All About COBRA Health Insurance

November 25, 2020 17:50 newlambertagency

COBRA health insurance or Consolidated Omnibus Budget Reconciliation Act (COBRA) is an insurance program that gives workers and their families who lose their health benefits the right to choose to continue the health benefits.

Created in 1985, COBRA allows individuals who experience a job loss or other qualifying event the option to continue their current health insurance coverage for a limited amount of time.

It is generally provided by employers outside the federal government with more than 20 employees.

How do you qualify for COBRA health insurance?

You can avail COBRA benefits only in certain situations that are called ‘qualifying events’.

You’re eligible for COBRA if,

  1. You were employed and covered under an employer’s group health plan.
  2. You were laid off, fired, retired, or quit, or had your work hours cut to the point that your employer is no longer required to cover you under a group health plan.

As a dependent,

  1. If you are a dependent of someone who qualifies for COBRA based on the above, you may be eligible, too.
  2. If you are a spouse who divorces or files for legal separation from the employee, you may qualify.
  3. A spouse of an employee who dies may also get COBRA coverage.

How does it work?

As already mentioned, COBRA insurance extends your health plan coverage when an employer’s plan ends.

Your insurance carrier is required to include COBRA rights information in your plan documents when you initially enroll. Your employer, your insurance carrier, or both will give you information on COBRA coverage.

After your insurance benefits end due to any of the reasons mentioned earlier, you will have 60 days to decide whether you want to continue your health coverage under COBRA. If you don’t approve it, your health coverage will end on the day that your employer’s plan coverage ended.

If you elect to continue coverage under COBRA, it will start the day after your employer’s plan coverage ends. The COBRA continuation coverage will offer the same benefits you had under your employer’s group plan. This means that you can see the same providers and follow all existing plan details.

COBRA coverage may last for 18 or 36 months depending on the type of qualifying event that made you eligible in the first place.

The coverage may be terminated if you don’t pay your premiums or other fees for coverage. It can also be terminated if you get a new job that offers health insurance coverage.

COBRA can be extremely beneficial for you as it covers the same benefits your employer’s health plan covered you for. However, it does not cover supplemental coverage, such as disability, life insurance, hospital care insurance, or other types of voluntary coverage

Common Insurance Terms And What They Mean

November 5, 2020 12:38 newlambertagency

Just like every other industry, health insurance has a unique language. If you’re not familiar with them, you face the risk of choosing bad insurance plans for you and your family.

But not to worry, we have curated this insurance glossary for you to make things easier.

Below are some important insurance terms you should include in your brain dictionary:

Allowable charge – also known as the “allowed amount,” “maximum allowable,” and “usual, customary, and reasonable (UCR)” charge, this is the dollar amount considered by a health insurance company to be a reasonable charge for medical services or supplies based on the rates in your area.

Benefit – the amount paid by the insurance provider or company to a member for their medical costs.

Benefit level – the maximum amount that a health insurance company has agreed to pay for a covered benefit.

Benefit year – the 12 months for which health insurance benefits are calculated, not necessarily coinciding with the calendar year. Health insurance companies may update plan benefits and rates at the beginning of the benefit year.

Claim – a request by a customer under a plan, or a plan customer’s health care provider, for the insurance company to pay for medical services.

Co-insurance – the amount you pay to share the cost of covered services after your deductible has been paid. The coinsurance rate is usually a percentage. For example, if the insurance company pays 80% of the claim, you pay 20%.

Co-ordination of benefits – sometimes two insurance plans work together to pay claims for the same person. That process is called coordination of benefits. Benefits under the two plans usually are limited to no more than 100% of the claim.

Co-payment – a predetermined amount for a covered service, paid by a patient to the provider of service before receiving the service. For eg: you pay 10$ for every visit to the doctor while your insurance covers the rest.

Deductible – the amount of money you must pay each year to cover eligible medical expenses before your insurance policy starts paying.

Dependent – any individual, either spouse or child, that is covered by the primary insured customer’s plan.

Decline – an insurance company refuses to accept the request for insurance coverage.

Effective date – The date on which a policyholder’s particular coverage begins.

Exclusion ­– also referred to as limitations, they are any specific situation, condition, or treatment that a health insurance plan does not cover.

We’re halfway through our insurance glossary, just a few more.

Explanation of benefits – the health insurance company’s written explanation of how a medical claim was paid. It contains detailed information about what the company paid and what portion of the costs you are responsible for.

HMO – Health Maintenance Organization is a health care financing and delivery system that provides comprehensive health care services for members in a particular geographic area who use in-network providers.

In-Network provider – a health care professional, hospital, or pharmacy that is part of a health plan’s network of preferred providers. You will generally pay less for services received from in-network providers because they have negotiated a discount for their services in exchange for the insurance company sending more patients their way.

Medicaid – a health insurance program created in 1965 that provides health benefits to low-income individuals who cannot afford Medicare or other commercial plans.

Medicare – a federal health insurance program that provides health benefits to Americans age 65 and older.

Out-of-network provider – a health care professional, hospital, or pharmacy that is not part of a health plan’s network of providers. You will generally have to pay more for services received from out-of-network providers.

Out-of-pocket maximum – the most money you will pay during a year for coverage. It includes deductibles, co-payments, and coinsurance, but is in addition to your regular premiums. Beyond this amount, the insurance company will pay all expenses for the remainder of the year.

PPO – Preferred Provider Organization is a health insurance plan that allows its customers to receive care from either in-network or out-of-network (non-preferred) providers. Although they’ll receive the highest level of benefits when they use providers inside the network.

Premium – the amount you or your employer pays each month in exchange for insurance coverage.

