Free Money Finance

13 Smart Insurance Moves for 2009

Bankrate lists 13 smart insurance moves for 2009. Several of them are "no brainers" and really don't need any comment. But here are a few that I think are worth adding a bit more on:

Investigate the financial health of your insurance carriers.

Of course. You want to be sure that your company is there if and when you need it, right?

Discuss payment options.

I'd suggest "pay annually" as an option. It's likely that you'll save money this way instead of paying monthly, quarterly, or semi-annually.

Don't cut back on health insurance coverage.

Many people are doing this rather than cutting elsewhere. My advice: cancel the cable TV and keep your medical insurance coverage where it is.

Build your own insurance policy in the form of an emergency fund.

In particular, if you've raised your deductibles in order to save money on your premiums, then you'll need to increase the amount in your emergency fund to make up the difference.

Raise your property policy deductibles.

A great way to save on both home and auto insurance.

Revisit your life insurance.

One of the best ways to save on insurance is to regularly compare premiums from different carriers.

Do you want to diversify your life insurance?

Interesting concept -- I'd never seen it suggested before. Here are the details:

Find out at what level of coverage your state insurance department backs life insurance, since it varies by state. Then keep policies below that amount and simply buy several policies from different carriers to give you the desired amount of coverage.

And a few more insurance-related thoughts from me:

• Buying Life Insurance from Your Employer

• Six Ways to Save on Homeowners Insurance

• What Kind of Life Insurance Should I Buy?

• How to Determine the Amount of Life Insurance You Need

• Don’t Let Disability Sideline Your Financial Health in 2008

• 12 Ways to Save on Insurance

Five Insurance Policies Worth Having

Here's a list from Smart Money of five insurance policies worth having:

• Health Insurance
• Disability Insurance
• Auto Insurance
• Homeowner's or Renter's Insurance
• Life Insurance

We have all of these. In addition, we also have umbrella insurance. After all, commandment #7 in the 10 commandments of personal finance is "Thou Shalt Protect Thyself Against Risk." ;-)

Here are a few details on our specific situation:

• Health insurance -- My company has a health savings account which is funded by the company. In addition, we put in a monthly amount up to the point where the maximum annual amount is contributed. I haven't yet started using my HSA as a super savings account, but it's on my list.

• Disability insurance -- I have my own disability insurance policy (not with my company, they don't offer it.) It's expensive, but well worth the cost. Here's why.

• Auto insurance -- Of course we have it. We keep the deductible high and only will use it in case of a major accident. And we shop around for car insurance every year or so to save a bundle of money.

• Homeowner's insurance -- Same as auto insurance.

• Life insurance -- A boatload on me and a good amount on my wife. Becoming less and less needed as our net worth grows and our kids get older.

Buying Life Insurance from Your Employer

Consumer Reports discusses the ins and outs of buying life insurance from your employer (over and above what you might get from them for free). In particular, they make this important comment:

Advisers warn against having employer-provided insurance serve as your basic policy for family protection. "If a group policy can't be converted to individual coverage when you leave the company, it could be disastrous, especially if you have medical issues," says Ginny Stanley, a principal at REDW Stanley Financial Advisors in Albuquerque.

True. You'd hate to have to leave an employer, lose your insurance and not be able to get new coverage elsewhere.

Another issue is price -- especially if you are younger. In my earlier employment days, my company's policy was actually more expensive for me than what I could buy outside the company (my current company doesn't have life insurance coverage so I buy outside, of course.) So I always went outside. I don't think many people checked on the price options. They assumed that the company insurance was cheaper because they got "group rates". But inside almost any group there are always some bad risks, which raises the average cost. If you're younger and healthy, you can likely do better price-wise (plus have a policy that sticks with you in case you change employers.)

All About Annuities

Every once in awhile I get a question about annuities -- what do I know about them, what do I think of them, etc. I don't really have a single post that describes what annuities are, how to handle them, etc., so when I saw this piece from the Wall Street Journal that talks about annuities, I knew I had to post on it.

This specific piece describes many of the basics including how annuities work, the difference between fixed and variable annuities, how annuities have been affected by recent market conditions, and whole host of other questions. If you're interested in finding out more about annuities, this article is a good place to start.

If you're interested in the pros and cons of annuities, here's a piece from Bankrate. They start with thoughts on when an annuity should be considered:

Only after you've contributed the maximum to your 401(k), SEP, Keogh, IRA and whatever other tax-deferred opportunities are available to you, should you consider an annuity.

Then they list the benefits of annuities as follows:

• Lifetime income is guaranteed
• Earnings are tax-deferred
• There is no limit on how much you can contribute
• There are no income restrictions
• You can switch investments within your contract without paying taxes
• You get a premium for outliving your life expectancy

And the cons of them:

• Fee and commissions can be high and cut deeply into your return. Look for low-load or no-load contracts with low fees.
• Annuities are generally bought with after-tax dollars.
• At payback time, income is taxed as ordinary income, even if most of it is from capital gains. Not good if you're in a 28 percent or 39.6 percent income-tax bracket and your capital gains tax rate is 20 percent.
• Annuity talk can sound like doublespeak, making it hard to separate the good contracts from the bad ones.
• An annuity is a long-term investment, and bailing out early can kick up penalties, taxes and surrender charges.
• You could be paying for life insurance you don't need.
• You need a long stretch of time and a big chunk of money to make it work.

Personally, I haven't used annuities yet though I may do so in the future. My biggest hang-up with them is that I view them as wily expensive -- as are most "investments" available from insurance companies. Then again, maybe this is a misperception on my end and they aren't as expensive as I think.

Anyone have some words of wisdom on annuities for us all?

Are Kids a Form of Insurance?

I was thinking the other day about a relative who doesn't have any children. She and her husband are in their 70's and in decent health, though eventually they are bound to need some "help" from someone, right? But who do they go to since they don't have children? Other family members? Friends?

I got to thinking of myself in this situation 30 years or so from now. Upon whom will I depend? Most likely it will be my kids. Then I got to thinking -- is having kids a form of insurance (BTW, if it is, it's an expensive form of insurance)? Not that you'd have children just for this purpose, but in having them, are you insuring yourself a bit from future uncertainties? Is having kids a way to help make sure there will always be someone to take care of you? Or are those days long gone -- the days when older family members moved in with younger family members who took care of them?

Interested in your thoughts on this issue.

