Tag: Health Insurance

Your income is the foundation that supports your expenses, lifestyle, and future plans. What would happen if your paychecks stopped due to an accident or illness? If you’re unable to work due to a sickness or injury, disability income insurance can help you meet your expenses and maintain your standard of living.

Disability income insurance can help you pay bills like your mortgage, tuition, and car payments, and help cover the expenses for food, clothing, and utilities. By replacing a portion of your income, disability income insurance can help provide financial security until you get back on your feet and return to work. 

Some statistics explaining the need for disability income insurance include:

• Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire. ( Social Security Administration, Fact Sheet February 7, 2013)
• Over 37 million Americans are classified as disabled. More than 50% of them are in their working years, age 18-64. ( Census Bureau, American Community Survey, 2011)
• In December of 2012, 8.8 million disabled wage earners were receiving Social Security Disability (SSDI) benefits, and 2.5 million of them were in their 20s, 30s, and 40s. ( Social Security Administration, Disabled Worker Beneficiary Data, December 2012)
• 65% of initial SSDI claim applications were denied in 2012. ( Social Security Administration, Disabled Worker Beneficiary Data, December 2012)
• Less than 5% of disabling accidents and illnesses are work-related. The other 95% are not, meaning Workers’ Compensation doesn’t cover them. (Council for Disability Awareness, Long-Term Disability Claims Review, 2012)
• Approximately 90% of disabilities are caused by illnesses rather than accidents. According to the Council for Disability Awareness (CDA), the leading causes of new disability claims in 2012 include musculoskeletal/connective tissue disorders, cardiovascular/circulatory disorders, cancer, mental disorders, and injuries and poisoning.

Disability income insurance is designed to replace anywhere from 45% to 65% of your gross income on a tax-free basis, should illness keep you from earning an income in your occupation. The premium on your individual disability income insurance policy is determined based on the factors like your age, occupation, medical history, lifestyle habits, policy riders you choose, monthly benefits you intend to receive, and waiting period and coverage period for disability income.

Every disability income insurance policy is different and should be assessed based on the quality of plan created for your needs, and not by the cheapest disability income insurance policy on the market. Many consumers do not plan for the possibility that they will be faced with a debilitating accident or illness during their working years. A professional with a family, for example, should consider disability income insurance as a necessity. Individuals believe they may have disability coverage through their employer. This at times may be true, but the quality of coverage often leaves the disabled employee short of the protection he/she thought they had.

Think of disability income insurance as insurance for your paycheck. It ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work. You don’t hesitate to insure your home, car, and other valuable possessions. So why wouldn’t you also protect what pays for all those things – your paycheck.

Long-term care refers to the variety of services and supports people with a chronic illness, disability, or other condition need on a daily basis over an extended period of time. Most long-term care is non-skilled personal care assistance, such as help with everyday activities like dressing, bathing, preparing meals, eating, transferring to or from bed or chair, caring for incontinence, etc. Long-term care insurance is a type of health care insurance that covers nursing home, skilled nursing, assisted living facility, Alzheimer’s disease care, custodial care, or in-home care costs for people over 65.

Some statistics explaining the need for long-term care insurance include:

• According to the U.S. Department of Health and Human Services, 70% of people turning age 65 can expect to use some form of long-term care during their lives.
• 20% of today’s 65 year-olds will need long-term care for longer than 5 years.
• 97% of people over the age of 85 require assistance in the last year of their lives. (The LTC Report)
• Over 50% of all people entering a care situation are penniless within one year. (Harvard University)
• Singles are at risk because they’re usually not with someone who can properly care for them. The same is true for wives who tend to outlast their husbands by seven years on average.
• Less than 1/3 of Americans aged 50+ have begun saving for long-term care. It can be expensive and may endanger your retirement and other savings. (www.longtermcare.gov)

The average cost of staying in a nursing home for a year is between $55,000 and $100,000, depending upon where you live. Either you plan and save for it, ask your children to pay for it, live abroad where healthcare is cheaper, buy life insurance with long-term care riders, or buy long-term care insurance.

If you did not buy long-term care insurance, you will need to pay for your nursing home and long-term care expenses out of your pocket, or qualify for some long-term care coverage through Medicaid. To qualify for Medicaid, your income must be below a certain level and you must meet minimum state eligibility requirements. Also, you qualify for Medicaid only after you and your spouse have “spent down” almost all your assets. Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances. Medicare does not pay for non-skilled personal care assistance.

If you have long-term care insurance, you will receive a maximum daily benefit of $100-$500 for your expenses, depending upon the type of coverage you selected. Your coverage is guaranteed as long as you continue to pay your insurance premiums. You don’t necessarily lose the money you paid for long-term care insurance if you don’t require long-term care during your life. Different insurance plans will have different terms for the return of premiums. Some long-term care programs include a program called “return of premium on death”. If you have this type of long-term care insurance and die without using your entire benefit, your premiums (minus the amount you used) will be returned to your estate.

Buying long-term care insurance is notoriously complicated. There are coverages, inflation protection, benefit periods, daily benefit, triggers, and elimination periods, that all need to be taken into consideration. Work with an insurance agent you can trust, to select the best long-term care insurance for your needs.