Protection for Families and Business

Income Protection - NOT health insurance

2009-08-03T06:58:00.001-07:00

Repeatedly we hear from the folks who want to shove socialized medicine down our throats that bankruptcies and foreclosures are caused - in some huge percentage - by lack of health insurance. Follow me on this - you get Cancer - have a heart attack - have a stroke - get in a bad accident and are without health insurance. Do you get denied care?

Not in the United States - not since Ronald Reagan passed HIPAA and hospitals and doctors were required to treat patients regardless of whether or not they had insurance. Yes you can run up a tremendous medical bill but does that force you into bankruptcy? Is you family homeless?

I've worked with families and collectors for years and can tell you from experience that most of the medical providers - when they know you are uninsured and without a big net worth will accept almost any small monthly payment. "Can you pay us something" is the question they ask and your answer needs to be yes. Your credit may be ruined and you may not get the best treatment but you won't be bankrupted by the medical bills.

Meanwhile what about your payments? Unless you are debt free you may have to make a house, car, credit card, car insurance, house insurance, student loan and other payments - obligation that often involve collateral. Creditors will repo the collateral if you don't pay them the money. Without income you still need food and utilities and transportation. It's NOT health insurance you need to take care of these problems it's disability insurance. You need a policy that pays at least 12 months and that pays for both accidents and illnesses.

What about Social Security Disability you wonder? Under the Government plan you have to be unable to perform any occupation by reason of accident or illness. You have to be disabled for 5 continuous months and the condition must be one that won't get better or expected to be terminal. In general the Government takes 6 to 12 months to process a claim so the average person who DOES qualify will not get a check for 13 months - and that's an improvement from prior years.

Private disability insurance is surprisingly affordable and tremendously easier to collect. How much does it cost?

Here are some examples from Assurity Life.

In each of these 3 cases the rates quoted are for a 2 year benefit of $2,000 month and a 30 days waiting period.

In English that means you would have to be disabled for 30 days and then the insurance company would pay you $2,000 per month for up to 2 years. If you recover before the 2 years is up the benefit stops at the time you can return to work. If you are still disabled after 2 years the benefit stops after you have received 24 monthly benefit payments.

These rates are with and without a return of premium rider that adds a little cost.

25 year old female virtual assistant
$25 dollars a month premium $45 a month with return of premium rider

35 year old male self employed plumber
$24 dollars a month premium $45 a month with return of premium rider

45 year old male Restaurant Manager
$34 dollars a month premium $62 a month with return of premium rider

In general - because of morbidity statistics - women pay a little more and men pay a little less up to about the age of 50 when the men pay a little more and women a little less. Riskier occupations pay more than less risky job descriptions. If you are a working stiff on a crew of deadliest catch you take a lot more risk than the front desk lady at the dentist's office.

With "Guaranteed Renewable" policies (MOST of the individual business) coverage CAN'T be canceled . Rates could - hypothetically - be increased if for some catastrophic reason but only if all the state regulators agreed. In my 30 years I've seen 1 increase for 1 occupation - Chiropractors and it was about 10 percent.

With "Non-cancellable" policies you get the additional benefit that the premiums can never be raised. The trade off - versus the guaranteed renewable version - is that premiums generally are 12 percent higher.

After occupation -age - and tobacco use the 3 basic cost of cost considerations are
How Much
How Soon
How Long

This is not rocket science folks

More cost More - Less cost Less
Sooner cost More - Later cost Less
Longer cost More - Shorter cost Less

Example - everything else being equal (like 40 year old nurse who does not smoke)
$5000 a month benefit costs more than $3000 a month
90 day waiting period is cheaper than 30 day waiting period
2 year benefit costs less than 5 year benefit

So what should you buy?

#1 A policy you can comfortably afford
#2 A policy that pays soon enough that you can pay your bills
#3 A policy that pays long enough that you have time to recover

Return of premium is a rider (with Assurity Life) that says if you have paid premiums until you are 67 years old and not had any claims you get all your money back. If you have had some claims but less than what you paid in - you get the difference back in cash.

Disability insurance premiums are NOT deductible because the benefits are received tax free. Often work related group disability insurance is paid for with before tax dollar and in that case benefits are taxed.

