Not only have the costs associated with long-term care insurance gone up, but in some cases the very existence of long-term care insurance has been called into question. Some insurance companies, such as Prudential Financial and MetLife, have begun to not offer long-term care insurance policies to most individuals at all. All in all, about half of the most popular insurance companies have cancelled their long-term care insurance policies, and have stopped offering them to people.

One problem with the long-term care insurance policies is they tend to be unsustainable for the insurance provider, and thus the costs associated with that risk become unsustainable for people already paying premiums on long-term care insurance policies. Another problem is that there is no baseline cost for long-term care insurance, so the costs associated with the policies vary widely from one insurance provider to another. In some cases, one person with a long-term care insurance policy may be paying twice as much or even more than someone else who has the very same long-term care insurance with a different insurance provider. The policies also tend to come with pages and pages of fine print and stipulations, which make the management of those long-term care insurance policies very difficult on every level- not just on a financial level.

There are three main things that will determine the overall cost of the long-term care insurance policy:

• the daily benefit,
• the length of coverage and
• the amount of inflation protection.

The daily benefit is how much money is predicted that you will need for daily care in the future. For example, a nursing home may cost $40,000 a year, so the amount of money you would need in care would be around $109.59 a day, which would be the amount represented by the daily benefit. It is important to plan out what kind of long-term care you will need and it is also important to plan out whether you want the insurance to cover all living costs, or whether you will also have a savings plan to supplement the insurance policy.

The coverage period will determine how long a person will get the care and be covered by the policy. These days, the period is usually anywhere from 2 to 6 years. There used to be a unlimited lifetime coverage option available, but that has been nixed by most insurance providers because it has become way too expensive and way too unpredictable.

The most important aspect of the policy may be the inflation protection. The future is unpredictable, and no one knows what the inflation will be in the future. That is why inflation protection is key, because it will safe-guard the money against the fluctuations in currency that may occur in the future.

There are many things a person must do to make sure they get the right long-term care insurance policy for them. There needs to be considerations made in the lifestyle for the rest of your future and financial management, because odds are the long-term care insurance may not cover all of the care expenses. A savings account, and other hybrid insurance options should be considered.

By-line

Written by Rachel Oda for the team at www.secureinsurancequotes.com/ who believe that insurance is the cornerstone to a healthy financial portfolio.

The sudden interest in weight loss has spawned a billion-dollar-a-year industry that has caught the attention of millions of Americans.

Most of us want to lose some weight to look better, feel better, and lower our blood pressure and cholesterol. Doctors and the healthcare industry approve this attitude; after all, losing weight is one of the best things you can do to improve your overall health. Did you know you can also lower your life insurance premiums by losing weight?

Losing weight has been linked to longer and healthier lives, so life insurance companies have a vested interest in helping you shed the pounds. In one study by the Centers for Disease Control, over 60 percent of Americans are overweight, with a body mass index of 25 to 29.9, or obese, with a body mass index over 30. This means that the chances are that you could stand to lose a few pounds, and your life insurance company is willing to give you incentive to do so.

BMI is calculated based on the ratio of fat to muscle, and several methods are used to calculate this figure. Many companies simply use a table comparing height and weight, although this can be very misleading. A 5’8 woman who is very muscular and works out regularly may well exceed the BMI limit on a table even though she is in much better physical shape than a 5’8 woman who is twenty pounds lighter. Muscle weighs more than fat, so a simple table reading may not be enough to tell the whole story of BMI.

Some doctors and health clubs, in an effort to be more accurate with BMI readings, utilize other methods of measuring this factor. One is a measurement of the waist-to-hip circumference. This test has the added benefit of highlighting increased belly fat which has been linked to heart disease, rather than residual fat on the hips, buttocks, legs, and arms, which is not thought to be as harmful.

Doctors can also use technological methods such as ultrasound, magnetic resonance imaging or MRI, and computed tomography. Of course, these methods are much more expensive than simply looking at a table or using a measuring tape.

How much you can save on your life insurance depends on the company, but $200 per year is a good industry average. In other words, a 39-year-old man at a healthy weight would pay $500 instead of $700 per year for a $1 million term policy. That is a savings of at least $20 per month. Most life insurance companies offer at least this much in discounts for losing weight, although some offer even more.

In order to find out what your company offers, talk to your customer service department. You may also find that if you are obese, or severely overweight, losing a significant amount of weight may result in much higher savings. “Morbid obesity” refers to a condition in which weight has become such a health hazard that it is endangering your life, and some companies will not insure customers who fall into this category.

