Long term care insurance is not something a lot of us think about. However, it is beneficial for everyone to have. The cost of care for seniors in nursing homes, for assisted living facilities, or in home aids is astronomical and having insurance coverage to help can be a relief. Long term care insurance can be useful for younger people too, those faced with disabilities or recovering from accidents or injuries.

Comparing Policies

Choosing long term care insurance can be extremely difficult as it is hard to predict future scenarios regarding our health and well being. Some things to consider when choosing a policy:

• You need to first consider why you need long term care insurance and determine if you qualify for coverage.
• Understanding inflation in terms of the policies being offered and how that will effect premiums is important.
• Comparing policies for care giver benefits for in home care, nursing homes and assisted living facilities, for both private and shared rooms is crucial.
• Making a list of daily living activities and checking the items on that list with the covered items in the policy is smart. The longer the list and the fewer restrictions the better the policy.
• Calculate the premiums, including future premium increases, and determine what fits your budget.
• Check Consumer Reports and the Better Business Bureau for any complaints or for the best rated companies.
• Use the internet to compare quotes from many companies to find the best policy.
• Talk to agents to determine and narrow down the right policy for your needs.

Best Rated Companies

There are three primary companies that rate insurance companies that provide long term care policies. Those companies are A.M. Best, Moody’s, and Standard & Poor’s. Each company uses a different rating system in terms of letters or numbers, but all three use a grading system to determine the best and worst insurance providers.

At the top of the list for all three companies are John Hancock, Mass Mutual Life, Prudential Insurance Company, and MetLife. These are great companies to start your search with but you should check to see if they offer policies that fit your needs.

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Alzheimer’s disease is a debilitating and frightening disease. Knowing that someday you or one of your loved ones can lose the mental capacity to function day to day, unable to recognize loved ones, and unable to care for oneself is scary. The care for someone affected by Alzheimer’s disease, can be long term, overwhelming, and costly. From doctors visits, hospitalizations, various therapists – including speech therapists, occupational therapists, physical therapists and psychologists, the expenses can be high. Therefore, it is a good idea to think about having insurance to cover Alzheimer’s care. It is one less thing to worry about should you or a loved one be stricken with Alzheimer’s disease.

Health Insurance

There are a variety of health insurance options that cover expenses related to Alzheimer’s disease.

• Medicare – Medicare is government sponsored health care that is available for most individuals when they reach age 65. Once enrolled in a Medicare plan, individuals typically have about 80% of non-hospital related expenses paid for, and 100% of in hospital care covered. However, this is after deductibles and co-payments. If there are frequent doctors visits and/or many therapists working with the patient, this can get costly.
• Medigap – Medigap health insurance coverage is supplemental health insurance that can be purchased to go with a Medicare plan. Medigap is sold by private insurance companies and typically covers the additional costs that Medicare does not cover, including deductibles.
• Private Insurance – Most people have health insurance through their employers. Alzheimer’s related expenses are usually covered through these insurance plans. It is best to research each plan that an employer offers and chose the one that has the best coverage. Private insurance can also be purchased by those not eligible for Medicare.

Long-term Care Insurance

People with Alzheimer’s disease can live a very long time with the illness. The disease progression can be very slow. Because the disease effects brain function, if a patient is otherwise healthy, they can live a very long time in a diminished capacity. This can mean that they will need care for a number of years, perhaps in a nursing home or assisted living facility. Having insurance to help pay for this care can be a tremendous help. Most individuals wait until around retirement age to think about purchasing long-term care insurance. But it is something many people should consider at an earlier age. With early onset Alzheimer’s having this insurance coverage in place already can be very valuable.

Life Insurance

One might not think of life insurance as a way to pay for health care expenses. However, a policy that has been in effect for many years can have a significant value. Being able to draw funds from a life insurance policy to help pay for the expenses related to Alzheimer’s care is an option that can help an individual facing these expenses. While it will leave less for beneficiaries, the benefit of not leaving medical debt could far outweigh the benefit of leaving money in the policy for survivors.

