HIPPA (Health Insurance Portability and Accountability Act)

  • Health Insurance

With the growing use of paperless forms, electronic information transfers and storage has become the norm. This is true about our medical information as well. So, how do we know that our sensitive medical records are being kept private? Thanks to a federal law entitled Health Insurance Portability and Accountability Act (HIPAA), health plans, health care providers, and health care clearinghouses are required to abide by a set of standards to protect your data. While this law does offer protection for certain things, there are some companies that are not required to follow these standards. Keep reading to find out where the loopholes are and how you are being protected by this law. 

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What is the HIPAA Law and Privacy Rule?

Although HIPAA and Privacy and Security Rules have been around since 1996, there have been many revisions and changes over the years so to keep up with evolving health information technology. HIPAA and the HIPAA Privacy Rule set the bar for standards that protect sensitive patient information by making the rules for electronic exchange as well as the privacy and confidentiality of medical records and information by health care providers, health care clearing houses, and health plans. In accordance with HIPPA, Administrative Simplification Rules were created to safeguard patient privacy. This allows for information that is medically necessary to be shared while also maintaining the patient’s privacy rights. The majority of professionals in the health care industry are required to be compliant with the HIPAA regulations and rules. 

Why do we have the HIPAA Act and Privacy Rule?

The original goal of HIPAA was to make it easier for patients to keep up with their health insurance coverage. This is ultimately why the Administrative Simplification Rules were created to simplify administrative procedures and keep costs at a decent rate. Because of all the exchanges of medical information between insurance companies and health care providers, the HIPAA Act aims to keep things simple when it comes to the healthcare industry’s handling of patient records and documents and places a high importance on maintain patients’ protected health information. 

HIPAA Titles

The Health Insurance Portability and Accountability Act, a federal law which was designed to safeguard healthcare data from data breaches, has five titles. Here is a description of each title:

  • Title I: HIPAA Health Insurance Reform: The objective of Title I is to help individuals maintain health insurance coverage in the event that they lose or change jobs. It also prevents group health plans from rejecting applicants from being covered for having specific chronic illnesses or pre-existing conditions. 
  • Title II: HIPAA Administrative Simplification: Title II holds the U.S. Department of Health and Human Services (HHS) responsible for setting national standards for processing electronic healthcare transactions. In accordance with this title, healthcare organizations must implement data security for health data transactions and maintain HIPPA compliance with the rules set by HHS. 
  • Title III: HIPPA Tax-Related Health Provisions: This title is all about the national standards regarding tax-related provisions as well as the general rules and principles in relation to medical care.  
  • Title IV: Application and Enforcement of Group Health Plan Requirements: Title IV elaborates further on issues related to health insurance coverage and reform, one key point being for patients with pre-existing conditions. 
  • Title V: Revenue Offsets:  This title has provisions regarding company-owned life insurance policies as well as how to handle situations in which individuals lose their citizenship due to issues with income taxes. 

In day to day conversations, when you hear someone bring up HIPAA compliance, they are most likely referring to Title II. To become compliant with HIPAA Title II, the health care industry must follow these provisions:

  • National Provider Identifier Standard: Every healthcare entity is required to have a 10-digit national provider identifier number that is unique to them, otherwise known as, an NPI. 
  • Transactions and Code Sets Standard: Healthcare organizations are required to follow a set of standards pertaining to electronic data interchange (EDI) to be able to submit and process insurance claims.  
  • HIPAA Privacy Rule: This rule sets national standards that help to protect patient health information.
  • HIPAA Security Rule: This rule establishes the standards for patient data security. 

What information is protected by HIPAA?

The HIPAA Privacy Rule safeguards all individually identifiable health information obtained or transferred by a covered entity or business associate. Sometimes this information is stored or transmitted electronically, digitally, on paper or orally. Individually identifiable health information can also be referred to under the Privacy Rule as PHI. 

Examples of PHI are:

  • Personal identifying information such as the name, address, birth date and Social Security number of the patient. 
  • The mental or physical health condition of a person.
  • Certain Information regarding the payment for treatments.

HIPAA penalties

Health industries and professionals should take extra caution to prevent HIPAA violations. If a data breach occurs or if there is a failure to give patients access to their PHI, it could result in a fine. 

There are several types of HIPAA violations and penalties including:

  • Accidental HIPAA violations could result in $100 for an isolated incident and an upward of $25,000 for repeat offenses.
  • Situations in which there is reasonable cause for the HIPAA violation could result in a $1,000 fine and an upward of $100,000 annually for repeat violations.
  • Willfully neglecting HIPAA can cost anywhere between $10,000-$50,000 and $250,000-$1.5 million depending on whether or not it was an isolated occurrence, If it was corrected within a specific timeframe. 

The largest penalty one could receive for a HIPAA violation is $50,000 per violation and $1.5 million per year for repeated offenses.

Source: pocketyourdollars.com

Indexed Universal Life (IUL) vs. 401(k)

Indexed Universal Life (IUL) vs. 401(k) – SmartAsset

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When creating your personal retirement plan, there are a variety of tools you can use to fund your long-term savings goals. An employer-sponsored 401(k) is one of them while indexed universal life insurance (IUL) is another. A 401(k) allows you to invest money on a tax-deferred basis while also enjoying a tax deduction for contributions. Indexed universal life insurance allows you to secure a death benefit for your loved ones while accumulating cash value that you can borrow against. Understanding the differences and similarities between IUL vs. 401(k) matters for effective retirement planning. Working with a financial advisor can also make a substantial difference in the amount of money you’ll have when you retire.

