Changes to Health Insurance Coming in 2014

Changes to Health Insurance Coming in 2014

            There are sure to be winners and losers as the federal government finalizes new rules for health insurance plans in the coming months.

            Starting in 2014, the federal health care overhaul will limit the factors that insurance companies can use in setting rates, allowing premiums to be based only on a person’s age, history of tobacco use, family size, and geographic location.  And even those disparities in premium rates will be limited.

            Also, the law requires health insurers to provide “essential benefits” as part of their coverage, ranging from mental health services and prescription drugs to preventive and pediatric services.  That will provide a greater degree of health care security for people who buy health insurance on their own, but is will also increase the cost.

            The rules, proposed in late November 2012, are likely to have the greatest impact on those who buy health insurance on their own.  An estimated 350,000 Ohioans bought their own health insurance in 2010, but the number is expected to increase to 537,000 by 2014, according to a report produced by Milliman Incorporated last year for the Ohio Department of Insurance.

            In Ohio, overall premium rates for those who buy individual policies are expected to rise by 55 to 85 percent.  For employers with fewer than 100 workers, premium increases are expected to be 5 to 15 percent.  At employers with 100 workers or more, the increases, if any, should be less than 5 percent, according to Milliman.

            Young, healthy men are likely to see the biggest premium hikes under the new rules.  In part, that is because women can no longer be charged more than men for health insurance, and men who buy individual insurance will effectively subsidize the premiums of women, said Milliman.

            Currently, premium rates for those on the cusp of Medicare eligibility are about six times what they are for young adults, according to Milliman.  Under the new rules, those rates can be only three times as high.  That is likely to lower premiums for older workers who are ill.

            Health insurers are concerned that some young people will find that it is to their advantage to decline the purchase of health insurance and pay a penalty instead.

            “You need the young and healthy people in the system for this to work,” said Robert Zirkelback of America’s Health Insurance Plans, which represents insurance companies.

            There will also be implications for choice; those who are older than thirty won’t have the option of buying an individual health plan that provides only bare-bones, catastrophic coverage.

            Fabien Levy, press secretary for the U.S. Department of Health and Human Services, said alternatively that young adults will benefit from the law in several ways.  Those who don’t have health insurance coverage available elsewhere can remain on a parent’s health plan until age 26.  Also, tax credit subsidies of premiums should defray the cost as well, according to Levy.

            Aetna said the proposed rules’ limits on deductibles and their minimum coverage requirements will change the mix of plans it offers.  Kelly McGivern, Aetna’s senior director of government affairs, said the health insurer sees opportunities to customize its products and plans to meet its members’ health and financial needs even after the new rules take effect, however.

            “For instance, we could see a product that could be offered in the marketplace that has a more narrow network design focused on the highest quality providers,” which could result in lower premiums for consumers, McGivern said.

Information taken from the Middletown Journal, December 2012

Newsad Insurance Services has been providing insurance and financial services in the Middletown community for over 20 years and is affiliated with over 60 different companies.  Tom Newsad and Elaine Dominy cover the areas of Middletown, Trenton, Oxford, Dayton, Monroe, Liberty Township, greater Cincinnati, and beyond.

            

Top Ten Most Expensive Health Conditions

Top 10 Most Expensive Health Conditions

Life insurance rates are determined by many factors including age, health, gender, and lifestyle. Life insurance underwriters put applicants in risk classes based on the likelihood of death before policy maturity. The higher the risk, the higher the rate class, and the more expensive a policy will be.

These are the top 10 health conditions that are most likely to affect your life insurance rate class:

1.)    Hypertension (High Blood Pressure)

·        High blood pressure that is not well controlled is a concern to underwriters because it can lead to vascular complications

·           T he industry takes individuals who have well-controlled and well-managed high blood pressure into consideration and often underwrites them very favorably 

2.)    Type 2 Diabetes (Adult Onset)

·        The potential complications that can result from diabetes affect risk class

·        Youth does not work in favor of the Type 2 applicant. The younger a person is when they are diagnosed, the higher the risk for a life insurance company as the person gets older

·        The important factor in getting affordable life insurance coverage with diabetes is good control and management

3.)    Sleep Apnea or Narcolepsy

·        Severe sleep apnea can be associated with high blood pressure and coronary artery disease

·        If sleep apnea is well controlled and well managed, applicants can still get a good underwriter rating

4.)    Heart Disease

·        Heart disease encompasses a wide range of diseases and conditions from atherosclerosis to a prolapsed mitral valve

·        Underwriters consider family history in heart disease assessments…they look at immediate family members- father, mother, brother, sister- who may have developed heart disease or had a stroke

5.)    Asthma

·        With asthma, underwriters are concerned about the severity of the condition and how well it is managed

·        An individual with well-controlled asthma should be able to be favorably underwritten

6.)    Cancer

·        The word “cancer” will flag any life insurance underwriter but its ultimate effect on an applicant's rate class can vary from negligible to substantial

