Is Funeral and Burial Insurance Worth It?

September 28, 2020 04:14 newlambertagency

Let’s be honest. No one likes to think about their death or death-related situations. People already have enough on their plate to think about the financial aspects of their funeral.

Death is an uncomfortable subject. But once you have planned your future and made the necessary arrangements to execute those plans, you’ll have one less thing to worry about.

There are life insurance plans that cover burial or funeral expenses while some plans are specifically created for any type of burial you want or any specific arrangements that might interest you. So if the question, ‘is burial insurance worth it?’  or ‘what exactly are they?’ crosses your mind, then let us put your thoughts at ease.

So what is Funeral/Burial Insurance?

Also known as a burial or final expense insurance, Funeral insurance is designed to be a small policy that ranges from $5,000 to $25,000. The policy is paid upon the insured member’s death to either a designated recipient, such as the executor of an estate or a family member making funeral arrangements. You can also make prior arrangements to pay a funeral home directly that will then carry out all the required arrangements.

What do they cover?

As the name implies, funeral insurance covers the expenses that are directly related to the funeral ceremony – cremation or burial, depending on your preference. The expenses cover a headstone purchase, the cemetery plot, or an urn or other container for your ashes after cremation.

However, it does not cover hospice care, medications, or anything else you may need before you pass. Just like life insurance, the policy is paid out only after your death.

It’s really important that you choose the right person to handle your funeral arrangements – a person who will use the money for the purpose they’re intended for. Because, theoretically, your family members are not legally obligated to use the money for your funeral – they can use the money for anything they like.

How much do they cost?

The most common funeral insurance plan covers $10,000 and on an average, the policy costs $50 per month, However, depending on your age, gender or health, the monthly premium can be higher or lower.

But it must be noted that many financial and insurance experts say that this insurance is a “last resort” type of coverage. Because the same monthly premium paid toward a term life insurance policy can get you much higher coverage than a funeral or burial policy would pay.

That is why experts say that such type of policies are meant for those who cannot qualify for a term life policy, and have no funds saved up for their funeral.

Also, people often mistake burial insurance as a separate product from funeral insurance, but it’s essentially the same. However, the arrangements made with a funeral home before your death falls under pre-need policies that payout at your death, and not before.

Understanding Level Term Life Insurance

September 23, 2020 04:00 newlambertagency

Term life insurance is the simplest form of life insurance. It is affordable and straightforward. You pay regular premiums, and if you die over the course of the term a death benefit is paid out to your loved ones. If you outlive the term, the policy expires and you stop paying.

There are different versions of term life insurance. However, people buying term life insurance are buying level term life insurance, an important distinction that guarantees you pay the same price for your policy no matter how long it’s active.

What is Level Term Life Insurance?

It is one of the most popular types of life insurance that offers you protection in the event of your demise within the term of the policy. Unlike decreasing term insurance, the amount paid as premium as well as the sum assured does not change over the course of the policy term.

That means regardless of whether you die in the 4th year or 24th year of your 30-year policy, your beneficiaries will get paid the same amount. That is why they’re also known as level benefit term life insurance.

The cost of premiums for level term life insurance varies from person to person and relies on a person’s well-being, age, and occupation. Thus you must keep up the premium payments to keep the policy coverage in place.

How do they work?

They follow the same basic process as other life insurance policies:

You chose a policy, along with a death benefit amount and term period. The cost of a term life insurance policy is determined by these, as well as the applicant’s health and age. The premiums can be paid monthly or annually.

If you or the insured person dies during the policy term, the death benefit is paid out to the named beneficiaries. If the policyholder outlives the policy, the policy expires and they don’t have to pay the premium anymore.

The terms typically last anywhere between 10 to 30 years.

Benefits of level term life insurance

Level term life insurance has its perks. When you take out a level term life insurance policy, you’ll set a term at the beginning, usually around 25 years, as well as a pay-out size. This pay-out will be the same whether you die at the beginning or end of the policy term.

Thus, it can be said that predictability is the main benefit this policy offers as you’ll know how much you’ll be leaving to your beneficiaries no matter when you die, as long as you don’t outlive your policy.

This policy also makes budgeting easy since the amount you pay for your coverage throughout the policy will remain the same. And since you’ll be paying the same amount and receiving the same coverage throughout the life of the policy, you can get 10, 20, or even more than 30 years of coverage based on your current age.

Such benefits are what make level term life insurance so popular.

ACA Health Insurance Plans vs. Healthcare Sharing Ministries

September 16, 2020 12:17 newlambertagency

The individuals who had previously been uninsurable due to poor health or pre-existing conditions received a gift in the name of the Patient Protection and Affordable Care Act in 2010. It brought with it a new era of healthcare for many Americans.