As the health care debate heats up remember that even in the worst case scenario - which I call single payor - you are not going to get any money to pay your bills when you get sick or hurt unless you take some action.

Independent Agents are my first pick when it comes to finding disability income protection. This is, however a specialty area that not too many agents are well versed in so expect to do some homework yourself in many cases.

My advice is always to be cautious when dealing with "1 company" or "captive agents like Allstate or State Farm. By contract they only have a single product to offer so there is no shopping going on with these folks. A captive - one company agent could have the best product but do your homework via a little comparison checking. You may be in good hands but you want to really may want to comparison shop a bit.

My favorite companies for disability income are Assurity Life, Illinois Mutual, Union Central and Mutual of Omaha.

For organizations that have independent agents I like Independent Insurance Agents Association, National Association of Health Underwriters, Professionals Insurance Agents of America and the National Association of Insurance and Financial Advisors.

One final note - you may find that you have health conditions that preclude you from getting coverage. Be aware that several companies have now developed "Graded Benefit" plans that cover lots of folks that used to be declined coverage. These policies don't pay the full benefit until you have had coverage for 2 or 3 years - one last reason to get coverage now - while you are healthy.

Doctors and Lawyers and politicians - oh my - Obamacare part 2

2009-06-30T17:09:00.000-07:00

While the Obama administration gears up to pass socialized health care a couple of "duh"s are in order.

Obama care will not increase the supply of Doctors

Obama care will not decrease the supply of lawsuits

So what you say?

Doctors...

Medical schools screwed up on estimating the number of doctors that we need in the US from the period beginning around 1975 to around 1995. The American Medical Association and the Medical Schools fearing an oversupply kept enrollment around 16,000 new students a years for 20 years while the population grew by 70 million legal Americans.

Was that intentional to create medical inflation? Probably more like keeping the Medical fraternity well paid but I like to think they just did not pay attention to the math involved. Most of the Medical profession are not that good with numbers - just ask 'em what their fees are.

In 2008 17,800 students entered medical school in the US - the largest enrollment ever. Is it too little too late? The challenge is it takes 10 years to graduate a doctor.

As the 79 million baby boomers enter retirement age their medical needs increase - they go to the doctor more often. At the same time the percentage of doctors over age 55 and older is now about 35% and about 250,000 current physicians will retire within the next 10 years according to the Association of American Medical Colleges.

There are 3 1/3 physicians in the US for every 1,000 citizens.

Socializing health care will discourage students from becoming doctors because they won't have same economic incentives that they do now - but (as Billy Mays would say ) wait there's more - they may have even higher likelihood of being sued!

Lawyers

John Edwards made a fortune litigating Cerebral Palsy lawsuits claiming medical malpractice. Now it turns out that the premise of all that litigation may have been false - all those millions in awards were probably not justified at all.

You can't watch TV today without noticing the proliferation of targeted illness litigation advertising? They are not advertising for the public good, they're doing it for the almighty dollar.

No doubt the medical profession should responsibly compensate victims of malpractice. But multi-million dollar pay days for trial lawyers?

Rich doctors don't pay malpractice awards - we do. Actually malpractice insurance pays the John Edwards' of the world. Then the malpractice insurance company raises premiums to cover the pay out. Then the doctors office raises the fees they charge patients. Then the insurance company raises your premiums to pay for the increase medical cost.

We need meaningful reform of and limitation of punitive awards because this "lawsuit lottery" adds significantly to the health care premiums we pay.

But we are not going to get any reform in Obama care. First of all the congress is full of attorneys who want to protect their possible future career. Secondly the American Trial Lawyers are great at lobbying.

And of course President Obama has political obligations to the American Trial Lawyers association. He publicly stated that he is not going to endorse ANY tort reform because he wants to protect people. The people he is protecting are trial lawyers.

According to the American Bar Association, 2003 was the first year we had 1 million attorneys in the US. There were 1,116, 967 licensed attorneys in June of 2006. The number rose to 1,128,729 by the end of 2006. By 2008 this great group had grown to 1,143,358. Number of lawyers for each state in those years can be found on "Lawyers By State" on the ABA Website. So we have about 1 attorney for every 300 citizens - and they all need work.