What Is Indexed Universal Life Insurance?

Indexed universal life insurance is a type of permanent life insurance coverage. When you buy a policy, you’re covered for the rest of your natural life as long as your premiums are paid. When you pass away, the policy pays out a death benefit to your beneficiaries.

During your lifetime, an IUL insurance policy can accumulate cash value. Part of the premiums you pay are allocated to a cash-value account. That account tracks the performance of an underlying stock index, such as the Nasdaq or S&P 500 Composite Price Index. As the index moves up or down, the insurance company credits the cash value portion of your policy each year with interest.

IUL is different from fixed universal life insurance or variable universal life insurance. With fixed universal life insurance your rate of return is guaranteed, making it the least risky of the three. With variable universal life insurance, your cash value account is invested in mutual funds and other securities so you’re exposed to more risk. An indexed universal life insurance policy fits in the middle of the risk spectrum.

Cash value that accumulates inside an IUL insurance policy grows tax-deferred. You can borrow against this cash value if necessary, though any loans left unpaid at the time you pass away are deducted from the death benefit.

What Is a 401(k)?

A 401(k) is a type of qualified retirement plan that allows you to set money aside for retirement on a tax-advantaged basis. Contributions are deducted from your paychecks via a salary deferral. Your employer can also offer a matching contribution. The IRS limits the amount you can and your employer can contribute each year.

With a traditional 401(k), contributions are made using pre-tax dollars. Any money you contribute is automatically deducted from your taxable income from the year. When you begin taking money out of your 401(k) in retirement, you’ll pay ordinary income tax on withdrawals. Any withdrawals made before age 59.5 may be subject to a 10% early withdrawal penalty as well as income tax.

Traditional 401(k) plans allow you to invest in a variety of securities, including mutual funds and exchange-traded funds. Target-date funds are also a popular option. These funds automatically adjust your asset allocation based on your target retirement date.

There’s no death benefit component with a 401(k). This is money you save during your working years that you can tap into in retirement. Unless you’re still working with the same employer, you’re required to begin taking minimum distributions from a 401(k) beginning at age 72. Failing to do so can trigger a tax penalty equivalent to 50% of the amount you were required to withdraw.

IUL vs. 401(k): Which Is Better for Retirement Savings?

Indexed universal life insurance and 401(k) plans can both be used as investment tools for retirement. But there are some important differences to note. With IUL, returns are tied to the performance of an underlying index. If the index performs well, then your policy earns a higher interest rate. If the index underperforms, on the other hand, your returns may shrink. Your insurance company can also cap the rate of return credited to your account each year, regardless of how well the underlying index does. For instance, you may have a cap rate of 3% or 4% annually.

In a 401(k) plan, you have the option to invest in index mutual funds or ETFs but you’re not locked in to just those investments. You can also choose actively managed funds, target-date funds and other securities, based on your time frame for investing, goals and risk tolerance. Your rate of return is still tied to how well those investments perform but there’s no cap. So, if you invest in an index fund that goes up by 20%, you’ll see that reflected in your 401(k) balance.

A 401(k) also affords the advantage of an employer matching contribution. This is essentially free money you can use to grow retirement wealth. With an indexed universal life insurance policy, you’re responsible for paying all of the premium costs.

Another big difference between the two centers on tax treatment and withdrawals. With an indexed universal life insurance policy, you can borrow against the cash value at any time. You’ll pay no capital gains tax on loans and no penalties unless you surrender the policy completely or fail to repay what you borrow. Death benefits pass to your beneficiaries tax-free.

With a 401(k), you generally can’t tap into this money penalty-free before the age of 59.5, even in the case of a hardship withdrawal. You may be able to avoid a tax penalty if you’re withdrawing money for qualified medical expenses but you’d still owe income tax on the distribution. You could take out a 401(k) loan instead but that also has tax implications. If you separate from your employer with an outstanding loan balance and fail to repay the loan in full, the entire amount can be treated as a taxable distribution.

Qualified distributions in retirement are taxable at your regular income tax rate. And if you pass away with a balance in your 401(k), the beneficiary who inherits the money will have to pay taxes on it. Talking with a tax professional or your financial advisor can help you come up with a plan for managing tax liability efficiently both prior to retirement and after.

The Bottom Line

Indexed universal life insurance and a 401(k) plan can both help you build wealth for retirement but they aren’t necessarily interchangeable. If you have a 401(k) at work, this may be the first place to start when creating a retirement savings plan. You can then decide if IUL or another type of life insurance is needed to supplement your workplace savings as well as the money you’re investing an IRA or brokerage account.

Tips for Investing

  • When using a 401(k) to invest for retirement, pay close attention to fees. This includes the fees charged by the plan itself as well as the fees associated with individual investments. If a mutual fund has a higher expense ratio, for instance, consider whether that cost is justified by a consistently higher rate of return.
  • Consider talking with a financial advisor about how to maximize your 401(k) plan at work and whether indexed universal life insurance is something you need. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool makes it easy to get personalized recommendations for professionals in your local area in just minutes. If you’re ready, get started now.

Photo credit: ©iStock.com/yongyuan, ©iStock.com/kupicoo, ©iStock.com/Piotrekswat

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.

