3 Reasons Retirees May Be Disappointed With Their Medicare Insurance Coverage
Your Medicare insurance coverage may not be as comprehensive as you think.
Medicare insurance coverage kicks in at age 65 for most Americans, and many people look forward to the day when they’ll get this government-provided insurance.
Unfortunately, some seniors may be surprised to discover Medicare isn’t necessarily all they were expecting it to be. In fact, there are three really big reasons why retirees may end up disappointed with this insurance coverage.
1. There are coverage exclusions
While Medicare covers medically necessary hospitalizations under most circumstances, as well as many types of routine outpatient care, the coverage is far from comprehensive. In fact, there are many things Medicare does not pay for including:
Eye exams and glasses
Hearing aids
Most types of dental care including dentures
Chiropractic maintenance care
Acupuncture
Routine foot care
In many cases, you’ll end up needing some or all of these services as a retiree. To make sure you can pay for them, consider getting supplemental insurance that provides for them. You could also create a dedicated savings account to pay for things that Medicare won’t.
2. With Medicare Insurance, No long-term care is paid for in most cases
As many as 70% of seniors 65 and over will need long-term care at some time during their lives. Sadly, Medicare almost never pays for this, regardless of whether it’s provided in a nursing home or provided by home healthcare aids.https://abf11d7d9c55f1f071cf7333d8de2582.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
Medicare covers skilled nursing care under limited circumstances. But most people who go to a nursing home or hire a home health aide do so because they need something called “custodial care,” or routine help with activities of daily living such as using the bathroom or bathing or eating. And Medicare doesn’t pay for custodial care at all.
To make sure you’re able to cover these services if you need them, consider buying a long-term care insurance policy. Alternatively, you could work with an attorney to engage in Medicaid planning, which allows you to protect your assets while ensuring you can qualify for Medicaid to pay for your nursing care services. You could aim to save enough to pay for long-term care out of pocket, but the cost could be more than $100,000 a year, so that’s a tall order.
3. Coinsurance costs are high
Medicare coinsurance costs are also a shock to many seniors.
See, if you have traditional Medicare, your insurance will pay for 80% of most outpatient services and you’ll be on the hook for the other 20% — with no limits on how much that amount could cost you. If you need a lot of costly medical services, which is more likely to happen as you grow older, you could end up spending thousands of dollars if you rely solely on Medicare alone.https://abf11d7d9c55f1f071cf7333d8de2582.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html
To limit your costs and make them more predictable, you may want to consider buying a Medicare Advantage or Medigap plan. These can either supplement your traditional Medicare in the case of a Medigap plan or serve as an alternative to it in the case of Medicare Advantage.
Healthcare is sure to be more expensive than you think as a retiree, with the Employee Benefit Research Institute estimating out-of-pocket expenditures at around $325,000 for a senior couple turning 65 covered by Medicare. If you’re expecting this insurance to pay for everything you need and aren’t saving for your healthcare services throughout your career, you could end up very disappointed.
Healthcare Premiums Drop Slightly As 2021 Open Enrollment Period Draws Near
Even with the election and oral argument in California v. Texas looming, the 2021 open enrollment period will soon be upon us and it’s all about healthcare premiums. In all states except California (where the open enrollment period began on October 15), the 2021 open enrollment season begins on November 1, 2020, with a deadline of December 15 in the 36 states that use HealthCare.gov. States with their own marketplaces—including New Jersey and Pennsylvania, which newly opened their own marketplaces—have set their deadlines later in December 2020 or January 2021.
Ahead of open enrollment, the Centers for Medicare and Medicaid (CMS) released new data on HealthCare.gov marketplace premiums and insurer participation for 2021. CMS’s analysis includes an issue brief on premiums, landscape plan data, and a map on insurer participation. (Public use files do not appear to be posted yet but will be available here when they are.) CMS also released the scheduled maintenance windows for HealthCare.gov for the 2021 open enrollment period.
