Dear Valued Customer,

In this issue of “————————-” we focus on Disability Insurance.

Disability insurance pays an insured individual an income when they are unable to work because of an accident or illness.

If becoming disabled seems unlikely, the odds may surprise you. Roughly three in ten Americans will suffer a disability lasting three months or longer before the age of 65. Nearly one in five Americans will be disabled for one year or more during their working years. And, for many, a sudden interruption in their income could have serious financial consequences.

Read on to understand the different types of disability insurance, how they protect you, the key things to look for when you’re shopping for disability insurance, and more.

We appreciate your continued business and look forward to serving you.

Kind regards,

If you were disabled and unable to work as a result of an accident or illness, what would you and your family do for income?

Disability income insurance, which complements health insurance, can replace lost income. Forty-three percent of all people age 40 will have a long-term (lasting 90 days or more) disability event by age 65.

There are three basic ways to replace income:

1. Employer-paid disability insurance  
   This is required in most states. Most employers provide some short-term sick leave. Many larger employers provide long-term disability coverage as well, typically with benefits of up to 60 percent of salary lasting from five years to age 65, and in some cases extended for life.
2. Social Security disability benefits  
   This can be paid to workers whose disability is expected to last at least 12 months and is so severe that no gainful employment can be performed.
3. Individual disability income insurance policies  
   Other limited replacement income is available for workers under some circumstances from workers compensation (if the injury or illness is job-related), auto insurance (if disability results from an auto accident) and the Department of Veterans Affairs.For most workers, even those with some employer-paid coverage, an individual disability income policy is the best way to ensure adequate income in the event of disability. When you buy a private disability income policy, you can expect to replace from 50% to 70% of income. Insurers won’t replace all your income because they want you to have an incentive to return to work. However, when you pay the premiums yourself, disability benefits are not taxed. (Benefits from employer-paid policies are subject to income tax.)

Source: Insurance Information Institute, “How can I insure against loss of income?” http://www.iii.org website. Accessed November 30, 2015. http://www.iii.org/article/how-can-i-insure-against-loss-income

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD):

1. Short-Term Disability policies (STD) have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two years.
2. Long-Term Disability policies (LTD) have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

Disability policies have two different protection features that are important to understand.

1. Noncancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits.
2. Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you.

In addition to the traditional disability policies, there are several options you should consider when purchasing a policy:

• Additional purchase options
  Your insurance company gives you the right to buy additional insurance at a later time.
• Coordination of benefits
  The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies.
• Cost of living adjustment (COLA) 
  The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA.
• Residual or partial disability rider  
  This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled.
• Return of premium
  This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy.
• Waiver of premium provision
  This clause means that you do not have to pay premiums on the policy after you’re disabled for 90 days.

Source: Insurance Information Institute, “What are the types of disability insurance?” http://www.iii.org website. Accessed November 30, 2015. http://www.iii.org/article/what-are-types-disability-insurance

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Talk to the agent who sells you your life, health, auto or business insurance—he or she may either sell disability coverage or will be able to refer you to an agent who does.

Your state’s insurance department will also have names of agents and companies writing policies in your state.

Make sure that you understand what you are buying and don’t be afraid to ask your agent to explain exactly what is in the policy.

Key things to look for when you shop around

1. The definition of disability
   Some policies pay benefits if you are unable to perform the customary duties of your own occupation. Others pay only if you are unable to perform any job suitable for your education and experience. Some policies define disability in terms of your own occupation for an initial period of two or three years and then continue to pay benefits only if you are unable to perform any occupation. “Own occupation” policies are more desirable, but more expensive.
2. Benefit period
   The benefit period is the amount of time you will receive monthly benefits during your life. Experts usually recommend that the policy you buy pay you benefits until at least age 65, at which point Social Security disability will take over. If you are young, you may consider buying a policy offering lifetime benefits because it will still be relatively inexpensive.
3. A policy that will replace from 60 percent to 70 percent of your total taxable earnings
   A higher replacement percentage, if available, is more expensive. Evaluate your other sources of income before deciding how much disability coverage you need.
4. Coverage for disability resulting from either accidental injury or illness
   An accident-only policy is less expensive but does not provide adequate protection. Ideally, both accident and illness coverage should be purchased.
5. A cost-of-living increase in benefits
   You are buying a policy today that may not pay benefits for a decade or more. Should you need those benefits, you will want them to have kept pace with increases in the cost of living. (Some companies also offer “indexed” benefits, keeping pace with inflation after benefit payments begin.)
6. A policy paying “residual” or partial benefits
   This type of policy is available so that you can work part-time and still receive a benefit making up for lost income. A standard feature in some policies, and added by a rider to others, a residual benefits policy pays partial benefits based on loss of income without an initial period of total disability.
7. Transition benefits
   Offered by some companies, it can offset financial loss during a post-disability period of rebuilding a business or professional practice.
8. Ongoing coverage
   A non-cancelable policy which will continue in force as long as the premiums are paid; neither the benefit nor the premium can change. A guaranteed renewable policy keeps the same benefits but may cost more over time since the insurer can increase the premium if it is increased for an entire class of policyholders.
9. Financial stability
   Check the financial ratings of an insurer. Your insurance agent or company representative should provide this information or check with the following companies, which rate insurance company strength:

• A.M. Best Company, Inc.
  Ambest Rd.
  Oldwick, NJ 08858
  908-439-2200
  http://www.ambest.com
• Fitch Ratings
  1 State Street Plaza
  New York, NY 10004
  1-800-75-FITCH
  http://www.fitchibca.com
• Moody’s Investor Services
  99 Church Street
  New York, NY 10007
  212-553-0300
  http://www.moodys.com
• Standard & Poor’s Insurance Ratings Services
  55 Water Street
  New York, NY 10004
  212-438-2000
  http://www.standardandpoor.com
• Weiss Research
  15430 Endeavor Drive
  Jupiter, FL 33478
  800-289-9222
  http://www.weissratings.com
• Waiting period
  Every disability policy imposes a waiting period, also known as the elimination period. This is the number of days you must be disabled before receiving benefits. If you are disabled during the elimination period, you will not receive any benefits, even though you are not able to work. If the elimination period is short, such as 30 or 60 days, the premium will be higher. A longer elimination period may strain your finances more when you need it, but you will be charged a lower premium. Most experts recommend that you select an elimination period of 60 to 90 days. The first check is usually paid 30 days after the waiting period.

Source: Insurance Information Institute, “How can I purchase disability insurance?” http://www.iii.org website. Accessed November 30, 2015. http://www.iii.org/article/how-can-i-purchase-disability-insurance

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Dear Valued Customer,

There is a good chance you will need some long-term care services if you live beyond the age of sixty five.

In this issue of “——————–“ we point out the value of planning ahead for long-term care, and it’s vital if you want to save your assets and income for uses other purposes.

Read on to understand how a long-term care policy helps defray the costs of providing care, whether in a nursing home, am adult day care center, an assisted living facility, or at home, and please contact us for more information. We have knowledgeable people on our staff who understand long-term care insurance.

It only takes a few minutes to read this vital information, but it can save precious time in an emergency. We appreciate your continued business and look forward to serving you.

Kind regards,

Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65. About 70 percent of people over age 65 require some services, and the likelihood of needing care increases as you age.

Planning ahead is also important because the cost of long-term care services often exceeds what the average person can pay from income and other resources. By planning ahead, you may be able to save your assets and income for uses other than long-term care, including preserving the quality of life for your spouse or other loved ones. With planning, there is a greater likelihood of being able to leave an estate to your heirs, because you are less likely to use up your financial resources paying for care.

Additionally, for many people, one of the most important advantages of planning ahead is to ensure greater independence should you need care. Your choices for receiving care outside of a facility and being able to stay at home or receive services in the community for as long as possible are greater if you have planned ahead.

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

Because of old age, mental or physical illness, or injury, some people find themselves in need of help with eating, bathing, dressing, going to the toilet or continence, and/or transferring (e.g., getting out of a chair or out of bed). These six actions are called Activities of Daily Living-sometimes referred to as ADL’s. In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care.”

Many people think that long-term care is provided exclusively in a nursing home. It can be, but it can also be provided in an adult day care center, an assisted living facility, or at home.

A long-term care policy helps to defray the costs of providing care in the above circumstances. Statistics show that a vast majority of people use long-term care services at some point in their lives and the cost of such services can be very draining.  Policy costs vary based upon the amount of “daily benefit” (how much the policy will pay out per day), how long the policy will pay for long-term care, (1 year, 2 years, unlimited, etc.), the age and health of the applicant at the time of policy procurement.

We work with the best carriers in the industry to provide you with the opportunity to acquire long-term care policies, either through your business or on an individual basis.

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

In general, it’s a good idea to buy long-term care insurance before you’re 60, for two reasons:

The younger you are, the less likely it is that you’ll be rejected when you apply for the policy. If you apply in your 50s, there’s a one in ten chance you’ll be rejected. If you apply in your 60s, the chance of rejection is two in ten. If you apply in your 70s, the chance of rejection is four in ten.

The younger you are, the lower the premium will be for a given set of benefits and features. Once the premium is set, it stays at that amount for the life of the policy, unless the claims for the group of people who have bought that type of policy require that rates for the group be raised.

Source: Insurance Information Institute, “What’s the best age to buy long-term care insurance?” http://www.iii.org website. Accessed December 2, 2015. http://www.iii.org/articles/whats-best-age-to-buy-long-term-care-insurance.html

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

There are various questions and issues to keep in mind when choosing a long-term care policy.

Where may care occur?

The best policies pay for care in a nursing home, assisted living facility, or at home. Benefits are typically expressed in daily amounts, with a lifetime maximum. Some policies pay half as much per day for at-home care as for nursing home care. Others pay the same amount, or have a “pool of benefits” that can be used as needed.

Under what conditions will the policy begin paying benefits?

The policy should state the various conditions that must be met.

• The inability to perform two or three specific “activities of daily living” without help. These include bathing, dressing, eating, toileting and “transferring” or being able to move from place to place or between a bed and a chair.
• Cognitive impairment. Most policies cover stroke and Alzheimer’s and Parkinson’s disease, but other forms of mental incapacity may be excluded.
• Medical necessity, or certification by a doctor that long-term care is necessary.