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Indexed Universal Life vs. Whole Life Insurance

Indexed Universal Life vs. Whole Life Insurance – SmartAsset

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Life insurance can provide a measure of financial protection against the worst-case scenario. Whole life insurance and indexed universal life insurance (IUL) are two types of permanent policies you might consider if you’re interested in lifetime coverage. While both policies can offer the opportunity to accumulate cash value while leaving behind a death benefit for your loved ones, they aren’t exactly the same. Understanding the differences between IUL vs. whole life insurance can help you decide which one may be right for you.

A financial advisor can help you sort through all the decisions that go into successful financial planning, not just deciding which type of insurance is appropriate.

Whole Life Insurance, Explained

Whole life insurance is a type of permanent life insurance. When you buy a whole life policy, you’re covered for life as long as your premiums are paid. This is different from term life insurance, which only covers you for a set term, say 20 or 30 years.

With a whole life insurance policy, you have a guaranteed death benefit that’s paid out to your beneficiaries when you pass away. Premiums usually remain level even as you age and the policy accumulates cash value over time.

You can borrow against that cash value if needed or use it to cover the premiums for your policy. Any outstanding loans remaining when you pass away are deducted from the death benefit that’s paid to the policy beneficiaries.

Indexed Universal Life Insurance, Explained

Indexed universal life insurance is also permanent life insurance coverage. Similar to whole life insurance, IUL insurance policies can accumulate cash value over time. You can take out loans against the cash value or leave it in the policy to grow.

The biggest difference between whole life and IUL is how cash value accumulates. With a whole life insurance policy, the cash value is guaranteed by the insurance company. If you’re using life insurance as an investment, that means the rate of return on your policy is fairly predictable.

Indexed universal life, on the other hand, works differently. The rate of return and the rate at which cash value accumulates in the policy is based on the performance of an underlying stock market index. Stock market indexes track a particular sector or segment of the market. So, for example, your IUL policy may track the movements of the S&P 500 Composite Price Index or the Nasdaq.

While the return potential for an indexed universal life policy can be higher than whole life insurance, returns aren’t unlimited. Insurance companies can impose a cap rate or ceiling on your returns each year. For instance, your policy might have a cap rate of 3% or 4% annually. The insurance company may also offer a minimum guaranteed rate of return.

IUL vs. Whole Life: Which One Is Better?

Indexed universal life insurance and whole life insurance can both help you accumulate cash value while retaining a death benefit. But one may suit you better than another, depending on your financial needs and goals. This is where it helps to understand what each one is designed to do. For instance, you might choose a whole life insurance policy if:

  • You’re interested in guaranteed, stable returns year over year
  • You want reassurance that premium costs won’t increase over time
  • You want a guaranteed death benefit with the option to borrow cash from the policy if needed

Whole life insurance is more expensive than term life insurance, but it can be less expensive than indexed universal life insurance. Guaranteed returns also make it the less risky option of the two, which may appeal to you if you’re looking for a more conservative addition to your financial plan.

On the other hand, there are some benefits to choosing an IUL policy over whole life. For example, you may consider an indexed universal life policy if:

  • You’re interested in earning higher returns
  • You need or want flexible premiums
  • You’re looking for a way to supplement retirement income

Indexed universal life insurance carries more risk since your returns hinge on how well the policy’s underlying index performs. It’s possible that you could even lose money but those losses may be limited if your insurance company offers a guaranteed minimum rate of return.

You also have more leeway with IUL insurance premiums compared to whole life insurance premiums. For example, you may be able to adjust your premium amount or temporarily suspend making premium payments and allow them to be covered by the policy’s cash value.

With both types of policies, the cash value can grow on a tax-deferred basis. You wouldn’t owe capital gains tax on earnings unless you were to surrender the policy. And any death benefits passed on to your policy beneficiaries would be tax-free.

How to Choose a Life Insurance Policy

Life insurance is something most people need to have and there are several questions to consider when choosing a policy. Specifically, ask yourself:

  • How long you need coverage to remain in place
  • What amount of coverage is appropriate for your financial situation
  • How much you’re comfortable paying toward premium costs
  • Whether you’re interested in accruing cash value
  • What degree of risk you’re comfortable taking

These questions can help you determine whether term life or a permanent life insurance policy is the better fit. And if you opt for permanent life insurance, they can also help you decide between IUL vs. whole life insurance.

Don’t forget that there’s also a third permanent life insurance option available: variable universal life insurance. With variable universal life insurance, you’re investing the cash value portion of the policy directly into mutual funds or other securities, rather than tracking a stock market index. This type of policy can offer the highest return potential but it can also carry the most risk.

Talking to an insurance agent or broker can help you decide whether IUL vs. whole life insurance or another type of life insurance, makes the most sense. You may also want to talk to your financial advisor about how to use life insurance effectively when crafting your estate plan.

The Bottom Line

Indexed universal life insurance essentially combines an investment tool with a life insurance policy. You might find that attractive if you’ve exhausted your 401(k) contributions or IRA contributions for the year but still have money to invest. On the other hand, you might lean toward whole life insurance if you want a guaranteed death benefit with lifetime coverage.

Tips for Estate Planning

  • Using an online life insurance calculator can help you determine how much life insurance you need. Generally, financial experts often recommend having anywhere from 10 to 15 times your annual income in coverage but the specifics of your situation may dictate having a larger or smaller death benefit.
  • Talk with your financial advisor about the best type of life insurance for your needs and how much coverage to get. If you don’t have a financial advisor yet, finding doesn’t have to be complicated. SmartAsset’s financial advisor matching tool can help you connect with professional advisors in your local area in minutes. If you’re ready, get started now.

