These employees have realized that the virus has not only threatened everyone’s health but also everyone’s job as well. Even if their job isn’t threatened, with schools closed, parents may also need to take time off from work to care for their children who can’t be left home alone and wonder if short term disability will pay them in this situation.

So, I wrote this article to help you make sense of when short term disability might pay for the coronavirus and when it definitely won’t.

When will short term disability insurance pay if you have the coronavirus?

If you are diagnosed with the coronavirus then you may qualify for short term disability benefits if:

• You are actually diagnosed with the coronavirus,
• You can’t work because of it,
• You are under a doctor’s care,
• Have satisfied the elimination period of the policy. The elimination period is the number of days your disability has to last before you are eligible to file a disability claim.

Let’s walk through what’s required for short term disability to pay if you have the coronavirus.

Have you been diagnosed with the coronavirus?

Short term disability insurance covers disabilities due to injury, sickness and pregnancy. Since coronavirus is a sickness, if you are diagnosed with it, then you are technically sick. How sick you really will be though will depend. You may end up hospitalized or just sent home to outlast it.

Get tested if you have symptoms for an official diagnosis.

Are you unable to work because of the virus?

Obviously, if you are hospitalized, it’s pretty clear you won’t be able to work. But you may still be sick and the doctor might just send you home to recover. In that case, you aren’t able to return to work because the doctor won’t allow it.

Are you under a doctor’s care?

Another requirement to qualify for a short term disability is that you must be under a doctor’s care. When you file a disability claim, the insurance company will need the doctor to attest that they won’t release you to go back to work because you are sick.

Just going to the doctor for a visit isn’t being under a doctor’s care. You don’t necessarily have to be in the hospital either. What matters is that the insurance company will verify with your doctor that you can’t work because of your sickness before they will consider approving your claim.

Have you satisfied the elimination period?

The elimination period is the number of days you have to wait before you can file a short term disability claim. The most common elimination periods are 7 days and 14 days. This means that you would have to be sick, unable to work because of it and under the care of a doctor for more than that number of days.

It’s possible you may recover in a couple of weeks. If you have a 14 day elimination period, you may not get to the point where you would be eligible to file a claim.

Have you used all your paid time off?

During your elimination period, you can use your paid time off. Depending on your short term disability plan, you may be required to use up all of your paid time off before you can file a short term disability claim.

You may not use up all of your paid time off before your short term disability would kick in.

What if I have been quarantined but haven’t been diagnosed with the coronavirus?

Many people are being quarantined as a precaution because they were exposed to the coronavirus. However, they have not been diagnosed with it and may not end up being diagnosed. In that case, I think it might be doubtful the insurance company would pay for a short term disability for a quarantine when you have not actually been diagnosed with anything.

To be sure, I’d still file a claim but realize there’s a good chance it will be denied.

Legally mandated coronavirus paid sick leave

The House of Representatives has passed the Families First Coronavirus Response Act that does provide some provisions for fully paid leave. But honestly, I wouldn’t put much faith in qualifying. First as of this writing, it hasn’t passed the Senate and become law. Many times these bills are just public relation stunts where no one really qualifies.

For proof of that, just check the numbers of people who have been denied for student loan forgiveness.

But that doesn’t mean you shouldn’t try.

Will short term disability pay if I have to take time off from work because I have to take time off or because a state of emergency was declared?

You might have to take time off work because a state of emergency was declared or you are afraid that you will be sent home from work during this crisis. Schools, bars, restaurants and even the NBA was suspended and all of those people are out of work.

But, you won’t qualify for short term disability in those cases because you aren’t even sick, you are just out of work.

Check with you insurance company because every insurance company is different

Remember this is a general guide to whether or not short term disability will pay because you have the coronavirus. I do not handle claims for any insurance company.

Every insurance company has their own set of rules. Every short term policy is different.

You could also be subject to a pre-existing condition clause if you were diagnosed before you enrolled in your short term disability plan.

When in doubt though, always file a claim to make the insurance company officially decide. The worst that can happen is your claim will be denied.

Conclusion

I hope that helps you better understand how your short term disability plan might help you if you get diagnosed with the coronavirus.

Let me know in the comments if you have you been diagnosed with the coronavirus and filed a short term disability claim or if you have other questions about short term disability.

The post Does Short Term Disability Cover the Coronavirus? appeared first on GLG America.

One of the questions I get from time to time during open enrollment is does health insurance cover gym membership? If you have a gym membership or are thinking about getting one, then an added bonus would be if the health insurance company would pay for it.

So, let’s talk about whether or not a gym membership is covered by your health insurance along with some other tidbits that might help you reduce the cost of your membership if you have one.

Does health insurance pay for gym memberships?

In general, health insurance companies will not pay for your gym membership directly. However, they often may give you a limited amount of money ($250 for example) towards the cost of it.

The answer is they will often pay a little towards the cost of your membership. Of course, a $250 yearly credit may not cover the cost of the local YMCA, that fancy tennis club or that kickboxing studio that you have your eyes on but every amount helps.

However, if you are a member of a club like Anytime Fitness, that $250 might come closer to covering the cost of the full year if you were one of the first members to join the club near you.

Every insurance company is different so what you’ll want do contact your insurance company and ask them if it’s a benefit in your plan.

I contacted my insurance company and it wasn’t a benefit. But I have had it in the past with other insurance companies.

There are a couple of other ways your insurance company or employer might provide a benefit that might go towards the cost of your gym membership.

Let’s talk about some of those.

Access to insurance company and employer gym membership discounts

Some insurance companies have arranged a discount for gym membership for its plan members.

Here’s a link to the Blue Cross Blue Shield Federal Employees program that provides a discount at more than 10,000 gyms nationwide. In this particular program, they’ve negotiated a $29 initiation fee and a $29 monthly membership which is pretty good.

I’ve seen others for about $25 per month.

You might also check with your gym or with your employer for other discounts. I know one gym gave a 10% discount for members of law enforcement.

While not exactly cash, reduced rates are like cash and certainly help.

Wellness benefits may include benefits you can use towards gym memberships

Some wellness programs provide credits towards gym memberships. I’ve seen some wellness programs provide up to $500.

In addition to the perks of a wellness program, if your employer provides a discount for taking biometric screenings, there’s another source of cash and we get $500 from my wife’s employer just for that.

If you are married and work for separate employers who do the same thing, then that could potential be up to $1,000 in a year.

As a side note, other wellness require you to touch base with the service on a regular basis. Some of the wellness based programs have phone coaching services that you might be able to use to help motivate you to work out.

That may be a good way to utilize that service to qualify for your benefit.

On site gym where you work or live

Many employers have a gym on site that is free for you to use. If you have one where you work, you might consider using it before you purchase a membership at a stand alone gym.

In addition to work, many neighborhoods where people live have a gym. If your neighborhood has one, you might already be paying for it through you homeowner’s association dues.

Working out at either of these before you join a gym might save you money.

Once you know you got a good habit of exercise formed, you’d know that spending money on actual membership will be worth it.

I say that because I once joined a gym I never used! Don’t be like me.

Conclusion

While insurance companies won’t necessarily pay for a gym membership, they may provide a small amount to you if you have a membership. They may also have a discount arranged if you want to take advantage of it.

You may also have a wellness program where you work that provides cash to you for meeting certain requirements.

Let me know in the comments if your insurance company pays anything towards your gym membership.

The post Does Health Insurance Cover Gym Memberships? appeared first on GLG America.

If you are doing your taxes right now, you might be wondering is the cost of health insurance tax deductible?

What about the other out of pocket expenses you pay for medical care like your deductibles, copayments and coinsurance?

Taxes are a pretty complicated issue but I’m going to do the best I can to walk you through what medical expenses are tax deductible and which ones are not.

I’m also give you some tips you might not have thought of that can make it a lot easier to avoid taxes on some of these medical costs than waiting until tax time.

As always, use my information as a guide but rely on your tax advisor too.

Now, let’s dig in.

Health insurance premiums and taxes

Let’s start with the first part of your medical cost and that’s your premium. Here are several examples and whether or not you can deduct the insurance premium.

