When should I update my Life Insurance Policy?

There are many reasons to update an existing Life Insurance Policy. Your life may have changed dramatically since you first purchased your life insurance policy. Contact your life insurance agent if your life has changed in any of the ways we listed below.

Major Purchase: If you make a major purchase you should contact your life insurance agent to set up a review and possibly update your life insurance policy. There are a couple items we consider major purchases. An automobile, swimming pool or boat is not considered a major purchase and should not be reflected within your life insurance review. A major purchase is a new home, refinancing your home, and a College Education. Purchasing a home or a College Education is a substantial investment and should be covered in your death benefit to ensure your family isn't burdened with the expenses.

Relating to a College Education when you have children you should consider a Life Insurance Policy review to ensure their College Tuitions are covered with your death benefit.

Marriage or Divorce: If you get married or divorced you should contact your life insurance agent to possibly change the policy figures but more likely to change beneficiaries. Your life will change when you get married or divorced so in any case of a life changing event you should contact your life insurance agent.

Other life changing events: Any event that will significantly alter your life like an ill family member, changes to you or your families health or coming into a decent amount of money be it professionally or by inheritance. A rule of thumb could be to consider a life insurance policy review when your life has seen a major change.

If you forsee the change in the near future it is better to act now than to wait so be sure you to contact your agent in a timely manner.

Why buy a 5 year term or 10 year term life insurance policy?

Why you should consider buying a lesser term life insurance policy

The title of this article may be a bit off. Not everyone should buy a shorter term life insurance policy however, there are some very good reasons why individuals should if the circumstances match up. In this article, I'll mention some obvious and not so obvious reasons why you or one of your family members should consider purchasing a 5 year term life insurance policy or a 10 year term life insurance policy.

Free Term Life Insurance Quotes

It's cheaper!

Ok, this is the obvious reason one may consider purchasing a shorter term life insurance policy. The longer the term the more expensive your premiums. So a short term insurance policy is quite a bit cheaper. The reasons for this is that it is less risky for the insurance company to insure. Of course your policy premium still has a lot to do with your health but in general the shorter the term, the cheaper the premiums. Saying that, I would not recommend purchasing a shorter term simply because it's more affordable. You would find out that once the policy is up your rates would go up and it would be quite a bit more to purchase three 10 year term life insurance policies back-to-back then to purchase one 30 year term life insurance policy. So why would someone want a shorter term?

It's for certain circumstances

When you know when your burdens are significantly reduced you can purchase a term life insurance policy to end at the right time. For example, if you're last child is a senior in high school and your well on your way to become an empty nester you can assume that your costs associated with education, and every other expense associated with children will be gone in 5 years then why not purchase a policy to cover that period. If you are in your 60's and are close to medicare or possibly cashing out some investments then you may consider a shorter term life insurance policy. Maybe your close to paying off your mortgage and all of your other expenses are covered through a different policy you may want to consider purchasing a 5, 10 or even 15 year term life insurance policy.

I believe we've made our point. It's all about timing and each term life insurance product is designed to meet certain instances and circumstances. Not every life insurance company offers shorter term life policies so you may need to shop around.

Keep your Life Insurance Policy Current!

There are many reasons why a Life Insurance policy lapses. The two most common reason an individual let's a Life Insurance Policy lapse is because they forgot to renew it or they don't think they can afford the insurance premium.

Allowing a Life Insurance Policy to lapse is a very bad thing. You may think you can simply call your life insurance company and reinstate your policy some time after it lapses similar to a cable, cell phone or electricity bill but the fact is you can't. If you allow your Life Insuracne policy to lapse it is very likely you will need to apply for a new policy. This can be very costly as you may have had a term life insurance policy locked in 10 years ago when you were young and healthy. There is no doubt your premium will now go up even with the same death benefit but how much the premium goes up depends on how well your health is. If your health isn't as good or you've taken up smoking or any change in your health will cause an increase in your life insurance premium.

Lets examine the most common reasons a Life Insurance policy lapses. Don't forget to renew it! Most life insurance companies have made it very easy to ensure you never forget to renew it. By implementing automatic withdrawal from your bank account you never have to write a check or mail a payment again. Your premium is deducted from your checking or savings account when the premium's due. The 2nd most common reason individuals allow life insurance policies to lapse is because they claim they can't afford it. This is a bad excuse as you can't afford not to have life insurance. When you die you will have expenses and you should be responsible to cover these expenses. There are ways to make a life insurance policy more affordable. The most common way is to adjust the frequency of your payments. Inquire about yearly, semi or quarterly payments as most life insurance companies will give you a discount for these payment types. Inquire with your insurance company about possibly lowering the death benefit. The most important thing to do is ask your company what options are availble but do not let your life insurance policy lapse.

Reasons why you shouldn't cancel your life insurance policy

Maybe your very fortunate and no longer require life insurance. This can happen for many reasons but a common scenario is when an individual receives or earns a large amount of cash. Enough cash to easily cover all expenses your family may receive when you pass away. If you have millions of dollars in an interest baring account, a home thats paid for and very little other expenses perhaps you don't need life insurance. You should consult with your life insurance agent to see if this is feasible scenario but in certain instances it is.

So you no longer need your life insurance policy. Should you call your life insurance company and tell them to cancel your life insurance policy? Remember, this is the same life insurance policy you've paid $X in premiums every year for however many years. Essentially, it's as good as flushing money down the toilet at this point if you decide to just cancel the policy. Sure it protected you when you needed it but now that you don't need it why keep it?

There are a couple good reasons to keep your life insurance policy. As I mentioned above, you've already invested some money into it. Your family is already covered in the event you pass so why not make the beneficiary someone else? Perhaps leave your death benefit to your brother in law (the struggling actor) or someone else that could really use it. Another good option is to leave your life insurance benefit to a Charity. Personally, I love the Animal Shelters so I would consider leaving the death benefit to a local Animal Shelter. You may want to consult with your Accountant but I believe when the beneficiary is a Charity then your premium payments are tax deductible.

So even if you don't need the death benefit consider keeping your life insurance policy.

What is No Exam life insurance?

A lot of people are talking about the new buzz which is no exam or guaranteed issue life insurance. No exam or guaranteed issue life insurance is a fairly new product in which an individual may purchase life insurance online with a credit card and receive coverage without having the annoying blood and urine tests done.

Get your free No Exam Life Insurance quote.

What does this mean? It means that almost anyone can purchase life insurance today and receive coverage the same day. Some people have problems scheduling time for testing and some people simply don't do needles very well. The convenience of being able to purchase insurance online and receive your policy in your inbox is very attractive.

There are some drawbacks and no exam life insurance isn't for everyone. No exam life insurance usually is limited to a certain death benefit. Most companies I have seen that offer no exam insurance have a maximum of $150,000 in coverage. It's necessary for a life insurance company to set a maximum to cover potential losses. The chance of an insurance company receiving a claim for no exam life insurance is much greater than standard Term or Whole life insurance policies because they make those individuals take medical exams and they only insure the healthy ones or they have such a high premium it's still profitable for the life insurance company.

Another drawback is the policy premium. Since the risk is greater for the life insurance company the premiums for no exame life insurance tend to be higher. To some, the higher premium and lower death benefit are good deals compared to going through a full medical exam.

Whole Life Insurance is Still a Preferred Choice

For a long time in America, whole life insurance was what most people bought. Lately, insurance companies have been offering other insurance at lower rates, but in most cases, whole life insurance is still the most beneficial of all plans.


Good For Life Policy

While term life insurance is for a specified period, whole life insurance is designed for life time coverage. This makes it ideal for someone with a steady income who wants to plan for the future.

Whole Life Insurance Premiums and Death Benefits

Whole life insurance rates have the steady quality that drives long-term policy holders to this option. While term life insurance premiums generally go up each time the holder renews the policy, whole life insurance rates usually stay the same until time of death or cancellation of the policy. Some policies do have increasing rates, but the increases are defined in the contract when the policy is purchased. So there?s no reevaluation and no surprises.

The benefits paid at the time of death stay the same with whole life insurance, so the holders can rest assured that their families are taken care of.

Cash Value Turns Whole Life Insurance Into an Investment

A term policy begins and ends (with the policy holder loosing all the money he or she paid into it). A whole life insurance policy builds cash value. How? A portion of the premium is put towards investment in the company, so the policy holder also becomes a share holder. Over time, this builds into an amount of money that can be used. That amount is called the ?cash value?.

The policy holder can cancel the whole life insurance policy and take the cash or re-invest it in a new policy to better suit his or her needs. Or the holder can take the cash value, and stop payments, but still retain a portion of the death benefits (this is called "Paid Up Insurance").

Loan Values

As the cash value of a whole life insurance policy grows, policy holders can borrow money using the cash value as collateral. This allows whole life insurance policy holders to keep the insurance policy, but still use the money. If the debt is unpaid when the policy holder passes away, the benefits paid might be smaller.

Flexible Payment Methods for Whole Life Insurance

Single Premium: This whole life insurance quote is usually the most beneficial. It involves one single payment, and produces an instant cash value. The death benefits are defined and never change. It’s ideal for anyone who has a portion of money they want to put away for their family.

Limited Payments: This is when the premiums are only paid for a specified number of years. The amount for the premiums is specified in the whole life insurance quote and never changes. The cash value of the whole life insurance policy rises steadily.

