For almost 30 years, I have been in the life and long term care insurance business. Because I am an independent broker, I have the freedom to “shop around” with different companies to find the best product at the best price for my clients. Different insurance companies have different products, different rates, and different underwriting which can make a huge difference. I believe the most important service that I offer is my advice, my wisdom, to help my clients make the most informed insurance decision that they can. Many people, unfortunately, realize they made a big insurance mistake after years have gone by, and its just too late and too expensive to do anything about it.
There are many different types of life insurance polices, to serve different purposes. If someone just wants a small policy to cover their funeral and related expenses, there are “final expense” policies that are generally between $10,000 to $25,000. Some companies do the application over the phone with very little underwriting. If someone wants to leave money to loved ones, or even their favorite church or charity, there are polices for that purpose too.
One of the most important types of life policies is something called a “hybrid” policy because it combines life and long term care coverage into one product. Basically, it is a life insurance policy with a rider (called a Chronic Illness Rider). Once the insured becomes disabled and qualifies for the rider, after a 90 day wait, they will receive a check that they can spend ANY WAY THEY WANT! So if they prefer to pay a friend or relative to care for them (instead of a home care agency) they can! In the event that they never use the rider, and then die, then the life insurance proceeds go to their beneficiary. So either way, SOMEBODY will benefit from this policy.
The original long term care policies were created about 30 years ago when insurance companies recognized two huge changes in America’s demographics. People were not having six or ten or fourteen children anymore, AND life expectancy had increased dramatically. It USED to be that our children were our retirement plan- our long term care policy. but not anymore. And that’s why they created these “traditional” polices that work very differently from newer products and have had some serious problems. Unfortunately, many of them were not designed very well, and companies have had to dramatically increase premiums. Most of them are also a “use it or lose it” policy meaning that the insured could pay a small fortune in premiums over the years, and if they died without ever going on claim, then they spent all that money for nothing. With the hybrid policy, premiums do not increase and in the event that the insured dies without going on claim, then the life insurance goes to their loved ones.
There is another kind of long term care policy that covers two people at the same time. Although it does have a life insurance component, the overwhelming reason that people buy this is for the long term care coverage. Two of the biggest advantages of this product is that there is a ZERO day elimination period and the benefit period is UNLIMITED, which can be extremely important if the insured has Alzheimers or some other prolonged health issue.
Unfortunately, many people wait too long to buy long term care coverage, and they find that they either can’t qualify, or afford a “Cadillac” plan. Well, there is now an alternative, called “Short Term Home Health Care” that does have limitations, but is an excellent alternative. This plan only pays for care received in the home and for a maximum of 360 days. Plans are available that pay $150, $300, or $450/day. The cost for someone 71-75 years old is just $76.94 for the $450/day plan. There are limitations to this plan, so its important to understand fully.
Health care, whether it is received in the home, assisted living facility, or a nursing home, is not only expensive, but can be very stressful for ones family. Much of what I have stated above is unknown to the general public, which is precisely why my advice is so important. There is no charge for a consultation.
