Having two health insurance plans does not mean you can choose which one pays first—or that both plans together will cover every dollar of a medical bill. Coordination-of-benefits rules determine the order: Primary insurance processes the claim first under its own deductible, network, medical-necessity, exclusion, and cost-sharing rules. Secondary insurance reviews the claim after the…
A grantor and a trustee can be the same person, but the titles describe different legal roles. The grantor—also commonly called the settlor, trustor, or trust creator—establishes the trust and contributes property to it. The trustee accepts authority over trust property and administers it under the trust document and applicable law for the beneficiaries. The…
Two companies can have the same market capitalization and still carry very different financial risk. One may hold more cash than debt. The other may be heavily leveraged. Their common shares may have the same total market value, but acquiring or comparing the operating businesses would not present the same economic picture. That is the…
The difference between wants and needs sounds obvious until you begin sorting real expenses. Housing is a need, but is every apartment a need? Food is essential, but is restaurant delivery essential? A phone may be necessary for work, safety, or family responsibilities, but the newest model usually is not. In personal finance, a need…
Coinsurance and copays are two ways a health insurance plan can divide the cost of covered care between you and the insurer. A copay, short for copayment, is generally a fixed dollar amount for a covered service. You might owe $30 for a primary-care visit or $15 for a preferred generic prescription. Coinsurance is generally…
An heir and a beneficiary can be the same person, but the terms do not mean the same thing. An heir is generally a person who may inherit from a deceased person under state intestacy law. A beneficiary is a person or entity selected to receive property through a will, trust, insurance policy, retirement account,…
Return on assets and return on equity measure a company’s profitability from different perspectives. Return on assets, or ROA, compares profit with the assets used to operate the business. It helps investors examine how efficiently the company turns its asset base into earnings. Return on equity, or ROE, compares profit with shareholders’ equity. It focuses…
An enrolled agent and a certified public accountant can both prepare tax returns and represent taxpayers before the IRS, but their credentials are built for different purposes. An enrolled agent, or EA, holds a federal credential issued by the IRS. The credential centers on federal taxation and practice before the IRS. A certified public accountant,…
Debt management and debt settlement both aim to help people struggling with unsecured debt, but they use fundamentally different methods. A debt-management plan generally organizes full repayment through a credit-counseling organization. You make one periodic payment to the organization, which distributes money to participating creditors. Creditors may agree to reduce interest rates or waive certain…