4. Not leaving behind cash value.
Ask your agent what will happen to any cash value that has accumulated in your old policy if you replace it with a new one.It is possible that a new policy will offer superior features, lower premiums and more coverage that would make a switch worthwhile. Just make sure before you proceed with the replacement.
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What kinds of health insurance are there?
There are essentially two kinds of heath insurance -- Fee-for-Service and Managed Care. Although these plans differ, they both cover an array of medical, surgical and hospital expenses. Most cover prescription drugs and some also offer dental coverage.
1. Fee-for-Service.
These plans generally assume that the medical professional will be paid a fee for each service provided to the patient. Patients are seen by a doctor of their choice and the claim is filed by either the medical provider or the patient.
2. Managed Care.
More than half of all Americans have some kind of managed-care plan. Various plans work differently and can include: health maintenance organizations (HM0s), preferred provider organizations (PPOs) and point-of-service (POS) plans. These plans provide comprehensive health services to their members and offer financial incentives to patients who use the providers in the plan.
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If I change jobs or become unemployed, can I bring my coverage with me?
If you switch employers, you have the right to carry your group health insurance coverage with you to a new job for up to 18 months under the Congressional Budget Reconciliation Act (COBRA). You must pay the full premium, but at group rates that are far cheaper than the individual rates you would pay for similar coverage. Health insurance under COBRA is available if you are in these situations:
1. You leave a company and become unemployed or self-employed for up to 18 months.
2. You are a widow or widower or child of an employee who dies while working for the same company for three years or more.
3. You are the divorced spouse or child of an employee who has left the company he or she was employed at for at least three years.
4. You are the child of an employee who left a job and have not yet reached age 23.
NOTE: If you need COBRA benefits, you must fill out the appropriate forms from your employer’s benefits department within 60 days of leaving your job. If you do not act within that time, you may be denied coverage.
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How can I save on long-term care insurance?
1. Find out if long-term care benefits are available through a group policy from your employer or as benefits from an existing life insurance policy. Then consider supplementing those benefits with a private long-term care policy.
2. Consider buying a policy before age 60 or 65, because premiums increase sharply between ages 60 and 70. Buying much earlier is even more cost-effective, and also guarantees your insurability.
3. Evaluate your other financial resources, then consider buying a policy that will pay most but not all of the average nursing home costs in your area. Paying part of the cost out of your own pocket will reduce the premium.
4. Buy a policy with a waiting period of two-to-three months before benefits are paid. Again, paying the initial payment out-of-pocket will keep costs down.
5. Check with several companies and agents, comparing both benefits and costs. In addition to checking current costs, find out how often each company has raised premiums in the past.
6. But don’t rely on price alone. MOST IMPORTANT: Because you may not collect for decades to come, be sure to buy from a company that has been around for some time and is financially stable. You may want to look up a company you're considering in a guide such as A.M. Best Company, Standard and Poor's, Duff and Phelps Credit Rating Company and Moody’s Investors Service. Back to Top
