Quick Insurance Tips

Here is a simple strategy to help you through these hard times.

1. Review your spending
2. Reduce or eliminate unimportant items
3. Save or invest what is left over

Review your Spending

You’ve probably heard this before. The reason you have is because it works. Keep track of your spending for a month. Write down every time you spend a penny. Use that information along with information from your check book and credit card statements to determine what you spend on a regular basis. Put everything into logical categories. If you are using a credit card to pay for some of your expenses don’t put the amount of your credit card payment on your list. Put the cost of the individual items you used the credit card for. You should also create a category called “credit card interest” and put the amount of interest you pay for your credit cards.

Reduce or Eliminate Unimportant Items

When you’ve determined where your money goes, put the items in order. Put the most costly items on the top and the least costly on the bottom. Your mortgage may be the item that is on top. You probably can’t eliminate that cost. However, you may be able to reduce the figure by getting a better interest rate. If you do, make sure that you don’t wind up paying more in the long run because you have delayed the date when your mortgage will be paid off. Look at each item on your list and decide whether you can reduce or eliminate the costs. Look especially hard at reducing or eliminating things that cost more than just money such as cigarettes.

Eventually you will get to items that involve insurance. You may find that another company can give you a lower rate on quality auto insurance, home owners insurance or medical insurance. Shop around and look for the best deal. If you pay for your own medical insurance, ask your agent about high deductible health plans and health savings accounts. You may save a lot of money if you use those programs properly.

If you can, leave some fun stuff in your budget. But not everything that is a lot of fun costs a lot of money. If you reduced the number of nights out with your family, I hope you can replace them with walks on the beach or more fun times at home or something else that appeals to your family. Maybe you can invest in a popcorn machine and save money by having a stay-at-home family night watching DVDs. Maybe you can trade DVDs with co-workers or borrow them from the library and further reduce your costs.

Save or invest what is left over

If you are one of the fortunate ones and have some money left over to invest or save, congratulations! Before you get involved in a long-term plan first make sure that you have ready cash available to take care of the small stuff that pops up from time to time. Once you have taken care of that, look at the interest that you are paying on your credit cards and other debts. It makes no sense to me to pay 18% on a credit card and invest money at 2%. Pay off your high interest debt before you get involved in any significant investment program. Remember to pay of the credit cards in reverse order of their interest rates regardless of the amount of the balances.

If you are comfortable with where you are financially and more importantly, where you are headed, please help someone else who isn’t. This may mean that you give money to family members or a charitable organization like FoodforThePoor.org. Your electric or heating utility company may participate in Operation Fuel. You can add a small amount, like two or three dollars, to your monthly gas bill and make a difference to someone who really needs it.

A consumer who has a health insurance policy that is no longer being sold by their insurance carrier will typically pay more for coverage than they should. This is something known to many insurance agents, but many consumers are unaware of this fact and wind up holding on to more expensive policies.

Discontinued Medical Insurance Policies Cost More

This is because the claims history for a particular policy series drives the price for that policy series. If there are more medical claims for the old policy series verses the new one, the new one will cost less. Almost invariably the discontinued health insurance policy series will have more claims.

More Benefits Myth

Often consumers will want to hold on to the old policy because it has more benefits. A logical assumption to make is that if the new one cost less, it must cover less. Sometimes this will be the case. However, state governments tend to add to the things they require in an insurance policy, this is usually not the case. Even if the old policy is more robust the added cost will often not be justified by those benefits. Also the cost difference between the older policy and the newer one will almost definitely increase as time goes on.

Change Health Plans Now or Risk Paying More Forever

When it gets to the point where you are ready to switch you or a family member may not be healthy enough to qualify for a different policy, so switch as soon as possible.

If the Insurance Carrier Pays More You will Too

Newer policies series cost the health insurance company less because they insure healthier people than discontinued policies. When you apply for an underwritten medical insurance policy, you will be asked a series of questions about your medical history. You may be asked to have a medical exam and your medical records may be requested from your doctor or doctors. If you pass the screening and have your health insurance policy approved you are unlikely to have a significant claim in the next year or two.

Of course some unlucky individuals will have significant claims the day after they purchase their policies. But if you look at a random group of 100 people who qualified for an underwritten health insurance policy 12 months ago and compare their claims for the last year with the claims of 100 people who were approved for the same policy 12 years ago, you will find a big difference in what they cost their insurance company. They have had 12 years to gain weight, to develop health problems that would be preexisting conditions if they applied for health insurance today.