• Health insurance paid for the government Any health insurance premiums paid for by the government through programs like Medicaid are not tax deductible.
• Subsidies provided through the exchange Subsidies provided through federal or state exchange that reduce the cost of your premiums are not tax deductible.
• Employers contribution to your premium The amount of money that your employer pays towards the cost of your health insurance can’t be deducted by you but it can be by your employer. I should note here that special rules apply to S-Corporation owners when it comes to health insurance premiums for owners. If you are an S-Corporation owner, you’ll want to check with your tax advisor.
• Employees contribution to their own premium at work If you are an employee, you usually can’t deduct the cost of your own health insurance premiums. That’s because these premiums are already taken out on a pre-tax basis every time they are deducted out of your paycheck. This means you already got your deduction for those premiums and so you can’t take it twice. If for some reason they are not deducted on a pre-tax basis at work, then you could deduct them. But that would be pretty unusual if that were the case.
• Premiums used to purchase private health insurance either on the exchange or directly from the insurance company After tax dollars that are used to pay health insurance premiums for a plan you purchase are tax deductible.

OK. So those are some examples of when you can and cannot deduct your health insurance premiums on your taxes.

Let’s move on to the other out of pocket medical expenses that you might have and see if you can deduct those.

Can you deduct out of pocket expenses like deductibles, copayments, or coinsurance on your taxes?

The next set of medical expenses that you may or may not be able to deduct on your tax return are your out of pocket medical expenses.

In order for you to deduct these expenses on your tax return, you’ll need to meet a few requirements.

• Must be in that taxable year You can only deduct expenses that you paid during that tax year.
• Must be an eligible medical expense If the IRS doesn’t consider it an eligible medical expense then you can’t deduct it. An example of this would be nonprescription medicines or cosmetic surgery. Here’s a list of what the IRS considers an eligible medical expense.
• Can’t deduct what the health insurance company pays If the health insurance company pays the medical bill and you don’t then you can’t deduct it.
• Can’t deduct amounts you were reimbursed for Similar to the health insurance company paying your bill, if you get reimbursed by through your flexible spending account or health savings account, you can’t deduct those expenses. That’s because those amounts were already deducted on a pre-tax basis from your paycheck and you already avoided tax on that money.
• Actually pay the medical expenses If you receive a medical bill but do not pay it, you cannot deduct it. You can only potentially deduct what you actually pay.
• Itemize deductions on your tax return The next requirement is that you must itemize your deductions on Schedule A of your tax return. If you don’t itemize your deductions but instead take the standard deduction, you won’t be able to deduct these other out of pocket expenses. Each year, you should always check to see if your itemized deductions exceed the standard deduction. If they do, then you have met the first requirement. Programs like TurboTax or your tax advisor can help you determine which is higher. In most cases, most people don’t itemize their deductions. If that’s the case, you won’t be able to deduct those expenses.
• Meet the threshold percentage of adjusted gross income Currently, if your out of pocket medical expenses exceed 7.5% of your adjusted gross income, you can deduct the amount above 7.5%. For example, if your adjusted gross income is $100,000 and you had $10,000 in out of pocket medical expenses then here’s how to calculate the deduction. You take $100,000 times 7.5% which equals $7,500. Then take your actual medical expenses, in this case $10,000 dollars and subtract the $7,500. Here that would be $10,000 minus $7,500 or $2,500. That means you could deduct $2,500 from your taxes. The 7.5% threshold increases to 10% in 2019.

The main drawback that people have in deducting these expenses is exceeding the threshold of eligible medical expenses if they do itemize.

I’d guess most people don’t itemize and just take the standard deduction which means a lot of people use after tax dollars to pay for all of those out of pocket medical expenses since they aren’t in a position to deduct them on their taxes.

But there is a way to pay for your medical expenses with pre-tax dollars out of your paycheck and avoid having to meet that threshold.

This is essentially the same as deducting them on your tax return but instead of waiting until tax time, you get the tax benefit each time you get paid.

Let’s review how to do that.

Using flexible spending accounts and health savings accounts to pay for eligible medical expenses instead of deducting them at tax time.

There are two tools you can use to pay for medical expense using pre-tax dollars. The first tool is a flexible spending account and the second one is a health savings account.

Let’s talk about each of these.

• Flexible spending accounts (FSA) If you are employed and your employer offers a flexible spending account, you can set aside a portion of your pay each paycheck that is deducted on a pretax basis. You can then use this money to pay for expenses. For this year, the amount you can set aside in 2019 is up to $2,700. Due to the nature of the use it or lose it nature of flexible spending accounts, a lot of employees are afraid to use flexible spending accounts. But if you know that you’ll have that much in expenses, you’d be crazy not to do it.
• Health savings accounts (HSA) If you are afraid of the use it or lose it provision of the FSA, the option of a health care savings account might appeal to you. That’s because you don’t lose the funds if you don’t use them in the current year they carry over. HSA’s also carry a higher amount you can contribute. The limits are $3500 for individuals and $7000 for families which means you can deduct more on a pretax basis. An employer may also be contribute to your HSA. If the do, that will reduce the amount you can contribute. Keep in mind that not everyone is eligible for an HSA however, so you’ll want to review your eligibility to see if that will work for you. Here’s a link to the eligibility guideline for HSA’s.

As you can see in both of these options, you can take advantage of the pre-tax nature of both to potentially avoid the need to try and deduct them on your tax returns. However, you do need to do a little bit of preplanning to figure out how much to set aside in these accounts.

However, you can’t do both an HSA and an FSA at the same time with the exception of a limited purpose FSA.

In my opinion, the HSA and eligibility and contribution rules can be way more complicated than they should be.

Conclusion

Hopefully this article helps you get a clearer picture of whether or not you can deduct health insurance premiums and the other out of pocket expenses you might have during the year.

Let me know in the comments if you use your HSA’s or FSA’s to help reduce your taxes on medical expenses or if you have ever itemized expenses instead.

Also, let me know if you have any questions as well.

The post Is the Cost of Health Insurance Tax Deductible? appeared first on GLG America.

The terminal illness rider is a life insurance rider. It may also be called an accelerated death benefit or living needs benefit rider.

Most life insurance companies include this rider on all of their policies at no extra cost to you. That means there’s a good chance this rider is attached to your policy (if it was available).

Because it’s usually a free rider, most agents just add this rider to your policy automatically even if they don’t discuss it with you.

Then, in the unlikely event that you ever need it, it will be there.

But what is the terminal illness rider and how does it work anyway?

What is the terminal illness rider?

The terminal illness rider allows you to “accelerate” a percentage of the face amount of your life insurance policy while you are alive if you are diagnosed with a terminal illness and have less than 12 months to live.

The word accelerate is just a fancy way of saying get part of your life insurance while you are still alive instead of waiting until you die. This is why it’s also sometimes called a living benefit.

How do you know if you have the terminal illness rider attached to your policy?

The best place to look to see if you have a terminal illness rider is in your policy. If you can’t find your policy or need help contact your agent or insurance company and ask them.

Your policy will outline the rules of how the rider works.

Why do life insurance companies allow people to accelerate a portion of their life insurance face amount while they are alive?

Life insurance companies started allowing policyholders to accelerate a portion of their life insurance face amount under a terminal illness rider back in the early 1980’s.

This was in response to the beginning of the AID’s epidemic. An increasing number of people with a terminal illness wanted to sell their life insurance policies to a third party for a lump sum payment.

This arrangement is called a life settlement or viatical settlement. You can still sell policies this way if you want.

But, rather than have their policyholders sell their policies to outside third parties, insurance companies decided they would just offer this option.

A real life example of how the terminal illness benefit can help

Several years ago, one of our policyholders needed a liver transplant. If they didn’t get the liver transplant, they would die. However, if a donor was found, liver transplants are expensive and the client needed as much money as they could raise to help pay for their medical and other personal expenses.

The life insurance policy we had put in place for the client had an accelerated death benefit option. Since the client had less than 12 months to live, they filed a claim under the accelerated death benefit. It was approved by the life insurance company.

