Insurance Solutions: Plan Well Live Better: A Workbook for People with Chronic Illnesses or Disabilities

194 Pages·2002·3.81 MB·English

by  Laura D. Cooper

This Page Intentionally Left Blank
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Demos Medical Publishing, Inc., 386 Park Avenue South,
New York, New York 10016
© 2002 by Demos Medical Publishing, Inc. All rights reserved. This book is protected by copy-
right. No part of it may be reproduced, stored in a retrieval system, or transmitted in any form
or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the
prior written permission of the publisher.
Library of Congress Cataloging-in-Publication Data
Cooper, Laura, 1956–
Insurance solutions, plan well—live better : a workbook for people with a chronic
disease or disability / Laura Cooper.
p. cm.
Includes bibliographical references.
ISBN 1-888799-44-7 (pbk.)
1. Insurance, Health. 2. Chronically ill—Long-term care—Finance. 3. Medical care,
Cost of. I. Title.
RA411.C665 2002
368.38′2 dc21
2001058443
Made in the United States of America
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INSURANCE SOLUTIONS,
Plan Well—Live Better: A Workbook
for People with a Chronic Disease
or Disability
LAURA D. COOPER, ESQ.
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Disclaimer
This book is not intended, nor should it in any way be construed as offering
legal or other professional advice, and neither the author nor the publisher
assumes any responsibility in this regard. This book does not deal with the
complete subjects of insurance planning, financial planning, or life planning,
which can vary from situation to situation and individual to individual. This
book is not intended, nor should it be used to serve as a complete substitute for
the advice that may be obtained from qualified professionals in the various
fields of life planning, including certified financial planners, tax advisers,
lawyers, insurance professionals, and accountants. Instead, individuals are
encouraged to seek out professional advice to help construct a thorough plan
for their unique needs, and to engage appropriate professionals to review any
plan or elements of plans they may have constructed with or without the use of
this workbook.
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Dedication
This book is dedicated to my mother, Grace B. Cooper, who was my lifeline and
remains my daily inspiration. It is also dedicated to three brave people: Brian
Harnetiaux, Leona Dater, and Dr. William Bond, all of Spokane, Washington,
without whose collective vision, dedication, assistance, and determination I
would never have been in a position to write this book.
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Acknowledgments
I would like to acknowledge the assistance of a number of people who were
critical to the development and completion of this book. Dr. Diana M. Schneider
publisher of Demos Medical Publishing, Inc., was instrumental in encouraging
me to develop this topic into a book. Both she and her editor Joan Wolk have
worked hard to produce this volume, and deserve an enormous amount of
credit for having the vision to understand its importance and for guiding me in
its craftsmanship along the way. I also wish to acknowledge the great support
and influence of Dr. Nancy Holland and Pamela Cavallo of the National
Multiple Sclerosis Society’s national office. They have struggled with these
topics on behalf of people with multiple sclerosis for decades, and have pro-
vided both insight and immeasurable amounts of support for me for the last ten
years while I have developed the knowledge base for the writing of this book.
I would also like to thank Diane Afes, a member of the staff of the National
Capital Chapter of the National Multiple Sclerosis Society, for providing the
initial inspiration about a decade ago to encourage me to develop this resource.
Here it is, finally, Diane!
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CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What the Financial Planners Didn’t Tell You . . . . . . . . . . . . . . . . . . . . . . . 1
Key Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Everybody Should Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Risk Planning Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Everybody Has A Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. It Matters Who the Underwriting Insurance Company Is . . . . . . . 4
5. It Matters When You Were Born . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. What Really Matters Is Keeping Your Own Cash . . . . . . . . . . . . . . 6
6. Your Premium Is Not Your Whole Cost of Protection . . . . . . . . . . 7
EXERCISE #1: Catalog Your Present Insurance Coverage . . . . . . . . . . . . . . . 9
Life Insurance Policy Worksheet Instructions . . . . . . . . . . . . . . . . . . . . . . 11
