Life Insurance
Life insurance is a policy that secures the financial setbacks after the death of the insured person. The costs of death can include settling the estate, taxes, debts, and of course preparations made for interment of the body. It is primarily a source of security for the insured dependents to make settling the deceased’s affairs easier.
There are two types of life insurance coverage available. The first is called Term Life Insurance, where the benefit of the policy is to be paid if the Insured passes away during the term of the policy. This type of policy needs to be kept up to date and renewed when needed. Premiums are generally low for term insurance policies and somewhat more difficult to get for older people since the risk of them passing is greater.
In a permanent policy, the term never ends and the security is for the entire life of the insured. Premiums are high for this type of policy but admittance is generally more relaxed.
There are other types of policies including Universal Life Insurance, where the insured selects the premium to be paid. There is also Variable Life Insurance where the insured has the option to allocate the monies which will be disbursed upon their death. There are also such types as Variable Universal, Single Premium, and Survivorship.
There are many things you should think about when choosing a life insurance policy such as the amount of coverage, what types of debts you have outsanding and foresee having upon your death, interment costs, and affordability of the premiums. The best indicator of a quality life insurance policy is the cost of the premium. If it is too good to be true, it probably is.
A policy on your life can help loved ones put the pieces back together after a loss. It is also a sound financial decision that should not be taken lightly. Here are some of the ways that a life insurance policy can help.
Replacing income for dependants. If your dependants are counting on your income, a life insurance policy can replace that loss. The most popular case of this is of parents of young children, where both incomes are needed to operate the household. It can also apply to couples were the survivor would be in dire straits if the partners income suddenly ceased.
Paying Final Expenses. The cost of burial and funeral homes are unexpectedly high, and of course unplanned. These costs can be deferred by a disbursement from a solid life insurance policy.
Creating an Inheritance. This can be the greatest gift you give to those you leave behind. By naming your heirs as beneficiaries this can give them an inheritance that they may not have had otherwise.
Estate Taxes, and Federal Taxes. Just because you have passed on, does not mean you still do not owe final taxes. Your estate will incur many taxes during the sale, or acquisition by family. To offset this cost and give your family and beneficiaries the true amount of the estate and/or assets, the life insurance policy can be used to offset the taxable items.
Some types of insurance policies created carry a cash value. This can, in some situations, be borrowed against much like a 401k, or retirement plan. If you think having a cash-value policy might be for you then ask your financial advisor for more information on such a policy.
Health Insurance
Most people in the United States receive some sort of Health Coverage provided by their employers. This managed care is contracted by the companies who then provide the Insurance company with a large number of guaranteed policies. Health insurance helps to guard you against unexpected, high medical costs.
Before you even begin to understand how your coverage protects you and saves you money, you first have to know which kind of plan you have.
There are three most common types of plans, the first being a Private Plan. Most companies offer these to their employees, but they can also be purchased by individuals. The second most common plan is Medicaid. This is a government funded program providing health coverage for low income individuals and families. The last of the most common three is Medicare. This is government funded health coverage generally for retired or individuals over 65.
You must meet certain requirements to qualify for Medicare and Medicaid, and if you don’t they will not be available to you. If you do qualify but are not satisfied with the coverage you may purchase additional coverage to supplement Medicare or Medicaid. This is at your own expense but can really help if you run into some medical problems that one plan will not cover.
Benefits of health coverage include protection against severe illness through preventative visits to the doctor, as well as protection against the rising costs of health related services. The average doctor visit is far too expensive for the average person to afford and without the life-saving technology and expensive medicine the quality of life you may live can be in danger. Health Insurance provides you the security you need to be able to afford to go the doctor regularly, keeping you from incurring big hospital bills later on.
For example if you do not have health coverage, you may be less likely to visit the doctor on a regular basis, getting regular checkups, physicals, vaccinations, etc. If you push these things off you may be putting yourself and others at risk of getting sick. You may also be ignoring problems in your own health that may need to be addressed. If you ignore these problems, they do not go away, and likely they will rear their heads when you least expect it, and you will end up in the hospital and the bills from those visits are expensive. If you think you cannot afford health insurance you definitely cannot afford a hospital stay.
If you do have health coverage you will go and see your chosen physician on a regular basis, he or she will inform you adequately about your health and take a vested interest in keeping you healthy. You will receive personal care from the nurses and staff as opposed to going to the County Hospital in an emergency situation which is never good. The County Hospitals are overcrowded and conditions are bad. It can take hours to be seen and then you may be triaged to a lower risk level and simply ‘patched up’ and sent home. It is far better to have a physician who keeps a history on your health and cares about keeping you healthy and happy.
Glossary
Health Insurance Glossary
A
Additional Insured: Refers to anyone covered under your health plan that is not named as “insured” in your documentation.
Assisted Living Facility: Residential communities for senior citizens that provide nursing care.
B
Benefit: The dollar amount your insurance carrier will pay when you claim a covered loss.
Benefit Period: The interval during which you will be eligible for benefits. Generally, your benefit period will begin with the first medical service you received for a specific illness and end after you have not been treated for that condition for 60 days.