·        Just as each cancer is individual, every insurance company will underwrite it differently

7.)    Obesity

·        Centers for Disease Control and Prevention statistics indicate that more than 1/3 of adult Americans are overweight and another 1/3 are clinically obese

·        Insurance companies calculate an applicant’s BMI when determining their risk class

·        Most carriers have build tables to determine which weights can qualify for each rating

8.)    Organ Transplants

·        Insurance companies treat organ transplants on a case-by-case basis

·        Kidney transplants are the most common and can be insurable but liver and heart transplants are rarely insurable

9.)    Depression

·        The rating for individuals with depression depends on the degree, the severity, and how well it is managed

10.)            High Cholesterol

·        Life Insurance companies are concerned with high cholesterol because it is a risk factor for the development of a lot of vascular conditions, including coronary artery disease, stroke and other atherosclerotic kinds of disease

·        Underwriters tend to treat high cholesterol like they treat high blood pressure…favorable ratings can exist if it is controlled and well-managed

-From Bankrate.com “Top 10 Health Hazards for Life Insurers”

Tom Newsad of Newsad Insurance Services has building relationships for over 20 years through insurance and financial services.  Newsad Insurance Services serves Middletown, Trenton, Hamilton, Franklin, Dayton, Centerville, Oxford, and surrounding areas.  For more click on www.newsadinsurance.com

Now More Than Ever

Now More Than Ever

Market volatility. Pension Plans being killed off. The future of social security in flux. All of these factors-and more-conspire against. Consumers, who are trying to create a solid stream of income for their retirement, enter or, perhaps better phrased, re-enter annuities.

 According to LIMRA (Life Insurance Marketing Research Association), an organization that does life insurance marketing and research, “will retirement assts last a lifetime?”

 One in five retirees receives income from individually purchased annuities! While data from LIMRA recent “sources of retirement income.” Studies show that just 4 percent of retiree’s income currently comes from annuities (most come from pension plans-38 percent, and social security 34 percent.) It’s becoming clear that annuities will have a growing place in consumer’s plans for retirement,

 At Newsad Insurances Services we guide our clients through an education process on current plans and designs. “Fear of the unknown is a bug reason clients have a version to annuities.” So I try to explain to people you need to know what you’re saying no to.

Everybody has two forms of expense in retirement Living Expenses and Life Style Expenses.

Our goal at Newsad Insurance Services is to provide financial information to our clients so they don’t make income retirement mistakes!

Tom Newsad of Newsad Insurance Services consults with clients in the surrounding areas:  Middletown, Trenton, Franklin, Miamisburg, West Carrollton, Hamilton, Preble County, Lebanon, and more.

We currently offer Life Insurance and Financial Services with over 60 companies.

Feel free to call Newsad Insurance Services at (513) 424-6871 or contact Tom Newsad directly at (513)348-9573, or click on www.newsadinsurance.com for more information

Low Interest Rates Raise Term Life Prices 

Term life is becoming costlier and a bit harder to find.  Following a decade in which prices fell to all-time lows, premiums for new term policies last year rose on an average of 3%, according to Tom Newsad of Newsad Insurance Services.  Newsad forecasts more increases for the coming year.  The culprit?  Sickly yields on bonds in which insurers invest most of customers’ premiums.  Hit hardest are policies offering longer term plans such as those for twenty and thirty years.  Term rates are up 5% on those carriers offering those rates.  Shopping your rates with an independent agency such as Newsad Insurance Services will give you the best chance to shop rates across the board.  One should only consider buying policies with A rated companies or better.

Tom Newsad offers insurance and financial services in Middletown, Monroe, Franklin, Trenton, Hamilton, and West Chester, Ohio.  See www.newsadinsurance.com for more information or contact Tom directly at tom@newsadinsurance.com .

Investment Rollovers and RMDs

Remember, when rolling investment money over the accounts must be of “like kind” to move.  For example, IRA money can come from a 401(k), 403(b) holdings, or self-directed IRA accounts and you must withdraw at least a minimum amount annually after turning age 70 ½.  The amount that you must withdraw is called the Required Minimum Distribution (RMD), and this amount is determined by the Internal Revenue Service on an annual basis.  Most companies require you to take money in the third quarter of each year.  The funds received from an RMD can be reinvested into non-qualified savings accounts (which you pay taxes on) or non-qualified annuities (which you do not pay taxes on until the funds are withdrawn).  Before taking out your money for an RMD, it is recommended that you consult with your financial advisor and your tax professional or CPA.

At Newsad Insurance Services, we guide our clients through this process making it simple and easy to understand.  Tom Newsad has been providing financial services in Middletown, Trenton, Hamilton, Franklin, Carlisle, Dayton, Monroe, and beyond for over 20 years.  Please visit www.newsadinsurance.com for more information.