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Accuquote offers a variety of different life insurance options, so depending on the safety net you would like to establish, they will have a plan to suit your needs. There are many different types of life insurance available to us, and with health care costs rising at a rapid rate, life insurance could be the saving grace you leave behind for your family.

Policy Types:

Term Life Insurance with Accuquote

There are variations of term life insurance but I will break it down into a simple version. Term life insurance is generally the cheapest but could also turn out to be the most risky. Essentially you will pick a term (number of years) you would like your policy to last for, and a death benefit. The death benefit is what you will receive if the insured dies during the term period. There is no cash value to this type of policy so if the insured does not die within the period than there is no collection. Your premiums will depend upon the term that you select as well as your age when you apply.

Permanent Life Insurance

Free Quote

Permanent life insurance is a policy structure that has no term attached. If you were to purchase a permanent life insurance policy then the insured would be able to receive the benefit no matter what year the insured were to die. Permanent life insurance is also a savings mechanism, as you pay the premiums your insurance policy will have a cash value. This cash value will appreciate throughout time as you pay your premiums. You will have the option to cash out your insurance policy at any point in time for this cash value. There is also a death benefit attached to the policy, which will be the amount the insured will receive upon death.

Accuquote Also Offers Accidental Death Insurance

Accidental death insurance is pretty much the same as it sounds, if you were to die from an accident then you could be insured up to $500,000 for as little as $11 per month through Accuquote. The plan through Accuquote also includes with no additional cost a travel accident benefit. This travel accident benefit will pay the insured 100% more if they were to die on a fare-paying bus, train, airplane or subway.

Disability Insurance

Most people are offered some type of disability insurance through their employer. The problem with the group plan of your employer is that if you change jobs, you will lose the policy. With Accuquote you can purchase a disability insurance plan that carries from employer to employer. There is also a guarantee that your premiums will not be raised above the amount shown in their policy and that your policy is renewable. Your income is essential to provide for your family, so why not protect it?

Final Expense Insurance

This insurance policy will provide your family with a previously agreed amount upon your death to pay for the burial procedures as well as other expenses upon your death. The policy will never be cancelled and has low monthly premiums dependent upon your age.

Long Term Care Insurance

Long term care insurance in today’s world is arguably the most important. People are living longer than ever and health insurance costs as well as medical attention is increasing fast. If you were to acquire some sort of long term illness in the future, this type of insurance will cover your medical bills that include services like in home care, as well as nursing home expenses. This type of coverage could be essential to leave your family with financial stability.

Conclusion on Accuquote

Accuquote offers a wide variety of insurance policies with very competitive rates. They also offer a free life insurance calculator as well as a free quote screener that will compare their prices with all of their leading competitors. Remember though all of the policies listed above all have the stipulation that the benefit will only be paid if the premiums are paid on time!

When it comes to planning for retirement, don’t pull a Homer J. Simpson “Doh!” moment and make a costly move. Unfortunately, when it comes to making key decisions for retirement, you only got one shot- so you better make it count! Don’t dismiss how much time it takes to plan a successful retirement. Some plan more on the annual family vacation that they do on retirement. Please don’t let this be you. Here are some of the more common mistakes people make when retiring and how you can avoid them.

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1. Close Your Ears

It’s not a bad idea to pick the brain of friends or colleagues that are in a similar situation.  You have to remember though that they made the best choice for them- not you. Everyone’s got an opinion about what you should do with your money nowadays. You want to make sure you hire a qualified financial planner to help you along the way. This is no time for amateur hour.

2. Pension Options

If you’re one of the few boomers to still have a pension, deciding what to do with it is the most important decision in your life.  You can take out a lifetime payment on your and your spouse’s life or you can roll the pension into an IRA.

If you’re married, the joint life payout option might be the best so your spouse will continue receiving a monthly benefit when you die. The only problem there is that the pension ends when both of your life’s do- meaning that your kids get nothing.   You also have to think about what happens to your pension if your company goes bankrupt.  You do have the PBGC insurance, but it only covers a certain amount.