The law proposed a new structure of subsidies intended to help make healthcare more affordable, which presented an opportunity for many to get comprehensive health insurance coverage via their state health insurance portal or its federal counterpart.

The introduction of the ACA health insurance plans eliminated lifetime caps on coverage, meaning you could never get kicked off your plan for getting sick or “run out” of coverage and gave several Americans a chance to finally buy healthcare regardless of their health, employment situation, or income.

While ACA health plans kept made and kept several families happy, another healthcare solution has been gaining popularity over the years – healthcare sharing plans or healthcare sharing ministries. While they aren’t considered “health insurance,” healthcare sharing ministries can be used to reduce the out-of-pocket cost by families who want to share their healthcare expenses with other like-minded families.

Individuals and families who choose healthcare sharing ministries pay a monthly “sharing amount” (read premium) and depending on the program they choose, they can enjoy many of the same perks of traditional health insurance – like discounts on healthcare, limited out-of-pocket limits, and predictable monthly payments.

ACA Plans vs. Healthcare Sharing Ministries: What you should know

Like choosing any insurance, it’s important to weigh the pros and cons before you sign up. We have laid out the pros and cons of both the plans for you to help you make a decision.

Benefits: ACA plans

As already mentioned the most attractive feature of ACA health insurance plans is that there are no lifetime limits or caps. You can buy coverage regardless of your health and subsidies available for those who earn less than 400% of FPL.

Drawbacks: ACA plans

ACA plans are quite expensive and the plans may run on narrow networks. Also, the availability of plans depends on your state of residence.

Benefits: Healthcare sharing ministries

The most appealing feature of healthcare sharing plans is its cost. They’re less expensive and are more cost-efficient than ACA plans. The annual costs and deductibles are low and Families can share their costs with other like-minded families. Also, with this plan, you can avoid the penalty for not having health insurance.

Drawbacks: Healthcare sharing ministries

You need good health to qualify for this plan. It has a lifetime or annual caps on coverage and you cannot use a health savings account.

At the end of the day, the best way to find the right plan for yourself or your family is to look at your unique situation and determine which plan might offer better protection without costing too much or sacrificing your quality of care. After all, it’s your life!

What is Short Term Health Insurance?

September 9, 2020 13:40 newlambertagency

A short term health insurance plan is known to offer major medical type benefits in the case of unexpected accidents and illnesses. They’re also called as short-term medical insurance, temporary health insurance, short-term care insurance, short-term health plans, or STM health plans.

The plan lasts up to 3 years and both individuals and families can enroll in temporary medical insurance plans. In terms of benefits, most short-term plans offer some coverage for inpatient and emergency care, surgery, labs, imaging, and a limited number of outpatient office visits.

They generally don’t cover pre-existing conditions and your application for such a plan can be denied based on your medical history.

Let’s look at some important benefits of short term health plans:

  1. Short term medical plans offer broad networks and/or allow you to go to the hospital or provider of your choice. This means you don’t have to change doctors.
  2. You can apply at any time as these plans have no open enrollment period restrictions.
  3. They’re available with limited waiting periods so in many cases, you can use your coverage as early as the next day.
  4. You’ll be notified of your approved application within minutes.

Who should go for this plan?

If you do not have an ACA or employer-sponsored health insurance plan, a short term health insurance plan could be a viable option for you. It efficiently bridges the gap for people moving from full-time employment to self-employment, or other scenarios where the future is unpredictable and finances are tight.

And if you’re in overall good health and don’t have chronic conditions or complex medical needs, then this plan is the best fit for you.

Also, if you’ve recently retired but are still too young for Medicare, a short term health plan is the right solution. However, the downside to STM health plans is that they are not guaranteed renewable. Although the premiums are low if one were to get sick with significant claims the company will decline to renew that policy. This is an inherent risk with STM plans. Therefore, for people with chronic and complex conditions, ACA plans would be much more suitable.

Thinking of buying a short-term health plan? Here are some things to keep in mind:

  1. Read the fine print of what the plan covers and what it doesn’t cover and see if a COBRA plan through your former employer or coverage through your spouse’s employer makes more sense for your situation.
  2. Understand how much you’ll pay out of pocket, how much are the deductible, the percentage of covered medical expenses after the deductible, and the maximum out of the pocket amount you will have to pay.
  3. Check the dollar cap on coverage – the lifetime benefits maximum and make sure the plan’s network includes your doctors and hospitals.
  4. And please keep in mind that once you enroll in a short term health insurance plan, you will lose eligibility for COBRA after the short-term plan expires.