Wrightsville Beach NC

Wrightsville Beach NC
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Wilmington, NC
Twenty Five Years of insurance and related financial services for individuals, families, and small business owners in the Carolina's. Offering services in Estate Planning, Business Continuation for life and disabiity insurance, Long Term Care and Critical Illness Insurance. Fixed annuities for accumulation or income distribution are offered.

Thursday, January 29, 2009

Long Term Care Insurance Premiums to Costly? It Depends.

Most people think the need for long term care assistance is for people in their 70’s and 80’s. The fact is that 40% of long term care needs are under age 65. The younger the age the lower the premium. Plus at younger ages people are generally in better health in order to qualify.

These plans not only help pay for custodial care expenses but also preserve assets that may now or later be needed to pay these expenses but were really planned for retirement income. And especially now when a number of people’s assets have decreased significantly.


Before considering Long Term Care insurance, consider the premium cost (also as a percentage of ones income- if it makes sense to pursue) and then consider the cost of care. Using the April 2008 study by Genworth Financial, the following are sample national average costs for different services:

Home Maker Service: (non-certified) $18 per hour. Certified is $38 per hour.
Adult Day Care Facility: $59 per day
Assisted Living Facility: (private room) $3,000 monthly.
Nursing Home Facility: (semi-private) $185 per day. Private room, $209 per day. The national average (now) is over $75,000 a year.


These costs do not consider incidental expenses for personal items, drugs, spending money, etc.
In Alaska, a nursing home runs $515 per day ($187,902 per year.) In New York City it’s $398 per day ($145,392 per year). To see what cost’s are in or near your area, go to
your internet search engine and look up Genworth long term care study or Metlife Mature Market. These will give you a lot of information which should be helpful.


No, Medicare isn’t a plan for long term care expenses. Medicaid can provide assistance once the beneficiary spends-down their assets as set by each state. With funding going down and expenses going up, don’t count on the state or the federal government to pick up the tab.


And if the thought of giving (or gifting) away assets in order to qualify for Medicaid is a consideration, be very aware of the strict rules that are in the Deficit Reduction Act of 2005. There could be a rude awakening in the delay of Medicaid benefits if not followed.
Contact legal counsel such as an elder care attorney for assistance in this area.


A few states (and more are joining in) are a part of the Federal Governments supported Long Term Care Insurance Partnership Program. For a person purchasing a LTCi policy in those states, the benefit from the plan can be used first and then still qualify for Medicaid.
See, http://www.ltcfeds.com/help/faq/miscellaneous_partnership.html#1 .
Under certain situations, all or part of Long Term Care insurance premiums may be income tax deductible by individuals as well as businesses. See the following web sight for information.
http://www.aaltci.org/long-term-care-insurance/learning-center/tax-for-business.php


Premiums will vary by policy benefits: A 90 day waiting period before benefits start will be less costly than a 30 day waiting period. A 3 year plan will be less than a 5 year or life time benefit. Using an inflation rider such as 5%, (compound or simple interest) where the initial daily or monthly benefit increases each year before a benefit is paid out, is more expensive than no inflation rider. Some plans also offer an inflation rider based on the annual CPI (Consumer Price Index) rate which can result in lower premiums
compared to a fixed guaranteed inflation rate option.

How to pay for LTC insurance premiums? A number of options to consider.
Out of current earned income.
Withdrawals from investments (principle, interest or both).
Assistance in part or whole by a relative (children).
Purchase an annuity with its income used to fund the LTCi policy.
A plan offered through an employer. Keep in mind that in a number of situations premiums in part or whole may be deductible. Some states also offer a tax credit.

Some new Life Insurance and Annuity plans offer an optional LTC rider.
If both spouses are considering individual policies look at a plan with a Shared Care option or one policy that pays the benefit on more than one life –benefit paid on who ever has the claim first. Many carriers also offer spousal discounts.


In the early days of Long Term Care plans, only nursing homes were covered. Today, numerous options are available and if feasible, a person would rather stay at home to receive care as long as possible. Today’s plans also cover or offer this option.


What triggers benefits in the first place before a Long Term Care insurance policy will pay out. Normally, when you cannot do yourself or require substantial assistance with two out of six ADL’s (Activities of Daily Living) events, e.g., eating, bathing, dressing, toileting, transferring, and maintaining continence. See policy’s definitions to see specific wording on what qualifies benefits to begin. Normally, cognitive (memory) impairments can also trigger benefits.


