By Bret Harding
Key man life insurance is an affordable way to prevent your business from sinking after a critical employee passes away. Although contemplating the death of a key employee is a pretty dismal subject, the fact of the matter is it must be addressed soon than later. Key man life insurance plays an important role in any size business, but typically in a start-up company it becomes vital to the continued success of the business, should something ever happen to one of the key employee’s.
Key man life insurance works like individual life insurance - when the insured dies the policy pays out a benefit. Instead of an individual insuring himself or a family member, however, the business owns the policy and pays the premium. If the insured dies, the business is the beneficiary and will receive the policy payout.
To ensure the livelihood of the company, the money can be used to pay off debt and keep creditors at bay, find a replacement for the deceased, buy out the deceased's shares in the company (buy-sell agreement), or even help to supplement the income of the deceased's family.
The founder or owner of a business shouldn't immediately be considered the right or only candidates for a key man life insurance policy. Rank is less important than who the critical employees in your business are. Your business couldn't function day to day without the founder, but it also may not be able to survive without your revenue-generating sales team or without the precious relationships a business development employee has with your vendors.
If you still think you and your employees are invincible and key man life insurance isn't for you, you may be forced to reconsider. Oftentimes investors and lenders will insist you purchase a policy to protect their own investment. Another reason to consider? Term life insurance policies are dirt cheap!
How does it work? An insurance agent appraises the person you want to insure and sets a premium on that person. The premium is based on the current health of the employee, his (or her) health history, age, and salary. Keep in mind that not everyone can be covered - the insurance agent does have the right to deny coverage.
Structurally, many key life insurance polices are set up as permanent polices that build cash value over time. However, a smaller business can opt for a more affordable term life policy where premiums are paid until the employee retires or leaves the company, and then it can be transferred to that key person's replacement.
In general, coverage ranges from matching the key person's base salary to as high as 10 times his salary - or it can be a flat amount. Most small businesses find they do best with a payout of two to three times the key employees' salary, at a cost of less than $1,000 per year for the premium. A permanent policy will cost more, about 3percent the face value of the policy.
It's not fun to think about, but key man life insurance is an affordable way to ensure the future of the business that you and your employee’s have worked so hard to make successful.
To Learn More About Key Man Life Insurance For Your Company Call Or Email Bret Harding: 801-372-2647, email: Bret@UtahInsuranceSolutions.com. Visit: www.UtahInsuranceSolutions.com
Thursday, January 14, 2010
Could Life Insurance Save Your Business?
Could Life Insurance Save Your Business?
By Bret Harding
Key man life insurance is an affordable way to prevent your business from sinking after a critical employee passes away. Although contemplating the death of a key employee is a pretty dismal subject, the fact of the matter is it must be addressed soon than later. Key man life insurance plays an important role in any size business, but typically in a start-up company it becomes vital to the continued success of the business, should something ever happen to one of the key employee’s.
Key man life insurance works like individual life insurance - when the insured dies the policy pays out a benefit. Instead of an individual insuring himself or a family member, however, the business owns the policy and pays the premium. If the insured dies, the business is the beneficiary and will receive the policy payout.
To ensure the livelihood of the company, the money can be used to pay off debt and keep creditors at bay, find a replacement for the deceased, buy out the deceased's shares in the company (buy-sell agreement), or even help to supplement the income of the deceased's family.
The founder or owner of a business shouldn't immediately be considered the right or only candidates for a key man life insurance policy. Rank is less important than who the critical employees in your business are. Your business couldn't function day to day without the founder, but it also may not be able to survive without your revenue-generating sales team or without the precious relationships a business development employee has with your vendors.
If you still think you and your employees are invincible and key man life insurance isn't for you, you may be forced to reconsider. Oftentimes investors and lenders will insist you purchase a policy to protect their own investment. Another reason to consider? Term life insurance policies are dirt cheap!
How does it work? An insurance agent appraises the person you want to insure and sets a premium on that person. The premium is based on the current health of the employee, his (or her) health history, age, and salary. Keep in mind that not everyone can be covered - the insurance agent does have the right to deny coverage.
Structurally, many key life insurance polices are set up as permanent polices that build cash value over time. However, a smaller business can opt for a more affordable term life policy where premiums are paid until the employee retires or leaves the company, and then it can be transferred to that key person's replacement.
In general, coverage ranges from matching the key person's base salary to as high as 10 times his salary - or it can be a flat amount. Most small businesses find they do best with a payout of two to three times the key employees' salary, at a cost of less than $1,000 per year for the premium. A permanent policy will cost more, about 3 percent the face value of the policy.
It's not fun to think about, but key man life insurance is an affordable way to ensure the future of the business that you and your employee’s have worked so hard to make successful.
