The Future of Health Care Plans

September 21, 2013


We are in the midst of transitioning to a new Health Care Reform where employees are going to have to choose a health care provider, if they currently do not have one.  As with any new procedure, there are going to be new decisions that have to be made about their health care.

By October 1, employers are now responsible for education their current employees about their health care choices and the availability of health coverage on the exchanges, if the employer opts not to provide health benefits to the employees.  Then they must post legal notices on the premises for new employees.

The employees must then visit the exchanges on-line and shop around for an insurance plan.  Each state has their own website.  For most employees this task could be overwhelming, as there are sixteen different plans available in the state of Rhode Island.  Some will not understand the different insurance terms and some may not have the patience to shop for coverage themselves.

The state has a staff available to answer questions and the site is very user friendly.  Employees have three months to choose a plan which would be effective on January 1, 2013.  Employees are expected to choose a lower priced plan with high deductibles and co-payments, rather than a plan with a low deductible and co-payments. 

This may put a strain on the budge when utilizing the services.  However, there are other plans available outside of the exchanges, at affordable prices, which would enable the employees to pay most if not all of their medical bills.

For anyone who wants more of an explanation on the details of the health care reform and the responsibilities of the employees and the employers, there will be workshop sponsored by the Chambers of Commerce and other organizations.  For a complete schedule of the locations, go to the Health Source RI website.

Life Insurance on a Tight Budget

September 20, 2013




If you have been reading my postings on my fan page or my my blog, you may have drawn a conclusion that you need to purchase life insurance.

The reason we purchase life insurance is to protect one’s income.  Generally, we need to decide how much money the family is going to need upon our death.  The first thing to do is to make a list of all debts that you have now.  Then compute the dollar amount of your salary times the number of years you would like to provide for the family.  Add a percentage each year for inflation, as the cost of living increases every year.

For example, John and Mary have $50,000 in credit card debt and an outstanding mortgage of $250,000.  John earns $50,000 per year and they decide to include 5% for inflation per year.  Mary would like an income for at least three years after John’s death.

Most families would elect to cover, at least, the mortgage with life insurance so that the family would not lose the home.  The spouse could elect to use the life insurance proceeds to pay off the mortgage upon death of the other spouse. 

Ideally, both spouses should purchase an amount of life insurance on themselves to cover the mortgage, since both make contributions from their salaries to pay the mortgage.  A life insurance agent can assist in helping the couple to determine the amount of cover they can purchase, based on their budget.

The most economical insurance policy would be term insurance which provides a death benefit without cash value.  The most advantageous policy would cover them for ten, twenty, or thirty years at a level death benefit.  The spouses would name each other as beneficiaries on each other’s policy.  In this way, each would collect the proceeds of the policy, if the other dies.

Younger couples would be able to purchase this amount of coverage very inexpensively.  However, older couples would have to pay more money, especially if they have health problems.  Therefore, they may have to elect lower levels of coverage.  However, a lower amount of insurance is better than none at all.  Couples should purchase as much insurance as their budgets will allow.

In conclusion, couples should make plans for their financial security for the family in the event of the untimely death of one or both of the spouses.


Financial Security for Single Mothers and Fathers

September 9, 2013



Single mothers and single fathers need to plan for their financial security very carefully. Because there is only one parent, the parent has to give careful consideration as to how the children will consider their normal lifestyle, if something were to happen to the mother or father.

Because the single parent can only rely on one income, it is especially important to open an emergency fund to cover repairs on the automobile, emergency trips, and living expenses due to unforeseen events. This will help in time of need.

It is also important to designate a guardian in the event of the untimely death of the parent and to purchase life insurance to help cover the living expenses for the children. The addition of new family members could put an additional strain on the new family. A will would have to be created which would designate who the guardians will be. If guardians are not appointed, the state would designate someone who would be entrusted with custody of the children.

If the plan is for the children to go to college, the earlier the parent saves money toward this goal, the better. Since the children are relying on one income, parents can accumulate more money in interest if they start saving early. Additionally, there are state sponsored insurance plans available for the accumulation of college funding.

Some employers offer short-term and/or long term disability plans in the event of sickness or disease. However, the single parents should also consider a separate supplemental disability plan which would offer payments in addition to what the company offers. Often, the plan which is available at work is inadequate to continue paying for household expenses. One can secure a disability plan as a rider on some life insurance plans.

When purchasing health insurance at work, single parents should elect a plan with a low deductible and little or no copayments to protect the income. Since there is only one income, the single parent is more in need of a low deductible so that they can have the extra money for household expenses.

In conclusion, single parents need to be more responsible with their financial planning to ensure their families are protected in the event of emergencies and untimely death of the parent.