Insurance Insights

By Joey Giangola

A very important service I like to provide my clients with is a yearly health insurance renewal evaluation. This process is essential for anyone who wants to keep their health insurance costs under control, which should include just about everyone. Otherwise, if your health insurance was left unattended year after year, at some point, you will end up overpaying for that plan.

It’s never fun picking up the phone to tell someone they have to pay more for the same thing they already have. It is however, the realistic nature of health insurance and part of my job. What makes it easier for you  is understanding why your rate has increased and more importantly what you can do about it.

Usually I am treated with one of  two standard response when talking to a client about their renewal. The first, I like to call, the defeated acceptor. This group is getting smaller and smaller each year. However, they will say,  “It’s because I’m a year older, isn’t it?” The answer, yes and no. Or you have the constant denier, who says, “That’s ridiculous, I didn’t have a single claim last year.” Both groups have valid points and are highlighting things that do have a slight effect on their yearly renewal.

However, neither of which are the main reason you find yourself in a fit of rage each year come renewal time. For that, you can thank the dynamic duo of medical inflation and overall risk pool health.

I know a lot of people like to think that insurance companies charge arbitrary high premiums for no apparent reason. While there are sporadic instances where this might happen (usually due to extreme health conditions or an aging/deteriorating risk pool) health insurance rates are largely reactive to the increasing cost of medical care and the group (or risk pool) of people you are insured with.  I can’t remember the last time I saw a doctors office advertising a buy one get one free physical examination sale. The truth of the matter is, medical services are expensive. Doctors and hospitals are not going to be taking a pay cut or start offering great deals anytime soon.

That means, the greater the risk (or potential cost for medical services), the more expensive it is to insure that risk. As long as MRI tests cost more then a trip to Europe and major surgeries more then a modest home, It doesn’t matter where you get your health insurance from, it will always cost more then you want it to.

Your risk pool is going to have the most significant effect on your yearly health insurance renewal. The fundamental principal of insurance is to transfer the risk of one individual by spreading it out across a larger group of people. This means, if the 7,000 out of the 10,000 people you are insured with ended up having a rough year medically, the insurance company will have paid out substantially more in claims then they anticipated. Thus leading to the necessity for that company to recoup those funds in order to keep the risk pool and company solvent, or capable of paying claims.

What can you do about it?

You should have an insurance broker (preferably an independent agent)  review your health insurance renewal each year. They will be able to tell you if the renewal is average, even if it seems high to you, or if your current company got a little greedy this year and that you can do better. If the later is true, they will more then likely suggest you consider switching companies, if you are in a position to do so. If not, you can always make a plan change with your current company to lower your premium.  

There is no magic formula to keeping your health insurance premiums down. The best thing you can do is to find a health insurance broker who will review your policy each year. This will allow you to ensure that you are always paying a rate you are satisfied with.

Joey Giangola is an independent insurance agent for Giangola Insurance Agency and specializes in health and life insurance. You can email him at joey@giangolainsurance.com, or follow him on Facebook, Twitter and Google+ to receive the latest insurance news and tips. Read More...

By Joey Giangola

Short-Term health insurance fills a very specific need for individuals who might find themselves in one of the situations it was created for.

The Basics

Short-Term health insurance is just what it sounds like, insurance coverage for a very specific, or “short” amount of time. This of course, is different from the traditional, open ended, coverage provided by standard insurance policies, which stays in force until the insured cancels or stops paying the premium.

Generally a Short-Term policy can be purchased for up-to six months at a time and features a much quicker application and underwriting process. While a traditional insurance plan requires extensive medical information and can take as long as two to three weeks to be approved. Short-Term insurance requires the completion of four or five medical questions and can be processed within 24 hours.

The Benefits

Short-Term insurance is never going to be confused with a “top of the line” insurance plan. Its coverage will vary from company to company and generally feature a wide range of deductibles, however it will most likely have reduced coverage compared to standard plans. The biggest omission is the exclusion of all pre-existing conditions. That means anything you have been previously treated for will not be covered by a short-term policy.

The Need

Chances are you might never run-in to a situation that would require, or make sense for you to purchase short-term health insurance. However there are a handful of areas where this type of coverage can be a life saver.

The first and most common need is for someone who is between jobs. While stints of unemployment seem endless these days, short-term coverage is flexible enough to handle even the most extended hiatuses from the workplace.

This type of coverage is also great for recent graduates who might have a short period of time to fill until they can jump on their new employers health plan.

Lastly, short-term coverage can also come in handy for someone who has been declined for a standard health insurance plan. Because the policy has a very general application process and time of coverage is only guaranteed for a set amount of time, this allows someone with moderate health issues to get coverage.

The Cost

Of course, probably the most important benefit of all is that short-term health insurance is going to be much easier on the wallet. Because of the limited benefits we discussed earlier and the specified duration of coverage, monthly premiums are only going to be a fraction of the cost of standard insurance plans.

Again, chances are most people might never find the need for such a policy. However if you do find yourself in a situation where short-term coverage makes sense, it is a very affordable way to provide you with the protection you need.  Read More...

By Joey Giangola 

I have lost count of how many times I have talked to middle aged married couples that say, “We are getting to that age where we probably should have life insurance."

The truth of the matter is, they needed that life insurance 20 years ago. Now that doesn’t mean there is not a need for life insurance in a middle age couples plans. The purpose of life insurance is to protect the financial well-being of your spouse and children in the event you are no longer around to do so.

However, a young, newly married couple starting their lives together is probably in a much more vulnerable position financially (Mortgage, Children, Car or Student Loans) then that empty-nest middle aged couple who has already raised their children and paid off most of their debts.   

Stop for a moment. Think about all the outstanding financial commitments you currently have. Now, do some quick math. What is your number? If it’s even a little bit scary, and there is someone or multiple someone’s in your life that could find themselves responsible for your number, life insurance should have just made its way to the top of your priorities list.

I’m sorry for continuing to fuel your anxiety attack, but here are a couple of questions to consider. Do you have children? If so, how much do you spend on them a year? What about college? How much is your spouses annual income? Will he or she still be able to work those hours and take care of your family if you are no longer around to help out? Can your spouse afford to keep your family in the home you built together? Alright, I think you get my point. I will stop the train of despair there for now. However, as you can see, the scope of your absence is much wider then you probably ever imagined.

This is not an exercises in how to inflict panic via blogging. It is simply an important step in realizing how to appropriately protect your family. If you want some good news after all that, life insurance is almost always cheaper the earlier you buy it. Also, keep in mind that if you ever run into a serious or semi serious health problem you may not be able purchase life insurance after that. If you can, it will be much more expensive. I know, this was suppose to be the good news section.

Bottom line: Will the need still exist for life insurance when you become that middle aged married couple? Sure. It just probably won’t be as great.  

Life insurance will never replace your spouse or the role they fill in your life, but it will make a lot of things a lot easier if the worst were to happen. 

Joey Giangola is an independent insurance agent for Giangola Insurance Agency and specializes in individual health insurance and term life insurance. You can email him at joey@giangolainsurance.com, or follow him on Facebook, Twitter and Google+ to receive the latest insurance news and tips. Read More...