Indexed Universal Life vs Limited Pay Whole life Insurance. Which is a better investment?

Health insurance is a crucial component of financial security, but for many Americans, coverage seems financially out of reach. The Affordable Care Act (ACA) introduced premium tax credits—commonly known as subsidies—to make health insurance more affordable for individuals and families with moderate incomes. Despite being available for over a decade, these financial assistance programs remain misunderstood by many who might benefit from them. At American Assurance, we believe everyone deserves access to quality healthcare coverage. This guide will explain how ACA subsidies work, who qualifies for assistance, and how to determine if you might be eligible for significant savings on your health insurance premiums. What Are ACA Subsidies? ACA subsidies are tax credits designed to reduce monthly premium costs for health insurance purchased through the Health Insurance Marketplace (Healthcare.gov or state-based exchanges). Unlike traditional tax credits that reduce your tax bill once a year, these premium tax credits can be applied directly to your monthly insurance premiums, lowering your out-of-pocket costs immediately. There are two main types of financial assistance available: 1. Premium Tax Credits These credits reduce your monthly premium payments for a Marketplace health insurance plan. The amount of your premium tax credit depends on: ● Your estimated household income for the year● Your household size● The cost of plans in your area● Your age  2. Cost-Sharing Reductions In addition to premium tax credits, if your income falls within certain ranges, you may also qualify for cost-sharing reductions that lower your out-of-pocket costs for deductibles, copayments, and coinsurance. These reductions are only available with Silver-level Marketplace plans. Who Qualifies for ACA Subsidies? Subsidy eligibility is primarily based on your household income relative to the Federal Poverty Level (FPL). Recent legislation has temporarily expanded eligibility, making subsidies available to more Americans than ever before. Income Requirements Currently, subsidies are available to households with incomes between 100% and 400% of the Federal Poverty Level. Additionally, recent changes have implemented a rule that no household should pay more than 8.5% of their income for a benchmark Silver plan, regardless of income level. For 2025, the income ranges for subsidy eligibility are approximately: Household Size 100% FPL (Minimum for subsidies) 400% FPL 1 person $14,580 $58,320 2 people $19,720 $78,880 3 people $24,860 $99,440 4 people $30,000 $120,000 5 people $35,140 $140,560 *Note: Alaska and Hawaii have different poverty guidelines. Other Eligibility Criteria In addition to meeting income requirements, you must: ● Live in the United States● Be a U.S. citizen, U.S. national, or lawfully present immigrant● Not be incarcerated● Not be eligible for affordable, qualifying employer-sponsored coverage● Not be eligible for Medicare, Medicaid, or CHIP (Children’s Health Insurance Program)● File taxes jointly if married (with limited exceptions) How to Estimate Your Subsidy Amount The exact amount of your premium tax credit depends on several factors, but the most significant is the relationship between your household income and the cost of the “benchmark plan” in your area. The Benchmark Plan The benchmark plan is the second-lowest-cost Silver plan available in your area. Your subsidy amount is calculated to ensure that this benchmark plan costs no more than a specific percentage of your household income (ranging from 0% to 8.5%, depending on your income level). For example: ● If your income is at 150% of the FPL, you would pay no more than 4% of your income for the benchmark plan● If your income is at 300% of the FPL, you would pay no more than 8.5% of your income for the benchmark plan● If your income is above 400% of the FPL, you would still pay no more than 8.5% of your income for the benchmark plan  Using Your Subsidy Once your subsidy amount is determined, you can apply it to any Bronze, Silver, Gold, or Platinum plan available in your Marketplace. This gives you flexibility to choose the plan that best meets your needs: ● Apply it to a Bronze plan for potentially very low or even zero premium payments (but higher out-of-pocket costs when you need care)● Apply it to the benchmark Silver plan to get the exact premium rate calculated based on your income percentage● Apply it to a Gold or Platinum plan for higher premiums but lower out-of-pocket costs when you receive care Common Misconceptions About ACA Subsidies Misconception #1: “I make too much money to qualify for subsidies.” With recent changes to subsidy rules, there is no longer a strict income