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Tips from a Broker: Navigating Life Insurance, Medicare and Final Expense Plans · Healthy Happy Wise Wealthy

0:00
Welcome
0:05
to Healthy, Happy, Wise, Wealthy, the podcast where we take people who
0:09
have lived through some fire and now want to take that light and help
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guide others. I am your host, Mary Meyer. I'm so glad you're here.
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I want you to step away from today feeling like you
0:20
know some things about how to heal, about how to move
0:24
forward, about how to create the life that you want to live.
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Let's get started. Hi, everybody. Welcome back to Healthy,
0:32
Happy, Wise, Wealthy. I have with us today Xander Lehn, and
0:35
he is an insurance professional.
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I know him from the Missing Link network. And I know in our first
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episode, we had Jaclyn on from that to talk about the importance of
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networking. And networking has been good for both of us. I know.
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So I wanted to have him on because insurance is one of those things, in
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my opinion. I know a little bit about insurance, too, because ins. You know,
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I had 20 years married to an insurance
1:02
broker, basically, so I got to know a lot about that field.
1:06
And I know for people, there's usually a lot of questions they have about
1:09
insurance, and maybe they don't want to call to ask somebody, because
1:13
I think in this world, sometimes you want to know the answers before you call
1:16
somebody, just to make sure you're on the right. The right track.
1:20
So. And you have only been doing this a couple years and you
1:24
made a big life transition. I know we talk about that lot on this show,
1:27
too. So, yeah. Introduce yourself a little bit and tell us
1:31
why you chose to go into this profession. Yeah. Thanks, Mary. I
1:35
appreciate you inviting me on the podcast. That's pretty cool.
1:40
Definitely a fun opportunity. And I did make a big life
1:43
transition to become an insurance broker and
1:47
work with the people that I do. And I love what I do
1:51
now. Before I was an automotive
1:54
technician for like 12 plus years,
1:58
I went to school for IT degrees, you know,
2:01
the whole nine yards. And I loved doing it,
2:05
but it became a little
2:09
challenging to deal with. You know, that I
2:13
didn't have a lot of autonomy. I was tied to one place.
2:17
I was doing a lot of work that I didn't
2:20
have control over. And I really like having the ability
2:24
to. To kind of control my own destiny, if that makes sense.
2:28
And at the same time, as I was feeling this
2:32
tug, this push and pull in my career,
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I also lost a family member and
2:41
experienced what happens when there isn't
2:44
a plan in place. And I
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knew one of my good friends was a life insurance
2:53
salesperson. And I said, hey, I want to find out about what you
2:57
do. And after I learned, I said, you know, What?
3:01
I'm gonna make a drastic 180. I signed
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up that night for the classes and while
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working a full time job, raising two kids, wife, you
3:12
know, family, everything, I did the, the 40 hour course
3:16
in two weeks, passed my test the first time
3:20
and just went, you know, head first into
3:23
figuring out all this world and I haven't looked
3:27
back. That's very brave. Making a transition like that
3:31
with family in tow and everything is a
3:35
very brave transition to make. Yeah, it's
3:38
definitely scary but rewarding at the same time. And
3:43
you know, I, after a couple years doing this, I, I, I
3:47
would make the same decision again. Yeah.
3:51
And I, I do enjoy just highlighting on this podcast that
3:54
life takes turns and you don't always know where you're going
3:58
and lots of times those are career changes. And for you
4:02
it was just like, man, I, I'm making a change because this,
4:05
you have that personal experience and you're like, this is, this is
4:09
really the avenue I want to go. So I think, you know,
4:13
you do highlight or you do focus a lot on
4:16
senior life insurance, final expense, those kind of
4:20
things. So we're gonna, we're gonna move into that. I know probably,
4:24
you know, boomers are, the boomer generation is in
4:28
that age and it's, you know, for most of us listening, it's either
4:31
we're one of those or our parents are or a grandparent.
4:35
So this affects all of us. And life insurance in
4:39
general does. It's something I know. I got life insurance very young, in my
4:43
20s. Yep. A term policy.
4:47
So can you give a general overview of the
4:51
benefit of what the different things? There's three different types, right?
4:54
Yeah, yeah. So real quick, you, you touched on something
4:58
important that I primarily work with seniors
5:02
and a big reason is that there's 10 to 12,000
5:06
people in the US turning 65 every
5:09
day. So it is a huge market and they need a lot
5:13
of help. And they're getting advertisements on
5:17
tv, on Facebook, everything blasted this way and that.
5:22
You know, some people say they get a hundred spam calls a day, you
5:26
know, telemarketing, things like that. And so
5:29
there's just a lot that is
5:33
happening in that age group right now.
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And so that's why I serve that market primarily is
5:40
because there's just such a big need. It's
5:44
a little easier for somebody that's, you know,
5:47
32 to hop online and
5:50
click a few buttons and figure it out themselves. Maybe they're using
5:54
chat GPT that answer some questions. But
5:58
if you're 72, you don't really
6:01
use a lot of that stuff for the most part. Right?
6:05
Yeah. So you asked, you asked one thing that was, what are the
6:09
different types of life insurance? Right.
6:12
There's two main types. One
6:16
is whole life or permanent, and one is term,
6:20
and that's temporary. Or it has a time period where it
6:23
expires. There's a hybrid in the middle, and some people
6:27
may have heard of it, it's called universal life.
6:30
It can be permanent and it can term out. It depends on
6:34
how it's set up and the purpose for why you're using it.
6:39
There's a few big pieces that, when
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you're comparing those types of coverage on, like, why
6:47
would I make one choice or the other?
6:51
Personally, I think that each one of those types of
6:55
insurance has a great purpose.
6:59
I have permanent and I have term coverage for
7:02
myself, and here's why. I'm 31, I've
7:06
got young kids. If I pass away
7:10
before they're adults, I want to make sure my wife has, you
7:14
know, the mortgage covered, bills paid, some living
7:17
expenses while she's trying to figure life out without me.
