Personal Finance Tips

Health insurance market sure looks confusing to those who have to deal with it for the first time in their life. But as with anything that seems complicated at first, health insurance is quite easy to understand when you take some time to learn the basics of it. Of course, don’t expect to become an insurance market specialist overnight but the following tips will certainly help those inexperienced with health insurance shopping to get a decent policy for a fair price.

What you can get?

Individual insurance plans – the most common option for people with normal income, especially those who aren’t offered with group insurance by their employers. The vast majority of insurance companies offer such policies and the diversity of coverage options is very wide here. However, make sure to learn what are the requirements in your state and check if the insurance company is licensed in your area before getting the plan.

High risk pools – some pre-existing conditions will make it hard for you to get typical individual health insurance. That’s where high risk pools may come in handy. Such plans are available only in certain states, so make sure to learn if there are any in your area. If yes, then it would be a good option for those who are considered to be a high risk policy-holder. The rates are relatively high here, but for some it may be the only option for adequate coverage.

HIPAA coverage – this type of insurance best appeals to those who have been recently dropped of employer sponsored group coverage and don’t fall under COBRA coverage too. Health Insurance Portability and Accountability Act (also known as HIPAA) health insurance can be purchased in any state and is particularly useful to those who have pre-existing conditions. Thus, it’s a good alternative to high risk pools or an option where the pools are unavailable. Speak to your insurance agent to decide which option is better for you.

Where you can get it?

Insurance agents – these are independent individuals that provide health insurance quotes and plans from numerous companies. Each insurance agent has his own selection of companies he provides services of, and if there are any question he is the person to ask. However, first make sure that the agent you’re speaking with is licensed to work in your area before getting any services or signing policy contracts. You can do that at your state’s insurance department.

Department of insurance – while not being a direct seller of health insurance, the state insurance department can give you valuable information on local agents and providers you can buy from safely. If there are any complaints about any particular provider, this is the place to learn about them.

Online sellers – the recent trend in many insurance companies going online, as well as the development of independent sources can be a very helpful and easily accessible source of information regarding health insurance. It is very easy to get health insurance quotes online with these sites and shopping for a plan takes you only a couple of minutes.

There are several options available to maximize the chance for children to be included in a health plan. Employer-provided plans routinely offer cover for family members and adding children to private plans is relatively inexpensive. For those families with low incomes who cannot afford cover, there are federal and state funds available to pay for basic cover. But all these options disappear when the child becomes an adult. This is the magic time everyone used to look forward to. Finally, the law recognizes people are old enough to take responsibility for their own actions and removes the built-in protections. Except, of course, these new adults are either still in full-time education or joining the group with the highest unemployment rate in the country.

For young adults going through college and university, this is the time when debts are really starting to mount up. Tuition fees and living costs take years to pay off. Adding in the cost of a health plan is often the straw that breaks the camel’s back. Even though all the better colleges and universities offer good value group insurance, this is one additional cost too many. Younger people take the rational view. They have good heath and statistics on their side – the statistics show the vast majority of people enjoy good health during the prime of their lives. The main risks come from accidental injuries with many hit with big bills following traffic accidents. So most young people put off the decision on buying into a health plan and hope their parents will solve the problem for them.

This calculation may be about to change. The insurance industry applies a simple formula to set premium rates. It guesses how much it is going to pay out over the next twelve months, adds its operating costs and a profit margin, and then divides this total among all the people holding a policy, i.e. everyone in the group pays a more-or-less equal share. Because millions of young adults opt out, the cost of medical treatment falls unevenly on older people and those with existing medical conditions. The premium rates for everyone would fall if the cost of the nation’s medical bills was divided between all adults. That’s why the legislation working its way through the House and Congress includes proposals to make holding an insurance policy mandatory or to fine people who do not have a health plan. This is a form of single payer program because it matches the idea that all the employed should contribute a percentage of their earnings toward universal health coverage.

Health insurance is the big political hot potato right now. But, if medical costs are to be controlled and everyone is to pay only a fair amount for insurance, some changes will have to be made. Mandating insurance for the young is not a bad way of paying for universal coverage. As it stands, health insurance companies routinely refuse cover for people with pre-existing health problems. Allowing a redistribution of the additional costs of treating these people among the fit and healthy is the fair option. Whether the politicians will think so is another matter. The Republicans believe this infringes basic liberty. The Democrats are not united. It’s going to be interesting to see who wins the argument.

Term insurance: simple and affordable

When it comes to comparing different types of insurance policies for covering your life term insurance policies turn out to be the most simple and inexpensive. If your insurance needs don’t require sustaining a policy for your entire life, you may find it very appealing to get a term policy especially with the price tag being times smaller than of continuous policies.

Why term policies are the cheapest option for life coverage?

Term insurance policies will cover you only for a specific period of time. They also usually have pre-set premiums and fixed amounts of benefits to receive. Term policies can last from one to 30 years, but the most popular options are 10 and 20 year term policies. The vast majority of these policies cannot be renewed and the chances for the insurance company to pay out death benefits on term coverage policy are minimal. In fact, only about 1% of all term insurance policies actually give out a death benefit to their clients. That’s why the insurance company can place a significantly lower price tag on such a product.

Why taking term insurance coverage?

Term insurance policies are aimed at covering certain types of debts in case the policyholder is disabled or dies. Some debts that term insurance coverage may pay for include:

• Consumer credits
• Mortgage loans
• College education for children
• Funeral expenses

That’s why people who get 30-year mortgage deals are looking for 30-ear term life insurance policies. The most widespread options in terms of policy duration are those of 10, 15, 20, 25 and 30 years. Short-term policies are also available but they are rarely purchased.

Types of term insurance policies

Decreasing term insurance policies, also referred to as mortgage insurance policies, have a fixed premium over the entire term, however the death benefit is constantly decreasing with the time passing, being often connected to your mortgage debt. And as you pay out your mortgage, your insurance amount is decreased respectively. Insurance experts are not very enthusiastic about this type of policies although it’s a cheap life insurance option. But keeping in mind the low percentage of death benefit payout there’s not much sense in having such a policy.

Other types of term life coverage include:

• Burial insurance: such small insurance are aimed only for covering funeral costs.
• Group term insurance coverage: suitable for enterprises as it is designed to cover more people than standard policies.
• Specified age term insurance: such policies provide coverage only until the policyholder reaches a specified age.
• Return of premium: such policies will reimburse a part or all the premiums you have paid during the term if a claim is not filed. However, the premiums with such policies are usually higher.

Although, term life coverage is a relatively inexpensive compared to other types of insurance, your policy can still cost you much in premiums if you don’t take some time and shop around for a good policy. There are numerous insurance companies providing term insurance policies, and the rates can differ significantly for the same type and amount of coverage. That’s why it really pays off shopping around and getting as much life insurance quotes as you can, in order to find the perfect term insurance policy to purchase. Be smart, and don’t get the first policy you are offered with as there may be numerous offers way better than that.