Tips To Buy Life Insurance
To view the previous video in this series click:
http://www.monkeysee.com/play/22128 Wells Fargo financial expert Sherri
Littlejohn provides the top tips to buy the right life insurance.
California Medicare Explained
With changes in the recent insurance laws, it is no wonder that there is much confusion surrounding the different types of insurance that exist today. One type of insurance people are wondering about is California Medicare. Too many folks simply don’t know what it is.
California Medicare is medical insurance that covers US residents who are 65 years of age and up. In order to receive California Medicare, one must be a legal citizen who has resided in the US for a minimum of five years. Some folks who are under the age of 65 and have a disability also qualify.
So, what are the items that California Medicare covers? One of the things it covers is hospital costs, including inpatient hospitalization, hospice care, certain outpatient costs, and in-home care. If you paid into Medicare through employment taxes for at least 10 years, you will receive most of these benefits. If you paid into Medicare for a shorter period of time, you will receive only partial benefits.
California Medicare also covers medical expenses. These include physician services and medical supplies not covered by the aforementioned hospital insurance. Typically, Medicare covers about 80 percent of these costs, leaving you to pay the remaining 20 percent. It is advisable to purchase supplemental medical insurance so you don’t have to pay anything out of pocket.
Medicare Advantage is an enhanced form of Medicare that may also cover prescription medication, optical, and dental costs depending on the plan. This type of coverage has the most benefits. Plans vary, so review them carefully online at www.CaliforniaMedicareAdvantage.com or with a local Medicare insurance agent..
If you are not interested in California Medicare in the forms presented here, you can still purchase a plan that covers only prescription drugs. Prescription drugs can be very pricey, especially if you have a serious condition that requires constant medication. Check the fine print to ensure that the plan meets your needs, as some plans are more comprehensive than others.
3 Things You Should Know When Shopping For A Medigap Plan
Medigap insurance is a type of health insurance policy sold by private insurance companies in order to meet the financial obligations associated with healthcare not covered by original Medicare. These plans cover some to nearly all of the healthcare costs one may incur. When looking for a Medigap policy here are a few basic things to explore.
One starts with the mission of finding the right Medigap plan by browsing through catalogs offered by various insurance providers. If you are new to this field, in order to be eligible for a Medigap policy, you need to have Medicare Part A and Part B from the government. You have the right to purchase a policy under the Medigap open enrollment window. During this time one is guaranteed acceptance, even with pre-existing health conditions. A Medigap policy can be denied if you already have one, have a Medicare Advantage Plan or are enrolled in Medicaid, are under the age of 65, or are in the last stage of a chronic illness.
Once you have bought a Medigap policy, the only time you are denied benefits is when you fail to pay the premium, make false impression on the policy, or the company files bankruptcy. If you are denied a policy for reasons other than these standard issues, you are eligible to buy another policy.
Reliability of Insurance Companies
In these economic times, there is probably no need to remind anyone eligible for Medigap insurance that not all companies insurance companies are equal. There is more to it than just looking at Medicare supplement rates when shopping for a new plan.
Call your state insurance authority which inspects the dealings of private insurance companies and make sure the company in question is licensed to do business. These authorities and other health insurance assistance programs come in handy when shopping for a policy. Be on the lookout for malpractices in the company before a purchase is made. There are agents and companies out there that may trick you into buying policies that are not affiliated to them or sell a secondary policy against the rules. They may also charge you extra as a processing fee when you are eligible for one free of cost.
Medicare Coverage Gaps
When you look at the coverage you get with Medicare it is easy to see that there are multiple coverage gaps. What causes a problem for most people is figuring out how to get coverage for the gaps. The problem is that if you talk to different insurance agents you can get completely different answers. The best way to know exactly what you need to do is to look at the different coverage gaps and then examine the options to fill those gaps.
The Medicare Coverage Gaps
Medicare has nine specific gaps in the coverage it provides. The gaps associated with Medicare Part A are: the insurance deductible of $1,187, the coinsurance, and coinsurance and co-pays for skilled nursing care, hospice care, charges for foreign travel emergencies, or the first three pints of blood in the event that you received a blood transfusion. Medicare Part B has three specific coverage gaps and they are: the coinsurance, deductible, or any excess charges over the Medicare approved amount. All of these gaps can be very expensive if you were to come down with a chronic condition or have an extended stay in the hospital. The good news is you have two distinct options to take care of these coverage gaps.
Medicare Advantage Plans
Because Medicare is a one size fits all kind of plan, the option or getting private health insurance and using the fund that provide your Medicare coverage was created in the form of Medicare Advantage. They are available only through private insurance companies and HMO’s. The plans are pretty versatile but are required to cover everything that you would get through Medicare coverage. Due to the subsidy the plans can be very inexpensive but you have to be careful about your coverage since each plan will be a little different. While this is a good option the easiest way to make sure you have comprehensive coverage is to keep traditional Medicare and to add Medicare supplemental insurance.
Medicare Supplemental Insurance Plans
There are ten Medicare supplement plans and each one covers a different number or combination of the nine coverage gaps in Medicare. Each plan is designated with a letter. Plan F is the most expensive of the group, but it also provides complete coverage, meaning that you will have no extra expenses above your monthly premiums. The plans are also widely accepted since they have to be accepted wherever Medicare is accepted. This is not the case with Medicare Advantage plans. While they may be a little more expensive this is the best way to make sure you do not get left with any additional expenses.
What Is Burial Insurance?
I wrote a few days about possible needs for burial insurance even if you already have another life insurance policy. I had several people asking for more information about it and where was the best place to get it.
I’ll answer the second question first. Right here is a great place I found online to get a quote for burial insurance.