7:21
Right. And so a term policy is great because you'll hear
7:25
the advertisements, oh, you can get
7:28
$500,000 for 30 bucks a month.
7:32
And the only way they're able to do that is because it's term.
7:36
At some point that's not going to be there. And
7:40
the biggest statistic that they really don't cover with term
7:43
insurance is that only about 3% of
7:47
people that have term coverage actually pass away
7:51
while it's active. The majority of people, 97%,
7:55
live through their term policy and then
7:59
get something different or just, you know, they don't have that
8:02
anymore. Yeah. How longer term? You
8:06
know, is it 20 years, 30 years, 10 years? What's the typical amount of
8:10
time that you buy term insurance for? And I imagine that affects the
8:14
rate. Yeah. So the longer the term, the more
8:17
expensive the rate. Interestingly enough, you'd
8:21
kind of think it would be backwards, but if you compare
8:25
a 20 year versus a 30 year, it's going to be a few
8:28
dollars more for that 30 year because they're taking on more risk
8:32
for those extra ten years. Right, right. The longer you live, the more
8:35
likely something is to happen. So
8:39
the majority of term policies people
8:43
look at are 20 or 30 years. But, you know, a lot of
8:46
people, we get our life insurance from an employer maybe.
8:50
Right. And you might even hear, oh, you could
8:54
take that with you when you go. But that type of term
8:57
insurance, because of almost 99% of
9:01
employers only offer term coverage. It's actually
9:05
called annually renewable. And so every year,
9:10
if you take it from your employer, it gets more expensive.
9:13
It's your new age and the rate can go up.
9:17
There are some caveats to that. Some of them change every five
9:21
years or whatever. But in general,
9:25
having private coverage that you own is more
9:29
secure and guaranteed than that employer
9:33
provided. And one other really important piece of
9:36
that is that for the majority of employer
9:40
provided coverage, anything over
9:43
$50,000 of life insurance is
9:47
going to be counted as taxable income for your beneficiary.
9:51
And people don't know that. So they'll buy up their insurance
9:55
with their employer and if something happens, it can
9:58
significantly change their family's, you know,
10:01
income tax and things like that. Yeah, and I,
10:05
I definitely would say I would highly recommend if
10:09
you have, own a home, if you have children, if you have anyone that's
10:12
depending on you whatsoever to pay a bill,
10:16
that you have some life insurance and the younger you
10:20
are, the cheaper it is. I know I still have a policy. I think I
10:22
started in my, in my 20s and it's,
10:26
I think it'll go another, I don't know, it's term. Yeah,
10:30
I lost Track. Maybe another 10 years. But it's under $30 a month
10:34
or right at that 30. So yeah, that's worth it for that peace
10:37
of mind of, you know, or if you have,
10:41
you know, kids, you want to leave something to, you know. Exactly. It's a,
10:45
it's a great tool, but that's all that it is. It's
10:49
a tool. There are term plans that you can
10:52
get your money back from after, you know, if you pay in
10:56
for 20 years. That's something called return of
11:00
premium. And a lot of people don't know that. Most insurance companies
11:03
don't offer that and they think, oh, I'm going to get my money back. But
11:07
it, the majority don't and that's actually
11:11
to help them keep the cost lower. So if
11:15
you have that return of premium, you're comparing options
11:18
between companies, it's going to make that more
11:22
costly, more expensive. Yeah, that's interesting. So return a
11:26
premium is, I mean, it's kind of a savings account,
11:30
you know, some money with time on the interest. But
11:33
that's not a bad, bad option to do if you wanted to do
11:37
it. So. Yeah. Yep. And a little piece that most people
11:41
just don't know about. Yeah, I would have forgotten about that. I don't
11:45
know that I recalled that. So I know we want to get to the senior
11:48
stuff, but Tell us briefly about like what whole, what the difference with whole life
11:51
is. Whole life is a lot more expensive, right? Yeah. So
11:55
per, like unit of coverage, let's let, let's say per
11:59
thousand dollars of life insurance, whole life is going to
12:03
be significantly more costly. You know, might hear people like Dave
12:06
Ramsey say, oh, buy term and invest the difference.
12:11
And there's some theory around that and it may be valid.
12:16
But there's a few truths to the situation.
12:19
Because whole life is permanent. You have a guaranteed
12:23
insurance policy as you age, if your health changes,
12:27
if you get sick or if your income goes down,
12:31
you can count on that lower rate forever. You don't have to
12:35
re qualify down the road. And so if you want some
12:38
guarantee that the family's going to have something, whether it
12:42
is just for final expenses or it is a
12:46
gift or whatever, it's a guarantee because it's
12:49
whole life, it's permanent coverage and it's not
12:53
going to change down the road. You don't have
12:57
to have $500,000 of permanent coverage
13:01
because maybe, you know, when you are 82, you just don't
13:05
need to give away that much. Right. So you could have a small policy
13:09
that's just that guarantee for down the road where
13:13
you're, when your term ends, you're not trying to re qualify.
13:16
Maybe you have a new chronic health condition and you don't,
13:20
you know, you can't get new insurance.
13:24
How much in general, how much more expensive is that? Oh
13:28
goodness. Well, like for instance, at my age, if I
13:32
am like 31, I could get maybe half of a
13:36
million dollars of life insurance on term coverage for
13:39
around 30 to $35 a month. If I took
13:43
that same amount and went to a whole life coverage,
13:47
it's going to be maybe 30,000 or
13:50
$40,000 is not going to be a whole heck of a lot
13:55
comparatively, when you look at numbers. Yeah, yeah.
14:01
But that's the difference is the guarantee and the
14:05
continuous, you know, hey, I don't have to re qualify down the
14:08
road. Right. That's almost estate planning
14:12
at that point, right? It is, yep. And the, the last piece
14:16
of whole life is that it does build cash value.
14:20
So a lot of people have heard of a family member or a friend that
14:23
cashed out and like took a cruise or whatever. And that's usually
14:27
where that comes from is they borrow against the built up
14:30
value in their life insurance and for some purpose,
14:34
whether it's a need or a want, they can use that down the road.
