Create a pool of healthcare dollars that will grow in any market.

Provided by Duaine Owings

How will you pay for long term care? The sad fact is that most people don’t know the answer to that question. But a solution is available.
As baby boomers leave their careers behind, long term care insurance will become very important in their financial strategies. The reasons to get an LTC policy after age 50 are very compelling.

Your premium payments buy you access to a large pool of money which can be used to pay for long term care costs. By paying for LTC out of that pool of money, you can preserve your retirement savings and income.

The cost of assisted living or nursing home care alone could motivate you to pay the premiums. Genworth Financial conducts a respected annual Cost of Care Survey to gauge the price of long term care in the U.S. The 2010 report found that

• In 2010, the median annual cost of a private room in a nursing home is $75,190 or $206 per day – $14,965 more than it was in 2005.
• A private one-bedroom unit in an assisted living facility has a median cost of $3,185 a month – which is 12% higher than it was in 2009.
• The median payment to a non-Medicare certified, state-licensed home health aide is $19 in 2010, up 2.7% from 2009.1

Can you imagine spending an extra $30-80K out of your retirement savings in a year? What if you had to do it for more than one year?
AARP notes that approximately 60% of people over age 65 will require some kind of long term care during their lifetimes.2

Why procrastinate? The earlier you opt for LTC coverage, the cheaper the premiums. This is why many people purchase it before they retire. Those in poor health or over the age of 80 are frequently ineligible for coverage.

What it pays for. Some people think LTC coverage just pays for nursing home care. That’s inaccurate. It can pay for a wide variety of nursing, social, and rehabilitative services at home and away from home, for people with a chronic illness or disability or people who just need assistance bathing, eating or dressing.3

Choosing a DBA. That stands for Daily Benefit Amount – the maximum amount that your LTC plan will pay per day for care in a nursing home facility.

You can choose a Daily Benefit Amount when you pay for your LTC coverage, and you can also choose the length of time that you may receive the full DBA on a daily basis. The DBA typically ranges from a few dozen dollars to hundreds of dollars.

Some of these plans offer you “inflation protection” at enrollment, meaning that every few years, you will have the chance to buy additional coverage and get compounding – so your pool of money can grow.

The Medicare misconception. Too many people think Medicare will pick up the cost of long term care. Medicare is not long term care insurance.

Medicare will only pay for the first 100 days of nursing home care, and only if 1) you are getting skilled care and 2) you go into the nursing home right after a hospital stay of at least 3 days. Medicare also covers limited home visits for skilled care, and some hospice services for the terminally ill. That’s all.2

Now, Medicaid can actually pay for long term care – if you are destitute. Are you willing to wait until you are broke for a way to fund long term care? Of course not. LTC insurance provides a way to do it.
Why not look into this?

You may have heard that LTC insurance is expensive compared with some other forms of policies. But the annual premiums (about as much as you’d spend on a used car from the late 1990s) are nothing compared to real-world LTC costs.4 Ask your insurance advisor or financial advisor about some of the LTC choices you can explore – while many Americans have life, health and disability insurance, that’s not the same thing as long term care coverage.

Duaine Owings is a Representative with Plan To Win Ins Agnecy and may be reached at www.Life2Health.com 816-224-9466 or duaineowings@gmail.com

This information should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 genworth.com/content/etc/medialib/genworth_v2/pdf/ltc_cost_of_care.Par.85518.File.dat/Executive%20Summary_gnw.pdf [4/10]
2 – aarp.org/families/caregiving/caring_help/what_does_long_term_care_cost.html [11/11/08]
3 – pbs.org/nbr/site/features/special/article/long-term-care-insurance_SP/ [11/11/08]
4 – longtermcare.gov/LTC/Main_Site/Paying_LTC/Private_Programs/LTC_Insurance/index.aspx [6/25/09]

Are you having trouble deciding which type of life insurance product is right for you? Term life insurance? Whole life insurance? Or universal life insurance?

A good decision is based upon many personal factors, including your age, your time horizon for coverage, and your particular risk profile.

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Early in life
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Whole life products offer guarantees on the premium, death benefit, and cash value. Dividends can accumulate into significant cash values over a long period of time. And the companies that manufacture this product are historically strong.

It makes sense to use this product as the basis for the conservative portion of your financial portfolio.

People in their twenties or thirties frequently purchase whole life, because they anticipate having a long period of time in which to accumulate cash values. Also, the lifetime guarantees are especially attractive at a young age.

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Later in life
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However, it is often the case that additional life insurance is needed later in life — for example, to cover a second mortgage, a business loan, or college funding for children and grandchildren.

What is the product of choice at that point?

At a later age, the shortened time horizon may make whole life less attractive, because there is apparently less time to accumulate a cash value. By the same token, the shortened time horizon translates into larger premiums because the insured has less time in which to pay for the same death benefit.