Also keep in mind the cost of care giving. Possible lost wages and well as personal health issues are factors when taking care of a person. Many times the caregiver will be the spouse or adult children. You may have already experienced this or know someone who has. Here again, Long Term Care insurance can play a big part in care giving expenses and many times pays for respite care for the caregiver.
There are a number of resources on this subject through your state as well as web sights including http://www.aarp.com/ and http://www.longtermcare.gov/. Plus many others.


If you or someone you know is considering purchasing a Long Term Care policy now or in the near future, look at all your options- the various policies and benefits available, definition of what triggers the income, the company’s history in marketing these plans (and their financial strength), and the source who you may be buying a policy from. Always request and expect professional advice.

Cal DesVoigne
LifeStyle Financial Resources, LLC
lifestylefinancialresources@blogspot.com

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Is Your Life Insurance or Annuities Safe

Oct. 1, 2008

With the current events of the financial markets, with loss of banks and the bailout of one large insurance company, you might wonder what happens to your life insurance or annuity policies in the event your insurance company fails.

These are certainly not normal times. No doubt we will see more consolidation with banking and insurance companies. Generally, if a life insurance company has a problem, another insurance company will buy them and take on the obligations without any mayor change, except maybe the name.

However, if there is a problem, policyholders do have some gaurantees as set out in each state (where the policyholder lives). This is set up throught the Life and Health Insurance Guarantee Association in each state. Generally these amounts (per policy) can be, as in North Carolina, up to $300,000 of value (cash or death benefit.) For annuities it is the 'guaranteed', fixed amount -not the equity funds as in a Variable Annuity.
For specific states and information, go to http://www.nolhga.com/.
In North Carolina it's http://www.nclifega.org/.

Has Your "Nest Egg " Cracked

Sept. 15, 2008

These are not good economic times for a lot of people. And if you are near retirement or are already there, your ‘nest egg’ probably is now smaller. Consequently your current (or projected) income level has dropped and the length of time it will last is reduced.

If your fund sources are in securities, no doubt the values have decreased. And when market conditions start to turn around (historically they have), how long will it take to get back to where you were before securities or other investment values headed south?

If you’re young enough and have the time for your investments to recover, hopefully you’ll be able to regain your losses and head back up a path of respectable returns on your investments. If you don’t have the time, you may be searching for ways to make up losses including cutting expenses.

There are a number of financial products at your disposal to consider. Stocks, mutual funds (both of which over a period of time generally do perform well), bonds, precious metals and even real estate (although now is not the best of times), and numerous other options. Certificate of Deposits (CD’s) and money market vehicles may not provide much of a gain, but they are very popular and have their place in overall planning.

Another option to review is an annuity. These plans include variable or indexed annuities which have become popular as accumulation vehicles with options to withdraw money for retirement purposes. Both of these type of plans have the potential for gains or losses but also have features that can protect downside risk. Results are tied into various security options or indexes. Fixed annuities provide a return based on the investment results of the general account of the insurance company issuing the policy.

One annuity product that may be considered to some as being ‘ho-hum’ or ‘boring’ is the Single Premium Immediate Annuity (SPIA). The boring part is that there is generally no potential for increases in value, no access to cash values, and no increases in the levels of income it provides.*

However, what is not boring is that the income received from a SPIA has guaranteed life time income options (or for a specified period of time) for individuals or for two people under a joint income annuity. And if an individual (or even two people under a join annuity) have serious health issues, many insurance companies will actually increase the normal level of income.

So who might consider this type of an annuity? Anyone who wants or needs a guaranteed income in addition to their monthly check from Social Security or other income sources they may receive. This may be the ‘bond’ vehicle in a total portfolio of mixed investments. Depending on age and personal financial goals, some advisors may suggest 10% to 20% of investments used for retirement income might come from a SPIA. Each situation will be different and requires a review of personal goals, obligations, and
other financial considerations. Longevity should also be considered.

Another feature of SPIA income is that due to a special formula called an ‘exclusion ratio’, federal income tax due on the income received can be less (over a number of years) than other types of investment income. This special tax treatment applied to money received from non-qualified money sources, not qualified funds (i.e. pension type plans).

We’re all getting older and generally, living longer. One concern may be that of outliving your money. Another is the cost of long term care which many of us will require sometime in our lives. For a 65 year old retiring today, its estimated there will be an additional cost of $250,000 for health services needed over and above any benefit plans we may have in place, either personally owned or provided by the government.

