Q&A on long-term care insurance
If my dad had long-term care insurance, could he have stayed home? He paid for his home care for three years, then ran out of money and had to go to a nursing home.
One of the best benefits of long-term care insurance is the ability to stay in your home. Having to pay the full cost of care out of pocket often means depleting your savings. Having long-term care insurance provides that buffer to keep you in your own home or the ability to pay for an assisted living facility and avoid a nursing home.
Can I be paid to be a caregiver to my parents?
There are some policies that allow you to pay “independent caregivers” to provide care.
My mother has been on a waiting list at a nice nursing home and she has almost $100,000 in assets. They told us there is a six month waiting list, and now she is having to use her savings to pay for care at home. My neighbor’s mother went on the waiting list AFTER my mother and only had to wait a few weeks before she got in. My neighbor said her long-term care insurance helped speed up the process. Is that correct?
That is correct. Nursing homes are a business. When a bed becomes available, they are looking at who can be “self-pay” the longest. They don’t get the same amount of money for a Medicaid patient as they do a self-pay patient, so a person with a long-term care policy is more desirable because they will self-pay longer. They don’t necessarily have to take whoever is next on the list.
We were told long-term care costs a lot of money up front. Is that true?
There are policies that allow you to pay a one-time “lump sum” up front. However, there are also policies that allow flexible payment options such as paying over 10 years. Many people like the idea of paying a lump sum and others prefer to pay annually. They can be designed to fit your needs.
Learn more about long-term care insurance
Schedule a phone consultation with Eileen (opens to new website).
The impact of COVID on insurance
The pandemic has not only greatly impacted our personal lives but also the business world—so not surprisingly, the personal insurance industry is feeling its effects. That’s because COVID dramatically changed our lifestyles and our behaviors in ways that are directly related to how we use the things we insure: our vehicles and our homes.
Here is how some of those changes may affect you.
Auto usage down
National data shows that staying at home to prevent the spread of the virus has had a dramatic impact on our driving habits—for the most part eliminating morning or evening commutes, the need to drop off kids at extracurricular events, and outings to restaurants or road trips. People simply drove less. In fact, miles driven were down by as much as 50% during spring lockdowns (National Highway Traffic Safety Administration (NHTSA)).
And insurance companies took note. The reduction in driving early on meant losses during that time were generally lower than the previous year. Many carriers even returned a percentage of second quarter premiums to customers in the form of a discount.
Claims severity up
However, as the year went on, less crowded roads actually had an adverse effect on claims overall. While there were fewer claims, the severity of the incidents increased dramatically. Empty roads provided more opportunity to speed, and distracted driving—especially phone use—continued to be a contributing factor. Traffic fatalities increased 18% over the first half of last year (NHTSA).
This does not bode well for insurance rates. Just a year ago, insurance companies across the country were considering building the savings they saw in March and April into their rates, but now that is less likely to happen given the claims experience since.
The concern is that driving patterns and usage will return to pre-COVID levels, but risky driving behavior like fast driving will continue—keeping claim severity high and putting upward pressure on rates.
Costs on the rise
Member Benefits’ auto insurance experience has been similar to what has happened nationally during the last year. Mike Godby, Insurance Services Operations Manager for Member Benefits, says, “There was a clear decrease in auto claims during March and April of 2020. Like other insurers, we gave premium back to members for that period, but the benefit of the stay-at-home ordinance was short lived. Losses increased as the year went on, which offset any savings from the reduced number of claims earlier in the year.”
And supply chain disruptions caused by the pandemic didn’t help. When materials and parts are in short supply, prices rise and repairs are delayed. But even before the pandemic, claims costs were on the rise, says Mike. Contributing factors include ever-rising medical costs and advanced vehicle features like sensors and air bags that are designed to keep you safer. “Those advanced features in your car are very expensive to replace. A simple mirror or a windshield replacement isn’t simple anymore. They have sensors and special glass with forward facing cameras. Cars are designed and engineered for safety so that when there is impact, it does more damage to the car but keeps the occupant safer. It’s a trade off—a good one—but it increases the repair costs and ultimately premium rates,” he explains.
