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Is Group Disability Insurance sufficient to meet my needs?

Article by Gary Fegan

The age old question “Should I enroll in my group disability plan or purchase my own individual disability policy?” needs to be reviewed in detail before making any decision. The similarities and differences and the pros and cons of both need to be determined and considered thoughtfully before concluding what is best for you. There are three likely outcomes from this analysis- You will enroll in the group plan, you will buy an individual policy, or you will buy a group policy and layer a small individual policy on top of the group policy. Every person’s situation is unique and will demand its own review. In other words, there is no universal right or wrong answer here.

In general, if your group plan is an employer paid plan, you are required to participate, and the benefit is a taxable income to you in the year it is received. In this case, you may want to buy a small individual policy to layer on top of the taxable group plan to get your potential cumulative disability benefits closer to your pre-disability net take home pay.

If you have a group plan offered through your employer, and you have the option to enroll in the plan, you need to look closely at the coverage offered in detail and the cost associated with the policy. Then compare that to what you may be able to secure on your own in an individual disability insurance policy. It is imperative to thoroughly understand all the terms and conditions of the group and individual policy options and how they impact you. You should consult a disability professional to help you dissect the options and offer a side-by-side comparison and analysis for you to understand your options and ultimately decide what is best for you.

If you do not have a group plan offered through work, your only option is to secure an individual disability insurance policy for yourself. Again, consult a disability insurance professional to find and tailor a plan that best meets your needs and budget.

Key points to look at when comparing group and individual policies:• Is the benefit taxable to me?• Is the premium guaranteed level?• Is there a mental disorder limitation?• Does the policy cover me in my own occupation?• Will I be eligible for benefits if I cannot work in my occupation due to a disability but am working in another field?• Does the policy offer inflation protection and the ability to add benefit to my policy as my income increases?• Can the policy be cancelled by the insurance company?

Group long term disability insurance typically covers 60% of base salary to a monthly maximum benefit of ,000 or ,000. If your company is making the premium payments for you, then the benefits are taxable during a claim. So in other words, a policy that covers 60% of your salary, therefore may really only net you around 45% of your current salary in the end (depending on your personal tax rate). In addition, you should look carefully at the policy’s definition of disability (for example, are you unable to perform your own occupation or any occupation to qualify for benefits ) and recognize a group policy will only be in force for as long as you stay with that employer.

What can a supplemental disability insurance policy do for you? This type of policy can increase your percentage replacement of income up from the actual 45% (60% minus taxes during the claim), and will likely give you more comprehensive disability coverage. This policy will stay with you regardless of who your employer is since you own the policy.

A supplemental disability insurance policy through Berkshire may most likely have a more comprehensive definition of total disability, a significantly better Residual Disability Benefit Rider*, and may also help protect against inflation with the addition of an optional Cost of Living Adjustment Rider**.

There are many differences between the plans, just remember that there is no one size fits all answer for which plan is right for you. Make sure you look closely and engage the knowledge and experience of an insurance professional to help you with this.

Group plan’s eligibility language quoted is common but variations occur.Licensed in all statesCalifornia Insurance License No. 0C09324This publication is offered for the purposes of education and information only and should not be considered tax or legal advice. For information on your specific situation please consult your legal or tax advisor.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 1355 Piccard Drive #380 Rockville, Maryland 20850. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor, (240) 683-9700. James Fegan, Financial Representative. The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian.Financial Balance Group is not an affiliate or subsidiary of PAS or Guardian.PAS is a member FINRA, SIPC.

Disability insurance Policy Forms 1400, 1500 or 1600 underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. This policy provides disability insurance only. It does not provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. For policy forms 1400, 1500, or 1600, the expected benefit ratio is 50% (including NY 1400). For policy forms 1400-F, 1500-F, or 1600 F, the expected benefit ratio is 60% (NY only). The expected benefit ratio is the portion of future premiums that the company expects to return as benefits, when averaged over all people with these policy forms respectively. Product availability, provisions and features may vary from state to state. * Optional riders are available for an additional premium.

** This benefit is not necessarily protection against increases in the cost of living.

Group Health Insurance For $9 Per Week?

Business owners now have a low cost option available when considering benefits for their hourly employees.

