Why is health insurance important?

Enrolling in high-quality health insurance can also help you avoid large medical bills that can cause financial hardship and even medical bankruptcy. With health insurance, you can receive care in the following situations:

  • Preventive services to help you avoid serious illness.
  • Medical care for existing conditions.
  • Treatment of new health problems, such as chronic illnesses or injuries.

Understand your options

Health insurance can be confusing. The good news is that there are several resources that can help you understand and compare health plans:

Summary of benefits and coverage:

If you have a private health plan through your employer or bought it on your own, you get a standardized, easy-to-understand form called a Summary of Benefits and Coverage (SBC). You can use it to compare different insurance costs and options. If they didn’t provide it, ask your insurer for it.

To see an example of this short form and find out how it can help you, Consumer Reports magazine has created this handy guide.

Glossary of health insurance terms:

The US Department of Health and Human Services created a glossary of common terms related to health insurance, such as “deductible,” “copayment,” and “out-of-pocket limits.”

Payment for health care or medical insurance

If you don’t already have health insurance or are interested in switching to a new plan, you can buy one on your own through the Affordable Care Act (ACA). The ACA allows eligible individuals and families to receive financial help to cover the cost of premiums. This subsidy, known as the Health Insurance Premium Tax Credit, helps people who need health insurance pay for their coverage. Resources like HealthSherpa.com(link opens in new window) and Healthcare.gov can help you find out if you qualify for the tax credit. In addition, they can help you compare different health insurance plans available in your state. They can also tell you if you qualify for programs like Medicare or Medicaid.

What are the Options of No Expiration of Life Insurance?

We can credit our favorite kite-flying ancestor, Benjamin Franklin, with playing a major role in founding the life insurance industry in the United States in the 18th century,1 but it wasn’t until the mid-19th century. , which created a regulatory infrastructure for the industry.2 Insurance regulations were developed to protect consumers in three main areas: the financial capacity of insurance companies, the products they sell, as well as market behavior and prevention. of unfair business practices.

Almost all of the regulations that life insurance companies must follow are state laws and not federal laws. Each state has a state insurance department, which means that a life insurance company operating in each state must adhere to the applicable laws of the state in which it operates.

The National Association of Insurance Commissioners (NAIC) is the United States standards-setting and regulatory support organization, created and governed by the major insurance regulators of the 50 states, the District of Columbia and five US territories. The NAIC acts as a forum for the creation of model laws and regulations, but generally, each state decides whether to pass these model laws and regulations. States are allowed to make changes during the enactment process, but model laws and regulations are widely adopted.2

Special Circumstances

Life insurance is a contract

in which you agree to pay the policy premiums to the insurance company, and the insurance company agrees that, upon your death, it will pay your designated beneficiary the death benefit you have selected, if the benefit is payable under the policy provisions. Like any other legal contract, life insurance policies have rules and provisions depending on the type of policy you purchase.

Sometimes people stop paying their life insurance premiums. In some policies, the policy ends after a grace period, but if the policy has a cash value, state law prevents insurance companies from canceling the policy and keeping the cash value.

An option (or clause) of no expiration

is a provision included in certain life insurance policies that states that an insured will not lose the value of the policy if the policy expires after a defined period due to unpaid premium payments. The non-forfeiture clause may also be available when the owner of some life insurance policies renounces (actively cancels) the policy. Carefully compare the consequences of canceling your original policy, which also cancels the death benefit of your policy.

Permanent life insurance policies generally have three standard payment options in the non-forfeiture clause.

Cash Surrender Value

If the insured chooses the cash surrender option, the insurance company pays the cash value to the policy owner as a lump sum. At that time, the policy is canceled and cannot be reactivated; the liability of the insured under the contract ends. Most states allow insurance companies up to six months to pay the cash surrender value.

Extended Term Option

This option allows the policy owner to use the cash value of their policy to place the policy on extended term insurance. This option also helps the policy owner stop paying premiums for the original policy.5 The term of the new policy will depend on the available cash values ​​in the policy.5 A policy converted to term insurance can be reinstated under the reinstatement provision of the contract, as long as the term has not expired.

Reduced Total Payment Insurance

Choosing this option means that the cash value of the policy is used to purchase a paid policy of the same type as the policy that lapsed. The insured will not have to pay more premiums. The new policy will have a reduced death benefit, but will retain a cash value that will increase over the life of the policy at a reduced rate.

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