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Insurance Services for Seniors
Long Term Care, Home Health Care Insurance, Assisted Living, Life Insurance Settlements, Health Savings Accounts,
Medical Supplement Insurance, COBRA
Insurance Information Center
Search 10,551 Rated and non-Rated companies found (within Consumers population), results sorted by Company Name or search by company name or check out information by state.
http://www3.ambest.com/consumers/default.asp
If you're considering buying a long-term care policy, be sure to do your homework first.
A long-term policy is supposed to pay for in-home, assisted living or nursing home care. Typically, benefits will be triggered by diminished mental ability, as with Alzheimer's, or if you can't perform activities of daily living: walking, dressing, bathing or eating, for instance. Many insurers spell out a list of activities; you must be unable to do a certain number of them for benefits to kick in.
The cost of premiums depends on the insurer, as well as the policy's provisions. Some provisions will affect your price more than others. They're listed here in rough order of their impact:
Age. A married 55-year-old person in good health will pay an average annual premium of $1,027 for a policy with benefits of up to $150 a day for three years, according to the American Association for Long-Term Care Insurance. When you turn 65, the premium jumps to $1,939. (Most policies are unisex). Typically, you can't get a long-term policy after age 79.
Daily benefit. A policy that pays $100 a day costs less than one that pays $200 a day.
Length of benefit. You can buy policies that pay for one year, three years — or as long as you need them. The longer the benefit, the more you pay.
Waiting period. A policy that kicks in as soon as you need it will cost more than one that won't start until you've paid for 30, 60 or 90 days of long-term care yourself.
Health. If you're in good health, you can often get a discount. If you're not, you may not be able to get long-term insurance at all.
Features. Many policies offer an inflation feature; your benefits will be adjusted up for inflation every year. Typically, a policy whose inflation feature is linked to the consumer price index is cheaper than one that awards a flat 5% inflation boost to benefits each year. If you're worried about cost, opt for a policy that pays out for three years. The odds are good you won't need more than three years. A recent study found that just 8% of claimants with three-year payout policies exhausted their benefits, says the long-term care association.
Similarly, you might opt for lower daily payouts. That's because you might be able to count on Social Security, or your own savings, to make up the gap.
Your choice of coverage should depend on a variety of factors, says Joseph Matthews, author of Long-term Care: How to Plan and Pay for It. If Alzheimer's runs in your family, consider opting for unlimited benefits. Here are Matthews' main tips for buying long-term care insurance:
Buy from an established national company with financial strength. You can obtain ratings for most insurance companies from A.M. Best, an insurance evaluator: www.ambest.com. Remember: You're buying a policy you may not need to use until 2020 or beyond; you want the insurer to stick around.
Look for flexibility. Make sure your policy will pay for home health care, nursing home care, or even respite care, which gives caregivers a break. Also be sure the policy will cover Alzheimer's and other long-term cognitive disorders.
Buy the inflation rider. A payout of $100 a day would be worth only $76 a day after 10 years of 3% annual inflation.
Shop around. Insurers have the right to change premiums. Don't just look for the lowest initial premiums. Insurers with low prices now might raise rates later.
Should you buy long-term care insurance? It depends. The odds of spending many years in a nursing home are fairly low if you're in good health and have no family history of Alzheimer's or stroke. But if you fear being a burden to your family, or if you don't want to wind up in a nursing home paid for by Medicaid, you might consider a long-term care policy.
First things first. "There's no sense in buying long-term care insurance if you're not paying your bills or funding your retirement," says Gregory French, an elder law attorney in Cincinnati.
Statistics show that at least 6.4 million people aged 65 or older need long-term care, with one in two over age 85 requiring care. At least half of the population who are 85+ will need help with Activities of Daily Living.* Such care is provided when someone can no longer independently carry out essential everyday activities like eating, bathing, dressing, etc. Most people think of long-term care as something needed by older people, but accident or illness can strike someone of any age. When it does, they too may find themselves in need of assistance.