There are very good immediate reasons to choose a thirty-year term policy over a twenty-year term, and one of the biggest is price. You will most likely pay far less per unit for a thirty-year term policy than a twenty-year term policy, simply because the risk of your death is spread over a much larger pool of paying customers. Most insurance companies also like to give incentives for thirty-year policies because they make more money from these policies.

How does a thirty-year policy really benefit you? In the long run, what matters is your family’s security. Issues such as your children’s education, your spouse’s well-being, and your parent’s health and welfare are at stake, and a twenty-year policy simply may not give you enough protection to ensure that all these things are taken care of if you die suddenly.

The cost of your children’s education is a good example of something that can “sneak up on you” as you grow older. While you may not be thinking about your babies going to college right now, that time will be here before you know it. You can invest in a college fund, but what happens if you die suddenly and that money runs out?

Further, parents can no longer afford to think of their children as “leaving the nest” at age eighteen; instead, parents should plan to be financially responsible for children until they are at least 22; a more conservative estimate might be 25. This is because the world for young people has changed, and most cannot find a job that pays a decent living wage before they have completed at least four, and sometimes six, years of post-secondary education.

During the time your children are in college, technical school, or training programs, they will need someone to support them just as you do now. Further, if the employment outlook does not improve significantly, many college graduates may be forced to move back home briefly while searching for a job.

The welfare of your spouse is another reason you should think about a thirty-year policy. Besides having to manage your children’s education and finances, your spouse may need to train for a new job as well.

Many widows and widowers are living for twenty years after their spouses are gone, so it is very important for these people to have access to enough money to survive. A thirty-year policy may extend your coverage just enough to give your spouse a chance to find work or make some investments for his or her old age.

Finally, you may have parents who are or will be depending on you to make the right decisions for them. If you die without leaving behind proper financial support, your mother or father may be forced to depend on government-run nursing home or medical care.

Most people do not want this for their parents; instead, you should leave enough term life insurance proceeds that your parents can be taken care of in dignity and comfort. If your term policy expires before you die, not only your immediately family but your parents or other elderly dependents may suffer from your loss.

The reason you buy term life insurance is to protect those you love. Do not make the mistake of taking out a shorter-term policy and disappointing those who are counting on you to make the right decisions for them.

Here are three common errors people make when purchasing term life insurance and how to avoid them.

1) Buying too much or too little insurance.

This is probably the biggest mistake most first-time insurance buyers make.

There are several formulas for calculating how much insurance you will need for your family, but none of them are foolproof and none will work for every situation.

Common sense will tell you that if your spouse works and makes enough to pay the bills, you need far less insurance than if your spouse is a stay-at-home mom or dad. One good way to begin calculating how much insurance you will need is to begin a dialogue with your spouse about expectations if something was to happen to you.

For example, if your spouse does not currently work, but is willing to go back to school for a degree if something happens to you, it is reasonable to assume that you need about five years’ of income in the form of life insurance to support your family during the time your spouse would be getting an education.

On the other hand, if your spouse is not currently working but is “work-ready,” you might want to provide one year of income from your life insurance to give your spouse time to find a job.

You should also consider if your family will have other means to pay major bills after your death. For example, if you have mortgage payoff insurance on your home, your house would be paid for on your death.

How much more would it take to keep your family comfortable? As you examine these questions, keep in mind that you are not trying to make your family rich through life insurance, just ensure that they have the same standard of living that they enjoy while you are with them.

2) Insuring for the short term instead of the long term.

If the most common mistake is buying too much or too little life insurance, then the second-most common mistake must be buying insurance for the wrong period of time. Generally, you want life insurance to create an instant estate for your family if you are taken from them prematurely.

If you know that after ten years in your job your home will be paid for and your spouse already has a high-paying job, you may not want thirty years’ worth of term insurance.

On the other hand, you can never be certain about your job’s future, and if your spouse does not work, you may want to consider a longer term on your policy. You can always purchase long-term insurance, which is generally cheaper, and let it expire before the term is up if you find you do not need it.

3) Expecting life insurance to perform miracles.

Life insurance is not designed to meet retirement needs, pay off your home during your lifetime, or perform any of the other financial functions that people mistakenly assign to it.

It is not designed to keep your family from developing any financial acumen.

All term life insurance is designed to do is to provide instant money to your family to keep them from financial ruin if you are taken from them unexpectedly.

You will need to talk with your family about financial expectations and plans, and how your life insurance policy works in conjunction with your other investments to provide security for them.