Healthcare Premiums Drop 2%
Overall, healthcare premiums are expected to drop by 2 percent for a 27-year old for a silver benchmark marketplace plan sold through HealthCare.gov. This builds on a 4 percent decline for 2020 and a 2 percent decline for 2019. The unsubsidized average benchmark plan premium for a 27-year old will be $369/month for 2021 (compared to $388/month for 2020). In four states, silver benchmark premiums will decline by double-digits: Iowa (29 percent), Maine (14 percent), New Hampshire (18 percent), and Wyoming (10 percent). Only North Dakota will see an average benchmark plan premium increase of 10 percent or more (29 percent).
Lower Healthcare Premiums Ahead
Lower premiums are expected even with the pandemic. First, Congress repealed the health insurance tax beginning with 2021, which should result in premium savings that are passed along to consumers. Second, insurers continue to owe record-high medical loss ratio rebates in the individual market. This suggests that insurers are overpricing their products and those premium reductions are warranted. Third, more states have adopted state-based reinsurance programs: currently, 14 states have received a waiver to operate a reinsurance program. Fourth, the pandemic has led to higher profits for many insurers, further incentivizing premium reductions. These factors made it unsurprising that many insurers would reduce their premiums for 2021.
Insurer participation continues to increase.
Six more insurers will offer marketplace coverage through HealthCare.gov, increasing the total number of participating insurers to 181 for 2021. (Even so, this metric continues to lag earlier years in ACA implementation, remaining well below the high of 237 participating insurers for 2016.) Of the 36 states that use HealthCare.gov, 16 states will have more insurers compared to 2020 and 27 states will have counties with more insurers relative to 2020. Only Arkansas, New Mexico, and Wyoming will have an additional insurer offer statewide coverage. Four states have counties with fewer insurers in 2021 relative to 2020 while Delaware is now the only state with just one insurer (down from two states for 2020). Only four percent of enrollees will have access to only one insurer compared to 12 percent of enrollees for 2018 and 20 percent of enrollees for 2019.
Average premium reductions and higher insurer participation are encouraging. The uninsured rate was on the rise long before the pandemic, and robust individual market coverage options will be especially important in 2021 with millions of people losing their job or health insurance. Fortunately, many low-income consumers will continue to have options in 2021. CMS estimates that 30 percent of subsidy-eligible enrollees can find a marketplace plan for $10/month or less, and 71 percent can find a plan for $75/month or less. Of those not eligible for subsidies, 27 percent can find a plan for $300/month or less.
Deductibles Continue to Rise
At the same time, deductibles continue to rise. For bronze plans, the median individual deductible increased from $6,755 for 2020 to $6,992 for 2021. For silver plans, deductibles rose from $4,630 to $4,879. And gold plan deductibles rose from $1,432 to $1,533. Consistent with prior years, nearly all enrollees will have access to a health savings account-eligible marketplace plan in 2021.
Finally, potential maintenance for HealthCare.gov has been scheduled for early morning on November 1 (to make final preparations ahead of the start of open enrollment) and each Sunday from 12 am to 12 pm ET except on November 1 and December 13. Federal officials selected the Sunday morning time period because this is when the website receives the least amount of traffic. During any website downtime, HealthCare.gov will be unavailable for consumers to select a plan and enroll in coverage. As in prior years, CMS anticipates that actual maintenance periods will be much shorter than the scheduled slots. Despite the maximum allocation of 72 hours of maintenance last year, the website was down for only 24.5 hours and HealthCare.gov was reportedly available 96.9 percent of the time.
Whether you’re reviewing your Medicare coverage during open enrollment through Dec. 7 or are signing up for the first time, there are some key considerations to factor into your decision-making, advisors say.
Although Advantage Plans often come with low or no premiums, the out-of-pocket maximums for in-network coverage can be as much as $7,550 in 2021.
So-called Medigap plans, whose monthly premiums can be pricey, provide more flexibility.
For the nation’s older residents, the stakes can’t be higher when it comes to choosing health-care coverage.
That’s partly because under Medicare — you’re eligible at age 65 — changing plans can be challenging in some circumstances and costly if you get your choices wrong. So whether you’re giving your coverage an annual checkup during open enrollment (Oct. 15 through Dec. 7) or signing up for the first time, financial advisors say there are some key considerations to factor into your decision-making.
“I encourage people to get the best plan they can because you don’t know what will happen with your health,” said certified financial planner Carolyn McClanahan, a physician and founder of Life Planning Partners in Jacksonville, Florida.
