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| | HEALTH INSURANCE
Choosing the right health insurance policy plays a critical role in your long term health, your finances and your ability to live and work on a day to day basis without worrying about being able to afford your medical bills in case of an emergency. Health insurance in the U.S. is incredibly complex, and, depending on your circumstances, can be very expensive. But health insurance is so important to our lives that many of us make major life decisions based on the health insurance coverage we can receive pursuant to those choices. Because of this, it’s important to know as much as you can about health insurance in general, as well as your own individual circumstances vis a vis your employment status, your health history, the state of residence and your income level.
WHY YOU NEED HEALTH INSURANCE
The best time to get health insurance is when you are in good health. You cannot predict how much your medical bills will be in the near or distant future, and medical insurance protects you from unexpected costs and pays for your routine healthcare that keeps you healthy. If you become seriously ill or are diagnosed with a terminal condition, the costs of obtaining health insurance become much higher and your eligibility drops drastically. If you don’t have health insurance, start looking for coverage now.
HOW TO GET HEALTH INSURANCE
There are three main avenues through which you can receive health insurance:
Group Health Insurance – This is the most common method that families and individuals receive affordable, quality health care. Group insurance policies are offered at a discount through your employer, trade organization or union and are often considered part of your compensation. Usually, the employer or sponsoring organization pays a portion of your premium. However, once you leave the employer or group, you won’t be eligible for group insurance any longer.
Individual Health Insurance - For those who are self-employed or work for a company that does not offer them health benefits, you can purchase an individual health insurance plan. This is more costly, since you will pay the full premiums. You’ll have a wide range of choices at a number of price points, and the burden is on you to get the best deal.
Government-sponsored Health Insurance – Many individuals receive health care through government healthcare programs, such as Medicare and Medicaid and programs from the Department of Veteran Affairs and the Department of Defense. Eligibility and coverage typically depends on income level, military service and other factors.
HOW TO CHOOSE HEALTH INSURANCE
Depending on the type of health insurance programs you qualify for, you’ll have a number of choices to make in terms of your health insurance policies. The top items you should be comparing are: premiums (monthly costs for coverage), coverage/benefits (types of procedures that can be paid for and how much is paid), access to doctors, hospitals and other providers, access to emergency care, out-of-pocket costs (coinsurance, deductibles and co-pays) and exclusions and limitations. You will also have to choose between indemnity insurance - which is more flexible in terms of types of procedures, specialists and primary care physicians that are covered, but requires more paperwork and more out of pocket costs - or managed care, which has a smaller network of covered providers but lower out-of-pocket costs and less paperwork.
There’s much more to learn about health insurance than is contained in this short article. Make sure you work with an experienced and ethical health insurance agent and ask plenty of questions, including the specific regarding the topics covered here. Find out how each health insurance policy differs from the next and take a close look at what each one covers as well as the cost of the premiums.
CAR INSURANCE
Carrying a solid car insurance policy isn’t just a good idea - it’s the law. In every state in the U.S., you are required to have a minimum amount of auto insurance coverage in order to protect those you may harm while driving.
There are two main types of coverage that are built in to vehicle insurance policies, depending on the options that you choose.
Most drivers will carry collision insurance. Collision insurance, as the name implies, covers you for damages caused by collisions with your vehicle and other objects on the road, including other vehicles, people, signs and fixtures, and parts of the road itself. Collision insurance will cover the costs for repairs to your car, as well as the expenses incurred for towing, salvaging your car and storing your car. Collision insurance policies will pay out regardless of whether or not the accident is your fault. However, if damage is caused by another insured driver, you can usually have your expenses covered by their car insurance company, rather than yours.
In addition to collision insurance, many car owners choose to purchase comprehensive car insurance as well. While the details vary, comprehensive car insurance covers practically everything that isn’t covered by collision insurance. Comprehensive insurance covers damage from vandalism, theft, fire, floods, animals, shopping carts in grocery store parking lots, etc. Comprehensive insurance doesn’t usually cover damage or loss that results from negligence (i.e. failure to keep your car maintained according to the manufacturer’s recommendations) or theft from an employee or family member.