While they didn’t receive the full face amount of the life insurance death benefit, the percentage they did receive helped pay for some of their expenses.

The good news was that the terminal illness rider helped the client survive.

Will you be paid 100% of your life insurance face amount?

If you file a claim and it is approved by the insurance company, you won’t receive the full face amount. You’ll only receive a percentage of the face amount minus any fee the insurance company charges.

The percentage paid out may vary by insurance company but will probably range between 75-90% of the face amount.

If you have a $100,000 policy, this means you would receive roughly $75,000 to $90,000 if you qualify (minus any fee).

Are accelerated death benefits taxable?

When a life insurance policy pays out when someone dies, the face amount is generally income tax free. But when you take the benefit while you are alive, there is the potential that the amount of money you receive might be taxable.

While generally not taxable, they could potentially be taxable. You should check with your tax expert to see what the laws are

Is the terminal illness rider really free?

While most life insurance companies don’t charge an extra premium to include the rider on your policy, if you do file a claim, you’ll most likely pay a fee that will come out of your benefit.

Does every policy have this rider?

I add this rider to every policy I write. However, even though every policy can have this option, there are certain minimum face amounts that are required to make the policy eligible for payment.

For example, if you have a $40,000 life insurance policy but the rider states you need at least a $50,000 policy, then you won’t be able to use the terminal illness option.

This means that even though the rider is included, it doesn’t matter since you won’t be able to use it.

A terminal illness rider is different than a critical illness or chronic illness rider

Remember a terminal illness is one where you aren’t expected to live longer than 12 months. A critical illness, like cancer, may not be terminal. A chronic illness on the other hand is one where you have lost the ability to do two of the six activities of daily living (ADL’s).

Activities of daily living are ability to do the things we take for granted everyday like feed ourselves and go to the bathroom without assistance to name two of the six ADL’s.

Some policies have both a terminal illness rider AND a chronic illness rider.

What happens to your policy after a terminal illness claim?

After a terminal illness claim is paid out, the policy terminates. Premiums would no longer need to be paid.

The only reason it wouldn’t terminate is if your life insurance policy face amount is larger than the maximum face amount the insurance company will accelerate. Just like there is a minimum face amount, there is also a maximum face amount.

In you exceed the maximum face amount that can be accelerated, you can continue the remaining life insurance by paying a pro-rated premium for the amount left that will pay out when you die.

Things to consider before filing a claim (or if you don’t qualify)

If you have a permanent policy that has cash value, you may be able to take a policy loan. While it would be a smaller amount, you wouldn’t need to prove you have a terminal illness.

Another thing to consider is you might want to keep your life insurance policy intact to pass on the benefit to your named beneficiary. In that case, you wouldn’t want to file a claim. You could also accelerate less than the maximum amount and keep some life insurance as well.

Also, I suppose it’s possible that any claim made under this rider could affect medicaid eligibility so you want to be careful if you are going to apply for medicaid.

How to file a claim

If you have an agent, contact the agent and ask for help filing the claim. If you don’t have an agent, contact the insurance company directly.

Expect to have to work with your doctor to provide proof you have been diagnosed with a terminal illness.

Conclusion

The terminal illness rider can be an option to raise cash if you are diagnosed with a terminal illness. It’s a lot easier to work with the insurance company (and probably a better deal) than working with an unknown third party.

Have you or anyone you know used the terminal illness rider? Or do you have any additional information you’d like me to add to this article?

Let me know in the comments.

The post What is the Terminal Illness Rider and How Does It Work? appeared first on GLG America.

It’s time to review my list of things you should do this month to clean up your life insurance.

Outside of weird people like me who really dig into how life insurance works, most people have their life insurance on a set it and mostly forget it mode.

Unfortunately, that’s one of the worst things you can do if you want your life insurance to be there when you need it.

In this article, I’m going to walk you through a list of practical and specific things everyone should do with their life insurance this month.

Before I get started, a quick history lesson on Life Insurance Awareness Month.

What is Life Insurance Awareness Month?

Life Insurance Awareness Month was started many years ago by the Life Foundation to get people thinking about their life insurance. Each year, they develop a promotional campaign to help educate consumers and agents about life insurance.

As part of that, they also choose a spokesperson. Past spokespeople include Molly Shannon from Saturday Night Live, Chris Noth from Sex and the City and former NBA star Lamar Odom.

This year’s spokesperson is former IndyCar driver Danica Patrick. Here’s a video message from Danica.

Now that you know what life insurance awareness month is all about, let’s talk about some specific things you should do during life insurance awareness month.

1. Update your contact information

The first thing you should do is make sure that all of the insurance companies you have life insurance with have your current contact information. Along with your address, phone and email, make sure that if you changed your name, to also change it with the insurance company.

Having current contact information with the insurance company is important because insurance companies mail out premium due notices, annual statements and other important notice to the address they have on file.

If something happens and you die, whoever is taking care of your important paperwork will get these notices. This will alert them to the fact you had life insurance if you didn’t tell them.

They won’t get these notices if you have the wrong contact information on file with the insurance company.

Don’t forget about any individual life insurance you may have purchased through work. Changing your address with your employer doesn’t always change it with the insurance company.

2. Update your beneficiaries

Did you get married or divorced in the last year but forget to change your beneficiaries? You’d be surprised that many people fail to update their beneficiaries after they get divorced and then the life insurance gets paid to the ex-spouse.

Did you get married but still have your parents as beneficiary?

Did your kids turn 18 and now you want to name them beneficiary instead of another family member you named?

This is the time to review your beneficiaries.

I always suggest if you aren’t sure who the beneficiary is, just fill out a new beneficiary change form and send it in to the insurance company.

3. Review your life insurance riders

Many policies are written with life insurance riders attached to them. Some riders, like a child term rider, aren’t needed if all of your children are now adults.

A child term rider is not automatically removed since you may have had additional children since you took out the policy. That means you’ll still be paying for it. You also might have a term conversion option available for your kids in that rider if needed.

You should also review any whole life dividend options.

4. Review any rated life insurance

If you had a medical condition when you got your life insurance, it may have been “rated”. This means you had to pay a higher premium than other people your age because of your health.

You could also have been required to pay an additional premium called a “temporary extra” which you want to make sure comes off when it’s supposed to.

Work with your agent to see if you can do anything better now.

5. Pay your loan interest

If you have an outstanding loan against your policy, you’ll receive a loan interest statement from the insurance company every year.

Many people just ignore their loan interest statement and don’t pay it.

You want to pay this loan interest. Otherwise, it’s taken out of any cash value in the policy. Then, you’ll be paying interest on the interest this coming year.

Ignored long enough, it’s possible that your life insurance could lapse because the interest is making the loan build higher and higher every year and eating up the cash value.

6. Replace underfunded universal life insurance

If you have any universal life insurance, there’s a strong possibility that your life insurance is underfunded and will lapse if you don’t pay additional premium when you are older.

If you don’t know it, I hate universal life insurance because it’s almost always underfunded and that increases the chance it won’t be there when you need it.

I personally think you should get rid of it if you can and it makes sense (along with any loaned up policies you aren’t paying the interest on).

7. Take advantage of any term conversion options

Term insurance you own often has a conversion option. A conversion option allows you to change a term policy that will expire into a permanent policy you can keep that won’t expire (unless it’s converted to universal life that’s underfunded!)

In addition to the term life insurance you own that may have a term conversion option, group term life and child term riders also may have term conversion options.

If you or someone you have covered on a term policy (or rider) has a health issue, this might be the only opportunity to obtain permanent life insurance.

8. Own your life insurance outside of work

Many people rely completely on their employer’s group term life insurance.

What happens is that most people outlive this group term and either it starts reducing because of an age reduction schedule or ends when they leave employment.

Owning your own life insurance allows to lock in your own rates that aren’t subject to an attained age rate structure (rates often increase every five years on group term).

It also give you control of your life insurance. Employers change their group term life all the time and in some cases, they’ve also been known to discontinue or reduce it.

