Monday, December 3, 2007

I Love Insurance. Maybe You Don't.

Life Insurance is an incredible tool when used in the right way for the right purposes. Long Term Care Insurance can create a peace of mind for the caregivers and families that is hard to explain if you haven’t been there.

But for some reason, some people don’t like insurance. Won’t consider it. Why?

A couple of reasons come to mind:
1. No one wants to think about the bad things that happen that trigger the need for insurance;
2. The monthly premiums can disrupt a family’s budget;
3. With some types of insurance, you may not get your premiums back if you don’t need the coverage; and
4. Sometimes you simply can not get coverage due to age or health.

When you look at Long Term Care protection, there are options for people who don’t choose to buy insurance for whatever reason, or who can’t buy insurance due to age or health considerations. Let’s look at little closer.

First, consider the family that objects to LTC Insurance because the premiums “are gone if you don’t make a claim”. (Strangely, these same people do not object when they don’t have to make a claim on their auto, health or home insurance.)

For them, I ask, “How would you feel if I showed you (1) LTC Insurance that would return your premium if you did not make a claim, or (2) Permanent Life Insurance that allows you to tap into the death benefit for Long Term Care expenses, or (3) Asset based options that do not have monthly premiums and can guarantee a lifetime income stream to help cover LTC expenses?”

I have been involved in many “Medicaid Meetings”. These are very sad times. I have these meetings with the children of family members who have been diagnosed with something that is going to put them into some type of a Long Term Care program. It is too late for insurance.

Now, thanks to some unique products offered by excellent companies, we may be able to avoid Medicaid and the dreaded “Spenddown” that can wipe out a life savings.

The first criterion is that they have enough assets to work with. The amount determines how much guaranteed cash flow that will paid out for life. If there is more than enough to cover his or her expenses, it may be possible to also recover all or a part of the initial single premium that was paid.

Whatever the mindset that your family may have regarding insurance to protect your lifestyle, there are options that can provide solutions for the growing, critical problems of outliving your Retirement Nest Egg, including if a loved one needs Long Term Care.

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