While people commonly purchase life insurance either through the group benefit sector or the individual marketplace, they are less likely to buy disability insurance. This can be a critical mistake. The risks of an extended disability are much higher than that of an unexpected death for the average worker. According to a report by Cornell University, 15,533,000 American workers aged 21-64 reported a work limitation in 2013. Many never regained their ability to work full-time and must deal with the economic repercussions for the rest of their lives. Group disability is an excellent benefit, but, like all insurance products, should be carefully researched before purchase. For instance, many people don’t realize that their disability benefits are taxable if their group disability is paid by their employer. This can drastically reduce an income check that already has been cut by 40% or more by the COBRA payments necessary to continue basic health coverage. Combining group disability with a private disability plan will increase the amount of after tax benefits available to you should you become incapacitated in a way that would prevent you from earning a wage. Just like with many forms of insurance you may think. “Why should I pay for something I may never use?” Well, the moment you become disabled you will look like the smartest person alive because you had the foresight to put some protection in place for you and your family. If you don’t have disability insurance available to you in the group setting, you need to at least look into a private plan. Disability insurance will cost you less than you may think and, if you have paid your own premiums, the income you receive from a payout of benefits is not taxable. Please, for your family’s sake, take a moment and think about how all you obligations would be met if you were unable to work, and consider private disability insurance. If you… | Read More »
Author: Matt Weyers
Group benefits are important but not cure-all
When people select insurance coverage often they are fortunate enough to select from options available to them at their or their spouse’s workplace. Group benefits are great opportunities to provide protection to you and your loved ones via health insurance, life insurance, disability insurance, and even long term care (LTC) insurance. If some or all of these types of insurance are available to you in a group benefit setting you need to take the time and consider all of the options available to you for a couple of reasons. Group benefits often have limited or even no underwriting when it comes protection like life insurance and LTC. Why is this important you may ask? In the individual sales market, life insurance and LTC insurance is fully underwritten, meaning the insurance company can look at your health and charge you more for desired coverage or even deny coverage entirely. It is this less restrictive access to benefits that makes group life and especially LTC coverage a necessary consideration in your overall risk management portfolio. Also because group benefits spread the risk out among many employees, they are more than likely more affordable than comparable individual benefits. However nothing is perfect. More often than not when the person carrying the insurance protection leaves or is terminated from employment the group benefits are no longer available. Sometimes ownership of life insurance or LTC polices can be transferred and the insured would take on the full burden of premiums if they didn’t pay it all already. What’s the problem with that you may ask? Let’s say having life insurance on yourself is important to you. You have access to affordable group life insurance and take it out on yourself. Unfortunately your company has to downsize its workforce and you are let go. During the time you were employed you were diagnosed with diabetes. The life insurance on yourself at your old employer is not… | Read More »
Guarantee life insurance for the next generation
If you are a parent or grandparent you may not even think about your little one’s ability to purchase life insurance. But the fact remains that when they decide to purchase life insurance for themselves at a later date, they may not be eligible. Life insurance is written and priced based on health and age. With our nation’s health as a whole declining rapidly, the next generation’s ability to purchase affordable life insurance may be threatened. A great example of this would be diabetes. If you as a family member want to take the “what if” out of your little one’s ability to purchase life insurance in the future, you do have that right and option because you have insurable interest. When you do this for your loved one, it should be with a form of permanent insurance. Some options would be Whole Life (WL), Universal Life (UL), and Guaranteed Universal Life (GUL). WL is the most expensive up front but it does lock in a level premium for the remainder of the insured’s life. Universal life would be the least expensive of the three permanent options, but if market conditions change drastically after the policy is written, the planned premiums might not be enough to carry the death benefit for the insured’s entire life. The premiums with UL are adjustable and, if needed, more money in the future can be paid in to keep the policy alive. GUL is a very simple permanent option. It has a level premium and level death benefit for the life of the contract. This type of insurance is also guaranteed to stay inforce as long as the planned premiums are paid. Examples of guaranteed lengths are ages 95-126 depending on the company. With any one of these options, a crucial question to ask is, are there guaranteed future purchase options for the insured? This would allow the insured, regardless of health, to purchase… | Read More »
How retirees can make a smooth health insurance transition
Finally retiring? Congratulations! Have you thought about where your healthcare coverage is going to come from until you hit that magical age of 65 when you are Medicare eligible? Healthcare, for many, is one of the most important factors in determining when to retire. Make sure to do some homework and work with someone with a fiduciary standard to help you make sense of the sometimes confusing health insurance environment we live in today. If you are already 65, your employer may offer a retiree Medicare insurance benefit. If they do, in many cases it is offered at no cost or reduced cost to you. If your employer doesn’t offer a retiree benefit, there are multiple options available to you in the Medicare world. We can explain each option to you in simple terms so that you can make an educated decision on what option is best for you. If you are under 65, the first thing you should do if you are retiring and currently have group benefits is ask your HR department what the continuation options for health insurance are. Sometimes, as a retiree benefit, your employer will still continue to offer coverage at no cost or a lower cost to you. If your employer doesn’t allow you to continue your current coverage as a retiree benefit, he or she must give you the option of COBRA continuation coverage. This is a mandated benefit and it allows you to keep your current coverage from your employer for 18 months. The main difference from COBRA to retiree benefit health insurance is that with COBRA, you will be responsible for the entire cost of insurance. This in many cases is the simplest and most affordable option available to someone looking to retire. With that being said, it is always in your best interest to do your due diligence and compare with the individual market. The individual market for major medical… | Read More »