Ministers looking for health insurance

I was asked to write a brief post in regards to Health insurance for preachers. It is one of the things that I think many preachers forget to consider or if they do consider it, they don’t realize the price of such insurance.  When you are young and just starting out, as you plan a budget or negotiate a price, you should not forget to include health insurance as part of your planned expenses.

The best time to get insurance is when you do not need it and sign up with a company that is a full service health insurance company. When you are young, the cost is obviously lower. Planning ahead allows you to forecast that prices will go up over the years, not that you really have to use a calculator for that, just ask the generation before you.

So in writing an article offering my help to those in this field, I know that some groups of churches offer group plans to their members and some ministers are on their own to find the insurance that works for them. You should first check to see if such a plan exists for you in your groups structure.

The Disciples of Christ offer a pension and health care plan that extends to a couple of other groups as well. Basically, their plan is open to all compensated employees of any congregation that is associated with the Barton W. Stone and Alexander Campbell Restoration movement. This would include the churches of Christ and Christian churches as well and a couple other groups.

Their plan is a group plan which is great if you have pre-existing conditions because your acceptance is guaranteed. The cost may be a bit higher but at least you can get in. When I say the cost is higher, I mean that you pay 100% of the plan cost whereas normally an employer would pay 50% or more.

For those of you who go the individual family plan route, I would suggest that you consider an HSA plan. Health Savings Accounts allow you to set aside money, get an additional tax deduction, and save up for a rainy day. You really only need your deductibles amount saved up but the monthly costs are usually lower. It is a plan that can be described as a catastrophic plan and one where you take more control and responsibility for your own expenses.

Never knowing how many will read this, you are welcome to contact me and see if I can help you. I am able to offer insurance in several states and can get permission quickly in most of the others, just let me know how I can help.

Steven

512.704.4438

Long term care insurance

Isn’t just for nursing homes any more.

I am not the first to note this, I will not be the last and as our population ages there are some concerns that we all should be thinking about. In brief, I would offer this tip for you….think about the insurance you currently buy.

You pay for auto and home insurance and hope that you will never use it. The chances are really good that you won’t need your home insurance and if you drive good and yet you gladly will spend 2,000 a year or more for a home and 2 auto policy…..MORE if you have teenage drivers.

Yet, for a long-term care policy, most people do not think about it and yet it is likely that 40% of us if not more will need something in the long-term care area. The odds are much better that we will need such a plan than for our car insurance.

While I do not practice being an alarmist, I will suggest that you educate yourself about this type of a policy. It will pay for a Skilled nursing facility (e.g. Rest home), an assisted living arrangement, or home care up to the amount you decide to buy. For the money, it is an excellent deal.

I also, do not recommend at this time, hybrid plans. Get yourself one that is just a straight LTC plan. It is cheaper for you that way.  Consider getting one once you reach 50 and seriously plan to by the time you reach 60. It is cheaper at 50 by a lot but I understand why a person would wait.

If you have questions, type them out here and I will try to find the answer. No high sales pressure, just an honest to goodness thought that this stuff matters.

When you have need to get that Long term care, you will want to be able to say “I have that covered”

How can I be underinsured?

Perhaps you are familiar with the T-shirt that asks “How can I be out of money, I still have checks left?”

In a very similar way, the amount your home is insured for has little relation to how much you paid for the home itself.

As far as a mortgage company is concerned, if you have enough coverage to pay off the loan you have sufficient coverage. However, from the perspective of actually replacing the house you may be in for a surprise. The difference is best explained by remembering that you are dealing with two different markets when you purchase a home and when you build a home.

When you by a home, there are a lot of factors that go into the price. What people call market value is determined in negotiation between the owner and the buyer usually with the help of a real estate agent, appraiser and the mortgage company.

When you go to build a home however, you are talking to a contractor and then you are looking a different type of market. Labor and material costs, permits; a whole new world.

In the area I live in, $100 per square foot for building is not an unusual amount to hear quoted. Perhaps a little more, perhaps a little less. So when you have a home that is 1,600 square feet, you get two different values. On the market, you can sell it for $130,000 but if it burnt to the ground, you would need $160,000 to $185,000.

That is the difference. Many people are insured for enough to pay the mortgage but not the cost to rebuild. This puts the client in a difficult position should they lose everything.

What is the difference between the two costs: In the prices I menitoned above,  would you believe $25 to $30 a month?

Contact your insurance agent, make sure you are not underinsured and make any appropriate adjustments needed.  That way, if your house does burn to the ground you can breath a sigh of relief when you realize “I have that covered.”

Do not Fear the High Deductible

I do not know know why it is, but many people tell me, “I do not want a high deductible.”

