What Social Security Pays Survivors
A term life insurance policy can be locked in for 1 to 20 years. It is often the best – and cheapest – bet for families who want to provide for the future in the event of the loss of a breadwinner and who want to target the years when their insurance needs will be greatest.
A term insurance policy can often be rolled into a whole life policy later. “Whole life” (also called guaranteed-permanent) insurance provides a death benefit until you reach the age of 90 or 100, as long as you pay fixed premiums – premiums that cannot have unscheduled increases. (more…)
The Best Long-Term Care Policies
In the course of writing Long-Term Care: A dollar and Sense Guide, Susan Polniaszek examined nearly 1,000 policies. Here are her favorites:
Amex: The former Fireman’s Fund offers a traditional policy focusing on nursing home care with an option for home health care. It also offers an integrated policy, which means you can buy four years of care and apply it to either nursing home or home health care, witj a managed care option that increases your benefits if you use the company’s providers.
Continental casualty company: The Classic plan lives up to its name as a traditional nursing home plan. A second, Premium plan allows you to buy a pool of days instead of the usual pool of money. Your benefits are limited by the number of days you need care instead of the care’s cost.
John Hancock: A higher standard of admittance than most. You need to have help with two of the five activities of daily living before receiving benefits. A policy debuting in late 1995 will allow spouses to draw on each other’s pool of funds.
Lincoln National: This life insurance company offers a traditional policy as well as a policy that allows you combine your life insurance and long-term care policies. It is expensive, but guarantees you or your family will see some return on your investment.
The Travelers Insurance Company: Their pool of funds policy mostly follows the traditional model.
Unum: This life insurance company markets an expensive benefit that allows your family members to be paid for home health care. Most plans require a licensed professional to receive the benefits, but UNUM allows spouses or children to be compensated.
Playing the Odds When You’re 65
Premiums are expensive, and benefits could be a long way away
If you’re 65, there’s slightly more than a 60 percent chance you’ll never collect anything from a long-term care policy. There’s a 75 percent chance that you’ll need care for less than a year, and chances are, you will have the resources to pay for it. On the other hand, there’s a chance that you or your spouse will need nursing care for five years or more. That bill could wipe you out.
Even so, long-term care coverage is expensive, and policies are often full of loopholes that allow insurers to avoid paying claims. No wonder few people over 65 have ponied up. (more…)
Having Trouble With a Claim?
Just when you thought things couldn’t get any worse…
It’s bad enough that your car’s been smashed, your house broken into, or you’ve suffered some other unfortunate calamity. Now, you have to face your insurance company. The good ones make it almost painless. But, if you’re having difficulty getting a fair claim settlement, the consumer Federation of America’s Insurance Group suggests the following:
Keep good records. When you have a claim, keep a file on what happens. Write down who said what and when. It could mean thousands of dollars later because the company, the state insurance department, and any attorney you might go to will need clear facts to work with. (more…)
The Automotive Guessing Game
Reading your insurer’s mind can save your money
If you’re a 22-year-old male driving a souped-up Porsche, you may want to think about getting married. There’s nothing cheap about a high performance sports car, including insurance premiums, but insurers do give a discount to married sports car enthusiasts under the assumption – based on hard data – that they will get into fewer accidents.
That doesn’t mean you should get married just to get a lower rate, of course, just that auto insurers know more about you than you think. Like anyone that makes a living by gambling, insurance companies make it a point to know the odds. Years of accumulating data on the kinds of people who will get into accidents have allowed them to play the percentages with increasing accuracy. (more…)
Playing the Rating Game
How you can tell which insurance companies have staying power
The financial strength of your insurance company is all the insurance you have that the firm will be around when it’s time for you to collect on a policy. But how can you tell if any one company is financially strong or weak?
Fortunately, you don’t need to spend hours poring over financial statements. Several independent organizations specialize in issuing “ratings” of life insurance companies. You should check a few best-known rating agencies. (more…)
Picking Up An Extra Rider
Standard policies often don’t cover the things you value the most
A rider is an extra piece of insurance that covers special property in special circumstances. For example, if you read the fine print of your policy, you may discover that jewelry is covered up to a specified amount against certain named perils. But what if your necklace is stolen and theft isn’t one of the named perils? You’re out of luck – unless you have a rider. Some circumstances in which you might consider adding a rider to your policy: (more…)
Home Sweet Home Insurance
You may be able to cut your premiums as much as 50 percent
Experts estimate that over a third of the some 60 million people who pay homeowner premiums could cut their home insurance bills significantly – in many cases by 50 percent or more. Yet many are unaware that they qualify for various discounts. Slimming down your bill needn’t be time-consuming. Nor does it require much expertise about the fine print in insurance policies. In fact, your research may amount to no more than a few well-placed telephone calls. (more…)
The Nightmare scenario: Rates are zooming, but you can’t afford not have a policy
Here’s a frightening fact: Insurance companies report that if a disability keeps you out of work more than 90 days, you’re not likely to work again for about three years.
The usual source of long-term disability coverage is your employer. But if you ever need it, this coverage will probably not be sufficient. For starters, only 60 percent of your present earnings are covered. Disability insurance payments paid under your employer’s policy are taxable. Pension and retirement funds, bonuses, overtime, or special pay may not be covered by your group disability plan. (more…)
Attention, Heirs Apparent
Ways to escape estate taxes and die happily ever after.
There’s no getting around death and taxes. Even after death, there can be taxes – and lots of them. Sure, if all of your assets go to your spouse, there won’t be any estate taxes. And you get break on the first part of your estate, which is tax-free. But after that, estate tax rates start at 37 percent and rise to 55 percent. For estates of $10 million to $21 million, there’s an extra 5 percent surcharge, which brings the the top rate to 60 percent. What’s a rich guy to do?
Well, buy insurance for one. Financial planners generally urge couples with estates of some million or more to look into using life insurance to pay estate taxes. When you die, you life insurance proceeds are not subject to income tax. If the policy is owned by someone else, such as a child or an irrevocable trust, it will not be part of your estate and will not be subject to estate taxes either. (more…)