Archive for May, 2010
Health savings accounts (HSAs) are wildly popular. Since their introduction in 2004, approximately 2.5 million Americans have enrolled in these so-called consumer-driven health plans. But, alas, HSA plans are not for everyone.
Here are some pointers to help you consider whether an HSA will benefit you and your family.
1. An HSA plan can cut healthcare costs by an average of 40% for many people.
Nevertheless, some people will not realize any net savings. Those most likely to realize significant savings are people who pay all of their own health insurance premiums, such as the self-employed, who are relatively healthy with few medical expenses.
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An HSA plan puts individual consumers back in control of their own health care. This also means that each individual must be more responsible for his or her own health care decisions. This approach of self-reliance is not always popular with or appropriate for everyone, especially those who have become comfortable with HMO-type “co-pay” plans.
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Every dollar contributed into your HSA account is deducted from your taxable income in the same manner as contributions into a traditional IRA account–regardless of whether you spend it or just save it. Interest and investment earnings in a HSA accumulate tax-deferred, just like a traditional IRA. Unlike an IRA, withdrawals are tax-FREE when used to pay qualifying medical expenses. In many situations, new account holders are able to almost fully fund their HSA with money saved on premiums from a prior, higher priced plan. By stashing all or most of those savings into an HSA, the account holder realizes instant, additional savings in the form of reduced taxes.
4. You must have a properly qualified high health insurance policy in place first before
you can open a health savings account. One of the biggest misconceptions about HSA plans is that any insurance policy with a high deductible will qualify the policyholder to establish an HSA account. IRS regulations, however, are quite specific. Not just any policy with a so-called “high deductible” will suffice. It is important to be certain that you are insured under a properly qualified policy. Your best bet is to work with a qualified and duly licensed health insurance broker who is experienced in marketing properly qualified HSA plans.
5. You must be insurable in order to qualify for the HSA-qualified health insurance policy.
Because most people do not have a properly qualified high deductible insurance policy, they will need to switch insurance plans in order to become HSA-eligible. Unless coverage is being offered under small group reform laws (generally groups with 2-49 employees), the new high deductible policy will be individually underwritten by an insurance company. This means that some “pre-existing” conditions may not be fully covered. Alternatively, some companies may opt to cover certain “pre-existing” conditions in exchange for slightly higher premiums. Unfortunately, some health conditions simply render an individual uninsurable (examples: diabetes, chron’s disease, heart attack, etc.). Underwriting requirements vary by state, which is another reason to rely on an experienced health plan broker.
You should not switch to a HSA plan when the management of existing medical expenses is more important than saving up-front medical insurance premiums. Do not change health plans: in the middle of ongoing medical treatments; after a major health issue has been diagnosed; or if any family member is pregnant.
Generally, it is relatively hassle-free to qualify, i.e. no medical exams, etc. Most insurance companies offering HSA coverage will issue based on your application answers, perhaps accompanied by a follow-up telephone interview. In some cases, medical records may be requested, and companies always reserve the right to order a paramed exam.
6. Although HSA insurance premiums are low, they are not always as low as you might expect.
This happens for one main reason. Simply stated, the underlying insurance policy is just that—a health insurance policy. Although it has a “high” deductible, as required by law, the insurance company still must compensate for the risk it is assuming over the deductible amount, which it does by charging premiums. Many companies offer policies with “one deductible” that all family members contribute toward. With those plans, it is not uncommon for premiums for a 5000 family deductible with 100% coverage after the deductible to be comparable to a 2500 “per person” deductible plan with 80/20 coverage after the deductible.
Lower premiums represent just one element of the lower net cost achieved with an HSA plan. The low net cost of an HSA plan is achieved after factoring in the benefits of lower taxes, made possible by the tax-deductible contribution to the HSA account. Thus, if obtaining the lowest possible gross premium is your main concern, you may wish to consider a high deductible, non-HSA policy, especially if you do not see the benefit to contributing to a tax-deductible savings account.
7. An HSA offers your best chance to keep a lid on health insurance rate increases.
Make no mistake-you will have rate increases with your HSA insurance policy. Because an HSA qualified policy is still a health insurance policy at heart, there is no logical reason to presuppose that an HSA policy would be immune to rate increases required by an insurer to keep paying claims and stay in business. But what you can expect is that the actual dollar amount of any future rate increases will be substantially lower compared to traditional health insurance plans (regular PPO and HMO plans). This is true because insurers base increases on percentages, and the same percentage of a lower base premium results in a lower dollar increase. It’s not a perfect solution-but it is the most cost-efficient solution for many qualified people.
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It is an old saying — “Health is Wealth.” The most important step to maintain this wealth is to get a health insurance policy for you as well as your family. But, sometimes the premiums of such policies can leave you in and out of the budget situation. Can you really do something to bring down your premium? Read on to learn about the 5 quickest ways to lower your health insurance premium.
1. Adopt a healthy lifestyle
Living a healthy life has many benefits. Your healthy lifestyle can easily help you in bringing down the health insurance premium. Exercise regularly, eat healthy diet, avoid smoking and heavy drinking — and your visits to the doctor will surely be minimized. The healthier you are, the lesser you are represented as a risk for the insurance company.
2. Shop for the best available price
One of the best options to keep your premium lowest is to go out and shop around for the health care policy. This will ensure that you find the best available policy that fits in your budget. Do a thorough research before investing in any policy. You can get information from your friends and relatives or even Internet.
3. Take up plans with higher deductibles
Insurance plans with higher deductibles tend to have lower premiums. Typically, deductible is the amount you are expected to pay toward hospital, doctor, and other medical bills. Taking up a plan with a higher deductible may not be a universally applicable idea. If you’re generally healthy and do not fall ill very frequently, then you can take up this plan. This way you can keep your premium at a lower rate and avail basic health care facilities as well. But, if you have a history of some major consistent illness, avoid taking this plan.