COLI began to be commonly issued after World War II as a tax hedge for companies against the losses of key employees. A COLI policy could be issued on a president, vice-president, or CFO of a company, and although the premiums were not tax-deductible, the proceeds of the policy were. This allowed a company not only to insure the lives of important persons employed by the business, but to enjoy a tax advantage if the person died while employed.

By the 1950s, Fortune 500 companies had begun to realize that more than tax benefits at death could be gained from COLI policies. In a complex legal tangle of tax law and financial workmanship, companies began to take out “leveraged” policies.

This meant that companies could make large payments toward COLI policies under the guise of insuring the lives of key employees, then borrow against the policies, in effect creating a tax deduction since the interest paid on these loans was tax deductible. The IRS soon realized that many large companies were gaining a significant tax advantage through this method and began legislation to stop the process.

In the 1980s, large companies began a new type of scheme with COLI policies. Instead of insuring key employees, these companies took out broad-based policies on all of their employees, leading to the term “dead peasants” insurance or “janitors” policies. These policies often paid little or nothing to the families of the deceased employees, while giving the employers large, tax-free payouts.

Ultimately, the IRS and Congress fought lawsuits and passed laws to limit this practice. Today, COLI policies are governed by strict tests to determine if the proceeds of a policy are taxable. One of the tests is that employees must know and agree to the policy being taken out in their names.

In the late 1990s, several Fortune 500 companies were sued over COLI practices, including Wal-Mart, Camelot Music, Winn-Dixie, AT&T, and Proctor & Gamble. These companies all used the “dead peasant” method of insuring all of their workers for cheap sums and then collecting the tax-free proceeds of a life insurance policy after these employees were deceased.

In most cases, the families of the deceased workers received no compensation, and many were not aware there were insurance policies on their family members. Many of these policies were extended even though the employees no longer worked for the company, as well.

Today, COLI policies are limited by many companies to their top CEOs and executives, whose lives the company has a vested interest in protecting. This type of insurance is common for employees who own large amounts of stock in the company as a way of preserving continuity if the employee dies suddenly.

COLI policies should not be confused with group term life offered by many companies to their employees. Group policies are taken out and paid for by the workers, whose beneficiaries receive the benefits of the policies. In this case, the company simply acts as a conduit to administer the premium payments and has no stake in the payout of any death benefits.

These group policies are typically offered as a fringe benefit of employment and may also include policies for the dependents of workers, although usually in a more limited face amount. Group policies are typically less expensive than private policies because risk is pooled among all employees of the company.

Each of these issues has, at some time during the past ten years, contributed to change the face of the life insurance business, making it a very different one from that of the early 1990s.

The Gramm-Leach-Bliley Act of 1999 ushered in a new era in the practice of selling insurance. This bill allowed mergers of large companies such as banking institutions and insurance companies. As a result, many acquisitions and company blendings took place that allowed a more all-inclusive type of insurance sales.

Companies that formerly concentrated only on life insurance now offer investment advice, automobile and health insurance, and other services. As a result of these big-company mergers, smaller companies have often been faced with bankruptcy or dissolution if they chose not to be swallowed by larger firms.

Further, the demutulization of many companies has contributed to the shareholder-based mentality now prevalent in the insurance industry; instead of being owned by policyholders, most life insurance companies are now controlled by stock owners who are more concerned with profit than with the company’s policies.

The events of September 11, 2001, brought into sharp focus the reality of terrorist attacks and their damaging effects on people and companies. Several companies lost huge capital investments on that day, and billions of dollars of damage was done, not to mention the sheer magnitude of loss of human life.

While these events did bring some people around to the thought of life insurance for the first time, companies were scrambling to pay out thousands of claims; some companies were simply unable to meet the financial burdens brought about by the horrible events of September 11th.

The economy has also had an effect on how life insurance companies are run. With the popping of the “mortgage bubble” and the subsequent job loss and recession, many people simply cannot afford high premiums for large insurance policies. Because of this, companies have had to get very creative in the way they offer policies and pricing structures.

Whole life companies have suffered most due to their higher premiums and the inability of people to envision saving in the long-term while facing so many current bills. However, even term life companies have noticed a slump in business that has affected many insurers who were already treading a thin line between profit and loss.

These factors have combined to make life difficult for smaller insurance companies. Of course, in the long run, any industry controlled by only a few large companies is not a good thing for consumers. Diversification is important to keep prices down and give customers a choice when shopping for insurance.

