Staying Informed on Healthcare Reform

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One of our favorite carriers just left this in our email box. This explains a few things coming down the line for health insurance policies nationwide. As part of the  ”Healthcare Reform” legislation, carriers must provide uniform summaries of benefits regarding health insurance coverage nationwide, starting later this year.

This is definitely a good thing. For most, health insurance benefit summaries are hard enough to read as is. With a uniform system, it will be much easier to understand across the board and provide a uniform look, which will hopefully result in less confusion for consumers. However, be noted that carriers are not required to disclose premium information as part of the summary of benefits. While on first glace, this may seem like a bad thing, it will actually help eliminate confusion even more by making sure that premiums are discussed in real-time, as they can change rather suddenly from a number of factors.

 

Florida PCIP Health Insurance Plan Termination

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For those who are enrolled or are thinking about enrolling in the Florida PCIP Health Insurance Program, make sure you are aware of the termination date before moving forward. PCIP or “Pre-Existing Condition Insurance Plan” was designed to help those who are unable to obtain health insurance due to pre-existing condition a place to obtain a plan through government backing.

One of the provisions of the PCIP plan is that you must be uninsured for six continuous months and be unable to obtain health insurance through a major medical carrier. Applicants often must provide proof of denial through a denial letter. The PCIP plan has a catch though – it ends in 2014. Starting in the year 2014, the PCIP program will cease to exist and all covered persons will have to obtain health insurance through a new “marketplace” called a “health insurance exchange”. The exchanges are only 2 years from being implemented, and still there is not much to know about them…other than they must offer health insurance on a guaranteed-issue basis.

If you or someone you know is considering PCIP, please be aware of the uncertainty surrounding the imminent health insurance exchanges and make sure you investigate all options.

to read more about the Pre-Existing Condition Insurance Plan, visit their site at http://www.pciplan.com/index.html

Is Whole and Universal Life Insurance a Rip-Off?

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The following is a response to an article on DavidRamsey.com titled “The Truth About Life Insurance”. The original article can be found here.
For those who are not familiar with David Ramsey, he is a very financially savvy figure who gives some fantastic advice on common financial sense, and has helped thousands of people get out of debt. This provides them a solid basis to start down the path toward financial stability and peace. However, there is one particular area where we must disagree with Dave, and that is on the subject of life insurance. Dave teaches to “Buy Term and Invest the Difference” citing rates of return and badly built permanent life insurance policies to assert that people who buy these policies get, “…ripped off for years…”.

Dave advises to invest in mutual funds, as they get a higher rate of return. Let me explain how they calculate “average rate of return” in a mutual fund. Dave’s example of a 12% average rate of return is more reasonable, but let’s assume there’s a mutual find out there that averages 25%! Wouldn’t that be great! Here’s how a stock brokerage arrives at that number.

Let’s say we start with $100,000 in our mutual fund and the market has a GREAT year and our fund rises 100%.

Now we have $200,000 but the market has a bad year and falls 50% – we are back at 100,000.

Another great year, and our $100,000 goes up 100% again.

We are back to $200,000 but then another bad year hits and our mutual fund goes down 50% leaving us with $100,000 again.

(100 – 50) + (100 – 50) = 100 divided by 4 (years) = 25% average rate of return.

You have gotten a 25% average rate of return on your $100,000 and still have not earned a dime. It is truthful but misleading, and this is how a mutual fund calculates an “average rate of return”. This DOES NOT take into account taxes in any form, adding further exposure. Does that sound fair?

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In a whole life insurance policy that pays 6% yearly compounding on $100,000 in cash value over 4 years will leave you with $136,048.89…and this is not taking into account any policy dividends that would add to the policy’s cash value, any paid-up additions, or any contributions. Granted, dividends are not guaranteed in any given year, but there are life insurance companies who currently have 80+ years of continuous dividend payments, so there is a safe assumption that dividends will continue to be paid in many cases. The reason it works this way is that compounding interest cannot fall to a negative, and the value of each unit of that policy can never decrease like a stock share. A mutual fund can fall at the drop of a hat.

