Maryland Insurance FAQ

Maryland Health Insurance FAQ
Maryland Life Insurance FAQ

Maryland Health Insurance FAQ

What is a deductible and how does it work?
A deductible is the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses.

What is coinsurance?
Coinsurance is a cost-sharing requirement.  You are responsible for paying a certain percentage (i.e. 20%) and the insurance company will pay the remaining percentage of the covered medical expenses after your plan deductible is met.

What are co-pays?
A co-payment or co-pay is a specific flat fee you pay for each medical service, such as $30 for an office visit, after which the insurance company often pays the remainder of the covered medical charges

What's the difference between a Primary Care Physician (PCP) and a specialist?
A Primary Care Physician, or PCP, is the doctor you would go to on a regular basis, such as when you're simply not feeling well, or have an ear ache or the flu. A specialist is a doctor that your PCP might refer you to if the problem you have requires a doctor with more experience in a certain area.

What is "Out-of-Pocket-Maximum"?
This is the "worst case scenario" maximum one would have to pay from their own pocket towards medical expenses in any given year. The deductible, co-payments, and coinsurance, all make up what are called "out of pocket" expenses. Fortunately out of pocket expenses are limited to an annual "maximum" that is usually never more than a couple of thousand dollars. Once this amount is reached during any given year, all other covered expenses are paid by the insurance company at 100%.

What is a network?
A network is a list of doctors, hospitals and other providers that have contracted, or agreed, with an insurance company to do business with the insurance company. The provider's fees have been pre-negotiated, which means that the insurance company will not necessarily pay the doctor or hospital what your actual medical bills are, but will pay a lower amount.

What is a pre-existing condition?
A pre-existing condition is any health condition you have or have had prior to applying for a health insurance policy.

Can I get health insurance if I'm currently pregnant?
Unfortunately No. You certainly may obtain insurance prior becoming pregnant and if you have other children, they may be insured through us at any time.

What is HIPAA?
HIPAA stands for the Health Insurance Portability and Accountability Act. It is a law mandating that anyone belonging to a group health insurance plan must be allowed to purchase health insurance within an interval of time beginning when the previous coverage is lost regardless of current health status.

Maryland Life Insurance FAQ

Why Should I Buy Life Insurance?
One of the most important reasons to buy life insurance is to provide funds for dependents in case of death. As your family grows your need for life insurance will increase. The proceeds from a life insurance policy are generally used to replace the income lost to your family upon your death. The life insurance death benefit can also be structured to secure a loan, pay off debts, cover final and estate expenses, or provide money to a charity or organization.

How much life insurance do I need?
In general you need enough coverage to generate the cash necessary to replace your income and to pay off debts. Although there is no substitute for a careful evaluation of the amount of coverage required to meet your needs, one rule of thumb is to buy an amount of life insurance equal to five to seven times your annual gross income.

What is Term Insurance?
Term insurance provides pure life insurance protection for a specific period of time (generally 5, 10, 15, 20, or 30 years.) It pays a benefit only if you die during the specified term. While some term insurance policies can be renewed at the end of the coverage period, the premium rate will increase tremendously and may become unaffordable. Most all policies require that evidence of good health and insurability be furnished at renewal to re-qualify for the lowest available rate.

What is Permanent Life Insurance?
Permanent insurance (also called whole life or universal life insurance) is designed to stay in force for your entire life rather than just a specified term or period of time. Permanent insurance premiums are significantly higher than term premiums, but they never increase. This type of coverage also creates an incidental savings vehicle often referred to as cash value. It can be accessed during life by loan, withdrawal, or by refund should the need for coverage cease.

What type is better, Permanent Whole Life or Term Life Insurance?
Both have advantages; however the most important issue facing a person buying life insurance involves getting the necessary amount of coverage at an affordable price. The "type" of coverage remains a secondary issue. In general, term insurance provides the greatest amount coverage for the lowest initial out of pocket premium expense. Young families with limited financial resources often find term insurance to be the most affordable method for obtaining the required amount of coverage. It is also possible to structure a plan using a combination of both types of coverage; term insurance for temporary needs, and permanent insurance for long term requirements.

Do I have to take a medical exam?
Yes and No. Medical exam requirements will vary depending on the company, your age, and the amount of coverage requested. In some cases you will need to take a brief paramedical exam which includes a blood and urine sample. This service is free and can be done in your home or office, at your convenience.  It usually takes less than 20 minutes.

We do have companies that offer significant amounts of coverage with no medical exam but premiums from these carriers can be somewhat higher.

Why might it take a long time for a policy to be issued?
If you have any medical conditions an insurance company may see as questionable, they will send a request to your physician(s) for medical records and this process can take a few weeks. In addition, if you are applying for a large amount of coverage, most companies will request a copy of your driving record, send for a copy of your doctor records (whether there is any history or not) and also call you to complete a "Personal History Interview". The policy can not be issued until all requirements have been received and reviewed.

Can I name someone other than a relative as the beneficiary of my life insurance policy?
Although it is typical for an individual to name his or her spouse, child, parent, or other relative as the life insurance beneficiary, non-relatives can also be named. For instance, you can designate your estate, trust, business partner, lender, or domestic partner as beneficiary of your life insurance policy.

Check the laws in your state for specific requirements, though. A few states specify that under certain circumstances an unrelated beneficiary have an insurable interest. An insurable interest exists when one party has a financial interest in another party's life. The beneficiary of a life insurance policy must expect to suffer a financial loss if the insured dies.

I don't smoke cigarettes, but I smoke cigars occasionally. Will I have to pay smokers rates for life insurance?
Because of the increased mortality risk associated with smoking, smokers almost always pay more for life insurance than their nonsmoking counterparts. Some life insurance companies distinguish between moderate smokers (20 or fewer cigarettes per day) and heavy smokers (more than 20 cigarettes per day) and offer somewhat lower rates for those who smoke less. Rising cigar popularity raised numerous questions about how to classify cigar smokers. Unfortunately, there is not yet an industry-wide consensus on this issue.

Insurance companies will typically reevaluate your rates if you quit smoking for at least a year.

What does insurable interest mean on a life insurance policy?
If you want to buy a life insurance policy on someone else's life, you must have an interest in that person remaining alive, or expect emotional or financial loss from that person's death. This is called an insurable interest.

When you buy insurance on your own life, you are assumed to have an insurable interest. If you are buying a policy on someone else's life, an insurable interest can typically be established if you have a sufficiently strong relationship with that person based on blood, marriage, or monetary interest.

I am single. Do I need life insurance?
Single people often think they don't need life insurance, and in many cases, they are right. However, there are many factors that determine your need for life insurance; marital status is just one.

Consider this, if you died tomorrow, would there be enough ready cash to cover your funeral expenses? Would you leave behind a mortgage or other debts? If so, who would be responsible for paying? For many families, even a relatively simple funeral can create a major financial burden. For this reason alone, you might consider purchasing a small life insurance policy.

Do life insurance companies really check to see if I'm a smoker?
Because smoking is a health hazard, life insurance companies may charge you a higher premium if you smoke. Worse yet, smoking may even prevent you from obtaining life insurance coverage at all. How does an insurance company find out if you smoke and how much? In most cases, they start by simply asking you. Almost every application for life insurance contains questions about health issues, including smoking. Your responses to any smoking-related questions will play a part in a company's decision about whether to sell you life insurance and at what price.

I have a medical problem, can I get life insurance?
This depends on the type and seriousness of the problem. We work with a number of companies that specialize in providing coverage for difficult cases. By filling out a medical questionnaire we can often find a company that will offer coverage.