“Selling vs. Solving”

riskMany in our industry refer to themselves as ”Insurance Salespeople” or “Insurance Brokers” as if the objective of their efforts is to sell an insurance policy and collect a commission. Yes, selling a policy is necessary to make a living, but the real objective for the insurance professional is to identify a problem or exposure for the client and solve it through an appropriate insurance product, risk management process, or through a non-insurance mechanism. The focus should be on design and implementation based on need and perceived risk – where the solution to a problem is the implementation of strategies and techniques which may or may not include insurance. All too often it is the peddling of an insurance policy that trumps a well thought out process of uncovering and addressing what really needs to be protected.

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Growing Too Old

We all wish for longevity but sometimes living too long comes with a price – an expensive one if you need convalescent care in your final years.

Convalescent care can cost in excess of $100,000/yr and Medicare will not pick up the tab. Long term care (LTC) contracts are what is needed to address this potential problem.

LTC contracts will provide a daily amount for a specific number of years in the event you need care. Many will reimburse for care in your own home and some will pay for modifications such as ramps, a remodeled kitchen, etc.

Think of your premiums as a purchase of a “reserve”. $2,500 a year will buy a “reserve” of up to $365,000 (a contract for 5 years at $200/day) for someone in their mid sixties.

Give us a call and we will design a proposal for you.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660

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Insurance Needed for the Long Term

long term insurance

One of my insurance colleagues in the estate-planning area points out two critical issues we should be concerned about: dying too soon – or living too long.

Naturally, most of us would find dying too soon a much bigger concern. If you are worried about the economic implications of death, life insurance is a good remedy. However, living to a ripe old age may bring an unanticipated financial burden as well – especially if convalescent care is required.

Neither Medicare or health insurance policies will pay for services provided for convalescent care. Medicaid will step in but only after your own personal assets have been expended. The state of Connecticut is concerned that many citizens will have their savings depleted and will have to resort to Medicaid in the event of a lengthy convalescent stay.

Because of this, the state has developed a “partnership” arrangement with certain insurance companies in an effort to encourage the purchase of long-term-care polices.

Fortunately, there are a number of very good long-term-care (LTC) insurance policies that will provide per diem funds for this type of care.

You can choose how many years it will be available (1 year, 3 years, a lifetime) and the waiting period before benefits  will be paid (30 days after convalescence, 90 days, etc.)

Many contracts will reimburse for care in your own home if you choose not to go to a facility. Some will pay for modifications such as ramps, a remodeled kitchen or a modified bathroom.

Many people procrastinate over purchasing  long-term-convelescent policy because of the expense and the thought that ending up in a nursing home is “unthinkable.” If you wait too long to invest in a LTC contract, the premium will be prohibitively expensive. There is a big in your mid-60′s as opposed to late 70′s.

It’s easier to think of your premiums as buying a “reserve”: $1,800 a year will buy a “reserve” of up to $365,000 (a contract for 5 years at $200 a day) for someone in their mid-60s.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

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