There are many options available to you when it comes to personal insurance. These include both the product choices and the companies that offer them. You may be asking yourself the following questions: What do I need? How should I order them?
Your age and the purpose of the insurance will play a significant role. There are four main insurance planning considerations for individuals: Life, Disability Income and Critical Illness. Let’s look at some of these options.
1) Life Insurance: This is the foundation of all planning, especially if you have a loved one, a company, or a large estate that you wish to protect assets from federal and state taxes.
Term policies are a type of life insurance plan. These policies are for temporary purposes and cover a specific purpose, time or cash flow. You can purchase guaranteed level premium plans that last ten to thirty year depending on your age and eligibility. These policies are death benefit policies that offer no cash value and have no cash value.
Permanent plans (Whole Life and Universal) are cash-based and designed for long-term use. In Universal and Variable Life plans, premiums and cash values can fluctuate. Whole Life policies provide level premiums and guaranteed cash values (basic).
These plans may provide cash value that can be used to borrow money for an emergency, college expenses or business needs. They could also be used to supplement retirement income if the values are adequate. Life insurance has many uses.
2) Disability Income Insurance: These plans replace income lost due to illness or injury. After a waiting period, benefits begin. Many foreclosures occur due to income loss due to disability. An employer plan may not offer the same benefits as an individual policy. However, an individual policy can be portable and provide more than what an employer policy might. There are good chances of you being disabled for either short- or long-term.
3) Critical Illness Insurance. These plans are well-known in Europe and Canada, and have been more widely known in the U.S. in recent years. These policies, unlike disability income plans which replace incomes, pay a lump sum to the insured for qualified serious events. These conditions could include stroke, angioplasty, bypass surgery, heart attack, certain cancers, renal or hearing failure, MS, organ transplants, or Alzheimer’s. You can spend it however you like. You might be able to pay medical deductibles or other care that is not covered by medial plans. These plans may be offered in individual plans or group plans with fewer benefits. These plans can be considered regardless of whether you have a Disability Income policy.
4) Long-Term Care Insurance: Yes. As we age, there may be significant unexpected expenses such as nursing home costs (average $203 per day*), Adult Day Care, Assisted Living facilities, and continued staying at home services. Long-term custodial care is not covered by Medicare or any health insurance. Medicaid funding is running out in many states. A good portion of long-term care needs are actually before the age of 65. **
These plans aren’t affordable for older people and they aren’t suitable for all. Some states offer basic plans, while others may offer a plan through their partnership programs. If you’re healthy but cannot afford a plan right now, consider if your children will pay the premium. A benefit is better than none.
There are many options to meet your needs. Insurance is there for that purpose. You can get professional advice, product price comparisons, and quality insurance companies that are experts in these plans.