4. Take up a policy early in your life
The premium varies to a great extent with the age of the person. Try and get a policy as early in your life as you can. For example, if you buy a policy at the age of 25, then you’ll have to pay lesser premium but, if you go for the same policy at the age of 50 you’ll end up paying a raised premium amount.
5. Get in touch with independent insurance agents
You can take help from independent insurance agents. These agents represent several insurance agencies and can guide you to pick the right kind of health insurance policy and then plan your premiums at an affordable rate. Since independent agents will compete to get the business – so you’ll get serious offers quickly.
Although it makes sense to get in touch with a life insurance company to cover your dependents in the eventuality of your untimely death, there are integrity issues surrounding the insurance companies and agents. Broadly there can be 3 ways your life insurance company is scamming you. We have enlisted them for your benefit.
Selling Coverage that you don’t need!
The insurance companies thrive on the fact that most people don’t understand their life insurance needs. With standard products, they try to sell you coverage that you might not need, but, which are lucrative for them. The insurance agents expedite the process so that you skip the fine print and sign up for a coverage that is ill-suited to your needs. The trick is to play on your fear factor and sell you heavy insurance, even if you don’t have dependents.
Coaxing you to pay ‘Cash’
We strongly suggest, do not pay your premium through cash to an agent. Further, do ensure that you get a receipt for the payment. There are numerous fraudulent entities posing as genuine insurance agencies that extract hard cash from you in lieu of insurance premium. They ask you to sign at blank spaces in a form, assuring you that it is just a formality. Once you have fallen for their trick, you are left without an insurance coverage. The worst part is that most victims only come to know of this scam, when they have met with some mishap and there is not insurance to cover them.
Luring you with benefits!
Insurance agencies and agents have a way of promising you unbelievable benefits out a life insurance policy. Life insurance agents might offer you plans, with a guarantee that the policy would run premium-free for a specific period. Some agents play it smart and offer you great discounts for signing you up for a new policy, while replacing an old policy. The trick is that the old coverage gets terminated and new coverage does not get initiated due to the cumbersome procedural bottlenecks. Thus, exposing you to risk without cover.
Auto insurance refers to the insurance that is common for insuring all types of vehicles against all kinds of uncertainties that may cause bodily damage to the vehicle. The sole reason behind insuring the vehicles is that it gives protection against the losses incurred due to accidents. Auto insurance is available for consumers who want to buy such insurance, to protect the life span of their vehicles and also for recovering the amount of the damage that the vehicle survives. People usually buy these insurances for all kind of automobiles like cars, trucks and other kind of vehicles, to avoid any risk. Different kinds of coverages have been started by the insurance companies, to suit the interests and the needs of the insured.
Before buying auto insurance, it is very important that the person goes for a thorough analysis of the proposals offered by different companies for such insurances. Different companies offer different quotes for the insurance of the vehicle, the consumer must look out for the best one, which suits his needs and which proves to be very economical. Many companies also give different discount schemes to attract more and more consumers. The consumer can save a good deal, while purchasing auto insurance by comparing the quotes of different companies and choosing the cheapest one which satisfies all his needs.
Quotes from different companies can be compared on the internet, for buying the best available auto insurance, it provides a wider platform to the consumer, where he can easily access and compare quotes from several companies and choose one among them. The main thing about choosing a quote is that the quote need not necessarily be cheap but the company must be an established one on which the customer zeros on.
The consumer should not only compare the quotes of different companies but also companies, their reputation and their way of service. While comparing, the consumer is more acquainted with the different kind of coverages that are available and choose among them according to the needs.
The major hullabaloo about insuring automobiles is the increasing reckless accidents that are tolling high on the records. These can only be reduced once the certainty of the accidents is reduced. The companies quote their prices for insuring depends of various factors like the age of person to whom the vehicle belongs, the location where the car is bought and supposed to be used in the area and also many other factors. The details regarding the car like its parking place, whether it has a garage because that reduces the risk of being stolen or damaged. Also the mileage of the car is a deciding factor of the quoting the price of insurance.
The advent of the internet has opened up the possibility of cheaper life insurance for all.
In years gone by, if you were considering life insurance you would probably have invited an insurance salesman from your favourite insurance company to meet you or alternatively gone to your local insurance broker. But rarely would you have been courageous enough to get competitive quotations. It just wasn’t done. You trusted the salesman to do the best for you and surely you thought, life insurance is somewhat technical and requires specialised knowledge. All very cosy. All very expensive. How life has changed!
People now realise that life insurance is not that complicated. If on a scale of 1 to 10, buying car insurance online rates 9, life insurance must be a 7 or 8. This has opened up the Internet as a prime arena for cut-price life insurance. That’s not to imply that life policies bought on the Internet are in any way substandard. No, you’re most likely to end up with a policy from one of the UK’s big insurers like Norwich Union or Legal & General and they’ll be exactly the same policies as you could buy anywhere else. It’s just that the intense competition on the internet and efficiency and simplicity of the system, means that most online brokers decide to cut the commission and roll back the savings into lower prices.
Ah yes I hear you saying, 7 or 8 implies that life insurance is more complicated than car insurance. Yes it is – but that doesn’t mean that it represents a problem. The companies selling life insurance online recognise that many clients feel that some level of personal advice is useful and indeed, necessary. They accommodate this with a mix of useful information on the web site and more often than not, with a short telephone conversation with a life insurance adviser prior to you buying. This provides reassurance and helps to ensure you really do get the policy options you need all at rock bottom prices.
Buying online certainly is a good idea.