How Long-Term Care Insurance Can Keep You at Home Longer

When people think of long-term care, they often have images of drab nursing homes where the patients are unable to do any type of activity or have social interaction. And while this may have been the case many years ago, long-term care has come a long way today.

At present, there are roughly 10 million Americans in need of some type of long-term care. What many don’t realize is that more than 7.5 million of those individuals are actually receiving the care that they need in their own homes. In fact, many people purchase long-term care insurance to help keep them out of a nursing home.

Most of today’s long-term care insurance policies offer a home healthcare option. By including this feature, an individual will likely retain the ability to take part in as many of his or her normal daily activities as possible.

Home healthcare can cover a large variety of services, and although options are available that help pay for more skilled levels of care, home healthcare can include services such as meal preparation, companionship and homemaking. Other benefits may offer help with paying bills and managing other types of financial transactions.

Additional types of home healthcare that may be covered in the homecare portion of a long-term care insurance plan include assistance with bathing, dressing, toileting and transferring within the insured’s home.

With all the combined benefits of home healthcare coverage, both the insured and his or her family can have peace of mind knowing that these needs are being taken care of.

Insure Your Peace of Mind Amid Rising Prices

Inflation – who needs it?

You just end up paying more dough for the same loot

.

When inflation is to our disadvantage, we feel it everywhere.

It hits our pocketbooks at the grocery store and gas pump, and we may not take as many vacations or have as many toys.

But there is one place where you don’t have to feel the ill effects of the rise and fall of inflation. That place is your insurance policy.

Did you know that your property limit can be adjusted to keep up with inflation so that you have enough coverage in case of a total loss?

There is a provision in both personal and commercial policies to adjust the building insurance limit based on a chosen percentage of the current year’s building value.

It is called an inflation guard.

Depending on your insurance company, you can use this to choose between 2% and 8% of the building limit.

The following example illustrates how the inflation guard works.

In year one, if you have a $100,000 building limit with a $1,000 deductible and the building is a total loss, you would pay the first thousand and the insurance carrier would give you a check for $99,000.

In year two, if you carry the same $100,000 limit and have the same $1,000 deductible and there has been a 4% spike in inflation, if your building is a total loss, you would pay your deductible and the carrier would still pay you $99,000.

You would make up the difference of any additional costs after that to replace your property.

However, if there was a 4% inflation guard on the policy, the building limit would automatically increase to $104,000 to account for the increased cost to replace your home or building.

In a total loss, you would pay your deductible and the insurance company would give you a check for $103,000.

Now that’s peace of mind.

Condo Insurance: What Owners Need to Know

Condominium owners have some unique insurance policy needs.

What they require in the way of coverage is very different than what renters and homeowners need to look for in an insurance policy.

A condominium complex is often operated by an association, which is governed by a set of bylaws.

These bylaws determine who will cover what.

They can be written in any number of ways, but in general, the association is responsible for insuring the building itself and the unit owner is responsible for his or her belongings and any upgrades made to the unit.

This is often referred to as “studs-in.”

Condominium associations charge monthly fees for maintenance and other projects.

Should a unit owner have a loss and be unable to pay the fees, the insurance policy will pay them up to a limit of coverage.

Like other policies, liability coverage and personal property coverage are included in the unit owner’s insurance policy.

Condominium unit owners should review an association’s bylaws during the buying process to know what type of coverage is expected.

An insurance agent is a great asset in the insurance-buying process.

The agent can help first-time condominium-unit buyers find the best coverage to fit their needs.

Should You Consider Making Your Own Annuity?

Advisors often suggest that investors build things such as bond ladders, portfolios and estate plans.

But you can also build your own annuity.

An annuity is a contract between an investor and a life insurance company.

You make a payment to the life insurance company, either in a lump sum or in a series of transactions, and in exchange the life insurance company offers you an ongoing stream of income at some point in the future.

One type of annuity, the fixed annuity, is designed to provide guaranteed regular payments to the policyholder over the term of the contract. That’s appealing to many investors because fixed annuities promise guaranteed income payments in good times and bad.

Investors who have purchased them don’t have to worry about market volatility.

You can also build your own annuity, however.

Say you have $100,000 to invest in a deferred annuity that matures in five years.

You might invest $89,500 in five-year U.S. Treasuries, with recent yields of around 2.25%, and the remaining $10,500 in stocks via an S&P 500 Index fund.

At the end of five years, the five-year U.S. Treasuries will return $100,000.

If the stocks maintain their value, you’ll end up with $110,500. If the stocks lose half their value you’ll end up with $105,250. If the stocks gain 9%, you’ll end up with $116,200.

Of course, this example is hypothetical, but it does illustrate the concept. In each case, there’s a guaranteed return, there’s a potential profit and you hold the cash, not the life insurance company.

That said, assembling your own annuity-like investment can be tougher than it looks, so you may just prefer to stick with a fixed annuity. If so, your advisor can help you choose one.

How Annuities Can Help Calm the Market Roller Coaster

The summer of 2011 brought plenty of drama, with the debt-ceiling debate, the downgrade of U.S. debt and concerns about European debt all sending the stock market significantly lower.

It wouldn’t be surprising, given the market mayhem, to hear that financial advisors are juggling calls from worried clients. But many aren’t, because their clients invested in annuities.

