One thing that I don’t enjoy is insurance. Because I spend so much time dealing with insurance at work as a dentist, I hate having to think about health and life insurance.
Honestly, it’s a little intimidating.
Open enrollment is coming up and there are some things that you need to know to make the best choice for your health insurance.
My guest on the podcast is Lorena from MALM Life and Health Insurance Agency.
She shares ways to maximize your insurance so that you can make the best decisions for open enrollment and beyond.
Lorena shares some tips that make health and life insurance something that you will want to pay attention to more.
Understanding life and health insurance don’t have to be complicated.
Check out these tips to pick the best life and health insurance policy for your family.
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How can life insurance be used as an investment?
When we think about life insurance in the traditional sense, we typically think of life insurance as money that family can use when someone passes away.
But now people are living longer than before. With that, life insurance can be used for more than when someone passes away. It can be used while you are living.
God forbid you to have critical health issues, you could use your life insurance to help cover some of the medical costs.
Maybe your spouse is in the hospital for a long period of time. You can use your life insurance to cover living expenses so that you can take time off of work.
Or maybe you want to take that dream vacation you always wanted. No time like the present, right? You can use your life insurance policy to help pay for that.
So it’s good to know and have some reassurance that we can have the finances to take care of things if something does pop up.
What to look for in life insurance policy can you cash out
What should you keep an eye out for when you are looking for a policy that you can cash out or take advantage of while you are living?
So there’s different companies that offer these types of living benefits. It’s sometimes called the living benefit or an accelerated benefit rider. They come included in the policy. So it’s not like you’re paying extra for having that benefit to be offered. And, and the good thing is you can get these benefits in either term policy or a permanent plan. So it’s not that you’re tied to one in particular.
So what’s the difference between a term and permanent plans?
For a term policy, the policy only lasts a certain amount of years. It could be 10, 15, 20 or 30 years for a term policy. After this time period passes, life insurance coverage ends.
So it’s a way to get a lot of insurance for a lower premium because it’s almost like renting.
What are the benefits of term life insurance?
Term life insurance is more affordable. This is helpful when you are trying to stay within budget.
Plus, Lorena says that it’s good to have some coverage. Something is better than nothing when it comes to life insurance.
You can always convert a term policy into a permanent policy.
With a permanent policy, you lock in the price today for the rest of your life. So the premium will never go up as you age. You lock in the price regardless of any changes in your health.
If you are young and healthy, you benefit from locking in your permanent plan now. Because as you age policies get more costly.
With a permanent policy, it builds cash value over time.
How much life insurance should you carry?
At minimum Lorena explains that everyone alive should carry enough life insurance to cover final expenses. By final expenses, she means funeral, burial, cremation or whatever the person prefers when you pass away.
Typically final expenses are between $10,000-15,000 on average.
Also, you want to include a multiple of your income.
But beyond that, especially if you have young children you need to calculate at least five to 10 times your income. So that way you know, you have peace of mind that if something happens, you know that for the next five to 10 years your family will be taken care of.
If you have young children, consider having your children as riders. This allows your kids (now and in the future) to be covered if they were to pass away on your own policy.
Also, look into life insurance policies that provide scholarships for your children if you were to pass away.
What is Obamacare?
Obamacare is the common name given to the Patient Protection and Affordable Care Act (ACA).
The ACA completely transformed the health insurance industry in a few ways.
It’s made it so that insurance companies have to accept people regardless of any preexisting condition that they might have, which is huge because before companies used to deny people or charge them more.
And then say, you know, we’re not going to cover the heart attack that you have because it’s due to your preexisting condition of high blood pressure.
So that’s a big thing. Second, the law has eliminated maximums that insurance companies pay.
The other important aspect of a consumer is affordable rates. In the past health insurance was equivalent to car payments are mortgages for some families.
Now based on family income and how many people are in the household (how many people you claim on your taxes), the IRS will give a tax credit to help pay for health insurance.
Depending on where you fall on the federal poverty level, you may qualify for lower deductibles and lower payments.
What is the difference between a deductible and payment?
The payment or premium is what you pay monthly for health insurance.
The deductible is what you are responsible for paying before the insurance starts making any payments.
So an example, you go to the hospital and the bill at the hospital is $50,000 and your deductible is $2,000. Okay? So you’re responsible for the first $2,000, and then after that your insurance pays for the rest.
There’s also an out of pocket maximum. This is the maximum that you have to pay to pay for medical services including your deductible.
Back to the previous example of a $50,000 hospital bill and a $2000 deductible. If you have a $4000 yearly maximum, the most you will pay for the hospital bill is $4000.
Do I need maternity coverage in my health insurance?
So one of the things that the ACA changed, which is really important and I don’t think that’s talked about a lot, is that pregnancy is already included in the plans.
This is huge. Before women had to get insurance then wait to become pregnant so that they would have coverage during the pregnancy and during labor and delivery.
Open enrollment is coming
Open enrollment is November 1st through December 15th.
It’s important if you fall between 100-250% the federal poverty level based on income and the number of people in your household, you quantify for lower deductibles and lower on pocket premium. But that’s only available in the silver category.
It is critical if you fall into these into this range to choose a silver plan.
Pay attention to the cost of copays for your doctor’s visits and visits with the specialist.
That’s important because a lot of times people, want to choose a plan that says like no charge after deductible. That sounds great, but you’re going to pay for that doctor’s visit because you haven’t met your deductible.
To help you make an informed decision, reach out to a broker like Lorena.
Be sure that they are someone that represents different companies so that you can have different options.
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Links mentioned in this episode:
- Lorena’s website
- Get in touch with Lorena via phone at +1-786-236-1792
- Lorena on Facebook
- Put the ME Back in Mommy Summit
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