Voluntary benefit packages are 100% paid by the employee with no employer contribution required. The plans are guaranteed issue, meaning there are no pre-existing condition limitations barring an applicant from policy acceptance. There are no deductibles, and unlike major medical insurance, voluntary limited benefit health plan premiums are not age banded. Every employee pays the same amount each month regardless of age or health.

The primary reason for evaluating one of these plans is, of course, the cost. Medical expense indemnity plans are offered by many “A” rated insurance carriers, such as Transamerica and Pan-American Life, and start as low as per week (for a bare bones package).

The impact of this type of insurance strategy can prove substantial:

Imagine the reduction in turnover if hourly employees feared a loss of benefits; and the advantage in recruiting full and part time help.
Franchisors will have an opportunity to gain a competitive edge by adding a zero contribution benefit package to the service offerings sold to prospective Franchisees.
Individual business owners who are uninsurable or can’t afford major medical insurance now have a low cost option for basic coverage.

Although the positive aspects of this approach are considerable, it is important to understand the drawbacks as well.

Major medical insurance is generally designed to pay expenses after a deductible, and many plans require an additional payment of up to 50% of the medical expenses after the deductible is satisfied.

Limited benefit health plans are just that…limited.

A fixed dollar amount is paid up front, based on a written fee schedule for doctor’s office visits, diagnostic tests, outpatient surgery, etc. If the provider charges more than the scheduled fee payment, the policyholder must pay the difference out of pocket; for example: The limited benefit health plan pays for a doctors office visit. The patient visits a specialist who charges 0.The patient will receive a bill for . This difference is particularly acute in the event of a major hospitalization. The limited benefit plans pay a flat amount per day, however this amount can be cumulative due to the number of services on the fee schedule that are provided during a hospital stay; for example: The plan pays 00 per day for hospitalization, plus for x-rays, plus 00 for surgery, plus 0 for the anesthesiologist, etc. Any amounts exceeding the scheduled payments are the responsibility of the patient.

Why assume this financial risk?

The weakness of the major medical insurance model is that it generally requires deductibles and coinsurance. For many, the only way to afford a policy is to take on a huge deductible, which results in paying thousands of dollars per year in premiums and still having to pay out of pocket for doctor’s office visits, diagnostic and lab tests, etc., until the annual deductible amount is met.

The result is that individuals enrolled in PPO plans are visiting their doctor less often, and not scheduling wellness tests on a regular basis in order to save money.

Since limited benefit plans cover the first dollar with no deductible or coinsurance, policyholders can take advantage of discounted cash rates through the PPO network and be proactive with their preventive heath diagnostic exams. Early detection can potentially prevent a major hospitalization and the inevitable financial disaster awaiting the uninsured.

What happens if you don’t get sick, but are injured in an accident, or have a heart attack or stroke?

A common strategy is to use a combination of a limited benefit health plan and an extremely high deductible major medical plan. These types of plans are called catastrophic health plans, and at the highest deductible level are very low priced. The result of this approach is that the policyholder receives financial assistance up front to the limits of the policy, then uses the catastrophic coverage if the expenses exceed the deductible amount. This limits the potential financial loss; for example: Hospitalized 6 days, the total bill is 0,000.

The limited benefit plan pays ,000 up front.

The catastrophic policy has a ,000 deductible, covers 100% of costs, and has a policy limit of million.

The total financial exposure for the policy holder is ,000 (,000 deductible less ,000 benefit payment). One caveat. Before this strategy is implemented, make sure that the catastrophic policy does not prohibit the use of secondary coverage to pay your deductible expenses.

This is an excellent way for married or domestic couples to lower their health insurance expenses. One partner buys the limited benefit family plan offered by their part time employer, the other partner increases the deductible on the family major medical plan in their salaried benefit package.

Limited benefit health plans are not the perfect solution, but can provide critical financial support when it is needed most. A /hour employee can not afford to miss a day of work while sitting in an urgent care waiting room, or the county medical clinic. Limited benefit health insurance gives lower wage workers access to private doctors and the facilities of their choice.

Group Health insurance for small business owners

 

Employers of labour provide group health insurance for their employees as additional benefits. This type of insurance cover for the cost of health care of employees, their spouse and dependants.

With the rising cost of health care, most small business owners are scrapping group health insurance from the list of employee’s benefits. This is because employers consider it as a waste of money. However, the benefit of group health insurance is enormous to the success of your business.