“The most important thing when it comes to health-care costs is to be adequately insured,” McClanahan said.
Roughly 62.8 million individuals are enrolled in Medicare, the majority of whom are age 65 or older (the remainder are younger with disabilities or individuals with end-stage renal disease).
About a third choose to get their benefits delivered through Advantage Plans, which are offered by private insurers and typically include Part D prescription drug coverage. The remainder sticks with original Medicare: Part A (hospital coverage) and Part B (outpatient care). Those beneficiaries often pair that with a stand-alone Part D plan and a Medicare supplemental plan (aka Medigap), both of which also are offered by private insurance companies.
The most important thing when it comes to healthcare costs is to be adequately insured. Dr. Carolyn McClanahan
The current open enrollment period is for making changes related to those stand-alone drug plans and Advantage Plans: You can switch, drop or add them.
This window is different from your initial sign-up for Medicare when you get a seven-month period that starts three months before the month in which you turn 65 and ends three months after it. During that time, unless you meet an exception — i.e., you have acceptable coverage elsewhere — you generally must sign up for Parts A and B.
When deciding on your coverage, it’s important to consider all associated costs. In addition to things like premiums, copays or coinsurance through Medicare, be sure to consider aspects of your care that may not be covered. For example, dental, vision, and hearing generally are not covered under original Medicare, which also comes with no out-of-pocket maximums.
Additionally, higher-income beneficiaries pay extra each month for their Part B and Part D premiums through so-called income-related monthly adjustment amounts or IRMAAs. Your tax return from two years before the coverage year is generally relied on to determine whether you’re subject to the extra charges. However, if your financial situation has changed, you can appeal the decision. The charts further below show the 2020 amounts to give you a sense of how the IRMAAs are applied (income thresholds and monthly charges for 2021 have not been released yet).
Here are some tips from financial advisors when it comes to determining which type of coverage is most suitable for you.
Advantage Plan considerations
Enrollment in Advantage Plans has more than doubled over the last decade, to 24.1 million beneficiaries in 2020 from 11.1 million in 2010, according to the Kaiser Family Foundation.
These plans often come with low or no monthly premiums (although you usually still pay your Part B premium). As mentioned, they also typically include prescription drug coverage, as well as extras such as dental or vision.
However, “just know that it might look good on the surface at first, but it can be very limiting,” McClanahan said.
For example, you may have to see a doctor or other provider in the plan’s network. This means if you have a health crisis, you might be unable to see the specialist you want. And while Advantage Plans also come with out-of-pocket maximums, they can be as high as $7,550 (in 2021) for in-network coverage before the plan pays 100% of covered services.
Nevertheless, one of these plans may be suitable, depending on how much you use the health-care system. Keep in mind that generally speaking, the lower the premium, the more you’ll pay in copays or other cost-sharing.
If you’re already enrolled in an Advantage Plan, you can switch to another during this open enrollment if you find one that’s more suitable. If you take no action, your current coverage will continue next year.
“Just make sure your prescriptions and doctors are still being covered under your current plan,” said CFP Joe Boden, senior wealth advisor, and partnerat EP Wealth Advisors in Seattle.
If you want to drop your Advantage Plan during this enrollment period and are planning to pair original Medicare with a Part D plan and Medigap, be aware that getting the latter may involve medical underwriting. And if you have underlying health issues, you may be charged more or denied coverage altogether (more on that below).
Also, if you discover after open enrollment ends that you aren’t happy with the Advantage Plan you chose, you can switch to another, or drop it and return to original Medicare, during a separate window that runs from Jan. 1 to March 31.
Medigap considerations
So-called Medigap policies either fully or partially cover some cost-sharing aspects of Parts A and B, including copays and coinsurance and, perhaps, deductibles.
Each is simply assigned a letter: A, B, C, D, F, G, K, L, M and N. Some states also offer high-deductible versions of Plan F and G. While they are standardized from state to state, coverage between each plan varies. And the premiums can vary widely among locations and insurers.
For instance, the difference among the highest- and lowest-cost Plan G policies in various markets can be stark, according to the American Association for Medicare Supplement Insurance. In one Dallas ZIP code, the lowest cost is $99 per month for a 65-year-old female and the highest was $381 monthly for that same consumer. So yearly, that would be $1,188 vs. $4,572.