Perhaps more importantly, an emergent risk factor may eliminate whole life from the product selection altogether.  For example, the insured may have developed diabetes, hepatitis, or another serious illness.  Maybe he has taken on a dangerous hobby, such as scuba diving or mountain climbing.  Or career advancement may require travel to remote world-wide locations.

These factors probably give term insurance and universal life insurance an edge over whole life in pricing.

LIFE INSURANCE

Is it time to review your policy?

Provided by Duaine Owings

Life insurance is hard.

It’s hard to know if you have the right kind.

It’s hard to know if you have enough.

And it’s hard to know if you need any at all.

The insurance companies have made it even harder by coming up with bewildering names: whole life, term life, universal life. Some life insurance policies have a cash value while others don’t. Some invest that cash value in the stock market while others pay a fixed rate of interest.  Some insurance policies combine all of these ideas.

This may be one reason why a recent study by the National Association of Insurance Commissioners found that about 40% of people don’t review their life insurance annually.¹ In my experience, that number seems to be even higher. But no matter what the exact number, a large portion of Americans may simply be paying for insurance that’s not right for them.

That is why it’s important for you to sit down annually with an insurance professional to review how your policy works and how it will help you to protect your family.

When you’re young, a certain type of policy is needed. As you raise a family and take on more responsibilities, your needs change again. At some point – when the nest is empty or other life changes occur – there may come a time where you don’t need life insurance at all or you may desperately need it to protect your estate. Reviewing your life insurance policies is one way to make sure you have the coverage that is right for you and your family now, today – not when you bought it.

When is the last time you thought about your life insurance?

Is it time to take another look?

No Exam Life Insurance Quotes Here:

Duaine Owings is a Representative with Plan To Win Ins Agency and may be reached at 800-559-8777, www.Life2Health.com , or at mailto:duaineowings@gmail.com

 All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

1 http://www.pregnancytoday.com/articles/life-insurance/the-facts-of-life-insurance-4315/  [02/18/10]

How does the new health law impact my HSA? This newsletter answers the top 10 questions.

1. Does the new law eliminate HSAs? No, the new health law does not eliminate HSAs and you can continue to use your HSA as you have – at least until the end of 2010.

2. What are the specific changes to HSAs in the new law? Starting in 2011, the 10% penalty for non-eligible (non-medical) distributions is increased to 20% and you can no longer use your HSA for over-the-counter drugs.

3. Can I continue to contribute the same amount to my HSA? The new law does not change the HSA contribution limits. However, new rules on the definition of what is a Qualified Health Plan could change your eligibility to contribute to an HSA in 2014 or later.

4. Can I still use my HSA for over-the-counter drugs? Yes, for the rest of 2010. No, starting January 1, 2011, over-the-counter drugs are no longer considered eligible medical expenses.

This is your last year to buy aspirin, non-prescription cold medicine, contact lense cleaner and other over-the-counter items tax-free and penalty-free with your HSA.

5. I heard that FSAs are now limited to $2,500, does that rule apply to HSAs? No. The new law will limit Flexible Spending Accounts (FSAs) contributions to $2,500 starting in 2013, but that new law does not apply to HSAs.

6. Did the penalty increase for HSAs? Yes, the 10% penalty for using your HSA for non-eligible medical expenses will increase to 20% in 2011.

7. Will the law change my HSA in the future? Other than items discussed, the new law does not directly change HSAs. Indirectly, however, the new law may eliminate the ability to make contributions in the future.

Starting in 2014, the new law requires Americans to buy Qualified Health Insurance that offers an Essential Health Benefits Package.

Your current High Deductible Health Plan (HDHP) required to be eligible to make a contribution to your HSA may not qualify as a Qualified Health Plan. In other words, you may have to buy different insurance coverage in order to avoid taxes and penalties. Regulatory agency rulings and interpretations will provide more information on this point over the coming months.

8. What happens to my HSA balance in the case where I can no longer contribute new money? You can continue to use any amounts in your HSA for eligible medical expenses or save it for later even if you are no longer eligible to contribute more to your HSA.

This is important to know in case you do change insurance plans to a non-HSA eligible plan to comply with the new law. The HSA remains one of the best tax favored options available. One good strategy is to accumulate assets now in the HSA to prepare for whatever happens.

9. Should I change anything based on the new law? The new law is a foundational change to our health care and insurance system and mostly likely will impact everyone.

For now; however, the combination of a High Deductible Health Plan and HSA remain very competitive and a good choice for many businesses and consumers.

10. How do I keep up on the changes as they take place? Watch for changes posted here. We post additional information as we learn more.

Duaine Owings-President
Plan To Win Ins Agency
duaineowings@gmail.com
Toll-Free: 800-559-8777