Some of its benefit includes; reduction of employee turnover, enhanced employer and employee relationship, employees commitment to corporate vision and increased productivity. Its benefit cannot be over-emphasized. Every business owner should offer quality group health insurance for their employees.

To be eligible for group health insurance your company should be registered as a sole proprietorship, a partnership or a corporation.

The business of the organization should be legitimate and operated within the laws of the state. A small business is regarded as a concern with at least 2 full time employees and a maximum of 50.

To an employee, a group health insurance is a financial safeguard against costly medical bills. It provides unhindered coverage for any individual irrespective of his past claims history. Such program offers lower premium because the risk is bourne by the group. It provides cover for a variety of illness including dental and vision care at reduced cost.

In a group health insurance plan, the employer is regarded as the policy owner.

He contributes a fixed amount of money as premium. The good news is that the premium is tax deductible thereby reducing the tax burden on the business owner.

Alternative to group health insurance is a Health Savings Account (HAS). Under this plan the employer decides on the amount to contribute towards providing health care for the employees. Unlike the group health insurance, the employee is the policy holder under a health savings account. This health plan permits employees to choose their insurance plan provider.

The Health Savings Accounts subsidizes the cost of employee’s health care. The employer is free from premium payment and his contribution to the plan is exempted from payroll and the interest in the plan accumulates tax free.

If you own a small business and considering health insurance, connect with online insurance brokers and compare quotes. By comparing quotes of several insurance companies you have choice and the possibility of buying quality coverage at the cheapest market rate.  It’s interesting to note that to compare quotes most brokers site require you to fill out a brief form and next you have multiple quotes to choose from. It’s as simple as that.

I hope you find this little information useful.

How to Get Group Health Insurance

Who is eligible for group medical insurance? You are eligible for group medical insurance if you own or are employed by a company that has at least two employees. Yes, two people is all it takes to get a group plan. When you have a company that has anywhere from 2-50 employees, the employees of that company can qualify for what is called a small business healthcare plan.

What is the difference between “group” plans and “individual” plans? Typically individual plans are more expensive than group plans, but there are other differences as well. Individual insurance may more difficult to obtain, the application process can be lengthy and your rates can increase unexpectedly. Group medical insurance has shorter, quicker applications, and you cannot be denied because of pre-existing conditions. Your rate is also guaranteed for at least one year.

Another difference is that group medical insurance will be cancelled when you are no longer with your employer. With individual an individual plan, your policy will remain effective no matter if you are working or not, unless you stop paying your monthly premium.

When does group insurance take effect? This will vary depending on what insurer you (if you are self-employed), your employer, or your group chooses. Some policies will take effect on the first day of the month following the month that your application is approved. With others, there can be a specific effective date that will determine when your policy becomes effective. So depending on the insurer and the date that your application is approved, it can take a few days or a few weeks for your plan to take effect.

Why should you try to get a group together? With medical insurance, there is truly a strength in numbers.

Being that it can be quite difficult and expensive to obtain individual health insurance, having more people involved can be the key to having proper healthcare. You have a better chance of being approved in a group and you can take advantage of the lower rates that come along with it – this means more money in your pocket.

How can you get a group together? Check locally first – start with your church or place of worship. Also, check in your area for the chamber of commerce. If you are self-employed, many times the chamber of commerce will have information on others that are either in a group, or interested in affordable group medical insurance rates.

Where can you find affordable group medical insurance, individual plans, and more information about both? There are online resources and trust-worthy websites that were created specifically to help you find what you are looking for. In a few clicks, you will be on your way to finding group medical insurance that is right for you.

L. Waters
Research Writer
LowRateSearch
© 2009

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Strategies to Group Health Insurance

Article by Sharma

Offering a well-conceived, reliable and patient-friendly health plan is essential both for attracting clients and retaining good healthcare professionals. Employers should also know that good healthcare benefits provided to employees will keep them healthy, increases productivity and less staff turnover.

Many small businesses however do not understand the need to offer good group insurance policy to their staff. According to the nonprofit Kaiser Family Foundation, only 59 percent of small businesses with less than 200 employees provided group health insurance. As health care costs escalate, small business owners are finding it increasingly difficult to afford the premium amounts. Moreover, insurance companies apply higher rates to small businesses when compared to larger companies.

While serious efforts are being made for universal health care or at least some kind of major healthcare reforms, it is necessary for both health insurance companies and insurance seekers to do their bit to realize this laudable goal.