Modified Premiums: The premium amounts increase over time, and then level after a specified number of years. All of the specifics are clearly defined in the whole life insurance quotes. The benefits amount stays the same, so it allows someone to purchase a larger policy than they can afford at that time.

Continuous Premiums: Continuous premiums never change and are due for the life of the policy holder. The cash value rises steadily. This is the most popular whole life insurance policy.

Other Whole Life Insurance Options

Whole life insurance companies often offer other options like ‘term riders’, where holders can add temporary policies for short terms. Whole life insurance policies also sometimes offer child and spousal riders, so holders can add someone to the same policy.

Choosing the right insurance policy isn’t always the simplest decision. Ask for the advice of an insurance agent who has the benefit of experience and can help you find decide if whole life insurance is right for you.

Variable Life Insurance

When You're in It for the Long Term

Young, and ready to take on the world. This is who variable life insurance is made for. Variable Life Insurance is the greater way to glory, it's a security and an investment. It's much like whole life insurance, but different in that variable life insurance gives you more control over the cash value and death benefits amount.

How Does Variable Life Insurance Work?

With variable life insurance, the premium may go up or down, depending on the status of the market. Part of this payment goes to pay for life insurance. Another part (usually around 4%, but it depends on the policy) goes to build cash value in your "investment portfolio".

As the variable life insurance policy owner, you decide how to invest this money. You can invest in stocks, bonds, etc. As the market changes, so will your cash value and the death benefits. You'll decide how much of your investment is applied to the policy and how much is reinvested. You have more control over this policy than any other, which means you're more at risk. Then again, you have more potential to receive higher benefits when the market is up.

Each company issuing a variable life policy will issue a prospectus, which will define the policy. You should read it carefully before signing the policy. Both the Securities and Exchange Commission and The Commissioner of Insurance regulate these policies, and the agent must have a NASD in order to sell variable life insurance.

What if the Investment on a Variable Life Insurance Policy Goes Bad?

In extreme cases, when the investment choices for a variable life insurance policy loose their value, the policy can lapse, and it will no longer be considered a valid policy. Most companies offer a guaranteed minimum death benefit to keep this from happening. With these policies, the insured must pay a minimum premium each month.

What else does Variable Life Insurance Offer?

Since variable life insurance isn't a strict investment, all the monetary growth within the policy is tax deferrable. This also makes it an easy way to avoid estate taxes. People often purchase variable life insurance policies for their heirs, who can then either withdraw the cash value or borrow against it.

Withdrawing has the same effect it would with a whole life policy. The more cash value withdrawn, the more the death benefits would decrease.

Variable life insurance also gives you the opportunity to make changes in your investment choices without incurring taxes or transaction fees. Most companies limit the number of transactions to about 12 per year.

Most companies will offer a "survivorship" policy. In this case, two people are covered under the variable life insurance policy, and benefits will only be paid when both of them die. This kind of policy helps many people when they could not obtain life insurance by themselves due to health reasons.

Variable life insurance isn't for everyone. Talk to an agent to find out if it's right for you. The opportunity can be huge, but so is the risk, so review all your insurance options before making a decision.

Talk to your Insurance Agent to ensure Variable Life Insurance is right for you!

Return of Premium Life Insurance

The Alternative to Collecting Death Benefits

We pay for health insurance in high hopes that we'll never need it. Insurance, by its definition, is something we hope not to collect on. And so after paying years and years of life insurance premiums, and being "lucky" for all those years, it's easy to feel like it was all just a big waste of money.

Return of Premium Life Insurance, eliminates this problem because you can collect money without dying. After paying 20 years of life insurance premiums, a person can receive the money they've invested back. Not just a portion of it (as with whole life insurance) but return of premium life insurance offers everything back - 100% of the premiums you've paid.

How Much does Return of Premium Life Insurance Cost?

The premiums for this kind of policy vary from state to state. They generally run between term life policies and whole life policies. Return of Premium Life Insurance has benefits from both of these. It has the affordability of term life and the cash building value of whole life. You can buy it for periods of anywhere from 3 – 30 years.

Most companies can give you an estimate within 24 hours. The cost for return of premium life insurance is based on age, physical conditions, and habits (tobacco use) of the applicant…much like any other kind of life insurance.

Who Needs Return of Premium Life Insurance?

If you want to protect your family, but don't want to throw away the cash necessary to insure your life, return of premium life insurance is perfect. Not only do you get your money back at the end of the policy's period, but you won't have to pay income taxes on that money.

Return of premium life insurance is ideal for someone young who anticipates a lot of change before retirement. Whether you're just starting a family or still single, it allows for changes in the future.

What Happens if I Want to Cancel My Return of Premium Life Insurance Early?

Even if you don't keep your return of premium life insurance for the full term, you can still get a portion of your premiums returned to you. The longer you keep it, the higher percentage you'll get back. Canceling early will give you a small percentage back, and not canceling at all will give you 100% back.

On the other hand, you might want to keep the insurance after the end of the policy's period. Most companies will offer a continuance term after the original one ends. And since you'll be receiving a large sum of cash, it might be a good idea to invest it directly into a whole life insurance policy. The whole life insurance policy will also have a cash value, but not quite the same kind as a return of premium life insurance policy. You'll be able to borrow money against this policy, without loosing the coverage.

Return of premium life insurance is the easiest way to insure yourself without losing money. It's one of the few ways to collect the benefits, without actually using it.

Talk to your Insurance Agent to ensure Return of Premium is right for you!

Term Life Insurance

The Affordable Plan for Life and Family

Term life insurance is the most affordable option for anyone who needs to provide a future course in the event of their untimely demise. It's called "term life insurance" because it lasts for a defined term at the time of the purchase. As long as the premiums are paid each month, the beneficiaries are paid the full death benefit if the policy holder dies during that period.

Term life insurance costs less than permanent life insurance policies like whole life and variable life. The reason is because the policy accrues no cash value (except in the case of Return of Premium Term Life Insurance, where you can get a full refund for all the premiums you've paid at the end of the policy period). Another reason is because the policy is guaranteed to end within a certain number of years. The insurance company hopes this will be before the policy holder dies.

What Will Term Life Insurance Pay

Mortgages, education, cost of living, or burial costs. Term life insurance is typically set up to pay for all the things that the regular "bread winner" of the household would pay. You can also use it to pay the taxes involved in a estate inheritance.

You can purchase term life insurance policies for terms of one to thirty years. The most popular option is for fifteen years. At the end of the term, the policy ends. Some policies come with a guaranteed renewal rate, so you can purchase a new policy when the old one ends. The rates will obviously be higher because of the age increase.

Will I Need a Medical Exam to Qualify for Term Life Insurance

In most cases, companies require policy holders to undergo a brief medical exam before qualifying for term life insurance. Insurance companies try to make it as simple as possible. Some companies will even send a qualified nurse to your home for the exam.

It might be possible to bypass the exam and receive immediate coverage depending on your age. You can expect to pay more for this kind of term life insurance, and if you have serious health problems, it might be unavailable. Remember that insurance is something you buy ahead of time. You couldn't make an accident claim on an auto insurance policy if the accident happened before you purchased the policy. In the same way, if you have serious health risks, term life insurance might be much more expensive or unavailable.

What Else Should I Know About Term Life Insurance

Some policies provide you with accelerated benefits options. They'll pay you benefits before death if you have a terminal illness. This would cost more, but in some cases, the added protection is worth the money.

Sometimes you can lower your premiums by presenting your health profile before purchasing a term life insurance policy. Show the company that you have less risk of dying than an average person.

Term life insurance isn't for everyone. But if you can't afford an investment insurance, but still want to protect your family if you die at an early age, term life insurance might be the answer.

Talk to your Insurance Agent to ensure Term Life Insurance is right for you!

Universal Life Insurance

For the Investor Who Likes To Prepare for the Future

Universal Life Insurance is a lot like whole life insurance, but different in that the cash value of the policy earns interest. This way, universal life insurance becomes an investment, and not just an insurance policy.

With universal life insurance, your premiums are divided. Part of your payment covers the cost of insurance, and the rest becomes part of the cash value of the policy. The cash value in universal life insurance policies earns interest. Some policies offer a guaranteed minimum interest payment.

Universal Life Insurance is Ideal for Your Family

If you want protection for your entire family but want to leave your options open, then universal life insurance is the perfect choice. Universal life offers guaranteed death benefits (as long as the cost of insurance doesn't exceed the cash value amount) along with a solid investment that you can withdraw or borrow against.

Most universal life insurance policies come with optional term riders, so you can temporarily increase your benefits amount without purchasing a new policy. You can also usually add people to the policy, like a spouse or children. This versatility makes universal life insurance great for growing families.

Universal Life Insurance allows you to Invest Tax-Free
You can defer capital gain taxes on your universal life insurance policy. These gains can be kept in the cash value of the policy until the time of death, and will only be subject to estate taxes. To use the cash value amount before death, you can borrow against it without paying taxes and without ending the policy.

Universal life insurance policies often allow you to choose how much of your premium to put into the tax-sheltered amount. Investments can be safe and guaranteed, or you can put them into something more like a mutual fund.

Other Options with Universal Life Insurance
With universal life, there are three kinds of premiums.

1. Single Premium You pay one amount for the entire policy. The policy remains in effect as long as the cost of insurance does not entirely deplete the cash value or investment.

2. Fixed Premium You make monthly payments for the premium for an agreed upon time. Usually, this universal life insurance policy is in effect long after you stop paying the premiums.

