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New Annuity Research is Favorable

A Growing Need For Annuity Education

A recent study found that when employees understand how annuities work, they have few objections to including them in their retirement plan, despite the widespread acceptance that they aren’t a viable tool. More than 1,000 contribution plan participants took part in the survey that was published by Prudential Financial.

“If you just add a lifetime income option and nothing else, (retirement) plan satisfaction rises,” Sri Reddy, senior vice president and head of Full Service Investments at Prudential Retirement said in a recent InsuranceNewsNet article.

Researchers found that 78% of plan participants said they were familiar with guaranteed lifetime income options and believe they play a crucial role in a retirement portfolio. Additionally, 77% of participants said they would choose an annuity option, and Millennials are the most enthusiastic about annuities.

Approximately 35,ooo defined contribution plans use in-plan annuities, but that only adds up to about 4% of all defined contribution plans, meaning many workers still don’t/can’t maximize the benefits of them.

“We know that when you have lifetime income, you achieve better outcomes,” added Reddy. While annuities are more expensive than index funds, it’s important that employees understand that they are paying for income that is guaranteed and backed by an insurance company that will pay out for as long as the employee is alive.

Many Millennials Can’t Afford Health Insurance

Health Care Bill Helping Small Businesses

Did you know that one in five adults ages 18-36 said they can’t afford routine health-care expenses? According to a recent CNBC article, many millennials are uninsured because of the cost, and those that can, barely do.  A Harris Poll recently surveyed 1,171 millennials and found that 7 in 10 consider cost to be “very important” when looking for health care.

“I would go a month or so where I had no health insurance, hoping nothing would happen,” said Paul Yeager, a 30-year-old teacher and new father. “When I knew I was [going to be] uninsured, I would stock up on my prescription by asking doctors to write me a longer script,” he added.

Despite the concern over cost, the number of uninsured millennials has declined from 23% in 2013 to 11% as of April. Many believe the health insurance requirements under the Affordable Care Act, yet many still skip, delay, or stop receiving care.

The most common health conditions facing millennials, according to the survey, are anxiety, depression and weight issues. The Obama administration has announced a new strategy to push young adults to sign up for Obamacare plans in the fall. Because they are young and typically healthy, they are crucial participants to keeping prices for those plans down.

Blue-Collar Drivers Pay More, Study Finds

Auto Insurance Rates Increase as Economy Struggles

A recent study by the Consumer Federation of America found that blue-collar drivers pay higher in premiums than their white-collar counterparts, and the difference is significant. On average, blue-collar drivers pay $681 more each year, and non-driving factors are the reason why.

According to Dave Snyder, vice president of policy for the Property Casualty Insurers Association of America, there is a good reason for the increased cost. “We’re not pricing on the basis of socio-economics,” he said. “We’re pricing on the best information we can put together on the risk of loss.”

Consumer advocate and co-author of the study, Doug Heller, disagrees. “We believe the insurance companies are making lower-income drivers subsidize higher-income drivers,” he stated.

CFA visited websites of the five biggest car insurers to conduct the study. They obtained quotes for four hypothetical drivers in 15 cities across the country. The quotes included only liability insurance at each state’s minimum limits. The quotes compared a number of factors including gender, education, occupation, and whether the driver was a homeowner or renter. The only constant between quotes was that the drivers were considered to have “good” driving records. After careful consideration, researchers concluded that blue-collar drivers pay 59% more per year for coverage than white-collar drivers.

While many disagree about the ethics of this practice, it is not an illegal practice. So what can you do to lower your car insurance costs? Regardless of your economic status, show around for quotes. Check out The, a website that gives customized premium quotes from 18 to 35 insurers per state.  Shopping around is the best way to get the best price on your car insurance.

Major Life Insurer Denies Coverage to Successful Businessman

Life Insurance Sales to Remain Flat in 2011

Life insurance provider Mutual of Omaha recently made national headlines when the media caught wind that they had denied coverage to a successful businessman. Derek Peterson, CEO of Terra Tech Corp., received a letter from one of the nation’s largest insurers that stated, “we cannot accept premium[s] from individuals or entities who are associated with the marijuana industry.” While Peterson has experienced the loss of bank accounts and difficulty in obtaining health insurance for his employees because of his industry ties, but denial of a personal insurance policy is a new complaint.

“This was to get some additional coverage for me personally, my family,” he stated in a recent US News story. “On a personal level, to have something like this happen, where I can’t get protection for my family… it just seems ridiculous and archaic at this point.”

It is not clear exactly why Mutual of Omaha denied the application, and the company isn’t being very forthcoming with their reasoning.

“It is our practice not to comment on individual underwriting decisions,” said Jim Nolan, company spokesman.

Industry experts believe that an overabundance of caution is their justification, even though 25 states have medical marijuana laws and four have regulated recreational markets. The fear lies with the risky business of accepting money from a marijuana business. It’s easier for a company to simply say ‘No, thank you’ than deal with the red-tape and headache of the situation. The gap in insurance and retirement markets for employees in the cannabis business is growing, which has actually led to the creation of companies specializing in the multibillion-dollar sector. CannaSure and Premier Dispensary Insurance are among the leaders in the niche business.

Controversial Proposal for Medicare Part D

Understanding Medicare for 2011

A recent proposal for changing Medicare reimbursement for outpatient drugs is being hailed as “ill-conceived experiment” that would limit beneficiary access to medications, according to a recent Modern Healthcare article. CMS Chief Medical Officer Dr. Patrick Conway recently defended the controversial concept to the lawmakers who oppose the idea the most. While members of the Senate Finance Committee questioned Conway on whether CMS would pull the proposal, or at least make changes, Conway continued to assure the group that they would carefully consider all comments they’ve received, especially in regards to reduced patient access.

The new proposal calls for the lowering of Medicare Part B payment to doctors, from 6 to 2.5%, in addition to a drug’s average sales price and adding a payment of $16.80 per drug per day. Opposition argues that the change could put some drugs out of reach for patients, especially out of small practices in rural areas. The change is also being criticized for not addressing the core issues surrounding the high prices of prescription drugs. In response, CMS has proposed a monitoring plan and potential exceptions to the rule.

“If we think the status quo is optimal, I think we are mistaken, and we need to test new models,” Conway said.