Archive for the ‘Insurance’ Category

The appropriate way to appraise a person’s entire life after he or she is gone is a topic that has been debated by philosophers throughout the ages. Certainly, there are as many factors as there are ways to approach them. One measure of a life is the effect that the person’s death has on those close to him or her. For those with dependents, this effect can be substantial.

One way to help mitigate the financial blow of the loss of a head of household is through life insurance. Yet in a recent survey, even though most people agreed that everyone should have some form of life insurance, only 20% felt that it should go beyond just covering bills and funeral costs and should replace the income of the deceased in order to support dependent family members.¹

However, if you have dependents, the loss of your income could put your family in the difficult position of trying to maintain its standard of living on a much smaller budget. Life insurance can be a tool to help replace the lost income. But how much insurance is enough?

No Rule of Thumb

Some people recommend that life insurance be high enough to replace an equivalent of seven or eight times the annual salary of the insured. Yet this old rule of thumb may not be the best guidepost for someone with no children.

To determine how much life insurance coverage may be appropriate for your family, consider your dependents and their ages. How long would they be expected to need support? Would there be enough funds for college? Would you want the mortgage to be paid off?

Don’t forget about other benefits that might be lost along with your salary. For example, if your health insurance is provided by your employer, your family may need replacement coverage.

Remember that the cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable and to consult a tax professional.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

1) U.S. News & World Report, March 31, 2009

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2009 Emerald.

I was sitting down in my office with my webmaster “Amir” discussing putting together a video regarding the Controversial Obama Health Care where he suddenly, out of the blue, stuck a video cam in my face and recorded our conversation!

I wanted to have a professional video made but he insisted that it is better to just roll with this unrehearsed version! Reluctantly I agreed and trusted him to not make a fool out of me!

Please watch the 5 minute short video and also download the entire Proposed Health Care Reform plan via the link I have provided for you below.  Please let me know what you think and share your thoughts with everyone else on this subject in the comment area below.

To see the complete proposed plan, please click here and download the 1,100 page document.

Think that insurers are what make coverage so expensive? Think Canadians have it better or that your company’s plan is the cheapest for you? Think again.

Hearsay and bad information often fuel people’s misunderstandings of health insurance. When was the last time someone snuggled up with a cup of coffee and her insurance policy?

According to the Life and Health Insurance Foundation for Education and the Henry J. Kaiser Family Foundation, the following myths are alive and well in the minds of most folks.

1. It’s cheapest to buy health insurance through an employer’s group plan.

If your employer offers a group health plan, you’re likely experiencing annual increases in premiums, reductions in what’s paid for by your employer, increases in your out-of-pocket expenses and the possibility that you’re paying for lots of benefits you don’t want or need.

An individual health plan (the kind you buy on your own), especially for someone who’s healthy and young, can offer significant savings. Unlike individual plans, group health plans must abide by state health insurance mandates, which can require coverage for everything from autism to hearing aids and from contraceptives to in vitro fertilization.

Although an individual health plan can deny your application based on your health status, Matt Tassey, a spokesman for LIFE, notes that if you’re eligible the plan can be customized to meet your specific health care needs.

“If you’re a man, you have no need to see an obstetrician. But if they have an employer-sponsored health plan, they are still paying for (the obstetrics coverage),” he says.

2. Health insurance is expensive because health insurance companies are driven by profit.

Brenda Weigel, a spokeswoman for the National Association of Health Underwriters, says this is a common misconception. “The fact that health insurance is expensive is because health care is expensive. Or there’s the common misconception that Medicare administrative costs are lower than private plans, when in fact there is quite a bit of cost-shifting,” says Weigel.

When patients use a government insurance program (such as Medicare), providers of health care shift more costs to people who have insurance. The result is higher premiums for people who purchase their insurance on the individual market and workers who receive insurance through their employers.

Tassey notes that rising prescription drug costs also fuel increases.

3. If you’re young and healthy you don’t need to pay for health insurance.

Then what happens when you break your leg in a snowboarding accident or blow out your knee while playing soccer? If you find that your tonsils need to be removed, the cost of a tonsillectomy can start at $5,000, with an additional $1,500 per day for an overnight hospital stay.