Six Ways to Save on Homeowners Insurance

Smart Money lists six ways to save on homeowners insurance as follows:

• Maintain a healthy credit score
• Inquire about discounts
• Increase your deductible
• Disaster-proof your home
• Monitor neighborhood changes
• Pay promptly

This is a good list IMO. Here's what we do on each of these suggestions:

1. Yep, you can save a bundle on your homeowner's insurance if you have a good credit score. We saved 44%.

2. I called my agent the other day just to make sure we were getting all the discounts possible. We were.

3. We keep our deductible VERY high (and have increased our emergency fund accordingly) and will only make a claim in case of a major problem. Any other (slight) amount of damage, we'll pay ourselves. Our perspective on insurance is that it's there to protect against catastrophic loss and everything else is to be paid by us.

4. I need to work on this. I check our fire alarms regularly, but I read somewhere that they should be replaced every 10 years or so. Anyone know anything about this? And we do have a fire extinguisher, but I'm not sure where it is -- not good at all!

5. Our neighborhood actually just started a neighborhood "association" that's designed to help us all get to know each other and work together to make our neighborhood a better place. My wife is a "section leader" in this new group.

6. This applies to ALL insurance -- pay on time. You risk being dropped if you pay late, so be sure you plan accordingly and pay before the due date.

Five Insurance Traps

Here's a list of five insurance traps from MSN Money:

• Caesarian sections -- If you're not covered by an employer plan and you're trying to buy an individual health insurance policy, you'll typically pay more for maternity benefits, which help cover the costs of carrying and bearing a child. But maternity coverage may be more expensive, or not available at all, if you've had a child by Caesarian section.

• Trampolines -- Kids love them, but many insurers don't. Some will charge a higher rate to cover the increased liability for injuries, while others won't cover you at all.

• "Bad" dogs -- Some insurers have blacklisted certain breeds, such as pit bulls. Others will cover any dog until it bites, and then you could lose your coverage, pay more for it or be forced to sign a waiver that excludes any further damage done by the animal.

• Bad credit -- In most states, insurers that provide homeowners and auto policies are allowed to consider your credit history when deciding whether to issue or renew a policy, as well as how much to charge.

• Mental-health problems -- If you've ever taken antidepressants, seen a therapist or been treated for an addiction, you may pay more for life insurance. If your problems are serious or ongoing, you may have to search hard to find a policy at all.

Here are some thoughts on each of these from me:

• Caesarian sections -- Not an issue for us and I can't really comment intelligently on this (I know, when has not being able to comment intelligently ever stopped me before?) ;-)

• Trampolines -- A co-worker of mine had this issue. I think she ended up taking the trampoline down. If any of you watch AFV, you'll know why insurers hate these things.

• "Bad" dogs -- Since we've discussed this issue before, I asked my agent what AAA's policy was. He said that if you have a dog, it's no problem. If your dog bites someone, they'll cover it, but then it's a problem (for potential future coverage).

• Bad credit -- We saved a boatload on our homeowner's insurance by having a great credit score. Unfortunately, the opposite holds true as well -- if your score is bad, your rates will be higher.

• Mental-health problems -- I have a friend who is on anti-depressants and since it was a "pre-existing condition", and future treatment she has in this area is not covered by her insurance.

More Insurance Firms Allow Medical Tourism

Just received word that there's a new edition of Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Care Abroad coming out at the beginning of August. I loved this book when I first read it a year or so ago and a TON has happened in the medical tourism industry since that time (and the industry continues to change/evolve almost daily.) I'll be receiving a copy of the new book soon and will give you my thoughts on it, but for now I wanted to share a few interesting points the publisher highlighted when she sent me a recent email on the book. Her comments:

Over the past few months and since the launch of the First Edition, medical travel has seen some tremendous changes:

• Two insurance company giants (Blue Cross/Blue Shield and Aetna) have begun offering coverage for medical care abroad.
• The American Medical Association (AMA) has published its AMA Guidelines on Medical Tourism.
• In the past year, more than 50 new international hospitals have gained American accreditation through the Joint Commission International (JCI).
• Two large US hospitals will soon open full-service medical facilities abroad.
• The number of medical travelers worldwide has jumped to nearly 3 million—180,000 from the US alone.
• For the first time, more patients are leaving than entering the US for medical treatment.

The issue of affordable health care is not going to go away (we'll be hearing a LOT about it during the upcoming presidential election, I'm sure) and medical tourism may be one solution to our "crisis." And even if it's not part of the national plan for everyone, I'm sure that a growing number of individuals will select this option for their major health care needs. The fact that major insurers are now paying for medical tourism procedures is a HUGE step in helping this trend gain momentum.

For more on this issue, see these past FMF posts:

• Big Savings in Medical Tourism

• Want Better Health Care? Go Abroad

• Medical Tourism Saves Money and More Insurance Carriers are Approving It

• Why Go Abroad for Medical Care Reason #1: Cost Savings

• Why Go Abroad for Medical Care Reason #2: Better Quality Care

• Medical Tourism Can Save You Thousands of Dollars

Having a Pool: Limiting Your Liability

When I spelled out my five principles early on in the life of this blog, one of them (principle 5) was to protect the value of your assets. One issue that falls under this principle is protection against liability and nothing seems to scream "liability" (at least to a homeowner) than the word "pool."

The Street takes on this issue and suggests ideas for protecting your backyard pool from tragedy (of both the human and financial kind.) The piece lists five things you can do with your pool to make it safer for everyone as well as reduce your potential liability. The first four are simply taking steps to make sure the pool is safe, guarded, and all laws are followed. Here's the final suggestion -- and the one that applies most to personal finances:

Get insured. Pools are considered an "attractive nuisance" by insurance companies, meaning they can increase your liability risk and your costs. Most homeowners' insurance policies come with at least $100,000 of liability insurance, although the III suggests pool owners increase that amount to $300,000 or $500,000. If the pool itself is expensive, make sure you have enough insurance to cover it in case of damage from a storm or other natural disaster, especially if you're in a risky area. There are also "umbrella" policies for an additional premium of $200 to $300 per year that will cover $1 million of liability above the homeowners' policy.

We don't have a pool, but several people in our neighborhood do. Of course we keep a close eye on our kids and have given them strict warnings about not going into a pool without us around. We've also given them several years of swimming lessons and both of them are fairly good swimmers.

