questions & answers

Life Insurance

1. How much life insurance do I need?

• 5-7x your annual salary is what is recommended. However at Mid-Western Insurance we know that cost is often an issue. We feel it is better to have at least some coverage in place, rather than none at all.

2. Should I buy life insurance on my kids?

• Yes. Premiums paid are based on the age at time of application. If a policy was purchased on a 2 yr old, he/she will be paying the same premium at 40 as they did at the time of application. General rule of thumb…the older you get the more it costs.

3. Is my employer provided policy enough?

• Employer provided insurance stays with the employer if you were to ever seek different employment. Employers usually offer term life policies, which means they build no cash value.

4. Permanent vs. Term:

Term

• Term insurance does not build cash value or equity, so at the end of the term, the policy will have no value. Premiums are generally less than with permanent policies.

• If you die during the term, your beneficiary will receive the insurance benefit. If you outlive the term, the policy lapses.

Permanent

• Permanent insurance accumulates a cash value, and the policy owner may be able to borrow against it tax-free or use it for retirement or other goals (like education). Premiums are initially higher than for term coverage.

• As long as you keep the policy in force, your beneficiary will receive a death benefit. This type of policy costs more because at some point there will be a death benefit paid.

Annuity

1. What is an annuity?

• An annuity is a contract between you and an insurance company that is designed to meet retirement and other long-range goals, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date.

2. Benefits of Annuities

• A popular choice for investors who want to receive a steady income stream in retirement.

• They stand alone as the only investment that is inherently accorded tax-deferred status. All money invested into annuities of any kind grows tax-deferred until it is withdrawn.

• Predictable income you cannot outlive

• Protection from investment and market risk.

3. How much $ do I need to start one?

• It depends on how much income you will need. You can tailor an annuity to meet specific timing and family needs, and you will see corresponding changes in your anticipated payments based on what you decide.

Medicare

1. Open Enrollment?

• When you're first eligible for Medicare, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B.

• For example, if you're eligible when you turn 65, you can sign up during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65.

• Each year, you have a chance to make changes to your Medicare Advantage or Medicare prescription drug coverage for the following year. There are specific times when you can sign up for these plans, or make changes to coverage you already have. You don’t need to sign up for Medicare each year. However, each year you’ll have a chance to review your coverage and change plans.

• Annual Enrollment Period for 2014: October 15–December 7

• Join a Medicare Prescription Drug Plan

• Switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan

• Change from Original Medicare to a Medicare Advantage Plan

• Change from a Medicare Advantage Plan back to Original Medicare

• Switch from one Medicare Advantage Plan to another Medicare Advantage Plan

• Advantage Disenrollment Period 2015: January 1 and February 14

• Special Enrollment Period includes but IS NOT limited to: turning 65 or becoming eligible for Medicare for the first time

2. What age do I qualify?

• There are a number of factors that determine Medicare eligibility. In general, you are eligible for Medicare if you are 65 or older, or you are younger than 65 and meet criteria for certain disabilities. Enrollment eligibility requirements may vary by plan types.

Long Term Care

1. Does it only cover nursing homes?

• Most policies sold today are comprehensive. They typically allow you to use your daily benefit in a variety of settings, including your home, nursing home, assisted living, hospice care, respite care, Alzheimer’s special care facilities and adult day service centers.

2. When should I buy it?

• NOW…with that said, there is no better time than the present. As with most insurance, the younger/healthier you are, the better the rate.

3. Do I need it?

• 3 out of 4 people will need Long Term Care by the age of 65, do you want to take the risk that you will be the one person that doesn’t need it?

• Do you have assets to protect? If you are able to spend a small sliver of your pie to protect the whole pie, then LTCi is for you.

4. Partnership Program

• The Long-Term Care Partnership Program is a Federally-supported, state-operated initiative that allows individuals who purchase a qualified long term care insurance policy or coverage to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage.

5. Tax Credit

• North Dakota Long-Term Care Partnership Program policies qualify for an annual $250 North Dakota income tax credit.

Health Insurance

1. Is Health Insurance required?

• Yes. Health insurance is now required by law. The plan has to be a Qualified Health Plan. Penalties for 2015 will be:

• 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.

• $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

2. What if I have tried to purchase health insurance in the past and didn’t qualify.

• There is now no health questions to determine eligibility. Eligibility and premiums are based more on geographic location and annual income.

3. What is the Marketplace?

• The Marketplace helps people without health coverage enroll in a high-quality plan online, by phone, or with a paper application.

• During the 2015 Open Enrollment period, anybody who qualifies to use the Marketplace can fill out an application and enroll in coverage for 2015.

• The Open Enrollment period for 2015 coverage is November 15, 2014 to February 15, 2015. If you haven't enrolled in 2015 coverage by February 15, you generally can't buy Marketplace health coverage for 2015 unless you qualify for a Special Enrollment Period.