Month: January 2021

Should You Have Survivorship Insurance?

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Advantages of Having Survivorship Insurance

Life insurance is an important asset to own as it has a potentially high yield, excellent tax-favored benefits, and can solve many financial issues. Unlike traditional life insurance, survivorship insurance, also known as “second-to-die”, is a type of life insurance that insures two lives-usually a husband and wife. This policy pays the death benefit to the insured’s heirs only after both insureds have passed away. Because it does not pay out until both parties have passed, it is less useful as an income replacement and is best applied towards protecting the financial health of future generations.

Typically, the death benefit from a survivorship insurance policy is meant to pay federal estate taxes, inheritance taxes, and to cover the financial needs of the insured’s children or dependents. Some of the key advantages of a survivorship insurance policy include:

Preserve the Couples Wealth.

Individuals may choose to purchase a survivorship insurance policy after consulting with an estate planning attorney in order to preserve their wealth and assets.

Build Wealth for Heirs.

Some individuals may choose to purchase a survivorship insurance policy to build wealth for their heirs. In circumstances where individuals believe they will have used up their assets and will not have a large estate upon their death, this policy is a good option to leave a legacy for their heirs.

Take Advantage of Cash Value.

When one spouse has died, if there is cash value built up in the survivorship insurance policy, then the surviving spouse may be able to take advantage of the cash value of the policy as needed.

Easier to Purchase.

Survivorship insurance may be easier to qualify for than single insured life insurance. Since both policyholders need to pass away before any benefit is paid out, the insurance company is less concerned about whether one of the spouses is healthy or not. However, it is important to remember that each insurance company will have differing definitions of what is “uninsurable”.

Save on Costs.

A survivorship insurance policy can potentially save an individual money in the long run as opposed to having two separate life insurance policies. Especially when one of the spouses has medical issues or may have trouble finding affordable life insurance.

Things to Consider Before Purchasing

If you’re looking to use life insurance as an estate planning tool and want to ensure your heirs will receive the death benefit when you and your spouse pass away, then a survivorship insurance policy will work to your advantage. However, with any type of insurance policy, it is vital to find out how the policy with be impacted by a change in estate tax laws and in the event of a divorce.

As a full-service insurance provider, Schechner Lifson can help you determine whether or not a survivorship insurance policy is right for your individual circumstances. Contact us today!

What is Prescription Drug Insurance and How Much Does It Cost?

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Breaking Down the Benefits of Prescription Drug Insurance

Prescription drug insurance plays a significant role in a comprehensive health insurance plan. Individuals who have this coverage pay a monthly premium and an annual deductible in order to take advantage of the benefits. There is usually a copay for each individual prescription as well. As prescription drug prices have increased, many insurance companies have placed more restrictions on how they will cover prescription drugs and medications. This means that Americans who are enrolled in a health plan with prescription drug insurance may begin to see out-of-pocket expenses rise.

How Health Plans Cover Prescription Drugs

Health plans cover prescription drug costs in a wide variety of ways. Although rules vary from state to state on how costs are covered, health plans are designed with similar benefits to cover prescription drug insurance.

Copays are a set amount that you pay for prescriptions and are typically based on tiers according to the health plan’s formula. For example, the health plan may charge $10 for Tier 1 generic drugs and $50 for Tier 3 non-preferred brand-name drugs.

Coinsurance allows you to pay a percentage of the prescription’s cost. The other cost is covered by insurance. The ratio is typically an 80/20 or 70/30 spilt, meaning you will pay 20% or 30%, and insurance will cover the rest. Many health plans with coinsurance require you to pay the full price of the prescription until you have met your deductible, after which you pay a percentage of the full cost. However, other plans require only the percentage until a pre-determined limit is met, then they’ll cover 100% of prescription costs.

  • Prescription Deductibles can be separate from medical deductibles and will need to be met before any coverage starts. After the deductible is met, a copay will be applied.
  • Integrated Deductible includes both prescription and medical costs. When the full deductible is met, prescription coinsurance or copays will apply.
  • Out-of-Pocket Maximum. Health plans usually contain an annual maximum out-of-pocket limit. This is the most that you will have to pay for medical services, including prescriptions, before the insurance carrier picks up 100% of the cost. For out-of-network doctors, this limit and rules for what is included can be different.

As a consumer, prescription drugs and medications can be costly if you’re not careful. That’s why it is vital to choose a health plan that offers the best prescription drug insurance to offset the cost of the prescription drugs and medications you need.

At Schechner Lifson, we provide all forms of group employee benefits including health, life, disability, vision, and dental programs. Contact us to learn about our comprehensive set of insurance products and how we can help you.

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