9. Have at least enough permanent life insurance for a funeral

The average funeral costs about $7,181. I suggest people expect a funeral to cost between $10,000 to $20,000. You should have at least that much permanent life insurance to cover the cost of your funeral.

It’s probably a good idea to have at least $25,000 of permanent life insurance if you are over 50 and at least $50,000 if you are under 50.

That’s because you’ll be a lot older when you die and the average cost of a funeral will increase over time.

You want to have at least enough life insurance for the cost of a funeral so your family or friends don’t have to pay for your funeral or lean on other people to donate to a GoFundMe funeral campaign.

Arrange to take care of your own funeral expenses.

10. Increase your life insurance

You’d be surprised at the number of people who only have the life insurance their parents took out for them when they were kids.

Everything cost more today than back then. You’ve likely got a lot more obligations like a family, mortgages or other debt than you did back then.

Term life insurance isn’t as expensive as you might think and you should check into at least $200,000 to a $1,000,000 of additional term life insurance on top of the $25,000 to $50,000 of permanent life insurance you should probably own.

11. Totally organize your life insurance information

Life Insurance Awareness Month is a good month to sit down and totally organize your life insurance paperwork so it’s all in one place.

It’s not unusual to have life insurance through several companies on your own as well as through your employer.

I wrote a complete guide on how to organize your life insurance you can use to get a complete handle on how to do exactly that.

12. Find a life insurance agent

An interesting thing about life insurance is that it costs the same whether you have an agent or not.

Why go it alone?

Work with a life insurance agent to help you get a handle on your own life insurance.

Let me know if you need help.

Conclusion

Life Insurance Awareness Month is a great opportunity to review your life insurance. Use my to do list above to take this time to bring your life insurance up to date.

Let me know in the comments if you used my suggestions or how I can help improve these suggestions.

The post Everyone’s “Life Insurance Awareness Month” To Do List (2018) appeared first on GLG America.

A few months back, I had to take my wife to the emergency room. I have two hospitals within 5 minutes of me. Both are considered in network hospitals in our medical plan. I chose the closest of the two.

After being transferred to another in network hospital and a six day hospital stay, she was released from the hospital.

Within a month or so after, the medical bills started to roll in. I carefully reviewed them along with the Explanation of Benefits statements from the insurance company.

One doctor bill I received was denied for being an out of network provider. This came as quite a shock to me since I carefully chose an in network emergency room and hospital. However, through no fault of my own, I got an out of network bill because the doctor in the emergency room providing treatment for the in network hospital isn’t part of the network.

This is downright stupid to me.

After doing a little research, I discovered that getting surprise out of network medical bills is pretty common. Of course, it wasn’t very shocking to learn it’s a common practice. In fact, here’s a guy who had a heart attack and ended up owing $109,000 dollars.

Unfortunately, this practice is pretty unfair to policyholders but of course, it’s perfectly legal for insurance companies to do it for the most part.

It would be one thing had I chosen an out of network provider and gotten an out of network bill. However, I did what I was supposed to do and went to an in network provider.

Since I don’t feel I owe this bill, below are the steps I am going to take to deal with it. I can’t guarantee it will resolve my problem or yours if you have it. I’ll keep you posted.

But first, let’s go over why receiving an out of network bill is a problem.

The Problem with Out of Network Bills

When you receive medical treatment, after the insurance company decides if the medical treatment is covered under your policy and is medically necessary, they look to see whether the provider is an in or out of network provider.

The problem with out of network providers is that they are subject to a separate and often higher deductible. So even though we have met our health insurance in network deductible, we have to meet an entirely new out of network deductible before the insurance company will pay anything.

Since we haven’t met the out of network deductible, we owe the full amount of this doctor bill even though we have already met our in network deductible.

Here are the steps you should follow to avoid and tackle these out of network charges.

Step 1: Always use an in network provider

While it might seem obvious, the first step in avoiding problems with unexpected out of network medical bills is to only go to in network providers.

You should verify who is an in network provider by contacting your insurance company. Don’t rely on the provider to tell you. The provider doesn’t pay your benefits out. Your insurance company does. I’ve been given wrong information from numerous providers over the years.

Providers bill and insurance companies pay.

Unfortunately, it’s on you to find out. If you get billed by an out of network provider because you didn’t bother to check or because you personally wanted to use that provider, there isn’t much you can do about it.

Remember, networks can change too. Be especially careful if your health insurance company changes.

Check all your doctors and pharmacies before you use them. Think ahead. If there is an emergency due to an accident or health issue, know where you should go before an emergency happens.

In the case of my wife’s emergency room visit, we knew ahead of time that both hospitals were in network.

Step 2: Don’t pay the bill right away

Like all medical bills that are denied by the insurance company, you should always refuse to pay the bill until you find out for sure the insurance company is really denying it and you really owe it.

I can’t count the number of medical bills we have received over the years that the insurance company has initially denied only to pay later. I think it’s standard practice by the insurance companies to deny certain bills that they know with proper coding will be paid.

One time I remember getting a surgery pre-approved only to have them deny paying the anesthesiologist because I didn’t get the anesthesiologist pre-approved. Even though, it’s common sense that in order to have surgery, you NEED an anesthesiologist.

Initially denied, the insurance company eventually paid the anesthesiologist bill after I complained.

I think they deny these initial bills because they are hoping you will just pay the bill without challenging the decision. I’ve talked with lots of people who tell me they have done exactly that.

This just lets the insurance company off the hook for bills they owe.

With the high cost of health insurance premiums, you should never cave in so easily.

Don’t pay the bill until you know for sure you are indeed responsible for the amount.

Step 3: Dispute the decision of the insurance company in writing

Once you receive the Explanation of Benefits (EOB) from the insurance company, review it to see how they handled your provider’s claim.

If you need help understanding the EOB, contact the insurance company for help. In most cases, the insurance company will process your claim correctly and you’ll need to pay your share of the bill.

In our case, the EOB stated that the bill was denied because the provider used in the in network facility was an out of network provider.

I’ll let the insurance company know the circumstances in our situation in our written request and ask them to review it.

Hopefully, they will review it and pay the claim. If not, I’ll move on to the next step.

Step 4: Dispute the bill with the provider in writing

Next, contact the out of network provider in writing and let them know the situation. Advise them that you will not pay the bill because you went to an in network provider.

Let them know that you’ve contacted your insurance company to review the decision. Further, let them know they need to work with the hospital which was an in network provider and your insurance company to resolve their issue.

Step 5: File a complaint with the Department of Insurance and the Attorney General in your state

If you have no luck with the insurance company or the provider, file an complaint with your state’s Department of Insurance and a consumer complaint with your state’s attorney general.

Filing complaints like these will often get your situation resolved. But if not, the more people who file formal complaints will put this on the radar as an issue that needs to be solved.

Some states have already passed laws helping consumers getting unexpected out of network bills. While some of these laws have problems distinguishing between self insured and fully insured plans, at least it’s a start.

NOTE: If your health insurance is provided by your employer, also let your employer know about your issue.

Step 6: Contact the media

If your bill is large enough, contact your local news channels and let them know about your problem. If it’s completely outrageous they may be able to help.

The guy I mentioned above followed a similar strategy and got the $109,000 out of network bill eventually cut to $332.29.

Step 7: Refuse to pay the bill

If all else fails, then you can just refuse to pay the bill.

They can certainly put a mark on your credit report. They are hoping that other creditors you need to work with will force you to pay their bill even if you don’t really owe it.

The worse thing that could happen is that the provider could take you to court over the amount due.

Most people lose in court because they don’t defend themselves.

Defend yourself. Keep copies of all of your interactions with the insurance company, the provider and the state.

Make a judge decide if you have to.

Update on my wife’s surprise bill

The first thing that I did was contact the insurance company. The representative from the insurance company explained to me that the reason the bill was not paid was because we hadn’t reached my wife’s deductible.

However, we had already met my wife’s deductible. The explanation of benefits clearly showed we had.

After a lengthy discussion with her, she finally put me on hold and got another representative to take my call.

