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It’s not a topic anyone particularly enjoys thinking about, but life insurance can be a crucial pillar of financial protection for those who mean the most to you. It helps ensure your loved ones are better able to meet their future expenses — no matter what should happen to you.

In return for your policy premium payments, the insurer promises to pay a predetermined benefit upon your passing. Your beneficiary can use the money toward whatever financial needs they may have at that time — or in the future. Depending on the provisions of your policy, your beneficiary may receive their benefit as a single lump-sum payment, a series of installment payments or by some other means. Here are some things the payout from a life insurance policy could be applied toward:

·         Paying off the mortgage on a family home.

·         Sending your children or grandchildren to college.

·         Supporting a favorite charitable cause.

·         Paying estate taxes.

·         Covering funeral expenses.

·         Helping your spouse pay everyday bills.

·         Providing for long term care.

·         Paying off student, credit card or other debt.

·         Protecting a business.

·         Supplementing retirement income.

But you have a number of decisions to make before you purchase a policy. First, you’ll have to choose between the two basic types of life insurance: term life and permanent life.

Term life insurance provides protection for a predetermined period of time: That could be 10, 20 or 30 years, for example. If the loss occurs within the period you’re covered for, your designated beneficiaries receive the benefit. If not, no benefit is paid out. You might be interested in this type of policy for income replacement prior to retirement or to provide care for your children until they become financially self-sufficient.

And you also have two options when it comes to permanent insurance: whole life or universal life insurance — with either able to provide lifetime coverage. Permanent life generally costs significantly more than term life policies, but it also accumulates cash value that you may even be able to borrow against should the need arise.

Whole life insurance coverage is more predictable as the premiums, rates of return and amount of benefit are guaranteed and fixed. These policies can be useful to help provide for longer term needs such as ongoing care for an adult child. Universal life insurance, on the other hand, can offer an adjustable death benefit as well as premiums, within certain parameters. Cash value growth is dependent on the interest rate climate, so it’s important to consider that potential impact when looking at this type of coverage. Finally, look into fees, no matter what type of policy you select.

Life insurance can be an important foundation of financial protection for your family. And while it may seem complicated, it doesn’t have to be. Your financial professional can explain the options available and help you determine which type of insurance best meets your needs and budget.

Source

https://www.investopedia.com/articles/pf/07/whole_universal.asp

For most of us the conversation isn’t whether or not we’ll need long term care, but rather when. According to the U. S. Department of Health and Human Services as many as 70% of those turning 65 years of age are likely to require long-term care, meaning that it probably makes sense to start planning for this as an eventuality rather than a possibility.* Professional help with daily tasks like bathing and eating doesn’t come free, and knowing we are likely to need this level of assistance at some point in our lives doesn’t make it any easier to plan for

Paying for such ongoing medical and personal care out of pocket is often prohibitively expensive and current laws are written so that the state will usually only step in once you’ve exhausted the bulk of your assets. With no long-term care bailout on the horizon now is the time to make a plan for this important reality.

Can Long Term Care coverage wait until I retire?

Deciding that long term care coverage is necessary is an important first step, but it’s just as important to make sure to get the right amount of coverage at the right time.

Your personal characteristics, such as age, health and gender can influence available policies and premiums.

As a rule of thumb, buying when you are younger tends to result in much lower costs, both due to better overall health and a lower starting point for any future premium increases by insurers. It’s easy to imagine that a 65 year old in poor health will pay much higher premiums at the outset than a 50 year old with a clean bill of health.

How much coverage should I get?

This insurance is much like health insurance in that the benefit levels and policy costs can vary widely depending on the level of protection you are looking for.

Paying for such ongoing medical and personal care out of pocket is often prohibitively expensive and current laws are written so that the state will usually only step in once you’ve exhausted the bulk of your assets. With no long-term care bailout on the horizon now is the time to make a plan for this important reality

Can Long Term Care coverage wait until I retire?

Deciding that long term care coverage is necessary is an important first step, but it’s just as important to make sure to get the right amount of coverage at the right time.

Your personal characteristics, such as age, health and gender can influence available policies and premiums

As a rule of thumb, buying when you are younger tends to result in much lower costs, both due to better overall health and a lower starting point for any future premium increases by insurers. It’s easy to imagine that a 65 year old in poor health will pay much higher premiums at the outset than a 50 year old with a clean bill of health.

How much coverage should I get?

This insurance is much like health insurance in that the benefit levels and policy costs can vary widely depending on the level of protection you are looking for.

Desired benefit levels also make a significant difference on costs, meaning that high levels of coverage with generous daily payout levels don’t always come cheap. Other policy choices, such as provisions that help coverage levels keep up with inflation, are optional extras that oftentimes can be necessary to achieve protection for decades to come. Again, these options can add to the cost of the policy.

While the cost of a policy takes a few dollars per day out of the budget today it can be a financial parachute in the event of a catastrophic or ongoing infirmity. The specific dollar level of coverage that’s right for you will vary depending on your net worth, your long term goals, and other details like your health history and where you live.