3. Calling it Quits Too Soon.

Just because you’re to tell your boss what you really think about him and call it a day, it might be premature.   Do you have enough saved? Do you have your health insurance paid off?  Do you still have a lot of debt?  If so, you might want to consider a balance transfer with Discover® More® Card – $50 Cashback Bonus® or a debt consolidation loan through Lending Club.   This will get you closer on track to finally being able to retire the right way.

4. Tax Rules That Apply to You

Think you can stay on top of the tax code?  Don’t even think about it. Every financial decision has a tax consequence. Be sure to have a trusted accountant or CPA in your corner who can show you how to minimize your taxes and keep more of what you make.

5. Medicare & Social Security Pays for What?

There’s a 70% chance you’re going to need some sort of long term care.  Will your finances cover that? You have to be basically poor before the government will step in to help you.  Make sure you have done the proper planning and have secured long term care insurance, a Medicare supplement policy or have enough assets to pay your own way.  Don’t have long term care insurance yet?

Get a long term insurance quote to make sure your family is taken care of.

6. Risky Business

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Retirement encompasses many types of risk: longevity risk, interest rate risk, inflation risk, geopolitical risk, default risk, credit risk. How will you manage risk in retirement? The first step is having a financial plan.  Don’t let blind luck and pure guesswork lead you to the promise land. If you have sense of where you are and where you need to get to, you have a much greater chance of success.

Don’t let retirement be a bumpy ride.  Avoid these mistakes and enjoy the golden years!

Ahelping hand for a pressing need. With the baby boom generation maturing, numerous studies and articles have pointed out the rising need for long term care. Some state governments have directly responded to it.

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Now, many states have created partnership programs to encourage their residents to purchase LTC insurance coverage. It only makes sense: if more people opt to privately insure themselves, a state will face less of a burden and less liability when it comes to its own eldercare programs and eldercare costs.

How the partnership plans work.

Essentially, these plans provide dollar-for-dollar asset protection when you buy an LTC policy. So for every dollar the policy pays out in benefits, you get an equal dollar amount in asset protection under a state’s Medicaid spend-down regulations.

What does this mean for you? It means that you are able to retain assets you would otherwise have to spend down before you could qualify for state Medicaid benefits.

These partnership plans let you protect an amount of funds equal to the amount the policy pays out in benefits and still qualify for state Medicaid assistance (as long as you have used up all policy benefits and still require long term care).

Typically, Medicaid kicks in only when you are destitute. But with these partnership programs, you don’t have to be destitute to receive state assistance, even if your need for care outlasts your LTC policy benefits.

With these programs in place, LTC insurance seems more and more attractive. That’s important, because it has never seemed as essential as it does today.

Does your LTC policy qualify for a partnership plan?

You should find out if it does. Most LTC policies sold today do qualify for these partnership plans. A key factor is whether a policy has an age-related inflation protection benefit. In these policies, your daily or monthly LTC benefit amount is adjusted upward in response to inflation and increased cost of expenses. With these inflation-adjusted policies, your benefits typically go up each year, but your premiums may not.

There’s really not much incentive for state governments to partner with LTC policyholders whose policies aren’t inflation-adjusted. What would happen is that with each passing year, the odds would rise of the policyholder using up the whole LTC benefit and leaning on a state Medicaid program, so the state would be poised to pick up more and more of the cost of eldercare with the passage of time.

Partnership for Long-Term Care Insurance Example

Consider the State of Ohio’s Partnership for Long-Term Care Insurance, and the need it meets. In 2007, the average annual cost of a private or semi-private room in a nursing home exceeded $60,000 in Ohio, and the cost for a licensed, Medicare-certified home health aide was nearly $52,000 per year (for 50 hours of care per week).

