Insurance: Please don’t buy this!

135354-RumorsJust because someone offers a product, that’s no reason to buy it.  Some just don’t make sense, except perhaps in an alternative universe.

The newest entrant in this category is something called “Active Shooter” insurance.  These policies first appeared on the market in 2015 and are designed for business owners.

Now let’s think about this.  The US averages 51 deaths due to lightning strikes per year (source: NOAA).  It’s probably fair to assume that this averages one death per lightning event.  The most common activity among victims when hit by lightning was fishing.

Now, between 2000 and 2013, there were an average of 11.4 mass shooting events in the US each year (source FBI).  This number has risen recently, of course.  The FBI reports 20 such incidents in each of 2014 and 2015.  The number of people killed per event is greater than in the case of lightning strikes, but still, there were only 20 of these.  There were 20.9 million business in the US as of 2010 (Census), so the odds of a business incurring an active shooter event is 0.0000095694%.

The business has a much better chance of being hit by lightning.  How many businesses have lightning rods?

By the way, if you believe in Apocalypse theory, most insurance policies exclude claims due to “acts of war.”  Earlier this week, commentators on Fox endorsed the US “declaring war” on ISIS.  That recommendation would elevate ISIS to the status of a country AND eliminate some insurance protections Americans do have.  That’s why you don’t listen to Fox.

Anyway, Active Shooter insurance seems to me to be a silly way for the paranoid to waste money.  If you have money to waste, I can think of lots of better ways.

Microcephaly and Politicians

Zika has hit the US.  According to the CDC, there are now 279 pregnant women on US soil with Zika (3).  That number is likely to skyrocket this summer.  Mosquitoes will bite infected women and spread the disease to others.  Others will visit infected areas, especially with the Brazilzika2.png Olympics this summer, and return with the disease.  Sexual activity may spread the disease.

Meanwhile, the Oklahoma legislature creates a bill that removes any discretion in bringing infected babies to term.

Regardless of the intent in becoming pregnant, no one intends to bring a baby to term who will live for only 4-5 years and cost a fortune in terms of heartache and cash.  That’s not why someone becomes pregnant.

Women understand this.  The Zika outbreak is increasing demand for abortions in the countries that have been affected seriously thus far. (6)

However, because there is no lethal risk to the mother, under the Oklahoma law, a woman has no choice in bringing the baby to term.  The state will incur a mountain of costs in caring for these children, as most families cannot bear the load.

Even the Pope has expressed openness to the use of artificial contraception to deal with Zika.  (2)

Arguably, having a functioning brain should be a requirement for public office.

American writers have been quick to criticize Brazilian politicians for a slow response to the Zika outbreak.  However, as with the Michigan water crisis, this is evidence that American politicians can be just as oblivious.  The US Congress has been no better than Brazil’s in taking preventive action. (1)  The US is quite unprepared for the expected medical costs Zika will create. (5)

What actions can you take?

(a)  Adjust vacation plans.  The mosquito that carries Zika is prevalent in the US south, especially in the Gulf Coast region.

(b) Wear mosquito repellant.

(c)  If you or someone about which you care is pregnant, make sure they have access to good prenatal care and use it.  This is not a surprise you want.

(d) More controversially, lobby your local government for mosquito control measures.  That can affect other wildlife, but that may be a necessary sacrifice until this is past.  Hopefully, Zika won’t become a permanent part of our ecosystem.


Sources:

(1) Branswell, Helen.  “Congress is blocking key efforts to fight Zika, top health officials say,”  STAT News, 10 March 2016.  https://www.statnews.com/2016/03/10/zika-emergency-funding-anxiety/

(2) Burke, Dan and Cohen, Elizabeth. “Pope suggests contraceptives could be used to slow spread of Zika,” CNN.com, 16 February 2016.  http://www.cnn.com/2016/02/18/health/zika-pope-francis-contraceptives/index.html

(3) Cohen, Elizabeth.  “Number of pregnant women with Zika virus in U.S. triples, CDC says.”  CNN.  10:21 AM ET, Fri May 20, 2016.  http://www.cnn.com/2016/05/20/health/zika-cdc-numbers/index.html

(4)  “Oklahoma lawmakers OK bill criminalizing performing abortion.”  Associated Press. 19 May 2016.  http://www.msn.com/en-us/news/us/oklahoma-lawmakers-ok-bill-criminalizing-performing-abortion/ar-BBtfoqO?ocid=ansmsnnews11

(5) “Public Health Experts Warn U.S. Unprepared for Zika Outbreak,”  Insurance Journal, 13 April 2016.  http://www.insurancejournal.com/news/national/2016/04/13/404972.htm

(6) Simmons, Ann.  “Zika fears increase demand for abortions in countries where it’s illegal to have one,”  Los Angeles Times,  9 March 2016.