“There is this idea that if they need to be hospitalized they can just go to the emergency room because they have to take you,” says Tassey. “We like to call them ‘young immortals.’ A problem arises when they have to be stabilized or, worse, have to stay in the hospital for an extended period of time. What happens if they have to be transferred somewhere else for care or have to see a specialist? The cost could reach $100,000 once you add everything up, and starting out their lives in serious medical debt can have a long-term repercussions on their financial future.”

Tassey says young people rarely think about health insurance until it’s time to have a baby.

4. The highest numbers of uninsured people are under age 25.

The fastest-growing group of uninsured Americans is age 50 to 64. The difference between the younger and older people is accessibility to health insurance. While younger people who are not covered by an employer’s health plan may find it easy to acquire affordable individual coverage on their own because of age and health status, older people do not have the same advantage.

According to recent estimates from the Kaiser Commission on Medicaid and the Uninsured, middle-aged and older adults under age 65 (and not yet eligible for Medicare) are fast becoming the largest group of Americans without health insurance.

In fact, 19 million Americans from age 50 to 64 were uninsured or underinsured in 2008. Members of this group are more likely to arrive at a doctor’s office with a number of chronic medical conditions, making it difficult or impossible for them to buy individual health insurance. As baby boomers reach age 65, the sheer number of people in need of coverage has the potential of overwhelming the Medicare system.

“This is a serious problem as the baby boomers age and the cost of health care skyrockets. If you drive an old car, you have to do repairs to keep that car moving. Just imagine having 75 million old cars coming into the Medicare system — that is exactly what we are looking at in the next several years,” says Tassey.

5. COBRA is very expensive, and a short-term health plan would be cheaper.

The federal COBRA law allows you to continue buying your former employer’s group health plan if you are laid off. The catch is that the employer no longer has to contribute to the premiums. One alternative is buying a short-term health plan on your own.

If you are relatively healthy, a short-term plan could bridge the gap between other insurance plans, but if you have a pre-existing condition, or need maternity care or prescription drug coverage, you may not be able to find a short-term plan.

Also, short-term plans generally require you pay high deductibles before coverage begins. This deductible can vary from $250 (for very healthy policyholders) to well into the thousands. When you consider the cost of meeting the deductible before the plan pays for medical care, COBRA may be the better choice, especially if you have a pre-existing condition. In addition, a typical short-term policy lasts a maximum of six months, and the insurer is not obligated to renew your policy.

Under the American Recovery and Reinvestment Act that went into effect in February, you can receive a 65% subsidy of your COBRA premiums for up to nine months. In return, the federal government reimburses the employer with a payroll tax credit.

6. Large employers always offer health insurance to workers.

The Kaiser Family Foundation points out that one in five workers in firms with 500 or more employees is uninsured because many companies do not offer health insurance.

When workers are offered health insurance, they take it. According to the Employee Benefits Research Institute, less than 5% of those workers who are eligible for health benefits is uninsured.

7. Canada has a better health care system than the U.S.

The debate rages on. Canada’s universal care system is fine, but there’s a limit on what you can get. For example, if you happen to be a Canadian age 70 or older and need bypass surgery, the government won’t pay for it.

“Universal health care isn’t better; it’s just different,” Tassey says. “One of the largest hospitals in the U.S. is the Henry Ford Hospital in Detroit. Many Canadians come over to Detroit for care — not because it’s better; it’s because they can get it (in the U.S.). There is no rationing (in America) of any sort, so they can just write a check.”

Americans may complain about the high cost of health care in the U.S., but Tassey points out that people are rarely denied care for any reason.

“People in the U.S. demand care and demand it immediately. They also think we can cure anything,” notes Tassey. “Unfortunately, it costs a lot of money to treat the number of fatal diseases that need a cure. We already have a semi-Canadian system for those who are 65 and older — it’s called Medicare, and it’s going bankrupt.”

This article was reported by Michelle Matlock for Insure.com

Los Angeles (myFOXla.com) - Accidents happen… and if you have medical insurance, money should be the last thing on your mind when you’re in the emergency room.

Unfortunately, many insured patients find out there’s a gap in the system and that they’re still on the hook for thousands of dollars.

You can watch Phil Shuman’s report in the video below.

The Hospital Association of Southern California advises that you shouldn’t wait for an emergency.

