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Life Insurance–talk about a morbid discussion!

07-12-2008by Colleen King

Life Insurance is always an odd discussion to embark on, and I try to get that out right off when I speak with clients for the first time. Basically, when couples are shopping for life insurance for the first time, what you are trying to figure out how much money one would need if their spouse/partner were to die in order to maintain the current standard of living.


There’s a happy discussion! But realistically, when you have a family, what would happen if one of you were to die? These days, most couples are both working because if you live in California, you’ve had to either take out a mortgage the size of a small nation’s GDP. Or if you are renting, you know, rents here are pretty ridiculous too.


Optimally, when figuring out how much coverage you need, we look at your expenses on a monthly or annual basis to see what it would take if the income from one of the partners were to go away. This can be done in multiples of annual salary, or look at what it would take to pay off the mortgage, cover utilities, food, schooling for the kids and eventually college. As well as any other incurred debts. Either method usually gets you pretty close to the same number.


Then the type of insurance you need–term or permanent, either whole or universal. That will be covered in another post. Let’s say we’re looking at term rates, because that’s usually the less expensive. Doesn’t always mean cheap though–again, your health history, smoker status and a few other things get in to play. Please try to be of a normal weight, nonsmoker, not have a hazardous occupation and be pretty healthy. That way we can get the best rates. But if you’re not in ‘super hero’ status, don’t let that keep you from checking into rates.


If you need a $1,000,000, 20 year term policy let’s say, and the monthly premium is NOT going to fit into your budget, don’t do it. We start ratcheting back the amount until the cost isn’t a strain. Even if the final amount won’t cover everything that you want it to, you need to have some coverage rather than none. That will buy your surviving spouse time to grieve and deal with life without facing losing the home. It gives them time to figure out what they are going to do, and not having to make huge financial decisions at a time when they can’t think straight.


So, even though you aren’t going to die, talk to a good agent about your needs and look into the cost of something that will provide financial peace of mind. Life insurance–a morbid, but crucial discussion. Don’t make a bad situation worse. Be well!

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Category: Life Insurance


Long Term Care Insurance–no thanks, don’t need it

07-12-2008by Colleen King

Long Term Care insurance is being talked about a lot as baby boomers are starting to approach retirement. They/we are starting to need to go to the doctor a bit more, need a few more medications and find they don’t necessarily put it all together to figure out the obvious–we ain’t getting any younger!


What does Long Term Care insurance pay for anyway? If you think Medicare is going to pay for anything other than medical needs, those days are long gone. MediCal, California’s version of Medicaid will eventually, but you will have to spend the vast majority of your liquid assets before it will kick in. And then after you pass away, the State will usually try to reclaim they money they spent on your care from your estate. Wow, bet none of THIS was in your estate plan, was it?


If you have needs for skilled care, like recovering from a surgery calling for intravenous medications, dressing changes or other therapies, Medicare will cover a certain number of days, but then you end up sharing the cost.


But if you are becoming debilitated, need help dressing, bathing, eating, walking or getting to the bathroom, these aren’t considered ‘skilled’ needs, but rather, custodial care. Depending on the type of policy, care can be provided in the home, an assisted living center or a nursing home. Most people have the vision of growing old gracefully in their paid off home. But that’s not always possible without help. And don’t automatically assume your kids will be able to care for you.


First, they need to want and be able to. This usually falls to daughters in most families. On top of that, they either have their own families or depending on their age, they may be having health issues of their own. I can remember when I was an emergency nurse, we’d see people in their late 80s or 90s seriously ill and dependent, and the ‘kids’ that were supposed to take care of them were in their late 60s or 70s. So it’s just not always possible.


So at least look at a Long Term Care insurance quote with a good agent. There are lots of options, many ways to do this, so don’t assume it’s too expensive before you look at it. If you think $1,500 -$3,000 or more per year is expensive, how is $60,000- $80,000 going to fit in your budget? Revisit my blog in the future, because this and more will be discussed here. Be well!

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Group Health Insurance in California

07-12-2008by Colleen King

Group health insurance is a HUGE discussion in California. It has been over the past 2-3 years as concerns rise over the uninsured. As well as the cost of health care–wow, it’s all exploding.


The beauty of small group health insurance (2-50 employees) in California is that when a company is set up within certain parameters, group health insurance is guaranteed issue regardless of the health status of the enrolling members. One of the things that has been fun about setting up group health plans for me is that I’ve been able to help people get insurance they need, legitimately, and frequently they didn’t know this was an option. Love doing that! Does that mean it will cost a fortune? Well, it isn’t cheap but the plans tend to have richer benefits than individual health insurance plans so that make it cost more. BUT, even with disastrous health problems, a two person group will never pay more than 10% about standard rates.


So when you think every group health case sold in California is profitable, it’s not. The carriers know they won’t make money on every plan sold, but that’s the way the game is set up in California. At the risk of sounding too ‘salesy,’ if you are having trouble recruiting and retaining employees, having a group health plan can help you get and keep the people you want.


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