Tag: insurance

What is ADB or Accelerated Death Benefit?

Sanjiv Gupta CPA - 6 months ago
An ADB or accelerated death benefit is the benefit attached to life insurance policies. This insurance benefit pays the insured while he is still living. This lets the policyholders receive advances in cash and not the death benefit when the holder has a terminal disease. Individuals who prefer ADBs are those who have less than a year left. The money they receive is what they use for additional costs like medicine and treatments so that they can keep living.When choosing insurance policies with accelerated death benefits, the policyholder can then pay for day to day expenses. Another upside is that when they pass away, their loved ones do not have to worry about the final expenses such as funeral and burial costs. In fact, they can even live comfortably. This kind of benefit started around the late 1980s. This was to lessen financial pressures, especially individuals who were living with AIDS.There are policies that have this available for their holder even if it is not stated clearly in the contract. How does an Accelerated Death Benefit work?It is worth investing in life insurance. It ensures that the loved ones of the policyholder receive the financial protection required when the latter passes away. It is also an opportunity for the holder to provide for his family if there is a tragic and unexpected occurrence – like accidents. However, what about those who have conditions that are draining their bank accounts?This is where the Accelerated Death Benefit comes in and becomes the savior. In most cases, people going through the terminal and diagnosed illnesses are considered to be eligible to get the ADBs. This is the reason why it is also regarded as a living benefit. Definition of a Living Benefit?Living benefits are added to insurance policies before as well as after these have been purchased. With living benefits, patients diagnosed with terminal illnesses can also access portions of their benefits before they pass away. Initially, when living benefits were created, it was strictly for those who were diagnosed with AIDS/HIV. Over a period of time, it was then offered to patients who were diagnosed with cancer, kidney failure and terminal illnesses aside from AIDS. Medical expenses for these terminal illnesses can also be quite expensive. There are living expenses that the patient have to pay off as well. Living benefits can help all the expenses and can also be a form of assistance to those who are suffering from these terminal illnesses. A number of insurance companies provide living benefits in the form of the rider through life insurance policies. It comes in different forms of packages and there are lots of payment options to choose from. All in all, these have living death benefits. The death benefit is received when the policyholder has already been diagnosed with a terminal disease. It can also be obtained when the policyholder eventually contracts a disease. Contacting a terminal disease is definitely not in the mind of most people but for a majority, living benefits are something that they prefer to have in their policies. By having this, they can receive a particular percentage from death benefits. The percentage depends on their insurance companies. After death, the remaining percentage of the benefit is then paid out to the beneficiaries of the policyholder. If the holder recovers from the illness, they do not have to repay what they received in the form of benefits. Pros & Cons of Accelerated Death BenefitsSeniors who are terminally ill have insurance policies that can receive a percentage of the death benefits from their insurance providers way before their death. These benefits can also be used for any kind of assistance, especially for senior citizens. They can use this for nursing home care, hospice, assisted living and home care. ADB beneficiaries can also receive death benefits even if it is reduced in the amount of the ADB. ADBs are relatively new options. This results to elderly individuals who have been holding their policies for a number of years but not noticed that they can get the ADB in there. Policyholders who are interested should also ask their insurance providers if this option is available for them. The advantage of receiving accelerated death benefits is that they let policyholders have a percentage of the death benefit even before they pass away. There is no really major downside to this. The limitation is that there are policyholders that are required to only obtain this if they have been diagnosed by hospitals that they are terminally ill. Other Options for Life Insurance Policy HoldersThe same option that can be provided to terminally ill seniors is regarded as the viatical statement. Under this, policies are sold to the third party and the holder receives a settlement that is of a lump sum. The difference between viatical statements and that ADB is that with the latter, policy owners continue to pay monthly premiums. With the former, the person who purchased the policy is in charge of the payments on a monthly basis. This is the very reason why seniors prefer viatical settlement instead of accelerated death benefits. Death benefits which are also regarded as life insurance loans are options for seniors. This kind of loans with low interest allows the policyholder to borrow despite the cash value that is stated on the insurance policy. Borrowers can then pay the debt that they owe in their own time. They also have the option to not make payments. During the time of the death of the policyholder, the loan amount including the interest is then subtracted from death benefits. Benefits and LimitsAccelerated death benefits have no restrictions. Most cases have families who receive ADB putting the resources to a cost that provides food for loved ones. This is not a requirement nonetheless. The benefits are then paid out in a lump sum that arrives to