The earlier you face the issue of planning for long term care the better.  Start prior to your retirement.  A general rule of thumb is to engage in the planning process five to seven years before you plan to retire.  Waiting to long can have multiple consequences inlcuding the inability to secure the best solution, which may be long term care insurance.

Check out the report I mentioned above to read more about how important it is to plan for post-retirement expenses.  You can find the article here.

In their advertising, most insurance companies emphasize the cost of insurance as the standard in selecting carriers and coverage. The implication, of course, is that the lower the cost, the better the insurance.

We call this the Insurance Commodity Trap℠ It’s a trap because it fails to take the individual’s overall needs into account.

Cost is relative to protection! When loss occurs, your family’s peace of mind is all that really matters!

To help our clients view protection from a broader perspective, we developed The Peace of Mind Conversation℠. Avoiding The Insurance Commodity Trap℠ is based on answering 5 simple questions.

1) Do you update your insurance protection as often as you update your financial portfolio?

Most people pay more attention to their financial portfolio than their insurance portfolio. This can have catastrophic consequences. The solution is “rebalancing” protection on a regular basis.

Rebalancing protection means shifting premium dollars to pay for catastrophic losses by paying a greater percentage of the smaller losses. This same principle also should be practiced when deciding the protection balance desired between assets (home, cars, boats) and income (life insurance, disability income, long term care). It comes down to personal priorities.

The balance of protection people have between large losses and small losses needs to be corrected. The insured’s objective should be to limit their exposure to large, catastrophic losses and take a bigger portion of the small loss, the one they can afford.

It’s better to absorb small losses, for example, than to be vulnerable to catastrophic losses.

2) Does your coverage reflect recent lifestyle changes?

Each year all of us go through many changes; jobs, income, new purchases, renovations of parts of the home and changes to benefit packages at work.

While these changes are happening little attention is given to the impact they have on the overall protection plan in place. Over time gaps or excesses in coverage occur. These lifestyle changes are important to account for in your protection planning. It’s vital that you focus your dollars on areas that count the most for your family.

3) When was the last time you obtained an independent review of your coverage?

Not only does your lifestyle constantly evolve, but the companies that serve you change too. In response to increased competition companies add benefits and make changes to policies. Some changes are added automatically; some have to be requested.

An annual agency review can provide the platform to evaluate recent changes and discuss their impact. Your number one priority should be to continually ensure that you are receiving the maximum value for your protection.

The wiser choice is developing a relationship with an agent that can keep you in the loop, and help you make decisions that best meet your needs.

4) Are you over-paying or under-paying for coverage?

One of the most common mistakes is focusing on cost instead of focusing on protection.

• A small mistake is to pay a little too much over time for appropriate coverage.
• A big mistake is to have the wrong coverage at the time of a loss. This needlessly puts your hard-earned income and assets at risk.

The important thing is to focus on the purpose of the protection—to insulate assets and income from loss.

5) How effectively do your various policies work together?

Do the various types of auto, home, life, health and disability coverage work in concert with one another?

For example, if a person doesn’t have health insurance they can add coverage for injuries as a result of a car accident to the auto policy.

In order to create efficiency all policies should be evaluated to make sure there are no gaps in coverage that may cause problems later.

C O N C L U S I O N

The Haas Agency’s Peace of Mind Conversation℠ is a special, integrated discovery tool that helps you draw a clear picture of your life’s most important assets, so—together—we design a protection plan in which you have confidence.

Through your picture we identify the lowest cost insurance solution that properly covers your assets, lifestyle, business and hobbies. Gaps and excess coverage are easily seen and resolved.

We encourage you to call us and learn more.

I was contacted by an existing insured who had their home insurance with us but wanted to check on the auto premium. During our discussion of the coverage he indicated that he had liability coverage in the amount of $20,000 per person and $40,000 per accident. I stopped him in his tracks when I asked the following question: If you had an accident in which you were at fault and the other person had injuries greater than $20,000 do you have the assets and income to pay the balance? His response was a very scared but emphatic “Yes”.

Insurance company call centers do not ask questions to uncover assets and income that need to be protected, the call center employees  job is to provide the low cost solution, sometimes that means low coverage.

Luckily an accident did not occur and this person did not have to find out the hard way. He now has much more effective coverage that provides peace of mind.

The recourse in a situation like that, if you are injured, is to make a claim under your underinsured/uninsured motorist coverage. Your own insurance company will pay for “damages which an insured person is legally entitled to recover from the owner or operator of an uninsured auto or underinsured auto because of bodily injury sustained by an insured person.”

