When did you have life insurance and when did you just have premium receipts?

When did you have life insurance and when did you just have premium receipts?

People buy Life Insurance every day somewhere. They go online, they see life insurance agents, they respond to offers from banks and credit unions, and they buy it at their employer. All of these offer opportunities to think you had coverage you didn’t.

In the vast majority of cases applying, and then paying premium, results in real coverage that helps millions of people every year. However, there are some things you might miss that could result in your beneficiary being very disappointed. And you can’t just go back and fix it at that point.

Life insurance is a basically very simple, your beneficiary gets paid if you die. After that there are many ways to make the offer of coverage. Some of these “offers” are Term, Whole life, Variable life, Universal life, Accident only, credit life and more. Each of these provide several ways to pay for them.

So what are some of the unseen potholes you need to think about?

Verification of coverage – In all cases you need to make sure you received “verification of coverage.” This might be a “policy” or it might be a verification of coverage outline or certificate. No matter what the format was you need to read it and keep it where your beneficiary can find it. That document will tell you what coverage you actually have and how to keep it in effect. It will also tell your beneficiary how to file a claim.

Premium payment – Somebody must pay the premium to keep the insurance coverage. Every year we hear from somebody who had found an insurance policy in their parents papers but the parents had forgotten to pay the premium as they got older. After many years of payments the coverage is not there when it is needed the most. In some cases, with policies that included a “cash value”, the policy may have been being kept in force by using the accumulated cash. That means if you find an old policy do not throw it away until you call the insurance company and check on it.

Promotional or “Free” insurance – People frequently get offers for “Free” life insurance from banks, credit cards, car dealers, mortgage companies and credit unions. In most cases this is “AD&D” which is Accidental Death and Dismemberment. This means it only pays in the event of an accidental death or in some cases the loss of some combination of body parts. You have to be a “”member or have an account with whoever made the offer, so it is not enough to just return the offer and think you have coverage. If you are managing the affairs for somebody who dies be sure to contact every credit card company they used to see if it included a credit, or perhaps term, life policy.

Employer group term – Employer provided group term life insurance is one of the most common ways people are covered by life insurance. In most cases all eligible employees are given a basic amount of coverage and the employee may purchase more if they ask. “Eligible” is critical terminology here because if the employee is suddenly no longer eligible, they may not be covered by the insurance company even if they kept paying the premium. These policies typically include “Waiver of premium”, and “Conversion” rights. Waiver is a provision that “Waives premium payment” allowing the benefit to be kept if the insured becomes disabled and cannot pay the premium. Conversion allows the insured to change the coverage to a policy they own and would not lose based on employment eligibility.

This is a very brief look at the subject but it is so important that you should talk to your insurance agent about all the places you may have coverage and see if you really need coverage, and if you do – that it is really there. And by the way, get a real agent, one you can walk in and talk to, one who might really be there if your family needs the help.

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What do assume and Association health plan have in common? A cautionary note!

So, did you figure that out yet?  What do assume and Association health plan have in common?

The first three letters of course! Don’t let either one make an “Ass” out of you!

In both instances there’s a high probability you’re going to end up with egg on your face if you don’t do your due diligence.

The presidents proposed changes to the Association insurance regulations are all the rage right now, and if ever there was time for caution in regard to your health insurance now would be the time.

Before I go on I want to point out the most basic concept of insurance and it would be a good idea for all of you looking at Association plans to keep this in mind:
Insurance is a process of collecting a small amount of money from enough people with low risk to pay for (cover) an unforeseen catastrophic event with one of the members.

Insurance is not a product, it is not a rich uncle, it is not the golden goose of your dreams, and it certainly cannot exist beyond the actuarial rules regarding risk. Money coming in must be bigger than money going out and anytime you take on unknown and uncontrolled risk you jeopardize the financial stability of the entire program.

Whether you are ensuring 1000 individuals with personal policies, or allowing 1000 individuals to join your Association plan, the risk is virtually the same. 1000 people need to contribute enough money to cover the $800,000 per year dialysis cost of one member. You can only control the risk by limiting exposure to the claims.