Health insurance policies provide all types of schemes and plans. But the two broad categories of insurance are individual and group.

Individual health plans are meant for individuals and their family members. These policies generally require a detailed medical history to know of any preexisting conditions. The plan’s cost depends on the applicant’s health status and lifestyle. Applicants with serious or chronic medical problems may be denied coverage.

Group health insurance covers a number of individuals under one master policy, which is availed by an employer, a professional organization, a union, or other associations for providing cover to their employees/members. Today, a peculiar phenomenon is being noticed. Because the rates of health insurance for small businesses are rising steeply, individual workers may be able to get cheaper coverage by availing individual health policy than the group policy can provide.

The category of group health insurance offers a number of different plans, including defined networks, fee-for-service plans, and health savings accounts. Defined network plans (also called as managed care plans) allow the employees to pick doctors from within a prescribed group or network.

Under Health Maintenance Organization (HMO), members receive care from medical providers who are enlisted by the HMO, usually from within a specific geographic area. Under HMO, specialist services can only be procured if the primary care physician makes a referral. Under Point of Service (POS) plans members visit health care providers within a defined network and require a referral from a primary care physician in order to see a specialist. But unlike HMOs, POS allow enrollees to visit doctors outside the network, on condition that the enrollee pays a higher percentage of the bill. Under Preferred Provider Plans (PPP), enrollees pay a certain amount to visit the network doctors and a higher amount if they wish to go outside the network. In general, PPP offers less choice than POS, although members need not get a referral to visit a specialist.

Over the past few years, Health Savings Accounts (HAS) or tax-exempt accounts that employees use for certain kinds of medical expenses, are becoming popular. In some states, employees also can use their HSA to save for retirement.

Employers can make tax-deductible contributions to his employees’ HSA, which will make the plan more attractive for the workers. HSA is regulated by the federal government, which each year sets a minimum deductible and maximum out-of-pocket cost for these plans.

In recent years, both small and large businesses have started keeping the costs of their health plans down in various ways. One of the most popular ways is to institute wellness programs at the job. The wellness programs include posting information on the benefits of exercise, nutrition, and other health topics.

A wellness program might actually entail encouraging employees to adopt healthier lifestyles. In the long run, wellness programs can suppress the cost of group health plan because employees will be less likely to become sufferers of heart disease, diabetes, high blood pressure, and obesity.

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Mortgage disability insurance,mortgage disability,loan disability insurance

Article by Philippe Deray

So, you finally got your mortgage approved and the lender says to you, how about some insurance? Since the lender was so wonderful with your loan, you listen carefully and decide right there and then to take a so called mortgage disability insurance plan through that same lender (and often mortgage life too). Is it the right thing to do? I would venture to say that most time it is.

First of all, when I ask people about the disability insurance plan they got through their mortgage lender, they have no idea what coverage they really have. It may seem crazy unfortunately common.

What to look out for with disability insurance offered by mortgage lenders?

*

First of all, the plan is not really yours. In other words, when you joined the insurance program through the lender you became part of a certificate. What that means is, you became part of a group of people who also took out a policy with that same lender. So, if the lender sales the loan the new lender may not want to continue the insurance. Or if the lender decides to discontinue the offer, then you no longer have mortgage disability insurance coverage. *

Second, sometimes the mortgage disability insurance plan does not cover you for disabilities that resulted form an illness. In other words, some of those disability insurance plans only paid in case of an accident! *

Last, assuming that the plan does cover you for anything and everything, the benefit period often is only two years. What that means is that if you become disabled, then your mortgage payments will only be covered for two years. A little short don;t you think? Particularly, since most mortgages are 15 to 30 year mortgages.

Is there ever a time when the mortgage disability insurance plan through a lender is a good thing to do? The answer is yes. There may be some other convincing reasons but these are the top two we have encountered. If you are not in good health and nothing else is available, then the disability insurance plan through your mortgage lender may be a great idea. If you do not think that you will take the time to get anything else (that is a bit like being responsible because you are irresponsible), then take the plan offered by the lender and we hope you will quickly replace the lender’s insurance with something more adequate.