Nevertheless, many Medicare beneficiaries like the lower out-of-pocket predictability that can come with a Medigap plan. For example, if you get Plan D, you know that all of your Part B copays (usually 20% of covered services) would be picked up by Medigap. The same goes for the Part A deductible charged per benefit period (in 2020, that amount is $1,408).
Sticking with original Medicare also comes with flexibility in choosing where to get care. For example, if you’re vacationing far from your home state, most providers accept original Medicare. Some Medigap plans will even partially cover care if you’re traveling overseas.
“If you want to make sure you’re covered no matter where you are, a Medigap plan may be more advantageous than an Advantage Plan,” Boden said. Joe Boden SENIOR WEALTH ADVISOR AND PARTNER AT EP WEALTH ADVISORS
It’s important to know that if you don’t get a Medigap plan during your six-month “guaranteed issue” period — which starts when you sign up for Part B — it could be hard to get one down the road.
After that window, unless you live in a state with different rules, you would have to undergo medical underwriting, which could result in a higher premium or being denied coverage altogether if you have underlying health issues.
One exception: If you try out an Advantage Plan for the first time and decide within the first 12 months that it’s not for you, you generally would get a special enrollment period to purchase a Medigap policy without any underwriting.
Additionally, be sure that if you definitely want Medigap, pick the one that would be suitable long term, McClanahan said.
“Once you pick a Medigap plan, it can be really difficult to change because there might be underwriting,” she said.
Prescription drug Medicare coverage
If you’re first signing up for Medicare and wonder why you’d need prescription drug coverage when you are healthy and take no medications, be aware that you may face a life-lasting late-enrollment penalty if you change your mind down the road. And, you could find yourself shelling out full price for medicines if you have a health event and no coverage.
“People hate paying for Part D if they don’t have health issues, but the problem is that you don’t know when something could happen,” McClanahan said.
If you already have a stand-alone Part D prescription drug plan alongside original Medicare (and, perhaps, a Medigap policy), you can change it during this open enrollment if you find one that better suits you. If you take no action, you generally will remain with the same plan — which could have changed its formulary and how it covers (or doesn’t cover) certain medicines.
Be sure that any medications you take are on your plan’s formulary and that you’re at peace with any additional requirements for the plan, such as step therapy (trying a lower-cost drug before a more expensive one). Also, know your deductible. While not all Part D plans have one, it could be up to $435 (for 2020).
The bottom line is that regardless of the Medicare coverage you choose, it’s important to consider the “what ifs” in addition to the cost.
“Insurance is always one of those things where you might be glad you paid an extra amount upfront,” Boden said. “Sometimes it’s about peace of mind, even if you’re paying a little more each month.”
Contact Shield Agency owner, Andy Simmons, to answer your questions on Medicare.
The pandemic has made everyone acutely aware of the need for healthcare Insurance coverage. Small businesses struggling to survive are challenged to find ways to offer health coverage as a fringe benefit to employees. Premium costs are high.
Nonetheless, there are several ways in which small employers can help employees get coverage for the upcoming year.
5 Things to Know About Healthcare Insurance Coverage in 2021
Don’t wait until the last minute to explore your options. Here are 5 things to keep in mind.
1. Coverage Requirements for ALEs
If you have at least 50 full-time and full-time equivalent employees, you are an Applicable Large Employer (ALE) subject to the employer mandate under the Affordable Care Act. This means you must offer minimum essential health coverage that’s affordable to your full-time employees or pay a penalty. What’s affordable Healthcare Insurance? The IRS has released this information for 2021. The cost to employees can’t be more than 9.83% of household income in 2021.
2. HSAs
Health savings accounts (HSAs) allow individuals to cover their out-of-pocket costs. But to make contributions—whether by employers or employees—to such accounts, individuals must be covered by a high-deductible health plan (HDHP). For 2021, this means insurance with a minimum deductible of $1,400 for self-only coverage or $2,800 for family coverage and a cap on out-of-pocket expenses (deductibles, co-payments, and other amounts other than premiums) not exceeding $7,000 for self-only coverage or $14,000 for family coverage.