Traditionally, women in our families have provided this care when needed. However, today’s smaller families may be scattered across the country, and many women are now working outside the home. What’s more, caring for a loved one full-time can overwhelm even the most devoted family member. As a result, more caregivers than ever are turning to outside resources to help with the care of a family member.
Many people automatically think of nursing homes when they think of long-term care, but there are other options available as well, some provided in your own home or others in the community. This pamphlet* explains some of these long-term care arrangements, what they cost and how to shop for a long-term care insurance policy to help cover such expenses.
*Planning for Long-Term Care
United Seniors Health Council, Washington, D.C., McGraw-Hill, NY, 2002
Long-term care is so expensive that many people risk losing their life savings within a year of having such care. A year in a nursing home can cost from $40,000 to $80,000*, depending on the area of the country. Even a temporary stay in a nursing home can derail years of careful financial planning.
Insurance experts estimate that about one-third of all long-term care services are paid for by individuals out of their own savings or investments. The funds may come from pension plans, employee stock ownership plans, single premium annuities, the cash value of life insurance or savings.
Check out Long-Term Care Quote (www.ltcq.net) an independent agency specializing in long-term care insurance. Long-Term Care Quote will find the best long-term care policy and premiums for you or your family from a choice of top-rated insurance companies. There is no cost or obligation to use this service..
Make sure the insurer is a stable, reliable insurance company. Rating services like
http://www.weissratings.com/
http://www.ambest.com/
http://www2.standardandpoors.com/
can help you do this.
Check the benefit amount the insurance will pay you. $100, $150 $200 per day. The amount of the benefit and the time that elapses between when you are medically certified to need it, your age at the time you purchase the insurance and when the benefit actually begins have a great deal to do with determining the amount of your premium.
Check to see if there a maximum dollar amount the insurance will pay out and how long will you be covered? The length of coverage also determines the cost of the insurance.
Is there a difference between being admitted to a nursing home and staying at home with a registered caregiver? Who determines if you are able to receive benefits? Your physician? The insurance company?
Order the free Life Advice® guide about Long-Term Care produced by the MetLife Consumer Education Center with assistance from the American Association of Homes and Services for the Aging, Center for the Study of Aging and Health Insurance Association of America (HIAA).
www.longtermcare.genworth.com
Go to what is the cost of long term care
www.longtermcare.gov
Under paying for long-term care check out cost of care
www.metlife.com/maturemarketinstitute
Click on studies and then go to 2006 MetLife Market Survey of
Nursing home and Home Care costs
www.notaburden.com
Go to For Producers link and check under cost by state calculator
What is Life Insurance Settlement
This allows you to convert your life Insurance policy into cash
If you no longer need to have a life insurance policy or can no longer afford the premiums you can, of course, let the policy laps and collect what ever the cash value is if there is a cash value.
You may also decide to “sell” your policy and in most cases collect a good deal more than the surrender cash value. This is usually done through a broker who will check with a number of investors with the usual sale typically resulting in your receiving 3 to 5 times the cash surrender value of your policy.
Life settlement can apply to both straight life insurance and in some cases to term insurance (which has no surrender cash value) as well. In most cases purchasers expect you to have reached the age of 70. The value usually depends on your age as well as your health. A health person around 70 years old will receive much less than someone in his/her middle 80’s who is not well.
If you sell your policy the purchaser will pay your premiums and collect the full face amount of the policy after your demise.
If you are 70 years of age or older and have a $1,000,000 or larger policy currently in force you can contact Sandy Schmidt at Schmidt Financial Group, Inc sandy@schmidtfinancial.com,
733-774-2600 to see if your policy might qualify for life settlement.
Any financial dealings of this magnitude should be checked by your attorney and RetiredBrains makes no guaranteed as to the legitimacy of this or any firm included on the Website..
The value of Universal Life
This information below appeared in CNN Money.com in Walter Undergraves’ column Ask the Expert.