3. Flexible Premium You decide when to make payments and how much. If you go for a period without making a premium, the cost of insurance is deducted from the cash value of the policy. This type of universal life insurance gives you the chance to make one large payment when you first purchase the policy, and make sporadic payments according to your financial situation.

Most policies offer a "Waiver of Premium" option. This way, if you’re disabled, you can continue coverage without continuing your premium payments.

Planning for the future is part of starting a family. It means more than just setting a few dollars aside for a rainy day. Universal life insurance gives you the ability to save, invest, and protect your family when you're gone. It helps you now, and it will help them in the future

Talk to your Insurance Agent to ensure Universal Life Insurance is right for you!

Mortgage Life Insurance

Insuring Your Life's Biggest Investment

If you're like most people, your home is the largest investment you'll ever make. And if other people depend on this investment (like your family) then Mortgage Life Insurance could be a perfect safety net for their security. Mortgage life insurance is a term policy (it doesn't build cash value) designed to cover your mortgage in the event of your untimely death.

Your mortgage isn't only your largest investment, it's also the longest financial commitment most people will ever make. A lot can happen during the life of a loan. Health conditions, financial situation, and the value of your home will all change by the time a mortgage loan is fulfilled. A mortgage life insurance policy is long term protection, the kind a family needs.

Different Kinds of Mortgage Life Insurance

There are several ways to open a mortgage life insurance policy. Sometimes, banks and real estate companies will sell a mortgage life insurance plan. The security it provides is beneficial to them, so they often offer it as an extra when you close your loan. In most cases, your benefits decrease as the principal decreases, you're only covered for what you owe on the mortgage. Yet the premiums stay the same throughout the life of the policy.

You can also open a mortgage life insurance policy directly with an insurance company. Working with an insurance company, in most cases, offers more advantages than the policies sold by banks and real estate companies. One benefit, is that the benefit amount often stays the same instead of decreasing (depending on the policy).

Other Differences in Mortgage Life Insurance Policies through Insurance Companies

Beneficiary In most cases, you have the option to choose your beneficiary. Mortgage life insurance from other sources almost always name the mortgage owner as the beneficiary. Also, the beneficiary can choose how to use the money.

Conversion Options Companies can usually offer mortgage life insurance policies with a pre-defined option to change coverage and payment in the future, one without regard to age and health conditions.

Guaranteed Premiums Sometimes, a mortgage life insurance policy doesn't guarantee the premiums. Using an insurance company gives you more options to set a defined premium or a variable one.

Freedom of Lenders Since other options make your lender the beneficiary of your mortgage life insurance policy, you loose the policy if you decide to refinance with a new lender. This can be a problem if your health conditions have changed since your policy started, obtaining a new policy might be impossible. But many insurance companies offer you the option of keeping your policy even if you switch lenders.

Mortgage life insurance is the right move for most because it offers a discounted rate for a term life policy. It's secure for you and secure for your family. Among the millions of home owners in America, few can guarantee their stability for the next thirty years. Mortgage life insurance changes that, so anyone can feel secure that their families won't lose their home when the worst happens.

Talk to your Insurance Agent to ensure Mortgage Life Insurance is right for you!

Key Man Life Insurance

For the Sake of the Company

If your business relies on one or two key players, key man life insurance might be an important part of your future. Whether that key player is you, one of your star sales persons, or an office manager, you owe it to your shareholders to insure the "key man". This way the company won't end in bankruptcy if the unthinkable happens.

What Is Key Man Life Insurance

Key Man Life Insurance is a life insurance policy written to help a company when its survival rests on one or two people. The company pays the premiums and is the beneficiary if the person dies.

Small companies often purchase key man life insurance when the owner's relationships with clients and vendors are what keep the company working. But it's not always the owner who is insured. Sometimes an owner retires and leaves the company in the able hands of someone else…and that person becomes the "key man".

Key man life insurance policies sometimes cover a main salesperson. In small companies, clients often get used to dealing with one person and refuse to do business with anyone else. And sometimes a company relies on an employee's personal relationships for clients or discounts from vendors. In case of a sudden death, key life insurance would give the company a cushion to fall back on.

What Happens to the Benefits in a Key Man Life Insurance Policy

The money is generally either used to keep the company afloat while finding a replacement, or to make it easier to liquidate the company, pay off debts, and split the proceeds between shareholders (often the owner's family).

Owners insure themselves because several of their employees are dependent on the company, even though the company wouldn't exist without the owner. The key man life insurance policy would guarantee the employees a salary while they searched for another job.

Do Companies Really Need Key Man Life Insurance

In a small company, there's often a "one for all, all for one" mentality. For some, the lack of office politics makes it a more enjoyable atmosphere, and perhaps a more reliable one. People feel like they're less likely to undergo the mass layoffs commonly associated with large corporations.

Small companies are also more likely to hire people with certain situations that intrude on their work lives. A single mother might have to take off work if a child is sick or if school is canceled due to bad weather. Someone with chronic health problems may have to call in sick often. Small businesses often offer the flexibility to deal with such problems when large corporations do not.

For the reasons above, small business workers are often more dedicated to their employers. It's not uncommon to find cradle to grave employees, who never consider switching jobs, so they're completely dependent on the company. And if the company is dependent on one person, not having key man life insurance on that person is an injustice to the company on a whole.

Remember, you're not the only one who relies on your business. Key man life insurance is the protection you need for your company, your employees, and your family.

Talk to your Insurance Agent to ensure Key Man Life Insurance is right for you!

Guaranteed Issue Life Insurance

When Your Medical History Doesn't Look So Good

Guaranteed issue life insurance is a policy that's guaranteed to anyone... without regard to health conditions. You might think this sounds awfully risky for the insurance companies. They get around it in two ways.

Guaranteed Issue Life Insurance

First of all, guaranteed issue life insurance policies have "graded benefits". This means that if the insured person dies within a specified amount of time, the beneficiaries only receive a portion (or none, in the case of contestable periods) of the death benefits. Most guaranteed issue life insurance policies only pay full benefits after the first two years of the policy. So if John Doe purchases a guaranteed life insurance policy in 2006, and dies of cancer in 2007, the beneficiaries will only get a portion (or none) of the benefit.

Another way companies make money off guaranteed issue life insurance is by charging more for the premiums. They also set age limits on the policies (typically, they won't insure someone over seventy years old.)

What Kind of Insurance is Guaranteed Issue Life Insurance

It's a whole life insurance policy, but the premiums are higher because no-one can be turned down. This means that guaranteed life insurance policies accrue a cash value over time (usually after the first couple of years). A portion of the premiums pay the cost of insurance, while the rest builds the cash value.

And since it's a permanent life insurance, the premiums do not change, nor does the death benefit. As long as the premiums are paid, guaranteed issue life insurance is good for as long as you live.

Are There Exceptions to the Graded Benefits with Guaranteed Issue Life Insurance

Most policies will still pay the full amount of death benefits if the insured dies in an accident. But this is generally the only reason. In other words, if you find out you've only got three months to live, guaranteed issue life insurance won't help you.

What Else Should I Know About Guaranteed Issue Life Insurance

Since the policies are open to anyone, guaranteed issue life insurance doesn't require a medical exam or even a medical history. The questions asked are very general, like name, age, address, etc.

Most guaranteed issue life insurance policies have a limited death benefit amount (you'll have a hard time finding a policy for more than $50,000). Guaranteed issue life insurance policies are most often sought to cover burial expenses, debts left in the estate, and medical bills.

You can use the cash value in a guaranteed issue life insurance policy to cover emergency expenses while you're still alive. You can withdraw the money, and end the policy or accept a lower death benefit. Or you can borrow against the cash value and keep your benefits the same once you've paid the loan.

Guaranteed issue life insurance isn't for everyone. But if you have trouble obtaining other insurance policies because of a health condition, and expect to live for at least two years, guaranteed issue life insurance might be your only option.

Talk to your Insurance Agent to ensure Guaranteed Issue Life Insurance is right for you!

Group Life Insurance

Does your company offer group life insurance? If not, you might be ignoring one of the most cost effective ways to make your benefits package more attractive to potential and current employees.

Is Group Life Insurance Important

Today's employees expect more than a salary from their employees. In a recent survey by Wall Street Journal, participants were asked if they would rather: have no pay increase but retain current benefits, or get a raise and see benefits decrease. Fifty six percent of respondents said they would rather keep their benefits. This illustrates how important it is for employers to offer a competitive benefits package, aside from a decent salary.

Among the many benefits an employee can offer, group life insurance serves as an excellent way to attract new employees. It also increases the morale of current employees and creates loyalty within the company.

Who Will Group Life Insurance Cover

Group life insurance policies can apply to any existing or new employees and associates. And most policies can offer extra benefits that employees can opt for at a discounted rate if they want to pay for the added expense. This makes it easy for employers to offer more than one plan, but still only pay a minimum for premiums.

How Does Group Life Insurance Costs Compare to Individual Life Insurance

Group life insurance is often cheaper than individual life insurance for several reasons. First of all, it's a form of collective bargaining - it's buying in bulk. So you're getting bulk rates, and everything is cheaper in bulk. It involves less paper work for the agents and less time selling to each individual. These are the incentives for insurance companies to give lower rates on group life policies.

