Insurance Audit Information

Most people see long term care insurance as nursing home insurance when if fact it is the opposite. Long term care insurance provides options to avoid nursing home placement, unless a nursing home is where an individual prefers to live. And please do not misunderstand, nursing homes have changed significantly over time and many are now very clean and nice facilities. However, a nursing home is usually not where an individual would choose to remain for the final days or months of their life unless there are no other options.

Long term care insurance is becoming more popular as consumers realize it provides options for independence. Many studies indicate that two thirds of individuals over age 65 will require a long term care stay. A long term care stay is a nice way of saying nursing home or skilled facility stay. And over forty percent individuals over age 65 will experience a long term care stay lasting two or more years. This is a long time if you are in a facility in a shared room — not a private room, with a roommate you dislike. Think back to those college years and consider how you might like to be in a similar situation at age eighty.

And surprise, Medicare will not pay for a long term stay. Medicare usually covers days 1-20 if medically necessary and progress for rehabilitation occurs. On days 21-100 the individual pays an insurance co-pay of $128 per day (in 2008) and after 100 days, the individual is totally responsible for one hundred percent of the cost which averages between $175-220 per day (in 2008). As with anything these costs are expected to increase each year by 3-5% percent.

Long term care insurance not only will pay for these long term care stays, it will pay for care to be provided at home, which is where most individuals prefer to live as long as possible. It also pays for day care, assisted living, home modifications and other services depending on the policy.

Many individuals mistakenly think that long term care is too expensive. As opposed to what I ask you? As opposed to $6,000 per month in a long term care facility? Compare a monthly premium of $200 to the cost of $200 PER DAY in a long term care facility and tell me if long term care is too expensive?

Many are shocked when the cost of one year in a long term care facility at $75,000 eats up most of their retirement savings. Or when they have to “spend down” to qualify for public assistance called Medicaid. The government has determined that with the increasing numbers of baby boomers who will require medical care in the future that there is no possible way that the government can fund this care.

Thus the Debt Reduction Act of 2005. This Act states that individuals wishing to qualify for Medicaid assistance will need to spend all of their assets prior to qualifying for Medicaid. And there is a five year look back period to ensure that assets like homes and money were NOT given away to family members in an attempt to avoid the government receiving these funds. When money or resources are given away, the government imposes a penalty equal to the financial amount given away divided by the cost of one month in a long term care facility. So for example, if your parents gave away $60,000 today and wish to qualify for Medicaid in 2009, Medicaid will accept the application and penalize them for ten months of care. This means that they cannot receive services through Medicaid for a period of ten months from the date of their Medicaid application. Which means that if the care is truly necessary, children and other family members will pay personally for the care.

Even more reason to consider long term care insurance not only for yourself, but purchasing a policy for your parents if they cannot afford the premiums. The question is will they pay now or will you pay later for your parent’s care. Caring for parents and the emotional and financial stressors significantly impact the retirement prospects of children. Parents always assume that their children will take care of them but do not consider the impact on employment, retirement income and even marriages and children.

Don’t put yourself, your parents or your children in a situation of requiring care and not having a back up plan on paying for care. Because we will all pay for care one way or another when we are older. It’s inevitable. We will pay because of our ability to have long term care insurance that ensures we decide about our care. We will pay because our parents require care and they have not prepared financially for the cost. We will pay because we did not prepare financially for the cost by having to receive care through public assistance called Medicaid.

Unfortunately the probability that we will all die is one hundred percent absolute. The question is how do you want to spend the last years of your life? In a manner you choose or in a manner chosen for you?

When the sun is shining and the kiddies have the paddling pool out, winter storms are a long way from most people’s thoughts. Not just winter, either, as the August storms of just a few years ago caused absolute havoc. Maybe it’s time to turn your thoughts to some property maintenance, while the suns still shining.

The main hazards are falling trees, loose roof slates and masonry, as they can cause damage both to cars and pedestrians. Roof tiles can mean that water can get into your home and do untold damage. By inspecting the roof and gutters regularly, minor repairs can be carried out and a lot of hassle saved. Lots of people are unaware of exactly what is covered in their buildings policy – make sure you’re not one of them.

Things need to be checked out on a regular basis. Simply cleaning out the gutters means there’s less risk of them getting blocked and overflowing. Nearby trees make the matter ten times worse. It’s not a particularly pleasant job, but it’s something that just has to be done. Whilst you’re checking the roof to see if there are any loose tiles, you should take the opportunity to check for cracking or pointing problems. Check too for rotten branches on trees and make sure that boundary walls and fences are secure.