…let me first explain to readers who are unfamiliar with VULs and EIULs just what they are.
Although they're often referred to as retirement plans, in fact these are nothing more than insurance policies, specifically variable universal life (VUL) and equity indexed universal life (EIUL). Both are designed so that a portion of the premium you pay buys insurance coverage, while the rest goes into investments that build the "cash value" portion of the policy.
With a VUL, you invest in portfolios known as "subacccounts," which are essentially the equivalent of mutual funds. Most VUL policies offer a dozen or more such subacccounts, everything from domestic and international stock funds to all sorts of bond funds.
An EIUL, on the other hand, allows you to invest a portion of your premium in an investment whose return is pegged to a benchmark such as the Standard & Poor's 500 index. The idea is that you get the upside of stocks' returns, but also downside protection in the form of a small guaranteed return.
So how do these policies amount to retirement plans? Well, the pitch in both cases is that you invest in the policy, your cash value builds without the drag of taxes over time and in retirement you begin withdrawing money as you need it for living expenses.
And there's one more big lure: instead of just pulling the money from the policy, you borrow against your cash value at attractive rates. Since policy loan proceeds aren't taxable, you have the prospect of tax-free retirement income.
All this sounds delightful, of course, but there are some major downsides to consider. First, a portion of your retirement savings is going to life insurance, and the cost of that coverage is often higher than what you would pay for a regular old term insurance policy.
Then there are a variety of marketing fees and sales commissions that cut into your return. In the case of VUL, there are the annual operating costs for the sub accounts as well as an annual fee known as the "M&E" or mortality and expense charge, all of which lower returns even more.
The investment fees are less explicit in EIUL policies, but they're there nonetheless, built into the formulas that are used to calculate returns.
Speaking of those formulas, they're typically so complicated and convoluted, it's difficult for any average person to follow them, let alone understand whether or not you're getting a good deal. (Equity-indexed annuities are similar to equity indexed universal life policies from an investment point of view.)
And both types of policies come with a big potential tax trap - namely, if you've borrowed from the policy and then let it lapse, the investment earnings you've withdrawn that were touted as tax-free become taxable. So if you've been using the policy for income in retirement, you could end up facing a substantial tax bill late in life when the last thing you need is to be shelling out beaucoup bucks to the IRS.
I think these policies are too expensive, too complicated and too much trouble to be worthwhile.
In my opinion, you're better off maxing out your 401(k), investing in an IRA if you can, funding any other tax-advantaged accounts you may have access to (such as a SEP or solo 401(k) if you've got business, freelance or self-employment income), and then moving on to tax-efficient investments in taxable accounts, including low-cost index funds, ETFs and tax-managed funds.
If you've done all this and still have money to invest for retirement and are considering a VUL or EIUL, I recommend you first read "Variable Universal Life: Worth Buying Now?," which was written by James Hunt, a former Vermont insurance commissioner now with the Consumer Federation of America.
If you're still hot on getting one, I suggest you take the policy, the cash-value projections and all the information you can get about fees and costs and go to a financial planner who doesn't depend on the sale of such policies for his or her livelihood for a second-opinion about using the policy for retirement income.
If after doing this, you're confident that you understand the costs and the risks and you still want to buy such a policy, fine. But if that decision comes back to haunt you later on, don't say you weren't warned.
Walter’s column appears monthly in MONEY magazine and he has a weekly e-mail newsletter that you can sign up for at http://money.cnn.com/pf/expert/
Assisted Living
Seniors or retirees can elect to live by themselves, but individuals or couples who elect to do so must be active and able to care for themselves. Home health aids are available to assist those in need of their services and hospice workers can come into the home when a senior is in the last stage of life. Many seniors also arrange for live-in help which, although expensive, is often far less in cost than most other choices.
Sunrise Senior Living based in McClean, VA is one of the largest assisted living companies in the U.S (380 communities) and has a home-care division which provides in-home care for the elderly and infirm.