Can I put something in place then change coverage later?

Maybe, but it’s probably best not to count on it. Unlike auto or homeowners insurance the ability to easily switch from one long term care coverage provider to another is usually limited. Most of these companies price new policies higher than older ones and price older clients higher than younger ones. This double-whammy means that switching to a new policy when we are older tends to be very costly. It can pay to take the time and consult with a long term care insurance professional today so that you end up with the right level of coverage and peace of mind to carry you forward for years to come.

*2015 Department of Health and human services

Long-term care insurance policies contain exclusions, limitations, reductions of benefits, and terms for keeping them in force. Your financial professional can provide you with costs and complete details.

All policy guarantees are based upon the claims paying ability of the issuer.

Tags: long term insurance, long term care, insurance

If you can't work because you get sick or injured, disability insurance will pay part of your income. You may be able to get insurance through your employer. You can also buy your own policy

Types of Disability Policies

There are two types of disability policies.

• Short-term policies may pay for up to two years. Most last for a few months to a year.
• Long-term policies may pay benefits for a few years or until the disability ends.

Employers who offer coverage may provide short-term coverage, long-term coverage, or both. If you plan to buy your own policy, shop around and ask:

• How is disability defined?
• When do benefits begin?
• How long do benefits last?
• How much money will the policy pay?

Federal Disability ProgramsTwo Social Security Administration programs pay benefits to people with disabilities. Learn about Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI).

Social Security Benefits for People with Disabilities

The Social Security Administration (SSA) has two programs that provide benefits to people with disabilities:

• Social Security Disability Insurance (SSDI). SSDI is for people who have earned enough Social Security work credits within a certain time period

Definition of Disability

To qualify for either program as a person with a disability, you must meet SSA’s definition of disability, which says:

• You can’t work, and
• Your disability is expected to last for at least one year or result in death

Social Security uses a step-by-step process to decide if you have a disability. Partial and shortterm disabilities do not meet SSA’s standard and are not eligible for benefits.

Benefit Eligibility Screening Tool

You can use the Benefit Eligibility Screening Tool to find out quickly whether you may be eligible for SSDI or SSI disability benefits.

Learn More About Social Security Disability Insurance (SSDI)

Work Requirements

When you work and pay Social Security taxes, you earn Social Security “work credits,” up to four a year depending on your income. To be eligible for SSDI, you must have accumulated a certain number of work credits, some of them relatively recently. The number of work credits you need is based on your age when you stopped working due to your disability.

Benefits for Family Members

Your spouse or former spouse and your children may be eligible for benefits when you start receiving SSDI in some situations.

Applying for SSDI

You can apply for benefits online, by phone, or in person.

• If your application is denied, you can appeal the decision.
• If your application is approved, you’ll start receiving benefits about six months after your disability began. You’ll automatically be enrolled in Medicare two years after you begin receiving SSDI payments.

Returning to Work

You can generally return to work without losing your SSDI benefits if you earn less than what SSA considers a “substantial” amount. In 2018, average earnings of $1,180 or more per month are usually considered substantial.

Learn More About Supplemental Security Income (SSI)

SSI benefits are for adults and children with a disability who have little income or resources. Seniors 65 and older without a disability may be eligible for benefits if they meet the income limits. People who are eligible to receive SSDI may be eligible for SSI too.

In most states, people who receive SSI also receive Medicaid coverage. Many states also provide supplemental payments to certain SSI recipients.

Defining Disability for SSI

Adults under 65 must meet SSA’s definition of disability.

For a child, disability means:

• Having a physical or mental impairment that causes marked and severe functional limitations
• The disability is expected to last for at least one year or result in death

Applying for SSI

Adults can apply for SSI by phone, in person at a local Social Security office, or in some cases online. To apply for SSI for a child, you can start the process online but will need to complete it either in person or by phone.

• You can appeal if your claim is denied.

Explore this listing of SSI topics to learn more detailed information.

Going to Work

SSI work incentives can help you go to work by lowering the chances that you’ll lose your SSI benefit or Medicaid coverage. You can earn $65 a month without it affecting your cash benefit. Beyond that, your SSI payment will go down $1 for every $2 you earn.

Health Coverage for People With Disabilities

If you have a disability, you have a number of options for health coverage through the government.

• Medicaid provides free or low-cost medical benefits to people with disabilities. Learn about eligibility and how to apply.
• Medicare provides medical health insurance to people under 65 with certain disabilities and any age with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant). Learn about eligibility, how to apply and coverage.
• Affordable Care Act Marketplace offers options to people who have a disability, don’t qualify for disability benefits, and need health coverage. Learn about the Marketplace, how to enroll, and use your coverage.

Health Resources for People With Disabilities

Federal, state, and local government agencies and programs can help with your health needs if you have a disability.

