Medicare Advantage Plans – How do they work?

Healthcare is a very hot topic these days, and having sufficient coverage for whatever medical need that may arise is what everybody wants. There are certain medical expenses that may not be covered under Part A and Part B of Medicare that you would want to include in your healthcare plan. Medicare Advantage Plans provide the solution that you are looking for. Medicare Advantage Plans are health care plans that are provided by private health insurance companies that are designed to give you the medical benefits included in Medicare Part A and Part B plus additional coverage.

Medicare Advantage Plans are also often referred to as Medicare Part C. Even if you have a Medicare Advantage Plan, you can still enjoy the benefits of Parts A and B of Medicare. Medicare will pay the private company providing you with the Advantage Plan a fixed amount each month for your coverage. These companies must follow the rules set by Medicare but can charge for extra services that you opt for.

What does it cover?

A Medicare Advantage Plan covers the hospital insurance provided by Part A as well as medical insurance covered in the Part B of  Medicare. Medicare Advantage Plans also cover any emergency or urgent care, but unfortunately does not include hospice care.

Medicare Advantage Plans will benefit those who would like additional coverage included in their health insurance such as general check-ups, vision and hearing tests, dental check-ups, as well as other wellness programs which aren’t included in the government Medicare.

Medicare Advantage Plans are managed care plans which provide health care through a health maintenance organization (HMO) or through a preferred provider organization (PPO). Unlike the original Medicare, they can change the rules of how you obtain your services and may require you to choose a primary care physician. In some plans you also might be required to get referrals from that doctor to get other medical services included in your health coverage.

How can you apply for one?

Medicare Advantage requires that you already have Medicare Part A and Part B to join the program.

Information on Medicare Advantage Plans is available through their website as well as state specific sites, like this one covering Florida Medicare Advantage Plans. Medicate Advantage Plan also hold regular seminars in different localities and they offer on-site application during these events.

If you are already enrolled in a Medicare Advantage Plan, you can easily join another program. This action will cancel your enrolment with the previous program without any lapse in your coverage. Medicare has certain conditions when switching to a Medicare Advantage Plan, so make sure to check with Medicare before deciding to switch.

Life Insurance For Seniors

It’s never too late to plan for your future.  Even in your senior years, you can still make sure that your spouse and the family that you will be leaving behind will not be left handling your debts and continuing to live without your financial support.  Life insurance for seniors protects your family from getting into financial trouble and may help them continue to earn income even after you are gone. 

Contrary to popular belief that you can only get insured during your prime, insurance companies are now making available life insurance that are especially designed for the needs of seniors and elderly.  Life insurance policies for seniors are customized to fit the unique needs of seniors and can include provision of funds to cover for legal, medical, and funeral expenses in your passing.  Life insurance for seniors also helps your family get by during your loss until the time that they can financially stand on their own.

Benefits of life insurance for seniors

Aside from the continuation of income, having life insurance for seniors has numerous benefits as shown below:

  • Your loss will definitely cause financial stress on the family that you will leave behind.  Life insurance for seniors can help cover the immediate expenses of your death and help pay off any of the debts that you have left that you do not want to be covered by your spouse’s retirement savings or your family’s estate.
  • Social security and other similar programs do not offer benefits for immediate expenses and life insurance for seniors helps bridge this gap and provides the financial assistance that your family needs while waiting for your social security benefits to come in.
  • Investing in a life insurance for seniors will give you peace of mind knowing that you were able to provide financial security for your spouse and your family after your unexpected demise.

Types of life insurance for seniors

Life insurance for seniors also takes into consideration your age, gender, and current health condition when determining your insurance premiums and coverage.  Life insurance for seniors is generally categorized into 2 types as shown below:

  • Whole life insurance policies are life insurance for seniors that pay out the sum mentioned in your insurance contract to the beneficiaries that you have identified after your death.  It is very common for whole life insurance to have an investment component included in the contract that is received on top of the insurance coverage.  The insurance premiums for this type of insurance are generally the same during the entire term of the policy.  This makes for a steady growth of cash value that you can opt to withdraw or loan out as you wish.
  • Term life insurance covers or insures you just for a specific term or period, unlike whole life insurance that covers you until your death.  This type of life insurance for seniors will help support your family financially in the event of your death within a certain period.  Term life insurance does not build equity like whole life insurance, but just pays out the sum agreed upon in the contract if your death falls within the pre-determined period in the policy.  Some insurance companies provide renewal options for term life insurance that may avail in case your term life insurance will end soon and you feel that you would still want continued coverage.

Understanding Life Insurance Rates

You have finally decided that you need life insurance; it is a worthwhile investment and your loved ones will appreciate its benefits. Once you begin shopping for the best policy you will notice that the cost of premiums vary right across the board. Yes premiums will vary depending on whether the policy is for whole life or term life insurance but even within these categories the prices differ. How will you know which one is right for you? The difference in prices will have you wondering what companies consider when fixing premiums.  

Firstly, the rate is determined by the length and value of your policy. If you select a policy for 30 years with a cash value of $100,000.00 the premium will be significantly lower than had you chosen the same cash value but for a term of 15 years.

Life insurance rates are also determined by risk analysis, meaning whether the policy holder falls within a standard class or a preferred class. Your age, health, weight, life expectancy, family’s medical history, gender and lifestyle are all used to determine which class an insurance company places you in and consequently what rates you will pay.

