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Should You Keep Your Long-Term Care Insurance Policy?

Q: A few years ago I bought a long-term care policy; it cost about $200.00 a month, which is a lot of money for my budget. A lot of people my age prefer not to pay for long term care, instead they expect government to take care of them. What is your opinion, please?

A: Thanks for writing me with your question about long-term care insurance.

Since you are over 70 years old, I think it’s a good idea to have that long-term care policy.

I know the $200 a month is a bite out of your budget, but perhaps you can tweak your budget elsewhere to free up cash flow in order to keep your coverage in force.

There are many reasons I think you’d be smart to have long-term coverage — and not rely on the government, like you suggested some of your friends plan to do.

For starters, about 20% of Americans over age 65 and older experience some form or chronic physical impairment, leading them to need long-term care. For people 85 and older, 55% of them need long-term care.

And remember, you can get long-term care in a nursing home, and assisted living facility, or even in your own home. But the cost of such care isn’t cheap.

The average nursing home costs about $50,000 a year, depending on the part of the country in which you live. Assisted living facilities often charge roughly $24,000 a year. And having a home health attendant even for just two or three days a week – to help with stuff like meals or getting you dressed – can run $1,000 a month or $12,000 a year.

So that $2,400 a year you’re paying for long term care coverage could really be financially beneficial if it helps you avoid these much greater costs I just mentioned.

Additionally, don’t be fooled into thinking that the government will pay for all your ongoing medical needs. It won’t. In general, Medicare and Medicaid do not cover anywhere near the full cost of long-term care. Medicare pays only about 12% for short-term skilled nursing home care following hospitalization. Medicare also foots the bill for some skilled at-home care, but that’s only in cases of short-term conditions — not for the ongoing care that many elderly, sick, or injured people require.

As for Medicaid, this federal program does pay nearly half of all nursing home costs. However, you only get those Medicaid benefits immediately if you meet federal poverty guidelines. If you don’t qualify as being “poverty” stricken, then Medicaid benefits only kick in after you’ve exhausted all your savings.

Keep these points in mind when trying to determine if long term care coverage is financially feasible for you to maintain. The best decision is really made once you determine the risks and benefits of keeping – or dropping – your long-term policy. Good luck!

Forget You: How to Know It’s Time to Break Up With Your Agent

Author: The Money Coach

There are lots of times in life when you might need the help of a good insurance agent.

A trustworthy insurance agent can help you determine how much life insurance you’ll likely need as you reach mileposts in life, such as having a baby or getting married. He or she can walk you through the complexities of homeowners insurance. And, ideally, a good agent can show you how to save money on home and car insurance rates.

But just because you initially pick one person as your insurance agent doesn’t mean the relationship will last forever. In fact, there are times when you should consider ditching your insurance agent.

Here are some of those times. Continue reading the rest of Lynnette Khalfani-Cox‘s article on Insure.com

Meet The Money Coach at AARP’s National Event and Expo Sept. 22nd

Home insurers kick around cyberbully coverage

Author: The Money Coach

In recent years, a number of tragic cases have captured the public’s attention in which teenagers committed suicide after being taunted, harassed or shamed, due to invasions of privacy on sites like Facebook, MySpace and YouTube.

If you have a teen or a college student who is fond of social networking, the rise of cyberbullying is enough to give you gray hair. But now there’s another reason to fret over the rise of online intimidation: It could subject your family to expensive lawsuits. And incidents of cyberbullying may not be covered by your liability insurance.

Effective this fall, “cyberbullying” is an excluded offense under newly revised personal umbrella policy forms being filed nationwide by the American Association of Insurance Services (AAIS).

AAIS is an advisory group that supplies standardized policy forms to more than 700 insurance companies nationwide. In most states, the forms will be effective Oct. 1, 2011. AAIS is introducing the exclusion in response to reports of suicides by teens who were victimized by cyberbullying.
“The reports of suicides indicate that ‘electronic aggression’ could result in bodily injury claims, in addition to personal injury claims,” says AAIS spokesman Joe Harrington. Read the rest of this article on Insure.com

Insurance companies trying hard to be “Liked” online

Author: The Money Coach

Insurance companies are trying hard to find their place in the world of social media, but it’s not always easy to be “liked” online.
To increase Internet traffic, insurers are using a broad range of strategies to bolster their brands in the increasingly complex world of social networking.

Some insurers are going all out — using promotions, sweepstakes and marketing partnerships — in an effort to improve communication with existing customers, woo potential clients and generate enough goodwill to build large followings on sites like Facebook and Twitter. If a social network user “likes” or “follows” content, it tends to build traffic among that user’s interconnected friends and colleagues. Read the rest of Lynnette’s article on Insure.com