We are not advocating against term life insurance! In fact, term life is a great low-cost product and serves many different uses! However, the advice to “buy term and invest the difference 100% of the time” is logically and mathematically flawed. I hope I’ve made that very clear. If you’d like a free term life insurance quote or whole life insurance quote, contact us and we will educate you on the REAL “Truth About Life Insurance”.

Florida Term Life Insurance – Making It Work For You

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Term life insurance in Florida and nationwide has one inherent flaw – it expires. In every life insurance quote there is a minimum that the company can charge for any given amount of death benefit. This is called “term life insurance” because is has a given period of time or “term” that the policy is good for, which is expressed in numbers of years. The most common term options are anywhere from ten to thirty years in duration, but after that time has expired, the life insurance policy contract has been fulfilled. If the insured is still alive, the policy expires. For some this isn’t a problem, they can just go out and get a new term policy, but for others this is an impossibility.

The problem lies in the applicant’s insurability. Can someone’s health change over a ten or twenty year period? Absolutely! In fact, it can change instantly and unexpectedly. Tragically, our lives can change in the blink of an eye. A doctor’s visit with a diagnosis that you did not expect, or a split second on a busy highway – that’s all it takes! Do you know someone who has had a life changing accident or sudden illness? If someone has a term life insurance policy, and in the course of that term contract has a life changing illness or injury, it can affect their ability to obtain a new contract after the term expires. In fact in many cases, they will not be able to obtain insurance at all. The life insurance carrier will see them as a bad risk and will decline coverage.

Whole life insurance by default lasts the entire life of the insured, but is more expensive. The challenge becomes, “How do I avoid paying an arm and a leg, but keep my insurance through my whole life?” Term life insurance is much less expensive than whole life insurance, but it runs out. What you might not know, is that there are MANY different kinds of conversion options and policies available. Here is what to look for to make sure you’re not left without life insurance coverage in Florida – if someone takes out a term life insurance policy, for a few extra dollars they can get what’s called a “conversion privilege”. What this means is that anytime during that term contract, the insured can change or “convert” that policy into a permanent or “whole life insurance” policy without having to provide further proof of insurability. This, of course, requires a certain kind of term life insurance, but an experienced agent I’ll know how to build it. Furthermore, if you do convert to whole life, keep in mind that there are numerous kinds of whole life insurance, and you want to convert into a policy that serves the purpose of SOLVING YOUR PROBLEM – and that is keeping your same life insurance coverage for your whole life. Some policies get this done very well, others are more focused on cash buildup and cash value. Keep in mind that there is a difference and make sure your life insurance agent explains it fully to you.

The point we are driving home is this: If done right, a term life insurance policy can be converted to a permanent life insurance policy or “whole life insurance” regardless of how your health has changed over the years. This is such an important concept. As a consumer, this can save you thousands of dollars and lots of headache over the years. Do yourself a favor and ask the questions. Need prices? Get a free term life insurance quote today.

Florida Individual Health Insurance in Today’s Market

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One fundamental aspect of having Florida individual health insurance is that the policy owner is exactly that – the owner of the policy. Did you know that many people have insurance their whole lives, but never actually own their own plan? Sometimes, this means nothing, but in other cases it can lead to disaster. It’s important to know the implications of not owning your own health insurance so that there are no surprises in the future and you suddenly find yourself without coverage.

Picture the following: John is 30 years old, in perfect health, with a wife and child. John works for the next 25 years for various companies that have provided him with group health insurance benefits his entire adult life. John has always added his spouse and child on to the policy without ever really thinking that there could ever be any kind of drawback. Fast forward to when John is 55 years old, and through no fault of his own he is let go from his company. He has, since age 30 been fairly healthy, but back when he was 50 he came down with prostate cancer, which he fought through and is doing fine now. However, now that John is unemployed, he suddenly finds himself uninsured and uninsurable due to pre-existing condition. He cannot qualify for individual health insurance because he had guaranteed-issue group insurance his entire life, but now that he’s out on his own, he cannot qualify for an affordable individual health insurance plan.

When someone is on a group health insurance plan, they are not the actual owners of the plan. They are given a certificate of coverage and are allowed to use the plan, but they do not have control over it. They might only have 1 or 2 choices between plans. The plan could get changed by the company at a moment’s notice, downsized, or cut completely off in some cases. Companies that are legally required to offer health insurance benefits will sometimes choose the poorest plan to cut costs but satisfy the legal requirement. For someone who was enthusiastic about a new position, this can sometimes put a huge damper on their new job.