14:38
Yeah. So briefly, universal life, the in between of
14:42
those Two. Yep. So Universal Life kind of combines
14:46
the two. And depending on how it's structured, it may
14:50
build cash value quickly, it may not. It may be
14:53
more like a term policy where there's very little of the premium
14:57
goes to cash value, but it can adjust with your
15:01
life. That's why it's called universal, because you can have the same policy
15:05
and you could maybe this year you are. All of a sudden you're
15:09
making more money and you want more coverage. You just pay more into
15:13
that Universal life and they can restructure it without
15:17
you having to go back through underwriting. If something happens down
15:20
the road and you need to lower your premium, they can
15:24
restructure it. A lot of people what's
15:27
really hot right now, it's called IULs. Not
15:31
sure if you've ever heard of that. Indexed Universal Life.
15:36
I think I. Yeah, we'll explain it. I think I maybe have. Yeah.
15:40
So it's basically a universal life policy that's supposed to
15:44
build cash value that's credited against
15:48
the stock market index, which is usually the S
15:51
P500. And so there's other indexes that it
15:55
could be credited against, but it's supposed to only ever
15:58
gain value without losing the basis.
16:02
So let's say you have $10,000 of cash value and the stock
16:06
market crashes your cash value secured. If the stock
16:10
market performs really well, the cash value may increase
16:14
at like 6 or 8%.
16:18
It's. It is a great tool,
16:21
but it's being very oversold right now. And that's
16:25
something that. Getting an honest opinion on
16:30
to understand how it could affect you 10, 20 years down the
16:34
road. It's really important. Yeah,
16:37
I know sometimes these vehicles are. Insurance are used as
16:41
vehicles for savings for different reasons. I
16:45
know my brother did that. And when I looked at that, I'm like, I don't
16:48
like it. I think it
16:51
probably is a little bit dependent on personality, but. Or if it makes sense to
16:55
you. Yeah, it's definitely dependent on personality. You know,
16:59
there's. If you're looking at it as an investment
17:03
tool, it's more of a secure
17:06
kind of thing. So it's not crazy growth. It's not going to be like
17:10
a. A house in
17:13
2021 that was just exploding in value.
17:17
It doesn't do that necessarily, but it has
17:21
security and guarantees that some
17:25
people do use for financial planning. Some people
17:28
shun it and some people embrace it. But again,
17:31
that's up to you and your financial planner, which always
17:35
advised to do. Yeah. Advise for
17:39
financial planning, which we're not getting into that a lot. But insurance is usually a
17:42
part of financial planning. So for sure, all the different kinds of
17:46
insurance, because a catastrophic loss of any
17:49
kind is going to affect your ability to
17:53
manage your wealth. So. Yeah, that's why. That's why it exists.
17:57
Exactly. Yeah. So let's move a little bit
18:01
into the senior market then. I know you. This is what you
18:05
have chose to do. So all these people are turning 65,
18:09
you know, 10,000 a day, is that what you said? It's between 10
18:12
to 12,000 a day. Okay. That's a lot
18:16
more than a couple, that's for sure. Yeah, more than a couple. So
18:20
explain to us what,
18:24
what they're, what they're hearing about
18:28
this, what, what are their thoughts on it and what is their con or
18:31
confusion about it? Yep. So there's like this
18:35
huge push in the senior market for final
18:39
expense insurance or some people call it burial
18:42
insurance or cremation insurance.
18:46
And there's a lot of companies who market
18:50
to seniors. It's very big in TV advertising,
18:54
it's huge on all the social media. They're able
18:57
to really target that demographic and bring
19:01
up that need because there is a need there
19:04
primarily for people who maybe don't have,
19:08
you know, big savings or some sort of healthy
19:11
retirement account that they're going to. Well, I have all this cash
19:15
over here. My family can use that when the time comes.
19:19
But it doesn't even exclude that
19:23
maybe upper echelon or upper level market
19:27
that may be a little more financially secure. And
19:31
here's why. What final expense insurance does
19:35
is it can be based on term or whole life,
19:38
but it provides usually a faster
19:42
payout of insurance, death benefits to the family
19:46
to be able to make sure that they have the money right when they need
19:50
it without coming, going into debt, coming
19:53
out of pocket or even having to dip into the estate.
19:57
Right. And that's where it can protect each
20:00
level of, you know, financial,
20:06
you know. Yeah, so explain that, Explain that situation. So,
20:10
you know, no one, nobody likes to talk about death, but like
20:13
planning for death is just something we do and we should do and you know,
20:17
it's just a part of life. Right. So. So I think what you're
20:21
saying is someone has, there's a death in the family
20:24
expected or not expected. So maybe it's not expected, but
20:28
they're over 65, they have that final expense
20:32
plan. So what I hear you saying, tell me if I'm right, is that they
20:35
will get in time to pay for the funeral costs and
20:39
burial costs. They'll get the money. Yep, exactly.
20:44
So that's where it really does come down to the fine print.
20:49
Some insurance companies will say, hey, we pay in 24 hours.
20:53
But then the fine print, it'll say,
20:56
oh, we require a death certificate first. And so it's,
21:00
it could be three or four weeks before they actually receive
21:04
the payment. And depending on how things go, you know, the
21:08
funeral home may take that into consideration,
21:11
they may charge you a higher amount.
21:15
Or what some people do is they actually will take their policy down to
21:19
the funeral home and hand it over to the director and say,
21:23
hey, we just want to pay with this.
21:27
One big piece that most people don't know about is that if you
21:31
do that they can take a fee, an additional
21:35
cost because they're not getting paid today.
21:39
So that funeral home is going to charge a premium if
21:43
they don't have the money right when they want it.
