It is sooo easy to play…and fun! …NOT!

Feeling lucky?

Feeling lucky?

First, become disabled as a result of sickness or injury.

The disability may be on the job or off, but must prevent you from being able to perform any substantially gainful ($33 dollars a day or more is considered gainful in 2009) employment. Your medical condition must significantly limit your ability to do basic work activities—such as walking, sitting and remembering—for at least one year. If it is determined that, due to your condition, you can no longer do work that you did before and Social Security determines that you cannot adjust to other work, including work that is not available in your locale, and your disability has lasted or is expected to last for at least one year or to result in death (although dying before being approved in most cases will disqualify you) then you may qualify for benefits.

Second, set an appointment with your local Social Security office to submit an application. The interview process, will take at least an hour. However, you may wait several hours to see a case manager, since in many locations they will not set appointments ahead of time. You will need to have a list of all doctors, clinics, etc. who have seen you. The SSA will request employment documentation for the last 10 years including the specific tasks you performed for each employer. If there are no delays requesting your medical records, or interviewing doctors or verifying employment information, or other required information, and if the local office does not require you to see another doctor, then your application may be processed within 3 to 5 months.

Once your application is considered complete and processed you will receive a notice of approval or denial (3 out of 4 applicants). If denied you may request a reconsideration at which time the process begins again but with a different reviewer assigned to your case. If denied again you may request to be heard by a Social Security Administrative law judge. Sixty-six percent of these cases are approved, but getting there is the long stretch. See Benefits Backlog Swells As Social Security Slims.

If you are fortunate enough to make it this far and get approved you are one of the few living recipients of the Social Security Disability Lottery. Actually to be more exact few in 2006 was over 6,630,000. Although I’m not sure if that number includes those who passed away before receiving their benefits. See He Died Before Disability Came.

That’s not to say the people at the Social Security Administration don’t work hard or that I or anyone else could do a better job than those in D.C., but just… maybe …we might want take our lunch to work one or two days a week and put a few dollars back for the 1 in 8 chance that we might become disabled before age 65.

If you never use the insurance consider yourself lucky! …and if you do use it, consider yourself lucky you had it!


Yeh, right!

Yeh, right!

One of the theories as to why healthcare costs continue to rise at an alarming rate is “overcoverage“. Basically stated since insurance companies primarily pay the costs for healthcare, consumers have little knowledge or concern in regards to the costs of these services. Since ‘someone else’ is paying the bills, who cares how much it costs? However, if the money came directly from the pocket of the consumer, providers would have to compete more for healthcare dollars and consumers would have to budget their use of those services.
Health Savings Accounts (HSAs) were created with the purpose of solving this problem. How?
First it might help to know a little about the recent history of health care. If you are like the majority of Americans who have, or have had in the past, an HMO, you probably won’t be surprised to know that most people were less than satisfied with the plans.
Basically, HMOs were created for the purpose of bringing down the cost of health care expenses through the use of case management. HMOs signed up physicians to be a part of their network. The physicians provided discounted care to HMO members and the HMO would provide new patients to the physician. The belief was that the expenses paid by insurance companies would be reduced given that overpriced physicians would be removed from the group and unnecessary and expensive visits to specialists would be controlled through the Primary Care Physician (PCP).
That objective was successful from the standpoint of lower expenses for insurance companies; however it became very unpopular with patients. For one, it was often very difficult to get an appointment with one’s PCP since they were often overbooked by the networks which would require that a minimum number of patients be assigned to each PCP.
Second, the PCP was not able to dedicate a lot of time to complicated cases because of the number of patients scheduled to be seen from one day to the next. Moreover to discourage expensive visits to specialists, bonuses given to PCPs were reduced whenever a PCP referred a patient to a specialist.
Another complaint was that HMOs would many times offer lower rates at the start to attract new employer groups then raise rates mid-year. Employers who paid a percentage of the premiums for their employees were more likely to switch HMOs if they were offered a better price by another plan. When an employer switched plans it often meant the employees would have to switch PCPs and/or any other doctor that may have been treating them, in order to receive coverage. The same was true if a provider was unhappy with the HMO and left the network, or vice versa; either way the patient would have to shop for new care providers.
Preferred Provider Organizations (PPOs) were the next hoped for solution. They allow patients to choose to stay within the network or go outside the network for their provider(s). Since providers outside of the network used by the insurance company are more likely to charge more for their services, the insurance company passes the cost on to the patient by requiring a higher copay or deductible. The premiums are also generally higher for PPOs as opposed to HMOs.
However, although HMOs and PPOs have slightly slowed the rising cost of health care or health insurance, the rate of increase continues to be 2 and 3 times the rate of the cost of living. In fact, the number of individuals who cannot afford insurance continues to rise. When this occurs, one way or another the government (i.e. the taxpayers) ends up paying, either through Social Services programs or through Medcaid when the individual becomes medically needy.
So how do you encourage individuals to get insurance coverage that they can’t afford? This is where HSAs and HDHPs (High Deductible Health Plans) come in. Where someone may not be able to afford the premiums on a policy with complete coverage, a HDHP at least provides coverage in case of catastrophic events and leaves the outpatient expenses and prescription costs for the individual to pay. Since HDHPs only begin to pay once the high deductible has been met, the premiums for these policies are significantly reduced. With premiums reduced employers who otherwise would be forced to discontinue offering health insurance can continue offering group health insurance without medical underwriting. In addition, the consumer receives negotiated pricing for the visits to in-network physicians even before the deductible is met.
So, Uncle Sam doesn’t get stuck for a catastrophic health event, the insurance company doesn’t have to worry about how many doctors or which doctors a person visits, since the HDHP can be HMO based, PPO based, or other; and the consumer enjoys lower insurance premiums. But if a person could not afford complete coverage in the first place how will they pay for sudden doctor visits, and prescriptions before the HDHP begins paying?
Here is where HSAs (Health Savings Accounts) come in. Of course, HSAs do not give individuals the money to pay these expenses; nothing is perfect. However, HSAs provide both a mechanism and incentive for employees to save for those expenses. The method is a government approved savings account that works in conjunction with the HDHP. Depending on the amount of the HDHP deductible and how much the employee estimates his yearly out-of-pocket medical expenses will be, a set amount is withdrawn from the employee’s paycheck each pay period and deposited into the account. Whenever a medical expense occurs (doctor visit, prescription charge, etc.) the expense is deducted and paid for from the HSA.
The amount deposited into the HSA from the employee’s check is tax free so depending on the tax bracket of the individual the savings can be significant, from 20% to 40% or higher. So in a way an HSA (or rather the federal government) does provide at least some of the money for those expenses through tax savings.
Okay, that’s good news for those whose employer offers HSAs and HDHPs, but what about the self-employed or individuals who cannot get group coverage through their employer? Fortunately HSAs and HDHPs are available for individuals. Of course, as with all plans offered outside of group plans any preexisting conditions may result in denial of coverage or exclusion of coverage for the condition. (So what else is new?)

