Health Insurance
What is health insurance?
Health insurance is a contract with an insurance company, which agrees to pay some or all of your medical bills based on your “coverage,” or the terms of your policy. In exchange, the insurer is paid a set amount of money — a “premium” — on a regular basis. Most Americans have private health insurance, either through their employer’s group plan or through buying their own individual policy. Others are covered under public “safety net” programs such as Medicare and Medicaid.
Why do I need health insurance?
It’s no secret that health care is expensive today. The government says the cost to treat a broken leg can run $7,500 and an average three-day hospital stay can set you back $30,000. Without insurance, many Americans would be one health setback away from financial ruin. Regularly paying a set premium for health coverage assures that money will be available to defray the cost of everything from routine checkups to catastrophic medical bills.
What’s the difference between a deductible, a copayment and coinsurance?
All three are medical charges you must pay out of your own pocket, even if you have insurance.
- Your deductible is the initial amount you must pay each year for covered health services before your insurer will start to chip in. Plans may have separate individual and family deductibles and/or deductibles for separate services such as hospitalization.
- A copayment is a fixed amount you pay toward each medical service, such as $25 for a checkup.
- Coinsurance is a fixed percentage, rather than a flat amount, that you pay toward each service.
Life Insurance
Why do I need life insurance?
There’s no replacement for you and the contribution you make to your family. You want to make sure that people in your life, especially your dependents, can remain financially secure after you die. That’s what life insurance does for you and your loved ones. It gives you peace of mind. Income replacement is the #1 reason why people buy life insurance.
Stay-at-home moms or dads also have an important, often overlooked, economic value that should be covered by life insurance. Life insurance is also used to achieve specific business or estate planning goals.
Bottom line: life insurance financially protects your family and loved ones at a time when it is needed the most.
How do I know how much life insurance I need?
Many insurance experts recommend that each family income provider carry no less than ten times their annual income/worth in life insurance. The amount of your outstanding mortgage should also be a consideration. Any coverage for your mortgage should be in addition to the amount of insurance you calculate for your income coverage.
It’s quite common to see life insurance also referred to as mortgage protection insurance since most people equate buying life insurance with the need to pay off large debts.
Who should I buy life insurance from?
You take the time to purchase a life insurance policy, so you want to feel confident that the company will be around in 20 or 30 years to handle your family’s needs if the time arises.
That’s why the most important buyer’s tip is to buy from a financially sound life insurance company. Though competitive pricing is important, it’s more important that the company is stable, financially strong and able to fulfill the policy should you need it.
What are the advantages of term life insurance?
The easiest life insurance to understand (and the lowest cost to buy) is term life insurance. Term life insurance provides straightforward death benefit protection without any expensive “cash value” or investment component add-ons.
Your term life insurance policy will offer level premiums for your choice of 10, 15, 25 or 30 years during which the premiums are guaranteed not to increase. As long as you pay your premiums on time, the company cannot cancel you. If the insured dies during the term, the death benefits are paid to the beneficiary without any complicated process or rules.
Can I afford term life insurance?
Term life insurance has become very popular with consumers in recent years because premiums for new policyholders have dropped to all-time lows.
What should I look for in a term life policy?
Most high quality term life policies sold today are guaranteed renewable, which gives you the right to continue your coverage beyond the initial rate guarantee period without a medical exam. This feature can become extremely important to your family should you become sick and uninsurable towards the end of your initial term life rate guarantee period.