Photo credit: ©iStock.com/AleksandarGeorgiev, ©iStock.com/PeopleImages, ©iStock.com/designer491

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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Source: smartasset.com

Does Medicare Cover the Shingles Vaccine?

Both Medicare Part D plans — also called Medicare drug plans — and Medicare Advantage plans with prescription drug coverage cover the shingles vaccine, which prevents shingles infections and is approved for use by people 50 and older. Original Medicare (Part A and Part B) doesn’t provide coverage.

Medicare drug plans and the shingles vaccine

Unlike Medicare parts A and B, which are government insurance plans that cover hospital insurance and outpatient medical insurance, respectively, Medicare drug plans are private insurance policies developed by providers that have contracts with the federal government. You might purchase such a policy if you have Original Medicare or a Medigap plan and need prescription drug coverage.

While all Medicare drug plans cover the shingles vaccine — along with all commercially available vaccines that are reasonable and necessary to prevent illness — the coverage levels, premiums, copayments, deductibles and coinsurance requirements vary. For instance, while you may find a policy with a very low or even a $0 drug deductible, many have drug deductibles over $400. If you haven’t met your deductible, you may end up paying full price for the shingles vaccine.

Your final cost will also depend on how your plan classifies the shingles vaccine in its formulary, the list of drugs it covers. Shingrix is often classified as a Tier 3 drug, one of the most expensive tiers, which means you’ll have to pay much more than you would for a generic drug.

Can Medigap help?

Medigap, or Medicare Supplement Insurance, adds coverage to Original Medicare. Such plans are sold through private insurers. Although some older Medigap policies may cover prescription drugs, any Medigap policies sold after Jan. 1, 2006, don’t include drug coverage and won’t help pay for the shingles vaccine.

Does Medicare Advantage cover the vaccine?

Like Medicare drug plans, Medicare Advantage plans, otherwise known as Medicare Part C plans, are private insurance policies from providers that have contracts with the federal government. This means each plan has its own set of premiums, benefits, copayments, deductibles and coinsurance.

Medicare Advantage plans with prescription drug insurance also cover the shingles vaccine. Some plans even have a $0 deductible for drugs. If your Medicare Advantage plan doesn’t include prescription drug coverage, you may be eligible to purchase a separate Medicare drug plan to help cover vaccine costs.

What does the shingles vaccine cost?

The average retail price for a single dose of Shingrix, the shingles vaccine recommended by the CDC, is about $200, and the typical copay for patients who’ve paid their deductible but haven’t reached the drug expense threshold known as the donut hole or coverage gap can range from $0 to $164, according to the prescription drug coupon website GoodRx.

You may be able to offset the cost of the shingles vaccine with discount coupons from GoodRx or other similar companies. Those who meet certain income and asset requirements may also qualify for programs such as the Part D Low-Income Subsidy or state pharmaceutical assistance programs to reduce out-of-pocket costs.

Who should get the shingles vaccine?

The CDC recommends that adults age 50 and older receive the two-dose Shingrix shingles vaccine. This recommendation extends to those who’ve had shingles in the past, since shingles can sometimes reoccur. However, the CDC recommends against getting the vaccine in certain cases — for instance, if you’re currently experiencing a shingles outbreak.

If you’re unsure about whether you should get this vaccine, ask your primary care provider.

Source: nerdwallet.com

Why Everyone Over 30 Should Start Thinking About Life Insurance

I don’t like to make generalizations too often, but I do feel that everyone over 30 should start thinking about the importance of life insurance. That is, if you’re 30 and over and don’t have any life insurance.

No one likes to think about their demise, but life insurance is an extraordinary product that can be used to reduce the financial burden you could leave behind for loved ones. Plus, different types of life insurance can even help you build wealth and diversify your assets.

Here are 4 important reasons why everyone over 30 should start thinking about life insurance.

The Insurance At Your Job is Probably Not Cutting It

By now you probably realize the life insurance coverage that your job offers is not enough. Some employers include life insurance in their list of benefits which is great, but the coverage amount often doesn’t come close to your insurable need.

Your insurable need represents how much life insurance you should hold depending on factors like your age, liabilities, health conditions, and so on. One common rule of thumb is that your average life insurance coverage amount should be 7 to 10 times your annual income.

So if you’re earning $60,000 per year, you might want to consider a policy of $420,000 to $600,000 depending on your needs. However, the average employee life insurance policy amount is only around $25,000 to $50,000 or one years’ salary. This is not nearly enough.

Plus, when you leave your job, you’ll lose your insurance benefits too. This is why it’s always important to consider having your own life insurance coverage independent of your employer. So many people are switching jobs every 2 to 3 years so you may not want your life insurance benefits to be tied to your employer anyway.

Term life insurance is pretty affordable and you can get a free quote in just a few minutes from Bestow.

Here are 4 important reasons why everyone over 30 should start thinking about life insurance. Click To Tweet

You Want to Protect Loved Ones From a Financial Burden

You don’t have to be married with kids and a house to want to consider life insurance. However, more people in their 30s do focus on settling down and working toward some of these milestones.

If you do have kids, a mortgage, etc. you’ll definitely want to consider how your partner would get by if anything did happen to you. Would the kids still be able to go to college? Would your spouse be able to keep the house? These are important questions that life insurance can help you answer.