Silverado Senior Living based in San Juan Capistrano operates home-care in CA, TX & UT
Some Jewish Homes for the Elderly like the one in Fairfield, CN offer home-care. Check out your local home to see if they offer this service.
www.longtermcare.gov/LTC/Main_Site/index.aspx
National Association of Insurance Commissioners www.naic.org.
Click on More Consumer Alerts for long term care information
www.smartmoney.com click on personal finance
Costs vary depending on
- age at purchase
- daily benefit
- duration of benefit
- when benefits kick in
Major players that provide long term care insurance include:
John Hancock, MetLife, Prudential, MassMutual, New York Life
Assisted living communities are designed for seniors who are having difficulty managing on their own, but who can provide a basic level of personal care including eating, taking their medication and bathing without assistance.
Continuing care communities usually have facilities for seniors in various stages of the aging process. Many of these communities include independent housing, assisted living facilities and nursing homes as well as rehabilitation care/facilities.
Nursing homes offer a higher level of medical care usually under the supervision of a physician and are designed for seniors who can't care for themselves, suffer from dementia or Alzheimer's or are at the last stages of their lives.
A 2004 study by MetLife Mature Market Institute provides the following information: "The national average monthly cost for assisted living was $2.534. At the high end was Silver Spring, MD at $3718 and at the lower end was $1,340 in Miami. The average cost to stay in a nursing home was $192 per day. The average cost for home health aids was $18 per hour".
There are many different kinds of insurance scams that target seniors. The National Association of Insurance Commissioners http://www.naic.org/ provides information and links to help you avoid being scammed.
Home Health Care and Long Term Care Insurance can pay for nursing home or health-aids at home. The costs of these policies have risen substantially in the past few years. Check out several insurance companies prior to purchasing this kind of insurance and make sure to see if these carriers have raised their rates for existing customers over the past few years.
The cost of the insurance depends on several factors.
- What is the maximum daily benefit? $100, $150, $200?
- How long will this benefit be paid 1 year, 2 years 5 years?
- How long after you are judged in need of nursing home or home health care benefits before the daily benefits kicks in. 30 days, 60 days 90 days? It may take 30 to 90 days before receiving the first benefit payment after submitting a claim. Take this into consideration when choosing an "elimination period".
- Is the coverage the same if you stay at home as opposed to being admitted to a nursing home?
- You can also consider depositing a single sum or making deposits over ten years into a special type of annuity that will pay out a percentage of the total value for your care either at home or a nursing home. If the entire fund is not used during your lifetime the balance of the benefits will go to your heirs. Of course it is also important to understand the parameters of what constitutes your need for these benefits and who makes this determination. Your physician? The insurance company? An insurance company approved retirement provider or caregiver?
One of the best ways to save on your premium is the purchase of a policy with a long elimination period. If the period is 90, 120 ,150 days or even a year, the cost of the policy will be a great deal less than if the period is only 30 days or starts right away. However, the cost of care is substantial; often more than $100,000 a year and most seniors simply cannot afford to pay for their care and for out of pocket for more than a month or two.
Stand Alone Home Health Care policies are generally much less expensive than Nursing Home/Home Health Care Policies. They are designed to pay for care at home, not in a nursing home. There are two advantages.
- The patient can be kept in his/her own comfortable surroundings.
- The cost of the protection is a great deal less.
Policies can be designed to pay benefits for 1 year up to a lifetime. Benefits can be set to start immediately or put off for up to 365 days. The shorter the benefit period and the longer the elimination period, the lower your cost will be.
For example, a 60 year old, healthy, non-smoking male, using A F & L Insurance Company and starting coverage from day one with benefits extending a lifetime would cost about $830.00 per month. Using Physicians Mutual Insurance with benefits starting after 365 days and extending only one year the cost would be about $157.00 for the year. Of course there are many alternatives between these extremes.
(This information was supplied by Gil Nickelson, CLU, ChFC, SFS and is based on quotes which could increase in subsequent years).