 

Sanity, Finances and Supplemental Insurance

Realistic thinking and an ounce of prevention can give you a happier life.  If it sounds simple, it actually is.  It’s harder to change one’s mindset than it is to take the actions that are needed.

Most Americans, and certainly older ones like me, grew up with several assumptions about how our lives would play out.

(1)  Income will increase over time.  Taking on debt now is OK, because you can pay it off with increased earnings in the future.

(2) Housing is an investment.  The value of housing will increase.  Buy as  much as you can afford now, and make money when you sell.  Take on an equity loan now, and the growth in value will enable you to sell, cover the loan and still make a profit.

(3) Kids will do better financially than their parents.  In  your old age, your kids will be able to help you if needed.

(4)  Social Security is there to cover basic expenses in retirement.

(5)  You will be able to retire and enjoy yourself in your later years.

Like the Easter Bunny, these are wonderful myths.  However, trying to live as if they were true is a quick path to what some analysts call, “money depression.”(1)  That in turn is linked to problems with relationships and health.(2)

That’s the deadly spiral:  money problems can trigger depression, which can trigger health problems, which can add to money problems.

The blind faith in the future is what enables people to spend everything they earn and dive into debt.  It’s why almost half of Americans admit they would have trouble handling even minor financial emergencies, like a $400 medical bill.(3)

The new era of “living within one’s means” requires three things:

(A) Realism about the lifestyle one can afford

(B) A realistic budget

(C) Resources to deal with “the inevitable unexpected”, so that these don’t siphon off money you need for other things.

Item (C) is where supplemental insurance fits.  No one expects to get sick or have an accident, but the average American spends over 9 years of his/her life dealing with illness or injury.(4)  No one expects to have an accident.  Most cancers in the US are now attributed to environmental rather than genetic factors.(5)  You simply cannot plan on staying well.  That’s not something you fully control.

Supplemental insurance works by providing cash to those who are hurt or ill.  The cash is paid to the insured rather than to healthcare providers, and can be used to meet health insurance deductibles and copays, as well as to pay living expenses while ill.

Supplemental insurance makes sense for most people because it is very low cost.  Policies start at less than $20 per month for individuals, and less than $40 per month for families.

Financial peace of mind means having a budget that works and knowing that you are protected to the extent possible against the “inevitable unexpected.”  Once you achieve financial peace of mind, you’ll find you have the time and energy to tackle other challenges in your life.

 


Sources:

(1) Williams, Goeff.  “7 Steps to Defeat Money Depression.”  US News.  6 Aug 2014.
Harding, Anne.  “When Money Ruins Your Mood.”  Health.com.  http://www.health.com/health/gallery/0,,20541338,00.html

(2) Crown, WH, et. al.  “The impact of treatment-resistant depression on healthcare utilization and costs. The Journal of Clinical Psychiatry

(3) Gabler, Neal.  “My Secret Shame.”  The Atlantic Monthly [may 22016: 52-63]

(4) The World Health Organization gives the health life expectancy for US citizens as 69 years, as compared to a current life expectancy of 78 years.

(5) http://www.cancer.gov/about-cancer/causes-prevention/risk/substances
http://www.cancer.org/cancer/cancercauses/

 

 

 

Boomers: Living Longer but with Poorer Health

In the past, living longer was associated with having better health in one’s older years.  A new study by researchers at the University of Southern California indicates that this relationship is no longer true.

The study analyzed the increase in life expectancy among Americans between 1970 and 2010.  In turns out that most of the increase in life expectancy is in the time that an individual suffers from a major illness or disability.

That finding links the increase in life expectancy with a dramatic increase in healthcare costs.  However, there have been no changes in government funding of Medicare or Social Security Disability to match the change in need.

Source:  http://ajph.aphapublications.org/doi/10.2105/AJPH.2016.303120