Originally created 02/05/01

Care coverage benefits in long term



Middle age is the right time to reassess your insurance needs.

Now that you're closing in on retirement, experts say your focus should shift to long term-care insurance.

"Life insurance is not as important for 40- to 60-year-olds as it was when they were 20 and still had a lot of debt," said Gene McManus, a local accountant and financial planner.

Advances in medical technology during the last several years have raised life expectancies, increasing the chance an individual will survive sudden illness but live out his remaining years in a debilitated state.

Others simply live so long that they become too frail to take care of their basic needs, resulting in the need for nursing home or assisted living services.

Long term-care insurance meets those needs and is very affordable when a person is still in his 50s and 60s, said Steve Marbert, a financial planner with Richard Young Associates.

"It's like any other insurance: the earlier you buy it, the cheaper it is," he said.

Sylvester Larkins, president of Larkins, Betha & Associates Financial Services, said the rising cost of health care can lay waste to an individual's retirement savings.

"Long term-care insurance will cover people when they are confined to a nursing home," Mr. Larkins said. "A regular life insurance plan doesn't have that kind of coverage."

Neither does traditional health insurance. Therefore, individuals closing in on retirement should consider adding long term-care insurance to their existing portfolio.

But that's not to say middle-age people should forget about life insurance altogether. The dependents of middle-income wage earners may still need the financial security of life insurance benefits should something go wrong.

"Life insurance is one of the building blocks to financial security, and it will always be a building block," Mr. Larkins said.

CHECK YOUR HEALTH PLAN

Examine your employers' benefits package to see if your health coverage will change. Odds are, it will.

To cut corners and keep premiums low, many employers may reduce coverage - from 100 percent to 80 percent, for example - or even erase health-care benefits all together.

"As an active employee, insurance packages and premiums are based on a group rate," said Gene McManus, an accountant and certified financial planner. "When a person retires, that same rate is not applicable. Sometimes, it costs more for the same coverage."

Reach John Bankston at (706) 823-3352 or jbanks15@hotmail.com