Learn More About Key Man Life Insurance Policies Visit:http://www.utahinsurancesolutions.com/utah_key_man_life_insurance
By Bret Harding
Key man life insurance is an affordable way to prevent your business from sinking after a critical employee passes away. Although contemplating the death of a key employee is a pretty dismal subject, the fact of the matter is it must be addressed soon than later. Key man life insurance plays an important role in any size business, but typically in a start-up company it becomes vital to the continued success of the business, should something ever happen to one of the key employee’s.
Key man life insurance works like individual life insurance - when the insured dies the policy pays out a benefit. Instead of an individual insuring himself or a family member, however, the business owns the policy and pays the premium. If the insured dies, the business is the beneficiary and will receive the policy payout.
To ensure the livelihood of the company, the money can be used to pay off debt and keep creditors at bay, find a replacement for the deceased, buy out the deceased's shares in the company (buy-sell agreement), or even help to supplement the income of the deceased's family.
The founder or owner of a business shouldn't immediately be considered the right or only candidates for a key man life insurance policy. Rank is less important than who the critical employees in your business are. Your business couldn't function day to day without the founder, but it also may not be able to survive without your revenue-generating sales team or without the precious relationships a business development employee has with your vendors.
If you still think you and your employees are invincible and key man life insurance isn't for you, you may be forced to reconsider. Oftentimes investors and lenders will insist you purchase a policy to protect their own investment. Another reason to consider? Term life insurance policies are dirt cheap!
How does it work? An insurance agent appraises the person you want to insure and sets a premium on that person. The premium is based on the current health of the employee, his (or her) health history, age, and salary. Keep in mind that not everyone can be covered - the insurance agent does have the right to deny coverage.
Structurally, many key life insurance polices are set up as permanent polices that build cash value over time. However, a smaller business can opt for a more affordable term life policy where premiums are paid until the employee retires or leaves the company, and then it can be transferred to that key person's replacement.
In general, coverage ranges from matching the key person's base salary to as high as 10 times his salary - or it can be a flat amount. Most small businesses find they do best with a payout of two to three times the key employees' salary, at a cost of less than $1,000 per year for the premium. A permanent policy will cost more, about 3 percent the face value of the policy.
It's not fun to think about, but key man life insurance is an affordable way to ensure the future of the business that you and your employee’s have worked so hard to make successful.
Learn More About Key Man Life Insurance Policies Visit:http://www.utahinsurancesolutions.com/utah_key_man_life_insurance
Friday, June 5, 2009
Why Start up Companies Need Life Insurance
Why Start up Companies Need Life Insurance
By Bret Harding
Often times when starting a new venture life insurance is overlooked, this is because in most cases the individual had life insurance coverage through their previous employer. It’s critical to not overlook the important role life insurance plays in starting a new business venture. After all your family, your customers, and your business partners will be depending on you more than ever. And often time’s banks require a life insurance policy on the business owner before lending any money.
Life insurance is especially important to start up companies, because often times there are only a few key members of the business that perform all the vital functions. In these situations, life insurance can help the surviving partner or the family members of the deceased proprietor have resources to keep moving forward. Life insurance provides coverage that can help make a difficult situation easier to manage. Effectively utilizing life insurance in a business start up will assist the company with the wide range of factors that arise when an owner or a key executive or family member is no longer around to handle his or her usual responsibilities.
Essentially, the life insurance that every start up needs can be broken-down into three types or categories:
I. Individual Life Insurance: An individual life insurance policy will ensure the family members of a deceased business owner will have the necessary financial resources to move forward during a difficult time.
II. Key Man Life Insurance: Essentially key man life insurance protects the business should anything happen to a key individual (i.e. sales executive, computer programmer, key partner, etc).
III. Buy-Sell Agreement: A buy-sell agreement is critical business document that addresses important business concerns like “what would happen to the business if one of the owners passed away, left the company, suffered a divorce, or became disabled?”
By insuring the life of persons who are critical to the life of the company, it is possible to safeguard against the unexpected demise of an individual who possesses a skill set that is foundational to the success and ongoing life of the company. While life insurance cannot completely fill the gap left by the death of a valued member of the organization, life insurance coverage will provide the corporation with financial resources that can be applied to the expanses associated with finding and training a new employee. Business life insurance proceeds can also be used to cover the expenses of obtaining consultants and other temporary services that will assist the company in continuing to operate in the short term.
To learn more about the important role life insurance can play in your business call Bret Harding today: 801-372-2647. Visit: www.UtahInsuranceSolutions.com
By Bret Harding
Often times when starting a new venture life insurance is overlooked, this is because in most cases the individual had life insurance coverage through their previous employer. It’s critical to not overlook the important role life insurance plays in starting a new business venture. After all your family, your customers, and your business partners will be depending on you more than ever. And often time’s banks require a life insurance policy on the business owner before lending any money.