policyholders once. However, there are insurance companies that offer installments. These policy holders then get an amount every month. It is very important to distinguish which option is better for them and has more impact on the eligibility of the Medicaid insurance of the policyholder along with their loved ones. When applying for accelerated death benefits, there is a requirement to release medical information. This lets the insurance companies be in the know of the life expectancy of the person that will be insured. Benefits are then paid out in four to six weeks. It is important to note that ADBs can have as high as 95% when it comes to death benefits. The insurance provider also sets maximum benefits that are based on the life expectancy of the holder. This then makes him come up with a final decision on the financial advance that they are required to obtain. It is very crucial for policyholders to also know that ADBs are not taxed. Qualifications for Accelerated Death BenefitsAn individual qualifies for living benefits if he or she has been contracted or diagnosed with a terminal disease. They are then expected to die in just a matter of two years. If they have this illness then this reduces their life span. If the diagnosed illness requires the policyholder to have an organ transplant, then the benefits cover their care in a hospice, even if this is long-term care. Accelerated death benefits provided to individuals who require assistance on a daily basis. The definition of this assistance are activities such as using the toilet and bathing. The cost of living benefits also depends on the insurance provider. If the policy already includes coverage, then the cost also comes with the policy. If this is not the case, policyholders pay fees or percentage for the death benefit. Taxation of Accelerated Death BenefitsADBs are usually not taxable. This is because the benefits are tax-exempt for those who expect they will die in a matter of two years. This kind of benefit is not there to serve as a substitute for long term coverage. It is a supplement for the costs that the insurance company failed to cover. If policyholders think that they are eligible and qualified for death benefits, it is best that they clarify this with their insurance agents. They should also remember that receiving living benefits affect their eligibility for SSI as well as Medicaid. Example of an Accelerated Death BenefitHere is how accidental benefit riders can play the policy out. 1. The client has a critical, terminal and chronic illness that qualifies under the insurance. 2. The client has filed a claim that accelerates the portion of death benefits. 3. The claims department, as well as the underwriters, are responsible for reviewing the prognosis ratings as well as the medical records of the potential policyholder. This is how they can estimate the discounted offer. It depends on the life expectancy and if there will be changes. If life expectancy is high, then the percentage that is offered to the client is also high. 4. Once the client accepts, then they can receive the lump sum of the amount that has been determined in a matter of two weeks. If the death benefit is then accelerated, then the face that remains is $0. The policy is also terminated. If there is still part of the portion remaining, then the premium of the client will also be reflected on the new face amount. Accelerated Death Benefits and Chronic IllnessesRegarding chronic illnesses, there has been a proposition but it has not yet been adopted to the rider. The IRS is yet to provide their policies on payments of critical illnesses. There is hardly or probably no accelerated benefit that is taxed by IRS. This is considering that the policy is turned into a MEC or a modified endowment contract. Once this happens, then it will remain a modified endowment contract.  All the benefits that go with it will also be taxable. Policyholders are advised to always have tax advisors or CPAs with them whenever they deal with IRS. Life Insurance and Accelerated Death RidersNo one can predict the future. No one wants to ponder on how they will die – whether they will suffer from a terrible illness or they will die in their sleep. Nonetheless, it is crucial that everyone plans for worst-case scenarios possible. Loved ones deserve as much protection as they can especially when it’s the head of the house who is diagnosed with the illness and is counting down the days. If this happens, then the holder will only leave his loved ones with quite a massive debt due to the final expenses. Funeral and burial expenses are also not cheap. They can be quite expensive. So if loved ones already have debt, giving them more debt is not a good idea. Not only do they lose someone they love dearly, but they will also be in a difficult financial situation.A common reason why a number of people do not get life insurance or even an accelerated rider is they assume it is quite expensive and way beyond their budget. That is not far from the truth. There are situations when there are multitudes of options that provide your family with the life insurance and protection that they need. The best and easiest way to obtain the insurance rate at its lowest is through an insurance agent that works independently. Unlike traditional agents, these independent agents do not work with just one company. They represent dozens of insurance providers that are highly rated all over the nation and they can easily bring the lowest premiums to the policyholder. Insurance companies are different from one another. For one, they have different ways of calculating their premiums on the riders and life insurance. In order to get the best rates, compare multitudes of quotes even before choosing the best insurance policy that works for you. It is a waste of time calling each and every agent. Go to one expert and compare all the possible plans that you can have. 

Medi-Cal vs Obamacare - What's the difference?

