Around the Chicago area, as well as many other parts of the country, we have recently seen a bigger spike in health insurance premiums than in the last 24 months or so on the individual market. There are many contributing factors as to why, but for now we will focus on how to control some of those costs and improve your coverage.
By raising your deductible, you will bring your premium down. Now that does often times leave you more vulnerable at the time of claim especially if you have an illness that is going to put you out of work for a while. There are a few ways you can “cover a portion of that deductible.
The first way is a commonly used plan called an “Accident Plan” these plans cover injury or accident and pay a specified amount, often times you will structure the plan to cover the deductible so if you have a $5000 deductible, you would add a $5000 accident plan. These plans are normally quite affordable and often times you can insure the entire family for $40 or less for injury or accident.
Another way of covering some of the “gaps” is by using a new form of life insurance. We call this “Life Insurance with Living Benefits”. These plans do vary by State, of course, have of course a death benefit. In the State of Illinois all plans come with what is called an Accelerated Death Benefit which is basically an advance on a portion of the death benefit if you have a terminal illness. Now this is where these plans get interesting. Some of them come with a “Critical Illness” benefit. That is it would pay you a portion of the death benefit, if you were to have a heart attack, stroke or life threatening cancer. This is important because with many of the critical illnesses, you cannot return to work for some time. You can use this money to pay your deductible or any other bills you see fit.
The next benefit that some of these plans come with are a short term disability policy. Again in most cases it will reduce your death benefit, but can pay you money if you become temporarily disabled. Some plans come with this benefit and some you can add it to the policy.
The last one is a big one in my opinion and that is that it comes with a “Chronic Illness” benefit, which is basically a Long Term Care benefit. Long Term Care is a valuable insurance program, but is expensive to buy at age 60. At age 50 you are paying for a program that you likely will not need for at least 20 years. So if you can get it added to your life insurance policy, even if you do not need it ever, you still have the death benefit.
Living benefit Life Insurance policies are an outstanding way to improve your health insurance coverage and as a bonus come with a death benefit.