FAQ

Insurance-Frequently Asked Questions

Q Why do I need Life insurance? A It may be difficult to think about, but most people need life insurance to provide for their families if they are not around. Life insurance can help your family pay bills and meet financial obligations, make mortgage payments, handle educational expenses and maintain their standard of living in the event that something should to you.

A general guideline is that your life insurance should equal, at a minimum, five times you annual income. So if your income is, let’s say, $50,000 per year, you should have at least $250,000 of personal life insurance.

Q I am relatively young and in good health, so why should I think of Life insurance? A The best time to buy life insurance is when you are young and healthier. If you wait until you are old or have problems with your health, you may have to pay much higher rates, or even worse, it may be difficult for you to qualify.

Q What is the Instant Issue Term Life Insurance? A Instant Issue term life insurance is a product that utilizes a simplified underwriting process and streamlined application process. The process can be completed online through our Web site in as little as 15 minutes. No medical exam is required with Instant Issue term life insurance. Coverage amounts are limited to $150,000 or less, depending on the insured’s age. You can learn more about Instant Issue term life insurance

Q Why is term insurance sometimes a good choice for Life insurance needs? A Term life insurance is, quite simply, insurance which, in the event of your death, provides a lump sum payment to the beneficiary in return for the premiums you pay. Term life insurance is less expensive than other types of life insurance because you only pay for insurance coverage. With other types f life insurance, only part of the premium goes towards insurance, while a portion is used for investment.

Q What is permanent life insurance? A Permanent life insurance provides coverage for the life of the insured individual(s). These policies are more complex and expensive than term life insurance. They often accumulate tax deferred cash values from which future premiums can be paid or policy loans can be made. These policies typically stay in force as long as the premiums continue to be paid.

Some of the main types of permanent life insurance policies are whole life insurance, universal life insurance and variable life insurance.

Q How do I determine the amount of coverage I need? A Your coverage need will depend on your individual circumstances. Factors you should consider include anticipated final expenses (e.g., medical bills and burial costs), living expenses for your surviving family members, any outstanding loans (e.g. auto and credit cards), the outstanding balance on your mortgage, anticipated education costs for your children, estate taxes, and business continuation expenses.

A simple way to achieve a “starting point” is to take a multiple of your annual income and adjust for the factors listed above. UnicQuote recommends 10 times your annual income to start. Keep in mind that your needs will most likely change over time and what seems like enough today may not be adequate in ten years. It is usually best to purchase an amount you can afford while at the same time considering future needs.

Most insurance companies will allow a certain multiple of your annual income based on your age and are usually flexible if you can demonstrate other needs. The amount you choose is up to you for the most part; however, you will need to justify amounts over and above a company’s income multiple guidelines.

Q How do I choose the length of coverage? A Your coverage length will depend on your individual circumstances. Factors you should consider include your age, your spouse’s age, your children’s ages, the length of your financial obligations (e.g. mortgage and student loans) and the number of years until retirement. You will want to choose a term period that covers all of the above factors. For example, if you have a five-year old child and you wish to support that child through college and perhaps graduate school, you may need a policy term period of 20 years or more.

Q Is my life insurance policy convertible? A Most term life insurance policies are convertible to permanent life insurance policies. Convertible policies can generally be converted to permanent policies within a specified period of time from policy issue, without providing new evidence of insurability (unless you increase your benefits). You can check the see the specific requirements of the policy you are interested in by clicking on the “Details” button next to your quote on our Web site. UnicQuote can assist you with conversion to a permanent policy.

Q Will my premium rates change each year? A No, your premium rates are guaranteed to remain the same during the entire term period. These are called fully guaranteed or level term policies and they are the only type of term life insurance policies UnicQuote offers.

Q Will my final premium rates be the same as the rates you quoted on the Web site A It is certainly possible, but not guaranteed. Your final rates will be determined by the insurance company through a process called underwriting. Underwriting includes a review of your current health status, medical history, family history and driving record among other things.

Underwriting will determine your final rating class, which will establish your final premium rates. Your rating class may or may not be the same as that quoted on our Web site. With your assistance, we provide the most accurate quote possible up front.

Q What happens at the end of the life insurance term period? A The life insurance policy will terminate at the end of the term period. However, you may have the option to renew the policy on an annual basis without providing evidence of insurability. The cost to renew annually will most likely be much higher than the previous guaranteed premium rates were, but it may be a valid option for individuals who find themselves uninsurable due to injury or illness.

Q What is the difference between yearly renewable and level premium term insurance? A With a yearly renewable term policy, the premiums increase each year, but are generally lower in the earlier years than a level premium policy. With level premium policies, premium stays the same each year for periods of usually 5, 10, 20 or 30 years, depending on the policy chosen.

Q Which is better, yearly renewable or level premium term? A It depends on your circumstances. If the protection you need is for a fairly short time, yearly renewable term, with its initially lower premiums, may be more appropriate. If you need long term protection, level premium may be a better choice. Our licensed insurance counselors will be happy to help you determine which best fits your needs.

Q Are the rates for term Life insurance guaranteed? A All term products provide a guaranteed schedule of rates that apply for a specific period. The information we provide will clearly outline the guaranteed period for each product offered.

Q What does “re-entry” mean? A With re-entry feature, you have the option, typically at the end of your level period, to take a physical examination and possibly qualify for lower premiums. If you do not exercise this option, you can continue coverage at a somewhat higher rate. The quote we provide will specify at what point re-entry is an option for each product.