Life insurance is especially important to start up companies, because often times there are only a few key members of the business that perform all the vital functions. In these situations, life insurance can help the surviving partner or the family members of the deceased proprietor have resources to keep moving forward. Life insurance provides coverage that can help make a difficult situation easier to manage. Effectively utilizing life insurance in a business start up will assist the company with the wide range of factors that arise when an owner or a key executive or family member is no longer around to handle his or her usual responsibilities.
Essentially, the life insurance that every start up needs can be broken-down into three types or categories:
I. Individual Life Insurance: An individual life insurance policy will ensure the family members of a deceased business owner will have the necessary financial resources to move forward during a difficult time.
II. Key Man Life Insurance: Essentially key man life insurance protects the business should anything happen to a key individual (i.e. sales executive, computer programmer, key partner, etc).
III. Buy-Sell Agreement: A buy-sell agreement is critical business document that addresses important business concerns like “what would happen to the business if one of the owners passed away, left the company, suffered a divorce, or became disabled?”
By insuring the life of persons who are critical to the life of the company, it is possible to safeguard against the unexpected demise of an individual who possesses a skill set that is foundational to the success and ongoing life of the company. While life insurance cannot completely fill the gap left by the death of a valued member of the organization, life insurance coverage will provide the corporation with financial resources that can be applied to the expanses associated with finding and training a new employee. Business life insurance proceeds can also be used to cover the expenses of obtaining consultants and other temporary services that will assist the company in continuing to operate in the short term.
To learn more about the important role life insurance can play in your business call Bret Harding today: 801-372-2647. Visit: www.UtahInsuranceSolutions.com
Tuesday, May 26, 2009
Does My Business Need A Buy-Sell Agreement?
By Bret Harding
First of let me say “YES” a buy-sell agreement is a critical document for any business that has more than one founder or has recently brought additional “key stakeholders” into the business. The reason for a buy-sell agreement is to address important business concerns like “what would happen to the business if one of the owners passed away, left the company, or became disabled?”
In almost every instant the surviving owners generally want to ensure a continuity of ownership and management without having the departing owner’s successor thrust upon them. Nor do they want to compromise the liquidity needs of the business by funding a significant buyout. Disabled or deceased owners would want their families compensated fairly for their share of the business. A properly drafted buy-sell agreement can achieve all of these goals by:
• Providing that upon the occurrence of a specified “triggering event,” owners are guaranteed that their interest in the business will be purchased;
• Providing that the owner’s interest must be sold to the company, the remaining owners, or a combination of the two;
• Providing a mechanism whereby the purchase price may be determined by market conditions in existence upon the occurrence of the event;
• Providing a funding source, primarily through insurance policies, so that the liquidity needs of the business or its owners will not be onerous; and
• Establishing a valuation of a deceased owner’s interest in the business for estate tax purposes.
What are Triggering Events?
An integral part of any buy-sell agreement is to specify what type of events will trigger a mandatory or optional buyout of an owner’s interest by the other owners or the entity itself. The most common of these triggering events are described below.
Death or disability
This event is almost universally provided for in the buy-sell agreement. Terms of this buyout will include the determination of disability, the time for payment to the owner or the owner’s estate, whether the entity or the surviving shareholders have the obligation to purchase the interest, and whether a funding mechanism, such as life or disability insurance, should be maintained by the entity or the owners personally.
Desire to sell the interest to a third party
The agreement should provide that the terms of the potential sale be presented to the other owners, and that they be given the option of:
• matching the offer made by the outsider;
• purchasing the shares in accordance with the valuation method and payment terms provided for within the agreement;
• having the entity repurchase the shares issued in accordance with the valuation method provided for within the agreement; or
• allowing the sale to be effectuated to the third party.
Retirement of an owner
While a sale to a third party would provide the other owners an optional right to purchase the selling owner’s interest, an owner’s retirement will generally trigger a mandatory buyout. Of course, the conditions under which an owner may have the right to retire so that the remaining owners, or the entity, would be compelled to buy that owner out are often a point of negotiation. Once again, valuation methods and payment terms will be important issues, because there are no outside funding mechanisms, such as life or disability insurance, available to bear the cost.
Owner’s divorce or bankruptcy
Either of these events can subject the business to interference from outsiders. To prevent this, the other owners should have the option to compel the affected owner to sell his shares to the remaining owners or the entity itself, in accordance with the payment terms and valuation methods (to be discussed later.)
Types of Funding Arrangements for a Triggering Event
Cross-purchase arrangements
Under this plan, each surviving owner of a business becomes personally obligated to purchase the departing owner’s interest. To provide the surviving owners with liquidity, each owner would own an insurance policy on the lives of the other owners. The proceeds of the life insurance policy would be received tax-free by the survivor and then used to purchase the deceased owner’s interest so that the survivor’s ownership interest remains the same in relation to the other surviving owners.
