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Ask Colleen King | Blogs


Medicare open enrollment–need a change?

10-28-2008by Colleen King

Medicare–the golden years–woo hoo! You finally have your red, white and blue card, health care until you ‘no longer need it’ is now taken care of. But are you okay with your current situation? Medicare alone does not cover 100% of everything so most people pick up additional coverage, which I will go through below.

Medicare Supplements and Medicare HMOs, also known as Medicare Advantage plans, are something to choose wisely. This is because as time goes on, like with regular insurance plans, benefits change and what you chose originally might not be working for you now.

November 15 through December 31 is Medicare open enrollment every year, and if  you have a Medicare Advantage/Medicare HMO plan and you aren’t happy, or your doctor is no longer accepting the plan, NOW is the time to make a change and you don’t have to go through medical underwriting to be accepted.

Medicare Supplements don’t have quite as liberal rules around changing, but there are ways of doing it. BUT, generally you will have to be able to go through underwriting screening and be accepted. And that’s usually the problem. When you initially become eligible for Medicare, you have a six month window (three months before and three months after your birthday) to enter any supplement plan that you want. No underwriting. You can be a medical train wreck and they will still take you. However, if you have a supplement and it’s become too expensive, you can make the change to an HMO plan during the annual open enrollment period.

In Los Angeles County, and several other counties in California, the Medicare HMOs (aka Medicare Advantage plans) are free, so if money’s getting tight a Medicare HMO might be a good solution to your situation. If you are having trouble navigating the coverage waters of Medicare associated plans, call your agent. Or me; I’d be glad to help you figure out your options.

Be well! more

Long Term Care insurance–at what age should you buy it?

10-18-2008by Colleen King

Long Term Care insurance is going to be an essential part of your financial/retirement planning portfolio, because despite what you may think, the government is not going to take care of it. They’re struggling now to do what they are supposed to, and it doesn’t look like it’s going to get better anytime soon.

Many people think this is something you get in your late 60s or early 70s. You can, but the problem is that rates are significantly higher at that point, and there’s always the risk that you may have developed something rendering you uninsurable.

The time to really start looking is in your late 40s or in your 50s.  Reasons why:

Rates will be lower; for with each birthday, the rates will go up.

When you have no health conditions, you may qualify for a 10% ‘preferred health’ discount with most carriers. That can add up to worthwhile savings.

If you are married and you both apply there is usually about a 25% spousal discount. So you buy two policies for about 25% less each! Unfortunately, as we know, once you hit the ‘older years’ you risk one spouse possibly passing away and you lose that possible discount. Or, one of you may not qualify for coverage, so you lose the spousal discount possibility.

Case in point–I recently had two requests for quotes. My initial presentation was for a $170/day benefit, 5% compound interest inflation protection, a 3 year benefit period, and a 90 day elimination period. One lady was 52, the other was 72.  Standard rate, without any discounts, not taking into consideration the possibility of a preferred health discount. The 52 year old woman’s rates per year were $2329/year. The 72 year old woman’s rates were $7800/year! And those were the least expensive rates from the three companies I queried.

So even though $2300+ a year is not cheap, long term care costs in California at this time can be as much as $80,000 per year, or more. Compare $2300 vs. $80,000. All of a sudden, it seems manageable doesn’t it?

Also, while carriers won’t guarantee it, the majority of the time carriers will not raise rates on existing policies. So locking in that $2300/year could be helpful in a few years as you are looking to retire and your income is going down.

So at least do some checking; you can’t make a good decision without good information. If you have an agent you trust, get a quote or if they don’t sell long term care insurance, ask for a referral to an agent that does. And if you’re in California, I’d be glad to help you.

Be well more

I refuse to participate in the recession.

10-09-2008by Colleen King

I recently heard this statement at a sales training session, and it’s become my new mantra. Health insurance and most other types of insurance for that matter, can be really expensive and now’s not the time to be absorbing rate increases.

Even though I sell insurance for a living I don’t like to see people pay more than they need to. That doesn’t mean the least expensive coverage is the best way to go either. But there is a happy medium often times.

Life insurance rates overall have come down over the past few years so if you purchased life insurance more than 4-5 years ago, it might be time to see if there is something less expensive for you. Why not? You also have to see if what you have is sufficient. If you’ve had another child or two since you last bought a policy, it’s time to make sure that is still okay.

Long Term Care insurance–well, none of us are getting any younger, so if you are in your late 40s and up, you might consider at least learning about it. Maybe get a quote too. The old thinking was that this is something you buy in your late 60s, early 70s. By then, rates can be at least double what they would be in your 50s. Plus there’s the risk of developing a health condition that could either keep you from getting a 10% preferred health discount or rendering you uninsurable in general.

Annuities–see my September 30th post on annuities. They can be a great move in this economy if you don’t need the money right away and there aren’t enough antacids in your house to withstand the stock market volatility.

So don’t participate in the recession. If you are a business owner, you still need to market. Those that stop, their businesses don’t grow. You might not grow as much, but growth of any kind is good right now.

Be Well! more

What about Annuities in this crazy time?

09-30-2008by Colleen King

Can it get much crazier? If you’ve never considered an annuity for anything before, you should consider it now.

An annuity is actually an insurance product that gives people a guarantee on their investment. At least the fixed annuities and fixed indexed annuities do. The stock market is a scary place to have your money these days, especially if you saw the Dow drop nearly 800 points Monday! It didn’t plummet that much after 9/11, which doesn’t make me feel very good.

Annuities are life insurance products that guarantee your principal. Fixed annuities will make the commitment.  The variable annuities won’t, as they are directly invested in the stock market. If you are in your 20s and 30s, you may not mind the loss because you have time to make the money again or wait for the market to rebound. Not that it did after the mess of 2000, but it could.

But if you are in your 40s and up, we baby boomers aren’t going to have the time to re-save. I’ve moved a good part of my money into annuities over the past 3-4 years. There are different kinds, with different time frames, it is not a one size fits all product. Talk to your insurance or financial advisor to see if this if an annuity might be a suitable direction for you to go.  I use them for people that have left jobs and don’t want to leave their 401k or 403b behind. But they don’t have the stomach for the stock market. The other plus on this is that when you leave an employer sponsored retirement plan is that you will be starting an IRA. The main reason to move your old retirement plan is that if something happens to you, ODDS ARE THAT YOUR BENEFICIARIES WILL GET THE ENTIRE AMOUNT AT ONCE! Talk about ugly tax consequences.

By moving it into an IRA, whatever the vehicle, an annuity or whatever, you and your beneficiaries retain control and the money can be taken out over time. This is referred to as a ‘stretch’ IRA and you need to know about this.

If you are concerned about the stability of insurance companies, especially after AIG being ‘bailed’ out, or rescued, or ‘whatevered’, what you need to realize is that the insurance segments of AIG are sound. There are reserve requirements of 103% of the face value of policies that must be held, not flying around. What got them in trouble was poor investing by their other business units.  Remember, in 1929, the banks went under. The insurance companies held strong.

So take a deep breath and hang on. It’s going to be a bumpy ride! more

Category: Annuities

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