Financial tips for an 18 year old

Congratulations! You are finally 18! This means you can get your driver's license, vote and drink liquor (depending on the state where you reside and the type of alcohol you wish to consume!) It also means you can be legally employed and thus earn money.
Now most 18 year olds would be going to college, studying hard for assessments and completing class work.

Yeah right!

Most likely the recently turned adults would be having a good time depending on their definition about it. As I turn 31 I cannot help but wonder what I could have done differently when I was 18.

So here are some thoughts:

 Tip 1 - Get a job: Now this isn’t for those who are pursuing medicine or engineering or any other course which gives you hardly time to breathe. However if you are pursuing any course that gives you some free time during the day, then get a job. Not an internship. But a proper job that pays you money. You will not only start earning but will become comfortable operating your bank account, understand how a company works

       Tip 2 - Start investing in mutual funds: Do you know the greatest advantage that you have is the gift of time. Most individuals begin investing when they turn 28. You have a head start of 10 years. Click here to know how much you can earn by investing just Rs 500 per month for 10 years.

     

       

      Tip 3 - Get yourself a health insurance cover: This makes you truly independent. Suppose you are hospitalized because of one of your (mis)adventures your parents need not foot the bill

         

           

      Tip 4 - Start buying shares: Wouldn’t it feel great to become a co-owner of some of the biggest companies in the world at the young age of 18? Buying stocks enables you to do that. And they also pay you dividends which are tax free. Warren Buffet made his first investment at the age of 11 – something to ponder over. Be open to the idea that you might lose some money as the urge to execute short term trades for quick profits might be too strong. However train yourself to consistently buy stocks of good companies when markets are in red. Acquaint yourself with basic market terminologies and trends. Most importantly learn to figure out fair value of a share.

         

            

      Tip 5 - Create sources of passive income: Shoot videos or create a blog. And keep at it. Many of us stop writing after the initial few posts. Over a period of a decade, it will also become a source of passive income.

         

            

      Tip 6 - Network - Network is Networth: This is a cliched line but is also an axiom. And I don’t mean social network. I mean the real network. How many people do you know apart from your close friends who trust you with your expertise? Will they lend you money when you need it? Will they offer you business if you pitch to them? Will they have confidence in you to refer your services to their network? Start building your network and communicate with them. Technology and social media has made it easy to keep track of one’s special dates. Wish them on their birthdays and anniversaries. Not by writing on their Facebook Walls or sending a Whatsapp message. But call and talk.

    

      And finally, never forget to offer a tip for sincere service which makes you happy.

Philippine-American Life & General Insurance Co. (Philam Life) expects boom in health portfolio

Philippine-American Life & General Insurance Co. (Philam Life) expects its health portfolio to continue expanding on increased demand seen over the last two years since it was introduced, a top official of the insurer said yesterday.

Philam Life Chief Marketing Officer Jaime Jose M. Javier Jr., said its health products currently account for “more than a third” of all its new sales. “Our health products have gathered a lot of momentum in the last two years. In 2013, when it was launched, it was among the bottom but now, it is one of the bestsellers,” Mr. Javier said in a briefing on Tuesday.

“One-third of our new business is coming from health and the trend will continue despite the growing base. As of last count, it’s around 30%, even,” he added.

Mr. Javier noted that being healthy is among the top concerns of Filipinos, boosting demand for health-related products. “The relevance of health insurance makes it easier for consumers to relate to it,” he said.

In a bid to further expand its health-related offerings and help address growing health concerns, Philam Life launched Philam Vitality, a wellness program meant to promote a healthy lifestyle.

“We want to offer total wellness package and make insurance more than just a risk cover. It’s a one-of-a-kind product where members are rewarded for being healthy... ,” Kats P. Cajucom, Philam Life Deputy Head of Vitality said in the same briefing.

Mr. Javier said Philam Life is seeking “a few thousand” members for the first year of Philam Vitality, targeted for current policyholders.

BETTER YEAR
Moving forward, he said Philam Life may end the year with better premium income compared to 2014.

“This year can really be a good year given good investment environment and good channels. I hope [we could match last year’s] but if the stock market improves, we’ll even do better,” Mr. Javier said.

Last July, he said Philam Life is on track to surpassing its premium income last year on the back of better performance of both its agency sales and its bancassurance business.