Q If I decide to apply for insurance through UnicQuote, should I cancel my other policies? A No, submitting an application does not guarantee that insurance coverage will be approved by the carriers, so don’t cancel any policies which you currently have in force. However, after your new policy has been issued, you may want to review your other insurance coverage.

Q What factors determine whether my application would be approved and what my premium will be? A There are a wide range of factors which determine your eligibility for insurance coverage and your premiums rate e.g. age, health and life style… whether you smoke or if you have a medical history that includes cardiac disease are factors considered when determining eligibility and rates.

Q Is a medical examination required when applying for insurance coverage? A ) A brief examination including a blood sample and urine specimen is required; more requirements might follow depending on the amount of coverage applied for. Once we receive our application, a paramedic will contact you to arrange a convenient time for an examination at your home or office, at no cost to you.

Q If I have group life insurance through m job, do I still need life insurance? A Group life insurance is a benefit some people receive from their employers. The amount of coverage provided by group plans is often not sufficient. The rate can change from year to year and if you change jobs, or lose your job, you and your family could be left without insurance protection.

An individual life policy purchased personally stays with you no matter where you work.

Q How do I find the best company and the best policy for my needs? A We have done that for you, our quote system would give rates from a select number of highly rated and respected insurance carriers.

Q What are the different rating classes and what do they mean? A The policy rating class is the risk category which an applicant qualifies for according to an insurance company’s underwriting guidelines. Common rating classes are Preferred Plus (also called Super Preferred), Preferred, Standard Plus, Standard and Substandard. The policy rating class will determine the premium rate for the policy.

Q Why do my quotes show different rating classes than the rating class I selected? A Our quoting system is designed to return the most appropriate rating class for each company based on the information you provided on the Quote Questionnaire. Since underwriting guidelines vary by company, your quoted rating class may vary as well. For example, a build of 5’10” and 190 pounds may qualify for a preferred rating class with one company and a Standard Plus rating class with another.

Companies also vary with regard to the names of their rating classes. For example, the best rating class available is commonly called Preferred Plus. However, this same class may also be called Preferred Best, Super Preferred and Premier depending on the company.

Q What is the payment mode? A The payment mode is the term of premium payments for a life insurance policy. Available modes are annual, semi-annual, quarterly and monthly.

Q Why is the annual mode less expensive than the others? A This is because insurance companies build in a charge or ‘factor’ for all modal premiums to cover their cost of billing administration. For example, the quarterly mode requires four billing cycles in a year whereas the annual mode requires only one. The additional charge in the quarterly payment mode helps to cover the extra costs associated with extra billing cycles.

Q Can I change my coverage amount or length of coverage at any time? A You can change these terms at any time during the application process by sending us your request via email. Once your policy is in force, you can change these terms at specific intervals (usually every two years) by contacting the insurance company’s customer service department directly or by contacting us. The insurance company will require new evidence of insurability for any changes resulting in increased benefits (e.g. a higher coverage amount or longer term period).

Q What is the Accidental Death Benefit rider? A The accidental death benefit rider is an optional policy provision that pays an additional amount over and above your policy coverage amount in the event the insured’s death is caused by an accident. Even without this rider, your term life insurance policy will pay the stated death benefit in the policy if the insured’s death is the result of an accident.

Q What is the Children’s Term Life Insurance rider? A The children’s term life insurance rider is an optional policy provision that pays a death benefit for each covered child in the event of that child’s death. Life insurance companies will typically provide between $10,000 and $20,000 coverage on the life of each dependent child of the insured, subject to age limitations and other requirements. One rider may cover multiple children.

Q What is the Waiver of Premium rider? A The waiver of premium rider is an optional policy provision that provides for the payment of a life insurance policy’s premium in the event of the total disability of the insured. Age limitations and coverage maximums usually apply.

Q What is the Accelerated Death Benefit rider? A The accelerated death benefit is a policy provision that allows for the advance payment of a portion of a life insurance policy’s death benefit in the event the insured is diagnosed as terminally ill. Requirements vary by insurance company. This rider is commonly an included feature of many term life insurance policies requiring no additional cost.

Q Why wasn’t I quoted the same rating class I chose on the Quote Questionnaire? A Our quoting system allows users to choose the rating class they believe they may qualify for based on the chart of underwriting guidelines we provide. However, there are certain controls placed upon this feature to ensure users get an accurate quote.
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One of the areas our quoting system controls is the user’s build (height/weight) information as provided on the Quote Questionnaire. For example, if a user selects a rating class that she will not qualify for because of her current build, our quoting system will return quotes for the best rating class she can qualify for. This may mean the user asked for Preferred quotes but received Standard quotes, because she does not qualify for Preferred quotes based on her build. Please keep in mind that insurance company build guidelines vary, so it is possible to get a mix of rating classes quoted (e.g., some Preferred and some Standard).

The other area our quoting system controls is the tobacco/nicotine information as provided on the Quote Questionnaire. Once again, our system will provide quotes for the best possible rating classes given the selection made by the user. As with build, insurance company tobacco/nicotine usage guidelines vary, so it is possible to get a mix of rating classes quoted (e.g., some Preferred Tobacco and some Standard Non-Tobacco).

Q How does the application process work? A First you must complete your application forms and submit them to UnicQuote for review and processing. Our licensed sales representatives are available to assist you with the forms. The next step is to complete your paramedic exam with our examination company, Porta medic.

Once the exam results are received by the insurance company, they will be matched to your application and submitted for underwriting review. This review can be as short as a few days or as long as several weeks, depending on your individual circumstances. For example, if you have medical history that underwriting wants to review, medical records may be ordered from your physician(s). Depending on how quickly your physician(s) respond to the insurance company’s request will determine how long your application stays in underwriting.

