Health Care and Home

Getting the Loan You Want

2009-06-30T01:08:00.000-07:00

The best way to get the loan you want is to first understand what factors go into a decision to extend or deny credit to an application. The standard rule used by banks, credit unions, savings and loans, and other financial institutions is called the Five Cs:

Capacity: Will your business have the financial wherewithal to make loan payments in full and on time as required by your agreement with the bank? Will your cash flow support this additional burden of debt on your business? If the answers to these questions are no, you need to figure out how to improve revenues while tightening up on expenses. Does this before you apply for your loan, not after.

Capital: Capital represents the ratio of your company’s debt to assets or equity. Unfortunately, most business startups including home-based businesses have a relatively high debt load versus equity or assets. This is normal. You can, however, improve your chances of getting the loan you want by minimizing the debt you carry and maximizing equity and your own investment in the business.

Character. Are you personally a good credit risk? Do you have a history of meeting your own financial obligations, including repaying loans on time and avoiding default or bankruptcies? If your own credit is shaky, this is an indication to a lender that your character is less than sterling.

Collateral: What kind of property can you pledge in case you default? Car loans require your car to be pledged as collateral. Home mortgages require that your house be pledged as collateral.

Conditions: Conditions include the health and growth potential of the markets within which you operate, the demographics of the typical buyers of your products and services, and many other economic factors external to your business.

As you prepare to apply for a loan, review each of the Five Cs, and make an honest assessment of how you measure up. Are there areas you can improve in? Do so before you apply for your loan. There’s no reason why if you do your homework you can’t get the loan you want for your business.

Finding Seven Ways to Kick-Start Your Cash Flow

2009-06-29T23:53:00.000-07:00

Do you always seem to be a day late and a dollar short? Although you’re bringing in good money, it’s already spent as soon as it arrives? There are all warning signs that you have a problem with cash flow. Assuming you’re charging enough for your products and services, either you’re not collecting your money quickly enough or you’re spending too much too quickly.

Here are some ways to put your cash flow on the right track:

Get your money up front. If at all possible, ask for payment before you deliver your products or services. Have you noticed how most businesses that sell their products on the Internet require that payment be made by credit card when an order is placed? Or how fast-food restaurants want you to pay your before they hand you a bag of fries or a soda?

Don’t pay your bills any sooner than you have to. Many people feel that they should pay their bills as soon as they receive them. This is a mistake. Your cash flow will thank you if you wait to pay your bills until you’re required to do so.

Make sure your invoices are timely and accurate. Send out invoices as soon as you deliver a product or service preferably with the delivery itself. And make sure they are accurate.

Bill more often. The more often you bill your clients or customers, the more often you’ll be paid. And the more often you’re paid, the better for your cash flow.

Give prompt payment discounts. Everyone loves price discounts, and if you offer discounts to clients who pay their bills quickly, you’re sure to have many takers.

Manage your expenses. The flip side of bringing cash into your company is sending it out. The less cash you spend, the better your cash flow will be. Spend money on your company only when necessary.

Manage your accounts receivable. This means nothing more than being sure to keep track of what’s owed you and taking action to collect late payments. There are plenty of reasons why you haven’t been paid the money that is due you, however, and you’ll never find out why if you aren’t keeping track of your client’s payments.

Accounting software programs can easily generate a receivables aging report, which tells you the status on all of your payments. If payments are even a day late, take immediate action to get paid.

Finding Happiness in Positive Cash Flow

2009-06-28T09:15:00.000-07:00

For a new business especially a new, home-based business that you depend on to generate income in both your work and your personal lives generating a positive cash flow as quickly as possible after startup of the business is absolutely critical. Every new business goes through an initial period during which expenses exceed revenues.

Happiness in business truly is a positive cash flow. Seth Godin is the founder of Yoyodyne, an online direct-marketing company that he later sold to Yahoo for $30 million. As an entrepreneur who bootstrapped his business for the first few years, he notes that happiness for a business owner boils down to one simple thing: positive cashflow.