Boat made from 16,000 plastic bottles

Boat made from 16,000 plastic bottles

These days everyone is going green. I just read the coolest article about a boat made of 16000 plastic bottles that will be sailing from california to australia.
Anyway it made me think about the fact that life insurance in general is a green industry.

Think about it. The green movement is all about saving the planet for future generations, accepting responsibility personally for the well being of those to follow. It is an ideal that requires action. Not that you have to be an activist to be green. Just doing your part, doing what you can; recycling, minimizing and reducing waste, and teaching others those same habits, makes you green.

Life insurance is about preserving the financial future of our loved ones, our children – the next generation. It requires effort and sacrifice, though not as much as you might think, but what you put into it is nothing compared to the returns your children will receive back, not the least of which is the value of your example in putting others first.

…And for those of you who are still fighting the “what’s in it for me?” way of thinking, just remember, there may come a time when you will need someone to take care of you. Wouldn’t it be great if the “green” ideal was something your children believed in?

Free Financial Organizer and Planner

Free Financial Organizer and Planner

I am the type of person that likes to start a process at the beginning and follow through to the end. So when I started thinking about how to help someone develop a financial plan, I couldn’t let myself go directly to the planning stage without first going through the ‘get organized’ and the ‘find out where you stand now’ stages. So, I searched the Google web and reviewed ‘umpteen’ financial planners and organizers. I decided which features I liked best and consolidated them into one. The result is “A New Life Begins With A New Plan”, our 54 page financial planner and organizer.

I’m sure that as time goes on I will add more features and updates to the organizer as well as tips and suggestions, but for now you can download our organizer free; no strings attached.

If you’re like me and you need a little motivation to get organized, this should do the trick. It’s like getting a brand new ‘Do It Yourself…’ video. You sit down to watch it and half way through you are saying “Oh, I could do that.” Then by the end of the video you are actually off of the sofa and thinking to yourself “This will just take a jiffy!” (We won’t mention the fact that the completed project looked nothing like the one in the video.)

Anyway to get your free organizer and planner, just go to http://www.getfinancialadvice.com/request-free-financial-planner.html. Enjoy!

We finally made the

BIG Screen!


Medium Screen!


It’s short, to the point and only 30 seconds long. Anyway, I just wanted to blatantly promote it here because it does one very important thing; it shows just how quick and easy it is now to get life insurance. No medical exam! No agent visiting! Just 15 minutes online and you could be approved for up to $250,000 in coverage.