Once underwriting is completed, the insurance company will make an offer on your policy and send the application to policy issue. Your policy will then be issued and mailed to UnicQuote. We will process your policy as soon as it is received and mail it to you. At that point, a licensed representative of UnicQuote will assist you with any policy questions you have as well as appropriate policy changes.

For a more detailed explanation of the life insurance application process see our life application process walk through .

Q Am I required to submit a premium payment with my application? A Submitting premium with your application is optional. Doing so may provide temporary or ‘Conditional Coverage’ during the underwriting period.

Each company has its own conditions for temporary coverage which are explained in the application. This information can be found in the Limited Temporary Life Insurance Agreement section or Conditional Coverage section. These terms are often used interchangeably between companies. Please read the conditions carefully to determine your eligibility.
There are a few important points to remember: There are coverage limits on temporary coverage and they vary by company. Premium is required to be submitted with the application for temporary coverage. Coverage begins and ends at various points in the process, depending on the company. If you determine you are eligible for temporary coverage and would like to take advantage of this benefit, please follow these guidelines: Make your check payable to the insurance company (not to UnicQuote). Submit the amount quoted for your first modal premium (e.g. quarterly, semi-annual or annual). Date your check and all forms with the same date. This is very important to secure the temporary coverage. If paying monthly, submit the first two months’ premium. West Coast Life applications: Please do not send premium with your application if your coverage amount is greater than $500,000.

Q Who do I make my check out to? A Please make any checks you send to UnicQuote out to the appropriate insurance company (not UnicQuote).

Q What happens to my initial premium payment if I am not approved or decide not to accept the insurance company’s offer? A Any checks you submit with your application for life insurance will be refunded to you if you are not approved or if you decide not to put your policy in force.

Q What happens if I am not approved at the rate I applied for? A If underwriting assigns a rating class different from the class you applied for, UnicQuote will work with you to determine the best course of action. This can include changing the terms of your policy to reduce the premium or challenging the insurance company’s findings.

Q Who do I call for help with my application forms? A UnicQuote’s licensed sales representatives are available to assist you with your application forms. You can call us directly at 908-494-7777, option 1. Upon submitting your request for an application, you will be assigned to a representative who will contact you within a few days of receiving your request.

Q What is a paramedic exam, why is it required, and how do I schedule one? A All of our partner insurance companies require a basic paramedic exam in conjunction with a life insurance application. Our third-party medical examination company, Porta medic, will contact you within one business day of UnicQuote receiving your completed application. They will work with you to arrange your exam at a time and location most convenient to you. The exam takes only about 30 minutes and there is no cost to you for the exam.
A basic paramedic exam includes the following: Height/weight measurements Blood pressure readings Heart rate readings Urine sample Blood sample Medical history questionnaire Please remember these suggestions as you prepare for your paramedic exam: Schedule the exam for a time when you will most likely be able to keep the appointment. If the length of your work day varies, try scheduling the exam early in the morning, on a day off, or a weekend. Fast for a period of at least 8 hours prior to the exam, preferably 12 hours if possible. This will result in more accurate blood test results. If you are an occasional cigar smoker, refrain for as long as possible prior to the test. Increased nicotine levels in your urine will most likely qualify you for tobacco/smoker rates. Of course, you will need to disclose your smoking habits on your application as well. Depending on your specific circumstances (e.g., age, amount of insurance, medical history, etc.) the insurance company may require additional testing or information. These requirements do not apply to all applicants. Other requirements that may be included are: Electrocardiogram Chest X-ray Treadmill Test Attending Physician’s Statement Medical Records Motor Vehicle Report

Q How long does the application process take? A The length of the process depends on many factors, but you can generally expect to receive your new policy 4-6 weeks after submitting your application.

Q How can I speed up the process of receiving my insurance policy? A There are many ways you can control how fast a policy is completed, however there a other influences that determine the speed of the application process that you nor UnicQuote can control. The following is a list of the most important and beneficial tips to speeding up the process. Complete the application request form accurately. This will allow you to receive the application quickly. Complete your application packet promptly and accurately. This is the biggest delay in the process. If you can complete your application completely and return it within days you can cut weeks of the overall time. For corrections, cross through the incorrect information, write in the correct information and initial next to the correction. Do not use white out. Respond to us right away with any requests for missing or additional information. Schedule your paramedic exam as soon as you are contacted by Porta medic.

Q Who is my agent/broker? A UnicQuote™ is your agent/broker. We are a fully licensed brokerage operating in all 50 states. We do not sell your information to other agents outside of UnicQuote, nor do we pass “leads” along to other insurance companies. We process your application for you and remain your assigned representative through the life of your policy.

Q Who issues the policy, UnicQuote or the insurance company? A Your policy will be issued by the insurance company you choose to apply with.

Q Do I need to be a U.S. resident or U.S. citizen to qualify for life insurance? A All of our partner insurance companies require applicants to be U.S. residents, typically for a period of 3 years prior to the application date. They also require U.S. residency to continue beyond the policy effective date. Most of our partner insurance companies require applicants to be U.S. citizens or to hold a permanent visa/green card. Coverage may be available for U.S. residents holding a temporary work visa. Please call for details.

Q Why does the insurance company want to know my financial information for life insurance? A An applicant’s financial information is among several factors used to determine the amount of insurance the company is able to issue to an applicant. This information is required by ALL insurance companies as they must justify the coverage amounts of all policies they issue.