Entity redemption arrangement
Under this plan, the business entity is obligated to purchase the owner’s interest. To minimize the impact this might have on the entity’s liquidity needs, the entity can purchase life insurance policies on each owner. The business names itself as the beneficiary of each policy, and the face amount of the policy will be equal to the agreed-upon purchase price set in the buy-sell agreement. The proceeds should be received by the entity free of ordinary income taxes, pursuant to IRC section 101. This would be followed by a purchase of the owner’s interest by the entity with the life insurance proceeds.
Types of Valuation Methods
The goal of a valuation method is to best approximate the business’s actual fair market value. Fair market value has been defined as the price at which property passes between a willing buyer and seller, neither under any compulsion to buy or sell, and both with knowledge of all relevant facts. Of course, where less than the entire ownership interest is being acquired, there might be discounts to reflect the lack of control or lack of marketability. Some of the more common business valuation methods are summarized below:
Book value
This method, also known as the net asset value method, is based on the net worth (assets -- liabilities) of a business on a company’s books and records for accounting purposes. While this method is easy and relatively inexpensive to ascertain, book values are based on historical-cost principles, which frequently become unrealistic over time, especially for assets such as real estate, patents, and goodwill. Some modifications of the book value method include the tangible book value method, which basically includes only assets, such as cash, inventory, equipment, and real estate. Economic book value would entail an appraiser in an effort to update the value of assets to their current market value.
Capitalization of earnings
This method attempts to value a business by estimating an acceptable rate of return on a purchaser’s investment in light of the risk associated with the particular business, and then applying such a rate of return to the anticipated earnings stream of the business, based on its average net earnings (after operating expenses) over the last few years. Any potential buyers would obviously be looking at a rate of return on their investment well in excess of the rate of return on a much safer alternative, such as a certificate of deposit or a blue-chip stock. Rates of 20% or more are not uncommon for small closely held businesses. An interesting variation on capitalization of earnings is known as the excess earning method. This method, frequently used when a business has substantial receivables, inventory, property, and plant and equipment, seeks to separate a desired rate of return on a company’s tangible assets from its total earnings in order to derive “excess earnings.” The excess earnings is then multiplied by a factor (the higher the risk, the larger the factor), and this amount is then added to the fair market value of the tangible assets to determine the purchase price.
In Summary
A Buy/sell agreement can be an effective tool to allow a business to continue after a triggering event. A buy-sell agreement funded with life insurance can, in the event of death of an owner, provide the surviving owners the funds necessary to meet the terms of the agreement. Executing a carefully planned buy-sell agreement will assure owners in a closely held business that their interest in the business they built is secure regardless of any unforeseen circumstances. In many cases this can be accomplished without putting excessive strain on the business’s cash flow, ensuring that the business and its remaining owners continue to succeed as well. The actual decision to implement a Buy/sell agreement is a planning decision that should include the owners and their professional advisors.
To learn more about implementing a Buy-Sell Agreement for your company call Bret Harding today: 801-372-2647. Visit: www.UtahInsuranceSolutions.com
First of let me say “YES” a buy-sell agreement is a critical document for any business that has more than one founder or has recently brought additional “key stakeholders” into the business. The reason for a buy-sell agreement is to address important business concerns like “what would happen to the business if one of the owners passed away, left the company, or became disabled?”
In almost every instant the surviving owners generally want to ensure a continuity of ownership and management without having the departing owner’s successor thrust upon them. Nor do they want to compromise the liquidity needs of the business by funding a significant buyout. Disabled or deceased owners would want their families compensated fairly for their share of the business. A properly drafted buy-sell agreement can achieve all of these goals by:
• Providing that upon the occurrence of a specified “triggering event,” owners are guaranteed that their interest in the business will be purchased;
• Providing that the owner’s interest must be sold to the company, the remaining owners, or a combination of the two;
• Providing a mechanism whereby the purchase price may be determined by market conditions in existence upon the occurrence of the event;
• Providing a funding source, primarily through insurance policies, so that the liquidity needs of the business or its owners will not be onerous; and
• Establishing a valuation of a deceased owner’s interest in the business for estate tax purposes.
What are Triggering Events?
An integral part of any buy-sell agreement is to specify what type of events will trigger a mandatory or optional buyout of an owner’s interest by the other owners or the entity itself. The most common of these triggering events are described below.
Death or disability
This event is almost universally provided for in the buy-sell agreement. Terms of this buyout will include the determination of disability, the time for payment to the owner or the owner’s estate, whether the entity or the surviving shareholders have the obligation to purchase the interest, and whether a funding mechanism, such as life or disability insurance, should be maintained by the entity or the owners personally.
