As your
children strike out on their own, it’s time for another major review of your
insurance coverage.
Long-term
care (LTC) – Now is the time to begin considering one of the most overlooked
types of insurance: long-term care. This
insurance is designed to pay for custodial care in a nursing home,
assisted-living facility or professional at-home care, any of which can be very
expensive, especially in light of longer life spans and inflation.
Many people
don’t buy LTC insurance because they assume that the government will pay for
it. But Medicare does not pay for
long-term custodial nursing home care.
And Medicaid pays only if you have spent down most of your financial
assets.
If LTC
insurance is appropriate for you, we recommend that you buy it while you are in
your fifties. The premiums are still
reasonable at this age, and you run less risk of failing to qualify due to
deteriorating health. If poor health is
a barrier, you may be able to qualify by buying group coverage through work, if
it’s available. Again, factor in
inflation when choosing benefit amounts.
Disability
– You’ll want to continue this coverage as long as you are working and
dependent on the income.
Life – With
the kids gone, you may not need as much life insurance as before, but it
remains critical if you’re still working and a spouse depends on your
income. Estate planning considerations,
such as leaving an inheritance to loved ones, making a bequest to a favorite
charity or paying estate taxes, are other reasons why you may decide to keep
your life insurance in force.
Other – As
you review your insurance, watch out for gaps and duplications. People with multiple properties in multiple
states, for example, often use multiple insurance agents for their property and
casualty coverage, and can easily end up with expensive coverage – or worse, no
coverage at all for some property because it was overlooked or because a policy
expired.
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