So what’s new about getting life insurance online? What’s new is automated underwriting. In the past you could get a quote online and even apply, but you could not get instant approval and coverage. Now two large insurance companies offer Instant Term Life Insurance (also known as ExpressTerm and other names) through approved brokers. Of course, we are one of those brokers, hence the YouTube ad.
Anyway, you simply enter non-personal information for a quote, such as height, weight, age, gender, etc., and if you like the quote you answer 7 to 10 questions pertaining to your health, family medical history, and life style. If you have no major medical conditions, i.e. your health is excellent, and you are not involved in any dangerous occupations or pastimes (such as sky diving, bungy jumping, etc.) then you may be approved.
Now comes the new part. You may or may not know that before anyone is ever approved for life insurance, the insurance companies check at least 2 sources of information, the DMV (Dept of Motor Vehicles) and the MIB (the Medical Insurnace Bureau NOT the Men In Black). The DMV will inform the insurance company of any negative driving history. The MIB provides fraud protection services to insurers and consumers from attempts to conceal or omit information material to the underwriting of life insurance, etc. Now, two major insurance providers have developed programs to access this information instantly online. Now instead of having to wait for the requested data through the traditional channels underwriting receives an instant response and in turn is able to approve or deny your request without any wait time on your part.

Of course, this instant approval is only available to those whose health is excellent and no medical exam is required. If by your answers to the 7 to 10 questions* it is deemed that you do not qualify for instant issue term, don’t be discouraged. Few of us today qualify for instant approval, it just mean we just have a little longer wait for approval.

*For a peak at the questions, go to http://www.getfinancialadvice.com/online-non-medical-instant-term-life.html.

There are a lot of factors involved in estimating the amount you need to save for retirement. It all depends on how detailed you are willing to go and how much time you have on your hands. Some of the most basic factors are:

  1. What is your current annual income?
  2. What percentage of that salary could you live on after you retire?
  3. How long do you expect to live after retirement?
  4. At what age do you plan to retire?
  5. How much do you expect to receive from Social Security?
  6. How much do you have saved already?
  7. How old are you now?

There are of course an abundance of other important considerations, but if you would like a simple non-biased calculator try the BallPark E$timate® at http://www.choosetosave.org. It is recommended that you reevaluate your needs on a yearly basis as determining factors cannot be predicted with certainty.

There are numerous areas that a financial plan needs to cover to provide financial security for you and your family. A few of the major areas are:

  • Emergency funds
  • Life insurance
  • Health insurance
  • Disability income insurance
  • Saving for retirement, etc.

There are two rules of thought regarding financial planning and how much insurance and what type of insurance you should purchase:

1. “decide which goals will take priority and work toward the lesser goals only after the really important ones are well provided for“, and

2. Spread your funds to provide at least some protection to each of the major areas of need, or expressed another way “don’t put all your eggs in one basket”.

I was surprised to read the first opinion expressed by a CNN Money Advisor as if it was the one and only answer to the financial security conundrum. I believe the answer depends largely on you and your situation, and in fact for the most part I subscribe to the second rule of thought. Here’s why:

It is rare that someone just beginning the process of financial planning is able to immediately meet even one of their major goals right away, such as having an emergency fund to meet six months of family expenses or purchasing the maximum amount of life insurance truly needed. But, if one is able to, let’s say, purchase a sufficient amount of life insurance, or purchase an adequate disability policy, but cannot do both, then Murphy’s law is bound to apply; in the case that you purchased the life insurance, you will become disabled, and in the case that you purchased the disability policy, a meteor will fall from the sky landing on you, and only you.

On the other hand, if you are employed with a company that offers a wide array of benefits, it may be worthwhile to sign up for the lowest amount of disability insurance and life insurance, even if it means you cannot put as much into a retirement plan. Remember, regardless of your health or employment situation you can put away into a retirement plan. It does not require you to qualify. However, if any factor such as your health, age, or employment changes, you may not be able to purchase life or disability insurance no matter how much money you have in your emergency fund or in your retirement plan.

This is not meant to question the wisdom of contributing as much as possible to a retirement plan (something you definitely want to do), especially when your employer is matching the contribution amount, but it just illustrates why I believe you shouldn’t necessarily feel that you need to complete one goal before starting another.

Again, I believe that each situation is different and that it is the job of the advisor to inform and explain to the client about the options available and the benefits and drawbacks of each, while it is the client’s job to decide which option best fits his/her circumstance.

Anyway, as always, we are interested in your comments. Do you agree? Disagree? Or is there something else on your mind?

Let us know. We are listening.