21:48
And people will ask, well, why should I get
21:52
life insurance as a senior at you know, five thousand or
21:56
ten thousand dollar insurance policy, why wouldn't I
22:00
just go and prepay for this? And
22:03
I've seen it before, I've clients who've told me the stories
22:07
where a family member said, hey, I've got everything
22:11
set up, it's all taken care of. And then they pass away
22:14
and you're at the grave site, the funeral director comes
22:18
up and says, hey, I'm so sorry but we can't finish the
22:22
services. We've only been paid X dollars and
22:26
he didn't finish the other 3,000 so we
22:29
need that before we're going to put him in the ground. And
22:35
this the the simple fact of if he had even a
22:39
small life insurance policy in that kind of situation, they
22:42
could have said, oh, no problem, we've got it taken care of. But somebody had
22:46
to take out a checkbook, take it out of their
22:49
401k or whatever, right?
22:53
And so while prepaid planning is great, it's not
22:57
guaranteed until you have that thing paid off. And
23:00
you know, it's all good. Having some life
23:04
insurance can be a pretty important piece. Yeah. And there's one
23:08
other very big topic that people don't discuss when
23:11
or think about when it comes to life insurance for seniors,
23:15
if you're married, if you have a spouse or somebody that you
23:19
rely on for income, even if they're not, you know, directly
23:23
married to you when they pass away, you don't get to keep both
23:26
incomes from Social Security. And a lot of people,
23:30
the majority of Americans are reliant on Social Security
23:34
for their income. And so imagine if your income gets cut in
23:38
half, can you all of a sudden afford all the bills next month?
23:43
Whereas a life insurance policy can help you bridge the gap
23:47
while you adjust your living situation.
23:51
Yeah, yeah, that is very important for sure.
23:56
So if someone wants to, you know, their, their, their term
23:59
life is over, let's say they're 65, 70, 75. I
24:03
imagine the, these, it does range in price depending
24:07
on how much you get. And, and underwriting, which is health
24:11
testing. So can you explain that a little bit so
24:14
people kind of have an idea? Yeah, well, a lot of
24:18
people will, will be in shock. When I've talked with
24:22
a, it's like a 74 year old lady, she had a
24:25
20 or 25 year term, it cancelled,
24:29
they sent her a bill. If you want to keep this for another six years,
24:34
all of a sudden it's going to be $1,000 a month
24:37
instead of whatever it was $60 a month before.
24:41
She was like that's absurd. Right. So I went over,
24:45
we're addressing and looking at everything and
24:49
I said, well, this is what you can qualify for in permanent insurance.
24:53
Right. Similar budget of what you had been paying,
24:56
but the amount, you know, it was like 300,000.
25:00
It went down to like let's say 10,000. And she was like well
25:04
that's absurd. I used to get this much.
25:08
And that's just because you're not about. To die, you're closer to death.
25:12
Yeah, according to an underwriter, you're closer to death. I,
25:15
that I said that kind of. Rudely but, but that's
25:19
exactly what it is. And, and it's the difference of going
25:23
from term to permanent. Right. She paid in for 20 years
25:27
and didn't get anything back because she didn't have return of
25:30
premium. And ultimately in her situation she decided, or we
25:34
together combined said hey, you probably don't need it. Your house is
25:38
paid off, your car is paid off. You could just set aside the
25:42
money out of your Social Security for a couple of years and
25:45
have your arrangements taken care of. But not
25:49
everybody's in that situation. And some people just want
25:53
to make sure that the family or the state is
25:56
taken care of. I have a doctor or a dentist,
26:00
a doctorate in dentistry that I have coverage
26:04
with him and his wife. Even though they have like a
26:08
$150,000 policy with one of those
26:12
big permanent companies, you know, the,
26:16
they're like, hey, if, if we pass away, this needs to be the income
26:20
for the spouse. The. But we don't want to have to take that policy down
26:24
if we're tight on cash and use that at the funeral
26:27
home and have them charge us excess fees. So
26:32
right there it's just protecting the estate and making sure that
26:35
each individual in that family has the help they need
26:39
right when they need it. So what would you guess? Do you have an
26:43
idea about what they need to be planning for, for funeral
26:46
expenses in general? Yeah, so
26:51
I, I do funeral expense planning
26:54
on a, basically a daily basis with people. And
26:59
so I'm all too familiar with the topic. If you're planning for a
27:03
cremation and you don't have the money
27:07
today, if you have a life insurance policy that you're going to pay for
27:11
it right now, you're going to need between 4 and
27:14
$5,000 of life insurance coverage. That's
27:18
going to help take care of everything, pay the fees and
27:21
etc. Between transportation costs, death
27:25
certificates, the cremation, they even
27:29
put you in a casket for a cremation.
27:33
But the level of quality service that you want,
27:37
it could be a little less or a little more.
27:41
If you want a burial, the really
27:44
starts at at least $10,000.
27:49
And that's if you can find a plot of land for a
27:53
cheap or decent price. But
27:57
most people that I've been working with in the last two years, if
28:01
they've had to do a burial that nothing was planned in
28:04
advance, it was closer to the 12 to
28:08
$15,000 range.
28:11
Yikes. Yeah. That is a final expense for sure.
28:15
Yeah, hence the name. So let's
28:19
talk underwriting for a second. So underwriting, that's, that's when
28:23
prices vary per person based on their health. Yes.
28:27
There's a lot of different ways that companies do underwriting.
28:31
Each individual company is different. One of the big things
28:34
that people need to look out for is, is if they're going
28:38
into one of these insurance companies that says we don't
28:42
ask any health questions, we issue
28:46
a policy to anyone, and
28:49
anything like that is going to have a two year waiting period
28:53
before a death benefit's paid. And the rates are going to be
28:57
on average much higher than
29:00
anything that they could qualify if their health was
29:04
even remotely decent. Okay. Now that type of policy does
29:07
have an important place, right. There's some
29:11
people who got a cancer diagnosis and they're like, you know
29:15
what? It's better late than never. And so I'm going to put in
29:19
a policy with one of these guaranteed acceptance companies
29:22
and just, you know, hope that I make it through those two years and
29:26
everything's okay. If you do pass away in that time period,
29:30
the family Gets all of the money back that you paid in. So it's not
29:33
like it's all a loss, it's just not a full death benefit.
29:37
Gotcha. Now beyond that, the a big factor
29:41
are chronic health conditions like heart disease, lung
29:45
disease, kidney or liver disorders.