cap at 400% FPL. Instead, subsidies are now available to ensure that no one pays more than 8.5% of their household income for a benchmark Silver plan. This means that even households with higher incomes may qualify if insurance costs in their area are high relative to their income. Misconception #2: “I can’t get subsidies because I’m offered insurance at work.” If your employer-sponsored insurance is considered “affordable” and provides “minimum value,” you generally won’t qualify for subsidies. However, employer coverage is only considered “affordable” if the employee’s contribution for self-only coverage doesn’t exceed 9.12% of household income. If your employer’s plan fails either the affordability or minimum value test, you may still qualify for Marketplace subsidies. Misconception #3: “I’ll have to pay back all my subsidies if my income changes.” While reconciliation does occur at tax time, there are caps on repayment amounts for most households if their income increased during the year. Additionally, if your income decreases, you may receive additional tax credits when you file your return. The best approach is to report income changes to the Marketplace throughout the year to keep your subsidy amount accurate. Misconception #4: “The application process is too complicated.” While the application does require detailed information, there are many resources available to help, including American Assurance’s licensed agents who can guide you through the entire process at no cost. Real Examples of ACA Subsidy Savings To illustrate how subsidies can dramatically reduce insurance costs, consider these examples: Example 1: Single Individual ● 35-year-old living in Charlotte, NC● Annual income: $40,000 (approximately 310% FPL)● Full-price premium for Silver plan: $450/month● After subsidy: $280/month● Annual savings: $2,040  Example 2: Family of Four ● Couple (both age 40) with two children

Selecting the right health insurance for your family is one of the most important financial decisions you’ll make. With the multitude of options available—from employer-sponsored plans to marketplace coverage—finding the plan that best protects your family while staying within your budget can feel overwhelming. At American Assurance, we’re committed to helping families navigate these complex choices with confidence. This guide outlines the essential factors to consider when evaluating health insurance plans for your family, along with practical strategies to make this important decision easier. Before comparing plans, it’s crucial to understand your family’s specific healthcare requirements. This foundation will guide all your subsequent decisions. Evaluate Your Family’s Medical Usage Patterns Start by reviewing your family’s medical history and usage over the past year: ● Regular medications: Make a list of all prescription medications your family members take regularly● Ongoing treatments: Note any chronic conditions requiring consistent care● Typical annual services: Count routine visits, specialist appointments, and preventive care● Expected life changes: Consider upcoming needs like planned surgeries, orthodontics, or family planning  For example, a family with a child who has asthma, a spouse with diabetes, and another child needing orthodontic work has very different needs than a generally healthy family with minimal medical requirements. Identify Must-Have Providers and Facilities Many families have established relationships with trusted healthcare providers. Before switching plans, determine which doctors and facilities are most important to maintain access to: ● Primary care physicians for each family member● Specialists managing chronic conditions● Preferred hospitals and urgent care centers● Therapists, counselors, or other mental health providers● Pediatric specialists or preferred pediatricians Create a priority list, as you may need to compromise if no single plan covers every preferred provider. Understanding Different Plan Types Health insurance plans come in several varieties, each with its own structure for provider networks and cost-sharing. Understanding these differences is key to finding the right fit. Common Plan Types Explained Health Maintenance Organization (HMO) ● Requires selecting a primary care physician (PCP)● Needs referrals from PCP to see specialists● Generally doesn’t cover out-of-network care except in emergencies● Typically offers lower premiums and predictable copays● Best for: Families who prefer lower premiums and don’t mind working within a defined network  Preferred Provider Organization (PPO) ● Allows direct access to specialists without referrals● Covers both in-network and out-of-network care (though at different rates)● Generally has higher premiums but more flexibility● Best for: Families