If you have group insurance that is an HDHP, then you can decide whether to contribute to employees’ HSAs. If not, then employees can choose to make deductible contributions to their accounts for 2021. More information about HSAs is in IRS Publication 969.
3. HRA Options
Health reimbursement arrangements (HRAs) facilitate tax-free reimbursements to employees. While the business can deduct these reimbursements, they aren’t subject to employment taxes. For 2021, consider these HRA options:
Qualified small employer health reimbursement arrangements (QSEHRAs). These plans reimburse employees for premiums on their individually-obtained coverage up to a set dollar limit ($5,250 for self-only coverage or $10,600 for family coverage in 2020).
Individual coverage health reimbursement arrangements (ICHRAs). These plans also reimburse employees for their premiums on individually-obtained health coverage. The law doesn’t cap the reimbursement; it’s up to the employer to fix this amount (on a nondiscriminatory basis).
Excepted benefit health reimbursement arrangements (EBHRAs). These plans help pay for certain benefits, such as dental or vision care, not otherwise covered by a general insurance policy. Reimbursement is capped up to a set dollar amount. The cap for 2021 has not yet been announced (it was $1,800 for 2020).
If you don’t provide a Healthcare Insurance plan or do have a plan (including an HRA) but you don’t pay all of the cost, you can enable employees to pay all or the balance of premiums on a pre-tax basis. The plan must offer employees a choice between cash or reimbursement for health insurance coverage. If they choose the coverage, the amount of what they’d pay for premiums that are withheld from their paycheck is not treated as taxable compensation to them. There are no employment taxes on this benefit. If, however, they choose the cash option, it’s taxable compensation.
5. Notice Requirements
Employers offering a Healthcare Insurance plan are required to give notice to employees about their participation and what’s involved. Depending on the plan, notice may include providing a summary plan document.
Generally, notice is required to be given 90 days before the start of the plan year. So, if the plan year starts on January 1, 2021, notice must be given by October 3, 2020.
Conclusion
Start shopping now for Healthcare Insurance. Contact the Shield Agency expert Carlos Garcia or another tax advisor to find ways to make this benefit available to employees without busting your budget. And be sure that whichever option you use that you do so in compliance with the law.
As a business owner, it can be challenging to keep up with changing rules and regulations, especially those related to health insurance.
What are the essential insurance requirements you need to know for this year? And what are the advantages of offering small business health insurance? Keep reading to learn what your employer obligations are for group health insurance requirements in 2020.
Are employers required to offer small business health insurance in 2020?
Even with the now-repealed Individual Mandate from the Affordable Care Act (ACA), employers were never required to provide small business health insurance. According to the insurance requirements of the ACA, employers with less than 50 full-time employees are considered to be small businesses and are still not required to provide group health insurance coverage to their employees in 2020. However, businesses with 50 or more full-time employees (applicable large employers, or ALEs) are still required to provide health insurance to their workers or face penalties in 2020.
How can employers qualify for the small business health insurance tax credit?
Although it is optional for small businesses to offer group health insurance, employers may be able to benefit from the health care tax credit. A small business can usually qualify for the tax credit if it meets the following insurance requirements:
The small business has 25 or fewer full-time equivalent (FTE) employees.
Employees are paid an average salary of no greater than $54,200 (in 2019).
The small business pays at least 50 percent of employee premiums.
The small business buys a SHOP Marketplace Plan on the Marketplace, or from a partner such as Ehealth.
Smaller businesses can generally be eligible for a higher health care tax credit. For instance, a business with less than 10 employees and an average salary of less than $25,000 would qualify for the highest tax credit. Overall, the health care tax credit may help make the purchase of group health insurance more affordable for small businesses while ensuring that their coverage meets ACA insurance requirements.
How can employees save money?
Small businesses can still purchase group health insurance even if they do not qualify for a health care tax credit. For instance, small employers may still be able to deduct the cost of contributing to monthly employee premiums from their federal taxes as a business expense.
Since group health insurance is employer-sponsored coverage, small businesses can also ask employees to pay for a portion of monthly premiums (typically 50 percent or less) from out of their paychecks while still fulfilling employer cost-sharing requirements and ACA health insurance requirements. Browse affordable small business health insurance plans with eHealth to find the best options for your business.
