2019 Medicare Open Enrollment: a shopper’s guide

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It’s that time of year again. If you’re one of the roughly 60 million Americans enrolled in Medicare, get ready for some year-end shopping. Medicare’s annual open enrollment period runs from October 15th until December 7th and presents seniors with a great opportunity to manage their health care costs for the coming year. Any changes or new enrollment will become effective on January 1, 2020. Continue reading

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2018 Medicare Open Enrollment: a shopper’s guide

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It’s that time of year again. If you’re one of the roughly 44 million Americans enrolled in Medicare, get ready for some year-end shopping. Medicare’s annual open enrollment period runs from October 15th until December 7th and presents seniors with a great opportunity to manage their health care costs for the coming year. Any changes or new enrollment will become effective on January 1, 2019.

There are several important changes to the Medicare program for 2019, including the elimination of the coverage gap for certain prescription drugs and updates to the Medicare Plan Finder tool that will make it easier to use. Beneficiaries should note that Medicare Advantage and Medicare Part D prescription drug plans can and do make changes throughout the year that may affect their coverage. And even if you’re content with your existing plan, options with better coverage, fewer restrictions, and lower costs may be available. Now is your chance to find them. Continue reading

2017 Medicare Open Enrollment Checklist

healthcareIt’s that time of year again. If you’re one of the roughly 45 million Americans enrolled in Medicare, get ready for some year-end shopping. Medicare open enrollment for Medicare Supplement and Advantage plans and Medicare prescription drug plans runs from October 15th until December 7th. Open enrollment presents a great opportunity for seniors to manage their health care costs for the coming year. Continue reading

Life Insurance Awareness: managing policies, and disposing of those you no longer need

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September is life insurance awareness month and serves as a good reminder that life insurance is an asset and, just like most any other investment, requires ongoing monitoring. Continue reading

Comparing Medicare Supplement Insurance and Medicare Advantage Plans

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It’s true: Original Medicare does cover most health care expenses, but it comes with significant deductibles and coinsurance payments that can quickly add up. As a result, many American seniors will opt to defray these costs with a Medicare Supplement Insurance (Medigap) or Medicare Advantage Policy.

In our most recent blog post- 2015 Medicare Open Enrollment Checklist– we discussed the services provided by Original Medicare and some important considerations for augmenting this coverage for the upcoming year. This week, we’ll compare Medigap and Medicare Advantage plans and review some important considerations that could  make deciding between the plan types easier.

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2015 Medicare Open Enrollment Checklist

healthcareIt’s that time of year again. If you’re one of the roughly 50 million Americans enrolled in Medicare, get ready for some year-end shopping.

Medicare open enrollment for Medicare Advantage and Medicare prescription drug coverage runs from October 15th until December 7th, and presents a great opportunity for senMedicareCardiors to manage their health care costs for the coming year. On offer are prescription-drug and Medicare Advantage plans, as well as the opportunity to switch plan types.

“It’s like deja-vu, all over again”

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Common Questions After An Auto Accident

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Common Questions After An Auto Accident

Accidents happen, and even minor fender benders can be an unnerving experience. Advanced technology, including driverless cars, may eventually make accidents a thing of the past, but until that happens, we need to be prepared for when they do occur. This week’s blog post comes courtesy of our friends at Cook Maran & Associates, an insurance brokerage firm specializing in personal lines insurance. Personal Insurance Executive Director, Tim Brenneman, discusses what to do if you have been involved in an auto accident. Please click the link below to be directed to the original post.

http://www.cookmaran.com/blog/common-questions-after-an-auto-accident/

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Automobile Insurance 101

carcrashcartoonInsurance planning is part and parcel with retirement planning. The ability to share common risks at a reasonable cost protects us from a truly catastrophic loss and can help to ensure the continuity of our financial and estate plan. Automobile insurance, mandatory in most states, plays a foundational role in asset protection planning, and is at the same time both widely utilized and overlooked. In this week’s blog post, we will review the most important provisions of a personal automobile insurance plan and provide simple tips to help you design a thorough and cost effective plan of coverage. Before we begin, it is important to note that insurance is regulated at the state level and provisions or policy definitions that apply in one state may be different in another. Thus, the coverage areas outlined are general in nature and based on those found in a typical New York policy.

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Disability Insurance (Part 2): The 9 Things You Need to Know Before Buying Disability Insurance

Most people don’t have sufficient disability coverage. 

Disability insurance is a contract between you and the insurance company that will replace your wages when you become sick or injured and cannot work for a long time.

According to the Social Security Administration, nearly 1 in 4 of today’s twenty year-olds will become disabled before age 67.  Most people think that Social Security will provide the benefits that they need, but often that is not the case:

  1. Social Security does not provide a person’s full wages as benefits.
  2. Social Security has a very strict definition of what “disability” is and is not.
  3. Social Security has a 5-month waiting period before you can receive any of the benefits.  Even in the face of medical costs that are associated with disability income, it means forgoing income for 5 months.

Social Security should only be used as a supplement to your own long-term disability policy.

Many employers offer disability coverage as an additional fringe benefit, but as we mentioned in Part 1 of our posts on the topic, employer coverage only covers you while you’re working there and become disabled while you’re working there.  Additionally, most group plans do not typically cover more than 60% of your salary.  It is not portable.  If you lose your job, your next employer may or may not have a long-term disability plan.  Unlike health insurance where you can get coverage under COBRA for a period of time, once you leave your employer’s plan, you no longer have any coverage as a safety net.