Desire to sell the interest to a third party
The agreement should provide that the terms of the potential sale be presented to the other owners, and that they be given the option of:
• matching the offer made by the outsider;
• purchasing the shares in accordance with the valuation method and payment terms provided for within the agreement;
• having the entity repurchase the shares issued in accordance with the valuation method provided for within the agreement; or
• allowing the sale to be effectuated to the third party.
Retirement of an owner
While a sale to a third party would provide the other owners an optional right to purchase the selling owner’s interest, an owner’s retirement will generally trigger a mandatory buyout. Of course, the conditions under which an owner may have the right to retire so that the remaining owners, or the entity, would be compelled to buy that owner out are often a point of negotiation. Once again, valuation methods and payment terms will be important issues, because there are no outside funding mechanisms, such as life or disability insurance, available to bear the cost.
Owner’s divorce or bankruptcy
Either of these events can subject the business to interference from outsiders. To prevent this, the other owners should have the option to compel the affected owner to sell his shares to the remaining owners or the entity itself, in accordance with the payment terms and valuation methods (to be discussed later.)
Types of Funding Arrangements for a Triggering Event
Cross-purchase arrangements
Under this plan, each surviving owner of a business becomes personally obligated to purchase the departing owner’s interest. To provide the surviving owners with liquidity, each owner would own an insurance policy on the lives of the other owners. The proceeds of the life insurance policy would be received tax-free by the survivor and then used to purchase the deceased owner’s interest so that the survivor’s ownership interest remains the same in relation to the other surviving owners.
Entity redemption arrangement
Under this plan, the business entity is obligated to purchase the owner’s interest. To minimize the impact this might have on the entity’s liquidity needs, the entity can purchase life insurance policies on each owner. The business names itself as the beneficiary of each policy, and the face amount of the policy will be equal to the agreed-upon purchase price set in the buy-sell agreement. The proceeds should be received by the entity free of ordinary income taxes, pursuant to IRC section 101. This would be followed by a purchase of the owner’s interest by the entity with the life insurance proceeds.
Types of Valuation Methods
The goal of a valuation method is to best approximate the business’s actual fair market value. Fair market value has been defined as the price at which property passes between a willing buyer and seller, neither under any compulsion to buy or sell, and both with knowledge of all relevant facts. Of course, where less than the entire ownership interest is being acquired, there might be discounts to reflect the lack of control or lack of marketability. Some of the more common business valuation methods are summarized below:
Book value
This method, also known as the net asset value method, is based on the net worth (assets -- liabilities) of a business on a company’s books and records for accounting purposes. While this method is easy and relatively inexpensive to ascertain, book values are based on historical-cost principles, which frequently become unrealistic over time, especially for assets such as real estate, patents, and goodwill. Some modifications of the book value method include the tangible book value method, which basically includes only assets, such as cash, inventory, equipment, and real estate. Economic book value would entail an appraiser in an effort to update the value of assets to their current market value.
Capitalization of earnings
This method attempts to value a business by estimating an acceptable rate of return on a purchaser’s investment in light of the risk associated with the particular business, and then applying such a rate of return to the anticipated earnings stream of the business, based on its average net earnings (after operating expenses) over the last few years. Any potential buyers would obviously be looking at a rate of return on their investment well in excess of the rate of return on a much safer alternative, such as a certificate of deposit or a blue-chip stock. Rates of 20% or more are not uncommon for small closely held businesses. An interesting variation on capitalization of earnings is known as the excess earning method. This method, frequently used when a business has substantial receivables, inventory, property, and plant and equipment, seeks to separate a desired rate of return on a company’s tangible assets from its total earnings in order to derive “excess earnings.” The excess earnings is then multiplied by a factor (the higher the risk, the larger the factor), and this amount is then added to the fair market value of the tangible assets to determine the purchase price.
In Summary
A Buy/sell agreement can be an effective tool to allow a business to continue after a triggering event. A buy-sell agreement funded with life insurance can, in the event of death of an owner, provide the surviving owners the funds necessary to meet the terms of the agreement. Executing a carefully planned buy-sell agreement will assure owners in a closely held business that their interest in the business they built is secure regardless of any unforeseen circumstances. In many cases this can be accomplished without putting excessive strain on the business’s cash flow, ensuring that the business and its remaining owners continue to succeed as well. The actual decision to implement a Buy/sell agreement is a planning decision that should include the owners and their professional advisors.
To learn more about implementing a Buy-Sell Agreement for your company call Bret Harding today: 801-372-2647. Visit: www.UtahInsuranceSolutions.com
Friday, May 15, 2009
How to Buy Individual Health Insurance in Utah
By Bret Harding
ONE OF THE hardest things about leaving a job is walking away from the benefits package. Once you're out on your own — whether you're starting your own business, working for a small employer that offers no coverage or suddenly find yourself among the ranks of the unemployed — the reality is the same: You must cough up a lot of dough for what will feel like inferior health coverage.
