Health Insurance Basics

Health insurance is a way to help pay for health care expenses. Having insurance helps in the event of an accident or illness by paying some of the medical costs when you’re injured or sick. Like car insurance or home insurance, you can choose from a variety of plans.

How Insurance works
When you have health insurance, the insurance company pays a portion of your medical expenses. The amount the insurance company will pay, and the services that are covered (coverage) varies by plan.

For example, you may have to pay a $20 co-payment for each doctor visit. Or, the plan may not cover anything until you’ve paid a certain amount (the deductibles). These deductibles and co-payments, along with any other expenses you may pay, are referred to as out-of-pocket expenses.

Some plans may also have co-insurance, which is the percentage of the bill that you’re required to pay, in addition to your deductible and co-payment.

The term cost-sharing is often used to describe the share of costs covered by your insurance that you pay out of your own pocket. This generally includes deductibles, co-insurance, and co-payments, but it doesn’t include premiums, balance billing amounts for non-network providers, or the cost of non-covered services.

The amount you pay each month for your coverage is the premium.

The relationship between premium and deductible
No matter which health insurance plan you choose, you’ll pay a monthly payment (your premium) to keep your health insurance coverage. You may also pay a certain amount (co-payment or co-insurance) each time you receive medical care.

Generally, the higher your monthly premium, the lower your deductible will be.

Why life Insurance matters
We protect ourselves and our families with all sorts of insurance: health, auto, home, travel and more. For most of us, the coverage is (luckily) never used, or we don’t get the maximum benefit returned. It’s a back-up plan. It’s “just in case” security.

Life insurance is different, however. Someone – the policyholder, their loved ones, their business, a charity – will ultimately receive a benefit. Your investment isn’t a back-up plan … it’s a definite plan.

Filling a need
Life insurance isn’t for the dead. It’s for the living. Not only does it offer peace of mind for your surviving loved ones, but it can also offer solutions and benefits you can use to lead a fulfilling life. Here are the four main benefits of life insurance:

  • Death benefit protection
    In a time of grief, a life insurance policy can help with medical bills, funeral costs and other immediate expenses, ensuring a family has financial support when it’s needed most. It can also help replace lost income for the future, providing loved ones with a better chance of continuing their current lifestyle.

  • Cash accumulation
    Life insurance can be part of a diverse investment portfolio. In some products (universal and whole life) a portion of what you pay (the premium) earns interest. The gain is tax-deferred until withdrawn and can help fund financial emergencies, retirement income or college expenses.

  • Income tax benefits
    Typically, the death benefit on a life insurance policy transfers to beneficiaries free of federal income taxes. Additionally, earnings from accumulated value are not taxed until withdrawn.

  • Estate planning
    Regardless of the size of an estate, this can be a major consideration. Integrating life insurance into an estate plan can offer a number of benefits, including avoiding family conflict, protecting other assets or providing trusts for beneficiaries.

Take Action!
Don’t leave your family to chance.  Get in touch with your agent today and ask how to protect your loved ones.

Don’t have an agent? Give us a call at 605.384.5600.  We’d love to listen to your needs and set you up with someone who can help guide you.

  • The simplest form of income protection available. You purchase a specified dollar amount for a specific time. The primary options to be aware of with term insurance is the renew-ability feature and period of time, if any, in which the premium is guaranteed at the given rate. You may purchase a 10, 15 or 20 year guaranteed premium policy. Your individual needs will help you determine the length of time to purchase.

  • Both of these insurance policies are considered to be permanent forms of insurance. They provide a death benefit and also accumulate cash value. The premium is determined at the time in which you purchase the coverage and is based on your age, the amount of coverage you wish to purchase the death benefit, and the amount of money you would like to contribute to the cash value of the policy. It is important to be aware of the guaranteed earnings in a universal or whole life policy and not just the current earnings or earning potential.

  • This insurance is used to replace your earnings if you were to become disabled and unable to work. This coverage is a must for any working individual. When purchasing disability coverage it is important to be aware of the definition of disability as defined in the policy. This definition will be used to determine your eligibility to collect any benefits from the policy.

  • This is a temporary health insurance option to fill the gap for individuals and/or families who are losing insurance benefits. This may be due to changing jobs or graduation from school and looking for work. A short-term policy may be written for one month, one year, or anytime in between. It is primarily major medical coverage. It’s primarily used to cover a period time while waiting for eligibility for comprehensive health coverage through an individual or group plan.

  • Are an insurance plan that may be purchased by anyone eligible to received medicare benefits. There are a number of plans available to help pay for medical expenses not covered by medicare as long as it is a medicare approved charge. How much will be paid will be determined by the plan that you purchased. A good medicare supplement will cover the medicare Part A & B deductibles and the remaining $20.00 due on the medicare approved charges.

  • Plans that are considered permanent forms of comprehensive health coverage. Premiums will vary by coverage desired and deductible options. It is important to discuss with your agent what you expect to be covered by a plan and any budget constraints you may have to insure that you are purchasing a plan that is right for you and your family.

  • As an employer, you know the importance of benefits to your employees. It is essential for attracting new employees as well as maintaining your current personnel. Whether you have 2 or 200 employees, Perspective Insurance can help. We have access to numerous companies to help you find a benefit package that fits your needs and budget. From small group plans to self-funding, Perspective is your source for all your group health needs. Long Term Care – this coverage, also referred to as nursing home coverage, may be one of the most important forms of asset protection you can buy.

  • Insurance which will pay a specified daily limit for each day you are confined to a nursing home. The daily limit is chosen at the time of purchase and will begin after the elimination period ends, which is also chosen by you. Dependent upon the type of plan you have purchased, a long term care policy can also be used to pay for home – health – care costs and intermediate facilities.