Employers especially benefit from group life insurance in a unique way. There's no mandatory medical exams in order to be qualified. For some, this is the difference between being able to obtain insurance and not being able to. Chronic diseases make getting life insurance difficult. The fact that they can obtain life insurance through your company could be enough of a reason to persuade hard working employees to stay in their positions.

What other Benefits does Group Life Insurance Offer

* Since group life insurance is part of the wages you pay, it's tax deductible. If you're going to use a tax write-off, it may as well do something for you. Adding benefits to employee packages increases morale and, consequently, work productivity.

* Many plans offer a Waive of Premium benefit. If an employee is totally disabled, he or she can continue group life insurance coverage without paying the premiums. This (again) is a tangible sign of appreciation for your employees.

* You can customize group life insurance policies to fit your company needs. Many plans offer customization to fit specific employees (per salary, years with the company, etc.)

Your company's benefits package is the main attraction to the work force. Adding to it will attract a better working class, and help you retain your hardest workers. Take steps now to add group life insurance to your benefits package.

Talk to your Insurance Agent to ensure Group Life Insurance is right for you!

Child Life Insurance

The death of a child isn't something parents want to think about. But life insurance isn't necessarily all about death. Child life insurance is about the future and preparation. Taking steps today can help create a better tomorrow. And as parents or grandparents, our chief concern is making the future better for our children.

How Does Child Life Insurance Help a Child

Right now, when a child is young, strong, and healthy, life insurance is obtainable at a minimum cost. But if a child develops a problem like a chronic disease, life insurance can be almost impossible to obtain. So signing up for a low premium term life insurance policy now, with a guaranteed periodic purchase option, will make it possible for them to have life insurance as adults.

Another possibility for them is to purchase a whole life insurance policy, which will last for the rest of their lives. Their age and health status won’t make any difference…nor will it matter if they serve in the military or have dangerous occupation hazards.

Such child life insurance is perfect for planning for the future because of the cash value the plan would accumulate. As an adult, they could borrow against this value or stop the policy and withdraw the money (to pay for college or any number of things).

Who Can Purchase a Child Life Insurance Policy

Parents, grandparents, and legal guardians can all purchase child life insurance policies. New parents often have heavy financial burdens during the first few years of a child's life, and buying insurance is difficult. So grandparents (who might be more financially stable) purchase insurance for their grandchildren.

When Does Coverage Start for a Child Life Insurance Policy

When you start a life insurance policy for a child, the coverage begins immediately. There are no necessary medical exams to go through,just a few health related questions on the application is generally enough to get a child qualified.

The rates for child life insurance vary. Whole life rates stay the same. Term life rates depend on the policy, how old the child is, and several other factors. Policy renewal agreements can vary also, so make sure it’s spelled out before signing up for term policies. Some times you can purchase a term policy and then switch it to whole life at the end of the policy’s period.

Child life insurance policies can last as long as you wish to sign for. Again, whole life policies for children don't ever end, while term policies are defined before you purchase it.

Who Receives the Benefits

In child life insurance policies, the parents or legal guardians are the beneficiaries. But the one who benefits the most is the child. He or she benefits from the security of a life insurance policy that will continue even if he or she is diagnosed with a life threatening disease. Secure your children's future now with child life insurance. It's good for them, it's good for you

Talk to your Insurance Agent to ensure Child Life Insurance is right for you!

Retirement Planning and Estate planning with Insurance

Retirement Planning and Estate planning with Insurance:
Insurance coverage for Retirees and Seniors

Retirement sounds exciting and liberating but be sure to plan accordingly to limit your headaches. Retirement planning is a big deal and without help it can make your retirement a bad experience. Plan your insurance needs before you retire! There are certain insurance policies you need to maintain and certain policies you could consider changing once you retire.

Life Insurance
Your life insurance needs may change once you retire. You've worked most of your life to accumulate enough money to last the rest of your life. When accumulating or planning your retirement did you assume costs associated with taxes on your estate or costs associated with your funeral would easily be covered with your retirement savings? What about other expenses you may have? If you've assumed these expenses within your retirement savings then you may not necessarily need a life insurance policy. If you have accumulated enough retirement savings to pay for all your final expenses plus whatever else you wish to do with it then chances are you are covered. It's a good idea to consult with your retirement specialist to ensure your covered and depending on your assets and liabilities perhaps a short term life policy will cover you. Most of the time retirees have paid off their homes. If this isn't the case and there are only a few years on the mortgage you may want to consider a 5 or 10 year term life policy to cover any expenses the asset may not. Life insurance for retirees is case-by-case and truly depends on the size of your assets.

Homeowners Insurance
As I mentioned above there are often instances where retirees have paid for their homes and no longer pay a mortgage. You still need to cover your home in case of a loss. Likely your retirement savings aren't enough to pay for your retirement and completely replace your home so it's imperative you maintain your home insurance policy once your retired.

Auto Insurance
Like your homeowners insurance you should continue to insure your automobile. The last thing you should consider is paying for a new car or liability claims due to a car wreck. If your driving significantly less because your retired and no longer drive to work then you should talk to your Insurance company about discounts available to those that drive less than a certain amount of miles per year.

Health Insurance
You need to apply for health insurance as soon as possible. The longer you wait the older you get and the harder and more expensive health insurance costs. If you're retiring before 65 you will definitely need coverage. Once you reach age 65 you will be eligible for Medicare. So if you retire early at age 50 assume you will need enough retirement savings to cover at least 15 years of health insurance premiums. There are ways to adjust your premiums but that would entail higher deductibles or finding a group to join. Individual health insurance policies are expensive and especially for those over age 50 so do your diligence and start receiving quotes now.

Long Term Care Insurance
You like many others may consider purchasing Long Term Car Insurance when you retire. Long Term Car Insurance is an insurance policy that covers things generally not covered by health insurance or Medicare. Long Term Care covers things such as a live-in Nurse who would be hired to help do regular daily activities such as bathing, dressing and eating. Long Term Care does not cover health issues directly such as a heart problem or doctors visits. It is a great opportunity to purchase a policy that will allow you the liberties of staying and living at home and knowing you won't burden your loved ones with your daily activities. So Long Term Care Insurance is a policy that one should consider when planning retirement.

Organize your Insurance Policies

Keep your Insurance Policies organized in case of an emergency

Be sure to organize your insurance information yearly. Organizing it yearly will keep you fresh on coverages and most important it reminds you what you have and where you have it. The last thing you want to do after a car accident, a health issue or a death in the family is to search for any information regarding insurance coverage.

Ideas for keeping Insurance information organized.

Write down or type out the contact information for each type of insurance you own. So for your Auto Insurance write down the contact person's name and phone number. Do the same for your Health Insurance, Life Insurance and any other Insurance policies you own. Give a copy of the contact information to several friends or family members in case of an emergency. Build a folder for each type of Insurance you own and save policy information in the folder. Consider keeping the folders in a fireproof safe or in a safe deposit box at your local bank.

Consider consolidating all your insurance needs with one insurance company. One point of contact can make getting the information you need significantly less stressful. In addition to having one point of contact most Insurance companies provide rate discounts for those that carry multiple lines of insurance with the company.

Insurance Rates & Insurance Premiums

Why do insurance quotes vary depending on the company?

There are a couple reasons insurance policy premiums vary depending on the company offering the coverage. Insurance companies calculate policy premiums differently buy most are calculated using past risk assumptions and an equation actuaries use to assume risks.

Past risk assumption is what some may refer to as trends the company has seen in it's data that a particular occurrence may be a result of a particular factor such as age and location. A good example to explain the use of trends is in car insurance. Car insurance premiums can differ greatly depending on the company. I have received quotes for a car that ranged from $500 to $1100 every six months. All policies were the same as far as coverage is concerned and all companies were highly rated. So why is my policy $500 per six month for one insurance company and $1100 for another? For my particular quote, the company that quoted $1100 per six months evidently found issuing my policy to be significantly riskier than the company that quoted $500 per six months. The $1100 company must have had less than favorable returns on policy holders with the same variables as my age, car and location. Believe it or not, insurance companies are in business because it is a profitable business. They are in this business to make money and insuring a higher risk policy has the potential to cost the company more money therefore these premiums are more expensive.

Actuaries take these trends and either implement them into the equation or associate them with the equation used to generate policy premiums. The equation used is likely somewhat different for every company. It may not be an equation at all but a table with several factors of an insured when tabulated present an insurance premium. Each insurance company and there Actuaries develop algorithms or equations to calculate risk and insurance premiums. For this reason alone is why insurance premium rates differ depending on the insurance company. Shop around, find a policy offered by a reputable company that is affordable.

Online Health Insurance Quotes

Consider getting a free online health insurance quote

We've seen lots of trends with the CompuQuotes website and one that we've noticed is that people are less likely to receive a free online health insurance quote than other types of insurance. The amount of people looking for health insurance is much higher compared to the amount of health insurance quotes delivered.

Is it because most people associate health insurance with a single company and why get a quote when your assumption is that only one company will insure you? Many people don't realize how many health insurance options there are. You could be saving thousands a year. Wouldn't it be nice to buy a car with the savings you receive on your health insurance?

The fact is that there are lots of very reputable health insurance companies with different prices. Your health insurance is like all other types of insurance in that each company has different calculations in how they determine your premium. Company A may have a premium of $200/month and Company B may have a premium of $400/month. You'll never know unless you get the free quote.

True the process of receiving a quote is a little longer. There is quite a few more qualifiers than auto, home or life insurance quotes. Either way, your health insurance is likely your largest insurance expense so doesn't it make sense to compare and shop different companies and take more time to save that money?

