Do You Have Cracks in
Your Nest Egg?

Are you prepared for living a long life?

According to a recent article in the Wall Street Journal, the biggest mistake people make with their retirement savings is failing to consider the cost of Long Term Care (LTC) needs.  Long Term Care topped inflation, taxes, and underestimating life expectancy in terms of impact on retirement plans.  The real problem is that most people fail to consider a “non market-related” threat like Health Care and Long Term Care costs.  These “catastrophic event” can cause as much, or more, harm to your retirement nest egg than a volatile stock market.

Statistics show that over 60 percent of us will need Long Term Care during our lifetime.  The reason is simply that an aging population will live well into their 80’s with limited resources to pay for LTC expenses.   The cost is prohibitive for most people and can exceed $72,000 a year for a room and board alone in a Long Term Care facility in California.  Moreover, your health insurance and Medicare pays little, if any, of these costs.

Long Term Care insurance offers policy owners a wide variety of benefits that can be used once an individual is deemed to have a chronic health condition needing Long Term Care services by a licensed health professional.  The coverage will reimburse you for qualified care expenses, which can be provided in your own home, an assisted living home, or in a skilled nursing or other facility.

For businesses, the premiums are often fully or partially tax deductible, and the benefits, when received are normally tax free.  For individuals, some of the premiums may be tax deductible subject to current tax laws.  In either case, you should consult your CPA or tax preparer regarding your specific situation.

For businesses, Long Term Care is the fastest growing “executive insurance benefit” available today.  It is also is an excellent employee benefit, one which benefits both the business and its employees.  Either way it is good for business owners.

One of the most important considerations when purchasing LTC insurance is to check the financial ratings of the insurance carrier.  Since you may not need to use the benefits for many years, you will want the carrier to be there when it’s time to pay the claim.

The four key criteria when choosing the right policy are:

  • How much will the policy pay per day, or per month?.
  • How long will the benefits last? How much is the "pool of money"?
  • What is your deductible or elimination period (EP)?
  • Will your benefit amount keep up with inflation?

Whether you’re a business owner or an individual, you should consider the effect of Long Term Care as a critical part of your retirement planning.  Designing the right policy for your situation can be a bit complicated.  You should be sure to seek out a trained and qualified Long Term Care specialist to assist you with the design.  They can help you to keep your nest egg for what it was intended, your Retirement!

Randy R. Moberg, CLTC

Personal Articles Insurance

Are your most valuable possessions protected from loss?  Your possessions are worth a lot to you, especially certain ones that reflect your personal interests and taste.

The protection provided for personal property under the typical homeowners’ policy is very broad and includes coverage for your furniture, clothing, and appliances,  In addition, it provides limited coverage for items such as jewelry, silverware, furs and firearms.  It may not cover some types of loss that may be important to you, such as the stone falling out of your diamond ring, or your antique statue that is accidentally broken.  In fact, most homeowners’ policies set dollar limits on the amount of protection offered to cover the theft of items such as jewelry or furs (usually up to $1,000), firearms (up to $2,000) or silverware (up to $2,500).

Personal Articles insurance supplements coverage for possessions of higher monetary value, such as a diamond engagement ring, your grandfather’s pocket watch, artwork or a valuable collection.  While most homeowners policies have limits on the dollar amount and type of loss that can be recovered, Personal Articles insurance will provide the protection you need for your most valuable possessions in the event of loss through theft, accident or national disaster.

Personal Articles insurance provides extremely broad coverage, usually, with no deductibles.  For the most part, you’re agreeing on the value prior to loss.  The insurance is written on an     all-risk basis, which means that policy covers against everything except what’s specifically excluded.  Some also cover newly acquired items even if you haven’t had time to notify the insurance company of the purchase (provided you already have this type of article scheduled on your policy, a maximum limit applies per item).

Many different types of possessions can be covered by Personal Articles Insurance.  Here is a list of some of the items that are typically covered:  Cameras, China, Crystal, Firearms, Furs, Golfer’s Equipment, Jewelry, Personal Computers, Silverware, Musical Instruments, Works of Fine Art including paintings, etchings, pictures and other bona fide works of art.

For more information about these articles contact your L/B/W Account Manager or request a free quote at
www.lbwinsurance.com

 
*Securities and investment advisory services offered through
Capital Analysts Incorporated, Member FINRA/SIPC.
CAI does not offer tax or legal advice services.
L/B/W and CAI are independent, non-affiliated entities

DISCLAIMER: This newsletter is for educational purposes only. It is not a solicitation and it is not to be used as tax and legal advice. Please seek professional assistance with your tax and legal issues.