Treating Cash as King

For most home-based business people who have chosen the sole proprietorship form of business, money is used to pay not only business expenses, but also personal expenses if you’re the primary wage earner. The money from business enables you to fulfill your obligations, such as rent and car payments.
There are, however, many different forms of money available to you, including cash, checks, money orders, and credit cards and some are better than others. For most businesses, being paid in cash either before delivering a product or service, or at latest upon delivery is by far the top preference, followed by checks. Here are the different ways you can be paid, in order from the most to the least preferred:

Cash: Assuming it’s not counterfeit; being paid in cash is deal. It’s 100 percent liquid, you can spend it immediately if you like, and you can be sure it’s not going to bounce or have a one-week hold placed on it when you deposit it to your business bank account.

Checks: In many cases particularly for large payments of many thousands of dollars being paid in cash is just not practical, so using checks makes the most sense. However, checks aren’t as liquid as cash; you have to take them to the originating bank or deposit them in your bank account to be able to obtain cash.

Credit Cards: Credit cards are another step down the ladder of preference for receiving money. Credit card companies take a piece of every transaction that you give to them to process. But if a card turns out to be stolen, or if your customer decides to disputes the charge because she is unhappy with the product or service you delivered, you may be out the amount of the entire transaction.

Online payment: This includes services such as PayPal, and Western Union for customers who don’t have credit cards or who may be credit adverse.

Credit: When you sell someone a product or service and let him pay for it later, you’re extending credit to your customer. Although this practice is quite common in business, it is by far the least preferred way to be paid.

Creating positive cash flow starts with bringing cash into your business. The longer you take to convert whatever form of payment you decide to accept into cash, the more time goes by before your cash flow is positive. And don’t forget: Happiness is a positive cash flow.

Discovering most Common forms of Credit for Home-based Business

2009-06-27T06:49:00.000-07:00

Banks, credit unions, savings and loans, and other financial institutions are always coming up with new-and -improved loan products. Keep in mind, though, that you may have trouble obtaining a loan in the name of your business until it has established a track record of success over some extended period of time.

Here are some of the most common forms of credit for home-based businesses, along with their pluses and minuses:

Credit Card: Many a home-based business has been financed with credit cards. In fact, a survey showed that more than one-third of all small business owners use credit cards to at least partly finance their business operations. Not only are credit cards incredibly easy for most people to get (perhaps too easy, many people receive at least one or two credit card offers a month), but they are also convenient and easy manage.

Personal Loan: Personal loans are made to individuals based on their own personal income and creditworthiness. Assuming you have sufficient income and a good credit rating, there’s a good chance that you qualify for the loan you need. After you have your loan, you’re free to spend the money as you please, making personal loans quite flexible. If you decide to apply for a personal loan, be sure to do so while you’re working at your regular job-before you leave to start your own business.

Business Loan: Banks and other financial institutions make business loans to finance business startups, cover ongoing, operation needs, or finance business expansion. New business are inherently risky they often have little or no equity built up, usually lack a sufficiently long track record of sources, and have a statistically high rate of failure within the first few years after founding.

Line of Credit: A line of credit is a business loan with a unique twist: Instead of a lump sum for the full amount of the loan, you’re given approval to borrow funds up to a certain limit in whatever amounts or as often as you like.

Home Equity Loan: A home equity loan is similar to a personal loan, with one major difference: You’re required to pledge your home or other real property as collateral in the event that you default on your loan obligations.

SBA Loan: SBA loans are business loans that are backed by the U.S. Small Business Administration. Because the lending bank has less of a risk in the event of default, home-based business owners can obtain them more easily than a standard business loan.

So what kind of loan should you get? The answer depends on your particular situation, financial goals, how much money you plan to borrow, and your own personal credit history. Remember, however, that you should always minimize how much you borrow and be diligent about paying back your loans as soon as you can.

