Tag Archives: 10 Years

Exploring the Lesser Known Features of Long-Term Care Insurance

Exploring the Lesser Known Features of Long-Term Care Insurance

Buyers of long-term care insurance often focus on just the coverage basics, such as the level of daily benefits, length of coverage, and under what conditions the policy will pay a claim. While these basics form the chassis of the policy, long-term care policies offer a host of other options that may prove beneficial to the policyholder.

Let’s take a look at some of these available options:

Survivorship Premium Waiver– If both spouses obtain long-term care policies from one insurer, some policies will provide a waiver of all remaining premiums if one spouse dies within a certain number of years after the policy is issued. For example, the policy may provide a premium waiver if the policies have been in effect for 10 years before one spouse passes away. The policy might also stipulate that no claims could have been paid during the period.

This feature may be included with the policy automatically or it may be offered as a rider to the base policy for an extra premium.

Shared Pool of Benefits- Instead of each spouse having an individual policy with separate benefits, they can elect to share each other’s benefits if needed. For example, each spouse might have a policy with a 3-year benefit period. Once one spouse has expired 3 years of benefits they have no further coverage, but the other spouse may still have 3 years of coverage remaining. With the shared pool of benefits rider, the spouse receiving care could also access the other spouse’s benefits.

This feature is most commonly offered as rider to the base policy for an extra premium.

Alternate Plan of Care– With our population continuing to age, new ways of delivering long-term care will continue to be developed. Not too long ago, no one had ever heard of adult day care or assisted living facilities.

With the alternate plan of care feature, you can ensure that your policy will never grow obsolete. You, your physician, and the insurance company will develop a plan of care which best serves your needs based on currently available options.

Look for this feature to be included in the policy with no additional cost.

Accelerated Premium Payment Options– Many insureds worry about their ability to afford premium payments during retirement when their income is reduced. Some insurers offer policyholders an option to pay accelerated premiums for a shorter period of time with the benefit of a contractually paid up policy after a certain period. For example, a 10- or 20-year accelerated payment period with no further premiums due afterwards.

This option has several benefits. Business owners may be able to deduct premiums from their taxes during their working years with no further premiums due in retirement. Additionally, with the cost of long-term care increasing rapidly, a contractually paid up policy means no exposure to premium adjustments made by insurers in future years to account for higher than expected claims experience.

Enhanced Elimination Periods– While all policies provide several elimination period options ranging from a 0 day to a 180 day elimination, it’s important to understand how the elimination period can be satisfied.

For example, some policies may credit a week towards your elimination period with just one day of home care received per week. Still another policy may have no elimination period for home care benefits while nursing home or assisted living facility care may require an elimination period.

These are just a few of the lesser-known features of long-term care insurance. There are many other options to consider when selecting a policy, but be sure to compare not only the basics of each policy but the included features and available riders.

Tips to Maximize Your Social Security Benefits

Tips to Maximize Your Social Security Benefits

A married couple, or an unmarried couple who were previously married for at least 10 years, combine their working records, for the purposes of Social Security benefits, while they are both living. With careful planning, a couple can maximize their benefits in ways that are not available for single people.

Claim Deceased Spouse’s Benefits

If your spouse is deceased, you are eligible to receive his/her full retirement benefit when you reach the age of 60. If you are disabled, you only need to be 50 years old to collect. If you claim benefits before the full retirement age of the deceased, they can be decreased up to 28 ½ percent. However, you could choose to ask for the lower benefit on your deceased spouse’s working record when you reach 60, and change to your own full benefit when you reach your full retirement age.

Claim Ex-Spouse’s Benefits

If you are at least 62 years old and were previously married for at least 10 years to the same person, and unmarried now, you could be entitled to collect benefits from your ex-spouse’s earnings. The amount that you collect will not decrease the amount that your ex-spouse receives.

Claim % of Your Spouse’s Benefits

A spouse can collect 50% of the amount of his/her spouse’s benefit if that would be more than his/her own benefit amount. You must have reached your full retirement age to collect that amount. If you apply at the earliest age you can, which is currently 62, you will only receive 35% of your spouse’s benefit amount. Note that the higher earning spouse must apply for Social Security benefits before his/her spouse can receive spouse’s benefits.

If the higher earning spouse has reached full retirement age, he/she may apply for the benefits and then ask to have them postponed. In this way, the spouse who earns less can apply for the spousal benefit while his/her spouse keeps working until age 70 to earn more credits. Each year that you postpone claiming benefits after reaching your full retirement age adds approximately 7 and 8 percent to your retirement checks when you apply at age 70. Note that there is no advantage in delaying benefits past the age of 70.

If you and your spouse are both past your full retirement age, you can draw based on your spouse’s benefits and keep working and accumulating credits on your Social Security record. You can then claim benefits on your own work record when you reach the age of 70 and get a larger monthly check because you deferred your credits.

If you can increase your benefits by any of these methods, it is worth a phone call or a trip to your nearest Social Security office.