who want maximum provider choice or have established relationships with multiple specialists  Exclusive Provider Organization (EPO) ● Combines elements of HMOs and PPOs● Doesn’t require referrals to see specialists● Generally doesn’t cover out-of-network care except in emergencies● Often has premiums between HMO and PPO levels● Best for: Families who want specialist access without referrals but are comfortable staying in-network  High-Deductible Health Plan (HDHP) with Health Savings Account (HSA) ● Features lower premiums with higher deductibles● Allows tax-advantaged savings through an HSA● Covers preventive care before the deductible is met● Best for: Relatively healthy families seeking tax advantages or those who can manage potential higher out-of-pocket costs  Network Considerations Provider networks vary dramatically between plans and insurers. Before selecting a plan: ● Check if your preferred providers are in-network● Evaluate the breadth of specialists available, particularly those your family might need● Consider network coverage in all areas where family members live, work, or attend school● Assess emergency care coverage, especially when traveling  Remember that the largest network isn’t always necessary—a smaller, carefully curated network might include all your needed providers while keeping premiums lower. Balancing Costs: Beyond the Premium When comparing health insurance plans, many families focus primarily on the monthly premium. While this is an important factor, it’s just one piece of the total cost equation. Key Cost Components to Compare Premium ● Your regular monthly payment● The most predictable part of your healthcare costs● Generally, lower premiums mean higher out-of-pocket costs when you receive care  Deductible ● The amount you pay before insurance begins to pay● Family plans often have both individual and family deductibles● Higher deductibles typically mean lower premiums  Copayments and Coinsurance ● Your share of costs after meeting the deductible● Copays are fixed amounts (e.g., $25 per office visit)● Coinsurance is a percentage (e.g., 20% of hospital stays)  Out-of-Pocket Maximum ● The most you’ll pay in a year for covered services● Provides financial protection against catastrophic expenses● Lower out-of-pocket maximums provide better protection but often come with higher premiums  Calculating Your Potential Total Costs To compare plans effectively, estimate your total annual costs under different scenarios: 1. Best-case scenario: Only preventive care is needed○ Annual premium total○ Cost of any preventive care not covered at 100%2. Expected scenario: Based on your typical usage○ Annual premium total○ Expected out-of-pocket costs for your family’s usual care3. Worst-case scenario: A major illness or injury occurs○ Annual premium total○ Out-of-pocket maximum (representing the most you would pay if multiple family members had significant medical needs) This approach helps identify which plan offers the best financial protection for your specific situation. Additional Benefits and Coverage Details Health plans offer various additional benefits that may be crucial for your family’s specific needs. Prescription Drug Coverage If your family takes regular medications, prescription coverage can significantly impact your overall costs: ● Check if your family’s medications are covered under each plan’s formulary● Note which tier each medication falls into (determines your cost)● Compare plans’ pharmacy networks for convenience● Consider mail-order options for maintenance medications, which often cost less  Specialized Services Depending on your family’s needs, coverage for these specialized services may be essential: ● Mental health services: Compare coverage for therapy, counseling, and psychiatric care● Maternity care: If family planning is in your future, examine prenatal, delivery, and postnatal benefits● Pediatric services: Look for well-child visits, vaccinations, and developmental screenings● Dental and vision care: Some plans include these benefits or offer affordable add-ons● Alternative treatments: Check if services like chiropractic care, acupuncture, or physical therapy are covered  Telehealth and Digital Access Modern health plans increasingly offer digital convenience features: ● Virtual visits with providers● Online appointment scheduling● Digital access to test results and medical records● Mobile apps for managing benefits and claims These features can be particularly valuable for busy families balancing work, school, and other commitments. Special Considerations for Different Family Situations Your family’s unique circumstances may influence which health insurance options make the most sense. Families with Children ● Ensure robust preventive care and immunization coverage● Look for strong pediatric