Because of this, some legislators have considered measures to curb the power of the larger insurance groups. However, the drawback to this plan is that many small insurers may not have the financial capital to pay large numbers of claims, thereby defeating the purpose of purchasing life insurance.

While no easy answers are on the horizon for the insurance industry or consumers, an upturn in the economic situation, especially one that results in more jobs being created, will help to reinvigorate the struggling small insurance companies that provide competition for the few “mega-corporations” currently holding the majority of life insurance policies in our country.

But what happens if you want to reduce that term later? There are steps you can take to insure that you are not locked in to a policy which will last far longer than your need for term insurance.

Actually, the idea of “reducing” a term is a misnomer, because you can cancel a term policy at any point. If you take out a fifteen-year term policy, for example, and decide after ten years you no longer need it, you can simply cancel the policy. This means that you will no longer have coverage, but you will no longer pay the premiums, either.

One way to keep this problem from occurring is to think carefully about how long you want to keep your term policy in effect. If you are not sure, you can choose a shorter term, one or five years, and renew at the end of that period. The danger here is that you may have to pay higher premiums to renew, and your health may have changed, which may even disqualify you from your term policy.

It is usually better to take the longest term possible for your term life insurance. For one thing, you will often have the benefit of lower premiums; most companies offer better prices for longer term policies which begin at a young age than for shorter term policies taken when you are older.

However, even with a long-term policy, there may be requirements such as a health exam every five to ten years which will determine the price of your premiums. For an extra fee, you can often “lock in” a rate for a certain number of years. This means that your premiums will not increase even if you have health or other problems.

However, if you already know that you will only need life insurance for a few years, you can opt for a shorter-term policy. One-year renewable policies are generally very reasonable in price, especially for young people, and are easy to renew in most cases.

How do you know how long a term you should buy for? That depends in a large measure on your family and financial situation. You should have life insurance when you have a family and dependents, but probably not before; as a young single, there is little reason to insure your life to anyone’s benefit. However, once you marry and have children, it is important to provide for them.

Most experts agree that you should have some form of “instant estate” for your family at least until your youngest child turns 18, and often beyond if the children will go to college. For this reason, many people look at twenty or twenty-five year policies to be sure they will have coverage for their families’ needs during the time the children are in school.

If, by the time you are forty-five, you find your mortgage paid off, savings in the bank, and little need of an “instant estate” for your family, you may decide to drop your term coverage. On the other hand, if you can afford the premiums, it is generally better to keep your term policy as long as possible.

Can a terminally ill person get life insurance? Yes, but there are some facts of which you should be aware if you are trying to buy life insurance for someone who has a terminal illness.

1) You will pay more. It stands to reason that companies which offer policies to terminally ill people know that they will have to pay out a claim in the relatively near future, and will charge far more for their policies than “regular” life insurers.

The cost of such a policy may be so prohibitive that it is wiser to take the amount in question and put it into some other vehicle which can allow it to grow more rapidly.

2) You may have to settle for a “graded” premium policy. Graded premium policies are offered by several companies for those who have terminal illnesses with uncertain outcomes. For example, if a person is diagnosed with cancer, but the doctors believe there is at least a 50 percent chance the person may recover with chemotherapy, a company might agree to issue a graded policy.

For the first two years, the person pays the premiums; if he or she dies during that time, the company will simply refund the premiums paid to the family. After two years, the face amount of the policy will be paid.

3) Some policies do not pay anything during given time periods. Often, policies which do not require health exams refuse to pay if you die within a certain amount of time, even if you have paid your premiums regularly. This prevents people with terminal illnesses from buying insurance just before they die and expecting a large payout. Check carefully to be sure your policy will pay.

4) Suicide clauses can stop payments. If a person is determined to have ended his or her own life, many insurance policies will not pay the survivors. Examine your policy carefully for this type of language.

5) Pre-existing conditions can cause non-payment. Be very careful when buying an insurance policy which lists “pre-existing conditions” as an exclusion. This means that death from anything which was wrong with you at the time of the policy purchase is not covered. Graded policies make exceptions for this, but some policies have very strict limitations on pre-existing conditions.

6) Only qualified people can buy insurance on you. The person who buys an insurance policy must have an interest in your life; people cannot just buy policies on anyone and wait for them to die. If you want your family to have insurance, buy the policy yourself or designate a close family member to help you in this matter.

7) Work with an agent experienced in terminally ill life insurance policies. Not every life insurance agent understands the challenges and problems facing you in this situation.