When a family is on an individual health insurance plan, they have total control over their benefits. They are the owners of the plan and therefore have the freedom to choose whatever deductible and coverage options that they want without fear that it might all get changed around next year because a company decided it wanted to cut costs on health insurance benefits. For some, an individual health insurance plan can be a tax deduction, depending on the situation. For people who are self-employed health insurance can be a big tax break at the end of the year (This should not be taken as tax advice. Talk to your CPA for details).

Employees who are in a situation where a company offers benefits, pay close attention to what you’re about to read. Sometimes, even if the employer pays a portion of the health insurance costs, group insurance is sometimes so much more expensive than an individual health insurance plan, the employee can save money by actually waiving coverage from the group plan and purchasing their own health insurance plan. For those who have an employer who does not pay ANY portion of the health insurance premium, it is definitely a good idea to get a free individual health insurance quote. You may be amazed at how different the rates are between individual and group health insurance.

If it makes financial sense, or even if it’s only a few dollars difference per month, for residents of Florida individual health insurance is the best way to ensure that your insurance benefits controlled and owned by you, and not the workplace. We have been in this business long enough to hear the horror stories. The cancer survivor who was laid off of his job and can never qualify for individual health insurance ever again. The office manager who was in between jobs and had a car accident in the 90-day gap between her insurance coverage. these things happen. We all think it will never happen to us, but the reality is it can, and it does. Do yourself a favor and get free Florida individual health insurance quote today and see where you really stand.

Florida Health & Life Insurance Coverage – Efficiency In Insurance

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When it comes to Florida health insurance coverage and life insurance, there’s a word that should come to mind. A word often overlooked in the insurance world, mainly because most consumers do not have the knowledge of what to look for.

“Efficiency”

What does it mean to have efficiency in your insurance coverage? The definition I’d like to use for this article is, “Making every premium dollar go as far as possible, without being over insured.” The concept of efficient insurance coverage is foreign to most consumers because nobody really makes people stop and think about it. People don’t randomly ask themselves, “I wonder… am I getting the most out of my insurance premiums?”. What does it take to determine if you’re investing in your protection efficiently? We’ll start with health insurance and then move on to life insurance.

Efficiency in health insurance has a lot to do with cost and risk sharing, which makes sense considering that’s all that insurance really is – the sharing of risk with an outside entity for a premium. What you’re about to read might shock you. One seemingly helpful benefit in health insurance may very well be causing more harm than good, and when you see what I’m talking about, you’re probably immediately going to disagree. I’m talking about a “Doctor visit Co-Pay” benefit. The concept of a Co-Pay seems to make a lot of sense. Instead of paying the whole bill for a doctor visit, you pay a flat pre-set amount instead, and the insurance company pays for the rest. Sounds good right? In many cases co-pays can be a very good thing. Families with a lot of children, and people with ongoing medical conditions have a GREAT need for co-pays… but that doesn’t apply to everyone.

Consider the following two facts: 1) Co-Pays do NOT apply toward a health insurance deductible or out-of-pocket maximum in most cases and 2) Having Co-Pays on a plan costs money. If health insurance coverage has Co-Pays included in the price of the premium but never get used, it’s not an efficient use of premium dollars. On the same token, if Co-Pays are used heavily but do not apply toward a deductible, the out-of-pocket exposure is still higher which costs the insured more money. Again, not an efficient use of premium dollars for many.

Having efficiency in a life insurance policy is far more complex, and we suggest reading our previous blog post about term life insurance to somewhat familiarize yourself. Since life insurance has widely varying degrees of coverage, options, and flexibility, we won’t go into every small detail today but instead cover some of the basics. Life insurance can be the best or worst investment you will ever make in yourself. Think about it, in a health insurance plan there are certain perks and up-front benefits that you have access to just from owning a plan. In life insurance, there’s a possibility that you will pay thousands of dollars over the course of the policy and never get any kind of return on your investment if you outlive the policy’s term. This is known as term life insurance. On the other hand, life insurance such as Universal Life Insurance and Whole Life Insurance provide a vehicle to accumulate cash value over time at either the current interest rates, or through dividends. Would you rather pay for life insurance that you know you’ll be paid back on, or would you rather pay for life insurance that you may get zero return from? This is essentially the difference between term and permanent life insurance. Granted, there are policy riders and benefits that can help fill in the gaps between term and permanent life insurance, but that’s a conversation you need to have with your insurance broker. No two families have identical needs and situations, and there are enough options and flexibility out there to fit any situation.