Philam Life reported an Php18.312 billion in premium income in 2014, the third largest in the industry, although down from the previous year’s Php19.966 billion, based on its submitted annual statements to the Insurance Commission.

Philam Life’s total assets stood at P226.8 billion, net income was at Php5 billion and net worth of Php85.2 billion. It has close to 6,000 policyholders and more than 1.7 million insured group members.

-- Business World

Health insurance

Health insurance is a big big thing in the US where it is pretty much mandatory. In India, it has just begun picking up. It is important to realize that health insurance as available in India is completely different from what is available in the US.

I don't like the health insurance plans in India. The ones in US, I like even less. But my opposition to the US plans is more ideological while my opposition to plans in India is pragmatic - Indian health insurance plans do not make financial sense.

What is Insurance?

From wikipedia, "Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment". Further, "The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the case of a financial (personal) loss." (Emphasis mine).

Please note that the operative phrase is relatively small. In other words, something can be called as insurance if the premium is small as compared to the amount insured.

Typical Health Insurance Premiums

Consider insurance for Rs 5 Lakh. The premiums vary from Rs 3000-7000 (over 0-45 years) and then shoot up to Rs 40,000 by the age of 65-75. The total premium over a lifetime is over Rs 5 Lakh. But that is fine because the limit is really Rs 5 Lakh per year and not overall.

Is it really Insurance?

In no sense are the premiums relatively small as compared to the sum assured. But this makes sense. Health expenses do not vary significantly between people (unless in case of some catastrophic illness which I will cover later) so health insurance plans are really mechanism to spread your medical costs uniformly over your lifetime. This is thus really an annuity in reverse rather than insurance.

Issues

The average person should not care about the nomenclature but rather about whether the plans make financial sense or not. The problem with adding an intermediary is that it brings additional costs. Thus, it is more expensive to buy health insurance than to manage an emergency fund by oneself.

A larger issue is moral hazard - you tend to get medical (and sometimes quasi cosmetic) procedures done just because they are covered by insurance. I have seen multiple instances where people would not have done a procedure if they had to pay for it from their pockets. Since ultimately these costs come from the pockets of the insured, in effect, insurance makes people overspend on things that they would not otherwise have.

The only corresponding benefit of insurance would be that insurance funds are better placed to bargain and so costs may come down. My experience with car insurance however tells me that this effect is overshadowed by others.

When to get Health Insurance

It makes sense to get health insurance when you total net worth is very low and you have no liquid or semi liquid funds. But this is a temporary expense and should be eliminated in 2-3 years. On the other hand, catastrophic health insurance - which are for specified diseases (like cancers and heart issues) and provide 25 lakh and higher cover for a small (3,000 - 5,000 annually) are much more like insurance and should be taken.

For other cases, it is better to invest the premium in a fund and keep your other long term savings in a semi liquid form (like mutual funds or ETFs) to tide over emergencies.

Sign Up For a Medical Malpractice Insurance and Lead a Peaceful Life

Doctors and nurses can be sued in the court by any aggrieved party, on the charges of malpractices. With the help of malpractice insurance these professionals can protect themselves from any sort of harassment. Even an experienced nurse can sometimes go wrong, and if this happens, then they will be liable for a lawsuit. Therefore, all medical practitioners, be it a doctor or nurse needs to get themselves insured under this policy. To begin with, they need to choose a reliable policy.

A right policy will save them from any financial loss that they might incur due to the legal case. With this insurance, they can lead a serene life. There are hospitals that provide their staffs, especially nurses with such policies. To be on a safer side, you can purchase an individual policy, so that you have enough funds to meet this unfortunate incidence. This amount also covers for the loss of wages or income. This policy enables your employees to work as a part timer, in addition to their regular work. They can also participate in any kind of voluntary services too.

Choose the Right Policy:

At first, it is quite important to understand the terminology of medical malpractice. It happens when a nurse fails in carrying out her job, and treats a patient in a wrong way, causing harm to them. These nurses are always overburdened with responsibilities, and this might cause such accidents. No matter what the reason might be, it falls under the preview of malpractice.

Wrong medicines, incorrect recording of vital signs of the patients, and others are some of the common mistakes that are committed by nurses. No doubt they are experts, but any medical ignorance can cause serious health problem to the patients. In this case, the patient can file in a case against the nurse and claim a compensation for his loss.