Before you start your search, brace yourself. The Utah health-insurance market isn't pretty, but when navigated properly can save you money in the long run!
The key, of course, is to shop around and make an informed decision that you and your pocketbook can live with. This will take some time. Experts recommend you give yourself at least 60 days to examine your options and apply for a policy. There's a lot more to it than when your former employer asked you to check a box electing a managed-care plan or a preferred provider organization.
Here's how to navigate the private Utah health-insurance industry.
How it Works
If you thought buying life insurance was tough, just wait until you shop around for health coverage. Unlike an employer-sponsored plan that has to accept everyone at the same price, private plans in most states are underwritten based on your age, weight, smoking status and health history. In some cases, applicants will even have to undergo a medical exam. A preexisting condition as common as asthma could be enough for an insurer to hike your premiums, while a history of anxiety or depression might cause an underwriter to think twice. And if you have a history of heart disease, cancer or diabetes, you could be out of luck entirely. A plan could either be too expensive or include a rider that excludes the very ailment for which you need coverage. "If they look at your application and see something they don't like, a $600 [a month] policy could go to $850," says Bret Harding, chief executive of online insurance broker Utah Insurance Solutions.
You should also know that health insurance is regulated at the state level. In places like New York, New Jersey and Vermont, insurers must offer coverage to every applicant, regardless of age or health status. This egalitarian approach sounds great — until you see the premiums. Even young healthy men, who are the cheapest to insure, could be charged as much as $1,000 a month, says Bland. In other states, such as California and Utah, there are fewer restrictions on the insurers, and premiums tend to be more reasonable for young people and pricier for older folks. The problem in these regions is that insurers can outright refuse to provide coverage. In such cases, consumers can buy pricy policies from a state high-risk pool. But it won't come cheap, and it could exclude pre-existing conditions. For more information on the rules for your area, contact your state insurance commission's Web site.
How to Buy It
The quickest way to get a handle on your options is to look for policies on Web sites such as UtahInsuranceSolutions.com. If you need a little more hand holding, you should contact a local health insurance broker. Just make sure you find someone who represents a lot of companies and understands the underwriting standards for each insurer. The last thing you want is to be rejected from a plan that doesn't typically cover someone with your health profile. Not only is it a waste of time, but it could also raise a red flag when you apply to other insurers. An informed broker could steer you away from such insurers.
And since group coverage tends to be cheaper, don't forget to check with your professional trade association for coverage. The Writers Guild and the Actors' Equity Association are two examples of groups that offer their members health insurance. (In most states, however, people in their 20s and 30s may find cheaper coverage through an individual plan.) And for those starting a business: Most states allow as few as two employees to buy a small group policy.
The CostAccording to the Kaiser Family Foundation, a Menlo Park, Calif.-based nonprofit focused on health-care policy, the average employee paid $58 a month for health insurance in 2007. Employers picked up the rest — a $3,785 tab. How much can an individual expect to pay? America's Health Insurance Plans says the average individual annual premiums from 2006 to 2007 cost $2,613, or $218 a month. While individual plans may appear cheaper, individuals have to pay the entire premium on their own. And as we mentioned earlier, those in restricted states, and older individuals with health issues, can expect to pay a lot more. "It's not uncommon to hear of people paying $10,000 to $12,000 a year," says Families USA's Stoll.
One way to keep premiums manageable is to increase your deductible (don't go beyond what you can afford to pay out each year) and skip the vision and dental coverage. Don't even try to match your former employer's lush plan. Blue Cross Blue Shield of Utah, for example, charges a young family of four living in Salt Lake City $695 a month in premiums and a $250 deductible. If they accept a deductible of $2,000, they can lower the premium to $455 a month. "Insurance should be purchased to cover sudden accidental and unintended losses," says Harding CEO of Utah Insurance Solutions. "With low-deductible plans and maintenance policies, you are trading dollar for dollar with the insurance company over the long run."
While there are some benefits you can live without, others are important. A maternity rider is one of them, advises Bret Harding, an individual health-insurance broker from Utah Health Insurance Brokers. "I advise all of my female clients to get one," she says. Unlike employer-sponsored plans, which usually cover birthing expenses, private plans don't unless you pay for it upfront.
Buyer Beware
Before you make your final decision, read the fine print. Make sure you're buying comprehensive coverage that will cover you should you suddenly fall ill and rack up thousands in hospitals bills. Insurers have been known to attract customers with low teaser rates that can change after only a few months. It may cost a little more, but you should look for one that will guarantee your premiums won't rise for 12 months. And most important, go with a reputable firm. Check its claims-paying ability rating with an agency like Standard & Poor's or Moody's.