Finding the efficiency in health insurance coverage and life insurance is not something you’re supposed to know how to do on your own, and there are MANY things that we did not discuss in today’s blog post. That’s why we make ourselves available as insurance professionals to guide and make sure you’re doing the right thing for you and your family. You may be leaving a lot of money on the table. For more helpful information, feel free to contact a broker to learn more about your options so you can make the most efficient decisions possible in your insurance coverage.

Florida Health Insurance Rates on the Decline?

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It’s no secret that the the Florida health insurance market has had a giant question mark over its head since the Affordable Care Act was signed into law in 2010. Benefits have increased almost straight across the board with every health insurance carrier in the United States, and as a result, prices have risen steadily. If you give more benefits, you have to charge a higher premium. However… is it possible that the cost of health insurance in Florida has actually dropped in some cases?

Every health carrier uses its actuaries to determine the risk-to-price ratio in order to determine its premiums. What most consumers do not know is that rates can actually fluctuate from year to year based on their calculations, and they don’t always just go up. Our Orlando insurance office has had cases where rates have actually decreased this year with certain health insurance carriers despite the benefits rising. How is this even possible?

Health insurance rates are determined by zip code – yes, that’s right. Different zip codes have different rates. An insurance company will look at an overall snapshot of that zip code and factor things such as how many claims that zip code has had and how much the insurance has been used, basically tallying up when they have had to pay out for the policyholders of that zip code. For this reason, if one policyholder in any given zip code gets a rate increase based on utilization, that means everyone in the zip code will get the same percentage rate increase even if that person never used their health plan! It goes both ways however… If a zip code has had a particularly good year (i.e. not many insurance claims), the rates can experience a drop.

To put it very simply – the overall health and claims of your fellow policy holders in your local zip codes will directly affect YOUR health insurance rates weather you’ve used it or not.

Now, I’m going to tell you something that the insurance companies do not want you to know. If the risk profile in your local area drops, the company will not lower your rate. If someone were applying for new coverage they would get the better rate, but a current policyholder will almost NEVER see a decrease in their health insurance rates, even if the numbers are favorable. So, what can you do about it? Talk to your broker, and ask them to re-quote you at this year’s rates. If you don’t have a broker, you can talk to one of our brokers, and we’ll be glad to help. Many times, a carrier will not re-rate you even if your new rate is lower, so at that point it might be time to get a free health insurance quote and look for a better deal elsewhere. We are not condoning switching health insurance carriers every year, but if you have had a plan for 3-5 years, it might be a good idea to do a little shopping for a better rate. 4 out of 5 times, you will probably find one.

Staying on top of health insurance can save a family a lot of money over time. Don’t wait until its too late or you may find yourself stuck somewhere you don’t want to be. Review your policy carefully and make sure you’re getting the right coverage for the right price. Ask questions, demand answers, and don’t ever let anyone rush you into buying a plan.

Term Life Insurance – “Fast Food” Insurance?

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We have all seen the ads on TV for cheap term life insurance. Companies want to show you their lowest and best rates and compete for your business…but is it really that simple? Life insurance is an investment that requires a lot of consideration and thought – it’s not an impulse buy off of the home shopping channel. Getting the wrong kind of life insurance is just as bad as throwing your money away. Actually, it’s more like eating a tasty, albeit unhealthy, fast food meal.

The cheapest term life insurance like they show us on TV is almost never the ideal plan for someone. It’s just a price tag. It’s like advertising for fast food. Think about the most inexpensive fast food item you can. Is that item really what you should be buying and eating? Sure it may taste good and it might have a low price, but is that really the best thing for your well being in the long term? Life insurance is exactly the same. You can buy the least expensive, most appealing looking life insurance policy, but are you really getting something that’s going to have the strength, flexibility, and guarantees that you need? What if you become disabled and can’t pay for it anymore? What if you become chronically ill with a condition that will not kill you, and are going through financial hardship just to pay your medical bills? Does your life insurance policy help with that? If you are relying on “Fast Food” life insurance, the answer is probably “No!”.