It could be that they are used to the old plans offered at work where the deductible was $500 and you paid $25 or less to see the doctor. The problem is that as the costs have been rising in the world of individual plans, they have also been rising in the workplace too. In order to save money on these plans for their employees, employers have also been raising the deductible in order to lower the cost of the plans. Employees are being asked (or not asked) to shoulder more risk.

Some, as they have seen the employers raise the deductible have sought my help to find a cheaper plan as an individual. Let me help you out. If your employer is paying for health insurance, they are paying at least 1/2 of the employee’s cost. As a single person, this means, you are not going to find a cheaper plan out there in the individual market unless you do choose a much higher deductible and maybe not even then. I would not recommend a higher deductible in that case.

However, if you are buying insurance as an individual, by all means consider the higher deductible plans because they will save you money. I recommend Health Savings Accounts (HSA) because you are allowed (isn’t our government gracious) to save money in that account to use for medical expenses. These plans are a Tax deduction for you. Unlike the FSA plans where you have to use the money each year, the HSA allows you to continue to accrue both deposits and interest for as long as you have a qualified plan. After that, the money is still yours but you should use it for medical costs to avoid penalties.

Most individuals do not use even $2,500 deductible every year. The savings in monthly costs from a $5,000 HSA plan and a regular PPO plan can be significant. That saved money can cover the costs, save on taxes and…if you do not use it, then be saved  for future time. You don’t need to stuff your HSA full of money each year, most people will be fine adding money until they reach $5,000-$10,000. Then you can stop the contributions and start again if you need to. The fact is you can plan on having a medical cost, just not predict WHEN the cost will come.

For families, especially large families, the HSA is almost the only way to go. They are FAMILY deductibles not individual deductibles. So if one accident meets that deductible, although it is true that you will pay the deductible, no one in the family will pay for any covered cost including Rx for the rest of the year!! It truly is a good deal in that respect.

The savings and paying in cash can help you negotiate with your doctors and dentists. Do not assume that just because insurance pays some of it, that you cannot request a lowered bill for a prompt payment. Worse case scenario on a $10,000 deductible that you take out of your HSA account is that you pay the $10,000! However, it is non taxed money, so you saved on taxes and most doctor’s if you ask will discount  so you save there too.

If you shop around, make sure that you include the HSA plan as part of your shopping experience, that way you can have confidence that you have it covered.

What difference can a driver’s education course make?

There are two main reasons why going through the hassle of taking a driver’s education course can be worth it. Most of you will know that a driver’s education course is a way to keep points off your driving record. It does not avoid the cost of the ticket and the class itself cost money too. Some are fairly inexpensive, others are pretty expensive.

The first reason to take the class is because if you do not, you are almost certainly locked into your current carrier. Why? Because when you go to get comparative rates, the new agent will pull your DMV report and Viola! you will be a higher risk than a driver with a clean record. This means you will not get the best rates.  Assuming that you keep a clean record the points will drop off in 3 years.

The second reason is because if you get another incident on your record, your rates will go up! While most companies have what they call ‘accident forgiveness’ and will overlook a first infraction, a second infraction will undoubtedly result in a significant increase.

If your misfortunes happen one after the other, like mine did, you may wish you had paid the $50 for the class when your rates go up $100/month. Of course, your rates will come down in 3 years but wow….that is an expensive decision.

One last thought, minor accidents that are not needing to be reported to the police, and therefore to your insurance company, may be best dealt without reporting it to your insurance company. Avoiding that single report can keep you from even needing to take a class.

Next time you have an accident and someone asks what you are going to do you can say….I have it covered.

Before you say Good bye, kick the bucket, let the curtain fall….

Who wants to think about dying? Really after you have made peace with the fact that you eventually will die, there really are only two things you need to concern yourself about. Your Destiny after this life and those who you leave behind. Fortunately, both of those concerns can be dealt with while you are still among the living. The Eternal destiny is beyond the scope of this blog (though I do blog about things like that-or will once I get another one set up. See my recommended links) However, the concerns about those who you leave behind is definitely within the scope of this blog.

1) Get a will! I don’t care if you are young or old. If you do not have a Last Will and Testament made out there can be confusion for those left behind. Tell those closest to you what is in the Will and why you are leaving that special figurine or pocket knife to this or that niece and nephew. There should not need to be secrets.

2) While you are getting a Will get cheap term life insurance. (Hey! Fancy that, an insurance guy recommending life insurance.) Unless you have a nice pile of money stored away, you can help your loved ones adjust to your passing for very little money. Once you reach 60 and the kids are grown, if you have enough for your burial and to buy off the debts if you die then dump the life insurance. (Hey, I even tell you when you don’t need it!)

These two things can be a big help to those you leave behind. Remember, you can’t take it with you. Naked we came into this world and unless the undertaker clothes us….we will leave the same way.  Take the time to do both of these and whatever you do, if something changes, like a divorce or death of a beneficiary update both your Will and your life insurance…

Do you have that covered?