Thanks to our new partner NPC, represented by Olivier Etrillard, discover why insurance is a must have if you live in the USA
We all think about insuring our house, our car, but we think much less about protecting our own lives and that of our loved ones! Whether you’ve been living in the U.S. for a few weeks, a few months or several years, discover four types of insurance that are essential for you and your family.
Health Insurance … The Essential!
What Happens If I Get Sick Or Have An Accident?
Healthcare costs in the United States are among the most expensive in the world and are one of the leading causes of “bankruptcy” in American households. That is why the first piece of advice is to take this subject very seriously.
For your information, in Florida 27% of drivers do not have car insurance and a large percentage only take out minimum insurance (a few thousand dollars) for damage caused to others. How would you deal with the expenses of several tens, hundreds of thousands of dollars if you were in an accident? Are you contemplating a lengthy and expensive lawsuit from a driver who may be insolvent?
In Florida, 27% of drivers don’t have car insurance! (source : Insurance Information Institute – www.iii.org)
The site Helpcoster.com site gives you a very good idea of the real cost of many medical treatments.
Be careful, unlike in France, having a Social Security number does not give you any right to health care. The primary role of the Social Security Administration is the payment of retirement benefits and providing access to care for the over 65 population and the most underprivileged.
I have already taken out insurance in France!
Having a French insurance policy for expats is a default solution, often insufficient for major expenses.
It is important to take the time to understand concepts such as: Deductible, copayment, coinsurance, out of network, preexisting conditions…
Keep in mind that health care in the United States is primarily a business : Over-invoicing, pricing “errors”, unnecessary examinations are frequent, which is why a locally based insurance, knowing the system, will be much more efficient than a French solution.
I signed up for an American health insurance, but I didn’t understand everything!
It is very important to understand the details of your insurance and to have a contact person available. For example, if you already have health insurance, make sure what you have been sold is a “health insurance” plan and not an “indemnity plan”.
Indeed, the solutions may be similar but do not cover the same needs. For example, the solutions may be similar but they do not cover the same needs: The annual ceiling for an indemnity plan can be as low as $150,000 for one person… Which seems huge in France but is ridiculous low in the United States!
Deciphering a document of several dozen pages, written in technical English, is difficult but the exercise remains essential.
Otherwise, get help!
Health insurance… A criteria of the American authorities for renewing or not renewing your visa!
Finally, since March, 2020, the immigration services have been looking very closely at the quality of your health insurance. The goal: To make sure that you will not be a financial burden for the State in case of accident or illness. This is one criteria for renewing your visa.
I think I will still be covered for one year by the French social security and my “mutuelle”!
Ask the French social security because the basic rule is: “If you leave France, you must return your carte vitale”.
Thus, the French social security website Ameli states (updated 08 April 2020): As soon as you arrive in your country of expatriation, you are no longer covered by your French social security system.
Thus, it is likely that you will no longer be covered and if you are still covered, reimbursement for US care will be based on care prices in France. For example, the social security base for a general practitioner in France is 25€… But $100, $150 in the United States.
The Cleiss website provides detailed information on the subject: www.cleiss.fr
You will find information on the French social security website: www.ameli.fr and on the CFE (Caisse des Français de l’Etranger) website: www.cfe.fr.
“If you leave France, you must return your carte vitale”.
Back in France, your carte vitale may still work for an extended periods… Be careful, controls exist and the French social security can ask you to account for and reimburse sums unjustly paid.
Finally don’t forget: If you are on sick leave, you will be deprived of income for several days, months or weeks… A point to anticipate for your financial plan.
Umbrella Insurance: Protect Yourself Against Law Suit.
How will I manage if I am sued and ordered to pay several hundreds of thousands of dollars?
Lawsuits are numerous in the United States! If you are found to be at fault in an accident, you may be ordered to pay very high damages, ranging from tens to hundreds of thousands of dollars.
What is an “umbrella” policy?
When you take out a car or home insurance policy, your contact person will surely tell you about the “Umbrella Policy”. In addition to your Home Owner’s and your car insurance policies, the Umbrella Policy will participate in the compensation of victims.
The cost of an Umbrella Policy remains low compared to the protection it can bring you, up to several million dollars: $300 – $350 per million dollars in coverage (information for information purposes only).
Disability Insurance: What If I Lose My Income?
What is your plan B if you are disabled and no longer have an income?
The Covid 19 crisis has deprived millions of people of resources for several weeks. Imagine the same situation for you for several months or even years! Don’t put off taking out disability insurance!
Insurance conditions are simpler and less expensive when you are young and in good health. Saying: “I’m in great shape, I’m careful and I’ll see later” can lead to paying a lot more or simply never being insurable again.
Here are a few figures:
90% of disabilities are due to illness (1)
10% of disabilities are due to an accident (1)
one in four 20-year-olds will be considered disabled in their career before reaching retirement (2)
1 Council for Disability Awareness, 2014 Long-Term Disability Claim Review
I already have disability insurance through my employer.
Do you have disability insurance financed by your company? This is a plus, but it doesn’t mean you don’t need to check whether your coverage is sufficient and supplement it with your own solution. Indeed, these guarantees are often capped, limited in time, and easily modified by the employer. Finally, if you leave the company you lose this coverage at the time when you may need it most.
Forget about state aid!
In France, the aid paid in case of disability is insufficient to maintain your standard of living. In the United States, these benefits are practically nil and the criteria for obtaining them are particularly strict. 60% of applications are rejected and the duration of assistance is limited.
Life Insurance: Protecting Your Loved Ones And Saving.
What would my family’s situation be in the event of my death?
This subject is unavoidable if you have a family. In addition dealing with your loss of a loved one, your loved ones will face economic,family, and tax consequences.
First: A sudden and immediate halt in your income. Have you considered a solution to compensate for the loss of resources and the increase in certain expenses (childcare, higher education…)?
Secondly: Significant family consequences. Thus, in cases where minor children find themselves without parents, the American judge can decide to place them in a foster family while waiting for a definitive solution with the country of origin.
Third: Depending on your assets, the examination of an estate is to be expected in France and in the USA, which can take place over several months or years.
What solutions exist to protect my family?
Many options in the form of life insurance exist to protect your family but two formulas are frequently encountered: Term Life and Permanent Life, including very often Whole Life.
In a very simplified way, their objective is to pay a capital sum, the interest on which will be used to compensate for the loss of income of the missing person and/or to liquidate certain debts.
Term Life (term life insurance) pays a capital sum in case of death during a chosen period (10, 15, 20 years…) or until a certain age (50, 65, 70 years…). Financially accessible, it does not allow the creation of savings.
Whole Life : More expensive, it combines capital payment with the Creation of a savings element.
Warning: Life insurance in the United States is different in many ways from its French counterpart.
I have my own company, partners. What should I consider?
Do you own a business, with or without partners?
Businesses, like people, can be confronted with unexpected situations: retirement, disappearance, disability of the manager, a partner, a “key” person. Solutions exist to ensure the survival of the entity.
Their objectives: Limit conflicts, maintain the value of the company, ensure the stability of employees, and customers :
Will, Trust, Power Of Attorney: Indispensable Complements To Insurance.
They are not insurance, but they reinforce the protection of your family and complement life insurance.
It is imperative that you familiarize yourself with the concepts of having a Will, a trust, power of attorney, a living will, for your loved ones and validate the consistency of your decisions between France and the USA.
For example, the “trust”, widely used in the United States, is a device that can pose serious problems in France in terms of taxation… No need to recall the recent history of a famous french rock star estate between France and California! The rules are very different on each side of the Atlantic and if calling in specialists has a cost, it can avoid many problems.