29:48
Cancer is a big one. And diabetes. If
29:52
your conditions are under control or with basic medications,
29:56
you could probably pass through underwriting. With most
30:00
insurance companies, okay, it's once they've
30:03
been chronic or you're on some pretty heavy duty
30:07
medications. And that's how they do it. Most of these companies
30:11
nowadays are just running a prescription history check
30:15
through the medical information Bureau. It's called an MIB report.
30:19
They check your history, they know exactly what you've taken for the last
30:23
five years and they can say this medicine's a
30:27
risk factor or no, everything you're on is, okay, let's
30:31
issue this policy. That's interesting. So they don't like send someone out to take
30:35
your blood pressure and look at you and stuff anymore. If you have a
30:39
big policy like let's say you're going for
30:43
half a million dollars. Some insurance companies will
30:46
still require traditional underwriting or like a physical or
30:50
a medical exam. But since COVID
30:54
happened, they've really done
30:57
a good job at improving the way
31:01
they do underwriting and categorizing things. And most
31:05
insurance companies are moving to that
31:08
quick decision through the Medical Information Bureau. Because our
31:12
medical reports are all stored electronically anyways, they might as well
31:16
use them, you know? You know. Yeah, that's interesting. Yeah, for sure.
31:20
I know the world has changed since COVID so that changed
31:24
everything. Yeah. Even like how you get insurance.
31:29
Okay, so let's move on to Medicare. So you do Medicare
31:33
for people, and that's kind of a big topic. So that's health insurance
31:37
for seniors. And what are the, what are the things
31:41
people need to know about Medicare? Yeah, so a
31:44
lot of people get Medicare confused with Medicaid.
31:48
That's a big one. I, I, people
31:52
come up to me all the time, oh, I have Medicare. And they're like under
31:55
65. I'm like, do you or do you have
31:59
Medicaid? Oh, yeah, yeah, it's that, it's that other one.
32:03
So that's a big thing is that Medicare is a federal
32:07
health insurance program that's for seniors
32:11
65 and older or people who have been on Social
32:14
Security disability for two years or more.
32:20
So I have a client that's in Medicare who's in his 30s,
32:24
but he's on disability and he
32:27
qualified after being on disability for two years.
32:31
But primarily this is for people who are 65 or
32:35
older and don't have any sort of employer
32:39
provided health insurance. If you're retired or
32:42
if your employer kicks you off because you're
32:45
Medicare eligible, Some of them do that even if you are still
32:49
employed. Yeah. So what should people
32:53
expect to pay for a policy? Medicare
32:57
policy. Yep. So there's a couple different ways that
33:00
Medicare works. There's. There's original Medicare. That's just
33:04
the federal system. It has three primary
33:08
parts. Part A is hospital insurance,
33:12
and that's free. If you paid into Social Security,
33:16
you or your spouse for 40
33:19
quarters. So if you worked full time or, you know,
33:23
equivalent amount of 10 years of full time work before you
33:27
turn 65, hospital insurance is free.
33:31
Then there's part B, and that's doctor's insurance if
33:35
you need to go to a doctor's office, anything like that.
33:39
Part B right now costs $185 a month.
33:43
Most people elect to have it automatically withdrawn from their
33:47
Social Security. And they don't even know that it's
33:51
happening. They just. It's kind of like in the back of their mind. Right.
33:55
They're not directly paying that bill. Some people do, but it's
33:58
$185 a month. It went up $10 this
34:02
year from last year. It used to be 174 and some change.
34:06
Okay. And that does vary from year to year.
34:11
And then there's part D. And part D is prescription
34:14
drugs. Now, relatively recently,
34:18
it wasn't when it started. You're required to have a
34:21
prescription drug plan or some type of prescription drug coverage,
34:26
and people will hear about things like Goodrx or
34:30
one of these pharmacy discount programs. They might sign
34:34
up because it's five bucks a month or something. But
34:37
that's not actually a prescription drug plan. And it could
34:41
cause issues down the road if you think that it is credible
34:44
coverage. It's an important piece for seniors to know.
34:48
All right, so would you recommend getting both having the Rx
34:52
plan and Medicare Part D or.
34:56
Yeah, it really depends on your situation. Right. So now
34:59
that we know what original Medicare is, there's two
35:03
ways that people move forward and
35:06
finish protecting their health care. Because most
35:10
of the time, Medicare only pays for about 80% of
35:14
your costs. And so if you go into the hospital
35:17
and you're on a fixed income, do you want to pay 20%
35:21
of a hospital bill? No.
35:25
No. Right. Nobody, I mean,
35:29
rack up $50,000 in a week at a hospital. Yeah.
35:33
What about you? But I don't really want to pay 20% of that
35:36
myself. No. So people look at
35:39
supplementary Medicare coverage. And so there's two types of
35:44
that is a supplement plan or an Advantage plan.
35:47
And a lot of people get the Advantage plans confused. Some people
35:51
refer to them as Part C, Medicare
35:55
Advantage. There's a lot of different names, but
36:00
those, those two are the big differentiators.
36:03
Advantage plans and supplements. Now, we'll touch on
36:07
supplements first, because this was how most people
36:11
used to do it. The supplement plan
36:15
is like a private. It's kind of like having dental insurance.
36:18
Right. And you pay for it. Cost 30 bucks a month or whatever. You
36:22
can go to the dentist. Well, the supplement, you pay a
36:26
monthly fee and they cover. It's supposed
36:30
to cover that other 20% that Medicare doesn't.
36:33
So it fills in the gap. That's why a lot of people call it
36:37
medigap coverage. But makes
36:40
sense. There's a lot of different ways those plans are structured. And
36:44
so if you're thinking about a supplement or
36:48
medigap plan, it's important to really sit down
36:51
and analyze your health care needs before you make a
36:55
decision, because you only get one time of
36:59
a guaranteed issue where any. You could have cancer
37:03
and they have to write you a policy when you turn 65.