What are small business requirements related to tax reporting in 2020?
There are certain tax reporting requirements for small businesses to keep in mind for 2020.
If your company decides to offer group health coverage after meeting insurance requirements, you must report the value of the insurance provided to each employee. This information goes on the employee’s Form W-2 using the code DD, as per IRS requirements.
According to the IRS, your business is required to withhold and report an additional 0.9 percent on employee compensation that is greater than $200,000, as per the ACA.
Why should employers offer small business health insurance?
Although in some cases, offering health insurance is beyond typical employer requirements, there are several advantages to offering a group health insurance plan to your employees.
Retaining and attracting employees – Providing group health insurance coverage may help your small business recruit better employees while also helping keep your best current employees. In a competitive talent market, offering health insurance as part of a compensation package may be an appealing incentive for people to join your company.
Helping your business stand out – According to the Bureau of Labor Statistics, only about 55 percent of companies with less than 100 workers offered medical benefits through small business health insurance. Employees frequently sign up for group plans, even when they have to pay for part of the premiums.
Building a healthier workforce – When employees have health insurance, they may take less sick days and could help your small business be more productive. By having access to many health care resources, your employees can proactively attend to their medical needs with fewer disruptions to their work schedule.
Overall, offering group health coverage may be a worthwhile investment for your small business, regardless of your employer’s requirements.
Where can employers find small business health insurance?
As a small business employer, you quickly can find group health insurance coverage through eHealth. With eHealth’s online marketplace, you can easily compare group medical plans from multiple health insurance companies, including plans which may not be offered on the exchange. By quickly entering your number of employees and the company’s ZIP code, you can instantly get quotes for small business health insurance.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.
For assistance with your small business health insurance, contact our specialist, Carlos Martinez Garcia | P: 616-777-3017 | Fax: 616-896-4601
Medicare’s Open Enrollment ends December 7. Even if you’re happy with your current Medicare coverage, it’s important to know your Medicare coverage options for 2021. Here are a few reasons why:
Your needs may change. You may find you’re going to the doctor more or less often, the prescription drugs you take may be different, or you may need better access to health care services.
Benefits can vary. Not all Medicare coverage options offer the same benefits. Plan benefits can change from year-to-year.
New, more affordable Medicare plans may be available. The total cost, provider network, and services offered are different between plans. Review plans to see if other plan options could better meet your news or lower your out-of-pocket costs.
Review your current Medicare plan & check for changes
Does your current Medicare plan offer the benefits you need? Review your health or drug plan’s information and note any changes in costs or benefits that will happen in 2021. If you have other types of health or prescription drug coverage, make sure you understand how that coverage works with Medicare.
Compare Medicare health & drug plans
Each year, plans can make changes to the items and services they cover and what you pay. Decide if your current Medicare plan will meet your health care needs for the year ahead. If you like your current Medicare coverage and it’s still available for 2021, you don’t need to do anything.
New plan options may be available to you. If you take insulin, this Open Enrollment you may be able to get a Medicare plan that offers broad access to many types of insulin for no more than $35 for a 30-day supply. You can get savings on insulin if you join a Medicare drug plan or Medicare Advantage Plan with drug coverage that participates in the insulin savings model. You can choose among plans that offer insulin at a predictable and affordable cost. Select the “insulin savings” filter in Medicare Plan Finder to find plans that participate in this new model that can help you save on your insulin costs.
When you’re in the market for insurance, whether it’s home, auto or commercial insurance, you typically work with an agent who can help you find a policy that meets your needs. But most people don’t know that there are two different kinds of insurance agents—captive and independentagents.
So what is an independent insurance agent vs. a captive insurance agent? In short, captive insurance agents are contracted to work for one insurance company and can only sell that company’s policies. On the other hand, independent agents are contracted to work with a variety of insurance companies and can sell policies from multiple providers.
As a consumer, it’s important to understand the distinctions between captive and independent agents. Although they sound the same, some people may benefit from working with a captive agent and others with an independent agent. In this article, we’ll explain the key differences and help you decide which agent is best for you.
Captive Agents
Most of the major insurance companies, like State Farm, Allstate and Farmers, use captive agents to sell their insurance products. Their agents are only selling policies from that one insurer, so the agents are experts at knowing the different policies available, discounts and coverage add-ons for their one carrier.
