Understanding The Health Insurance Claims Process

It is very important to make sure that you have adequate health insurance but you also need to make sure that you know how to make a claim when the need arises. The health insurance claims process is fairly straightforward but you need to make sure that you have all of the information that the company will need so that your claim is processed as quickly and efficiently as possible.

Many people assume that the hospital and insurance company will do it all for you. Unfortunately, if you do this and do not make sure that it is being processed correctly then it might be that they will process you claim in a way that suits them and that you will not get all of the benefits that you are rightly entitled to.

A lot of health insurance policies will have coverage for a lot of conditions that are pre-approved, so it is important to read your policy carefully to see if the condition that you need to make a claim for is actually pre-approved as this will save you a lot of needless work. If you are not sure, then it is a good idea to call the insurance company providing your coverage and ask them as they would rather spend a few minutes helping you on the phone than having to work through a lot of pointless paperwork that you have given then for a condition that is actually pre-approved for treatment.

You also need to make sure you have read the schedule that tells you what benefits are attached to your insurance so that you know what you are entitled to. Additionally, you also need to read the exclusions and the limits for your insurance. There will be a separate part that tells you how to submit your request as each company has it’s own way of processing claims. If your insurance is an indemnity plan then the company will only process the claim after you have had the treatment, but you should always get an explanation of benefits whenever any part of a claim is processed no matter what insurance plan you have, this way you will know exactly what they have allowed or disallowed and why.

When you make an insurance claim it is important to make sure that you are fully aware of what that hospital and insurance company are doing so that you can make sure that they are giving you everything that you are entitled to that way if there is anything that needs sorting out you can give them the information to do it as soon as possible.

Timothy Gorman is a successful Webmaster and publisher of

When Your Health Insurance Plan Won’t Pay

The very nature of managed care health insurance plans increases the likelihood of a legitimate health insurance claim being denied. Bear in mind that managed care (health maintenance organizations, or HMOs, and preferred provider organziations, or PPOs) exist for the purpose of controlling costs for the health insurance company. Many health care procedures, surgeries, durable medical equipment and drugs, particularly the more expensive ones, require prior authorization from the health insurance plan before the plan will pay. Claims are reviewed to determine “medical necessity” of the claim. Health care services or products deemed “not medically necessary” will almost certainly be denied for payment by the health insurance plan.

Health insurance companies do make mistakes, however, and it’s certainly possible that a covered expense will be denied. What recourse does the health plan member have when one disagrees with the decision of the health plan? Here are some steps to take in dealing with a denial of payment.

1. Review the explanation of benefits (EOB) sent to you from the health insurance company. The EOB should state what services or goods were billed and briefly why benefits were denied.

2. Review your particular health insurance policy. What benefits does the health insurance policy state for the particular service or product? Should the claim be covered according to the policy?

3. Does the health plan have special criteria to be met in order for an particular expense to qualify as “medically necessary” and be considered a covered expense? For example, many managed care plans will cover drugs on their formulary. Other, nonformularly drugs may not be covered at all, or may be covered only if the formulary drugs have been tried and failed. An expensive MRI procedure may only be covered if certain symptoms are present. Check your policy to determine whether the expense qualifies as “medically necessary” by the health insurance company. Your health care provider must submit sufficent documentation to the health insurance plan to justify the need for the expense.

4. Is the health care provider “in-network” (contracted) with your health insurance plan? If not, does your managed care plan cover “out-of-network” (non-contracted) providers? Most HMO plans do not cover “out-of-network” providers; many PPOs will pay for services by “out-of-network” providers, but usually at at lower rate than paid to “in-network” providers.

If, after reviewing the health insurance policy and the EOB, you feel that the claim should have been a covered benefit by the insurance company, you should first request in writing that the insurance company provide you with the information that they used to base their denial of benefits. The health insurance company is required to provide you with this information on request. Review this information carefully. Many times the health insurance company was not provided with appropriate or sufficient documentation from the provider to justify the claim. If this is the case, contact the provider and request that they submit more medical records that support the claim for benefits. It may also be helpful for the provider to write a letter to support the claim in addition to the medical records. Your claim may be resolved in this manner.