When shopping for health insurance, you’ll encounter a variety of terms that might seem confusing at first glance. Understanding these key concepts is essential to selecting the right coverage for your needs and budget. At American Assurance, we believe that educated consumers make better decisions about their healthcare coverage, which is why we’ve created this straightforward guide to help you navigate the complex world of health insurance terminology. The Three Key Cost Components of Health Insurance Health insurance costs are typically divided into three main categories: premiums, deductibles, and out-of-pocket costs. Each plays a different role in your overall healthcare expenses. Premium: Your Regular Payment Your premium is the amount you pay to your insurance company for your health coverage, typically on a monthly basis. Think of it as your subscription fee for having health insurance. Key points about premiums: ● You pay this amount regardless of whether you use medical services● Premiums are usually paid monthly, but some plans offer quarterly or annual payment options● Lower premium plans often come with higher deductibles and out-of-pocket costs● Higher premium plans typically offer more comprehensive coverage with lower additional costs  When evaluating a plan, remember that the premium is just one part of your total healthcare costs. A plan with the lowest premium isn’t necessarily the most affordable option overall if you require frequent medical care. Deductible: What You Pay First Your deductible is the amount you must pay for covered health services before your insurance begins to pay. This “reset” typically happens annually. Key points about deductibles: ● Deductibles typically range from $500 to $8,000+, depending on your plan● Family plans often have both individual and family deductibles● Preventive services are usually covered before you meet your deductible● Some plans offer additional benefits before the deductible is met  For example, if your plan has a $2,000 deductible, you’ll pay the first $2,000 of covered services out of pocket. After you’ve met your deductible, you’ll typically pay only a portion of the costs (your coinsurance or copayment) or nothing at all, depending on your specific plan. Out-of-Pocket Costs: Your Shared Burden After meeting your deductible, you’ll still have some costs to share with your insurance company. These come in two main forms: Copayments (copays): Fixed amounts you pay for specific services ● Example: $25 for a primary care visit or $50 for a specialist● Usually printed on your insurance card● Typically apply to office visits, prescription drugs, and emergency care  Coinsurance: A percentage of costs you pay after meeting your deductible ● Example: With 20% coinsurance, if a procedure costs $1,000, you pay $200● Applies to a wide range of services including hospital stays, surgeries, and diagnostic tests● Continues until you reach your out-of-pocket maximum  Out-of-Pocket Maximum: Your Financial Safety Net The out-of-pocket maximum is perhaps the most important number to understand in your health insurance plan. This is the most you’ll have to pay during a policy period (usually a year) for covered health services. Key points about out-of-pocket maximums: ● Once reached, your insurance pays 100% of covered services for the remainder of the year● For 2025, ACA-compliant plans cap individual out-of-pocket maximums at $9,750● Family plans have both individual and family out-of-pocket maximums● Premiums and non-covered services do NOT count toward this limit  The out-of-pocket maximum provides financial protection against catastrophic medical expenses, ensuring that your healthcare costs won’t exceed a certain amount each year. How These Components Work Together Let’s look at a practical example to see how these components work together: Sarah’s Health Insurance Plan: ● Monthly premium: $400● Annual deductible: $2,000● Coinsurance: 20%● Out-of-pocket maximum: $8,000  Scenario: Sarah needs a surgical procedure that costs $20,000. 1. Sarah has already paid $4,800 in premiums for the year ($400 × 12 months)2. She pays the first $2,000 of the procedure cost (her deductible)3. She then pays 20% of the remaining $18,000, which is $3,600 (her coinsurance)4. Her total out-of-pocket cost for the procedure is $5,600 ($2,000 deductible + $3,600 coinsurance)5. If Sarah needs additional care later in the year, she’ll continue paying her 20% coinsurance until her total out-of-pocket expenses reach $8,0006. After reaching her $8,000 out-of-pocket maximum, her insurance will cover 100% of additional covered services for the rest of the year Choosing the Right Balance When selecting a health insurance plan, you’re essentially deciding how to balance these