I explained the situation to the new representative who understood what she was looking at. She agreed that we had met our deductible. While this was indeed an out of network provider, they did pay it with in network benefits.

Only problem was that this was a balanced billing situation where the provider was charging the balance above the allowed amount.

She offered to have the claim re-processed and told me that should fix the problem.

After I spoke with the insurance company, I contacted the provider and let them know. In both cases, I wrote down the contact information of the people I spoke with.

The next step for me is to wait for a new explanation of benefits from the insurance company to see if the claim was processed correctly.

I’ll update this once I receive it to let you know.

Conclusion

Always question the insurance company and the provider when the insurance company denies claims. The insurance company is counting on you to absorb as much as they can transfer over to you.

When you don’t say anything when you have a valid claim, you only do them a favor.

Use the suggestions above to resolve your out of network bills when you went to an in network provider.

Have you received a surprise out of network bill from an in network provider? Let me know what happened in the comments how it worked out.

Also, let me know if you used any of my suggestions to help you out.

The post 7 Steps to Beat Surprise Out of Network Medical Bills appeared first on GLG America.

In this article, I’m going to talk about the in’s and out’s of buying life insurance for your parents. I’ll also discuss the mistakes I see people make in dealing with their parent’s life insurance.

Here’s a link to my guide to life insurance for other life insurance questions.

Can you buy life insurance for your parents?

First, let’s answer the main question about whether you can try to get life insurance for your parents. The answer is yes you can, but you can’t do so with their knowledge and without their consent.

Although there are exceptions to this rule, insurance companies require the person being insured to sign the application. This is how insurance companies obtain consent. It also gives them the permission to look at medical records.

This means you can’t buy life insurance on your mom or dad without them knowing. If your parents won’t (or can’t due to disability) sign the life insurance application, then you’ll be out of luck.

This means you’ll need to talk to your parents about why you want to buy life insurance on them. In most cases, parents are not necessarily against getting life insurance if it’s needed. What they are usually against is paying for it.

Assuming your parents aren’t concerned you just want to knock them off for the insurance money, most parents will provide their consent if they don’t have to pay the premiums.

However, once you have their consent, the next hurdle is that you have to show the insurance company that you have an insurable interest.

What is an insurable interest?

Before an insurance company will let you buy life insurance on someone else, you have to show that you have an insurable interest.

An insurable interest is when you stand to lose financially if the person you want to insure dies. While having an insurable interest is more closely tied to insuring property, it does connect to life insurance as well.

Insurance companies won’t allow you to buy life insurance on strangers who have no connection to you. Besides the risk of fraud insurance companies would face of people killing people for the insurance proceeds, you stand to gain – not lose money – insuring someone you don’t have an insurable interest in.

Here are some examples of what an insurable interest looks like:

• Yourself: You always have an insurable interest in yourself.
• Husband and wife: If both the husband and wife rely on each other’s income and would suffer financially if one died, it’s an insurable interest.
• Children: If you have kids, you have an insurable interest if something happens to them.
• Business partnerships: If you own a business with another person and would need money if they died to continue the business, you have an insurable interest.
• Key employees: Business often rely heavily on key employees who are essential to making the business financially successful. If the business would suffer a financial loss if that employee died, there’s an insurable interest.

Surprisingly, I know of county governments who buy life insurance on their K9 dogs because the county would suffer a financial loss of having to find and train another K9 for law enforcement.

Now you know what an insurable interest is.

The key point here about insurable interest is that it’s the owner of the life insurance – not the person being insured – who has to show that there is an insurable interest.

Whenever the owner is different than the insured on a life insurance application, the insurance company is going to ask is there an insurable interest?

But, because the owner has control of the policy, this provides an easy way to buy life insurance on someone else and not have to worry about proving insurable interest.

How to get around insurable interest when buying life insurance on a parent (or someone else)

The owner of a life insurance policy controls the policy. This allows the owner the right to do certain things like name whoever they want as beneficiary for example.

One privilege all owners have is the right to transfer ownership to another person.

This means that if you want to buy life insurance on your parents or someone else for that matter, they should apply for the policy as the owner and insured.

Once the policy is in place, the owner can transfer the policy to someone else even if that person doesn’t have an insurable interest.

Now that you know you can buy life insurance on your parents, let’s talk about some reasons why you want to do that.

Reasons to buy life insurance on your parents

Having talked with thousands of people over years, I have heard many, many, many people say their parents didn’t believe in life insurance. Unfortunately, when their parents died, they got stuck with the bill from the funeral home.

Those that have had to pay out of their own pocket for the funerals of other family members certainly see the need for at least some life insurance. Because of that, they say they buy life insurance on themselves so their kids won’t get stuck with the same problem.

So let’s talk about some of the reasons you might want to buy life insurance on your parents. Here is a list of reasons why you might considers it.

• Funeral expenses The most obvious reason is that when anyone dies, there still will be funeral or other final expenses related to passing away.
• Financial support for a surviving spouse If both parents are still living, if one parent dies, the surviving parent may still need income.
• Care for family members Even older parents might still have family members who rely on them for financial support. For example, these days, many older parents are taking care of young grandchildren. However, parents still might support adult children financially or pay for specialized care for other family members who need it. Many other grandparents also need life insurance for grandchildren in case the worst happens and a grandchild dies.
• Provide a survivor benefit Parents may opt for a larger retirement benefit and chose to provide their spouse a survivor benefit through outside life insurance instead of inside their pension.
• Replace the life savings spent on medical expenses or long term care These days, health care expenses are through the roof and if you need long term care, prepare to be shocked by the monthly cost. Instead of just transferring a lifetime of wealth to health care system, you can retain that wealth in the family with life insurance. I’ve been told numerous stories by those who have blended families that their savings was used for a second spouses care and inheritance for their family instead of their rightful children.
• Pay taxes or other debts Parents could have other liabilities like taxes, mortgages and other debts that might need to be paid in order to retain assets in the family.
• Pass on a larger inheritance An often overlooked feature of life insurance is passing on a larger inheritance to their family by using cash that is just sitting there and would never be needed for support.
• Plan for chronic illness Long term care is a tough reality for most families with no way to pay for it. Many life insurance policies can have chronic illness riders that can provide cash for such expenses.

Those are just a few of the reasons that you might want to buy life insurance for your parents.

However, the number one need is most likely going to be for funeral expenses.

After that, it’s primarily a question of how much you want to spend.

How much does life insurance cost for parents?

How much life insurance will cost for your mother or father will depend on what type of life insurance you decide to buy and a bunch of other factors. The age and health of your parents is the biggest factor on what the rates would be.

To give you some idea of the cost involved, I surveyed a few insurance companies and averaged out the costs from a few insurance carriers.

Keep in mind these rates are for permanent life insurance policies and not term life insurance. The reason why is because term life insurance policies expire at certain ages. You don’t want the policy to expire before one of your parents needs it most.

Be careful when surveying rates. Realize that some sites on the internet will provide term insurance rates instead of permanent life insurance rates.

Also realize that the rates here are probably low, since your parents health will likely not be good enough to get the best rate available.

With that in mind, here’s a sampling of rates for ages 65-75 and amounts between $25,000 to $500,000.

Hopefully, if you decide to pick up some life insurance for your parents, you’ll get a rate you that can afford.

Once you apply for life insurance on your parents, though, you’ll find out your real rate if your parents can qualify for coverage.

But what if they can’t qualify for life insurance then what do you do then?

What if your parents are denied life insurance?

It’s difficult to get life insurance for sick parents and if your parents over 80 they won’t qualify life insurance due to their age. If they get denied for life insurance because of health, here are a few things you can try.