All health insurance companies have a process in place by which plan members can appeal the decisions of the health insurance company. If providing further documentation does not resolve the dispute, then an appeal must be filed with the health insurance plan. Your provider may help you with this, and they may not. Read the member handbook and/or policy and follow the procedure for appealing the denial of the claim. Be prepared to submit more documentation to support your appeal. Keeping a record of all interactions with the insurance company is vital. Record all phone conversations and include the name of the person you spoke with, a brief summary of the conversation, and the date and time. File all correspondence sent and received, and have it readily accessible.

Bottom line is that health insurance plans are “for-profit” entities; in business to make money. They look for reasons not to pay. Indeed, their goal is to not pay, increasing their profits and keeping costs down for the members. It’s up to you to ensure that legitimate claims for covered benefits are paid.

Ms. Lowe is a health care professional with 30 years experience in the health care field. She holds a graduate degree in health care. She is also webmaster for health-infosource.com/health_insurance_hmo.html Health-Infosource.com, a website dedicated to disseminating health information to consumers.

A New Health Care Financing Solution

In this era of creative financing and cost management tools, many employers are looking for new ways to help employees
finance their health care expenses.

As an employer, you want to provide good coverage, but the cost increases in recent years have been tough to handle. A typical response to these increases may be to select a high-deductible insurance product that lowers your cost. However, there
is a better solution.

Think HMO. That’s right — health maintenance organizations. The HMOs of today offer a whole new generation of health
care financing tools that every employer should consider.

It’s not your father’s HMO.

You may have heard bad stories or had a rough experience in the past. However, times have changed. HMO plans today offerextensive provider networks, excellent coverage for preventive care, the ability to frequently change a primary care physician
and outstanding prescription drug coverage through broad pharmacy networks.

HMOs take the surprise out of the bill.

With most health insurance plans, an employee is responsible for a percentage of the cost of care, often 20 percent or 25
percent. This can add up very quickly, and employees can’t predict what their expense is going to be.

With an HMO structured co-pay plan, an employee knows up front the expenses associated with most covered services. For example, an employee may have a $20 copay for a primary care physician (PCP) visit, which will include all services provided in that visit. Each time employees go to their PCP, they can expect to pay $20 — no surprises there.

Higher co-pays offer savings.

The days of nickel sodas and 25-cent phone calls are long gone — and so are $5 and $10 co-pay plans. It’s time to rethink the value of co-pays. New HMO plans have higher co-pays, some as high as $30 for a primary care visit and $50 for a specialist.But that covers all services provided during that
visit. That’s a valuable cost limit these days.

HMOs offer bold new designs.

New HMO plans have fresh cost-sharing strategies that provide low employee out-ofpocket expenses in some areas while controlling your costs by increasing employee expenses through deductibles in other areas.

In most deductible-based plans, employees have a high deductible that applies to all services. However, with these new focused-deductible HMO plans, the deductible is limited to specific services, such as hospital care or prescription drugs. After the deductible is satisfied, a co-pay also applies to that service.

Furthermore, with these plans, employees continue to have a co-pay instead of a deductible for highly utilized areas such as
physician or specialist visits.

HMOs are FSA and HRA compatible.

Many HMO plans can be used with flexible spending and health reimbursement accounts, enabling employees to decide
how some of their health care dollars are used. Many carriers are also developing health spending account-compatible HMO plans.

HMOs offer more than health insurance.

Today’s HMO plans offer health improvement programs such as discounted fitness club memberships and valueadded options that let employees take charge of their own health.

There are two primary reasons to revisit today’s HMO — savings to you and savings to your employees. Rediscover today’s HMO — you’ll be pleased with what you find.

STEPHEN RUSSELL, a health care industry veteran with more
than 35 years of experience, joined VISTA in 2002. As vicepresident of product development, he is responsible for product design and implementation, and contract compliance
activities for all lines of business, including Medicare, Medicaid, large and small employer groups, and individual. Reach him at vistahealthplan.com vistahealthplan.com

Looking for the Best Cheap Car Insurance Deal, Look on the Internet

The power of the Internet as a powerful communication and marketing medium does not need any proof or explanation. Everyone is aware of the reach and the scope of the Web in disseminating information and promoting goods and services. Initially, it began as a platform where information could be shared; but within a short span of time it also took up the role of an online marketplace. One can today buy and sell anything on the Internet, beginning from the costliest cars to the most cheap car insurance.