Even if you’re single and at the height of your career. More people in their 30s are carrying debt like student loans and personal loans. Did you know that some types of student loan debt can not be forgiven even if you died? You probably don’t want to pass on any financial burdens to your parents or other loved ones who would have to fit the bill.

Life insurance provides a tax-free payment to your beneficiary which can help cover everything from debt payments, loss of household income, funeral arrangements, and more.

RELATED: How Much Life Insurance Do You Really Need

30 Is Still Young Enough to Lock in Affordable Rates For Whole Life Insurance

Let’s say you’re considering the importance of life insurance. Whole life insurance in particular. Whole life insurance is permanent insurance that builds cash value as you continue to pay your premiums.

Other types of insurance, like variable whole life, even allow you to invest some of the cash value and grow the amount faster. You can borrow from your cash value, use it to pay your life insurance premiums, or even withdraw it while you’re still alive and well.

While whole life insurance is cheaper than term life, costs increase around the board as you get older. If you’re considering whole life insurance, the best option is to get a policy while you’re younger. Thirty years old is not too old to still get a decent rate for your life insurance premiums. Plus, it allows you enough time to build cash value that could be put to use in the future.

Get Insured and Protected From Medical Issues

Yes, life insurance is geared toward providing financial relief for your loved ones. Depending on your policy, you may be able to obtain something called ‘living benefits’. Living benefits are an insurance rider (which means it’s an added on feature) that can be added to your term or whole life insurance policy.

Living benefits can allow you to use some of your life insurance coverage amount to pay medical expenses for a serious illness or condition. Of course, this will reduce the benefit provided to your beneficiary, but it can still be a helpful feature to help you cover medical bills that could otherwise be left for your loved ones to deal with anyway.

No one likes to think about getting sick or becoming terminally ill, but planning for the best and worst is just a part of adult life. As you get older, your health tends to decline but if you’re still healthy in your 30s, it’s the perfect time to lock in a life insurance policy and consider adding a living benefits rider.

RELATED: Should You Get Disability Insurance? 4 Ways to Decide


Life insurance should be apart of everyone’s financial plan. Knowing the importance of life insurance can be life-saving information. If you’re over 30 and still don’t have coverage. Consider all the reasons to get a term or whole life policy. Consider your current future needs and carefully weigh the pros and cons.

Remember, you can get a free no-obligation quote from Bestow in just two minutes.

Source: everythingfinanceblog.com

How to Get or Replace Your Medicare Card

When you need to get a Medicare card or replace one, you can easily request it online or by phone. Whether you’re enrolling in Medicare for the first time or replacing a lost, stolen or damaged card, obtaining the traditional red, white and blue Medicare card shouldn’t be an obstacle to receiving and paying for health care.

The card includes your name and Medicare number, and if you’re an Original Medicare beneficiary, it will show if you have Part A (hospital coverage), Part B (medical coverage) or both. You’ll use this card to get your Medicare-covered services. If you have a Medicare Advantage Plan or Part D prescription drug plan, you’ll get a card from the provider when you enroll.

If you signed up for Medicare or Social Security, your card will be mailed

If you’re already receiving Social Security benefits as your 65th birthday approaches, you’ll automatically be enrolled in Medicare, and your card will be sent by mail to you.

Otherwise, soon after you sign up for Medicare, you’ll be mailed a “Welcome to Medicare” package that will include your card.

Replace a lost, stolen or damaged Medicare card

If you can’t find your Medicare card or it’s damaged (it’s printed on paper, not plastic), there are a few ways to replace it. You can get a replacement almost instantly by logging in to your secure account on Medicare.gov to print an official copy of your card at home, at a public library or wherever you have secure access to a printer. You can log in to or create your online account on Medicare.gov.

Alternatively, you can call Medicare at (800) 633-4227 to request that a new card be sent by mail. You can also call or visit your local Social Security office to apply for a replacement card. The downside of requesting a card through these agencies? You won’t receive it for about 30 days.

If you’re at a medical facility and realize you don’t have your card, ask the provider to look up your Medicare number online, which they often can. It’s also a good idea to make a copy of your Medicare card and keep it on your phone or in another safe place.

Medicare Advantage enrollees get a separate card

If you have Medicare Advantage, you’ll need your plan’s card to receive services. That card will be mailed to you automatically soon after you enroll. If you need to replace it, call your plan provider. Likewise, if you need a card for your prescription drug plan (Medicare Part D), contact your provider.

In any case, always keep your Medicare card and Medicare number in a safe place. Medicare fraud is a big problem, and it will be a hassle if your card or number is stolen. If you believe that someone is using your Medicare number, call (800) 633-4227 to report it.

Source: nerdwallet.com

Does Medicare Cover Eye Exams?

Original Medicare doesn’t pay for routine eye exams unless you’re known to be in a high-risk group for eye disease — although some Medicare Advantage plans do include vision coverage.

Because some potentially serious eye conditions aren’t apparent to the patient in their early stages, when treatment could prevent or reduce loss of vision, it makes sense for anyone eligible for Medicare to find a way to get periodic eye exams.

Most Americans ages 60 and up should have an eye exam every year or two, as should people in high-risk groups, such as 40-and-older African Americans and individuals with high blood pressure, diabetes or a family history of glaucoma, according to the National Eye Institute.

When does Medicare cover eye exams?

Medicare Part B (part of Original Medicare) covers an eye exam only when a patient has diabetes, which can cause diabetic retinopathy, or is deemed at risk for glaucoma or macular degeneration. Any of these diseases can cause blindness.

