The fact that Obamacare actually stands for the Patient Protection and Affordable Healthcare Act of 2010 illustrates the complexity of this massive initiative. More than three years later, as the program moves toward implementation, confusion reigns. In the next few weeks, we’ll dissect Obamacare and answer questions related to how this act will affect you. For specific questions regarding your own policies, please feel free to contact us. We would be glad to review your options. We’ll start with an overview and, in future posts, we’ll delve into the exchange process, coverage options, lifetime limits, individual responsibility, the effect of Obamacare on your premiums and tax implications of the act. Obamacare requires all Americans to have health insurance no later than March 31, 2014, or they will be subject to a penalty tax. The opportunity to compare plans on a health insurance exchange begins on October 1, 2013 and ends March 31, 2014, with coverage beginning January 1, 2014. Exchanges will be offered at the state level, although some state, like Wisconsin, will use the federal exchange at healthcare.gov. Approved plans must cover these 10 essential health benefits: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care However, if you have insurance already and your coverage began before March 20, 2010, your policy may be grandfathered in. Definitely take the time to compare your policy with those offered on the exchange (also, and more appropriately, called the marketplace). We can help you with that, so please feel free to stop in. Note: The government is releasing and retracting information as the process continues. We will continue to monitor the information and keep you as up to date as possible.
Insurance
Annuity fine print can cost you money.
Recently a client of ours came to us with an indexed annuity that he had just bought and wanted us to take an independent look at. We called the annuity company with him and asked a wide variety of questions to better understand the terms and conditions of the product. Our clients’ main concern was how he could access his money. What we found out was news to our client and he didn’t like what we learned. This particular product had ten-year surrender period. This means if our client needed to pull his lump sum of money out he would have been charged between 12% and 4% depending on which contact year he did so. He did have access to 10% of the contract value every year without penalty but not until the second contract year. This annuity also had a lifetime income payment benefit. The longer he waited to access this benefit the higher percentage of his benefit base value he could access. At our clients current age he could access 5.2% a year for the rest of his life. The major problem with this was that once he attempted to access this income rider, the payment amount was fixed for life, which would not keep up with inflation. This benefit was costing our client .95%. After the phone call I asked our client what he told the people who sold him this product. He said, “I want to be able to access my money when I need it.” This statement threw up a giant red flag to me because this particular annuity had plenty of limitations on how he could access his money. Then I looked at the start date of this contract and realized that he had purchased this product within the last month. I immediately thought of the free look period. Every insurance-based product has what is called a free look period, which varies by company… | Read More »
Take advantage of your life insurance policy’s free look period
The process of buying life insurance can be overwhelming at times, with so many different variations and available options. For this reason it is very important that you be an informed consumer. It is important to remember that you have the power of choice in regards to with whom you do business. You need to believe that the agent helping you find answers and solutions to your insurance needs truly has your best interests in mind. Never hesitate to ask a question if you don’t understand something that an insurance professional is telling you. If that professional shies away from certain topics or redirects you without answering your question, it is a big red flag. As the consumer you have a right to know all of the options available to you, along with the pros and cons of each option. This allows you to make the best decision and find the best fit for your specific insurance needs. If at any time you are unsure seek a second opinion from an independent insurance agent who isn’t tied to just one company. Even if you have taken delivery of a new policy you have between 10-30 days to change your mind in what is called a Free Look period. Be sure to ask how long a company’s free look period is. In this period you can return your policy for a complete refund of any premium paid in. If you have unanswered questions we can help you find answers. Our insurance department at Winch Financial prides itself on taking the time necessary to get all of the facts and options before making a recommendation. Think of us as a resource.
It’s time for a thorough insurance review
Recent changes in the life insurance industry have made it even more critical that you review your policies. We recommend a thorough review every two to four years after you have purchased a policy. You may be able to get the same coverage at a lower premium or increase your coverage without additional cost. There are even products available now that combine life with long term care insurance to really maximize your investment. Changes within your own life can also affect your insurance coverage and you should analyze your policies after major events like a marriage, divorce, retirement or home purchase. There are several questions you should ask yourself as you review your policies. Do you know when your term insurance expires? Will you still need coverage when the term is up? When is the last time you received an in-force illustration and had it explained to you? (An in-force illustration is something you have to request from the insurance company that shows how your policy is currently performing and when it expires. You would not want your policy to lapse unintentionally when your family needs it the most.) Have you reviewed your beneficiaries? Many people forget to change the beneficiaries when they have had a life changing event. It is usually best to have a named beneficiary instead of just naming your estate. Do you have enough coverage? Whether you bought your life insurance from our office or from another agent, we can help you assess what you have and how it is performing for you. We can help you request the in-force illustrations and explain what they mean and we can run through some of the exciting new options available to you.