On the home insurance front, the impact has been a bit different. Because Americans have been using their houses more and differently, there has been a significant increase in home improvement projects—up almost 50% from the same period last year.
Surveys of homeowners point to two things driving this trend—time and necessity. Almost 70% said they had the time to undertake a project, and half indicated that time at home made them more aware of things that needed doing (Porch.com and Houzz.com).
“Our homes suddenly became office space and classroom space,” Mike adds. And with families co-existing at home 24/7, there was also a need for more living space—indoor and outdoor. Homeowners added on rooms and remodeled at record rates to accommodate their new lifestyle. Plus, the installation of decks, patios, and pools soared.
What does this mean for your home insurance?
Mike says it means you need to rethink your coverage and review your policy. “You want to make sure your coverage is still appropriate. Home improvement projects may have changed the value of your home. If you modified your basement, you may want to add or increase sewer backup coverage, especially if you’re using the space for work and have equipment that would be costly to replace.”
You should also consider changes in liability as well. For instance, were you one of the over 11 million U.S. households that got a new pet during the pandemic? How about a boat, motorcycle, or trampoline? These can increase your liability.
“Trampolines are never a good idea. They are dangerous and cause many serious injuries. And dogs also raise your liability risk,” Mike points out. Many insurance companies won’t cover you if you have a trampoline and some dog breeds are restricted as well.
There may also be changes to your liability exposure if you are working from home or self-employed and operating out of your home. Home insurance excludes liability for business, and Mike recommends that in-home business owners should contact their business insurance carrier to review their coverage needs. For remote workers, there is an endorsement that can be added to your home insurance that boosts liability coverage for your home office. “Whether you’re working at home for your business or as an employee, you should confirm where you are securing your liability coverage,” he says.
Member Benefits was able to move the majority of staff to a remote-work environment early in 2020. “The transition went well,” Mike says. “We did have to rethink a few things and work with our adjusters in the field on protocols to minimize contact and to maintain social distancing, including wearing masks, when person-to-person contact was necessary.”
He adds that the biggest ongoing impact of moving staff to a remote work environment is social. “Most staff miss the camaraderie and collaboration with their colleagues and meeting with members. But regardless of our physical locations, we’re still ready and willing to help answer your insurance questions.”
It’s a good time to reevaluate your insurance needs
The pandemic transformed our lives on every level, and it’s hard to predict what the world will look like when the dust settles. In the meantime, be aware that because your lifestyle may have been altered by the events of 2020, your insurance needs may have also changed.
Now is a good time to:
- Review your policies and make appropriate changes to coverage.
- Consider increasing your deductibles to reduce your premiums.
- Ask about discounts that apply to save more.
- Give us a call or go online for an insurance review or price quote.
Reevaluate your insurance needs after retirement
A lot changes when you retire. Your day-to-day life is different and you may do more traveling, have new hobbies, or even a new home. Life may be different now—but you still need to protect yourself and your family with insurance that’s appropriate to your circumstances.
Old policies may no longer meet your needs, but be cautious about cancelling policies without doing a careful evaluation first. One size does not fit all. Here are a few guidelines to consider.
As you age, your health care costs tend to increase, so health insurance is vital. If you retire before the age of 65 and no longer have health insurance from your district, go to healthcare.gov to view your insurance options. If you lose your health care coverage not by choice, you have some flexibility and potential benefits for purchasing insurance.
Once you’re on Medicare, you may want to consider a supplemental policy to help pay for services not covered by the basic plan.
Consider dental insurance and vision insurance to help cover preventative checkups and new health issues as you age.
Long-term care insurance
Our life expectancies are longer than ever, which means we’re more likely to need some sort of long-term care during our lifetimes. Most costs for extended care needed during recuperation from strokes, accidents, illnesses, and operations are not covered by health insurance or Medicare.
You may want to keep your life insurance for the next generation. Beneficiaries on your retirement accounts may need to cash out within 10 years, and life insurance can help offset that.
It’s important to maintain coverage on your home and possessions. Without insurance, any loss you suffer would have to come from savings. If you move, be aware of any new hazards in your geographic zone or how your needs might change (with a new pool, for example) and how that could affect your liability coverage.