We have looked at buying a home with a pool. Seems like there are lots of pros and cons to it. I'm wondering what the pool owners out there have to say on this issue. What thoughts do you have on the financial and non-financial issues associated with pool ownership?

Create a Home Inventory for Insurance Purposes

I've already shared how I created a home inventory for insurance purposes (I took video instead of making a list). This piece from The Street reminds us what a good idea it is to have a home inventory for insurance purposes -- so if anything happens to your home you can provide the insurance company a complete list of what is missing/damaged. Here are some of their suggestions:

The III offers software that can help organize your list of items. Some insurers, such as Nationwide, recommend using this program, while others, such as State Farm and Allstate, offer their own software. Any inventory will suffice, however, so long as it is comprehensive and organized.

In addition to a list of items, you'll need some proof that the items actually existed and were in good condition -- so you'll need to take pictures. That's much easier these days, since digital photography is relatively commonplace. (If you don't have access to a digital camera, you can also scan printed photos of your possessions.)

A quicker way to catalogue your items is to videotape the contents of your home. Although a video is less comprehensive than individual pictures, it will still provide visual proof of what you have (or had). Video also allows you to narrate as you go. Along the way, zoom in on details and open all doors and drawers so you don't miss anything.

You should also save receipts for any big-ticket items (things like electronics or furniture where prices can vary and you want to prove your stuff was good quality). You can store them in a folder along with your insurance information, but it is also a good idea to scan them and keep digital copies as well.

A couple final suggestions:

• Be sure to store your list/pictures/video off-site. It won't do much good if you have your list at home and your house burns to the ground. I keep my video in my desk drawer at work.

• Be sure to update your list/pictures/video when you get something new. I need to do this as it's now been almost a couple years since I did the last one.

How about you? Anyone out there have a home inventory? Any tips to making one that you care to share with the rest of us?

The Basics of Umbrella Insurance

Principle 5 of my five principles of personal finance is to protect the value of your assets. To me this means to have the right kinds and levels of insurance as well as have a valid estate plan.

I've discussed almost all forms of insurance on this blog and also have regular reminders about the need for a will. But there's something I haven't addressed yet and I'd like to do so today. That topic is umbrella insurance.

Let's start with a definition from Wikipedia:

Umbrella insurance refers to insuring more than one property as opposed to insuring only one. For example the owner might get a discount for insuring both his house and car rather than insuring them with separate policies because it might cost more. Typically, an umbrella policy is pure liability coverage over and above the coverage afforded by the regular policy, and is sold in increments of one million dollars. The term "umbrella" is used because it covers liability claims from all policies underneath it, such as autos and homeowners policies. For example, if you have an auto insurance policy with liability limits of $500,000 and a Homeowners policy with a limit of $300,000, then with a million dollar umbrella, your limits become in effect, $1,500,000 on the auto policy and $1,300,000 on a homeowners liability claim. Umbrella policies are mainly used by those who have sizable unencumbered assets, such as a home with a large amount of equity to ensure that even a catastrophic claim will not allow those assets to be placed at risk.

Now let's move to a piece from the NY Times on umbrella insurance. They illustrate how umbrella insurance can work:

Here's the nightmare: Your car skids. You crash into a Mercedes with a highly paid business executive at the wheel. He’s hurt so badly he cannot return to work. A jury awards him millions of dollars and you have to pay it.

You’re wiped out financially. The court takes your savings, goes after your home and, for decades, requires you to give up a part of your salary.

For some people such a nightmare could never happen. They have an extra insurance policy, known as umbrella or excess liability coverage, which takes care of their liability for the lawsuits and medical bills of the auto accident victim — or of the teenage guest who dives into the shallow end of the swimming pool or the deliveryman who trips on the front steps.

And here's another example:

One of Mr. Cox’s clients crashed into the rear of a car on a slick highway. A woman and a child were critically injured. After two years of litigation, his client settled the lawsuit for more than $5 million. The client had $15 million in umbrella coverage. The policy paid for the settlement and all legal costs. “Without the umbrella,” Mr. Cox said, “they would have been completely wiped out.”

As you can see, umbrella insurance can be a key part of protecting your assets over and above what are normal insurance levels. For those with any sort of significant level of assets, umbrella insurance is a good financial move, but not many people carry this sort of protection:

State Farm, the biggest home insurer in the country, with a clientele of mainly middle- and lower-income homeowners, says about 12 percent of its policyholders buy umbrella coverage.

For those who want/need umbrella insurance, it's very affordable:

Buying such coverage usually does not greatly increase the overall cost of home and auto insurance. For example, in Louisiana, insurance on a $1 million home well away from the coast might run $4,500 a year, Ms. Edmonston, the Baton Rouge agent, said. Two cars could raise the cost of the package to $7,500. And $5 million in umbrella coverage might cost about $600 more, or about 8 percent of the total. In New York, agents say, $5 million in coverage might cost about the same.

I've had umbrella insurance for several years now and just upped ours to cover our ever-growing list of assets. In today's society where people sue others at the drop of a hat, cheap, umbrella insurance is a key part of protecting those assets that you've worked so hard to accumulate.

Help a Reader: Insurance Claim

Here's a question a reader left as a comment recently:

I wonder if anyone knowledgeable about it could comment on whether it's a good idea to file chipped windshield auto claims. I'm talking about the kind of minor damage that can be repaired for $50. The impression I've always gotten is that this is an exception to the don't file small claims rule, because it keeps the damage from spreading and causing a larger claim later (full windshield replacement).

I've always wondered about this myself. Anyone out there know the answer to this question?

What Kind of Life Insurance Should I Buy?

The following is a guest post by Kent E. Irwin of eFinPLAN. Want to know which is better for you -- term or cash value life insurance? Read on.

Virtually all fee financial planners and writers today recommend that people should only buy term life insurance instead of one of the other types of life insurance that have cash value. The insurance industry of course strongly argues the merits of cash value insurance. Over the years I’ve witnessed many emotional discussions between the insurance industry, financial experts and the financial media about the type of insurance people should buy.  I’ve been in both camps.

Prior to creating eFinPLAN financial planning software for consumers I was a fee only financial planner, holding the designation Chartered Financial Consultant or ChFC. During my 25 years experience in the financial services industry I have also sold life insurance, and worked in the home office of a life insurance company. In each of these roles I have tried to be an objective educator giving people good information so that they can make good decisions for themselves. The following discussion should provide some balance on the issue.