In reality, TV advertised life insurance is usually advertised at the highest, most healthy “super preferred” rate class. If you read the fine print, you’ll also see that 99 times out of 100 those same ads are advertising a price for a 30-year old male non smoker, with the assumption that they are in the peak of health with no issues whatsoever. You’ll also notice that the insurance is usually a 10-year term life insurance policy, sometimes with an unknown insurance carrier, that has no benefit riders, no conversion options, and no guarantees. Only around 2-3% of term life policies actually pay out, and it is statistically proven that it’s far more likely for an individual to become disabled prior to 65, as opposed to death.

So now, you might be asking yourself, “Is all low cost life insurance bad?” Fortunately, there are affordable life insurance options that pay for more than just the insured’s death, and provide for living benefits and flexibility as well. In fact, many of the gaps can be filled with term life insurance without having to pay for the more expensive permanent kinds of life insurance such as whole life and universal life. Surprisingly though, whole life and universal life can still be affordable if they are built correctly.

What should you do to make sure you are getting the right kind of coverage?

Ask these very important questions when you talk to a broker to inquire about life insurance for your family.

1) What is the plan’s expiration date?
2) Does the plan have a disability benefit?
3) What happens if I want to make changes?
4) What company is the plan written through? (you want to make sure the carrier is rated “A” or higher by A.M. Best)
5) Will the monthly payment ever increase?

Most people really have no idea what life insurance can really do for them. There is a plan for everyone out there, but one size does not fit all. Take your time. Ask questions. Get educated about your options and don’t make any hasty decisions. Having coverage for your family or business is important, but do not rush into it or you may be stuck with “Fast Food” life insurance that simply does not get the job done. Now that you’re more educated about life insurance in general, go back over any current coverage that you have and read over your policy. What do you see? If you’re not sure about what you have, or are starting to question if your plan was really the right decision, we may be able to help you. Consultations are free, but we can’t help unless you call.

Florida Health Insurance – Why Did My Rates Go Up?

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It happens over and over again. Floridians purchase a health insurance plan for their family and are very happy with the coverage they have selected, but as soon as they are finally settled in and familiar with it, the yearly renewal comes around and ruins everything.

What happened? The infamous RATE INCREASE! Take a minute and follow along as the Integrity Insurance Brokers Blog addresses rate increases in health insurance, why they happen, and tips to make sure your family keeps the same quality coverage at an affordable price.

 

WHY DO RATE INCREASES HAPPEN?

Policyholders receive yearly rate increases in their health insurance for a number of different reasons. The most obvious would be age. That’s right, you are almost guaranteed to get a rate increase each year because you have gotten a year older. The insurance company cannot charge a 40 year old the same rate as a 41 year old because the chance of getting sick or hurt rises with age. Another reason is claims. Some insurance companies will single a policyholder out for a rate increase if they file major claims. Utilization of health insurance for a zip code also impacts the individual rates. Did you know that if a high number of claims are submitted from policyholders in your county or zip code with the same carrier as you, that it can cause your health insurance rates to go up? That is because it’s now statistically more likely that someone in your zip code will cost an insurance company more money than before. Furthermore, carriers sometime have renewal rates that are different than new business rates. Quite simply, they charge current policyholders more than new members.

WHAT CAN I DO ABOUT IT?

You have options! Many insurance companies expect an insured to just accept the rate increase so they can keep their current health coverage that they are comfortable with. They know that most people are resistant to change, so they pay the higher rate out of fear. What they don’t tell you is that if you shop around for a better rate, many insurance companies will be glad to quote you at the new business rates instead of having to accept the renewal rate. Often times you can find a better health insurance rate by getting a new quote. Granted, it’s not recommended to switch health insurance coverage every year, but if there is a significant difference in price, definitely ask questions to see if switching might be right for you.

Contact your broker if you got a large rate increase in your health insurance this year. If you do not have a broker, we can assist you and provide you with competitive quotes. Get a free health insurance quote today.