what you should know about long term care insurance. - Spencer Insurance Agency, Inc

Are you getting ready to downsize and prepare for retirement?

 

Here is some information from our website about downsizing and preparing for retirement.

Your life has changed.  It is a lot different than it was a few years ago. Your children graduated from college, possibly married and are out on their own. You and your spouse are now empty nesters.  Or possibly your child has moved back into your home. Sometimes these events are good and sometimes not so good.  Grandchildren may be in your future and you look forward to spending time with them.

Your thoughts are turning more and more to the days when you are going to retire, whatever that means to you.  Today only a few people are truly ready for a financially independent retirement. You may have 10 or even 20 years to retirement and may spend 20 to 30 additional years in retirement.  Are you ready?

What is next for you?  You may be thinking about retiring, reducing your hours at work or volunteering.  What does this mean for your employment, living arrangements, hobbies and insurance needs?

It is time to start planning for your retirement, so we have put together some suggestions for you especially when thinking about your insurance needs during downsizing and retirement

What are you changing?

  • Your job– if you are considering retiring from your current job give some thought to what you will do with all that time.  You may want to look into a part time job, volunteer work or put more time into that favorite hobby.  Before you make any changes check out a few items:
    • Your health insurance – what happens to your coverage if you retire? Are you eligible for Medicare?
    • Your income – Check with a financial planner to understand how prepared you are financially before quitting your job.
    • Your health – What is the status of your health?  Will you need assistance with daily activities of life?  Is your current home appropriate living arrangements for you future?  You should discuss this with your family.
  • Your Home– You may want to consider different living arrangements.  You may decide a single family home is right for you or you may want to downsize and move into a townhouse, condo or apartment.  You may even want to discuss an independent living community or moving in with a child using an in-law suite.  Discuss your options with your family and if needed a realtor.  You also may want to make some renovations to your current home if you plan to stay there.
  • Your estate plans – Have you reviewed your will?  Are your power of attorney and medical power of attorney documents up to date?

 

How does all this affect my insurance coverage?  Let’s discuss several different insurance policies you have now that will be impacted by downsizing and/or retirement.

  • Health Insurance– What happens to this coverage if you retire?  Will your spouse lose their coverage?  Are you and your spouse eligible for Medicare?
  • Auto Insurance
    • Did you know that in Pennsylvania if you are age 55 or older you can get a discount of 5% on your auto insurance if you take a driver’s safety course called 55 Alive?  To find a location of a 55 Alive course near you contact AARP.
    • You may want to consider increasing the medical coverage on your auto policy to $1,000,000.  Although this only applies if you are injured in an auto accident, this coverage does not have deductibles or coinsurance.  You get to choose your providers.
    • Did you stop commuting?  Call us and see if your rates can be lowered since you are driving less often.
    • Check with us to see if any other discounts are available to you.
    • If you are retired, see if there is any coverage you no longer need such as work loss. You may need work loss coverage if there are others in your household who are still working so check with us.
  • Homeowner’s Insurance
    • If you are considering moving, check with us to see what type of coverage you will need.  You still need property and liability coverage if you move into a condo, apartment, Independent Care Facility or Assisted Living Facility.
    • Are you changing the ownership of your home to a Trust?  Contact us to make sure that you have the proper liability and property coverage.
    • Are you purchasing a second home in another part of the state or out of state?  Check with us to see how this affects your auto and property policies.
    • Are you starting a home based business in your home?  This may void some of the coverage in your homeowner’s policy so discuss this business with us to make sure you have the proper coverage for the business.
  • Disability Insurance– Many people think that since they are considering retirement their disability policy is not important. However if you are ten years away from retirement and downsizing this is one place you should not downsize.  Many people in this situation are earning more now than ever before and putting more money away for their retirement now than before.  What would happen to your retirement income if you were unable to earn those wages for the next 10 years? This may be the most important time to have disability insurance.  See our free report: SPENCER TIPS ON “How to Protect Your Family When You Become Disabled and What You need to Know About Disability Insurance.”

 

 

  • Life Insurance– As you downsize you may be asking yourself “Do I still need life insurance?”  That is a good question and now is a good time to review your life insurance needs with us.  You may have a 20 or 30 year term that is about to expire.  Do you still need the coverage for a few more years?  Here are a few things to consider:
    • If you die will your spouse be left without your pension?
    • If you or your spouse dies will the surviving spouse get less Social Security benefits?
    • Will your mortgage or debt continue past your date of retirement?
    • Do you have any special needs children that need your support?

Check out our free report: What you need to know about Life Insurance and How to Make sure the People You Intended to get your Life Insurance Benefits Actually Get the Benefits!”

Preparing for retirement should be an exciting time of your life.  Start planning now so your years in retirement will be very enjoyable for you and your family.

Is Long Term Care Insurance right for you?

Long Term Care - Be Prepared

Is Long Term Care Insurance right for you?  You need to ask that question.

Well tax day, April 15, 2019, is behind us now.  Taxes are paid or you received an extension.  Taxes are bittersweet.  They take money out of our pockets but yet provide much needed services.  I don’t have a problem paying my fair share.

But how much is fair?  We work every day and try to put money aside in 401K plans or IRAs so we can have a secure retirement. Our retirement assets could well be our largest asset.  Do you protect that asset?

The chance of a house fire is 1 in 300 but we would not hesitate to get homeowner’s insurance. The chance of an auto accident is 1 in 30 and it is required in Pennsylvania that we have auto insurance. The chance that you will need long term care is 4 in 10 yet few of us have any insurance to protect our retirement assets from the dangers of expensive long term care.

Genworth’ 2018 cost of care report tells us that the average cost in the Philadelphia area for a home health aide is $54,912 a year. The cost of a semi-private room in a nursing home is $124,465 a year.  How long would it take to use up your retirement assets to pay these costs?

Long term care policies have only been around since the 1970s.  But they really did not catch on until the 1980s and 90s.  There was very little data to help insurance companies set rates for these products so as a result costs have gone up dramatically over the years.  Some policies had multiple increases of 15% or more.

In the last few years many new options have been introduced by life insurance companies.  These new policies referred to as hybrid policies are life insurance policies that contain long term care riders.  These riders allow you to take out a percentage of your life insurance death benefit early to help pay for long term care costs. If set up properly these payments would be tax free.  For example if you have a $250,000 life insurance policy, one company’s rider would allow you to take out 4% a month ($10,000) to help pay your long term care costs.  When your death benefit is exhausted the policy ends and there would be no life insurance.  However, if you never need long term care or die before using all the benefit then the remainder of the life insurance benefits would be paid to your beneficiary.

Many clients we talk to are not aware of these options.  Since these policies are life insurance you need to be healthy to get the coverage.  Also, the younger you are the less the cost.  Contact Spencer Insurance agency to learn your options.  Don’t assume these policies are not affordable for you.

Let us help you protect those retirement assets you spent years accumulating.

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