Tuesday, December 6th, 2011 | Kevin Sloan | |
The purpose of health insurance is to cover and reduce the cost of health-related expenses. A good health insurance plan saves you money and protects you from having to pay in full for high medical expenses, now or in the future.
You may no longer be covered by your employer or may be self-employed, which puts the burden of getting health insurance coverage squarely on your shoulders. It may seem like a maze of information, but here are some tips to make it easier to find the best coverage for you.
To pick the health plan that’s right for you, balance the cost of the plan (the premium, usually paid monthly) with the level of coverage and the amount it saves on your medical expenses. Consider a plan’s deductible (how much you pay in expenses before coverage starts), co-payments (the fixed amount or percentage you pay of the full cost of products or services) and out-of-pocket limit (also referred to as out-of-pocket maximum, the most you may pay out-of-pocket for healthcare costs in the year).
Evaluate Your Needs
So what is the “best” health plan? It varies for each individual. The best health-care plan for you depends on your health, medical needs, level of coverage desired and plan cost.
- Examine your current health expenses and others you expect to incur. Where are your health-care dollars going currently: doctors, drugs, procedures, etc.? Based on this assessment, decide which areas need strong coverage, and which can be low- to no-coverage (so you only pay for what you need).
- Research plan coverage levels and costs for your specific needs. For example, someone who requires regular medications for a chronic condition may want a plan with full pharmacy coverage and low co-payments for drugs. A person who is otherwise healthy but planning to have knee surgery should closely check the policies and rates for major medical procedures.
- Then consider unforeseen medical expenses, small and large. It may be worth paying a little extra now for safety from future unexpected (and high) bills, or even peace of mind.
Research Your Options
Different health plans and configurations can protect you and save money in varying amounts. Use online tools such as health insurance comparison websites to see a quick and easy overview of several plans side by side. You can filter plans by cost and even compare copay amounts and charges for common medical expenses.
Be a well-informed consumer. The consequences of ill-fitting health insurance can be extreme. Based on a cross-section of plans, the average family out-of-pocket limit is $4,033. However, on some plans, you can be on the hook for $30,000 before coverage takes care of the remainder. Always make sure you know what’s covered, what’s not and how much you may need to pay in any situation.
There are many resources online to help you find the best health plans, so research thoroughly and make an informed decision about your health and future. Your family and your wallet will thank you.
In a recent LIMRA survey of Americans not yet retired, 40% said they currently save no money each month toward retirement.
The LIMRA research indicates that fewer future retirees will have pensions to pay for their living expenses and more will be relying on their personal savings to fund their retirement. Without a significant change in savings behavior, many Americans will not have enough money to afford to retire.
The survey also found that 19% of adults not yet retired typically save less than $100 a month, while 27% save $100 to $499 a month. Even those with household incomes of $50,000 or more, a sizeable proportion—42%—are either saving $100 or less, or nothing, each month.
Looking at pre-retirees, the results were not much better: 41% of pre-retirees are not putting aside any money for retirement and a little more than one-fifth (21%) of pre-retirees save less than $100 a month.
People may think they will just continue to work until they die, but LIMRA’s research shows that 56% of retirees retired before they expected and 43% were involuntary. So the choice of when to retire may not be theirs.
Employer-sponsored retirement plans, such as 401(k), 403(b), etc., are an easy way for employees to save for retirement tax-free. LIMRA’s study revealed that many Americans who have access to one of these plans do not take full advantage of the tax-deferred savings.
While 55% of surveyed adults do not contribute at all to an employer-sponsored plan, of those that do, 48% contribute less than 5% of their annual earnings. Overall, more than 20% fewer women contribute to their employer-sponsored retirement plan than men (39% vs. 50%). In addition, the survey found that women are more likely than men to contribute less than 3% of their earnings (19% vs. 13%, respectively).
The good news is, despite the poor economy, only 12% of plan participants have decreased their contribution rate over the past year; 24% increased the amount saved and 64% kept their contribution the same.
As LIMRA stated, educating people about the benefits of systematic saving is critical. For more information on how to accomplish your savings and retirement goals, contact your personal agent or advisor or go here.
Tuesday, November 22nd, 2011 | Cecily Kellogg | |
Two months before my wedding, my soon-to-be husband got a call from an emergency room near his mother. She’d come in with bad flu 
symptoms, and they wanted us to pick her up and take her home so she wouldn’t have to drive herself. When we arrived, it was immediately clear to us that she was completely mentally altered and a simple flu couldn’t be the explanation. After much insistence and fuss-raising, we got her evaluated by a neurologist. She had one of the worst cases of viral encephalitis the doctor had ever seen.
By the time our wedding arrived, she was in rehab recovering. The brain injury caused by her encephalitis, sadly, escalated her next big health crisis: Alzheimer’s. During the next 10 years, my husband slowly began taking over most of her care and managing her finances until we had to finally put her into a facility that could care for her escalating needs.