Benefits of Signing up for a Policy:

It is always recommended to sign up for such a policy, as it will always protect you if something goes wrong in your profession. Some of the nurses might not feel the necessity of such a policy as they are quite efficient. They strongly believe that this policy is meant for inefficient and new nurses. However, that’s not true, anyone can make a mistake.

The fact remains that everyone needs to have this policy. Even an experienced nurse may have to face litigation charges. The legal charges are quite expensive and you might have difficulty managing them if you don’t have a policy. This insurance will easily cover your expenses and give encourage to standup against the case.

If they lose the case, the compensation amount will be too high, and without this policy you can never afford it. They may have to borrow the money from their friends or others. There have been instances where nurses had to file for bankruptcy.
Holding such a policy doesn’t mean that you can be dragged in the court for nothing. It is a misconception and it is signed for securing themselves against any liability. Unless they declare that they have a policy no one can pull them out unnecessarily for not doing their job.

Before buying any such policy covers, nurses must do enough research about the insurance providers. They must evaluate the financial capability of a company and also find out how long have they been in this business. They must also try to find out about their history, how they have protected any nurses, and how have they compensated them. Best insurance provider will try to protect your interest in every circumstance. 

Dave is a qualified writer and his write-ups on tax benefits with insurance will help you save a lot of money. His post on Missouri health insurance will be worth referring to before investing on securing your future. 

Health Insurers Profit In Last Financial Year

Over the last 16 years rebates for physiotherapists, dentists and optometrists have dropped by 20% and now cover less than 50% of health costs. Health funds’ profits from ancillary cover, however, increased to $1.1-billion in the last financial year.

In 1996, health insurance covered 57% of fees for services like optometry and dentistry but by 2011 the figure had dwindled to 49%. Physio had a 60% rebate in 1996 but has now also dropped to 49%. Insurers also benefitted from $5.15-billion in subsidies from the government and now people over 30 and those considered to be high-earners are being forced into taking healthcare policies out. Despite rebates decreasing, insurers are topping their profits on an annual basis and consumers are being forced to pay more.

Since 2000 the industry’s for-profit health funds have increased from 12.5% to 70% and premiums are worth more than the premiums that are being paid out to cover ancillary services.

While the market becomes easier for health insurers to profit from, healthcare professionals are being reminded how it is much more challenging and ethically questionable for them to carve out avenues to drive business. The role of social media in the healthcare industry has also fallen under the spotlight recently, as the Australian Health Practitioner Regulation Agency (AHPRA) leaked a consultation paper on social media policy before the date of its highly publicised pubic launch. Contributors to the #hcsmanz twitter group, and Healthcare Communications and Social Media in Australia and New Zealand have voiced their disapproval at the content of the report, stating that it focuses too much on the negative aspects of the social media phenomenon.

AHPRA’s policy was drafted in response to demand from practitioners requesting guidelines on social media conduct from national boards. Unfortunately the report, which was apparently not the final draft, was released into Twitter prior to it being signed off and made publicly available. The focus of the report, that has got the social communities up in arms, is the focus of the report on social media’s potential to transgress laws pertaining to the health practitioner code of conduct and Advertising Guidelines.

AHPRA has been accused of neglecting the positives of the social media platforms and their potential for improving service delivery and involving the wider public in matters like health policy creation, research and service development.

The National Law for advertising health services is very restrictive and AHPRA has taken a conservative interpretation in light of the advertising opportunities on offer through social media. The laws pertain to any practitioners who are registered under National Law, their employers and anyone else who provides services through a registered health practitioner. Any person who advertises a health service on a social media platform is at risk of transgressing the Advertising Law.  Health practitioners who are found guilty of contravening the law could face losing their registration.

As a guideline practitioners must ensure that any content they post does not breach their professional mandate, does not transgress any privacy and confidentiality clauses, provides information that is informed and unbiased, ensure that no unsubstantiated claims are made and does not make use of any kind of testimonial. The laws prevent healthcare professionals from taking part in the reforms by advertising themselves as offering high levels of medical care. However, healthcare companies have been able to benefit directly from the competition that was generated in the market as people vied to make a health insurance comparison, before the means testing deadline. With insurance companies boasting exorbitant profits, it appears both the consumer and the practitioner are paying higher prices and the corporates are raking in the profits.