Don't waste any more time, We want to see more online health insurance quotes than any other type of insurance!

Company Health Insurance Benefits

A viable alternative to Company Health Insurance Benefits

In most instances, an individual applying for a position in a company reviews the health insurance benefits the company offers. Good healthcare benefits can often times solidify a potential employee on a position and likewise a poor health insurance benefit program can turn a potential employee away. Assuming your employer offers a fantastic set of health care benefits there are still problems.

Assume you're employed with this company at age 30. Your in great health, things are going well and the company is thriving. After working for this company for 15 years the company has problems and either lays you off or the company goes out of business. Now your 45 years old and not in the best health. You may have had some depression issues or perhaps some back problems. You can get health insurance through COBRA but it is very expensive so eventually you would like to get off of COBRA and get a more affordable health plan. The job market isn't great so you decide to work from home on your own projects. You apply for a more affordable health insurance policy and you get declined due to your health history. This is an extreme example and your situation could be different. Maybe you leave to start your own company, maybe you leave to take care of a family member, the point is that when you leave the company you don't take your health benefits with you, they stay with the employer. Once you lose these health benefits you will need to find and purchase health insurance and hopefully you can find a comparable policy at close to the same premium.

A solution for Employers that make Health benefits even more attractive!

A new trend in healthcare benefits companies are offering is individual health insurance policies where the premium is expensed. The employee is encouraged to find and purchase their own health insurance policy and each premium is then expensed so the employer is offering great coverage and a viable alternative to standard health insurance benefits. If you leave for any reason, you take your health insurance policy with you continuing your insurability and as long as you keep the policy in force you have very little to worry about. Sure you'll have to cover the premium but odds are it will be cheaper than COBRA and you won't have to be concerned about applying and possibly being declined.

If this interests you, ask your employer to look into it.

Medicare and Medicaid Insurance Coverage Guide

Please note that some information may be outdated. Please be sure to contact the appropriate parties if you have any questions regarding the accuracy of the data.

MEDICARE AND MEDICAID

Q. What is Medicare?

A. Medicare is a Federal health insurance program established in 1965 for people aged 65 or older. It now also covers people of any age with permanent kidney failure, and certain disabled people. It is administered by the Health Care Financing Administration (HCFA) of the U.S. Department of Health and Human Services. Local Social Security Administration offices take applications for Medicare and provide information about the program.

Q. What is the difference between Medicare and Medicaid?

A. Medicare is a Federal health insurance program for the elderly and disabled regardless of income and assets. Medicaid, on the other hand, is a medical assistance program jointly financed by the State and Federal governments for eligible low-income individuals. Medicaid covers health care expenses for all recipients of Aid to Families with Dependent Children (AFDC), and most States also cover the needy elderly, blind, and disabled who receive cash assistance under the Supplemental Security Income (SSI) program. Coverage also is extended to certain infants and low-income pregnant women, and, at the option of the State, other low-income individuals with medical bills that qualify them as categorically or medically needy.

Q. How many people are covered by Medicare?

A. Medicare currently covers approximately 35 million people, of whom about 3 million are disabled and some 150,000 are kidney disease patients.

YOUR MEDICARE COVERAGE

Q. What does Medicare cover?

A. Medicare has two parts: Hospital insurance (Part A) and Supplementary Medical insurance (Part B). Part A helps pay for inpatient care in a hospital or skilled nursing facility, or for care from a home health agency or hospice. If you are admitted to a hospital, Medicare provides coverage for a semiprivate room, meals, regular nursing services, operating and recovery room costs, intensive care, drugs, laboratory tests, X-rays, and all other medically necessary services and supplies. Covered services in a skilled nursing facility include a semi-private room, meals, regular nursing services, rehabilitation services, drugs, medical supplies, and appliances.

Part B helps pay for physician services, outpatient hospital care, clinical laboratory tests, and various other medical services and supplies, including durable medical equipment. Doctors' services are covered no matter where you receive them in the U.S. Covered services include surgical services, diagnostic tests and X-rays that are part of your treatment, medical supplies furnished in a doctor's office, and drugs which cannot be self-administered and are part of your treatment.

Medicare pays only for care that it determines is medically necessary.

WHAT MEDICARE DOESN'T COVER

Q. Are there services Medicare does not cover?

A. While Medicare helps pay a large portion of your medical expenses, there are various health care services and products for which Medicare will not pay. These generally include custodial care; eyeglasses, hearing aids, and examinations to prescribe or fit them; a telephone, TV, or radio in your hospital room; and most outpatient prescription drugs and patent medicines. Medicare also does not pay for cosmetic surgery, most immunizations, dental care, routine foot care, and routine physical checkups. Although some personal care services (for example: bathing assistance, eating assistance, etc.) can be covered along with skilled care, they are never covered alone except under the hospice benefit.

PAYING FOR MEDICARE

Q. How is Medicare financed?

A. Medicare Hospital Insurance (Part A) is financed mainly from a portion of the Social Security payroll tax (the HCA) deduction. The Medicare pan of the payroll tax is 1.45 percent from the employee and 1.45 percent from the employer on wages up to $125,000 in 1991. Medicare Medical Insurance (Part B), which is optional, is financed by the monthly premiums paid by enrollees and from Federal general revenues. The monthly premium in 1991 is $29.90. The premium pays about 25 percent of the cost of the Part B program and general tax revenues pay about 75 percent.

WHO'S ELIGIBLE?

Q. Who is eligible for Medicare?

A. Generally, people age 65 and over can get Part A benefits if they can establish their eligibility for monthly Social Security or Railroad Retirement benefits on their own or their spouse's work record. In addition, certain government employees whose work has been covered for Medicare purposes, and their spouses, can also have Part A.

In rare cases, involving those who became age 65 in 1974 or earlier, Part A may be available if these people meet certain United States residence and citizenship or legal alien requirements.

Part A is also available to most individuals with end-stage renal disease, and to those who have been entitled to Social Security disability benefits or Railroad Retirement disability benefits for more than 24 months, and to certain disabled government employees whose work has been covered for Medicare purposes.

Any person who is eligible for Part A is also eligible to enroll in Part B. Enrollees in Part B must pay a monthly premium of $29.90 in 1991.

MEDICARE ENROLLMENT

Q. How do I sign up for Medicare?

A. If you are already getting Social Security or Railroad Retirement benefit payments when you turn 65, you will automatically get a Medicare card in the mail. The card will usually show that you are entitled to both Part A and Part B, and the beginning dates of your entitlement to each. If you do not want Part B, you can refuse it by following the instructions that come with the card. If you are not receiving such payments, you may have to apply for Medicare coverage. Check with Social Security to see if you are able to get Medicare under the Social Security system or based on Medicare-covered government employment; check with the Railroad Retirement office if you are able to get Medicare under the Railroad Retirement system. If you must file an application for Medicare, you should do so during your initial seven-month enrollment period that starts three months before the month you first meet the requirements for Medicare.

GETTING MORE INFORMATION

Q. Whom do I call to get more information about Medicare?

A. If you want to know how and when to sign up for Medicare, or how to change an address or replace a lost Medicare card, contact any Social Security office.

ENROLLING LATE FOR PART B

Q. When I enrolled in Medicare Part A, I did not sign up for Part B. Is that coverage still available to me on the same terms?

A. You may still enroll in Part B during the annual general enrollment period from January 1 to March 31, and your coverage will begin on July 1. However, your monthly premium may be higher than it would have been had you enrolled in Part B when you enrolled in Part A. In most cases, if you defer your enrollment in Part B, you must pay a monthly premium surcharge. The surcharge is 10 percent for each 12-month period in which you could have been enrolled but were not.

You may not have to pay the surcharge if you are covered by an employer health plan. Delayed enrollment without penalty is generally available if you have been covered by an employer health plan based on your or your spouse's current employment since you were first able to get Medicare. In that case, you can enroll in Part B during a special 7-month enrollment period. The period begins with the month the employer group health plan coverage ends, or with the month the employment on which it is based ends, whichever is earlier. In the case of certain disability beneficiaries, the special period begins when Medicare replaces the employer group health plan as the primary payer of the beneficiary's covered medical services.

DO YOU HAVE BOTH PART A & B COVERAGE?

Q. How do I know whether I'm covered by one or both parts of Medicare?

A. Your Medicare card shows the coverage you have [Hospital Insurance (Part A), Medical Insurance (Part B), or both] and the date your protection started.

Q. What does the letter mean that appears after my health insurance claim number on my Medicare card?

A. It is a code used by Social Security to indicate the type of benefits you are receiving. There may also be another number after the letter. Your full claim number must always be included on all Medicare claims and correspondence.

BUYING MEDICARE

Q. If I am not entitled to Medicare based on employment, can I buy the coverage?

A. Individuals age 65 or over who are United States residents and either United States citizens, or aliens who have been lawfully admitted for permanent residence and have resided in the United States for at least five years at the time of filing, can purchase both Part A and Part B, or just Part B. The monthly premiums in 1991 are $177 for Part A and $29.90 for Part B.

GETTING MEDICARE-COVERED CARE

Q. Are there different health care systems Medicare beneficiaries can use to get their Medicare benefits?

A. Yes. You can receive services covered by Medicare either through the traditional fee-for-service (pay-as-you-go) delivery system or through coordinated care plans, such as health maintenance organizations (HMOs) and competitive medical plans (CMPs), which have contracts with Medicare.