Does Medicare cover eyeglasses or contact lenses?

Original Medicare doesn’t cover corrective lenses in most cases. However, Medicare Part B may cover one pair of eyeglasses or contact lenses if needed after cataract surgery.

Can Medigap or Medicare Advantage cover vision care?

Medigap, also known as Medicare supplemental insurance, doesn’t cover routine eye exams for people who haven’t been identified as high risk.

Some Medicare Advantage Plans, also known as Medicare Part C and provided through private insurers, may cover eye exams even when you’re not in a high-risk group. Contact the private insurers that offer Medicare Advantage Plans to ask about their vision care coverage, which might include eyeglasses and contact lenses as well as eye exams.

But since a routine eye exam isn’t a major medical expense, choosing Medicare Advantage just for that coverage may not always be the best value.

How else can you get eye exam coverage?

Private vision insurance, provided by many employers and also available to individuals, is a way to spread out over the year some of the costs of eye exams, eyeglasses and contacts, and possibly save money. You might be able to get insurance for vision care for about $20 per month.

For some people, it may make sense to simply pay for their eye exam out of pocket. The average cost of a dilated eye exam, including a vision test, glaucoma check and other assessments, is about $200 for a new patient or $128 for an established patient.

For people with low incomes, Medicaid in most states covers routine eye exams. Some states have copays, but they’re usually small.

The American Academy of Ophthalmology’s EyeCare America program offers eligible people ages 65 and up an eye exam by a volunteer ophthalmologist, often with no out-of-pocket cost. You don’t need a low income to qualify for this program.

Source: nerdwallet.com

Discriminatory Practices Leave Black Americans With Less Life Insurance

The relationship between life insurance and the African American community is complex. Although Black Americans are more likely to own life insurance than whites, a recent study shows, their coverage is often far less.

The sizable coverage gap between Black and white Americans has many causes, experts say, including the way life insurance was sold in the Black community and how discriminatory practices have impeded access to coverage.

Without adequate life insurance, families may find it difficult to protect and pass on assets to the next generation. It’s not always obvious how much life insurance is enough, but there are ways to calculate the right amount of coverage.

What is the life insurance coverage gap?

Black Americans typically have one-third of the coverage of their white counterparts, according to a 2020 study by Haven Life, an insurance company. Both groups had less than the recommended coverage amount outlined in the study of five to 10 times annual income. But Black respondents reported having life insurance equal to about a year’s income, compared with almost three years’ worth for whites.

Having the right amount of life insurance can help beneficiaries cover costs like living expenses or debts. And given the COVID-19 pandemic, this safety net perhaps feels all the more necessary.

But historically, life insurance was often sold to African Americans as burial insurance — smaller, cheaper policies that cover the bare minimum. “Those door-to-door salesmen weren’t always truthful with them,” says Jessica Smith, an insurance agent in Marietta, Georgia, and clients weren’t told about other options.

Causes behind the coverage gap

After the Civil War, insurers began classifying Black people who were former slaves as higher mortality risks, meaning they were charged more or denied coverage altogether. These practices stretched into the 1960s, with separate sets of rates for Black and white applicants. Some states banned race-based underwriting, but many insurers simply took their business elsewhere, reducing access to coverage and segregating the industry.

For a long time, Black people were “excluded from the conversation of just protecting their assets and protecting their loved ones,” says Malcolm Ethridge, executive vice president and financial advisor with CIC Wealth.

Insurance companies would also find creative ways to not pay claims, Ethridge adds, “so then there became this level of mistrust between the Black community and the insurance world.”

Years of discriminatory policies also reduced access to medical care, housing and education for many Americans, and all these things can factor into the cost of life insurance.

If an applicant with a high school diploma, living in a poor neighborhood, applies for the same $2 million policy as someone with a Ph.D. living in an affluent neighborhood, the less educated applicant may get approved for coverage but will likely pay more for it, Ethridge says.

If premiums are too expensive, coverage becomes inaccessible, wealth may be harder to pass down, and the situation compounds.

Why the gap is a problem

The legacy of segregation, redlining and discriminatory policies has made accumulating generational wealth a challenge for many in the Black community, and the Haven Life study found that Black Americans are more likely than whites to think of life insurance as a way to pass down generational wealth.

This approach poses a problem when a person dies and is underinsured. In this case, assets that would have been passed down are often liquidated to pay for expenses, and less wealth is passed on, Ethridge says.

Getting the right amount of coverage

Many of these causes are the result of bigger historical and social issues, making it hard for policyholders to close the gap themselves. And being underinsured isn’t always easy to recognize.

If you’re not sure whether you have enough coverage, a financial advisor, insurance agent or online calculator can help you estimate how much life insurance you need.

“We first want to figure out what they want the life insurance funds to do for them once they’re gone,” Smith says. “Then we have to determine what amount of money they would need to achieve that goal.”

If people rely on you financially, you may want a large payout to support them for multiple years after you die. Alternatively, if you don’t have any financial obligations or dependents, you may not need coverage at all.