• Group term life insurance conversion If your parents are still working, they might have a group life insurance conversion option through their employer to a permanent life policy without medical questions.
• Guaranteed issue policies offered through your parents employer If your parents are still working, they may have the ability to enroll in a permanent life insurance policy they can keep after they leave work without having to answer any medical questions.
• Work with an independent agent Not all insurance companies are the same. If you work with an independent agent who can work with multiple insurance companies, you can try applying at another insurance company.
• Apply for a guaranteed issue policy A privately bought guaranteed issue policy doesn’t require answering any medical questions or taking a medical exam. Depending on the offer, a guaranteed issue policy may have a limited death benefit for the first two years. This means that if your parents die before the limited benefit period ends, the death benefit will not be paid out.
• Prepay funeral arrangements You can often prepay for funeral expenses. You would need to contact the funeral home of your choice to learn more.
• Insurance of last resort: Buy an accidental death policy if under your parents are under age 70 One additional thing you can do if your parents are under age 70 and can’t qualify for life insurance is to buy an accidental death insurance only policy. Just realize that the likelihood they will die in an accident is extremely unlikely. Also, once they are over age 70 coverage will probably terminate. These two factors probably mean that the accidental death policy won’t ever pay.

One thing that is easy to fall for are no medical exam life insurance policies. Remember, no medical exam is not the same as no medical questions. It’s not the same as a guaranteed issue policy where no medical questions are asked.

I get offers for life insurance in the mail all the time that say no medical exam but when you read the fine print, it states they won’t approve you if you have a history of a list of medical questions.

The problem with those plans is that you could pay for coverage for years and then later learn the insurance company won’t pay because you didn’t read the offer carefully.

That’s one of a list of mistakes that many people make when putting together a life insurance plan for their parents.

Let’s discuss some of those.

Ten common mistakes made with your parent’s life insurance

It’s easy to get confused about how life insurance works and make mistakes.

1. Buying term life insurance for funeral expenses With older parents, you need permanent coverage for funeral expenses – not term life insurance. Term life insurance expires and it usually expires worthless because your parents will probably outlive it. That won’t do you any good if you need to pay for their funeral at an age after the term has already expired.
2. Buying universal life insurance Universal life insurance is cheaper but can (and does more often than you’d think) expire before you die if it’s underfunded. And, one of the problems with universal life insurance is underfunded premiums. You are better off buying a whole life policy with guaranteed premiums, face amounts and cash values. While you can buy a universal life insurance policy with a no lapse guarantee, your cash value wouldn’t be a guaranteed. That means if you need access to your cash value, you’ll run the risk of the policy lapsing if you take out the cash value. Chance are good though that the older your parents are, the more likely that cash value will be eaten up by higher mortality charges anyway.
3. Buying a graded benefit policy or an accidental death policy when your parents would qualify for a regular life policy Accidental death policies are cheap because they rarely pay out. If you parent can qualify for an ordinary life insurance policy, you want to choose that over an accidental death policy.
4. Lying or overlooking medical questions to get a policy Not being truthful on an insurance application gives the insurance company an out when it comes time to pay. You only want to buy life insurance for your parents that you know will pay out for sure. Otherwise, you are wasting your money. Read every offer and contract carefully to make sure you know how it works.
5. Not understanding how graded benefit insurance policies work Sometimes people get graded benefit policies. Graded benefit policies limit the death benefit for the first couple of years. If your parents die in the first two years of the contract, the life insurance won’t pay a death benefit. That’s fine if you are aware of how it works but not if you really don’t. Read your contracts to know for sure what the limitations are so you don’t get surprised.
6. Relying on parent’s group term insurance at work Most people feel like they will live forever and always have the group term life insurance where they work. But, almost all group term life insurance contracts have a built in age reduction schedule that lowers the insurance once you reach older ages. Plus, the moment you leave employment, it will probably terminate. While group term life insurance may be converted to a permanent life insurance policy if you can’t get life insurance any other way, most people let that option expire without checking into it.
7. Parents owning their life insurance in their own name When parents own their own life insurance, it’s one of their assets. The problem with this is that if they need long term care, the medicaid rules will basically steal their permanent life insurance. Get some legal advice and determine if you should own the policy or put it in a trust of some sort.
8. Transferring ownership on a policy that has cash value If you transfer a life insurance policy with cash value to another person, you could inadvertently make the life insurance proceeds taxable under what are called transfer for value rules..
9. Cashing in your parent’s policy A lot of kids cash your parent’s policy in to take the cash value when the face amount that would be paid out is much higher and also tax free.
10. Forgetting about additional riders included on the base policy As years go by, it’s easy to forget about the additional types of insurance riders that might be included on a policy. Riders such as a chronic illness rider can help offset the costs of long term care. Unfortunately, most of the riders get forgotten are left unused.

Those are a few of the mistakes that children make with their parents life insurance.

Conclusion

You can buy life insurance on your parents as long as they qualify and you can afford it. The primary reason to think about getting life insurance for your parents is to pay for their funeral expenses when they die.

Let me know in the comments your experience in buying life insurance for your parents. If I can help you with anything or have any other questions, let me know in the comments as well.

The post 10 Mistakes When Buying Life Insurance for Your Parents appeared first on GLG America.

However, with the higher deductibles brought on by the Affordable Care Act, these plans are more likely to be offered at work during your core benefits enrollment alongside critical illness and accident plans.

Because employers are now more likely to highlight hospital indemnity plans at open enrollment, many employees are wondering what does hospital indemnity insurance mean and is hospital indemnity insurance worth it?

What is hospital indemnity insurance?

Hospital indemnity insurance is a supplemental medical insurance plan that pays cash directly to you if you have to go to the hospital. If you don’t go to the hospital, then no benefits are paid.

What does it pay for?

While every hospital indemnity plan is different, you’ll probably see three core types of benefits especially in group plans offered at work.

• Hospital admission An initial, usually larger fixed benefit is paid if you are admitted to the hospital due to illness or accident.
• Overnight stay For each night in the hospital, a smaller daily fixed benefit is paid for each overnight stay in the hospital.
• Intensive care If you stay overnight in the hospital but are in intensive care, an additional fixed daily benefit is paid for each overnight stay in the intensive care unit.

In addition, to these core types of payments, you might see some other types of benefits offered in these as well. You are more likely to see these benefits in individually purchased plans but you could see them offered in group plans too.

• Emergency room visit A benefit is paid if you have to go to the emergency room for treatment.
• Outpatient procedure Benefits might be paid for certain outpatient procedures.
• Specified disease Normally specified disease policies are stand alone policies but you may see benefits for certain critical illness.
• Accidents As with specified disease, normally benefits for accident payments are in stand alone accident policies but it’s possible some benefits might be paid under a hospital indemnity plan.

Other types of benefits you might see added to both individual and group insurance plans include other less common things like medical evacuation, repatriation of remains as well as concierge type benefits like travel assistance due to covered qualified event to name a few.

Limitations on benefits

Benefits payable under these plans aren’t unlimited. It’s customary to see limits on the number of admission payments per year, limits on the number of overnights and limits on any other additional plan benefits. This means that your plan may not pay for every time you need hospital treatment.

You’ll want to read the contract to see what other types of limitations might exist. Unfortunately, if you are buying hospital indemnity insurance inside a group plan, you might not ever see the contract.

Not a replacement for health insurance

Keep in mind that hospital indemnity is a supplement to your medical insurance, it is not health insurance. It won’t pay for your medical bills from your doctors, hospitals or for your medications from the pharmacy.

While you may use the cash you receive for these expenses, hospital indemnity payments are meant to help you fill the gap for things not paid by insurance. Gaps that occur in medical coverage happen with things like deductibles and coinsurance.

Even then, your payment might not fill the gap completely or your payment could be more. Whatever the payment is, the payment is. No more no less, regardless of what your actual expense was.

In addition, some states require you to have an underlying health insurance plan before you can purchase a hospital indemnity plan.

Are hospital indemnity payments taxable?

The IRS has ruled that benefits paid by a hospital indemnity plan are not taxable unless the premiums are taken as pre-tax deduction out of your paycheck.

Most employers should be deducting these premiums on an after tax basis. If that is the case, or you pay your premiums directly out of your own pocket, the benefits you receive should not be taxable.

Example of how a hospital indemnity plan might help you

Recently, my wife had an unexpected trip to the hospital. After taking her to the emergency room, she was admitted to the hospital. She spent six nights in the hospital, three of which were in intensive care.