different costs: ● High premium, low deductible plans are often better for people who:○ Have chronic conditions requiring regular care○ Take expensive medications○ Are planning major medical procedures○ Want more predictable monthly costs● Low premium, high deductible plans might be better for people who:○ Are generally healthy with few medical needs○ Have savings to cover potential high deductibles○ Want to minimize monthly expenses○ Are eligible for a Health Savings Account (HSA) Beyond the Basics: Other Important Terms While premiums, deductibles, and out-of-pocket costs are the fundamental components of health insurance, there are several other terms you should understand: Network: The group of providers and facilities your insurance has contracted with. Using in-network providers typically costs less than going out-of-network. Prior Authorization: Some services require your insurance company’s approval before they’ll agree to cover them. Explanation of Benefits (EOB): A statement from your insurance company explaining what was covered for a medical service and how payment was calculated. Formulary: A list of prescription drugs covered by your insurance plan, often divided into tiers with different costs. How American Assurance Can Help Navigating health insurance options doesn’t have to be overwhelming. At American Assurance, our licensed agents specialize in helping individuals and families find the right health insurance coverage for their specific needs and budget. We take the time to understand your unique situation and explain your options in simple, straightforward terms. Whether you’re looking for individual health insurance, family coverage, or Medicare plans, we can help you compare options from top-rated carriers to find the perfect balance of coverage and affordability. Ready to find health insurance that works for you? Contact American Assurance today for a free, no-obligation consultation with one of our experienced health insurance specialists. Call us or schedule a consultation online to take the first step toward better understanding your health insurance options.

For decades, retirement planning advice has centered around a simple directive: contribute to your 401(k), watch it grow, and withdraw from it in retirement. While 401(k)s and similar defined contribution plans are valuable tools, relying solely on market-based accounts creates significant risks for retirees. True retirement security comes from building multiple income streams that work together to provide reliability, growth potential, and protection from various risks. At American Assurance, we believe that a comprehensive retirement income strategy is essential for long-term financial security. This guide explores how to create reliable income streams beyond your 401(k) to ensure your retirement remains financially secure regardless of market conditions, inflation, or longevity. The Limitations of the Traditional Retirement Approach Before diving into alternative income sources, it’s important to understand why relying exclusively on traditional retirement accounts may not be sufficient: Market Volatility Risk When your retirement income depends entirely on investment performance, market downturns can be devastating, particularly if they occur early in retirement. This “sequence of returns risk” can permanently damage your portfolio’s ability to provide sustainable income. Inflation Risk Even modest inflation of 3% annually will cut your purchasing power in half over approximately 24 years. Traditional retirement accounts may not keep pace with inflation, especially if you’re taking conservative positions to reduce volatility. Longevity Risk With lifespans increasing, many retirees face the very real possibility of outliving their savings. The longer your retirement, the more challenging it becomes to make your money last using traditional withdrawal approaches. Withdrawal Rate Uncertainty The traditional “4% rule” for retirement withdrawals has been questioned in today’s low-yield environment. Many financial professionals now suggest lower sustainable withdrawal rates of 3-3.5%, which means you need a larger nest egg to generate the same income. Building a Reliable Retirement Income Framework A more secure approach to retirement income planning involves creating multiple streams of income with different characteristics. Think of these as building blocks that together form a comprehensive strategy: The Five Essential Income Pillars 1. Guaranteed Lifetime Income This foundational layer consists of income sources that continue regardless of market performance or how long you live: ● Social Security: The most common source of guaranteed lifetime income, with built-in inflation protection● Pensions: Becoming less common but extremely