C
Carrier: Refers to the HMO or insurance carrier offering your health plan.
Certificate of Insurance: This is the printed description of your benefits and coverage limits that forms a contract between you and your carrier. It spells out precisely what will be covered, what won’t, and the dollar maximums.
Claim: This refers to any request to your insurance company for benefits.
COBRA: This acronym refers to 1985’s Consolidated Omnibus Budget Reconciliation Act. The law requires group medical plans covering twenty employees or more to offer participants the option to receive continued healthcare benefits for up to eighteen months, at a reduced cost, after the cancellation of their group plan.
Coinsurance: The amount you will be required to pay for your healthcare if you’re a participating in either a preferred provider organization or fee-for-service plan after having met your deductible.
Co-payment: This is a cost sharing arrangement in which you will be responsible for a specific charge for a specific medical service ($20.00 per office visit / $10.00 per generic prescription, etc).
Covered Expenses: Refers to the various medical procedures that your insurer has agreed to provide you with coverage for.
D
Deductible: Refers to the amount you’ll be required to pay for healthcare expenses before your insurance plan will begin to reimburse you.
E
Exclusion: A specific circumstance or condition for which your policy will not provide a benefit.
Effective Date: This refers to the date on which your insurance coverage will actually begin to cover you.
F
Fee-for-Service: This is a payment system for healthcare where your provider is paid for each service as it is rendered.
H
HMO: This is acronym stands for Health Maintenance Organization. HMO’s are popular, prepaid, health benefit programs in which you’ll pay monthly premiums in return for managed coverage for your checkups, hospital stays, doctors’ visits, surgery, emergency care, preventive care, lab tests, and X-rays. If you join an HMO, you will have to select what’s called a “primary-care physician” who will be responsible for coordinating your healthcare and making any referrals to specialists that you require. You’ll also have to use doctors, hospitals and clinics who are members of your HMO plan’s network.
Hospice Care: Regular health services given to a terminally ill patient.
I
In-network: Refers to healthcare facilities or providers who are members of your health plan.
L
Lifetime Limit: This refers to the cap (or maximum level) on benefits available through a policy.
LOS: This is simply an acronym for the term length of stay. It’s used by insurance carriers, case managers, etc. to describe the length of time any individual spends in a hospital or an in-patient care facility.
M
Maximum Out-of-Pocket Expenses: The most you will have to pay during one year—in the form of deductibles and coinsurance fees.
Managed Care: This term refers to an increasingly broad assortment of health plans employing a system that manages healthcare costs and usage. There are three major types of managed health plans—HMOs or health maintenance organizations, PPOs or preferred provider organizations and POS or point-of-service plans.
Medicaid: This is a joint state / federal health insurance program that is administered by the state. It provides health coverage for low-income individuals, especially pregnant women, children and the disabled.
Medicare: This is a federally sponsored healthcare program that offers coverage for medical and hospital care primarily to those over the age of sixty-five.
N
Network: This refers to the groups of doctors, hospitals and other medical professionals who have been contracted to provide discounted healthcare services to your insurance carrier’s customers.
O
Out-of-Network: This term typically refers to any doctors, hospitals or other healthcare providers considered to be non-participants by your insurance plan (HMO or PPO). Depending on your plan’s guidelines, services provided by out-of-plan providers may not be covered, or only covered in part.
P
POS: This is an acronym for Point-of-Service Plan. The POS is a managed healthcare plan that combines the features of a Health Maintenance Organization and a Preferred Provider Organization. These plans allow you to decide whether or not you’ll use an in-network provider or an out-of-network provider.
Preexisting Conditions: This refers to any healthcare issues you had prior to your insurance plan’s effective date. Many policies will refuse to cover pre-existing conditions, while others do so only for a short time.
PPO: This is the acronym for Preferred Provider Organization. PPOs are networks of healthcare providers who have negotiated discount contracts with health insurance carriers. Your healthcare provider decisions will be up to you but there are generally financial incentives for you to select providers within your PPO network.
Preventative Care: Health services that focus solely on preventative care measures such as physical exams, immunizations, diagnostic tests and mammograms.
Premium: The dollar amount you’ll pay on a monthly basis in exchange for your insurance coverage.
Primary Care Physician: Most HMOs and POS plans will require you to select one family physician, pediatrician or internist to monitor your health, treat most of your health problems, and refer you to specialists when necessary.
Provider: This term refers to any individual (nurse, physician, etc.) or institution (clinic, hospital, or laboratory) that provides you with care.
R
Rider: This refers to any policy attachment that makes additions or changes to your original insurance plan.
S
Short Term Health Insurance: This type of healthcare plan is purchased to provide you with benefits during coverage gaps between jobs, after a move or while you’re traveling overseas.
Small Business Health Insurance: This is a type of healthcare coverage that is available to businesses employing between two and fifty employees. It offers discounted premiums to employees and tax advantages to small business owners; also in most cases, the coverage cannot be denied.
T
Travel Health Insurance: This insurance is purchased to provide you with coverage when you’re traveling abroad.
W
Waiting Period: This refers to a pre-specified time period during which you will not be covered by your insurance (for a particular healthcare issue).