37:06
It cannot deny you. Oh, interesting. So if you
37:10
have really complex healthcare needs and you have
37:14
the monthly ability to pay for that supplement,
37:18
it could be a very, very strong way to do your
37:21
Medicare plan. The other piece is that you have no network.
37:25
Like, you have to stick within these doctors. You can go
37:29
anywhere that Medicare is accepted, which is nationwide.
37:34
With Medigap or the Medicap. You can do that
37:38
with Medigap or supplement plans. Yes, those
37:42
specifically because you're still with original Medicare.
37:46
You have no required network.
37:50
People that travel, people that get out of town,
37:54
that's a really important, important piece for them. And so they like
37:58
that. Yeah. So
38:02
I want to recap a little bit because I, I know you talk about this
38:05
every day, but I'm processing it and, and maybe people are too.
38:09
So basically, you would want to get part A, part B, part
38:12
C and. Part D. So
38:16
it. Part C is not required.
38:20
Okay. Part D is. But
38:23
yes, once you turn 65, if you don't have creditable
38:27
coverage from an employer, you want to sign up pretty much as
38:31
soon as possible. Because if you don't have
38:35
prescription drug coverage, you can get fined
38:39
later in life when you finally do sign up because you did it
38:43
too late. There's. It's called a late
38:46
enrollment penalty. And there are prescription
38:50
drug plans that cost nothing out of pocket, no
38:53
extra money. And so it makes complete sense where
38:57
even if you have super basic healthcare needs, you don't think you need
39:01
it. Like I'll just sign up in a few years when it's more important.
39:05
Don't do that. Okay, so part, part D can
39:09
be a zero cost. Exactly. Okay.
39:13
All right. It does depend on your market. So you know, I can't
39:16
guarantee in, in every single place, but most
39:20
places have a zero dollar plan. Okay, so can you
39:24
go through again and just tell us kind of the expected cost
39:27
per, per part. So, so
39:31
part A is free if you've worked full time
39:35
for 10 years or if you put in 40 hours
39:39
or 40 quarters. Sorry. Of payments into your Social Security.
39:43
Okay. Or if you're, if you're like a stay
39:47
at home spouse and your partner did that, that qualifies. Like
39:51
because you filed jointly or whatever, it qualifies you.
39:55
So are there exceptions on that? What I'm wondering about is like
39:58
you had a spouse who did that, but you get remarried too early. I've heard
40:01
that can cut it and not make it happen. Or if you're
40:05
working past 65 or what are their, are there like
40:09
devil in the detail stuff? There are some exceptional
40:13
circumstances that can make part A not free.
40:17
And there's a lot of people who
40:21
had to take early SSI or you know, but they
40:25
didn't quite qualify for disability. And so their part
40:28
A isn't paid for. And I looked it up for one
40:32
gentleman just about a week ago and his would have been
40:36
$253 a month. And he's like, I don't
40:39
want that. I said, you know, you don't need it
40:44
because he has, he just has prescription drug coverage.
40:48
So that's the one that's required. You don't need
40:52
part A and part B if you're in
40:55
some interesting bind. Yeah. So you have to basically get a
40:59
part D pretty much as soon as you turn 65. That's, that's the
41:03
requirement. And the other ones you can pick and choose from.
41:06
Yeah, right. Yeah. It really comes down to your specific
41:10
case. You know, the majority of people are going to want to
41:14
have A and B and D
41:18
because most people want to make sure they can go to the hospital, the doctor
41:21
and pick up prescriptions, right? Yeah. So A is
41:25
hospital and that's generally free. B is the Doctor and
41:29
that's $185 a month. Yeah. And
41:33
then D is prescription drugs and that's generally free. And then part
41:36
C, what is what, that's the supplemental for what isn't
41:40
covered at a hospital or that that's
41:44
for the 20% that's not covered. Right. So part
41:47
C is different from a supplement plan we've got. That's
41:51
like the delineating factor here. Okay, so the supplement, supplement plan,
41:55
those are over here. This is Medigap,
41:59
Medicare supplements, things like that, that covers the
42:02
20%. Okay. If you join part C over here,
42:06
what part C does is it actually combines
42:10
A, B and D all together
42:14
into one plan. And that's called a Medicare
42:18
Advantage plan with prescription drug coverage.
42:22
And so that, that does come down to a county by
42:26
county basis. Every county will have its own
42:30
Medicare Advantage plans. A lot of them will look very similar to
42:33
the county next to them. But if you're in a very rural spot,
42:37
they might not even be available. If you drive 100 miles
42:41
outside of Reno, where we live, there's not going to be
42:45
any Medicare Advantage plans offered. You have to be on
42:49
a supplement. They just don't have big enough
42:52
populations to support that type of coverage.
42:55
Okay, if you, if you've ever heard of a PPO or an
42:59
HMO health insurance, that's
43:02
how Medicare Advantage plans work. So they're a
43:06
managed care organization. You know,
43:10
they're the big names in insurance. If you ever
43:14
you think of a health care insurance company, they probably do
43:18
Medicare as well. And they'll have a
43:21
specific network of doctors, hospitals and
43:25
specialists that they will work in.
43:30
For a lot of people, this is going to be
43:33
the route that they take. It's about 60%,
43:36
50 to 60% of Americans are on
43:40
Advantage plans. And the reason is, is that
43:44
they for the most part have no additional out
43:47
of pocket cost above your part B premium.
43:51
So most of them are built around a zero dollar monthly
43:55
premium. They cover your prescription drugs with
43:58
some small co pays. They have a fixed
44:02
maximum out of pocket cost that you can build into your budget
44:06
in an emergency type of situation. And then
44:10
they have set co pays for all of your visits to the
44:13
doctor, you know, routine stuff.
44:18
And then they also provide or can provide
44:22
supplemental benefits like dental, hearing, vision
44:26
or other things like a lot of people hear
44:30
about Flex cards, those are always associated with
44:33
Advantage plans or part. C. Okay, what's a flex
44:37
card? Oh, that's a good question. Thanks.
44:43
Flex cards, as most people refer them to,
44:47
are usually over the counter spending cards.