There are several options in Connecticut:

1. Maintain Uninsured/Underinsured Motorist coverage at the same limits that you have bodily injury limits.
2. Increase the uninsured motorist coverage to twice your bodily injury limits. For example if you have $100,000/300,000 bodily injury limits the uninsured limit would be $200,000/600,000.
3. Add uninsured/underinsured motorist conversion coverage. That coverage reduces the damages, not the amount of coverage available, if money is collected from another insurance carrier.

Uninsured/Underinsured Motorist coverage can be complicated, please call us at The Haas Agency in order to make sure the right choices are made for your situation.

Our first example is a person who is disabled and has a specially equipped vehicle so they can drive. The cost to equip the vehicle was $25,000. When they purchased the coverage  from the call center the person helping them did not ask enough questions concerning the vehicle and the equipment to know that special coverage should be added to the car to cover that equipment. When the loss occurred the insurance company paid to fix the basic vehicle but the damage to the specialized equipment was not covered, causing the insured to pay $3,495.00 to completely repair the car.

In this case the cost of not having an agent was $3,495.00.

At The Haas Agency we bring the desire to create a lasting relationship into the picture. That means questions are asked to provide protection for the long term. In the situation above we would have discovered the special nature of the vehicle and provided the proper protection. The  goal is to be cost effective not cost focused.

What Happens in these meetings?

First, meetings can be done online in a web meeting or in a face to face appointment. Second,  through a graphic presentation called The Peace of Mind Conversation our customers can actually see how their coverage works, gaps and overlaps in coverage are easily spotted and can be fixed. To schedule your own appointment or for more details click here.

The best way to protect your home and property is with gutters, proper drainage around the foundation, dry wells, underground drain pipes, retention basins, etc.

Resources

If ground water is a serious problem at your house, please consider contacting a local landscaper at best, or a civil engineer to find a permanent solution to the problem. A damp basement and some limited wetness is one issue, but the mold that comes with it could become a health hazard that should be resolved as soon as possible.

If water damage does occur, consider contacting a local contractor to have the basement dried out properly with chemical desiccant and professional-grade vacuums and dehumidifiers.

For more information, call Tim, Peter or Paul at The Haas Agency at (203) 746-5077 in Western CT and (860) 659-1301 in Central and Eastern Connecticut.

What makes The Haas Agency different? It is our unique process The Peace of Mind Conversation which allows families to make consistent, objective decisions empowering them to make sound choices to protect and enhance their peace of mind.

Families have limited time and incomplete information on which to base decisions. In many cases, they do not take into account significant changes in their lives and assume what was good enough in the past will be good enough in the future. This often leaves them with insurance that is out of balance and inadequate for their assets and income.

The Peace of Mind Conversation is a copywrited process that enables people to physically see, in picture form, if there are gaps or overlaps in coverage. Comments like “this is incredible”, “I never understood my insurance like this before” are common when people understand that they are purchasing peace of mind, not insurance.

You can’t buy peace of mind online, in 15 minutes or through a call center. The Peace of Mind Conversation enables the Haas Agency to lead our clients to greater confidence. Isn’t it time you purchased peace of mind?

To schedule your Peace of Mind Conversation experience just send us an e-mail or call, we can meet in person on though an online meeting.

If you haven’t considered long term care issues during retirement, then your financial planner most likely has neglected a very important aspect of your plan. We can help.

Most planners consider retirement income needs, needs for housing, food, travel and  health care needs. Those plans are usually well developed. You even may have considered the value of leaving a legacy for your family, your church, alma mater, civic organization or community. The economic crisis may have you concerned about realizing all of your goals and obligations, which means that now is a great time to reassess.

Even though your assets have been diminished with recent economic crisis, now is a good time to assess the value of long term care insurance along with your other considerations. Long term care insurance protects your retirement nest egg from the significant financial drain that long term care expenses can impose.

Long term care insurance covers expenses for caring for someone who can’t perform normal daily routines, like eating, bathing, dressing, toileting, transferring (walking) and continence. The issue relates to the costs, which can be upwards of $100,000 per year, and which would rapidly diminish most retirement assets that otherwise would be used by a spouse or for establishing that legacy we talked about.

The issues are very real. They can be complex. Even your financial planner may need some support. We’re happy to work with financial specialists to help them understand the value of long term care planning.

Meanwhile, please consider long term care in your retirement planning. Ask one of the Haas brothers for their ideas about the issue. Not only are they educated and experienced with the challenges, they offer strong connections to the professionals advisors you may need to help with your overall retirement plans.

One of the most important considerations in the purchase of disability coverage is how to pay for it. If the premium is paid with pre-tax dollars the disability benefit can be taxed. If the insurance is paid for with after tax dollars then the disability benefit is paid out without any tax taken out. There is a significant difference in the net benefit received based on how the policy is paid.

It is very important that people who have disability coverage check the way they pay for the  coverage. If there are any questions please call The Haas Agency.