Socializing medicine will dictate less defensive medicine - those "extra tests" - because it just won't be covered. Wouldn't that lead to more lawsuits and probably bigger awards? I think so.

So if you decrease the number of doctors and you increase the amount of money pulled from medical care and give it to lawyers how do you make up the math?

I'm just asking...

Obama Care - what they won't tell you part 1

2009-06-29T06:29:00.001-07:00

As I write this the congress is heavy into debating nationalizing health care.

There are key areas that are not and will not be communicated to the public by the mainstream media.

Over my next 6 posts I'll address the following...

#1 - The numbers are intentionally misstated
#2 - Neither the Doctor shortage or Tort reform is addressed
#3 - People not in Unions or Government Jobs will be discriminated against
#4 - Pay or Play only plays into the Government control scenario
#5 - Federalized mandates will automatically increase cost and decrease supply
#6 - Loss ratio provisions will force insurance companies out of the business

Today topic is the numbers - "Facts are stubborn, but statistics are more pliable" Mark Twain

The spin that the administration is putting on this is that only they can save the American health care system and that the system is significantly broken. In addition, say the proponents of national health care all the insurance companies need to be kept honest and the only way to do that is to allow the Federal Government to compete with the private sector.

Reality is much different. To accuse the administration of lying is tempting but at the least you have to realize the bold misrepresentations they make.

First the uninsured population is promoted as being a staggering 46 Million "Americans".

One half of the these uninsured at without coverage for 4 months or less - they are truly temporarily without insurance. These are folks who just "aged off" their parents health insurance plan or lost their job and decided not to take the COBRA option for awhile. Two thirds of this half have the means to purchase insurance coverage but simply choose not to.

11 Million of the 46 are NOT Americans but foreign nationals in the US. Of these 11,000,000 half of them are illegal. Why are they included in the 46 Million figure - you decide.

Also the government conveniently excludes many people that really are covered - Veterans who use the VA system are counted as uninsured. So are native Americans covered by Indian Health care. Several million people have catastrophic temporary medical plans in force that cover them after some deductibles and co-insurance - they are also counted as UNINSURED.

All of this information comes out of the Census figures the government uses.

So what is the real number of uninsured - no one knows. It's possible that it is as little as 20% of the figure the proponents of National Health Care want you to think it is.

How many of the real uninsured are denied treatment? Uh - that would be zero - people can't be denied treatment in the US and unfortunately that's probably part of the problem.

Next time let's look at the Doctor shortage and Tort Reform

Is your insruance company safe?

2009-04-21T07:34:00.000-07:00

Right now there is a lot of concern about financial stability of banks and insurance companies.

Everyone knows that deposits in banks are "insured" by the Federal Deposit Insurance Corporation - the FDIC but what about insurance companies?

The answer is that their is currently a system in place that consists of the State Guarantee Funds. These state specific organizations vary in the amount of coverage they provide. You can check for specifics for your state. The National Organization of Life and Health Insurance Guaranty Associations "NOLHGA" is located at 13873 Park Center Road Suite 329, Herndon, VA 22071.

Essentially what happens when an insurance company is judged to be insolvent the State Guarantee Fund takes over and assesses the other companies in that state for any deficit liabilities that the company has.

Most states ironically prohibit the insurance agents and companies from advertising the existence of the guarantee funds out of concern that it might encourage misrepresentation or some unfair marketing practice.

The best source of specific information is the individual state guarantee fund office. Be patient as most of these agencies are fairly small without huge staffs.

Here is an overview of the state funds...
These limits are changing a lot right now after years of never changing - so don't take it as gospel that the figures are accurate today - check for yourself.