Once she recovered, the hospital and doctor bills started arriving. I think all the medical bills totaled more than $30,000. On our medical plan, we have a $3,000 deductible. This meant that of that $30,000 or so, $3,000 is our responsibility and we will be expected to pay it.

On top of that, one of the emergency room doctors was considered out of network which added another $1,200 above and beyond our deductible we shouldn’t be responsible for but are.

While my wife was in the hospital, she also missed six days of work. While she had enough sick time to cover her pay, her short term disability wouldn’t have kicked in until after 7 days and my wife was back to work by the 7th day. Because of that she wouldn’t have qualified for any payments from her short term disability plan.

A hospital indemnity plan would have paid us some cash to offset these expenses. Most likely she would have received cash for being admitted, staying overnight and a little more for each night of intensive care treatment that was required.

Without a hospital indemnity plan, those expenses have to be paid completely by us.

Reasons why you might consider getting a hospital indemnity policy

If you are presented an opportunity to buy a hospital indemnity plan, here are some reasons why you might want to take a look at it.

• High deductible health insurance plan The number one reason to consider a hospital indemnity plan is if you have a high deductible plan. This is for two reasons. Most people don’t have that kind of money set aside and if you even if you have that much money set aside in a health savings account, you can maybe protect it assuming it’s an HSA compliant plan.
• Planning on getting pregnant If you are planning on getting pregnant, a normal childbirth is two days in the hospital while a C-section is likely four. Unlike short term disability plans, group hospital indemnity plans don’t usually have a pre-ex that would exclude pregnancy.
• Over 50 years old Once you start getting older, the more likely it is you’ll get admitted to the hospital. Statistics show that once you reach the age of 50, there’s a greater than 10 percent chance you’ll be admitted to the hospital. And that percentage goes up each year you get older.
• Upcoming surgery If you know you are going to have a knee replacement or some other surgery you have control of when it happens, you might want to consider it.
• You have a chronic condition If you have heart issues, diabetes are on medications for other types of conditions, you are more likely to be admitted to the hospital. Here’s another study done by the AARP that shows the most common reasons older adults are admitted to the hospital.
• You missed open enrollment Sometimes, people miss open enrollment. If a hospital indemnity plan is offered to you during an off cycle enrollment, you might consider it. While not a replacement for health insurance, at least it’s something.
• It’s guaranteed issue If it’s guaranteed issue and you have some major medical problems you might want to consider it. It could help you get through pre-ex period on a critical illness policy for example.
• If it’s inexpensive If the cost is reasonable, then consider purchasing a policy. You are more likely to find that the basic core plans aren’t that expensive. Some of seen are under $200 per person per year which isn’t too expensive.
• No cash saved or to replace lost income If you don’t have much sick time or don’t have short-term disability, you might consider it. While it’s not disability insurance, it would still provide some cash you might need.
• Unexpected out of network expenses Even with a good medical plan, medical providers will still try and stick you with some unexpected expenses like my wife discovered when she got a bill from an out of network provider when she went to an in network facility for treatment.

Those are a few of the reasons you might take a look at buying a hospital indemnity program.

Remember, that at each open enrollment at work you can opt in or out. So while, I’m not a fan of people opting in and out of insurance programs, technically, if you time it right, you have that option to plan a little bit ahead of time to buy it when you think you might need it and drop it when you don’t think you would.

Are hospital indemnity plans good?

The thing about hospital indemnity plans is that it is insurance that pays you while in the hospital. But if you don’t go to the hospital, you don’t receive any benefits. In my wife’s case it would have been handy because the went to the hospital.

But if you don’t go to the hospital, then it won’t ever pay.

I should mention that part of whether an insurance plan is good or not boils down to the insurance company and the contract it offers as well.

Conclusion

I hope that helps you make sense of hospital indemnity plans and whether it might be worth it in your situation.

Let me know in the comments if you have used hospital indemnity and how it paid out.

The post Is Hospital Indemnity Insurance Worth It? appeared first on GLG America.

Whether it will pay for suicide or not will primarily depends on four things.

Those four things are:

1. What kind of life insurance is it?
2. Where do you live (or live when you bought the policy)?
3. How long have you had the policy?
4. Has the policy ever lapsed and then been reinstated?

Knowing the answers to these questions will help you know whether or not a life insurance policy will pay for suicide.

Since suicide is the 10th leading cause of death in the United States, let’s talk more about how insurance companies handle suicide and then go into some other important things you might need to know.

Generally, the suicide clause in a life insurance contract excludes payment for suicide for the first two years

It’s common for individual life insurance contracts to have a suicide clause. The suicide clause may allow an insurance company to deny payment for death caused by suicide for the first two years the life insurance is inforce.

However, after two years have passed, unless the policy has been reinstated (see below), suicide would no longer be excluded.

While this is the general rule, you actually need to know a few more things to determine if and how a suicide clause might apply.

What kind of life insurance is it?

Whether a life insurance company will pay for suicide first depends on what kind of life insurance it is. Let’s talk about three types and how suicide might be treated.

• Is it group life insurance through your employer? Group term life insurance may not cover suicide at all. You’d have to read the group contract to see how suicide is handled. The group contract is the agreement between the insurance company and the employer that governs how the group life insurance works.
• Is it individual life insurance? Individual life insurance will likely have a suicide clause. As I mentioned above, this clause is generally in affect for two years however it might depend on where you live or where you bought the policy.
• Is it an accidental death policy or an accidental death benefit rider? If the policy is an accidental death policy then suicide is probably totally excluded no matter what. This would also be the case for for any accidental death benefit riders, both on group term or individual life insurance. For more information, click what is accidental death.

As you can see, it’s important to know what kind of life insurance it is. If you are dealing with individual life insurance, then there are three other things that might affect a claim because of suicide.

Where do you live (or where did you live when you bought the policy)?

While most states in the United States allow insurance companies to exclude suicide for the first two years the policy is inforce, there are a couple of states that only allow for suicide to be excluded for the first year.

If you buy a policy in one state that limits the suicide clause to one year and later move to another state that allows it to be excluded for two years or vice versa, I’m not really sure what state would apply.

For those reading this that have bought their life insurance outside the United States, the best advice I can give is that you’d have to read your life insurance contract.

How long have you had the policy?

Since suicide is generally excluded for the first two years the life insurance is inforce, the next thing you’ll want to figure out is how long have you had the policy.

Keep in mind that the date you applied for the life insurance and the actual policy date might be two different things. Most likely, the policy date is probably when the exclusion period might begin.

Has the policy ever been reinstated?

If you have ever let your policy lapse and asked the insurance company to reinstate the policy, the time the suicide clause would be in effect would be reset and start all over again.

This means that even if you have had your policy for 4 years, let your policy lapse and then request that it be reinstated, you’d likely have to wait another two years before suicide would be covered again.

Always file a death claim when someone dies

No matter how someone dies, you should always file a claim and make the insurance company make a formal decision.

If the death was due to suicide and then denied under the suicide clause, the insurance company will probably refund the premiums paid.

Get legal advice if it’s unclear if it was an accident or suicide or for other legal questions

The insurance company will rely on the certified death certificate for the cause of death. If the death certificate says the death was a suicide, that’s what they’ll most likely go by.

But, things are often not so simple. I once had a case where a policyholder accidentally shot herself but they ruled it a suicide later.

In cases like that, it’s not really clear what happened. You might need to contact an attorney for legal advice.

If you are contemplating suicide, please ask for help

If you are reading this because you or a family member are contemplating suicide, please get help. Reach out to the National Suicide Prevention Lifeline at (800) 273-8255.

Conclusion

In general, life insurance companies exclude suicide for the first two years an individual policy is in effect. You’ll want to read the actual life insurance contract to see what kind it is, what state you bought it in and how long you have had it.

Have you had to file a death claim for suicide? Let me know in the comments what your experience was with the insurance company.

Also, if you need some individual life insurance, and want to help support this site, why not let me be your life insurance agent.

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The post Does Life Insurance Pay for Suicidal Death? appeared first on GLG America.