8 Types of Lenders who Specialize in Making Loans on Homes

2009-06-25T01:35:00.000-07:00

A first lien loan is the mortgage placed on the home before any other loans are taken out. It is usually the loan you use to buy the home and may be the largest loan on the home. The lender of a first lien loan has first claim on the home in the case of default.
There are several types of lenders who specialize in making loans on homes.
S&Ls and MSBs. These are savings and loan associations and mutual savings banks- depository institutions that offer checking and savings accounts and use the money to make loans. Most of these institutions also operate mortgage banking operations, which makes available to them a wider variety of loans they can keep sell.
Mortgage Bankers. “The mortgage bankers are the banks that specialize in real estate financing,” as clarified by Robert Irwin, author of the book Tips & Traps when Buying a Condo, Co-op, or Townhouse. These companies make loans and sell them to investors.
Mortgage Brokers. In her book, The Complete Guide to Becoming a Successful Mortgage Broker, Patricia Hughes defined mortgage brokers as “financial professionals who act as agent between borrowers looking for mortgages and the institutions that offer them,” These firms or financial professionals operate much like mortgage bankers. However, they do not use their own money to originate loans. Instead, they find the type of loan you want and originate the loan for the lender chosen.
Commercial Banks. Although banks specialize in short-term and business loans, they are becoming more active in home mortgages, particularly adjustable-rate loans.
Credit Unions. If you are a member of a credit union, you may be to get a mortgage loan from this source. Credit unions specialize in smaller, short-term loans but may offer some types of home loans.
Stockbrokers. If you have an account with a stock brokerage firm, you may be able to secure a mortgage there. Most stockbrokers, even discount brokers, offer mortgage loans.
Sellers. When buying a home, it is also possible to obtain financing from the seller, especially one who is anxious to move. The mortgage rate buyer and seller agree upon may represent a happy compromise between what the seller could earn on money in the bank and what the buyer would have to pay for borrowed funds.
Refinancing Options. If you are refinancing a first mortgage, you may want to check with the original lender first. As you consider your refinancing options, think carefully about your goals. What are you trying to do? Lower your monthly payment? Shorten the term of the loan? That’s important advice by Jason Rich, author of the book Mortgage and Refinancing.

The overwhelming predominance of mortgage loans originated has first-lien status, implying that a creditor would have first call on the proceeds of liquidation of the property if it were to be repossessed.

Shopping for the Right Loan

2009-06-24T02:11:00.000-07:00

“Your choice of lender and type of loan will influence not only your settlement costs, but also the monthly cost of your mortgage loan,” says Ralph Roberts, author of the book Mortgage Myths. The variety of mortgage options mean you can borrow the same amount of money, but with different terms, and end up paying very different amounts back. Interest rates and points may look like tiny numbers and percentages in the beginning, but they add up to real dollars later. It’s worth it to shop around. But how do you actually find the right lender and the best deal?
There are two very important reasons for putting your time and effort into shopping for the loan that is right for you. First, you avoid wasting your time and money applying for a loan that does not suit your financial situation. Second, you avoid loans with inflated interest rates and other overpriced costs.

Advertisements for mortgages are everywhere, in newspapers, on billboards, and online. Some offer very tempting rates, too. But the interest rates you see advertised often bear no relation to what you’ll actually be offered. That depends on unique factors, including:
*The type of mortgage (fixed-rate, or other).
* How risky you are as a borrower.
* The amount of your down payment. A large down payment tells the lender that you’re not like to walk away from your investment.
How many points you pay. The more points, the lower the interest rate.

On the other hand, if you buy and afterward interest rates drop even further you may have an opportunity to refinance. Refinancing is replacing your old mortgage with a new one.
Whether it is original mortgage or a refinancing, shop carefully for the best mortgage you can. A real estate broker can be helpful, but plan to spend several hours on the phone asking for rates.

Researching Mortgages Online
You can check out prevailing interest rates they change all the time in your local paper and on sites such as www.bankrate.com, www.hsh.com, and www.freeratesearch.com. If you’ve got the cash to pay points in order to lower your interest rate, use calculators such as those at www.nolo.com/calculators or www.mtgprofessor.com/calculators to see how long you’d have to stay in the house to make this upfront investment worthwhile. Finally, you can research current mortgage options yourself on sites such www.bankrate.com, www.hsh.com, and www.fanniemae.gov.
Whether to buy online is another matter. You’ll need to do a fair amount of research to understand the offerings and how they compare.

