Changing Face of Long Term Care Insurance

There have been a lot of changes in Long Term Care insurance in recent years.  Here are some things you should be aware of:

1.  Many companies that were in the business of selling LTCI aren't anymore.  When the LTCI first hit the market, companies jumped in with no actuarial claims history.  Many policies offered "lifetime benefits", but with people living longer, claims went up.  As a result, carriers either sold their books of business or stopped selling the policies but continued to service them.

2.  Companies reserve the right to raise the rate on a policy after issue.  In other words, if you were forward thinking enough to purchase a policy when you were younger (and reasonably thought it would be less expensive), you could have seen your premiums increase.  This happened often after the market dropped in 2008 because the companies' reserves (where they keep the money to pay claims) was invested in the stock market.  Some companies have gone through a second round of rate increases again in the last year or so.

3.  Newer policies have been stripped of benefits.  The previously mentioned "lifetime benefit" is gone from nearly all policies, as are many other benefits.  Again, rising costs are the culprit.

4.  Companies have started offering LTCI benefits inside permanent life insurance policies or as riders to life policies.  This makes the most sense if you are younger, because you don't have to worry about rate increases (see #2) and the policy can actually do 3 things:  be life insurance for your family if you die, offer LTCI benefits if you become chronically ill, or act as a retirement supplement if you want.

Long Term Care insurance should be part of a holistic retirement plan.  Contact us for more information at Surf Financial Brokers.

Insure Your Love

Valentine's Day is a few weeks away and with all of the love in the air, we think it's a great time to protect those you love with life insurance policy.

The LIFE Foundation has a page dedicated to this concept and we wholeheartedly endorse it.  And a little extra life insurance can be affordable.  In fact, if you want to know how much such a plan could cost, click here.  Keep in mind that we have policies up to $250,000 that require NO PARAMED exam!  How easy is that?

It's easy to "insure your love".

CD's vs.Annuities In A Low-Interest Environment

In the last few years, the Federal Reserve has kept interest rates low in an effort to keep inflation at bay.  For some people, like those refinancing a home or other debt, this is great.  However, it makes it difficult for people who are trying to make a few dollars in a conservative fashion.

For instance, CD's have traditionally been a safe haven.  The bad news is that the interest rates on these are very low, between 1-2%.  When you consider that inflation runs around 3%, the money is actually losing value.  

An alternative to this dilemma of late has been an annuity.  Specifically, a fixed indexed annuity, which offers growth with downside protection.  These annuities typically have "caps", which is the maximum rate of return the annuity offers.  In recent years, these caps have dropped significantly.  

Complicating matters, agents are promoting annuities with 7 and 10 year contracts, with hefty surrender charges for early withdrawals. And at the end of the contract, some of the annuities require annuitization (taking an income stream).

A reasonable alternative is a shorter term annuity with no annuitization requirement. With interest rates slowly creeping up, it makes sense to purchase a 3 or 5 year annuity that can be annuitized OR taken as a lump sum.  And it will still earn more than that CD at the bank!

Before you attend a "retirement seminar" for that free lunch, contact us and let us show you several options to help you make an informed choice.