In this article, I’m going to share with you some tips you can use if you want to know how to save money on life insurance premiums. Many of these things are simple strategies while others will require a change in habits. OK. let’s get started with my list.

1. Buy life insurance sooner rather than later

The first question that life insurance companies ask is your age. The older you are the more that life insurance is going to cost you. The younger you are, the cheaper it is.

Obviously you can’t control your age. But what you can control is whether or not you keep waiting to buy insurance.

No matter what your age, if you think you need life insurance, it’s time to look now. That’s because it won’t get any cheaper than it is right now.

2. Stop cigarette smoking, cigar smoking, chewing, vaping or using any kind of tobacco

The second question that the life insurance company will want to know is if you use tobacco products. Smoking and other tobacco use raises your premium by two to three times more than what a non tobacco user pays.

Whether you think it’s fair or not, if you can quit using tobacco, you can save drastically on your life insurance. This would apply to both new policies and existing policies in force.

Every insurance company words there tobacco use question differently. They also will have a different set of policies regarding how long you have to be tobacco free in order to say you are a non tobacco user.

Take the time to read the tobacco use question carefully. Talk to your agent about the question if you need to so that you answer it truthfully.

3. Lose weight, lower your blood pressure and cholesterol

Another big factor after tobacco use is your weight. If you weigh more than you should and can shed some pounds before you apply for life insurance, that’ll help lower your premium.

Do some research to see how much you should weigh at your height and try to get close to that weight.

Better eating habits will help you lose some weight if you need to and also that’ll help in another area.

That is with your blood pressure and cholesterol.

4. Keep your motor vehicle record clean

Insurance companies check your driving history. Speeding tickets, accidents and other moving violations are red flags when the underwriter reviews your application.

Make a point to be more careful driver. If you get stopped for speeding, check into any diversion programs that can keep it off your driving record.

An added benefit to keeping your driving record spotless is you’ll see lower auto insurance rates as well.

5. Keep away from hazardous activities

While things like scuba diving, race car driving, skydiving and other crazy activities can be fun, they also put you at higher risk of dying than other people who don’t participate in those activities.

If your job doesn’t require you to do hazardous things, refrain from doing them so they aren’t held against you when you apply for life insurance.

6. Don’t smoke marijuana (even if it’s legal), do drugs or other illegal activities

The legalization of marijuana in certain states of the country doesn’t mean that insurance companies won’t care if you use it. It’s a good idea to stay away from marijuana use as well as other drugs.

Of course, active drug use is a major concern to an insurance company when they look at your life insurance application. Don’t do drugs.

Also, stay out of legal trouble.

7. Exercise three or more times a week

Insurance companies sometimes give discounts if you are exercising on a regular basis. While exercise alone won’t reduce your rate, if it’s combined with other positive factors on your application, it could.

8. Go to the doctor every year and keep any medical conditions in check

Insurance companies like to see that you are taking care of yourself. If for example, you have high blood pressure, and are going to the doctor every year and keeping it under control with medication, it will look a lot better than if you don’t and could result in a more favorable premium.

9. Don’t buy universal life insurance. Stick to term and whole life only.

If you have read any of my articles, you’ll know that I’m not a fan of universal life insurance. That’s because most are underfunded. That means they may require extra premiums when you get older which can prove to be an expensive problem.

The reality is that many universal life insurance policies are at risk of lapsing in your later years when you need it most. When a universal life policy lapses because it was underfunded, it really was a just very expensive term policy.

While I suggest everyone have at least some permanent life insurance for final expenses, you should make sure to avoid buying any universal life policies. If you feel you need some permanent life insurance, stick to whole life insurance policies only.

Term life insurance is important to have as well and the great thing about term insurance is that it’s cheaper than whole life.

I personally think that everyone should have some of both types of life insurance – some term and some permanent life.

Just make sure that when you buy permanent life insurance, that it’s not universal life. Make sure it’s whole life.

10. Take advantage of your group term life insurance at work (but don’t rely on it)

Group term life insurance may be a source of cheap term life insurance when you are younger. Traditional group term life insurance rates typically go up every five years. Eventually this will price you out of it or it’ll get reduced by an age reduction schedule.

If you are young and your employer offers an issue age based plan that keeps you in the same age bracket, I’d suggest you take advantage of it. An issue age group life plan doesn’t increase in rates every five years.

I don’t suggest you rely on solely on group term life insurance, though. You don’t control it and will most likely outlive it.

11. Buy a fully underwritten policy

In order to get the best life insurance rates from the insurance company, you’ll need to provide a full medical history. You may also need to provide blood, urine, EKG or sometimes even some sort of cognitive testing.

The insurance industry is changing and they now make more decisions based just off the life insurance application and your medical information obtained from the medical information bureau (MIB) than they used to.

However, you can also buy policies called nonmed policies which require less information than fully underwritten policies. In exchange, everybody pays a little higher rate than you might have had you gone through fully underwritten policy.
If you are healthy, you’d be better off going with a fully underwritten policy.

However, if you are not sure how healthy you are, never go to the doctor and never have any lab work done, it might make sense to buy a nonmed policy first. Once it’s in place, then you could replace it with a fully underwritten policy.

12. Don’t lie on the life insurance application

These days insurance companies rely more heavily on the medical history provided on your application matching up with what’s in your medical history provided by the MIB.

If the information you provided doesn’t match what’s in MIB, then the insurance company will take a closer look at your life insurance application and request further medical requirements.

You also don’t want to lie on the life insurance application because your claim could be denied down the road.

Make sure you provide your agent with the complete and truthful answers to avoid the underwriter taking a second look at your application.

13. Be properly prepared if you have to take a medical exam

After you have scheduled any medical requirements, don’t go out partying, drinking, smoking marijuana or any other crazy stuff that could negatively affect your results.

I once had someone do that and it had a drastic impact on the premium. So much so that we had to reduce the face amount.

Keep a clean diet and get plenty of rest in the time leading up to the exam.

14. Attach a level term rider to a whole life policy instead of buying separate policies

Each policy written collects a policy fee. So if you want a whole life policy and a term policy and you buy them separately, each policy has this policy fee.

If however, you buy one whole life policy and attach a level term rider to it, you only pay one policy fee. While policy aren’t huge, it’s still a way to save some money.

15. Pay your premiums annually

Instead of paying your premiums monthly, pay your premiums annually, you could save 10 to 15 percent just buy paying the annual premium.

16. Take advantage of pricing bands

When buying term life insurance, insurance companies will sometimes have internal rate charts that make lower face amounts a little more expensive than higher face amounts. What this means is that it’s entirely possible that you could pay close to the same premium for more insurance. Check with your agent when you buy your policy.

17. Check for multi-policy discounts

If you have more than one policy with an insurance company, you might qualify for a multi-policy discount.

18. Remove riders and ratings that no longer apply

For existing policies you have, review them for riders that might not be applicable any more. Also check for rated life insurance policies. A rated policy is one that contained an extra charge because of a health issue or other risk.

You might be able to apply to have these removed or buy new policies that won’t have those ratings.

19. Work with an experienced agent

An experienced agent can make sure you properly navigate through the underwriting process when you buy life insurance. While not everybody can qualify for the lowest possible rate an insurance company will give, an agent familiar with these guidelines and solid knowledge of the insurance companies policies and procedures will help.

Lowest price isn’t everything

Price is important, but not the most important thing when buying life insurance. It’s worth paying a little extra for certain things like a solid company, a good agent, great policies, guarantees and other options.

You often get what you pay for.

Conclusion

Those are 19 tips that might help you save money on any of your new and sometimes existing life insurance. Some are easier than others of course.

Let me know in the comments if you have used any of my suggestions.

But, don’t let not being able to do all these keep you from buying life insurance.

If you need life insurance, you should definitely start the process of getting coverage.

Also, if you need some individual life insurance, and want to help support this site, why not let me be your life insurance agent. Click the red button just below or click ask for a proposal.

The post 19 Ways to Save Money on Life Insurance Premiums appeared first on GLG America.