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Ask Colleen King | Blogs


Health Insurance–what do you think of Supplemental Plans?

09-25-2008by Colleen King

Health Insurance is treated differently by people as opposed to homeowners or auto insurance, because unfortunately we tend to need to use it more often. Individual health insurance plans generally over 70% (or less) after you meet the deductible. So until you hit the out of pocket maximum, which is like a stop loss, your 30% adds up. Thank goodness for the out of pocket max, because that’s the part that keeps you from going broke, or paying that 30% forever.

I was asking my business partner about these in light of the current economy. His only response was on the economy, and to quote him, ‘Ruff” (see picture at the bottom of this post). Supplemental insurance can be sold in a few ways, and whether or not it makes sense depends on your personal philosophy on insurance. And yes, some people outside of this industry have insurance philosophies. These are plans you will hear about that provide extra coverage for cancer, accidents, hospitalization, critical illnesses such as strokes and heart attacks.

These may be helpful to you, but you really need to evaluate the cost versus what you get, IF you have an occurrence. The main thing that bothers me about the way I hear a lot of agents sell them, and only sell supplements, is that they describe them as ‘paying you money for what your main health insurance doesn’t cover.’ It often sounds like they make up the entire difference, and they don’t generally.

They don’t coordinate with your main insurance most of the time. They send you the specified amount after you file a claim if it meets the criteria. Then it’s up to you, if you spend it on non-medical expenses, which could be helpful, or you use it to pay medical costs.

Some employer groups will offer these to employees at the employees’ expense to enhance the benefit package. Depending on what you buy, it could be paid on a pre-tax basis, which is good for the employer and the employee. Before you go forward with it, ask the following questions:

Is there a limit to the number of times I can file a claim?

Will the rates ever go up?

What does this cost each month, and what is the potential payout?

These are just a few of the questions you need to ask. These types of plans are mostly offered in conjunction with group health insurance, but some can be offered on an individual basis. Wherever you are buying it, make sure you understand what you are getting and keep asking questions until you are satisfied.

Of course, there is always the alternative–Be well! more

Health Insurance–Should I use an independent agent or go ‘direct’?

09-16-2008by Colleen King

Health insurance tends to be confusing to most people, so going to a big, national web site to decipher what all is available might be okay for some. If you really understand it, then go for it. I can understand wanting to do it on your own and not risk being pressured into buying more than you want.

However, whether you are looking for an individual plan for you and/or your family or a group health plan, if this isn’t your forte, seriously consider using an independent agent. I’ve dealt with several people during my time in business that had gone to a major site to pick their own, then they were unhappy with it. There are several things that can be phrased in different ways, and if you don’t know all the nuances you might end up with something other than you thought. Many of these huge national sites also have agents available by phone you can call for help, but from what some of my clients have told me, trying to get the same person a second time especially if it’s a couple of months or more after you bought the policy can be tough.

By going to an independent agent, whether they are down the street or just established with a private agency in your state, if you have selected a good agent, they will be there if down the line you have a problem. I tell my clients that I don’t disappear after a sale, that I remain available to them in case there is an issue. I also tell them that I return phone calls usually the same day. That may sound like pompous horn blowing over a dumb little thing, but it you’ve ever had an agent evaporate on you, you’ll agree that it’s not.

I also tell my clients that I ‘do the shopping’ for them. On my web site I post the pricing and benefits of all the available carriers that I represent. So you could certainly go to my web site, find information, select a plan and apply online without ever talking to me. But I like to talk to people, so if you do go to my web site, let’s talk about what you have found and see if it will really fit what you are looking for. I look at the nonsense of individual health insurance and group health insurance plans day in and day out, so sometimes I can point out small things you might have missed. My goal is to help people find what fits their needs, not mine, and frequently I talk people down in price, spending less than they would have on their own.

Sometimes people think that by going to a carrier (insurance company) directly, then can save money. My services and those of any other independent agent, are free, whether you end up buying from us or not. We are paid by the carrier we place the business with. So our consultative services work for you–you don’t have to call a bunch of carriers to see what’s available, because I promise you–they all think they have the best thing going and it’s not always true. They won’t tell you about the ‘comparative pitfalls.’ So deal with an independent agent, and get objective information on your plans.

