If you're considering buying personal insurance, you have unlimited options, both as to product choices and the companies offering them. The questions you may have are what do I need, what should I consider, and in what sequence?
A lot will depend on the purpose for the insurance and your age. For individuals, there are four primary insurance planning considerations: Life, Disability Income, Critical Illness, and Long Term Care. Let's take a brief look at these options.
1) Life Insurance: The foundation of any one's planning-especially if you have a family, a business, a large estate where you want to preserve assets (who doesn't) from various state and federal taxes, or possibly charitable giving desires.
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Types of life insurance plans include term polices. These are designed for temporary needs, covering a specific purpose or time or cash flow considerations. Depending on age and if you qualify, you can buy guaranteed level premium plans covering ten to thirty years in length. These are strictly death benefit policies and offer no cash values.
Permanent plans (Whole Life, Universal and Variable Life) have cash values and are designed for long term use. Premium and cash values may fluctuate in Universal and Variable Life plans. Whole Life policies offer level premiums and guaranteed (basic) cash values.
These plans can provide cash values that could be used for borrowing in an emergency, college costs or a business need. If values are sufficient, they could be used as a supplementary retirement income source. There are unlimited uses for life insurance.
2) Disability Income Insurance: Available while employed, these plans replace a percentage of income when a sickness or accident results in a long period of not being able to work. Benefits begin after a waiting period. Many foreclosures are due to loss of income due to a disability. A plan through an employer has limited benefits while an individual policy is portable and can help make up what a policy through an employer may provide. The odds of experiencing a short or
long term disability are pretty good.
3) Critical Illness Insurance: These plans are well known in Europe and Canada and in the past few years have become more aware of in the U.S. Unlike disability income plans that replace incomes, these policies pay a lump sum to the insured when qualified serious health events occur. Conditions may include: Stroke, Angioplasty, Bypass Surgery, Heart Attack, certain Cancers, Renal or Hearing failure, MS, Organ Transplants or Alzheimer's. It's your money to use as you wish. Maybe pay medical deductibles, alternative care not paid by medial plans, pay bills, etc. These may be available in group plans with limited benefits or individual plans with higher lump sums. Also, these plans are available and not considered even if you have a Disability Income policy.
4) Long Term Care Insurance: Yes, getting older may
result in substantial unforeseen expenses; nursing home costs (average over $203 per day*), Assisted Living facilities, Adult Day Care, or continuous staying at home services. Medicare or health insurance isn't going to pay for long term custodial care. States are running out of funding for Medicaid. Actually, a good percentage of long term care needs occur before age 65. **
No, these plans are not inexpensive at older ages and aren't for everyone. Some employers may offer a plan and some states have Partnership Programs where basic plans can be purchase. If you are healthy now but can't afford a plan, if you have children, see if they will help pay the premium. Some benefit maybe better than no benefit.
So, you have a number choices to cover various needs and life events that can happen when you least expected it. That's what insurance is for. Get profession advice and product price comparisons and from quality insurance companies that specialize in these plans.
* 2009 Glenworth Financial Cost of Care study. Average national private room.** Freeseniorcitizenssolutions.com. 40% of people receiving long term care services are between
ages 18-64.
Cal DesVoigneLifeStyle
Financial Resources
LLCWilmington NC
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