Because of that, they can be helpful for people who are buying insurance for the first time or for people who aren’t sure how much coverage to purchase.
Client satisfaction is crucial for captive agents because they get a commission for every earned sale. However, their commission rate tends to be lower than for independent agents because they are also paid a salary from the insurance company and get financial assistance with costs like advertising and hiring.
Independent Agents
Independent agents partner with several insurance companies of their choosing to sell certain policies from each provider. For example, an independent agent might contract with Pioneer Insurance, Frankenmuth Insurance,and Citizens Insurance and sell any of their auto and home insurance policies.
Many consumers like working an independent insurance agent because an independent agent gives the customer more options. They aren’t locked into purchasing from a small number of plans that might be too expensive or not a great fit for their coverage needs. Those options help people shop around for plans before settling on one.
Which is better?
Generally speaking, there isn’t one better type of insurance agent. Whether you choose to work with a captive agent or an independent agent depends on you.
The main benefit of working with a captive agent is that they have extensive knowledge of their insurers products and policies, because they have one carrier. However, working with a captive agent tends to be more expensive, due to extra fees that the insurance company charges.
If you work with an independent agent, you’ll get more options, which also means a wider price range. But independent agents have in-depth knowledge about numerous carriers, where captives only need to learn one. Also, independent agents usually charge less because there isn’t one parent company to support.
If you’re concerned with keeping costs low, working with an independent agent will save you money. Keep in mind that you should already have a general idea of what you’re looking for before meeting with an agent.
Frequently asked questions
What type of insurance do independent agents and captive agents sell?
Both independent and captive agents can sell any kind of insurance they want. Some choose to sell every product that an insurer offers, while others specialize in a few areas, like home and life insurance.
Should I choose an independent agent or a captive agent?
There are a few main reasons why you would choose an independent vs. a captive agent. The first is cost—working with an independent agent will be cheaper than working with a captive agent. Secondly, independent agents can offer a wider variety of plans, so you have more choices and a wider price range to work from.
In case of an emergency, here is how to prepare your phone.
Today, our phones are rarely outside of our reach. This makes them one of the best tools we have to quickly respond to an emergency and increase the chances of a more positive outcome.
How prepared is your phone to handle an emergency?
In most emergencies, you would be the one to contact someone for help. So, it’s important to take a few minutes to research and save important emergency contact numbers on your phone so you can make the call immediately and get help faster.
Here are the main emergency phone numbers to prepare
Your emergency contacts, such as a parent, spouse, or close friend
Police, 911 in the United States for emergencies
Poison Control Center
State Highway Patrol
Your nearest police and fire department (for non-emergencies)
You should also consider saving these important numbers to help you in an emergency:
Your doctor, pediatrician, and/or veterinarian
Your pharmacy
Home health aides
Your insurance company
Your roadside assistance provider
Your employer
Your child’s school or caregiver
A nearby relative or friend
An out-of-town relative or friend
There are also some emergency situations, like a bad fall or car accident, where you might not be able to communicate with first responders. For this reason, it’s important to take these two steps:
Add an emergency contact in your phones, such as a parent, spouse, or close friend who can come to your aid.
If your phone locks, set up a lock screen message to communicate helpful information to first responders, like your emergency contact, blood type, allergies, and medications.
Depending on the type of phone you’re using, there are different ways to add a lock screen message.
iPhone users can use the Health app on their phones to add their basic personal information, important medical details, and emergency contact numbers within the Medical ID tab and make them accessible from their lock screen. Just make sure you select “Show When Locked” and test it out after you’ve finished setting it up.
Android users can set up their lock screen message by going into their Settings, Users & Accounts, and then Emergency Information. Enter your medical information and emergency contact. Then test it out by locking your phone, swiping up, and tapping “Emergency” to find the information you entered.
Additionally, Android lets you put any message you want on your locked screen. To do this, open your Settings, go to Security & Location, and next to the Screen Lock tab hit Settings. Then, tap Lock Screen Message. Here, you can enter your primary emergency contact or important medication information so that it always displays on your locked phone screen.