The best part about shopping online is that it saves tremendous amount of time and effort on the consumer’s part. A click of the mouse is all that is required to view the best products and deals, in advertisements around the world. The consumer is no more limited due to geographical boundaries, or by lack of choice. The Web exposes all the markets of the world to the consumer and he is inundated with choices. Not only products, but also services like cheap car insurance, home insurance to booking tickets and accommodation in foreign lands, all kinds of services are today easily available on the Internet.

But finding the desired product or service at the most suited and appropriate price requires thorough research on the consumer’s part. For example, if a person is looking for Cheap car Insurance, he will have to use various search engines and other Web resources to find what he is exactly looking. The usage of proper keywords is essential in finding the exact information and appropriate websites related to the product and service desired by the consumer.

The only resource required while shopping in the online marketplace is patience. Sometimes it might take some time before you find the product or service that fits your expectations in every regard. Something like cheap car insurance that is quite popular will yield numerous results. Being able to successfully sift through unwanted sites and information and find the desired commodity in the least possible time is the sign of an expert online shopper.

Allan Elvin is an MBA in Finance and has a rich experience of writing on topics related to finance. He professes special interest and expertise in look4insurances.co.uk/cheap_car_insurance.php Cheap Car Insurance and in guiding you on its various details.

Photography Insurance-Insurance for the Photographer

Part and parcel of establishing your own photographic business is establishing your own legal entity. This means establishing yourself for taxes. This is broader than the scope of this article, because every country has it’s own business rules. Also every state in federal countries has different legal rules. The first thing you need to do is register your business according to your local rules, if you are unsure of this either take legal advice or go and see your local town hall and ask them about local legal requirements.

You then need to separate your private finances from your business finances. Even if you pay your bills with a credit card you should have a separate business card.

Once you have set up your business, then you have to ensure that that business is protected, and one of the ways you can do this is to insure yourself against risks to your business. Whilst you should be able to insure an overall business policy for your business you need to make sure that all the liabilities you face both fiscally and legally are covered. We live in a litigative society, and whilst insurance may seem an expense you can do without, it gives you peace of mind. You need to consider insurance for your errors, omissions and liabilities, as well as ensuring your equipment for loss or damage. You also need an insurance against a claim made as a result of an accident, occurring whilst you are conducting a photographic session.

All sorts of simple errors and omissions can occur between taking the photographs and giving the finished image to the customer. Film can get lost either through your fault or the processor’s. Images may be lost whilst shipping, or in the postal system. Images may also be lost by private carriers, paying a premium price for services may not be sufficient, do you know whether or not you are covered by their insurance, and if you are what is the limit? Whilst it is possible for images to be lost in Cyberspace you should be able to cover those eventualities yourself, by having back up systems. You may release the images to the incorrect party. As well as this there may be a human delay and you may find yourself in the wrong venue, with no time to correct this.

There are other errors that you can be held responsible for this; your customers may sustain a personal injury whilst they are in your home or studio. It is advisable to protect yourself with liability insurance. If someone trips or falls over a piece of equipment, you can be held responsible for the damage. One of your customers may even trip and sustain and injury outside your house on the steps, but if they are coming to your house for business purposes, the business is often deemed to be liable.

Depending on what type of work you are doing you may need an insurance policy for your models. Supposing you take a model to photograph to an outside location and she or he is struck by lightning, or a stray horse, etc? You will also have to ensure that all your equipment is also covered whilst you are on location, as well as inside your normal working area. If you work internationally on location, it is very important to ensure that everything is covered on an international basis.

When you protect your equipment make sure that remember to insure all of it. This does not include just your camera, lenses, and other obvious pieces, but your computer, fax machine, as well as all your software. If you use all your own dark room, then there is that equipment to insure as well. Even if you are using your house, your office equipment will not be included on a normal domestic policy.