We also know about the subtle differences between carriers when it comes to underwriting health issues. They don’t tell us everything, because honestly, with some agents that would be like giving away the answers to the quiz. But there are some carriers that are certainly easier to work with than others.

So use our expertise and willingness to help you if something goes awry–Be well! more

Life Insurance as ‘Mortgage Protection’ insurance–a so-so way and a much better way to do this

09-10-2008by Colleen King

Life insurance is life insurance, right? Many times yes, but with the right type of life insurance your mortgage will be protected in a way that affords your survivors more options.

Have you gotten a mortgage or refinanced a loan lately? About 20 minutes after the close, you started getting things in the mail offering crucial, vital protection that was absolutely essential to your existence and the existence of your family as well the continuation of liberty and freedom in America. Geez, when you put it that way……..

Often is it offered by an affiliate of the company you did your loan through, but also insurance agencies that do this type of coverage buy information and seek out public records when a new loan or re-fi closes. The idea is that you fill out the card, mail it then get a call to set an appointment. You can do that and meet with the agent, but there are some definite questions you need to know to ask.

Generally what is being offered is called ‘decreasing term’ life insurance. What you are buying is a term policy that is meant expressly to pay off your mortgage, it’s not a fixed, static amount.  So, as your mortgage balance decreases, so does the amount the policy will pay if you pass away. If you are buying with a spouse or partner and you both apply, you are really paying two premiums and getting one policy, with a death benefit that decreases over time. AND, if you sell your house, usually the policy is attached to the house so you end up starting over if you are buying another home.

What about this scenario–one of you is working, the other isn’t. The working spouse dies.  You have other bills, and now a loss of income. What do you do? Well, the decreasing term life policy will pay off your mortgage, but what about other expenses?

By using a regular term life insurance policy, either 20 or 30 years, you control what happens to the money. You can now address other bills and have a financial cushion. Maybe you do want to pay off the house, and you can, but what if you are now going back to work and would like the mortgage interest expense as a deduction? This is one of the things I mean by having control over your situation. If  two people are insured, you have two level premium death benefits (meaning the value doesn’t drop over time). And if you move, the policy goes with you.

Optimally, you look at an amount that will pay off the mortgage, put all kids through a four year college program and take care of a majority of the remaining partner’s living expenses. That can end up being expensive, and you don’t want to buy insurance that breaks you. Once we look at rates, then we go ‘backwards’ and see what death benefit amount is affordable. After all, having something is better than nothing, because it will give your survivors time to grieve and deal with things. And not have to make difficult financial decisions at a terrible time.

Some people if they are younger will opt to add on a ‘return of premium’ rider. If you are alive at the end of the term of the policy, they will return 100% of the premium to you. No interest of course, but at least you get it back. Agents are divided on whether this is a good thing to recommend or not. I suggest it, but don’t push it, because ultimately my clients are calling the shots.

So basically, when you have people depending on you financially, whether you want to call this mortgage protection, life insurance or just good old peace of mind, seriously consider looking at it. Be well! more

Category: Life Insurance

Health Insurance–California and the U.S. aren’t the only places with problems.

09-03-2008by Colleen King

I was on vacation last week, and even though I was out of cell phone and computer/wireless range, there’s always someone talking about health insurance.

I was in a cab on the island of Aruba, which is beautiful. My boyfriend and I with another couple had gone to a great beach and in the cab on the way back, we were asking the gentleman driving us to tell us a bit about Aruba (other than what we knew about Natalie Holloway!)

He was of Dutch origin and had lived there most of his life. Said it was beautiful and safe, but like anywhere, things were changing. Health care coverage was free (remember, that always means higher taxation!) but they were having a huge influx of Colombians which was a burden on their system. He groused that when one comes, the whole family comes and often times they aren’t working, ergo they aren’t paying taxes or contributing to the system. Just draining it. Sound like familiar complaints?

