Someone reached out to me today and sent me an email asking:
When should I consider life insurance?
This is a very good question and every person's situation is different. To answer that question I will also answer these two questions : What is insurance? What is life insurance specifically?
I remember when I was studying to get my license and I ran across the definition for insurance. I always knew what insurance did on some basic level but didn't have a legal definition for it. Chris Rock put it this way, insurance is giving someone money in case (expletive) happens. The legal definition is that you are transferring risk from one party to another. Simple right. Life insurance is transferring the risk of someone passing away and the financial outcome as a result. So when you purchase or consider life insurance you are transferring the risk that you will pass away in exchange for money? This is the most basic reason to buy life insurance is to protect your loved ones in case you pass away in an untimely manner. Life insurance provides a tax free benefit to a party who would be affected by your loss, i.e your beneficiary.
Life insurance is normally purchased when:
1) A couple gets married.
2) You are taking on a loan college, vehicle, home purchase etc.
3) You have someone dependent on you for financial support who would be hard pressed with out you. To replace income for e.g Birth of Child, Adopting a child, caring for parent, etc.
4) If you are planning on retiring before 59.5 years old (will go into detail later, this involves advanced topics in insurance and its tax situation)
5) You or your loved ones cannot cover the costs for funeral out of pocket (10,000)
6) A child is born and the insurance will be used as a partial vehicle to fund college expenses (also an advanced topic which will be touched upon later)
7) To divide up funds equitably once you pass away and increase the amount your next of kin would receive (also another advanced topic which will be discussed at another time)
8) To be used as a vehicle for charitable giving could be an organization could be your University
9) You are looking to use insurance as an investment vehicle (also another advanced topic to be discussed on this blog)
Sunday, July 25, 2010
Sunday, July 18, 2010
Health Insurance Q& A
I have been asked by several people what the Health Care Bill means to me, so here are a few questions that I have been fielded
Q: Can I add my son/daughter aged 18-26 to my insurance plan now?
A: Although the Bill was signed it will not be enacted till October 2010 according to healthcare.gov it could be as early as Sept 2010. You should note though there is no cap on what that cost would be so far. Also note this does not apply if he can insurance through his employer.
In PA the law 2009 SB 189 states that an unmarried child may remain on parent's insurance up to age 30 if they have no dependents and are residents of PA or are enrolled as full-time students.
51 Pa.C.S.A. § 7309 states that full-time students whose studies are interrupted by service in the reserves or the National Guard must be extended health care benefits as a dependent of their parent beyond the terminating age equal to the length of their deployment..
Q: What changes can I expect if I am on Medicare?
A: You can expect a $250 rebate when your medicare prescription runs out this is a one time check if you enter the Medicare Part D donut hole you can expects checks to mailed out Mid-June and throughout the year as people become eligible.
-You can also expect to see other savings until 2020 when the coverage gap is closed
- In 2011 you will recieve free screening for preventive care like mammograms for females, and you will also receive a free annual physical
there are a few other benefits as well the best explanation of benefits I found was at the following link
Q: What if I am a small business owner what can I expect?
A: Well first note that most small business are paying more for benefits than larger employers if you offer insurance have 25 or fewer employers whose wages average 50k you may be eligible for a small business take credit up to 25% in 2014 the credit goes up to 50% also in 2014 you will be eligible to take advantage of an insurance exchange give your broader access to plans with lower cost similar to large businesses
Q: I am individual, self-employed but I have been denied coverage can I get insurance?
A: According to healthcare.gov On July 12, eligible residents of Pennsylvania will be able to apply for coverage through the state’s Pre-Existing Condition Insurance Plan program run by the Pennsylvania Insurance Department.
To qualify for coverage:
You must be a citizen or national of the United States or lawfully present in the United States.
You must have been uninsured for at least the last six months before you apply.
You must have had a problem getting insurance due to a pre-existing condition.
The Pre-Existing Condition Insurance Plan will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available for you, even if it’s to treat a pre-existing condition.