Provider ­– any person that includes doctor, nurse, dentist, or any institution i.e., hospital or clinic that provides medical care.

Waiting period – the period of time that an employer makes a new employee wait before he or she becomes eligible for coverage under the company’s health plan. Also, the period of time beginning with a policy’s effective date during which a health plan may not pay benefits for certain pre-existing conditions.

There you go! Your very own handy dictionary to understand the insurance world better. Although there are a lot more terms involved, with this insurance glossary, you’re now better prepared to evaluate your needs, ask good questions, and take a more active role in your health insurance decisions.

Re-Evaluating Your Life Insurance Needs

October 14, 2020 04:13 newlambertagency

If you have taken a life insurance policy, likely, you don’t think about it often. After a while, it seems like a car that drives itself. Life insurance gives you the security and peace of mind of knowing that your family would be financially safe in the event of your death.

But it’s crucial to not get too comfortable or fall into a sense of complacency as life, as we know, is pretty unpredictable. As the economy changes, so will your financial life changes and your life insurance needs.

To be on the safer side, it’s always a good idea to re-evaluate your life insurance coverage every few years, especially after major life changes, such as marriage, divorce, or having children. The changes could be good or bad, depending on your financial needs and condition.

Below are some of the changes to consider after reviewing your life insurance:

Buy more coverage

You may think there’s no reason to buy more coverage now. But what if you have more children in the future?  More children will add many years of child-care and education expenses. The most obvious way to secure more life insurance is to buy another policy that adds to your existing coverage.

It’s even better if your needs are specific. For instance, if you only want to cover the years of your child’s education or the length of a mortgage, then term life is the right type of life insurance for you.

Convert term life to permanent life

Most term life policies are convertible term life insurance. You can easily switch your term life policy to a permanent policy such as whole life or universal life depending on the company that issued the term life insurance.

You don’t even have to convert the entire policy. You can just convert a portion, such as $100,000 of a $1 million term life policy.

Cash-out a permanent life policy

If you feel like you don’t need to own permanent life insurance, you can surrender it for the cash value. However, the downside to this is that your beneficiary won’t be able to make a life insurance claim when you die.

Cashing out is a suitable option only if you have a permanent life insurance policy or you feel like you don’t need life insurance coverage anymore.

Sell your life insurance policy

If you don’t want your permanent life insurance anymore, there’s also the option of selling it. A third party can buy your policy at a price that’s more than the cash value and less than the death benefit. This transaction is called a life settlement. After buying the policy from you, the buyer then makes the premium payments and gets the death benefit when you die.

Before making any moves, do your research and talk to a financial advisor as it’s often difficult to tell whether you’re getting a good deal. You can sell your policy through a life settlement broker or through a life settlement company that buys policies.

And according to the Financial Industry Regulatory Authority, the transaction fees can cost up to 30% of the settlement.

Takeaway

Always remember to review your coverage and life insurance needs periodically, even if you recently bought a policy or you purchased one year ago.

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.

Steps to Buying Whole Life Insurance

July 21, 2020 11:37 newlambertagency

We as humans love to plan everything. We love the comfort of a pre-planned schedule and we derive comfort from the idea of an ideal future. But even as we’re busy making plans for our lives there always comes a time when we think about life insurance – whether it’s the right time? Which type of insurance is beneficial? What exactly is whole life insurance?

Well, you’re not alone! But as you mull over all the options you’ll find that when it comes to buying whole life insurance, you’ll need some assistance.

Not to worry as we have curated a detailed list of steps to follow when going for whole life insurance.

What is whole life insurance?

Before you decide to settle on whole life insurance coverage, you need to know what exactly does it stand for. Whole life insurance is a type of permanent life insurance (also called cash value life insurance), which is one of the two major categories of life insurance the second major being term life insurance.

The biggest difference between these two categories is that term life insurance ends after a set number of years; it offers a death benefit and nothing more. Permanent policies like whole life insurance, on the other hand, cost more because they include an extra savings component, which is referred to as the “cash value.”

Choosing the right company

There are a plethora of companies that sell whole life insurance. While some are better than others, each one will appear to have something unique to offer.

You must begin by filtering out the clutter to make a list of companies that you deem to be appealing and then compare the pros and cons to make a final decision.

When comparing companies, the details could be daunting but their financial strength rating should be your top priority – this shows here the company stands at present.

You need to also find out what the dividend payout is and whether the policy will accumulate a cash value.

Asking the right questions

Even if you skimmed through the list of various companies to select the right one for you, you must ask the right questions. The last thing you want to do is purchase a policy without being sure of the whole life insurance benefits.

Prepare a set of questions beforehand when you set up a meeting with the insurance provider – this will help you make the right choice.

Get illustrations

After landing on the preferred company, it’s time to layout the final details of buying a policy. You can decide on a policy by analyzing your personal needs and budget.

However, you need to be aware that the final price could change based on your medical exam.

You need to have a clear agenda on what will happen next. From there, review each step for potential roadblocks. For example, you may realize that a medical exam could turn up that you’re a smoker and that could result in an increased premium.

Activate your policy

After going through the tedious process, it’s finally the time to activate your whole life insurance. Make sure you receive the details of the policy one final time before you make the purchase.

Carefully go through the details such as the coverage, including the death benefit, as well as the premium. It’s alright to not move forward if you’re unsure about something and need assistance from the agent.

The last step is making your first payment. Speak with your company about your options for making payment – online, credit card, over the phone, check. Choose as per your preference.

Buying whole life insurance can seem overwhelming and that’s why you need to remember communication is key. You’re entitled to ask about any minute detail that seems to be clouding your judgment and get it cleared from your agent.

Hope the aforementioned steps help you find the right company and policy that makes you worry about the future a little lesser.