Be sure to find one who deals with these types of policies, so that you can get sound advice and help from the agent, and feel confident that you are making the right insurance decisions for your loved ones.

However, did you know that there are reasons not to pay for term life, as well? Here are six scenarios in which you should not buy term life insurance, but put the money to better use:

1) Your company already pays for a term policy. While we all like to think of leaving our family well off, in reality, if money is tight, we might be better off taking the extra bit every month and putting it toward our family’s enjoyment and standard of living, if we are already covered by an adequate term policy.

For example, suppose your company supplies you, at no charge, with a $125,000 term policy with double indemnity. If you are killed in an accident, your spouse will receive $250,000 immediately. If you are now living on $50,000 per year, that is five years’ worth of income—more than enough to allow your spouse to find a job or pay off the house.

In this case, the $30 per month you would be spending for an additional term life policy might be better spent in saving for that vacation or big-screen television you both want.

2) You are over 50 years of age. If you haven’t saved up until now, do not expect term insurance to make up for the lack. There are so many exclusions, and the price is so high, for term insurance for the elderly that you would be better off taking what you would pay in premiums and investing it in a faster-growing asset, such as a mutual fund.

3) You have a pre-existing condition. Do not throw your money away on an insurance policy which will not pay any benefits. If you already have a terminal illness, your insurance company will almost certainly find a way to exclude your beneficiaries from collecting on your new policy.

4) You have trust issues. If you need to set up a trust, whole life may be a better option than term life, as the proceeds from the whole life policy can pay estate taxes and other expenses. However, this is really a question for a financial advisor; there may be better ways to create a trust for your estate.

5) You are not sure you will continue to pay the premiums. One benefit of whole life over term insurance is that, after a long period of time, you will build cash value. With a term policy, the day you stop paying your premiums, everything you have paid up to that point is simply gone.

Therefore, it is not a good idea to buy a term policy unless you intend to keep it for a long time. It is better to think of it as a fixed monthly expense; you are paying for the assurance that your family will have money if you die, not as an “investment” which you can cash out of.

6) You have few assets and little income. If you are on a stringent fixed income and have no heirs to leave your property to, it makes little sense to spend any of your money on term insurance. Remember, insurance will only benefit your survivors, not you.

However, one area where people with disabilities continue to find problems in keeping up with other groups is the area of insurance. Fortunately, there are several companies which specialize in insuring people with disabilities at a reasonable cost.

New York Life became one of the first life insurance companies to insure people with disabilities, as long ago as 1896. This action was in conjunction with New York Life’s new “disabilities policy,” which was one of the first of its type to presume total disability after a period of time.

Since then, other companies have recognized the value of special policies designed exclusively for people who suffer from various disabilities. While not always priced exactly the same way as other people’s policies, these disability life insurance policies offer hope to those who might feel they are uninsurable or are discriminated against because of their disabilities.

Insurance companies generally divide people with “disabilities” into one of three groups: those with permanent disabilities, health issues, or senior citizens. Some companies impose waiting periods to pay benefits on new policies for people who fall into these groups, but others offer “first day” death benefits.

It is possible that, due to the nature of a person’s disability, he or she may be able to obtain coverage at prices comparable to those of persons without disabilities. What will determine this is the nature of the disability itself. For example, a person who is born blind or loses sight through an accident, but still lives a normal and productive life, will probably find that insurance companies do not care so much about the disability as about other health factors: weight, blood pressure, and smoking habits, for example. A smoker will pay much higher prices than a blind person who does not smoke, in most cases.

On the other hand, if the disability is of the type that is likely to cause problems later in life, then that person will likely have to pay more for life insurance coverage, or be denied altogether. Many life insurance companies have “pre-existing” condition clauses which exclude death benefits from a person who dies of a disease or injury which took place prior to the insurance coverage period. On the other hand, many “pre-existing condition” clauses also expire after a period of time. It is possible, for example, to get life insurance with a disability, live out the pre-existing condition period of two year, and have survivors collect in full on the policy three years in the future.

With access to the MIB, or Medical Information Bureau, life insurance companies find it quite easy to determine if someone has been regularly taking certain medications or has a life-threatening condition. When asked health questions by an insurance agency, it is important to be honest, but not to volunteer unnecessary information. If you are applying for a policy as a person with a disability, do not assume that the insurance company will ask you particular questions; rather, answer only the questions which are asked.

If you have a disability, do not think that you cannot qualify for or get life insurance. An online life insurance quote website will help you determine the best coverage for you at the most reasonable price.