Car Insurance
If there is truth to the projection of some health care specialists that come 2030 there will be a huge reduction of nursing home residents who will spend down their assets so Medicaid will shoulder them, then it appears long term care costs should not stand as a threat.
Cost of care in the country has been the issue of financial advisers and healthcare specialists among baby boomers since news broke that the figures of home care and long term care (LTC) facilities are going to double in 2026 and quadruple in 2030.
This shouldn’t be the case had all baby boomers prepared ahead for their health care needs. Unfortunately, out of the predicted 79 million elderly folks who will require care very soon, only 10 million have clinched long term care insurance (LTCI) policies. Many of them are still in denial of the possibility of becoming disabled even though it has been foreboded that 26 million of them will come down to a serious condition and will require 24/7 monitoring in a nursing home.
Due to the very small number of insured people, the government can’t help but feel the weight of the LTC industry’s problem. Last year, Medicaid shouldered 49% of the nationwide LTC expenses and if this goes any higher this year and in the succeeding years, government agencies fear that it is only going to be a matter of a few more years before this federally-funded health program dries up completely.
It’s good to know that there are still people in the LTC industry who can manage to make positive predictions such as Medicaid getting to save $28 billion in 2030 as private insurance owners increase by 29%.
Beating Long Term Care Costs
Just like the prices of food, petroleum and housing, the rising cost of care should not be viewed as a new item in inflation.
As a matter of fact, it has been like this since time immemorial only magnified nowadays as financial analysts have predicted a significant increase in the rates of LTC facilities in 2026 and 2030. Had it not been mentioned that rates of LTC facilities would go up twofold and fourfold, the government and its people wouldn’t be fussing over it.
If you look at the issue closely though, you will realize the advantage in telling people about the speedy and continuous increase in the cost of care is that you get them to act and plan. The downside is turning those individuals without a single plan for their future into pessimists.
Private insurance will be very useful someday when your body has turned frail and incapable of doing the activities of daily living. If you will constantly think of the annual premium as a total waste of money, you will never get to plan your health care.
Your retirement plan should be inclusive of your health care needs and long term care costs increase by the year so while you’re 20 or even 30 years away from the retirement age, see to it that you are taking the necessary measures to secure your future and that of your family.
Accepting a deductible?
In theory, insurance is the easiest of contracts to understand. You pay a premium and, if you incur a loss listed by the policy, you put in a claim and recover the relevant amount of cash. You should find this a fair exchange because, in return for a relatively small amount of money, you can claim a lot more back. This works because a large group shares the total cost of loss. When you share between tens of thousands, the premium rates come right down. As an aside, that's why the failure to enforce the mandatory liability minimum is so frustrating. In some states, up to 20% of all the drivers on the road are uninsured. If they were all forced to contribute, everyone's premium rates would fall. Anyway, back to the real world, the effect of insurance is to transfer personal risk to the group. Taking a realistic view of the world, that's the best place for the risk to be.
So what's a deductible? This reverses the usual effect of an insurance policy because now you are agreeing to insure yourself for the first part of every claim. In straightforward language, this self-insurance lets the insurer off the hook because the majority of claims are for relatively small sums of money. Let's say, for example, you agree to a deductible of $500. You know you will be hit with a premium rate increase of you make a claim. So suppose you have an accident and the cost of repairs is $600, are you going to claim? Think of it this way. The actual amount you are going to claim from the insurer is $100 but the odds favor a premium rate increase of rather more than that. Most people calculate it's cheaper to pay more than the deductible to settle the claim and avoid rate increases.
Now let's up the deductible to the usual maximum of $1,000. This justifies the largest discount so, as long as your luck holds, you have the cheapest possible premium rate. Have you only liability insurance? If so, you are going to need the $1,000 for your insurer and enough money to repair or replace your own vehicle. This assumes you were not injured or carry health cover for treatment. Otherwise, there may be medical expenses to find as well. This can hit your family budget really hard but, if your luck holds, most people can get through it. In the worst case scenario, however, you have another accident a few months later. Now this is really asking you questions about your savings and ability to raise cash in a hurry.
So here's your chance to be wise before the event. Say you save 10% on your annual premium if you agree to pay the first $1,000. Which is better? To pay the 10% and give up the deductible, or run the risk of having to find $1,000? Get different car insurance quotes to see the difference in premium rates. Unless you have enjoyed years of trouble-free driving and are absolutely confident of no claims, it may be better to struggle with the higher premium for peace of mind. Of course it all comes down to what you can afford. Do the math on the car insurance quotes and see which is best.
About the author:
Want to read the latest news and discussions from David Mayer? Visit http://www.insurers-info.com/articles/deductible.html to get his latest insights on many different subjects in the world.
Article Source: http://www.Free-Articles-Zone.com
Article tags: insurance
About the author:
Research and compare the costs of long term care insurance available in your state. Visit CompleteLongTermCare.com to learn more tips on selecting the best possible long term care plan.
Article Source: http://www.Free-Articles-Zone.com
Article tags: long term care insurance
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