As well as all these things you need to have a type of health insurance that covers you if you are sick, or cannot make an assignment. Also what happens when your car breaks down, and you miss a wedding? All sorts of events can and do occur.

It is also normal for any individuals to cover themselves for loss of income. You need to have an insurance policy for this, not just for your health expenses, but to ensure that over basic bills such as mortgages or repayments are covered.

If you have employees, then the business of insurance becomes more complicated, you need to ensure against their actions against your customer’s as well. Supposing they get caught up in a claim for sexual harassment, then you yourself are responsible. Each added little extra thing which you ensure yourself against will probably only add a few extra dollars to your annual bill, and the dollars spent may save a lot of heartache later.

You can ask to extend your private insurance to include a business package, or there are several companies that ensure the professional photographer’s needs with a separate package of comprehensive insurance. It may also be necessary to extend your vehicle insurance for the transportation of equipment, or it may be cheaper to include such things as loss of equipment from an unattended vehicle on your business package. It is not advisable to assume that you are covered for liabilities on existing insurance policies; it is always safer to check.

This article has been supplied courtesy of Roy Barker. Roy often writes and works closely with profitable-photography.com Profitable Photography Business. This site is dedicated to coaching you in starting your own photography business but places a strong emphasis on profitability issues & guidelines. You can also gain many photography resources (some free) from profitable-photography.com/resources.php Digital Photography If you seek further guides, helpful hints, articles and news, you can go to photography-business-tips.com photography-business-tips.com which also has a Photographers Forum for exchange of views with other photographers.

Policies in Trust

Any life insurance policy should be “written in trust.” The policy ‘written in trust’ will guarantee that you receive payout. When a policy is in trust, then the beneficiary receives payout immediately and the money is ‘tax-free. ‘The policy makes provides convenience, since the policy has a “40% tax saving.” Thus, if the plan is active and in use then the security is there, as well as security to the beneficiary since no taxes are necessary for pay.

If you are searching for life insurance, you will need to provide information to help the company provide you a quote. Thus, make sure, that the policy will be ‘written in trust’ and then provide details, including birth date, address, name, gender, and so forth. If you are getting a quote online then you will need to answer a couple of questions, including whether you smoke and how good your health is. You will also need to decide which type of insurance you are seeking. Thus, be prepared by researching the policies available to know more about what coverage you desire.

You may need to attend an interview to determine your qualifications. The insurance agent will often explain the coverage inquired of, but may not extend the informative interview to additional coverage that may be needed. For example, few companies offer Critical Illness or Terminal Illness coverage, and will often offer the coverage at no additional charge, however, few companies’ may offer the policy but charge minimal fees. If you have risk factors, you may be prompt to apply for Rated Premium Coverage, since the insurance company is considering you, but risks are there. Thus, you will be expected to pay higher premiums.

The preponderance of Life Insurance Agents take for granted that the physical condition of the policyholder is secure based on age. As long as you employment poses minimal risk for injury, thus the companies’ are factoring in common fees and costs. Thus, many companies’ base the risk factors on age, location, employment, activities, lifestyle, and so forth. The main idea of life insurance is understanding how long the term is to be taking out, and what type of coverage is needed. If you own a home with pending payments, you want to consider how much you will owe in the event you pass on to payoff the mortgage.

Again, life insurance agents may offer Critical or Terminal Ill coverage with the policy for no additional fees. If you have coverage already and do not have ‘dependents’ then the policy is a good choice for the most part. Combining the policy with you life insurance you will have additional coverage for medical exams, treatment, procedures, in-home care, equipment for medical care, hospital coverage, mortgage and so forth.

Life insurance with Critical Illness pays out large sums of ‘tax-free’ cash to beneficiary and/or policyholder in the event the policyholder suffers a critical ill. If you are unable to continue work as a result of illness, the policy can benefit you in many ways. If you own a home and have critical ill coverage, you will have a way to make your monthly installments. Combing Critical Illness with Life insurance is the smarter choice, since the company that charges for the combination will provide discounts for multiple insurance coverage. Still, you want to look for the companies’ that incorporate Critical Ill or Terminal Ill coverage into the life insurance policy at no extra fees.

