Group Health Insurance
Health care reform
Health Savings Accounts (HSAs)
Individual Health Insurance
Long Term Care Insurance
Medicare related coverage
10-04-2012 by Colleen King
On a good day, long term care insurance is not cheap but it can be reasonable for what you get if you get it when you’re younger. But in this article CalPERS is looking to potentially raise rates 75%? Is that reasonable, can they do that?
Yes they can do that–even though they offer a ‘Partnership’ plan. These offers asset protection for people who exhaust their policy then need to potentially qualify for MediCal, and have certain parameters in place especially around rate increases. But the CalPERS plan is exempt from this because they are what is referred to as ‘self funded.’
Normally one buys insurance (this applies to health insurance also) and the insurance company pays for care. When a long term care or health insurance plan is ‘self funded,’ that means there is a ‘check book’ figuratively speaking, and the plan sponsor, which in this case is CalPERS, pays the claims. The CalPERS plan has been closed to new enrollment for at least a couple of years now, so you have no new, young blood (or money) coming in.
So that’s why I urge my clients who are eligible under CalPERS to consider long term care insurance outside of the State’s plan. There are no restrictions on rate increases, there are other limitations in the duration of the of the plans offered, and it’s starting to look like there could be a sustainability problem. Ya think?...read more
09-02-2009 by Colleen King
Hey I couldn’t make this up. I’m assuming it’s the insurance industry that came up with this, not Hallmark or American Greeting since I haven’t seen any ‘Happy Life Insurance Awareness Month’ cards at the local retailers as yet in the card racks.
But as odd as it sounds, ‘Life Insurance Awareness Month,’ it is important for people to review what they have in the way of life insurance. Needs change over time, since there are times in your life when you need more coverage, and points where you can consider decreasing your coverage if you want to.
Agents are often taught that they should do annual reviews on what their clients have, but most of the time I think if you meet/talk with your agent every 2-3 years, that will work. You will need to contact them sooner if you have some life changes. Things like getting married, buying a home, having a baby, these are all times that increase your expenses so you don’t want to risk what you have by not have sufficient coverage in case the unthinkable happens. You need to consider the income of both spouses, multiply that anywhere from five to fifteen times depending on your liabilities and that will give you an idea of the amount of coverage you should consider. And if one spouse isn’t working, is the ‘stay at home’ partner, don’t assume you don’t need life insurance on them. If something happens to them, especially if you have kids, you may need to start paying for child care, need housekeeping help, and you aren’t necessarily going to be able to work as much. You may want to take time off for after school events. You may need to change jobs if you do something that makes you travel often. Just stave off a financial mess by insuring the non-working spouse, whatever your situation.
As you get older, those are times you may be able to either decrease your coverage, or elect to convert your term policy to a permanent policy, either a whole or universal life policy. If your kids are grown AND have left the nest (being grown doesn’t necessarily mean they’ve moved out on their own these days) you may be able to get by with less coverage. If your home is paid off or the mortgage balance is very low, something that current savings could pay off, you may be able to decrease your coverage.
But before you cancel or decrease coverage, evaluate the overall worth of your estate. One reason to maybe buy MORE at this point in life is to facilitate a transfer of wealth. Life insurance proceeds are tax free to the beneficiaries; some people spend a couple hundred thousand dollars to buy a million dollar policy, thereby increasing what they leave to their heirs. Also having life insurance paid to your beneficiaries can help them pay off the inheritance taxes a large estate can incur.
So for a little extra help in figuring out what you need, check out this life insurance calculator in addition to talking with an agent or financial advisor.
So, Happy Life Insurance Awareness Month–Be well!...read more
02-12-2009 by Colleen King
Health insurance, life insurance, business liability, homeowners, auto, rental property coverage, umbrella policies, long term care insurance–Wow! And of course, there are more types.
A lovely woman named Rose recently posed that question to me. There are a lot of detailed reasons, but I’ll try and make it brief. First, you have to differentiate between insurance companies and insurance agencies. Insurance companies are the entity with the really big buildings in most downtown areas and they write the checks. Insurance agencies can have big buildings too, but agencies represent insurance companies and sell to the public. Insurance companies usually choose to focus on a few areas rather than all areas. Life and health carriers also may offer Medicare related coverage, disability, long term care insurance, more ‘people’ oriented coverage. Other carriers focus on the property and casualty types of coverage; auto, homeowners, boat, umbrella policies, business liability, basically more along the lines of ‘stuff.’
Even if a company offers things from both sides of the table, there may be subsidiaries that handle it so you still aren’t going to get ‘one bill.’ From there, you have agents and agencies. There are two main licenses insurance agents hold in California, a Life Agent license or a Property and Casualty license. As a Life Agent, I can’t sell homeowners, and a P&C agent can sell homeowners but not usually health insurance. Interestingly, they can sell life insurance, but that doesn’t mean they will. Some P&C agents focus on the personal lines, but don’t do business liability and workers compensation.