What other options are best for a mortgage disability insurance plan

The answer is actually very simple, get an individual disability insurance plan from a reputable company. Here are the main reasons:

*

If you get your own plan, the only one who can cancel the plan (assuming no fraud is involved) is you. So now you don’t have to worry about your lender canceling the coverage and on the other hand, you can decide to cancel your loan and refinance without any worries about your disability insurance coverage. No need to worry about higher premiums every time your loan changes, no worry about re-qualifying (medically) and no worry about what the new plan you may qualify for will offer. *

When you shop for your own plan, I am sure (or I hope) that you will get a plan that is more adequate to your mortgage insurance needs. In other words, if you have a 15 year mortgage, you will select a plan that covers that need. I hope that you will get a mortgage disability insurance that does not just cover your mortgage in case of a accident related disability but rather one that will cover you no matter happens. *

How about riders? What are those? Well the details of riders for a disability insurance policy is beyond the purpose of this article but important nonetheless. So, I will just say this. Riders can be specific to the needs of mortgage disability insurance. By riders I mean, additional benefit your disability insurance plan offers (lenders don’t offer these) that will enhance the plan you have selected. An example would be the retroactive injury benefit rider, or the hospital benefit rider, or the return of premium rider.

By the way, one good reason people select the return of premium rider is because, it can unable someone to pay off their mortgage early using the cash back feature offered by that rider. Please also keep in mind that the riders mentioned above can come under different names. I only want to make you aware of the options of riders so that you may ask about them as most people do not seem to.

A few facts about becoming disabled and mortgages

According to the US Department of Housing and Urban Development, nearly half of all foreclosures are caused by disability. On top of that, according to the Social Security Administration, one in five people suffer long-term disability before the age of 65. If you put two and two together, it’s pretty clear that disability is one of the most significant threats to your home.

Don’t let yourself become a statistic. With a mortgage disability insurance plan in place, you can rest assured that your home is paid for regardless of your health (assuming you get the right plan). If illness or injury should occur (note that I said illness OR injury), you can focus on recovery instead of worrying about how the mortgage bill gets paid.

We hope this article gave you a better understanding of the plans available for mortgage disability insurance. When it comes to insurance at least, most information is free and so are questions to an advisor. Irregardless of who you select for your insurance needs, as we say in all of our articles, ask, ask and ask more questions about the plan you choose. Be well.

An introduction to individual disability insurance by Steve Crawford from Guardian Disability Insurance Brokerage.
Video Rating: 4 / 5

Thinking About Disability Insurance

When everyone else around you slows down at the end of the working day, you are the one still working hours later when they have all gone home. This is part of the positive commitment everyone has to make during the start-up period. You are the can-do guy, the energizer bunny who keeps on working to get the business up on its feet. Then, just because it starts to pay its way does not let you off the hook. Now you are all about growth. You know if you take your foot off the gas pedal, those little shoots will not grow into a sturdy plant (or even a big tree). So the first threat most people think about is an early death. Unfortunately, there is a link between the levels of stress in starting a new business and heart attacks. In younger people, it is fairly remote but, as you age, the risk of dying increases. You add in life insurance coverage to protect your family. Giving them a lump sum will see them able to survive. You may tie this cash into some degree of succession planning to enable the business to keep on running. It depends on whether you have family members or other trusted individuals who can take over from you. But most people leave it at that. Unfortunately, among younger people, disability is far more common than death.

Disability covers a whole range of physical problems arising from an accident or illness. It may be you lose your mobility or an injury may prevent you from using your skills. Now the issues are more complicated and simply receiving a lump sum as on death, is often not going to be helpful. So, for planning purposes, do you have reliable people who could keep the business going while you recover or learn how to cope with more permanent problems? This may involve a loss of profitability. That is less important than still having a functioning business to come back to. If the answer to this question is “yes” and the business can survive a period without your practical contribution and continuing supervision, you need to consider insuring against the loss of profit or look for a policy that will pay a proportion of your business overheads during your absence. Either way, the investment of capital and your time will be protected. But if the business is dependent on your specialized input, then you will be looking to sell it or wind up in an orderly fashion. This failure makes some level of payment to you essential.

When it comes to buying this type of policy, talk through the issues with your small business insurance agent. You need to understand what physical conditions the different insurers consider disabling and, most importantly, how quickly they begin paying out. Understand that many insurers have a waiting period to assess the degree of disability. You will also need to check your state’s law. Many cap the amount payable on small business insurance against disability. If so, you cannot avoid these limits by buying several policies. These are cumulative limits. Get the best advice to protect your interests.

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