Options with Guaranteed Issue Term Life Insurance

As the kids move on to their independent life and mortgages are fully paid, the need for life insurance diminishes for several people who are passing through their late middle age. The focus now shifts from “how will my family survive when I am no more?” to “how will I take care of myself and how am I going to pay for it?”

There is a strong probability that one will need guaranteed issue term life insurance after age 65, as per National Clearing house for Long Term Care Information. Medicare, including health insurance, does provide coverage for long term care, which reimburse for assistance with daily activities, such as getting in and out of bed, eating, and bathing.

The expenditure on care received at home, assisted living facility or nursing homes, can accumulate to tens of thousands of dollars in a year and is a considerable burden on the financial portfolio. Those who still have to worry about their kids, as soon as they get older they will have nightmares about outliving their money.

Making a Switch from Guaranteed Issue Term Life Insurance

At what time in life should a person think of dropping guaranteed term life insurance and move to long term care policy. The answer to this question depends on personal situation and the amount of cash flow. In some cases, a person may require to enrol in both types of coverage while in other cases he or she needs just one policy.

In majority of the cases, the requirement of life insurance is utmost when people are in their 20s, 30s, or 40s. Mostly, during this period, a person has to pay for mortgage, start a new family, raise children, and also have to save money to pay for kid’s college education. A person needs to enrol in guaranteed term life insurance, if he or she still has dependants who may suffer financially in case they meet an untimely death.

As people approach their late middle age, the obligations they have tend to reduce. Children graduate out from college and start earning. The mortgages are all paid off. The responsibility now moves to, providing security to the surviving spouse. The need life cover reduces as a person gets free from all the obligations. The aspect that requires increased consideration is long term care. The assets accumulated by the person are at risk.

People who do not have coverage for long term care have to pay for their own care, till the time you have consumed all your resources and qualify for state and federal program, Medicaid designed for low income elders and their families and also for disabled adults. Medicaid provides coverage for long term care at nursing homes certified by Medicaid.

Having enough insurance for long term care or having considerable amount of assets to support care for the type of treatment one is looking for. People who are super rich may not feel the need for long term care insurance as they can fund their own expenditure. People who do not have sufficient funds have to rely on their family or their children or on Medicaid.

As per The Life and Health Insurance Foundation for Education a single person who earn $30,000 or married couples earning $80,000 will find it really difficult to afford long term care without an insurance coverage.

Overlapping Needs

As one turns 50, people should start planning to shift from guaranteed term life insurance to long term care coverage. It is better to enroll in some form of coverage before one develops some form of health problems, and due to which the rates will be higher. At this point in life, the need for long term care and life insurance may overlap, particularly in the case when a person has kids who are still pursuing studies and mortgages are not paid off.

During this time, when a person needs both long term care and guaranteed issue term life insurance, one should try to find a balance in the premium paid for the two risks. There has been significant rise in the cost of long term coverage in the recent years. As per the American Association for Long Term Care Insurance there has been rise in premium by almost 18% in the last couple of years.

In some cases, a person may opt out from life insurance all together, and just continue with a small plan to pay for their final expenses. People, who have modest means relatively which means they no longer have anyone to support, it is very important risk to manage long term care. Apart from providing a financial backup, insurance for long term care reduces the emotional setback one feels by asking money from loved one.

In some cases a person has to continue with guaranteed issue term life insurance. For instance, family business is sold the heirs or in case a person does not receive proceeds from life insurance and have to pay estate taxes.

Combining Long Term Care with Life Insurance

People who require both long term care and guaranteed issue term life insurance, they have to purchase separate plans or invest in a plan that provides both the features. Life policy with long term rider is a unique way to go. This option has gained in preference as insurance companies are increasing premium, reducing benefits, and making underwriting process stricter, particularly for single policy. Moreover, certain companies are planning to close down their long term care business.

For more information on how you can enroll in a combined insurance feel free to contact one of our experienced and knowledgeable insurance agent. The plans offered by our advisers are from reputed insurance companies that have strong financial stability and high credit rating.