Income multiples are one method of calculating coverage amounts, which is why annual income is required. Net worth helps insurance companies develop a picture of the family’s overall financial position and potential loss in the event of the insured’s death.

A common misconception among insurance consumers is they can purchase any amount of life insurance they desire, regardless of financial considerations. This simply is not the case. All insurance companies use financial information to determine allowable coverage amounts. This is done to control fraud and limit excessive insurance situations.

Q What is net worth? A Net worth by definition is as follows:
Net Worth = Assets – Liabilities

Simply put, your estimated net worth can be calculated by taking the value of all of you own and subtracting the amount of all you owe. Keep in mind major possessions (homes, autos, etc.), personal possessions (clothing, jewelry, etc.) and financial possessions (savings, retirement accounts, etc.) are considered assets.

Q What is a replacement transaction and how do I complete one? A Consumer protection laws exist to prevent the occurrence of unnecessary policy replacements in the insurance industry. Each state has enacted laws to protect its residents and therefore, regulations and required forms vary by state.

UnicQuote is required by law to determine if a replacement transaction exists with every application we process. Please read the following definition of a Replacement Transaction:

A Replacement Transaction occurs when an applicant intends to discontinue an existing individual life insurance contract or annuity contract upon the purchase of a new life insurance contract. This does not apply to group coverage as may be provided by an employer, whether the applicant contributes to the premium payment or not. It also does not apply to a contract that is paid for by an employer.

If your application is determined to be a replacement transaction by the above definition, you will have additional forms to complete. Please provide all requested information on these forms pertaining to your existing coverage. This information is required by law and will help speed the application process.

If your application is not determined to be a replacement transaction by the above definition, you may still have a form(s) to complete, depending on the laws of your state.

Q Does it make sense to replace a policy? A Think twice before you do, because in many situations it may not be to your advantage. Before dropping any in-force policy, consider: If your health status has changed over the years, you may no longer be insurable at standard rates. Your present policy may have a lower premium rate than is required on a new policy of the same type (if, for no other reason, that you have grown older). If you replace one cash-value policy with another, the cash value of the new policy may be relatively small for several years and may never be as large as that of the original one. You will be subject to a new contestability period. You should ask insurance agents for a detailed listing of cost breakdowns of both policies, including premiums, cash surrender value, and death benefits. Compare these as well as the features offered by both policies.
If you decide to surrender or reduce the value of the policy you now own and replace it with other insurance, be sure that: The agent making the proposal puts it in writing. You pass any required medical examination. Your new policy is in force before you cancel the old one.

A Final Word on Life insurance If you are buying insurance directly, read and compare the policies you are considering before you buy, and make sure you understand all of the provisions. Marketing or sales literature is no substitute for the actual policy. Read the policy itself before you buy.
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Buyers Guide For Health Insurance

Q Introduction A If you have ever been sick or injured, you know how important it is to have health coverage. But if you’re confused about what kind is best for you, you’re not alone.

What types of health coverage are available? If your employer offers you a choice of health plans, what should you know before making a decision? In addition to coverage for medical expenses, do you need some other kind of insurance? What if you are too ill to work? Or, if you are over 65,will Medicare pay for all your medical expenses?

These are questions consumers are asking; these questions aren’t necessarily easy to answer. Here, we discuss the basic forms of health coverage and include a checklist to help you compare plans. We answer some commonly asked questions and also include thumbnail descriptions of other forms of health insurance, including hospital-surgical policies, specified disease policies, catastrophic coverage, hospital indemnity insurance, and disability, long-term care, and Medicare supplement insurance. While we know that that we can’t answer all your questions, we think it will help you make the right decisions for yourself, your family, and even your business.

Q Making Sense of Health Insurance A The term health insurance refers to a wide variety of insurance policies. These range from policies that cover the costs of doctors and hospitals to those that meet a specific need, such as paying for long-term care. Even disability insurance – which replaces lost income if you can’t work because of illness or accident – is considered health insurance, even though it’s not specifically for medical expenses.

But when people talk about health insurance, they usually mean the kind of insurance offered by employers to employees, the kind that covers medical bills, surgery, and hospital expenses. You may have heard this kind of health insurance referred to as comprehensive or major medical policies, alluding to the broad protection they offer. But the fact is, neither of these terms is particularly helpful to the consumer.

Today, when people talk about broad health care coverage, instead of using the term “major medical,” they are more likely to refer to fee-for-service or managed care. These terms apply to different kinds of coverage or health plans. Moreover, you’ll also hear about specific kinds of managed care plans: health maintenance organizations or HMOs, preferred provider organizations or PPOs, and point-of-service or POS plans.

While fee-for-service and managed care plans differ in important ways, in some ways they are similar. Both cover an array of medical, surgical, and hospital expenses. Most offer some coverage for prescription drugs, and some include coverage for dentists and other providers. But there are many important differences that will make one or the other form of coverage the right one for you.
The section below is designed to acquaint you with the basics of fee-for-service and managed care plans. But remember: The detailed differences between one plan and another can only be understood by careful reading of the materials provided by insurers, your employee benefits specialist, or your agent or broker