 What events must occur before the policy begins paying benefits? 

• Some older policies require a hospital stay of at least three days before benefits can be paid. This requirement is very restrictive; you should avoid it.
• Most policies have a “waiting period” or “elimination” period. This is a period that begins when you first need long-term care and lasts as long as the policy provides. During the waiting period, the policy will not pay benefits. If you recover before the waiting period ends, the policy doesn’t pay for expenses you incur during the waiting period. The policy pays only for expenses that occur after the waiting period is over, if you continue to need care. In general, the longer the waiting period, the lower the premium for the long-term care policy.

 How long will benefits last? 

A benefit period may range from two years to lifetime. You can keep premiums down by electing coverage for three to four years—longer than the average nursing home stay—instead of lifetime.

Indemnity vs. Reimbursement

Most long-term care policies pay on a reimbursement (or expense-incurred) basis, up to the policy limits. In other words, if you have a $150 per day benefit but spend only $130 per day for a home long-term care provider, the policy will pay only $130. The “extra” $20 each day will, in some policies, go into a “pool” of unused funds that can be used to extend the length of time for which the policy will pay benefits. Other policies pay on an indemnity basis. Using the same example as above, an indemnity policy would pay $150 per day as long as the insured needs and receives long-term care services, regardless of the actual outlay.

Inflation protection

Inflation protection is an important feature, especially if you are under 65, when you buy benefits that you may not use for 20 years or more. A good inflation provision compounds benefits at 5 percent a year. Without inflation protection, even 3 percent annual inflation will, over 24 years, reduce the purchasing power of a $150 daily benefit to the equivalent of $75.

Six other important policy provisions

1. 1=7 Elimination period. Under some policies, if the insured has qualifying long-term care expenses on one day during a seven-day period, he or she will be credited with having satisfied seven days toward the elimination period. This type of provision reflects the way home care is often delivered—some days by professionals and some days by family members.
2. Guaranteed renewable policies must be renewed by the insurance company, although premiums can go up if they are increased for an entire class of policyholders.
3. Waiver of premium, so that no further premiums are due once you start to receive benefits.
4. Third-party notification, so that a relative, friend or professional adviser will be notified if you forget to pay a premium.
5. Nonforfeiture benefits keep a lesser amount of insurance in force if you let the policy lapse. This provision is required by some states.
6. Restoration of benefits, which ensures that maximum benefits are put back in place if you receive benefits for a time, then recover and go for a specified period (typically six months) without receiving benefits.

For more information on long-term care insurance, you can access the Life and Health Foundation for Education OR America’s Health Insurance Plans.

Source: Insurance Information Institute, “What features of long-term care policies should I focus on?” http://www.iii.org website. Accessed December 2, 2015. http://www.iii.org/articles/what-features-of-long-term-care-policies-should-i-focus-on.html

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

The tips below will help you save money wisely, but don’t rely on price alone.

MOST IMPORTANT: Because you may not collect for decades to come, be sure to buy from a company that has been around for some time and is financially stable. You may want to look up, from an independent rating agency, the financial strength ratings of a company you’re considering.

GENERAL GUIDELINE: Keep the premium for your long-term care insurance policy to 7 percent of your income, or less. For example, if your monthly income is $4,000, the long-term care insurance premium should not be more than $280 per month. (This is what the National Association of Insurance Commissioners recommends in its Model Regulation for Long-Term Care Insurance.) Another expert advises that the income to use in this calculation isn’t your current income, but your expected income in retirement, since that’s the income from which you’ll be paying premiums for most of the policy’s existence.

Other ways of saving:

1. Find out if long-term care benefits are available through a group policy from your employer. Employers might subsidize the cost, lowering what you must pay.
2. Check whether you can add long-term care benefits as a rider on an existing life insurance or annuity policy. These “combination” arrangements can save because the insurance company gains operational savings that it can pass along to you.
3. Buy a policy with the longest waiting period you can afford. For example, choosing a 90-day period instead of a 30-day period can cut the premium by 30%. However, if you do need long-term care services, you should save some money to pay these costs until the waiting period ends.
4. If both spouses of a married couple are considering buying long-term care policies, look into buying one joint policy for both of you. Such a policy pays when either one needs care and can pay for both, if necessary, up to its benefit limits.
5. If you’re still looking to trim the premium further, consider buying a policy that will pay most, but not all, of the average nursing home costs in your area. For example, if a nursing home room now costs $120 per day, buy a policy that pays $100 per day. However, be sure to buy an inflation-protection provision.
6. Check with several companies and agents, comparing both benefits and costs. As with other types of insurance (and many other purchases), comparison shopping can save you money. Just be sure you’re comparing policies with similar provisions and companies with comparable financial strength and service records.

Source: Insurance Information Institute, “How can I save on long-term care insurance?” http://www.iii.org website. Accessed December 2, 2015. http://www.iii.org/articles/how-can-i-save-on-long-term-care-insurance.html

© Copyright 2016. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.