44:51
And each individual company will determine what
44:55
you can and can't use them for. But what
44:58
they'll do is they'll load up a certain amount of money on
45:02
it looks like a Visa debit card or something like that.
45:06
And they'll give you that on a monthly basis or quarterly,
45:10
depending on how the company works, to go to the store
45:14
and buy over the counter supplies. Some of them let you buy
45:17
groceries like healthy foods. Some of them allow you to
45:21
use it to pay for power like utilities or
45:25
even gas at the pump. There's quite a variety,
45:28
but each company has, you know, different restrictions and
45:32
how they work. And so that, that's part of the Medicare
45:36
Advantage plan for some. Some things. All right,
45:39
so I am curious. I know you have stories about people
45:43
who've bought a Medicare Advantage plan from someone who maybe
45:47
doesn't know their area and that hasn't worked out for them. Why might that be?
45:51
Yeah, so every Medicare Advantage plan
45:55
has networks that they work in.
45:59
Just this week, I met with a gentleman who had been
46:03
sold an Advantage plan that he did not know
46:06
he could not go to the preferred hospital or his preferred
46:11
doctor that he's been going to for years. They just said, oh,
46:15
yeah, this, you know, this is the greatest thing since sliced bread. And he's
46:18
like, sounds good. He didn't even think to ask or
46:22
know that he should ask about networks.
46:26
Okay, so that's a big piece of it. The other
46:30
piece is that networks can change. In
46:34
July. Yeah, July, I helped a couple who had been with
46:38
one insurance company for many years, and they.
46:42
That insurance company lost a major contract with one of
46:46
the largest cancer centers in Northern Nevada. This
46:49
happened back in April of this year. And the husband
46:53
is going through treatment. He had to leave his network
46:57
provider, go to a different place, wasn't having
47:01
the type of service that he really wanted. And so
47:05
when they found out that there was a
47:08
different organization that could still visit that original
47:12
cancer center he likes so much, they were
47:16
obviously overjoyed that I would be able to help them make that switch.
47:20
Yeah, I can imagine that's. Yeah. Making a mistake with this can.
47:24
Can be devastating, which is part of the reason why I wanted to have you
47:28
on, because I do think people get. They just don't know
47:32
who to ask the questions to. And they don't know if they're going to be
47:35
sold a bill of goods that. That isn't true. So I
47:38
certainly, by doing this, would like to have everyone and, and also
47:42
I've seen, you know, my mom and aunts and stuff
47:45
really kind of like get. And uncles and stuff like that that
47:49
are in that boomer age get frustrated and, and
47:53
concerned that they're making a bad decision or what which decision should I
47:57
make? And that's like, because you know, then you're relying on
48:00
someone that you want to have a very honest person in front of you like
48:04
yourself, which is why I wanted to have you on to just, to, to just
48:08
talk through it and you know, this is an. Explain it all
48:11
accurately. Yeah. And kind of with what the expectations
48:15
should be. Yeah. So there's a big piece there that
48:19
you touched on. And I think it's really important
48:24
to be working with someone like, like myself who's
48:28
a broker with a lot of
48:31
moral integrity and here's why. There's a
48:35
lot of telemarketers that are brokers, but they may
48:39
only contract with three or four
48:42
different nationwide organizations and they don't
48:46
even know what is happening in your market.
48:50
And so if you live in central Texas or
48:53
southeast Florida and you're getting a call from one of these
48:57
telemarketers and they say, oh well, I've got better benefits for you
49:00
on this plan. Get you to switch and you find out that like
49:04
you said, it's not the bill of gold goods you were sold.
49:09
It's really important to, you know, just find out someone
49:13
who's either willing to do the research for you. Right. If
49:16
they don't live in your area or somebody who knows your area
49:20
like the back of your, their hand. Yeah. My services,
49:25
a broker does not cost anything extra out of your pocket.
49:29
We're compensated by the insurance companies that we work for and our
49:33
compensation is set at a federal level. So one
49:36
insurance company can't incentivize me over another. I
49:40
want to do what's best for my client because it helps with retention
49:44
and that long term relationship that I'm looking to build with
49:48
the people that I serve. And so if you find somebody like
49:51
myself who has that type of integrity and, and wants to
49:55
do the research, they're going to ask you the right questions.
49:59
Yeah. And that's a big way you can find out are they asking you
50:02
questions or are they just selling you benefits?
50:06
Yeah. Can you explain? I think a lot of people probably do know the difference
50:10
between a captive agent and a broker. But can you explain that?
50:14
Yeah. Yeah. So a captive agent would be somebody
50:17
that works directly for a single insurance company.
50:22
There are some captive agents that work for
50:26
an organization that may contract to two or maybe
50:30
three. They're not really a broker because they don't have access
50:34
outside of their system. They're like captive to an agency
50:38
even though the agency brokers but that the
50:42
captivity keeps them from even being able to
50:45
explain what the competition could be doing,
50:49
how they may be able to be better served from a different
50:52
organization. And what they're going to
50:56
focus on is their benefits, whether they're
51:00
greater or their cost is less. They're going to try to sell you
51:03
on something like that rather than making
51:07
sure that the solution you choose fits your needs
51:10
best. Right. So if you do choose to work with a captive
51:14
agent for some reason or talk to one, probably the best idea would be to
51:18
get more than one person to talk to. So
51:22
here come have more than one person to talk to. But yeah, I
51:25
do like the broker in general and insurance for that
51:29
reason, because you have the, the ability to go to different
51:32
insurance companies and, and
51:36
just pick and choose what's best for the client. I have generally really
51:40
preferred that myself. So that is.
51:44
Yeah. And I think a lot of people are intimidated. Um,
51:47
you know, I've had people just talked to somebody this morning and, and I
51:51
was telling her, hey, have your friend give me a call and
51:55
I'll walk her through a couple, you know, different questions and make sure
51:58
that whatever, even if she doesn't choose to work with me, the plan
52:02
that she picks is the best one for her. And she
52:06
said, well, what does that cost? What, what are you going to charge her? I
52:09
said, nothing. I'm just out here to do the right thing.
