Monday, July 23, 2018

How much Long-term Care Insurance do you need?

Although major sickness can strike at any age, the chances of suffering from a long-term medical condition increase as you get older. Requiring long-term care in your senior years is bad enough. It is even worse if you feel that you are a financial burden on your family because of your medical bills then. A well-planned long-term care insurance will give you the financial resources to manage expenses arising from chronic or long-term debilitating sickness.

While an increasing number of people realize of late the importance of having long-term care insurance, they may not have the coverage they need. Long-term care insurance is not a one-size-fits-all type of policy. If you have questions on long-term care insurance or the right quantum of coverage, here are a few important facts to keep in mind.

Image Courtesy: https://health.mil/

  • Resources cushion: Long-term care insurance should be part of your retirement planning. What assets and income sources will be available to you in your senior years? Can some of these be devoted to possible long-term care needs? What kind of insurance is needed to cover the gap between resources and care costs?
  • Place to retire: The place where you plan to live after retirement is a variable factor in arriving at the cost of care; it varies not only from state to state but also from city to city.
  • Duration of care: The duration of the long-term care will have a major impact on the cost and the policy you need. While it is not possible to predict an ideal duration, the typical care period is around 3 years. Genetic and hereditary diseases like Parkinson’s or Alzheimer’s can significantly increase the duration.
  • Health history: Your current and past health history and any recurring medical issues in the family over the last few generations would be important inputs. Those details would have a direct bearing upon the probability of long-term care need and the required duration of care, which in turn would help arrive at the type and quantum of insurance.  
  •  Inflation factor: Buying a long-term care coverage policy at an early age has the advantage of a low cost; but it may be many years before you may need the care and make the claim. Therefore, inflation should be factored into the amount of coverage that you opt for.

Planning: essential though unpleasant

Sentimentally, no one wants to think about prolonged medical care, especially in old age. Everybody would prefer instead to keep perfectly fit until the last breath. Nevertheless, it is too important a subject to ignore. Do not mistake long-term care for end of life care: they are two different things.

Long-term care is medical treatment and nursing for an extended period until you recover. End of life care refers to the care you need when you are in a terminal condition. Long-term care coverage affects how well and how fast you can be expected to recover.

Guidance of an expert

The financial situation of every person/family is different from every other. The factors outlined above will give you an idea of the kind of coverage you need. However, insurance is a complex matter: making mistakes and miscalculations is easy.

Discuss your insurance needs with an expert insurance agent who will be able to guide you to the right long-term care insurance policy at the right cost. It does not take long and the peace of mind you get will be lasting.

California State: Second Most Vulnerable to Natural Disasters

Natural disasters cover a wide range of natural phenomena including hurricanes/tornados, earthquakes, floods, fires and so on. California, called the ‘Golden State’, is truly a great place to live. Ask Californians if they would like to live in another part of the country; surely a majority of them will say ’No’.

However, California has its fair share of calamitous occurrences and the Californians take them in their stride. According to Federal Emergency Management Agency (FEMA), California is the number two state most prone to natural disasters. A few of the worst disasters of the last 100 odd years that devastated California are listed below. 

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  • 1906 The San Francisco Earthquake: More than three-fourths of the city were severely damaged or destroyed, and over half the population was left homeless.
  • 1923 The Berkeley Fires: The fires gutted multiple city blocks and almost 700 buildings.
  • 1964 The Christmas Flood: 19 people died, and damage of a scale of over a $100 million occurred in Humboldt County.
  • 1982 The Alpine Meadows, Tahoe North shore Avalanche: This is the deadliest avalanche ever recorded in North America.
  • 1989 The Loma Prieta Earthquake: The images of the havoc caused remain seared in the minds of San Franciscans even today. 63 people were killed and 3757 injured.
  • 1991 The Oakland Hills Fire: Over 800 buildings were destroyed and 25 people died.
  • 2015 The Valley of Fire: Over 1,300 homes and almost 80,000 acres of land were burnt in Napa, Sonoma and Lake County.
  • 2015 onwards Savage wildfires: They are now a regular part of summer.
  • Many more have made headlines.

Survival and recovery

Surviving a natural disaster is a matter of preparedness and luck. There will of course be state and federal aid forthcoming to help survivors face the immediate aftermath. However, these are not meant or sufficient for recovery and rebuilding lives. The victims often find that their homes and sources of livelihood are demolished. The only protection, if they have one, is the insurance coverage.

It is insurance that is likely to help rebuild homes, restart businesses and keep families protected and fed. Unfortunately, many Californians are either uninsured or underinsured. This is due to a feeling that disasters always happen to ’other people’, not ‘us’. Many of those who were unable to recover from the disasters listed above too thought so.

Insurance: The Best Protection

Do not remain unprepared for calamities, taking your insurance for granted. You may feel you are well protected, but in reality, you could be underinsured or there may be gaps or catches in the coverage that you are not aware of.

It is best to contact an experienced and reputed insurance broker  at the earliest. They will  examine carefully whether you are sufficiently protected from natural disasters, and whether you need any additional coverage.

Hopefully, you will never ever need to file a claim. Nonetheless, a carefully planned insurance that covers all possible eventualities would surely give you immense peace of mind that you CAN rebuild your life come what may!