Getting Help from a Mortgage Broker
You may want to hire a mortgage broker to help you find a suitable loan. The broker can help you determine how much you can borrow, the best interest rates, and closing costs and can answers any questions along the way. According to Eric Kevin Tyson and Raymond Brown, in their book “Home Buying for Dummies,” Mortgage brokers typically tell you that they can get you the best loan deal by shopping among many lenders. They can help polish and package your application, and steer you to the few lenders that may make you a loan.

You will always be better of starting your loan shopping at a major bank, major savings and loan, or other large lender.

Using Leverage

2009-06-23T23:48:00.000-07:00

In his description, David Bach, author of the book Start Late, Finish Rich: A No-Fail Achieving Financial Freedom, “Leverage is what you use what is called “OPM,” which stands for “other people’s money.” So, anytime you use borrowed money to make an investment, you are using leverage. In the case of buying a home, you probably have little choice other than to get a mortgage loan. Very few can afford to buy a home with all cash. However, even if you did have that much cash, you might still want to borrow money to cover part of the purchase.
For one thing, you might not want to tie up large part of your cash in property. By borrowing, you can keep those funds available for emergencies or to take advantage of good investments as they appear. You are better able to spread your funds among many investments, so that you are not so dependent on the success of each one.

Finally, using leverage can improve the performance of your investment. You may not think of buying a home as an investment, but it is. First, you are investment in housing for the future. Instead of renting a home, you are renting the money to buy that home. It is true that you could lose that home if you don’t keep up the rent payments on the loan, but you don’t have to worry about losing your lease because the owner of the property changes plans.

Furthermore, your home can return a profit if it increases in value while you own it. Leverage will increase the rate of return you may realize on appreciation. For example, if you buy a home for $100,000 cash and sell it the next year for $110,000, your rate of return would be 10% on your investment. However, if you borrowed $80,000 to buy the home, the rate of return on your $20,000 down payment would be 50%.
Refinancing to take out equity keeps the maximum leverage working for you. In the example above, say you sold the home at the end of the second year for $120,000. With the original $80,000 loan, the return on your equity in the second year would be 33%. If you refinanced the loan after the first year for $90,000, your return on equity in year two would be 50%.

The other side of leverage is that it increase s your risk of loss. The more you barrow, the more pressure there is on your income to cover the payments on the loan. If you run into problems, you may have trouble making your payments. Also, if the property declines in value and you must sell, leverage acts to increase your loss. For example, if the $100,000 home is sold after a year for $90,000, you would suffer a loss of 10% of your investment. If you had used a loan of $80,000, however, you would have lost half of your equity.

In any financing or refinancing decision, you should keep in mind the effect the arrangement will have on your exposure to financial trouble.

Home Financing in the Twenty-First Century

2009-06-23T22:01:00.000-07:00

Innovations emerged in the last decade of the twentieth century that are transforming the way home mortgages are made and are promising to bring even more changes in the years ahead. These changes have benefited mortgage borrowers and homebuyers to a great extent, although there are some important tradeoffs. Most importantly, the borrower is in a position today to shop more effectively and make critical decisions based on better information. However, that borrower needs to be aware of the financing choices and sources of information available in order to get the best value. The big trends affecting the market include:

* The use of computers and electronic communications to speed loan applications.
* The development of a national market for mortgage loans and the growth of major institutions to further that development.
* The demise off inflation has reduced volatility in interest rates and encouraged lenders to extend financing to barrowers once considered too risky.