Whether you choose fee-for-service or coordinated care, you get all of Medicare's hospital and medical benefits. The care provided by both systems is comparable. The differences in the two systems include how the benefits are delivered, how and when payment is made and how much you might have to pay out of your pocket. Most of the information in this booklet pertains to fee-for-service health care. For more information about coordinated care plans, request a copy of the leaflet titled Medicare and Coordinated Care Plans from any Social Security office.

FEE-FOR-SERVICE

Q. How does the fee-for-service system work?

A. Under the fee-for-service health care system you have freedom of choice. You can choose any licensed physician and use the services of any hospital, health care provider, or facility approved by Medicare that agrees to accept you as a patient. Generally a fee is paid each time a service is used. Medicare, within certain limits, pays a large portion of the hospital, physician, and other health care expenses.

HMOs AND CMPs

Q. How do coordinated care plans work?

A. In a coordinated care plan (HMO or CMP) a network of health care providers (doctors, hospitals, skilled nursing facilities, etc.) generally offers comprehensive, coordinated medical services to plan members on a prepaid basis. Except in an emergency, services usually must be obtained from the health care professionals and facilities that are part of the plan. Care may be provided at a central facility or in the private practice offices of the doctors and other professionals affiliated with the plan.

ENROLLING IN AN HMO

Q. Can I enroll in a HMO?

A. Yes. You may enroll in any HMO or CMP that has a contract with Medicare. The only requirements are that you live in the plan's service area and be enrolled in Medicare Part B. Medicare makes a monthly payment to the plan to provide you with Medicare-covered services. Some plans provide additional services, and most charge enrollees a monthly premium and nominal copayments when a service is used. Contact plans in your area for enrollment and coverage information.

DISENROLLING FROM AN HMO

Q. If I enroll in a coordinated care plan, can I later return to fee-for-service Medicare coverage?

A. Yes. You may disenroll from a coordinated care plan at any time. Your coverage under fee-for-service Medicare will begin the first day of the following month. You may also change from one plan to another simply by enrolling in the second plan.

CHARGES YOU PAY

Q. Do Medicare beneficiaries have to pay any charges out of their own pockets when they use covered services?

A. Yes. Both Part A and Part B have deductible and coinsurance amounts for which you are liable. You also must pay all permissible charges in excess of Medicare's approved amounts for Part B services, and charges for services not covered by Medicare. These charges do not apply to you if you are enrolled in a coordinated care plan. Instead, you generally must pay a monthly premium to the plan and nominal copayments when a service is used.

HELP FOR LOW-INCOME BENEFICIARIES

Q. Is assistance available to help low-income Medicare beneficiaries pay Medicare's premiums, deductibles and coinsurance amounts?

A. Yes. If your annual income is below the national poverty level and you do not have access to many financial resources, you may qualify for government assistance under the State Medicaid program in paying Medicare monthly premiums and at least some of the deductibles and coinsurance amounts. The national poverty income levels for 1991 are $6,620 for one person and $8,880 for a family of two. If you think you may qualify, you should contact your State or local welfare, social service or public health agency.

PART B DEDUCTIBLE AND COINSURANCE AMOUNTS

Q. How much are the Part B deductible and coinsurance amounts?

A. The Medicare Part B deductible in 1991 is $100 per year. This means that you are responsible for the first $100 of approved expenses for physician and other medical services and supplies. The deductible is paid when you are first charged for covered services. After the deductible has been met, then Medicare starts paying. Medicare generally pays 80 percent of all other approved charges for covered services for the rest of the year. You are responsible for the other 20 percent. If the physician or supplier does not accept assignment of the Medicare claim (that is, accept Medicare's approved amount as payment in full), you are responsible for all permissible charges in excess of the approved amount. You also generally are liable for charges for services not covered by Medicare. Them is no deductible or coinsurance for home health services.

PART A DEDUCTIBLE AND COINSURANCE AMOUNTS

Q. How much are the Part A deductible and coinsurance amounts?

A. The Part A deductible is $628 per benefit period in 1991. This means that if you are admitted to the hospital, you are responsible for the first $628 of Medicare-covered expenses. After that, Medicare pays all covered expenses for the first 60 days. For the next 30 days, Medicare pays all covered expenses except for a coinsurance amount of $157 per day in 1991. You are responsible for the $157 per day. Whenever more than 90 days of inpatient hospital care are needed in a benefit period, you can use your lifetime reserve days to pay for covered services. Every person enrolled in Part A has a lifetime reserve of 60 days for inpatient hospital care. Once used, these days are not renewed. When a reserve day is used, Medicare pays for all covered services except for a coinsurance amount of $314 a day in 1991. You are responsible for the $314 a day. Because the Part A deductible applies to each benefit period, you could have to pay more than one deductible in a year if you were hospitalized more than once.

SKILLED NURSING FACILITY CARE

Q. What if I require care in a skilled nursing facility after leaving the hospital?

A. If, after being in a hospital for at least three days, you receive covered care in a skilled nursing facility that has been approved to participate in the Medicare program, Part A will help cover services for up to 100 days per benefit period. Medicare pays all covered expenses for the first 20 days and all but $78.50 per day in 1991 for the next 80 days. You are responsible for the $78.50 per day.

BENEFIT PERIOD

Q. What is a benefit period?

A. A benefit period is a way of measuring your use of Medicare Part A services. A benefit period, which applies to hospital and skilled nursing facility care, begins the day you are hospitalized and ends after you have been out of the hospital or skilled nursing facility for 60 days in a row. It also ends if you remain in a skilled nursing facility but do not receive any skilled care there for 60 days in a row. There is no limit to the number of benefit periods you can have.

PROCESSING MEDICARE CLAIMS

Q. Who processes Medicare claims and payments?

A. Medicare claims and payments are handled by insurance organizations under contract to the Federal government. The organizations handling claims from hospitals, skilled nursing facilities, home health agencies, and hospices are called "intermediaries." You almost never have to get involved in the Part A claims process. The insurance organizations that handle Medicare's Part B claims are called "carriers." The names and addresses of the carriers and areas they serve are listed in the back of The Medicare Handbook, available from any Social Security Administration office.

MEDICARE APPROVED AMOUNT

Q. How does Medicare determine its approved amounts for physician services?

A. Medicare's approved amount, which is also referred to as the reasonable or allowable charge, is determined in the following manner for most Part B claims:

When a doctor submits a claim, the Medicare carrier compares the amount submitted with the doctor's usual charge for the service and with the amounts other physicians in the community usually charge for the same service. The lowest of the three becomes the approved amount. After you have met the Part B annual deductible ($100 in 1991), Medicare generally pays 80 percent of the approved amount and you are liable for the other 20 percent. A NEW SYSTEM FOR DETERMINING THE AMOUNT PHYSICIANS WILL BE PAID FOR PROVIDING SERVICES COVERED BY MEDICARE WILL BE INTRODUCED IN 1992.

ACCEPTING MEDICARE ASSIGNMENT

Q. What does it mean when a physician accepts assignment?

A. Physicians and suppliers who accept assignment of Medicare claims agree to not charge you more than the Medicare approved amount for services and supplies covered by Part B. They are paid directly by Medicare, except for the deductible and coinsurance amounts for which you are responsible. Some physicians and suppliers have signed agreements to participate in Medicare. In doing so, they have agreed to accept assignment of Medicare claims all of the time. Other physicians and suppliers will accept assignment on a case-by-case basis or not at all.

PHYSICIANS WHO DON'T ACCEPT ASSIGNMENT

Q. What if a physician does not accept assignment of a Medicare claim?

A. Physicians and suppliers who do not accept assignment of Medicare claims may charge more than the Medicare approved amount and collect full payment directly from you. Medicare then pays you 80 percent of the approved amount for the covered service, less any unmet portion of the $100 Part B deductible. You are liable for all permissible charges in excess of Medicare's approved amount.

LIMITING A PHYSICIAN'S CHARGES

Q. Is there a limit to the amount a physician can charge a Medicare beneficiary for a covered service?

A. Yes. Physicians who do not accept assignment of a Medicare claim are limited as to the amount they can charge Medicare beneficiaries for covered services. In 1991, charges for visits and consultations cannot be more than 140% of the Medicare prevailing charge for physicians who do not participate in Medicare. For most other services (surgery, for example) the limit is 125 percent of the prevailing charge for nonparticipating physicians. In 1992 the limiting charge for all services covered by Medicare will be 120 percent of the fee schedule amount for nonparticipating physicians and in 1993 it will be 115 percent of the fee schedule amount.

FINDING PARTICIPATING PHYSICIAN

Q. How can I find a Medicare-participating physician or supplier?

A. The names and addresses of Medicare-participating physicians and suppliers are listed by geographic area in the Medicare-Participating Physician/Supplier Directory. You can get the directory for your area free of charge from your Medicare carrier (listed in the back of The Medicare Handbook) or you can call your carrier and ask for names of some participating physicians and suppliers in your area. This directory is also available for review in Social Security offices, State and area offices of the Administration on Aging, and in most hospitals. Physicians and suppliers are given the opportunity each year to sign Medicare participation agreements.

FILING A PART B CLAIM

Q. When a physician provides Medicare-covered services to a Medicare beneficiary, does the physician or beneficiary file the claim with the Medicare carrier for payment?