State	Maximum benefits for all lines of coverage combined	Maximum death benefit protection per individual per company	Maximum protection for the cash values per individual per company	Maximum protection per person for present value of an annuity contract	State Guarantee Association Phone Numbers
अलबामा	$300,000	$300,000	$100,000	$100,000	(205) 879-2202
Alaska	$300,000	$300,000	$100,000	$100,000	(907) 243-2311
Arizona	$300,000	$300,000	$100,000	$100,000	(602) 364-3863
Arkansas	$300,000	$300,000	$300,000	$300,000	(501) 375-9151
California	80% not to exceed $250,000	80% not to exceed $250,000	80% not to exceed $100,000	80% not to exceed $100,000	(323) 782-0182
Colorado	$300,000	$300,000	$100,000	$100,000	(303) 292-5022
Connecticut	$500,000	$500,000	$500,000	$500,000	(860) 297-3862
Delaware	$300,000	$300,000	$100,000	$100,000	(302) 456-3656
Dist. of Col.	$300,000	$300,000	$100,000	$300,000	(202) 434-8771
Florida	$300,000	$300,000	$100,000	$100,000	(904) 398-3644
Georgia	$300,000	$300,000	$100,000	$100,000	(770) 621-9835
Hawaii	$300,000	$300,000	$100,000	$100,000	(808) 528-5400
Idaho	$300,000	$300,000	$100,000	$100,000	(208) 378-9510
Illinois	$300,000	$300,000	$100,000	$100,000	(773) 714-8050
Indiana	$300,000	$300,000	$100,000	$100,000	(317) 636-8204
Iowa	$300,000	$300,000	$100,000	$100,000	(515) 248-5712
Kansas	$300,000	$300,000	$100,000	$100,000	(785) 271-1199
Kentucky	$300,000	$300,000	$100,000	$100,000	(502) 895-5915
Louisiana	$300,000	$300,000	$100,000	$100,000	(225) 381-0656
Maine	$300,000	$300,000	$100,000	$100,000	(207) 633-1090
Maryland	$300,000	$300,000	$100,000	$100,000	(410) 998-3907
Massachusetts	$300,000	$300,000	$100,000	$100,000	(413) 744-8483
Michigan	$300,000	$300,000	$100,000	$100,000	(517) 339-1755
Minnesota	$300,000	$300,000	$100,000	$100,000	(651) 407-3149
Mississippi	$300,000	$300,000	$100,000	$100,000	(601) 981-0755
Missouri	$300,000	$300,000	$100,000	$100,000	(573) 634-8455
Montana	$300,000	$300,000	$100,000	$100,000	(262) 965-5761
Nebraska	$300,000	$300,000	$100,000	$100,000	(402) 474-6900
Nevada	$300,000	$300,000	$100,000	$100,000	(775) 329-8387
New Hampshire	$300,000	$300,000	$100,000	$100,000	(603) 226-9114
New Jersey	$500,000	$500,000	$100,000	$100,000	(973) 623-3989
New Mexico	$300,000	$300,000	$100,000	$100,000	(505) 820-7355
New York	$500,000	$500,000	$500,000	$500,000	(212) 202-4243
No. Carolina	$300,000	$300,000	$300,000	$300,000	(919) 833-6838
North Dakota	$300,000	$300,000	$100,000	$100,000	(701) 235-4108
Ohio	$300,000	$300,000	$100,000	$100,000	(614) 442-6601
Oklahoma	$300,000	$300,000	$100,000	$300,000	(405) 272-9221
Oregon	$300,000	$300,000	$100,000	$100,000	(503) 588-1974
Pennsylvania	$300,000	$300,000	$100,000	$100,000	(610) 975-0572
Puerto Rico	$300,000	$300,000	$100,000	$100,000	(787) 765-2095
Rhode Island	$300,000	$300,000	$100,000	$100,000	(401) 273-2921
So. Carolina	$300,000	$300,000	$300,000	$300,000	(803) 276-0271
South Dakota	$300,000	$300,000	$100,000	$100,000	(605) 336-0177
Tennessee	$300,000	$300,000	$100,000	$100,000	(615) 242-8758
Texas	$300,000	$300,000	$100,000	$100,000	(512) 476-5101
Utah	$500,000	$500,000	$200,000	$200,000	(801) 572-1218
Vermont	$300,000	$300,000	$100,000	$100,000	(802) 244-8540
Virginia	$300,000	$300,000	$100,000	$100,000	(804) 282-2240
Washington	$500,000	$500,000	$500,000	$500,000	(360) 426-6744
West Virginia	$300,000	$300,000	$100,000	$100,000	(304) 733-6904
Wisconsin	$300,000	$300,000	$300,000	$300,000	(608) 242-9473
Wyoming	$300,000	$300,000	$100,000	$100,000	(303) 292-5022