Condition Insurance Policies

Health Insurance mandates in the U.S. have changed due to the “Patient Protection and Affordability Act” passed on March 23rd of 2010. This new law has a number of positive changes for the uninsured, insured, and Medicare recipients. For the uninsured, the government has initiated a Pre-existing Condition Insurance Policy www.PCIP.gov for those that cannot receive insurance due to a previous illness. These policies are issued to persons who have not had insurance in the past six months and who are uninsurable. An uninsurable person would be one that has been turned down to purchase major medical coverage after being diagnosed with a condition such as cancer, heart or liver disease, diabetes, bi-polar illness, HIV, stroke, etc. Usually, conditions such as high blood pressure, high cholesterol, smoking and abnormal weight gain, excluding obesity, are rated conditions and are accepted by the major medical companies at an additional cost or waiver to the consumer.
For some uninsurable persons, the government’s PCIP is not affordable and they do not qualify for Medicare or Medicaid. For those persons, we have “Limited Benefit Plans” that are guarantee issue and will give much of the needed care to reduce catastrophic expenses when confronted with an illness. These policies participate in major PPO networks and many offer doctor’s office visits for a set fee of $50 or less; provide scheduled dollar allowances for medical expenses in such areas as diagnostic care, hospital confinements, surgeons’ and anesthesiologists’ benefits. Usually, with some exceptions to generic drugs, brand named pharmaceuticals are provided at the PPO network’s pre-negotiated rates.

Continuing the Conversation on Life Insurance

What type of life insurance to buy?

Now that we know when to buy, what type of policy should we purchase. Using the previous example, the family above is burdened with debt in their early years. As time goes by, this debt is paid off as salaries increase and saving is accumulated. Once their debt is paid off with a sizable savings, there is no further need for life insurance. This time frame is usually over a 20 to 30 year period. As a result, this family may have bought a “Term Life Insurance Policy” in the early years of the family. A Term Life Insurance Policy is issued for a period of time called a “Term” and cost less than a permanent policy. A Term Life Insurance Policy is usually issued as annual renewable term, five, ten, fifteen, twenty, twenty-five or thirty year term. After the term is over, one has the option to purchase this policy at a much higher price as permanent insurance or just let it expire. Assuming their debts are paid off, at the end of the term, this family can rely on their savings and investments for burial expenses.
On the other hand, this family may want a permanent life insurance policy that will outlast the owner and be able to accumulate value while paying premiums. Unlike Term Life Insurance, Whole Life or Universal Life Insurance is permanent. These policies are typically more expensive but give a guaranteed rate of return and expire well beyond the average life expectancy of the owner. In many cases, these policies last until 125 years of age. This family will not have to worry about the expiration of their policy and will likely have an accumulated savings after owning the policy over a long period of time.

How much to purchase?

Option (1)
Calculate your liabilities such as the money owned on your Mortgage, Student Loans and Credit Card Depts. Total this number and use it as your Face Value for your Life Insurance Policy. It may be best to use this method if the beneficiary has a steady livable income, and will not have to depend on the proceeds of the policy for daily expenses.

Option (2)
Compute what income would be lost if one of the bread winners were to die. Take this amount and divide it by an annual return or yield that you and your spouse are comfortable with purchasing. i.e. One bread winner brings home $50K/Year, so divide this number by the interest rate or return given on your investment portfolio. $50K/.05 = $1,000,000. One Million dollars becomes the Face Value of your policy. This means if a loved one making $50K/Year dies, putting the face amount into an interest bearing account of 5% would return $50,000 a year for life. This would become an annuity giving the beneficiary a $50K income for life.

Option (3)
If you cannot afford the other two options, then buy time. After the passing of a loved one, people need time to adjust to their loss. Let’s say your monthly debt is $2500/month. By purchasing a $100,000 life insurance policy, you have just bought yourself 40 months of time ($100K/$2500/month = 40 months). Use the money to pay your monthly bills and use the time to find another job, relocate, etc.

Are you thinking about buying life insurance?

When to buy?

When determining when to purchase a life insurance policy, here are some things to consider. The older you are, the more expensive the policy. Therefore, a person purchasing life insurance in their twenties will pay less than a person in their forties with all health issues the same. The idea here is to mitigate risk, often to borrowed money, to a healthy young family by giving them small affordable premiums while insuring large amounts of capital. Usually, a young family getting started is in debt for such things as cars, furniture and mortgage payments, along with school loans and baby expenses. If one of the bread winners dies, the house hold has just lost an income. This makes it almost impossible to keep the same standard of living in the household. By purchasing a Life Insurance policy equal to the family debt, this will insure peace of mind and financial security to surviving members of the family. Always purchase as much life insurance needed to cover family expenses as early in life as possible.

Travel Insurance

Summer is a time for travel and many people start thinking about travel insurance.

Insurance4Dallas exclusively uses IMG for all of its international medical insurance. For more than 20 years, IMG has dedicated its efforts to providing international medical insurance, travel insurance and impeccable service to the international community. It’s their specialty. They realize that traveling abroad can be an exciting experience. IMG also knows that anything can happen while you’re away from home – whether visiting short-term or living abroad indefinitely. It’s important to be prepared for any unexpected illness, injury or medical emergency. Many traditional medical plans simply are not designed for international travel.

IMG’s combination of insurance products and unparalleled services bring Global Peace of Mind®. They have served over a million people worldwide in more than 170 countries. Their products supply the coverage you need, while their services help overcome language, currency, time zone and cultural challenges.

Below are typical uses for International medical insurance.
• Leisure Insurance – Traveling abroad for a short or long vacation.
• Business Travel – Business travel multiple times a year or group employee coverage.
• Missionary – For short or long term travel abroad.
• International Scholarship – Coverage for students in cultural exchange or educators around the globe.

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