In California, it’s the Central Americans who are often blamed as a problem. Several years ago when I spent a lot of time in Italy, it was the Tamils, the people from Sri Lanka that were ‘draining’ the economy. Every country has it’s problems, and part of it seems to evolve from people in poorer nations striving to make a better life for themselves and their families in a better place.

Health care is only one piece of a ‘better life’ and it costs money. What do we do about it? There are so many ideas, but whatever you think is a great way to change our current system, it won’t happen quickly. The more people that buy health insurance, healthy people rather than just those who are ill, the more money that goes into ameliorating the risk–right now, who buys it? People anticipating needs whether it’s planning a family and all the care costs that come with having babies, people getting older fearing illness, and so on. Younger healthy people also need to get on the band wagon, even though they ‘don’t need it.’ You may not develop asthma or high blood pressure in your 20s, but what about that snowboarding accident or amateur sports injury? Running down the stairs in a hurry and either badly spraining or breaking an ankle. That costs too, and those are the kinds of things that can saddle a young person with a ton of bills that would have been avoided with a decent health plan.

So until the ‘big reform’ (lord help us all!) takes place, covering yourself and your family, if it can be done without costing a fortune, seriously look at doing it. That’s not just a sales ploy on my part, it’s reality. Significant reform will take a few years at best. Meantime, help avoid the potential pitfall of financial ruin by seeking some sort of coverage. A good agent will help you find what fits you best.   Be well! more

Individual health insurance–explain guaranteed issue plans?

08-29-2008by Colleen King

When dealing with Individual Health Insurance, depending on your personal health history, it can be dicey to apply because you don’t know whether you’ll be accepted or not and if you are, and are offered coverage at an above standard rate, will it be affordable? Depending on your situation there are some options in California, so we’ll look at a few of them. You can see this poor guy is trying to figure it all out in a song….

Light picture to get you through this subject...

If you are coming off a group health plan and have health issues, you are eligible for Federal COBRA for usually up to 18 months as a result of the Health Insurance Portability and Accountability Act (HIPAA). Problem is, if you’ve ever looked at the cost, if you didn’t have a heart condition before, you will now. You get to keep your exact same coverage, not subject to underwriting review, but you are now paying the full cost plus a 2-4% administration fee. NOW you understand the true cost of health insurance. Federal COBRA applies to businesses with more than 20 employees, but California, being the way we are, instituted CalCOBRA for companies with less than 19 employees. Similar rules around this, you can keep it for 18 months but you pay the full cost plus about a 10% administrative cost. And if you work for a 20+ company, you can take advantage of Federal and CalCOBRA for a total of 36 months coverage, if you can afford it.

What do you do when COBRA ends, or if you can’t afford COBRA and are uninsurable? Once you complete the full run of COBRA, the insurance carriers have guaranteed issue health plans you can apply for. But, the cost is often comparable to your COBRA coverage.

Option of last resort are a type of plan called a ‘mini med’ plan. These are not the first line of plans that I as an agent offer but when there is nothing else, it can help keep the wolf from the door. I work with one company that offers 3 different level plans and I usually try to encourage people to look at the highest level, contrary to what I usually advise. The carrier pays a fixed amount per day for hospitalization, a specific amount for office visits, they will help with some physicians and surgical charges and offer several discounts on other types of services such as vision, prescriptions, hearing aids, and so on. The monthly cost on these can often be better than your COBRA offering but not as comprehensive a type of coverage. But, it will help.

Again, not the first type of plan in my arsenal but when properly explained, there is a place for the mini med plan. They tend to be more popular outside of California and can also be found in the group health insurance arena as well when an employer wants to offer something but doesn’t want to break the bank.

Reform of the health care and health care reimbursement has been talked about intensely for well over a year in California. Don’t plan on it happening too soon, we can’t even get a budget passed. You need to be responsible for your own wellbeing so seriously consider looking into at least a high deductible health plan in case something major happens. Because comprehensive reform ain’t happening soon. Be well! more