We Can’t Buy Cheap; We Aren’t Rich

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Looking For Affordable Insurance?

Sometimes, as one might overhear in a coffee shop, insurance is a “bad word”. On the contrary, if handled correctly, insurance can be affordable (for most people), serve to protect one’s assets and help assure that you will be able to access needed medical care. Ask anyone who has had a fire if they appreciated having homeowner’s insurance. Simply, insurance can be a “Godsend”.

Have you heard it said “we can not afford buy cheap stuff, we aren’t rich”? Most often, the same applies to insurance products. When insurance premiums of “like” products vary, look for the differences in coverage and, most importantly, the size and stability of the insurance company.

While households should have budgets, one could easily sacrifice overall costs while trying to save a small amount of premium dollars. The most important issue to remember about insurance is that its purpose is to provide financial security. Financial security, in turn, helps provide mental and emotional “peace of mind”.

Does this apply to Medicare Advantage plans? Saving premium dollars works well if a person does not give up the ability to seek the medical services and providers they desire; and they are content with the benefits offered by the policy.

The same thought process applies to long term care insurance (LTCi), In the past few years many smaller insurance companies offering LTCi products have increased their premiums for policies that have been in-force (in effect) for a while. Usually these are smaller companies, financially weaker companies, or insurance companies just not committed long-term to LTCi.

Of course, not all insurance companies fall into the bracket described above. There are large, stable insurance companies committed to LTCi. For example, two of these companies have raised LTCi premiums only one time (about 11%) for existing policy holders they have had insured for 20+ years.

Now, back to the title of this column: if you have a limited amount of money to buy protection against the high costs of nursing home or home care, it makes good sense to purchase from a large, stable, company committed to LTCi. These companies are less likely to raise premiums in the future, and less likely to sell their block of LTCi business to another company.

Sometimes, however, due to one’s health history the large, highly rated companies would consider a person too great of an underwriting risk to insure. Therefore, one’s health history may dictate that a person would need to buy LTCi from a smaller insurance company. Usually, this person is much more likely to use this policy in the short term, and buying an available LTCi product would most likely be a great investment.

So how would one research what LTCi companies might be the best to purchase from? Several ways exist. First, contact an experienced insurance agent specializing in LTCi. That agent can give you a short list of companies that should be the most stable. This list can be confirmed with the Illinois Department of Insurance at 800-548-9034. While the Department of Insurance cannot make recommendations, they will provide details as to: company rating, years in business, assets, liabilities, numbers of complaints and past history of premium raises.

History will show that a savings of a couple of hundred dollars now may result in the spending of thousands in the future. Still LTCi is a most needed type of insurance for people, especially age 65+. Remember, 43% of people, over 65 will be nursing home confined. 70% of married couple will have at least one partner needing long term care. These statistics don’t even discuss that 80% of LTCi claims are for home healthcare.

John Ruskin once said “it is unwise to pay too much, but it is worse to pay too little”. As always, if you have any questions or desire further information, feel free to contact our office.

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Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc., a firm specializing in issues affecting seniors, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.

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