Senior Insurance Scams

There are many different kinds of insurance scams that target seniors. The National Association of Insurance Commissioners <http://www.naic.org/> provides information and links to help you avoid being scammed.

Home Health Care and Long Term Care Insurance can pay for nursing home or health-aids at home. The costs of these policies have risen substantially in the past few years. Check out several insurance companies prior to purchasing this kind of insurance and make sure to see if these carriers have raised their rates for existing customers over the past few years.

The cost of the insurance depends on several factors including:

• What is the maximum daily benefit? $100, $150, $200?
• How long will this benefit be paid 1 year, 2 years 5 years?
• How long after you are judged in need of nursing home or home health care benefits before the daily benefits kicks in. 30 days, 60 days 90 days? It may take 30 to 90 days before receiving the first benefit payment after submitting a claim. Take this into consideration when choosing an "elimination period".
• Is the coverage the same if you stay at home as opposed to being admitted to a nursing home?

You can also consider depositing a single sum or making deposits over ten years into a special type of annuity that will pay out a percentage of the total value for your care either at home or a nursing home. If the entire fund is not used during your lifetime the balance of the benefits will go to your heirs. Of course it is also important to understand the parameters of what constitutes your need for these benefits and who makes this determination. Your physician? The insurance company? An insurance company approved retirement provider or caregiver?

One of the best ways to save on your premium is the purchase of a policy with a long elimination period. If the period is 90, 120 ,150 days or even a year, the cost of the policy will be a great deal less than if the period is only 30 days or starts right away. However, the cost of care is substantial; often more than $100,000 a year and most seniors simply cannot afford to pay for their care and for out of pocket for more than a month or two.

Stand Alone Home Health Care policies are generally much less expensive than Nursing Home/Home Health Care Policies. They are designed to pay for care at home, not in a nursing home. There are two advantages.

1. The patient can be kept in his/her own comfortable surroundings.
2. The cost of the protection is a great deal less.

Policies can be designed to pay benefits for 1 year up to a lifetime. Benefits can be set to start immediately or put off for up to 365 days. The shorter the benefit period and the longer the elimination period, the lower your cost will be.

For example, a 60 year old, healthy, non-smoking male, using A F & L Insurance Company and starting coverage from day one with benefits extending a lifetime would cost about $830.00 per month. Using Physicians Mutual Insurance with benefits starting after 365 days and extending only one year the cost would be about $157.00 for the year. Of course there are many alternatives between these extremes.

(This information was supplied by Gil Nickelson, CLU, ChFC, SFS and is based on quotes which could increase in subsequent years).