Source: nerdwallet.com

Salary Needed to Afford Home Payments in the 15 Largest U.S. Cities – 2021 Edition

Salary Needed to Afford Home Payments in the 15 Largest U.S. Cities – 2021 Edition – SmartAsset

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Housing costs eat up more of the average American’s salary each month than any other single expense, reaching about one third of average expenditures in 2019, according to data from the Bureau of Labor Statistics. And while homeownership is coded into the DNA of the American Dream, buying a home isn’t easy for many. Car payments, student loans, credit card bills and other debts can make it difficult to qualify for a home loan and keep up with mortgage payments. That’s why SmartAsset analyzed data from the 15 biggest U.S. cities to estimate how much money you will need to make – and not exceed the recommended 36% debt-to-income ratio – to afford monthly home payments.

Our study compares these cities using the following factors: median home value, property tax rate, down payment, homeowners insurance and other monthly non-mortgage debt payments. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAsset’s fourth study on the salary needed to afford home payments in the 15 largest U.S. cities. Check out the 2020 version of the study here.

Key Findings

  • California is expensive. Three California cities – San Jose, Los Angeles and San Diego – are included in the 15 largest U.S. cities, and they all rank within the top four of this study, at first, third and fourth, respectively (with New York City claiming second place). Our findings show that living in California can be very costly if you want to own a home. The average salary (with no additional debt) needed to afford home payments across these three cities is $111,533.
  • Home prices vary by more than 5x. Homes in big cities are usually more expensive than homes in suburbs or small towns. But our study reveals that there is also a big difference among the 15 largest U.S. cities. The highest median home value on our list is higher than five times more expensive than the lowest. San Jose, California has a median home value of almost $1 million, while San Antonio, Texas has a median home value of just $171,100.

1. San Jose, CA

Homeowners in San Jose, California need to have the highest income out of all 15 cities to afford their home payments. Our study shows that they have to earn $143,233 (with no debt) to afford a property with a median home value of $999,900. That income goes up to $159,900 when a homeowner has $500 in monthly debt payments, $168,233 if he or she owes $750 a month and $176,657 with $1,000 of additional monthly debt. On a more affordable note, the property tax rate in San Jose is relatively low, at 0.76%.

2. New York, NY

The Big Apple comes in second, but if you want to buy a home in New York City, you will need to earn at least $98,867 with no additional debt to afford house payments. If you owe $1,000 in monthly debt payments, you will need to make $132,200. The median home value in NYC is $680,800, and the median real estate tax bill is $5,633.

3. Los Angeles, CA

Los Angeles’ median home value is slightly higher than New York City’s and the second-highest in the study ($697,200). The property tax rate, however, is the second-lowest overall – at just 0.68%. If you have no debt, you’ll need to earn at least $98,333 to make home payments and keep your debt-to-income ratio less than 36%. But if you owe $500 each month, you’ll need an income of at least $115,000.

4. San Diego, CA

San Diego, California’s median home value is $658,400, fourth-highest in the study. The average property tax rate, however, is third-lowest at 0.69%. If you have monthly debt payments of $1,000 before you take out a mortgage, you’ll need to earn at least $126,367 to afford house payments in San Diego. By comparison, if you have a monthly debt of $750, you will need to make $118,033.

5. Austin, TX

Austin, Texas homeowners without debt must earn a minimum of $64,600 to make their housing payments. Their income requirements rise to $81,267 if they have a monthly debt payment of $500. The median home value in Austin is significantly lower when compared to the top four cities on this list, at just $378,300. But the property tax rate is more than twice as high, at 1.75%.

6. Chicago, IL

The median home value in the Windy City is $275,200. Chicago homeowners have to pay a fairly high property tax rate, at 1.54%. If they do not have any monthly debts, they’ll need to earn at least $45,400 to afford monthly home payments without exceeding the 36% debt-to-income ratio. If they owe $1,000 in debt payments outside of their mortgage, they’ll need to earn $78,733.

7. Dallas, TX

Dallas has the fifth-highest property tax rate in this study, at 1.66%. The median home value in the city is $231,400. Homeowners without a debt must earn at least $38,933. But if they owe $750 in monthly debt, they’ll need to make at least $63,933 to afford a mortgage.

8. Charlotte, NC

Charlotte, North Carolina has a median home value of $252,100 and a property tax rate of 0.94%. Homeowners here must earn $37,367 without any additional debt to afford housing payments. If you owe $500 in monthly debt payments outside of your mortgage, you’ll need to make at least $54,033 for your housing payments.

9. Forth Worth, TX

The property tax rate in Fort Worth is 1.98%, the highest rate across all 15 cities. The median home value is $209,400, and homeowners with additional monthly debt payments of $750 need to make $62,100 to live comfortably in this city. By comparison, if their non-mortgage debt payments are only $500 each month, they will need to earn $53,767.

10. Phoenix, AZ

The property tax rate in Phoenix, Arizona is 0.58%, the lowest in this study. The median home value is $266,600. Homeowners can afford making mortgage payments with an income of $36,867 as long as they have no other debt. But if they have $750 in monthly debt payments, they’ll need earn at least $61,867.

11. Houston, TX

Houston’s property tax rate, like in the other Texan cities in the top 15, is fairly high – third-highest in the study, in fact, at 1.78%. The median home value, though, is much lower on the list, at $195,800. To afford the home payments without breaking the 36% debt-to-income rule, you’ll need to earn at least $50,267 if you have $500 in other monthly debt payments. If you’ve managed to stay debt-free before the mortgage, you’ll only need $33,600 in annual income.

12. San Antonio, TX

The median property tax rate in San Antonio, Texas is 1.91%, the second-highest property tax rate in the study. The median home value is $171,100. To afford payments on the median San Antonio home, you’ll need to earn at least $29,967 and have no additional debt payments. If you owe a monthly debt of $1,000 outside of your mortgage, you’ll need to earn at least $63,300 to afford home payments comfortably.