Q Fee-for-Service A This type of coverage generally assumes that the medical provider (usually a doctor or hospital) will be paid a fee for each service rendered to the patient – you or a family member covered under your policy. With fee-for-service insurance, you go to the doctor of your choice and you or your doctor or hospital submits a claim to your insurance company for reimbursement. You will only receive reimbursement for “covered” medical expenses, the ones listed in your benefits summary.
When a service is covered under your policy, you can expect to be reimbursed for some, but generally not all, of the cost. How much you will receive depends on the provisions of the policy on coinsurance and deductibles. Here’s how it works: The portion of the covered medical expenses you pay is called “coinsurance.”
Although there are variations, fee-for-service policies often reimburse doctor bills at 80 percent of the “reasonable and customary charge.” (This is the prevailing cost of a medical service in a given geographic area.) You pay the other 20 percent – your coinsurance.
However, if a medical provider charges more than the reasonable and customary fee, you will have to pay the difference. For example, if the reasonable and customary fee for a medical service is $100, the insurer will pay $80. If your doctor charged $100, you will pay $20. But if the doctor charged $105, you will pay $25.
Note that many fee-for-service plans pay hospital expenses in full; some reimburse at the 80/20 level as described above. Deductibles are the amount of the covered expenses you must pay each year before the insurer starts to reimburse you. These might range from$100 to $300 per year per individual, or $500 or more per family. Generally, the higher the deductible, the lower the premiums, which are the monthly, quarterly, or annual payments for the insurance. Policies typically have an out-of-pocket maximum. This means that once your expenses reach a certain amount in a given calendar year, the reasonable and customary fee for covered benefits will be paid in full by the insurer. (If your doctor bills you more than the reasonable and customary charge, you may still have to pay a portion of the bill.) Note that Medicare limits how much a physician may charge you above the usual amount. There also may be lifetime limits on benefits paid under the policy. Most experts recommend that you look for a policy whose lifetime limit is at least $1 million. Anything less may prove to be inadequate.

Q Managed Care A The three major types of managed care plans are health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans.

Managed care plans generally provide comprehensive health services to their members, and offer financial incentives for patients to use the providers who belong to the plan. In managed care plans, instead of paying separately for each service that you receive, your coverage is paid in advance. This is called prepaid care.

For example, you may decide to join a local HMO where you pay a monthly or quarterly premium. That premium is the same whether you use the plan’s services or not. The plan may charge a copayment for certain services – for example, $10 for an office visit, or $5 for every prescription. So, if you join this HMO, you may find that you have few out-of-pocket expenses for medical care – as long as you use doctors or hospitals that participate in or are part of the HMO. Your share may be only the small copayments; generally, you will not have deductibles or coinsurance.

One of the interesting things about HMOs is that they deliver care directly to patients. Patients sometimes go to a medical facility to see the nurses and doctors or to a specific doctor’s office. Another common model is a network of individual practitioners. In these individual practice associations (IPAs), you will get your care in a physician’s office.
If you belong to an HMO, typically you must receive your medical care through the plan. Generally, you will select a primary care physician who coordinates your care. Primary care physicians may be family practice doctors, internists, pediatricians, or other types of doctors. The primary care physician is responsible for referring you to specialists when needed. While most of these specialists will be “participating providers” in the HMO, there are circumstances in which patients enrolled in an HMO may be referred to providers outside the HMO network and still receive coverage.

PPOs and POS plans are categorized as managed care plans. (Indeed, many people call POS plans “an HMO with a point-of-service option.”) From the consumer’s point of view, these plans combine features of fee-for-service and HMOs. They offer more flexibility than HMOs, but premiums are likely to be somewhat higher.

With a PPO or a POS plan, unlike most HMOs, you will get some reimbursement if you receive a covered service from a provider who is not in the plan. Of course, choosing a provider outside the plan’s network will cost you more than choosing a provider in the network. These plans will act like fee-for-service plans and charge you coinsurance when you go outside the network. What is the difference between a PPO and a POS plan? A POS plan has primary care physicians who coordinate patient care; and in most cases, PPO plans do not. But there are exceptions!
HMOs and PPOs have contracts with doctors, hospitals, and other providers. They have negotiated certain fees with these providers – and, as long as you get your care from these providers, they should not ask you for additional payment. (Of course, if your plan requires a copayment at the time you receive care, you will have to pay that.)

Always look carefully at the description of the plans you are considering for the conditions of payment. Check with your employer, your benefits manager, or your state department of insurance to find out about laws that may regulate or indicate who is responsible for payment.

Q Self-insured Plans A Your employer may have set up a financial arrangement that helps cover employees’ health care expenses. Sometimes employers do this and have the “health plan” administered by an insurance company; but sometimes there is no outside administrator. With self-insured health plans, certain federal laws may apply. Thus, if you have problems with a plan that isn’t state regulated, it’s probably a good idea to talk to an attorney who specializes in health law.

Q Appropriate Care A HMOs, PPOs, and fee-for-service plans often share certain features, including pre authorization, utilization review, and discharge planning.

For example, you may be asked to get authorization from your plan or insurer before admission to a hospital for certain types of surgery. Utilization review is the process by which a plan determines whether a specific medical or surgical service is appropriate and/or medically necessary. Discharge planning is an approach that facilitates the transfer of a patient to a more cost-effective facility if the patient no longer needs to stay in the hospital. For example, if, following surgery, you no longer need hospitalization but cannot be cared for at home, you may be transferred to a skilled nursing facility.

Almost all fee-for-service plans apply managed care techniques to contain costs and guarantee appropriate care; and an increasing number of managed care plans contain fee-for-service elements. While the distinctions among plans are growing increasingly blurred, the number of options available to consumers increases every day.