For help in choosing a nursing home, negotiate fees, resolve billing questions or find assisted living quarters, look at Senior CareGuiders http://www.careguiders.com/.
The Medicare Web site http://www.medicare.gov/is a good resource to help you find nursing homes convenient to the location you are looking for.http://myhealthcareadvisor.com/ can assist you choose a hospital and make health care decisions but there is a small charge (at publication time it was $12 for a 6 month subscription) to subscribe and get answers to your questions. Powered by Subimo hospitals are ranked from 1 to 100 based on a number of factors including use of technology and cost. The information provided on the site says "The Healthcare Advisor is a powerful personal health management tool, integrating cost and quality information to help you make better health care decisions. Whether you’re looking for information on a common medical condition or procedure or, where to go for treatment, the Healthcare Advisor empowers you to make the right choice by presenting what you need to know clearly and simply."
Medicare is the federal government’s health insurance program for the disabled and those 65 years and older. Many Americans believe Medicare will pay their long-term care bills, but in fact it pays for a small percentage of all nursing home costs. At present, it may cover skilled care in a nursing home for the first 20 days (and a portion of the cost for the next 80 days) if admission follows a three-day hospital stay. The biggest gaps in Medicare’s long-term coverage are:
- No coverage for custodial care, either at home or in a nursing home
- No coverage in a nursing home without prior hospitalization
- No coverage for nursing home care after 100 days
- Coverage only in a Medicare-approved facility
To apply for Medicare or obtain information about the program, contact your local office of the Social Security Administration. For a free copy of The Medicare Handbook, write to CMS, Office of Public Affairs, 200 Independence Ave. SW, Washington, DC 20201, or call the Medicare Hotline at 1-800/772-1213.
Medicare supplement insurance (often called Medigap) is private insurance that supplements Medicare benefits and may cover copayments and deductibles for medical and hospital expenses. Medigap policies generally do not provide coverage for long-term care.
Medicare managed care. Instead of purchasing a Medigap policy, some people enroll in a Medicare HMO to supplement their Medicare benefits. Such plans may provide more preventive services and charge lower copayments. However, you are generally restricted to participating providers (physicians, hospitals, nursing homes, etc.). Again, such plans generally do not provide coverage for long-term care. Short-term nursing home care covered by Medicare and your Medicare HMO is usually available only in participating facilities.
Medicaid is a joint federal/state program that pays for health care for people with limited income and assets. More than half of all nursing home costs are picked up by Medicaid. To be eligible for Medicaid reimbursement, nursing home care must be provided in a Medicaid-approved facility. To receive Medicaid you must meet federal poverty guidelines for income and assets and may have to “spend down” or use up most of your assets. Some assets, such as your home, may not be counted when determining Medicaid eligibility. To obtain information about the program, contact your local Medicaid office or Department of Social Services.
Long-term care insurance is private insurance designed to help pay for nursing home or home health care expenses. It is available to individuals and may be available under a group policy. You pay a premium to an insurer in return for protection against the high costs of long-term care
For additional resources, contact these organizations:
AARP http://www.aarp.org/ppi
Home Renovations for the Elderly http://www.homemods.org/
Consumer Consortium on Assisted Living, http://www.ccal.org/
National Assn for Homecare & Hospice http://www.nahc.org/
National Center for Assisted Living, http://www.ncal.org/
Assisted Living Federation of America, http://www.alfa.org/
Total Living Choices, http://www.tlchoices.com/
National Alliance for Care Giving http://www.caregiving.org/
National-Family-Caregivers-Associations http://www.nfcacares.org/
Caring From a Distance http://www.cfad.org/
Center-for-Medicaid-and-Medicare-Services http://www.medicare.gov/
Alzheimer's Association http://www.alz.org/
Oncolink (Cancer help) http://www.oncolink.upenn.edu/
Aging Network Services http://www.agingnets.com/
Eldercare-Locator http://www.eldercare.gov/Eldercare/Public/Home.asp
SeniorBridge Family http://www.seniorbridgefamily.com/
You may also contact the National Association of Professional Geriatric Care Managers http://www.caremanager.org/520-881-8008
The-National-Academy-of-Elder-Law-Attorneys http://www.naela.org/520-881-4005
Health Insurance Costs
Retirees and seniors thinking about retiring must plan for health-care costs, or they will likely find themselves facing financial problems. As one gets older health care becomes more expensive. A study by the Institute for the Future found that seven in ten Medicare beneficiaries have two or more chronic ailments and that roughly half of Americans now turning 65 will at some point spend time in a nursing home, with one in ten staying three years or longer. The federal Centers for Medicare & Medicaid Services performed a 2004 study which found that health-care spending in the United States surged to $1.6 trillion in 2002. Prescription drug costs grew 15.3 percent for the year, far outstripping the growth of most pension checks and Social Security checks. According to the Kaiser Family Foundation and the Health Research & Educational Trust, family premiums in 2004 in employer sponsored health-care plans rose 11.2 percent over the previous year to $9,950.