The conventional wisdom today regarding life insurance that only term insurance should be purchased may indeed be true for most people, however I think it is good to be informed about all the issues so that people can make well informed decisions.

Why do most experts recommend term insurance:

1. Term costs less than other forms of life insurance both initially and over 10 to 30 years.
2. Lower cost life insurance maximizes the amount of money someone can save and invest.
3. Cash value insurance earns a low rate-of-return on the cash build up.
4. Most people will not need life insurance when they are older if they have little debt and large investments.

Why life insurance agents recommend cash value insurance:

Cash Value insurance is also known as permanent because it lasts at least until age 100. Term insurance expires at the end of the term. Cash value insurance comes in many forms such as Whole, Universal and Variable life insurance. For a full grid comparing most insurance types, click here.  The following are the major reasons insurance agents recommend cash value insurance.

1. Cash value insurance costs less than term insurance, if you compare it over a long period of time.
2. Cash value insurance forces people to save money, which is helpful to people who lack the discipline to save.
3. Cash value insurance’s rate-of-return is comparable with the part of a client’s portfolio that might otherwise be invested in bonds or cash.
4. Many people need life insurance in their older ages: Wealthy people for estate planning, middle income people who were unable to save enough to self-insure.
5. Retirement income: Life insurance cash values grow tax-deferred and may be borrowed tax-free.

Costs & Need for Life Insurance Later in Life

Life Insurance provides protection. It is purchased to provide immediate cash so that loved ones are able to maintain a certain standard of living in case you die. Term life insurance is indeed the lowest cost life insurance initially and if you compare total out-of-pocket costs for premiums for the 20 or so years that most people need it most - when children are still at home and you have a mortgage.

However, there are situations in which people need insurance for longer periods of time. After divorce or death people start new families and have young children later in life. In addition to these “blended families” some don’t save enough and often carry too much debt. Therefore, if you compare term versus cash value insurance over very long time periods, cash value insurance may be lower.

Young people just starting out with new families, careers and mortgages are often at a point in time that their income is low, they have large needs and they can’t afford to compare long term costs. They need the lowest cost for their budget today, giving them maximum cash flow for savings and investing. Many people are underinsured for disability, if they have additional dollars, disability insurance should be a top priority.

Some agents suggest that if you have prosperous financial ventures, your net worth may some day be worth several million dollars. At that time you would need life insurance for estate planning. This may be true, however it is difficult to justify purchasing a lot of cash value life insurance when you are young on the chance of that future possibility. If you need it when you become wealthy, you will probably be able to afford it then.

Some may need life insurance in their older age to provide for their family. Bad decisions, setbacks, blended families and low savings may cause some in their 50’s to wish they had some life insurance other than term, because their term policy may soon expire or cost a lot to renew. They may also have health problems that may hinder their ability to obtain competitive life insurance.

Forced Savings, Rate of Return and Retirement Income

When I was a young insurance agent, one of the main motivations to encourage young people to buy cash value insurance was to force savings discipline. In actuality those that were undisciplined savers eventually let their policies lapse, and those that were disciplined sometimes cashed in their policies because they could see their other savings and investments growing faster. Instead of buying cash value life insurance to force savings they would probably be better off learning good budgeting habits and family financial management.

Is life insurance rate of return that bad when compared to other like investments?

Some argue: Since most people should have some of their investments in cash, money markets and bonds for safety, for reducing volatility and for emergencies – why not put some of that into cash value life insurance? Over the long term life insurance cash values from good policies and companies should perform in the middle single digits similar to a intermediate term bond. Some of the best policies may perform in the upper single digits – not bad for your “safe money.”  However these cash value policies may take 5 to 15 years to break even, and much longer to earn these comparable rates of return.  If you can afford to wait for these types of return, and are saving enough for emergencies and retirement, then you might want to consider cash value life insurance.

Life insurance is also sold to provide retirement income. Sometimes it is referred to as an IRA or 401(k) alternative, or under the LEAP system. Life insurance cash values grow tax deferred, and if properly arranged can be taken out in the form of loans without paying income tax. The computerized models of these programs can look competitive with other investments. Most advisors recommend that people take full advantage of the available retirement and IRA plans before ever considering such an approach. If you desire to investigate this, make sure that the agent provides computer illustrations that show results of lower rates of return and higher mortality and other expenses. Then perform internal rate-of-return calculations on these modest projections. If this still interests you, closely examine the insurance company and obtain quotes from other high quality insurance companies.

Conclusion

Term insurance is often the best decision for most consumers, especially for those with modest incomes and large needs. The first phase of financial planning, forming a secure foundation, usually begins with establishing an emergency fund, having adequate term life and disability insurance, and maximizing IRAs and employer sponsored retirement plans. Those with more mature financial plans may want to consider having a percentage of their life insurance to be the cash value type, depending upon their individual family circumstances, personal preferences, and overall financial circumstances and plan.

Claims that Boost Your Insurance Rates

I think everyone knows that certain insurance claims have a tendency to increase your premium. What are they? Here's a list from Bankrate on a few claims that will increase your homeowners insurance:

Bowen says that making two claims in a three-year period is more likely to trigger a hike, although each company is different.

Dog bites. A single attack is often likely to result in higher premiums.

Water damage. Water damage tends to set off a barrage of red lights for insurers, largely because of the costs of eliminating mold.

Slip-and-fall claims. Slip-and-fall injuries, according to the National Safety Council, are the single largest cause of emergency room visits. If someone hurts themselves on your property and files a claim with their insurance company, your rates may rise.

And here's what can raise your car insurance rates:

Factors that may be considered include whether you were driving while drunk, whether injuries incurred, and the severity and type of accident.

The piece advises only filing a claim when it's a major one. Here's the rationale they use in saying so:

It gets back to the notion of what insurance is all about: bailing you out from a large disaster, rather than the small things that annoy rather than harm.

A few thoughts from this on me:

1. I agree with them 100% on when to file a claim. If we have any minor damage, we always pay for it ourselves. Insurance claims are for major (over $2,000 for us) damage.

2. As such, we've raised our deductibles as high as possible. Doing so saves us a ton of money on our insurance premiums.

3. If you decide to do this as well, be sure to up your emergency fund so you have enough to cover the deductible in case a major accident occurs.

4. Just another expense of having a dog. Sorry, I couldn't help but throw that one in. ;-)

How to Determine the Amount of Life Insurance You Need

The following is a guest post from Marotta Asset Management.

