Creditor Insurance vs Mortgage Protection

October 21, 2013


There is a difference between creditor insurance, which the bank requires when one purchases a mortgage, and mortgage protection, which a life insurance agent offers to cover the mortgage in the event of the death of the mortgagee.

The bank owns the creditor insurance and requires it to ensure the mortgage will be paid.  The bank would name themselves as the beneficiary and they have complete control of the policy.  Life insurance, on the other hand, is owned by the mortgagee and the mortgagee has complete control over the policy.

When the mortgage expires or the bank cancels the mortgage, the coverage ends.  However, the life insurance company would never cancel the policy, as long as premiums are paid.  The coverage could continue after the mortgage is paid.

A mortgagee can choose a higher amount of insurance over and above the mortgage, including a level death benefit.  The mortgagee can also choose other benefits and features to add to the mortgage protection policy.   The benefit amount for the creditor insurance, however, decreases as the mortgage is paid off.  When the health changes, there are limitations placed on the coverage, and it cannot be customized to meet other financial needs.

In conclusion, the mortgage insurance offered by a life insurance agent is more expansive and flexible than the creditor insurance available at the banks.

Catching the Wave – Adjusting to the Health Care Reform

October 14, 2013



Business owners are facing tough decisions on whether they should offer health care benefits to their employees.  Business owners with under 50 employees are not obligated to offer health care benefits to their employees under the new Health care reform.  However, there is an incentive if they do. 

Any business owner with under twenty-five employees is now eligible for a thirty-five percent tax credit for 2013 and fifty percent for 2014.  It would be advisable for business owners to contact their accountants for the tax consequences.

This would be a good incentive for business owners to offer the health care benefits to their employees, however, most say they cannot afford it.  In that case, the employee would be able to shop for health insurance on the exchange.  If the employee cannot afford it, they would be eligible for a subsidy from the federal government if their income falls within four times the poverty level or $44,000.

If the employee still cannot afford the insurance premium after the subsidy, they can apply for Medicaid.  However, they must fall within the income guidelines in order to qualify for Medicaid.

Studies have shown that employees become more loyal, productive, and experience job satisfaction when they receive a comprehensive benefits package from their employer.  In return, they offer better customer service, take fewer days off, work more efficiently, tend not to complain as much, discover ways of being more effective, and are more enthusiastic about their work.

Since Massachusetts implemented the health care reform seven years ago, economic growth has increased and unemployment is still low.  Additionally, 90% of the people have health care and more are practicing preventive measures in their health.   Small business owners can now acquire health insurance for their families while they are building their businesses.  Because much of the overhead costs of selling insurance, premiums are lower.

In conclusion, the health care reform will help to improve employee morale and health and will help business owners to grow their businesses.

Health Care Reform Affects Women

October 6, 2013


With the October 1 deadline behind us, it seems the word has spread about the new health care reform as many people are already flocking to the exchanges on-line to shop around or purchase the health coverage.

Now, employees who previously did not have health care coverage will be able to purchase the coverage on-line from one of the exchanges. There are several plans to choose from and it will take careful examination in order to choose a plan which is right for the employee. This would include a choice in the amount of co-payments and deductibles to be applied to the medical services.

Many of the services for medical care will include a deductible or co-payment, with the exception of some services for women. These services include preventive services such as, mammograms, screenings for cervical cancer, prenatal care, diabetes, obesity, breast cancer, and heart disease, and other services which pertain to the care of women. In these cases, co-payments and deductibles would not apply.

Additionally, women will not be charged higher rates than men for health care. To accommodate the people who will be visiting community health care centers, there will be an increase of $11 billion for funding of these centers.