13. Jacksonville, FL

Jacksonville, Florida’s median home value is $200,200, and the property tax rate is relatively low at 0.87%. This means that you’ll need to make $29,300 to afford an average house payment as long as you have no additional monthly debt. If you are making other debt payments of $500 each month, you’ll need to earn at least $45,967 to afford home payments in Jacksonville comfortably.

14. Columbus, OH

Columbus, Ohio’s property tax rate is 1.60%, and the median home value is $173,300. Homeowners with additional debt payments of $500 each month must earn at least $45,533. Doubling monthly non-mortgage debt payments to $1,000 means that they’ll need a salary of at least $62,200.

15. Philadelphia, PA

The median home value in the city of Brotherly Love is $183,200, and the property tax rate is 0.91%. If you have no other debt, you’ll need a salary of at least $27,000 to make home payments in Philadelphia. If you owe $750 in monthly debt payments outside of your mortgage, you will have to earn a minimum of $52,000 per year.

Data and Methodology

To find the minimum required salary to afford home payments in the 15 largest U.S. cities, we used data from the U.S. Census Bureau. First, we took the median home value in each city and calculated the cost of a 20% down payment. We then used the average real estate taxes paid in each city and the median home value to find the average property tax rate. Using those figures and our mortgage calculator, we found the average monthly home payment in each city assuming a homebuyer would get a 30-year mortgage with a 3% interest rate for 80% of the home value (the balance after paying a 20% down payment). We also factored in an annual homeowners insurance payment of 0.35%.

After finding the average monthly home payment, we calculated the income needed to make those payments while not exceeding a 36% debt-to-income ratio. We also considered the necessary income to make home payments based on prospective homebuyer debt levels, which ranged from no monthly debt payments to debt payments totaling $1,000 per month.

We ranked each city from the highest minimum income (with no additional debt) needed to afford home payments to the lowest minimum income (with no additional debt) needed. Median home values and median household incomes are from the U.S. Census Bureau’s 2019 1-year American Community Survey.

Tips for Homeownership

  • Feel at home in your finances with a trusted advisor. Want to buy a house and make sure your finances stay sound? Consider working with a financial advisor. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors, get started now.
  • Be realistic. Make sure you know how much house you can afford before you even start looking at homes so you don’t fall in love with a unit that is above your price range.
  • Budgeting is key. If you want to start saving for a down payment, make a budget and designate a certain amount to put aside for that each month.

Questions about our study? Contact press@smartasset.com.

Photo credit: ©iStock.com/KenWiedemann

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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Home Insurance Calculator: Estimate Your Costs

Buying a home means you’re also buying something else: homeowners insurance. And while it isn’t your biggest expense, how much you pay for insurance will impact your home ownership costs.

The national average cost of home insurance is $1,631 a year, according to NerdWallet’s 2020 rate analysis. But the amount you pay can vary substantially depending on several factors. Here’s how to get a better idea of what your home insurance might cost.

How to estimate your home insurance

Determine how much coverage you need

A typical homeowners insurance policy includes six components, and the amount of coverage you want for each type will help determine your overall premium. The six types are:

  • Dwelling, which pays for damage to the main structure of your home.

  • Other structures, which covers unattached structures like sheds and fences.

  • Personal property, which covers your belongings.

  • Additional living expenses, if you need to temporarily relocate while your home is being repaired.

  • Liability, should you cause property damage or injury to someone else.

  • Medical payments, which pays for treatment to someone injured on your property or if you, a family member or a pet have injured someone elsewhere.

Typically, you need enough dwelling coverage to pay the costs of completely rebuilding your home.

Several of the others may be calculated as a percentage of your dwelling coverage — generally 10% for other structures, 50% to 70% for personal property and 20% for additional living expenses. Liability coverage usually starts at $100,000 and can be higher depending on your needs. Medical payments coverage typically has a low limit, between $1,000 and $5,000.

Choose your insurance deductible

Your insurance deductible is the amount you pay out of pocket for a covered claim before insurance kicks in. A typical homeowners insurance deductible ranges from $500 to $2,000.

The higher the deductible you set, the lower your premium.

Evaluate other factors

Physical characteristics of your house, such as its age, the condition of the roof and compliance with current building codes, will all affect the cost of insurance. A swimming pool will likely require additional liability coverage.

Similarly, location can play an important role. Insurers may weigh factors such as the quality of local fire safety and the home’s proximity to the coast.

Consider supplemental coverage

Standard home insurance policies do not cover damage from floods or earthquakes, but separate coverage may be available for these and other home insurance exclusions. If your home is at risk, you may want additional coverage.

Use a coverage estimator

Some insurers offer tools for estimating how much their home insurance will cost. These features typically use a limited set of information, but they will at least give a sense of your potential costs.

NerdWallet home insurance calculator

NerdWallet offers a ZIP-code-based calculator to help you estimate your homeowners insurance premium. The sample homeowner is a nonsmoker with good credit living in a single-family, two-story home built in 1983. The hypothetical homeowner had a $1,000 deductible and the following coverage limits:

  • $300,000 in dwelling coverage.

  • $30,000 in other structures coverage.

  • $150,000 in personal property coverage.

  • $60,000 in loss of use (additional living expenses) coverage.

  • $300,000 in liability coverage.

Source: nerdwallet.com