These trends are driving changes in the way people finance their homes, such as:
Where you go to get a mortgage loan: During much of the last century, most people went to specialized mortgage lending institutions such as savings and loan associations when they needed to buy a home. Today, being able to gather information on a number of lenders and loan products and choose from among them is well established in the market place. The Internet allows individuals to compare the terms of a broad array of loans. For those who need more guidance, there are real and virtual mortgage brokers and bankers to help explain the options.
What kind of loans you can get: In the 1980s, many different types of mortgage loans appeared, largely to cope with a high-inflation interest rate market. Today, almost anyone can buy s home thanks to a proliferation of loans designed for different kinds of borrowers. With very good credit, you may be able to borrow 100% of the purchase price.
How your loan is processed: In the past, waiting for loan approval was a long and nerve-racking experience for most homebuyers. In recent years, much of the loan underwriting process the procedure used to decide whether the loan should be made has been streamlined, thanks to the greater ease with which information can be accessed and transferred.
The modern mortgage market appears to develop new products whenever there is sufficient demand. When many homeowners refinanced their mortgages as interest rates were falling, lenders began offering loans with no discount points. These loans were very popular because they reduced the cost of refinancing. Now, no point mortgages dominate the market for purchases as well as refinancing.

Not every lender will offer every type of loan or even the latest technology. So, today’s mortgage barrower needs to research available options and do some comparison shopping to find the best deal. The information in this blog provides a good start toward discovering the possibilities in the marketplace.

Home Equity Loan Sources

2009-06-23T02:18:00.000-07:00

A key to finding the right loan is to consider all available sources. The emergence of home equity programs has enlarged the field of lenders. Likely lenders are among the following:

Banks. Commercial banks are attracted to home equity lines as a way to sell other bank services, such as savings accounts and credit cards. Banks have been some of the most aggressive marketers of home equity loans, offering low closing costs, special initial interest rates, and no annual fees.
Consumer Finance Companies. In their book “Barron’s Finance & Investment Handbook,” John Downes and Jordan Goodman stated that these finance companies also known as small loan or direct loan companies lend money to individuals under the small loan laws of the individual U.S. states”. These firms have long experience in making second mortgages on homes. They have also been aggressive home equity loan makers in an effort to keep borrowers who want to retain tax-deductible interest.

Savings and Loan Associations. The S&Ls have moved into home equity more cautiously. However, these loans are natural extension of their first mortgage business.
Mortgage Bankers. W. Frazier Bell in his book “How to Get Best Home loan,” explained that mortgage bankers work closely with the secondary market, using its guidelines and selling the resulting loans or securities backed by the loans. As home equity loans become more acceptable to investors and other purchasers of mortgage loans, mortgage bankers can be expected to offer more programs.
Credit Unions. These organizations should provide equity loans for the same reasons as consumer finance companies.
Securities Brokerage Firms. Stockbrokers are more than just securities salespeople. Many of the major companies offer their own line or sell programs offered by the large investment houses.
Nontraditional Lenders. A major university provides student loans backed by home equity. Some home improvements dealers also offer equity financing for these products and services.
Online Lenders. “These are usually mortgage brokers who operate over the internet,” says Robert Erwin, author of the book “Tips and Traps When Mortgage Hunting”. Many mortgage banking companies have an Internet presence, as well as their bricks-and –mortar offices, while others operate through Web sites only. Though the latter are not chartered banks, they do have to comply with all federal lending laws.

With home equity loans, you often do not have to search out sources. If you own a home and have a good credit rating, the lenders will seek you out.

Obtain a Home Equity Loan or Credit Line

2009-06-22T03:23:00.000-07:00

You’ve probably seen the ads for home-equity loans. They normally show a tanned and fit couple frolicking on the beach during their dream vacation or an all-American-looking family smiling in front of their gorgeous new van. Sometimes they show a blushing bride to be wearing an engagement ring with a diamond the size of a Volkswagen or a kid grinning ear to ear as he opens the best Christmas present of his life.
Home-equity loans and home-equity lines of credit can be very convenient. In fact, they can be lifesavers if you have unexpected expenses or expenses you just can’t cover. This type of loans is taken, as the name implies, against the equity you’ve built up in your home. Your equity is used as collateral on the loan. Always remember, though, that there’s a big risk associated with home-equity loans. If you default on the loan, you lose your home.