Buying health insurance may not top your list of fun things to do, but that doesn't mean it's unimportant. After all, there are few things in life more valuable than good health.
Visit Utah Insurance Solutions Today to Find Affordable Utah Health Insurance Plans: www.UtahInsuranceSolutions.com.
ONE OF THE hardest things about leaving a job is walking away from the benefits package. Once you're out on your own — whether you're starting your own business, working for a small employer that offers no coverage or suddenly find yourself among the ranks of the unemployed — the reality is the same: You must cough up a lot of dough for what will feel like inferior health coverage.
Before you start your search, brace yourself. The Utah health-insurance market isn't pretty, but when navigated properly can save you money in the long run!
The key, of course, is to shop around and make an informed decision that you and your pocketbook can live with. This will take some time. Experts recommend you give yourself at least 60 days to examine your options and apply for a policy. There's a lot more to it than when your former employer asked you to check a box electing a managed-care plan or a preferred provider organization.
Here's how to navigate the private Utah health-insurance industry.
How it Works
If you thought buying life insurance was tough, just wait until you shop around for health coverage. Unlike an employer-sponsored plan that has to accept everyone at the same price, private plans in most states are underwritten based on your age, weight, smoking status and health history. In some cases, applicants will even have to undergo a medical exam. A preexisting condition as common as asthma could be enough for an insurer to hike your premiums, while a history of anxiety or depression might cause an underwriter to think twice. And if you have a history of heart disease, cancer or diabetes, you could be out of luck entirely. A plan could either be too expensive or include a rider that excludes the very ailment for which you need coverage. "If they look at your application and see something they don't like, a $600 [a month] policy could go to $850," says Bret Harding, chief executive of online insurance broker Utah Insurance Solutions.
You should also know that health insurance is regulated at the state level. In places like New York, New Jersey and Vermont, insurers must offer coverage to every applicant, regardless of age or health status. This egalitarian approach sounds great — until you see the premiums. Even young healthy men, who are the cheapest to insure, could be charged as much as $1,000 a month, says Bland. In other states, such as California and Utah, there are fewer restrictions on the insurers, and premiums tend to be more reasonable for young people and pricier for older folks. The problem in these regions is that insurers can outright refuse to provide coverage. In such cases, consumers can buy pricy policies from a state high-risk pool. But it won't come cheap, and it could exclude pre-existing conditions. For more information on the rules for your area, contact your state insurance commission's Web site.
How to Buy It
The quickest way to get a handle on your options is to look for policies on Web sites such as UtahInsuranceSolutions.com. If you need a little more hand holding, you should contact a local health insurance broker. Just make sure you find someone who represents a lot of companies and understands the underwriting standards for each insurer. The last thing you want is to be rejected from a plan that doesn't typically cover someone with your health profile. Not only is it a waste of time, but it could also raise a red flag when you apply to other insurers. An informed broker could steer you away from such insurers.
And since group coverage tends to be cheaper, don't forget to check with your professional trade association for coverage. The Writers Guild and the Actors' Equity Association are two examples of groups that offer their members health insurance. (In most states, however, people in their 20s and 30s may find cheaper coverage through an individual plan.) And for those starting a business: Most states allow as few as two employees to buy a small group policy.
The CostAccording to the Kaiser Family Foundation, a Menlo Park, Calif.-based nonprofit focused on health-care policy, the average employee paid $58 a month for health insurance in 2007. Employers picked up the rest — a $3,785 tab. How much can an individual expect to pay? America's Health Insurance Plans says the average individual annual premiums from 2006 to 2007 cost $2,613, or $218 a month. While individual plans may appear cheaper, individuals have to pay the entire premium on their own. And as we mentioned earlier, those in restricted states, and older individuals with health issues, can expect to pay a lot more. "It's not uncommon to hear of people paying $10,000 to $12,000 a year," says Families USA's Stoll.
One way to keep premiums manageable is to increase your deductible (don't go beyond what you can afford to pay out each year) and skip the vision and dental coverage. Don't even try to match your former employer's lush plan. Blue Cross Blue Shield of Utah, for example, charges a young family of four living in Salt Lake City $695 a month in premiums and a $250 deductible. If they accept a deductible of $2,000, they can lower the premium to $455 a month. "Insurance should be purchased to cover sudden accidental and unintended losses," says Harding CEO of Utah Insurance Solutions. "With low-deductible plans and maintenance policies, you are trading dollar for dollar with the insurance company over the long run."
While there are some benefits you can live without, others are important. A maternity rider is one of them, advises Bret Harding, an individual health-insurance broker from Utah Health Insurance Brokers. "I advise all of my female clients to get one," she says. Unlike employer-sponsored plans, which usually cover birthing expenses, private plans don't unless you pay for it upfront.
