Here you can learn a little more about our services that we offer through American Entitlements like:
Permanent Life Insurance
Long Term Care
Health care encompasses many things: preventive care, urgent care, mental health care, physical therapy, rehabilitative services, emergency care, and everything in between. And health insurance sometimes falls short when it comes to the health care–related financial assistance you need. Other times, obtaining comprehensive individual major medical insurance is difficult due to affordability and other factors. Under such circumstances, a hospital indemnity plan can be an asset to your personal benefits portfolio.
Hospital indemnity plans, also known as hospital and surgical health insurance plans, can be a temporary solution for individuals and families without a traditional health insurance plan as well as long-term supplemental coverage for those who do and want some extra benefits. This type of plan fixed payment amounts and lump-sum cash benefits for specific services and care. It is important to note that hospital indemnity does not cover catastrophic care and is not intended to be a replacement for major medical insurance.
What is a hospital indemnity plan?
Considered a supplemental insurance product, hospital indemnity plans provide first-dollar fixed benefits for medical expenses related to hospitalization, surgery and outpatient therapy services. That means the plan pays up to the stated benefit amount for a service without any additional copay, coinsurance or deductible; however, it is important to note that first-dollar benefits only kick in after the deductible, if there is one, has been met.
What does a hospital indemnity plan cost?
Hospital indemnity plan premiums tend to be relatively low compared with traditional full-coverage health insurance plan premiums. These plans are highly customizable, which allows you to select a design affordable for your household budget.
Plans like those offered by IHC allow consumers to choose any doctor or hospital in America but offer a network of discounted providers for those who seek additional savings on health care. No matter what the provider charges, the plan pays the fixed benefit amount selected.
Who is this type of coverage ideal for?
Securing a hospital indemnity insurance plan is another way to reduce medical bills and pick up where your medical insurance leaves off. If you anticipate needing hospital or surgical services, this type of plan can provide some financial relief at a budget-friendly rate.
This type of coverage might be the right fit if you are looking for additional financial assistance for unexpected hospitalization or surgery charges. Those who are in relatively good health, do not have a major medical plan and need to save money might consider this as a short-term safety net to assist with costs related to hospital or surgical services. Those who see a doctor regularly or take prescription drugs may find this coverage too limited.Discussing your health care needs and the amount you can afford to pay for insurance with an agent, broker or carrier sales specialist can help you arrive at the best solution for your circumstances.
Are hospital indemnity plans still relevant in the age of Obamacare?
Absolutely. They offer additional financial protection on top of major medical insurance. Once you gather monthly premium quotes and have considered how you might use your health insurance in the upcoming year, consider the benefits included, the deductible you might select and any anticipated out-of-pocket costs. At a relatively small cost, a hospital indemnity plan may help you save more in the event you need hospital or surgical services.
This coverage typically includes hospital and surgical benefits, as well as the ability to bundle in additional options such as critical illness benefits. The plan pays the fixed benefits based on the coverage level you select.
These benefits may include:
- Inpatient services (paid per day) such as:
Inpatient hospital confinement
Inpatient physician visits
Inpatient ICU/CCU confinement
- Inpatient surgical services (paid per surgery)
- Outpatient surgical services (paid per surgery)
- Maternity (lump sum benefit)
- Ambulance (per trip)
- Chemotherapy and radiation (per treatment up to a lifetime maximum)
- Per injury or illness deductible
- Critical illness benefits
Again, hospital indemnity plans are not major medical insurance and do not include Obamacare essential health benefits. This type of coverage is not subject to provisions under the Affordable Care Act and does not fulfill the requirement that most Americans buy health insurance or face a tax penalty.
Permanent Life Insurance
There are many questions surrounding whole life insurance and universal life insurance. Luckily, this article will help clear up some of those questions and help you better understand the differences between whole life insurance and universal life insurance.
Whole Life Insurance
Universal Life Insurance
Under a whole life insurance policy, the purchaser agrees to pay premiums to a life insurance company in exchange for a guarantee of a specified benefit payable to their spouse or other beneficiaries upon their death. Earnings on a whole life insurance policy are set by the life insurance company based on the overall return on its investments. Earnings above and beyond those required to cover the death benefit go to the policy’s cash reserve, which you can borrow against, use to pay premiums, or allow it to accumulate for long-term goals such as retirement.
Universal life insurance policies allow the purchaser to set the premium and the death benefit. As such, it lets people establish a permanent policy with a lower premium than they would have to pay under a whole life policy. Under whole life insurance, premiums are set by the insurance company based on long-term interest rates and actuarial tables predicting the period of time over which the premiums will be paid.
Whole Life Insurance vs. Universal Life Insurance
How do interest rates factor in?
Interest rates in this case are a double-edged sword. As with any attractive option, there is an associated risk. In this case, you are betting long-term interest rates will remain where they were when you bought the policy. If rates fall significantly after you purchase the policy, the odds are good that the premium stream won’t cover the cost of keeping the universal life insurance policy in force and maintaining the death benefit payable sometime in the future.
If the worst case scenario occurs and interest rates drop (as they have since the 1970s), it is likely the premiums paid on the universal life insurance policy will need to be increased to generate enough income to cover the projected cost of the death benefit. If premiums do fall short, the policy could eventually lapse – becoming completely worthless. While your agent should make it very clear to you that you are running into a situation where this might happen, letting a life insurance policy lapse you have been paying into for years is a significant potential drawback. This is something that will never happen with whole life insurance.
Once you have figured out your life insurance needs, it is then time to decide if a whole life insurance or universal life insurance policy is best for you. It is always important to make sure you get the coverage you need at a price you can afford.