During those times, one thing that helped us immensely was rather unexpected. It turned out that many years earlier—right after her husband passed away—my mother-in-law purchased a very, very good long-term care insurance policy. This enabled her to have a home-care aid for several years, and helped in placing her in a better quality home when it came time. It was a tremendous boon to our family.
This was never clearer than this past January when it was my turn; I got a call from my mother’s doctor saying she was in for an appointment and clearly had some sort of very severe pneumonia. My mother was suffering from a profound hypoxia (lack of oxygen to the brain) that was causing her to be combative and mentally altered, and she was resisting going to the hospital.
After a 10-day medically induced coma, two months of rehab, and six months of my mother being out of work, my husband and I nearly lost our house trying to keep her (and us) afloat financially. My mother has zero long-term care insurance, no disability insurance (she’s an adjunct professor), and little in the way of savings. Eventually we addressed the problem by triggering my mom’s Social Security early and having her move in with us. We’re adjusting to being a family of four now; secretly I think my daughter loves having her Grandma around all the time. I do, too—mostly. We clash a little during TV time at night. But we’ll survive.
The contrast between the two scenarios is stark, and it’s all because my mother-in-law was smart and purchased long-term care insurance early; she was in her late 40s. We’ve brought the subject up with my mom, but we’ve met some resistance; she thinks long-term care insurance equals nursing home. We’re trying to correct that misconception; long-term insurance would actually make it much easier to keep her at home, after all. At 43 now myself, it’s also something my husband and I have on our “list” when our finances recover this year.
During open enrollment at work, we’re faced with the often confusing task of evaluating the benefits options our employers offer. Often, these benefits can change from year-to-year, complicating things even more. While you may be tempted to just let your previous benefits selections “roll over,” it’s critical to take time to review and understand what’s being offered and make any necessary updates to your insurance and other plan selections to meet the changes you have—or will have—in your life.
According to a recent survey conducted by LIFE and LIMRA, among the top financial concerns of Americans today are
- having enough money for a comfortable retirement
- paying for medical expenses
- being able to support themselves if they become disabled and unable to work
Open enrollment gives you the perfect opportunity to review your financial and insurance plans to make sure you have a foundation in place to help prepare for these types of potential expenses. These eight tips will give you a helping hand:
1. Choose your options carefully. Barring a major life change, such as marriage, divorce or the birth of a child, most benefit plans do not allow you to make changes to your coverage elections more than once a year, during open enrollment season. Be sure to consider your plan options carefully so that the choices you make meet your current needs.
2. Don’t assume that doing nothing will maintain your status quo. Allowing your benefits options to just roll over from one year to the next can seem like an easy decision when you’re faced with numerous open enrollment choices. But not taking the initiative to evaluate new or changing options could mean missing out on plans that could potentially save you money or could leave you in a program that no longer meets your needs.
3. Consider a high deductible health plan. Review your health plan options to see if your employer offers a high deductible health plan. These plans can be less expensive if you don’t plan to use your coverage often. However, you’ll want to take the money from your lower premiums and save it. If you should incur medical expenses, you may need that money to pay for them because you will have to pay a larger deductible up front. If you don’t have high medical expenses, you will have saved that money.
4. Look for cost-effective ways to increase your life and/or disability insurance. Many companies offer their employees group life and disability insurance. Sometimes employers will provide a basic life or disability insurance benefit at no cost to their employees. They may also offer an option to supplement coverage through a voluntary payroll deduction. It is important to review the options available to you to maximize any opportunities where you may be able to increase coverage in a cost-effective way.
5. Re-evaluate the amount of insurance coverage you need. If you’ve recently had a child or been married or divorced, it is important to update your insurance policies to account for these life changes. When the number of people who depend on you changes, it’s likely that your health, life and disability insurance coverage will also need to change. The LIFE website offers several calculators, including a Life Insurance Needs Calculator and a Disability Insurance Needs Calculator, to help you determine how much coverage you should have.
6. Make sure your beneficiary information is up to date. Marriages, divorces, births or adoptions can often be overlooked when people are reviewing their policies and the beneficiaries designated for things like life insurance or a 401(k) account. You’ll want to be sure that your beneficiary information is updated based on your current life situation to avoid any confusion or potential problems during the claims process.
7. Calculate your out-of-pocket healthcare expenses. As health-care costs continue to rise, it’s important to consider taking advantage of a flexible spending account (FSA) or health saving account (HSA). These types of accounts allow you to set aside a portion of your pre-tax earnings to pay for qualified expenses, such as doctor co-pays, prescriptions, daycare or even mass transportation and parking—depending on the type of account being offered. If you currently contribute to a FSA or HSA, you may want to increase or decrease your contribution based on your current needs.
8. Ask for help. Talk to your human resources representative or your company’s employee benefits advisor about your benefits options during open enrollment. You’ll also want to review your options with your spouse—some benefits packages are better than others, so you may want to consider being added to your spouse’s plan as a dependent or vice versa.