Q How Do I Get Health Coverage? A Health insurance is generally available through groups and to individuals. Premiums – the regular fees that you pay for health insurance coverage – are generally lower for group coverage. When you receive group insurance at work, the premium usually is paid through your employer.
Group insurance is typically offered through employers, although unions, professional associations, and other organizations also offer it. As an employee benefit, group health insurance has many advantages. Much – although not all – of the cost may be borne by the employer. Premium costs are frequently lower because economies of scale in large groups make administration less expensive. With group insurance, if you enroll when you first become eligible for coverage, you generally will not be asked for evidence that you are insurable. (Enrollment usually occurs when you first take a job, and/or during a specified period each year, which is called open enrollment.) Some employers offer employees a choice of fee-for-service and managed care plans. In addition, some group plans offer dental insurance as well as medical.

Individual insurance is a good option if you work for a small company that does not offer health insurance or if you are self-employed. Buying individual insurance allows you to tailor a plan to fit your needs from the insurance company of your choice. It requires careful shopping, because coverage and costs vary from company to company. In evaluating policies, consider what medical services are covered, what benefits are paid, and how much you must pay in deductibles and coinsurance. You may keep premiums down by accepting a higher deductible.

Q Pre-existing Conditions A Many people worry about coverage for preexisting conditions, especially when they change jobs. The Health Insurance Portability and Accountability Act (HIPAA) helps assure continued health insurance coverage for employees and their dependents. Starting July 1, 1997, insurers could impose only one 12-month waiting period for any preexisting condition treated or diagnosed in the previous six months. Your prior health insurance coverage will be credited toward the preexisting condition exclusion period as long as you have maintained continuous coverage without a break of more than 62 days. Pregnancy is not considered a preexisting condition, and newborns and adopted children who are covered within 30 days are not subject to the 12-monthwaiting period.
If you have had group health coverage for two years, and you switch jobs and go to another plan, that new health plan cannot impose another preexisting condition exclusion period. If, for example, you have had prior coverage of only eight months, you may be subject to a four-month, preexisting condition exclusion period when you switch jobs. If you’ve never been covered by an employer’s group plan, and you get a job that offers such coverage, you may be subject to a 12-month, preexisting condition waiting period.

Federal law also makes it easier for you to get individual insurance under certain situations, including if you have left a job where you had group health insurance, or had another plan for more than 18 months without a break of more than 62 days.

If you have not been covered under a group plan and have found it difficult to get insurance on your own, check with your state insurance department to see if your state has a risk pool. Similar to risk pools for automobile insurance, these can provide health insurance for people who cannot get it elsewhere.

Q What Is Not Covered? A While HMO benefits are generally more comprehensive than those of traditional fee-for-service plans, no health plan will cover every medical expense. Very few plans cover eyeglasses and hearing aids because these are considered budge table expenses. Very few covers elective cosmetic surgery, except to correct damage caused by a covered accidental injury. Some fee-for-service plans do not cover checkups. Procedures that are considered experimental may not be covered either. And some plans cover complications arising from pregnancy, but do not cover normal pregnancy or childbirth.

Health insurance policies frequently exclude coverage for preexisting conditions, but as explained, federal law now limits exclusions based on such conditions.

You should also remember that insurers will not pay duplicate benefits. You and your spouse may each be covered under a health insurance plan at work but, under what is called a “coordination of benefits” provision, the total you can receive under both plans for a covered medical expense cannot exceed 100 percent of the allowable cost. Also note that if neither of your plans covers 100 percent of your expenses, you will only be covered for the percentage of coverage (for example, 80 percent) that your primary plan covers. This provision benefits everyone in the long run because it helps to keep costs down.

Q What Happens to My Insurance if I Lose My Job? A If you have had health coverage as an employee benefit and you leave your job, voluntarily or otherwise, one of your first concerns will be maintaining protection against the costs of health care. You can do this in one of several ways: First, you should know that under a federal law (the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA), group health plans sponsored by employers with 20 or more employees are required to offer continued coverage for you and your dependents for 18 months after you leave your job. (Under the same law, following an employee’s death or divorce, the worker’s family has the right to continue coverage for up to three years.) If you wish to continue your group coverage under this option, you must notify your employer within 60 days. You must also pay the entire premium, up to 102 percent of the cost of the coverage. If COBRA does not apply in your case – perhaps because you work for an employer with fewer than 20 employees – you may be able to convert your group policy to individual coverage. The advantage of that option is that you may not have to pass a medical exam, although an exclusion based on a preexisting condition may apply, depending on your medical history and your insurance history. If COBRA doesn’t apply and converting your group coverage is not for you, then, if you are healthy, not yet eligible for Medicare, and expect to take another job, you might consider an interim or short-term policy. These policies provide medical insurance for people with a short-term need, such as those temporarily between jobs or those making the transition between college and a job. These policies, typically written for two to six months and renewable once, cover hospitalization, intensive care, and surgical and doctors’ care provided in the hospital, as well as expenses for related services performed outside the hospital, such as X-rays or laboratory tests. Another possibility is obtaining coverage through an association. Many trade and professional associations offer their members health coverage – often HMOs – as well as basic hospital-surgical policies and disability and long-term care insurance. If you are self-employed, you may find association membership an attractive route.

Disability Insurance
Disability insurance is a type of insurance that provides you with a portion of your salary if you become disabled or unable to work. You usually have small amount of disability coverage on the job; it is also a good idea to have your own individual disability policy with a private company.

What is the difference between long term and short-term disability?
Short term disability is basically sick leave. If you are out of work for a week or two, your employer may continue to pay a salary. However, it is not coming out of his payroll budget, but from the short-term disability that he provides as a benefit on the job.

Long term disability is a replacement of your salary, but for a longer time period which could be anywhere from a couple of months to two years.