• Check your health plan’s web site or handout book for the names of every doctor in the network… and what percentage of costs will be covered. 
•  Before an emergency happens, designate someone close to you as your advocate in an ER situation. 
• Also, Cosumer Watchdog’s Judy Dugan advises that you should keep meticulous records.
• Lastly, don’t be afraid to argue the doctor’s bill. If you put up a fight, many doctors will reduce charge.
   

If you have concerns regarding “Balance Billing” and/or charges for an “out of network” doctor, check out consumerwatchdog.org .

Source:  http://www.myfoxla.com/dpp/health/Medical_Billing_Controversy

Even as the economy stumbles, the price of a college education keeps on climbing. Average tuition and fees at public four-year colleges and universities rose 6.4% in the 2008–09 academic year, while costs at private four-year institutions rose 5.9%.¹

Higher college costs and trying economic conditions have interrupted the education plans of many aspiring students. In a recent survey, 57% of high-school seniors lamented that they were considering less prestigious and less expensive college options, and 16% were putting their searches on hold because they didn’t think their families could afford to foot the bill.²

It’s likely that admission to the nation’s top colleges and universities will remain competitive, but adequate college savings can help ensure that a student’s opportunity to attend his or her school of choice is not compromised by the lack of resources. Fortunately, Section 529 plans are designed to help families save for future higher-education costs.

Study This Strategy

With a 529 savings plan, investment earnings accumulate on a tax-deferred basis. Contributions and earnings can be withdrawn tax-free if they are spent on qualified higher-education expenses such as tuition, fees, room and board, books, and other school supplies.

Family members can contribute up to $13,000 ($26,000 for married couples) to a 529 plan each year per student without triggering gift taxes, and there are no donor income limits. Contributions up to $65,000 ($130,000 for married couples) are also allowed in a single year as long as no other gifts are given to the student by the same contributor(s) for five years.

As with other investments, there are generally fees and expenses associated with participation in a 529 savings plan. There is also a risk that the plan investments may lose money or not perform well enough to cover college costs as anticipated.

The tax implications of a 529 plan should be discussed with your legal and tax advisors because the plans can vary significantly from state to state. Also note that most states offer their own 529 plans, which may provide advantages and benefits exclusively for their residents and taxpayers.

Before investing in a 529 savings plan, please consider the investment objectives, risks, charges, and expenses carefully. The official disclosure statements and applicable prospectuses, which contain this and other information about the investment options and underlying investments, can be obtained by contacting your financial professional. You should read this material carefully before investing.

The average debt for college graduates who borrowed money for college has reached $22,700, with many owing much more.³ For parents who worry about the financial future of their children, it can be worth the investment to support worthy students in their pursuit of a higher education.

1, 3) The College Board, 2008
2) The Wall Street Journal, October 30, 2008

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by StoneRiver–Emerald. © 2009 StoneRiver, Inc.

Americans are more likely to have employer-sponsored life insurance coverage than to own their own life insurance policies.¹ Unfortunately, the major problem with employer-sponsored group insurance is that you usually lose coverage after you leave your job or retire (unless the policy is portable).

Owning your own life insurance policy is one way to help keep your family protected, regardless of whether your employment situation changes. Fortunately, owning your own policy may offer some other attractive benefits as well.

Term Policies

Individual term life insurance policies remain in effect for a specific period and pay a death benefit if the insured dies within that term. The death benefit paid to beneficiaries is generally not taxable as income. Term policies do not accumulate cash value and have no residual value if allowed to lapse.

Permanent Policies

Like term policies, the death benefit from a permanent policy is generally income tax–free. But unlike term policies, certain types of permanent life insurance policies remain in force throughout the insured’s lifetime as long as the premiums are paid.

Permanent insurance not only provides a death benefit, it also offers a living benefit. Part of each premium goes into a cash-reserve account that accumulates earnings on a tax-deferred basis. Once you have built up significant cash value, you can access it for any purpose, such as college tuition for your loved ones or retirement income. Because you have already paid income taxes on the funds used to pay the premiums, that portion of the cash value will not be taxed (any interest withdrawn, however, is taxable). Remember that access to cash value through loans or partial surrenders will reduce the policy’s cash value and death benefit, and it may result in a tax liability if the policy terminates before you pass away.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the claims-paying ability of the issuing insurance company. Before you take any specific action, be sure to consult with your tax professional.

1) LIMRA International, 2008

This material was written and prepared by StoneRiver–Emerald.
© 2009 StoneRiver, Inc.