Don’t crack up over windshield damage
A windshield is a crucial part of the safety system of your car. It provides strength and structural support to the vehicle, allows air bags to be deployed properly, and helps prevent you and your passengers from being ejected during an accident. In a front-end collision, the windshield provides up to 45% of the structural integrity of the cabin of the vehicle and in a rollover, up to 60% (Auto Glass Safety Council (AGSC)).
A windshield also protects you against extreme weather conditions. Changes in weather can expand or contract the windshield, which can cause cracks or chips to expand. Dirt and debris can also become embedded in cracks, making a repair less effective or impossible. So even if the damage to your windshield is minor, it’s important to get it repaired as soon as possible.
Newer windshields are specialized equipment
Many windshields today have safety and navigation sensors added, so repairs can be costly. For example, front collision sensors may be mounted on the car’s rearview mirror stand just inside the windshield. For these sensors to work properly, the windshield glass has to meet very specific requirements for clarity and lack of distortion. So even if your windshield has minor damage, it may mean you’ll need to replace it with an original equipment manufacturer windshield, not the less expensive aftermarket glass. Adding to that cost is the specialized technician who must recalibrate the front collision sensors for the new glass.
Repairs (if appropriate) are generally much less expensive than replacement, which is a good reason to take care of them as soon as possible before minor damage gets any worse.
Be prepared before you repair or replace
Before you choose a repair shop, safewindshields.org suggests you ask them the following questions:
- Are you an AGSC-Registered Member Company?
- Do all the materials you use meet or exceed ANSI Z 26.1 and all pertinent Federal Motor Vehicle Safety Standards?
- Does your adhesive manufacturer certify you, and who is the manufacturer of the adhesive?
- What type of warranty can I expect?
- How soon after my glass is replaced will I be able to use my vehicle?
AGSC provides a certification program for installers as well, so ask if a company’s technicians are certified and by whom. If someone tells you they are certified by an insurance company, that is most likely not true. Member Benefits does not certify windshield technicians.
In most cases with your Member Benefits policy, if you file a claim for damage to your windshield and the glass company determines it is repairable, your deductible is waived. If the windshield needs to be replaced, it is subject to the comprehensive deductible.
Questions about your insurance coverage?
Protect your home and the people you love
While deaths from home fires in the U.S. have steadily gone down since 1980, even one death from a preventable fire is too many. Here are some tips to help keep you and your family safe.
Be alert and stay in the kitchen while you are frying, grilling, boiling, or broiling food. Keep anything that can catch fire away from your stove top.
Keep all flammable items at least three feet from a space heater, stove, or fireplace. Never leave portable heaters unattended and be sure fireplace embers are extinguished before leaving the room.
Other common causes of fire
Smoking, electrical problems, and candles are common hazards. Institute a “no smoking” policy in the house, check cords for damage or wear, and switch to flameless candles.
Working smoke alarms are a must
About three out of five fire deaths happen in homes with no smoke alarms or nonworking smoke alarms. Install smoke alarms on every level of your home, inside bedrooms, and outside of sleeping areas. Test smoke alarms monthly and replace batteries annually—same for your carbon monoxide detector. Replace alarms that are 10 or more years old.
Make an escape plan
Visit the National Fire Protection Association to learn how to make a fire escape plan for your family.
Source: National Safety Council
Two products to help ensure your financial security
Member Benefits is very pleased to announce we have partnered with Associates of Clifton Park (AoCP) to offer life insurance to our members.
Life insurance not only helps ensure your family’s financial security, it provides peace of mind.
It’s also an important part of your family’s financial stability and well-being. If anyone depends on your income, they would likely struggle without it if you were to pass away.
Have you considered life insurance and what it might mean to your family? We answer some frequently asked questions to help you decide.
When is the best time to buy life insurance?
Now! You will never be younger or healthier. Life insurance costs less the younger you are.
Why should I purchase life insurance?