Here’s the kind of difference the Ohio partnership plan could make for an Ohio resident. As an hypothetical example, let’s say Mr. and Mrs. Jones in Toledo have a $100,000 LTC policy. Once they use up their $100,000 policy benefit, they have to spend down their assets to $2,250 before they can get state Medicaid benefits. But if they exhaust a $100,000 partnership policy, they can potentially qualify for Medicaid coverage and still hang on to $101,500 of their assets.

In Ohio, if you bought your current LTC policy after August 12, 2002, your insurer must offer you the choice of exchanging it for a partnership-compatible policy. You have 90 days to decide if you want to do that. Ohio also offers state residents free, in-home long term care consultations.

What kind of long term care coverage do you have?

Do you have a policy that is eligible for a partnership plan? Do you have any LTC policy at all? It is wise to look into this. It may be essential for your long-range financial well-being. I urge you to speak with a qualified insurance advisor or financial professional today about long term care coverage, and these remarkably useful partnership plans.

Did you buy some annuity product earlier this decade that allowed some provision for long term care insurance too? If you did, and weren’t really sure of the benefit, next year might be the year that you do. In 2010, you will be allow to withdraw money from a certain kind of annuity without paying taxes as long as you use it to pay for qualified long-term care coverage. All baby boomers, especially those in the highest tax bracket, can thank the Pension Protection Act of 2006 for this new, fortunate development.

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1. New popularity for an obscure annuity.

In the mid-2000s, a new kind of non-qualified deferred annuity emerged, the hybrid annuity, structured to provide either a long-term care benefit or a death benefit. It was designed as a less expensive alternative to a traditional long-term care policy. So far, these hybrid annuities with long-term care riders had been little publicized, but all that is about to change. Before 2010, you could make withdrawal from these hybrid annuities without facing penalty or surrender charges, but part of the withdrawal could be subject to tax. Starting in 2010, any withdrawal from such an annuity will be income tax-free if the money goes towards qualified long-term care. So in 2010, if $100,000 you initially put into hybrid annuity with long-term care rider has grown to $250,000, you can pull the entire $250,000 without a tax hit, if that $250,000 will be used to pay for qualified long-term care coverage. You wouldn’t even pay taxes on the $150,000 gain of the annuity. If you are simply withdrawing small amounts from the hybrid annuity to help pay for long-term care, those tax-free withdrawals will be taken from the principal of the hybrid annuity and not the gain of the annuity. That is the by-law under the new tax treatment.

2. Can You exchange a tax shelter into a hybrid annuity?

You sure can. The Pension Protection Act also allows you to make a 1035 exchange into a hybrid annuity starting in 2010. So you can exchange the annuities you have now for one with a long-term care rider that would permit you to withdraw entire value of the annuity to pay qualified long-term care costs, tax-free and penalty free.  If  you are looking to do an exchange with an existing policy, be sure to make sure that the current policy doesn’t have a death benefit or income guarantee that you might be giving up.  This kind of goes without saying, too; but also make sure you don’t have a substantial surrender penalty.

3. 2010 is a time to learn more.

Could these hybrid annuities prove useful to you in paying long-term care costs? Are they suitable for your overall financial picture? You, and only you, are going to know the answer to that question. You definitely want to meet with an insurance or financial professional to take a closer look at your situation and find the potential tax break that could be offered to you.

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Many baby boomers want to leave an inheritance to their descendants when they get older. Research has shown that for some seniors, leaving an inheritance to their beneficiaries provides a senior with a sense of heritage, belonging and security.  All of which are important human needs as described in Maslow’s Hierarchy of Needs.

If we were to step into the shoes of an elderly person and be totally honest with ourselves, we might begin to understand the significance of bequeathing ones inheritance has for an elderly person.  The deep feeling of family ties of having a legacy to pass on to future generations has immeasurable importance to many individuals.  While many seniors will plan to leave an inheritance, far too many fail to take into account how the cost of their long term care may interfere with their ability to leave an inheritance.  They fall victim to what economists call “Negative Inheritance“.

What is Negative Inheritance?