Sanjiv Gupta CPA - 6 months ago
First, let's see what is Obamacare (at least what is left of it).During the presidency of Obama, a bill was signed that was known as the Affordable Care Act or ACA. President Obama promoted it as Obamacare and this phrase quickly caught on.  This act provided numerous benefits to those who were uninsured and those with pre-conditions.  However, it also came with a penalty for those who didn't have insurance.  Penalty clause was repealed by the Trump administration (GOP Tax Bill that was enacted in December 2017).   Just to clarify, if you were uninsured in 2018, the penalty will still be assessed. Obamacare is usually referred to health insurance plans that are sold in the health insurance exchanges. Now, let's take a quick look at Medical.What is Medi-Cal?This is a government health insurance program. It is often FREE or low-cost.  Almost everyone with lower income can meet the criteria for Medical. Seniors, children, adults, people with disabilities, Kids in foster parents care can qualify for Medical. Do they cover all the services ?No, they do not.  These low-cost insurance plans usually only cover essential health benefits. For example:Emergency servicesAmbulatory patient services.HospitalizationPreventive and wellness services and chronic disease management.Laboratory servicesRehabilitative and habilitative services and devicesPrescription drugsMental health and substance use disorder servicesBehavioral health treatment We recommend that you carefully check what services are covered or NOT covered by Medi-Cal when you enroll. Rules are often changing.Medi-Cal or Obamacare - Getting ApprovedObamacare is easier to get. It is private and subsidized by the Government for those with lower income.  On the other hand, criteria to get the Medical is strict. It varies by the state.So, what should I get?Start with Health Insurance Exchange -  They will check to see if you qualify for medical. If they determine that you do qualify, it will forward that information to the right department. If you are not eligible then you can continue the process of getting Obamacare.

Why Life Insurance Is Necessary For You and Your Family ?

Sanjiv Gupta CPA - 11 months ago
As people grow older, marry, start families and engage in businesses, they realize that life insurance is a crucial part of a financial plan. It depends on the kind of policy that they sign up for. Life insurance can be cheap, so there is no excuse to not sign up for one. Through the years, people will find comfort knowing that there is money for their loved ones just in case curve balls are thrown, and unexpected events such as the individual occur.1. Protecting Loved Ones and FamilyLoved ones depend on the financial support of their livelihood. This is reason enough to press on the importance of life insurance. This replaces the income of the insured once he or she passes. This is also very important for the parents of young children or adults who would regard it difficult to sustain the standard of living that they have grown accustomed to if they have no more access to the income that the departed provided in the past. They need to provide money that is enough to cover the costs of taking care of the members who remain alive.2. Leaving an InheritanceEven if the individual has no assets to leave to their heirs, they can create an inheritance just by buying life insurance policies and listing them as beneficiaries. This is an excellent way to set up the kids for a financial future that is very solid and can provide them with the monetary needs that are required once the necessity arises.3. Paying off Debts and Other ExpensesAside from providing the income to sustain daily expenses, a family needs insurance in covering outstanding debts such as credit cards, mortgage, and car loans. There are other expenses that include the burial and funeral costs which can also run into thousands of dollars. No one wants their spouses, children, parents or loved ones left behind with financial burden along with the emotional burden that they are already going through.4. Adding More Financial Security Like most parents, the insured individual finds comfort in knowing that their kids are well taken care of especially when they are gone. They want them to get a good quality college education and also provide them with the necessary ventures such as marriage and starting a business. This is the very reason why additional coverage is a necessity especially when the kids are still living at home.5. Bringing peace of mindIt is hard to tell when people are destined to pass away. It can be today, a day from now or in 50 years. It will happen one way or another, and no amount of money can replace the person. More than anything, life insurance helps in protecting life's uncertainties. Without a doubt, having life insurance also brings loved ones the peace in mind that are needed especially in those trying times. It is also one thing that they can be sure of and have no questions regarding who will take care of them the minute they are gone. Life insurance can also protect the heirs from the unknown and assist them through the loss.It's not fun to talk about life insurance because it is not a process that anyone enjoys. However, just like death and taxes, buying life insurance is quite a crucial part of life and an essential element of sound financial planning. Some people are aware that they needed life insurance but based on the experience of most, some individuals procrastinate until there is a life-changing event that drives them to buy it. However, there are serious benefits to investing in insurance early in life, especially if the individual is in debt, married or planning to get married, have or starting a family or an entrepreneur.How Does Life Insurance Work?How life insurance works are quite simple. You can use it, or you can lose it. The insured individual pays a yearly premium because it is determined by the insurance provider. If the insured died during the duration of the policy (usually it is 20 years), the beneficiary collects the specific amount that is indicated and written on the policy. For example, assuming that the insured individual invests in purchasing a $1 million, 20-year term policy with a premium that is $600/year. If this is the current premium payment that is to be paid, and the individual dies within that period, then the beneficiary will also receive $1 million and tax-free. There are various kinds of life insurance products for purposes today.Why is Life Insurance a Necessity?A fundamental question that is often asked is will someone is adversely effected by the untimely death of the insured.Here is a question that most people ponder on. If they were to die the next day, who