You may have heard that "Life insurance is a gift of love." But if you bought a $100,000 whole-life policy because you wanted to build some cash value when you should have bought a million dollars of low-cost term insurance to meet the survival needs of your family, your well-intentioned effort was not an act of love.

Objective life insurance advice is hard to find. Prior to joining the National Association of Personal Financial Advisors (NAPFA), Bob Arms, CLU, ChFC, AIF®, coauthor of this week's column, sold life insurance for 26 years. He is currently licensed as a life insurance consultant, a fiduciary whose legal obligation is to represent the client first.

The first step toward representing your best interests entails an in-depth discussion of how much life insurance you might or might not need. The formula is Future Financial Needs minus Current Assets equals Your Current Risk. How much you want to provide for your loved ones should you predecease them (A) minus how much you have that could be used to provide for the survivors (B) equals your surplus or shortage (C).

To the extent that a gap exists between your financial needs and your current assets, life insurance is the most efficient product available to provide tax-free dollars exactly when you need them. As you go through the life changes of marriage, children, and career, you should recalculate your need and revisit the life insurance you own.

When members of a young family are making a decision about life insurance, six line items are significant.

1. Debts: The baggage of debt makes the journey toward financial success difficult. Avoid debt if possible, but if you have any, don't burden your family with it after you are gone. Being able to liquidate all credit card debt and car, home equity, and personal loans will give your surviving family the best chance at success in life.

2. Mortgage: Carrying a long-term fixed-rate mortgage keeps more money invested in the markets and qualifies you to enjoy a tax deduction on the interest. Leverage is a popular financial strategy of the rich. But if you would sleep better at night without a mortgage, sleep is more important. Either way, you need enough insurance or investments to pay off the mortgage.

3. Educational and child-care expenses: Depending on the age of your children, multiple expenses must be considered. If your children are preschoolers, the cost of child care may make it impractical for the surviving spouse to return to work. Consider the math. When the children are school age, will you want them to attend private school? Call the schools in your area and work the numbers. What percentage do you want to help with college? In-state tuition, room, board, books and transportation for college presently averages $6,185 annually. Private schools cost about $23,712 per year. Which do you want to fund?

4. Final expenses: Include a small amount for your funeral, approximately $10,000. The average funeral today costs $5,000 to $7,000, but expenses can exceed $10,000.

5. Family income: Estimating a young family's income needs is very challenging. To ease the mental strain, use seven times your adjusted gross income as a rule of thumb. A more accurate prediction requires either a financial calculator or a computer program.

6. Emergency fund: No one can forecast the exact amount a surviving family will actually need, but this category does absorb a potential miscalculation. Most gaps are filled by using 10% of the total of the other five line items: debts, mortgage, education, final expenses and family income.

Now that you have an estimate of how much your family needs, compare the total with your current assets. Include only the assets the surviving spouse can use for expenses. So do not include your house because your spouse needs someplace to live; your car because transportation is essential; or your retirement assets, which the surviving spouse will need during retirement. Nor should you count any inheritance. The old adage is true: Don't count your chickens before they hatch. This category is the total of your current life insurance and all investment assets.

The easiest math remains: Your Total Future Financial Needs minus Your Current Assets equals The Current Risk you may want to insure against. To determine how much life insurance the other spouse should carry, trade places as the first to die and rerun the numbers. Clearly, if the bottom line is positive, you've done something right and either you have enough life insurance or you are self-insured. Congratulations. If the bottom line is negative, thankfully you still have time to take action.

Financial planning is a lifelong process that covers multiple areas, including investments, insurance and taxation. Reviewing all of your financial affairs periodically with a trustworthy advisor who sits on your side of the table will ensure that you achieve your financial goals. 

Life Insurance Advice from Dave Ramsey

Here's Dave Ramsey's take on life insurance:

The only people that have a real need for life insurance are those on whom people are depending for their livelihood. They should carry about 10 times their annual income on 20-year term life insurance.

Here's my take:

1. This is straight-down-the-middle advice, and it's what I do myself personally (for the most part -- see next point.)

2. Insurance on me is about five times my annual salary but that's because: 1) our annual living expenses are FAR below my annual salary (my life insurance is about 12 times our annual living expenses) and 2) we have a good level of investments that could help to support the family in case something ever happened to me.

3. I know there's a contingent of universal life, whole life, etc. readers on this blog, and I've got something to say on these offerings as well: 1) Most of these are VERY expensive, 2) they aren't good options for MOST people, 3) in certain circumstances, they are advisable, and 4) I'm working on having an agent write a post on when these forms of insurance are good deals. More to come.

For more of my thoughts on insurance, check out these posts:

• Buy Term and Invest the Difference

• 12 Ways to Save on Insurance

• What to Do When Your Term Life Insurance Expires

15 Money Moves for Tough Times

Yahoo lists 15 money moves for tough times. Here are some of my favorites along with some corresponding Free Money Finance articles on the same subject:

3. Consider cutting back (rather than cutting out) some expenses. Depending on your current situation and concerns, it might make more sense to just scale back.

"It's much more effective if people cut back rather than cut out," says Cunningham, "because it's the change in behavior that's so tough."

Some ideas:

• Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount

• How To Save Money On Your Vet Bills

• Two Examples of Saving Money by Asking for a Discount

4. Safeguard your current job. Remain engaged and enthusiastic, keep a high profile and network, network, network.

Analyze how much you save or produce for the company, stay current with the latest developments, [and] participate in at least one local professional organization.

Some thoughts:

• How to Hunt for a Job Without Letting Your Current Employer Know You're Doing So

• Career Reminder: Very Few Jobs are Worse than Unemployment

• What to Do When You Have a High-Paying Job You Hate

10. Re-examine your insurance. You don't want to be underinsured or overinsured. The key is to have enough to cover you at the best rate you can find. Shop your policies, set your deductibles at the highest amount that you can comfortably pay out of pocket and make sure you're getting credit for everything appropriate, like having car alarms, air bags and a good driving record, says Cunningham.

My adds:

• 12 Ways to Save on Insurance

• 10 Commandments of Personal Finance, Commandment #7: Thou Shalt Protect Thyself Against Risk

• Buy Term and Invest the Difference

Don’t Let Disability Sideline Your Financial Health in 2008

The following is courtesy of ARA Content.