An annuity is a contract between an investor and a life insurance company. You make a payment to the life insurance company, either in a lump sum or in a series of transactions, and in exchange the life insurance company offers you an ongoing stream of income at some point in the future.

Because fixed annuities promise guaranteed income payments, in good times and bad, investors who have purchased them don’t have to worry about market volatility.

That’s why sales of annuities have risen significantly in today’s market environment. They were up more than 16% to $60 billion in the first quarter of 2011, according to industry research group Limra. And, sales may rise even more.

In June, the Government Accountability Office, the investigative arm of Congress, suggested that some investors could benefit from buying fixed annuities rather than trying to manage their money themselves.

If you’d like to maintain a certain level of income, then an annuity might be worth consideration. But note that annuities can be complex, meaning it’s a good idea to have the assistance of an advisor when researching options and purchasing one.

Mistakes to Avoid When Buying Life Insurance

Around 35 million U.S. households have no life insurance coverage, according to a 2010 study by industry research group Limra, and more than half of American households say they need more.

But life insurance policies can be complicated.

Terms and riders make the purchase of even the most straightforward policy a challenge to many.

Following are ways to avoid five mistakes when buying life insurance:

Don’t Procrastinate:

You may think you can get away with postponing your purchase until you’re older, but then you may also be sicker, and being sicker will make your policy cost more or maybe even prevent you from getting coverage at all. So look into life insurance now, when you’re in good health and can easily pass an insurer’s medical exam.

Don’t Lie:

If you smoke or have a medical condition, be sure to be open about it. It might cost more, but not telling could cost you coverage when you need it most.

Don’t Forget About Your Spouse:

Life insurance isn’t just for your kids. A life insurance policy should provide your spouse money in the event of your death too. That’s because if you die, without your income, your spouse’s lifestyle could change drastically.

Don’t Let the Policy Lapse:

It’s tempting to forgo life insurance when your household budget is tight, but it’s a bad idea. In addition to needing life insurance, it’s also a financial mistake, depending on the type of insurance. For example, generally the surrender or cash value of a whole-life policy won’t equal the premiums paid until 12 or 15 years have passed.

Don’t Forget to Do the Math:

Determine how much money your spouse and children would need if you weren’t around, by taking into account your lost income and any debts such as mortgages and major expenses that are pending, like college tuition.

Two Reasons to Think About Commercial Auto Insurance

Business owners get different types of coverage under a commercial as opposed to a personal insurance auto policy. Following are two types of commercial auto policy coverage:

Hired and Nonowned Auto: For any business with employees, this coverage is a must. It provides auto liability to a business when a vehicle must be hired or borrowed to conduct business. The most common scenario is the way this applies to employees. Hired and nonowned coverage will protect the business while an employee is out doing anything from running errands to making sales calls in his or her own vehicle. The business is “borrowing” the employee’s car to do its work. You might say, “Wouldn’t my employee’s personal auto policy take care of this scenario?” Yes…and no. If an employee is at fault for an accident and is on business time, the injured party could go after the employee personally as well as the business for damages. This is where hired and nonowned coverage kicks in. Coverage is available at a $1 million limit for a few hundred dollars.

Driver Other Car: This coverage is specifically designed for the business owner who may have one or two cars that are used personally and commercially. Most personal auto insurance companies want nothing to do with insuring a business. A personal auto policy was not intended for that purpose. Driver other car coverage provides personal liability coverage to the owner and his or her spouse, thus eliminating the need for two policies.

Review your auto policy, and if you don’t find such coverage listed, it’s very easy to get a quote from your agent.

Do You Need Employment Practices Coverage?

usiness owners and executives – especially those who run small and medium-sized enterprises where rules and procedures are more lax compared to larger corporations – are more vulnerable than ever in the day-to-day operation of their businesses.

As a result, employment practices liability insurance (EPLI) has become more prevalent in the work world of today.

Following are some examples where EPLI would help:

  • A male employee is discriminated against because of his sexual orientation.
  • A female employee is harassed because she is pregnant with her fifth child.
  • A co-worker is berated because of a disability and feels that he has suffered emotional distress.
  • An employee sues over what she feels is a wrongful termination because she was ready to retire within a year.
  • A delivery person files a suit because he feels sexually harassed while at your place of business.
  • A long-term employee sues because she feels she should have been promoted to a high-ranking position.

Should a claim arise of the nature listed above, EPLI coverage would provide for the investigation and defense of the claim as well as provide a limit of insurance should a judgment be made against a business.

Steps can be taken to prevent and minimize the instances of these types of circumstances.

For example:

  • Management at all levels should make a very clear, strong and consistent statement to everyone in the company that there is a zero tolerance level for any behavior that makes another employee uncomfortable. This can be done through the employee manual and seminars on harassment in the workplace.
  • Management should implement and communicate a procedure that makes employees feel safe to report a situation that may make them feel uncomfortable. Implement an open-door policy between management and employees to keep the lines of communication open and free from anxiety.
  • Management should communicate with the person making the claim to let him or her know that his or her statement is being taken seriously. An action plan should be created to investigate all complaints, and discipline and potential termination of the offending parties should be undertaken.
  • Management should ensure executives are adequately insured. Up to $1 million in coverage can be included on a business owner’s policy for a minimum premium. Higher limits can be quoted as part of the general liability policy or even its own separate policy. Not all insurance carriers offer the same coverage and deductibles.

Your agent would be happy to find the best coverage that suits you.