Long Term Care Insurance, (L.T.C.I.), is not usually on the front of people's minds. This is mainly due to the low incidence for the need of such a policy. Less than 10% of people 65 years of age or older will ever need this kind of policy. One can look at their own hereditary for signs of a debilitating illness to see if it runs in their family. This would increase your chances of needing such care as a nursing home stay. But, and this is a big but, if you are a candidate, it would behoove you to look into Long Term Care Insurance. The average price in 2009 for a nursing facility stay was over $200.00 per day. This is projected to increase by $100.00 per day for every decade going forward. So less than ten years from now, you could reasonably expect to pay over $300.00 per day in a nursing facility. That comes out to just over one quarter of a million dollars for the average 2&1/2 year stay in a nursing home! That could certainly put a damper on your financial freedom!
While no one relishes the thought of having to pay insurance premiums, there are ways to lower your costs for L.T.C.I. The most common is to increase the elimination period. This is insurance talk for how long you have to wait before the payments start to come in such as 30, 60, or 90 days. You can also make several calls to nursing homes in your area to find out their daily rate and aim to get coverage for at least 70% of that number. Finally, you could also get coverage for a shorter stay than the national average.
Disability Insurance, as the name implies, disability insurance is designed to replace a person's income if the need should ever arise due to a disability. According to current actuarial statistics, one person out of ten under the age of 65 will require disability income. As this is such a low percentage, this insurance, just like L.T.C.I. above, is not at the front of one's insurance planning needs. If you decide to pursue this policy, you will learn that the premium is based on many factors such as short term disability versus long term disability, partial disability versus permanent disability, elimination period or how long you have to wait before receiving a check, the amount of the check in relation to your pre-disabled state, what are the exclusions to the policy and finally, will your check adjust for inflation. There is a small ray of sunshine in all of this. If you bought the disability insurance with after tax dollars, the disability income checks will be tax free.
Umbrella Insurance...no this is not about the weather! Umbrella Insurance is designed to supplement your other policies, particularly, your homeowners and auto policy. With all the litigation taking place in society and the large monetary awards to boot, an umbrella insurance policy will raise your policy limits of liability to new heights. With this protection comes the added comfort that allows you to sleep better at night with very little additional cost. This is because your current policy limits are exhausted first before umbrella insurance kicks in.
Last but certainly not the least, the miscellaneous insurance planning topic would not be complete without at least casually mentioning the following areas you should look into if they applied to you. Let's not forget about Insurance Planning for: 1) Motorcycles, 2) Watercraft, 3) R.V.'s, 4) Pets, 5) Personal Articles, and 6) Renters Insurance. As with most insurance products that you look into, premiums will no doubt be closely tied to the value of whatever it is that you are insuring. You can lower your costs by increasing your deductibles and lowering your limits of coverage but be very cautious before cutting too many corners as it could ultimately affect your financial freedom.
Chris Borg is a practicing pharmacist and financial adviser who writes about health care and investing. Chris's latest website on financial freedom is at RatraceBgone, where Chris provides financial tips such as the 9 steps to financial freedom: 9 Steps To Financial Freedom
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