52:13
And, you know, that's not how compensation works in,
52:18
in our field. That's interesting because I wouldn't even
52:22
have thought to that. That would be something people would be confused about. But of
52:25
course, if you don't know, you don't know. So there's not a cost to have
52:29
you come talk to you. You get paid basically by the
52:32
government or the insurance. The insurance companies, you know. Yes, the government
52:36
pays the insurance companies to pay you. So. Yes. Yeah. Big, big thing
52:40
that we have to say. We are not federal employees. I do not
52:43
work for Medicare. Yeah. Oh, yeah.
52:47
Because it is interesting. It is, it is like that. Maybe people don't know that
52:50
either. So the government contracts with the insurance
52:54
companies. Correct. And then the insurance companies deliver the
52:58
insurance. Yes. So that the government isn't in the
53:01
business necessarily of insurance. They are in the business of paying insurance
53:05
companies to make it happen. Is that accurate? That's.
53:09
Yeah, that's accurate. When it comes to part C.
53:12
Okay. Right. If you are on original Medicare with a
53:16
supplement, the federal government pays the
53:19
doctor directly through
53:23
the Medicare billing, you know, portal
53:27
or whatever, however they do that. Right. Okay. And then
53:31
what's left over, you turn over to your Supplement company
53:34
and they pay the leftover. Okay.
53:38
So I appreciate you if I'm confused about that.
53:42
I imagine maybe someone else is, because, you know, I'm really so. No,
53:45
I'm just kidding. Yeah, that's. That's good to know.
53:49
So, A, again, is the hospital and the government
53:53
would directly pay that bill. And then B, is the doctor, and the government would
53:56
directly pay that bill with Medicare supplement.
54:00
Medicare Advantage plan or supplement plan plan would
54:05
tell me if I'm right. So that the part C Medicare Advantage plan
54:09
would be the government paying the insurance company who pays the claim.
54:13
Yes. Accurate. Yeah. So it. It
54:17
in. In a Advantage plan, if you're not with
54:21
original Medicare anymore, you've joined an Advantage plan,
54:25
the federal government pays them a monthly stipend
54:29
essentially for each of their members. And
54:32
so then when you go to the hospital, it's up
54:36
to that insurance company to pay that claim. And here's
54:40
one piece that it really makes me like
54:44
Advantage Plans from an outside perspective. I'm
54:47
obviously not in Medicare as a recipient or a
54:51
beneficiary, but one of the things
54:55
that I have seen, which with some of my own clients, is
54:58
that the Advantage Plan, that they are
55:02
incentivized to keep you healthy. They are more
55:05
profitable as a company if you're not going into the
55:09
hospital, you know, every other week
55:13
because your health is so poor. So they do
55:16
supplemental benefits that are there to help you
55:20
be healthy, help you be happy, taken care of.
55:25
That way you're not having to use the healthcare
55:28
system excessively. And they make, you know, they don't
55:32
make more money off of you if you, you know,
55:36
they're. If you're. Yeah, right, right. Because,
55:40
like, here's your stipend. So, like, they're. They wanted to. And isn't. Silver
55:43
sneakers. Is that Nationwide? Yeah. No.
55:47
So, like, that's an example. That is. Surprised I know
55:50
about that. That's one of those little benefits that most Advantage
55:54
plans have. A gym, free gym program
55:58
where you can go in and get your. Get your workout
56:02
on, get healthy, take classes, and you're not even
56:06
committed to just one place. You can go nationwide or just
56:09
across town to a different one if you want to try it out. Yeah.
56:13
That's awesome. I know my mom, she must be on. I don't even know. I
56:17
don't handle her insurance, but an Advantage plan because she said
56:20
that sometimes she'll get bonused, you know, a little bit of money for doing
56:24
certain activities. They'll just send her a little bit of money and
56:28
stuff. So. So that's her little flex card. And many of the
56:31
insurance companies will give you extra money on your
56:35
flex card for doing routine
56:38
preventative stuff like oh, did you get your mammogram done? Oh, did you get
56:42
your flu shot? Here's $50. You know, go
56:46
spend grocery store, have fun. Get some Oreos.
56:49
Get some Oreos. That's not, not
56:53
there's, that's not healthy. We're not, we're not.
56:57
Yeah, the, the, those little
57:01
like boosts have less
57:05
restrictions on what you can. What you can get with it.
57:08
Yeah, just do, do the thing that want you to do to stay
57:12
healthy and then you have some spending money kind of thing. Yeah, exactly.
57:16
Well, this was an enormous amount of good information. And I
57:20
know you're licensed in a few states beyond Nevada,
57:25
California, Texas and Florida. Is that correct? That's
57:28
correct. I like to say I'm coast to. Coast, coast to
57:32
coast, proud of myself, remembering. And then you know, in
57:36
any other state that you're in the, there are people to help you with
57:40
this. Exactly. And this is one thing that I, I'd
57:43
love to leave your audience with is that,
57:47
you know, ask a lot of questions, visit
57:51
with a broker, see if you like
57:55
their personality. If you think, is this person going to return your
57:58
calls when you have a question. Because we are
58:02
compensated to service our clients.
58:06
Don't be afraid to sound stupid. I
58:10
love answering those questions. And if you're trying to work with
58:13
somebody and they're not trying to be overly helpful like that,
58:17
go find someone else. There's somebody out there who wants to do an
58:20
excellent job to make sure you're taken care of the best way
58:24
possible. And if it doesn't cost you anything out
58:28
of pocket, you might as well take their services and, and
58:32
be well informed and taken care of. Yes,
58:35
for sure. That's such good advice and such
58:39
great information. So Sandra, thank you so much for coming on today
58:43
and I appreciate you as a human and I appreciate you coming on. So
58:47
yeah, this was awesome. Thank you, Mary. Yeah, you're welcome.
58:51
All right, see you everybody.
58:54
Thanks for joining us on Healthy Happy, Wise Wealthy. If you believe in
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59:21
and keep on keeping on