People who have the old policy and people who have the new policy are aging at the same rate. However, their underwriting is getting older. A twenty year old woman who hasn’t been underwritten in five years may be significantly more costly to the insurance company than a sixty year old man who was just checked out by his insurance company and found to be in excellent health.

If you are healthy and can find another health insurance policy that meets your needs, switch to that other policy when your current policy is no longer offered to the public. The cost for both insurance policies will probably rise over time, but you may find that the discontinued one will rise twice as quickly. If you wait until the price goes up you may find that you are less healthy at that time and your pre-existing condition forces you to stay with the more expensive plan.

A good insurance broker can often save you a lot of time and money. An agent who works with several companies that offer the type of insurance that you are interested in can do the shopping for you. You will only need to tell your story once. Your agent can then eliminate most plans and companies from consideration.

A broker who represents several companies is usually much less biased than the agent who works with one company. Often brokers will get higher commissions from bad companies, but I’d like to think that most agents have their clients’ interests at heart. And frankly most of us are more interested in making a sale than we are in making an optimal commission. So although an agent who works with multiple companies won’t always lead you to the right policy, there is a much greater chance that he or she will.

Agents will typically look at several factors before they make recommendations. These factors include the client’s needs, coverage price, and the stability of the insurance carrier. Often an agent has a better perspective on these criteria than the client will. For example Tonik health insurance in Connecticut is very popular. It is a program that is very rich in benefits. However, a good agent will know that a client who is taking medications may not be a good prospect for this product because the prescription limit is very low.

Working with someone who can answer your questions is a very good thing. Working with someone who will ask you questions is even better. For most people buying insurance is something they do very infrequently. They may not know all of the questions to ask. A professional agent can help here.

Of course as an insurance broker, I’m biased towards insurance brokers and believe that a good agent saves his clients time and money. I hope that if you are looking for insurance that you will let a broker help you. When you work with one company, you will be forced to see their products in the best light. Working directly with several companies is time consuming and often confusing. By working with a broker who represent several companies you can work with multiple companies without all of the hassles.

I may be one of the only people who sell private health insurance who thinks that universal health care might be a good idea. The idea that universal healthcare will not create higher taxes is ridiculous to my way of thinking, but we may get benefits worth far more than that.

One of the things that I’ve noticed is that people are often shackled to their employers when they or a family member has a medical condition. I strongly believe that this keeps many potential entrepreneurs from living their dreams and in so doing keeps them from enriching us all.

Also older workers may become more hireable. Today an employer may look at an older applicant and see him or her as a potential drain on their health insurance and be afraid to hire him. If we implement a system where the burden of healthcare expenses is spread differently, older workers may be able to find work more easily.

Another issue is that many people today are unable to work due to a health condition that they cannot afford treat or that could have been prevented if they had access to healthcare. Instead of being a financial drain on society, that person could be working and paying taxes.

Will socialized medicine work in America? I don’t know. There are both pros and cons of universal healthcare in America. I have my fears. I think that there are more ways to do it wrong than to do it right, but I believe that eventualy we will find the way that is best. Socialised medicine will eventually be here in the US. It’s everywhere else. We can resist it if we want to but eventually we will be implementing the Obama health care plan or the health care plan of another leader. We should be prepared and do what we can to make it work for all of us.

Dental insurance is a nice, but non essential type of coverage to have. Because individual dental insurance plans will almost invariably have low annual limits on coverage, dental insurance does not protect against a catastrophic event.

No Catastrophic Coverage

A typical dental insurance plan might have an annual cap of $1,000 to a few thousand dollars a year. While a thousand dollars is nothing to sneeze at, the level of coverage on a typical dental plan pales in comparison to that of a typical auto or health insurance policy. This means that the impact of not having dental insurance when you need it is small.

Beware when purchasing dental insurance!

Individual stand alone dental insurance policies often have significant waiting periods, big deductibles and other cost shares. This is because if these policies paid more in benefits people would often purchase coverage when they need dental work done and drop the coverage when the work is done. This can in many cases mean that you are better off paying for your dental work out of your pocket and not purchasing a dental plan at all.

Dental insurance when purchased through a good group insurance plan through an employer can often be a good deal. If your employer offers you an option to participate in a Blue Cross Blue Shield Dental insurance in Illinois, you may be offered a good deal. However if you are offered individual dental insurance in North Carolina from a no-name company, you might not be. Stand alone individual dental insurance often isn’t a good deal.