Furthermore, life insurance combined with mortgage payments is often expensive. The Repayment Loans are sources for decreasing loan amounts, thus the borrower is paying down the capital on the loan. However, if you have the “interest only mortgage’ then you are paying toward interest working up to capital. Therefore, you will need a ‘level coverage,’ on an interest only loan, and will be expected to pay higher premiums. Finally, having life insurance now can save your family hassle later, thus go online and get a series of quotes to compare the rates and premiums, as well as the coverage offered.

Authored by Michael Bens. For more great information about all forms of insurance visit our free online insurance publication the

Types Of Dental Insurance Plans For Employees

Types of dental insurance plans for employees

A dental insurance is an insurance that will provide the person having dental insurance protection with required financial assistance for normal dental care and damage occurred to teeth from accidents, this can be under an individual or group insurance plan. Dental insurance was once a neglected area, but the awareness about importance of dental insurance is increasing alarmingly. In the past dental insurance was treated only as a perquisite provided by the company to its employees, studies (Human Resource Management Survey-1999) show that 83% of the small business provides dental insurance to its employees.

It’s advisable for every one to go for dental insurance. Dental insurance is more affordable and cheap when compared to other medical insurance. In fact dental insurance costs less than 10% of the cost of the medical coverage. Like every other type of insurance dental insurance also offers a number of plans that you can select from. The major types of dental insurance for employees are discussed below:

Direct reimbursement plan

This plan works on the amount that the company set aside specially for this purpose. In this plan the employees are reimbursed the money that they have spent for dental care. The most positive aspect of this pan is that it is straight forward and not involves any complex calculations. This plan is widely recommended by American Dental Association. Direct reimbursement plan is considered as most expensive for the employers. Certain small business finds it difficult to go in tune with this plan because of the cost factor involved.

Indemnity plans

These plans are more feasible. Under this plan the amount of premium is paid to the insurance company and the company in turn pays the amount to the dentists for their treatment. Under this plan the insurance company generally uses UCR (usual, customary, and reasonable) for making payment to dentists. In case if the UCR rate used to pay dentists falls short of dentist’s rate, the patient has to make up the shortfall. The insurance coverage under this plan are 100% for preventive measures like cleanings, 80% for basic work like a crown or cap, and 50% for major procedures like oral surgery.
Managed care plans
These plans are treated as the least expensive. These plans include some cost control measures and are best suited for small business. This plan wants the patients to pay a certain amount as co-payment and the co-payments vary according to the procedure. Preventive procedures are normally performed without a co-payment and advanced procedures are carried out with a higher co-payment.
The managed care programs are of two types, they are:
a. Preferred Provider Organization (PRO) Program
Preferred provider organization program consists of a network of dentists. The dentists who fall under this plan have reduced their charges with a view to participate in this plan. The employees can select the dentist from this pool, if the employees have to go to a dentist not in this pool they have to pay penalties.
b. Dental Health Maintenance Organization (DHMO) Plan
In this plan also the employees have the right to choose the dentist from the pool, but in this plan instead of discounting the fees the dentists provide certain treatments free of cost. The dentists are paid a fixed amount as fees per individual even if the patient never ever receives the payment.
The above stated are the various plans of dental insurance provided by the employer to the employees. It is possible for the employees to select the best suited plan after analyzing the advantages and disadvantages of the available options. By selecting a proper dental insurance it is possible for the employees to assure the health and safety of their teeth.
Author Description

dentalinsurancehelper.com is an easy and exact way to find the complete dental insurance for individual, family and group. This site helps you to save much of your time by providing guidance to select right type of insurance for the right people.

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Do You Need Low Income Medical Insurance?

What is low income medical insurance?

Medical insurance policy was first introduced in Germany by OTTO Von Bismarck in the Year 1883 – 84. It was later adopted by many leading countries such as Great Britain, Soviet Union and France after the World War 1. In Britain, the new national Medical health insurance policy which was brought into effect in the year 1948, provided the complete rules and regulations about health insurance the main motive behind the who health in-thy always. But many at times, many individuals forms the habit of deliberately harming themselves in order for them to get the insurance amount which happens to be against the rules stated in the act of health insurance 1946.