Life Insurance Policy Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Term Life Insurance Policy Imaged Example . . . . . . . . . . . . . . . . . . . 14
Term Life Insurance Policy Worksheet Example . . . . . . . . . . . . . . . . . 15
Disability Insurance Policy Worksheet Instructions . . . . . . . . . . . . . . . . 28
Disability Insurance Policy Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Disability Insurance Policy Imaged Example . . . . . . . . . . . . . . . . . . . 32
Indemnity Major Medical & Hospitalization Health Insurance
Worksheet Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Health Insurance Policy Worksheet: Indemnity Major Medical &
Hospitalization (Part A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Health Insurance Policy Imaged Example . . . . . . . . . . . . . . . . . . . . . . 50
Health Insurance Policy Evaluation: Indemnity Major Medical &
Hospitalization (Part B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Self-Insured Employer & HMO Plan Health Insurance
Worksheet Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Health Insurance Policy Worksheet: Self-Insured Employer
& HMO Plan (Part A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Health Insurance Policy Evaluation: Self-Insured Employer
& HMO Plan (Part B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Health Insurance Policy Worksheet: Medicare (Traditional) . . . . . . . . . . 69
Medigap Policy Federal Requirements (Summary) . . . . . . . . . . . . . . . . . 70
vii
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viii CONTENTS 䡲
Long Term Care Policy Worksheet Instructions . . . . . . . . . . . . . . . . . . . 71
Long-Term Care Policy Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Long Term Care Policy Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
EXERCISE #2: Creating the Spreadsheets . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Life Insurance Spreadsheet Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 77
Life Insurance Spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Disability Insurance Spreadsheet Instructions . . . . . . . . . . . . . . . . . . . . 81
Disability Insurance Spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Health Insurance Spreadsheet Instructions . . . . . . . . . . . . . . . . . . . . . . . 85
Health Insurance Spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Long-Term Care Insurance Spreadsheet Instructions . . . . . . . . . . . . . . . 88
Long-Term Care Spreadsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
EXERCISE #3: Evaluate and Analyze Your Insurance Needs . . . . . . . . . . . . 91
Evaluation of Insurance Coverage by Risk Category . . . . . . . . . . . . . . . 94
Analyzing Insurance Coverage Needs by Risk Category
and Evaluation Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Category 1: Income Loss Due to Chronic Illness During
Elimination Period of Disability Insurance Plan . . . . . . . . . . . . . . . . 100
Category 2: Income Loss Due to Chronic Illness During
First Five Months of Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Category 3: Income Loss Due to Chronic Illness After 6 Months
of Disability If Not Eligible for SSDI . . . . . . . . . . . . . . . . . . . . . . . . . 102
Disability Needs Estimator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Category 4: Income Loss Due to Chronic Illness After 6 Months
of Disability If Eligible for SSDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Category 5: Income Loss During Subsequent Periods If Disability
Policy Has Further Definition of Disability . . . . . . . . . . . . . . . . . . . . 105
Categories 6 and 9: Income Loss To Dependents Following Death . . 106
Comprehensive Life Insurance Estimator . . . . . . . . . . . . . . . . . . . . . . . 108
Category 7: Income Loss or Need for Additional Income Due
to Disability of Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Category 8: Income Loss Due to Unemployment of Spouse
of Person With Chronic Illness or Disability . . . . . . . . . . . . . . . . . . . 114
Category 9: Spouse Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Categories 10 & 11: Risk of Inflation During Periods
of Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Category 12: Health Expenses for Chronic Illness/Disability
After Diagnosis and During Employment . . . . . . . . . . . . . . . . . . . . . 115
Category 13: Health Expenses After Employment Ceases Due
to Disability If SSDI Eligible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Category 14: Health Expenses After Employment Ceases Due
to Disability If Not SSDI Eligible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Category 15: Health Expenses After Retirement If Social Security
Retirement Eligible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119