Annuities

Annuities

In a recent Gallup Poll, people who had been asked about annuities believed:

• Annuities have a competitive rate of return
• Annuities provide a long term savings plan
• Annuities are important sources of retirement planning
• Annuities can ensure that a surviving spouse has a continuing income
• Annuities provide payout  flexibility
• Annuities offer tax deferral
• Multiple beneficiaries can be named on annuities

Annuities can only be purchased through life insurance companies. Prior to purchasing an annuity with a life insurance company it is important to check the company’s ratings.

Annuities purchased through Newsad Insurance Services will give you the peace of mind of knowing that you are investing in a safe plan. At Newsad Insurance Services we believe in knowledge, trust, and service. Let us help you prepare for the future!

Tom Newsad has been building relationships for over 20 years and is based in Middletown, Ohio.  Newsad Insurance Services offers equity indexed annuities as well as life, health, disability, and long term care insurance and serves Hamilton, Butler, Warren, Montgomery, Clermont, and Preble Counties and beyond.

Life Insurance Begins at Age Fifty

Life Insurance Begins at Age Fifty

            If your term life insurance policy is ending but your needs continue, consider the cash value alternative of permanent life insurance.  One way to continue your life insurance is simply to renew your term protection; however, if your health has changed, you may be limited on the type of policy you can buy.  A permanent life insurance policy, or whole life policy as some call it, may provide a steady investment.  In contrast, many people believe whole life insurance as an investment is controversial, but that is because it takes many years for a policy to show value.  The first years’ premium goes largely toward commission and other expenses, so your cash value will lag the amount paid in premiums in the early years.  It typically takes eight to ten years for your cash value to exceed the premiums you pay.  If you carry on, however, the results improve—sometimes dramatically.  This is a long term proposition.  Do not buy it if you cannot keep it.  From 1991 to the start of 2011, according to Blase Research (a life insurance data provider from Easton, PA), annualized cash value returns for representatives from major companies such as Northwestern Mutual and New York Life in private range from 2.62% to 4.44%.  This amount is tax deferred and includes the part of your premiums that go to pay for death protection and company expenses.  It is also a good idea to see whether you can convert your term policy to permanent insurance without changing insurers and without a new physical exam, especially if you have developed medical conditions that were not present when you purchased the life insurance originally.  Clearly earnings on life insurance policies will not keep up with stocks over a lifetime and certainly not with an extended bull market.  This is why just about every financial advisor, including well-trained life insurance agents, emphasize that life insurance is not meant to be your primary investment.  Tom Newsad advises everyone to have a comfortable emergency reserve savings or tax deferred investment.  Remember that permanent or whole life insurance has a few strong suits, the first of which is safety.  With the exception of AIG, life insurers survived the credit crisis and the recession in excellent financial condition.  The next strong suit mentioned is that falling costs, competition, and longer life expectancies are driving the cost of all life insurance policies down, including those for people aged fifty and older.

            Permanent life insurance also appeals to risk-adverse people who do not have time to recover investment losses in the event of another financial crash.  Another form of whole life or permanent life insurance protection is a type of whole life policy called limited pay.  You may pay higher premiums for fewer years, but it is an option that has become popular among pre-retirees who want to time the end of their premium obligations with their retirement date.  Cost could range perhaps twice as much per year versus regular premiums paid over one’s lifetime, but by putting more into the pot earlier cash value also compounds quicker.

            Cash value life insurance can also be a good portfolio diversifier.  That is because a whole life policy is unconnected to the securities market.  You can think of it as cash or bond allocation in your overall investment nest that allows you to become more aggressive with stocks, commodities, or real estate in your IRA and 401(k) or taxable brokerage accounts.  Cash value life insurance is also one alternative to home equity line of credit or other sources of borrowed money.  That is because the money you usually borrow from your whole life insurance policy is not taxed (remember, whole life insurance policies are the only vehicle that you can borrow money out of and not have to pay taxes on).  A policy loan is instant credit.  You can borrow up to your total premiums paid with no questions asked, simply by sending a fax or sending the insurance company a check at the office of Newsad Insurance Services.  A simple phone call or email starts this process for you.  Besides speed, there are two huge advantages to CDs and conventional loans, and that is that nobody runs a credit check or ties the interest rate to your credit score, and that you do not have to repay the money on any schedule.  There is also no penalty if you want to make a withdrawal at or before age 59 ½ because it is not a taxable event like a withdrawal from an IRA or a 401(k).  Policy loans are not a totally free ride, however.  They tend to acutely accumulate interest at 5% to 8% in your unpaid principal and accrued interest is deducted from the death benefit paid to your survivors, or from the cash value taken away if you discontinue the policy. 

            Ultimately, what is most important here is that the money accumulating in your policy is your money.  You also will not have to beg a banker to approve a loan after you have retired and have a lower income.

Tom Newsad has been building relationships in the Middletown, Ohio area since 1994.  Newsad Insurance Services offers life, health, disability, and long term care insurance as well as fixed indexed annuities and serves clients in Middletown, Franklin, Trenton, Liberty Township, Hamilton, Cincinnati, Dayton, and beyond.  Click on www.newsadinsurance.com or call 513-424-6871 for more information