Shift Your Retirement Risks Away from the Business

Each year more than 500,000 small businesses close their doors, including 20,000 to 40,000 that are shuttered by bankruptcy.¹

Whether you are building a small business or are at the helm of an established, successful enterprise, you know that it can take everything you have in terms of time and money to survive the competition while also turning a profit.

However, allocating too much of your investment capital to one company — even your own — is a risky proposition. Obviously, it would be unwise to devote your entire retirement portfolio to a single investment, but this is exactly what you are doing if you invest in your company to the exclusion of all else.

One way to help insulate your retirement from the risks associated with surviving in business is by investing outside of your company. Sometimes it might seem that your only option is to reinvest profits back in the business in order to keep it growing. But by investing away from the business, you may be able to help insulate your financial situation from fluctuations in the market in which you conduct business.

There are some potential benefits of building wealth outside the business:

Greater bargaining power when you eventually sell the business because you may be able to wait for the best terms rather than accepting the first offer.

Possible alternative source of income to help bridge the gap if the company enters a lean period.

Defense against a reduced retirement lifestyle in the event that your firm pays you less retirement income or fetches a lower sales price than you had expected.

It’s natural to want to put everything toward the success of your business. We can help you evaluate potential investment opportunities and decide whether now is a good time to begin building wealth outside your company.

1) U.S. Small Business Administration, 2008

This material was written and prepared by StoneRiver–Emerald.
© 2009 StoneRiver, Inc.

State Children’s Health Insurance Program (SCHIP) Reauthorization Update February 9, 2009 The expansion and reauthorization of the State Children’s Health Insurance Program (SCHIP) was signed into law by President Obama on February 4, 2009. In California, the SCHIP is known as Healthy Families. This law keeps nearly 900,000 California children in Healthy Families. It also gives thousands more children access to health care. It provides money for 4 ½ years and gives financial stability for Healthy Families. Federal funds provide 2/3 of the funding needed for states to run their SCHIPs.

Making sure Healthy Families has enough money to cover children is important to Governor Schwarzenegger. The Governor is grateful that President Obama shares the same thoughts. Children who need coverage will be able to receive it. The reauthorization will allow California children access to comprehensive health, dental and vision care that is crucial for their healthy growth and development.

Click the following link to read the official press release:

http://www.mrmib.ca.gov/MRMIB/Press_Release_President_Signing_2009.pdf

Doing Fine in ’09?

Although 75% of Americans surveyed in the first quarter of 2008 thought the economic situation was “poor” at the time, 60% thought economic conditions in 2009 would be “good.”¹ Considering the market volatility over the past few months, will we see an improvement in 2009 economic conditions? What will this situation mean for you and your money?

Housing

The housing sector has taken a significant tumble recently. Although some
economists forecast another year of falling home prices, the decline is
projected to be less than half that of 2008.² Former Federal Reserve
Chairman Alan Greenspan speculated that home prices may start to stabilize or
touch bottom sometime in the first half of 2009, but could continue to fall
through 2009 and beyond.³

Interest Rates and Inflation

On October 29, 2008, the Federal Reserve lowered the federal funds rate from
1.5% to 1% and expressed a weaker economic outlook related to worries over the
financial and credit-market crisis. The Federal Open Market Committee said it
“expects inflation to moderate in coming quarters to levels consistent with
price stability….Nevertheless, downside risks to growth remain.”⁴

Before the rate cut, some economists believed that the Fed would have to
raise interest rates in the first six months of 2009.⁵

In a retirement poll conducted early last year, before their retirement
accounts and stock investments plummeted, many Americans already had a gloomy
outlook on the long-term future. In fact, only 29% of respondents were “very
confident” about saving enough to live comfortably in retirement; just 44%
thought they would be able to retire when they want to.⁶

When examining prospects for the near future, it is important to consider
your long-term financial goals. Economies and markets fluctuate constantly. It
can be tempting for investors to make decisions based on short-term fluctuations
without fully considering the long-term consequences.

Call today to discuss ways to potentially capitalize on financial
opportunities in 2009 while keeping sight of your long-term strategy.

1, 6) CNNMoney, March 21, 2008

2, 5) Wall Street Journal Economic Forecasting Survey, September 2008

3) The Wall Street Journal, August 13, 2008

4) Federal Reserve, 2008

This material was written and prepared by Emerald Publications.

© 2009 Emerald Publications