What is a Home Equity Loan?
A home equity loan is simply a loan keyed to the equity in your home. The equity in your home is the value of your home less the balance of the mortgage you used to purchase the home and any other debt secured by the home, such as a tax lien, judgment lien, or second mortgage.
Using the equity buildup in a home to finance purchase is an alternative to refinancing. Home equity loans are of funds for homeowners to use for a variety of financial needs, including the following:
*To finance the purchase of expensive items.
*To consolidate existing installment loans or credit card debt
*To pay medical, education, home improvement, or other expenses

Obtaining a home equity loan has advantages and disadvantages. If all of your debts are unsecured and your house is exempt from collection. It’s almost never a good idea to put your home into jeopardy by getting a second mortgage or home equity line of credit. If you’re behind on your house payment, you’ll be better off negotiating a mortgage workout with your lender.
If you decide that you do want a home equity loan a mortgage workout or for some other reason, be sure you understand all the terms before you sign on the dotted line. It is extremely important that you find out how much the loan will cost you each month and determine whether you can afford it.
Consider the following pros and cons of home equity loans and credit lines.

Advantages of Home equity Loans and Credit Lines

You can borrow a fixed amount of money and repay it in equal monthly installments for a set period of time. Or, you can borrow as you need the money, drawing against the amount granted when you opened the account: you’ll pay off this type of loan as you would a credit Card bill.
The interest you pay may be fully deductible on your income tax return.

Disadvantages of Home Equity Loans

Some home equity loans are sold by predator lenders at very high rates. Predatory lenders target people in financial trouble or with past credit problems. Often, predator lenders count on the borrower not being able to make the loan payments and expect to foreclose on the house when the borrower fails to make payments.
Teaser rates might make a home equity loan look more attractive than it is. Equity loans often have a variable interest rate that rises or falls with a particular interest rate index. But often, the rate for the first six months to three years is much lower. Once the initial period ends, the rate automatically jumps up to the regular variable rate, which can make your loan payments much higher.

Before you take out s home equity loan, be sure you can afford the monthly payment.

3 Stages for International Student Health Insurance

2009-06-21T01:14:00.000-07:00

Every country has its own distinctive arrangements for health care. All of them are complex systems, filled with bureaucracy and government regulation, designed to allocate scarce and expensive resources. But, beyond that, crucial elements differ.
Take the United States and Canadian systems. Both offer high-quality, high-technology, high-cost health care, but they pay for it very differently. In the United States, individuals pay for their own care, at least indirectly, through insurance or HMOs (health maintenance organizations). In Canada, the government pays for health insurance (which means individuals pay for it through taxes). The system doesn’t use HMOs, which are central to U.S. medical care. Because Canada’s coverage is so straightforward, their doctors have far less paperwork. Because it is a far less litigious society, their doctors don’t practice medicine with lawyers looking over their shoulders.
These differences have some impact on international students. The biggest is that students in the United States may need to choose between an HMO and health insurance. In Canada, insurance is the only option. Other than that, international students find the two systems very similar. Even Canada’s single payer health insurance has little effect, because it rarely includes international students. An article “Studying in Canada: A Guide for Foreign Students,” section on health insurance stated that provinces and territories have the option of covering international students, but they avoid it because of the cost. International students in Canada, like those in the United States, must pay for their own health insurance. It’s not cheap.

In discussing health coverage for international students, it helps to distinguish between short-term issues –the ones you face when you arrive and longer-term issues.

The first stage is preparing yourself properly before you leave your health-care system at home. You need to collect your medical records, prescription medications, and proof of vaccination and bring them with you. These records will ease the transition to your health-care provider here.

The second stage is arranging your health care here. You need to sign up for an HMO or health insurance and then find the right doctor, pharmacy, and dentist. The two stages are closely linked, of course, but they are not identical.
Medical records are important enough to take in your carry-on luggage, if there’s room. If you are already here and don’t have your records, ask your doctor at home to send you a copy.
You should also pack a couple of month’s supply of prescription medications. It might take that long before you see a doctor and have your prescription renewed or replaced. (Your prescriptions might be changed for two reasons. First, your new doctor might think there are better treatments. Second, your old medications might not be approved for use in the United States or Canada.