Age and life expectancy are determinants because they help the company analyse how many years of premium you will have to pay before they can viably pay you the death benefit you desire. Health, weight and life expectancy are also used to predict the likelihood of you dying during the term of your policy and how many years into the policy. Similarly, gender helps in weighing the risk because women tend to live longer than men and as a result, pay their insurance rates are lower.

If your family has a long history of serious illnesses which may be hereditary then you may find yourself paying higher insurance rates. This is because from a scientific perspective, you are genetically predisposed to being diagnosed with the same illnesses and dying from them. This makes you a bigger risk for insurance companies.

If your lifestyle puts you at risk of death you will also have higher life insurance rates. This is very evident in a comparison of rates offered to smokers and non-smokers. People with nicotine habits or other drug addictions are bound to end up paying more for coverage. Insurance companies also look at your driving record. The more traffic violations you have, especially drinking under the influence charges, the higher the risk that you may die in a motor vehicle accident.

Even with all these factors taken into consideration, when you look at life insurance rates online, there will still be some variety in prices amongst companies. The best advice is to shop around and even seek the advice of a professional when looking for life insurance coverage.

Understanding Mortgage Life Insurance

Companies marketing mortgage life insurance sing on the fact that your home is one of your most important investments and that you protect this prized possession. Understandably, you want to ensure that your loved ones are not pushed out of their family home as a result of your passing but before you jump at what sounds like a great offer, ensure you have done your research and understand what you are really being offered.

Mortgage life insurance is a type of insurance that pays the balance on your mortgage upon your death. Some companies also make payments or waive premiums in the event you become disabled or diagnosed with a terminal illness.

Initially, the insurance policy covers the amount outstanding on the mortgage so in the event of your death or you become disabled the company will be able to make a payment of the capital outstanding to the mortgage company. The termination date of your mortgage life insurance policy is the same date as the final instalment for your mortgage payment. The death benefit, like your mortgage, decreases over the life of the policy because the insurance company calculates the amount of payments you will make to your mortgage company annually and reduces the benefit accordingly. The catch however, is that your premiums do not decrease with the life of the policy. Consequently, mortgage life insurance policies are highly criticized and not often recommended.

Policies designed for specific events are often not suitable for most people. It is very likely your family relies on your income for contributions to the mortgage payment but your family also relies on your income to meet numerous other financial commitments. As a result, for most people, the best solution would be to assess the likely needs of your family after you die and purchase a general life insurance policy with enough coverage to meet these needs. Where it may be convenient is where you suffer health conditions and are likely to pay higher premiums with general life insurance policies which require medical examinations.

Mortgage life insurance is also not suited for people whose spouse may decide to downsize and get a smaller place upon their death. In other situations, the surviving spouse is able to make the mortgage payments and would much rather being able to use the lump sum for something more pressing.

This is not merely a dismissal of mortgage life insurance as there are occasions in which it may be beneficial. For example, mortgage life insurance rates are very reasonable for those with pre-existing conditions who might not otherwise qualify for traditional insurance.

However, err on the side of caution and ensure that you look at the entire picture when deciding on the form of insurance most suitable for your family’s needs.

Benefits of Saving Early for Retirement

So you are fresh out of college and just got your first paycheck. Chances are contributing to your retirement scheme isn’t at the top of your list of expenses right next to student loans and next month’s rent. However, do not think of retirement contributions as expenses. They are investments! No matter how small the sum, it is the consistency of these investments that will yield rewards and cushion your years in retirement.

Most of us look forward to retirement and the idea of spending our golden years in leisurely bliss. However, there is a side of this that we often negate to consider. How will we fund this idyllic bliss? We forget that these golden years may be filled with increased health costs and unforeseen expenses.

In a constantly changing economy security is very important. So here are a few reasons to start saving today for retirement:

Contributions offer a tax break

You may choose to contribute to a 401(k) plan where your contributions aren’t taxed up front but your earnings and withdrawals are fully taxable or you may choose a Roth IRA where you do not get an initial tax break however your earnings and withdrawals are tax free. Other Individual Retirement Accounts are also options which allow you to make tax deductible contributions. Whichever method you choose, saving for retirement is stashing away tax free income.

Starting early, even with small amounts, gives you larger returns.

Retirement accounts work by compounding interest. This means that the interest you earn this year is added to the principal and your next year’s interest is calculated based on the principal amount plus the interest you earned in the previous year. For example if you contribute $5,000.00 this year at an interest rate of 5% per annum at the end of this year your account balance would be $5,250.00 but after 30 years that $5,000.00 would have matured into $21,609.71. In contrast, that same $5000 would only mature into $10,394.64 had you been saving for 15 years. The magic of compound interest is in longevity, not in the amount.

Your contributions are only a percentage of the income you’re used to spending.

If you retire at age 65 you may have at least 15 to 20 years in retirement. Your retirement contributions would have been up to 20% of your monthly income and had you started saving at age 40 for 20 years on retirement you would be getting that 20% of your monthly salary with a bit of interest for the next 20 years. Your lifestyle would have to drastically change to accommodate this decrease in income. Starting your retirement savings at age 20 means you get 40% plus there has been an extra 20 years to allow the magic of compounding interest to work.

Whether you choose to begin the day you get your first paycheck or you’re in your 30’s and haven’t started saving yet. It is never too soon to start saving for retirement. You don’t want to have to play catch up in savings ten years before retirement or even worse, have to delay your retirement plans because you find you cannot afford it.