Q Long Term Care Insurance A Long Term Care insurance is designed to pay for care not covered by Medicare or your health insurance policy. It pays for hired help either in your home, a nursing home or skilled nursing facility. It pays for help with personal care activities such as getting dressed, bathing, taking medications, or using the toilet. It can provide not only for elderly people but also for younger ones who became disabled due to accidents or chronic illnesses. Unlike health insurance and Medicare policies pay for medical charges like drugs, doctors’ fees, hospital bills, medical equipment like wheelchairs, etc.

Buyers Guide For Life Insurance

Q Introduction A If you should die, how would your responsibilities be taking care of, for instance, your family and other assets? Life insurance protects your family by making sure money would be available to take care of them. Also, it protects your assets by providing cash needed for estate tax when you die, or for your business to buy-out a deceased partner or for replacement of a deceased key person in your firm. If you are confused about what type of Life insurance is best for you, what types of coverage are available and what you should know before making a decision, etc., you are not alone. The information provide below and on the frequently asked question (FAQ) would give you in a nut shell some basic information.

Q Term Life Insurance A Term life insurance provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments and/or conditions. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis. The reason the costs are low is that term programs may expire without the insurance company paying death benefit. And if you are young enough, you may be able to get a level premium for as long as 30 years. Term life insurance is a pure death benefit; its primary use is to provide coverage of financial responsibilities, for the insured. Such responsibilities may include, but are not limited to, Estate tax, key business succession, man coverage, consumer debt, dependent care, college education for dependents, funeral costs, and mortgages.

Q Annual Renewable Term Life Insurance A Annual renewable term life insurance is for a term of one year. The death benefit would be paid by the insurance company if the insured died during the one-year term, while no benefit is paid if the insured dies one day after the last day of the one year term. The premium paid is then based on the expected probability of the insured dying in that one year. One of the main challenges to renewal experienced with some of these policies is requiring proof of insurability. For instance, the insured could acquire a terminal illness within the term, but not actually die until after the term expires. Because of the terminal illness, the purchaser would likely be uninsurable after the expiration of the initial term, and would be unable to renew the policy or purchase a new one.

Q Guaranteed Level Premium Term Life Insurance A A guaranteed level premium term life insurance, the premium is guaranteed to be the same for a given period of years. The most common terms are 10, 15, 20, and 30 years. The premium paid each year remains the same for the duration of the contract. This cost is based on the summed cost of each year’s annual renewable term rates, with a time value of money adjustment made by the insurer. Thus, the longer the term the premium is level for, the higher the premium, because the older, more expensive to insure years are averaged into the premium.

Q When You Meet Your Agent, You Want To Ask The Following Questions: A Does the policy have conversion options? Is it possible to get credit for what has already been paid? Some carriers offer a conversion to an individual whole life policy while other companies may only covert to decreasing term or annual renewable term. How does one calculate the increasing cost after the initial Term expires? What riders are available? Do they expire at the same time as the primary policy or earlier? What would be the actual cost of whole life if you took it now versus having the same amount in Term now and a new whole life policy 20 years from now? On a child rider, at what maximum age can the child convert to whole life? With some policies it is 21, at others 23 or 25. You don’t want to be surprised by this. If you take the disability rider, does it expire at a certain age, or will it renew the policy for life if you become disabled?

Q Whole Life Insurance or Whole of Life Assurance A Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a permanent life insurance policy that remains in force for the insured’s whole life and requires (in most cases) premiums to be paid every year into the policy.

If you don’t have life insurance, probably the best thing you could do for your family is to purchase guaranteed whole life, simply because you are giving them some stability in the event of your death that you can’t give them in any other way. There are a lot of reasons for purchasing life insurance, and a lot of things life insurance will do other than just helping someone put you in the ground. However, all the intended purposes for individual life insurance can be boiled down to just one—love. You purchase life insurance because you love someone who will benefit from the policy, someone whose future you are willing to protect even though it might mean trimming the family budget in order to make the premium payments.

Guaranteed whole life is trouble free with a premium that will never increase and a benefit that will never decrease. You would accumulate cash value which you could borrow against or cash out if you surrender the policy. Universal Life Universal Life is a type of permanent life insurance based on a cash value. That is, the policy is established with the insurer where premium payments above the cost of insurance are credited to the cash value. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, and any other policy charges and fees which are drawn from the cash value if no premium payment is made that month. The interest credited to the account is determined by the insurer; sometimes it is pegged to a financial index such as a bond or other interest rate index.

UL is used as a tax-advantaged way to purchase life insurance. In the early years of the contract, the premium far exceeds the cost of insurance (COI) charges. The difference between the two (the “cash value”) will grow tax-deferred so long as the policy remains in force. If the policy is held until death, the cash value will escape taxation entirely. This is because the premiums are paid with after-tax money, so the money going in has already been taxed, and only growth would be taxed. The death benefit of life insurance policies generally does not face income tax as long as the policy was not received as a result of payment by you to the previous owner of the policy Single Premium UL
A Single Premium UL is paid for by a single, substantial, initial payment. Some policies do not allow anymore than the one premium contractually, and some policies are casually defined as single premium because only one premium was intended to be paid. The policy remains in force so long as the COI charges have not depleted the account.

Fixed Premium UL
Fixed Premium ULis paid for by periodic premium payments associated with a no lapse guarantee in the policy. Sometimes the guarantees are part of the base policy and sometimes the guarantee is an additional rider to the policy.

Flexible Premium UL
Flexible Premium UL allows the policyholder to vary their premiums within certain limits. Inherently UL policies are flexible premium, but each variation in payment has a long term effect that must be considered. In order to remain active, the policy must have sufficient available cash value to pay for the cost of insurance.

