A number of consumer trends continue to resonate, as the Patient Protection and Affordable Care Act (PPACA) and Illinois health insurance laws dangle in limbo. In other industry news, Illinois life insurance agencies are reducing rates to entice new policyholders. The president of IllinoisLifeandHealth.com, Michael Novelli participated in a recent interview pertaining to the state of Illinois health insurance and Illinois life plans. The discussion highlighted several compelling findings.
Despite the contention over the PPACA or an Illinois health insurance law requirement, have you seen a decline in policy underwritings?
Novelli: On the contrary, our company is seeing a rise in new policies. There’s a serious demand for high deductible Illinois health insurance. People are looking for coverage just to offset the event of a hospitalization. And with preventative care included, this can be adequate coverage for a healthy person.
Are there any other trends you’re seeing in the Illinois health insurance marketplace?
Novelli: With the high deductible health plan, individuals and families are turning to health savings accounts (HSA) too. Lately, my clients are not just interested in an affordable Illinois health insurance policy. They’re in quest of an HSA. These programs are like Apple’s iPad: everyone seems to want one–and for a good reason. Flexibility to build a medical nest egg, carry it over and have it available as financial recourse to cover expenses is why more consumers are opting for the HSA as a component of the high deductible health plan.
Are high deductible health plans – HSAs like HMOs?
Novelli: As seen with an HMO, there are not any physician referrals, pre-approval policies or other restrictions. The high deductible plan and HSA work more like a PPO–in that the policyholder has more autonomy over his or her medical choices. However, these plans are inappropriate for the elderly or individuals, who are prone to illness.
What about cancer insurance?
Novelli: I find that many Illinoisans, who contact our company, have misconceptions regarding cancer insurance. It does not cover treatment for radiation and chemotherapy. Cancer insurance is really a financial back-up plan. A cancer insurance policy provides a cash payout to cover time off of work, the consumables, medicine, and other out-of-pocket expenses. Ten thousand-dollar benefits are standard for a cancer insurance policy with premiums starting at $50 a month.
Are there any new trends in life insurance?
Novelli: Illinois life insurance companies recently lowered rates on term life plans. Since, 78 seems to be the average life expectancy, agencies know that they can profit from paying out fewer life benefits on term life plans, as people live longer.
According to the Centers for Disease Control and Prevention, life expectancy in the U.S. is 77.9.
Then does that make an Illinois life insurance policy a futile investment?
Novelli: Anytime a household consists of children, a mortgage, and a situation, where one person is the primary breadwinner, a life plan is a viable necessity. Level term life plans are generally enough for a middle class family. Quite manageable, these types of Illinois life insurance plans serve as a financial contingency per se to cover funeral expenses, the mortgage, and other living expenditures.
Don’t most employee sponsored life insurance plans provide adequate protection?
Novelli: No, most employee-sponsored life insurance plans have insufficient funds to cover the mortgage, living expenses, college tuition, medical coverage and the loss of income spread over several years.
What advice do you think that people should know if they’re shopping for an Illinois life insurance policy?
Novelli: First, I recommend that consumers outline their objectives for buying an Illinois life insurance policy. Is it to replace an income, pay the mortgage, funeral costs, college tuition and other living expenses? The sum of these line items should be used to help calculate the value of the term life plan. Also, include the household’s annual income multiplied by eight to account for inflation.
Established in 1906, the A.M. Best Company assigns insurance agencies ratings, based on quantitative and qualitative evaluations of financial performance, balance sheet and overall stability.
Novelli: Compare Illinois life insurance companies that have been given a high rating by the A.M. Best Company. Consult an agent, who holds a license in the state of Illinois, representing a variety of life insurance agencies. This allows one to compare rates, securing unbiased professional advice. A comparison of different insurance quotes should also be conducted when shopping for an Illinois health insurance plan. And, never pay any professional any upfront fees to compare quotes or obtain advice.