Planning for Increases
Why provide you with all these scary numbers? In order to make sure you understand that although Medicare helps, it will not entirely solve the problem of high health-care costs. You must plan for it yourself. Take a good look at how much you’ll need for health-care costs. If you have not retired yet, consider postponing retirement a bit if you can’t find ways to cover the costs. If you have already retired, consider taking a part-time or temporary job or reducing your monthto-month expenses accordingly. This advice is particularly important for seniors hoping to retire before Medicare coverage takes place.
Employers are finding that paying health benefits to their retirees is becoming so expensive that they are looking for ways to cut these expenses. Seventy-nine percent of employers in 2004 raised the portion of the premium they expect retirees to pay, said Alix Nyberg in the February 2005 issue of CFO Magazine.
According to a Kaiser/Hewitt 2004 survey of companies with one thousand or more employees:
85 percent will very likely or likely increase retiree contribution to premiums for health benefits 51 percent will very likely or likely increase retiree coinsurance or co-pay
49 percent will very likely or likely increase retiree drug co-insurance or co-pay
With this information in mind, seniors should be planning to pay for a larger portion of their health insurance in the coming years. The costs for health insurance prior to reaching the age of 65 when Medicare becomes available are substantial. Depending on the policy it can be thousands of dollars a year.
Health Savings Accounts
Health savings accounts or HSAs that became available via the 2003 Medicare Drug Act are a way to help pay for these costs. They allow employees to save up to $2,650 on a pretax basis per year for future medical care. These are employee owned accounts that can be moved if you change employer. All funds that accumulate in these accounts are tax free.
Some employers provide employees nearing retirement with health reimbursement arrangements, which allow employers to credit amounts of money toward a retiree’s medical benefits. These accounts can’t be used prior to retirement. Ask your employer if such a plan is available for you.
Medicare Supplement Insurance
Once you reach 65 a Medicare supplement insurance policy can be purchased for comparatively little money. Some of these policies include partial payment for prescription drugs. In order to be eligible for any kind of health insurance that does not exclude preexisting conditions, you must present a certificate of creditable coverage to the insuring company.
This document will show that you had insurance prior to switching coverage. If you are unable to secure this document, any condition you had prior to your new insurance becoming in force will not be covered. Thus, it is very important that you maintain your old insurance while applying for new coverage.
COBRA
If you leave your current job you can COBRA (Consolidated Omnibus Budget Reconciliation Act) their insurance for a year and a half. Under COBRA, you must pay the full costs of the insurance yourself, but at the rate your employer is currently paying for your coverage. COBRA applies to both employee and family if the family has had prior coverage.
For more information on COBRA go to the U.S. Department of Labor Web site:
http://www.dol.gov/dol/topic/health-plans/%20cobra.htm.
According to the Labor Department, “The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.”
COBRA generally requires that group health plans sponsored by employers with twenty or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
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