would then be responsible for paying her debt. If the deceased owns a home, business or personal liabilities, someone else will then be responsible for these. This is normally the next of kin. Therefore, the spouse, parents, and siblings of the deceased could end up paying the debts which makes it quite unfair for them.Those who have children invest in life insurance because they do not want to put their family at risk. For business owners, they consider it very important to have a succession plan just in case something does happen to them. For business owners who do not have a succession plan, the financial advisor has to figure out who will be next in line to run the company.Another concern of most people is how much insurance they should get. There is no specific answer because everyone requires different insurance. There are many variables that determine the kind of insurance that an individual invests in. It also depends on age, sex, and finances. The best factor is how much insurance a person can afford.Now that everything is all figured out, the individual then searches where to buy life insurance. It is a compelling and competitive industry. There are some companies that are better selling certain insurance over others. Having a financial advisor can make the decision making easier for the person buying the insurance. It also depends on the person if he or she would resort to a captain agent. A captain agent is a person who works for a specific insurance company and only sells the insurance from that company. It is better to go around and consider all possible insurance.Life insurance is never fun to talk about, but once individuals sit down and confide with experts who have their best interests in mind, then they may regard life insurance as something that they not only need but want as well - to protect their family, business, dependents, and legacy.1. No one knows what tomorrow has in store.Anyone can die suddenly, like an accident or an unexpected illness or natural causes. Any of these can happen at any moment. Life insurance also helps loved ones pay bills, mortgage, college costs even after this has long been gone. It also provides tax-free cash to pay death duties and estate. Nothing can replace the insured in their hearts but planning this with insurance can also make the grieving stage easier for those who are left behind.2. Funerals can be very expensive.Funerals can cost between $7,000 to as much as $10,000. This is just the average service and not the extravagant ones. The time is already emotional and difficult, and life insurance can cover these bills by not stressing those involved with financial hardship.3. Protecting the loved ones of the insured individual.Those who work wish to protect their loved ones - spouse, children, partner, family members. They make sure that these people are well taken care of. It is very important to consider financial support by providing the future for the dependents who survive.4. Death should not equate to debt.Life insurance assists the dependents in covering the financial responsibilities that the insured leave behind after her death. Debt can be quite a tremendous burden especially when this comes with the emotional toll that the death of the insured individual creates.5. The unexpected can happenIf the individual develops a serious illness, he or she may not get life insurance. If the person has been diagnosed with a terminal illness, life insurance can provide financial support. Life insurance can also be the tool in case of emergencies, and this can be done by requesting loans or withdrawals.6. Taking care of businessLife insurance is not just for individuals. It can also protect the business from any kind of liabilities, instability or financial loss just in case the insured individual does pass away. Whether the person provides the necessary short-term cash and keeping operations, then it goes until things settle down. Life insurance can also be invaluable when maintaining the business that the person has already worked so hard for.7. Supplementing the retirement.You can also use the life insurance to make sure the retirement savings that lasts as long as it is done. An annuity is like a pension plan that you can do for yourself. If the individual puts enough amount of money and turns this into a life insurance product, then in return this can guarantee a good enough stream of income each month.8. It makes logical financial sense.Life insurance is regarded as a financial asset that can also increase the credit and also help in loans and health insurance. There are policies that result in returning the cash value which occurs in case of bankruptcy and cannot be touched by any creditor.9. Giving to charityLife insurance also enables in leaving a lasting gift to the favorite cause and charity that is larger than is otherwise set aside for charity work and donation.10. Peace of mind, plain and simpleThere is no amount of money that can replace any individual. More than anything, life insurance helps in protecting any of life's uncertainties.Life insurance is a very selfless gift that can be given to people left behind. It is not as complicated or even as expensive as many people think. Rather than viewing this as such, it must be considered as a necessity for the individual and loved ones. This can be a potentially happy ending that leads to a difficult situation.The gist of it all is that life insurance is not really for the individual who gets it but for his or her loved ones. Whether it be short-term family needs such as rent, bills, and funeral costs, this is a way for the surviving dependents to get by financially especially when left with loans and credit card debt. Life insurance can also help in keeping family members from tackling financial issues when these are least expected.Long-term family needs can also be covered especially when this results to an economic impact due to a loss. Family members make major changes, and these create additional expenses. Sometimes, it may not even be death but non-working spouses returning to the workforce and also needed to pay for daycare. Life insurance can cover life's new expenses. If children are in the picture, life insurance provides normalcy and stability. Life insurance should not be as expensive as deemed to be. This is dependent on variables such as age, sex, health, and kind of policy. It costs less than people think. As long as there are appropriate budgeting and spending, life insurance is affordable. When life insurance is purchased, individuals will then feel that when the time comes they need it the most, they are saving more than what they thought they would have to shell out because of these unexpected costs.
No Events To Show
No Deals To Show