The low income health insurance works just like any other insurance. Any one wishing to insure his health has to make a contract with insurance. In which he has to agree he would be paying premiums to the insurance company at a particular decided amount (under normal condition the amount is not all that expensive like other insurances).Which the person then falls Ill or have any kind of disability, he then gets his cash value which should be amounted to the agreed.

What are the benefits of medical insurance?

Today’s health care costs are high and always getting higher as the days goes by the reason why most people buy other kind of insurance is to protect themselves financially, also having a low income medical insurance protects you yourself and your family in case you need medical care that could any way be very expensive since you can’t predict what your medical bills will be like. Sometimes your medical cost may be low. But if you become ill, your bills may become high so if you have an insurance, most of your bills will be covered their own expense. The reason why you need a low income medical insurance is that, the medical usually do pay 80% of their allowed charge, while the patient is responsible for the Remaining 20% balance usually the remaining 20% balance is being picked up by a secondary supplemental insurance coverage consider the cost of not having a medical health insurance for instance, if you contact a serious illness, get involved in an accident on your way to work then you will have to pay the medical bills out of your own pocket.

In some cases your family has no better choice than to settle for public health care facilities, waiting in line among hundreds of other sick patients also you still have to pay for additional expensive operations which are not fully covered under public health care system. Another thing to note is that most medical insurance plans do have polices that states that the hospitals must contact them about covering you for any period in the hospital. And if the hospitals don’t agree, then you are liable for the payment of bills. Also the more cost of not having a health cover is usually much higher in terms of your family’s health and security than in paying the monthly premiums a large proportion of uninsured people do use the emergency care unit as their only medical facility. This can also lead to an unwanted lifestyle since the large medical bills cannot be paid. Also if proper and timely medical care was given, there shouldn’t be any case of hospitalization for conditions that can be easily avoided. In most cases where adequate medical care is needed, many people who lack health insurance can’t afford to visit doctors, so they settle for over the counter medicine most times they don’t even go for medical check up, this stand the chance of being diagnosed of serious disease and also face a higher risk of mortality as a consequence.

Types of low income medical insurance

The two major types of medical insurance includes: Private and group insurance. Many among the private Health insurance companies don’t provide the wide coverage which the group insurance offers. Their individual cover is mostly quite expensive in order for you to select a medical insurance that fits your needs, you should compare all this requirements acquire as many as you can, enough brochures and documentation from every health insurance company as you can study the cover to make sure that the company will fulfill as it states, all the things you regard as important compare the services they offer to know their rates and also what they offer find out what illnesses or services are being excluded from their policy, make sure the policy has a payment starting and also an ending date. Stay away from any health insurance that only covers limited disease and also do not settle for any policy that doesn’t offer you a period in which to decide whether you will stay with the cover or not. The group insurance is where employers provide health plans in order to assist their employee in obtaining medical cover at a better and cheaper rate.

The employer may choose to bear all the cost or carry part of it if he wishes but if an employee should leave the enterprise, then He lose his group medical health insurance automatically. He may then decide to keep the cover or pay the full amount that is normally set aside for individuals most small business don’t provide medical insurance plans for their Employee, but you could get one through employee unions or through club memberships if you fall in this category.

Kingsley Duru has an BSc (Banking & finance). Insuranceavenue.info offers our visitors the best of Insurance articles, review and offers. To find insuranceavenue.info more about affodable, low income medical and travel insurance visit insuranceavenue.info Insurance Avenue.

Temporary Insurance: A Great Option For Those Without Insurance

Temporary insurance is a great option for those who find themselves without insurance. Generally, this type of insurance is valid for thirty days to one full year, depending on what you are looking for. Temporary insurance is for those who have recently changed jobs but won’t be eligible for insurance from their employer for a length of time. Often, the COBRA coverage offered by their previous employer is too expensive to maintain. Sometimes temporary insurance is purchased by individuals who quit work to return to school, knowing they will soon return to the job market. New parents who want to stay home with their infant or individuals who have been laid off all find temporary insurance a welcome relief.