Life insurance is essential when there’s someone you care about who would suffer if you and your financial contributions were no longer in the picture. This could include a spouse, children, disabled family members, aging parents, or anyone else who depends on your earnings to make ends meet. It’s a simple answer to a very difficult question: How will my loved ones manage financially if something were to happen to me?
What does life insurance cover?
Some common immediate and everyday expenses people use life insurance for include:
- Funeral and estate settlement costs.
- Healthcare and health insurance bills.
- Mortgage or rent.
- Credit card debt and other loans.
- Childcare expenses.
In addition to letting your loved ones maintain their standard of living now, life insurance also helps ensure their future. Some common non-immediate expenses life insurance covers include:
- Future college costs.
- A spouse or partner’s retirement.
- Planned inheritances.
- Special charitable giving projects like a memorial fund.
What type of life insurance should I have?
While there are several different types of life insurance to consider, what they all have in common is that they pay cash to your loved ones in the event that you pass away.
Steve Gregory, Principal at AoCP, explains, “We offer life insurance from a variety of insurance carriers, including term insurance and universal or whole life insurance policies. Most people purchase life insurance to provide benefits to their loved ones when they are no longer here, but there are also a variety of ‘living benefits’ that life insurance can offer. We can review options to help you decide what best meets your needs.”
Who needs life insurance?
This question is a very personal one. Some of the people who commonly consider life insurance include:
Married or partnered people. Those left behind often find it difficult to cover daily and future living expenses without a partner’s financial contributions. This is often as true for young couples as it is for empty nesters closing in on retirement. Life insurance can help ensure your surviving spouse or partner can maintain the standard of living you worked so hard to achieve.
Parents. It is estimated that it costs $233,610 to raise a child to age 18 (USDA). And that number increases if you plan on contributing to your child’s college education.
Statistics like this underscore how incredibly important it is for parents to consider life insurance. This is as true for working parents as it is for stay-at-home parents whose unpaid contributions to the family would be expensive to replace. And single parents supporting families on their own have an especially important need for financial protection in the form of life insurance.
Retirees. Surviving partners often have to make do with less Social Security and pension support. They may also have unforeseen funeral costs to cover. This can seriously hamper their finances.
What’s more, if you’re planning on leaving money to heirs, they could be required to pay estate taxes of up to 45%. Life insurance, which is almost always exempt from federal taxes, can be immensely helpful in any of these situations.
Business owners. Surviving family members are often not prepared to take over a business when an owner passes away. This pain is only compounded when a business has debts that are backed by assets like the family home. What’s more, a family that wishes to continue running a business may need to buy out a partner’s shares.
Those who only have group insurance through work. Group insurance is usually limited in amount and scope, and only covers you while you remain an employee. Individual insurance can be purchased for any amount needed and allows you to choose your own time period of 10, 20, 30 years or more.
What life situations would warrant life insurance?
There are certain life events that should make you ask, “Do I need life insurance?” They include:
- Changing jobs or starting a business.
- Buying a house.
- Getting married or divorced.
- Having or adopting a child.
- Deciding to go back to school.
- Becoming a single parent.
- Supporting someone financially.
- Saving for a child’s college education.
- Getting close to retirement.
Learn more from Associates of Clifton Park
There are many reasons to consider life insurance. The good news is that getting life insurance is simpler and more affordable than most people think. One of the best ways is to work with a licensed insurance agent who can walk you through the entire process.
Adds Steve, “Educators love to teach and learn, as they know knowledge is power. The life insurance world has changed beyond comprehension in the last couple of years. For example, did you know there are programs that reward healthy living, with the potential to earn lower premiums, and other rewards? Contact us to learn more about all of your options.”
Do you have health concerns or questions? AoCP shops over 70 policies, so chances are they can find the right policy and price for your situation.
Do you have a quote from an agent or company and want an education or second opinion? We can help. You DO NOT need to provide any personal information to compare life insurance quotes with us. If you have questions about your quote and if there is a better fit, we may tell you to go with it or give you better alternatives.
Contact us and speak with a Licensed Life Insurance Advisor. Fill out our online information request form or give us a call.
Long-term care insurance
Long-term care (LTC) has been called “the greatest uninsured financial risk today.” That’s because most costs for extended care needed during recuperation from strokes, accidents, illnesses, and operations are not covered by health insurance or Medicare.