To the extent you have employer coverage, if you are applying for personal, the insurance company will take that into account and decrease your benefit accordingly.

Q: How much disability should you obtain?

A: At least 80% of your before tax earnings. 

When choosing a long-term disability insurance plan, these are some aspects of the fine print about which to ask:

  1. Check the definition of ‘disability’ (there are 3 potential options)
    1. Own occupation: this is the best definition of disability because it is the most broad. Under this definition, an insured person is considered entirely disabled if he is unable to do any or every duty of his occupation.  For example, if you can get a job in a different industry, you can still collect benefits under this policy.
    2. Any occupation: this is the strictest definition of disability. Under this definition, an insured person is considered disabled only when he is unable to do every duty for which he is trained.
    3. Split definition: frequently used by insurance companies, this is some sort of combination of the two previous definitions.
  2. Make sure that your contract is NonCancelable and Guaranteed Renewable. This guarantees that after you place a policy in-force that there will be no changes to your premium schedule, your monthly benefits, or your policy benefit. No one can guarantee that their incomes will never go down, under a Non-Cancelable policy even if your income goes down later in life, if you become totally disabled the insurance company will pay you the total disability benefit you originally placed in-force. Under a Non-Cancelable policy for example, if you changed jobs from being professional worker (a low-risk occupation) to a professional weight lifter the company could not change your benefits for the worse.
  3. Ensure that your monthly benefit coverage replaces between 50-80% of your pre-disability income.
  4. Make sure you get a cost of living rider, which is an inflation hedge for your benefits.
  5. Ask for a FIO (future increase option), which allows you to increase your insurance benefits as income rises, regardless of health. Without this rider, there is no way to protect your future earnings. A disability insurance policy by itself only protects the amount of income that you make at the time when you take out the policy. It does not grow automatically unless you have this.
  6. Check that the policy eliminates any requirement for you to pay any premium payments while you’re disabled.
  7. Ask about a residual benefits clause, which is a partial payout due to partial disability.  For example, receiving partial benefits if you’re only able to work part-time.
  8.  Evaluate and choosing the waiting period or elimination period as its sometimes known as.  The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. The most common waiting period is 90 days, but it can be less or more time. Examples include 30, 60, 90, or 180 days to 1 year to 2 year waiting period.
  9. Length of time or Benefit period. Think of the benefit period as the period of time you are eligible to collect benefits while on a disability insurance claim. The shortest period of time is coverage for 2 years up to life time benefits.

The underwriting for disability insurance is significantly different than the underwriting for life insurance.  As you get older, there is a higher probability of getting disabled and many people begin to develop ailments.  Therefore, over time it becomes more challenging and difficult to obtain reasonably priced long-term disability coverage.

It will depend on your overall health and what your doctors have put in your files.

Note that many insurance companies exclude coverage for Mental & nervous disorders, alcohol & drug claims, acts of war, and payments of claims caused during a crime.

Lastly, there are tax consequences for long-term disability insurance.

  1. If you pay the premium as an individual with after-tax dollars:  if/when you were collect insurance benefits, the benefits are tax-free.
  2. Benefits under an employer group plan are taxable if the employer paid the premium and the premiums were not taxable income to the employee.

If you’d like to set up an appointment to discuss your financial plan, we look forward to hearing from you.

It Can’t Happen to Me: Why Forgoing Disability Insurance is a Costly Mistake (Part I)

If you had a machine in your basement that printed out $20 bills whenever you wanted, would you buy a warranty for the machine?

We recently had a meeting with a client that we’ve known for a long time.  Despite an annual income of $500K+, we were concerned; his financial plan had a few major shortfalls, which put his family – his wife and two daughters – at risk.

Of note, his financial plan:

  1. Did not have enough liquidity
  2. Had no emergency account
  3. Did not have enough savings for retirement
  4. Had no personal disability insurance

 The first few issues are ones we often encounter with new clients.  These typical financial traps can be safely avoided with a good financial plan that re-allocates income and creates liquidity in savings.

The most worrisome part of this client’s financial plan is that he didn’t have personal long-term disability insurance.

Fifteen years ago, this client had bought life insurance, but declined purchasing long-term disability insurance.   Why?  His excuses are ones we hear far too often:

  1. “My company offers disability insurance” (only for as long as you’re working there)
  2. “It can’t happen to me” (unfortunately, it can’t until it does)
  3. “I don’t want to pay for it” (if you need to use it, the investment in the premium will pay off very quickly)

Fast-forward fifteen years to our meeting last week.  This client, like many people we know, has been diagnosed with a degenerative disease (something similar to multiple sclerosis, or muscular dystrophy, Lou Gehrig’s disease, etc.).  Like many of those diseases, there’s no known cure.  Moreover, the disease will get progressively worse over time.  If/when he becomes disabled, the insurance that he bought through work will not cover him long-term.  If he was to lose his job, not only is he completely vulnerable, but so is his family – there is no coverage in place. 

Think back on the money-printing machine we asked about at the top of the page.  Would you insure it?  Most people answer yes that they would get a warranty for the money-printer; however, most people don’t take the same warranty out on their ability to work, which is their greatest asset and source of future money.