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Policy Coverages

Types of Coverages
Life insurance coverage is important, but it's also important to know the kind of coverage that best fits your needs.

Term insurance coverage is popular, and is usually the least expensive. Every year, you pay a fairly low premium which covers your life for that policy term. However, as you get older, the premiums get higher for the same amount of coverage.

Burial expense coverage is often used to cover the very young or very old. It provides enough money to cover burial expenses. The return varies but the standard is five thousand to ten thousand dollars. This coverage helps to ensure that a death in the family does not add additional financial strain.

There are also permanent life policies. One example is known as Whole Life. This coverage differs from term insurance because more money is paid for a predetermined period, often ten years. Money contained in the whole life policy is invested at a fixed interest rate. There are also variable life plans in which money is invested at a variable interest rate, usually through a mutual fund. An advantage to these policies is that funds can sometimes be borrowed against the money accumulated in the policy.

Term vs. Permanent Insurance
There are different types of life insurance policies available. Term insurance is the most straightforward and often least expensive type of life insurance coverage you can buy. Term life insurance is purchased for a specific period of time, such as ten years. If you were to die during those ten years, the insurance company would pay your beneficiaries a death benefit. On the other hand, if you are still alive when your policy expires, your coverage ends and nothing is paid.

Some term life insurance policies provide a diminishing amount of coverage for each successive year of the term. This type of policy provides greater protection during the early years of the term and less towards the end. If you need life insurance for ten years of less, term insurance may be your best choice because it generally offers lower premiums compared to other types of coverage.

Permanent life insurance, often called whole life, is the more traditional type of life insurance policy. With whole life coverage, you pay premiums which remain the same for the length of the policy. When you've paid all the premiums, the policy remains in effect until you die, unlike term life, which lasts only for a specified period. Permanent life insurance also has the added benefit of allowing you to accumulate a tax-deferred cash reserve which is invested by the insurer.

Cancer Insurance
Cancer strikes three out of four families. Early detection combined with new treatments and technologies have improved patients' chances of survival. However, these improved results come at ever increasing costs. In fact, cancer costs Americans well over $100 billion each year. 70% of these expenses are not covered by major medical plans. These expenses include indirect costs such as loss of income, child care, special diets, and travel expenses.

Cancer patients often require expensive treatments. All that you have been able to save in your lifetime could be wiped out during an extended period of even the most affordable cancer treatments. Basic medical health insurance does not always provide for continuous medical treatment in the event of cancer. Non-medical expenses are rarely covered by basic medical health insurance; therefore, a cancer insurance supplement is recommended.

Most cancer plans cover cancer screening; radiation/chemotherapy and blood/plasma; new or experimental treatment required when conventional radiation therapy and chemotherapy drugs can no longer bring about results; and transportation and lodging (this pays the charges for transportation and lodging when special cancer treatment is not available locally).

Cancer insurance helps lighten the financial burden by helping to pay for both the direct and indirect costs related to cancer. In addition this insurance also covers most pre-screening and wellness tests that aid in the early detection of cancer.

Long Term Care Insurance
An important issue for older Americans is the potential loss of their personal and financial freedom due to an accident or debilitating illness. Long term care can be expensive and is fast becoming one of the greatest benefits concerns for Seniors and their families. At least 40% of people age 65 and over are at risk of entering a nursing home sometime during their lifetime. Studies show that for every two senior Americans receiving care in a nursing home, five others require regular assistance of varying degrees in a home care setting.

Long-term care insurance policies cover the health costs of long-term custodial care, either in a nursing home or at home. While the coverage from long-term care policies can offset some of the costs of such care, they rarely pay all the bills. Nursing homes charge between $30,000 and $70,000 a year, and home health aides can cost between $7,000 and $10,000 a year for just three visits a week. Long-term care insurance can help with these tremendous costs. You may want to consider a long-term care policy with an inflation adjustment clause. Long-term care policies are often a supplement to other health policies. Long term care insurance helps participants:

• Keep control over their current income and assets and avoid being dependent on family and friends
  
• Decide where to receive care: at home, in an assisted care facility, or in a nursing home
  
• Determine, with the help of family and medical advisors, the kind of care they want and need

Critical Illness Insurance
Advances in medical technology and the treatment of disease enable ever-increasing numbers of people to survive illnesses that may have been fatal years ago. Many survivors of heart attacks, strokes and cancer face exorbitant expenses as a result of their illness. Consider these facts: Therapeutic costs for a stroke can add up to more than $100,000 over the victim's remaining lifetime and heart bypass operations can cost in excess of $65,000. The American Cancer Society reports that more than two-thirds of all cancer-related costs are indirect, non-medical expenses. Finally 49% of all mortgage foreclosures are due to the expense of serious medical problems.

Critical illness insurance is a supplement product that can help lift the burden of the financial and emotional stress associated with a critical illness so that the patient and his family can continue to lead their lives. It is a product designed for the living, providing living benefits, as opposed to typical life or accident insurance plans which pay benefits only in the event of death.

A critical illness insurance plan can protect the insured and his/her family with lump sum benefits to be used for indirect, non-medical, and non-covered costs associated with a critical illness, including:

• Lost income - lost or reduced wages due to prolonged absence or unpaid leave from work
  
• Uncovered medical expenses - such as alternative therapies, home health care, experimental treatment and procedures not covered by HMO plans or major medical insurance
  
• Travel - transportation to and from specialized treatment facilities
  
• Retraining - to facilitate the return to the workforce
  
• Childcare - to help cover the costs of childcare during periods of hospitalization

Disability Insurance
Disability insurance is designed to replace a percentage of income while the employee is unable to work due to a covered illness or injury. Disability income plans provide employers with a program to continue income for employees who become totally disabled.

• Short-term disability is generally defined as an employee's inability to perform the duties of his or her current position. Paid sick leave and sickness and accident insurance protect workers against loss of income during temporary absences from work due to illness or accident. The duration of short-term disability benefits ranges from 13 weeks to 52 weeks, with most workers covered up to 26 weeks.
  
  Sick leave usually provide 100% of a worker's normal earnings with a specific number of covered days each year that are permitted for paid sick leave. Often, paid sick leave is available to the employee without any waiting period.
  
  Under most sickness and accident insurance plans, the disability must exist for at least one week before a worker becomes eligible for benefits. This waiting period is intended to control plan costs. Generally, benefits replace between one-half and two-thirds of a person's pre-disability gross weekly income.
  
  
• Long-term disability for the first two years is generally defined in the same way as short-term disability. If it continues beyond two years, the definition of disability usually changes to the inability to perform any occupation that the person is reasonably suited to do by training, education, and experience.
  
  Typically, long-term disability plans pay benefits amounting to approximately 60% of a person's pre-disability monthly pay with most plans setting a limit on monthly payments.

24 Hour Accidental Death & Dismemberment
Accidents are the fifth leading cause of death for people of all ages. A serious injury or the accidental death of a wage earner can be devastating, even in two-income families. Purchasing Personal Accident Insurance is an important step in helping to improve an employee's financial security, as well as that of their family.

Once enrolled, the insured(s) are covered 24 hours a day, 365 days a year against covered accidents occurring in the course of business or pleasure. Coverage is provided for injuries caused by accidents that occur on or off the job, at home, while traveling by train, airplane, automobile, or any other public or private air or land conveyance (except as limited by the exclusion).

Index Annuities
A single premium deferred annuity with a market value adjustment and a choice of interest guarantee periods. At the end of the initial guarantee period, the annuitant may choose to surrender without penalty or renew for any guarantee period. Interest is credited daily and compounded annually. Periodic interest withdrawals will slightly reduce the effective annual interest rate.