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    Is LTC Insurance a Waste of Money?

    Posted by Guest Blogger on Fri, Jul 18, 2014 @ 09:39 AM

    Many times over the years I’ve written about long-term care insurance, and it still blows me away how many people say that this coverage is a waste of money.  I’ve heard it from readers, accountants, attorneys and financial advisors. 

    The only ones who want LTC coverage are the families who have been squeezed by the very difficult decisions in providing long-term care for a loved one or the agents who sell the policies.

    The issues surrounding caring and paying for long-term illnesses are far more significant than issues that we think about when evaluating the purchase decision.  The factors surrounding the purchase decision are frequently the odds of needing the coverage, fear of the cost and alternative ways to get care if needed.  When you are feeling great and healthy; purchasing long term care insurance is an easy decision to put off until next year.

    Consider forecasting your retirement under two scenarios.  First is with the cost of paying for coverage and the second would be the consequences of a full blown long term health emergency.  More likely than not, the later forecast will be gloomier and cause you to investigate further.

    Statistics show that family caregivers, on average, hit the wall after about 6 months of playing nurse.  At the same time, their lives and everything else that 

    Learn about ltc and life insurance with andrew g gordon inc

    they do takes a back seat.  That may sound acceptable to your daughter today as she tells you not to buy coverage. But she may have a different opinion after she sees how challenging the caregivers' role can be.

    Regarding the costs of providing care, there are direct costs such as doctors, nurses and therapists, but also the indirect costs of lost wages for family caregivers.  Elder clients often tell me that they don’t want to become a burden on their children at any time. That burden could be financial, time, or both.

    In recent years, I thought that LTC insurance will be as ubiquitous as health insurance is today.  But unfortunately for seniors, that is not true.  Premiums have been rising materially throughout the past decade and underwriting has become more stringent.  Most policies leave the door open for future rate increases, which indeed scares buyers.

    Your options to better contain the cost of your LTC coverage are quickly dissipating in the insurance marketplace.  For the past several years, as evidence led professionals to believe that premiums were set to rise, the advice frequently went to shorter payment periods such as 10 or 20 pay policies or policies that provide a refund of premiums for coverage never used.  Limited pay policies have become very rare in the marketplace today with only a few companies still willing to underwrite that risk.  Return of premium policies still exist, but require a much larger premium outlay in order to generate the cash for the insurer to fund the guarantee.

    Insurance markets are constantly changing and evolving.  The outlook for LTC insurance still calls for rising premiums, and should cause anyone concerned about the impact of long term illnesses to take another look.

      Beneficiary Choices Guide

    john p napolitano card

    John P. Napolitano CFP®, CPA is CEO of U. S. Wealth Management in Braintree, MA.  Visit JohnPNapolitano on Facebook or

    The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/SIPC.  Investment Advice offered through US Financial Advisors, a registered investment advisor. US Wealth Management and US Financial Advisors are separate entities from LPL Financial. He can be reached at 781-849-9200.

    Insurance guarantees are based on the claims paying ability of the issuer.

    This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

    The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.

    Insurance offered through US Insurance Brokers.

    Tags: health insurance, health care, long-term care, retirement, ltc, long term illness, senior health care, insurance costs

    Life Insurance Beneficiaries

    Posted by Guest Blogger on Wed, Jul 16, 2014 @ 09:34 AM

    describe the imageWhen choosing one or more life insurance beneficiaries, it is important to note that there are 2 major distinctions: Per Capita and Per Stirpes.

    When a person dies without a will, the estate of the deceased is called intestate. In this case, the state will take control of the estate and decide who will become the beneficiaries. The property of the estate will pass to the decedent’s heirs at law according to the laws of intestacy. Although this blog is not about life insurance planning, it is always recommended that everyone have a will. The will should be executed by a qualified professional.

    Per Capita - the grantor (you) indicates that no one except the named beneficiary receives that share of the estate. For example, let’s say that you name three beneficiaries in your will, your 3 siblings, David, Ronald and Susan.  You want all 3 to split the estate equally. If each sibling is alive, each will inherit one third of the estate. But let’s assume that your brother David dies before you do.

    Ronald and Susan will then inherit 50% of your estate.

    Per Stirpes – In the same example above, you still name three beneficiaries in your will, your 3 siblings, David, Ronald and Susan.  You want all 3 to split the estate equally. If each sibling is alive, each will inherit one third of the estate. But let’s assume again that your brother David dies before you do.

    His share (one-third) automatically is inherited by his heirs (such as his children).

    Knowing the difference between Per Capita and Per Stirpes inheritance is an important factor when organizing your will; make sure to choose the system that best fits the needs of you and your family.

    Legal & technical disclaimer:  Any advice provided here is not legal advice.  Statements or advice are based on our experience in risk control, mitigation, and transfer, and is believed to be effective and valid when provided.  All legal or contractual wording, including any suggestions offered in a legal context, should be reviewed by qualified legal counsel.

    Learn more about life insurance here.


    Tags: insurance, life insurance, will, beneficiary, beneficiaries, per capita, per stirpes

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