Current Nursing Home care in North Carolina is $5,569 per month for a private room (and doesn’t included drugs and other incidentals). An Assisted Living facility (private room) is $2,395 per month. Most people, if in fairly good physical and mental health, would prefer to stay at home. If assistance is required, an un-certified aide’s fee is
$18.00 per hour for their service. (Source: Genworth Financial 2008 Financial Cost of Care Survey)

These costs are increasing higher than the national inflation rate. If a family member or friend is going to assist at home, the cost of lost wages and their own well being can be greatly affected. Purchasing Long Term Care insurance while healthy is a good option to help pay for a major part of long term care expenses. These costs can run into many thousands of dollars (and that could be from your retirement/investment money).

A Single Premium Immediate Annuity (SPIA) can also be an option to pay for Long Term Care insurance premiums. A one time single premium is paid which equals the income level required to pay for the Long Term Care insurance premiums. ** For example, if two spouses each own a Long Term Care insurance policy (and are joint annuitants under one SPIA), and one of the spouses die before the need for long term care occurs, the addition income from the annuity (required to pay for the deceased Long Term Care insurance policy) is now available for other uses to the surviving spouse.

What ever type of saving vehicles you might be using for accumulation or income purposes, diversification of investment choices will generally be important, particular in today’s volatile markets. A Single Premium Immediate Annuity is an option to consider when guaranteed income is needed. And actuarially, people live longer who receive guaranteed income from annuities.

What Will Rogers said in the 1930’s still applies considering today’s investment atmosphere. “I’m not so much interested in the return ON my money as I am in the return OF my money.” A SPIA may be the right option.


LifeStyle Financial Resources, LLC, an independent insurance advisor.



*Some companies offer SPIA’s with access to values and increased income levels.
** Long Term Care insurance premiums may be subject to future increase.

Cancer Patients and Life Insurance


Opportunities for Life Insurance on Cancer Patients Increase
Sept 20, 2008


The initial stress of being told that someone has cancer can for many people be devastating. The experience can either be negative or many remain positive about this life event. Either way, a lot of thoughts and feelings are going on during this time.

Many times the thought of “I should have bought (more) life insurance before this happened” comes up. And in the past, the opportunity to be considered for life insurance was either not an option or expensive if even available, or offered after a considerable length of time since remission.

Today however, there are better chances of qualifying for life insurance for women and men with certain types of cancer. Even the possibility to issuing policies on a standard basis without additional premium surcharges may be offered and in some cases without a waiting period after treatment before applying for insurance.

A few life insurance companies in recent years have improved their underwriting capabilities on certain types of breast and prostrate cancer.

For example, one company will consider a standard issue policy (subject to favorable medical history, lab - x-ray and other test results) on first time breast cancer patients for localized small (1 cm. or less Stage 1) tumors and with strong prognosis.

Another company will do the same and offer insurance immediately after surgery but with a small extra charge for a few years, then standard premiums. They will also consider preferred premium rates for women with noninvasive (Stage 0) cancer. And Stage 1 tumors larger than 1 cm. maybe offered after a one year waiting period with a temporary surcharge. Other cancer situations may qualify for life insurance after a certain time has passed and then subject to favorable results.

Prostate cancer history with men has also seen improved underwriting with another insurance company that may offer standard rates if age 70 and up, has been treated with radiation for moderate aggressive cancer, and a PSA level of 0.5 or less after treatment. For ages 60 and up, possible standard rates may be offered after surgically removed.

A recent study indicates in the next few years that women will own 60% of the wealth in the U.S. Women however, fall short of life insurance coverage compared to men. The use for life insurance can:
1) Replace income lost due to a family wage earners death. Many times that’s a working married mother or a single (stay-at-home) mom raising children. Maybe having money for college education is important.
2) Replace caregiver costs of taking care, both physically and financially, for a parent.
3) For a small business owner, the money available for succession plans to fund
business buy-sell agreements with other owners or partners and,
4) Any final expenses for funeral costs, uninsured expenses, cover taxes that may be
due, estate administrative costs, etc.

So with advances of more aggressive and favorable experiences in underwriting certain types of cancer’s, the opportunity by some companies to offer life insurance has opened the door where once closed, or highly ratable, or at least postponed. If the insurance need is there, then explore the possibilities. It may be available where once it was not.

LifeStyle Financial Resources, LLC

We do not provide legal council. Consult your own legal or tax providers for assistance
Any insurance company offers subject to actual medical history and underwriting results