Save Money, Buy an Accident Benefit

Health Insurance is expensive enough today and the process of buying a plan can be very frustrating. A bad agent will only make the process worse. Therefore, I'll offer you some quick pointers to navigate the process with ease. Today we'll look at Accidental Injury Coverage or Accidental Injury Benefits. These are insured benefits that work in concert with your regular health insurance plan (Major Medical, HSA, Employer Group plans).  I encourage you to do the research and feel free to reply or contact me personally with questions. Again, my advice is completely free!  There are links below for more info.

WHAT is Accidental Injury Coverage or an Accidental Injury Benefit?
-These are supplemental insurance policies that pay a benefit up to a certain amount if you (or a family member) are injured in an accident. Many also included other benefits like accidental death and dismemberment but we're focusing on the Accidental Injury value. The probability of an accidental injury leading to an Emergency Room visit and/or hospitalization is much higher than illness.

WHY should I consider purchasing Accidental Injury Coverage?
-If you and/or your family are on a $1500 deductible (or higher) on your Health Insurance plan, you must take Accident Coverage into consideration. The higher the health plan deductible, the more crucial it is to hedge against accident.

HOW much will this cost me per month?
-A $5,000 Accident Coverage should not cost you more than $40 per month for the ENTIRE family PERIOD.

You MUST look for creative ways to save money without substantially increasing your risk. One way to save money on health premium is to take a higher deductible health plan. The higher the deductible, the lower your premium will be. The problem some folks run into with higher deductible is a psychological one. A $3500 or $5000 deductible seem to be a lot to take on, but if your premiums are so high that you can barely afford it, you get creative!

Example: (for sake of simplicity, we'll assume your health insurance plan has 100% co-insurance after the deductible)
Currently, your family has a $1500 deductible health insurance policy and the premium amount is $600 per month ($7200 annually). You decide that $600 per month is breaking the bank. You know that you MUST have insurance on yourself and family. You decide to move to a $3500 deductible health plan and the premium is only $450 per month. You just saved $150 per month ($1800 annually)! You buy a $5000 Accident Injury Coverage policy for $30 per month. You are still saving $120 per month AND you have completely hedged against Accident Risk because the Accident Policy is going to pay all but a couple hundred dollars of your $3500 deductible. Basically, you end up with BETTER coverage than when you started and it costs you LESS. Why give your hard earned money to an insurance company, when you can keep it more important things (like an Emergency Fund)?

(another way to look at it)
Family A: Before hedging with Accidental Injury Coverage
$1500 Health Deductible / $600 per month ($7200 annually)
A $100,000 injury claim costs you $1500!
Family A: After hedging with Accidental Injury Coverage
$3500 Health Deductible / $450 per month ($5400 annually) + $5000 Accidental Injury Coverage / $30 per month ($360 annually) = $480 per month ($5760 annually)
A $100,000 injury claim costs you $250!

Extras:
-Employers: This is a great way to save money while improving benefits for your team!!!
-Folks with pre-ex: This is a good way to curb costs if you cannot move to a new plan. You can always go to a higher deductible to save money
-Parents with kids in sports: I think the value is pretty obvious J

In conclusion, in order to save money on monthly insurance expenses, you must get creative. One way is to use products like an Accidental Injury policy to do that. If you have a hand in controlling the cost of your healthcare, you will sleep better at night.

Note: Do not assume that because you are currently "healthy", you don't require health insurance. Try telling that to a family whose bread winner is in the county hospital with no insurance and bankruptcy is knocking at their door. Lives are ruined by selfish/foolish decisions. Don't be THAT GUY! When someone say's "I'm healthy, I don't need insurance", what they are REALLY saying is "I'm irresponsible, unreliable and short sighted". Personally, I do not associate with people who are of that mindset. Insurance rule, if you CAN pay for it… YOU MUST! It is quite another thing not to be able to afford health insurance. Ask yourself. What is more important, my family's well-being or an extra car payment or boat payment, etc?

Links:
SBA with Accident Benefit- Click Here (Example of the product I have and use)
High Deductible Health Plans (Wikipedia)

Take control

Lance Cashion
Catch Me if You Can Newsletter - Click Here!

Health Insurance Tips (Health Savings Accounts/HSAs)

Many clients and friends ask me about Health Savings Account Qualified Plans or HSAs. Since most folks look at the process of buying insurance like going to the dentist, it is my goal to make this as painless as possible. I teach my client how plans work and together we make decision on what suits their needs. Purchasing the proper coverage is a process and a very important one. The HSA qualified plan must be placed into the mix. I will present some basics here. Feel free to reply or contact me personally if you have specific questions. My advice is completely free!

I will also provide you with links for further education. Let me preface this conversation by saying that I’m going to focus on individual health plans/HSAs (not group).

1. HSA concept has two components: Insurance Policy and Bank Account

a) The Health Insurance component: This is a High Deductible Health Plan (HDHP) that is designated as HSA Qualified. You must purchase this plan from an insurance company. Premium mounts with vary from company to company, so get several quotes. You will buy an HSA Qualified Plan first.

b) The Bank Account component: This is a HSA designated checking account/debit account. You must open this account after your health plan has gone into effect. The bank will issue a debit card for medical expenses. You will open the HSA Bank account second.

2. HSAs are self-directed. You fund the account yourself up the mandated limits. There are annual maximums. Note: Your plan premium is separate from account funding.

3. HSA Qualified Plans and Bank Accounts have tax advantages
-HSA Qualified Plan premiums are tax deductible
-Distributions are tax-free for qualified medical expanses
-HSA accounts “roll-over” every year (your money stays in your account) tax-free
-Your personal contributions offer you an “above-the-line” deduction. An "above-the-line" deduction allows you to reduce your taxable income by the amount you contribute to your HSA. -Funds in the account grow tax-free through investment earnings, just like an IRA.
Please note that there are several other tax advantages to an HSA not listed.

4. HSAs Qualified Plans are a single deductible for individual and families.

5. HSAs are portable. If you leave your place of work, you take it with you.

I hope these basic points are helpful when considering coverage.

Helpful links:
Dept of Treasury: The Basics
http://www.treas.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-07.pdf
http://ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs_072208.pdf

Have a great weekend!
Lance Cashion

Lance Cashion has been a licensed Life & Health Agent insurance agent in the State of Texas since 1998 and currently holds non-resident licenses in more than a dozen other states. He serves as the Vice President Marketing Technology and CTO at American Health Underwriters in Fort Worth, Texas.
-Serving the self-employed, small business owners, individuals and small groups
-Specializing in professional customer service and customer education (the heart of a teacher) -Employed at American Health Underwriters Inc (Est. 1968 by James H. Cashion Jr. Ft Worth, TX)
-10 years of experience dealing directly with clients, care providers and underwriters
-Major Medical and HSA Qualified Health Plans / Term Life Insurance / Medicare Supplements /Annuities