Finally, before you come to the United States or Canada, check on the immunizations you need. Different jurisdictions and universities have their own requirements. California, for instance, requires all university students to be immunized against mumps, measles, and rubella, and requires students under twenty-one to be immunized against hepatitis B. Washington, D.C., has a much longer list of requirements.

Why Buying Your Own Health Insurance is Better, Cheaper, Safer?

2009-06-18T10:53:00.000-07:00

Many Americans are wasting thousands of dollars a year paying for health insurance benefits that they don’t need such as pregnancy coverage when they are single.
Most Americans get health insurance from their employers and never think too much about it until they or a family member develops a serious health problem.

Annual premium in 2006 for employer sponsored group plans cost approximately $4,500 per single and $14,000 per family. Comparable individual/family traditional co-pay policies for 2006 cost less than half this amount. Even better, the newest individual/family insurance plans that qualify for a Health Savings Accounts (HSA) cost 50 percent less than these individual/family tradition co-pay plans.

If you are like most Americans, there are probably things you do not like about your employer-sponsored health insurance plan. Or you may not have insurance at all because you don’t work for a company with health benefits plan. Thanks to legislation and development in the health insurance industry, you have a good alternative to traditional employer health insurance-it called an individual policy or an individual/family policy.

If you are relatively healthy and don’t have free employer-sponsored health insurance, you will probably be able to save thousands of dollars by purchasing your own individual/family health insurance policy without your employer-just as you buy your own auto insurance. You may even get your employer to reimburse you tax-free for the monthly premium.
Further details, Suze Orman, in her book “The Road To Wealth “explained about individual/family health insurance that if you receive free health insurance from your employer, an individual policy may be safer (since you will not lose coverage if you lose your job) but it will not save money right now. However, if you pay extra to your employer to cover your spouse and children on your company plan, you may be able to save thousands of dollars now by taking them off your company plan and buying them an individual/family policy and they will be safer because their health insurance will not be at risk if you lose your job.

What is Individual/Family health Insurance?

An individual or family health insurance policy is a policy purchased from an insurance company or government entity covering a single individual or selected family members.

Unlike employer-sponsored health insurance, individual and family health insurance is real “insurance” because it guarantees protection or safety. As long as you pay the premium, your policy cannot be canceled nor the premiums increased just because you lose your job, change jobs, or have a catastrophic illness in your family.

What Happens When You Lose Your Health Insurance

2009-06-18T01:08:00.000-07:00

Once you lose your employer-sponsored health insurance, your nightmare has begun. Not only are you going to have to worry about how to pay for healthcare, you are also going to have worry about how to get good healthcare. Many medical providers refuse to schedule an appointment for people without health insurance, and those who do agree to see you will typically charge of what they would have charged you or your insurance carrier had you had health insurance.

Since the 1980s, each year between 1 and 2 million American families file personal bankruptcy. In 2004, more than 1.5 million people sought personal bankruptcy protection, according to the American Bankruptcy Institute, which expects a spike in filings over the next few months. “Before, people were somewhat concerned but in denial,” says Samuel Gerdano, executive director of the ABI. “This is the real deal”. The causes of these bankruptcies were unknown, and most people assumed credit card spending, divorce, and loss of employment to be among the major reasons. In February 2005 Harvard University released the results of its study, “Illness and Injury as Contributors to Bankruptcy.”
The study interviewed 1,771 Americans in bankruptcy courts and determined that about half were “medically bankrupt” driven to bankruptcy by medical bills not covered by health insurance. Equally surprising, the study concluded:

* Three-fourths of the medically bankrupt had health insurance at the beginning of their illness.
* The majority of the medically bankrupt owned their own homes and had attended college.
* Many people filing medical bankruptcy were middle-class workers with health insurance who were unable to pay their co-payments, deductibles, and exclusions in the employer-sponsored health insurance plan.

