Health Insurance
Our presentation on this topic is brief. We can give you some alternative ways of dealing with this very expensive type of insurance and a few thoughts as to how to best cope. Employer coverage is best and least expensive even if you supplement the coverage. But if that doesn’t exist, which way do we go?
Consider a high deductible policy that is one where the company doesn’t pay until your bill is $5,000 (more or less). It is considered a catastrophic protection policy. The cost of the policy is much less but you must have the ability to cover that first $5,000. My wife has this protection and a small limited cover policy for emergency rooms and short hospital stays, since she is between retirement and Medicare. By-the-way she is somewhat accident prone, especially in July. One year it was a bicycle, another stepping off a curb in London trying to hail a taxi.
Medicare is available at age 65 regardless of when you retire. It is very important to apply for coverage before your 65th birthday. Check with Social Security. Even after qualifying for Medicare, you should have a supplemental policy. Go to our Social Security/ Medicare topic for a detailed discussion.
Health savings accounts (HSAs) are tax-sheltered accounts similar to IRAs. The deposits are 100% deductible and can be withdrawn by check or debit card to pay for routine medical bills. This includes a broad array of pills and miscellaneous drugstore and grocery store items. Keep your receipts and mark the items that qualify. HSAs can be advantageous. Check to see if you qualify, HSAs do work well with that high deductible insurance policy. What remains in the account each year is rolled over to the next year while continuing to earn tax free income in a qualified account. There will be more on this topic in a future newsletter.
Liability
You are no doubt already carrying liability insurance through your auto coverage and home/renter coverage. We recommend you consider an Umbrella policy for a million dollars if you have significant assets to protect. This type of policy will pay above and beyond what the other coverages will pay and is not too expensive. We focus in our Asset Protection topic on the ways to protect your assets from law suit and steps that can be taken by the prudent person to help provide financial protection.
Collectibles
A standard home owner or renter policy will likely fall short if you suffer a catastrophic loss. You should review your policy for the coverage on certain categories of assets. You will discover that your out buildings are well protected, even if you don't have one. If you have been around for awhile and/or have inherited or collected guns, books, coins, stamp collections, furs, oriental rugs, art and jewelry for example, you need a supplemental policy for coverage of these items. I inherited a collection of old Indian baskets, and when my wife saw some similar baskets which were not nearly as nice, she was astonished at the asking price. It will be worth the time and money to have your collectibles appraised. This coverage is not cheap, but we know you are going to be disappointed by the protection you have through your home owner’s policy.
Summary
Remember that we see insurance as only protection. It is designed to protect you from the financial loss of an asset, be it a life, income, home or health. When you review our Planning Section you can use the risk lists to help evaluate how to handle the risks you assume on a daily basis. Certain things and activities may be cost prohibitive from an insurance angle. You then must decide to stop that risky behavior or take your chances. Please don't let yourself be blind sided by an unforeseen event.
Insurance
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