Homeowners with subprime mortgages won’t be the only ones facing foreclosure in 2008. Each year, 50 percent of all mortgage foreclosures are the result of the financial toll exacted by disability, according to the medical journal Health Affairs.

In fact, loss of income due to disability causes 350,000 personal bankruptcies every year, the journal reports. And three in 10 workers entering the workforce can expect to become seriously disabled during their lifetimes; one in seven will be disabled for five or more years, according to the Social Security Administration.

“Clearly, getting financially fit by preparing for disability should be high on the New Year’s resolution list of every working American,” says Robert Taylor, president of the nonprofit Council for Disability Awareness (CDA). “Not being able to work because of an illness or accident can be incredibly costly and personally devastating. Planning for disability is an essential, but often overlooked, part of the financial planning process.”

Under the best of circumstances, disability can place a financial hardship on families. But many American families are more financially at risk than ever, with 44 percent spending more than they earn, according to the Federal Reserve, and average credit card debt approaching $10,000, as reported by Parade Magazine.

“Disability does not have to equal financial disaster,” Taylor says. The CDA offers the following tips for getting financially fit – and preparing for disability – in 2008:

1. Make a list of your essential monthly living expenses. These include costs like rent or mortgage payments, utilities, food and medical insurance that would continue if you lost your income. Eliminate extras that you could live without if you had to, such as entertainment and vacations. This list of essentials will give you an idea of how much money you absolutely must have each month in order to make ends meet.

2. Get familiar with your employer’s sick pay and/or long-term disability policies. Can you count on your employer to continue at least some of your income while you are disabled? Many do not. Knowing in advance what, if anything, you can expect from your employer and how long you can expect to receive it, can help you determine how much income you’ll have to replace in the event of disability.

3. Identify other sources of income that might help you cover expenses during a disability. Can your spouse work to replace some of your lost income? How long would your savings cover those expenses if you had no income? Would you want to tap into your retirement savings? Could a second mortgage or support from family members and friends be an option?

4. The average length of disability is 30 months. If your income during disability and savings wouldn’t carry you for at least that long, you’ll need to increase your savings or line up other sources of income.

The road to financial fitness begins with thinking ahead and good planning. You need to plan for disability just as you plan for an unexpected major medical expense or save for retirement. With good planning, the financial impact of disability can be much more manageable.

Taylor’s organization, the Council for Disability Awareness, is a nonprofit group focused on helping the American workforce become aware of the growing likelihood of disability and its financial consequences. The Council’s Web site, www.disabilitycanhappen.org, offers tools and tips to financially prepare for disability and how to help prevent disability before it happens.

For more on disability insurance, see these posts:

• Why You Need Disability Insurance and How to Save on It

• 12 Ways to Save on Insurance

• One of the Greatest Financial Mistakes

How I Create a Home Inventory for Insurance Purposes

Nickel asked his readers if they have a home inventory -- a listing of what's in their home. Such a list would be used to get reimbursed by your insurance company in case fire, flood, etc. damaged all or most of what's in your home.

We don't have a listing of what's contained in our home (that would take quite some time to complete!), but we do have a home inventory. The summer before last, I videotaped our home room by room, detailing what we owned, where any especially valuable items were kept, and so on. I then took the take to work and keep it in my desk. If anything ever happens to our home, I can review the tape with the insurance company and decide upon replacement costs.

The video was much easier to make than a list of everything in the home -- it took me less than an hour (imagine showing someone your home, though in a bit more detail, and you'll know what I have on tape.) Though this reminds me that I probably need to update the video this year. After all, things change a bit in that amount of time.

How about you? Do you have a home inventory for insurance purposes?

10 Commandments of Personal Finance, Commandment #7: Thou Shalt Protect Thyself Against Risk

Bankrate offers a list of the 10 commandments of personal finance that I'll be sharing with all of you as well as providing my thoughts on their selections. The commandment for today:

VII. Thou shalt protect thyself against risk

There are numerous risks in this world, many of them financial. Sweeney believes it's important for people to have the right insurance, such as health, life and disability, to protect themselves and their families. In addition, they need car, home and even renters insurance. A new survey by Apartments.com indicates that 58 percent of their respondents do not have renters insurance.

I agree. Having insurance is a key part of sound money management. The types of insurance you'll need include:

1. Disability insurance.
2. Life insurance.
3. Homeowner's insurance.
4. Car insurance.
5. Umbrella insurance.
6. Medical insurance.

Did I miss any? (Maybe long-term care insurance?)

For related thoughts on this topic from Free Money Finance, see these posts:

• 12 Ways to Save on Insurance

• Insurance: Use It for the Big Losses in Life

• Costly Insurance Mistakes

Click here to read part 8 of this series.

Click here to read part 1 of this series.

How Much Would It Take for You to Give Up Your Health Insurance?

Here's an interesting piece of information I found in the February issue of Money magazine:

25% of people say they'd give up their health coverage at work if their employer gave them $25,000.

Wow. I know it's not a large percentage, but 25% isn't small either.

Maybe there's a seed of an idea here. I can see a time in the future where some employers buy out employees' health coverage as a way to lower costs/limit potential losses.

I'm not sure what it would take for me to give up my health coverage, but it's a lot more than $25,000. How about you? Would you trade your health coverage for $25k? If not, what would it take for you to consider such an option?

Minor Minivan Fender-Benders Can Cost You a Fortune

Here's an article from my neck of the woods that details how expensive minor fender-benders in a minivan can be. The details:

Repairing damages to minivans involved in low-speed crashes of 3 to 6 miles per hour could range from $483 to more than $3,500, according to test results released Thursday by the Insurance Institute for Highway Safety.

In the "olden days" when I was a kid, our car could hit a tree at 25 mph and not show any signs of wear. Then again, that car probably got two miles-per-gallon as it was as heavy as a tank. ;-)

It's not only minivans either. When I was backed into this summer (at a low rate of speed, as you can imagine), the total bill for the insurance company was $2,000. Yikes!

Maybe this is yet another reason to ride my bike to work instead of driving. ;-)

Buy Term and Invest the Difference

I've written a couple times about buying term life insurance and investing the difference (see Insurance and Investing: Buy Term and Invest the Difference and Former Insurance Agent: "No Way" is Permanent Insurance Better than "Buying Term and Investing the Difference"). For those of you unfamiliar with the phrase "buy term and invest the difference," it simply suggests that you do not buy permanent life insurance and instead by the cheaper term life insurance and invest the money you saved doing so. If you do this, you'll end up having more money in the long run as well as life insurance during the time you need it.

