No one wants to admit that they could die prematurely. But the last thing you want is to not have the proper life insurance policy in place should disaster strike.
Danny Kofke, a special education teacher in Jackson County, Ga., knew he needed life insurance shortly after getting married 12 years ago. He and his wife, Tracy, were planning to have children, and they wanted Tracy to be able to stay home for at least a year to raise the child. “Since we would be depending on my teacher’s salary alone to get by, we took out an insurance policy for each of us,” Danny Kofke says.
The couple’s 10-year term life insurance policy covered them for $250,000 each, which equated to a $24.50 monthly fee per person. “It gave us both peace of mind,” Danny Kofke says. “We treated it like having automobile insurance. I never want to have to use it, but it’s comforting to have it there.” The Kofkes, however, had to take out another 10-year term life insurance policy this year since the old one expired.
Although the length of the original policy wasn’t right for their needs, the Kofkes wisely opted for a term life insurance policy over whole life insurance. The difference between whole and term—the two basic types of life insurance—is that whole is a lifelong policy with an added investment component to it, wherein you can build up cash tax-free. However, the built-in fees, commissions, and surrender charges (in the event you cancel the policy) take such a significant chunk out of your investment that most personal-finance experts agree there are better places to invest your money. Whole life insurance plans also typically carry premiums that are up to 10 times that of term insurance. Meanwhile, with term life insurance, in exchange for fixed premiums that you pay monthly, quarterly, or annually, you are covered for a set number of years and only receive death benefits.
While some life insurance agents aim to guide you toward whole life insurance over term life insurance (whole means more commission for them), term makes more sense for most people, says Tony Steuer, a life insurance consultant and author of Questions and Answers on Life Insurance: The Life Insurance Toolbox. “Term coverage is the appropriate coverage for most individuals, as their needs are for a certain term of years while their other assets accumulate, such as retirement savings,” he says.
Robert Miller, president of the National Association of Insurance and Financial Advisors, agrees with Steuer that term insurance is usually the best route. “I’ve always believed in insuring up to the point that you need insurance,” he says. “You can do that with term insurance and it comes out to be far cheaper.”
Steuer recommends guaranteed level premium term insurance, where the premium is set at a fixed rate for a specific period of time. “I match the length of the term period to the anticipated period of need,” he says. “For example, with a 2-year-old child and a client purchasing a 20-year guaranteed-level premium term to take care of the child, that would provide coverage until the child is 22.”
There are a few select circumstances where you might be better off with whole life insurance. For example, if you have children who are handicapped and will be financially dependent on you their whole lives, you may want to consider the permanent coverage.
Americans struggling with their finances in today’s downtrodden economy may think they can save money by skimping on life insurance. Approximately 30 percent of U.S. households have no life insurance coverage, according to a 2010 study conducted by LIMRA, an insurance industry research outfit. And among households with children under 18, 11 million have no coverage.
But for parents who still have children living at home, not having a life insurance policy could put their kids at risk if something were to happen to them. In the event the parents die, a life insurance policy can provide a safety net for the children to live off of.
However, if you’re young, single, and don’t have any dependents, Steuer advises you hold off on purchasing life insurance. “You can’t predict the future. You don’t necessarily know how many kids you’re going to end up with, or even if you are going to get married,” he says. Nonetheless, some experts recommend buying life insurance as a young single person, due to low costs and the ability to get a 30-year term that you’d have in place for when you have kids.
So you purchase a term insurance policy to cover your spouse or your kids, but then what? Once the kids grow up, most people can let the policy expire, advises Bill Wixon, a certified financial planner with Wixon Advisors in Maple Grove, Minn. “After your kids are through college, your other assets should be built up enough that you no longer need the life insurance,” Wixon says.
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With RX drugs on the rise, now would be the perfect time to ask your employer or as an employer offer your employees the option of an HSA, HRA, of FSA , Health Saving Plan. EpiPens are used more then ever an additional savings for these costly prescription drugs would be most helpful.
As the controversy over Mylan Pharmaceutical’s steep price hikes for its EpiPen continues to fuel the debate over skyrocketing drug prices, consumers have a more simple issue: Is there any way to get this medicine for less and still be protected in an emergency?
People with severe allergies rely on the EpiPen. More than 40 million Americans have allergies to food or insect bites that can cause severe reactions including anaphylactic shock, which can be deadly. The EpiPen is filled with the hormone epinephrine, which can counter severe allergic reactions.
But the price for two packs of the pens has risen from about $94 in 2007 to more than $600 now. (The pens are sold in pairs to ensure there’s enough medicine on hand to handle an emergency.)
If you’re one of the many allergic individuals or the parent of an allergic child who needs to carry an EpiPen at all times, consider this advice from the Asthma and Allergy Foundation of America and other health experts.
Check your insurance. If you have a high-deductible health plan, either through the exchanges or your employer, you may find you must pay the full cost of the EpiPen until you meet your deductible and your insurance kicks in. As open-enrollment season approaches, you may want to do the math again, especially if you or your covered family members regularly takes prescription drugs. With drug prices rising across the board, you may find the higher premium cost of a plan with Rx drug coverage will cost you less overall.
Take a tax break. If you still find going without Rx drug coverage is best for you, be sure to check if you’re eligible to save money for medical expenses in a flexible spending account (FSA) or health savings account (HSA). With those accounts, you can pay pretax dollars for your high-price drugs, taking out some of the sting.
Pay attention to expiration dates. The pens expire in a year, so if you can manage to time the expiration and your next purchase toward the end of the year when your deductible is more likely to have been spent, you may be able to get coverage.
Compare prices. Different pharmacies offer different prices on almost all drugs. Big-box stores like Wal-Mart (WMT) and Costco (COST) have become major competitors on price. At the same time, local pharmacies often offer the best deals. It all depends on where you live. Comparison-shopping sites like GoodRx can make shopping easier.
Even if you have prescription drug coverage, it pays to compare prices. The amount of your co-pay may differ from pharmacy to pharmacy, depending on what terms your insurance company has negotiated with each outlet.
Consider the alternative. One of Mylan’s (MYL) competitors in the epinephrine auto-injector market, Auvi-Q, pulled out of the business when manufacturing problems forced a total recall of its product.
However, a lesser-known player called Adrenaclick also sells epinephrine in single-dose injection devices but at a lower price, in some cases half the price of the EpiPen. Adrenaclick also offers a generic version of its product. Your doctor may be able to help you determine if it makes sense to switch to the less expensive brand.
Remember, in this case, you’re paying for the injector, not the drug. Epinephrine is extremely common and inexpensive. It’s the injection technology that differs from manufacturer to manufacturer. Consumers also differ in terms of their comfort level with different injection instructions. Again, your doctor can help.
Use Mylan’s discount and assistance programs. Mylan offers a coupon of up to $100 for consumers to help offset expensive co-pays. You can find more information here. Unfortunately, the coupons don’t apply to people paying the full cost of the drug out-of-pocket whether they have no insurance or high-deductible insurance. The increase of people with high-deductible health care plans paying full freight for their EpiPens is one of the reasons the prices hikes have come into such sharp relief lately.
Mylan is also part of a patient-assistance program that offers relief for low-income patients in need of EpiPens. You can find eligibility requirements here.
Take care of those pens. Although these devices are designed to be carried with you — and with any luck you’ll never need them — pay attention to temperature and other storing directions. You don’t want to have to throw out a batch because of exposure to extreme heat, cold or light. Tempting as it is to keep a pack in the car, tuck it in your bag or pocket instead.
The Associated Press contributed to this report.
Source cbsnews.com © 2016 CBS Interactive Inc.. All Rights Reserved.
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