If you want to narrow down who you are dealing with, it helps to find agents that handle more than one line of insurance. There are agents that carry both licenses, but that is a LOT to learn and keep up with.
Personally, I feel there is often an advantage of going to an independent agent or agency over going directly to a specific company. You select one insurance company, they generally will only be able to show you their product line. With an independent you can get a variety of options with just one person to deal with. You can still do multiple policies with one agent, and if they can bundle most or all of what you want with one carrier, you can often get multiple policy discounts.
So find a good multiple line agent, or one good Life Agent coupled with a good P&C Agent, that that should help narrow down some of your hassles. Hopefully! You could go to one doctor for all your needs, but do you really want your gynecologist performing your brain surgery? They won’t be thrilled with doing it.
Be well!...read more
12-31-2008 by Colleen King
Health Insurance, life insurance, annuities, long term care insurance–okay, my usual topics are in. But today’s article is not to talk about insurance, I just want to wish everyone a Happy New Year.
2008 was a lousy year for many people, so kick it to the curb and get ready for 2009. As far as insurance, we’ll see what actually changes in the health care arena. It won’t be fast or ‘all curing’ but I hope there will be some positive action.
Especially if it doesn’t mean me losing my source of income!
So, I wish you all a Happy NYE, and we’ll be ringing it in from the Caribbean. Hope that bodes well for smoother sailing in 2009! I look forward to answering your questions again…..
Be well!...read more
10-18-2008 by Colleen King
Long Term Care insurance is going to be an essential part of your financial/retirement planning portfolio, because despite what you may think, the government is not going to take care of it. They’re struggling now to do what they are supposed to, and it doesn’t look like it’s going to get better anytime soon.
Many people think this is something you get in your late 60s or early 70s. You can, but the problem is that rates are significantly higher at that point, and there’s always the risk that you may have developed something rendering you uninsurable.
The time to really start looking is in your late 40s or in your 50s. Reasons why:
Rates will be lower; for with each birthday, the rates will go up.
When you have no health conditions, you may qualify for a 10% ‘preferred health’ discount with most carriers. That can add up to worthwhile savings.
If you are married and you both apply there is usually about a 25% spousal discount. So you buy two policies for about 25% less each! Unfortunately, as we know, once you hit the ‘older years’ you risk one spouse possibly passing away and you lose that possible discount. Or, one of you may not qualify for coverage, so you lose the spousal discount possibility.
Case in point–I recently had two requests for quotes. My initial presentation was for a $170/day benefit, 5% compound interest inflation protection, a 3 year benefit period, and a 90 day elimination period. One lady was 52, the other was 72. Standard rate, without any discounts, not taking into consideration the possibility of a preferred health discount. The 52 year old woman’s rates per year were $2329/year. The 72 year old woman’s rates were $7800/year! And those were the least expensive rates from the three companies I queried.
So even though $2300+ a year is not cheap, long term care costs in California at this time can be as much as $80,000 per year, or more. Compare $2300 vs. $80,000. All of a sudden, it seems manageable doesn’t it?
Also, while carriers won’t guarantee it, the majority of the time carriers will not raise rates on existing policies. So locking in that $2300/year could be helpful in a few years as you are looking to retire and your income is going down.
So at least do some checking; you can’t make a good decision without good information. If you have an agent you trust, get a quote or if they don’t sell long term care insurance, ask for a referral to an agent that does. And if you’re in California, I’d be glad to help you.
10-09-2008 by Colleen King
I recently heard this statement at a sales training session, and it’s become my new mantra. Health insurance and most other types of insurance for that matter, can be really expensive and now’s not the time to be absorbing rate increases.
Even though I sell insurance for a living I don’t like to see people pay more than they need to. That doesn’t mean the least expensive coverage is the best way to go either. But there is a happy medium often times.
Life insurance rates overall have come down over the past few years so if you purchased life insurance more than 4-5 years ago, it might be time to see if there is something less expensive for you. Why not? You also have to see if what you have is sufficient. If you’ve had another child or two since you last bought a policy, it’s time to make sure that is still okay.
Long Term Care insurance–well, none of us are getting any younger, so if you are in your late 40s and up, you might consider at least learning about it. Maybe get a quote too. The old thinking was that this is something you buy in your late 60s, early 70s. By then, rates can be at least double what they would be in your 50s. Plus there’s the risk of developing a health condition that could either keep you from getting a 10% preferred health discount or rendering you uninsurable in general.
Annuities–see my September 30th post on annuities. They can be a great move in this economy if you don’t need the money right away and there aren’t enough antacids in your house to withstand the stock market volatility.
So don’t participate in the recession. If you are a business owner, you still need to market. Those that stop, their businesses don’t grow. You might not grow as much, but growth of any kind is good right now.
