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LIFE & LONG-TERM CARE
INSURANCE EXPLAINED
by Bob Kadzie

Life Insurance Explained

Life insurance is a simple concept—you buy a policy that pays to your beneficiary or beneficiaries when you die—but the decisions of what kind of life insurance to purchase, how much of a death benefit and how much you pay are extremely complex.

Note: There are more than 2,000 companies selling life insurance in this country. Some are very good, financially solid companies; others are not so sound. A company's financial strength is vitally important to you because, hopefully, no one is going to collect on your life insurance for a long time.

You want to make sure that your life insurer will be around for the long haul. How do you do this? You can consult a seasoned insurance professional, which is probably your best bet, or you can look at how various independent organizations "rate" the life insurers you are considering. Ratings are like school grades, A+, A, A-, B+, etc. In general, it's wise to stick with companies that are rated A or better by most organizations.

Many Purposes for Life Insurance

Life insurance is far more than just a decision of how much to buy. Depending on your financial situation, life insurance can be used for a variety of purposes, such as:

Providing for your spouse and children
Paying off your mortgage and other debts
Accumulating cash on a tax advantaged basis
Transferring wealth or business interests
Achieving estate tax liquidity

As specialists in providing life insurance advice and coverage to individuals and businesses, we will help you design a cost effective life insurance plan to meet your needs and protect the ones you love. Click here for a FREE No Obligation term quote to see how inexpensive it is to provide basic protection for your loved ones.

Long-Term Care Insurance Explained

Consider the following scenario: You have a stroke. It is serious, but not fatal. After a few days or even weeks in the hospital, doctors are able to stabilize your condition and you are sent home. But you are paralyzed. You are unable to dress yourself, feed yourself and go to the bathroom without assistance. Basically, you need so-called custodial care 24 hours a day.

Question: Does your health insurance policy cover the costs of the care you need if this happens to you?

Answer: No, not at all.

So, if the previous scenario happens, what do you do? Well, if you don't have long-term care insurance, you pay for the care yourself.

Or, if you have few or no assets, the government pays for it through Medicaid. But if you do have assets and you need care that is custodial in nature, you could exhaust all your assets paying for this care, particularly if you need it for several years.

Many people mistakenly believe their health insurance covers custodial care. In fact, health insurance is mostly for critical care that gets you back (or close to) where you were before you got sick or were injured.

But some injuries and illnesses don't allow you to get fully healthy again. A stroke can leave you paralyzed for life. Alzheimer's disease likely will eventually prevent you from caring for yourself.

Fact: When people think about long-term care, they usually think of nursing homes. In fact, only 20% of long-term custodial care takes place in nursing homes. The remaining 80% is at home. About 90% of at-home custodial care is provided by family members or friends. As such, just because you need custodial care doesn’t mean you will have extensive costs. However...

Fact: More and more Americans will need long-term custodial care sometime during their lifetimes, and it isn’t only the elderly who require custodial care. Currently, 40% of those who need such care in this country are younger than 65.

Fact: One in four people will enter a nursing home sometime during his or her lifetime.

Fact: Further, of those who turned 65 in 1990, three out of seven will be in a nursing home at some point.

Custodial care, if it requires a professional or professionals, is definitely not cheap. Nursing home costs range from $40,000 to $80,000 a year. Home care costs anywhere from $10,000 to $30,000 annually.

Consider these costs when compared to your current asset base. And remember that you won’t be able to earn much of a living, if any, when you require such care. More than anything else, the need for long-term care can cause life savings to evaporate.

Tip: Long-term care insurance is the solution to this potential financial disaster. A good long-term care policy will cover custodial costs in nursing homes or at one’s residence. A good policy will provide coverage if you are unable to perform one or more of what are known as “activities of daily living.” Bathing. Dressing. Eating. Going to the bathroom. Transporting yourself in and out of bed.

As specialists in providing long-term care insurance advice and coverage to individuals and businesses, we will help you design a cost effective long-term care insurance plan to meet your needs and protect you and the ones you love. Click here for a FREE No Obligation long-term care insurance quote to see how inexpensive it is to provide this valuable and comprehensive protection for you and your loved ones.