Most states will require to carry a minimum amount of liability insurance as well. Note that collision and comprehensive car insurance only covers your own car and property. Liability insurance helps pay for damages that you caused to someone else’s vehicle or property. There are two main types of liability coverage: bodily injury liability and property liability. The first covers medical expenses for any injuries caused by your at-fault accident, while property liability covers the costs for repairs to their cars.
Other coverages that you may consider purchasing are car insurance policies that pay for uninsured motorists or underinsured motorists. While state laws require that all motorists carry car insurance, oftentimes, the minimum limits are not enough to cover the full costs of your car repair. For example, someone may collide with your car, causing $20,000 worth of damage, but they only have insurance that pays out a maximum of $5,000. Unless you have an underinsured motorist policy, you’ll have to pay the rest of the $15,000 out of your pocket or file a collision insurance claim. Uninsured motorist coverage is the same, except it protects you if the driver has chosen to break the law and drive without car insurance. Depending on your state and policy, uninsured and underinsured car insurance will cover you in the case of a hit and run.
The above policy types and insurance riders only scratch the surface of the types of coverage you can receive with your car insurance policy. To find out exactly what you need to keep you and your family safe, speak with an experienced auto insurance agent or car insurance broker.
LIFE INSURANCE
Life insurance is all about planning for the unforeseen. While the death benefit that’s paid out to your heirs or your estate upon your passing is often viewed as the main benefit of a life insurance policy, today’s life insurance plans have evolved to provide for you before your death as well. When considering life insurance policies, there a few main costs and benefits to consider: premiums, living benefits and death benefits.
LIFE INSURANCE PREMIUMS
Life insurance premiums are the monthly or annual costs that you have to pay in order to receive life insurance coverage. These payments go directly to the life insurance company, and you don’t get them back. While the terms for each life insurance policy varies, you must remain current on your life insurance premium payments, otherwise your life insurance policy will lapse and you won’t receive a death benefit.
The cost of your life insurance premium depends on a number of factors, including the face value of your policy (how much is paid upon your death), your health, age, occupation and other factors that increase or decrease the probability that you may be filing a life insurance claim.
LIFE INSURANCE LIVING BENEFITS
Living benefits are the monetary benefits and financial instruments that you can use while you are still living. Living benefits exist for permanent life insurance policies that accrue cash value over time. Typically, you can withdraw from this cash value (less a surrender fee) or take a loan out from the life insurance company while using your life insurance policy as collateral. This is a flexible and cost-effective way to manage unexpected expenses and finance major steps in life, such as college education for your children or home improvements.
Permanent life insurance policies with cash value can also be used as income generating vehicles. For example, a universal life insurance policy’s cash value accrues interest, much like a savings account or CD account. A whole life insurance policy can be invested in a more aggressive instrument. Many individuals use a permanent life insurance policy as a combination retirement savings and life insurance policy.
LIFE INSURANCE DEATH BENEFIT
The death benefit is the amount that is paid out to your heirs or your estate upon your passing. This amount varies depending on the type of life insurance policy you have and how much you’ve opted to receive. This amount can stay constant over the entire term of the life insurance policy, or it can increase or decrease. For example, a decreasing term mortgage life insurance policy diminishes in value in accordance with the amount left on your mortgage balance and disappears once your principle reaches zero. On the other hand, a universal life insurance plan can increase if you choose to deposit more into your cash value account.
CHOOSING A LIFE INSURANCE AGENT AND POLICY
When it comes to choosing life insurance, you have many options - both in terms of policy types and the agencies who provide it to you. There is wide variation across both of these, and your best bet is to interview two or three insurance agents or insurance brokers and let them know what your needs, goals and concerns are. They’ll usually be able to suggest one or two different products that will work best for your long term and short term goals.
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