Promoters of association plans will tell you that they have found some way to reduce the risk, allow people to have better medical coverage, and produce the world’s best bagel. This might in fact happen, assuming that they reduce the benefits, and impose restrictions not currently available in most traditionally insured health insurance people purchase. Oh, it will really help if they can get you to have habits that keep you healthier.

So what are some of those restrictions I’m talking about?

Subrogation – If the Association is self-funded (or level funded) you need to be aware of the subrogation clause. That says that if you are paid for your medical expenses because of an auto accident your insurance plan can go back against your auto claim settlement and recoup their money. That means they take all of the money you got in your settlement.

You need to look at the most important page in the policy document, the exclusions page. This is where your plan can refuse payment if you are involved in any accident involving alcohol, any event that may be construed as self-inflicted, and a host of other things that would currently be covered under most health insurance plans that are fully insured.

Although it may not sound like it, I am actually a big proponent of association plans and self funding, however, there are going to be a large number of plans promoted by people who may not know what they’re talking about, and number two definitely do not have your best interest at heart.

Always keep in mind that no other person cares as much about your well-being and your health as you do. If you have a major claim of any kind it may well jeopardize your life. At that point you need to know that your health insurance covers what you thought it did. To put a finer point on the argument you do not want to be standing in an emergency room with your injured child wondering if the people you bought your health insurance from are ethical, honest, and honorable. At that moment you will not care how cheap the coverage was, you will only care that it works.

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Competence – who cares Spell Check will catch it!

Today I want to talk about competence, or probably more aptly the lack thereof. Let’s start with the question “Does competence really matter anymore?”
Does it matter if every word in your text is spelled correctly?
Does it really matter if everything in your last email was accurate?
Is it important if you’re insurance enrollment card was correct, can’t you just change it later?

Of course most of you who know me will say that my short answer to this is “Are you serious?”

I recently saw a joke about the importance of one letter being missing in a text message. A man was having a great time on a trip so he sent a text message to his wife. When he got home she had filed for divorce based on his text message which said, “having a great time wish you were her!”

Before somebody points out to me that I too have sent emails to the wrong address I wish to agree to a Mea Culpa right now. No matter how important competence is to me or how hard I try, I also make mistakes now and then. The question may not be do we make mistakes, because we all do. The question is more what is our attitude toward general competence and what is our acceptance level for a lack of competence?

What if the credentialing report for your surgeon left out the word “not” when they wanted to indicate he was “not” qualified?

What if the jury left out one word in their verdict they delivered to the judge: “the jury finds the defendant (not) guilty!”

Competence matters and even minor errors can have dramatic impacts on your life.

Today we received a report from a payroll company indicating the people who had added and people had deleted coverages in their open enrollment event. It turns out that due to some programming issue every single event may have been reported incorrectly. Due to a highly competent staff member in my office it was noted that these did not make any sense and she questioned the report. Had she just let that report go through several people would have been erroneously deleted from coverage. Do you think that would have had an impact on their lives? Do you think it might have had some impact on the employer?

Of course competence matters and I would ask where in your lives do you see the demand for competence and knowledge becoming less important. Are you finding more people applying for work whose attitude is who cares you can always fix it later, or spellcheck will catch it?

In every issue it is true that you will get more of what you encourage. If in your work life and your daily life you encourage or except incompetence you will certainly get more of it and the impact on you could be catastrophic. In our situation it eats up valuable time having to check the work of every person and company we deal with due to the increased incompetence caused by a general lack of knowledge, no sense of importance in their own work, and to a great degree due to the increased automation of almost every task.

It can truly be said that to err is human but to truly screw up you need a computer.

Workloads have increased dramatically in every field and this has caused people to rely heavily on computerized solutions to their day-to-day jobs. The problem with taking the human mind out of the endeavor is that once a mistake is made the computer multiplies the magnitude of that mistake many times. It is true that people do make mistakes just because were people, and were busy. However, when you couple being human with an increased reliance on computerization and automation it becomes imperative that each person have a sense of personal honor and dedication to competence.

I have a sign over my desk that says “Is that your best work?” Are you doing your best work? Is competence important to you?

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