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Dear Everyone!
It is quiet in the insurance world, but this is the calm before the storm.
There is some legislation brewing that will have a huge impact on health insurance but with the budget mess, I'm not sure it will pass this year.
One bill has to do with standardizing plans so people can compare one to another.
The other is an attempt to get rid of agents by making carriers pay out 85% of premiums in benefits. If that happens, there is no room left to pay commissions. How do agents feel about this? Guess. Personally, I'm OK with it. I sell health insurance as a "service." I don't like the current system and I'm about the only agent who calls for total reform... even if it puts me out of a "job." I'd rather sell life, long term care, and disability anyway.
The "big thing" that everyone is expecting is a wave of new life insurance plans due out next year that will have long term care (LTC) riders such that one policy will cover two needs. Right now John Hancock has a "LifeCare" rider that is very exciting. You can add this to either their whole life or their universal life plans and it converts the death benefit into LTC if needed.
The great thing is that the cost is reasonable.... like $30 a month extra.
You can take a million dollar life policy and for a few dollars more have the ability to convert that million bucks into (up to) $40,000 a month in LTC. Do you need $40,000 a month? Of course not. So you only take $10,000. That's 100 months of long term care... over eight years. Not a bad deal. This plan is HOT and other carriers will copy it soon.
This issue has some info for those of you who are new grads or are parents of new grads.
Finally I have a short piece on trusts... something most of you should have.
It is Labor Day weekend. I hope all of you are having a nice holiday.
-Al
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Graduation Healthcare Blues!
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This year, summer break is different for the Class of 2008 - it's filled with reworking resumes, filling internships in hopes of getting a permanent offer or drafting another cover letter that will eventually turn a student into a professional with no more summers off. No one wants to be saying "You want fries with that?"
Often the last thing on the minds of the young and seemingly invincible who are searching for employment is health insurance. Yet, no matter how important everything else may seem, there is no question that health insurance should be a top priority.
What actually happens after the excitement of graduation when young adults realize they may no longer be covered by their parents' health plans? All too often, the answer is that many of them join the ranks of America's uninsured.
Unfortunately, some also will find that their perceived invincibility isn't enough to pay for unforeseen medical bills from an accident, illness or emergency that can quickly drain a small or non-existent bank account.
On car wreck can put liens on the future earnings of a young person for the rest of their life. Is it fair? Of course not. But welcome to the "ownership" society... which means "You're on your own!"
A national study just released found that more than half of all young people have gone without health insurance at some point in the past five years - including 75 percent of those who are now carrying medical debt... which they will carry until the moon turns blue!
In fact, young adults are among the largest and fastest-growing groups of Americans lacking health insurance today. According to 2006 Census Bureau data, nearly 30 percent of 18-24 year olds have no health insurance. If you factor in the Americans age 25-34 who also are without health insurance, young adults represent over 40 percent of America's uninsured population.
Reducing the number of young uninsured Americans has become a priority in the halls of Congress, on the presidential campaign trail and in state legislatures. Over the past few years, a number of states have extended the age that dependents can remain on their parents' health plans as a way to address this issue. At UnitedHealthcare's Golden Rule Insurance Company, for example, they allow dependents to stay on their parents' plans until they reach 26 years of age in all the markets they serve. Good luck getting this in California... Golden Rule is not licensed here!
The hope is that graduates will find a job that has benefits. But all too often they either end up with small companies that don't have group health... or they have long wait-periods, often up to six months.
One good solution I use to address the gaps in coverage for recent graduates is short term health insurance. Short term medical (STM) insurance offers one to six months of coverage, and can be a lower cost alternative for new graduates as well as workers between jobs and seniors with just a few months before Medicare eligibility.
Short term health insurance is designed to be an easily understood plan with a quick, simplified application process. There's also the flexibility to drop the plan at any time without penalty which is important when your life is in a period of transition and change.
The drawback is that STM does not cover any pre-ex(isting) conditions. If you have a pre-ex, and you need treatment for it... you are on your own.
The reality today is that no one can afford to be without health insurance coverage and there are choices in the marketplace. Certainly, the last thing a new graduate with limited income needs is to be saddled with medical debt before he or she even has a chance to get on solid financial
ground. Unfortunately, it happens all too often that the young person wrecks the car or falls off a ladder resulting in large expenses that will dog them for many years to come. And it is so not necessary!
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Living (as opposed to dead) Trust!
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For many people, establishing a will by itself may not meet all of their planning needs. for example, some individuals may desire an added measure of control over assets while they're alive. A will sets forth instructions for how your assets should be transferred after you assume room temp, but a living trust can provide added flexibility and control over the transfer of your assets and for carrying out your instructions - both during your life and after it.
A trust is a legally recognized arrangement that holds assets for an individual or individuals. A trustee follows the stipulations outlined in the trust document, including any actions that should be taken should you become unable to manage your own financial affairs due to disability or illness.
You can be the trustee of your own living trust, but it may be advisable to name another person as trustee because one of the trust's advantages over a will is its ability to cover contingencies while you're incapacitated. Also, a trustee with experience may offer more financial acumen than a relative or friend can provide, which is essential since the trust's assets must be managed until fully distributed.
Another difference from a will is the living trust's ability to shield transfer of assets from public eyes. Wills are probated and their contents can become public knowledge, but living trusts remain private. Additionally, the trust potentially may be acted on more quickly than a will. Probate costs also may be high in your state, depending on the amount of assets probated. You should, however, compare the costs of probate with the costs of establishing a living trust through an estate planning attorney and having to retitle assets that you intend to transfer to the trust.
If you become incapacitated, a living trust can also serve as a useful tool. If you choose to be the sole trustee of the living trust, it becomes vitally important to name a successor trustee, who would manage the trust's assets while you're incapacitated. Someone else would have to manage your assets that are not in the trust, however. That is why it may be wise to have a durable power of attorney to take care of your other finances if you can't do so yourself. The power of attorney will be more than sufficient to take care of such assets as checking accounts, which are usually not transferred to a living trust. For many people, control, privacy and expediency are reasons enough to establish a living trust. Remember, though, you still need a will to include other basic instructions and transfer assets not owned by the trust. And keep in mind that most living trusts do not provide estate-tax savings.
Getting a living trust is not too expensive. You want to have an attorney experienced in these to draw one up for you. Contact me if you are looking for a legal referral.
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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