Buyer Beware
Before you make your final decision, read the fine print. Make sure you're buying comprehensive coverage that will cover you should you suddenly fall ill and rack up thousands in hospitals bills. Insurers have been known to attract customers with low teaser rates that can change after only a few months. It may cost a little more, but you should look for one that will guarantee your premiums won't rise for 12 months. And most important, go with a reputable firm. Check its claims-paying ability rating with an agency like Standard & Poor's or Moody's.
Buying health insurance may not top your list of fun things to do, but that doesn't mean it's unimportant. After all, there are few things in life more valuable than good health.
Visit Utah Insurance Solutions Today to Find Affordable Utah Health Insurance Plans: www.UtahInsuranceSolutions.com.
Tuesday, May 12, 2009
Utah Life insurance Buying Tips - Ask Yourself These Questions?
By Bret Harding
Buying Life Insurance in Utah is one of those necessary things that you may have to force yourself to do at some time during your busy schedule. There never seems to be a right time or convenient time to buy life insurance. We, however, you should give the subject ample thought and then take action.
What will happen to your family when you die? Would they be provided for? Life Insurance is the solution and we can help.Compare Multiple Quotes from Highly Ranked Carriers and Save up to 70%! Getting your quote is easy and FREE. Call or visit Utah Insurance Solutions: http://UtahInsuranceSolutions.com, or call: 801-372-2647.
Some people don't want to take the time to think about buying life insurance because when you do so you must think about death, or to be more accurate, what would happen to your loved ones after your untimely demise. I would urge you to put away the emotional considerations and take the time to open your mind and kindly and responsibly give this vitally important subject your capable consideration.
When considering life insurance buying try to arrive at the amount that best fits your particular situation. In order to arrive at an intelligent and accurate decision as to this amount you need to ask yourself some very important questions:
Buying Life Insurance in Utah is one of those necessary things that you may have to force yourself to do at some time during your busy schedule. There never seems to be a right time or convenient time to buy life insurance. We, however, you should give the subject ample thought and then take action.
What will happen to your family when you die? Would they be provided for? Life Insurance is the solution and we can help.Compare Multiple Quotes from Highly Ranked Carriers and Save up to 70%! Getting your quote is easy and FREE. Call or visit Utah Insurance Solutions: http://UtahInsuranceSolutions.com, or call: 801-372-2647.
Some people don't want to take the time to think about buying life insurance because when you do so you must think about death, or to be more accurate, what would happen to your loved ones after your untimely demise. I would urge you to put away the emotional considerations and take the time to open your mind and kindly and responsibly give this vitally important subject your capable consideration.
When considering life insurance buying try to arrive at the amount that best fits your particular situation. In order to arrive at an intelligent and accurate decision as to this amount you need to ask yourself some very important questions:
- Am I buying a life insurance policy to cover my funeral expense or do I want to pay for this out of accumulated cash? Life insurance is the advisable path to take because of cost and tax considerations.
- Should I use this life insurance policy to provide an income for my family? There are many advantages to providing an income through life insurance. There are tax advantages. You can set up the income in such a way that the beneficiaries cannot outlive it.
- Should I provide a lump sum to my family? If so why. The answer to this may vary. Give consideration to the experience of the beneficiary in handling large sums of money.
- Do I want to set up a charitable fund or grant for an organization that I hold near and dear? Let us assume that life has been good to you. You have fulfilled all or most of your dreams. You have seen your children face life with confidence and victory in most things they have tackled, and whenever they were not victorious they were able to turn their losses into a learning experience, thus in the end winning. You see other people that need help. You do as much as you can while you are alive. Do You want this to continue even after you die. You can set up a grant, or charitable fund through life insurance.
- How about a college fund for your children or grandchildren? Have you thought about this? Is this a good idea? What is the best way to do this. Is life insurance a viable vehicle to use for this fund...if so, why?
Should I set up a pension fund for myself. Can a life insurance company assist me in this matter. What about a joint retirement income with a wife and husband that neither can outlive? Is this an intelligent consideration.
Give these things serious thought when doing your life insurance buying. May be you should discuss these questions with your spouse or significant other too!
Call or visit Utah Insurance Solutions: http://UtahInsuranceSolutions.com, or call: 801-372-2647.
Monday, April 20, 2009
Utah Group Insurance Deals
Utahan’s who are looking for a good deal and group or individual health insurance now is a great time to look at Humana. Humana is a relatively new player to the Utah group insurance market, and they are doing some great things in the Utah market. I recommend giving Bret Harding a call to get a fast Humana quote for your group insurance in Utah. Ph. 801-372-2647, or visit: http://www.UtahInsuranceSolutions.com.
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