Temporary insurance is sold through an insurance broker. The cost of it will depend on many factors. The region you live in affects rates as does your age, the length of time you want to purchase the insurance. The insurance is more expensive if you are purchasing it for your entire family than if you are looking at purchasing it for yourself only. Some states require a medical exam as well as base your rate on that examine. If you use tobacco products, your premium will increase.

Your deductible also affects your premium. Generally, the higher deductible you choose the lower your premium will be. However, it is important to only choose a premium that you can reasonably cover or the insurance won’t really do you much good. A deductible is the dollar amount you must pay before the insurance pays anything. Most temporary insurances cover check up, doctor visits, emergency room visits, and surgery. A co-pay may also apply, meaning you pay a set fee for each doctor visit. Some temporary insurance plans will include prescriptions.

Since having health insurance coverage is so important, the opportunity to purchase temporary insurance is a great offer. Just one major medical expense without coverage can be damaging to your finances for years to come. It is wise to prepare yourself in advance by purchasing temporary insurance. Most companies make the cost easier on your pocket book by allowing you to make monthly payments.

Get free short-termhealthinsurance.com/ insurance temporary health quotes at short-termhealthinsurance.com/ short-termhealthinsurance.com

The Life Insurance Policy and What You Need to Know Before You Buy

Are you looking to buy a life insurance policy? Well, be careful. Life insurance can be difficult to understand and it’s easy to be conned into buying something under false pretenses.

Recently a prominent life insurance company together with several of its agents paid a huge fine because it permitted the sale of a life insurance policy disguised as a retirement plan. There was little attention given to what a life insurance policy is truly designed to provide.

Life insurance is not an investment for your benefit. It’s guaranteed income tax-free cash paid to someone you designate in the event of your death. If you love someone and want to protect them, then buying a life insurance policy makes sense.

As primary bread winner in your family, your lost income could jeopardize the ability of those you love to continue to enjoy their standard of living.

The only way to guarantee an immediate replacement of this money is with the intelligent purchase of a life insurance policy.

Notice I didn’t say term life insurance, low cost life insurance, or whole life insurance.

To your loved ones … this doesn’t really matter.

Over the years I’ve delivered millions of dollars of life insurance benefit to the families of deceased bread winners. And you know what?

No one ever asked me what type of life insurance policy it was. They were just extremely grateful to get the money.

Term is the cheapest, but it’s unlikely the death benefit will be paid since the life insurance policy will probably lapse before you actually die. Right now the premium may seem cheap compared with other types. But what happens when you’re older?

Term life insurance premiums can be level for a specific number of years, but when that number of years is up the price will skyrocket to the point you won’t be able or willing to pay.

Whole life insurance provides a lifetime level premium until the policy is paid-up. This can be 10 years, 20 years … or when you reach age 65, 85 or 100. One big advantage is you don’t have to worry about your policy expiring before you do.

One type of life insurance policy is not necessarily better than another. But it’s critical you understand what you are buying, how it works and your net cost.

After all, if the policy isn’t in force when you die you have thrown your premium dollars right down a rat hole.

By the way, don’t fall for that line about buy term and invest the difference. Anyone who cons you with this bunch of malarkey has absolutely no idea how to intelligently evaluate the purchase of life insurance.

An excellent life insurance policy to consider is universal life. This guarantees the death benefit up to age 115 regardless of the performance of the underlying investment.

Although more expensive then term life insurance, universal life is far less costly than a typical whole life insurance policy. But be careful because some universal life policies are sold by focusing on projected interest rates rather than contractual guarantees.

If you are considering the purchase of a whole life insurance policy from a mutual company that declares annual dividends, ask the agent for a hypothetical illustration using a dividend forecast at least one percent less than the current rate.

In the past, when long-term interest rates were higher, mutual companies credited very handsome dividends to their policies. But today with long-term rates still depressed, it’s unlikely a life insurance policy will perform as illustrated.

In summary, pay close attention to the guarantees of whatever life insurance policy you decide to buy. Also, make sure you know the credit rating of the life insurance company.

There is nothing wrong with term life insurance, but understand your options about converting to a permanent plan. This could be critical if you become uninsurable before the policy expires.

Don Adams is a 24 year veteran financial consultant who provides easy to understand personal-finance-on-the-net.com/ personal finance advice on a wide variety of money matters.