• Explore the Disability and Health section of CDC.gov for articles, programs, tips for healthy living and more
• Learn more about assistance and benefits for people with disabilities from the Social Security Administration.
• Contact your local city or county government to find out what medical and health services are available locally for people with disabilities.
• Your state social service agency can help you locate medical and health programs.
• Visit USA.gov’s Government Benefits page to learn more about government programs and services that can help you and your family.

https://www.usa.gov/disability-benefits-insurance

tags: disability insurance, disability, insurance, retirement

NFPR-2019-81

Insurance may be less about if you’ll need it than when you’ll need it. Anyone who started driving at 16 is likely to have had a claim by the time they’re 34. More than 1 in 20 insured properties reported a claim in 2016, according to Insurance Services Office (ISO). And according to the U.S. government, someone who turns 65 this year has an almost 70% chance of needing long-term care services, which are generally not covered by Medicare.

A network of prudent insurance coverage is the foundation of any solid financial plan. A single healthcare crisis, incident of property loss, or other liability can quickly wipe out a lifetime of savings. The types of circumstances that may require the use of insurance may not be a subject we like to think about, but it’s one of the most important issues to address when planning for the financial security of you and your family.

Here are some common types of insurance available and the associated risks they can help address.

Health Insurance:

Many people receive health insurance through their employer, while others purchase it independently. Health insurance can cover everything from preventive care, treatment for injuries and disease and mental health treatment, as well as products and equipment necessary to address various medical needs. Your insurance may dictate from whom and in what types of facilities you are eligible to receive treatment. It will also indicat what your responsibilities are for payment in terms of deductibles and any limits to your coverage. It is critically important that you review your health insurance on an annual basis and fully understand your policy.

Auto Insurance:

Your automobile insurance is designed to cover property damage and personal injury in the event of an accident. The amount of coverage for these occurrences can range dramatically from policy to policy. With car insurance, you not only have to be concerned about covering your own liability if you’re at fault — but damage that may be caused by uninsured drivers as well. One in eight drivers are uninsured according to The Insurance Information Institute. Luckily uninsured motorists coverage for both property damage and bodily injury is available, although not all states require it.

Disability Insurance:

This covers loss of income resulting from injury or illness. Many people receive disability insurance from their employer, but not everyone does — so it’s important to understand whether or not you have this benefit. If you do not have disability insurance through your employer, you may wish to buy a private policy. You may elect to purchase short-term disability insurance, long-term disability insurance or both. Many people think they’re automatically covered for disability losses through Social Security disability, otherwise known as SSD. However, SSD which is administered through the Social Security Administration, has stringent requirements:

• You are unable to perform the work you did before.
• The SSA determines you are unable to do other work due to your condition(s).
• The disability is expected to last at least a year or lead to death.

Private disability insurance eligibility requirements are often less strict and no not require a complete inability to work in order to receive benefits. And it is possible to receive SSD and benefits from private disability insurance simultaneously.

Long-term Care Insurance:

This can cover medically necessary assisted living or nursing home care —or if you require help at home to carry out daily activities. Many people mistakenly assume that Medicare pays for such services, but this would be a faulty assumption. With Medicare, coverage is generally limited to rehabilitation from an acute injury or illness where a full recovery is anticipated as opposed to long-term care needed in old age as a result of gradually declining function. This type of care is extremely costly. Here are some averages according to government statistics:

• $6,844/month for a semi-private room in a nursing home
• $7,698/month for a private room in a nursing home
• $3,628/month for care provided in an assisted living facility

Life Insurance:

This coverage pays a death benefit when the insured passes away. It’s particularly important for breadwinners with family members who depend on their income. Life insurance needs often change over time as children grow up and move out of the house. Here’s an article that explains some common types of life insurance (link to previous life insurance blog here). This may be the type of insurance people don’t like to think about the most — but in the event of the unthinkable, it may matter the most.

Property and Casualty Insurance:

P&C can cover your home and possessions as well as provide personal liability protection should you injure someone or damage their property. It’s a broad category of insurance. Here are some common types:

• Homeowners Insurance:insures your home and possessions in the event of theft or damage. It’s important to know your deductible for different types of losses, and any limitation for certain types of events, such as floods and hurricanes.
• Renters Insurance:this insurance is specifically designed for renters, who do not own their dwelling. It is substantially less expensive than homeowners insurance, and can cover property and liability as a renter.
• Condo Insurance: These policies can mitigate risks specific to condominium owners,including portions of the structure they’re responsible for, as well as assessments levied against owners to pay for repairs or improvements to commonly owned elements.
• Umbrella PolicyAn umbrella can extend the coverage of your auto and homeowners insurance policies. Carriers will generally require insured individuals to have a minimum amount of coverage already in place before they will write an umbrella policy.

Risk is a part of life — there’s no getting around that. But with solid insurance coverage, you just might be able to sleep a little better at night no matter what the future may hold.

Reference:

https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance

https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

Tags: Baby Boomer, behavioral finance, education, finance, insurance, millennials, retirement planning, risk management