valuable for those who have them● Income Annuities: Purchased from insurance companies to create personal pension-like income● Qualified Longevity Annuity Contracts (QLACs): Special annuities that can provide income later in retirement Ideal allocation: 70-80% of essential expenses (housing, food, healthcare, utilities) should be covered by guaranteed income sources to create security and peace of mind. 2. Growth-Oriented Investments These investments offer the potential for increasing income and keeping pace with inflation: ● Dividend-Focused Stock Portfolios: Companies with histories of stable and growing dividends● Growth-Oriented Mutual Funds and ETFs: Provide potential for capital appreciation● Real Estate Investment Trusts (REITs): Offer potential for income and growth through real estate● Growth-Oriented Portions of Your 401(k)/IRA: Allocated for long-term growth Ideal allocation: 15-30% of your retirement portfolio, depending on your risk tolerance and time horizon. 3. Interest-Generating Investments These more conservative investments provide stability and reliable income: ● Bonds and Bond Funds: Government and high-quality corporate bonds● Certificates of Deposit (CDs): For safety with modest returns● Fixed-Income Portions of Your 401(k)/IRA: The more conservative allocations● High-Yield Savings Accounts: For emergency funds and short-term income needs Ideal allocation: 20-40% of your retirement portfolio, with the percentage increasing as you age. 4. Alternative Income Sources These diversifying income streams aren’t correlated with traditional markets: ● Rental Real Estate: Direct ownership of income-producing properties● Business Interests: Ongoing income from businesses you own or partially own● Royalties: Ongoing payments from intellectual property● Private Lending: Acting as a lender through peer-to-peer platforms or direct loans Ideal allocation: 0-15% of your retirement income strategy, depending on expertise and risk tolerance. 5. Flexible Income Options These sources provide adaptability and additional income when needed: ● Part-Time Work: Consulting, freelancing, or flexible employment● Home Equity: Tapping into home value through downsizing, home equity lines of credit, or reverse mortgages● Monetizing Hobbies: Turning passions into income sources● Deferred Benefits: Strategically timing when to activate certain benefits or income streams ● Ideal allocation: Variable based on personal preferences and needs, typically representing 5-15% of potential income. Strategies for Creating Reliable Retirement Income Now let’s explore specific strategies to implement each income pillar effectively: Maximizing Guaranteed Income Sources Social Security Optimization Social Security represents a foundation of guaranteed, inflation-adjusted income, making optimization crucial: ● Delayed Claiming Strategy: For each year you delay claiming beyond Full Retirement Age (up to age 70), benefits increase by 8%● Spousal Coordination: Married couples can coordinate claiming strategies to maximize household benefits● Survivor Benefit Planning: Ensuring the surviving spouse receives the highest possible benefit Example: James delays claiming Social Security from his Full Retirement Age of 66 to age 70, increasing his monthly benefit from $2,800 to $3,696. This not only maximizes his lifetime benefits but also ensures his wife will receive a higher survivor benefit if he predeceases her. Pension Maximization For those fortunate enough to have pension options: ● Lump Sum vs. Annuity Analysis: Determining whether to take a pension as a lump sum or lifetime income● Single Life vs. Joint and Survivor Options: Balancing higher initial income against protection for a surviving spouse● Pension Maximization with Life Insurance: Using life insurance to protect a spouse while selecting the higher single-life pension option Example: Elizabeth has a pension offering either $4,000 monthly as a single-life annuity or $3,400 monthly as a joint-and-survivor annuity with her husband. After analysis, she chooses the higher single-life option and purchases a permanent life insurance policy with a portion of the additional $600 monthly to protect her husband if she dies first. Strategic Use of Income Annuities Annuities can create guaranteed income streams to supplement Social Security and pensions: ● Single Premium Immediate Annuities (SPIAs): Convert a lump sum to immediate lifetime income● Deferred Income Annuities (DIAs): Purchase now for income starting at a future date● Qualified Longevity Annuity Contracts (QLACs): Special annuities that provide income later in life (typically 80+) while reducing required minimum distributions● Fixed Indexed Annuities with Income Riders: Provide withdrawal guarantees with some growth potential Example: Robert