Premium: $283.20 per month
Deductible: $1,000 in-network, $10,000 out-of-network
Out of Pocket Limit: $5,000 in-network, $20,000 out-of-network
Q: I or someone I know has a disability what can I expect?
A: Starting as early as Sept you cannot be denied coverage based on a pre-existing condition including disability to any child under 19 in 2014 the insurance company will not be able to exclude anyone from coverage or charge higher premiums based on pre-existing conditions in 2012 you may be eligible for voluntary benefits from the class program. Until that time comes you have the following options coverage under your parents plan if you are under 26, state high risk insurance pools/preexisting condition insurance plans, or possible medicaid
Hope this information helped for more information visit Healthcare.gov or you can contact us at medinifinancial@gmail.com.
Medini Financial is licensed with the PA DEPT OF INSURANCE, all the information here is for educational purposes and does not constitute as tax or financial advice for specific information to your situation reach out to your local agent or you can contact us directly.
Q: Can I add my son/daughter aged 18-26 to my insurance plan now?
A: Although the Bill was signed it will not be enacted till October 2010 according to healthcare.gov it could be as early as Sept 2010. You should note though there is no cap on what that cost would be so far. Also note this does not apply if he can insurance through his employer.
In PA the law 2009 SB 189 states that an unmarried child may remain on parent's insurance up to age 30 if they have no dependents and are residents of PA or are enrolled as full-time students.
51 Pa.C.S.A. § 7309 states that full-time students whose studies are interrupted by service in the reserves or the National Guard must be extended health care benefits as a dependent of their parent beyond the terminating age equal to the length of their deployment..
Q: What changes can I expect if I am on Medicare?
A: You can expect a $250 rebate when your medicare prescription runs out this is a one time check if you enter the Medicare Part D donut hole you can expects checks to mailed out Mid-June and throughout the year as people become eligible.
-You can also expect to see other savings until 2020 when the coverage gap is closed
- In 2011 you will recieve free screening for preventive care like mammograms for females, and you will also receive a free annual physical
there are a few other benefits as well the best explanation of benefits I found was at the following link
Q: What if I am a small business owner what can I expect?
A: Well first note that most small business are paying more for benefits than larger employers if you offer insurance have 25 or fewer employers whose wages average 50k you may be eligible for a small business take credit up to 25% in 2014 the credit goes up to 50% also in 2014 you will be eligible to take advantage of an insurance exchange give your broader access to plans with lower cost similar to large businesses
Q: I am individual, self-employed but I have been denied coverage can I get insurance?
A: According to healthcare.gov On July 12, eligible residents of Pennsylvania will be able to apply for coverage through the state’s Pre-Existing Condition Insurance Plan program run by the Pennsylvania Insurance Department.
To qualify for coverage:
You must be a citizen or national of the United States or lawfully present in the United States.
You must have been uninsured for at least the last six months before you apply.
You must have had a problem getting insurance due to a pre-existing condition.
The Pre-Existing Condition Insurance Plan will cover a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available for you, even if it’s to treat a pre-existing condition.
Premium: $283.20 per month
Deductible: $1,000 in-network, $10,000 out-of-network
Out of Pocket Limit: $5,000 in-network, $20,000 out-of-network
Q: I or someone I know has a disability what can I expect?
A: Starting as early as Sept you cannot be denied coverage based on a pre-existing condition including disability to any child under 19 in 2014 the insurance company will not be able to exclude anyone from coverage or charge higher premiums based on pre-existing conditions in 2012 you may be eligible for voluntary benefits from the class program. Until that time comes you have the following options coverage under your parents plan if you are under 26, state high risk insurance pools/preexisting condition insurance plans, or possible medicaid
Hope this information helped for more information visit Healthcare.gov or you can contact us at medinifinancial@gmail.com.
Medini Financial is licensed with the PA DEPT OF INSURANCE, all the information here is for educational purposes and does not constitute as tax or financial advice for specific information to your situation reach out to your local agent or you can contact us directly.
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