Term Life Insurance Lowdown

You Have a 1 in 8 Chance For Disability

You have auto insurance, home insurance, and pet insurance but you still don't have disability insurance. This shows that you are probably thinking chances of a house-fire are more than chances of you coming down with a disability. Statistics show that 1 in 8 of us can get disabled as opposed to only 1 out of 90 will have a house fire.

So, we are insuring for eventualities that may not happen and ignore disability insurance which you may need more. Normal life goes haywire if you are suddenly disabled and your medical expenses will upset all other cash outflow. Heart disease and back problems are the highest causes of disability and it’s not difficult to grasp what a stroke can do to a person.

Long-term disability can be devastating physically, emotionally and financially. Even a period of two years of disability can eat up all of a good savings build-up. So, if you have little or no savings and end up with a disability you are sure to be on the verge of bankruptcy.

What are the features of a long-term disability cover?
1. Long-term disability helps replace income for an extended period of time, usually ending after five years or when the disabled person turns 65.
2. There are two kinds of long-term disability insurance - non-cancelable and guaranteed renewable.
3. In a non-cancelable type you have extra security that your premium can never be raised.
4. In a guaranteed renewable your premiums can be raised but they are a lot cheaper at the time of purchase than a non-cancelable.

Waiting period: Most long-term disability insurance has a waiting period that starts with a low 60 days to 730 days. You can decide on the number of waiting days by assessing how long you can go without an income. Remember the longer the waiting period the lower the premium and the younger you start the better as in the case of most insurance.

Long-Term Care Insurance

The biggest fear, the seniors of our society have is that they have to depend on others for their day-to-day expenses. So, as the person ages requirement for hospital treatment increases and this can be financially crushing.

Traditional health insurance and Medicaid pay only a small amount or for only a limited stay in a nursing home. Therefore, we have a growing market for long term care insurance. Long-term care insurance pays for a stay in a nursing home, or for daily care at home and even adult day care centers.

The catch in this comes in the form of yearly increasing premiums, which can eat into an elderly person’s savings and can even lead to cancellation right before the actual need of such insurance. It’s not easy for the middle-income group to make daily payments of home care of $150 to $300 every day.

There may be benefits in both partners applying for long-term care insurance as providers sometimes offer discounts for one spouse. Many states have tax benefits in addition to the federal tax preference and this needs to be checked in your state. The increasing popularity of this type of insurance is evident as many employers are offering long term care as an employee benefit as group coverage.

Long-term care insurance is dotted with fraud for example; it is not uncommon for policyholders to need "continuous one-on-one assistance" in performing daily activities in order to receive benefits. To qualify, you would have to be severely ill and be in need of admission to an intensive care unit to collect under the policy.

It is always a good idea to make it a family decision and bring together all, your spouse, children, siblings, and closest personal friends. Give due importance to such shared decision-making, as it will help avoid some of the pitfalls that have been the curse of long term care insurance.

The government needs to step up for the benefit of our elderly and plug the loop holes through which agents con people into buying LTC that is really not affordable nor beneficial at the time of need.