A. For Medicare-covered services and supplies received on or after September 1, 1990, the physician or supplier is required to submit the claim for the beneficiary. For services and supplies provided prior to that date, the physician or supplier was not required to submit the claim unless the physician or supplier participated in Medicare or had agreed to accept assignment of the claim.

WHAT TO DO WHEN YOU HAVE A PROBLEM WITH A CLAIM

Q. Whom do I call if I have a question about a Medicare claim for a doctor's services?

A. Call the Medicare carrier for your area. The carrier's name and toll-free telephone number are listed in the back of The Medicare Handbook and appear on all Explanation of Medicare Benefit (EOMB) forms.

Q. How long should I wait before contacting the Medicare carrier to check on the status of a claim?

A. Allow 30 to 45 days for the claim to be paid. If you have not received a check or an Explanation of Medicare Benefit (EOMB) payment statement after 45 days, call the Medicare carrier for your area.

APPEALING A CLAIMS PAYMENT DECISION

Q. What recourse do I have if Medicare denies payment for a claim or pays less than I think it should?

A. You have a fight to appeal Medicare's coverage and payment determinations for both the hospital (Part A) and medical (Part B) segments of Medicare. The appeals processes are explained in The Medicare Handbook.

AMBULANCE SERVICES

Q. Does Medicare cover ambulance services?

A. Medicare Part B can help pay for certain medically necessary ambulance services when: (1) the ambulance, equipment, and personnel meet Medicare requirements; and (2) transportation by any other means would endanger your health. This includes transportation from a hospital to a skilled nursing facility, or from a hospital or skilled nursing facility to your home. Medicare will also cover a round trip from a hospital or a participating skilled nursing facility to an outside supplier to obtain medically necessary diagnostic or therapeutic services not available at the hospital or skilled nursing facility where you are an inpatient.

MEDICARE COVERAGE FOR WHEELCHAIRS, PACEMAKERS, AND ARTIFICIAL LIMBS

Q. Does Medicare cover prostheses and medical devices?

A. Yes. Medicare covers these items when provided by a hospital, skilled nursing facility, home health agency, hospice, comprehensive outpatient rehabilitation facility (CORP), or a rural health clinic. Medicare also covers cardiac pacemakers, corrective lenses needed after cataract surgery, colostomy or ileostomy supplies, breast prostheses following a mastectomy, and artificial limbs and eyes. Coverage also is provided for durable medical equipment, such as wheelchairs, hospital beds, walkers, and other equipment prescribed by a doctor for home use.

NURSING HOME CARE

Q. Does Medicare pay for long-term care in a nursing home?

A. No. Medicare only helps pay for post-hospital extended care in a skilled nursing facility (SNF). A SNF is a specially qualified facility with the staff and equipment to provide skilled nursing care, a full range of rehabilitation therapies, and related health services. Medicare only pays when a skilled level of care is required as a continuation of a hospital stay and the care is provided in a SNF that participates in Medicare. Even if you are in a SNF that participates in Medicare, Medicare will not pay if the services you receive are mainly personal care or custodial services, such as help in walking, getting in and out of bed, eating, dressing, and bathing. A SNF that participates in Medicare will inform you at the time of admission about potential Medicare payment and your rights to seek payment.

CHIROPRACTIC SERVICES

Q. Will Medicare pay for a chiropractor's services?

A. Medicare helps pay for only one kind of treatment furnished by a licensed chiropractor: manual manipulation of the spine to correct a subluxation that can be demonstrated by X-ray.

PSYCHIATRIC COVERAGE

Q. Does Medicare pay for care in a psychiatric hospital?

A. Yes. Medicare Part A helps pay for up to 190 days of inpatient care in a participating psychiatric hospital during a beneficiary's lifetime.

CHECKING FOR CANCER

Q. Does Medicare pay for cervical- and breast-cancer screenings?

A. Yes. Medicare Part B helps pay for Pap smears to screen for the detection of cervical cancer and for X-ray screenings for the detection of breast cancer.

HOME HEALTH CARE

Q. Does Medicare cover home health care?

A. Yes. If you need skilled health care in your home for the treatment of an illness or injury, Medicare pays for covered home health services furnished by a participating home health agency. To qualify, you must be homebound, need part-time or intermittent skilled nursing care, physical therapy, or speech therapy. You also must be under the care of a physician who determines you need home health care and sets up a home health care plan for you.

COVERAGE LIMITS

Q. How long can home health care last?

A. Home health care can continue for as long as you are under a physician's plan of care and the services you require are the type of services Medicare covers, such as skilled nursing, physical therapy, and speech therapy. Home health aide services are also available if you are eligible. Daily skilled care is available on a limited basis to those beneficiaries who qualify.

WHO PAYS?

Q. How much does Medicare pay toward the cost of home health care?

A. Medicare pays the full approved cost of all covered home health visits. There is no coinsurance on home health care. You may be charged only for any services or costs that Medicare does not cover. However, if you need durable medical equipment, you are responsible for a 20 percent coinsurance payment for the equipment.

MEDICARE AND HOSPICE CARE

Q. What is hospice care?

A. Hospice is a special way of caring for a patient whose disease cannot be cured and whose medical life expectancy is six months or less. Patients receive a full scope of palliative medical and support services for their terminal illnesses.

Q. Is hospice care available to Medicare beneficiaries?

A. Yes. Medicare beneficiaries certified by a physician to be terminally ill may elect to receive hospice care from a Medicare-approved hospice program. Under Medicare, hospice is primarily a comprehensive home care program that provides medical and support services for the management of a terminal illness. Beneficiaries who elect hospice care are not permitted to use standard Medicare to cover services for the treatment of conditions related to the terminal illness. Standard Medicare benefits are provided, however, for the treatment of conditions unrelated to the terminal illness. Medicare has special benefit periods for beneficiaries who enroll in a hospice program.

PROs

Q. What are PROs?

A. Utilization and Quality Control Peer Review Organizations (PROs) are physician-sponsored organizations in each State that the Health Care Financing Administration (HCFA) contracts with to ensure that Medicare beneficiaries receive care which is medically necessary, reasonable, provided in the appropriate setting, and which meets professionally accepted standards of quality. Among other things, PROs are responsible for intervening when quality problems are identified and for making every attempt to resolve them. They ensure that beneficiaries are advised of their appeal rights and review all written complaints from beneficiaries or their representatives concerning the quality of care rendered. If you are admitted to a hospital, you will receive a notice explaining your rights under Medicare and how to contact the PRO if the need arises.

MEDICARE AND FOREIGN TRAVEL

Q. If I require medical services outside the United States and its territories, will Medicare pay the bills?

A. No. But there are three exceptions. Medicare will help pay for care in qualified Canadian or Mexican hospitals if:

(1) You are in the United States when an emergency occurs, and a Canadian or Mexican hospital is closer to, or substantially more accessible from, the site of the emergency than the nearest U.S. hospital that can provide the emergency services you need.

(2) You live in the United States and a Canadian or Mexican hospital is closer to, or substantially more accessible from, your home than the nearest U.S. hospital that can provide the care you need, regardless of whether an emergency exists, and without regard to where the illness or injury occurs.

(3) You are in Canada travelling by the most direct route between Alaska and another State when an emergency occurs, and a Canadian hospital is closer to, or substantially more accessible from, the site of the emergency than the nearest U.S. hospital that can provide the emergency services you need.

WHO PAYS FIRST?

Q. Is Medicare always the primary payer of a beneficiary's medical bills or are there situations when another insurer must pay first?

A. There are a number of situations in which another insurer is the primary payer of your health care costs and Medicare is the secondary payer. For example, Medicare may be the secondary payer if you are covered by an employer group health insurance plan, are entitled to veterans benefits, workers' compensation, or black lung benefits. Medicare also can be the secondary payer if no-fault insurance or liability insurance (such as automobile insurance) is available as the primary payer. In cases where Medicare is the secondary payer, Medicare may pay some or all of the charges not paid by the primary payer for services and supplies covered by Medicare. This issue is discussed in more detail in the publication titled Medicare Secondary Payer, available from any Social Security office.

MEDIGAP INSURANCE

Q. What is "Medigap" insurance?

A. Medigap insurance is private health insurance designed specifically to supplement Medicare's benefits by filling in some of Medicare's coverage. A Medigap policy generally pays for Medicare approved charges not paid by Medicare because of deductibles or coinsurance amounts that you are liable for. There are Federal minimum standards for such policies which most States include as pan of their programs to regulate Medigap policies. Because Medigap policies can have different combinations of benefits and the policies may vary from one insurance company to another, you should compare policies before buying. Compare the benefits and the premiums. Some policies may offer better benefits than others at a lower premium.

MEDIGAP TO BE STANDARDIZED IN 1992

Q. Is it true that Medigap policies are to be standardized?

A. Yes. During 1992 most States are expected to adopt regulations limiting the Medigap insurance market to no more than 10 standard policies. One of the 10 will be a basic policy offering a "core package" of benefits. The other nine will each have a different combination of benefits, but they all must include the core package. Insurers will not be permitted to change the combination of benefits in any of the 10 standard policies. Individual States will be allowed to limit the number of the different standard policies sold in the State to fewer than 10 if they wish to do so, but must ensure that insurers offer the basic policy. For more information on this subject, contact your State insurance department.