Turns out that Money magazine's "Mole" agrees that buying term and investing the difference is the best option for most people:

If you are a disciplined saver, I strongly recommend buying term and investing the rest. If you need a forced savings vehicle and you can't find that vehicle elsewhere, then you may want to consider a permanent policy. But either way, make sure you understand what it is you're buying and how much it's costing you.

He hit this one exactly on the head in my opinion. If you are disciplined enough to actually invest the difference (and not spend it), then buying term and investing the difference is probably for you. But if you're not able to save on your own, permanent insurance, though much more expensive, is likely a better option for you.

My Company is Moving to a Health Savings Account

Wouldn't you just know it? A few days after I posted Fund Your HSA to Cover Retirement Healthcare Costs, my company announces that we're changing our medical insurance as of January 1 and going to a Health Savings Account (HSA) plan. Great! This gives me a new subject to write about! ;-)

Here are the details of our plan:

• Our new medical insurance has a $4,000 deductible. Yikes!

• The company is going to fund $4,000 per employee per year (covering the entire deductible)! Hooray!

• With this amount, we pay for doctor's visits, prescriptions, etc. at the negotiated rate by our health care provider. (in other words, no more $20 co-pays for a doctor's visit, we're now on the line for $100 or so a pop.)

• Once the deductible is met, our medical costs are covered at 100%.

• Any amount of the deductible we don't spend is ours to keep. The account then gets re-funded with the total amount the next year. For example, let's say my account gets funded with $4,000 and I only spend $1,500 in year 1. My unspent $2,500 carries over and I get another $4,000 put in my account. I'll then be up to $6,500. You can see that the account can really build up value over time for a healthy family.

• The amount noted above is mine -- it does not belong to the company -- so I can take it with me if I leave (and spend it on a variety of health-related costs.)

• I can make additional contributions (which are tax deductible) up to a certain point (somewhere in the $5,600 total range -- they still need to get us that information.)

• If my HSA gets over $3,000 in it, I can have those funds invested in any of eight mutual funds (I don't have the list yet) to make my money work as hard as possible.

• While our dental and optical plans are not changing, we can use money from our HSAs to cover out-of-pocket costs in these areas, such as glasses, braces, etc.

They gave us an "HSAs for Dummies" mini-booklet that I'll be reading and sharing with all of you as time goes on. But at first blush, it looks like a great plan.

If you want to know more about HSAs, check out Fund Your HSA to Cover Retirement Healthcare Costs for now.

Complications From Diabetes Can Significantly Impact Americans’ Financial Stability

The following article is courtesy of ARA Content. I decided to run this one because my grandmother is facing this very issue -- diabetes is impacting her finances. She's older and is no longer working, but for younger workers, situations like the ones described below are the reasons we all need disability insurance.

Diabetes is one of the fastest-growing health crises in the United States. One in four Americans, or about 75 million people, has diabetes or is at risk of developing type-2 diabetes.

As with other chronic diseases, the financial consequences and economic impact of diabetes can be devastating. According to the American Diabetes Association (ADA), one out of 10 health care dollars is now being spent on diabetes and its complications while people living with diabetes spend nearly $11,000 more per year on medical expenditures compared to those without diabetes. Furthermore, the Milken Institute estimates that this year diabetes will result in over 140 billion dollars of lost wages and productivity costs. Fortunately, just as there are lifestyle actions people can take to manage and even prevent diabetes, there are steps people can take to prepare for the impact of diabetes on their financial security.

“Often, the financial implications of chronic diseases such as diabetes are overlooked,” says Robert Taylor, president of the Council for Disability Awareness (CDA). “It is important to understand that complications from diabetes may hinder people’s ability to earn a living, jeopardizing their present and future financial security. Wage-earners should be thinking about the financial measures they need to have in place to protect their financial lifestyles.”

Financial preparedness in case a disability happens is a critical responsibility for all wage-earners, particularly as disabilities among the work force continues to grow. A good starting point in the planning process is to estimate the monthly living expenses that would continue during an income limiting disability and determine your potential sources of income. From there you can develop your own plan for protecting your financial lifestyle.

The CDA Web site offers a financial review form that helps users to see how a disability could affect their financial situation, and a guide on how to prepare for that possibility. Also available at www.disabilitycanhappen.org are facts and figures about disability, real-life stories, and tips for healthy living that can reduce your chances of suffering from a chronic disease like diabetes.

Medicare Medical Savings Account Plans

The following is provided courtesy of Marotta Asset Management.

Medicare Medical Savings Account (MSA) Plans are one of the newest Medicare Advantage Plan options. Private companies began offering these accounts in 2007. Like Health Savings Accounts, a Medical Savings Account puts you in control of your own health care dollars.

If you are in good health and want to limit the maximum you would need to pay in a medical emergency, you may want to consider a Medicare Medical Savings Account plan during your retirement years.

When you choose a Medicare MSA plan, you are still participating in one of Medicare's plan options. A Medicare MSA plan is a "Medicare Advantage Plan," also known as Medicare Part C.

A Medicare MSA has two parts: a medical insurance plan and a savings account. The medical insurance portion is a high-deductible health care plan which covers your medical expenses only after you have met a high out-of-pocket deductible. But before you receive coverage, you'll have to pay all of your health costs until you reach your deductible. However, to help you pay the out of pocket costs, the Medicare deposits money into your savings account each year. You can use this money to pay your health care costs before you meet your deductible.

To purchase the Medicare MSA coverage, you probably won't have to pay an additional premium. In keeping with the Medicare Advantage Plan system, you'll simply have to pay the Medicare Part B premium. The costs of Part B are dependent upon your yearly income. In 2008, seniors will pay $96.40 per month if they are married filing joint and reported $164,000 or less in income. Monthly premiums climb as high as $238.40 if you are in the highest income bracket.

With a Medicare MSA, you can keep all the money you don't spend on health costs. In fact, you may do better than break even each year. The annual amount you are given will not cover the gap until you meet your deductible. But if you spend less than the amount you are given, your account could grow in size. You may be able to accumulate enough money in your account to cover all of your health care costs up to the amount of your deductible. And like a true savings account, anything you don't spend one year carries over to the next. With an MSA, it's your money.