To protect yourself and your family, you will need to evaluate employer-sponsored health insurance and individual plans that you purchase yourself, paying particular attention to terms like annual out-of-pocket maximum which means the maximum out-of-pocket expense you could incur in a given year from coinsurance, deductibles, and exclusions.

Many employer health insurance plans have annual OOP maximums of tens of thousands or more. You can start to see why 75 percent of medically bankrupt middle and upper -middle-class Americans mistakenly think their health insurance will cover them.

Characteristics of Healthy Families

2009-06-17T23:07:00.000-07:00

In healthy families, the family is the stable source for sustenance, nurturance, growth, and development of each member. There is mutual support as members share in problem solving and decision making. There is also recognition that the family is dynamic and that each member will become part of another family system at some point in time.
Healthy families maintain flexible boundaries that support and encourage exchange between the family and the larger society. There is a defined power structure, which results from clear role definitions and appropriate rules. In healthy families, power is shared among members, within parental roles and appropriate with age. Also, there is an open communication system in which there is honest, clear, and direct communication. Finally, the healthy family is adaptable, flexible, and resilient; this allows for coping with changing demands.

The following specific characteristics or traits can be observed in healthy families

* Members interact with each other repeatedly in many contexts.
* Members are encouraged to grow and develop as individuals and members of the family.
* Members are enhanced and fulfilled by maintaining contacts with a wide range of community groups and organizations.
* Members make efforts to master their lives by becoming members of groups, finding information and options, and making decisions.
* Members support and maintain a healthy environment and lifestyle.
* Members engage in flexible role relationships, share power, respond to change, support growth and autonomy of others, and engage in decision making that affects them.
* Members support mastery of developmental tasks leading to interdependence, progressive differentiation, and transformation to meet the requisites for survival of the system.
* In their book “Assessment of Families,” Allender and Spradeley stated that members provide nurturance and resources for growth and sustenance.

Families are vital to promoting and preserving health. It is acknowledged that individuals can best be understood within the context of their family and the family can be essential in helping address individual health needs. Furthermore, the family itself may be healthy or unhealthy and may possess a number of risk factors that affect each member and the family as a whole.

Establishing a Health-Insurance Plan for Small Business

2009-06-16T08:19:00.000-07:00

When you try to enroll with a particular health-insurance plan, you may have trouble securing coverage if any employees have health problems, also known as pre-existing conditions. Try health-insurance plans that don’t discriminate some plans will sometimes take you regardless of your condition.

Shopping for a quality health-insurance plan requires patience and time to understand the myriad attributes of plans, as well as to address your needs and those of your employees. Here are some issues to consider when establishing a health-insurance plan:

1. Commitment of the insurer to its health-insurance business: Some insurance companies have their fingers in various pots- they may dabble in many lines of insurance including health insurance.

2. Comprehensive, catastrophic coverage: So-called major medical coverage pays for potentially large expenses such as hospitalization, physician, and ancillary charges. Health-insurance plans specify the maximum total benefits that they’ll pay over the course of the time that you’re insured by their plans.

3. Choice of health-care providers: Increasing number of health-insurance plans contract with specific health-care providers, which restricts your choices but helps to keeps costs down.

4. Guaranteed renewability: Only consider health-insurance plans that will keep renewing your coverage without you and your employees needing to take more physical examinations to prove your continued good health.

Selecting higher deductibles and copayments

As with other insurance policies, the more you’re willing to share in the payment of your health-insurance claims, the less you’ll have to pay in premiums. To reduce your health-insurance premiums, choose a plan with the highest deductible and copayment that you and your employees can comfortably afford.

Making sure you shop around

Most health-insurance plans are sold through insurance agents, but some are sold directly by the insurer. If a plan is sold both ways, going through an agent shouldn’t cost you any more. Start by getting plan proposals from the larger health insurers in your area. Also, check with professional or other associations that you may belong to. A competent independent insurance agent who specializes in health insurance can help find insurers willing to offer you and your employee’s coverage.

Health insurance costs have risen dramatically in the last decade or more, and the affect on your bottom line is significant.