GAPS IN YOUR MEDICARE COVERAGE

Q. What are the "gaps" in Medicare coverage?

A. In general, they are charges for which you are responsible. They include Medicare's deductibles and coinsurance amounts, permissible charges in excess of Medicare's approved amounts, additional days of care in a hospital or skilled nursing facility, and the charges for the various health care services and supplies that Medicare does not cover. Medigap insurance can cover some or all of these charges, depending on the policy.

ONE MEDIGAP POLICY IS ENOUGH

Q. Do I need more than one Medigap policy?

A. No. One good policy tailored to your needs at a price you can afford is sufficient. Beginning in 1992 most States are expected to make it unlawful for an insurance company or agent to sell a second or replacement Medigap policy to an individual unless the purchaser states in writing that the first policy is to be cancelled. Medicare beneficiaries enrolled in coordinated care plans (HMOs and CMPs) or who are eligible for Medicaid usually do not need Medigap insurance. If you have insurance from an employer or labor association, you may also not need Medigap insurance.
MEDICARE SELECT

Q. What is Medicare SELECT insurance?

A. Medicare SELECT is the name for a new Medigap health insurance product that is expected to be introduced in 1992 in 15 States to be designated in 1991 by the Secretary of the U.S. Department of Health and Human Services. During the three-year period currently authorized under Federal law, Medicare SELECT will be evaluated to determine how it should eventually be made available throughout the Nation. Medicare SELECT is private insurance, it is not issued by the government and it is not part of Medicare. It is designed to supplement Medicare coverage.

Q. What is the difference between Medicare SELECT and other Medigap insurance?

A. The principal difference is that Medicare beneficiaries who buy a Medicare SELECT policy are expected to be charged a lower premium for that policy in return for agreeing to use the services of a network of designated physicians and other health care professionals. These health care professionals, called "preferred providers," will be selected by the insurers. Each insurance company that offers a Medicare SELECT policy will have its own network of preferred providers. Policyholders usually will be required to use a preferred provider if the insurance company is to pay full benefits. Medicare will continue to pay its portion of covered benefits regardless of whether a preferred provider was used or not. Beneficiaries who buy other Medigap insurance policies are not required to use doctors and other providers designated by the insurance company.

GETTING MORE INFORMATION ABOUT SUPPLEMENTAL INSURANCE

Q. Where can I get information about insurance to supplement my Medicare benefits?

A. Contact your local Social Security office, State office on aging, or your State insurance department and ask for a copy of the Guide to Health Insurance for People with Medicare. It describes Medicare's benefits and the types of private insurance available to supplement Medicare. If you need help in selecting supplemental insurance, check with your State insurance department. Some departments offer counselling services.

MEDIGAP COMPLAINTS

Q. Whom should I contact if I have a complaint about the agent who sold me a Medigap policy?

A. Suspected violations of the laws governing the sales and marketing of Medigap policies should be reported to your State insurance department or Federal authorities. The Federal toll-free telephone number for registering such complaints is 1-800-638-6833.

SECOND SURGICAL OPINIONS

Q. Whom do I call if I want a second surgical opinion?

A. If your physician has recommended surgery for a non-emergency condition covered by Medicare and you want the names of doctors in your area who provide second opinions for elective surgery, call your Medicare carrier. Many conditions that do not require immediate attention can be treated equally well without surgery.

REPORTING FRAUD

Q. Where do I report suspected cases of Medicare fraud?

A. If you have evidence of or suspect fraud or abuse of the Medicare or Medicaid programs, call your Medicare carrier.

CHANGING YOUR ADDRESS

Q. I moved. How do I get my address changed?

A. You should call your local Social Security office and ask that your Medicare file be changed to reflect your new address.

Indemnity Health Insurance

Is Indemnity Health Insurance Better Than Managed Care Insurance?

Indemnity health insurance (sometimes referred to as a fee-for-service policy) was, at one time, the most popular kind of health insurance. In fact, it was the only kind of health insurance in America. It was out shadowed in the nineties by the introduction of managed care insurance. But many employers still offer indemnity today.

Is Indemnity Health Insurance More Expensive?

Indemnity health insurance is more expensive than a managed care plan on two different levels. First of all, the premiums (the amount of money you pay each month) are higher.

There are several reasons for this. Since it’s not a managed plan (like an HMO), there tend to be more unnecessary procedures…so the insurance companies end up paying more money. As with everything in life, the added expenses get passed along to the end users (the ones buying the insurance). The premiums for indemnity health insurance policies are also higher because managed care plans are more focused on group rates. They generally only provide insurance through large groups (like employers) and contract healthcare providers into a network where they receive lower fees. Without this kind of ‘bulk buying’, the prices are naturally higher.

Indemnity health insurance is also more expensive because it usually covers a smaller amount. With an HMO or PPO, you might pay small co-pays for doctor and hospital visits. Indemnity health insurance usually only covers a percentage of medical bills…and that’s after you’ve met a deductible. Such plans often won’t cover preventive healthcare like check-ups and vaccinations.

Why Would Anyone Choose Indemnity Health Insurance?

There are several reasons someone might choose indemnity health insurance over a managed care plan. The most obvious reason is because sometimes a managed care plan isn’t available. Indemnity health insurance is offered more as an individual plan, or to small businesses when they won’t have enough policy holders to qualify for group rates with an HMO or PPO.

Another reason someone might prefer indemnity health insurance is that it offers more freedom than managed care plans. A person isn’t restricted to a network of doctors and hospitals…they can go anywhere in the country. Someone with indemnity health insurance also doesn’t have to worry about referrals when going to a specialist. In most cases, they don’t need approval from their insurance company.

What Else Should I Know About Indemnity Health Insurance?

As already mentioned, most indemnity health insurance policies have deductibles. This is the amount of money the patient must pay before the insurance company starts covering the costs. You can lower the premium payments by choosing a policy with a very high deductible.

Indemnity health insurance usually only pays a percentage of the medical costs after you’ve met the deductible. Let’s say your deductible is $500 and your policy covers 80% after the deductible. If a hospital visit costs $700, the insurance would pay 80% of $200 ($160).

Indemnity health insurance policies often have out-of-pocket maximums. That is, the maximum amount of money a patient would have to spend on covered procedures within a year. This amount is generally very high, and lowering it would cause higher premiums.

Finally, indemnity health insurance policies only pay the UCR (Usual, Customary and Reasonable fees). They base such fees on what health care procedures cost in your surrounding area. For example, let’s say your hospital visit cost $700, but the indemnity health insurance policy’s UCR is $650. Then the policy would only pay 80% of $150 (remember the $500 deductible) or $120.

So is indemnity health insurance better than a managed care plan? That all depends on your situation…and if a managed care plan is even available.

HMO Health Insurance

HMO Health Care: The Good, The Bad, The Managed

What is HMO Health Insurance and why does it have such a bad reputation?

HMO health insurance (Health Maintenance Organization) is a form of Managed Care Insurance. The idea is that an organization (the one providing the health insurance) works with doctors and hospitals to form a network.

These doctors are contracted with the HMO for lower prices, and might subject themselves to the organization for ‘utilization review’. The HMO reviews the dollar amount or number of visits that a person would use in one month, and scrutinizes for excessive medical care.

When signing up for an HMO health insurance policy, you would choose a Primary Care Physician within the network. That physician then becomes your main source for healthcare, and must give you a referral before you’re able to seek other medical help (like from a specialist). Women would choose an OBGYN when signing up…who would also be able to give referrals. And, of course, parents would choose a pediatrician for their children.

HMO Health Insurance Provides Less Expensive Care

With a setup like this, the HMO health insurance company is able to lower the over-all cost of health insurance (and increase the amount of benefits) in several ways. As mentioned before, the healthcare providers are contracted for lower prices in exchange for network inclusion. It’s like buying health care in bulk and then reselling it.

Since HMO health insurance reviews the utilization, they also save money by making sure patients do not receive unnecessary treatments…this lowers the over all cost of the insurance itself, and in turn allows them to increase the benefits amount.

HMO Health Insurance Can Seem Restrictive

The utilization review…it can be somewhat limiting. For example, Doctor Noname wants his patient to receive a CAT scan, but someone reviewing the case disagrees. The doctor then has to hassle with the HMO health insurance case worker before his patient can receive the care. Some people find this intrusive and difficult to deal with.

There are two ways to look at this. On the one hand, Dr. Noname is the one seeing the patient. He sees a person…not a case number. He is able to put the patient’s symptoms into context with the patient’s current health condition.

On the other hand, and this is something people often forget, HMO health insurance providers are looking at the big picture. Not necessarily always at the money saving aspect, but as a way of troubleshooting patient afflictions. That’s really part of what a doctor does…troubleshoots.

HMO Health Insurance is a Numbers Game

Think of it in terms of a car or an office machine. Not all technicians are the same. A rookie might spend an hour trying to figure out what’s wrong with a machine and someone with more experience might only spend five minutes. The HMO health insurance company adds years to a doctor’s level of experience.

When you hire a small copier dealer to repair your office machine, the technician is free to troubleshoot in any way he sees fit. He could replace the wrong part and end up costing the customer money. But some big corporations (like Xerox) train their techs to follow troubleshooting procedures…ones they put together by looking at the big picture. So even inexperienced technicians are able to quickly find a problem. And this is part of the concept behind HMO health insurance policy restrictions.

HMO health insurance might not be the best plan for everyone, but it allows companies to provide affordable health care for a large number of people…people who need good benefits with low premiums. This is what makes HMO health insurance an important part of the industry.