A Chance to Avoid the Penalties

By Jay Sedmak
SNPJ Publications Editor/Manager

I’m not going to weigh-in on the perceived advantages and disadvantages of the Affordable Care Act, which is probably better known to everyone as “Obamacare.” There are too many arguments, opinions and political rhetoric – both for and against Obamacare – for me to take into consideration before I could even anticipate commenting on such a broad (and divisive) piece of legislation. Simply put, I’m not sure what exactly is going on with Obamacare, and in all honesty, I’m really not ashamed to admit that.

But this much I do know about the Affordable Care Act: Beginning this year, the Federal government is imposing a penalty upon those who choose to remain uninsured by failing to register for health insurance coverage in 2014. And that means those who choose to opt out of health insurance coverage are subjecting their financial well-being to considerable risk. In case you weren’t aware, as was my case until a week or so ago, the deadline to comply with the terms of the Affordable Care Act is March 31 – just a week from now – before a penalty is assessed.

The penalty we’re talking about for 2014 is the greater of $95 per person ($285 maximum per family) or 1% of your yearly household income (capped at the maximum of the national average yearly premium for a “bronze” health insurance plan). And the penalty fee isn’t the biggest hit you’ll take to the wallet. Even once you’ve paid the fee, you’ll still be uninsured, which means (1.) you’ll have to pay out-of-pocket for all of your health-related expenses, and (2.) you’ll either have to enroll for health coverage next year or face paying another penalty fee for 2015, which will be even greater than the 2014 fees.

Now remember, this is health insurance we’re talking about here. There are no mandatory enrollment periods for life insurance coverage. And there are no life insurance penalties either... or are there?

While there are no government-induced penalties associated with the lack of life insurance coverage, those who choose to remain uninsured – or even underinsured – will certainly pay a penalty in the years to come. But unlike the Affordable Care Act penalties, which are levied against the individual, the penalties for doing without adequate life insurance coverage will severely affect a person’s loved ones – and to a much greater extent than $95 per person or 1% or total household income.

Life insurance can fill a number of important roles, for example:

  • paying for funeral expenses, loans or any outstanding debt
  • covering your children’s future education expenses
  • providing funds for your family to pay off a home mortgage
  • providing child care or elder care for aging parents
  • providing peace of mind for your loved ones in uncertain financial times
  • comforting your loved ones in a difficult time of loss and grief

Take your pick; they’re all good reasons to invest in a life insurance policy. Now imagine the stress and utter loss your loved ones might face without having the benefits and security of your life insurance coverage to help provide for their futures. You can’t attach a price or a percentage to a penalty like that!

I’m sure you’ve heard this before: Life insurance is for the living. Make certain you avoid leaving your loved ones with nothing but heartbreak, suffering, an insurmountable sense of loss and, perhaps worst of all, a severe penalty by failing to consider an investment in life insurance. Have some questions about life insurance? Contact the Sales Department at the SNPJ Home Office for some expert advice, then make it a point to provide your loved ones with a penalty-free future.

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