basic components of this financial merger process are knowledge and communication.

Begin by determining your net worth as a married couple. To do this, make a list of your assets, together with a list of your liabilities. Subtract your liabilities from your assets, and the result is your total net worth.

Examining your net worth helps clarify your overall financial picture. If you have a high net worth, then you will want to continue doing together what the two of you had done separately in the past. If your net worth is low, you can use this information to map out a strategy to secure your financial future.

The next step is to discuss and prioritize your short and long-term financial goals. Together, determine how the two of you will accomplish these goals. This means deciding how much you will need to save, and what types of investments are best suited to achieving your objectives. Finally, you need to ask yourselves if accomplishing one goal will ultimately help you accomplish another.

Creating a monthly financial budget is necessary if the two of you are to stay on track in working toward your goals. List all sources of income and then make a list of all expenses. Calculate and compare your total expenses and your total income. The result should be that you spend less than you make. If the reverse is true, review your expenses and see where you can cut. Keep in mind that a budget is a work-in-progress, so review it periodically and modify it to adapt to your changing financial circumstances.

Another issue you will have to deal with as a couple is whether or not to merge your bank accounts and credit cards. Consolidating your funds into one bank account makes it easier to apply for loans and manage funds. It also cuts down on maintenance fees. However, when two people are writing checks and making automatic withdrawals from the same account, it’s more difficult to keep track of how much money is being spent and how much is available. Having a joint account also means that either spouse is financially vulnerable if the two of you decide to split up, because one spouse can deplete the account without the other one knowing about it.

Merging your credit cards means that you are both responsible for the charges incurred. However, even if you maintain separate credit cards, you still might be liable for your spouse’s debt. In some states both spouses are held accountable for the credit card debt incurred for family expenses. In community property states, a spouse may be held accountable for the other’s credit card debt if the property that underlies the debt is jointly owned.

Merging insurance coverage could be beneficial, especially when it comes to Auto insurance. Many companies offer discounts if you insure more than one vehicle with them. Also, your insurance company might give you an additional discount for covering your home or apartment, as well as cars, with them.

Taking these steps to merge finances successfully can help to keep that aspect of your marriage secure over the long-term.

More than 51 million Americans are classified as disabled, which represents 18% of the population.(1) Research indicates that most people vastly underestimate their likelihood of becoming disabled before their working years end. Worse, the American Payroll Association estimates that 71% of Americans live paycheck to paycheck.(2)

Of course statistics are just that: Statistics. But how many of us ever think we’ll become one of these statistics? Now there’s a new online tool that can help individuals calculate their chance of becoming disabled and take the necessary steps to manage that risk.

This first-of-its-kind calculator, developed by the non-profit Council for Disability Awareness (CDA), spotlights one of the largest risks to any wage earner’s financial security: The chance that a serious illness or injury might prevent you from earning an income for an extended period of time. It is available free-of-charge online at www.WhatsMyPDQ.org.

The calculator estimates future earnings potential and offers practical tips on how to prevent a disability or at least financially prepare for such an event. Educational resources feature a prevention component that emphasizes better health care, lifestyle and safety, as well as planning resources aimed at helping people budget for lost income, use benefits and secure their financial plans.

“During this economic crisis, more and more people are realizing that their ability to earn an income is their single most valuable asset,” said Bob Taylor, president of CDA. “They recognize how essential their income is to funding everything that’s important to them. But all too often, they seriously underestimate how likely their income may be threatened by a disability.”

1 U.S. Census Bureau, Public Information Office, November 2008

2 American Payroll Association, “Getting Paid in America” Survey, 2008