Buildings insurance will usually cover damage to your home, plus any domestic outbuildings. Paths and driveways are normally covered too. Although the terms flood and storm are quoted, it may be that extremely strong winds or abnormally heavy rain conditions which cause damage are not covered. This begs the question if abnormally strong winds cause damage, is this not a storm? It shows that you should check your policy and be absolutely sure of what is covered and what’s not. Emergency cover is invaluable and well worth adding if it’s not already there.

Home emergency cover costs very little to add to a typical policy and it offers a great deal of peace of mind. It covers plumbing, drainage, heating and power supply problems. It’s not normally absolute cover, but tends to pay a set sum per claim which will cover a call out charge, plus the cost of two hours labour and an amount towards parts and material.

There are many insurance companies offering this type of cover, but you should be warned that there’s a very wide variation in terms. Again, read the small print again and again to make sure you’re covered for the situations that concern you. If you’ve been with your insurer for some time, you may have got into the habit of just renewing your policy each year. This is a mistake; you don’t have to stick with the same old company. Next time your policy comes up for renewal, check out the opposition. You may find you can make a big

saving and even improve on the cover. Lots of companies give discounts for new customers and the best prices are to be found on-line. Log on and find an independent home insurance advisor, who’ll give you all the help you need to find the right cover at a fair price.

What is the Difference between Homeowner’s Insurance and Home Warranties?

A homeowner’s policy is an insurance policy that covers the homeowner in the case of a loss to the home because of fire, theft, vandalism, wind storm or other damage. A homeowner’s policy also covers damages that may be awarded to someone that is injured while visiting your home. A homeowner’s policy covers the value of your home, and should be considered a necessity for anyone that owns a home.

A home warranty is a policy that works in much the same way as a homeowner’s insurance policy, in that you pay an annual premium to receive coverage. The difference is, a home warranty covers the cost of routine home repairs that would normally come out of the pocket of the homeowner. A home warranty will cover things like a leaky roof or a refrigerator that doesn’t keep your ice cream solid.

Do I Need Both a Homeowner’s Policy and Home Warranty Policy?

Everyone who carries a mortgage should carry a homeowner’s insurance policy in the amount of the appraised value of the home. This is the bare minimum coverage that you should have, for your peace of mind. If you do not have a mortgage on your home, you should still have homeowner’s coverage. Homeowner’s is valuable for many things other than replacing a home that is destroyed in a fire. Perhaps one of the most valuable features of a homeowner’s policy is the liability coverage that you receive. If someone slips on a patch of ice or trips over a bump in the sidewalk leading up to your home, your homeowner’s policy will protect you from a lawsuit.

A home warranty may be considered more of a luxury, but it really is not. Home warranties actually make the most sense for people that feel they can least afford them. A home warranty covers the cost of those home repairs that often crop up unexpectedly, when you can least afford them; for instance, a furnace that breaks in the middle of the winter? Water streaming in through the roof during the spring rains? For someone living on a fixed income or a tight budget, the cost of these repairs may mean saving money for several months. With a home warranty, as long as your premium is up to date, you will only be charged the cost of a service call, which is often less than 50 dollars.

Determining Who Pays for What

To consider yourself fully covered in the case of a household emergency, you should have both a homeowner’s policy and a home warranty plan in place. Having both plans should provide you with peace of mind, but it does bring up the question of who pays for what? While it may seem confusing, and that there would be some overlap, it is easy to determine who pays for what.

Both your homeowner’s policy and your home warranty policy will clearly state what is covered. Although there are can be additions and exclusions to both the homeowner’s policy and the home warranty, there will be no overlap. Homeowner’s policy typically cover things that may not occur, such as fire, theft or vandalism, just the way auto insurance covers you for accidents that you may never have. A home warranty covers you for routine maintenance, plumbing or electrical problems, a hot water tank that doesn’t heat, just like a warranty on a tool covers the tool if it breaks.

Choosing the Best Provider

Whether you are shopping for homeowner’s insurance or a home warranty policy, customer service is the first priority. Without someone available on the phone to answer your questions and get your claim processed, the most extensive coverage available will not be beneficial.

The length of time that a company has been in business is also important. While it is not a guarantee of good service, it is an indication that they are able to keep their customer’s happy. When you are shopping for a homeowner’s policy or a home warranty policy, talk to others who have similar policies, or who you know have recently filed claims. How was their claim handled? Was the paperwork overwhelming? How quickly was the claim settled? Although each claim is different, you can get some idea of how a company is run by how satisfied its current customers are.