LTC is the care you may need at home if you are unable to perform daily activities on your own, such as eating, bathing, dressing, or going to the bathroom. It may also include care in the community, such as in an adult day care facility.
Long-term care insurance (LTCi) provides coverage for quality LTC that may be needed at any time in life. Without LTCi, these costs are paid from one’s personal savings and assets.
Fortunately, LTCi policies can be tailored to cover varying circumstances. They are not one size fits all. When deciding which coverage you’ll need, here are some things to consider:
- How much can you afford to contribute toward the expense of your care?
- For how long might you need LTC services?
- How much time will pass before you need to start receiving benefits from the policy?
- What’s the anticipated cost of LTC?
Because your first claim might be years into the future, it’s essential to obtain your policy from a trusted source to ensure that customer service and insurer funding will be available at the time of need.
For more information, contact Associates of Clifton Park.
Home and car safety tips
But during the pandemic, some localities have seen an increase in home burglaries, theft from autos, and theft of autos. So it’s important to remain vigilant. Here are a few tips to keep in mind.
- Keep exterior doors, garage door, and windows locked at all times when you leave the house—even for a few minutes.
- Package thefts from homes are on the rise. Consider sending packages to work or a neighbor’s home, use “ship to store” instead, or add detailed delivery instructions to place packages in a less conspicuous location.
- Keep bushes and trees well trimmed to eliminate hiding places.
- Keep your home well-lit on the outside, and use timers to keep lights on inside when you’re not at home.
- Stop mail and newspaper deliveries when you’re away for an extended period of time and have a neighbor keep an eye out on your home.
- Make sure keys, purses, wallets, etc. are not visible through a window or door.
- When parking at home, remove keys and garage door openers from the car to prevent access to your home.
- Make sure your recreational toys (boats, motorcycles, etc.) are secured and properly insured.
- Consider scheduling valuable items on your home insurance.
- Do a home inventory of your possessions and keep it up to date. Download our free home inventory booklet.
- Car theft is usually a crime of opportunity. During the pandemic, it has been easier to steal cars due to fewer people circulating outside and more cars available.
- Remove all valuables from sight—loose change and gift cards are some of the most common items taken. Even if you’re only going to be away from your car “for a minute,” secure valuables in the trunk or remove them from the car.
- Park in well-lit areas when in public. When parking at home, park in the garage or close to the house if possible.
- Lock your doors, windows, and sunroofs. The majority of car break-ins reported involve cars parked in the owners’ driveways that are unlocked. No matter where you park—always lock your doors.
Need an insurance review?
If you’re curious about whether your home and auto are adequately covered, we can help! Call 1-800-279-4030 and talk with a Personal Insurance Consultant. Or sign up for a personal consultation.
Control your own health care choices with a long-term care plan
Prior to the COVID-19 outbreak, patients 65 years and older represented nearly 40 percent of hospitalized adults, accounting for nearly half of all health care dollars spent on hospitalization. However, they comprised less than 13 percent of the population in the United States (Centers for Disease Control and Prevention). And according to the most recent data from the Wisconsin Department of Health Services, 47% of all Wisconsinites are over the age of 60.
With age comes the increased probability of requiring assistance to stay at home. If you live to age 65, you have a 58% chance of needing long-term care at some point in your life. Regardless of your current health or your financial situation, these statistics are certainly a cause for concern as health care costs continue to rise.
The good news is that there are steps you can take today to protect yourself against the potential financial and personal costs of needing long-term care. Eileen Dunn, Geriatric Care Manager at Associates of Clifton Park (the firm providing life insurance and long-term care insurance support for WEA Member Benefits participants), has worked on the front lines of long-term elder care for over 30 years. “The single most important thing you can do is to include a long-term care strategy within your retirement plan,” she states. “Having a plan that looks at your assets, income, lifestyle, goals, estate plan, and tax situation is critical. But nothing is more important than protecting yourself, your family, and your life savings from the financial devastation of an extended chronic illness.”