As an example, the Anthem MSA plan in Virginia has an annual deductible of $3,000 and an annual deposit $1,300. In short, you pay all medical costs up to $3,000. But to help you cover those costs, Medicare will deposit $1,300 at the beginning of the year into your medical savings account.

If you don't need all of your savings for medical expenses, you can spend your account on what you do need. Withdrawals for Medicare covered expenses are tax-free and count toward your deductible. Withdrawals for qualified medical expenses that are not Medicare covered (such as dental, vision and prescription drugs) are tax-free but do not count toward your deductible.

Qualified expenses may also include items which may or may not count toward your deductible. The IRS has approved a long list of qualifying expenses. In addition to doctors visits, hospitalizations, lab tests and the like, the list also includes prescriptions, some over the counter drugs, vision and dental costs.

You can withdraw and use a portion of the money in your Medicare MSA for non-medical reasons (such as groceries and utilities) without penalty. You will still need to pay income tax on non-medical withdrawals, just as you would with a traditional IRA. The limit you can withdrawal without penalties is equal to your account balance on December 31st of the prior year minus 60% of your policy's deductible. Withdrawals above that for non-medical expenses will be taxed as income and slapped with an additional penalty.

A Medicare MSA can also be a good solution if you have very high out-of-pocket costs under your current Medicare program. Unlike the plain vanilla Medicare Part B which could leave you paying 20% of all your medical costs with no limit, a Medicare MSA account caps your liability. Once you've met your annual deductible, your insurance plan will cover 100% of your Medicare-covered health costs.

Consumer-driven health care plans may help shape consumer behavior and keep health care costs from spiraling out of control. Contrast Medicare MSA plans with other Medicare Advantage Plans. Generally HMOs pay for medical services. Doctors dictate which services are given, and patients are the ones who actually benefit from these services. With Medicare MSA plans, consumers pay, dictate and benefit from services. They are empowered to make their own healthcare decisions.

Those covered by a Medicare MSA plan should be more likely to engage in healthy behaviors and to get annual check-ups. They should also be more likely to inquire about costs and less likely to consume health care they don't need. If this sounds like you, you may be a good candidate for a Medicare MSA.

Medical Savings Accounts offer you the opportunity to take more control of your health care spending. The money you save on your medical expenses is really yours and can be used to pay whatever bills you might have in retirement, even if those bills are not Medicare covered expenses.

Enrollment in a Medicare MSA is limited to one percent of Medicare recipients on a first come first serve basis. If you are interested, I suggest you sign up early. Open enrolment for Medicare MSA plans begin November 15th and ends December 31st every year.

For related articles, see the following:

• How Medicare Works

• Fund Your HSA to Cover Retirement Healthcare Costs

How Medicare Works

The following is courtesy of Marotta Asset Management.

Many seniors look forward to saving on medical insurance costs by enrolling in Medicare at age sixty-five. However, navigating the Medicare system is not for the faint of heart. Medicare is an alphabet soup of plan choices. Currently Medicare is organized as parts A through D.

Medicare Part A provides hospital insurance to seniors. For the majority of seniors who have paid into the plan, enrolling in Part A comes at no cost. Part A covers hospital stays, home health care services, and hospice care. However, if you just need a check up, you'll need to resort to Part B or Part C to help with those costs.

Part B helps to cover doctor's services, some outpatient care, and routine preventative services. However, unlike Part A, you'll have to pay a monthly premium to buy the coverage. The costs of Part B are dependent upon your yearly income. In 2008, seniors will pay $96.40 per month if they were married filing joint and reported $164,000 or less in income. Monthly premiums climb as high as $238.40 if you report lots of income in retirement.

However, unlike Part A, Part B may require you to first pay the $135 deductible before Medicare will pick up the tab. For other services, Medicare will cover 80 percent of your medical costs, requiring you to pay the other 20 percent. Still in other cases, you'll wind up paying both the $135 deductible plus 20 percent of the remaining costs.

Don't try and save a few bucks by skipping Part B coverage. If you fail to enroll in Part B at age 65, you'll be slapped with a 10% penalty for each year you delayed enrollment.

Your Part B insurance will provide you with some free services such as a flu shot, diabetes and cancer screenings, and 'Welcome to Medicare' physical exam. If you take advantage of these services you may avoid more costly and more dangerous conditions.

Most seniors sign up for the Original Medicare plan, a combination of Parts A (hospital insurance) and B (medical insurance). However, if Uncle Sam's doesn't provide you with sufficient coverage, you may be better served by a private insurance company offering a Medicare-approved insurance plan.

Part C, also known as Medicare Advantage Plan, includes coverage for parts A and B through private insurance companies. The plans are usually offered in the form of a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). Your premiums, co-payments, coinsurance and deductibles will vary based on your specific plan benefits. And, although offered by private companies, Medicare Advantage Plans are approved by Medicare.

Choosing a Part C plan may mean you already receive prescription drug benefits. If your prescription drug coverage is deemed "creditable" by Medicare, you won't have to pay an additional premium for the Medicare prescription drug plan, also known as Part D.

Part D, the Medicare Prescription Drug Plan, is the newest of all the Medicare programs. However, Medicare does not provide the insurance directly. Instead, each state has contracted with insurance providers to offer the drug coverage. If you are a senior, you must decide if you should sign up, and then which plan you should purchase.

Most states offer at least 40 different drug plans. Premiums average $28 per month, depending on the level of coverage and the types of drugs covered by the plan. If you are enrolling in the Original Medicare or don't already have "creditable coverage", you'll need enroll in Part D, or face a penalty. If you fail to enroll at age 65 but decide to enroll at a later date, you'll pay a 1% penalty for each month you delayed enrollment.

The costs of Part D vary, and if you don't think you will need the coverage you should find the lowest cost Part D to avoid the penalties. That way, if you need the coverage later, you won't be stuck with premiums inflated by penalties. You can always change providers at a later time, if you decide different coverage suits your situation better.

If your income and assets are low enough, you may be able to save money on your Medicare costs. This assistance is done through your State Medical Assistance and is often called Medicaid. Call even if you aren't sure if you qualify. The Virginia Medicaid office can be reached at 804-786-7933. Call 1-800-MEDICARE to get the telephone number for other states.

The initial enrollment period begins three months before your sixty-fifth birthday and ends three months after your birthday. Be sure you enroll to avoid unnecessary penalties.

You can get more information by visiting Medicare on the web or by calling 1-800-MEDICARE.