Managing life, health & long-term care insurance

Have you ever thought about where you would be financially if you were hit with a large health care bill that you were not expecting? Insurance allows you to be proactive, so that the big costs that go along with health matters, long-term care or death don’t have to drain your savings.
Life insurance
If something happens to you, a life insurance policy can help take care of the people who depend on you.
Three general types of life insurance policies1 to consider based on your needs:
  • Group life insurance: Offered as a benefit by many employers, group life insurance generally pays money to your beneficiary(ies) as a multiple of your income, such as one or two times your annual salary. Coverage ends when you leave the employer.
  • Term life insurance: Available to purchase directly from insurance companies or agents, term life insurance provides a level of coverage you choose (6 to 10 times annual income is a rule of thumb). Term insurance is protection in its purest form.
  • The “term” means it only covers you for a specific time frame or until a certain age. Term insurance allows you to purchase insurance at a comparatively low cost for a period of time directly related to your family's needs.
  • Permanent life insurance: Like term, permanent life insurance is usually purchased from an insurer or agent. The key difference is that permanent life insurance policies can provide insurance protection for as long as you live. They have the potential to build cash value that can be accessed through policy loans or withdrawals. Loans and withdrawals will reduce policy cash values and the death benefit and may have tax consequences.
No one type of life insurance is best for everyone in all circumstances. You may need a combination of group, term and permanent life insurance over the course of your working and retired years.

Health insurance

Health insurance can help protect your savings, or prevent you from taking on large debts, in the event you or family members face costly health issues.

Types of health insurance coverage:
  • Group health insurance: If you work for an employer with group health insurance, you can typically pay for the coverage out of your income and enjoy the benefits of coverage for you and, most likely, your family.
  • Individual health insurance: If you don’t have access to health insurance through your or your partner’s employer, you can purchase an individual policy through the Health Insurance Marketplace . Prices may be higher than a group policy, but it can potentially save you from major expenses later.
With either group or individual health insurance, generally you can expect routine checkups to be covered at low or no additional cost. More importantly, the big ticket items like unplanned hospital visits or surgeries will be covered too – either partly or in full.

Long-term care insurance

Long-term care (LTC) insurance can help protect you from the growing costs of care if you or a loved one needs help with activities of daily living. While features vary by insurer, many policies provide benefits in terms of a dollar amount of coverage per day - $50 or 100 a day, for instance. Often, there’s a waiting period of 30 to 90 days, or more, before the policy will pay. Generally, LTC policies cover qualified expenses whether the care is provided in the insured’s home or in a facility. However, the type of provider may be restricted by the policy. Read the fine print to understand policy terms. The larger the share of the long-term care expenses you take on, the lower your insurance costs will be.
Insurance is considered by many money gurus to be the foundation of a financial plan. Understanding your needs, the types of insurance available to you and what each covers is an important first step to getting your financial house in order.

1 These are general overviews/descriptions of insurance products. You should consult consulting your insurance agent or financial advisor for more information.