Be Well!...read more
08-13-2008 by Colleen King
The problem with Long Term Care insurance when speaking to prospective clients about it is the cost. That may come before or after the denial of the need for it, because none of us want to admit that we need it. At least I don’t, but I bought it anyway. To avoid ever needing it, because if you can’t eat it or wear it, I don’t want to spend money on it.
In the conversations with people about this frequently and the reasons I hear for not needing it are as follows:
It’s too expensive
My kids will take care of me
I’ll never go to a nursing home!
Okay well, here’s the deal. The expense, just like we don’t want to admit the McDonalds Cheeseburger isn’t 35 cents anymore, you can’t find safe care for $1000/month. Check out the following numbers:
In California, over the past five years, costs increased 19 percent in Los Angeles, 12 percent
in San Francisco, 21 percent in Oakland, 9 percent in San Diego, 9 percent in San Jose, and 28
percent throughout the rest of the state. This compares to a 17 percent increase nationwide.
The study, which found that nationwide the cost of long term care in nursing homes, assisted
living facilities and in the home increased for the fifth consecutive year, also found that one
year in a private nursing home in San Francisco costs $100,101. The comparable cost in
Los Angeles is $76,459, while in Oakland the cost is $92,740, in Sacramento the cost is $92,094
and in Santa Ana the cost is $86,934. The annual cost for a room in a private nursing home runs
$82,560 per year in San Diego and $89,973 in San Jose, while the cost throughout the rest of the
state averages $72,919.
By contrast, the national average for a year in a private nursing home is $76,460 - more than one
and a half times the average annual household income in the U.S. of $48,201. Most long term care
services in this country are rising at a rate faster than inflation, as the cost of providing
this type of care continues to rise.
SO, basically just because you've saved in your retirement fund, you can deplete that very quickly
with long term care needs. Looking into a plan that will cover care at any level, home, assisted
living or nursing home, and has some sort of inflation protection so the daily benefit level will
rise annually is crucial. Your kids will probably have families of their own and may have health
problems of their own by the time you need assistance. With a long term care policy, they can take
care of you if they are able, but supplement that with outside caregivers so they don't run
themselves into the ground. You need to at least look at it. Be well!...read more
07-22-2008 by Colleen King
The topic of Long Term Care insurance can be a real tough discussion. We’re talking about something that deals with us aging, being unable to care for ourselves and it can be expensive! That’s uplifting.
I would have been able to put my head in the sand too if it had not been for a few things in my life, both professional and personal. I was an emergency nurse for many years, and even though an emergency department brings visions of car accidents, stabbings, shootings and drug overdoses (at least where I worked) the other thing you would see was families bringing in an elderly relative that they could no longer take care of at home.
These poor debilitated people didn’t need acute medical attention, but without getting too graphic, they were bedridden, no bowel or bladder control, couldn’t feed themselves, I’ll stop there. When people get to that point they need what’s called custodial care. Medicare doesn’t cover it, MediCal (California’s version of Medicaid) will, but only after you deplete the person’s assets. It can get ugly and destroy what they worked hard to save for all those years.
You don’t need to be elderly to need custodial or nursing home level of care, and that’s another reason that long term care insurance can be important at any age. Instead of just getting old, younger people have motor vehicle accidents that leave them a mess, the unusual illness at a younger age could leave you needing help, anything can happen at any age. Does that mean you need to get it at age 25 or 30? There’s a lot of debate about that in the industry. Get it at a younger age, your rates are lower, you are still insurable, those could be good reasons. It used to be that you would start looking into it in your late 60s/early 70s, but it gets more expensive and there’s a greater chance that someone can be uninsurable. 50s are good, even late 40s–that’s when I did mine.
Personally, I had tried to talk my mom into doing this for years–she lives in another state and I’m not licensed there, so it’s not like I was looking for a sale. I just knew the cost of care versus the cost of long term care insurance, her overall financial situation and it made sense. She said she’d get to it, blah, blah, but never did. My mom was and still is very active, so I can understand. We lost my dad when he was only 62, it could have been useful during his cancer care, but in 1991 things were different in insurance.
But she called me one morning, in tears, because her husband (she remarried a good guy) had a TIA, or mini stroke. Well that knocked him out of the running and that’s what I told her. THAT got her attention, and within a few months she bought long term care insurance from an agent she had a long standing relationship.
Back to the professional side, when I speak to clients and prospective clients, they tell me they don’t need it, their children will take care of them. Well, back to the old ER scenario. We’d see debilitated people in their 80s and 90s, and their poor kids were in their 60s or 70s. Even before then, the children could have their own health issues that would preclude them from doing the heavy physical care that is often needed.
SO, when you look at $2000-$3000 per year for this coverage, where you are buying a large ‘pool’ of money that can potentially grow over time, compare that to the $60,000-$80,000 per year that in home, assisted living or nursing home care can cost. All things to look at, so if you have an agent you trust, talk to them. If you don’t, and you’re in California, I’d appreciate the opportunity to talk to you. Be well!...read more
07-12-2008 by 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!...read more