Also dental and health insurance when purchased together as part of an individual plan can be a good deal. You may find that a well priced alternative to dental insurance is an individual dental discount plan.

Before purchasing a dental insurance on your own, be aware of the annual and lifetime limitations of the coverage, the waiting periods, the cost shares such as deductibles and the cost. Do the math and see if you aren’t better of just paying for your dental expenses out of your pocket.

Very few medical insurance policies will pay 100% of your medical expenses. Many people will ask their agent “what is my doctor’s office visit co-pay?” but will fail to inquire about the other charges they might have to pay. You will probably have to pay a deductible, a co-pay and/or coinsurance when presented with a healthcare expense.

How a Health Insurance Deductible Works

If a given expense is subject to your deductible, you will have to pay your deductible before the insurance company pays anything towards that expense. Deductibles only need to be met once per year. The year typically starts on January 1st, and not when your policy became effective.

Here is an example of a deductible on a plan from Blue Cross Blue Shield with a high deductible of $5,000: If the insured had a $2500 emergency room visit in January and another visit that cost the same in February, if both of those visits were subject to the deductible, the insured would pay for both of them. At that point the deductible would be met. Any similar expenses incurred for the rest of the year would be covered at least partially by Blue Cross Blue Shield.

Health Insurance Coinsurance

Coinsurance is based on a percentage of an expenses. This is different from a deductible or a co-pay which is based on a flat amount. If your coinsurance is 20%, you will probably be subject to 20% of your expenses after you have paid your deductible until you have met your maximum out-of-pocket amount.

For example if you have a $1,000 deductible on your policy, a 20% coinsurance and a $2,000 maximum-out-of-pocket amount: You will pay the first $1,000 of our medical expenses per year, then you will pay 20% of any other charges until you have paid an additional $2,000 or in some cases an additional $1,000. Some companies include the deductible in the maximum-out-of-pocket amount and some do not.

Health Insurance Co-pays (or copays).

Co-pays are paid per incident. You might pay $30 for each doctor’s visit or $20 for every one-month’s supply of a prescription. Some policies will ask you for a to pay your deductible and co-pays for the same expense. Some will waive the deductible for certain expenses such as prescriptions and physician visits.

Co-pays are not typically limited by the maximum-out-of-pocket amount.

Similar sounding insurance policies can very different. Make sure you understand how your policy works. A low deductible health insurance in North Carolina or a low cost no deductible health insurance in Georgia may have other cost shares, such as high coinsurance amounts or big copays. Be sure to ask plenty of questions or read the literature thoroughly before buying. You want to know what a policy will do before you buy it, not after you have an expense that you think will be covered.

A lot of my clients will ask me if they should or shouldn’t list a particular pre-existing condition on their insurance application. Some will be very explicit and others will just hint at the question.

In many cases, nothing will happen. The client will get their private medical insurance policy approved and that will be the end of the story. But this isn’t always the case.

Your Health Policy Can be Canceled Up to 2 Years Later!

Getting a policy approved doesn’t mean that the policy will stay in force. In many cases the insurance company will rescind the contract. This means that the insurance company will cancel the policy and ask the insured for any money that they have paid in claims. The insurance company will also refund any money that was paid in premiums. An insurance company has up to two years to do this!

A client who applies for a health insurance policy and leaves something off his or her application often gets caught when they file a claim. If you file a claim for expenses associated with a heart attack or a stroke, the insurance company may look very carefully at your application. If you said that you had normal blood pressure and cholesterol they might request a doctor’s report to see if that was the case on the date you applied. If there is a record of a health issue that you should have put on your application, it can cause you a world of trouble.

Insurance companies will not rescind a contract based on some minor issue. Many clients are concerned that if they get a date wrong or fail to dot an “i” that they are jeopardizing their insurability. Policies are rescinded based on significant information being withheld. This usually means information that was intentionally withheld. People don’t tend to forget about heart attacks, strokes or their diagnosis of diabetes.

No reputable health insurance carrier will rescind a contract lightly. They need to be prepared to prove in court that the insured lied by omission or commission. They need to be able to show the court, that according to the underwriting guidelines that were in place at the time, they would have denied the application had they known the truth. They also need to be able to prove that the insured knowingly mislead them.

So if you said that you are five pounds lighter than you are or had a cold when it was really the flu, don’t sit up at night worrying about your policy being rescinded. However, if you said that you have never had cancer and you have, or you applied for a policy on Friday so that you could go to the hospital on Saturday, expect to have some problems.