Many people are unsure as to what burial insurance is. It is often also referred to as graded life insurance or, even more commonly, final expense insurance. Essentially burial insurance is life insurance. Burial insurance is a life insurance policy that covers members up to the age of 100. This makes it comparable to a universal life insurance policy.
The term burial insurance actually refers to an array of inexpensive coverage choices for burial costs. The most typical services are limited low-cost policies and burial services. Burial insurance is mean to cover the final expenses of the policy holder in order to avoid placing financial hardship on loved ones.
Premiums for burial insurance are typically inexpensive and payable on a weekly or monthly basis for the convenience of the policy holders. Each installment is collected by a representative at the policy holder’s home or office, which helps to create a comfortable bond.
Who Needs It?
Burial insurance is a simple and relatively inexpensive method for funding your final arrangements. The individual plans can be made in advance to suit your personal needs and preferences. In addition, this method insures that all is taken care of, and leaves loved ones unburdened by the financial responsibilities in their time of grieving.
Typically, burial insurance is least expensive if it is purchased as a group policy. Group policies have lower premiums that are spread out over the group evenly. Each member will have access to pre-planning their funeral arrangements, for a very low cost. Burial insurance is fast becoming a popular form of coverage because of its low cost and easy planning. Additionally, burial insurance covers any cost that might be directly related to the funeral. The policy holder can even decide what costs will be covered by the policy and which will not be.
Why Burial Insurance?
Burial insurance may be a seemingly morbid thing to consider at first. While burial insurance will not make loss any easier to bear, it can make the planning process and financial hardships much easier for loved ones. When grieving it is often hard to make choices related to the final arrangements of a family member or cherished friend, and having this pre-planned is a way to provide some care and relief from beyond the grave.
By taking care of the final details you are giving a gift to those who care for you the most. It allows them to shed the worries of the technical things and simply mourn. Burial insurance allows you to plan things as you would have them, so others need not. It also ensures that your final wishes are acknowledged and followed to the letter.
If I Already Have a Term Life Policy, Do I Need Funeral Insurance Too?
Funeral insurance, often called final expense insurance, is a policy that pays for the costs associated with your funeral and burial. Because it pays out in the event of your death, many people who already have term life policies assume that they do not need this coverage. In fact, some people with term life policies might need this type of insurance.
A term life policy is meant to provide funds to your loved ones in the event of your death. In many cases, this money is used to pay for daily living expenses, but it can also be used to pay off debts and for higher education expenses. It can also be used to pay for funeral costs. The real question that people need to ask is whether their current term life policy has enough coverage to provide funds for everything. If not, one option is to visit a site like www.goldsmithinsurance.com to get a quote on increasing coverage.
With the average funeral today costing around $7,000 and incidental expenses costing even more, it is possible to quickly deplete the funds in a small term life policy. A policy worth $100,000 for example, would see nearly 10% of the money used to pay for a funeral. A larger policy, on the other hand, would not be greatly affected by being used to pay for funeral costs.
It is also worth noting that it is possible to select a cheaper option for your final expenses. Many people choose a simple ceremony with cremation in order to reduce their final costs. If you are comfortable with this option and can keep a small savings account in place to pay for it, burial insurance is probably not necessary.
If you are like most people, however, your financial and family situation will change significantly enough every few years to warrant reviewing your insurance needs. Many young families, for example, might want to buy a small burial insurance policy to cover expenses so that their life insurance money does not have to be used to cover funeral costs. As a family gets older, however, the same amount of money provided by the term life policy does not have to last as long until the kids are able to support themselves. That might mean that burial insurance could be skipped because there will be sufficient funds from the term life policy to pay for it.
Is A Term or Whole Life Insurance Policy Right For You?
So you have made the decision that it is time for you to buy a life insurance policy to protect the future needs of your family. The next decision you need to take a look at is what type of policy will best serve your needs. There are two types of life insurance: term life and whole life. Either one will give you some protection, but one might be more suitable for both your family’s needs and your current budget.
Term life insurance is the traditional life insurance policy. It gets its name because it covers a specific period of time, or term. This is a policy that is ideal for new parents. They might want to look at something like a 30-year term policy which will provide their child (and any additional children that may be on the way in the near future) with enough coverage until after they have graduated from college, and give the parents plenty of time to start saving towards the surviving spouse’s retirement. Low cost term life insurance is fairly easy to find if you are young and healthy. You can shop online for some quotes or seek out options through your insurance agent.
Term life insurance also has the benefit that it is fairly straight forward and easy to buy. You simply need to sit down with your financial advisor and determine how much coverage is going to be appropriate for your family’s needs and for what term you want to provide protection for. From there it is simply a matter of shopping around.
Whole life insurance is generally a lot more complex than term life. If you continue to pay your premium, it has no expiration, and you will remain insured until your death. Whole life policies are more expensive. They also accrue a savings or cash value in a tax-deferred account. They are often recommended by financial planners to clients who are worried that their estate is going to be heavily taxed.
With the cash value, whole life policies are combining life coverage with an investment fund. You are purchasing a policy that pays a fixed amount on your death, while part of your premium goes toward building a cash value from investments that are made by the insurance company. You can borrow against this cash value without being taxed.
Under whole life policies, you have two additional options to choose from. Universal life combines term insurance with a money market-type investment that pays a market rate of return. In order to get a higher return, these policies usually will not guarantee a certain rate.
Variable life is a permanent policy with an investment fund tied to a stock or bond mutual-fund investment. Returns are not guaranteed.
A word of caution, you should never buy a whole life policy as a type of investment. Because the insurance company is taking their share of the returns on the gains (after all, they are a for-profit business), your return will be much lower than if you just invested the money outside of the insurance vehicle.
For most situations, I generally recommend term life insurance as the most suitable, and cost-effective solution to satisfy a family’s needs.