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Health and life insurance are integral to keeping yourself protected against the unknown. Read on to learn more about the various policy types of health and life insurance we offer and discover which kind of coverage is right for you.

What kinds of health insurance plans are there?

There are essentially two kinds of health insurance: Fee-for-Service and Managed Care. Although these plans differ, they both cover an array of medical, surgical and hospital expenses. Most cover prescription drugs and some also offer dental coverage.

    • Fee-for-Service
    • These plans generally assume that the medical professional will be paid a fee for each service provided to the patient
    • Patients are seen by a doctor of their choice and the claim is filed by either the medical provider or the patient
    • Managed Care
    • More than half of all Americans have some kind of managed-care plan1
    • Various plans work differently and can include health maintenance organizations (HM0s), preferred provider organizations (PPOs) and point-of-service (POS) plans
  • These plans provide comprehensive health services to their members and offer financial incentives to patients who use the providers in the plan

What is ‘long-term care’?

    • Because of old age, injury or mental or physical illness, some people find themselves in need of help with eating, bathing, dressing, toileting or continence and/or transferring (e.g., getting out of a chair or out of bed)
    • These six actions are called Activities of Daily Living and are sometimes referred to as ADLs. In general, if you can’t complete two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care”
    • Long-term care isn’t a very helpful name for this type of situation because, for one thing, it might not last for a long time, as some people who need ADL services might need them only for a few months or less
  • Many people think that long-term care is provided exclusively in a nursing home. It can be, but it can also be provided in an adult day care center, an assisted living facility or at home
    • Assistance with ADLs, called “custodial care,” may be provided in the same place as (and therefore is sometimes confused with) “skilled care”
    • Skilled care refers to medical, nursing or rehabilitative services, including help taking medicine, undergoing testing (e.g. blood pressure) or other similar services
  • This distinction is important because generally Medicare and most private health insurance pays only for skilled care–not custodial care

What are the types of disability insurance?

There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD)

    • Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years
  • Long-Term Disability policies (LTD) have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life

Disability policies have two different protection features that are important to understand: Non-cancelable and Guaranteed renewable

    • Non-cancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits
  • Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you

In addition to the traditional disability policies, there are several options you should consider when purchasing a policy:

    • Your insurance company gives you the right to buy additional insurance at a later time for an additional cost
    • Coordination of Benefits refers to the amount of benefits you receive from your insurance company. It is dependent on other benefits you receive because of your disability
    • The Cost of Living Adjustment (COLA) increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA
    • Residual or Partial Disability Rider is a provision that allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled
    • Return of Premium is a provision that requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy
  • Waiver of Premium Provision is a clause which means that you do not have to pay premiums on the policy after you’re disabled for 90 days

What is the difference between policies of Term and Permanent Life Insurance?

    • Term Life Insurance is designed to meet temporary needs. It provides protection for a specific period of time (the “term”) and generally pays a benefit only if you die during the term. This type of life insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage
  • Permanent Life Insurance provides lifelong protection. As long as you pay the premiums and no loans, withdrawals or surrenders are taken, the full-face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time

Which kind of life insurance is better to have?

    • It’s impossible to say which type of life insurance is better because the kind of coverage that’s right for you depends on your unique circumstances and financial goals
  • But remember, the best way to figure out the amount and type life insurance that makes sense for your particular situation is to meet with a qualified and licensed professional. They will assist you in determining which policy should you get. Learn more about our life insurance today.