Long-term care insurance policies are specifically designed to provide the protection you need by giving you the power to decide where you get your care and who gives it to you. Most people go to nursing homes because their spouse or family cannot provide the care, they simply can’t afford home care, or their care has become too complex to receive at home. Eileen shared a story of a 92-year-old client who was recently hospitalized and had surgery for a blood clot behind his knee. “Upon discharge from the hospital, they were going to send him to a rehab facility for six weeks,” she recounts. “But due to the current COVID situation, the family was adamant that he go home. He required 24-hour care, physical and occupational therapy, and nursing services for wound care. Fortunately, he had a long-term care insurance policy and was able to be discharged to his home with all the services he needed, including additional physical therapy and home health aides that enabled him to remain safely and comfortably at home.”
The state of Wisconsin gives residents another reason to consider long-term care insurance: the Wisconsin Long-Term Care Insurance Partnership Program. This is a joint effort between the federal Medicaid program, private long-term care insurance companies, and the state. Under the program, a long-term care insurance policy holder’s assets are protected up to the full amount the insurance policy paid out should they outlive the benefits. This guaranteed asset protection potentially allows you to retain thousands of dollars of your hard-earned money.
The reality is that everyone needs a long-term care plan. What’s important is to get started today by reviewing your options and creating a plan that works for you. After all, we’re not getting any younger.
To get help making informed decisions about your long-term care insurance options, call 1-800-893-1621 or fill out our long-term care insurance information request form.
Source: Paul A. Werlin, President, Human Capital Resources, Inc.
Wisconsin OCI press release: Be attentive and alert when driving this fall
October 28, 2020
Madison, Wis. – The deer population in Wisconsin becomes more active in October and November, during hunting and mating season, increasing the chance of vehicle-versus-deer accidents.
According to the Wisconsin Department of Transportation (WisDOT), last year in Wisconsin there were 18,414 reported deer/vehicle crashes resulting in injuries to 556 motorists and nine fatalities (six were motorcyclists).
“With the likelihood of hitting a deer increasing in the coming weeks, it’s important for drivers to be alert to deer and to understand their auto insurance coverage,” said Insurance Commissioner Mark Afable. “Deer-versus-vehicle collisions can lead to costly repairs without proper auto coverage.”
It is important to know that most policies cover hitting a deer under comprehensive, not collision, insurance. Comprehensive coverage pays for damage to your auto for causes other than a collision, including fire, vandalism, wind, hail, falling objects, or hitting an animal.
The Office of the Commissioner of Insurance (OCI) urges drivers to check their policies and call their insurance company or agent to see if they have comprehensive auto coverage.
Even seasoned Wisconsin drivers can be taken by surprise by a deer darting across the roadway. To avoid deer crashes and motorist injuries, WisDOT provides the following tips:
- Slow down, eliminate distractions, and make sure all vehicle occupants are buckled up.
- If you see one deer cross in front of you, watch for more. One long blast from your vehicle’s horn may frighten the deer away.
- If a collision with a deer is unavoidable, brake firmly and stay in your lane. Avoid sudden swerving which can result in a loss of vehicle control and a more serious crash. If you hit a deer:
- Get your vehicle safely off the road if possible and call law enforcement.
- It’s generally safest to stay buckled-up inside your vehicle. Walking along a highway is dangerous as you could be struck by another vehicle.
- Don’t attempt to move an injured deer.
Created by the Legislature in 1870, Wisconsin’s Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI’s mission is to protect and educate Wisconsin consumers by maintaining and promoting a strong insurance industry.
Don’t forget renters insurance
A renter’s insurance policy provides protection for your personal property as well as liability protection. If a fire or other disaster destroys your possessions, you could suffer a significant financial loss unless you have renters insurance. And unintentional bodily injury or property damage that you cause to others could be as financially damaging to you as a fire in your apartment. Liability protection against accidental occurrences (such as someone slipping on a wet floor and breaking an arm) comes standard with renters insurance policies.
Fortunately, renters insurance is affordable. Get a free insurance consultation and comparison quote, fill out our online quote form, or call us at 1-800-279-4030 to ask us about our renters discount programs and budget-friendly payment options.