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Long-Term Care Insurance: Who Needs It?

Tuesday, November 30th, 2010

We will all need long term care insurance at some point in our lives. The basic principle behind this financial term is ‘plan for your future early’. And while you are thinking of the future, consider inflation and the rise of costs and expenses. It only makes sense to secure your health starting today.

We came across this article which clears all confusion on who needs a Long-Term Care Insurance.


Long Term Care Insurance: 6 Ways to Buy It Right

Monday, November 29th, 2010

Analyze what is most necessary and don’t go overboard. A long-term care insurance policy which covers both institutional and community-based care is enough. Doing so helps you stick with your resources and prevents you from spending too much. You need to be certain the insurance company is reputable and that both the company and the agent are properly licensed to sell long term care insurance.

We came across this article which gives a clear view that you need to keep in mind when buying long term care insurance.

It’s not only the insurance companies and investment markets that are messing with the future of long-term care. They’re doing it in the name of consumer protection. But that adds to the need for even higher premiums later, Some states don’t permit short-term policies or other money-saving designs that could reach a wider market.

Nevertheless, this industry isn’t going away. People with assets should get their heads out of the sand and protect themselves against these old-age costs. Here are six rules for buying LTCI today:

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Disabling Long-Term Disability

Tuesday, May 4th, 2010

The likelihood of contracting a Long Term Disability always seems bleak. The truth however is quite different. In fact, according to the US Census Bureau, disability is imminent for one in five of us! Disability that could be induced by Cancer, or back, neck, joint & tendon related complications and any such ailment that renders us incapable of holding our jobs for periods ranging from 6 months to 3 years. To go that long without regular income is hard; and to ignore the possibility of disability in the first place; foolhardy.

While we can not always prevent Disability; we can guard against its outcome to a large extent by investment in a good Long Term Disability Insurance program. Experts contend that this is the most important insurance type one can purchase. Depending on the kind of insurance bought, one can be compensated to the tune of 60-70% of one’s salary. This payout can be increased to a healthy 80% if your employer allows you to purchase additional insurance.

There are some basics that one must take into account when deciding a fitting Long Term Disability Insurance. They are:

* Salary is set at the time of Policy Purchase. As your salary increases, increase the value of the plan
* Policy with or without mandatory Physical Examination
* Payout Periods vary. It might be better to opt for late payout (until age 65) as against 5-10 years
* Disability Definition differs between insurers. Take a studied and suitable plan
* Insurance Type varies. ‘Guaranteed Renewable’ ensures that the company can not drop the plan (unless premium payment is defaulted). ‘Non-Cancelable’ type prevents the insurer from raising Premium

These and many more factors need to be specifically scrutinized. Would it suit your needs better to have a ‘residual benefits’ policy (where insurer compensates for incremental difference between old & new remuneration), or buy a ‘cost of living’ policy (where insurer takes inflation into account).

There are many things to consider for a tailor-made insurance plan, best done by engaging a trusted financial advisor (or company). With the perfect Disability Insurance, you have the power to ‘disable’ many of the worst effects of ‘disability’.

Why Key Person Insurance is Crucial for Your Business

Thursday, April 22nd, 2010

One can easily consider insurance one of the biggest assets of a business and keeps the work machinery running smoothly. Without argument it is the employees of a company that are its biggest advantage. But every team has a leader, and this leader’s contribution to a business is invaluable. And perhaps the wise thing to do would be to guard a business against the loss of this one key person.

This is exactly what Key Person or Key Man insurance is. A safeguard against uncertainty, just as all other insurances are. It is an insurance that is meant to cover the company’s losses and tide over any financial difficulty in case anything untoward happens to this person. This insurance is available for anyone from the company’s owner, director to chief sales person, etc.

Such insurance will guard your business against death, incapacity or ill-health of those key individuals. The insurance cover is directly proportionate to the cost to company of the person in question, but the ultimate benefit is to the company. The premium paid is usually quite hefty, but is tax deductible and will cover the business under myriad circumstances including loss during extended leave of the key man, costs incurred to find a replacement. The claim however is taxable.

Though a key person insurance sounds like a win-win situation, certain things should be kept in mind;

Tax deduction can be denied if the key man owns a substantial share in the company. If the company chooses to endorse the policy to the key man, he will be liable to pay income tax on it and not the company.

Beware of double taxation if the company so chooses to forward the proceeds to the key person’s estate.

Every policy has its advantages and disadvantages. What we have to take care of is that the benefits tilt in our favor. Read the fine print. Understand the terms and conditions. Understand its tax implications. Take all things into account. If you need any help on this, please do not hesitate to request us for more information.