Variable Universal Life
Variable universal life is a type of permanent life insurance that builds cash value. The death benefit will be paid if the insured dies any time as long as there is sufficient cash value to pay the costs of insurance in the policy. With most if not all VULs, unlike whole life, there is no endowment age (which for whole life is typically 100). With a typical whole life policy, the death benefit is limited to the face amount specified in the policy, and at endowment age, the face amount is all that is paid out. Thus with either death or endowment, the insurance company keeps any cash value built up over the years. However, some participating whole life policies offer riders which specify that any dividends paid on the policy be used to purchase “paid up additions” to the policy which increase both the cash value and the death benefit over time. With a VUL policy, the death benefit is the face amount plus the buildup of any cash value that occurs (beyond any amount being used to fund the current cost of insurance.)

Variable universal life insurance receives special tax advantages. The cash value in life insurance is able to earn investment returns without incurring current income tax as long as it meets the definition of life insurance and the policy remains in force. The tax-free investment returns could be considered to be used to pay for the costs of insurance inside the policy.
Variable Universal Life Insurance is used among relatively wealthy persons who give money yearly to their children to put into VUL policies under the gift tax exemption. Very often persons in the United States with a net worth high enough that they will encounter the estate tax give money away to their children to protect that money being taxed. VUL policies have a great deal of flexibility in choosing how much premiums to pay for a given death benefit. The minimum premium is primarily affected by the contract features offered by the insurer. VUL is used for Financial Protection, Retirement Planning, Estate Planning and Education Planning.

Joint Life: First to die life insurance
Joint life insurance insures two or more people. Upon the death of the first life the insurance company pays the beneficiary and the policy ceases. It is used when there is a need for two or more people to be protected and the need ends once one person within the unit dies.

Survivorship Life: Second (or last) to die
Survivorship life is similar to joint life in that it insures two or more people for a premium based on their joint age. However, survivorship life pays a death benefit out only on the last death.

Mortgage Insurance
Mortgage insurance, referred to as PMI, is a type of coverage that protects the bank in the event that you default on the loan.

Mortgage Life Insurance
Mortgage life insurance pays off the mortgage in the event of your death. Some policies also have additional accident and disability riders. Mortgage life is marketed by a third party or a company affiliated with your bank.

Life Insurance Settlement
When your insurance needs are no longer high, the kids are gone and the house is paid off, you may not need as much life insurance. A policy holder may opt to take a Life Insurance Settlement, which is the sale of your policy to an investment company.

Key Person Insurance
Key person insurance or key man insurance is an important form of business insurance. it is an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business. The aim is to compensate the business for losses and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy. A key person insurance policy is taken on the life or health of any employee whose knowledge, work, or overall contribution is considered valuable to the company.

Q Annuity A An Annuity contract is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner in several ways. The defining characteristic of all annuity contracts is the option for a guaranteed distribution of income until the death of the person or persons named in the contract.

Q Immediate Annuity A This is an insurance policy in which an individual gives a life insurance company money, and the insurance company guarantees to make a series of payments. These payments may be either level or increasing periodic payments for a fixed term of years or until the ending of a life or two lives, or even whichever is longer. It is also possible to structure the payments under an immediate annuity so that they vary with the performance of a specified set of investments, usually bond and equity mutual funds. Such a contract is called a variable immediate annuity. The overarching characteristic of the immediate annuity is that it is a vehicle for distributing savings with a tax-deferred growth factor. A common use for an immediate annuity might be to provide a pension income.

Q Annuity with Period Certain A Annuity with period certainis an immediate annuity that pays the annuitant for a designated number of years .

Q Life Annuity A A life or lifetime immediate annuity is used to provide an income for the life of the annuitant similar to a defined benefit or pension plan.

Q Deferred Annuity A Deferred annuity is a financial instrument for accumulating savings with a view to eventually distributing them either in the manner of an immediate annuity or as a lump-sum payment. It has the benefit of tax-deferred growth, where any increase in account values is not taxed until those gains are withdrawn. This is also known as tax-deferred growth.

Q Equity Indexed Annuity A Equity indexed annuities (EIA) may have features of both fixed and variable deferred annuities. The insurance company typically guarantees a minimum return for EIA. An investor can still lose money if he or she cancels (or surrenders) the policy early, before a “break even” period. An oversimplified expression of a typical EIA’s rate of return might be that it is equal to a stated “participation rate” multiplied by a target stock market index’s performance excluding dividends. Interest rate caps or an administrative fee may be applicable.

Q Fixed Annuities A Fixed annuities offer some sort of guaranteed rate of return over the life of the contract. In general such contracts are often positioned to be somewhat like bank CDs and offer a rate of return competitive with those of CDs of similar time frames. Many fixed annuities, however, do not have a fixed rate of return over the life of the contract, offering instead a guaranteed minimum rate and a first year introductory rate. The rate after the first year is often an amount that may be set at the insurance company’s discretion subject.

Q Variable Annuities A Variable annuities allow money to be invested in an insurance company “separate accounts” (which are sometimes referred to as “subaccounts” and in any case are functionally similar to mutual funds) in a tax-deferred manner. Their primary use is to allow an investor to engage in tax-deferred investing for retirement in amounts greater than permitted by individual retirement or 401(k) plans. In addition, many variable annuity contracts offer a guaranteed minimum rate of return (either for a future withdrawal and/or in the case of the owner’s death), even if the underlying separate account investments perform poorly.