Negative inheritance describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

To protect against the havoc a negative inheritance can have on a seniors financial plan, some financial planners have developed detailed strategies for hedging these family-related risks.  These methods typically include a combination of family dialogue, long term care insurance, and proactive management of the parents’ remaining assets.

Researchers long ago projected a large portion of the baby boomer generation would one day find themselves in the uncomfortable position of becoming “parents to their parents”. Many baby boomers are now becoming the primary caregivers for their elderly parents who will need to usher their parents through old age and very often, through chronic and debilitating diseases like Alzheimer’s, diabetes and cancer. This is often referred to as being stuck in the sandwich generation.

The Rising Cost of Health Care

A 65 year old couple who plans to retire in 2009 will need an estimate savings of $225,000 to cover health care costs during their retirement. This is a 4.7%  increase from last year, according to a study released by Fidelity Investments.  Last year, Fidelity said that such a couple would need an estimate savings of $215,000.  In 2002, when the study began, Fidelity said that such a couple would need an estimated savings of $160,000.  This figure has increased by an average of 5.8% annually.

The Cost of Long Term Care

In addition to the $225,000 that is needed for health care costs, the same 65 year old couple today will need $85,000 on average to cover annual premiums for long term care insurance according to a second study by Fidelity Investments.  Thus the couple would need a total of $310,000! That’s a staggering sum for any individual no matter your geographic location.  It is a little wonder, then, that many must rely on the social safety net, that is, Medicaid, to pay for their long term care.

A significant number, however, have sufficient resources and do not want to rely on Medicaid.  For those individuals, there is……

Long Term Care Insurance

Long term care insurance can be the savior for seniors looking to protect their assets and not being a financial burden on their descendants.  If you don’t have long term care insurance, you need to seriously consider it.  In the next series of posts, we’ll be looking at tip sheets on purchasing long term care insurance and things you need to consider.

Have you had to deal with a family member staying in a nursing home? Most Boomers that haven’t do not see the need to purchase Long Term Care Insurance. Most that have see Long Term Care Insurance as being one of the most important types of insurance to have. If you are Baby Boomer tha does not have Long Term Care Insurance, you need to take a serious look at it.

Research has recently indicated that 69 percent of Boomers turning 65 in 2006 can expect to use long-term care. The average stay is about 2 ½ years, or about 30 months. You think that sounds bad, it gets worse. In a study done by Genworth Financial, nursing home care in IL has gone up by 26 percent over the past 5 years. This compares to 17 percent increase nationally.

Long Term Care Cost How Much?

Say it ain’t so Joe.  Can it really cost that much?  The study also found that one year in a private nursing home in Chicago costs $72,567 and $52,362 throughout the rest of the state. Considering that the average annual household income is only around $48,000, the nursing home costs is about 1 ½ times that. Those figures aren’t expected to slow down any time soon, with nursing home costs rising faster than the rate of inflation.

2008 Cost of Care Survey:

Assisted Living: A private one-bedroom unit in an assisted living facility in the U.S. has an average annual cost of $36,090. In Chicago, the average cost is $54,089 per year. In other parts of the state, the average cost is $35,472 per year.

Home Care: Nationally, the average hourly rate for a non-Medicare certified, state licensed home health aide is $19.18, a cost that translates to $43,884 per year for 44 hours per week of care. In Chicago, the average hourly rate is $20.42, or $46,721 per year for 44 hours per week of care. Elsewhere in Illinois, the average hourly rate is $18.65, or $42,671 per year for 44 hours per week of care.

Adult Day Health Care: First year research findings indicate the average annual cost for five days a week in an adult day health care facility is $15,236 nationally. The comparable cost in Chicago is $13,156, and $15,959 throughout the rest of the state.

More good reads on Long Term Care:

Cash Money Life: Sponsor’s Free Long Term Care Insurance Guide

Good Financial Cents: Long Term Care Insurance

Tough Money Love: Time For A Serious Look At Long Term Care Insurance

Cash Money LIfe: Four Ways To Not Get Stuck in the Sandwhich Generation