No good insurance company wants to rescind a contract. It is not good for their public image. They will investigate before they approve a policy when they can. If you mention that you have diabetes and they only want to insure people who have diabetes controlled by diet, they are likely to ask for a statement from your doctor to make sure that you meet their criteria. This means that if you complete your application truthfully you are unlikely to have your policy rescinded. However, if you don’t mention diabetes at all, they have no chance to investigate.

What is a Pre-Existing health condition?

Before looking at expensive or restrictive policies, make sure that the pre-existing condition you are concerned about will actually prevent you from getting coverage. Sometimes the medical condition that causes an individual concern, is not one that causes an insurance company the same level of concern. Health insurance for high risk individuals can be hard or impossible to find, but getting information and quotes from various sources will keep you from paying more than you should.

High blood pressure, high cholesterol and even a diagnosis of cancer may not be enough to get an applicant denied when applying for a medical insurance policy. In the state of Connecticut an applicant with high blood pressure or high cholesterol will usually find that most of the underwritten private health insurance plans are available to him or her, unless there are other negative aspects to his or her medical history. Many people who have had cancer will also find that they will qualify for a policy. However, an active cancer is treated differently than one that hasn’t required treatment for a period of time.

Medical Insurance Companies Have Different Rules

If you have had a stroke or a heart attack in the last couple of years, you will not be able to find a private health insurance company that will insure you unless they are forced to due to regulations. However, many conditions such as allergies, obesity and diabetes are treated differently by different insurance companies. For example Blue Cross in Connecticut might deny a particular client who has sleep apnea. Aetna may accept that client, but will charge him more each month than a more healthy client. United HealthOne might insure that client, but refuse to cover him for the sleep apnea. Depending on the condition, you might get different answers from different companies.

It pays to query the different companies or to work with a broker who works with multiple companies and who can do that for you.

Group health insurance may be available to you even if you can’t find coverage on your own. If you or your spouse are employed and have group health insurance as an option this will probably be the best choice for you. Medical insurance options may be available to you from a local, state or federal sponsored plan. A local health insurance broker may be able to point you in the right direction. Your state’s health department or local hospital may also be sources of good information.

An insurance agent or broker can help you save time, money and aggravation. You can get the same price for the same policy if you deal directly with an insurance company, but you may not know where to look or what to look for.

An Insurance agent who works with several companies can save you time. A good insurance agent will know which companies are likely to have the best insurance plans for your family and will have a good idea what insurance should cost for your family. When looking at a particular policy an experienced agent may ask himself or herself "how much should this insurance cost?" and compare it with an offering from another carrier. He or she can do this much more efficiently than the average consumer.

When you work with a broker who in turn works with several high quality companies, you may only have to talk with one person to get all the benefits of shopping around.

By shopping around for you, an agent also saves you money by finding the best low cost insurance plans that meet your needs. He or she may compare dozens of plans and before making recommendations to you.

You can also save a lot of aggravation when you work with a broker. You will typically have one person to talk to who can answer your questions. Instead of receiving a lot of biased and contradictory information from various insurance company representatives, you will get the opinion of someone who is much less biased.

Buying an insurance policy can be time consuming, costly and stressful when you try to do it on your own. Only in rare instances will an agent’s commission affect your price. The insurance company saves money on advertising and other costs when a broker sends them a new client. The broker gets some of that money, but your cost will be the same whether you use a broker or not.

Depending on your income and other factors, you may qualify for a low cost health insurance policy from a private company, the federal government, your state or a local agency. Children’s low cost insurance may be available through your state.

You may be able to find information about a plan in your area that provides coverage for children on the http://www.insurekidsnow.gov website. Your doctor may know about plans in your area that you can investigate. Your department of health may also be a source of information. Often a local insurance agent who focuses on medical insurance will be know about plans available in your area.

Often these plans are not only affordable, but will also accept people with pre-existing medical conditions that make them difficult or impossible to insure in the private market.

However, you may find that the best low cost health insurance plans are available through a private insurer. Often programs offered through government-sponsored programs have limitations that you won’t find in a policy that you might purchase from Blue Cross Blue Shield or another carrier.

The limitations often include:

• A small list of physicians on their provider list
• A small list of hospitals on their provider list
• A lower lifetime or annual dollar limit on covered services

Sometimes you will find that a government-sponsored program is less advantageous when compared to a plan that is available in the private market. Sometimes a government-sponsored program is your only options. Be sure to get quotes and information from both the plans offered through the government and from an insurance broker who serves your area.