Because it’s difficult to predict when or where an emergency will happen, it is a smart idea to prepare your phone now so that you’re ready to handle any situation that comes your way in the future. Be safe out there!
This article is for informational and suggestion purposes only. To learn more about Shield Insurance Agency, business and life insurance, or auto insurance including Roadside Assistance, please call or text our office at 616-896-4600
References: – Harvard Health Publishing, Harvard Medical School – HuffPost, LIFE
It’s simple for thieves to turn plain, old regular crime into cybercrime – if you give them the right information. Leave these ten items out of your wallet.
Over time, it’s easy for your wallet or purse to become stuffed full of crucial information – receipts, PIN numbers, and social security cards – that thieves can use to access your online life with only a few clicks.
Keep only what you need in your wallet and purse and keep your online life secure. Use the infographic below to help determine what should be, and more importantly, what should not be in your wallet.
Identity theft insurance is there to help protect you from the worst financial situations. And in today’s data-driven world, identity theft remains a constant threat that comes with a big financial risk.
When an identity thief has your Social Security number and other identifying information, they can use it to fraudulently open new accounts or credit cards for financial gain, steal money from your existing accounts, apply for loans, rent an apartment, obtain a job, receive medical care or establish accounts with utility companies.
Still not sure if you need identity theft insurance?
Here are a couple of reasons why you should consider it the next time you speak with your independent insurance agent.
Reason #1: Your household contains children or seniors.
Everyone with a Social Security number is at risk for identity theft, but identity theft thieves like to target individuals who are less likely to regularly check for identity theft warning signs or report irregular activity on their credit reports. This means children and seniors are prime targets.
If you have children, periodically check for a credit report in their name. If no credit report exists, that is a good sign that your child has not been a victim of identity theft. However, if you start receiving collection calls, statements or pre-approval credit offers in your child’s name, these are warning signs that your child’s identity may have been stolen.
If you have seniors in your household, help them learn about common tactics identity thieves use to trick their victims into sharing private personal information that could compromise their identity. Seniors are most often targeted with over-the-phone and internet phishing scams. Teach them how to identify phishing and encourage them to call the organization directly to confirm if the communication is real or a phishing attempt before they share any information.
Reason #2: You’re in the military.
Active duty military members are particularly vulnerable to identity theft while they’re deployed. This is because they might not be checking their credit reports or receiving calls from debt collectors.
According to the FTC, military members are most affected by bank and credit card fraud, but they have also been victims of employment fraud, tax-related fraud, and loan or lease fraud.
If deployment is in your future, set up an Active Duty Military Fraud Alert on your credit report. Once in place, businesses must verify your identity before issuing credit in your name and this makes it harder for identity thieves to use your information to apply for credit.
Reason #3: You’re on social media.
When you share your name, date of birth, hometown, and other personal information on your social media profile, it makes it easier for cyber-criminals to connect that information to even more sensitive information that they collect from you from phishing or another type of scam.
In 2018, the FTC processed over 9,000 email or social media identity theft reports, which was a 23% increase from the previous year.
Think twice before you share a lot of personal information on your social media profiles.
Reason #4: Your password is 12345.
If you use a simple password to protect your accounts or internet-connected devices, then it’s time to update it. Some examples of a simple password are 12345, password, and admin.
A secure password is long, includes a mix of letters, numbers, and symbols and it isn’t easily guessed. You should also avoid using the same password for all of your accounts, since cracking it in one location could open the door for an identity thief to access and take over your other accounts, too. Consider using two-factor authentication, which sends a code to your phone during login, whenever it’s available to add an additional layer of password protection.
Even if none of these reasons apply to you, it pays to be on the lookout for identity theft. CyberScout, a provider of full-spectrum identity, privacy, and security services and a Grange Insurance partner, recommends checking your credit report from all three credit agencies at least twice a year. Under FACTA, every consumer has the right to obtain a copy of his or her credit report free from each of the credit reporting agencies. Take advantage of this opportunity and learn about additional prevention techniques like setting up credit monitoring to keep your identity, and those of your loved ones, safe.
This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy apply. Shield Insurance offers an Identity Theft coverage endorsement that can be added to a Personal Auto or Homeowners insurance policy. For full details on coverages and discounts, contact us@ShieldAgency.com .
